C2001/3719, Transcript of Proceedings [2001] AIRCTrans 1685 (24 July 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 8289
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER TOLLEY

C2001/3719

LURGI CONSTRUCTIONS

and

AUTOMOTIVE, FOOD, METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION
and OTHERS

Notification pursuant to section 99 of the Act
of a dispute re application of excess travel
time and kilometre payment

MELBOURNE

9.00 AM, MONDAY, 9 JULY 2001

PN1

MR C. BURSTON: I appear for Lurgi Construction and with me is MR J. BARRON, Operations Manager, Commissioner, and MR S. LOHR, the site manager. Also joining us will be from Murray Goulburn, MR I. BIRD.

PN2

THE COMMISSIONER: And where is he, Mr Burston? You don't know?

PN3

MR BURSTON: They should be a few moments away, parking the car. We apologise, Commissioner.

PN4

THE COMMISSIONER: Yes, thank you, Mr Burston.

PN5

MR D. NOONAN: I appear for the Construction, Forestry, Mining and Energy Union. With me in the Court today is MR M. O'CALLAGHAN, who is the delegate for the CFMEU at the site.

PN6

MR M. SOLLY: I appear on behalf of the Australian Manufacturing Workers' Union and my delegate, MR P. DORADO.

PN7

MR D. McCLUSKEY: I appear on behalf of the CEPU.

PN8

MR T. GRAY: I appear on behalf of the CEPU Electrical Division.

PN9

THE COMMISSIONER: Why are you sitting back there, Mr McCluskey?

PN10

MR McCLUSKEY: Because there wasn't another seat.

PN11

THE COMMISSIONER: Well, there is a chair there. You get up to the bar table. Yes, Mr Burston.

PN12

MR BURSTON: If the Commission pleases, first of all some background, Commissioner. Lurgi Construction has a contract with Murray Goulburn Co-Operative Company Limited to construct a new milk powder plant next to its client's existing milk processing plant at Koroit, some 15 kilometres inland from Warrnambool, in south-western Victoria. The plant will produce powdered milk, largely for export markets when it is finished. It is important to note that Murray Goulburn is in fact a co-operative. Its shareholders are some 3500 Victorian dairy farmers and their families. Lurgi is the principal contractor and project manages construction of the building that houses the processing equipment and its installation.

PN13

Lurgi uses its own employees to carry out some portions of the work and uses subcontractors to perform other aspects such as the installation of dryers and associated plant. Lurgi's client, Murray Goulburn Co-operative, is currently extending its existing plant at Koroit right next door using some of the subcontractors that Lurgi also uses. Last year the unions and Lurgi Construction negotiated an agreement titled the Lurgi Construction Agreement 2000/2001 for Murray Goulburn milk processing plants to cover the work on the site. The negotiations were completed 20 December 2000 and we expect to lodge the agreement with the Commission shortly for certification. The plant extension work being managed by Murray Goulburn is covered by the same agreement which includes a straightforward four step avoidance of disputes procedure at clause 20 and if the Commission pleases, I would like to hand up a copy of that disputes procedure.

PN14

THE COMMISSIONER: A1.

EXHIBIT #DISPUTES PROCEDURE DOCUMENT

PN15

MR BURSTON: Both parties during the negotiations aim to have the work proceed smoothly and saw the negotiation of the agreement as a major step in ensuring this would happen, realising that this was necessary to encourage further investment in the region. Turning to the dispute, this alleged dispute is over management's rejection of a claim by the delegates that the excess travel time and kilometre payment that is provided for in the National Building and Construction Industry Award, clause 38, and the MECA Award at clause 8C for travel from sites inside the 50k radial area to sites outside the 50k radial area should also apply for travel to and from a residence that is located outside the 50k radial area. In other words, from home up to where the radial area cuts the road and back again.

