Macquarie Generation v Construction, Forestry, Mining and Energy Union (NSW Branch) and ors re acting in higher grade [2003] NSWIRComm 10 (7 February 2003)

Last Updated: 7 March 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Macquarie Generation v Construction, Forestry, Mining and Energy Union (NSW Branch) and ors re acting in higher grade [2003] NSWIRComm 10

FILE NUMBER(S): IRC 6496 of 1999, IRC 4164

HEARING DATE(S): 13/05/2002, 14/05/2002, 15/05/2002, 25/05/2002, 31/05/2002

DECISION DATE: 07/02/2003

PARTIES:

APPLICANT

Macquarie Generation

RESPONDENTS

Construction, Forestry, Mining and Energy Union (NSW Branch)

Public Service Association of New South Wales

Electrical Trades Union of Australia, NSW Branch

Australian Insitute of Marine and Power Engineers, NSW District

JUDGMENT OF: Harrison DP

LEGAL REPRESENTATIVES

APPLICANT

Mr J Phillips of Counsel

RESPONDENT

Mr S Turner

Public Service Association of NSW

CASES CITED:

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

- 25 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: HARRISON DP

Friday, 7 February 2003

Matter No IRC 6496 of 1999

Notification under s130 by Macquarie Generation of a dispute with Construction, Forestry, Mining and Energy Union (New South Wales Branch) and others re threatened industrial action

Matter No IRC 4164 of 2000

Notification under s130 by Macquarie Generation of a dispute with Construction, Forestry, Mining and Energy Union (New South Wales Branch) and others re industrial action - Liddell Power Station.

DECISION

[2003] NSWIRComm 10

1    The notification in matter No IRC 6496 of 1999 was filed pursuant to s130 of the Industrial Relations Act 1996 (‘the Act’) by Macquarie Generation on 25 November 1999.

2    The notification advised of a dispute with members of the Construction, Forestry, Mining and Energy Union (New South Wales Branch) (CFMEU); the Electrical Trades Union of Australia, New South Wales Branch (ETU); the Australian Institute of Marine and Power Engineers New South Wales District (AIMPE); and the Public Service Association of New South Wales (PSA), consequent upon a decision of employees taken in mass meeting at Liddell Power Station (‘Liddell’) that from 2300 hours on Friday, 26 November 1999 they would not act in higher grade as required by the Macquarie Generation Employees (State) Award 1999 317 IG 904 (‘the award’).

3    The matter was subject to compulsory conference proceedings on 26 November 1999. These proceedings established that operating staff at Liddell had been concerned with issues of renegotiation of annualised salary and classification restructure. In particular, remuneration to employees qualified to act in higher grade and called upon to do so by payment of one additional salary point on a continuous basis as compared to intermittent payment for the duration of the time required to act in a higher graded position.

4    Mr Harris, then appearing for the PSA and CFMEU, supported by Mr Ashton for AIMPE and Mr McPherson for the ETU, put that negotiations had been ongoing for over two and a half years; and that Liddell management refused to honour a commitment that Liddell operators would not be disadvantaged compared to those at the neighbouring Bayswater Power Station (‘Bayswater’), also operated by Macquarie Generation, where issues of annualised salary and classification restructure had been resolved in the manner now sought by Liddell operators.

5    Mr Petersen, appearing on behalf of Macquarie Generation, acknowledged the ongoing negotiations with Liddell operators, referring to a meeting held on 18 November 1999 wherein it was agreed that Macquarie Generation would review long service leave data in relation to adjustments that would need to be made to the existing salary loading and at which, he put, it was confirmed by management that it would not create any new positions which fell outside the restructuring agreement; i.e. no mid-point position between Assistant Power Plant Operator (APPO) and Power Plant Operator (PPO) for an APPO acting up to PPO; nor establish a mid point between PPO and Shift Manager for a PPO acting up into the Shift Manager’s position.

6    A recommendation issued in the following terms:

HIS HONOUR: The circumstances presented to the Commission this afternoon are indeed regrettable and regrettable on a number of counts. The patience of operators at Liddell in struggling with this issue for over two years is commendable, but equally regrettable. It has been within their capacity, within that time to make their own notification to the Commission pursuant to the dispute settlement procedure and to thereby accelerate and focus their concerns.

A resolution to work to the award appears on its face to be innocuous, though on what has been put to me, it is a camouflage for industrial disruption and inconvenience to the operations of Liddell Power Station, contrary to other award obligations. To rely on the legal validity of exhibit L takes an enormous risk. The legal validity of exhibit L remains an unresolved issue, having been presented to this Commission in a number of proceedings and avoided by the commonsense and co-operation of the parties in coming to mutually productive and satisfactory arrangements.

Rather than going down the path of testing whether exhibit L retains any validity, there is a strong case to suggest that it does not; because a number of awards have been made since its inception in 1991 and a number of agreements, written and unwritten, have been put into practice by the parties since then. If that litigation is to be joined, it will no doubt be extensive and involve quite a deal of expense and distraction for the parties from what they ultimately wish to achieve in positive terms.

