C2001/1867, Transcript of Proceedings [2001] AIRCTrans 1906 (10 August 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER WILKS

C2001/1867
C2001/1868

CONSTRUCTION, FORESTRY, MINING
AND ENERGY UNION

and

WARKWORTH MINING LIMITED

Notification pursuant to section 99
of the Act of a dispute re training

Application under section 170LW of the Act
for settlement of dispute re training

SYDNEY

10.05 AM, WEDNESDAY, 25 JULY 2001

Continued from 30.4.01

PN191

MR K. ENDACOTT: I appear for the Construction, Forestry, Mining and Energy Union, Mining and Industry Division, and further appearances are as they have been on the previous occasion. If the Commission pleases.

PN192

MR R. DALTON: To the extent I need to, given previous proceedings, I seek leave - - -

PN193

THE COMMISSIONER: No, you do not need to seek further leave, Mr Dalton, leave has already been granted. You have Mr Quinn and - how is that pronounced?

PN194

MR DALTON: Mr Gerdes for the company.

PN195

THE COMMISSIONER: Mr Gerdes appearing with you.

PN196

MR DALTON: Yes, Commissioner.

PN197

THE COMMISSIONER: Right. Yes, Mr Endacott?

PN198

MR ENDACOTT: Thank you, Commissioner. This matter is set down for hearing over the next three days and certainly we intend to proceed with the hearing of this matter. The Commission would have before it, on behalf of the applicants, three statements, that of a Mr Jordan, Mr Kelly and a Mr March and would also have our outline of contentions. It is not the intention of the applicants to make any general submissions prior to commencing evidence other than I would expect the Commission has read the outline of contentions.

PN199

THE COMMISSIONER: Yes.

PN200

MR ENDACOTT: I would wish to say no more than that. The process that we propose is that we will call witnesses in the order of Mr Jordan, then Mr Kelly, then Mr March. Certainly our evidence in the main and almost in its totality is as set out in the statements but there are a couple of additional points, basically issues that have been identified in the - - -

PN201

THE COMMISSIONER: All right. Mr Endacott, on the previous occasion Mr Dalton made reference to the jurisdictional matter and there was some discussion about whether the jurisdictional issue should be dealt with separately and as a threshold matter prior to hearing any evidence about the merits.

PN202

MR ENDACOTT: Yes.

PN203

THE COMMISSIONER: I determined on that occasion that we would deal with the jurisdictional matter and the merits in the same proceedings. What do you have to say about the jurisdictional issue? Mr Dalton will no doubt want to put submissions to me about the jurisdictional question in relation to which you, of course, will have a right of reply and Mr Dalton will have a right to respond to what you have to say.

PN204

MR ENDACOTT: Yes.

PN205

THE COMMISSIONER: That is the opposite process of the matters dealing with merits where you will put your case, Mr Dalton will put evidence in response and you will have an opportunity to respond. How do you propose to deal with those two sets of processes?

PN206

MR ENDACOTT: Well, we propose, Commissioner, I think this is the same process as we proposed on the previous occasion, is that we would bring the evidence before this Commission and then make submissions on jurisdiction.

PN207

THE COMMISSIONER: Okay.

PN208

MR ENDACOTT: Mr Dalton proposed that it should happen as a threshold issue first and if I recall, my submission was that we will push to bring evidence about the manner in which the disputes clause was developed between the parties - - -

PN209

THE COMMISSIONER: And that is a matter that goes to the merits as well, is it not?

PN210

MR ENDACOTT: Yes, it is. And as a result you would be aware that there is evidence in the statements from Mr Jordan and Mr Kelly about discussion surrounding the process, intentions and otherwise and I think the company has also brought some evidence about that process and we would say not until that evidence is heard would the Commission be able to make a decision on jurisdiction.

PN211

THE COMMISSIONER: All right. I will just hear from Mr Dalton on that subject and then we will get on with it. Yes, Mr Dalton?

PN212

MR DALTON: Given that there is some evidence from both parties in relation to the disputes clause I am content, given that the jurisdiction and merit is to be heard this week together, for the submissions in relation to jurisdiction to be as part of the overall submissions on both jurisdiction and merit at the appropriate time. I would just say, just for clarification, I think the evidence in relation to the disputes clause does in fact only go to the jurisdiction because it only relates to whether the Commission has the power to arbitrate on the matter. The merits, I think, is contained in the rest of the evidence. If the Commission pleases.

PN213

THE COMMISSIONER: All right. Thanks, Mr Dalton. Well, Mr Endacott, I come to you. You intend to call Mr Jordan first, is that right?

PN214

MR ENDACOTT: Yes, I do. Prior to calling Mr Jordan, I would like to just indicate that there was some discussions between myself and Mr Dalton about what would happen to other witnesses while evidence was being given and I think it was an agreed position that other witnesses would leave the surrounds of the Commission until such time as their evidence had been concluded.

PN215

THE COMMISSIONER: I am not sure that I require them to leave the surrounds of the Commission.

PN216

MR ENDACOTT: Well, certainly not within earshot of the Commission.

PN217

THE COMMISSIONER: I do not want to send them to Surrey Hills, Mr Endacott, but I am happy for them to leave the court room.

PN218

MR ENDACOTT: Yes.

PN219

THE COMMISSIONER: So if you intend to call Mr Jordan, any other witnesses ought to repair to the either the lobby or the coffee shop from where they can be summoned when the time comes.

PN220

MR ENDACOTT: Prior to putting Mr Jordan in the witness box, Commissioner, I would just like to tender into evidence, if the Commission feels it necessary, our outline of contentions.

PN221

THE COMMISSIONER: Very well. I will mark that E1.

EXHIBIT #E1 OUTLINE OF CONTENTIONS

PN222

MR ENDACOTT: I now call Peter Jordan.

<PETER JORDAN, AFFIRMED [10.10am]

<EXAMINATION-IN-CHIEF BY MR ENDACOTT

PN223

THE COMMISSIONER: Yes, Mr Endacott?

PN224

MR ENDACOTT: Thank you. Mr Jordan, do you have a statement that you have prepared that constitutes 71 paragraphs and 25 attachments marked PMJ1 to PMJ25?---Yes, I do.

PN225

Thank you. You indicated that there was a couple of minor corrections you wish to make to the statement?---Yes, there is just a couple, Mr Endacott. If I may just take the Commission to that?

PN226

Yes?---In paragraph 42, six lines from the bottom, the line commencing:

PN227

Company's new positions - - -

PN228

There shouldn't be an "s" on the end of the word, "positions."

PN229

Right?---Paragraphs 52 - basically the second last line, Commissioner, the word, "work," needs to be deleted. That line should read:

PN230

Flexibility in the allocation of employees and of work.

PN231

The first word, "work," is to be deleted. Paragraph 52, the second line, I use the word, "on," and I think the correct word should be, "an." It should read:

PN232

The vote occurred at an all shift meeting.

PN233

Yes?---The next page on the top line towards the end of the line, the word, "the," should be, "that," therefore the sentence should read:

PN234

This was not the first time that it had been.

PN235

Yes?---And down in paragraph 56, the third last line, the last word in that line, the word is, "in," and it should, "is." And the next line it reads:

PN236

A copy of statement.

PN237

It should have the word, "the," in there, "the statement," and further along the same line it says:

PN238

And a copy the transcript.

PN239

It should have the words -

PN240

of the transcript.

PN241

Yes?---And the last one, Commissioner, is paragraph 68 and the second line, the use of the word, "procedures," is incorrect. It should just read:

PN242

Was to operate so that disputes could be settled.

PN243

Yes?---Other than that, I understand that that's my statement.

PN244

Well, I asked you to swear and affirm - do you swear and affirm to the accuracy of that statement?---Yes, I do.

PN245

Thank you.

PN246

THE COMMISSIONER: Do you tender that statement, Mr Endacott?

PN247

MR ENDACOTT: Yes, I tender that statement, Commissioner.

PN248

THE COMMISSIONER: I mark that E2.

EXHIBIT #E2 STATEMENT OF MR JORDAN

PN249

MR ENDACOTT: As I indicate, Commissioner, the statement forms almost the totality of all the evidence. There is a couple of additional points of evidence I wish to take - - -

PN250

THE COMMISSIONER: Yes, you could take the statement as read, Mr Endacott.

PN251

MR ENDACOTT: Yes, thank you.

PN252

Mr Jordan, could you indicate to this Commission the tensity or otherwise of the industrial environment that occurred at the site during the negotiation of the certified agreement?---I would describe - the tense situation was, if there was any tense situation, then it was in the very early part. The very early part being actually prior to the commencement of the negotiations. There was a period of time in and around October '98 that was very tense. We were still under the previous certified agreement, it was the period of debate between the CFMEU and the company regarding them offering or endeavouring to offer to employees AWAs. At the time it became, to the union's knowledge, that an individual on the mine site, a member of the CFMEU, had taken up the option of an AWA. During that period of time I would describe the discussions between the union and the company as very tense. At the period that the negotiations actually commenced in and around the turn of the year, I would describe the negotiations as a normal negotiation between the union and the company that was carried out without any threat of industrial action and almost all negotiations at some times raised themselves to a level of heated argument, I would certainly describe the negotiations as never being tense. In fact, I would describe them as being of a normal occurrence between the union and Warkworth management.

PN253

Was there any industrial action taken over the negotiation of the agreement after post negotiations commenced?---No. The parties had agreed on a structured - what I would describe as a structured process or means to arrive at a new certified agreement. It was basically an arrangement that the parties entered into. In fact, it was put into writing by the company and accepted by the union and its members that we would not threaten or undertake industrial action, bans or any other type of persuasive action to bolster our position in negotiations, conditional upon that the company would not continue to make available or offer AWAs to employees. So the parties had reached that agreement. It was recorded in writing and for the full period of negotiations, both the parties honoured that written commitment through until we reached the outcome of our certified agreement. So there was no lost time. In fact, the time that the union did meet as a union for report backs and votes or whatever else we were required to meet for, was by the approval of management and as agreed approved union meetings.

PN254

Okay. You mentioned that the understanding was put into writing?---Yes, it was.

PN255

If I take you to PMJ9 of your statement?---Yes, I have that.

PN256

Is that what we are talking about?---Yes.

PN257

THE COMMISSIONER: Where do I find that, somewhere in the body of this document? Is that the handwritten - no, it is not.

PN258

MR ENDACOTT: No, it is the - your copy is probably not tabbed.

PN259

THE COMMISSIONER: I have it. I have it.

PN260

MR ENDACOTT: Yes. It is dated 28 October '98.

PN261

THE COMMISSIONER: Yes, thank you.

PN262

MR ENDACOTT: How many employees accepted an AWA, to your knowledge?---One.

PN263

Can I take you to the certified - I ask you to recall the certified agreement negotiations, the ones that occurred about March, 15 March 1999?---Sorry, could you repeat - - -

PN264

I asked you to recall the certified agreement negotiations, predominantly the meetings that occurred about March 1999, I think 15 March is - - -

PN265

THE COMMISSIONER: Is there a particular paragraph in Mr Jordan's statement?

PN266

MR ENDACOTT: Yes, paragraph 40.

PN267

THE COMMISSIONER: Forty?

PN268

MR ENDACOTT: Yes. Commencing at paragraph 40.

PN269

THE COMMISSIONER: Yes.

PN270

MR ENDACOTT: This was the meeting at which the company's flexibilities document was tendered, which is PMJ15, and you put in evidence at 41, and I take you to the third last sentence in that. It says:

PN271

The company finally agreed -

PN272

and Mr Davis said words to the following -

PN273

We understand that staff have to come out. If we press for staff to do your work we won't have an agreement.

PN274

So at this point it was just a principle position. At that meeting, did the company ever indicate that it had any intention of revisiting the staff either through the agreement process or outside it?---Never in that meeting or any other subsequent meeting that I was involved in or in any other discussion that I actually had with the general manager, Mr Davis.

PN275

In any of the report backs that you attended with the employees that the company was in attendance, was that ever raised by the company that they could revisit the staff doing production and engineering employee's work or would revisit it?---It's my clear understanding that at no time in any joint meeting with the work-force was that ever indicated to the work-force that management may wish to or would revisit that issue. In fact, it was mine and every other union representative's clear understanding that when we reached agreement with this company, particularly the senior managers, in this case Mr Davis and Mr Hedges, that when we reached agreement on any issue, particularly this issue, then once we agreed to it, based on the most important part of our negotiations being the vision of the certified agreement, relied upon the parties living up to their commitments but particularly being honest and applying integrity in every respect of not only throughout the negotiations but after the negotiations were completed. So from any side once an agreed arrangement was arrived at, both parties would expect the other to live up and honour what was the agreed situation, and in this case, when the company removed from any flexibilities within the certified agreement that included no staff performing any role of production or engineering work, it was with a clear understanding that it was agreed by all parties that that would be the case for the life of the agreement, and, in fact, was what was carried through and presented by both parties on 16 August, which was the presentation and vote of the certified agreement. The situation had never changed.

PN276

Did the company ever use the wording in any of the discussions that it was only "backing off" the position of staff doing production or engineering work?---I can't ever recall the use of the words "backing off". In fact, I on behalf of the union made it very clear to the company in the very early parts of the negotiations when it was presented to us, their intention to have it part of the agreement that there would never be the ability of the union to deliver an agreement with that. That was reaffirmed by not only the delegates but all of our members and it was of no surprise to me when the company, in my own view, very easily decided that that should not be part of the agreement. What they did insist upon when there was not to be any staff play a role in production or engineering was, they were adamant that there be some flexibility agreed between the parties regarding production and engineering employees and ultimately we had ended up deciding upon, that the agreement did provide the ability for an engineering employee to perform functions within production work and, in fact, it could work vice versa where perhaps a production worker could perform a role within engineering subject to what is called the "skill principle" that is recorded within the certified agreement.

PN277

And so what would have happened, in your experience, if the company had informed the employees that this was a temporary issue of - - -

PN278

THE COMMISSIONER: Yes, Mr Dalton, of course it is speculation.

PN279

MR DALTON: Well, it is. I guess it was framed based on his experience, but I am not sure how it is going to be relevant given that it is speculative.

PN280

THE COMMISSIONER: Yes. I do not know that the question is relevant, Mr Endacott. I mean, firstly, it is speculative and secondly, the fact of the matter is that the agreement was put in the terms that it now contains and, presumably, was adopted by a valid majority of the employees, otherwise it would not have been certified. I mean, I am not sure what the relevance of the question is?

PN281

MR ENDACOTT: Well, the relevance of the issue is that the company has in its statement - - -

PN282

THE COMMISSIONER: If you want to put to Mr Jordan the question as to whether or not he would have accepted, or put to his members an agreement which contained provisions allowing for staff to perform production and engineering work, that is a different question.

PN283

MR ENDACOTT: Would you have put to the employees an agreement that once in force would have not - would have permitted staff employees to do production engineering work?---I wouldn't have put forward that because it was quite simple, my instructions from - as a district official, as well as my instructions from my members were that such a provision within agreement was totally unacceptable and no agreement was possible for it to be endorsed by a majority of our members, so it was simply a waste of time and it's my role as an official, along with my delegates, to make sure that we deliver what is a possible outcome, and that was one that both myself and my delegates knew was never possible at Warkwork, in fact, I'm convinced that that was also the management's view.

PN284

Okay; I have no further questions.

PN285

THE COMMISSIONER: Yes, thanks, Mr Endacott. Mr Dalton?

