TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s29 application for hearing of an industrial dispute

Australian Mines and Metals Association (Incorporated)
on behalf of BHP Temco
(T7997 of 1998)

and

Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union

and

Construction, Forestry, Mining and Energy Union, Tasmanian Branch

and

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

and

The Australian Workers' Union, Tasmania Branch

and

Transport Workers' Union of Australia, Tasmanian Branch

Industrial dispute - threatened industrial action - performance payments - arbitrated

REASONS FOR DECISION

This was an application for a dispute hearing made under section 29(1) of the Industrial Relations Act 1984 (the Act) by the Australian Mines and Metals Association (Incorporated) (the Association). The Association was in dispute with The Australian Workers' Union, Tasmania Branch, the Construction, Forestry, Mining and Energy Union, Tasmanian Branch, the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Transport Workers' Union of Australia, Tasmanian Branch (the Unions) over a provision of the TEMCO Workplace Agreement 1996 (the Agreement).

The Association represented the Tasmanian Electro Metallurgical Company Pty Ltd of Bell Bay (TEMCO) in the dispute.

The disputed provision of the Agreement was in Clause 14 - TEMCO Alloyshare Plan, which specified four separate incentive payment schemes:

The dispute involved item 2, the Production Performance Component, the stated objective of which was to recognise all employees' contribution to improved production.

Subparagraph (2)(a) of the Production Performance Component clause in the Agreement provided:

The threshold levels are for finished product tonnes greater than 10 mm.

A final, unnumbered paragraph in the same clause of the Agreement headed "Review of Performance Payment Threshold" provided:

The Unions claimed that TEMCO had changed and increased the "threshold levels" outside the terms of the Agreement. TEMCO said that the terms of the Agreement, especially those set out in the ultimate paragraph of the Production Performance Component clause, clearly envisaged and provided for such changes.

There were four furnaces and a Sinter plant at the Company's Bell Bay works. Each furnace and the Sinter plant were set an annual production target in tonnes (Budget) based upon annual projected sales (June-May).

For the purposes of the Production Performance Component the Company set the "threshold levels" at 93 percent of the annual production target for each unit.

For example, if the annual production target for one unit was set at 1000 tonnes, the "threshold level" of production for that unit would need to reach 930 tonnes before Production Performance Payments would commence to accrue.

The Unions claimed the Company was manipulating the "threshold levels" contrary to the provisions of the Agreement.

The catalyst for the dispute was the fact that for the quarter ended 31 August 1998, three production units (furnaces 1, 2 and 3) had failed to reach the changed threshold levels and, as a result, no payment was due.

The Unions also submitted that there had been very little consultation and no notice that changes to the threshold levels were to be made. The Company said that the Unions had been well aware since late 1997 that changes were possible and intended. The Company pointed out for example that the threshold levels for furnace 3 had been changed without objection because it had been upgraded and yielded greater production. The Company said that if the Agreement clearly allowed for threshold level changes because of plant or technology changes, it also clearly allowed for the "threshold level" changes resulting from the setting of business plan targets (Budget).

The Company endeavoured to show with evidence that the Unions had been notified and consulted before the threshold levels were changed.

DECISION

This is the second occasion that a dispute has been brought to the Commission over the interpretation of a particular provision in the Agreement. Whilst this dispute does not concern the same subject matter as the previous dispute (T7061 of 1997) some of the Commission's comments in the decision on that previous dispute are apposite and I will restate them because I consider them to be just as relevant in this case.

In this case I consider that the words of the Agreement, specifically those quoted earlier in this decision, from Clause 14 on page 16 of the Agreement, under the heading "Review of Performance Payment Threshold" whilst not as clear as they could have been, nevertheless provided for a review of the "threshold levels". I also accept the submission of the Company that a provision for a review definitely implies a consequent "change to the threshold levels": again the Agreement could have been more specific in this regard, but, the meaning is clear enough for the Commission to decide the matter.

Accordingly, I am satisfied that the Company, when it changed the Performance Payment Thresholds for the 1998-1999 Budget, following a review, acted within the meaning and intentions of the Agreement and I so order.

P A Imlach
COMMISSIONER

Appearances:
Mr W J FitzGerald of the Australian Mines and Metals Association (Incorporated), with Ms L Van Jager and Mr G Hannan, for BHP Temco
Mr P Baker, with Mr D Salzberger, for Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union
Mr G Cooper, with Mr C Hinds and Mr C Hogan, for Construction, Forestry, Mining and Energy Union, Tasmanian Branch
Mr R Flanagan, with Mr G Dawson, for The Australian Workers' Union, Tasmania Branch
Mr K Becker, with Mr A Dawson, for Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Date and place of hearing:
1998
October 8
November 11
Hobart