BHP Steel (Jla) Pty Limited v Australian Workers Union, NSW Branch [2003] NSWIRComm 189 (3 July 2003)

Last Updated: 11 July 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : BHP Steel (JLA) Pty Limited v Australian Workers Union, NSW Branch [2003] NSWIRComm 189

FILE NUMBER(S): 2806 of 2002 & 5150

HEARING DATE(S): 03/10/2002, 10/10/2002, 17/10/2002, 18/12/2002, 19/12/2002, 08/04/2003, 09/04/2003, 10/04/2003, 27/05/2003, 29/05/2003, 05/06/2003

DECISION DATE: 03/07/2003

PARTIES:

BHP Steel (JLA) Pty Limited

Australian Workers Union, New South Wales Division

JUDGMENT OF: Grayson DP

LEGAL REPRESENTATIVES

Mr T Davies, Solicitor

Blake Dawson Waldron

Mr A Gillespie

Australian Workers Union, NSW Branch

CASES CITED: Australian Iron and Steel Pty Ltd v the Federated Ironworkers' Association of Australia, New South Wales Division (No 254 of 1977)

Australian Tramway Employees Association case (1925) 25 CAR 597

BHP Steel (AIS) Pty Ltd - Port Kembla Restructured Ironworker Classification Rates of Pay Award (No IRC 582 of 1996)

BHP Steel (JLA) Pty Ltd - Springhill and CRM Works Employees Award 2001 331 IG 1257

BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266

Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410

Clerks (Oil Industry) Award 150 CAR 387

Cram; Ex parte NSW Colliery Proprietors' Association Limited (1987) 163 CLR 117

Federated Engine Drivers and Firemen's Association of Australasia (Coast District) and the Broken Hill Proprietary Company Limited [1950]

Federated Gas Employees Industrial Union v Australian Gas Light Co (1955) 81 CAR 628

Five-Day Working Week case (Applications by Organisations of Employees for variation of Award with respect to a Five Day Working Week (1945) 54 CAR 34

Iron and Steel Works Employees (Australia Iron and Steel Limited - Port Kembla) Award, Re [1955] AR 663

John Lysaght (Australia) Limited Port Kembla - Slit Recoil Line (IRC 2374 of 1994 unreported, Hungerford J)

Liverpool City Council v Irwin [1977] AC 239

Merchant Service Guild of Australia v Commonwealth Steamship Owner's Association and Others (1916) 10 CAR 214

Minister of State Munitions v Arms Explosives and Munition Workers Federation of Australia (1943) 50 CAR 66

Municipal Tramways Trust, Adelaide v Australian Tramway and Motor Omnibus Employees Association (1955) 85 CAR 312

Navy v Federated Ship Painters and Dockers Union of Australia (1943) 51 CAR 31

Shell Company Australia Limited and Others v Transport Workers' Union of Australia Print G6298, C No 3303 of 1986

Steel Works Employees and Engine Drivers, etc (Australian Iron and Steel Limited - Port Kembla) Awards, Re [1956] 855

The Corporation of the City of Burnside v The Municipal Officer's Association & Anor (1985) 10I IR 313

Utah Construction Ltd v Transport Workers Union of Australia (1954) 78 CAR 733

LEGISLATION CITED: Industrial Relations Act 1996

JUDGMENT:

- 60 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Coram: Grayson DP

Thursday, 25 June 2003

Matter No IRC 2806 of 2002

BHP Steel (JLA) Pty Ltd v Australian Workers Union, New South Wales Branch

Notification of an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996

Matter No IRC 5150 of 2002

Australian Workers Union v BHP Steel (JLA) Pty Ltd

Notification of an industrial dispute pursuant to s 130 of the Industrial Relations Act 1996

Decision

[2003] NSWIRComm 189

1 These matters were the subject of unsuccessful conciliation and relevant certification pursuant to s 135(2) of the Industrial Relations Act 1996 (the Act). By and with the consent of the parties, they proceeded concurrently to hearing with evidence in one being taken to be evidence in both.

2 Throughout the proceedings BHP Steel (JLA) Pty Ltd (the Company) was represented by Mr Davies of Blake Dawson Waldron, Lawyers and the Australian Workers Union (the AWU) by Mr Gillespie, Secretary Port Kembla, South Coast and Southern Highlands Branch.

3 Matter IRC 02/2806 commenced by way of notification by the Company dated 16 May 2002. At the time of the notification, the Company alleged that bans were in place following a proposal on the part of the Company to change the shift pattern and manning in the Uncoated Department at the Company's Springhill Works located at Port Kembla.

4 The proposed change in shift pattern was to affect employees in the Uncoated Department members of the AWU, the Automotive Food Metals Engineering Printing and Kindred Industries Union, New South Wales (the AMWU), and the Electrical Trades Union (the ETU). The proposed change in manning affected employees working at the Coupled Pickled Cold Mill (CPCM) in the Uncoated Department, members of the AWU.

5 The Commission convened a compulsory conference on 21 May 2002 and the matter was subsequently re-listed on numerous further occasions (6 June 2002, 27 June 2002, 11 July 2002, 15 August 2002 and 22 August 2002). During the course of the proceedings the Commission was informed that the issue between the parties concerning the proposed changes to shift patterns had been resolved. However the parties were unable to resolve the issue between them concerning any change to manning at the CPCM in the Uncoated Department.

6 During the course of the proceedings, the Company and AWU were directed to hold discussions in relation to manning at the CPCM in the Uncoated Department. Despite the parties holding such discussions, no agreement was reached between the parties about a proposed reduction in manning at the CPCM in the Uncoated Department. In the proceedings on 11 July 2002 the Company, as directed, handed up a document entitled Application for Directions/Orders which set out the position articulated by the Company in relation to proposed manning in respect of production employee positions at the CPCM in the Uncoated Department at its Springhill Works. The document had been provided to the AWU prior to the proceedings on 11 July 2002.

7 The relief sought by the Company is as follows:

· Under s136(1)(a) of the Industrial Relations Act 1996, the Commission gives a direction/order as follows:

· Production employees employed by the Company in the Coupled Pickled Cold Mill (CPCM) in the Uncoated Department at the Company's Port Kembla Operations shall perform such work as the Company shall from time to time reasonably require and in particular, for the time being:

(a) there shall be seven production employees (inclusive of in-built crib relief) employed on each shift to perform all work associated with the CPCM operations provided that:

· there is a minimum line operating crew of six production employees while the plant is operating and

· ancillary to the line manning is the Raw Coil Coordinator, whose primary function is to manage feed stocks for the line. It is proposed that the Raw Coil Coordinator will assist in unloading of rakes in peak times provided the Raw Coil Coordinator is to be paid appropriately according to the work performed.

8 It is perhaps appropriate to note at this point that at all times throughout the proceedings, the status quo has been maintained by the Company. The CPCM has been operating with a nominal crew structure of 10 production employees (including 2 crib relief) and in addition 2 annual leave relief per crew. On each day shift there was in addition, a Raw Coil Co-ordinator production position. The Company proposes to reduce the manning of production positions on the CPCM to a crew structured as follows – 7 production employees (including 1 crib relief) and in addition 2 annual leave relief per crew and additionally on each day shift, a Raw Coil Co-ordinator production position.

9 The Commission directed that "active and ongoing discussions" take place in respect of the Company's proposal. However discussions between the parties failed to resolve the matter and having regard to the fact that attempts at conciliation were unsuccessful, during proceedings on 22 August 2002, the Commission listed the matter for arbitration. The dates initially set for arbitration were 3 October, 10 October and 17 October 2002.

10 During the course of the hearing additional dates were allocated having regard to the amount of time required by the parties for examination and cross-examination of the various witnesses in the proceedings. In addition to conduct of the hearing on 3, 10 and 17 October 2002, evidence in the matter was also heard on 18 and 19 December 2002 and 8, 9 and 10 April 2003. Site visits were also conducted for the purpose of familiarising the Commission with the operations of CPCM.

11 The grounds and reasons for the Company's application in proceedings 2806 of 2002 are as follows:

· A dispute exists between BHP Steel Limited (the Company) and The Australian Workers' Union, New South Wales (the AWU) concerning the Company's proposed changes to manning at the Coupled Pickled Cold Mill (CPCM) in the Uncoated Department at the Company's Port Kembla operations.

· Specifically, the Company seeks a reduction in the manning level of production employees at the CPCM from 10 production employees to 7 production employees in total per shift.

· The proposed manning changes affect employees who are members of the AWU but not employees who are members of the Automotive, Foods, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (the AMWU) and Electrical Trades Union, New South Wales Branch (the ETU).

· A reduction in manning at the CPCM has been the subject of ongoing discussions with the AWU. All proposals raised by the Company in respect of reduced manning have been rejected by the AWU and its members. The AWU has indicated its opposition to any change in manning by production employees working at the CPCM.

· The Company contends that having regard to operational requirements and existing technologies at the CPCM, a manning level of 7 production employees per shift is appropriate to perform the production work required to be performed at the CPCM.

· The Company contends that the reduction in manning as sought by it does not place any unfair or unreasonable demands on production employees who would operate at the CPCM under the Company's proposal.

· The Company contends that the manning level sought by it will not require the production employees to exercise any new skills or to perform any duties not already within the skill and capability and duties of the employees in respect of their employment in the CPCM.

· The Company contends that the manning level sought by it is in accordance with relevant Award provisions in particular, clause 32, Contract of Employment of the BHP Steel (JLA) Pty Limited – Springhill and CRM Works Employees Award 2001.

· The Company contends that:

(a) the proposed changes are also not unfair or unreasonable when regard is had to other relevant matters including, for example, that any proposed reduction in employees will first be met by applicants for voluntary redundancy; and

(b) that the Company will be able to place any surplus employees in alternative employment with the Company at its Springhill operations.

· For such other grounds and reasons as to the Commission appears sufficient.

12 The arbitration commenced with opening submissions by the Company and the AWU. Thereafter the proceedings were adjourned for the purposes of conducting a site inspection of the CPCM at the Uncoated Department at the Company's Springhill operations. At the commencement of the proceedings on 10 October 2002, Mr Gillespie on behalf of the AWU raised with the Commission the joining of a dispute notified to the Commission in matter IRC 02/5150 – which concerned the manning of the pulpit by production employees of the Company at the CPCM. By consent of the parties, and subject to a reservation on the part of the Company of its "right to bring evidence in reply to [the evidence of the AWU in relation to matter IRC 02/5150]", the Commission accommodated the joining of the dispute in matter IRC 02/5150 to the proceedings in IRC 02/2806. Following a number of preliminary matters on 10 October 2002 the Commission proceeded to hear evidence in the proceedings.

Company Evidence

13 The Company called 4 witnesses to give oral evidence, namely:

· Mr John Penno, Operations Co-Ordinator – Uncoated Department;

· Mr Anton Kiesel, Shift Co-Ordinator – Uncoated Department;

· Mr Sandy Galos, Manager – Uncoated Department

· Mr Peter Griffiths, Staff Roller – Uncoated Department.

14 The Company's evidence also included a number of documents which were tendered during the course of the proceedings including witness statements in respect of Mr Penno, Mr Kiesel and Mr Galos. In the case of Mr Griffiths, the Company tendered two witness statements – the second statement being tendered following Mr Griffiths' being called to give further evidence on 10 April 2003 after the evidence by witnesses of the AWU had been heard in the proceedings.

15 The Company's documentary evidence was as follows:

· Exhibit 1 – Letter to the AWU from the Company and enclosed Application for direction/order in resolution of industrial dispute in matter 2806 of 2002. (The enclosed Application was a copy identical to that which was tendered to the Commission in the proceedings on 11 July 2002).

· Exhibit 2 – BHP CSA Springhill CPCM Production Training Matrix.

· Exhibit 3 – Table setting out the current manning and the Company's proposed manning of various production positions at the CPCM in the Uncoated Department.

· Exhibit 4 – Affidavit of John Penno sworn 3 October 2002.

· Exhibit 5 – Affidavit of Anton Kiesel sworn 3 October 2002.

· Exhibit 6 - Affidavit of Sandy Galos sworn 3 October 2002.

· Exhibit 7 – CPCM year to date delays for the period to November 2002.

· Exhibit 10 – Graph setting out distribution of weld complete to next weld complete time for the period 29 December 2002 to 25 January 2003.

