C3220/800, Transcript of Proceedings [2001] AIRCTrans 308 (21 March 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

JUSTICE GIUDICE
SENIOR DEPUTY PRESIDENT POLITES
COMMISSIONER LARKIN

C No 32208 of 2000
C No 32209 of 2000

CALTEX REFINERIES (NSW) PTY LIMITED
and ANOTHER

and

THE AUSTRALIAN WORKERS UNION

Applications under section 170MW of the
Act for an order to terminate or suspend
a bargaining period - part heard

SYDNEY

10.02 AM, THURSDAY, 1 MARCH 2001

Continued from 18.12.00

Hearing Continuing

PN402

JUSTICE GIUDICE: Any changes in appearances?

PN403

MR SHAW: I don't believe so, your Honour, but I think I would announce an appearance certainly of my junior, MR D. GITTUS and MR WOODS from the AWU.

PN404

JUSTICE GIUDICE: Who is to start?

PN405

MR SHAW: I believe that we are, your Honour. That is the arrangement. There have been some discussions between the parties to facilitate the procedures and I believe the bench will see a hopefully efficient management of the proceedings with some co-operation from both sides. If the Commission pleases, last time we were here before this bench we had I think four issues in mind. Certainly my understanding was that the really hard issue was manning. Essentially, we spent a couple of days resolving that and that is, I would respectfully submit, an achievement which we had the assistance of the bench on.

PN406

It was a process resolution rather than a specification of manning at the refinery but in the statement of Mr Wicks of February 2001, annexure A, is I think a two page document that reflects the outcome of those deliberations. So, lest your Honours and Commissioner think that any time was wasted during those conciliation proceedings I think that that is a positive achievement that the parties have reached. Still there is one additional clause that the employers seek in relation to manning that is over and above the agreement and we can have a short debate about that. I don't think very much turns on it. It can be shortly dealt with as a matter of submission.

PN407

Secondly, there was the question of wages and there remains the question of wages. Your Honours and Commissioner, although I said it in the course of conciliation proceedings, I indicated that there wasn't a vast difference between the parties, although the union seeks retrospectivity. The employer doesn't deny that there should be a wage increase over the next two years. The quantum is not very far apart. I did invite the bench in conciliation mode to give us some kind of indicator as to what an appropriate quantum would be and I indicated that, from my client's point of view, they would be advised to and indeed would take seriously any indicator that the bench were to make about wages but at the moment we are still apart on that.

PN408

Prima facie that would need to be arbitrated although one can never preclude some kind of pragmatic agreement, given the relatively small distance between the parties on quantum of wage increases. Then there were two other questions that the union had put on the table; namely, redundancy and superannuation. I think it is right to say that the question of redundancy has essentially gone away. In relation to superannuation, there is what I would characterise as a very modest claim by the AWU for some superannuation review committee to be set up. It is difficult to see why that couldn't be the subject of agreement.

PN409

After all, in this world anything can be reviewed or reconsidered and some kind of consultative mechanism to do that would seem to be really parenthood and ought to be the subject of read agreement. Since then and in the course of the conciliation proceedings, a whole host of issues have been raised principally by the employer which I suppose might be characterised as questions of managerial prerogative and an attempt to displace a number of the agreed provisions to be found in the current enterprise bargaining agreement.

PN410

I suppose your Honours and Commissioner they are the issues which perhaps regrettably we will need to go through in the days that have been set for a hearing. Mr Woods from the national office of the AWU has asked me if he could make a few opening remarks to the bench I believe shortly. I would ask, unless your Honours and Commissioner had any difficulty with that, that Mr Woods could do that.

PN411

JUSTICE GIUDICE: Thank you. Yes, Mr Woods?

PN412

MR WOODS: Your Honours and Commissioner, I have requested this opportunity before the case gets under way in any substantive way is to put to the bench two issues of major concern that the AWU has in relation to these types of application and the approach the oil industry in general is starting to take. The two issues I want to canvass are the concept of annual wages and the approach that the AWU has taken in relation to the draft award. The AWU and its amalgamated parts, such as the FIA, have had a fairly long history of being somewhat different to the traditional unions in this country in that it has accepted as a concept payment for rewards for whatever work is done; such as shearers, goldminers or even in the steel industry was one of the first unions to introduce bonus type arrangements.

PN413

In the chemical industry, when the chemical workers amalgamated with the iron workers, this country for the first time saw annualised salaries brought in at ICI Botany and it was a new concept that essentially was developed by this organisation as to handing over responsibility to workers in a shared but responsible way. The concepts of that as it had been developed in the blue collar area where it had never been done before was really giving authority to workers to manage a refinery. The concept was fairly fundamental that management around the oil and petrol chemical industry had decided that what they wanted was a more sure bug free way of working out how much a facility was going to cost to run.

PN414

They entered into discussions with the union and got agreement that for a certain amount of wages with a certain amount of resources, all of the management and responsibility, the rostering, the covering of absenteeism, the managing of breakdowns was all going to be given the authority of the workforce. It became their problem. The problems of short term absences, the problems of rostering, the problems of employees that were not as efficient as others were all the problem of the workforce once you accepted the concept of annualised salary. It wasn't an easy road to hoe to get there.

PN415

There was in all cases, in all industries - and it has gone through the steel industry, the aluminium industry, the chemical industry and the oil industry - there were basic principles and concepts that made up the very fabric for us to move into those areas. It was a mature relationship that had been developed and the enormous amount of responsibility and authority and obligation on the workforce increased tenfold. It was not a case any more where we got rewarded for inefficiency, where we would be paid overtime. If there was inefficiency, we paid for it not the management. We had to come in and cover those types of approaches. So, this is a history that has been built up right through industry and particularly in Caltex Kurnell Refinery.

PN416

All the concepts and approach to annualised salary that have been developed have been enshrined in either reports, awards or EBAs and they have all been agreed to. Now when the AWU received the draft award from the company, whilst we were talking about specific issues, it became obvious to us that that fabric that had been woven to reach an agreement, to move in to analyse salaries, had been abandoned by the company. In our attempt to deal with the draft award that the company had provided us, we tried to go through clause by clause, and we quickly found out a quarter of the way through that this would have been a mammoth case for us argue every single point. So the approach the AWU has taken in this matter is to basically work from previous agreed awards, previously agreed agreements, EBAs and documents to make up annualised salary, such as the Spitt report.

PN417

The AWU has taken a calculated risk, in that what it's done in its draft, is that it puts before the Commission all that has previously been agreed. This bench can operate in some confidence that if it uses the AWU draft, it can do it on the basis of knowing that all of the documentation and all of the drafting and all of the provisions we have put before you, have previously been agreed by the company, by the union, by its members and by this Commission.

PN418

You can't say the same for the employer's document. It is a document based on what they want. And our fear is that if the Commission uses the company's document as a working model, that the fabric that was woven for us to go into annualised salaries will have been lost. The work force would not have accepted the concepts of annualised salary under the master/servant type approach that the employer has taken with managerial prerogative. The two do not mix. They are like oil and water. They do not mix.

PN419

We strongly urge that the Commission deciding and working on this, that they've got two clear choices. They've got a choice to use a draft award, that has all been previously agreed. We will identify every single change that has been made to bring it up to date, but we strongly urge once again, that this bench uses the AWU draft because it can do it with some confidence that at one time in history that that document - 95 per cent of it would have been agreed and certified by this Commission.

PN420

If the Commission pleases.

PN421

GIUDICE J: Thank you, Mr Wood.

PN422

MR SHAW: If the Commission pleases, there is a summons to produce that's been issued and I call upon that summons.

PN423

MR WATSON: There are some introductory comments we wish to make and perhaps we could do that first, and then respond to the summons issue separately. This is an arbitration arising from a termination of bargaining periods in matters 32208 and 32209 of 2000. Since the matter was last before this bench there have been some related developments. There were further bargaining periods generated by the AWU given matters C numbers 24041 and 24042 of 2000. They were initiated in December 2000 prior to the last hearing or conference before the Full Bench, and those bargaining periods involved substantial identity of matters identified in those bargaining periods compared to the bargaining periods, the subject of these proceedings, and the matters at issue between the parties in these negotiations, giving rise to these proceedings.

PN424

My clients made applications to terminate the December 2000 bargaining periods, and in a decision PR 900212 handed down on 11 January of this year, Senior Deputy President Harrison granted the application. An appeal has been lodged by the union against that decision. An application for a stay of her Honour's decision and orders has been unsuccessful. Her Honour, Senior Deputy President Harrison convened a conference under section 170MX(2) of the Act for Monday of this week. That did not take place and that matter was adjourned due to the unavailability of the AWU.

PN425

Can we foreshadow our position in relation to those related as follows:

PN426

We expect that conciliation will occur before Senior Deputy President Harrison as is required under the Act. If conciliation results in agreements, that may obviate the need for a decision in this matter. If conciliation does not lead to agreement and her Honour finds as she did in the earlier proceedings giving rise to this matter, that she was unable to resolve the matter by conciliation, then pursuant to the Act, a Full Bench will need to arbitrate on the matters at issue in that bargaining period.

PN427

We say that the appropriate course if that follows that particular path is for the two matters as it were to be joined before this bench and one award be made applying to the Kurnell refinery arising from the joined section 170MX matters. We foreshadow that now, because we anticipate that the point of conciliation occurring as being completed, may well not occur till the hearings in this matter next week are completed. It may be necessary for some further proceedings to hear and determine our application for joinder and any consequential issues that may arise as a result of the applications that we foreshadow.

PN428

GIUDICE J: Well we have decided that there is no likelihood of agreement being reached in these proceedings. The matter will just have to be arbitrated. I am having difficulty seeing where the second lot of proceedings fit into that. Why would they be joined. In due course wouldn't they just lapse?

PN429

MR WATSON: Well your Honour, there is an obligation to arbitrate matters at issue. Insofar as there is overlap, then there wouldn't be any point to anything further.

PN430

GIUDICE J: You are saying there are matters at issue in the second bargaining period that aren't at issue in the first.

PN431

MR WATSON: There could be, your Honour. And we don't know how the submissions will ultimately be made, but can I say this, that in this matter previously, my learned friend has foreshadowed an argument that the issue of refinery shift supervisor being the team leader was not a matter at issue in the bargaining period subject to these proceedings. Her Honour, Senior Deputy President Harrison, found that it was an issue in the proceedings that she most recently terminated. I don't know whether that's still an issue - it does appear from the contentions filed by the union, that it may no longer be the position of the union.

PN432

But can I raise that directly so that if that turns out to continue to be the union's position, that would be a matter which would be arguable in these proceedings, but unarguable we say in the other, and it would be unsatisfactory for two sets of issues which clearly overlap substantially but are not identical, are required to be dealt with separately by separate Full Benches with separate awards, when the most common sense approach would be for them to be joined, all matters at issue in all of the bargaining periods. The consideration of a single prevention essentially joined proceedings and a single award be made in relation in all matters at issue. Can we next say that the parties have filed proposed awards to be made in these proceedings and served on each other. It is probably convenient that at this stage I tender the draft award provided on behalf of my clients and the outline of contentions in support thereof. At some stage they should be marked.

PN433

JUSTICE GIUDICE: The contentions dated 12 January, they're the ones?

PN434

MR WATSON: Yes, your Honour.

PN435

JUSTICE GIUDICE: They will be Caltex 6.

EXHIBIT #CALTEX 6 CONTENTIONS RE DRAFT AWARD

PN436

JUSTICE GIUDICE: And the draft award will be Caltex 7.

EXHIBIT #CALTEX 7 DRAFT AWARD

PN437

MR WATSON: I say, for the assistance of the bench and the parties in the consideration of evidence and the determination of those matters that we assess that the differences between the parties involve approximately 24 matters. Our assessment of those matters is that there are around 13 matters which do involve significant areas of disagreement. A lot of the matters that there was a difference between the parties we anticipate will be the subject of short submissions and they do not involve substantial areas of disagreement or the need for evidence in relation thereto. Some of the issues, for example the issue of salaries involves sub-issues including operative dates, etcetera.

PN438

What we have done to hopefully assist the parties and the bench is to attempt to summarise the proposals of the parties reflected in the two draft awards and can I tender a document in the nature of a aide memoir. It is headed "Comparison of proposed awards".

PN439

JUSTICE GIUDICE: I will mark that Caltex 8.

EXHIBIT #CALTEX 8 COMPARISON OF PROPOSED AWARDS DOCUMENT

PN440

JUSTICE GIUDICE: Your rights are reserved obviously, Mr Shaw in relation to that.

PN441

MR SHAW: Yes.

PN442

MR WATSON: The document, as I have said, is an attempt to reflect the positions of the parties in a brief manner. Identify the differences consecutively. There are some notes in the right-hand column which are our notes which are intended to assist in understanding the nature of the differences between the parties.

PN443

JUSTICE GIUDICE: Yes well that is very useful, Mr Watson, thank you.

PN444

MR WATSON: The other documents, including witness statements, will be tendered as witnesses are called. There are some other documents which may well be tendered during the course of the proceedings. A couple of other general points. We have agreed to the request by the union that their witnesses be called initially. We have not discussed the order of submissions which we anticipate to reach next week. We will have discussions about that order to see whether we can agree on that approach.

PN445

Can we just make this general point: that it is our submission that there is an onus on a party seeking to have a particular award provision made to make out a case in these proceedings that that provision should be made and we submit that should be having regard to the merits of the issue and the factors mentioned in section 170 MX(5). We have also reached an agreement as to procedure in this sense in that there are time limits for the hearing and determination of these matters.

PN446

There have also been witness statements filed and contentions exchanged and it is agreed that there will be, I suppose, a non-technical approach to the calling of evidence that there will not be a need to cross-examine all witnesses in relation to all issues that may be the subject of subsequent evidence of future witnesses and we place that point on the record. Can I now deal with the issue of the summons. A summons has been issued by the commission requiring two classes of documents to be provided today.

PN447

I deal with the second matter first. The second matter asked that a report known as a Solon report, referred to in the witness statement of Mr Hogarth, be provided pursuant to that summons. Can we provide to the commission a document which responds to that part of the summons and can we say that this is a large document. It contains a number of separate parts. The Solomon report is a collection of data and analysis of that data by Solomon and Associates.

PN448

JUSTICE GIUDICE: It is not a biblical reference?

PN449

MR WATSON: Not biblical, your Honour.

PN450

MR SHAW: No wisdom there.

PN451

MR WATSON: Probably quite a lot of wisdom though. The vast majority of that - - -

PN452

MR SHAW: I say that without having seen it, by the way.

PN453

MR WATSON: The vast majority of that material is provided to each of the companies that subscribe to that process conducted by Solomon and Associates but the final tab in that folder behind a blue divider sheet contains information relating to the Caltex Kurnell Refinery which is not provided to any other company and which is of a confidential nature relating to detailed material as to costs and other operational figures of the Caltex Kurnell Refinery. We have no objection to the legal representatives of the union having access to the entirety of the document on the basis that the confidentiality of the last tab, in particular, is respected and we respond to that aspect of the summons on that basis.