<CROSS-EXAMINATION BY MR DALTON [10.30am]

PN286

MR DALTON: Mr Jordan, I think as you say in your statement you have been an organiser with the CFMEU for at least eight years; is that right?---Since '93, the CFMEU.

PN287

Okay, and before that were you with FEDFA in an organiser capacity - - -?---No.

PN288

- - - or was it some other role?---No, it was in the same type of capacity since 1986.

PN289

So how long have you been acting as a representative of mine workers in the coal industry?---Since approximately 1989.

PN290

Okay, so it is fair to say that you are a highly experienced negotiator on industrial matters in the coal industry?---Yes.

PN291

And you have particular experience in relation to industrial matters in the coal industry in the Hunter Valley?---That's correct.

PN292

And you would be very familiar with industrial terms and conditions, in particular in more recent years the content of certified agreements across the Hunter Valley in the coal industry?---Reasonably familiar with most of those.

PN293

And, in fact, when you negotiate certified agreements you are familiar with what other companies have been prepared to concede on and what matters the CFMEU has conceded on?---Generally the case, yes.

PN294

And all those matters are relevant for you in working out what position the CFMEU is going to take in the new enterprise bargaining situation?---Subject, of course, to meeting the needs of a particular job in respect to our membership which can vary from job to job.

PN295

Absolutely, and I mean, that is the nature of enterprise bargaining?---That's correct.

PN296

Now, I do not need to tell you that there are two key instruments that govern the terms and conditions of employment of the mine workers; do I? Perhaps I can just say - - -?---Yes.

PN297

- - - just to clarify; I mean, obviously, there is the Coal Industry Award?---That's correct.

PN298

Yes, and then there's, I think in virtually all cases there would be a certified agreement operating on top of that and it may well be operating in conjunction with the award?---That's correct.

PN299

So it is fair to say that they are the two key instruments that would apply at any coal mine that you have responsibility for?---Yes.

PN300

Yes. And you are also very familiar with the - well, with the idea that while they are the two key instruments they do not cover everything that affects the employment relationship, do they?---They're the two that I'm familiar with.

PN301

Just listen to my question: of course, you are familiar with them, but you also know, do you not, that while they may be comprehensive instruments they do not cover everything that affects the employment of the people that you represent?

PN302

THE COMMISSIONER: For example, Mr Dalton?

PN303

MR DALTON: Well, you are familiar with the concept of custom and practice, are you not?---Yes, I am.

PN304

Yes, and you would acknowledge that there are a number of things that operate through custom and practice that may not be mentioned, or certainly may not be mentioned in the industry award as simplified, and may not be mentioned in the certified agreement?---Yes.

PN305

And, in fact, you have had plenty of experience negotiating on behalf of your members in relation to disputes about custom and practice in circumstances where these two key instruments are silent on that particular matter?---Yes.

PN306

Yes, and you would have to accept, would you not, that over the years custom and practice has been a very important part of the coal industry?---It plays a role in most work places, yes.

PN307

Yes, but in the coal industry, and particularly the Hunter Valley, in the areas that you have been responsible for over the years, you would accept that custom and practice is a very important aspect of the industrial relationship?---I said yes, but it would vary from job to job.

PN308

Yes, okay. Now, were you involved in the negotiations for the Warkworth 1996 Certified Agreement?---Yes, I was.

PN309

And were you involved throughout it and until certification?---Yes, I was.

PN310

So you are familiar with what was in the 1996 certified agreement?---I can reasonably recall it, yes.

PN311

Yes. I am not asking you to recite it word for word for me, but you are familiar with the results of that agreement?---Yes, I am.

PN312

Now, that does not have a clause, the 1996 agreement, that did not have a clause which either specifically prohibited, or specifically allowed the company to train all you staff on production engineering gear, did it?---I'd have to go back and have a look through it.

PN313

Okay, but as far as - well, do you recall that being included in the agreement?---The agreement sometimes referred to particular clauses as prescribed in the industry award, for example, the dispute procedure, as I recall in '96 agreement I don't think was set out, or wasn't prescribed within the document, that is the Warkworth Agreement. It simply had words that referred you to the award clause - - -

PN314

Choice, yes?---It was drafted in that type of term. So I'd have to go back and have a look through the document to recall - to be able to answer your question.

PN315

All right. Well, can I ask you the question in relation to the award: there is no provision in the award that either specifically permits, or specifically prohibits the use of staff on production and engineering gear, is there?---No, I'm not aware.

PN316

So I would suggest to you that at the time when you started the negotiations for the 1999 certified agreement and I think your evidence is that negotiations started pretty much in October 1998?---I think the negotiations were closer to Christmas, if not after. There were initial meetings about, I guess, stating expectations and that but the real negotiations started in and around Christmas time.

PN317

Okay. So from Christmas time 1998, the position in relation to the use of staff on production engineering gear, I am suggesting to you, was custom and practice, that is that there was a demarcation between staff and production engineering work and that that demarcation had existed for a long time by virtue of custom and practice?---Well, I have never heard it said to me by management or anyone else at Warkworth, that it was because of custom and practice that staff weren't used. I have never had that said to me.

PN318

But that is not the question I have asked you. I am putting to you that at the time that you were negotiating the 1999 certified agreement which you say is in Christmas 1998, that the position on this issue, the subject of this arbitration, was that it was dealt with in custom and practice, it was not specifically dealt with in either of the two key instruments that we have talked about, the award or the 1996 certified agreement. That is true, is it not?---That's true.

PN319

Yes, so I think at paragraph 16 of your statement you talk about 27 October 1998 meeting where Mr Craig, who was the General Manager of the company at the time, first raised this issue of total flexibility. That is right?---That's correct.

PN320

Yes, and your understanding of this concept of total flexibility and I do not think there is any argument from the company on this is that what the company was seeking was some specific provision in the certified agreement that would break down that demarcation between staff and production and engineering work so that if staff were competent to do a production and engineering task and if the company wanted them to do that then they could ask that staff person to do it. That is the effect of what the company was seeking, was it not?---That's correct.

PN321

So it is true, is it not, that what the company wanted to do was to change the custom and practice which had that demarcation by including a specific provision in the new certified agreement which broke that demarcation down?---Yes.

PN322

Yes, and your evidence, and I think the evidence from Mr Kelly, is that the CFMEU position on this was you are vehemently opposed to the inclusion of any such clause in the new certified agreement?---Vehemently opposed to staff operating production and engineering gear - full stop.

PN323

Full stop, and you certainly were not going to agree to inclusion of a clause that specifically allowed that to happen, were you?---That's correct.

PN324

So from day one, late October 1998, you fed that viewpoint back to the company negotiators, did you not?---That's correct.

PN325

And I think through your statement you refer to some attachments, there is PMJ13 and PMJ14 - I do not need to go this in any detail, Mr Jordan, but they are attachments where you are showing that the company has continued to push this total flexibility issue into the 1999 year in negotiations so they are still pushing the issue in February - I think is PMJ13 and even after that time. That is right, is it not?---That's correct.

PN326

And every time you were saying, "No, we will not agree to a clause that breaks down that demarcation"?---Again we weren't talking about a clause, we were simply saying there won't be a certified agreement with the CFMEU if it involves staff being involved in production or engineering work.

PN327

Okay. All right. So come 15 March, it is fair to say that the company has raised the issue of total flexibility fairly and squarely on a number of occasions since October 1998?---In late '98 it was raised in the initial meetings that it was one of the company's expectations.

PN328

Yes?---It didn't get discussed in detail until it later surfaced in the early part of '99 when we got down to the actual issues.

PN329

Yes?---So there were several months we didn't get into those particular issues but then when it came back, as you said, in February it was in the same form of what had originally been proposed back by Mr Craig in October.

PN330

And the company had made it clear to you that they wanted a provision in the certified agreement which allowed them to use staff in the way that they were suggesting?---They certainly wanted to include it in the agreement.

PN331

Okay. And your response could not have been clearer - the answer was no?---Our answer was, "No," to the point about having them involved in any production or engineering work. It wasn't the question of the clause.

PN332

Okay. So your rejection was on two fronts, as it were. It was we are opposed to change to the custom and practice on that demarcation - full stop - and we are opposed to that being allowed in the certified agreement?---We were opposed to having staff perform any role in production or engineering and therefore to have a certified agreement with the CFMEU, it could not have a provision within the certified agreement allowing for it.

PN333

Permitting it, yes, okay. And that message was put quite clearly to the company certainly by February 1999?---Yes, it would have been.

PN334

Okay. So come 15 March when the company tables this flexibility document that is attached to PMJ15 in your statement, the company knew in advance of that meeting that you were not going to agree to the document that it had tabled?---No, I go right back to October when we spent several months clearing the deck of the ability of the parties to negotiate anything. In fact Mr Craig made it clear that for a successful negotiation to be carried out at Warkworth then all parties should be allowed to put anything on the table and that the other party should respect the other party and allow it to be discussed out.

PN335

Okay. Well, perhaps I can phrase the question a little differently. It would be fair to say in light of the negotiations that we have talked about that when the company tabled its proposed flexibility document on 15 March that it would have occurred to them the likely outcome of that was that you would require changes to that document?---Well, they did table documents before 15 March that regarded flexibility.

PN336

Yes?---The 15 March document was one more in detail.

PN337

Yes?---There was earlier versions.

PN338

All right. Can we go to PMJ15. Now, in your statement you say on 15 March:

PN339

This document was tabled to the negotiators.

PN340

All right?---Correct.

PN341

You and your other union negotiators presumably had an opportunity to read through that document and then your response to it was"

PN342

That there's no way we can agree to the document in the form that it's in. That the references to staff have to be taken out.

PN343

Was that - is that what happened on the 15th?---That's correct.

PN344

Yes. Your handwritten changes, just so I am clear on this, were they made on 15 March or on the next meeting on the 17 March when there was more detailed discussion about the wording of the document?---Well, they would have been done on the days we talked through the document, but it does not necessarily mean that all of those changes were made on that day.

PN345

Okay. So there was discussion about the document and some changes that you were wanting and then I think your evidence is that on the 17th there were further discussions about the changes and then I think on the 18th the company tabled the amended document, which is PMJ16 to your statement. Is that a fair sequence?---Yes, that's fair.

PN346

Okay. Now you will see in the document there is a lot of reference to home bases. Now it is going to be the evidence of the company that the flexibilities document was prepared to address the concerns that the union had raised in the negotiations to that point about the potential impact flexibilities might have on particularly production workers who did not have trade skills in the context of selections for redundancy; is that right?---An initial concern raised by the unions as a reason why there was concern about engineering employees obtaining production skills is that in the event of a redundancy they may become more favourable for the purposes of maintaining a job ahead of a guy who perhaps only had one or two production skills. It was certainly an immediate concern of union delegates.

PN347

Yes?---As we discussed the issue of breaking down the work between production and engineering employees.

PN348

That is how this concept of home bases, which was recorded in this flexibility document, came about?---No.

PN349

Okay. Well, could you explain what happened?---Home bases was actually proposed by the union as a way to record it during our discussions previous, which would have been previous to the 15 March document.

PN350

You had, in fact, introduced a similar concept at another mine that you had done a negotiation for, had you not?---That's correct.

PN351

So in the same context that home bases to address this issue of breaking down some of the old demarcations; is that right?---You're right. The company was wanting to break down the barriers, as you outlined earlier, using your experience - using my experiences from elsewhere proposed how we had dealt with such a similar thing elsewhere and therefore encouraged discussion in and around the use of the phrase "home bases".

PN352

Okay?---There was a number of phrases "home-work areas" etcetera, etcetera. Eventually the phrase "home bases" was landed upon.

PN353

Can you explain to the Commissioner just in a nutshell what home bases was and how it addressed your concern?---Well, the experiences we were using was that you looked at the layout of your operation in respect to Warkworth. It was considered there was three work areas, which were to become home bases. One was the mine relating to production. One was the mine relating to maintenance, which included both mechanical and electrical and a third one being the washery, which was commonly referred to as the CHPP, as the three agreed work areas which became three home bases for Warkworth.

PN354

If you came from there originally, for the purposes of any sort of selection process, you would look at where the person's home base was, that is where they came from originally, irrespective of where they might be working at the particular time the redundancies were required; is that right?---Except for looking at - that the washery or the CHPP may have had a different outcome but generally, yes.

PN355

Okay. The flexibilities document that was tabled on 15 March was trying to encapsulate those concepts in writing, was it not?---That's right.

PN356

This sort of document was, leave aside the content of the document for the moment, just the process, the tabling of this written document to try and encapsulate a home-bases concept was consistent with the process that you - negotiators had agreed upon for dealing with enterprise-bargaining issues in that you take on an issue, negotiate it and if an agreed position could be reached you would try and document that in writing to close off on it and it was to be put to one side and not to be revisited. However, you did not finally agree on it until it was part of a complete package, which would be the enterprise agreement. Is that a fair description of the agreed process?---Well, I guess only to say that the negotiators, both company and union, may agree in principle that they're in agreement prior to the actual presentation or package being finalised. It was all subject to being signed off by the work-force

PN357

Of course. But it was the approach of the negotiators that taking on a major issue like flexibilities and home bases, it was important to document the agreed position so that the parties were clear on what they were agreeing to and once that was done it was put to one side and you would move on to the next issue. So it was - the flexibilities document was a document tabled to try to document and finalise an in-principle agreement on the issue of flexibilities?---Except to say that we didn't just tackle one issue in isolation, we would be dealing with several issues but - - -

PN358

Of course?---- - - the ones in principle we had agreed, yes, it was then put aside and we continued on with the others.

PN359

Yes. That was a sensible course to adopt to try and record in writing the agreed position to avoid any arguments or uncertainties about exactly what was the agreed position, given that you moved from issue to issue and negotiations often take several weeks or several months before a certified agreement is reached?---Close to 12 months, generally, but I go back to, as I understood, what the parties had set out to do was - there was four particular issues that had to be signed off on and unless we were able to, basically, in principle - reach agreement in principle on those four issues - - -

PN360

Those key items?---- - - then all of the others were worthless to start our efforts on because neither party was going to sign off to a new agreement without those four key issues being behind us.

PN361

As an experienced negotiator, you knew the value in recording in writing these agreed positions if agreement could be reached, rather than waiting right at the end to draft up a certified agreement?---Well, that's correct. There is a number of means for recording things. We had our own notes.

PN362

The document such as the tender document of exhibit 15, that later became an agreement document, but more importantly the one thing I always relied upon at Warkworth was the integrity of the parties not to change so you didn't only have to rely upon notes, the integrity of the parties, in my involvement in all the years at Warkworth were - you knew what each party had agreed on, you lived up to your commitment and you didn't go back on it.

PN363

And being an experienced negotiator, I am sure you can recall times where parties have walked away thinking that they are in agreement but they have a different idea as to what was agreed and then that has to be revisited?---At Warkworth?

PN364

Or generally?---That certainly has occurred to me but I wouldn't apply that in these negotiations at Warkworth.

PN365

Okay. But I guess your experience of that would surely serve you as a reminder that it is always important to take good notes in negotiations?---I know you come to - for example, I may talk a lot in a negotiation throughout a day's meeting could be for six to eight hours in a meeting of course with breaks.

PN366

Yes?---A lot of my notes, as is for example a manager who might be exchanging discussion with me, aren't sitting at the table recording word for word what you are talking about.

PN367

I notice that - - -?---You rely upon a lot at the end of the day in principle of what you have agreed at the end of the day.

PN368

Yes, but you have people who you ask to take detailed notes of what is discussed in a meeting, do you not?---We have different people taking notes, that's correct.