· Exhibit 11 – Affidavit of Peter Griffiths sworn 8 April 2003.

· Exhibit 13 – Affidavit of Peter Griffiths, undated, attested to in oral evidence on 10 April 2003.

16 Some of the main points of the Company's evidence included the following:

· In his Affidavit (Exhibit 4) and in his oral evidence, Mr Penno described the Uncoated Department and the CPCM and gave an explanation of each line function and the role of the Shift Team at the CPCM.

· In relation to the operation of the CPCM line, Mr Penno's Affidavit included the following:

a. Raw coil is unloaded at the rail siding at the Northern end of the plant. This is done by forklift on a 24 hour, 7 days a week basis. The coils are placed in coil rows awaiting scheduling to the line. The co-ordination and stock management is carried out by the Uncoated Departments Raw Coil Co-ordinator (RCC). There are two RCC’s who work a continuous 12 hour day shift roster.

Entry End of the CPCM

a. There are various different gauges of coils which are used in production. When a particular grade of coil is scheduled to be processed in the CPCM, the relevant coil is moved to the entry of the CPCM by forklift. The coil is placed on the coil transportation system which is an automated transport process called a Walking Beam. The Walking Beams transport the coils to the Coil Preparation Station, and after some preparatory steps at the Coil Preparation Station the Walking Beams transport the coil further into a position where they can be fed into the process line. Annexure JP 1 is a copy of a photograph of the Entry End Walking Beam. Annexure JP 2 is a copy of a photograph of the coils at the Walking Beam, and the scrap bin where the Coil Preparation Operator leaves the left over scrap.

b. The Coil Preparation station is manned continuously. The 2 main Coil Preparation Operator functions are to remove the strap from the coil and place it in the scrap bin, as well as key in the coil number to the computer. This task takes about 2 minutes and is repeated for each coil. (A coil is processed through the CPCM on average approximately every 10 minutes). Other than this task the prep station is fully automatic, only needing manual intervention if the coil is damaged or a malfunction occurs. Annexure JP 3 is a copy of a photograph of the Coil Preparation Operator Area.

c. The coil progresses from the Coil Preparation station to the Pay Off Reel where it enters the line process. The Pay Off Reel is an automated process. The Pay Off Reel lifts the coil into position on the process line, and feeds the coil onto a Leveller and from there into a series of rollers which unwind the coil onto the process line. The coil is unwound as it feeds off the Pay Off Reel and becomes a continuous length of strip as it travels through the CPCM. Annexure JP 4 is a copy of a photograph of the Pay Off Reel area.

d. This is the start of a series of sequential processes before the steel strip is transformed into the desired product at the other end of the line.

e. When the previous coil is finished unwinding, the Pay Off Reel feeds the front end of the next strip into the Leveller where the very front and the very end of the coils are made flat to give best results in the welding process. Currently the Pay Off Reel is a continuously manned station and the operator on duty ensures the front end of the strip does not foul as it is fed up. The operation is fully automated. Manual intervention is only required if there has been a malfunction. When there is a malfunction the Pay Off Reel Operator operates a control panel which in turn operates the machinery to address the problem.

f. After a strip is unwound from the Pay Off Reel, the strip then enters the welder where it is welded to the tail (end) of the previous strip. The strip now truly becomes one continuous length of strip which moves through the Pickle section (acid treatment) and Mill section (to make the strip thinner).

g. The Welder station is also manned continuously. The Welder Operator uses a control panel to initiate a cut of the tail end of the previous coil to ensure it is ready for welding. After two strips are welded together the Welder Operator will visually inspect the weld and scarf quality (scarfing is the process of removing the jagged part off a weld so that the weld does not foul up the process). If the weld and scarfing are satisfactory the Welder Operator allows the strip to proceed. The welding and scarfing process is fully automated. Manual intervention is required when changing scarfing tips. Typically this occurs less than once a shift when the line is running. Manual intervention is also required if there is a malfunction. Again by manual intervention I mean the operation of a control panel to address any process issues. Annexure JP 5 is a copy of a photograph of the Pay Off Reel area and the welder station.

Exit End of the CPCM

a. The Welder station is the last operator station at the entry section of the line. The strip now moves into a strip accumulator which is called the “entry looper”. This stores strip length to allow the Process Section of the line (ie the acid pickling process) to keep moving when the Entry Section has stopped to do a weld or in the event of a delay.

b. After the strip passes through the accumulator, it enters the Process (or Pickling) Section of the CPCM. This section includes an acid bath and rinse section. The purpose of this section is to remove oxidisation from the strip and prepare it for the rolling process. The Process Section is fully automated, it does however need monitoring for acid usage and concentrations. These tasks are carried out by the Shift Technical Officer (STO) who is one of three staff officers on shift.

c. As the strip leaves the Process Section, it then enters the Side Trimmer area where the steel strip is trimmed back to the desired width. This is done with two sets of steel cutting blades which trim the edges of the strip. This is a fully automated process. However again an operator is engaged at this part of the process to monitor the surface quality and width of the strip. The function is referred to as the Side Trimmer Operator. Manual intervention is required when malfunction occurs for example where a poor cut results in a jamming of side scrap. The operator is required to remedy this situation and the time to clear these jams could be between 2 and 30 minutes. On average I estimate a problem of this type would arise approximately once in a 12 hour shift. Annexure JP 6 is a copy of a photograph of the Side Trimmer Pulpit and Annexure JP 7 is a copy of a photograph of the strip looking towards the Side Trimmer from the Side Trimmer Pulpit.

d. The strip is now clean and at the correct width to enter the cold reduction mill. The mill is a set of five "stands". Each stand made up of large steel rolls including two small diameter work rolls which are in contact with the strip surface and two larger rolls called back up rolls which exert force to the work rolls to reduce the strip thickness. As the strip moves from stand to stand it is subjected to extreme force and tension which progressively reduces the thickness of the strip to the desired thickness. During this process the temperature of the strip and the rolls increases and needs to have coolant applied.

e. The mill speed, roll force, strip tension and coolant flow is fully automated and controlled by the mill computer. However monitoring of the process and fine tuning adjustments of these parameters must occur. This function is carried out by the Roller who is the second staff officer on shift. (When the Staff Roller is on annual leave or crib break (but not at other times) an operator with appropriate training relieves in the Roller function. However the operator only performs the operator part of the Staff Roller function and not the other staff and related functions which the staff roller performs. Annexure JP 8 is a copy of a photograph of the coils at the Exit End viewed from the Roller Pulpit, and a coil at the lower front of the photo at the Inspection Table.

f. After the strip has been rolled in the cold reduction mill, the strip is recoiled onto a "mandrel". It is removed from the mandrel by the coil car and placed on a walking beam which progresses the coil through a banding station, a labelling station and onto an automated guided vehicle stand where it awaits transportation to the next process via an AGV (Automatically Guided Vehicle). Every step in this process is automatic. The coil may be delivered to packing or for further processing at one of the other manufacturing units in the other departments on the site.

g. Apart from the Side Trimmer Operator (see above) there are a further 3 operator functions at the Exit End of the CPCM. One of these operators mans the No. 15 crane and the other two carry out duties on the mill floor. These duties include inspection of coils, manually banding coil if the strapping machine fails, belly banding of “pack” coils and assisting the crane in tasks of scrap bin removal and roll changes. The crew will call in another man if belly banding is over 200 tonne of coils. Annexure JP 9 is a copy of a photograph of the Mill Operator Manual control panels at the Exit End. Annexure JP 10 is a copy of a photograph of the Exit End Comfort Station.

h. Roll changes are necessary due to the wear that the process takes on the rolls. There are two rolls, the general work roll and the larger back up rolls. The most common roll change is that of the work roll as they are in contact with the strip. Roll changes take between 15 and 60 minutes depending on how many sets of rolls are needed to be changed. A full set of work rolls will take 60 minutes to change and this would happen every 24 hours. Delays of up to 30 minutes for two to threes sets may occur once a shift. Back up Roll changes take up to three hours, however, these are not frequent. Back up roll changes occur about once every four to six weeks. Annexures JP 11 and JP 12 are copies of photographs of the work rolls in the Cold Mill.

i. The Staff Roller coordinates the operators during roll changes.

j. When a roll change occurs, the mill stops and the other operators (eg at the Entry End and the Side Trimmer cannot perform their usual functions."

17 Mr Penno's Affidavit evidence included a history of the manning of the CPCM. In his Affidavit and his oral evidence Mr Penno also described the main work functions of the various production positions in the CPCM. Mr Penno was cross-examined extensively in relation to the work requirements of each of the production functions in the CPCM.

18 Mr Penno attested to the fact that "operators are generally (ie with few exceptions) trained and paid to perform each of the various operator functions in the CPCM" and that employees rotate throughout the various different operator positions. This is not disputed. Furthermore, it is not disputed that operators assist each other as and when required.

19 Mr Penno's evidence was that the Pay Off Reel Operator and Welder Operator positions could be performed as a single position, rather than the current two positions. Mr Penno's evidence was that the No. 15 Crane could be operated by the mill operators without an additional designated No. 15 crane operator. Finally Mr Penno's evidence was that with the reduction in other crew numbers, each crew required 1 rather than 2 crib relief positions.

20 Mr Penno's evidence was that on his observation, the proposed manning changes were able to be implemented and were "very workable". Mr Penno gave evidence of a number of reasons, as to why this was so. He said a number of improvements have reduced delays and reduced non-prime product (ie output of the mill not meeting specification) or have improved operating conditions, meaning production processes are more efficient and reliable.

21 The Company's evidence in the CPCM Operations and Training document is that when it was commissioned the CPCM operated with 10 operator positions. Additionally, there was one No 15 crane driver per shift; a total of 6 holiday reliefs and training positions to train operators in the newly commissioned equipment.

22 In about 1996 4 positions were removed. These positions equate to the "Tractor" (or Lorraine car) operator role which ceased with the introduction of the Automated Guided Vehicles (AGV's). The dedicated training roles no longer exist now that operators are trained up in the operations. Otherwise, notwithstanding the many improvements, designated operator functions in the CPCM have not changed since commissioning of the CPCM;

23 In relation to the Pay Off Reel and Welder Operator – Mr Penno said:

The proposed change of moving from a Pay Off Reel Operator and a Welder Operator is to a single role of Processor (Pay Off Reel)/ Welder Operator is very reasonable. These two roles are physically located beside each other (see the photo at Annexure JP 5 and the two functions are performed sequentially – that is, while one is occurring, the other operator is primarily waiting. The Processor (Pay Off Reel)/ Welder Operator will be required to check that the front end of the strip is fed into the entry pinch roll at the Pay Off Reel then follow the strip some 20 meters through to the welding process. After checking the welding and scarfing the Operator can return to the Pay Off Reel for the entry of the next coil into the process. Further the Prep station Operator will be able to assist at the welder platform when needed, for example if there was a problem of any length of time which would hold up the line. This is possible as while a welder platform delay is in progress there is no need for coils to be prepared because the entry section would be stopped.

24 Mr Penno gave evidence that he regularly observes only one operator at the Pay Off Reel/Welder areas or the two operators talking. He emphasised, as did other Company witnesses, that this was in no way a criticism of the operators but rather commentary on the fact that existing manning levels were surplus to needs and operationally inefficient.

25 In relation to the No. 15 crane operator - on Mr Penno's observation of current operations, the No. 15 crane is regularly unmanned or the operator is in the crane reading or resting. The No. 15 crane is currently a designated function for one operator each shift. Mr Penno's evidence was that in fact the mill could operate more efficiently if, there being a designated No. 15 crane position, the No. 15 crane was operated by a mill operator as and when required during shift. When the crane is not in use, the mill operators can assist as required on the floor.

26 In that regard, Mr Penno said:

The No 15 Crane is now idle for a substantial portion of the time. The No 15 crane can pick up some work from the entry end. More importantly, because the No 15 Crane is utilised for less than half the time each shift, the 2 mill operators can work the crane when required. On the occasions where a No 15 Crane Driver is required and several hands are required on the floor at the Exit End, assistance can be obtained in the following ways:

a. Entry operators assist eg roll changes; breakdowns – the Entry End is stopped at these times;

b. The Side Trimmer Operator can assist the Mill Operators during roll changes much of the time.

c. Annual leave and crib relief will often be available too.