PN454

JUSTICE GIUDICE: Have you see this, Mr Shaw?

PN455

MR SHAW: I have not, your Honour, but I am content to apply for access on the conditional basis outlined on behalf of the company. If we seek to use that material in some way, shape or form we will obviously need to raise the matter with the bench again and deal with it on that basis.

PN456

JUSTICE GIUDICE: Very well.

PN457

MR SHAW: There is a similar position in relation to the other aspect which relates to financial material relating to the Caltex Kurnell Refinery. It's complicated however, in this sense, in that the Kurnell Refinery, does not operate as a discreet business unit with income costs and profitability, and accounts are not kept as if it did operate in that way. The Kurnell Refinery, is a part of the operations of Caltex Australia, and the costs of running that refinery are a costs centre within the accounts of Caltex Australia, however the income - I'll be put in these simplistic terms, the costs of purchasing crude oil, and the income derived from selling petroleum products, is not included within the costs centre accounts of the Kurnell Refinery. So it is not possible to produce figures which show income expenditure and profitability, in the sense that one might find in a discreet operational business.

PN458

Nevertheless, we have endeavoured to assemble material which relates to the matters dealt with in the summons, and we have also provided some explanatory notes as to that material, which explains that in more detail the point that I've just made, and the contents of the folder of material. There is one document which is in a glossy form, which is the Caltex Annual Review 1999, which is a public document, the remainder of the document is not public, it is of a confidential nature, and we provide it for the Commission in response to the summons, and we do so on the basis that we have no objection to it being made available to the legal representatives only, acting on behalf of the union for the purposes of these proceedings alone.

PN459

MR SHAW: If the Commission pleases, I apply for access on the limited basis set out by my friend, and presumably we can liaise with your Honour's associate to have access to that documentation in both categories overnight.

PN460

JUSTICE GIUDICE: Yes certainly, Mr Shaw. Access will be granted on that basis.

PN461

MR SHAW: If the Commission pleases, we should reciprocate by tendering the draft award filed by the AWU and also the AWUs outline of contentions in support of that draft award.

PN462

JUSTICE GIUDICE: Yes, the outline of the contentions is a 3 page, 10 paragraph document, that will be AWU8, and the draft award, will be AWU9.

EXHIBIT #AWU8 OUTLINE OF CONTENTIONS

EXHIBIT #AWU9 DRAFT AWARD

PN463

MR SHAW: Thank you, your Honour. In terms of witnesses, if the Commission pleases, I've taken the view, and I just put it on the record, that I don't see any difficulty about witnesses from either side being present during the proceedings. I don't see any critical issues really arising, but unless there's any objection to that.

PN464

JUSTICE GIUDICE: We won't make any order about witnesses, unless somebody suggest we should, and then hear argument about it, so I think we'll proceed on that basis.

PN465

MR SHAW: I agree with my friend that there has been discussions about what he characterises as a non technical approach to cross-examination, that is no Browne v Dunn type points.

PN466

JUSTICE GIUDICE: Well the matters would be put in issue by the opposing witness statement, presumably.

PN467

MR SHAW: I believe so, your Honour, that's the approach the parties have taken, I say that without prejudice, to another Browne v Dunn point I've got reserved before a different Full Bench of this Commission, I don't want to prejudice another client, but that's the pragmatic approach we've taken in the current case, where there is a voluminous amount of documentation before the Commission, and I believe the issues will be fairly ventilated by looking essentially at that documentation rather than being illuminated by lengthy cross-examination.

PN468

Now could I just add to the opening we've put by saying that if the Commission pleases, since the conciliation conferences took place before this bench, in the latter part of last year, both the employer and the AWU have been required to prepare draft awards and evidence in support of those draft awards, and the draft awards have been tendered. As I've said earlier the conciliation proceedings, have had the beneficial result of, in one sense narrowing the area of disputation between the parties, certainly in relation to the Manning issue, but on the other hand, perhaps regrettably opening up a whole lot of other issues about the way in which the plant should work at Kurnell.

PN469

The AWU Manning clause is to be found at clause 3.3 of the draft award, that is AWU9. The clause is in the same terms as the agreement reached in the conciliation conferences chaired by the Full Bench, or presided over by the Full Bench. In addition, appendix 5 of the AWU draft award reflects the Manning levels that currently operate at the Kurnell refineries. The employer's proposition about Manning, is to be found at clause 6 of the Caltex entities draft award. One subclause, that is clause 6, point 1, did not form part of the, in principle, Manning agreement that was struck during the course of the conciliation conferences, but is nonetheless propounded by the employer.

PN470

Appendix 5 to the Caltex entities draft award, identifies areas of responsibility, but does not unlike the current enterprise bargaining agreement specify Manning numbers. The parties' competing draft awards, can be characterised broadly in this manner, if the Commission pleases. The AWU draft award, seeks to build on to the terms of the Ampol Refineries New South Wales Pty Limited, and Ampol Lubricating Oil Refinery Limited manufacturing agreement of 1997. That is the 1997 certified agreement.

PN471

Where changes have been incorporated in the AWU draft award, that is departures from the 1997 certified agreement, they attempt to replicate the terms of agreements that were reached between the parties, during the negotiations that have taken place since August 1999. So essentially we've used the 1997 agreement as a model, but we've then incorporated into that, in our draft award, a number of thankfully documented agreements between the parties, which we would say represent prima facie, a fair and reasonable outcome in terms of the arbitration.

PN472

Can I give some examples, just in a preliminary way, of those agreed matters. Firstly clause 6.1(2) Learning Time, the clause in the AWU draft award reflects the agreement struck between the parties, on or about 6 March 2000, in respect of that training programmeme. Clause 6.4 of the AWU draft award, that is AWU9, learning allowance, the clause in the AWU draft award we say, reflects the agreement struck between the parties on or about 6 March 2000, about learning allowance. The third example I would give about what we say are agreed matters, is appendix 9, of the AWU draft award, Refinery Technical Recap Criteria, we say and we say the evidence will show, that that appendix, appendix 9 of the AWU draft award, reflects the agreement struck between the parties on or about 6 March 2000 in that respect.

PN473

There are also, your Honours and Commissioner, clauses in the AWU draft award that reflect positions where, although full agreement was not reached between the parties, we say that there was no substantial difference between the parties in a number of respects and may I give a number of examples of areas where we say there is not really a substantial difference between the parties.

PN474

Firstly, appendix 7, Process Maintenance Tasks and again I'm referring to the AWU draft award, exhibit AW9, the variances between the AWU and the Caltex Entities draft award proposals on this issue, reflect the fact that AWU does not consider it appropriate that it be required by award prescription to undertake work that has the potential to give rise to demarcation disputation. That's the only example I give of matters which were - although not fully agreed then nonetheless substantially agreed - - -

PN475

JUSTICE GIUDICE: What was the reference to that again, Mr Shaw?

PN476

MR SHAW: It is appendix 7, Process Maintenance Tasks and the stumbling block to agreement here seems to be, as I understand it, possible demarcation.

PN477

JUSTICE GIUDICE: Yes, I remember some discussion about that.

PN478

MR SHAW: Yes, I recollect that. I'm sorry, I correct myself, that's the only example I'm giving, at least in opening, of matters which seem close to agreement but have something of a question mark over them. Your Honours and Commissioner, in addition to the above, there are contained within the AWU draft award clauses where there was no agreement between the parties. For example, clause 3.6 Superannuation, we would be propounding and saying that it ought to be inserted in the section 170MX award made by the Commission.

PN479

By way of contrast to the AWU draft award, the Caltex Entities Draft Award seeks to move away from the terms of 1997 certified agreement and reverts back, speaking broadly here, reverts back to positions that were to be found in the Ampol Refineries NSW Pty Limited and Ampol Lubricating Oil Refinery Limited Australian Workers Union Manufacturing Department Award 1995 which I shall refer to for the sake of brevity as the 1995 award. I think that's an attempt to fairly reflect the philosophical approaches of the two parties. Our case focuses on 1997 agreement plus subsequent agreements reached between the parties, documented where as the company seeks to, as it were, turn the clock back to the 1995 award and remove a number of the provisions which had been agreed in 1997.

PN480

It is to be noted that the Caltex Entities draft award seeks to enshrine the refinery shift supervisor, RSS as the team leader at the Kurnell Refineries and I refer the bench to clause 8.1 of the Caltex draft award and that would give the RSS a major involvement in and control over the rostering system and that is further explained in appendix 6 to the Caltex Entities draft award under the headings of Annual Leave, Start-ups and Shutdowns and T & I coverage and as the bench may well know better than I do, T & I means Turnarounds and Inspections.

PN481

Those changes, while no doubt our friends appearing for the employers would characterise or would seek to characterise them as minor in nature, we say they are changes that really are matters of substance and they require a fundamental alteration to the terms of annualised salary guidelines. In other words, we say they were part and parcel of the deal which lead to the introduction of annualised salaries. They were the quid quo pro for the introduction of annualised salaries and your Honour with Senior Deputy President Polites will remember because you were involved in this particular agreement and we say they were an important factor in reaching that significant agreement which led to 1997 certified agreement.

PN482

The Caltex Entities draft award also seeks to entrench a competency assessment regime and we refer to clause 25.6 thereof. The position taken by the company and the evidence in support of it that the bench will find, for example, the statement of Mr Hayward of 12 January, 2001 which presumably will be tendered in due course, we say is at odds with the agreement reached between the parties on or about 6 March, 2000 where the primary importance of gap training was recognised and we refer to the statement of Mr Wicks of February, 2001, paragraph 13.

PN483

As I appreciate the difference between the parties as to the nature of the training, the AWU operators, if I can use perhaps the outdated term, really say, look, we don't need to be trained in the day to day work that we're actually doing but they are cooperative and available to deal with the so called gap training which means the gap between existing knowledge and skills and technological innovation. There's really something of a difference about the focus of the training although I would apprehend that both parties would say that gap training was necessary, I presume there is no actual disagreement about that.

PN484

There is an apprehension that a general unqualified regime of training may lead to that training being used for disciplinary purposes or otherwise purposes that are ulterior from the plain and clear meaning or the intended meaning of the regime of training. Finally, if the Commission pleases, we would note that the parties remain apart on the issue of the quantum and operative date of wages and the basis upon which bonus payments ought to be calculated and that is something subject to the always possibility of some sort of agreement your Honours are likely to be called upon to arbitrate.

PN485

May I just say in terms of the idea of the shift supervisors becoming the team leaders, may I just reiterate that in our submission that was part of the annualised salary agreement. There were guidelines put up by the company and accepted by the AWU which are set out in Mr Wicks' statement in tab A thereof and that was really the selling point; that was the critical proposition put by the company in order to persuade the union and its members to move to annualised salaries which would, on the face of it, seem to have significant benefits for the company.

PN486

JUSTICE GIUDICE: Mr Shaw, I don't quite understand that issue, I must say. It may become clearer later but is the proposition that the change in organisation that accompanied annualised salaries increase the work of the operators and made it more complex?

PN487

MR SHAW: No, I don't believe so, your Honour. It's not so much a question of the additional work load although some of our evidence does go to changes in the work of the operators, it's more that the company said, let's have annualised salaries. Let's incorporate any overtime component in the aggregate salaries and the quid quo pro for that was that for example, in relation to annual leave, the work team would administer the annual leave roster. Another example is that where extra manning was required for startups and shutdowns, that extra manning would also be managed by the work team.

PN488

In other words that was part of the package that led to annual salaries so it is not as if it's an additional work load but it was, one might say, a workplace cooperative arrangement whereby the work team would manage questions of extra manning annual leave and similarly in relation to T & I, that would be dealt with by agreement with the work team. All of those provisions are in 1997 enterprise bargaining agreement and as I've said they were part and parcel of the general agreement about annualised salaries in 1995.

PN489

The benefit to the employer is, we would say, self evident that there is no longer a separate or identifiable overtime component in the remuneration package. But in the claims that will be advanced by the company here, the bench will see that in relation for example to annual leave, to start ups and shut downs and to TNI coverage, essentially it's a managerial determination of those matters. Admittedly subject to some consultation with the work team.

PN490

JUSTICE GIUDICE: Yes, well I understand the submission that because of that history no change should be made in relation to the refinery shift supervisor position. The claim made by the company. But if we were to contemplate that change, what would the implication of that be in terms of the salary structure? Have you got that far?

PN491

MR SHAW: No, I think I'd need to take that on advisement if I can, your Honour. I'll endeavour to assist the bench as to our views as to that if that were to be the case.

PN492

JUSTICE GIUDICE: Yes, but the sort of submission that I thought might be coming was, well if the Commission's contemplating changing the arrangements in terms of devolution of authority, then there should be a movement away from the annualised system. But that doesn't necessarily follow, so in any event I'll leave that with you.

PN493

MR SHAW: Yes, I don't have instructions on that and partly that's because of the strength of feeling that these changes ought to be opposed root and branch.

PN494

JUSTICE GIUDICE: Yes, I fully accept that.

PN495

MR SHAW: So putting it bluntly, if the Commission pleases, the teams and the union members have had control over their own rosters and we say bluntly that's why they accepted annualised salaries. Another major issue that I'll just foreshadow and I won't be lengthy in this opening, because we want to get on to the witnesses fairly soon. But another major issue concerns the claim by the company for competency retraining for operators or refinery technicians. That's to be found in clause 25 of the Employers Draft Award and as I had foreshadowed there is an apprehension that that might be used for untoward purposes. For example, disciplinary purposes rather than a bona fide training plan.

PN496

It is, I believe, accepted that there is some time in the annualised salary scheme which could be reasonably used for training. So that there's not a total stand off between the parties about that. The company wants to use that period where operators are paid but not necessarily required to work as a period of mandatory training. The bench will see that the company claim contemplates that training would occur on the rostered day off and that training would occur before or after the shift. As we have said our apprehension is that that might be used unreasonably or punitively by the company and it's clear pursuant to clause 10.5 of the employers claim or draft award that if the training was not complied with then the employee would lose pay as a result of that.

PN497

Then as I said earlier there is an acceptance on the part of the union that there is desirable training in what is called, the gap, that is new technology. But there is a resistance to training which simply is used to educate people on what they already are doing. Indeed there was a compromise reached between the union and management in that respect and prima facie one would think that such an informed compromise on both sides ought to be accorded considerable weight by this bench in an arbitration pursuant to section 170MX. That compromise is embodied in the AWU draft award. That is clause 6.1.2. It's also to be found in Mr Wicks' statement of February 2001 and in annexure D thereof where there is the agreed training prescription which putting it broadly and perhaps simplistically, contemplates a period of 24 hours training per annum within the paid time. That would include gap training as I have defined it.

PN498

So that that document, we would say, represents a prima facie and perhaps even more than that, a weighty piece of evidence why that kind of compromise would be an appropriate outcome for the arbitration. May I just add to what I've just said, although it's by no means a complete answer to the question your Honour raised with me. That one concern is that if the RSS which we would equate to being essentially management has complete control of the rosters that that may lead to pressures for additional overtime which we would regard as being antithetical to the basis of the annualised salary agreement that has been reached. But I appreciate that's not a full answer to the matter your Honour the President raised with me and we'll obviously need to come back to that in the days ahead.