PN369

Yes, and I think based on the evidence that has been tendered by the union in this matter, Mr Kelly seemed to have the main responsibility for recording the notes of what took place in these negotiations?---Mr Kelly in his role as the secretary would endeavour to record to the best of his ability the position, yes.

PN370

Okay. And did you read through his notes at the time or did you just look back on them as and when required?---No, generally the process at Warkworth was that the next morning generally we would have two and three days together but - the next meeting I should say - the union would have a period of an hour or sometimes longer to themselves. We would review amongst us, as a group of delegates, the discussion of the previous meeting, we would share our notes from all delegates, sometimes whiteboard those types of issues in preparation for management in joining us later and I would understand that management conducted themselves in that similar way. Management would be off in another room doing the same type of thing and we would generally come back together, maybe an hour or two after we had been by ourselves and it was usual practice at Warkworth that we would both somehow review our understandings from say, the previous day or previous meeting.

PN371

All right. So the notes that have been attached to Mr Kelly's statement, for example, you would have looked at around the time that they were made, for example a day or two afterwards?---Yes, we would.

PN372

Okay. All right. So on 17 March these changes are discussed and the key changes that we are dealing with, the dot-point 3 which is the - you asked for a change for the general reference to personnel to be changed to production and engineering employees?---That's correct.

PN373

Yes, and on the fifth point, this home bases point to delete the reference to staff?---That's correct.

PN374

Okay?---And a note that in (c) there was to be the reference of mine maintenance being broken up into both mechanical/electrical.

PN375

Right. Okay. But that is a production engineering streams issue?---Well, the concern was there that, of course, from mine maintenance was - some people may have viewed it that we had, for want of a word, amalgamated those two traditional areas of work and I think the view of the delegates were that a mechanical fitter just can't become an electrician and therefore there needed to be the reference that engineering was broken up into those, for want of a phrase, two substreams.

PN376

All right. Now, can I take you to paragraph 41 of your statement. Turn to page 11, I want to refer you to this quote that you attribute to Mr Davis:

PN377

We understand that staff have to come out. If we press for staff to do your work we will not have an agreement.

PN378

Okay. Now, the company witnesses, as you may be aware if you have read their statements, do not accept that that was said however, Mr Hedges thinks that something fairly similar to what you have put there in the first part of that quote may have been said, that is:

PN379

We understand staff have to come out.

PN380

He thinks something along those lines might have been said and the company are saying that because the discussion was evolving around changes to the document that Mr Davis may well have said something like, "We understand staff have to come out," or, "We understand staff have to come out of the document." Is that possible?---Well, as I understand we would have been discussing the document at the time.

PN381

See you recognise that there is a difference between a comment like, "We understand that staff have to come out of the document," versus, "We understand that staff have to come out if we press for staff to do your work, we won't have an agreement." Do you see what I mean by that?---No, I don't understand what you mean. I clearly just understand that they were words to the effect that Mr Davis used as we would have been sitting down, going through the document of 15 March, a comment made by him in his position at the time as when we have basically agreed that we are going to put a pen through the word staff.

PN382

That is right. And I think that Mr Hedges agrees with you that something along those lines was said so that the company said, yes, we understand.

PN383

THE COMMISSIONER: So the point you are making, Mr Dalton, is that the company was proposing that reference to the staff be deleted from the document, however, the company, presumably the witnesses will assert, that at no stage did that mean that the company would not use staff in that way.

PN384

MR DALTON: That is right. It is the effect of what was said there.

PN385

THE COMMISSIONER: Whereas the statement Mr Jordan attributes to Mr Davis is contrary to that?

PN386

MR DALTON: Well, we can argue about the effect of what was said but yes, I think that that is obviously going to be one of the matters, Commissioner. Now, on 17 March you say that there was some discussions - going through the bullet points and making the changes to the document and you say that the company explained this would mean that only the P and E employees would perform the work in their work areas?

PN387

THE COMMISSIONER: Which paragraph is this?

PN388

MR DALTON: This is paragraph 42. It is a very large paragraph. Mr Jordan, do you see that there? You refer to the quote which is the change to the third bullet point?---Yes.

PN389

You say what the company was prepared to change the wording to and then after that you say:

PN390

The company explained this would mean that only the P and E employees would perform the work in their work areas. This reflected the company's new position under the new site agreement that P and E employees did the work within their work areas, not staff.

PN391

Now, the company does not accept that it said anything to that effect, and I am suggesting to you that it is possible that you took what they said to mean that, but they did not actually say, "We agree that staff will not do work on production and engineering gear"?---Absolutely not.

PN392

You do not accept that that is possible?---Look, I have an absolute clear recollection that a very lively debate for hours and hours around the table and the training centre at Warkworth from every delegate in the room, including management, left the room on the day of the 15th, the 17th and the 18th, that staff would not play any role in production and engineering work for the life of the new certified agreement, provided we got an agreement.

PN393

Yes. That may well have been the clear understanding of the union negotiators. What I am suggesting you is that you may have walked out thinking that, but the company did not actually say those exact words. What the company said, "Yes, we agree that staff will come out of that document"?---No, I disagree, for the reason work mentioned earlier. Mr Davis on a number of occasions used to actually ask me in front of all the other representatives, "How have you dealt with this issue elsewhere, Peter?" "Can you give us your experience." And the one earlier referred to where the home basis came from was where we resolved this very same issue and in fact Warkworth followed suit in every way that we did it that mine as well, and Mr Davis clearly understood that that mine and his mine were not about to use staff in production and engineering work. That was the clear outcome, as presented by Mr Davis.

PN394

Which mine was that, Mr Jordan?---Drayton.

PN395

Sorry?---The Drayton mine.

PN396

Drayton. And are you able to recall any clause in the Drayton agreement which provides that the company cannot train or use staff on production and engineering gear?---There's a document recorded between the parties and presented in certification as to what staff do at the Drayton mine - - -

PN397

Really?--- - - - and it shows that they do no work of a production or engineering nature unless it is of an incidental and peripheral nature that is recorded in this document

PN398

All right. Now, you would accept that there is a difference between, firstly, the company retreating from its original position that it wanted the certified agreement to allow the use of staff on production and engineering gear on the one hand and on the other hand the company agreeing that it will not use staff on production and engineering gear?---Retreating is the word you use. Their retreated position was that they knew they weren't going to have an agreement with the CFMEU if it involves staff. They knew they had to convince their work force that staff would not play a role for the life of that agreement to have it endorsed. That was the company's position, that's what they told the negotiators, and in fact, went on and told the work force on 16 August.

PN399

So you say the company did the second thing that I put to you, that is, that they did not just retreat from their claim to have something in the certified agreement that allowed the use of staff. They actually went further than that and agreed that staff would not be used on production and engineering work for the life of the agreement. That is your evidence, is it not?---That's my clear understanding.

PN400

Okay. Well, why? I have got to ask this question, particularly in light of that you have said in relation to Drayton. Why - someone like yourself who has had 15 years experience as a negotiator. Why on earth is there no reference to that agreement in the flexibility document as amended, as set out in PMJ16? Would you like to go to that document, PMJ16?---Right.

PN401

Are you able to point the Commission to any of those dot points which says the company agrees that it will not use staff on production and engineering gear?---Not in that document.

PN402

No?---But I can in the agreement.

PN403

Well, we will get to the agreement in a moment. Now, can I ask you why, as a skilled negotiator, you did not insist on the company including in that document a dot point which said, "Staff will not be used on production and engineering gear for the life of this agreement"?---There was nothing in the earlier agreement, and this agreement - there was no reason to record it in this agreement for two reasons. One is there was a negotiation that clearly represented the integrity or the supposedly integrity of the parties, and secondly a provision within the agreement that recorded that the parties would honour the commitments that they made during the negotiations for the life of the agreement.

PN404

Yes, but the company says - - -?---The parties were satisfied that the commitment given by the company not to use staff in P and E work was accepted by the negotiating team.

PN405

The correct position to put, is it not Mr Jordan, is that you may have walked out thinking that the company gave such a commitment? The evidence of the company is that it did not give that commitment?---The evidence of the union is that they did.

PN406

Okay. Then why is it not recorded in writing in the flexibilities document?---Well, I just answered that.

PN407

See the integrity envisioned says that, "Yes, the parties will stick by what they agreed to." The company's evidence is it did not agree to it, so it is important, is it not, to record things down in writing so that the parties are clear on what they have actually agreed to, is it not?---And we did.

PN408

Well, where is it, Mr Jordan? There is no reference in the flexibilities document?---I've already answered.

PN409

So apart from - - -?---I told you why it's not in the document.

PN410

Okay. So you are saying that the only reference to this issue - to this agreement that you say the company gave you not to use staff is the vision and the references to integrity; is that right?---If you're suggesting to me that the company agreed to retreat and take out of a document during the negotiation, and then on the other hand are sitting there saying that they have honesty and integrity based around that the parties had to - had to have completed and agreed to a vision and then conduct themselves in every respect to that vision to arrive at an end point in all of the hard issues, including flexibility, that they were sitting there and being dishonest throughout the negotiation. But that is what I think you're suggesting to me.

PN411

No I am not. What I am suggesting to you is that the company retreated from its claim and decided that to get the certified agreement up it had to leave the demarcation of staff versus production and engineering back to where it always was, which, on your own evidence which you have accepted, was custom and practice; that is right, is it not?---This company knew from day one - - -

PN412

Just answer the question. That is right, is it not?---Repeat the question.

PN413

The company retreated from its claim and the affect of that was that the matter was back to where it always was, which on your own evidence you have accepted, was custom and practice?---My evidence was that it was never ever raised in all my years at Warkworth that staff did production and engineering work.

PN414

Yes?---In fact it was never raised that it was custom and practice that they didn't, it was just a non-issue at the Warkworth mine.

PN415

Mr Jordan, you have said earlier that it was custom and practice. You are not saying now that it was not custom and practice, are you?---They were your words. If you wish to want to put it that it was custom and practice that it don't then I'll agree with you. My evidence was that we didn't talk about whether it was custom or practice. The company simply put forward, in my own view, an ambit claim to get what they really wanted.

PN416

They did not get it, did they?---They got exactly what they wanted. What they wanted is recorded in the document. They wanted flexibility between the production and engineering employees in the workplace at Warkworth like the other operations had been getting in negotiations with the CFMEU. That was the bottom line; that's what they wanted; that's what they got.

PN417

Right, now, you have you accepted earlier in your evidence that the position at the time of the negotiations - so prior to reaching the 1999 certified agreement, the position on this staff working on P and E gear issue was that it was enforced by the union through custom and practice? It was not allowed - - -?---Never had to enforce it.

PN418

Okay, well, I would suggest to you that is not the case?---My evidence - - -

PN419

That, in fact, there has been examples at Warkworth where staff have been used, for example, on a loader moving some debris off a track and that has resulted in industrial action; are you able to confirm that that is the case?---No, I'm not.

PN420

Okay, but you are certainly aware, as a negotiator in the Hunter Valley over the years, that there has been plenty of examples where staff has been used to do any production engineering work, there has been an immediate industrial reaction by your union?---I couldn't say on all occasions, but there would have been industrial action, yes.

PN421

Yes, and I am suggesting to you that that is how the demarcation was enforced. It was not enforced under the award because there was not any provision in the award prohibiting the use of staff on production engineering gear and there is no provision in your certified agreement, 1996 agreement at Warkworth that prohibits it either, so the reason why staff were not used is because the company decided not to do it and not to press the issue because of the likely industrial action by your union if the company chose to do it. That is a fair statement, is it not?

PN422

THE COMMISSIONER: But is not the import of your earlier question, Mr Dalton, that the company retreated from its position in insisting that reference be made in the agreement to staff performing this work not be insisted upon by the company because it was the company's intention to revert to custom and practice; is not that the import of your earlier question?

PN423

MR DALTON: That is right, Commissioner.

PN424

THE COMMISSIONER: And the company was happy to revert to existing customs and practices which were that staff did not perform the work; is not that the import of it?

PN425

MR DALTON: Well, I do not think it is - I actually do not think that that is the issue that I am dealing with at the moment because custom and practice can, of course, be changed, so it does not really matter what the company - whether the company thought it would press staff at that time, or some time in the future, or never at all.

PN426

THE COMMISSIONER: Right. Mr Dalton, I want to take a 10 minute adjournment.

PN427

MR DALTON: Yes, Commissioner.

PN428

THE COMMISSIONER: We will resume at 11.30.

SHORT ADJOURNMENT [11.25am]

RESUMED [11.40am]

PN429

THE COMMISSIONER: Mr Dalton, I think it is appropriate that I just let you know that I will be adjourning at 20 past 12. I have got an engagement which will occupy a small amount of my time immediately after the luncheon adjournment, so for the purposes of these proceedings the adjournment at lunch time might be a bit longer than normal. I just want to put you on notice so that you can take that into account as your cross-examination continues.

PN430

MR DALTON: Thanks, Commissioner.

PN431

Mr Jordan, is it fair to say that after the March meetings which resulted in the change from the flexibilities document at PMJ15 to PMJ16, in relation to the question of staff working on production and engineering work, that the outcome was the position would be the same as it was under the 1996 agreement?---As it was for all of the previous years at Warkworth.

PN432

Yes. Now, I think you say after the March meetings the parties basically left the issue alone; I think that was the - so that was the flexibilities document, PMJ16, written up, done, closed off and you moved on to other issues?---Yes, the only time it probably was revisited that that particular document of flexibilities was as we encapsulated it into the drafting of the actual document which was done later.

PN433

Yes, and when you did that you did not insist, or ask for a clause which said specifically "staff will not work on production and engineering gear"?---It didn't have to.

PN434

And you did not produce a document like the one that you, I think you say you produced in relation to the Drayton Certified Agreement which had a list of what things that staff could do?---No, no, no, I didn't - I didn't produce documents that I had at Drayton. I don't - an in-house document at Drayton is an in-house document I don't present, or use at another mine.

PN435

Oh, no, but you did not come up with a document either in the certified agreement, or to be read with the certified agreement which listed things that staff could, or could not do?---No.

PN436

No, all right. Can I take you to the guarantee of supply issue? I think that your evidence and that of Mr Kelly is that this was raised by the company on, or around 23 March 1999? Would you like to go to the parts of your statement that deal with this issue? It is at paragraph 45 and onwards. So that is right, is it not, 23 March it was raised by the company?---That was on 23 March they presented a document that included the issue of aiming to guarantee total customer satisfaction.

PN437

Yes, and you say that the company described this as meaning train loading, meeting shipments and the supply of labour to do that work; yes?---That's the way I describe it, yes.

PN438

Okay. And that is how the company did describe it to you in that meeting?---That's my understanding.

PN439

Yes. So the issue of guaranteeing total customer satisfaction was that the company was insisting on continuous labour supply at the prep plant so that it could loan trains and make sure that the ships were supplied?---Not knowing the full extent of what is required at the wash plant, or the washery to load trains, the issue certainly was as described that trains are booked ahead and that it did not do the company - company's reputation as a supplier to have trains cancelled that had been put in place in the event of industrial action.

PN440

And, in fact - - -?---So the basis was the company as saying to us: if trains had been ordered, booked for Warkworth on a particular day that our union was involved in outside industrial, "outside" meaning not an issue that was locally based, then their expectation was that the train had to be loaded, which brought about talking about the issue as to who would load that train in the event of an industrial stoppage.

PN441

Yes, and do you remember, I think over the AWA issue, that, in fact, they had missed a train because the troops had taken strike action and a train had arrived and there was no one to load the train?---I can't specifically recall that, but - - -

PN442

Do you remember them raising that issue and that is why they needed that - - -?---Not the particular issue over the - I am not suggesting that it wasn't. The company would have made examples.