PN16

The claim was raised originally at a meeting between management and the AMWU, CEPU and CFMEU delegates and local officials some weeks ago. The company indicated it would pay the claim if it was an award entitlement, but needed to seek advice to ascertain if this was the case. Tuesday, 3 July, Lurgi site manager, Steve Lohr, told the AMWU and CFMEU delegates the company had rejected their claim because it had been advised that the claim was not an award entitlement and not covered by the awards' provisions. A mass meeting then resolved to withdraw labour from approximately 10.30 that day and to return to a meeting at 7 am Wednesday, 4 July.

PN17

The AMWU and CFMEU delegates met with the site manager at approximately 7.15 on Wednesday, 4 July while all the employees waited at a mass meeting. The site manager advised the delegates the company's rejection of the claim stood and asked that employees resume work before further discussions took place. Delegates rejected this request, claimed management had reneged on its agreement to pay the travel and re-joined the mass meeting which then resolved to strike until another meeting on Friday morning, 6 July.

PN18

Friday's meeting I am very glad to say did resolve to return to work and employees did so at approximately 9.30 after a safety audit or safety walk had been conducted across the site. The industrial action didn't just include Lurgi and subcontractor employees, but also employees from the contractors performing plant extension work for Murray Goulburn at the operational plant which, as I mentioned earlier, is right next-door.

PN19

This action has cost three days construction time and if it continues it will not only delay completion of the project and the employment of some permanent operational people, but also puts at risk the income to the farmer shareholders, not to mention the wages lost to some of our 93 construction employees and 32 contractor employees who are working on the plant extension next-door.

PN20

We therefore seek the Commission's assistance in resolving this matter and we also, in the interests of seeing the progress on the job continue smoothly, request that it issues a strong recommendation that all parties adhere to the disputes procedure in dealing with any future issues. If the Commission pleases, it may be appropriate to adjourn into conference after the other parties have responded. Thank you, Commissioner.

PN21

THE COMMISSIONER: Mr Noonan.

PN22

MR NOONAN: Commissioner, my knowledge of this dispute, I should say at the outset, is second-hand and comes from instructions from Mr Stewart who is unable to be here today, the area organiser, and from my colleagues from the other unions. My instructions are, Commissioner, that the issue that has led to a dispute in this case is that the company has on my instructions on three occasions agreed that the excess fares for travel is applicable to some employees at the site and has subsequently reneged on that agreement, and whilst our union takes seriously disputes resolution procedures, we say that in this case the situation is that the company's reneging on the agreement has led to a great deal of anger at the site level from the employees.

PN23

Commissioner, we have got a number of arguments that we will put or can put as to the applicability of the particular clause within the site agreement. On the brief instructions I have had, my understanding is that the site agreement contains a provision in respect of living away from home allowance at clause 18.

PN24

THE COMMISSIONER: Has anyone got a full copy of the site agreement?

PN25

MR NOONAN: I do have a copy, Commissioner, but I don't have a spare copy.

PN26

THE COMMISSIONER: Mr Burston has got one. We will mark that as A2, Mr Burston.

EXHIBIT #A2 COPY OF SITE AGREEMENT

PN27

THE COMMISSIONER: Which clause did you say it was, Mr Noonan?

PN28

MR NOONAN: My understanding, on brief instructions, clause 18 at page 12, and I think that the - I would take the Commission's attention to (ii) which falls under clause 18. The clause is titled Living Away From Home Allowance, but it has an impact on these discussions.

PN29

THE COMMISSIONER: Yes.

PN30

MR NOONAN: Specifically, Commissioner, in respect of clause 18, 18(ii) provides - and I will read the clause:

PN31

The parties agree that employees paid the living away from home allowance will relocate to a residence no further than 50 kilometres from the site. If the employee chooses not to relocate closer than 50 kilometres from the project site, then the living away from home allowance and any additional amounts for fares and travel will not apply.