PN499

Now, if the Commission pleases, would that be a convenient time to start calling the union witnesses?

PN500

JUSTICE GIUDICE: Yes, it would, Mr Shaw. I've just got one general question that I don't expect you to answer now, but you might give some consideration to. The cases under section 170MX have had quite varied outcomes I think if you look at them. There aren't that many and the approaches haven't always been the same in the sense that the circumstances of the particular case seem to have altered the way the bench has look at it. I think there are if you like some contrast to be drawn in the degree to which the Commission has decided to intervene in the arrangements the parties have reached themselves.

PN501

Now, in this case your client is asking us to a very large extent, adopt agreements already reached. I am interested as a matter of perhaps general principle, in your submissions on the effect upon negotiations generally, not just between these parties, but generally if the Commission were to adopt an approach of saying, well at a particular point in the negotiations there was agreement therefore we'll adopt that as an appropriate outcome. I think there may be some broader policy issues there that we might appreciate some submissions on. But I'll leave that to you and I think it's probably something that might be covered right at the end when you're addressing on what we should do.

PN502

MR SHAW: Yes, your Honour. I accept entirely that I think those questions of principle are starkly raised by the case and we will be seeking to address the Commission on those matters. I suppose there are a range of approaches that could be taken. The most extreme point against us could be that well agreements are reached during the bargaining process but they ought to be disregarded by the Full Bench in arbitral proceedings. That's one extreme view. An intermediate view would be that agreements reached between competent parties freely bargaining, ought to be regarded as prima facie fair and reasonable.

PN503

Another view, and I think it's a view we would be tending to urge upon the Bench, is that the matter can be put somewhat more highly than that, that it's not merely a prima facie position but unless there is good reason to the contrary, positions reached between competent parties, properly advised during bargaining, ought to be given great weight by the Commission in the arbitral process. In a sense there's a shifting of the onus.

PN504

One would need to show why there's some changed circumstances or why the bargain struck was fatally flawed before the Full Bench would depart from that bargain in the arbitral process. To go to the other extreme of the spectrum, and I'm not sure whether I'll put that or not, but the other extreme would be the bargain ought to be regarded as binding and the arbitration or controversy ought to be precluded, by reason of the fact that the agreement has been reached.

PN505

So I think they are the spectrum of possibilities and I entirely understand that what your Honour, the President, has said to me, that the Bench would need to be assisted by submissions in point of principle going beyond the relationship between these two parties, as to what weight and role these agreements ought to be given in the section 170MX arbitral process. That applies, I suppose, both to the 1995 agreement in relation to annualised salary, to the 1997 enterprise bargaining agreement between the parties and to the agreements in more recent times in specific matters reached ad hoc.

PN506

JUSTICE GIUDICE: Yes, and they may raise some different considerations.

PN507

MR SHAW: They may. I accept that, your Honour. There may be some hierarchy there of weight to be given - - -

PN508

JUSTICE GIUDICE: Yes. I wasn't really thinking of hierarchy, more of just different considerations.

PN509

MR SHAW: I withdraw the word hierarchy, your Honour.

PN510

JUSTICE GIUDICE: I'm open to be persuaded, but what I intended was that there may simply be different considerations if you're looking at whether a certified agreement provision should continue on, than if you're looking at whether an agreement reached at some point in the bargaining episode should be adopted.

PN511

MR SHAW: Yes. As I think I really conceded in the course of answering your Honour, the President, there may be different considerations in different cases depending upon the question of the quality of bargaining power advice. There may be parties that could say, "Well, I'm sorry, we made a shocking error in coming to this accommodation". That's not a proposition that I would respectfully submit that could be meaningfully heard in this case. We're dealing with grown-ups. We're dealing with parties seasoned in the vicissitudes of industrial relations bargaining.

PN512

JUSTICE GIUDICE: Seasoned is one good word.

PN513

MR SHAW: It would be hard for Caltex or indeed the AWU and its delegates to say, "We were naive, we were misled," so we would be putting that in this case particular weight should be given to hard won agreements as part of the bargaining process, and indeed if that view of significant weight to these agreements were to prevail, it would in an appropriate case, alleviate the task of the Full Bench in section 170MZ arbitrations, by reason of the fact that they could at least prima facie or perhaps something more than that, place great store on the arrangements which the parties themselves had reached.

PN514

It might be thought to be a negative factor in terms of the collective bargaining process if the Full Bench were too readily to say to parties, "Well, you can take a step back from that. You've reached that agreement but you can now wash your hands of it. We'll deal with it de novo". In any event, I think I've said enough to give the Bench the flavour of the sort of approach that we would want to take in terms of urging particular outcomes in the arbitration to the Bench.

PN515

JUSTICE GIUDICE: Yes.

PN516

MR SHAW: Now I'll ask my junior, Mr Ginters, to call the various AWU witnesses. One point of procedure, if the Commission pleases, is whether the Bench would require the statements to be read.

PN517

JUSTICE GIUDICE: No. Not unless it's suggested otherwise.

PN518

MR SHAW: I wouldn't suggest otherwise. It would certainly expedite the matter if they were simply tendered and taken as read.

PN519

JUSTICE GIUDICE: But, Mr Shaw, I think it would be of assistance if we could get a programme so that we know the order of the witnesses. There is a document that has a list 1 to 13. Is that the order?

PN520

MR SHAW: I don't have that document that says 1 to 13 but I can tell the Bench there has been co-operative arrangements between the parties as to order of witnesses. I haven't actually heard from my friend about the order of the company witnesses yet, but during the day I no doubt will and I don't say that by way of complaint, but I'll hear from him hopefully at lunchtime as to the order of company witnesses. But for want of any more scientific basis, we've actually proposed to call the AWU witnesses in alphabetical order and we've told our opponents of that, so the first witness would be Mr Craik.

PN521

JUSTICE GIUDICE: There's no cross-examination required of Mr Bergen?

PN522

MR SHAW: I think there is cross-examination of all witnesses required except for some of those OH&S witnesses about manning that I've already tendered, where there is no cross-examination required. So I think fairly short cross-examination. Mr Andrew Hopkins and Mr Berger, their statements have already been tendered and I did indicate to the Bench what seems to be a fair time ago, that they were not required for cross-examination.

PN523

That's exhibit AW2 and exhibit AW1. AW2 is Mr Berger, AW1 is Mr Hopkins, so they can be disposed of. In relation to the balance of the witnesses, I believe that what we hope is relatively short cross-examination is required so the first witness, as I've said, would be Mr Craik. I haven't told my friend about this but there is what I think is a minor availability problem about the next witness, Mr Dean, but we're working on that. We may not necessarily have him as the second witness but we'll see if we can have him here.

PN524

Then Mr Grace, Mr Jenkins, Mr Keys, Mr Moran, Mr Ottaway, Mr Peddie, Mr Taylor, Mr Sam Wood from the AWU Federal Office and Mr Wicks. My friend has raised the question that it's not strictly alphabetical in relation to the last two. I take the point. Could I hand up a copy of that list of witnesses to the Bench? I'm afraid there is only one copy.

PN525
JUSTICE GIUDICE: Thanks, Mr Shaw.

PN526

MR SHAW: Thank you, your Honours, Commissioner, and if that's convenient, I'll ask Mr Ginters to call the first union witness.

PN527

JUSTICE GIUDICE: Yes. Thank you, Mr Ginters.

PN528

MR GINTERS: May it please the Commission, I call Mr John Craik.

<JOHN ALEXANDER CRAIK, SWORN [11.12am]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN529

MR GINTERS: Mr Craik, you've prepared a number of statements in relation to these proceedings?---Yes, I have.

PN530

Do you have copies of those statements with you?---No, not at the moment. I have down at the chair, yes.

PN531

Just excuse me, your Honour. Could we ask that those be made available to him? I'm sorry, your Honour, we'll just make sure the witness has his statements with him because it will be easier to have them signed and formally tendered.

PN532

Mr Craik, the first of your statements is filed 9 October 2000. Do you have that statement in front of you?---Yes, I have, yes.

PN533

Have you had an opportunity to read that statement since it has been prepared?---Yes.

PN534

Can you indicate whether the contents of that statement are true and correct?---They are true and correct.

PN535

Could I invite you then to turn to the fifth page of that statement, which is the final page and could I invite you to sign and date that statement as being true and correct. I tender that statement Your Honours.

PN536

JUSTICE GIUDICE: Exhibit AWU10.

EXHIBIT #AWU10 FIRST STATEMENT OF MR CRAIK FILED 09/10/2000

PN537

MR GINTERS: Mr Craik, a further statement has been prepared, filed on or about 24 November and dated 23 November. Do you have that statement in front of you, a statement of some six pages in length. Do you have that statement?---I have.

PN538

Have you read that statement?---I have.

PN539

And are the contents of that statement true and correct?---Yes.

PN540

Could I then ask you to turn to page six of that statement and could I ask you to sign and date that statement, please?

PN541

JUSTICE GIUDICE: Perhaps you might cross out 23 November 2000 on page 1.

PN542

MR GINTERS: Yes, thank you, your Honours. I tender that statement.

PN543

JUSTICE GIUDICE: Exhibit AWU11.

EXHIBIT #AWU11 SECOND STATEMENT OF MR CRAIK, FILED ON OR ABOUT 24/11/2000

PN544

MR GINTERS: Mr Craik, a third statement has been prepared. It's a statement dated February 2001. It's a statement of some four pages in length with a number of annexures to it. Do you have a copy of that statement with you. Have you read that statement?---I have.

PN545

Are the contents of that statement true and correct?---Yes.

PN546

I would ask you then to turn to the fourth page of that statement and sign and date it, please. Could I also ask you on the first page there, you will see under the heading third witness statement in reply John Craik, it's on blank February 2001. Could I ask you to insert today's date, please. I tender that statement, Your Honours.

PN547

JUSTICE GIUDICE: Exhibit AWU12.

EXHIBIT #AWU12 THIRD STATEMENT OF MR CRAIK, FILED FEBRUARY 2000

PN548

MR GINTERS: With the leave of the Commission, I would seek to ask Mr Craik a number of short questions. They are matters that arise out of an incident last Friday so they weren't able to be the subject of a formal statement and I shouldn't expect the questions will take a considerable amount of time.

PN549

Mr Craik, do you know who a Mr Capers, spelt C-a-p-e-r-s, is?---Yes.

PN550

And who is he?---Mr Capers headed up a review committee which just completed its findings at both refineries last Friday.

PN551

Prior to Mr Capers conducting that review committee, do you know what position or positions he had held in the past?---Mr Capers was a founding member of the Solomons group.

PN552

Thank you. You gave some evidence of a review committee. Were you privy to the results of that committee?---Yes, the committee gave a presentation last Friday afternoon at the refinery of their initial findings.

PN553

Did you attend that presentation?---Yes, I did.

PN554

Can you inform the Commission, in your own words, what it was that Mr Capers advised you were the results of that review?---Following the presentation by the various members of that committee, there was a question and answer session at the end. A question was asked of Mr Capers concerning the Solomons indices for the oil industry. Mr Capers replied to the audience, which is about 100 people, that he was a founding member of the Solomons which did review refineries worldwide to give a statistical report on their operations and maintenance and that he basically left the company because the statistics did not take in the human content towards determining whether refineries should operate under a certain set of conditions.

PN555

Thank you. Just excuse me for one minute. Mr Craik, was it simply an oral presentation that was given during the course of that meeting last Friday?---It was an oral presentation but it was also videotaped.

PN556

Thank you, I have no further questions of this witness.

PN557

JUSTICE GIUDICE: Mr Watson.

PN558

MR WATSON: Thank you, your Honour. Mr Craik, you have read the statements of Mr Haywood filed in these proceedings?---I have.

PN559

Where you have disagreed with the contents of those statements, you have said so in your statements in reply?---I have.

PN560

While you are at work, it is true, isn't it, that sometimes you are busier than other times?---No, the routine work that I perform and also the additional workload depending upon the process units themselves, whether we are shutting down or starting up, the workload is consistent.

PN561

Would you accept that there is some work that is routine and some that is non-routine?---There is routine workload of operations and there is also maintenance work that has to be prepared for, which is scheduled and unscheduled.

PN562

The operations are either operating in a stable manner or there are operational problems of one sort or another that occur from time to time?---There is routine work that we perform on a routine basis and the un-routine or unscheduled work that we perform due to operational problems.

PN563

You operate a console, do you not?---I operate two consoles.

PN564

You also do the refinery technician work which doesn't involve operating a console, from time to time?---I also perform the outside operator's duties, yes.

PN565

A number of employees on your team are trained to operate the console that you operate from time to time?---There is a number for each shift, yes.

PN566

For each console, there would usually be at least two employees who would be trained to operate that console on the shift at any one time?---Depending upon holidays, depending upon shift changes, depending upon sickness, that may be the case and it may not.

PN567

The way in which work is organised is that members of the team perform a particular function per shift which may involve operating the console or may involve performing some other role, for which they're trained?---The shift team determines what actual job position you cover for a set period of time, that's consistent with maintaining the currency in each of those areas that you are competent in.

PN568

Do you accept that there are in the order of 540 documents relating to the refinery quality system in area 2?---The last time I actually looked at the database that looks after the control documents in the refinery, I think there was 544.

PN569

So, approximately that number?---Yes. Can I add to that last remark? That's for area 2, specifically.

PN570

Yes, that's for area 2?---Not the refinery, yes.

PN571

Those documents are reviewed and revised, checked and re-issued on a regular basis?---They're reviewed regularly, they can be changed depending upon technology changes, depending upon new equipment being installed, they are changed. That's not a regular in a - what I'm trying to say is a set fashion, that it's reviewed. As I said, any new equipment there are changes added.

PN572

What you've attached as attachment A, to your most recent statement prepared this year is a print out of those procedures which have been subject to the process of checking and re-issue?---Subject to the process of review and any changes, yes.

PN573

Yes. Do you accept that there is only, in the last 2 years, one new work practice issued by the company?---No.

PN574

Do you accept that the one that you have attached to your statement as attachment B is the only new procedure issued?---That is the only additional full procedure. Any other changes that have been made are inclusive of other procedures that are in place at the moment and they are just changed and that could incorporate quite a bit of workload.

PN575

So, you accept that there have been modifications to certain procedures but there is only one additional procedure?---I'm not sure that the one that I submitted is for the example of workload.

PN576

Are you aware of any other additional procedures that have been issued in that period?---For area 2 or the refinery?

PN577

Area 2?---No, I'm not.

PN578

Do you accept that shutdowns have a major impact on refinery reliability?---Yes.

PN579

Do you accept that over the past 12 months or so, there have been 5 shutdowns affecting area 2?---To the best of my recollection, yes.

PN580

Do you accept that in each of those cases they were controlled shutdowns, rather than uncontrolled shutdowns?---Definition of controlled and uncontrolled?