PN443

Okay?---Whether it was the actual AWA or more, I'm not sure, but they certainly would have raised examples of where a train had not been loaded in the past.

PN444

All right, and so the company was saying that trains had to be loaded even if the employees were on strike?---Well, putting it in its context of the negotiation, this time we have already basically committed ourselves to a vision, which is part of the agreement. It was the part that the company insisted upon as being the fundamental base of our certified agreement. In short, the vision was an integral part of the document that really committed the parties to working through all their issues and delivering the outcome. Not just one party doing it, both parties doing it. The company said to us in those negotiations, "If you as a union are truly committed to the vision" and the vision included the customer satisfaction, I think, or words to that effect, that what that meant was making sure that our customers aren't let down. They went through a number of examples about, you know, quality, not, for example, sending a shipment of coal full of - with a bucket full of steel in it and things like that, that was all customer satisfaction, we have to give a good product, through to the end point, we have to deliver the product on time. So we talked all through that to the point where the company was saying, "If you can't guarantee to us that there's not strikes, then what you've got to do is guarantee to us that we'll load those trains and supply the customer's satisfaction". So that's how it came about and at the end of the day the bottom line was the company's position was that it was that important to Warkworth that if you didn't load them, we would need labour.

PN445

Yes. So you knew that if you did not provide labour during a strike that the company would use staff if it had to?---The company during the negotiations was saying that if we couldn't provide that then they would have to look at labour elsewhere and therefore I assumed that that would certainly be staff.

PN446

Okay. So the focus here is, you need to provide - on my instructions I think it is about four employees sufficient to keep the coal loader - well, the conveyor belt and getting it off to the Mount Thorley coal loader. That was the issue, was it not?---I can't give evidence to the amount of employees.

PN447

The focus was on providing sufficient labour to ensure that the coal was getting out of the prep plant to the trains?---The minimum amount of labour required to load trains would have been what the commitment is.

PN448

All right?---Whether that's one or four, I can't give evidence on.

PN449

The company was pushing that you had to give this to me - this commitment to them consistent with the vision?---Well, in fact, we'd already been giving it to them in the past, it's just that they wanted it written into the agreement.

PN450

They wanted it written in the agreement?---Yes.

PN451

Okay. Now, the evidence of the company is that its position was that it would not use staff in circumstances where you guys provided labour at the prep plant during a strike but that it did not give any guarantees above and beyond that. What do you say about that?---No. I say that in agreeing - the company agreeing to not have staff perform production and engineering roles generally in the flexibility document meant that if we were able to give a guarantee in writing on the customer satisfaction, meant clearly that then staff would play no role in any function of our work for the life of the agreement.

PN452

That would be - I think you are saying that that would be across the whole mine and prep plant, any time and in any circumstances over the life of the agreement. Is that - - - ?---Yes, I'm saying they had already agreed not to do the work generally, out in the mine and in maintenance and at the washery provided now that we could guarantee train loading, then it meant no staff in any role inclusive of train loading.

PN453

Now, this guarantee of supply was going to raise some concerns with the employees, was it not? You knew that that was going to be something that they would need explained to them to allay any concerns that they might otherwise have had about it?---I didn't have a concern myself.

PN454

Right. But you know that Mr Kelly had a concern?---The delegates are directly related to the guys out on the work-force as opposed to myself - - -

PN455

Deal with them every day?---- - - and, of course, Mr Kelly is also allocated at the washery where the labour would be required. The issue, as I understand it, was more so what happens to that employee or employees that are required to supply the labour as the issue more so. The reason I say that is because we had already been supplying labour in the past. In the case of strikes, there would have been occasions when the local lodge, through delegates such as Mr Trappel or Mr Kelly or others, would have granted labour to be made available for that type of work.

PN456

That up until the 1999 agreement and clause 14, that was basically up to the co-operation of the union?---We still have that.

PN457

But that was the position, was it not?---The co-operation of the union, absolutely.

PN458

There was not a provision in the notes?---Well, subject, of course, of a request being made because in some circumstances a strike may have occurred and there was no requirement for train loading.

PN459

Okay. But there was not a provision in the 1996 agreement which would have held the union and/or its members in breach of the certified agreement if it failed to provide that labour?---The reason - no, you're right.

PN460

The change here was that the company pressed for and got such a clause?---No. Well, they pressed for it - - -

PN461

It was not a big deal for you guys, I think is what you were saying?---It was consistent with the vision of having employees commit fully to that vision. The vision being that customer satisfaction.

PN462

Yes, but the difference between 1996 and 1999 is that in the 1999 agreement there is a claus which binds you to provide that labour?---There was no vision in the 1996 agreement. The difference is there's a vision in the 1999 agreement.

PN463

Yes, but clause 14 is the clause which requires the labour to be supplied?---I agree, consistent with the vision.

PN464

Yes. Now, Mr Kelly says that he was a bit concerned about it because he did not think employees - there might be a risk that employees would not approve the agreement because of this concession that had been made by the union to commit in the agreement to providing labour during a strike at the prep plant. Now, Mr Kelly says that your response to that is, "Well, in essence, you've got to take the good with the bad and it's an overall package and I'm sure we can persuade them that the overall package is good enough to approve". Is that right?---Along with some other comments.

PN465

Yes. Now, I think that your comment - one of the comments that you said was that the trade-off here was that the company would never use staff on production and engineering gear for the life of the agreement?---That's what we both told the work-force.

PN466

Yes. In such an important concession, the guarantee of supply clause, why was there not the guarantee not to use staff clause there as well?---We never had it in the past.

PN467

You have never had a guarantee of supply clause in the agreement in the past either?---Now we've got a vision.

PN468

Yes, you have got a vision?---The vision was all about honouring your commitments, honouring integrity and complying with what you agreed to. This company agreed and told their employees and their union representatives in the negotiation that, "You give me flexibility in the P and E area, you give me guarantee of supply and there will be no need and we will not use staff in your role". That's the short of it. That's the deal. That's what they told their employees. That's the integrity that we accepted from the company.

PN469

The difficulty that I have got with your explanation here is that we cannot find any express provision which prohibits the use of staff on production engineering gear and if there was an opportunity for that to be recorded it clearly would have arisen in the March discussions. Also there is no provision in the context of the guarantee supply negotiations whereby the company guarantees not to use staff on production and engineering gear. Now, I suggest to you that the reason those express provisions are not there is because the company did not give those guarantees to you. That the issue of staff working on P and E gear was to remain, as it had remained, under the 1996 regime, that is award and certified agreements silent on the issue. Do you accept that position?---No, I accept that the company gave an absolute guarantee to me - - -

PN470

Then why did you not record it anywhere, Mr Jordan?--- - - - and my delegates and my members that staff would not perform any function that my members were associated with during the life of the agreement. When you shake on it, when you negotiate with Mr Davis and Mr Hedges, the integrity of the parties is that they will honour their commitment and I can look Mr Davis in the eye and shake his hand on the day we meet agreement in principle knowing that what Mr Davis agreed to, Mr Davis will honour and when he turns around and stands on a stage in front of all of my members and says the same damn thing, then I would expect him to honour the commitment when in particular Mr Davis insisted upon our integrity being honoured for the life of the agreement and insisted that nothing less than a vision statement be recorded in the agreement that represented how the parties would conduct themselves and it appears now, in evidence, from what I read from - not in evidence - from reading statements of Mr Davis, would assume to me that Mr Davis did not conduct himself with integrity in those negotiations if that is now what he is saying he was agreeing to retreat from the situation but silently, keeping to himself that he intended to revisit the question in the life of the agreement, I would say is nothing short of deceitful.

PN471

Now, as a negotiator you record things in writing when changes to positions are made. You would record those matters in writing as a matter of course, would you not?---Well, it depends on what it is that you are recording.

PN472

Well, I am suggesting to you that such an important concession by the company guaranteeing never to use staff on P and E gear for the life of the agreement was surely something that you would have felt appropriate to include in writing, either in a flexibilities document or in the certified agreement, and not rely on a general statement relating to vision?---No, I conducted myself in the negotiations of Warkworth Mine in respect to the issue of staff, no differently than I had on other occasions at other mine sites. The question of staff and the role that they may play on a particular mine is recorded by the integrity of the parties in negotiations. At times parties have to accept there is a bit of integrity and honesty has to occur. There was never a reason in the past to have recorded the question of staff and the general acceptance was there was no need to address the issue in future as the question had been addressed. By maintaining the normal functions that we do and even the question of guarantee of supply does not say that they won't use staff. I can't even read in there where it says that they won't use staff. It just is a guarantee of supply.

PN473

That is right?---So the question wasn't that Mr Davis had to write in the guarantee of supply that if you don't guarantee and for some reason fall over, then we will use staff. Mr Davis would rely upon my integrity and my delegates' integrity and everyone of my members in the work place that our integrity is we have committed to guarantee a supply in the event of an industrial dispute at the Warkworth Mine for the life of the agreement and as I understand we have done so to date.

PN474

And there is no doubt about that, is there, because it is recorded in the certified agreement?---Well, it is a question of guarantee of supply.

PN475

And I will suggest to you that the guarantee of supply clause in the certified agreement was not given in exchange for a similar guarantee for the company in the certified agreement because had the company given such a guarantee we would also see that in the certified agreement. Do you accept that?---Repeat the question.

PN476

I did not word that terribly well for you. I am suggesting to you that as a skilled negotiator, Mr Jordan, if you had obtained a promise from the company that it would not train or use staff over the life of the agreement, whether or not that was in exchange for this guarantee of supply clause that we see in the certified agreement, you would have made damned sure that it was recorded in writing in one of three things, at the very least, notes of the meetings, some document like the flexibilities document or in the certified agreement?---I believe it is recorded in our notes as we sat down and discussed the company's document. There is no issue between the parties that staff had to come out. The question is why did staff have to come out.

PN477

There is no record in the notes, Mr Jordan, recording an agreement by the company that it would not train or use staff over the life of the agreement?---And if that was the case then why did not the company, during the life of the negotiations but particularly the day of the vote, inform their employees of that intention when in fact such an integral part - if such an integral part of the company's negotiations was to have staff involved in gear and they had to retreat and it was so important to them, then why didn't the company raise that question with their employees that whilst they retreated, it may be an issue that they have to revisit during the life of the agreement, but they didn't. It didn't have to because the negotiating group had accepted what they said during the negotiations and more importantly our members and their employees heard the company say that to them on the day of the vote and our members and their employees accepted their word and without a doubt they wouldn't have voted for the agreement if they had informed them of their intention.

PN478

Can I take you to the question of the disputes procedure?---Paragraph?

PN479

I think you start dealing with it in - - -?---Fifty-seven?

PN480

Paragraph 57?---No, that's - - -

PN481

Yes, 62. Paragraph 63 you say:

PN482

It was always understood between the parties that the appropriate industrial authority would resolve the issue between the parties. This fact was stated many times by the company throughout the negotiation process.

PN483

Are you able to point us to any notes which set out what the company said specifically in relation to this issue in particular clause 16.2(4)?---Well, I have no particular notes. If I did they would be party to my statement. My evidence there is clearly that during the course of the negotiations, at the critical part of drafting the clause that eventually ended up in the agreement, there was a fair bit of discussion. The course was the first time that we were actually recording at Warkworth their own dispute procedure because the previous agreement, the '96 agreement, referred to the award.

PN484

And 16.2(4) - - -

PN485

THE COMMISSIONER: Mr Dalton, I am sorry to interrupt, I am searching the documents on the bench and cannot find a copy of the disputes procedure.

PN486

MR DALTON: Sorry, Commissioner, it is attached to Mr Jordan's statement, PMJ3.

PN487

MR ENDACOTT: 25 of that document, Commissioner.

PN488

MR DALTON: Page 25, yes.

PN489

THE COMMISSIONER: Right.

PN490

MR DALTON: Mr Jordan, 16.2, paragraph 4 is exactly the same as it appears in the Coal Industry Award and has done for many years, is it not?---Well, not my understanding.

PN491

That particular line:

PN492

If the matter remains unresolved it will be referred by either party to the appropriate industrial authority.

PN493

?---Without me going to the award, Mr Dalton, I think the word might be "may". I'm not sure if it's a stronger "will", but - - -

PN494

Oh, okay?---I think the award is a little different.

PN495

Is "may"'; yes, all right. But it uses - - -?---Could - I'd have to go to the award and check that.

PN496

But it uses the expression "referred to the appropriate authority"?---It does.

PN497

Yes; so - - -

PN498

THE COMMISSIONER: When this agreement was certified, Mr Dalton - you may not know, you might have to seek instructions on it, but when this agreement was certified did the member - it may well have been me, did the member certifying the agreement ask the question as to what those words meant, or not?

PN499

MR DALTON: I am going to deal with that in submissions. The transcript is attached as PMJ25 to Mr Jordan's statement. I think that that is a matter for submissions, Commissioner. I do not intend to ask Mr Jordan any questions about what was said on that day. The transcript speaks for itself. Commissioner, sorry, I will help you. I was marking that this morning. The references, the relevant references you will be looking for are at page 3, line 10 is the transcript reference from Mr Jordan, and page 2, line 29 for Mr Whale on behalf of the company and it was Commissioner Harrison.

PN500

Mr Jordan, you talk about this AWA clause that was used for this - AWA for that one individual at Warkworth where the disputes procedure limited the role of the Commission to conciliation. Yes?---Yes.

PN501

It is true, is it not, though that in the negotiations for the certified agreement the company never asked for a provision in the same terms as the AWA on the disputes procedure?---The company, from the very outset, when there was a lot of discussion about them offering AWAs, in the early part of negotiations we were referring to AWAs that were available provided the flexibility that the company required in an agreement and that was the basis for their negotiations.

PN502

Yes. No, answer my question which is just specifically in relation to this disputes procedures because - - -?---Yes, including the dispute procedure.

PN503

Well, the evidence of the company is that the position of the company in relation to the disputes procedure was to keep the clause in the form that it is there, which is:

PN504

If the matter remains unresolved it will be referred by either party to the appropriate industrial authorities.

PN505

MR ENDACOTT: Well, I object. That was not the evidence of the company. The evidence of the company is, they had no - they did not wish to limit it to conciliation. Certainly not what - they did not want to change it.

PN506

THE COMMISSIONER: We will get to that; Mr Dalton - - -

PN507

MR ENDACOTT: I am just saying he has put the evidence, and it is clearly not what the evidence is and I can take you to that evidence.

PN508

THE COMMISSIONER: Well, it is open to you to do that when I come back to you, Mr Endacott.

PN509

MR ENDACOTT: Well, I object to - well, I should have raised it as an objection, I object to the question because it is not - it states that that is what raised. That is what the company will raise in evidence and that is in the evidence.

PN510

MR DALTON: Well, perhaps I will put it in this term: the - - -

PN511

THE COMMISSIONER: It would be best if you clarified the situation, Mr Dalton.

PN512

MR DALTON: The evidence of the company will be that at no stage did it press for a clause in the certified agreement which specifically said "the Commission's role will be limited to conciliation", or words to that effect. It was not discussed. Do you agree with that?---No, I don't.

PN513

Okay. Now, again, as a skilled negotiator you would accept that the words referred by either party to the appropriate industrial authority is unclear as to what the parties intend the role of the Commission to be?---Repeat the question.