27 Mr Penno observed that often 2 or 3 operators were in the exit end comfort station which meant that no work was required to be done on the floor.

28 Mr Penno's evidence in relation to the reduction in crib relief was that this could be accommodated because:

· there would be two less people to cover for crib as a result of the other proposed manning reductions;

· currently employees are off on crib longer than their designated award times;

· often there are others available to provide coverage as required eg another operator may be able to assist at times; existing annual leave relief positions (2 per shift) would not change; the Raw Coil Co-ordinator is proposed to be available if need be (eg where there is not another operator to provide coverage) to cover or assist the forklift driver on day shift .

29 Mr Penno's evidence was that many of the operator functions were highly automated and are sequential. At the Entry End of the CPCM Mr Penno's evidence was that with some exceptions operators perform a monitoring role and manually intervene by operating equipment in the event a problem arises. In relation to the Entry End he said that the Pay Off Reel and Welder functions were sequential – that is, that generally, the pay off reel functions are performed, then the welder functions – rather than the two functions being performed at the same time. Mr Penno confirmed his observation that he often observed only one person working in the Pay Off Reel/Welder area.

30 At the Exit End in relation to the mill operator roles, Mr Penno said that "when the mill is running there is no manual intervention at all". Mill operators perform routine monitoring functions (eg changing the robot labeller, strapping and routinely inspect strips). Mr Penno reiterated that the No. 15 Crane was "idle more often than not" and often the No. 15 Crane Driver is in the comfort station.

31 He described the work required of Mill Operators and the No 15 Crane Driver when the mill is not running (eg for routine or non-routine roll changes; or less frequently for "mill wrecks"). He explained that at these times the Entry End is stopped and operators are "more or less waiting for the mill to get going". Mr Penno explained that operators work flexibly and are not restricted to particular functions or to a particular end of the mill. Entry End operators can be required to help at the Exit End when the mill is stopped.

32 In relation to crib relief, Mr Penno accepted during cross examination that the crib relief had to relieve 8 persons per shift (including the Staff Roller and the crib relief himself). Mr Penno calculated the amount of time required to relieve for crib to be 8 hours per 12 hour shift (allowing 30 minutes per break notwithstanding the award provision of 20 minutes per crib break).

33 As to the functions of the Staff Roller position – a position which the AWU contends ought be made a "wages" function, and with the current staff persons incumbent in the roles being removed from the positions to make way for operators Mr Penno said that there were a number of ways the 3 staff personnel on shift assisted each other. The Staff Roller performs a number of staff functions in addition to operational duties as a Roller (eg leading accident investigations, safety audits, working with STO's and engineers, co-ordination on down days).

34 Mr Gillespie's cross-examination of Mr Penno focussed on a number of points including:

· comparing the functions of operators today with their functions in 1990 as set out in Annexure JP 14 and noting the similarities.

· Mr Gillespie also concentrated on problems which operators deal with in their various functions at the CPCM;

· that 2 forklifts operate for several hours in the mornings the majority of the time;

· the work required at the Entry End to operate the No 28 crane;

· the time taken per coil for processing – Mr Penno's evidence being that heavier gauge coils take between 6 to 8 minutes and lighter gauge take probably 10 minutes per coil.

· that Mr Penno's observations were made during the limited periods he was present on the mill. That is, although Mr Penno's evidence is that he would "walk the line" once a day and be in the mill on other occasions in the day – Mr Penno agreed he is not in the mill observing operators all the time;

· evidence in relation to the coverage provided by annual leave relief.

35 Mr Kiesel gave affidavit and oral evidence. Mr Kiesel has worked in the Uncoated Department since about 1994. Currently he works as Shift Co-Ordinator in the Uncoated Department supervising D-Crew. He also relieves the other staff positions of Shift Technical Officer and Staff Roller.

36 Mr Kiesel's evidence traversed the purpose and operations of the CPCM as well as the current manning levels and shift structure at the CPCM. On each shift crew there are currently 12 operators (including 2 annual leave relief) and 3 staff. There is also a Raw Coil Co-ordinator on each day shift.

37 Mr Kiesel described the capability of and requirement for operators to be trained across the various CPCM operator functions – that is, operators can and do work in each of the various roles in the CPCM (with a few exceptions) and the operators change between the various roles "usually on a daily basis".

38 Mr Kiesel described the main aspects of the various operator functions in the CPCM. He said operators generally are required to "play observational roles in many of the positions apart from the forklift driver and crane driver roles which operate machinery and mill operators which involve manual assistance mainly when the mill is stopped." He said that since the process is automated and there is lifting machinery and other appropriate equipment available, "the jobs are not highly physical."

39 As to progressive improvements, in efficiency at the CPCM, Mr Keisel said:

The CPCM machinery is largely the same now as it was when I commenced in 1994. However the operation of the CPCM itself is now much different because of many improvements which have been made. Many of the improvements are technical, management or small step improvements although there have been some larger changes also affecting the operations.

In 1996 a carousel reel was installed in the CPCM. The carousel reel permitted the continuous rolling of the metal strip back into coil at the exit end reducing line stoppages and increasing the level of automation and control, therefore reducing the need for operator intervention. At about that time, Automated Guided Vehicles were also introduced at Springhill. Automated Guided Vehicles are driverless vehicles which move coils from one location to another guided by computer and magnetic strips in the floor.

Other improvements which I can recall having occurred are set out below:

a. At the Coil Prep Operator position - when I first commenced, the Coil Prep Operator had to decide how many shears (ie cuts) to make on each coil when preparing the coil for entry into the CPCM. More recently better analysis of the number of shear cuts required for the different qualities of coil entering into the mill has meant the company has been able to automate the machine so that it automatically is programmed to make the specified number of shears. This has reduced the workload of the function.

b. Improvements in the preparation process at the start of the CPCM have been made such as a technical decision to "build up" process leveller rolls after machining to avoid changes in specifications which were affecting the reliability of the entry end. This has meant that the coil proceeding through the line is better able to be processed with fewer stoppages and the need for fewer manual interventions.

c. Continuous improvements in the welding process has meant that there are far fewer weld breaks. Weld breaks generally occur at the Mill section of the line and will result in a stoppage, the length of which depends of the damage caused by the welded strip breaking in the line. For example, work roll changes at the Mill are not uncommon after a weld break. In the last 8 years the weld breaks per 1,000 tonnes has reduced from 1.25 to 0.25.

d. There have been improvements in the Entry Looper (which is physically located after the welder machine). The Entry Looper has more strip storage capacity and is very reliable compared to several years ago. Improved maintenance practices in this area mean that the welder operator rarely has to deal with track off problems, something that was a common occurrence in the past. Previously much more often the welder had to deal with tracking off problems with the Entry Looper.

e. Improvements in the quality of coil coming from the Hot Strip Mill (because the Hot Strip Mill has set higher tolerances on the quality of coil it accepts and rejects) has improved the reliability of functioning of the CPCM and fewer manual interventions at Pay Off Reel, Welder and Side Trimmer, and less mill wrecks;

f. At the Exit End, the Inspection Reel Station has replaced the manual method of coil inspection requiring the No 15 Crane to roll out coils for inspection;

g. Introduction of Automotive Guided Vehicles have reduced the amount of lifting and handling of coil required in the Mill – it is now rare that coils are stored in the Exit End field of the CPCM;

h. An upgrade to the Automatic Gauge Control System has meant fewer mill wrecks;

i. A new stressometer or exit shape measuring system has dramatically reduced shaped related non prime first time (hold coils) as well as reducing the number of mill wrecks and unnecessary roll changes for shape related defects;

j. A lot of technical improvements have been made to the mill control system which controls the speed, tension etc of the mill and has reduced tension related mill wrecks e.g. differential tension control between the mill stands;

k. Improvements in technical matters relating to Grade Thickness Width have reduced Grade Thickness Width related mill wrecks;

l. Recently the Metal Coating Line was upgraded increasing the capacity of coils it can handle meaning the CPCM can run off longer coils resulting in fewer coils to make for the same tonnage. This means fewer coils to inspect, strap and handle;

m. Programming and maintenance changes have brought about other improvements too;

n. Scrap coils are now placed in a scrap bin and removed by Metserv (contractors), whereas previously either 28 or 15 crane was required to load the coils onto a semi-trailer;

o. The operators used to test the coolant for the mill section, but this is no longer required because more accurate testing is carried out by the Shift Technical Officer (STO) in the laboratory. Similarly operators used to perform Branson tests (a measure of strip cleanliness) but this is also no longer required because of changes to the mill coolant system.

40 As to the proposed manning arrangements, Mr Keisel said:

The Pay Off Reel Operator and Welder Operators roles can be performed by a single operator. There are a number of reasons why this is the case.

Firstly, physically the Pay Off Reel Operator and Welder Operator are located side by side. It is a matter of taking about 20-25 paces to walk from the pay off reel operator cabin to the welder operator cabin along a flat platform.

Secondly, as I have said earlier, the Pay Off Reel Operator and Welder Operator functions are sequential. That is, when the pay off reel is loading a coil, the welder is not operating. Similarly, when the welder is operating, the pay off reel is not at the stage of loading the next coil onto the leveller. A single operator would be able to monitor the pay off reel operation as a coil is loaded onto the pay off reel and then walk along the platform alongside the strip as it moves down to the welder. The operator could then observe the weld, check the scarfing and the scarfer tips etc after the weld and perform any manual function (on the occasions it is required). Once the weld is completed, the operator can return to the pay off reel and await the loading of the next coil.

It is also notable that the two jobs, the pay off reel operator and welder operator jobs are more observational and do not require significant physical work. Even where manual control must be taken over the operations, this is done using a control panel to operate machinery.

There is less need for manual intervention at the pay off reel and welder because of the process improvements which have been made over the years. For example, the maintenance practice of building up rolls so the settings can stay the same makes the process leveller and welder much more reliable. There have been improvements in the reliability of the welder machine and the Entry Looper (which is physically located after the welder machine). Previously, the welder operator often had to deal with track off problems with the Entry Looper. These problems are now rare. Programming and maintenance changes have brought about other improvements as well;

Even when manual override is required at the pay off reel or welder, it will only be occurring at one or other not both at the same time. For example if the pay off reel is being manually operated, the Welder operator will not generally have work at the welder station.

If the welder is required to change scarfer tips at the welder, the Staff Roller slows the line to allow it to occur – a separate Pay Off Reel Operator is not required at that time.

If there is any period of down time required for the welder to deal with welding problems or some other matter, the Coil Preparation Operator would be able to assist since while the line is stopped, the Coil Preparation Operator will not be preparing more coils for entry into the line.

It is generally the case that the Pay Off Reel and Welder Operators spend quite a deal of time talking to each other during the shift. Each operator also spends time reading etc because the functions are almost fully automated with manual override being required only on occasion. It is often the case that I observe only 1 of the Pay Off Reel Operator and Welder Operator on the platform or the two of them talking together in one or other station, or both reading or playing computer games.

It is to be noted that the Pay Off Reel Operator and Welder Operator functions are effectively operative only while the CPCM is operative. During down time these 2 positions have very few operator functions to perform. Often it is the case that while the exit end is working on a problem which has caused the CPCM to stop, the Pay Off Reel and Welder Operator and the Coil Prep Operator may be idle and will talk with each other, or read or play cards etc. I outline later in this statement how these operators will be able to help if required on some occasions to do so during down time at the exit end. Because most of the operators are skilled and paid to perform the various roles throughout the CPCM, this can be easily accommodated. There are only a few operators who do not have a crane ticket and about three of the current 45 operators at the entry end who do not have exit end qualification and two operators at the exit end who do not have full qualifications to perform entry end work.

Finally, I note that while in my view the Pay Off Reel and Welder Operator functions can be performed by one person for a shift, I also note that if they wish to do so, operators can share functions for a shift – for example, the Pay Off Reel/Welder Operator could swap with the Coil Preparation Operator half-way through the shift or on some other rotating basis if the operators wished to do so in the same way as operator currently rotate daily into the different roles.

On analysis of the work performed in the mill, there is not a need to have a Crane Driver as well as 2 mill operators at the exit end. Currently the number 15 crane has a permanently designated driver. Some of the number 15 crane drivers remain in the crane for much of the shift. Other crane drivers may come down from the crane but generally are not required on the plant.