PN581

Whether they were scheduled or unscheduled, they were shutdowns which were able to take place in a planned and orderly manner, in accordance with operational shutdown procedures?---Yes.

PN582

Do you accept that in the case of 2 of them, they were scheduled and in the case of 3 others, they were unscheduled?---Yes.

PN583

Is it true in the case of your area that, there are currently - there's a currently refinery shift supervisor who is responsible for areas 2 and 3, for each shift?---Each shift? That's correct.

PN584

Are you aware of the company proposal which is to have a refinery shift supervisor responsible for each area, on each shift?---From their award, yes.

PN585

Yes. Do you accept that the current refinery shift supervisors, responsible for your areas, either have a background in area 3 or a background in area 2, in terms of operating experience?---For the supervisor, currently?

PN586

Yes?---Currently the supervisor that currently cover area 2 and 3 have either come from one area or the other.

PN587

Yes?---But having said that, each area - I'll speak about area 2 for where I come from. There is 4 process units and specifically RSSs mainly come from only 2 of those 4.

PN588

That tends to be the case across the refinery in the sense that people perform their operating career, mainly within a particular unit rather than across the units within a particular area or across different areas?---I think historically, people have been trained in a limited number of areas since the introduction of a skill based structure, we've actually - a lot of the guys within each of those areas are cross-trained in more areas then what has been historically noted.

PN589

Well, let's take your example in more detail. How long have you been employed at Kurnell?---13 years.

PN590

Which unit did you commence your work as a - - -?---I commenced on a number 1 CAT Cracker.

PN591

Which is, part of area 2?---Which is part of area 2, yes.

PN592

Have you worked exclusively in that area, or have you moved?---No, I've moved within the area but stayed within area 2, yes.

PN593

Yes. So, you've worked in CAT Cracker No 2?---I've also been trained on No 2, yes.

PN594

So, CAT Cracker No 1 and No 2 are two areas that you've worked in during the course of your career?---That's correct.

PN595

There are other units within area 2?---There is.

PN596

How long did you work in area 1?---In area 1?

PN597

Sorry, sorry, in CAT Cracker 1?---How long did I work there?

PN598

Yes?---It's an estimate so probably a guesstimate, 4 years, initial 4 years.

PN599

Do you mainly work now on CAT Cracker 2?---No. Depending on the roster, we do swap between 1 and 2.

PN600

Have you been swapping between CAT Cracker 1 and CAT Cracker 2 for the remainder of your employment?---Yes.

PN601

Are you trained at all in the other units in area 2?---I haven't been checked out, no.

PN602

JUSTICE GIUDICE: How many units are there in area 2?---There's four specific process units.

PN603

MR WATSON: Do you accept that if there is a refinery shift supervisor who has a background as an operator in area 2 and who has sole responsibility for area 2 for that particular shift, that this will be increased assistance to the shift working team in each shift?---No.

PN604

Why do you say that?---I say that based on my relevant experience within area 2 purely because of the fact that I cannot give directions and oversee the operations of the other two units that I'm not trained on. The shift supervisors are in the same situation.

PN605

But you understand that the company is not proposing to do away with the RT6s who currently perform the task of shift supervisors, team leaders, on each of the units on which they are employed?---They don't currently perform that role, no.

PN606

You understand that those RT6s will continue to be employed and will continue to be important parts of the team operating in conjunction with the refinery shift supervisors?---The RT6s have never performed the function of team leader, at this stage.

PN607

Well, who do you say leads the team at this stage?---The RSS, he has the responsibility.

PN608

Yes, but nevertheless, the leadership at the unit, as it were, falls with the most senior person on that unit who would be an RT6?---It was an RT6.

PN609

Are you saying that there are not RT6s on each unit?---What I'm saying is that people have nominated to take on the role of the RT6 but have not taken on the responsibilities or duties due to lack of training.

PN610

Would you accept, then, that, with that training, the training you talk about, the lack of training, is provided and there is a refinery shift supervisor who has an operational background in that particular area that they will be able to provide effective leadership of the teams operating in your area?---Can you classify leadership, effective leadership?

PN611

You understand that there are certain leadership tasks that are required as part of operating a team in your area?---From our SBIT report which looked at going to teams and, basically, absorbing a lot of the responsibilities and duties that shift supervisors currently have, down to the team leader, as I said, those responsibilities have never been handed over in that matter. The RSS is currently, and in the perceived future of the company's idea of a team leader, being the RSS, will still not be able to competently oversee or operate the area he is responsible for purely because he is not competent in all areas within that area.

PN612

You don't suggest he won't be competent working in conjunction with the existing members of the team, do you?---What I'm suggesting is that he is not competent to oversee an operational problem. If it's an administrative issue, he can perform that role, yes.

PN613

What if he has an operational background in the CAT Cracker. Are you saying that he would not be competent to provide leadership in that area?---Currently the RSSs that look after area 2, I would say they have not operated a console for the last five or six years. There have been major revamps and changes to the way we operate those areas. They can assist in a limited fashion only. They cannot basically step in and assist you in a major fashion.

PN614

You are aware that the company has advertised for additional RSSs late last year?---Yes.

PN615

You are aware that a number of refinery technicians have applied in each of the areas?---I'm not aware officially, only what you hear, yes.

PN616

If you were to assume that the company appointed to the additional RSS positions, people who have operational experience and are currently refinery technicians in, for example, CAT Cracker area, you would accept that the availability of that person on those shifts as the primary shift supervisor will assist the team?---No.

PN617

Why do you say that, Mr Craik?---As I said before, the shift supervisor, if he comes from area 2, will only know two of the units within area 2 not the total four, so he may be able to assist in only two of those units. Whether he comes from the ..... poly area or whether he comes from the CAT Cracker area.

PN618

So you accept that he would be able to assist in the area that he comes from?---If he is specifically trained. He might only be specifically trained in one CAT Cracker.

PN619

But wherever he comes from, he has sufficient training to - - - ?---For a period of time, yes, he has to maintain his currency, yes.

PN620

In your evidence, you've talked about changes in the stores checklist?---Yes.

PN621

There used to be a system called Empac?---That's correct.

PN622

And there's now a system called SAP, S-A-P?---That's correct.

PN623

Do you accept that the SAP system involved the computer-based recording of the information that was previously recorded manually through Empac?---In what respect? In respect of stores ordering, in respect of work requests or - - -

PN624

Stores ordering, yes, stores checklists?---Yes, that's correct.

PN625

And that the SAP computer system has now been formatted so that it is in a similar format to the previous manual form used in Empac?---Yes, it's actually in what is called the bill of material.

PN626

That particular change to make the format look the same as the previous manual form was designed to make the data entry easier?---For that specific function, yes.

PN627

You have also talked about MLCs, multiloop controllers?---Multi variable controllers.

PN628

Multi-variable controllers. It's true in your area that there have been four multi-variable controllers installed in recent times?---There has.

PN629

You accept that three of those are the direct replacement of multiloop controllers that previously applied?---Yes.

PN630

There are such things as single-loop controllers and multi-loop controllers?---There is.

PN631

The fourth multi-vehicle controller replaced a single loop controller that previously existed?---My multi-variable controller that I'm talking about in my statement replaced three single loop controllers and Adcon, which is advanced control.

PN632

The notion of a multiloop controller allows you to look at several variables at once as it were rather than a single loop controller that enables you to look at one variable of time, do you accept that?---We monitored both the same off an overview screen.

PN633

Do you accept that the multiloop controllers provides you with information to monitor at the single point in time?---As I said we monitor the same off an overview screen.

PN634

Would you accept that it is the provision of the further material that comes from the multiloop controller makes it easier and quicker to monitor the material - the information that is generated by that technology?---No, it's the same.

PN635

Why do you say that?---We monitor it off an overview screen and if there is a discrepancy within that application, it shows up on the overview screen.

PN636

You give some evidence regarding the Pentacat?---The Pentacat, yes.

PN637

Do you accept that the Pentacat was introduced in number 2 cat cracker in 1995?---Yes.

PN638

And in early 1997 - March 1997, the No 1 cat cracker?---Yes.

PN639

Now you have given evidence about familiarisation programmes. Do you accept that the familiarisation programmes run by the company are useful to your role as an operator - refining technician?---Depending on the content of the familiarisation programme.

PN640

Yes but you accept in general they assist in making you used to and familiar with concepts that you come into contact with in the course of your duties?---As with any familiarisation programme, it is only a familiarisation programme depending upon content of what's in it. So depending if it is specifically weighted towards whatever they want to familiarise you in.

PN641

In terms of familiarisation programmes which relate to matters which relate to, which you are required to perform in your duties, do you accept that they do assist in providing you with an understanding of those matters - in so far as they do deal with those matters?---They may assist and they may not depending on each individual's level of knowledge.

PN642

And do you accept that the familiarisation programmes that you have attended in some cases at least have provided you with useful information to assist you further?---In my own experience?

PN643

Yes?---No.

PN644

So, you are saying that in the case of every familiarisation programme that you have attended, you have not gained any assistance whatsoever for the purposes of performing your duties?---Very limited.

PN645

So you say that that's the fault of the familiarisation programme itself, do you?---It may be, yes.

PN646

What other reasons would you suggest?---That maybe my level of knowledge is greater than the familiarisation programme they offer.

PN647

I see, so that you already had,?---I might have had prior knowledge of what it was. It might have been part of the make up of the familiarisation programme, there is a thousand different reasons.

PN648

Yes. Have you noticed that others have been assisted where perhaps they didn't have the same level of knowledge that you have?---I can't answer for them, they may have.

PN649

You have given evidence about the Alpha laval filters l-a-v-a-l?---Yes.

PN650

Do you accept that they are used to filter saltwater coming into the relevant plant?---Yes.

PN651

And that's designed to remove weed or shells that may be present in that saltwater?---Yes.

PN652

Do you accept that the changes in that regard have meant that there is not the same necessity for RTs to undertake backflushes on the saltwater coolers?---Depending if Alpha laval is operational or not, yes.

PN653

When it's operating, it is designed to and does have the effect of reducing the need for such backflushes?---It can yes depending upon the exchanger.

PN654

Would you accept that it also reduces the number of exchanger failures due to fouling?---It can assist.

PN655

And where it does say that also assists in relieving the refinery technicians of the work that might be required arising from foulings if they were to occur?---Fouling is not a routine thing. It can occur at any time.

PN656

The Alpha laval is to assist - to minimise the effects of fouling of the exchangers as long as the Alpha laval filter is operational?---Yes.

PN657

Do you accept that this is an example where that new technology has had an affect on the work that used to have to be carried out by the RTs perhaps on a more frequent basis?---It also adds to workload because it's new equipment that has to be checked as part of your initial and final checks of your area responsibility and it can assist in limiting the effects of fouling, yes.

PN658

You agree that it may have the effect of having extra workload but it also may have other effects of reducing other sort of workload that might have been required with the undertaking more frequently in the past?---If you are saying that the workload depending upon fouling - it's not a regular - we don't measure it - it's just part of operating the unit.

PN659

Do you accept that fouling involves quick action to correct the Alpha Laval exchanger when it occurs?---Quick action depending upon the extent of the fouling.

PN660

If you accept that the Alpha Laval filters reduce the incidence of fouling than there is less need for that sort of action that's required?---There's a thousand other variables that affect it. That could be tidal out on the bay depending upon the screens down at the wharf that actually pumps the salt water into the refinery. It is very hard to monitor the actual - when we are required to do that additional work load. Now with the Alpha Laval filter it has limited the number of times that we do backflush exchanges, but on the other hand it is also extra equipment on the unit that has to be monitored, has to be understood and has to be, in cases of it malfunctioning, us operating that piece of equipment to ensure that it is bypassed or whatever.

PN661

Now, you've given evidence about chemical addition system. You accept that the numbers of chemical additives have reduced by one in the last two years?---From my recollection I think they are the same.

PN662

Have you checked this in recent times or that's just your recollection?---Just my recollection.

PN663

You wouldn't be sure one way or the other?---I say they are the same.

PN664

Nothing further if the Commission pleases.

PN665

MR GINTERS: No re-examination.

PN666

JUSTICE GIUDICE: Thank you, Mr Craik.

<THE WITNESS WITHDREW [11.55am]

PN667

MR GINTERS: I call Mr Warren Graeme Grace.

<WARREN GRAEME GRACE, SWORN [11.56am]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN668

MR GINTERS: Mr Grace you have prepared two statements in relation to these proceedings?---Yes.

PN669

Do you have copies of those statements in front of you?---Yes.

PN670

Can I first take you to the earlier of the statements that you prepared? It is a statement which is dated 31 October 2000. Do you have that statement?---Yes.

PN671

It is a statement of some seven pages in length?---That's right.

PN672

Have you had an opportunity to read that statement?---Yes.

PN673

Are the contents of that statement true and correct?---Yes.

PN674

Could I invite you on the first page two delete the reference to 31 October 2000 and insert today's date? Then could I ask you to turn to page 7 again deleting the 31 October reference and inserting today's date and then sign that statement? I tender that statement.

PN675

JUSTICE GIUDICE: AWU 13.

EXHIBIT #AWU13 FIRST STATEMENT OF MR GRACE

PN676

MR GINTERS: If it please the Commission.

PN677

Mr Grace, could I take you to the second statement that you have prepared. It's a statement of some seven pages in length again. Do you have that statement in front of you?---Yes.

PN678

Have you had an opportunity to read that statement?---Yes.

PN679

Are it's contents true and correct?---Yes.

PN680

Could I invite you first to insert a date on the first page being today's date and then sign and date at page 7 please?

PN681

JUSTICE GIUDICE: AWU 14.

EXHIBIT #AWU14 SECOND STATEMENT OF MR GRACE

PN682

MR GINTERS: If it please the Commission. That's the examination in-chief of Mr Grace.

<CROSS-EXAMINATION BY MR WATSON [11.58am]

PN683

MR WATSON: Do you play cricket Mr Grace?---No, my father is an umpire.

PN684

You originally filed a statement in support of a claim for increased manning by the way of engagement of stand-alone operators is that correct?---That's correct.

PN685

Originally the claim of the union was for there to be 60 stand-alone operators and that was reduced to 30?---I believe that's so.

PN686

Across the refinery, that's, yes?---Yes.

PN687

That claim for additional stand-alone operators has been withdrawn as at the current point in time?---That's correct.

PN688

In the preparation of evidence in this matter you effectively being given the job of giving evidence in opposition to the position of the company that the RSS be the team leader?---Yes, I felt quite driven to do that.

PN689

You are aware that the company is in the process of increasing the number of RSSs in its employee?---Yes.

PN690

It involves the appointment of additional RSSs as well as other additional technical support staff available in each of the areas?---I believe they are going to hire more shift supervisors, but I wasn't aware that there was going to be any extra area specialists I thought it was just replacements.

PN691

Okay, you are aware that the company has advertised for additional - to employ and appoint additional RSSs and additional area specialists beyond those currently employed?---Yes.