PN514

I am saying that, given you have been an experienced industrial negotiator, you would agree with me when I say that that clause that we are talking about is unclear as to the exact role that the Commission is to perform, because all it says is, "it will be referred to the appropriate industrial authority" which we will accept is the Commission?

PN515

THE COMMISSIONER: Just as a matter of interest, Mr Dalton, let us assume for a moment that the parties had to refer something to the Commission and not have the Commission do anything; what is the point of the clause?

PN516

MR DALTON: Again, that is something that I can deal with in submissions.

PN517

THE COMMISSIONER: It is a question that I am very interested to hear the answer to.

PN518

MR DALTON: Yes, it has been dealt with specifically in some decisions. I actually have a folder of cases that I was going to hand up to you later in the week and I am happy to provide you that today. They are not long decisions by they deal with the issue directly.

PN519

THE COMMISSIONER: I am happy to wait till later.

PN520

MR DALTON: Thanks, Commissioner.

PN521

So you would agree with me when I say that that expression, "it will be referred to the appropriate industrial authority" is unclear as to the exact role that the authorities - to take?---It's only unclear if it is the view of one party that that means that the appropriate authority can't deal with the dispute.

PN522

Well, I do not think that the company is suggesting that the Commission cannot deal with the dispute. What it is saying is that it - - -?---But to resolve it.

PN523

Well - - -?---To deal with it and resolve it are two things.

PN524

Well, it depends on - well, the company does not accept that it agreed that the Commission could compulsorily arbitrate the dispute if the parties could not resolve it either through themselves or with the assistance of the Commission in conciliation?---I - I - - -

PN525

Do you accept that they could have had that view given the wording of the clause?---I believe the company's view at Warkworth always was one of, from the general manager down to the people who dealt with the union on the mine side, that their clear view was - their first preference was as to resolve all of their disputes by way of discussion, on site, amongst the appropriate - relevant parties. That was always their very preferred position.

PN526

Yes?---But ultimately, if it couldn't be sorted out by the parties on the site that the parties should get the matter resolved and get on with life.

PN527

All right?---And I would relate that to the history of my involvement at Warkworth.

PN528

All right, but again that is a fairly general statement, is it not?---Well, it's a general statement in this sense that the companies as I would clearly understood, the Warkworth management that I dealt with when reaching this agreement and this clause 16.2 would mean that is we can't deal with our problems on site then we get someone to do it for us, and then get on with life. But nine times out of 10 we would have done it on site.

PN529

Okay. See the company says that all the debate over disputes procedure was about what were going to be the work conditions pending progression through the disputes procedure, the old status quo chestnut?---No I disagree. I can remember a fair bit of discussion around arbitration because it came about with, as my statement refers to, as when we talked to the company about the redundancy provision, retrenchment clause within the agreement, and - - -

PN530

Well, yes, let us talk about that, because that is a separate - - -

PN531

MR ENDACOTT: Let him finish answering the question.

PN532

THE COMMISSIONER: All right, Mr Endacott?---I would evaluate it that probably the majority of the discussion was around that particular issue. If anything, the old question of status quo that you're referring to, in my view, was resolved pretty quickly.

PN533

MR DALTON: Well, can I just put the status quo debate to one side. The company says that in relation to the redundancy process that there was specific discussion as to how disputes about any selections might be dealt with. That was not discussion about the operation of the disputes procedure in relation to disputes generally over the application of the agreement; do you accept that?---No, I accepted was that they were related together in discussion.

PN534

But there was a separate agreed process, is there not, in the agreement to resolve disputes over selections for redundancies?---That was the eventual outcome.

PN535

Yes?---I am talking about the negotiations. There was inter-related discussion around both.

PN536

Well, the company evidence is that they do not recall any discussions about the specific role of the Commission's powers, arbitration or conciliation?---Well, I disagree with that totally - - -

PN537

Did? Sorry?--- - - - Again, the retrenchment clause is similar to another mine - might I say it is Drayton Coal again. I can recall both particularly Mr Davis questioning me as to, "If you can't resolve an outcome around retrenchments," - because you had this period of time that the parties would undertake to negotiate an outcome for retrenchments, and in the event that you don't, and the questions he was saying to me was, "Well, then, what happens? Can you tell me what your understanding is would happen in the event we can't resolve our differences." And he made it very clear to me and the other delegates that the idea that the union had in mind about dealing with retrenchments was initially he wasn't concerned about. His biggest concern about it is what would happen in the event of us not being able to reach agreement. And then it centred around the question of is it the dispute procedure that resolves it, because his concern was he didn't want a third party, in this case the Commission, interfering with that position as to who would determine retrenchments.

PN538

Now, you know of - - -?---That's the inter-relationship that I'm talking about in the discussions throughout our negotiation.

PN539

Now, from your extensive experience you would be aware that the Commission has general powers to settle disputes under the Act, conciliation and arbitration within the allowable matters. That is one way that the Commission can deal with disputes?---Yes, I'm reasonably familiar with that.

PN540

Yes. And so even if - well, you could have a process for resolving disputes which involved the Commission exercising those normal powers under the Act, that is, conciliation and arbitration within the allowable matters, could you not?---Yes.

PN541

And in fact, at the time that the clause was negotiated, disputes procedures in certified agreement arbitration could only be on allowable matters, could it not?---Well, allowable matters never got talked about at Warkworth.

PN542

No. But you were aware - - -?---What the concern was by management was, "What do we do if we can't resolve our position, Peter?" "Is it the dispute procedure?" Knowing full well, Mr Davis questioned me at length, knowing that if we couldn't resolve our issues in this regard to retrenchments it would mean a third party resolving it for us, and he wasn't about to have that position. He made it clear to me that the idea that I had about how to resolve the question of retrenchments - and could I just say that the logic that I was applying in getting an agreement up with the manner in which we resolved retrenchments was, if we had to come up with an outcome on retrenchments prior to the vote, we'd never get an agreement up, because it's such an emotional issue. Therefore the view put forward to the company that sold them on my idea was, "Let's get the agreement up that allows the parties, once the agreement's up, to sit down over a period of time and sort out the process." It had some logic to it and Mr Davis understood that. But Mr Davis' concern with my logic stopped at the point of wanting to know if we couldn't resolve it, who did, and the eventual outcome was that it be by mediation, not arbitration, because Mr Davis knew full well that the manner in which we deal with disputes at Warkworth meant that the Commission having the ability to resolve it for the parties. How he resolved it was a question of what the Commission thought was appropriate to resolve it, and then the parties getting on with life. That's the history of the job.

PN543

Commissioner is it now a convenient time?

PN544

THE COMMISSIONER: Yes, now is an appropriate time, Mr Dalton, thank you. We will adjourn and resume at 2.15.

LUNCHEON ADJOURNMENT [12.25am]

RESUMED [2.25pm]

PETER JORDAN:

PN545

THE COMMISSIONER: Yes, Mr Dalton?

PN546

MR DALTON: Thanks, Commissioner.

PN547

We were talking about the disputes procedure prior to lunch, Mr Jordan. I just want to ask you a couple more questions on that issue. If you say that the - it was the clear understanding of the parties that in the absence of an agreed outcome on a dispute that the Commission could act as arbitrator to determine the outcome of the dispute, why that was not recorded in writing in the dispute's clause?---Because the dispute clause was relevant - sorry, the structure of the dispute clause, as you mentioned previous, is if not the same, very similar to the award in layout, and as the previous agreement, '96 agreement, referred to the award, dispute procedure is the reason why the agreement remained the same structure for that particular clause, but it's the manner in which the parties applied it, whether it be this agreement, last agreement or even pre the '96 agreement, it was the manner in which the parties applied it and that was to genuinely sit down and try and resolve your own differences within the procedure on the job and, of course, while that's happening work should continue normal and if for some reason the parties are unable to resolve the difference and there was an expectation that it be given to a third party or the relevant authority and the matte would be dealt with by that relevant party.

PN548

Yes. But you go further than that, Mr Jordan, you say that not only did the parties agree for the dispute to be dealt with in that way, but that once the Commission had the dispute before it, it could deal with it by conciliation and in the absence of a resolution through that it could, with or without the agreement of both parties, arbitrate?---Yes.

PN549

Now, why was that not recorded in the agreement?---Well, as I just explained, parties have basically relied upon the award dispute procedure and the history of Warkworth and the parties, because there's more than the CFMEU, have been to use the Commission or the relevant authority as the party to resolve their disputes.

PN550

Okay. You are familiar with the High Court decision in the Kestrel Coal case?---No.

PN551

You do not know anything about it?---No.

PN552

All right. Well, I would like to just hand you a document - - -

PN553

THE COMMISSIONER: I suggest you put it on your bedside table, Mr Jordan.

PN554

MR DALTON: Mr Jordan, have you seen the documents on the first page before?---It looks familiar of a company document regarding that issue.

PN555

Okay. Well, my instructions are that the document I have given you comprises three pages. The first page is version three of the company's proposed guidelines for the application of staff flexibility. The second page is the second version and the third page is the original version. So are you familiar with those documents?---I'm not sure about the last page, Mr Dalton, but certainly the one dated 22 March I am.

PN556

Okay?---I'm just trying to recall whether I may have been involved in - I think I'm familiar with the 9 March one as well.

PN557

Okay?---I'm not sure if the last page is part of that or it's a document on its own, but the last page I'm not sure of.

PN558

Okay. You remember that the company handed the union a document which was the proposed guidelines which set out how it saw the staff flexibility issue operating and then following further meetings and discussions that there was a second version produced and then following further discussions there was a third version, which is the one you have got on the first page there?---I understand it unfolded something like that.

PN559

Okay. Now, it is the view of the company that the guidelines establishes a fair balance between the company's need for flexibility regarding their use of staff on the production in engineering work and the employees interests in relation to issues such as job security and training. What do you say about that?

PN560

MR ENDACOTT: Commissioner, I just question on the basis of relevance. I cannot see how this is relevant to the issues that are presently before the Commission. The issues before the Commission surround a dispute with respect to the operation of the agreement in jurisdictional questions and I think the position put is that it is outlined in our contentions that staff are not to do P and E work, this is a sort of para-phrase description, because of those reasons. I mean, that is the position. It is not one of that they can do some work or there has been limited restrictions placed on the work and the company can give all the evidence and all the reason why it wishes that it is good business sense, all those sorts of issues, but I think it is relevant to the issues to be determined before the Commission, and for that purpose I object on the basis of relevance.

PN561

THE COMMISSIONER: What do you say about that, Mr Dalton?

PN562

MR DALTON: Well, it sounds like Mr Endacott is just explaining to you how he intends to run his case, which is he essentially rises or falls on his argument as to whether the agreement prevents the training and use of staff. What I am trying to do is give you the overall merit picture should you agree with him on that issue because your job is not done, you still need to work out whether as a matter of industrial merit you should be making an order which gives effect to what the union seeks, which is, as I understand it, a ban on the use of staff on production and engineering work.

PN563

THE COMMISSIONER: Well, is it really the case here? Is it not the case that I am required to determine what the agreement allows the company to do in respect of the performance of work by staff as opposed to what it is desirable that the company do from an efficiency perspective. I mean, presumably, the parties would have dealt with the relevant interests in the process of negotiating the agreement. Having negotiated the agreement and having certified that agreement in this Commission, it is now a matter that the Commission is being required or being asked to deal with a dispute arising out of that agreement. If this were an arbitration about what ought to be contained in that award of the Commission, then perhaps that would be an appropriate form to discuss or to make submissions or to cross-examine witnesses about whether or not a particular course of action is desirable on efficiency grounds. But that is not the case in these proceedings, is it?

PN564

MR DALTON: Well, there are a few issues arising out of that - - -

PN565

THE COMMISSIONER: I asked - just without cutting you off - I have seen some certified agreements that beg a belief in terms of the restrictions that people are prepared to place upon themselves but that is not a matter for the Commission's discretion.

PN566

MR DALTON: Well, it depends on how the matter is brought before the Commission. As I understand it we have two applications. The first one is section 99 and the second one is 170LW.

PN567

THE COMMISSIONER: Yes.

PN568

MR DALTON: I think applying the High Court decision in Kestrel, if the union's position on the LW question is right, then yes, you can effectively interpret the agreement even though that involves judicial power in the ordinary sense of the word, the High Court seems to say well, as long as the parties have agreed for the Commission to act in that way under the certified agreement, it can do so.

PN569

THE COMMISSIONER: It does not seem to say that; it does say that.

PN570

MR DALTON: Yes, I think that is right so that is one way. The other thing is that if that argument is not - if LW is not available to the union then they encounter two significant problems to the way they are running their case. The first point is under section 99 the argument about allowability.

PN571

THE COMMISSIONER: Yes.

PN572

MR DALTON: And the second point is judicial power because if all they are asking you to do is interpret the agreement - - -

PN573

THE COMMISSIONER: I agree with all that absolutely.

PN574

MR DALTON: The other thing, Commissioner, is 170LW if you are to accept that you can decide the matter the fact that the union might be asking you to decide it just wholly and solely on the basis of the interpretation of the agreement, in my submission, would not prevent you from making a decision which deals with the core issues because one of the points is, of course, that the agreement does contemplate changes to the agreement over its life under the POTS process, for example, and prevents the union from unreasonably withholding agreement and things like that. So to that extent I think that issues about the industrial merit of the company's proposal versus what the unions come up with may, depending on how you decide all the other issues when you work through those matters may properly require determination by you.

PN575

THE COMMISSIONER: So you are not saying that I should determine what you should have agreed to? You are not saying that I should determine what the words should say, are you?

PN576

MR DALTON: No, I am not. It is a question of how you settle the dispute.

PN577

THE COMMISSIONER: Okay. Look, I am going to allow the question because I am interested in the answer frankly.

PN578

MR DALTON: I should point out, Commissioner, I am not going to spend a great deal of time on this. You are familiar, through conciliation, what the documents put up but my witnesses will be saying some things about their proposal and how the union's proposal does not meet their expectations and I just wanted to put those matters to Mr Jordan briefly.

PN579

THE COMMISSIONER: That is fine. I think that is fair enough. Go ahead.

PN580

MR DALTON: Thanks Commissioner. Do you remember the question that I asked you, Mr Jordan?---No, I don't.

PN581

Okay. The question was prefaced by me saying that the company's view is that their guideline strikes a fair balance between what they are after, being using staff on production and engineering gear where it is safe and sensible for that to happen, and the legitimate employee concerns of job security and making sure that training of staff does not hold them back in their training on further P and E skills. Do you agree with that view that the company has about their guidelines?---No, I don't.

PN582

Can I take you to the union's document, the flexibility proposal there. Do you have a copy of that in front of you?---I only have my statement so it is not in there.

PN583

All right. I will give you a copy of that. For everyone else it is TJF5 - that is Terry Flynn.

PN584

THE COMMISSIONER: Which page? It is not paginated.

PN585

MR DALTON: I will start with page 1.

PN586

THE COMMISSIONER: Yes, I have that.

PN587

MR ENDACOTT: Commissioner, I would just like to raise a point of objection here. It is my understanding, and Mr Dalton can correct this, this was a document produced after this matter was before conciliation and the Commission made a recommendation that the parties should go back and attempt to resolve an issue and a meeting has occurred in accordance with that and in an attempt to resolve it, dispute documents were produced by the union. I say then on the basis that they should be - normally they would be without prejudice discussions and negotiations. Certainly, and I believe the course which was followed, was one at which was suggested upon it by the Commission in a recommendation and the employees picked that up.

PN588

THE COMMISSIONER: So this is a document produced by the union subsequent to the recommendation that was made in earlier proceedings.