I strongly recommend that the operators at Liddell cease and desist from industrial action and do not adopt or apply the resolution taken to work to exhibit L, and I make that recommendation in their interests of furthering their objectives in this matter.

I further strongly recommend that the parties confer in respect to these issues, and that on receipt of the response indicated by Mr Petersen to be available next week, the parties discuss the consequences thereof. The Commission' would take a report from the parties from 2 pm on Monday, 6 December 1999, which is interposed within other proceedings which has Macquarie Generation and the unions currently represented, present in respect to issues involving Bayswater Power Station. A more productive and appropriate timetable can then be established to resolve these issues in a mutually beneficial way in compliance with the legislation which is overriding on all parties.

I make that recommendation in the strongest terms. I relist the matter for report back and further conference from 2 pm on Monday, 6 December 1999, with leave to either party to seek an earlier listing of the matter should the recommendations not be accepted or complied with.

7    In further proceedings on 6 December 1999 the parties advised that the recommendation had been accepted and industrial action not undertaken.

8    Mr Petersen, continuing his appearance for Macquarie Generation, indicated a willingness to continue negotiation with the unions, however, expressed the view that the issues of annualised salary and acting in higher grade remained unresolved and were unlikely to be resolved in further discussion.

9    The parties then embarked on a series of negotiations with reports to the Commission on 7 February and 1 March 2000.

10    The approach by the unions to these negotiations was to request management to identify issues of concession, co-operation, or flexibility from operators in order to achieve parity of annualised salary and acting in higher grade arrangements with those in place at Bayswater.

11    Management, then represented by Mr Petersen and Mr Winterbine, undertook to conduct that investigation and further confer.

12    On 1 March 2000 Mr Petersen reiterated that a partial solution to the acting in higher grade issue had been developed between the parties, resulting in an advertisement for PPO positions on the basis of a revised position description. In addressing the issue of annualised salary Mr Petersen relied upon correspondence to operators dated 24 February 2000 (MFI 4) in which Macquarie Generation concluded that the annualised salary loading applicable to Bayswater was untenable at Liddell:

Macquarie Generation is prepared to make the attached Annualised Salary agreement with Operating staff at Liddell Power Station. This will allow for Annualised Salary to apply to worker's compensation, sick leave and long service leave.

A loading of 34.7% will apply. This is derived from the current 37.7% loading, adjusted by 1% for each week of leave allowed for in the calculation, i.e. a total of 3% has been taken into account - 1% for one week's sick leave and 2% for two week's long service leave.

A detailed review of the “Operator Restructure Agreement - Bayswater Power Station" as well as current operating work practices at Liddell Power Station has been undertaken in order to determine if any opportunities exist to enhance work practice flexibilities at Liddell which may impact on the annualised salary percentage factor (34.7%) currently offered.

It is concluded that the annualised salary loading of 36%, applicable to Bayswater, is currently unattainable at Liddell, noting that the above Bayswater Agreement specifies that: “The annualised salary loading will be adjusted from 37.7% to 36% for the 12 hour 7 x 2 shift system worked at Bayswater Power Station."

Currently, 12 hour shifts are not under consideration by management at Liddell Power Station.

13    Mr Drew, then appearing on behalf of the CFMEU, supported by Mr Turner for the PSA and Mr Ashton for AIMPE, was reluctant to accept that 36 percent loading was untenable at Liddell; putting that the only particular difference between the sites was that one worked a 12 hour shift and the other an 8 hour shift. The unions argued that this was an irrelevant and baseless argument as 12 hour shifts had been introduced on a “cost neutral” basis by arrangement between the parties, and accordingly could have no bearing on the structure of annualised salary.

14    Mr Turner was further concerned that advertising vacancies in the PPO classification would not resolve the issue of APPOs acting up as there had been no communication from Macquarie Generation on the number of PPOs to be appointed.

15    Mr Petersen put that the calculation of the annualised salary loading of 34.7 percent at Liddell was in accordance with a well established formula applied to the circumstances at Liddell, which he put had been explained to the operators. Mr Petersen put that Macquarie Generation was prepared to continue negotiations on an annualised salary and invited ideas, initiatives or suggestions from operators that might provide circumstances in which the 36 percent annualised salary loading sought could be achieved.

16    The issue of appointment of PPOs was further clouded at the time by uncertainty surrounding the introduction of a distribution control system (DCS), which management expected would reduce the requirement for operating staff and significantly reduce the requirement for acting in higher grade. Neither party was able to predict with any certainty whether DCS would be introduced into Liddell, and if so when it might be undertaken and when the expected effects on staffing would occur.

17    Mr Drew relied upon correspondence to Mr Petersen of 10 February 2000 (MFI 5) which sought specific information in respect to sick leave, workers’ compensation, and acting in higher grade for the period 28 November 1998 to 4 February 2000, to assist consideration of the present issues.