PN692

JUSTICE GIUDICE: Pardon me for a moment, Mr Watson. Mr Ginters could you clear something up for me? I seem to have a rather lengthy witness statement of Graeme Grace.

PN693

MR GINTERS: Yes, your Honour.

PN694

JUSTICE GIUDICE: Which has annexures A - K on it doesn't appear to be dated. It's got some 39 paragraphs. Is that one of the statements you've tendered.

PN695

MR GINTERS: I may have omitted to tender that statement. Could your Honour just excuse me for one minute and I will check that matter out? My learned friend just reminded me, your Honour, that the statement to which you are referring may well be one that was given in some of the earlier proceedings. Could I invite the Commission to provide that statement to me and I can confirm as to whether it is a matter that is in issue in these proceedings?

PN696

JUSTICE GIUDICE: I would be delighted if I could discard that amount of reading material, if you can help me, Mr Ginters?

PN697

MR GINTERS: Yes, your Honour. Just excuse me for a minute, your Honour.

PN698

JUSTICE GIUDICE: Yes. You can come back to that, Mr Ginters. You don't need to deal with it straight away.

PN699

MR GINTERS: Perhaps while my learned friend is in cross-examination I can get some instructions on that, your Honour?

PN700

JUSTICE GIUDICE: Yes, but in any event, the one that you are now holding, that I've provided to you, is not one of the two you have just tendered?

PN701

MR GINTERS: No, it's not, your Honour. Thank you, your Honour.

PN702

JUSTICE GIUDICE: Sorry, Mr Watson?

PN703

MR WATSON: Thank you, your Honour.

PN704

Mr Grace, your area of work is which area?---Area 1.

PN705

How long have you been employed at Kurnell?---10 years.

PN706

Have you been in area 1 for the entirety of that time?---No.

PN707

What other areas have you worked in?---I've worked in part of Area 3, when I first started, though I don't remember much about it.

PN708

Yes. Sorry, did you say how long you were employed there?---I think it was about 2½ years.

PN709

Now are you aware that the current RSSs who are responsible for areas 2 and 3 either have a background as operators, now called refinery technicians, in either area 2 or area 3?---I believe that they do have a background in parts of either area 2 or area 3.

PN710

Do you understand that the engagement of additional RSSs will enable those RSSs to perform their function in only one area and the proposal of the company that that be in the area in which they have a background, an operating background?---Well, that may well be the company's intention, yes.

PN711

You're aware that the company is currently interviewing applicants from all of the areas for the filling of the new positions?---Yes.

PN712

Now assuming that appointments are made within each area of someone with an operating background from that area, you would accept, wouldn't you, that that refinery shift supervisor would have knowledge relevant to at least part of the area in which they supervise?---I'm aware that they would have knowledge. All of them would only have knowledge of one part of the area they are to administer. None of them would have full knowledge of any area they would be administering.

PN713

Yes, but some may have worked, like Mr Craik, in more than one part of the area, on more than one unit?---Yes. Just about every operator has worked in more than one unit, but no operator, to my knowledge, has worked in all of the areas that a supervisor would be asked to administer.

PN714

Now you accept that part of the function of a team leader is to assist other members of a team which difficulty arises?---Yes.

PN715

You would accept that insofar as the RSS has experience in a particular area and is, for example, trained to operate a particular console, that the availability of that assistance will be of assistance to the team?---Partly and maybe at times, but it would not be any reassurance to every operator in an area who's been administered by such a supervisor, that he be able to help all of them in any particular emergency.

PN716

No. But you accept that it is likely that there will be people more likely to be of assistance than the current situation where someone's operating background might be from a different area altogether?---No, I think the company's plan is actually dangerous.

PN717

Now why do you say that, Mr Grace?---Because the membership of the union, who are all operators, have asked the company to look at the problem which came up at the Longford disaster, where there were not two sets of eyes, not two sets of hands looking over units and able to help. Now what happened at Longford was that the company, the refinery managers, were focused on one part of the operations in regard to safety and they sent a message to the CEO of the company that the Longford plant was really safety conscious. Unfortunately their focus on the minute issues and not on the catastrophic issues. Now what is going to happen here if the company is allowed to have team leaders as supervisors is that our problem of not having a second pair of eyes is going to be relayed by the refinery management to the CEO that the problem is fixed, therefore the problem that we have shown the company. The CEO will then focus on some other aspect and not on the real problem at hand.

PN718

MR WATSON: Well, you understand that the change that arose after the Longford incident was that Esso employed additional staff supervisors at that plant?---Yes, I am, and the reason for that was that very same thing. They had traditionally had supervisors who did work as team leaders, in a sense. They each looked over two units. What happened was the company decided to get rid of the two supervisors and put one administrator in there and then the explosion happened. The company then went and found, looking through the excellent organisation all round the world to find supervisors who had previously worked on those units. They now have one supervisor for every two units. That is not what the company is proposing in this case. It's more like one supervisor for seven or eight units.

PN719

MR WATSON: Now are you saying that the increase in the number of supervisors is a bad thing or do you believe it is insufficient?---I think it's a bad thing when it's trying to make out that it's going to be able to help out with the problem of having a second pair of eyes on the operations. Other than that, the company can hire as many administrators as they like.

PN720

Now you accept that the company would have the RSSs and the on unit team leaders, the RT6s, working cooperatively as members of a team?---Not as a part of an operational team, no, because that's not how it current works and that's not how the company envisages the work.

PN721

You accept that the company intends that they would perform their respective duties in a cooperative manner?---That's what the company expects, yes.

PN722

You would expect that the RSSs would require on unit leadership from the most senior member of the team on that unit?---We all do.

PN723

Yes. Now if directed to work in that manner, you're not suggesting that it won't occur, are you?---How do you mean?

PN724

If the refinery shift supervisors and the RTs are directed to work in a cooperative way, you're not suggesting that they will not do so, are you?---No, I'm trying to talk about the life and death dangers on the site, not about the problems of whether an administrative supervisor has trouble with a shift team leader.

PN725

Now you accept that safety is a very important matter in oil refineries?---Yes.

PN726

It's important that there be a responsible approach?---Yes.

PN727

That involves being thorough and vigilant to hazards and risks?---And manning refineries properly.

PN728

Yes. And that requires a constructive approach by everyone in identifying issues and dealing with them?---True.

PN729

You accept that knowledge of safety issues for all of those involved at the refinery is very important?---Yes.

PN730

Are you aware of an incident regarding the consultants, UOP, last year?---No, I don't know what you're referring to.

PN731

Are you aware of seeing an email where consultants UOP convened a meeting of refinery technicians to enable refinery technicians to raise concern about processes at the refinery?---No, I don't remember that. In any case, I don't think it really matters because the operators elect people to speak on their behalf about safety issues.

PN732

There's a process, isn't there, at Kurnell of there being a team of delegates, union delegates?---Yes.

PN733

What's the term used for that group?---The Negotiating Team.

PN734

There is regular emails circulated between the members of that negotiating team?---I suppose so.

PN735

Yes. Is there a wider group of delegates that come from various units and shifts?---Yes, the shift delegates and a negotiating team on top of that.

PN736

Do you recall receiving an email in May of last year from Mr Hassall regarding, the UOP study?---No, I don't. There are hundreds of emails every month circulated, I don't remember every one of them.

PN737

Yes. Mr Hassall is a shift delegate, is he?---Yes.

PN738

Of which area?---Area 3.

PN739

Perhaps I can ask you this whether you - this refreshes your memory, an email sent from Mr Harrison, who's the manager in area 3, inviting refinery technicians to attend a session to discuss concerns. Mr Hassell sent back an email and circulated a copy to others, including yourself, which said:

PN740

I don't expect that any RT should be attending this.

PN741

Do you recall that?---No, I don't. But it doesn't surprise me because we have attended white washes before. There's no point in going to a meeting where you express your concerns and have the company ignore them and then say that they've consulted properly with you.

PN742

Yes. So, you knew that that presentation was going to be a white wash?

PN743

MR GINTERS: I object.

PN744

MR WATSON: Are you suggesting that the presentation was or was likely to be a white wash, are you?---I'm not surprised that Mr Hassell thought it may have been.

PN745

If the company invited refinery technicians in your area to a presentation from a consultant, so that they may obtain their views, you may well have adopted the single view?

PN746

MR GINTERS: I object.

PN747

JUSTICE GIUDICE: What's the basis of the objection?

PN748

MR GINTERS: Relevance. We're asking hypothetical questions based upon an email that Mr Grace has already given evidence that he knows nothing about.

PN749

JUSTICE GIUDICE: Sounds like a fairly solid basis. What's the relevance of that question, Mr Watson?

PN750

MR WATSON: Well, your Honour, Mr Grace has given evidence about safety issues and the importance of knowledge and commitment to it. He has also expressed a view as to the attendance of refinery technicians at presentations which he termed, "white washes", exploring the basis for that.

PN751

JUSTICE GIUDICE: Yes, all right, go ahead. Do you remember the question?

PN752

MR WATSON: Perhaps I can ask it again and hopefully it won't be too different, Mr Grace. If the refinery technicians in your area were invited to a presentation from a consultant, so that they could raise concerns as to processes, are you suggesting that you may have adopted a view such as supporting nobody attending those sessions?---Not if I was convinced or I thought that there was even one hundredth of a chance of it being fair dinkum, if they really wanted to look at safety. In that case I would encourage, as I have in many other emails, encourage people to approach consultants and the company over safety issues, in the vain hope that something may actually be done.

PN753

Are you aware of occupational health and safety sessions run for operators and refinery technicians, throughout the refinery including some last year in area 3?---No. We have an occupational health and safety committee on site that does meet every now and then.

PN754

Are you aware of oil refinery technicians being invited to sessions conducted by the area manager of area 3?---No.

PN755

Are you aware of a fire which occurred in plant 2 of area 3 in September last year?---Plant 2? That's part of area 1B, I thought.

PN756

Well a fire in area 3?---No.

PN757

Do you recall that incident?---No.

PN758

Perhaps if I could refresh your memory. The company conducted a taproot study into the incident that occurred on plant 2?---Could you say that question again?

PN759

Are you aware that the company conducted a taproot investigation into the fire that occurred on plant 2 in September of last year?---I believe they made investigations into it, yes.

PN760

Yes. Are you aware that a meeting was organised with refinery delegates to discuss the results of that taproot investigation?---No.

PN761

Do you recall being copied in on emails, where the AWU delegate indicated that they would not be attending those meetings?---No. What I do remember from the investigation was that the company never invited the operators actually concerned, or the operators who were on the fire crew when it happened.

PN762

So, you do recall that, do you?---Yes, yes. That was the company's investigation which I've already said I remembered happening, in regard to one of the plant 2 fires, there were several or incidents regarding that same heat exchanger.

PN763

When one of the delegates responds to a manager and signs it for and on behalf of the delegates, does that arise from a discussion of some sorts amongst the shift delegates of which you are one?---Yes, yes, it's called unionism.

PN764

So, that would tend to be a united position that is then presented when there is an email sent, for example, by Mr Scullard for and on behalf of the delegates?---Yes.

PN765

Mr Scullard is one of the delegates in area 3?---No, no. He's actually in area 2 but we don't align our delegates to areas, they're aligned to shifts.

PN766

I see. If Mr Scullard said that the delegates invited to a presentation about the taproot investigation, would not be attending because of shift commitments such as, night shifts, days off and personal reasons, would you say that's a responsible approach?

PN767

MR GINTERS: I object. My learned friend's asking the witness a question of the opinion of Mr Scullard. Mr Grace quite clearly isn't Mr Scullard and his opinion on Mr Scullard's view is of no assistance to this Commission.

PN768

MR WATSON: I think the question was of his opinion.

PN769

JUSTICE GIUDICE: Well, perhaps you could ask it again?

PN770

MR WATSON: Mr Grace, perhaps I can assist in this way. Can I show you this document? I apologise, I've only got the one. Do you see at the top of the page there is an email. I can tell you that the bottom of the previous page indicates that it is from Mr Scullard, and I ask you to assume that. Could you read the contents of that email which is addressed to Mr Harrison?---"Steve, thank you for the invite but the issues that were brought up in the safety meeting relating to no haz op done, AWU not present at tap root, shift supervisor from the fire not present at the tap root when he was in the refinery, have already been raised. Also, because of shift commitments such as night shifts, days off and also personal reasons, we're not available. If the plant 2 OIC communication problem is a change to work practice there are pre-existing procedures in place to address this."

PN771

Do you see that you have been copying on that email?---Yes.

PN772

Do you see that it is signed for and on behalf of the delegates?---Yes.

PN773

Does that assist you to recall that particular refusal?---Yes.

PN774

Is it true that you were consulted in the adoption of that position?---Is it true that I - - -

PN775

Was consulted?--- yes.

PN776

And you support that position?---I do.

PN777

I tender that document, undertake to have it copied and made available to the parties.

PN778

JUSTICE GIUDICE: Exhibit Caltex 9.

EXHIBIT #CALTEX 9 EMAIL FROM MR SCULLARD

PN779

MR GINTERS: Might I have the opportunity to have a look at that document?

PN780

JUSTICE GIUDICE: Mr Grace, could I ask you a question about your statement of 1 March? Do you still have that with you?---No, I haven't.

PN781

Could the witness be furnished with another copy of AWU13. Does anybody at the bar table have that?

PN782

MR GINTERS: I'm sorry, Your Honour, I didn't hear your Honour's question.

PN783

JUSTICE GIUDICE: AWU13, I wonder if you could furnish a copy of that to Mr Grace.

PN784

MR GINTERS: Most certainly, Your Honour.

PN785

JUSTICE GIUDICE: If you could hand me back the original, Mr Grace. I would just ask you to have a look at paragraph 9 and perhaps refresh your memory about it. I want to ask you a question about it?---Yes.

PN786

That seems to be contrasting the union's position on the reinstatement, I think, of the head operator positions, is that right, with the shift supervisor line the company have made?---I think we're talking about two different things, because the work teams, the actual operational work teams, there are, by the company's own admission, 11 of them. What the company is proposing is four shift supervisors so each shift supervisor has to be the operational team leader of either two or three teams concurrently at the same time.

PN787

Yes, I understand that but I thought you were contrasting those two positions - your position against the company's in that paragraph. In particular in the last sentence. Is that right?---Yes, it is an argument against that position of the company having a shift supervisor.

PN788

I just wanted to ask you why you make the statement you do in the last sentence?---Because of what I've been told by the operators at BP Kwinana and at Esso Longford. At BP Kwinana the operators had a position called shift team leader which could be staff or award. It ended up being everybody in that position being staff and the operators say that they had a lot of problems because they are no longer part of the award system, that the company has been handing heaps of administrative tasks to them and they are losing touch with the plant. I was also told the same thing by the operators at Longford, that after the company put back the two supervisors as shift team leaders, that the company has loaded those people up with more administrative tasks, and they too are losing touch with the actual operational needs and capabilities in an emergency of the plants.

PN789

I see, thank you.