In the past, there was much more crane driving work required. This is because in the past the number 15 crane driver performed functions which included:

a. Helping with lifting when there were break downs caused by "wrecks" (ie. the steel strip breaking up in the mill). This still happens but the reliability of the Line is increased such that there are fewer "wrecks";

b. Helping to "run-out" finished coil by lifting it to the relevant position, for inspection after the coil came off the exit end of the mill. The crane driver now does not lift the coil for this function, there is a designated Inspection Reel Station and relevant machinery which performs the function – this function in the past required a person in 15 Crane to lift a coil for inspection and return the coil – and would occur every 6th to 10th coil. (This no longer happens);

c. Previously the number 15 crane driver would also lift coils and move them around in the exit end prior to them being transported to the next unit . With the introduction of the Automotive Guided Vehicles, coils are now be placed on the Automotive Guided Vehicles and moved straight out of the area without handling by the number 15 crane.

d. Improvements in technical and other aspects of the Automatic Control System; the Mill Control System and specifications relating to the Grade Thickness Width have reduced the number of wrecks and therefore the amount of work required of the No 15 crane to assist with removal of the wrecks. We rarely have a camber mill wreck these days;

e. Total Off-Gauge has improved significantly over time. Very poor off-gauge strip requires work from the No 15 crane, and this work is now seldom required.

f. Number 15 or 28 crane used to be used to place scrap coils from the coil field onto semi-trailer, now the coils go directly into a scrap bin, which is then taken away by a contractor. This has reduced the workload of the cranes.

On my observation the Crane Driver has about 8 hours time spare per shift to assist with other functions.

Recently the Metal Coating Lines was upgraded increasing the coil size it can handle meaning the CPCM can run off larger coils, resulting in fewer coils to make for the same tonnage. (85% of CPCM coil goes to the Metail Coating Lines.) This means fewer coils for the Mill Operator to inspect, strap and handle.

It might be said that when there is a wreck that is when hands are needed. However in addition to the 15 Crane Driver and Mill Operator, when there is a wreck, the operators at the Entry End can help because they will not be required at their stations. The crib relief or annual leave relief may also be available to assist.

Similarly it might be said that more hands are required for the daily roll change – however again the Line is idle for the roll change and the entry end operators, crib relief or annual leave relief can assist.

If manning is reduced by 3, then, having regard to award crib breaks, the one crib relief will relieve for 5 hours 20 minutes of crib per day (8 people by 2 crib breaks by 20 minutes each). With the current manning, each crib relief relieves for 3 hours 40 minutes per day. The difference is 1 hour and 40 minutes. However, I note that because the Line is reliable and is automated and workload does not require it, usually crib breaks extend out to 30 minutes or more.

Indeed, at the Exit End, the operators currently take 3 breaks – 1 half hour and two 40 minute breaks. The workload has meant that the operators have been able to have some extra time at crib. Not only have I observed the lengths of crib, but when I have relieved in the Staff Roller job and taken the cribs along with the operators I have had these breaks and have been relieved by the Relief Roller for these breaks. Taking the extra length of breaks into account, the crib reliefs are already relieving for the amount of time which would be required under the propose manning change.

The above having been said, I would expect that even with the proposed manning changes, most of the time, with the operations working smoothly, there will be a lot of time where some of the operators will not be required hands on – eg the crane and mill operator.

41 Mr Kiesel deposed that:

· if need be, the Raw Coil Co-Ordinator could be used to assist the forklift driver if the changes affected the amount of assistance available to the forklift driver;

· he has observed on many occasions the Entry End or Exit End operating with 3 or less operators;

· when there is a breakdown, operators from other areas can assist (eg a breakdown at the Exit End can be attended as required in the circumstances by operators from the Entry End.) Other people are also available to assist if need be.

42 Mr Kiesel spoke about the functions of the shift staff and the relief that these staff provide to each other (excepting in some, circumstance where operators relieve the Staff Roller). Mr Kiesel described functions which a Staff Roller can and does perform which are staff/management functions rather than purely operational tasks as follows:

Furthermore, the Staff Roller has a number of additional important functions. Together with the Shift Co-Ordinator/Manager and Shift Technical Officer, the Staff Roller is involved in making various operational and process decisions relating to the CPCM. The Staff Roller, STO and Shift Co-Ordinator positions carry a much higher level of responsibility and are less function driven and more process and decision driven.

The staff roller also carries other responsibilities including:

a. monitor absenteeism/annual leave and timekeeping issues for the crew;

b. be involved in sign-off of overtime, call-ins for overtime etc;

c. involvement in non-prime first time management event matters eg analysis of plant issues and sourcing problems where there are breakdowns etc;

d. completing incident investigations, incident reports and follow up;

e. where possible attending shift change over meetings;

f. conducting regular safety audits on a basis of 1 per week. While operators may perform a safety audit from time to time, they do not have a regular responsibility to ensure that an ongoing system of safety audits is conducted on a regular and systematic basis. Whereas operators will complete an audit report from time to time and hand it on, the Staff Roller is also responsible for follow up action in relation to safety audits;

g. the Staff Roller is involved in disciplinary issues and management of production and maintenance employees;

h. the Staff Roller completes common problem reports;

i. perform performance reviews.

Therefore, although the specific operational function of the Roller position is automated, it is the highest level function in the production process and from the staff roller point of view there are numerous other functions which the staff roller must perform;"

Pat Haskard is the Staff Roller on my shift. Pat Haskard was previously a mechanical maintenance employee and a staff co-ordinator. Mr Haskard has a trade qualification as well as a certificate in mechanical engineering. He has a lot of plant experience and analytical and decision making experience.

On the other shifts, Bob House has also had previous experience as a Mechanical Maintenance Co-ordinator, and Steve Oehlman was previously a supervisor at the temper mill before coming into the staff roller position. Peter Griffiths was a CPCM supervisor and a person who has a lot of rolling experience.

In about 1996 there were discussions about operators (Ironworkers) performing the Rollers position. The proposal was that by a process of natural attrition when a Staff Roller left their position (eg to take up another role, or retire etc), an existing operator in the CPCM would be trained up to perform the role. The operators did not want to undertake supervisory duties because it involved telling fellow Iron Workers what to do and the operators also said the pay offered was not high enough.

After that the Company negotiated for operators to relieve the Staff Roller during crib and annual leave. Temporary training relief was made available on the CPCM operation line to allow operators to train up in the roller's pulpit. When trained to relieve the Roller these employees were graded as Level 4 operators.

Temporary relief in an operator's position on the CPCM was provided by surplus employees from other departments while the operator training was in the Roller functions.

The Operators relieve the Roller for crib breaks and annual/LSL leave (ie relief for about 6 weeks or less per year). When an operator relieves the Roller they perform the operation tasks associated with the Rolling function but do not supervise or take any decision making actions which the Staff Roller makes. Similarly the operators do not perform the Staff Rollers other management or staff functions. Any decisions needed to be made is referred to a staff member.

Therefore while it is true that operators can be trained to perform the operational functions of the staff roller position. However, not every operator has the capability to be trained up to the position. Furthermore more it takes quite a degree of training and then experience on the job to perform the roller operational functions well. Because they are more difficult not everybody is suited to the role.

The roller job is the most complicated at the CPCM involving understanding of frictions and tension, control systems and troubleshooting, ensuring for example, roll force tensions are appropriate, motor current in the mill stands are appropriate, mill set ups are correct, including the right coolant applications and changing coolant and an awareness of how different products are run eg different steel grades etc.

When the staff roller is not on duty and is being relieved by operators, I generally receive more phone calls to deal with issues and generally see an increase in non-prime coils (ie coils which do not meet specific customer specifications and are reclassed).

Operators performing the roller position will generally raise issues for decision making by staff and do not perform the various other staff functions of the Staff Roller.

Overall, the current Staff Rollers are far more experienced, have the skill training and capability and higher qualifications and higher level analytical thinking for the staff roller position. They are generally in a better position to understand the whole of plant operations, non-operational matters and handling of supervisory, management, decision making and staff related functions. Therefore, overall, while an operator can be trained up for the operational functions of the roller position the current staff rollers are better qualified for the role.

Based on their experience; the additional work functions that they perform; their skills, qualifications and abilities, the current Staff Rollers are the most qualified persons in the CPCM for the roller functions. They are able to observe the whole of the CPCM process with the highest degree of skill. No existing operator has the same capability and it would take a number of years to get to the same level, even assuming those operators were equal on other matters such as analytical ability, qualification/training and were willing and able to perform various supervisory, management and related functions.

If an operator moved into the roller position on a fulltime basis, my responsibilities would certainly increase and make management more difficult. I would have to perform a number of additional functions together with the staff technical officer which would be difficult in the circumstances and given the work already required.

43 Mr Kiesel said the effect of the proposed manning changes may be to affect production from time to time, rather than to require or cause employees to work in an unsafe or unreasonable way.

44 Mr Kiesel re-affirmed his affidavit evidence about the CPCM operations including the following:

· the pay off reel and welder functions are sequential; work at the welder and work at the pay off reel are not occurring simultaneously;

· there are monitors, slow down buttons and stop buttons that can be utilised to observe and intervene in the operations at the pay off reel/welder stations if necessary;

· No 28 crane performs limited work – and the Coil Prep Operator could perform this work under the new proposal – particularly because the walking beam can be split to allow downstream production to continue while the Coil Prep Operator was on the No 28 crane emptying a scrap bin;

· various reasons and examples why there is reduced work for No 15 crane;

· at the Exit End while the line is running workload is generally pretty low. Work picks up when there is an operational breakdown. At the Entry End of the line the opposite is the case;

· Mr Kiesel explained that longer than prescribed crib breaks were taken - "the reason is because there is too much manning on the line. The line can run without those people being on the job all the time. It is recognised that the guys can have that little bit of extra freedom and the line can still run the way it is supposed to."

· the staff roller does a lot of things other than just operate the roller's pulpit;

· the Company could possibly reduce the level of manning further than presently proposed in the CPCM had it wanted to;

45 In cross examination of Mr Kiesel, Mr Gillespie focussed on a number of points including:

· testing how often Mr Kiesel saw people reading or doing nothing on the line – Mr Kiesel's evidence was that about half the time he sees operators reading and doing things other than work. Mr Kiesel made no criticism of the employees for being idle at times. He said that "Given the situation of the line at the moment we have to recognise that if the work gets done they can have a bit of leeway";

· the changes at the time of the introduction of Automotive Guided Vehicles leading to a reduction in manning of one operator per crew;

· the fact that formal surveys of the lines operations had not been conducted by management;

· Mr Kiesel was also cross examined about his evidence that on average a coil is processed every 12 minutes. Mr Kiesel agreed that when the line running speed is 250 metres per minute a 20 tonne coil would take about 7 minutes to run through the mill. Coil processing times are faster than 12 minutes per coil in various circumstances on certain coil types and when the mill is running faster;

· some slow rolling is occurring because operators are doing things manually in which case some operators are then "head down, bum up";

· the volume of coils coming into the CPCM – though Mr Kiesel disagreed there was an increase;

· extra work at the Entry End – eg a change in schedule; removing a coil which is too hot; problems which can occur on the line requiring manual intervention

· the work generally of each operator function in the line;

· not everyone operates the No. 15 crane.

46 In re-examination Mr Kiesel confirmed the ways that manning can be obtained when the workload is highest at the Exit End due to an operational stoppage. Those ways included assistance being provided by available annual leave relief, crib relief or Entry End operators.

47 In relation to crib relief, in re-examination Mr Kiesel confirmed that where there is less labour available (eg a lot of sickies), employees revert to "normal crib".