PN589

MR ENDACOTT: Yes, and I can take you to those recommendations and I am pretty sure that the Commission recommended that we should go about trying to settle it on that sort of basis.

PN590

THE COMMISSIONER: Yes. Mr Dalton, you have made reference to this document at this point. It is an attachment to a statement which is not yet in evidence by Mr Flynn. Is that correct?

PN591

MR DALTON: That is right, Commissioner.

PN592

THE COMMISSIONER: I have some difficulty, Mr Dalton, with the introduction into evidence of material which is without prejudice between the parties in discussions arising out of conciliation. If it is in fact a without prejudice document, the document itself does not specify that it is.

PN593

MR DALTON: No, it does not.

PN594

THE COMMISSIONER: But if, as Mr Endacott asserts, that it ought to be treated as such then I would require a fairly powerful submission from you to allow the admission of this material; either now or as part of Mr Flynn's statement.

PN595

MR DALTON: Yes, Commissioner. Well, perhaps I will ask some different questions of Mr Jordan at this stage.

PN596

THE COMMISSIONER: Yes, all right.

PN597

MR DALTON: But I reserve my position as to the document.

PN598

THE COMMISSIONER: Yes, of course. Absolutely.

PN599

MR DALTON: What is the position of the union in relation to the training and use of staff at this point in time?---My understanding was we had a meeting back on the mine subsequent to our appearance at the Commission. The parties exchanged some further views about how to bring together their respective positions. I understand that the union had proposed some change to their position for the company's consideration and that that had been turned down by the company; that the company's position was made clear to the union that they expected a position that had no restriction attached to it; that they believed the agreement didn't restrict them from doing what they were proposing and therefore they rejected all amended proposals put forward by the union.

PN600

Notwithstanding your position in these proceedings about how you interpret the agreement, is the union prepared to accept some form of use of staff on production and engineering work?---Can I say firstly that the vision of the agreement basically commits the parties to sit down and look at different things that may arise during the life of the agreement that the parties should talk about and give some consideration to.

PN601

There is a POTS process that deals with that?---That's correct. I think it is clause 3.4 of the agreement.

PN602

Yes?---The reason I say that is that if the company wishes to raise the issue of staff performing some role then under our genuine commitment to 3.4 of the POTS overview, is that we wouldn't deny the company the right to talk that through with us and provided that we believe that an eventual outcome, whatever that may be, satisfies all of the parties, and I emphasise all of the parties needs, then as a party to the agreement our commitment is we would take that forward, present that to our membership, explain the merits of the idea and seek the endorsement of our members of the recommendation or proposal for that new change. That's the way I see a commitment and my understanding is that was what we were endeavouring to do in the number of meetings that I had become involved with on the mine site in regards to the particular issue of staff performing work of a production or engineering nature.

PN603

Is it the position of the union at this stage that it is prepared to recommend to its employees some limited use of staff on production and engineering work, but only on incidental and peripheral tasks?---We were prepared to talk through a list of - - -

PN604

Well, just - I mean, it is a simple question. Is that the position of the union or is it not?---Well, it's only the position of the union if whatever that list of incidental and peripheral you referred to has been thoroughly examined and understood by the parties - - -

PN605

Yes, without?--- - - - and if the union is on board with that then, yes, they would recommend that, but there was no final list in a position ready for recommendation.

PN606

And I am not suggesting that there was. I am just simply saying is it the position of the union at this stage that it is prepared to, well, consider recommending to its members some staff flexibility arrangement, but that such an arrangement would have to have limitations on it and a list of things that could be done and matters such as that?---Well, again it's hard to say that we were in a position to recommend until I know what we were going to recommend.

PN607

It is true though, is it not, that the position of the union has, and remains, that the - that it will not recommend to members that the company be able to use staff to operate production equipment?---I'm not sure if we got to that - that far into the discussions to be able to make a comment on that. See the matter, from the union's perspective, the matter was still in discussion, a without prejudice type of discussion on the mine site.

PN608

Yes, I am not asking you - - -?---It's the company. It's the company that has chosen to close down those discussions, so it's hard to comment on where we were on it.

PN609

I am just asking what your position is today?---Well, my position is what my members would be, and I haven't yet been back to talk to the members about it, because the company hasn't yet completed the discussions with the union. That's the point. See I've got to get to a - - -

PN610

So the union does not have a position on this issue?---The union is our members. Individual people representing the union may have a position. Once we've completed the negotiations then the union would form a view about recommending that back to our members. We haven't got to that stage. Documents that are between us are on a without prejudice basis. They're put forward by experienced delegates in an endeavour to try and bring together an issue between the parties. And let me say that on many occasions during our discussions it would have been informed of the company that it's all subject to us giving a report back to our membership. We haven't done that yet.

PN611

You are not going to agree, Mr Jordan, are you to any document that allows the company to use staff to operate production equipment. You can say that now, can you not?---That's not correct.

PN612

Okay. There is just one more document that I want to show you, and it is the Drayton Certified Agreement which you mentioned earlier in your evidence. I have only got one copy of this. I have marked a clause there, Mr Jordan. Could you first of all read that and tell us whether that is in fact the clause that was in the certified agreement, and then if you could read it out to us?---The second paragraph? Is that the one you want me to read?

PN613

So you remember that clause being negotiated?---Yes, I do.

PN614

Okay. Yes if you could read out that paragraph that I have marked?---

PN615

It is recognised -

PN616

It's under the title of clause 28 Work Practices and Skills Development. The second paragraph reads:

PN617

It is recognised that Drayton Coal employees who are members of the CFMEU may be required from time to time to assist with tasks that are outside their principal functional areas involving supervision and support of the business processes. Similarly, Drayton Coal employs people in supervisory and support roles in the business. These people may assist with tasks from within the principal functional areas of production, mechanical and electrical.

PN618

Okay. When was that agreement negotiated?---I'm not sure which agreement I'm - oh, it's the '99 agreement. That clause has been in the Drayton agreement for the last two agreements, so it would be unchanged in the '99 agreement, which I think was certified in the Commission this year. Sorry, the '99 agreement would have been certified in '99 and that same clause is in the current agreement, which is the 2001 agreement, that would have been certified here earlier this year.

PN619

Okay. So you have negotiated agreements in the valley, which address the issue of this demarcation between staff and production and engineering functions?---Well, it's understanding what that clause means.

PN620

Yes. I will ask you questions about what the clause means if I need to, but I am just asking you at this stage to confirm that, yes, there have been agreements in the valley that you have negotiated, which have specific provisions in those certified agreements dealing with the demarcation between staff and production and engineering functions?---Yes, I have.

PN621

No more questions of the witness, Commissioner.

PN622

THE COMMISSIONER: Yes. Thanks, Mr Dalton.

PN623

MR DALTON: Thank you.

PN624

THE COMMISSIONER: Mr Endacott?

PN625

MR ENDACOTT: My re-examination will not be extensive, Commissioner.

PN626

THE COMMISSIONER: I beg your pardon?

PN627

MR ENDACOTT: It will not be extensive.

<RE-EXAMINATION BY MR ENDACOTT [2.55pm]

PN628

MR ENDACOTT: In your cross-examination, Mr Jordan, you - Mr Dalton takes you to the issue of the practice of staff not performing production engineering employees work and indicates that was just customer practice. Has that ever been described to you as customer practice by the company?---No, it hasn't.

PN629

Was that terminology used in any of the negotiations in which the agreed in principle flexibility document was agreed?---No, it wasn't.

PN630

Has the company ever informed you or the employees that it has the automatic right to change customer practice?---No, they haven't informed us. The question has never arisen.

PN631

I made some notes. Mr Dalton says to you, and I paraphrase this, he goes, "I put it to you" - and he is just talking about negotiations, I think, on 15 March 1999, about the company - "that your position was that you would not agree to have a clause in the certified agreement that includes staff." In your response you said:

PN632

I'm not talking about a clause of the agreement. We say something to the effect that there won't be an agreement if staff are involved in operating equipment.

PN633

Now, can you explain - if you can explain your answer and why you drew the distinction between "we're not talking about a clause"?---Well, it was very clear to the parties that the company required, as part of their negotiation or expectations, to have that as part of the agreement. Particularly so it was very clear to the company that we required no change in that area. Because you require no change, there was no requirement to put a clause, particularly when the company agrees and tells employees that their position now is, in the negotiations, that staff will not do work of production or engineering employees. It just maintained the situation that had always occurred at Warkworth. There had never been a clause. We maintained the current arrangement. Nothing had happened. The system didn't require a clause to address it and built on the provision of the company, the requirement of the company to have a vision required the parties to honour their commitments. Their commitment to the union was that there would be no staff perform production and engineering work and therefore the clause, I guess, that addresses the question is in the document, it's in the document under the vision.

PN634

I take you to your response in this procedure - in response about this procedure you say that it was discussed later on when we were discussing the clause to go into the certified agreement. What was the difference between the earlier discussions, that of when you were agreeing in principle and when you were having discussions about the wording of the clause, could you just explain that?---Well, the wording of the clause, in particular, was talking about production and engineering employees and when we talked about putting - as we're having a discussion about putting the document into the agreement, then the document addressed a couple of important areas. It addressed the question of the work-force and who the work-force is. It addressed the question of the respective groups of employees being production and engineering and it talked about where those employees home bases were and in particular the entire clause was constructed by the parties to be agreed on the basis that it was for production and engineering employees and that staff had no involvement in it.

PN635

So if I understand this correctly, you agreed on the principles and then later on you agreed on a wording that gave effect to those principles?---That's correct.

PN636

In paragraph - Mr Dalton takes you to paragraph 42, and I believe I have marked the right area, he takes you to the wording that says, and I think it starts at - there is quite a long paragraph there, so it is on page 11 of your statement, and in fact 42 goes over to page 12. I take you to the part where it says, and I think this is right:

PN637

The company explained that meant that all employees including staff could do any work within any work area. This wording was required by the company so staff employees could perform P and E work under the new site agreement.

PN638

It goes on:

PN639

But the company changed the wording, as reflected by my handwritten amendments, to "it is recognised that all production and engineering employees were employed at Warkworth to complete tasks within their work areas. The company explained this would mean that only the P and Es employees would perform the work in their work areas. This reflected the company's new position under the new site agreement, that P and E employees did the work within their work areas, not the staff.

PN640

In response to that being put to you, it was asked whether you agreed if that was still the case?---We did agree. What we agreed was that the amendments put forward by the union, the company agreed situation. They accepted it. All of their intention and manner in using staff would be withdrawn. They accepted our amendments to their document. It then became the agreed outcome.

PN641

Mr Dalton asked you to read I think it was the second paragraph in the Drayton agreement of clause 28. Mr Dalton asked you to read in transcript, I think it is the second paragraph of clause 28 of the Drayton agreement?---Yes.

PN642

Could you explain, I will not get you to read it out again, what that clause means?

PN643

THE COMMISSIONER: Before you do, Mr Jordan. Mr Dalton, could I ask again of you, the purpose of asking the witness to read that part of the Drayton agreement into transcript was so that, when having consideration to all the issues before me, I could take account of that in consideration of clause 3.4; is that right?

PN644

MR DALTON: No. I was simply putting it to Mr Jordan because I wanted to refer to it in later submissions and I did not want it to be said that I was referring to a certified agreement, certified by the Commission, without having given Mr Jordan the opportunity to look at it. It will be clearer through my submissions as to - - -

PN645

THE COMMISSIONER: Well, we do not want him to leap too far into the future, Mr Dalton. What will be the thrust of that?

PN646

MR DALTON: Really just along the lines of my question to Mr Jordan which was that that is an example of an agreement that had been certified shortly prior to the negotiations for the Warkworth agreement and it had a clause that dealt specifically with the issue, and I will be making submissions on that as distinguished from the situation with Warkworth.

PN647

THE COMMISSIONER: Yes, I will leave my query about that submission until then. I am sorry, Mr Endacott, for interrupting your re-examinations.

PN648

MR ENDACOTT: Yes, I will just ask if you can explain what is meant by that clause?---My clear understanding of what was agreed between the parties for that clause, the Drayton agreement, that is, as I gave earlier in evidence, is also still within the current agreement, is that the company required staff of a supervisory and support role to be able to assist in roles and I emphasise assist, not perform. Assist means you go and help out another production or engineering worker, you do not perform the role, you assist and in fact to clarify for all the parties needs the company asked that the companies dot point what that might be to avoid any potential flare-ups out in the work place so after that clause had been agreed, the parties then put together an in-house document and the document talks about things like the staff and supervisory roles can start and shut down mobile plant, relocate lighting plants, perhaps assist the tradesmen in the workshop as a TA if required, man-haul people around the mine, those types of assistance. Under no circumstances does any staff employee at Drayton Coal actually perform any core production or engineering role in the work place. They did not under the 1999 agreement and they still do not under the current agreement.

PN649

Okay. I have no further questions.

PN650

THE COMMISSIONER: All right. Thanks, Mr Jordan.

<THE WITNESS WITHDREW [3.10pm]

PN651

THE COMMISSIONER: We might as well purge on, Mr Endacott. Do you have another witness?

PN652

MR ENDACOTT: Yes, I do. I call Mr Graham Kelly to the witness box.

<GRAHAM PATRICK KELLY, SWORN [3.10pm]

<EXAMINATION-IN-CHIEF BY MR ENDACOTT

PN653

THE COMMISSIONER: Yes, Mr Endacott?

PN654

MR ENDACOTT: Thank you.

PN655

Could you give your full name and address to the Commission?---Yes, it's Graham Patrick Kelly, 28 Pitt Street, Singleton - I nearly forgot.

PN656

Do you have with you, Mr Kelly, a statement comprising of 57 paragraphs and seven annexures marked JPK1 to JKPK9?---G - - -

PN657

GP, sorry, GPK1 to GPK9?---So there's nine of them? There's nine annexures?

PN658

Yes?---There's nine annexures?

PN659

Yes?---Yes, and 50 - yes, I do; 57.

PN660

Do you affirm to the accuracy - the truth and accuracy to your knowledge and belief of the information contained in those - in that statement?---Yes.

PN661

Thank you.

PN662

THE COMMISSIONER: Before you go any further, Mr Endacott, Mr Dalton, the document you handed to Mr Jordan through pages - Staff Trading Guidelines, version 2 Staff Trading Guidelines, version 3 Staff Flexibility Guidelines, do you propose to tender that into evidence at some stage, or - - -

PN663

MR DALTON: I do, through one of my witnesses.

PN664

THE COMMISSIONER: All right, I will do nothing with it at the moment; thank you.

PN665

MR DALTON: Thanks, Commissioner.

PN666

THE COMMISSIONER: Sorry, Mr Endacott.

PN667

MR ENDACOTT: I would ask the statement of Graham Patrick Kelly be marked into evidence, Commissioner.

PN668

THE COMMISSIONER: I will mark that exhibit E3.

EXHIBIT #E3 STATEMENT OF G.P. KELLY

PN669

MR ENDACOTT: I just wish to take Mr Kelly to a couple of additional points in evidence; I will be quite brief, Commissioner.

PN670

THE COMMISSIONER: Yes.

PN671

MR ENDACOTT: Mr Kelly, can you inform the Commission how much industrial action was taken over the agreement during the time it was negotiated?---Industrial action as far as a stoppage, there was none. We did have meetings with approval of the company on, I think about seven occasions. I am not sure on that number, but it'd be something like that.

PN672

There was, I understand, one stoppage unrelated to the agreement during that period; a national stoppage?---Yes, I do recall that. There was the - I think it was to do with the Hunter Valley discussions at the time; yes. I can't recall all the detail but I do remember there was a national stoppage, yes.