18    A recommendation was issued that there be a response to this correspondence, at least on a preliminary basis, within 24 hours; that the parties further confer in respect to the appointment of PPOs in line with a forward planning projections of the operational needs of Liddell; and that the parties further confer in respect to the issues arising from the introduction of DCS; and the fundamental question of initiatives that might close the 1.3 percent gap in their discussions concerning loading for annualised salary.

19    The parties sought the proceedings to be stood over generally with leave to relist whilst they conferred in respect to these issues.

20    The matter was next listed on 13 November 2000 on site at Bayswater at the request of the unions, concurrently with matter No’s IRC 986 of 1999 and 6752 of 1999, in an effort to overcome what appeared to be an unsatisfactory industrial relations climate, characterised by communication difficulties, and a lack of progress in matters of negotiation between the parties of an endemic nature. These proceedings resulted in arrangements for enhanced communication and a commitment to improved industrial relations by the parties which in the event failed to materialise.

21    Further proceeding scheduled for 30 November 2000 were vacated and the matter next subject to proceedings on 14 December 2000.

22    On that occasion matter no IRC 4164 of 2000, a notification filed pursuant to s130 of the Act on 21 August 2000 by Macquarie Generation, was joined to the proceedings. That notification advised of a dispute involving operating staff employed at Liddell in the following terms:

Re: NOTIFICATION OF DISPUTE

I wish to advise of a dispute involving Operating staff who are employed at Liddell Power Station.

These employees have given notice of their intention to refuse to act in higher grade as from 7.00am on Tuesday 22nd August 2000. Such action would be in breach of the following provisions of the Macquarie Generation Employees (State) Award 1999:

1. Clause 23, Grievance and Disputes Procedures

2. Clause 15, Higher Grade work and Pay

3. Clause 3.2(d):"....The express intention of the parties for Macquarie Generation to continue in a period of industrial stability and that the company will be spared the consequences of industrial action.”

The threatened industrial action by these employees has the potential to cause disruption to the normal operation of the power station.

Your assistance is requested for an urgent compulsory conference of the parties to be held in accordance with section 132 of the Industrial Relations Act, 1996.

The other persons affected by or involved in this dispute or difficulty are set down in the attached form.

23    Matter no IRC00/4164 was first subject to proceedings on 22 August 2000. Those proceedings established that, arising from proceedings in matter no IRC99/6496, an additional three PPOs had been appointed to bring the number of PPOs to 10, being considered by the parties as sufficient to cover two unit operation.

24    Mr Drew, then appearing for the CFMEU and ETU, supported by Mr Turner and Mr Ashton, advanced an argument that, since establishing manning to cover two unit operation, Liddell was now expanding to three unit operation with the possibility of four unit operation; significantly increasing the need for PPOs which management intended to fill by acting APPOs in the higher graded position of PPO.

25    Mr Drew argued that this resulted in excessive acting in higher grade, over and above what was, in his submission, already an excessive acting requirement, in order to meet leave commitments for the ten appointed PPOs.

26    Mr Drew submitted that staffing at Liddell to two unit operation had been a definitive position by management since November 1998 when a number of PPO positions were made redundant as being in excess of the requirement to operate two generating units.

27    Mr Drew enunciated the position of APPOs as being prepared to act in higher grade to replace any of the 10 appointed PPOs under any circumstances, but were disinclined to act in higher grade to cover positions in excess of the ten. Mr Drew contended that there was no award obligation upon operating staff to do so.

28    Mr Drew proffered several resolutions to the issue; the first being that management appoint an additional five PPOs so as to adequately staff for three or four unit operation; or that a mid point between APPO and PPO be negotiated which, Mr Drew reiterated, would be in conformity with the arrangements at Bayswater and honour an undertaking by Macquarie Generation that Liddell operators would not be disadvantaged by comparison to those at Bayswater.

29    Mr Drew put that those propositions were advanced to management at a meeting of 27 July 2000 and again on 11 August 2000 on which occasion he put Mr Winterbine committed to providing a response within two working days. Mr Drew put that the position adopted by operators, described in the information, arose from failure of management to respond to either proposition.

30    Mr Petersen refuted Mr Drew’s interpretation of the obligation to act in higher grade, contending that the award obliges APPOs so qualified to act in higher grade where required by management where that is to fill an existing position or supplement shift requirements. Mr Petersen indicated the preparedness by Macquarie Generation to discuss the options advanced by Mr Drew in light of the impact of the anticipated introduction of DCS and the effect on requirements for APPO in the future.

31    In addressing the propositions concerning what he described as the “no disadvantage undertaking” vis a vis Liddell and Bayswater, Mr Petersen noted that the Bayswater agreement would be taken into account, however the circumstances at Liddell and the associated cost considerations, necessitated arrangements appropriate to meet the particular needs of Liddell.

32    Mr Drew acknowledged the obligation and right of management to manage, asserting that the present circumstances at Liddell were being under-managed in that the necessary staffing had not been put in place to meet operational needs.