PN32

On my instructions, there have been discussions about the provision of the MECA award in respect of fares and travel, and what had been put by the unions was that essentially the provisions of MECA in respect of those employees who live between 50 and 100 kilometres from the project should be applied. I understand that there are a number of people at the site who fall into that category, as would be customary in a large project in regional Victoria.

PN33

Commissioner, my understanding is that the company have rested on 18(ii), which I have just read into transcript, as a reason why these employees should not receive the benefits of the MECA Award. What we say about that, Commissioner, is that in fact the MECA Award applies only to people who originally live more than 100 kilometres from the site - well, I withdraw that. Clause 18(ii) applies only to employees who have an entitlement to the living away from home allowance, and persons that I described before who live between 50 and 100 kilometres away do not necessarily have an entitlement to the living away from home allowance.

PN34

The situation there is that the Metal and Engineering Construction Award does deal with a set of provisions for people in that circumstance. It is acknowledged that that clause differs from the National Building and Construction Industry Award clause. The claim was advanced and, on my instructions, accepted on a number of occasions, but that the company later reneged.

PN35

In terms of any recommendation, Commissioner, the unions are concerned about a recommendation being made on the basis that we have somehow done the wrong thing in this case. The situation is that the dispute procedure in its last line commits the unions to making every endeavour to ensure that work continues normally whilst the processes are followed. The unions have done that, but in a context where agreements are reneged on, it becomes very difficult for union officials to ensure that work does continue normally.

PN36

That is perhaps all I can add on the transcript at this point, Commissioner. Could I say at this stage we are opposed to any recommendation being made because we think that it actually would, if you like - and there is no criticism of the Commission intended in this - but it would be to in fact prejudge what has happened here.

PN37

We are, however, of the view that it would be useful to have a conference with the company, chaired by the Commission as presently constituted, to see if we can progress this matter further. If the Commission pleases.

PN38

THE COMMISSIONER: Yes. Anyone else? We will adjourn into conference.

SHORT ADJOURNMENT [9.15am]

RESUMED [12.26pm]

PN39

THE COMMISSIONER: The parties have had some discussions over the last several hours and have informed the Commission they have got something put together that they have asked the Commission to recommend for acceptance. Mr Burston, read it out.

PN40

MR BURSTON: Commissioner, in settlement of the dispute the parties have come up with the following arrangement. In settlement of the dispute at the Murray Goulburn site at Koroit during July 2001, the parties have agreed to the following payments in the radial zones beyond 50 kilometres, and a series of dot points.

PN41

* 50 to 60 kilometres - $37.

PN42

* More than 60 to 70 kilometres - $47.

PN43

* More than 70 to 80 kilometres - $57.

PN44

* More than 80 to 90 kilometres - $67.

PN45

* More than 90 to 100 kilometres - $77.

PN46

These payments are inclusive of, the first dot point:

PN47

* Daily fares and travel

PN48

* Any excess fares and travel provisions in the parent awards as listed in the site agreement that relate to employees within the 50 to 100 kilometre zone.

PN49

This settlement is without prejudice to the parties' rights at any other site.

PN50

THE COMMISSIONER: Mr Noonan.

PN51

MR NOONAN: The report that Mr Burston has given and what he has just read out is an agreed position with the unions and it is our position - I am speaking on behalf of you - - -

PN52

MR ..........: Yes.

PN53

MR NOONAN: It is the position of all the unions that are present here today that the position will be recommended to a mass meeting of members of the unions on-site tomorrow morning and we are very hopeful that it would be accepted. If the Commission pleases.

PN54

THE COMMISSIONER: Well, I congratulate you on your common sense. The Commission also recommends the acceptance of the outcome and the Commission makes the point - and you are to make the point at the report-back to whoever is there - there will be no more breaches of the disputes procedure. The Commission is adjourned. Good afternoon.

ADJOURNED INDEFINITELY [12.31pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #DISPUTES PROCEDURE DOCUMENT PN15
EXHIBIT #A2 COPY OF SITE AGREEMENT PN27