48 Mr Galos is the Manager of the Uncoated Department. As with others, Mr Galos gave affidavit and oral evidence. Mr Galos's affidavit evidence included the following:

· his first hand observations of the operations at competitor Coupled Pickled Cold Mills in Japan and Canada that operate in a like manner to the CPCM at Springhill with the only distinction of note being that some of the mills were equipped for automatic roll changes. Each of the mills observed by Mr Galos operated with fewer employees per shift than the CPCM at Springhill. NKK Japan operated with 5 people less per shift and Nisshin Steel operated with 4 people less per shift than Springhill. At each operation, one operator was used to perform the pay off reel and welder operations;

· technology and process improvements in the CPCM. Mr Galos provided data in the form of graphs with numerical information comparing the improvements in the CPCM over time in respect of a number of areas of the operations including the following:

a. fewer rewelds – meaning less operator intervention to "jog back" the strip;

b. reduced time lost due to strip breaks (65% less than 11 years ago) meaning less stoppages requiring work of mill operators to deal with such breaks;

c. a 50% reduction in manual cuts required of mill operators since 2000;

d. virtual elimination of shape defects. Shape defects require transfer of the coil (sometimes with assistance of the No 15 crane);

e. fewer off gauge coils to transfer;

f. increased input and output coil mass meaning fewer coils to process and weld and handle;

g. reduction in non-prime meaning less processing, less customer complaints and less inspections etc dealing with non-prime issues;

· On average per operational shift in the last year, the CPCM processed 59 coils per shift at the Entry End with an output of 79 coils per shift at the Exit End;

· operationally, the CPCM must operate profitably to continue to remain viable. Other mills at Springhill have closed because they have become unviable eg the Coil Annealing and Temper Rolling Mill in March 2000;

· the long term trend is a reduction in the price of product produced by the CPCM meaning the operations must continue to reduce costs to remain competitive. The Company has looked at and implemented a number of changes to reduce costs, not simply by reducing labour but by making other changes;

· other groups of staff and trades have been reduced in the last 2 years. Now the Company seeks to reduce the number of operators at the CPCM;

· the reductions in numbers of operators will occur by accommodating persons who wish to be offered a redundancy, including persons in other parts of Springhill were CPCM operators can move into those other roles. There are also vacancies from time to time which surplus CPCM employees can apply for. Mr Galos did not plan for or expect forced retrenchments being necessary and if necessary the Company would assist employees to identify work elsewhere.

49 In oral evidence Mr Galos confirmed that the loss of 50,000 tonnes of exports to the US has added $3.16 per tonne to costs at the CPCM. To combat dollar per tonne pressure the Company has been attacking other elements of its costs.

50 During Mr Galos' oral evidence a document was tendered which showed year to date delays to November 2002 in the CPCM. Mr Galos' evidence was that the document contained information from the Company's computer system on the line. Mr Galos informed the Commission that during 25.69% of available operational time on the line there were delays/stoppages (whether planned or unplanned). When a delay occurs, there will be work in a particular part of the line to deal with the cause of the delay. The delay may involve several operators, or only one operator performing tasks; or if the delay requires tradesmen etc to deal with the problem, operators may not be involved. Mr Galos marked the document highlighting delays requiring operator activity or intervention. These equated to approximately 11% of available operational time.

51 Mr Galos gave evidence of attempts at consultation between employees and the Company about the proposed restructure and the impasse reached between the parties. Mr Galos gave evidence about the function of the Staff Rollers which is more than just operating the line. Mr Galos said that these people were selected through the normal selection process based on their knowledge, technical capability, potential for leadership, attitude and work practices. He emphasised that the deeper the technical knowledge on shift staff, the better their problem solving skills.

52 Mr Galos' evidence was that the line could be operated with 6 operators continuously – however he conceded that the Company will stop for crib breaks if manning is 6, and operate continuously manned with 7 operators.

53 During cross examination Mr Galos also confirmed that he had seen the line operate without the Pay Off Reel Operator being there. Mr Galos' evidence was also that most of the time the functions at the Pay Off Reel and Welder are occurring automatically without manual intervention. Mr Galos also confirmed in cross examination that the No 15 crane can be idle for extended periods.

54 In cross examination Mr Galos confirmed it is part of the Roller's function to help set up the mill during a roll change, though this has been suspended due to threats of industrial action by operators who do not wish to see their work functions performed by staff employees. Mr Galos also confirmed in cross-examination the nature of self-relieving between the 3 shift staff and the role played by Level 4 Operators relieving the Roller.

55 In cross examination Mr Gillespie raised other issues with Mr Galos including:

· that the reduction in personnel at the CPCM has been two per shift since its commissioning – one when the carousel reel and AGV's were introduced and voluntary retirement with the reduction of training roles. Mr Gillespie clarified that there was no reduction in maintenance staff at the time – Mr Galos agreed that maintenance staff were not reduced until 1999;

· Mr Gillespie questioned Mr Galos about the role of the crane driver at the commissioning of the CPCM, being in addition to the other nominated operator functions;

· Mr Gillespie questioned Mr Galos about the movement of coils at the CPCM – Mr Galos' evidence was that coil handling has reduced significantly and there is less stock in the coil field;

· Mr Gillespie again reviewed the various operator functions with Mr Galos and the problems which can arise from time to time;

· Mr Galos was questioned about the amount of time he spends on the line – his answer was 3 or 4 times a week, sometimes for 10 minutes, sometimes an hour or more.

· Mr Gillespie questioned Mr Galos about the average coil speed in the line – in particular that coils are processed faster than every 12 minutes when the line is operating at full speed; and that heavy gauge coils do not take as long to process. When Mr Galos returned to the witness box on 8 April he provided a graph setting out normal times weld to weld (Exhibit 10). Most coils in normal operations are processed in between 5 to 10 or 11 minutes.

· Mr Gillespie questioned Mr Galos about a pre-feasibility study to increase the line speed. Mr Galos confirmed that if faster line speed were to be implemented (currently there has not been a decision to do so) this would not alter the cycle time for machine operations like the welder.

· Mr Gillespie reviewed the function of the Staff Roller, the work performed by Operator 4's in the pulpit and Mr Galos' preference that Staff Roller's have additional qualifications or skills. Mr Galos confirmed in re-examination that the Staff Rollers won their positions on merit (and some came from the "shop floor" eg Mr Griffiths.)

56 Mr Griffiths is currently a Staff Roller at the CPCM. Previously he was a shift co-ordinator and in the past he had worked in operator roles in the CPCM and prior to that the 5 stand mill. Two affidavits were tendered in respect of Mr Griffiths – the second tendered in response to evidence by the union's witnesses and given after the union's evidence.

57 Mr Griffiths' evidence in the first affidavit was to the following effect:

· The operators have proved over the years the pay off reel and welder can be operated with one man. If the operator faces problems the line can be slowed or stopped. Further the Coil Prep Operator can assist while the line is slowed or stopped;

· there are fewer track off and tear off incidents requiring manual intervention;

· a reduction in one operator in the Exit End will not impact the operation of the mill. Many of the mill functions during normal operations are/can be performed by one person eg changing strapping, roll inspections, inspecting strip edges, belly banding;

· the No 15 crane is not fully utilised over a 12 hour shift. Its main tasks are emptying scrap bins, assisting routine roll changes and transferring work rolls to the Roll Shop as well as occasional maintenance lifts – often the No 15 crane driver is in the mill comfort station or rests in the cabin. In cross examination Mr Griffiths disagreed that the No 15 crane was ever flat out except during down days (once about every 6 weeks);

· current crib breaks have come about because of excess operator capacity;

· the Staff Roller can assist with roll changes but currently there is no need to. The Standard Operating Procedures include the Staff Roller as assisting with roll changes. Entry End Operators can also assist.

58 Mr Griffiths' evidence in the second affidavit included the following:

· a summary of the production functions of the Staff Roller;

· the monitoring by the Roller in the pulpit of the various areas including pay off reel, welder, side trimmer and cold mill, walking beam and AGV's;

· the functions of the Staff Roller in the monitoring of engineering/process systems, fault finding and data analysis eg to determine the cause of strip breaks;

· performing various Shift Technical Officer functions in the absence of the STO;

· assisting with staff functions such as supervision, timekeeping, overtime, incident reports, process improvement;

· if the crew is short manned operators take two 30 minute crib breaks rather than the extended breaks otherwise taken;

· a comparison of the Staff Rollers and Level 4 Operators. Staff Rollers have more experience in the functions of their job, make more reliable entries eg in the Shift Report, give broader supervision and direction to other operators, perform higher level analysis and additional staff functions than do the Level 4 Operators.

59 In cross examination Mr Gillespie addressed the following points with Mr Griffiths:

· No 15 crane is also used for safety in case coils telescope out and fall in the pit on the mandrill. Mr Griffiths agreed this might occur but, this concerns only a small range of product (narrow light gauge material);

· No 15 crane lifts strapping off the strapping machine once per shift;

· No 15 crane assists on mill wrecks;

· the technology used at the pay off reel and welder;

· where in the Company's records was there provision for Staff Rollers to work on the mill floor? Mr Griffiths said in the Roller's Manual or Mill Manual;

· the fact that there is no need to have a Staff Roller assist on the floor, the work can be done anyway – there are no longer two men behind the mill therefore fewer hands are require.

Union Evidence

60 The Union's documentary evidence was as follows:

· Exhibit 8 – CPCM Restructuring Manning Agreement tendered by the AWU in the course of its cross-examination of Mr Galos.

· Exhibit 9 – Extract from the Standard Procedure of the Uncoated Department RAM truck/coil prep manual.

· Exhibit 12 – Document entitled "What is a QUALITY Safe Act Observation Audit".

61 The union called 3 witnesses to give evidence:

· Mr Milija Sukoski, a Level 4 Operator on the CPCM;

· Mr Angelo Iacurto, also a Level 4 Operator on the CPCM;

· Mr Chris Cotton. These witnesses gave oral evidence only.

62 Mr Sukoski gave oral evidence which may be summarised as follows:

· Mr Sukoski has worked in the CPCM since its commissioning. He worked as a Shift Raw Coil Co-Ordinator from commissioning until about 1995 when his job became redundant and he got a job as an operator;

· originally 54 operators worked in the CPCM – the number has reduced since that time to 48;

· the CPCM has not changed excepting the Pay Off Reel Operator has been relocated from where the Raw Coil Co-Ordinator now is located, to the current pay off reel pulpit;

· Mr Sukoski explained the process of the CPCM from receipt of coils into the coil field;

· the forklift is busy at all times and in Mr Sukoski's view two forklift drivers were needed all the time (Mr Sukoski later clarified in examination in chief the second driver is needed when things are busy) – currently two forklifts are utilised until about 10.30 (several hours after the start of shift). Sometimes people work overtime to assist the forklift driver;

· Mr Sukoski thought the amount of coils processed had "probably increased";

· Mr Sukoski described problems that can arise which operators must deal with eg a coil is too hot and must be removed from the walking beam (an order may be cut short as a result);

· The time to prep a coil is about a minute and a half. During coil preparation there may be a number of manual interventions (in addition to the operators roll of checking the coil for defects, removing the strap and confirming the coil in the system). He said that once every 4 or 5 coils the Coil Prep Operator would have to intervene in some way. For example the Coil Prep Operator must look out for and intervene in relation to coils not correctly centred (once or twice every 10 coils), intervene manually when there is outer damage to a coil affecting automatic operations, change tonnage information on the system, make additional manual shear cuts or oxy acetylene heavier gauge to remove "concertina" damaged coil on the outer layer of a coil (this does not happen often), removing centres from coils (perhaps once per shift);

· Mr Sukoski estimated about 2.5 to 3 minutes as the speed heavy gauge coils move through the coil prep; and about six to seven minutes for more standard gauge eg G550;

· coil sizes average 23/24 tonnes (Mr Sukoski said that when the CPCM started they were about 19 tonne);

· there is a coil on the pay off reel ready to be processed and 3 coils already "preped" on the walking beam awaiting processing after having been "preped";

· the Pay Off Reel Operator inspects coils for damage, manually retracts the table and adjusts the front of the coil if the front end will not set up properly, watches the coil for track off's and manually adjusts equipment to prevent track off's. He also empties the scrap bins using the 28 crane;

· when there are problems a slow down button is pressed in the pay off reel cabin and the roller assists by slowing the mill or it may need to be stopped;

· the welding occurs automatically but the Welder Operator must check the weld (and cut and re-level the strip if the weld is rejected so the strip can be re-welded). While it is not physical work the Welder Operators must maintain scarfing tips and ensure everything is working. The function is basically unchanged, though there are fewer tear-offs and wrecks than 4 or 5 years ago – much of the reason being the increased experience of the operators;

· Entry End crib breaks are 40 minutes each;

· Mr Sukoski thought it was excessive to reduce by one operator at the Entry End and remove a crib relief;