33    It was further established in these proceedings that at this point, 22 August 2000, there had not been any discussions between management and union officials in respect to these issues. Mr Petersen indicated a willingness to further confer and arrangements made for discussions to be held in the week commencing Monday 28 August, 2000.

34    A holding position on a without prejudice basis to either party was recommended, requiring APPOs to act into any one of the 10 nominated PPO positions; additional vacancies to be filled by the Shift Manager acting as a PPO; the use of PPOs on overtime; and, as a last resort, APPOs acting into a position in excess of the 10 appointed PPO positions.

35    The matter was subject to report back on 1 September 2001. Mr Phillips of Counsel, then appearing for Macquarie Generation, reported that the discussions had been singularly unsuccessful, in resolving the matter. Mr Phillips contended that information available on unit operation at Liddell since November 1998 to date revealed that two unit operation had been the dominant mode, occurring for 70 percent of the time, which Mr Phillips asserted made the adoption of a “Bayswater model” impractical and inappropriate.

36    Mr Phillips noted that since the introduction of the Liddell Operators Restructuring Agreement there has been a significant reduction in overtime requirements. Mr Phillips put that analysis of wage records in the previous financial year reveals only one eight hour overtime shift was required by operators.

37    Mr Phillips further reported that the attitude of the unions expressed in the recent discussions was that at any time Liddell goes to three unit operation there would be refusal to act in higher grade; i.e. PPO’s would not act in Shift Manager positions and APPO’s would not act in PPO positions. Mr Phillips put that three unit operation would be required for approximately 30 percent of the time over the ensuing months. Mr Phillips submitted that the introduction of DCS would allow two unit operation in a far simpler manner, but that this remained some time hence.

38    The position of APPO’s reported by Mr Phillips is qualified by an undertaking that in a changeover situation, i.e. a fourth unit in service where one was coming out so as to maintain three unit operation, operators would act into additional positions for the limited period of the changeover.

39    At the time of the proceedings on 1 September 2000 Liddell was in fact operating in three unit mode, and had been since June 2000 and was anticipated to do so for a further 12 weeks. Mr Phillips confirmed that the then current three unit operation was staffed by Shift Managers acting down to PPO position and overtime, with APPO acting into PPO positions, limited to acting into the 10 appointed PPO, with acting in higher grade limited to the 10 appointed PPO positions.

40    Mr Turner put that management had informed the unions that Liddell was essentially a two unit station and accordingly the Bayswater model was inappropriate. Mr Turner put that Liddell, properly regarded as a three unit station, with regular four unit operation, was significantly understaffed by comparison with Bayswater. Mr Turner put that there were 52 operators engaged at Liddell as opposed to 80 at Bayswater.

41    Mr Phillips tendered correspondence to the Commission dated 29 August 2000 (MFI 1) which purports to clarify Macquarie Generation’s position on the basis that Liddell is adequately manned for 3 unit operation without the need for acting in higher grade. There is nothing in the correspondence to indicate that it had been provided to the unions.

42    Mr Phillips was instructed by the Commission to inform the principles of Macquarie Generation that it was most inappropriate to communicate directly with the Commission during the course of proceedings and that this information was properly directed to the respondent unions for discussion in the course of conciliation of these proceedings.

43    That said, Mr Phillips maintained that Macquarie Generation’s attitude to the proceedings was accurately expressed in MFI 1.

44    Clause 23.2(g) of the Award provides that other than issues of safety, until an issue is resolved by a grievance conciliation, the conditions that applied at the time of the dispute will remain without interruption and without prejudice to final settlement. Clause 23.2(h)(ii) of the Award provides for reference of this matter to this Commission. There is nothing in cl 23.2(h)(ii) concerning the status quo or conditions at the time of the dispute, the available and most often relied upon course is for the Commission to put in place by recommendation or direction a holding position on a without prejudice basis. This may be the status quo, the conditions applying at the time of the dispute, or such other arrangement as appears to the Commission to be appropriate.

45    A recommendation was made putting in place a without prejudice holding positions consistent with the arrangements outlined by Mr Phillips above, which did not require APPO’s to act in excess of the 10 PPO positions other than on changeover.

HIS HONOUR: And there needs to be, I think, the forensic exercise to see whether in the administration of this provision there has ever been a situation where people have been asked to act in the way you say you can to look at the custom and practice aspects of interpretation. It might need to be resolved by examination of a particular direction and refusal or you might like to invoke the declaratory interpretation powers of the Commission in Court Session to give an answer to what that provision of the award means but, for these proceedings, it is in dispute and we remain in conciliation and I'm not going to interpret an award in conciliation and, accordingly, your disputes procedure requires a status quo.

The status quo is in dispute and accordingly I made a recommendation as to what would an appropriate holding position while those issues are resolved. It would seem to me that up to and including 3 unit operation that holding position poses no difficulty to management on the basis of MFI 1 which says that you're staffed to run three units without acting in higher grade.