PN790

MR GINTERS: I have no objection to the tendering of this email. In relation to the email that my learned friend has just shown you, Mr Grace, it refers to a specific meeting that was called, is that correct?---Yes.

PN791

Were there other meetings in relation to this incident that you are aware of?---Yes.

PN792

Did you, or did members of the AWU negotiating team participate in those meetings?---The members have. I did not participate at all. I believe it to be the case other AWU delegates did.

PN793

Do you have any knowledge of what was discussed in that meeting?---I have a very faint recollection of what it was. It didn't seem too different from other handlings by the company of the incident.

PN794

Thank you. Mr Grace, you were asked some questions about UOP consultants. Do you recollect those questions being asked of you?---Yes.

PN795

Are you aware or are you able to say the purpose for which UOP consultants were at the Kurnell refineries?---No, I don't recall.

PN796

Thank you. You were also asked some questions about the results of the Longford Inquiry. Do you recollect that?---Yes.

PN797

Your answers dealt with questions in relation to the appointment of additional shift supervisors?---Yes.

PN798

Are you aware of whether or not additional operators were appointed as a result of that Inquiry?---I am.

PN799

And could you elaborate on that, please?---There were extra operators employed, extra shift positions put on and there currently are a lot more extra trainees, as we speak.

PN800

Thank you.

PN801

JUSTICE GIUDICE: Sorry, what was that last answer?---There are more trainees. A lot of extra operators were not employed.

PN802

MR GINTERS: I have no further questions for this witness. Just briefly, while I am on my feet, Your Honour. Your Honour handed me a document which is marked exhibit No AWU3, being a statement of Mr Graham Grace. I can indicate to Your Honour that I am instructed and I understand that this was document that was part of the earlier proceedings that were before Senior Deputy President Harrison or, possibly, before the Full Bench in the application to terminate the bargaining periods and the appeal that arose from them. It's not a document that needs to entertain the Commission's mind in these proceedings.

PN803

JUSTICE GIUDICE: Yes, I see. It seems to have got into the wrong file.

PN804

MR GINTERS: My learned friend suggested I can keep it but perhaps I can hand it back to Your Honour's Associate.

PN805

JUSTICE GIUDICE: Yes, thank you. Thank you, Mr Grace.

<THE WITNESS WITHDREW [12.31pm]

PN806

MR GINTERS: I note the time. Would your Honour like to at least start another witness before the luncheon break?

PN807

JUSTICE GIUDICE: I think so, yes.

PN808

MR GINTERS: I call Mr Robert Jenkins.

<ROBERT WILLIAM JENKINS, SWORN [12.32pm]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN809

MR GINTERS: Mr Jenkins you have prepared two statements in relation to these proceedings?---I have.

PN810

Do you have a copy of those statements with you?---I do.

PN811

The first of the statements is a three page statement which was filed in this Commission in October of this year. Do you have that with you?---Yes, I do.

PN812

Have you had an opportunity to read that statement?---I have.

PN813

Are the contents of that statement true and correct?---Yes.

PN814

Could I then ask you to turn to the third page of that statement and sign and date it with today's date. Yes, I tender that statement, your Honour.

PN815

JUSTICE GIUDICE: AWU 15.

EXHIBIT #AWU15 FIRST STATEMENT OF MR JENKINS

PN816

MR GINTERS: Mr Jenkins, a second statement has been prepared on the first page of that second statement it is dated 23 November 2000. Do you see that?---Yes.

PN817

Could I just ask you to delete that and insert today's date please. You have had an opportunity to read that statement?---I have.

PN818

The contents of that statement are true and correct?---Yes.

PN819

I would ask you just to sign and date at the bottom of page 3 there please. I tender that statement.

PN820

JUSTICE GIUDICE: AWU 16.

EXHIBIT #AWU16 SECOND STATEMENT OF MR JENKINS

PN821

MR GINTERS: I would also just remind you, Mr Jenkins, the microphone doesn't actually amplify your voice it's just for sound recording purposes so if you could keep your voice up. That's the examination-in-chief your Honour.

PN822

JUSTICE GIUDICE: Mr Watson?

<CROSS-EXAMINATION BY MR WATSON [12.34pm]

PN823

MR WATSON: Mr Jenkins have you been provided with copies of Mr Steve Harrison's statements filed in these proceedings?---Yes, I have.

PN824

Where you disagreed with those contents you said so in your statement in reply?---Yes, I have.

PN825

Can I refer you to your second statement the one originally dated November 2000. Do you have that there?---No, I don't.

PN826

You don't have those statements with you?---I just handed them on.

PN827

Okay, do you recall saying that there were - perhaps those copies could be provided to the witness I think the Bench has other copies.

PN828

JUSTICE GIUDICE: AWU 16 you are referring the witness to?

PN829

MR WATSON: Yes, that is correct, your Honour.

PN830

You see in paragraph 3 you indicate that there was a, right at the bottom of the page:

PN831

Processing sour crude was dealt with by six RT job positions and is now conducted by only four.

PN832

?---Yes.

PN833

You accept that that change occurred around 1991 or 1992 not 1997?---Yes, I do and I'm sure that I said in there that prior to 1997.

PN834

I see, so when you say prior to 1997 you are referring to some previous time which could well have been 1991 or 1992?---Some time before 1997, yes.

PN835

You accept therefore that it has been dealt with by four RTs since around 1991 or 1992?---That's - the area itself has, yes, but not the sour crude, the treatment of sour crude, no.

PN836

Do you accept that the six hands on job positions was to deal with sour crude was a situation which applied prior to but not after a change in instrumentation which occurred in 1991 or 1992?---Well, no.

PN837

Do you recall that there was a change in the hands on job positions when new instrumentation was installed?---Depends what sort of new instrumentation you are talking about.

PN838

Well, when do you say the change occurred, Mr Jenkins, from six RT hands on positions to four?---When the company got rid of more personnel.

PN839

Yes, do you know when that was?---I can't recall the exact dates, no. But it was the original redundancy package that was offered, that's when we lost the fellows.

PN840

Does that assist you to recall that it would have been around 1991 or 1992?---I guess it would be, yes.

PN841

Now in paragraph 4 of that statement exhibit AWU16 you refer to a situation with plant 38?---Yes.

PN842

Do you accept that that situation was a once off occurrence?---At the time, yes.

PN843

It was a once off because that particular plant hadn't run for 10 years?---Well, they hadn't treated sour crude in 10 years.

PN844

It had previously been running but had been closed, not processing sour crude for 10 years or so?---Yes.

PN845

So in other words the operation of that plant was used to be part of the responsibilities when it was running but it ceased to be so when it ceased to be used for that 10 year period?---Well, because it wasn't going didn't mean it wasn't a part of our responsibility, no.

PN846

But not as an operating unit more as a - - - ?---It doesn't matter it still takes time.

PN847

Still care and control more than operating?---That's right.

PN848

Now, you refer to in paragraph 5 to the new flare drum?---Yes.

PN849

The discharges had some modifications recently?---Yes.

PN850

Those modifications were in fact your idea?---Yes.

PN851

You received an award from the company because of that idea?---That award that wasn't a trip to Manly or anything that was a laminated piece of paper. I appreciate it.

PN852

It was recognition rather than - - -?---I would have preferred to go to Manly.

PN853

Yes, you would have been happy with a trip to Manly?---Manly would have been fine, I live next door.

PN854

Nevertheless you appreciated the recognition?---Wonderful, yes.

PN855

It means that the extra workload has been avoided because of those modifications?---That's not completely true, no. There is work still involved there.

PN856

But there is less work isn't there?---Well, no. I think it's just the same it discharges to a different line that's all, but it creates problems elsewhere in the plant. If anything it's probably complicated the problem.

PN857

So, it wasn't a good idea?---It was a wonderful idea, it was mine.

PN858

Now, paragraph 6, you say that there is an entire extra crew of RTs available to undertake procedure which previously took 8 hours?---Yes.

PN859

Do you accept that that entire extra crew was removed prior to 1991/92?---No. No, that extra crew just seemed to disappear out of the system with the introduction of annualised salary.

PN860

Yes. When that function is required to be performed, there are others within the existing crew which are now available to assist in that regard?---Well, we seem to handle it with the crew on shift, yes.

PN861

Yes, and that's the notion that it was considered by the company and it has worked this way that those on shift at the time assist with that. That's now required?---There's nearly always extra hands there. Just because they don't go on the time sheet, doesn't mean they're not there.

PN862

Sure. Now, in paragraph 7 of that statement, you refer to different crude compositions and types?---Yes.

PN863

It's always been the case at Kurnell that there have been diverse types of crude processed by the refinery?---There's always been varying crude, yes.

PN864

Varying crudes. So, and that's really the case since the 1980s?---They're more diverse now.

PN865

Yes. But there's nothing new about there being diversity, is there?---Well, as far as I'm concerned there's a totally different way of flushing lines. They never used to flush lines the way they do now. Invariably, that always ends up in the crude unit. That's the initial slug that hits the crude unit and you chase it for hours.

PN866

Now, you say that there's more diversity now? It's true, isn't it, that if there is more diversity that something which has occurred progressively since the 1980s, there have been various changes over those years?---Well, I guess as time goes on the crudes will be different again.

PN867

Yes?---It's been an every changing thing, I guess. But with the introduction of sour crude, there's - it's more complex.

PN868

When do you say sour crude was introduced?---Last year, I think they had 4 cargoes in last year, which impacted on, over the time frame, over a 2 month period, I know it impacted on about 75 per cent of the different crude tanks that were given to us.

PN869

Are you saying that there had never been sour crude before then?---It was at least 10 years prior to that.

PN870

Yes. That's related to plant 38 that used to process sour crude?---Well, that's only a very small part of the crude unit, yes. It's only a treating plant.

PN871

Yes, yes. Now, at paragraph 8, you refer new analysing equipment?---Yes.

PN872

Installed about 1997? Now, do you accept that that equipment is designed to assist the console refinery technician, by providing a continuous check on run down quality?---That may have been the intent.

PN873

Yes, and when it's operating normally, that requires less samples to be taken by the outside operators?---I disagree.

PN874

So, you say when that is operating, there's no impact on the number of samples required to be undertaken?---The only time we can't sample is on night shift and that's because there's nobody in the lab. But most of the time, we put samples in to check the analysing equipment.

PN875

I see. Now, at paragraph 9, you refer to Mr Harrison's comment about paragraph (h) of your first statement. Do you have your first statement there as well?---No, I don't have his statement, no.

PN876

Perhaps the witness could be provided with exhibit AWU15?

PN877

JUSTICE GIUDICE: I think he might have that.

PN878

THE WITNESS: My statement or Harrison's statement?

PN879

MR WATSON: No, your statement, I'm sorry?---Right, sorry, I thought you said Harrison's statement.

PN880

Yes, you've got your 2 statements?---Yes.

PN881

Do you see in AWU15, it's on page 2, about two thirds down the page, paragraph H?---Yes.

PN882

You say that "There's one of the examples of the way in which extra workload and work pressures has occurred is increase in night switches on the PDU as a result of the different of the different type of oils which has been brought into the refinery?" Do you see that?---Yes.

PN883

In paragraph 9, you say that the increased mode changes to which you refer, has nothing to do with the Rabbigh Vac product which Mr Harrison said, "That PDU is only ever processed in the past 10 years", and that, "Mode changes are due to planning requirements and emergencies"?---That's right, mode changes are.

PN884

So, do you accept that your original paragraph (h), when you said that, "Increase in mode switches on the PDU as a result of the different type of oil", was not correct?---Probably not entirely correct, that part, no.

PN885

Yes. So, you're saying that your second statement is correct and your first statement in this regard is not entirely correct?---Well, probably the wrong use of words in the first one.

PN886

I see. Now, at paragraph 10, you refer to pump problems and exchange problems?---Yes.

PN887

It's true, isn't it, that those sort of problems have existed since the 1980s?---Ever since I've been there, yes.

PN888

It's always been an issue?---Yes.

PN889

You would agree, wouldn't you, that there's been no significant change in taking equipment out of service since 1997?---No, I wouldn't agree with that.

PN890

Have you checked records as to the extent of problems in that time, compared to previous times?---We now have to abide by a thing called environmental compliance and things have changed drastically since then, the way we go about things.

PN891

Now, in paragraph 11, you refer to a situation of RTs refusing to perform the task, I think they are Mr Harrison's words originally, of cleaning and changing gas filters?---I didn't say we ever refused to do it, I said it was a - it had never been agreed to, it was never an agreed position.

PN892

But you accept that the company wants RTs to clean and change gas filters?---No doubt they do.

PN893

Do you accept that the RTs do not do it?---We do not do it.

PN894

Do you accept that the company has asked RTs to do it?---Yes, they have.

PN895

Do you accept that, in response to that request RTs have still not done that?---It's not an agreed position as yet.

PN896

Yes. Why do you say that's not a refusal to perform the task?---Well, as far as I'm concerned, when you've got an agreed position and you say then you're not going to do, that's a refusal. But until you've got an agreed position, how can it be a refusal?

PN897

I see?---It's not an agreed position.

PN898

But they have declined to undertake the training when requested to do so, haven't they?---I don't know, I've never been requested.

PN899

But you know that the people have been requested?---No, I don't.

PN900

Nothing further.

PN901

JUSTICE GIUDICE: Any re-examination?

<RE-EXAMINATION BY MR GINTERS [12.57pm]

PN902

MR GINTERS: Your Honours, Commissioner.

PN903

Mr Jenkins, do you recollect being asked some questions about the cleaning and changing of gas filters?---Yes.

PN904

Is that work that has been traditionally performed by the refinery technicians?---Never, previously, no.

PN905

Who primarily performs that work?---Maintenance technicians.

PN906

Are maintenance technicians members of the AWU?---No.

PN907

What union are they members of, if you know?---No.

PN908

Thank you, your Honour, no further questions.

<THE WITNESS WITHDREW [12.59 pm]

PN909

JUSTICE GIUDICE: Thank you, Mr Jenkins. We will adjourn until 2.15 pm.

PN910

MR GINTERS: If it pleases the Commission.

LUNCHEON ADJOURNMENT [12.52pm]

RESUMES [2.19pm]

PN911

MR GINTERS: Thank you, Your Honours, Commissioner. I call Mr John George Keys - K-E-Y-S.

<JOHN GEORGE KEYS, SWORN [2.18pm]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN912

MR GINTERS: Mr Keys, I'll just remind you, as I have with other witnesses, the microphone in front you doesn't amplify, it's just for sound recording purposes. So if you could keep your voice up. Mr Keys, you have prepared two statements in relation to this matter?---That's correct.

PN913

Do you have a copy of those statements in front of you?---Yes.

PN914

Could I take you to the first of those statements? The front page, you will note, begins, "on 'blank date' October 2000". Do you have that in front of you?---I do.

PN915

Could I ask you just to delete the October 2000 and insert today's date there please?---Okay.

PN916

That statement you have prepared is a statement of 13 pages in length with a number of annexures. Is that correct?---That's correct.