· the side trimmer is fully engaged each shift;

· the Exit End operations are automatic – mill operators observe, maintain the bander, inspect every 5 coils on light gauge and every 10 coils on heavy gauge, belly band 10 to 20 coils per shift (up to 200 tonnes);

· the No 15 Crane Driver empties the scrap bin (10 minutes per bin) about 16 times per day. He also assists in the crane with removal of "pup coils", roll changes (which take about 85 minutes for a full set) and perhaps other work roll changes on some stands if there is a mill wreck or other problem as well as assisting to remove materials). The No 15 crane driver does a pre-check at the beginning of shift, and transfers work rolls to the roll shop. It is also used sometimes for a coil run out on the floor. The crane also stays over small gauge coil to ensure it does not telescope. The crane does not work all shift;

· when asked by Mr Gillespie if it was reasonable for the Company to do away with the No 15 Crane Driver position, Mr Sukoski did not say that the Company could not make its proposed change but did say that he would not like to be driving the crane;

· Mr Sukoski's evidence was that when the No 15 Crane Driver is not busy he does not assist the mill crew;

· if the crane driver remains in the crane he can help very quickly if there is a problem such as something falling on someone;

· Exit End crib breaks are two 40 minutes and a 25 minute break;

· in re-examination Mr Sukoski said that improvements in weld breaks and tear offs are due to improved technology and improved operator skills;

· in relation to the Staff Roller Mr Sukoski gave evidence that the Staff Roller relieves with other staff "only on down days" – then "they help each other definitely" – he went on to confirm that when one staff member is missing they self- relieve;

· Mr Sukoski also gave evidence about what he could do when relieving the Staff Roller;

· it would assist if the Roller could help in the roll change;

· reducing positions would create strain on a lot of people and not be a wise business decision – delays and workloads would increase;

63 In cross examination, the Company addressed the following points with Mr Sukoski:

· his assessment of the number of coils coming through the entry end;

· Mr Sukoski performs all operator functions in the CPCM and his skills have improved significantly over 5 or 6 years. The crews are all (or many) trained up and now much better skilled;

· in relation to the forklift driver, Mr Sukoski agreed there is less than 6 hours help per shift unless annual leave relief are available. In any event the line does not stop because there are 14 positions on the walking beams – the forklift would just have to catch up if he got behind (eg in down time);

· the Raw Coil Co-Ordinator does not drive a forklift. Operators would not let him because they do not regard him as being part of the crew;

· the walking beam can be split to allow "prepped" coils to be processed even though no further coils are being "prepped" for example because the Coil Prep Operator is not present and is performing other duties;

· the Coil Prep Operator can leave his station to do other work eg drive the 28 crane – he could be away while 4 prepped coils are being processed before the line would stop (note - the line speed can be slowed by the Roller if need be);

· the Pay Off Reel Operator can pre-check and operate the 28 crane. The Welder operates the Pay Off Reel for the 22 minutes or so that the Pay Off Reel Operator is absent;

· When problems occur, the line can be slowed or stopped – while the problem is being fixed wherever it has occurred (Welder or Pay Off Reel) – the processing of coils (ie normal operator functions) stop. The welder can't perform his job until the Pay Off Reel fixes the problem for example;

· Mr Sukoski was questioned about the sequential nature of the process;

· at the Exit End it is all hands on deck when there is a roll change or mill wreck – sometimes people from the Entry End help though currently not often – operators accept the mill has priority;

· a small percentage of coil is light gauge;

· improvements affecting use of the No 15 crane eg the No 15 crane used to be used for coil run-outs but is no longer required, the AGV's reduce the coils required to be lifted by No 15 crane, there are fewer mill wrecks (which also utilise No 15 crane);

· subject to service from Metserv – two side trimmer bins can be emptied consecutively;

· there are fewer weld breaks, reduced non-prime, scrap is now removed by contractors not Company cranes and tension loss improvements have been implemented;

· introduction of the "flying shear cut" has reduced stoppages;

· operators will not allow Staff Rollers to help during stoppages;

64 Mr Iacurto gave oral evidence in chief including the following points:

· he worked in the CPCM from commissioning;

· from about 1989 to 1993 the Pay Off Reel Operator was located where the shift co-ordinator now is. He was moved closer to the welder so they could assist each other;

· if the walking beam is split, and the Coil Prep Operator stops prepping coils to do other work, it can sometimes be hard to "catch up";

· while the Pay Off Reel is a monitoring role, there is a lot of hands on work if problems occur – Mr Iacurto gave a number of examples including ensuring coil especially larger coils are not struck by the pillar table at the pay off area, avoiding track offs etc;

· the weld process is now slower but welds are better – and the slower run through the welder means less damage if there is a break;

· the Welders Operators are more skilful than 5 years ago and more aware of problems and how to rectify them;

· the Pay Off Reel Operator and Welder Operator work in tandem to get rid of scrap if there is damage to strip following a track off. If the front of one strip overlaps the tail of another (which does not often occur), the Pay Off Reel Operator helps the Welder with the jogging back of the strip – the Roller will slow the line down while this occurs;

· the line does not stop while the Pay Off Reel Operator is on the 28 crane emptying bins (even while the Welder is attaching the latch the line continues);

· Mr Iacurto gave evidence about the work done by mill operators when the mill is functioning;

· changing rolls is a precise operation – Mr Iacurto described his observations of the roll change process;

· after the AGVs and carousel reel, the operations reduced by a total of 4 men – one per shift;

· Mr Iacurto described his own experience as the No 15 Crane Driver – including that he is in the crane most of the shift; the No 15 crane may have to move coils if the AGV's are not operating; it is also used to stop light gauge coil "telescoping" and also after each mill wreck a coil is run out on the floor and the No 15 crane is utilised for this;

· at the moment operators will not let Staff Rollers assist on the mill (this has been the case for about 12 to 18 months to preserve operator jobs). Mr Iacurto says they never used to help anyway;

· Mr Iacurto is a Level 4 Operator and prepared to learn the jobs of the Staff Roller and believes he can train up in the role;

· when the Roller slows the mill, this is not booked as a delay;

· there has been a reduction of 2 trades assistants per shift in the last 18 months;

· Mr Iacurto alleged that the reduction in staff was the removal of an extra staff position which had been added to shift a few years ago (the SPO);

65 In cross examination, the Company addressed the following points with Mr Iacurto:

· when the line is stopped, the Coil Prep Operator cannot perform normal functions;

· track offs and tail end set up problems are occasional or relatively infrequent;

· introduction of technology to allow the flying shear cut has reduced stall breaks and high tension breaks. This helps reduce the number of roll changes and need to re-thread the mill;

· Mr Iacurto does not perform a number of the staff type functions listed by Mr Kiesel as being performed by Staff Rollers. However he would be prepared to perform the supervisory functions of the Staff Roller – with limited exceptions eg supervising absenteeism;

· If Mr Iacurto replaced an existing Staff Roller, he could help out on the floor. The current Staff Rollers are not permitted – Mr Iacurto does not regard them as part of the crew. However Staff Rollers have helped out on the floor in the past;

· Mr Iacurto conceded the Company had reduced the staff relief positions on shift. He did not know what additional functions were added to shift when the SPO commenced which remained after the SPO was made redundant several years later.

66 Mr Cotton's evidence in chief included the following:

· combining the pay off reel and welder is a disaster waiting to happen. By observing the coil at both functions avoids damage;

· though the pay off reel/welder are automated they require manual intervention about 60% of the time;

· the proposal for the pay off reel/welder area could place workers under more strain;

· heavy gauge requires constant prepping of coils;

· Mr Cotton described the operations performed by the No 15 crane, said that it does not operate all shift and is busier some days and others. Personally, Mr Cotton remains in the crane all shift;

· there needs to be a dedicated No 15 crane operator;

· reduction by one crib relief is impractical;

67 In cross examination:

· Mr Cotton agreed the Coil Prep Operator could assist in dealing with problems at the pay off reel welder but was unsure if the Coil Prep Operator could then "catch up" on heavy gauge so as to keep optimal production – there would be a cost to the Company;

· Mr Cotton was reluctant in giving evidence about the practice of others working in the crane. His evidence was that he did not observe others as he concentrated on his own job though he thought they may come down rarely;

· when the crew is not fully manned up, crib breaks are 30 minutes;

· the reason they want the Staff Rollers job is to save the job of the production crew union members. Previously Mr Cotton was not personally in favour of production employees taking over the Staff Roller functions.

68 In cross examination Mr Cotton agreed that the Coil Prep Operator can assist the Welder on the platform, and the line can be slowed if need be to give more time to allow such assistance. Meanwhile the split walking beam allows prepped coils to continue to be processed in the absence of the Coil Prep Operator.

Consideration

69 The Company contends, as a matter of general principle, that an employer has the right to manage its operations as it so decides provided that in consequence of the exercise of such a right, no unjust or unreasonable burden is placed upon employees. The AWU adds to that, and the Company accepts, that in consequence of the exercise of the employer's right to manage its operations, work practices must not be made inherently unsafe.

70 In Re John Lysaght (Australia) Limited Port Kembla - Slit Recoil Line (IRC 2374 of 1994 unreported), Hungerford J summarised the principle in this way:

A question of manning is, it seems to me, concerned necessarily with the management of an employer's business. The long settled approach to such matters by the Commission is for it not to intervene by assuming the role of the employer but rather to assess whether what the employer proposes would impose unfair or unreasonable demands on employees, including unsafe work practices. So much was acknowledged in Re John Lysaght (Australia) Limited - Port Kembla - Slit Recoil Line - Rates of Pay Award when the present award was made. Specifically as to disputes about the level of manning, I refer to what was observed in the unanimous decision of the High Court in Re Cram; Ex parte NSW Colliery Proprietors' Association Limited (1987) 163 CLR 117 at 135-137:

Many management decisions, once viewed as the sole prerogative of management, are now correctly seen as directly affecting the relationship of employer and employee and constituting an "industrial matter".

A dispute about the level of manning is a good example. It has a direct impact on the work to be done by employees; it affects the volume of work to be performed by each employee and the conditions in which he performs his work. So also with the mode of recruitment of the workforce. The competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards. Employees, as well as management, have a legitimate interest in both of these matters.

...

These considerations indicate that the objection voiced by O'Connor J in Clancy to the regulation and control of business enterprises by industrial tribunals is not a matter that goes to the jurisdiction of the tribunals. Rather it is an argument why an industrial tribunal should exercise caution before it makes an award in settlement of a dispute where that award amounts to a substantial interference with the autonomy of management to decide how the business enterprise shall be efficiently conducted.

71 In Re Steel Works Employees and Engine Drivers, etc (Australian Iron and Steel Limited - Port Kembla) Awards [1956] 855 at 859-860 Richards J observed:

The Company is entitled to decide upon and introduce its own system of working and only in very extreme circumstances would the Commission interfere with this right. In Re Iron and Steel Works Employees (Australia Iron and Steel Limited - Port Kembla) Award [1955] AR 663 at p665, when dealing with a question of manning at the soaking pits at the Company's work, the court (Richards J) said;

Prima facie, the Company has the right to manage its business in its own way and is entitled to exercise its own discretion in the manning of its plant. In order to obtain an order against the Company in relation to the manning decided upon by it in a case of this kind, the Union carries the onus of establishing that the work which the employee is called upon to perform on his shift is more than a fair shift's work under the conditions in which the work is to be performed.

In Re Dispute Between the Federated Engine Drivers and Firemen's Association of Australasia (Coast District) and the Broken Hill Proprietary Company Limited [1950] at 371 Cantor J at p372 said:

On the authorities, summarised the following is the legal position:

First, an employer has the right to manage his own business in his own way; secondly, the Commission will not intervene with this right unless it is satisfied that intervention is justified because in the exercise of this right unjust or unreasonable demands or conditions are imposed, or because the action of the employer is taken in bad faith or amounts to victimisation or oppression or the like.

However, where the Company has introduced a new system of working the Commission will readily intervene in relation to ancillary matters such as where it is shown that the manning laid down by the Company is insufficient to carry out the work required or if the working conditions are such that they warrant the awarding of specific spell time or special rates of remuneration.