PHILLIPS: The difficulty, of course, is that that doesn't accord us the flexibility which we say is guaranteed to us under the award because you might be wrong in relation to what is perceived to be the status quo because if, for arguments sake, that is, I said, the holding position - - -

HIS HONOUR: I don't make any discrimination as to what the status quo is. I simply say it is in dispute and I simply say that on the information in MFI 1 that you don't need acting in higher grade to run up to and including three units. I'm at a loss to comprehend what lack of flexibility and disadvantage there is and that shouldn't be taken as a determination. That should be taken as an invitation to prepare appropriate information to demonstrate the disadvantage that is visited upon Macquarie Generation by the interpretation placed on those provisions by the unions and the continuation of the holding pattern and I would afford you leave to relist this matter, either in conciliation or arbitration to demonstrate the difficulty. It is not enough to simply say, "we are denied a flexibility" because I don't know what that means until you flesh it out.

... ...

HIS HONOUR: And I think the invitation is to you, Mr Phillips, to prepare the argument as to fact or law and decide whether you wish to pursue it in conciliation or whether conciliation is not available and, indeed, to decide whether you wish to pursue it here or under the declaratory jurisdiction of the Commission in Court Session and reinforced by MFI 1 that a problem should not occur up to and including 3 unit operation whilst that resolution process takes place.

On the question of overtime, I would suggest to Mr Turner and Mr Drew and Mr Alexander that they, perhaps, talk to their members about means by which they could overcome the current malaise of lethargy and see whether some energy could be found while these issues are resolved.

46    Referring to a proposition advanced by Macquarie Generation which the unions had refused on the morning of the proceedings of 1 September 2000, Mr Turner sought further opportunity for the union to examine that proposition (MFI 1) and to confer with Macquarie Generation. In so doing, Mr Turner reiterated the unions’ understanding that Macquarie Generation had agreed to renegotiate the Liddell Agreement, which he put is allegedly achieved by acknowledging the Bayswater Agreement as a Macquarie Generation agreement applicable to both Bayswater and Liddell.

47    Mr Phillips on instruction refuted this approach, asserting that the unions merely sought to claw back concessions made in the negotiation of the Liddell agreement for which their members had received an increase in remuneration.

48    Mr Turner was supported in this submission by Mr Drew for the CFMEU and Mr Alexander for the ETU.

49    Mr Turner noted that MFI 1 referred to the introduction of DCS within 12 months. Mr Turner's suggestion that alternate advice from Liddell indicated that implementation of DCS was some five years hence.

50    Mr Phillips sought removal of the holding position established on the previous occasion, which he contended was contrary to "the status quo" and the award requirements to act in higher grade. Mr Phillips put that there was an apparent refusal to work overtime by operators which he characterised as a ban. This was denied by the unions, submitting that individuals had declined overtime due to personal reasons, most commonly fatigue.

51    Mr Phillips denied any assertion that Liddell was a two unit station, submitting that there are four units at Liddell to be used as market conditions require. Mr Phillips supported this assertion by reference to the investment in the DCS at Liddell.

52    The proceedings were then adjourned to allow the parties to confer. On resumption Mr Phillips provided the following report:

PHILLIPS: Thank you, your Honour, for allowing us that time to see whether there was a way forward and we did find a way. And what that requires is that Mr Turner and Mr Drew need to take something back to a meeting of members at Liddell and that would be something to the effect that they will agree to provide all the flexibilities we need in relation to the operation of the power station concerning people acting in higher grades and the flexibilities which we have said we've had in the past and obviously there's some dispute about that and if what I further say unravels, well, we may have to come back here and argue what the status quo was.

But in the meantime, the unions say they will need to take to a meeting of members that all those flexibilities will be given so long as we sit down with them to talk in a meaningful way. I don't know quite what that means but I think it means that we are bona fide in our discussions with them to look at questions such as the annualised salary percentage and also the other question of whether or not there will be another position which appears between that of APPO and the other of PPO.

And we intend to embark upon those discussions in a bona fide way to see whether we can reach an accommodation so that the difficulties which we perceive or whether unrealised but we fear might happen because of - you know -changes in the needs we have. Those at least can be overcome. So it would mean that the recommendation which was made regarding a holding pattern would not apply pending the discussions.

53    The matter was next before the Commission on 14 December 2000. The parties reported ongoing discussion of a satisfactory nature, culminating in a document prepared by Macquarie Generation and provided to the unions during the course of proceedings in matter no IRC99/6496 earlier on the morning of 14 December 2000.

54    The unions required an opportunity to consider the proposal in detail, the circumstances put by Mr Drew in the following terms (TR p27):

In looking at the document, briefly, I think we've moved well and truly forward than what we were last time we were here before yourself. Without trying to absorb all points in the document, we would say that we should have further meetings, early in the New Year and probably be in a situation to come back and report back when the Industrial Commission comes back from their break. But I am pleased to see that there is movement and we are going in the right directions, following discussions with management and also further discussions with our operators. I think we will be in a clear position to give a final report back, if needed, in the New Year.