PN917

You have had an opportunity to read that statement?---I have.

PN918

And are the contents of that statement true and correct?---Yes.

PN919

I ask you to then turn to the 13th page there and if you could sign and date there, please.?---Okay.

PN920

I tender that statement. It's 17 that I think we're up to, Your Honour.

PN921

JUSTICE GIUDICE: 17. Exhibit AWU17

EXHIBIT #AWU17 FIRST STATEMENT BY MR JOHN GEORGE KEYS DATED 01/03/2001

PN922

MR GINTERS: And, Mr Keys, a second statement that you've prepared, I understand, is a document of some six pages in length with an annexure to it. Is that correct?---That's correct.

PN923

Could I ask you on the front page of that statement to insert the date, delete the February date and insert today's date, please. Have you had an opportunity to read that statement?---Yes.

PN924

Are the contents of that statement true and correct?---Yes.

PN925

Could I then ask you to turn to the sixth page there and, again, sign and date it. Thank you. Again, I tender that statement, Your Honour.

PN926

JUSTICE GIUDICE: Exhibit AWU18.

EXHIBIT #AWU18 SECOND STATEMENT BY MR JOHN GEORGE KEYS DATED 01/03/2001

PN927

MR GINTERS: With the Commission's leave, just a number of short additional questions for Mr Keys.

PN928

Mr Keys, since you prepared these statements, have there been any further incidents or matters at the Kurnell refineries which you say are relevant to the evidence you wish to give?---There's three incidents that happened recently. On 12 and 13 last month, we had three hydrogen failures. The last one resulted in equipment failure through high pressure and there was a huge release of hydrogen into the atmosphere and the frontline fire crew, along with the NSW Fire Brigade, was called out until the situation got under control.

PN929

Thank you. And how is it, if in any way, would that affect or did that affect the manning situation at the Kurnell refineries?---At the time, on the first two incidents, people stayed back and there was extra manning on the unit. The third time, when the exchanger blew out and released hydrogen, there was extra day workers on the unit. Also, I think that sort of goes back to my statement where I've predicted if certain things happen, you could have a high pressure and loss of hydrogen of the unit which, in fact, happened.

PN930

Thank you for that Mr Keys. I have no further questions, Your Honours, Commissioner.

PN931

JUSTICE GIUDICE: What does that refer to specifically in your statement, Mr Keys? Do you have the reference in your statement?---In my statement- - -

PN932

No, perhaps you misunderstand me - I meant the actual paragraph or the - - - ?---Okay.

PN933

MR GINTERS: I'm sorry, your Honour. Perhaps I can address your Honour's question this way.

PN934

Mr Keys, the incident that you were just referring to, when did that occur?---It happened on 13 February.

PN935

Was that after you had prepared your second statement in this matter?---That's correct.

PN936

JUSTICE GIUDICE: Yes, now I think Mr Keys said that it validated or in some way gave credence to his earlier evidence and I wanted him to identify what part of his earlier evidence he was referring to.

PN937

MR GINTERS: I'm sorry, your Honour.

PN938

JUSTICE GIUDICE: Did you understand my question, Mr Keys?---Yes, I understood it. Well, I think it goes back to a few things I said in both my statements and probably the other witness statement where I replied to Mr Taylor, who is referring back to my other statement. So, therefore, in paragraph 1 of my second statement I say that certain things that I said in my first statement would happen, which was high pressure during a hydrogen flush if certain valves were shut out of sequence and that's, although we don't know the valve movements on that particular day, but the consequences of high pressure during a hydrogen flush actually happened on that day. I'm just looking forward in my first statement. Yes, on page 6 of my first statement, in paragraph 18.

PN939

Yes, I follow.

PN940

MR GINTERS: Thank you, that's the evidence-in-chief.

PN941

JUSTICE GIUDICE: Thank you. Mr Watson.

<CROSS-EXAMINATION BY MR WATSON [2.25pm]

PN942

MR WATSON: Mr Keys, your first statement was prepared in response to the company's proposal in relation to manning that there be a process for considering manning changes in areas 3 and 4?---More for area 4, not for area 3.

PN943

Yes, specifically in relation to area 4, where the company had proposed a process take place to consider possible reductions and to address a report prepared by people including Mr Taylor?---Yes, so what's the question.

PN944

You understand that?---Yes.

PN945

You understand that at that time the Union were opposed to that position advanced by the company?---I don't believe they were opposed to it at that particular stage. Sometime after that, they were probably opposed to it.

PN946

You understand that the Union has changed its position from the time you prepared your first statement to the position now, in relation to the manning issue?---Yes, I would say, yes.

PN947

After preparing your first statement you had a chance to consider Mr Taylor's third witness statement?---That's correct.

PN948

Where you disagreed with his statement, you made comment to that effect in your further witness statement?---That's correct, yes.

PN949

Can I ask you some questions about the attachments you have attached to your first statement?---Yes.

PN950

Am I right in observing that Attachment A is a series of notes prepared by different RTs in area 4?---That's correct.

PN951

You didn't prepare all of these yourself, did you?---No.

PN952

The identity of the person who prepared this is not revealed in your statement?---No.

PN953

Can you just assist me in how we might read these documents. I notice the first couple of pages there is a starting time and a finishing time in the first two columns. Is that intended to indicate the time it took for that particular task?---That's correct, yes. Are you looking at the HTU outside RT?

PN954

Yes, the first page HTU outside RT 2/01/2000 No 3 shift. Who asked the relevant RTs to complete this information?---I did.

PN955

So at some stage before that time in January last year you asked that to occur?---Yes.

PN956

Did you tell Mr Taylor or anyone else in the management of area 4 that you were doing this?---No.

PN957

Did you provide the results of this to Mr Taylor at any time prior to attaching these to your witness statement?---Well up until then I was just doing it as a bit of a personal thing and the union requested that we in reply to his statements or his manning reviews. That we get some sort of work value or - that's the wrong word. We really find out what the operators do, so the ideas were - I come up with the idea. One of these are mine actually. That we go through our day to day and we just write down everything we did which is what happened. Then I asked other people on other shifts to do the same thing and these are the results we came up with. They are not a blow by blow description they were meant to give just a good idea of what we did, sorry, 15.10 to 15.20 they go write down the page and give a full review an honest account of what we operators do cause I don't believe anybody really understands what operators do.

PN958

When it says up the top No 3 shift, what does that mean?---No 3 shift that's from 15.30 to 11.30.

PN959

So, in my language afternoon shift?---Afternoon, yes. Number 1 is night shift and number 2 is day shift.

PN960

Any reason why there doesn't appear to be any night shift here?---No particular reason I just never asked and it is a lot easier to do things on the other shifts. Plus there's daylight hours.

PN961

You see towards the end it's about I suppose the last half a dozen pages there's a different format used?---That's correct.

PN962

It seems to indicate the starting time but not the finishing time?---Well that was the way it was presented to me and I didn't want to change the format. All they are saying there if you go to page, for instance, the second last page, page 6. It's got the VDU No 2 shift Tuesday, 11/01/00 that's indicating if you go say to 070705 there was 10 minutes of turnover and at 0715 this operator got changed and at 720 he went to console 1 and discussed and etcetera, etcetera and that's the way it goes down.

PN963

You go through it, am I right in assuming 8.58 is when he went to smoko and 9.40 is when he came back?---That would be correct.

PN964

For example, 11.30 cooling water test. 11.40 seps?---That would be correct.

PN965

So that assumes that that cooling water test took around 10 minutes?---That's correct.

PN966

There was nothing done and no arrival time in between?---I would say no, just going off the top of my head that test takes about that long.

PN967

See at the bottom of that entry it says 1 hour 45 minutes on call. 6 hours 15 minutes work. Now that's the total of the 8 hour shift is it you add those two together to reach 8 hours?---Yes, that's correct.

PN968

What components on call?---On that particular one.

PN969

Smoko, lunch?---Will be smoko and lunch in there. I'm just trying to pick an example out. If you look at 14.35 that's got CCB that would be that the RT was just waiting in the CCB.

PN970

What does satellite mean?---It means - well there's the main CCB where the consoles are there's another building further away from that and it's got another console in over there so he would be in that looking - monitoring that station.

PN971

Operators go there from time - the outside operators go there to monitor - - - ?---The console, they can't operate from there.

PN972

The activities of the console through various displays that are contained in that satellite room?---That's correct.

PN973

So is being in the satellite regarded as on call or work?---We would have to add up the times to see what they add up to, but - - -

PN974

Did you give any instructions to people to make sure that they did these things in a uniform manner?---Well, I told them to be honest about it. I said if you are doing nothing write down in CCB or try and indicate that you are virtually - you are never doing nothing because you are always waiting for something else to happen, but sometimes you will sit in the CCB and just hang around waiting for something to happen. In reality that's what happens so that's what the guys are putting down.

PN975

So you are not too sure about satellite. Are there any other entries there that - - - ?---Well, I would say actually looking at satellite that's 14.30 to 14.35 that's five minutes the guy would have in that case been monitoring the satellite. If you go back up to 1155/1200 satellite and there's five minutes there.

PN976

There is 15 minutes at 5 past 2 it seems to be throughout the day, but you don't know without doing the maths which someone could do later whether satellite is regarded as on call or work in this analysis?---In the main I would say satellite means checking the satellite station, which you do quite a few times during the day. Because just looking at satellites they are only five minutes at a time except for that one, what did you say? 15 minutes.

PN977

Yes, see 1405 it appears to be 15 minutes?---Yes.

PN978

Then doing some emails for 10 minutes. Where would that be done?---Checking the email?

PN979

It was Lotus Notes 14.20?---Lotus Notes, that would be in the CCB. You can also do that in the satellite station to.

PN980

So are there any other entries that you say should be regarded as being on call rather than work, just looking at that particular example?---That particular one. Not that stand out to me, no.

PN981

Where it says - - - ?---If you want to get down to the nitty gritty you are probably better off going to the one that I did.

PN982

Just looking at - to take that example if you look at 8.15 seps there's the next entry is 30 minutes later. There's a further mention of seps at 9.40. The next entry is 15 minutes later. How do we know whether the seps activity was taking place for the whole of the intervening period or whether something was done and nothing much else was done in between?---Well I would say it was. If you look up the top here it's got weather, right, there's heavy rain. No 1 shift stormy with light rain. So when there's a lot of rain out there through the whole separator system and at this time we are going out to guide the ocean outfall, so there's a lot of oil coming down to the separators. Oil goes out into the ocean there's the EPA requirements so on this particular time because of that heavy rain activity, right, that operator spent a lot of time down there at those separators keeping them clean to EPA requirements. Plus you go down there at that stage of the game every two hours to take samples of the effluent and while you are down there you do quite a bit of work down there.

PN983

You said at 11.30 the cooling water test takes about 10 minutes. If you go back to page 5 at 11.25 on 9 January there is a cooling water check that took 8 minutes. Can you see that?---What time are you talking about?

PN984

At 11.25 page 5, see that?---Yes.

PN985

Go back another page - - -?---Well, I will explain that away. It's like dry from here up to the top of the tower, how many lights are you going to catch? You can go down and do these cooling water samples and everything goes like to hitch, other times you go down there and you break a little tube into the water to get a reading out of it. If that doesn't work correctly the first time, you might do that a couple of times or the pumps aren't working, so these times aren't, yes it takes me 5 minutes to do that job. It might take 10 minutes to do it one day. It might take 5 minutes at least but these jobs aren't cut and dried, it takes X amount of time to do the same job every day.

PN986

So it could be those sort of variations, 8, 10 minutes, 5 minutes or something like that?---And there all the time.

PN987

If you go back another page to page 4, you see the top half of the page, 11.15, cooling water test - info from engineer. I think there is probably a type out, it should read 13.52 as the next entry but even with that adjustment, it looks to be 2 and a half hours?---Okay, I'll accept that it's probably a typo, it might be half.

PN988

How do you explain 2½ hours for the cooling water test there and are you suggesting that that's how long it took?---Well at that stage, well somewhere there it would have been lunch and I guess I typed these out myself from the originals, I probably had a type error, lunch has come into there, but at that, I think this is correct, about that time of the game the providers of the service to keep the separators clean. Sorry, not the separators the cooling water was changed and there was a lot of uncertainty amongst quite a few operators including myself, of how to go about these tests and get them correct and which readings we were actually looking for. So around about that time the new engineers were coming down and talking to operators and showing them exactly what it was all about and I would suggest, without going back to the guy that did these checks, that's probably what's happened here. So therefore cooling water tests plus the info from the engineer. They have had a long talk with the engineer from Baker.

PN989

About 2½ hours?---As I said, it's probably a typo on my behalf but also there would have been lunch in there.

PN990

If it was not a typo it's 3½ hours?---Well, I could go on for days trying to explain why that's there.

PN991

You don't know?---I don't know. I didn't actually do the tests.

PN992

Now, I take you to paragraph 36 of your first statement. You say in the second last line, up to 24 extra valves on DCFs will increase workload. Do you know there is 24 extra valves on DCFs?---Which statement are you talking about now?

PN993

I'm talking about your first statement, AW17?---Which page?

PN994

Page 11?---Okay.

PN995

Do you have that paragraph 36?---Okay, yes.

PN996

Do you see the second last line of that page, 24 extra valves on DCFs. Do you know that there is 24 or is that just an estimate?---That's an estimate actually, I think there's more and if you want me to run through them I can.

PN997

Well you believe there's more than that do you?---When I sat down and really worked it out the other day because I was thinking about that, I think there is probably 26. To make the system work.

PN998

Well it's true isn't it when there's a shutdown, that you don't shut down all the valves down at once, it's done in a progressive manner?---That's - you shut them down in blocks.

PN999

Yes, you don't do it all at once?---That's correct.

PN1000

Can I take you back to paragraph 14? It's page 4. I'm sorry to jump about like this. There you are talking about refining technicians - it's an aspect of the companies paper whereby refining technicians on shift would cope with work involved in startups and shutdowns through overtime?---I don't understand that where are you looking?

PN1001

Do you have page 4, paragraph 14?---Yes.

PN1002

And it refers to the companies November 99 paper:

PN1003

Where it is not possible for refinery technicians on shift ...(reads)... to maintain the start up schedule.

PN1004

?---That's correct.

PN1005

You say this would in your opinion result in an unreasonable amount of overtime?---Yes.

PN1006

You are aware that the annualised salaries that came out incorporate 8.5 per cent of hours overtime?---Yes.

PN1007

And you are aware that the actual incidence of overtime is much less than that?---Yes.

PN1008

You are aware that in 1999 the figure was around 1.32 per cent?---Well, I don't know that for a fact, but I read Mr Taylor's statement and he indicated that.

PN1009

Yes, and you have no reason to disbelieve what he said, based on his checking of the records?---Well, I know that all the overtime worked out there is not recorded so therefore the figure would be higher, but I don't know how much higher, for instance, last week overtime was worked and I know for a fact, it's not on the timesheets.

PN1010

And you know that last year the figure for overtime was pretty low as well?---I don't know how low but I know it could be low.