72 What was said by Richards J above was later cited with approval by Watson J in Australian Iron and Steel Pty Ltd v the Federated Ironworkers' Association of Australia, New South Wales Division (No 254 of 1977) and later yet by Hungerford J in BHP Steel (AIS) Pty Ltd - Port Kembla Restructured Ironworker Classification Rates of Pay Award (No IRC 582 of 1996).

73 Similarly in the Australian Industrial Relations Commission, in Shell Company Australia Limited and Others v Transport Workers' Union of Australia Print G6298, C No 3303 of 1986 per Sweeney C, the principle was expressed thus:

The overwhelming principle involved in this matter is the long established right of management to allocate and arrange work and for the employees to respond to reasonable management requirements.

74 The company further contends and the AWU accepts, that the AWU bears the onus of demonstrating there is an unjust or unreasonable burden arising out of the proposed manning changes. In my opinion, after careful consideration, no such case has been made out.

75 The evidence reveals that since the CPCM was commissioned in 1989, manning levels have changed in the wake of improvements in operational efficiency and further that the changes in manning levels have not adversely impacted upon individual workloads such as to unjustly or unreasonably burden operators.

76 Historically when the Coupled Pickled Cold Mill (CPCM) was commissioned the manning level was 10 per crew (ie 5 operators on the Entry End and 5 operators on the Exit End) plus, as a consequence of the CPCM commissioning, 2 additional persons to provide relief for training purposes to train up operators from the "old way of operating" under 3 separate and distinct (ie the Raw Coil Store; Nos 1 and 2 Pickle Lines; and the Five Stand Mill) to the "new approach with the CPCM". In addition there was a "crane driving" role - No 15 crane - and effectively 1.5 annual leave relief per crew.

77 The Commission determined at the time that the manning arrangements were fair and reasonable (No 90/966 McMahon DP, 7 September 1990).

78 Since then, and to their credit, operators have undertaken various training modules and have thus acquired the skills necessary to enable rotation throughout the various roles in the CPCM. One consequence in addition to improved operational efficiency was that there was no longer a need to retain the designated training relief roles.

79 Additionally, in about 1996 there was a further reduction of one position at the exit end of the CPCM as a result of the introduction of the Automated Guided Vehicles (AGV), which replaced the manually operated Lorrain cars. There was also a significant reduction at that time in the loading work of the No 15 crane.

80 As the Company correctly submitted, the evidence makes it clear enough by way of summary, that over the course of the past 13 years or so, effective production manning positions have remained without significant change other than the introduction of the AGV's instead of manned cars. Originally the CPCM was a newly commissioned piece of equipment with the inherent vagaries of new equipment when it is first set up and with the difficulties faced by employees in learning the skills of operating that new equipment as efficiently as possible.

81 The evidence clearly shows that over the course of the last 13 years there have been significant operational improvements in the CPCM which allow the CPCM to run more efficiently and smoothly and to reduce the level of manual intervention required of employees.

82 The evidence is also that the employees are significantly more skilled at the operations now - hence significantly more efficient with the consequence that that the mill performance has reduced problems requiring manual intervention. AWU witnesses described improvements as resulting both from changes introduced by the Company and because employees are much more skilled in their positions. Some of these improvements are external to the CPCM. For example, the Hot Strip Mill has set higher tolerances on the quality of acceptable coil to be forwarded to the CPCM.

83 Other improvements are within the CPCM. For example, the flying shear cut which reduces roll changes, stall breaks and high tension breaks; improved scarfer tips, product changes and improved processes have resulted in less weld breaks. There has been an overall reduction in non-prime product and faults generally. Manual tasks have been reduced by for example, the introduction of robot coil labelling and banding and the reduction in mill roll changes by 50 per cent since 1996.

84 Although unable to be tested in cross-examination and accordingly afforded due weight by the Commission, the Company relies upon the evidence given by Mr Galos, Uncoated Department Manager, to the effect that mills in Japan and Canada which compete directly with BHP Steel Limited, operate with lower manning levels than the CPCM. Further, with the overall trend in the global steel market of falling prices of cold rolled full hard product, there is continuous pressure to reduce costs so as to continue to remain price competitive, particularly when faced with more difficult environments such as the US market in recent times.

85 The Company contends and the evidence in my view amply demonstrates, that manning reduction has not fallen unilaterally upon production employees but has extended across the board in the wake of improvements in operational efficiency.

86 As to the impact of the proposed manning changes on production employees, the Company argues with some persuasive force, I am bound to say, that it is insufficient on the part of the AWU to allege simply that there may be job losses. Provided there is compliance with relevant industrial instruments and laws, the Company is entitled to reduce numbers.

87 The applicable award, the BHP Steel (JLA) Pty Limited - Springhill and CRM Works Employees Award 2001 provides for steps to be followed on termination of employment due to retrenchment or redundancy.

88 In any event, the Company anticipates minimal or no forced job losses arising out of the reduction in manning:

· Mr Galos said that a number of operators have expressed an interest in redundancy payment and would be accommodated

· Employees in other departments have a similar wish and employees in the CPCM may have an opportunity of a redundancy swap to work in the positions of other employees who are offered a redundancy in place of the CPCM operators who replace them

· Operator vacancies at Springhill occur from time to time and therefore CPCM employees could be selected in some of those positions

89 A consequence of the above is that it is not planned or expected that there will be foreseeable retrenchments; although if it were to be the case that any forced retrenchment was to occur, that would not prohibit the proposed change. Furthermore, the Company asserts that it has sought to implement the proposed changes only after the prerequisite consultation processes.

90 As to the aspect of the proposed manning arrangements which involves combining the functions of the Pay Off Reel Operator and the Welder Operator, the evidence and the Commission's direct observation makes it clear that the two functions which are carried out in close physical proximity on the line, are sequential and dependent one upon the other. That is, whilst the primary functions at the Welder station are being performed, the Pay Off Reel function is not required and vice versa. The same applies by and large, although not without exception, to problem solving where the intervention of the operator at one of those stations would preclude operation at the other station for the time being. The exceptions to which the AWU witnesses referred such as coil track-off and tail out problems at the Welder are firstly, infrequent and secondly, require the Entry End of the line to be stopped in any event thus freeing up the Coil Preparation Operator for other duties.

91 Furthermore, and in the unlikely event that the Pay Off Reel station and the Welder station simultaneously required manual intervention, it is open to the Roller in the pulpit to slow or stop the line on request. The evidence reveals that if there were to be only one person performing the Pay Off Reel and Welder functions, that person would have the following avenues available for assistance on any occasions a second person may be required to deal with a problem if need be:

· The operator can immediately stop the relevant part of the line by pressing the stop buttons which are available along the line. In a rare emergency which required the mill to be stopped there are also emergency stop buttons.

· If manual intervention is required, the line will be slowed upon request - the process can be slowed down for a period of up to about half an hour;

· If required, the line can be stopped at the Entry End in which case the Coil Prop Operator is freed up to assist, since any delay slows down the processing coils through that function

· Further, the "split walking beam " allows the Coil Prep Operator to help even when the line is running. The split walk beam allows the Coil Prep Operator to leave the station for several coil cycles and then prep a number of coils quickly so as to "catch-up"

· Assistance may be obtained from available Exit End Operators where a stoppage is caused at the Entry End (or indeed annual leave relief).

92 As to the aspect of the proposed manning change at the Exit End, such change involving the removal of the designated No 15 Crane Driver position, the evidence makes it clear enough that there has been a significant reduction in the work required of the No.15 Crane and further that the crane is idle for much of the time. On one view of the evidence it may be idle for up to 8 hours per 12 hour shift. The major uses for the crane include daily mill roll changes and the emptying of the side-trimmer scrap bins. The crane is also used to assist in clearing waste product after a "mill wreck" and is positioned for safety when light gauge coil is being rolled to help avoid the coil from falling into the pit. Light gauge coil represents a very minor percentage of total production.

93 Even allowing, as the AWU evidence suggests, that scrap bins are cleared 16 times per 12 hour shift and not 9 times per shift as the Company evidence suggests, and allowing for work other than that described above such as the infrequent removal of "pup" coils after a stoppage, it is clear that there is considerable surplus capacity in the No 15 Crane.

94 The evidence further suggests that whilst some operators choose to remain aloft when the crane is not in use, others choose to leave the cabin and go aloft as and when required. Others, although trained and/or certified, do not feel comfortable operating the No15 Crane and choose to rotate between other positions on the CPCM floor. The mill floor and therefore, the Exit End operators are generally busiest when the mill is in down time for roll changes or clearance of scrap after a wreck. A breakdown or malfunction in the automatic labeller may also require additional manual intervention but it is not disputed that there may be several operators in the "comfort station" at any one time and that no manual intervention is routinely required in the rolling mill process.

95 In the event that additional assistance is required to assist at the Exit End during stoppages, the Company proposal envisages that would be available as needed from crib relief or annual leave relief positions; from Entry End operators who are not required to perform their usual functions during roll changes and other mill stoppages in more extreme cases, from the Staff Roller providing the occupant of that position at the relevant time has been trained in mill floor functions. The evidence in that regard, as I have earlier observed, is that AWU production employees maintain a threat of industrial action if the Staff Roller comes onto the mill floor to assist. I will return to that matter when I come to deal with the AWU claim in IRC 02/5150 - that the Staff Roller position (in which Level 4 Operators regularly act) should be made available to production employees to the exclusion of staff employees.

96 The final aspect of the proposed manning change involves a reduction in the present number of crib relief positions from 2 to 1, the rationale for which is derived firstly and self-evidently, from the reduction in manning from 10 to 7 per shift, this requiring less crib relief and secondly, from the practice in the CPCM whereby the existing workload enables operators to take significantly longer crib breaks than the award prescribes.

97 It should be clearly noted in that regard that the taking of such longer crib breaks than the award prescribes occurs with the full knowledge of and without criticism by the Company and furthermore, that operators take a flexible approach to longer crib breaks and respond without question if they are needed on the line.

98 The fact remains however, as the Company submits, that employees are not entitled as of right to take longer crib breaks than the award prescribes. The evidence did not disclose any contractual entitlement by which the Company may be bound in that regard nor was there evidence of express agreement or by which an agreement may be implied (see BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3).

99 Nor, as the Company further submits, is there a crystallised "custom and practice" as discussed in Byrne & Frew v Australian Airlines Limited (1995) 185 CLR 410 per Brennan CJ, Dawson and Toohey JJ at 423 and per McHugh and Gummow JJ at 440 and also in the cases cited therein. What is clear from these cases, and the AWU does not here suggest otherwise, is that mere acquiescence in a custom does not have the effect of importing such a term into the employment contract to the extent that:

Both parties know and would if asked, unhesitatingly agree to be part of the bargain (Liverpool City Council v Irwin [1977] AC 239 at 253).

100 In this case, the operators on the CPCM are required to and without question, do meet production requirements. Subject to so doing and in the process, being afforded no less than their award requirement in respect of crib breaks, operators are not prevented by the Company from staying longer at crib.

101 This is in no way a criticism of the employees concerned but nor is it an agreement by which the Company may be bound. Further, it is as I have said, a non-standard arrangement which varies considerably as between busy and non-busy times; as between the Entry End and the Exit End of the CPCM and it is an arrangement which is responsive to the additional resource demands created by unexpected absences due to sick leave, for example.

102 Clearly though, the very existence of the capacity to take crib breaks which are significantly longer than those prescribed by the award suggests as the Company rightly submits, that there is a degree of "overmanning". For all of that, it is not envisaged by the Company that the proposed manning changes will have the effect of limiting CPCM employees to the award prescription with respect to crib breaks and there has been factored into the proposed changes an ongoing but somewhat reduced capacity for CPCM employees to generally be able to take 2 x 30 minute crib breaks per 12 hour shift which is still in excess of the award prescription (see cl 13.3.2 BHP Steel (JLA) Pty Ltd - Springhill and CRM Works Employees Award 2001 331 IG 1257). If strict compliance with the award was observed, a crew of 7 operators and the Roller would require crib relief for 5 hours 20 minutes per 12 hour shift (8 employees x 20 minutes per break x 2 breaks per shift) which clearly is capable of being provided by one relief position with time to spare. If as the evidence reveals, 30 minute crib breaks are factored into the proposal then relief is required for a total of 8 hours crib time per 12 hour shift which again appears well within the capacity of one position to provide.