55    The proceedings were stood over subject to relist at the request of either party.

56    Matter no IRC00/4164 was next before the Commission on 28 March 2001 when it was heard concurrently with matter no IRC99/6496. These proceedings resulted in a formal statement and recommendation in the following terms:

HIS HONOUR: The parties have conferred and I have at their request, assisted them in private conference. The circumstances emerge that at Liddell Power Station a fourth unit is in operation and anticipated to continue as a four unit operation to the end of Easter, around the 14th or 15 April this year. There is some dispute between the parties as to the proper application of the acting in higher grade provisions of the award and other circumstances surrounding the operation of a four unit station

at Liddell Power Station.

In the spirit of compromise and without prejudice to the position of either party in the final resolution of the matter, I recommend that:

Where additional power station operators are required to sustain a four unit operation, that the positions be filled in the first instance by the offer of overtime to existing classified employees and that a full roster of that overtime requirement be put by management in order that the positions can be so identified and filled.

Where, for proper reason, employees are not available for overtime, management fill positions by acting in higher grade using people from the particular shift and in the next step, by overtime.

I stress that these arrangements are interim and without prejudice to either parties' position.

As to the broader issues of dispute, I direct that the company file and serve a Statement of Contention in the matter. I will then, on receipt of that document, list these proceedings for mention to consider the appropriate course of arbitration in those matters.

Nothing in this recommendation or the procedures for hearing should inhibit the parties in any way from revisiting their discussions in respect to salary package arrangements, annual salary for assistant power plant operators and annual leave arrangements which were the circumstances that saw the current negotiations break down.

I think much has passed between them today in terms of commercial and industrial considerations in respect to these matters and 1 expect that each will learn much relevant to these issues during the course of the four unit operation over the next weeks.

I so recommend and stand these proceedings over generally subject to receipt of documentation from the management or relist at the request of either party. The matter stands so adjourned.

57    The matters were next before the Commission on 23 May 2001 consequent upon Macquarie Generation filing their outline of contentions in respect to cl 15 of the award.

58    Mr Phillips, appearing on behalf of Macquarie Generation, submitted that conciliation was exhausted and sought the issue of Certificates of Attempted Conciliation and directions to bring the matters to arbitration.

59    Mr Drew, appearing on behalf of the CFMEU, concurred with the position put by Mr Phillips, submitting that discussions had proceeded whilst four unit were in operation at Liddell, however, on return to two unit operation all negotiations had broken down.

60    Mr Drew submitted that negotiation in respect to annualised salary foundered on a requirement by Macquarie Generation to limit the number of people on annual leave to two at any time, removing arrangements which allow for more than two in conjunction with school holiday periods which operators would not agree to and an absolute refusal by Macquarie Generation to consider establishment of a salary mid point between APPO and PPO for persons qualified and required to act in the PPO position as in place at Bayswater.

61    Mr Drew’s position was subject to clarification of correspondence issued by Macquarie Generation (MFI 6).

62    I declined to issue Certificates of Attempted Conciliation pending discussion between the unions and Macquarie Generation in respect to MFI 6. The matters were stood over to allow this to occur and the union officials to consult with their relevant members.

63    The matters were next before the Commission on 16 July 2001. On this occasion Mr Phillips again pressed for the issue of Certificates of Attempted Conciliation. Mr Drew reported that a mass meeting of operators had been held on 21 June 2001, which resolved to abandon all claims in respect to annualised salary and mid point salary for persons required to act in the PPO position, and to withdraw from the operator’s agreement with Liddell flowing from proceedings in matters No IRC98/5044 and 98/2677 (MFI 8 in these proceedings). This agreement, which is detailed and of considerable length, provides in part for flexibility of operations by APPO’s and in particular requires that new appointees be prepared to train and act in the position of PPO and that current incumbents considered suitable, with appropriate skills and qualifications, have the opportunity to train and act in the position of PPO on a Station needs basis.

64    This agreement (MFI 8) affords salary increases to APPO’s from salary point (SP) 26 to 29 and for PPO’s from SP 31 to 32-34.

65    On 16 July 2001 the parties were reluctant for Certificates of Attempted Conciliation to be issued, seeking further opportunity to consider the mechanism by which the current operating agreement (MFI 8) may be cancelled and the consequences thereof. Directions were issued requiring the unions to file a statement of contention by no later than 27 July 2001, setting out succinctly the disadvantage they say their members, employed as operators at Liddell, suffer and the remedy thereto. A recommendation issued that there be no change to working arrangements as described by MFI 8 and the matters stood over to 1 August 2001.

66    In the proceedings of 1 August 2001 the parties reported that a number of discussions had taken place at Liddell, resulting in a renewed optimism that the issues may be resolved in conciliation. The parties sought the assistance of the Commission in private conference.