PN673

Could you describe the intensity, or otherwise, of the negotiations and the industrial atmosphere while these negotiations over the certified agreement were continuing?---They started off very tense because of what had happened on the mine site, so they'd started off tense, but once we'd reached an understanding of the process then they became quite amicable.

PN674

I understand there was some sort of challenge put out early in the piece that agreement could be reached without any industrial action?---There was, yes.

PN675

Was there - and who was that? Could you give the Commission a reflection of what that challenge was?---It dated back a bit. After I became the lodge secretary in '96, a year later I had a discussion in Graham McKenzie's office and I was talking to him about something unrelated and the general manager at the time, Ian Craig, turned up and I said, "I've been looking for you, Ian" and he said, "Why?" I said, "Well, I'm wondering where our jackets are?" And he said, "What do you want a jacket for?" I said, "Well, we've gone a year without a strike." And he said, "I'm not giving you a jacket for a year out of strike", he said - but he said, "We'll lay down the challenge to you that if you can go through the next - through the next lot of negotiations without any industrial action", he said, "We'll get your jacket." So I took him on a bet and told Graham McKenzie that he was the witness and so as it turned out, after the negotiations were over - or actually just before I finished I called on my bet with Ian and reminded him of it and he agreed and then he moved on to Nowra, and then so I reminded the manager of the day, naturally, I gave him a spiel about working together in partnership and all that first and then told him about the bet. Yes.

PN676

And as a result a jacket was provided to all employees that read - that had the emblem of T body, the company, and the union and the statement "Working in Partnership."?---Yes, that was actually given to district official as well as, I think we gave one to the guy from the Metal Workers, Gerry Moane, plus all the company. Actually, I believe there was a bit of a presentation up in the main office when I gave them to all the staff and that, because I think - because they kept Ian's because Ian had moved to Nowra so he was actually back at some meeting one day and they gave it to him sort of formally. I don't know what they - they didn't invite us but they had a presentation, but, yes. No, it worked well.

PN677

THE COMMISSIONER: It is good when a plant comes together, is it not?---Yes, it is good. It's a nice jacket too.

PN678

Oh, it looks - I was just admiring it for the bench, actually.

PN679

MR ENDACOTT: Tender it?---No, you can't have it, it's mine. I keep it.

PN680

THE COMMISSIONER: Yes, Mr Endacott?

PN681

MR ENDACOTT: Thank you, I am just finding the section referred to.

PN682

You mention in your statement the - I specifically refer to paragraph 11, the formal discussions of meetings that were arranged?---Yes.

PN683

You also indicate that there was a series of, I think, 20-odd meetings with employees where the operation of the certified agreement was explained?---Yes, that's correct.

PN684

Okay. Now, at these meetings did you explain to the employees about how the guarantee of supply commitment - the guarantee of supply clause was meant to operate?---Yes, I did.

PN685

Can you indicate to the Commission what you informed the employees at those information assessments about the guarantee of supply?---We'd gone through a number of other issues beforehand - a number of other slides. When it got to my turn we linked it back to the vision about why it was important to do this. We talked about what our guarantee was. We talked about the fact that it had been, in effect, approved by the northern district and the national office and that we would guarantee supply and that this would stop the staff doing our work and that "guarantee supply" meant that we would send coal that was washed across the CC5 which is our conveyor to our rail distribution point, or we would even bypass around the washery to send it over. One of the very early ones someone asked about CC8, which is another loading pad where we send our coal to and because it was to be sent from there to a customer, as long as they needed it to go to a train there and then, then that would be part of our guarantee of supply. I remember Steve Hedges raising it at the end of that one session about what would be involved and we even went further from then on. I think - and that was, like, the first or second one, someone asked us about it and we talked about that we'd supply labour for the CC8 later, and we'd also supply CC5 overland breakdown while we were on strike then we'd get the labour to come in to work to fix the overland conveyor, so that's, in effect, what we told them about what the guarantee of supply meant.

PN686

Did you raise any, at those meetings, any positions of the company about not doing production engineering work as a result of the guarantee of supply?---The guarantee of supply was the second part, I suppose? The first part being - our intention was to stop staff doing our work. We'd sorted out every other day and that's all we needed to do was shore up any time - any other possibility of staff doing our work which would be if we were on strike, and we told the blokes that by them guaranteeing this then staff would - there'd be no reason at all for staff to do our work.

PN687

Were the company representatives in attendance at these meetings?---They were, there was - tentatively there was four of them, but on some of the night shift ones Tim Branch wouldn't make it, he'd have one of the other guys do his bit.

PN688

Okay?---Because there were sort of flat out for two weeks. It was just you sort of got a sleep when you could.

PN689

Yes. Did they raise that what you were saying was not correct?---No, not once, not once, in fact, it was - I believe, I'm 95 per cent sure that it was Steve Hedges that saw me after the first or second one about the CC8 issue. So they actually, they actually listened to the presentations and confirmed that position with us and we signed off on, yes, CC8. We've taken it further since then, now we do Redbank Power Station as well.

PN690

There is one thing that I should - just showing the statement of Peter Jordan, I am only going to take him to exhibit PMJ3 which is the certified agreement, the current one. If you go to the back of that agreement, it will just be before where the tab 4 starts?---Yes.

PN691

Mr Jordan has fortunately marked his tab. There is a variation to the certified agreement. I think it is the last two pages of the - - -?---Yes.

PN692

Could you indicate how that variation came about?---The company approached us about an issue in the first instance with they needed, what they termed a crew to work on the weekends for road maintenance, they also asked us about a change to the shot firing arrangements so that they could rotate and they'd pick up some benefits in having a longer shift on afternoon shift so they get a bigger changeover. They raised it in the first instance with the POTS team and then went down that road a little bit and then they involved the union officials. We were aware of it because they'd raised it with two POTS teams. I believe they raised it with the shareholder's POTS teams which I'm a member of. In the first instance they did that earlier in the year and when it was time they raised it with the workforce POTS teams.

PN693

And I believe there has been since that one on 5 June 2000 there has actually been another one agreed that has not sort of been formally processed as yet?---Well, (a) I don't think this is all of it, you're down a page; and - cause that's page 1 and 3 not page 2.

PN694

Yes, I apologise for that?---Yes, there is. There are actually several other ones done. We did one on our - we got this ratified on 5 June. On 9 June we had one not ratified here, but agreed in principle about our sick leave JSE process which the company agreed to. We then had - since then we've had common start time sorted, we've had a new roster in the maintenance department go from six to six and a half days. There was an issue with sick leave where there was an agreement around changing a word to - from being exactly you must do something, to the boss may put you on a management plan, so.

PN695

I believe they are currently in the process of being processed in accordance with the formal mechanisms of varying the agreement?---Yes, mate. Sorry. They've been done, they're sitting on, my understanding is John Thompson's desk waiting to reach a priority enough for him to send off the paperwork.

PN696

John Thompson is?---John Thompson, I believe is Peter Gerdes boss with Coal and Allied.

PN697

Okay, thank you. Were all those variations done through the POTS mechanism referred to in the agreement?---In essence, but well - in essence with the maintenance roster it was. As far as the start time went, it went there for a little while and then came out because it was just too hot a subject. The intention from the company was that they wanted a common start time, they didn't care if it was 7 o'clock or 6.30 and they wanted - they wanted to know how we're going to deliver it. So we said, "Well, we'll do it industrially," which we did and the problem was that it was a split vote. So it didn't matter which way we did it, we were going to get basically a tied vote and it wasn't until we went through probably a three month period of talking to the blokes and getting them to sign off on different aspects of the common start time to satisfy them that we could even get them to agree, and we could never get the company to agree to allow a common meeting with the blokes to vote. So in the end we - there was an opportunity come up when the mine manager was away and he left one of his underlings in charge and he allowed us to have a full lodge meeting, that we were even able to sort it, and when we did it was fine, so yes.

PN698

I have no further questions. All I say with respect to the page missing, Commissioner, unless you really require it, it is not related to the issues that are - - -

PN699

THE COMMISSIONER: Just reference to the print number is sufficient.

PN700

MR ENDACOTT: Yes, thank you.

PN701

THE COMMISSIONER: Thanks, Mr Endacott. Yes, Mr Dalton.

<CROSS-EXAMINATION BY MR DALTON [3.27pm]

PN702

MR DALTON: Thanks, Commissioner. Mr Kelly, you have been a CFMEU delegate at Warkworth since 1996. That is right, is it not?---Yes, yes.

PN703

You were heavily involved in negotiating the 1999 agreement?---Yes.

PN704

Were you involved in the 1996 agreement as well?---Only as being a rank and filer who was able to have his say at lodge meetings.

PN705

Okay. So you have had a fair bit of experience over the five years or so in your role as delegate in negotiating with management on industrial issues?---Yes.

PN706

You would know that, in your capacity as a delegate, that the main instruments that set out the wages and conditions of your members are the industry award and the certified agreement?---Yes. Since my time it's only been certified agreements. So I haven't had a lot to do with the award other than - I don't think I ever had to reference it in my time with the last agreement, but basically we've had enterprise agreements.

PN707

Okay. You would accept, would you not, that outside the certified agreement the employment terms and conditions are not wholly and solely dealt with by a certified agreement?---With our '99 agreement our intention was to make it wholly dealt by that. The '96 agreement there was parts of it that referred back to the award.

PN708

All right. You would be aware and possibly even personally involved in disputes with the company over issues that are not dealt with specifically in the certified agreement?---There was the - there was three issues I remember from '96 to '99, but they all had a link to the '96 agreement. I don't think I've been involved in a dispute with the company that wasn't, in my interpretation, something to do with our agreement.

PN709

Okay. Are you aware of any disputes at the mine that involves issues about, you know, what - outside the agreement, for example, the union might be saying, "Look, this has been the way that work has been done and this is the way it should stay"?---We've always had an understanding at Warkworth about honouring commitments. I remember when I first became lodge secretary I was asked by the then general manager, Ian Craig, to do a presentation to the staff, and Russell Trappel assisted and we gave a presentation to staff and one of the questions there Ian asked me, he said, "So what are you going to bring to the union?" And I pointed out to him that one of the things that I wanted to ensure that we did was honour our commitments. If we make a deal we honour it, and so we always have. So if we've had an arrangement, whether it be a certified agreement or an agreement that we've had honoured with the company then we live up to that, whatever that may mean. So yes, so if we've had a position around it then, yes, we honour it and we simply get on with life. The company raise it with us and we sort it out.

PN710

Are you aware of any cases where the union has been in dispute with the company or it cannot refer to a clause in the certified agreement or it cannot refer to a particular agreement?

PN711

THE COMMISSIONER: I think that has already been answered, Mr Dalton.

PN712

MR DALTON: I am not sure whether it has, Commissioner.

PN713

THE COMMISSIONER: I think the evidence of the witness a few minutes ago was that he had not been involved in any dispute since he had been elected lodge secretary which were not referrable to the agreement.

PN714

MR DALTON: Yes, it was his involvement. I have asked him whether he was aware.

PN715

THE COMMISSIONER: I see. All right?---If there was a dispute at Warkworth that was a serious dispute, then I was involved.

PN716

MR DALTON: Right. But you are saying that the only disputes that you have ever been involved in have always been disputes about interpretation of the certified agreement?---No, I think they'd be your words. What I was talking about was that there wouldn't be a link to the agreement. Like you had - there was a dispute about servicemen which I am not 100 per cent if servicemen were part of the 1996 agreement but it was linked to the 1996 agreement so I can't give you an absolute to say yes or no.

PN717

All right. Are you familiar with the concept of custom and practice?---I am.

PN718

Okay. Well, could you explain to the Commissioner what your understanding is of custom and practice?---Custom and practice would be that something that had occurred in the past was the norm so if you did it like X for a long period of time then it was the custom and practice of the job so that's the way you did it.

PN719

And what if the company wanted to change that?---Under the 1996 agreement they would have raised it with us and we would have talked it through and under the 1999 we would have linked it back to the vision similar to how I explained the changes we have made to our agreement before.

PN720

Now, in negotiations for the 1999 agreement, the negotiators agreed on a process to go through the issues and where you could reach agreement on a particular issue then you would try and get that down in writing so everyone was clear on what the parties had actually agreed and then you would move on to other issues. Is that a fair statement of the agreed process? That is how you would try to work through the issues?---Yes and no. Yes, in respect that the company would come to us normally with an issue paper because they had this belief that it needed all to be - not all - but it needed to be in black and white as far as their points because they used to play a game with us which we picked up pretty early on that it depended on how we reacted to an issue that they raised whether it came back or not. They used to have people sitting in the room taking notes and we sat near them one time and read their notes and it was all to do with how we reacted to their situation. You have got to appreciate our negotiation process. The first three months was a slide show. We were bored to death with the process because it was just really boring so we went through all that and then we went into the part of, to some extent, signing off on things and some things you would note down and other things was an understanding about how you were going to go forward and the only time they ever came back was when there was a problem with the understanding because - to appreciate, Mr Dalton, how it was done, once they got the vision which was Paul Davis' baby to start with as far as having a vision, once they developed the vision, it was always you have got to live up to your integrity of it so that if - down the track they would test us and they would say things like what certain things meant and if we didn't give them the answer that they expected then they would want to go back and revise their words and all that sort of stuff so that is sort of the way they worked it.

PN721

Well, as a negotiator, you knew that it was important to record any agreement that was being reached on a particular issue?---I took a lot of notes, Mr Dalton. I took a lot of notes for a couple of reasons.

PN722

Mr Kelly, I just asked you a simple question?---Well, you had better tell me again.

PN723

I say that in - and Mr Kelly, I am going to ask you not to look over at the CFMEU bar table when you are answering your questions.

PN724

THE COMMISSIONER: Sit down, Mr Endacott. Mr Dalton, just put the questions. Let us not play silly games here.

PN725

MR DALTON: Yes, Commissioner. I just noticed and I just wanted to make sure.

PN726

THE COMMISSIONER: Okay. Mr Kelly, all you need do is answer Mr Dalton's questions, okay?---Yes.

PN727

Thanks.

PN728

MR DALTON: Now, I have asked you a simple question. Do you want me to ask it again?---Yes, please.

PN729

Okay. As a negotiator you realised that it was important to take note and record in writing any positions that were agreed. That is right, is it not?---I wrote things that I thought at the time were important.

PN730

Okay?---I wrote opinions, I wrote positions, I wrote agreements that we had reached with certain points, I would write intents about what people understood about things, and then other things that were, what I would suggest, not a major change from the current circumstances I sometimes didn't write very much at all.

PN731

Now, you have said you took a lot of notes and you have attached some but not all of those notes in your statement?---I attached those that I perceived were relevant.

PN732

Yes, and Mr Jordan has said earlier today in his evidence that the union negotiators would review the notes that you took shortly after the meetings. Do you agree with that?---Yes, on occasions we did.

PN733

Just on occasions?---Well, we didn't meet at the end of every session.

PN734

No?---No.

PN735

Okay. All right. And you would accept, would you not, that it is a good idea in industrial negotiations to take thorough notes of the meetings so that you can remember what the positions of the parties were?---We had I think nine people there and a number of them took notes.

PN736

I am just asking whether you agree with that or not. You do not need to tell me - - -?---I am trying to answer what happened and I got to have a fair say so I got, in the main, a lot of the notes down but I didn't get all of the notes down so although I agree with your point that you should have good notes, I don't think that I got all the points down, no.