103 The Company proposal envisages, in those circumstances, the crib relief position being available as a second set of hands to assist the forklift driver in transporting coils from the outside raw coil storage area to the walking beam at the start of the shift. In the event that there is a certain amount of coverage lost by reducing crib relief to one position, assistance will be available from the existing annual leave relief positions in respect of which no reduction is proposed to cover for leave and thus additional available capacity for other duties. Assistance will also be available, as it is presently, by means of interchange as between the Entry End and Exit End personnel and if needs be, although the evidence and submissions indicate that the proposed manning arrangements do not depend on this, the Raw Coil Co-ordinator position which is not presently attached to the CPCM crew, would be called upon to assist with forklift duties on the day shift. The Company submits that this would be an efficiency improvement and warrants that the rate of pay for the Raw Coil Co-ordinator position which is not presently attached to the CPCM crew, would be called upon to assist with forklift duties on the day of the shift. The Company submits that this would be an efficiency improvement and warrants that the rates of pay for the Raw Coil Co-ordinator position would be increased commensurately with the additional forklift operating responsibilities.

104 For its part, the AWU seeks to resist the proposed manning changes on the basis that unfair and unreasonable demands on employees would be made and that employees would be placed in unsafe positions on a regular basis. The AWU does not challenge the Company's right to manage, albeit to manage within reason.

105 The AWU contends that the Company's assertions of progressive improvement in operating procedures and plant are not borne out by the evidence, a proposition which I am bound to say with respect, must be rejected on the evidence as I view it. This is particularly so when it is considered that the AWU witnesses by and large accepted when taken to it in cross-examination, the improvements relied upon by the Company and to their credit they added, in significant dimension, a raft of improvements brought about by increases in their own skills and expertise since the CPCM was commissioned more than a decade ago.

106 True it is, as the AWU submits, that there was some contest in the evidence as to the frequency and regularity of occurrences or events on the line and where there were such contests they were adequately resolved, in my opinion, by concessions on the part of Company witnesses where appropriate or by reference to computer generated records in other cases. I do not consider that the Company evidence suffered as the AWU submits by reason of insufficient time spent by incumbents in one or another of the supervisory/management positions when compared with the time spent by AWU witnesses in their respective positions. Nor do I consider the Company evidence to be deficient, as the AWU submits because of limitations on the timing, duration and frequency of direct observations of the workings of the line.

107 The plain fact is, when the lengthy technical evidence - vigorously tested on both sides of the record save as to Mr Galos's evidence as regards overseas mills - is broken down and evaluated, that there is remarkably little difference between the parties in many respects. It is not to the point that the line may not run as efficiently with the manning proposed although a significant amount of forensic energy was directed by the AWU towards establishing such a possibility. The rejoinder to that proposition, however, must be that any risk of increases in stoppages or lost productivity attributable to reduced manning is in a sense a risk which the Company must bear and the enquiry undertaken by the Commission must be limited to whether the manning changes proposed by the Company would or would be likely to impose unjust or unreasonable demands on employees or render their working environment inherently unsafe. On balance, I am unable to so conclude and will accordingly make the orders sought in IRC 02/2806.

108 Turning then to proceedings in IRC 02/5150, the proposition for which the AWU contends is that existing staff or non-production employees be removed from the Staff Roller position in the pulpit and that position be reserved into the indefinite future for production employees. The AWU seeks to have the position renamed Pulpit Operator presumably to reinforce the notion that incumbency is the sole preserve of production employees.

109 Presently, Level 4 Operators relieve from time to time in the Staff Roller position as do staff employees and in the past, Operators have been appointed substantively to the position as have staff employees. Importantly, the Staff Roller is seen to be a member of the 3-person Shift Management Team (SMT) and may be called upon to relieve other members of the SMT namely the Shift Co-ordinator or the Shift Technical Officer as required.

110 There can be no question on the evidence that the Roller position is critical to the efficiency of operation of the CPCM and that high levels of skill and technical expertise are required in the performance of the Roller functions. Additionally, there is a requirement for the Roller to monitor absenteeism, leave and timekeeping issues; to be involved in sign-off and call-ins for overtime; to be involved in disciplinary issues and management of production and maintenance of employees and to undertake performance reviews. The evidence as to the present workplace practice was that Operators choose not to carry out certain of those administrative or supervisory functions when relieving in the Staff Roller position and that operators generally will not permit the Staff Roller to come down from the pulpit and assist on the mill floor during stoppages. This measure, I apprehend, has been employed in defence of production workers jobs which are seen to be at risk if staff employees are permitted to carry out such work.

111 The AWU by its evidence and submissions warrants that any such self imposed work limitations and/or bans would be lifted if the Commission were to grant the relief it seeks. The AWU further submits that given the opportunity, production workers can be trained up in the total range of skills required of the Roller position.

112 For its part, the Company does not dispute as a general proposition, that production and/or maintenance employees with appropriate levels of skill, experience and training can and demonstrably do carry out the Roller functions in an exemplary way. The company however, asserts its right and I may observe here that it does so persuasively, to choose persons for appointment as Rollers from the skill base and qualification base which best suits the position. Having done so to date, the Company strenuously resists any order or direction by the Commission which may constrain or prevent it from so doing into the future.

113 In that regard, the Company relies upon the well-established principle that arbitral tribunals will not deprive an employer of the right to choose its own employees unless a clear case of industrial injustice exists. The principle was discussed by the Federal Court of Australia Industrial Division in The Corporation of the City of Burnside v The Municipal Officer's Association & Anor (1985) 10I R 313. In that case at pp 321-323 Keely J said this:

The employer's right may be affected by an award clause which requires him to give preference to members of a union and thereby limit the class of persons from whom the employer may choose, but the employer nonetheless retains the right of selection of the particular employee for appointment or promotion. Under awards giving 'preference", neither the selection of the employee nor the decision as to whether a potential employee is "suitable", is a matter assigned to a Board of Reference for "determining" as a "matter...which, under the award, may from time to time require to be...determined...by the Board" (s 50 of the Act).

The principle of not interfering with the employer's right to select his employees has often been enunciated by the Commonwealth Court of Conciliation and Arbitration, by Conciliation Commissioners and by members of the Arbitration Commission in making awards and giving decisions under the Act. An early application of the principle is recorded in the Merchant Service Guild case (1916) 10 CAR 214 at 228 where Higgins J, in his reasons for judgment under the heading of "Promotions and Vacancies", said:

I need not repeat what I have said in previous cases as to the practice of this Court to avoid interfere with the discretion of the employers in the choice of employees...I want to leave the employer's hands free in the selection of the suitable men for positions to be filled...

Beeby J in the Australian Tramway Employees Association case (1925) 25 CAR 597 at 605 applied the same general principle.

The principle has had quite general acceptance and has been applied in State Tribunals. A Full Bench of the NSW Industrial Commission, constituted by Piddington, Street and Cantor JJ, in Winsor's case (1929) 28 AR 9NS) 235 at 236 said:

To deprive an employer of his right to choose his own employees and appoint them to the positions in his employment which he regards as proper is, of course a serious matter, and the mere fact that the Commission might disagree as to the wisdom or propriety of any particular appointment or dismissal by an employer is not in itself sufficient to justify intervention on the part of the Commission.

That passage was quoted by Commissioner Tonkin in Federated Gas Employees Industrial Union v Australian Gas Light Co (1955) 81 CAR 628 at 629.

Although the principle was first expressed in the early years of arbitration, it has been repeatedly applied in the years since World War II. The principle was succinctly stated by Commissioner Chambers (as he then was) in Utah Construction Ltd v Transport Workers Union of Australia (1954) 78 CAR 733 at 735:

This is perhaps an occasion which it is desirable to restate the principle, well established and followed by Judges of Commonwealth and State Arbitration Courts and Conciliation Commissioners, that management's right to 'hire and fire' should not be interfered with unless a clear case of industrial injustice exists.

(See also the Five-Day Working Week case (1945) 54 CAR 34 at 35 for an application of the same general principle by a Full Court, consisting of Piper CJ, Drake-Brokman, O'Mara and Kelly JJ).

It may be noted that the principle was applied even during the war years when the Court, in addition to its normal powers under the Act, exercised wider powers under the National Security (Industrial Peace) regulations. Those regulations were based upon the view that it was necessary for the efficient prosecution of the war that "peace in industry" in war-time did not lead to interference with the employer's right to choose his employees and to select those for promotion. In Minister of State for the Navy v Federated Ship Painters and Dockers Union of Australia (1943) 51 CAR 31 at 36 O' Mara J said:

...those who are responsible for the conduct and management of the Naval Establishment must have the right to select their supervisors and must be maintained in that right. It is for them to apply their own standards in selecting supervisors...The Court is not entitled to give effect to its own opinion as to what is considered desirable in supervisors.

In Minister of State Munitions v Arms Explosives and Munition Workers Federation of Australia (1943) 50 CAR 66 Mr Commissioner Mooney said:

This court has frequently laid down as a principle that it will not interfere with the internal administration of an employer's business,...(a matter) that should clearly be left to the discretion of the employers is the selection of employees for promotion.

The Management has the right to select a person for promotion from the employees of the undertaking wherever employed.

The judgment of a Full Court in Municipal Tramways Trust, Adelaide v Australian Tramway and Motor Omnibus Employees Association (1955) 85 CAR 312 related specifically to the question whether a Board of Reference should be given the power to interfere with the rights of management. A Commissioner's decision had conferred "a right of appeal to a Board of Reference from any decision by the management by virtue of which an employee loses two days pay or more or has been demoted or dismissed." In allowing an appeal against that provision Kirby, Dunphy and Wright JJ, in a unanimous judgment said (at 329) that:

...it is a matter of principle that the right of an employer to manage his own business should not be encroached upon by an award of an industrial authority unless there is clear proof of injustice in his dealings with his employees.

The principle that Arbitration Tribunals will not interfere with an employer's right to "hire and fire" his own employees unless a clear case of industrial injustice exists - applied by so many distinguished judges and arbitrators over so many years - was not cut down or impinged upon in any way material to the present proceedings by the decisions of a Full Bench ion 1973 in inserting a preference clause in the Clerks (Oil Industry) Award. The Commission (Moore and Aird JJ and Mr Commissioner Holmes) pointed out (150 CAR 387 at 391) that the section in the Act, great care had to be used in applying what had been said in those earlier cases granting preference on that limited basis.

There was nothing in the Full Bench decision which was inconsistent with the general principle of non-interference with an employer's right to "hire and fire".

114 In this case and as the Company is quick to point out, if the AWU claim were to be granted, a manifest industrial injustice would be done to staff and/or maintenance employees presently occupying positions of Staff Roller who would be displaced in favour of production employees for no reason other than that production employees wish to lay exclusive claim to the position. On the evidence as it stands, no such order could be made in my opinion consistently with the objects of the Act which among other things, are to be provide a framework for the conduct of industrial relations that is fair and just (s 3(a) of the Act). I am compelled to refuse the AWU claim and do so accordingly.

115 Before leaving the matter it might be quietly observed that questions of manning having now been determined there should no longer be a threat of industrial action accompanying the offer of assistance on the mill floor by the Staff Roller during stoppages. It seems to me on the evidence that such offers would firstly, be made only by those Rollers with mill floor training and experience and competence in carrying out the prerequisite functions and secondly, that such offers would be necessarily limited to occasions when the suitably trained and experienced Roller is not otherwise engaged in work of higher priority.

116 The following direction is made by the Commission pursuant to s 136(1)(a) of the Act:

Production employees employed by the Company in the Coupled Pickled Cold Mill (CPCM) in the Uncoated Department at the Company's Port Kembla Operations shall perform such work as the Company shall from time to time reasonably require and in particular, for the time being:

(a) there shall be seven production employees (inclusive of inbuilt crib relief) employed on each shift to perform all work associated with the CPCM operations provided that there is a minimum line operating crew of production employees while the plant is operating and;

(b) ancillary to the line manning is the Raw Coil Co-ordinator, whose primary function is to manage feed stocks for the line and who will also assist in unloading of rakes and other forklift work in peak times as required provided the Raw Coil Co-ordinator is to be paid appropriately according to the work performed.

117 The directions shall take effect from the date of this decision.

LAST UPDATED: 04/07/2003