67    Subject to discussion between the parties the matters remained unresolved though some further conciliation was considered appropriate. The matters were stood over to 27 August 2001 to allow this to occur. At the request of the parties, 5, 6 and 12 December 2001 were reserved for arbitration in the matters, if required.

68    On 27 August 2001 the parties confirmed that the matters were unresolved and conciliation exhausted. Certificates of Attempted Conciliation were issued and directions made to bring the matters to hearing on 5, 6 and 12 December 2001.

69    The matters were next before the Commission on 9 November 2001 at the initiative of the Commission. During the course of the proceedings in these matters the Award was subject to review pursuant to s19 of the Act. The review proceedings resolved issues between the parties covering the application of shift self-containment and annualised salary, known as exhibits L and M.

70    The application of the parties on 9 November 2001 was to defer compliance with directions for arbitration on 5, 6 and 12 December 2001 and to use the time available on those dates to renew conciliation in the circumstances resulting from the award review process.

71    Much of 5 and 6 December were taken upon in private conference, resulting in a need to the parties to separately consider issues and confer. The proceedings were adjourned to 25 February 2002 with further listing on 1 March 2002 for conciliation and/or mediation if required.

72    In proceedings on 25 February 2002 Messrs Turner and Drew, representing the unions, put that operators at Liddell had formed the view that Macquarie Generation Management were not bargaining in good faith and withdrew from negotiations, bringing the conciliation phase to conclusion.

73    Mr Turner put that the operators no longer wished to press an argument in respect to mid-point and annualised salary; and that the only issue now in dispute is whether the award allows Macquarie Generation to require operators to act in higher grade.

74    Mr Turner contended that Macquarie Generation could take the position of applicant in that dispute and press it to a conclusion, or withdraw, bringing these proceedings to an end. Mr Turner put that this would validate the position adopted by the operators that there is no obligation upon APPO’s to act up into the position of PPO.

75    Mr Phillips put that Macquarie Generation would press for determination on the matter so identified.

76    Directions were then issued to bring the matter to hearing on 13 May 2002.

77    Arbitration proceedings took place on 13, 14, 15, 27 and 31 May 2002.

78    Mr Phillips brought evidence from Mr J Dyson, Production Manager at Liddell.

79    Mr Turner brought evidence from Mr A Drew, an official of the CFMEU; Mr D Bitschkat, and Mr J Shorter, employed at Liddell as APPO’s.

80    The case advanced by Macquarie Generation relies on cl 15.1 of the award which provides that:

Employees must carry out work at a higher grade as directed and must be paid in accordance with the provisions of this clause.

81    Macquarie Generation contend that this provision obligates employees to act in higher grade and does not limit that acting into an appointed position; the provision requiring employees to work above their appointed position where their skills and abilities allow and affording them payment therefor. This argument is supported by the contention that this award and its predecessors have provided significant increases in remuneration over and above State Wage Case increases by negotiation and agreement between the parties.

82    Mr Phillips contended that an integral part of these arrangements is agreement by employees to work flexibly and up to their skill levels set out in cl 3.2(a) and (b) of the award.

83    Mr Phillips further supported this application of the award, putting that there is no qualification to be found on the face of the award limiting operation of the acting in higher grade clause to an appointed position. Mr Phillips likened the provision to “mixed functions” clauses generally found in awards which provide additional payment having regard to the duties performed, not the role or position an employee may be required to act in. Mr Phillips supported this argument by reference to cl 15.12, Lower graded work of the award which is not limited to an appointed position operating in such a way that employees are required to perform such lower graded work as directed.

84    Mr Turner acknowledged the provision of cl 15.1 as advanced by Mr Phillips, putting that Mr Phillips failed to include the second paragraph of the clause which qualifies the requirement to work in higher grade in the following terms:

Employees will not be compelled to work in a higher grade, should they object to such work, if it is not reasonable or practicable for them to do so.

85    Mr Turner put the unions’ contention that this qualification allows for an employee to carry out reasonable acting in higher grade; and that an employee cannot be compelled to act in higher grade if it is not reasonable or practicable.

86    Mr Turner also relied on cl 3.9 of the award which provides that employees must work to their skill level, competence and training and classification flexibility. Cl 3.9(a)(b) and (c) states:

Employees must:

(a) work up to their skill level, competence and training within the categories listed below, and

(b) work in accordance with the classification description, salary points and Skills Development Programmes negotiated under Award Restructuring:

Administrative Officer,

Engineering Officer,

Operator,

Power Worker,

Tradesperson

(c) Classification Flexibility;

Following agreement through consultation with classifications affected and/or relevant unions where required, work can be performed across the classifications referred to in sub clause 3.9 (b) above.

Those jobs which change as a result of classification flexibility will have the new position evaluated within one week of a signed position description becoming available.

In the interim, for the three classification groups not covered by the current job evaluation system, additional skill levels can result in additional remuneration.

87    Mr Turner contended that Shift Managers receive additional remuneration to act into PPO positions but no such remuneration is paid to APPO’s to act as PPO’s. Mr Turner also contended that shift self-containment and flexibility arrangements detailed in documents associated with the award, known as exhibits L and M, no longer exist.