PN737

Okay. But you recognise that it was important to take detailed notes of at least the important negotiations?---I learn a lot through the process.

PN738

Okay. I am sure you did?---If one was to read my notes you would see that when I started I had copious amounts of notes about lots of different things and by the end of it I had a point form note and if you referred to the document that we were talking about that I'd have notes on that and if you referred to the draft agreement I would have comments on all of those so you would have to sort of link them all together to get notes by the end of it because 11 months was a long time to negotiate.

PN739

Sure. All right. And you would agree with me, would you not, if I said to you that it was important for you as negotiators to get an agreed position finalised in a document so that you could move onto other issues because negotiations for a certified agreement could take a number of months?---It was pretty amicable, the negotiations. We, in effect - I know I had grown up with the people that we were dealing with and there was a lot of trust so I don't think you had to have everything written down, no.

PN740

Not everything written down?---No.

PN741

But let us say on the question of flexibilities which was an important issue?---Yes.

PN742

The aim of the parties in finalising that flexibilities document was to get the points of agreement down, was it not?---Yes.

PN743

Now, there is nowhere in 1996 agreement that specifically prohibits the use of staff on production and engineering gear, is there?---I don't know, Mr Dalton, without - I haven't looked at the 1996 agreement since, oh, the middle of '99 so I couldn't tell you, honestly, I don't know.

PN744

You have not aware of one?---Not at this very second off the top of my head, no.

PN745

Okay. Now, you would be aware of instances where in the past the company has, in fact, used a staff member on production equipment and the CFMEU has reacted by taking industrial action?---Well, there's twice, I suppose, that I'm aware of. Once was only recently, which was the start of these discussions to some extent, when they attempted to start training a guy at the washery despite the best attempts of everyone to negotiate a way through it. And the other one was before my time as the lodge secretary and I was on the five-panel. I don't know a lot about it.

PN746

All right, now, in October 1998 Mr Ian Craig, who was the general manager at the time, he first raised this concept of total flexibility?---Yes, he did.

PN747

Yes, and he made it clear that the company wanted to incorporate that concept of total flexibility in the new certified agreement?---Yes, that was one of his points, yes.

PN748

All right, and the issue was raised again, I think, in February 1999?---Yes, I think it was.

PN749

Okay, and every time it was raised Mr Jordan and yourself made it clear that the CFMEU would not agree to that proposal?---We wouldn't agree to the inclusion of staff, but Mr Jordan, myself, and a number of other officials went to great lengths to explain why it was not appropriate.

PN750

Right, and when you say you would not agree to the inclusion of staff, what exactly do you mean by that?---Staff have a function and a role to play that we didn't think would compliment the business, especially if we were attempting to work in partnership. So we thought - they had a role and we thought we had a role.

PN751

And that is the way that it had operated in the past?---The different roles?

PN752

Yes?---Yes, that's right. We'd been down a road somewhat in discussions at the washery where I work about people's roles. I was in a development group, we called it, and it had a catchy name called The Turtles and their job was to look at ways to improve the washery and what we did was we developed roles for staff and those roles were coaching and a resource. They were not doing production, or engineering work.

PN753

All right. So in answer to my question, that demarcation between what staff people do and production engineering people do, had been the practice at the mine for some time?---Yes.

PN754

Yes, and what the company wanted to do was to change that by having a provision in the certified agreement which enabled them to use staff on production engineering work; that is right, is it not, that is what they wanted?---Yes. Yes, I'm just trying to get in context in my mind.

PN755

Yes, sure. And the response of you and Mr Jordan was "no" to that?---Yes, we didn't think it was appropriate.

PN756

Yes, all right. Now, you progressed through to 15 March in negotiations and, of course, you have talked about other issues in the meantime, but this is the day that the company tabled the flexibilities document?---Oh, yes, yes.

PN757

Yes?---Yes.

PN758

And you will know that the flexibility document deals with this concept of home bases a bit?---Yes.

PN759

And the company's evidence is that the home bases concept was developed because there was a concern of the CFMEU that the breakdown of some of the traditional demarcations of work may adversely impact on some production employees in the context of redundancy; is that right?---I'm not sure if home bases were there for that reason because it was the company document.

PN760

Yes?---What they did was, they turned up with a document that said "home bases", from memory, "production engineering", I think they broke it up and then they had it started.

PN761

Yes, you have got Mr Jordan's statement there. He has got it attached at PMJ15, so it might make it easier for you if you have that document in front of you because I am going to ask you a few questions about it. Do you have that in front of you?---I do, Mr Dalton, I was just reading it.

PN762

You will see that there is a reference at point 4 and 5 about "home base"?---Yes.

PN763

So the company says that this document was its attempt to record an agreed position on flexibilities recognising this home base concept as the solution to the concerns about making production employees without trade skills vulnerable for selection for redundancy; is that a fair summary of what the company's thinking was when it handed the document to you on the 15th?

PN764

MR ENDACOTT: I object. He cannot give evidence as to the company's thinking when they handed the document to him.

PN765

MR DALTON: As was expressed to you?---This was what the company wanted from the negotiation process. In effect, it was their wish list which they then attempted, I would suggest, to make it palatable to us.

PN766

All right, but what I am saying to you is that, yes, I mean, yes, it was its wish list but it was trying to encapsulate the issue of flexibilities. It wanted to record an agreed position between the parties on flexibilities; is that right?---A lot of the staff that's there was the stuff that we listened to for the three months at the start, when they went through all the different slide shows where they talked about the needs of the business to determine the priority of the day and all this sort of stuff, so I would suggest that it was their document. I don't know if we'd signed off on any of those issues, or even discussed it at any length until we got it. We'd talked about streams for a long period of time, hours of work, visions, all that sort of stuff.

PN767

Yes. If you listen to my question carefully - - - ?---Right.

PN768

- - - I think we will probably get through this a fair bit quicker. I was not suggesting to you for a moment in my question, that this was somehow an agreement that you had reached with the company. What I am saying is that the document was handed to you. It was a document that the company asked for your agreement to encapsulate an agreed position on flexibilities?---Yes.

PN769

Yes, and it refers to the home bases and the reason it does is because that was a solution that the parties had discussed to one of the concerns that you had raised which was, well, how is flexibilities between production and engineering streams going to impact on production workers without trade skills, for example?---Yes.

PN770

Yes; okay. Yes, getting back to your point about it being a wish list, there were some items in this document that you did not accept?---Yes.

PN771

Yes, now, before we go into this in further detail perhaps I should ask: who makes the key decisions about the company's negotiating position, sorry, the union's negotiating position?---Can you say that again, please?

PN772

Who makes the decisions about what is acceptable and what is not? Was it Mr Jordan or was it you or was it both of you? How did the decision making work?---We used to meet on a regular basis. Peter would arrange at the meeting before, for example, for the next day, for example we'd talk ourselves after the company gave us an issue and we'd have frank and open discussions about what each of us thought about the issues and from there we'd pick the best course of action or course of response to go forward with.

PN773

So was it both of you?---There was nine of us, Mr Dalton. There was lots of people. As far as - if you want to base it on seniority, I had none. I was the junior guy. I mean, I was last man on the block but I had a fair say because I was Lodge Secretary, but by the same token it wasn't all my points.

PN774

Okay. So you had a fair say, and Mr Jordan, as the organiser, obviously had a - his view was going to be important. It was and we had two board members of the northern district on our negotiating committee, plus we had our central councillor - - -

PN775

Okay?--- - - - So there was a lot of people, plus you had a guy that had been Lodge Secretary for about 20 years - Lodge President for about 20 years, so you had a lot of, as I said before, a lot of seniority there that had a say.

PN776

I can imagine some of those negotiations would be more difficult than ones with the company?---You should have attended some, Mr Dalton.

PN777

All right. So the decision was made as part of the group of negotiators that there were a number of items on this flexibilities document that were not acceptable to the union?---Yes.

PN778

Yes. And in particular you made it clear to the company that references to staff had to be taken out of this document?---Yes, staff weren't to do our work.

PN779

Right. So you say that you put it to the company that staff are not to do the work?---P and E work. Staff - what we proposed to the company was staff were not to do P and E work.

PN780

All right. And so the company made some changes to this document?---Yes. I don't know if they agreed that day, Mr Dalton - - -

PN781

No, no?--- - - - I think they came back a couple of days later.

PN782

I am sorry. I will be clearer, because then there were meetings on the - I think Mr Jordan agreed with this sequence so I will put it to you and if you agree with it that will save us a bit of time. The 15th and then there was a general exchange of positions?---Yes.

PN783

The 17th you got down to some more detail and then there was some actual changes made to the drafting - some drafting changes made?---Yes.

PN784

And then the 18th the amended flexibilities document was tabled?---Yes. I'm happy if the dates are correct that that's about the sequence, yes.

PN785

Okay. Now, you say in your statement that - well, perhaps I had better take you to it just so there is no misunderstanding.

PN786

THE COMMISSIONER: We are going to take a short break at 4 o'clock, Mr Dalton.

PN787

MR DALTON: Yes, Commissioner.

PN788

Paragraph 24 of your statement?---Yes.

PN789

It was at this meeting that management gave the concession staff would not perform P and E employees work; right?---Yes.

PN790

And then you go on to say, and I assume that this is the reason you say that management gave the concession:

PN791

Mr Davis said words to the effect, "I acknowledge staff are out of P and E work if we are going to reach our agreement."

PN792

Right?---Yes.

PN793

Now, you say words to the effect - you cannot remember whether those were the precise words that he used?---No, no, I can't remember if they were the precise words.

PN794

As far as you recall you walked out of that meeting believing him to have said words along those lines?---Yes.

PN795

So you took whatever he said to mean that he accepted that staff could not do P and E work if he was going to reach an agreement?---Yes.

PN796

Okay. Now, the witness - Mr Davis does not recall exactly what he said on that day, but he says that the discussion revolved around the document. That the discussions on the 15th and 17th revolved around the document so the CFMEU was saying, "We do not agree with these points," or, "We want these changes to the document," and then the company responding to that; do you agree with that?---In part. We get quite passionate in our presentations sometimes and we would have talked about all the sort of stuff, about if you want to make an - get an agreement with us then staff won't be able to do our work. And my recollection of the meeting was Mr Davis agreeing to that point of view.

PN797

All right. Now, Mr Hedges says that he agrees with you that Mr Davis said something similar to what Mr Jordan describes him to have said, and I will read that to you?---Thank you.

PN798

Mr Jordan says, "We understand staff have to come out."

PN799

That is the first part of what he says, and then he goes on to say:

PN800

If we press for staff to do your work then we won't have an agreement.

PN801

Now, Mr Hedges thinks that Mr Davis said something like, "We accept that staff have to come out if we are going to reach agreement." That is that it was a comment made in the context of taking staff out of the document. Do you accept that that may have been said?---My recollection isn't clear. As I said, I - he said words to the effect that they were agreeing that staff were going to come out and if Mr Jordan and Mr Hedges suggest that that's the way, then yes, I would agree with them.

PN802

I guess the company is saying that you may have walked out thinking that what they said meant something, but they walked out thinking that it meant something else. Is that possible?---I didn't leave the meeting on the 15th and I certainly didn't leave it after it was all sorted thinking anything other than the company agreed that staff wouldn't be doing our work.

PN803

Okay. And - - -?---So although it's possible they may have, I never.

PN804

Okay. The - walking out of that was it your understanding that the company had retreated from its claim to have the certified agreement providing for staff to do P and E work?---My understanding was that the company agreed that staff wouldn't do P and E work. They tested us later on with the guarantee of supply.

PN805

Well, we will deal with that in a little while?---Yes.

PN806

When you say that the company agreed that staff would not do the work, did the company ever agree - - -?---Sorry?

PN807

- - - Did the company ever agree that it would not use staff on P and E gear for the life of the agreement?---Yes, that's my understanding.

PN808

Well, it is your understanding. Did they say that?---I believe so, yes.

PN809

You believe they said that?---Yes.

PN810

All right. Well, can I ask you to refer to your notes which you have attached. Well, perhaps I should ask you the first question. You do not attach any notes for the 15 March meeting. Can you explain why not?---I can't explain. No, I don't know.

PN811

Well, did you take notes on 15 March?---If we had a meeting on 15 March I would suggest that I'd have some notes of it.

PN812

Well, can I ask you why did you not attach them to your statement?---I don't know, Mr Dalton.

PN813

Well - - -?---I can only imagine that there was nothing of relevance to the debate other than what the flexibility document shows in Mr Jordan's statement. I haven't read the books for - - -

PN814

Well, do you remember when you prepared this statement looking for your notes of 15 March to see whether it supported your understanding of what the company said?---I can't recollect. I've read so many notes I can't recollect exactly what the notes on 15 March say.

PN815

So there are notes for 15 March?---Yes, because I would have had them to suggest there was a meeting on 15 March.

PN816

And it did not occur to you that that would be a relevant document for the purposes of this proceeding?---It never - no, Mr Dalton.

PN817

Do you have that set of notes available for us to look at?---I don't have them here, no.

PN818

Well, are you able to arrange with Mr Endacott for that document to be provided to us?---Yes.

PN819

THE COMMISSIONER: Take a break there, Mr Dalton, 10 minutes.

SHORT ADJOURNMENT [4.02pm]

RESUMED [4.34pm]

PN820

THE COMMISSIONER: Mr Dalton, I do apologise for that delay, it was unavoidable.

PN821

MR DALTON: That is fine, Commissioner. Could I ask the Commissioner what time you plan sitting to this evening?

PN822

THE COMMISSIONER: Well, I propose to have these proceedings concluded within the three days set down. To a large extent that depends on the parties.

PN823

MR DALTON: Yes, in - - -

PN824

THE COMMISSIONER: If there is a shared view between you and Mr Endacott that the balance of the witnesses can be dealt with in the remaining two days easily, then I would be proposing to adjourn today at five, but if there is some doubt as to the ability of the parties to complete the witness evidence and submissions by, or within the allotted time then I would propose to sit later than that and again later than that tomorrow, so as to ensure that the proceedings are completed within the time allotted. Perhaps we might adjourn into private conference and discuss that matter before you continue with this evidence. Is that appropriate?

PN825

MR DALTON: I am happy to do that now, yes.

PN826

THE COMMISSIONER: We will adjourn into conference and leave the record now.

OFF THE RECORD [4.34pm]

RESUMED [4.35pm]

PN827

THE COMMISSIONER: Having consulted with the parties in private conference about the programming of the matter what I propose to do is the following. Firstly, we will suspend the evidence of Mr Kelly for the moment. We will adjourn the proceedings this afternoon and tomorrow morning continue with Mr Kelly's evidence. We will then have the evidence of Mr March, and subsequent to the conclusion of Mr March's evidence we will move on to the evidence of the witnesses of the respondent, Messrs Flynn, McKenzie and Gageler, is that correct?

PN828

At the conclusion of the evidence of those witnesses, subject to their availability we will have one of either Mr Hedges or Mr Davis late tomorrow. We will sit late tomorrow night and conclude the witness - the evidence of the other witness and the submissions on Friday. Any questions? No questions. We are adjourned until, I think we will make it 9.30 in the morning. We are adjourned.

ADJOURNED UNTIL THURSDAY, 26 JULY 2001 [4.45pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #E1 OUTLINE OF CONTENTIONS PN222
PETER JORDAN, AFFIRMED PN223
EXHIBIT #E2 STATEMENT OF MR JORDAN PN249
WITNESS WITHDREW PN651
GRAHAM PATRICK KELLY, SWORN PN653
EXHIBIT #E3 STATEMENT OF G.P. KELLY PN669