88    Mr Turner sought further support from cl 15.14 which provides:

Where a vacant position is acted into for a period of six months it is the intention to either fill that position permanently or the position is to be deleted.

89    Mr Turner submitted that where an APPO is required to act into a PPO position for more than six months, that in itself is evidence that the position exists and should be addressed in the terms of the provisions of cl 15.14.

90    Mr Turner contended that the application of acting in higher grade provisions has evolved and developed over time. He noted the arrangements for establishment of mid-point between APPO and PPO which facilitated the acting in higher grade, noting that Liddell had rejected such arrangements.

91    Mr Turner supported these arguments by reference to detailed information on the extent of acting in higher grade by APPO’s from 1993 through to 2002 (Ex 9). These figures in total reveal that for the period 1 December 1996 to 31 December 1998 1,081 shifts acting in higher grade was required across all shifts; in 1999, 1,496 shifts; in 2000, 1,614 shifts; in 2001, 1,195 shifts; and for 2002 up to 26 April, 342 shifts, which projects to an annualised figure in excess of 1,000 shifts.

92    Mr Turner submitted that the operators are rostered to work 226 ordinary shifts during the course of a 12 month period.

93    Mr Turner put that the levels of acting in higher grade, when compared to the base roster of 226 shifts per operator, are unreasonable and evidence of a need to appoint additional staff.

94    Mr Dyson’s evidence went primarily to the ability to run Liddell on the existing manning, and the commercial implication of change. The evidence of Mr Dyson revealed a failure to consider personal and personnel issues which he subjugated to those of engineering and economics

95    The evidence of Messrs Drew, Bitschkat and Shorter went primarily to the failure of Macquarie Generation to meet an undertaking that Liddell operators would not be disadvantaged by resolving their agreement prior to Bayswater operators; the failure of negotiations detailed earlier in this decision; and the excess of acting in higher grade.

96    The decision in this matter was reserved on 31 May 2002. Shortly thereafter Macquarie Generation, the Labor Council of New South Wales and affiliated unions entered into intense negotiations for renewal of the award, during the course of which the Labor Council and unions adopted a position that all outstanding issues of dispute, including mid-point and annualised salary for Liddell operators, be resolved in those negotiations. Negotiations proceeded privately between the parties and with the assistance of the Commission in conciliation and mediation in matter No IRC 02/4251.

97    These negotiations were attended at times by volatile industrial circumstances, but for the most part genuine recognition of the need to resolve fundamental issues at the most senior level of each of the negotiating parties. Consequently a decision in the instant matter was deferred by consensus of the parties. In the event, the award issues and a large range of other matters were resolved; however the parties remained unsuccessful in resolution of the mid-point and annualised salary issues, though seemingly close to resolution at one point, as had been the case much earlier in these proceedings.

98    A new award was made by consent of the parties on 19 December 2002.

99    The issues left to be determined in this matter are those raised in respect to the application of cl 15 of the award and the question of existence and compliance with an undertaking by Macquarie Generation that Liddell operators would not be disadvantaged by settling their arrangements prior to negotiations between Macquarie Generation and Bayswater operators.

DETERMINATION

100    The evidence supports the argument advanced by the unions that Macquarie Generation made an undertaking that Liddell operators would not be disadvantaged by settling their arrangements prior to Bayswater operators.

101    The evidence further supports the conclusion that Macquarie Generation have honoured this undertaking by the re-opening of the Liddell operators arrangements and the exhaustive, albeit unsuccessful, negotiations concerning the issues of mid-point and annualised salary.

102    The undertaking made by Macquarie Generation was not that Liddell operators would automatically receive whatever arrangements came out of the Bayswater operator negotiations, though it would appear that Liddell operators assumed this position. If that was to be the case, logic dictates that Liddell and Bayswater operators would have negotiated jointly for an identical outcome, not separately.

103    The application of the acting in higher grade provision is properly applied in the manner contended by Mr Phillips. The provision is written in the singular, the question of reasonableness applying on an individual basis not a collective basis.

104    On examination of all of the circumstances of this matter, I must conclude that a collective refusal to act in higher grade is not supported by the award. Any objection pursuant to the second paragraph of cl 15 of the award must be supported by the circumstances of the individual concerned.

105    This does not limit the unions from placing the total extent of requirement to act in higher grade in dispute in accordance with the disputes avoidance procedures and these circumstances being examined on their merits.

106    The extent of acting in higher grade revealed by the information brought by Mr Turner in exhibit 9 suggests an excess of acting in higher grade which should be remedied by appointment of appropriate additional personnel.

107    I note however that operators were prepared to undertake this level of acting in higher grade should they receive additional remuneration in the form of the establishment of a mid-point position; a somewhat anomalous position.

108    I so determine.

109    Matters no IRC 6496 of 1999 and IRC 4164 of 2000 are so concluded.

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LAST UPDATED: 24/02/2003