PN1011

Certainly much less than 8.5 per cent?---Well, my answer to that is what happens if we all do 8.5, is the company going to pay us overtime after that? Therefore, my idea was, my interpretation is to keep overtime down, away from these figures, which is what's happening.

PN1012

And you know that, I think I'm in the right year, last year, there were around six shutdowns for area 4?---Well, it was more than that if you look at Mr Taylor's. He says 15, I say 20. My indication is that it's probably somewhere in between.

PN1013

In 1999 would there have been about 6 shutdowns or more than that?---I'd say more, well, Mr Taylor says there was 15, does he? I believe in his second statement.

PN1014

Yes. Thank you nothing further.

PN1015

JUSTICE GIUDICE: Mr Ginters?

PN1016

MR GINTERS: No, re-examination, can Mr Keys be excused?

PN1017

JUSTICE GIUDICE: Yes, certainly. Thank you Mr Keys.

<THE WITNESS WITHDREW [2.47pm]

PN1018

MR GINTERS: I call Mr John Moran, that's M-o-r-a-n.

<JOHN WILLIAM MORAN, SWORN [2.48pm]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN1019

MR GINTERS: Mr Moran, you have prepared two statements in relation to these proceedings?---That's correct.

PN1020

Do you have those statements with you?---Yes.

PN1021

Could I take you to the first of those statements? It was filed about 9 October and it is a statement of some four pages in length. Do you have that with you?---Yes.

PN1022

Have you had an opportunity to read that statement?---Yes.

PN1023

Are the contents of that statement true and correct?---Yes.

PN1024

Could I ask you then to turn to page 4 and sign and date that statement? You have done that?---Yes.

PN1025

I tender that statement, your Honour.

PN1026

JUSTICE GIUDICE: Exhibit AWU19.

EXHIBIT #AWU19 FIRST STATEMENT PREPARED BY MR J.W. MORAN

PN1027

MR GINTERS: Thank you. Mor Moran, you have prepared a second statement. On the first page, it is dated 23 November 2000. Do you see that?---Yes.

PN1028

Could I ask you to delete that date and insert today's date please? That is a statement of some five pages in length with some annexures. Have you had an opportunity to read that statement?---Yes, I have.

PN1029

The contents of that are true and correct?---Yes.

PN1030

Could I ask you then to turn to the fifth page there and again sign and date the document. Thank you. I tender that statement, your Honour.

PN1031

JUSTICE GIUDICE: Exhibit AWU20.

EXHIBIT #AWU20 SECOND STATEMENT PREPARED BY MR J.W. MORAN

PN1032

MR GINTERS: That is the examination-in-chief.

PN1033

MR WATSON: Could I just say we don't appear to have received the second of those statements or at least we can't locate it in our folders readily.

PN1034

JUSTICE GIUDICE: It was filed on 23 November according to the Registry stamp.

PN1035

MR WATSON: It certainly hasn't found its way into our material. Might I reserve a position in relation to that?

PN1036

JUSTICE GIUDICE: Yes. What do you say to that, Mr Ginters?

PN1037

MR GINTERS: I have no difficulty with that, your Honour. It is a statement that responds to Mr Gary Charles Edgar's statement of 27 October 2000. We can arrange for a copy to go to my learned friend and perhaps if he wants a few moments to look at it or if he needs longer having looked at it, we can arrange to accommodate his convenience.

PN1038

MR WATSON: The difficulty we have is that our worst fear is seven are correct. We have not provided a copy of this to Mr Edgar and he may not have had the opportunity to respond to it. We simply have no instructions in relation to it. So, we will need to check more than 10 minutes.

PN1039

JUSTICE GIUDICE: Yes. Do you have cross-examination for Mr Moran?

PN1040

MR WATSON: Yes, I can cross-examine.

PN1041

JUSTICE GIUDICE: Do you wish to cross-examine Mr Moran now?

PN1042

MR WATSON: I am happy to cross-examine and reserve my rights in relation to the second statement if I may.

PN1043

JUSTICE GIUDICE: All right. If you need to make some application in that regard, you can do that in due course.

PN1044

MR WATSON: Thank you, your Honour.

<CROSS-EXAMINATION BY MR WATSON [2.52pm]

PN1045

MR WATSON: Mr Moran, how long have you worked at Kurnell?---20 years next month.

PN1046

How long have you been in - you're in area 1, aren't you?---Yes, 1A.

PN1047

How long have you worked in that area?---20 years next month.

PN1048

So the entirety of your time at Kurnell. How long have you known Mr Edgar?---I have known of him for that amount of time but I would say only the last 10 years I suppose that I've got to speak to him.

PN1049

You would accept he has a good knowledge of the Kurnell Refinery, including your area?---Yes, I would say that. Yes.

PN1050

He is fair and reasonable in his approach?---To what?

PN1051

To any issue that you have had to deal with?---Yes.

PN1052

In your first statement you refer on page 2, paragraph (c) to digital control systems. Do you see that?---Yes.

PN1053

Do you note that Mr Edgar, in his statement, indicates that the DCS system was introduced into the oil movement centre in 1995?---Yes.

PN1054

Do you accept that's correct?---Yes.

PN1055

In paragraph (d), you refer to the bio-treater. Do you recall that Mr Edgar says in his statement - can I take you to that statement? You don't have Mr Edgar's statement with you?---No, I don't.

PN1056

In that statement, he said that:

PN1057

With the introduction of the bio-treater, the OMCRTs who operate the DCS have been ...(reads)... console position which attracts a higher qualification.

PN1058

Do you accept that's correct?---Yes, I accept that.

PN1059

It is the same situation, isn't it, with the DCS?---You will have to be more elaborate. I don't understand what you're getting at.

PN1060

DCS, there was - - -?---A console and a DCS are the same thing.

PN1061

Yes, but a DCS system, all RTs who operate the full DCRS system to control the propylene system, SARB system and WWTP have been upgraded to a console position and therefore receive a higher grade of pay?---That's correct. We're now consistent with the rest of the refinery.

PN1062

Yes. Now, you refer to the jet fuel flush system in your first statement and in your first statement you say that, "They were installed in 1996 or 1997" - that is paragraph (e) on page 2 of your first statement?---(f).

PN1063

Sorry, (f) is the flush filters and a flush system. Mr Edgar in his statement says that, "The flush system was installed in the early 1990s on each jet fuel tank." Do you accept that's correct?---Yes. It was in the 90s, early 90s.

PN1064

Paragraph (j) over the page in your first statement you say, "Propylene loading system, this is a whole new system which began running in about 1996 or 1997." Mr Edgar says that, "The propylene system was installed and operated from 1995." Do you accept he is correct in that?---Yes, I do. Yes, installed in 1995.

PN1065

Now the previous entry of the jet fuel filters was a different matter, is that right?---To the propelling, yes. To the fast flush, yes.

PN1066

The jet fuel flush system?---Yes.

PN1067

Now the jet fuel filters you say were installed in 1996 or 1997. Mr Edgar says in paragraph 28, that the jet fuel filters were installed in 1979 and have been used constantly since that time. Do you accept he is correct in saying that?---Yes, but they are now in a different format.

PN1068

I've reached the point, if the Commission pleases, that I really do need to obtain instructions and investigate this missing witness statement. What I seek to do is reserve the right to have Mr Moran recalled for further cross-examination once I am in the position to understand what's happened.

PN1069

JUSTICE GIUDICE: Mr Moran, you've heard that. You may be recalled. It will be subject to among other things what's put by your counsel if there is an application to have you give some further evidence?---Okay.

PN1070

MR GINTERS: Just a short matter in re-examination your Honours and Commissioner.

<RE-EXAMINATION BY MR GINTERS [3.00pm]

PN1071

MR GINTERS: Mr Moran, do you recall being asked some questions about the propylene loading system. One of the questions that my learned friend asked you, was when it was installed, and I think you agreed with him that it was installed in about 1995?---Yes.

PN1072

In your statement you talk about it beginning to run in about 1996 or 1997?---That's correct.

PN1073

Is a distinction to be drawn between installation and operation and running on that system?---Yes, there is.

PN1074

So when was it that the system actually began running to the best of your recollection?---I would say 1996, somewhere around there it became operational, but has never worked from that day to this.

PN1075

Thank you. I have no further questions. Might Mr Moran be excused at the moment.

<THE WITNESS WITHDREW [3.01pm]

PN1076

MR GINTERS: I call Mr Ian Ottaway, that's O-T-T-A-W-A-Y.

<IAN DOUGLAS OTTAWAY, SWORN [3.02pm]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN1077

MR GINTERS: Mr Ottaway, you've prepared a number of statements in relation to these proceedings?---Yes, I have.

PN1078

I count four in total, is that your understanding?---I've only got three here at the moment.

PN1079

Perhaps if we go through them in order?---Yes.

PN1080

The first statement is one that was filed about 9 October 2000. It's a 3 page statement of four paragraphs, but the fourth paragraph has got a number of sub paragraphs going right through to U. Do you have that in front of you?---No. No, I've only got three here. One is dated 23 November 2000.

PN1081

Yes?---That goes through to 19.

PN1082

Perhaps we can deal with that one first?---Okay.

PN1083

That is a statement of some 5 pages in length?---Yes.

PN1084

And on the front page of that document, there is a date 23 November 2000?---That's correct.

PN1085

Could I ask you just to delete that date and insert today's date. Now, have you read that statement?---Yes, I have.

PN1086

And are the contents of that statement true and correct?---Yes, they are.

PN1087

Could I then ask you to turn to page 5, the last page of that statement, and could I ask you to sign and date it there please.

PN1088

I tender that statement.

PN1089

MR WATSON: Are those the same issue. Unfortunately it appears we have not received that statement. In the short time we have checked the facsimile cover sheets from November, and we received two batches of statements which include the statements that have already been tendered from that date. But in either batch there is no statements from Mr Ottaway and Mr Moran and any others that might have been included, filed but not served on us. That appears to be the case. Again we will continue our checks, but can we flag our difficulty at this stage and it may be that we ultimately object or at least defer cross-examination.

PN1090

JUSTICE GIUDICE: Yes. I think you can go on at this stage Mr Ginters.

PN1091

MR GINTERS: I would seek to tender that statement but I hear what my friend says, your Honour.

PN1092

JUSTICE GIUDICE: We will mark it, but the situation is reserved as far as it needs to be Mr Watson.

PN1093

MR WATSON: Thank you, your Honour.

PN1094

JUSTICE GIUDICE: That's AWU21.

EXHIBIT #AWU21 STATEMENT OF MR IAN DOUGLAS OTTAWAY DATED 01/03/2001

PN1095

MR GINTERS: Mr Ottaway, there is also a three page statement, the front page of that is a February 2001 date, do you have that one in front of you?---Yes, I have.

PN1096

Could I ask you just to delete the February 2001 date and insert today's date there please. Have you read that statement?---Yes, I have.

PN1097

And the contents of that statement are true and correct?---Yes, they are.

PN1098

Could I then ask you to turn to the third page of that statement and sign and date it. I tender that statement.

PN1099

JUSTICE GIUDICE: Do you have that one Mr Watson?

PN1100

MR WATSON: We've got that one, your Honour.

PN1101

JUSTICE GIUDICE: AWU22

EXHIBIT #AWU22 STATEMENT OF MR IAN DOUGLAS OTTAWAY DATED 01/03/2001

PN1102

MR GINTERS: There should be two other statements that you have Mr Ottaway, but you are telling me that you only have one in front of you now?---One in front of me, yes.

PN1103

Would you excuse me for just a moment your Honours, and I will check that. Mr Ottaway, do you have a statement on the front page with a date October 2000?---Yes, I have.

PN1104

It's a statement of some 13 pages, with a great deal of annexures behind it?---Yes, I do.

PN1105

Could I ask you to change the October 2000 date to today's date? The statement that you've got in front of you Mr Ottaway, it's a 13 page statement is that correct?---That's correct.

PN1106

Have you read that statement?---Yes, I have.

PN1107

And are the contents of that statement true and correct?---They are.

PN1108

Does your Honour have that statement?

PN1109

JUSTICE GIUDICE: Yes.

PN1110

MR GINTERS: I tender that statement.

PN1111

JUSTICE GIUDICE: That's AWU23.

EXHIBIT #AWU23 STATEMENT OF J.D. OTTOWAY

PN1112

MR GINTERS: There's one further statement, Mr Ottoway, that I've got and perhaps I can hand it to you. Can I show you a copy of this statement, Mr Ottoway. Do you recognise that statement?---Yes, I do.

PN1113

Have you had an opportunity to read that statement?---Only just before I came in here. I've been away so I haven't seen it, but I have read it.

PN1114

That statement has a file stamp on it of 9 October 2000. Do you recollect preparing that statement in or about that time?---9 October.

PN1115

JUSTICE GIUDICE: Perhaps you had better have a careful look at it, Mr Ottoway?---I'm pretty sure this is the one I prepared only a matter of a couple of weeks ago. I think so.

PN1116

MR GINTERS: Could I ask you if you could just return that statement to me, please. Could your Honours and Commissioner just excuse me for one minute, please, while I clarify this matter.

PN1117

JUSTICE GIUDICE: I wonder if there's any point in adjourning for a few moments, Mr Ginters. That might give Mr Watson an opportunity to perhaps check whether a problem we've identified with the last two witnesses is going to recur.

PN1118

MR GINTERS: Yes, I would be assisted by that, your Honour. If I could have a discussion with the witness.

PN1119

JUSTICE GIUDICE: Yes. We will adjourn for about 10 minutes.

SHORT ADJOURNMENT [3.11pm]

RESUMES [3.22pm]

PN1120

MR GINTERS: Your Honours, Commissioner, I can indicate, having had discussions between the parties, that there appears to be three statements which may not have made their way to the respondent or may have been lost in the voluminous amount of paperwork. My instructing solicitor is arranging for those documents to be brought down to the Commission this afternoon and will be provided to my friend's instructing solicitors. I understand my friend wishes to reserve his rights as to the effect of those statements in cross-examination and we'll make whatever accommodations can be made in relation to those matters.

PN1121

JUSTICE GIUDICE: Yes, thank you.

PN1122

MR GINTERS: Mr Ottoway, just before the break I was seeking to take you to a fourth statement of yours that was filed in this Commission on about 9 October. Do you have that statement in front of you?---Yes, I do.

PN1123

I understand there is a change that you wish to make to that statement, is that correct?---Yes, there is.

PN1124

Could I take you to what is subparagraph (o) on page 3 of that statement. Have you got that?---Yes.

PN1125

Is there a change that you wish to make to that paragraph?---Yes. Where it says "Advance control applications not being updated", the "not" shouldn't be there.

PN1126

You wish to delete the word "not"?---Delete the word "not".

PN1127

Could I ask you to do that, delete it, and then just put your initials next to that deletion? With that change made, Mr Ottoway, are the contents of that statement true and correct?---They are.

PN1128

Could I invite you then to sign and date the document at the bottom of page 3? I tender that document.

PN1129

JUSTICE GIUDICE: That's AWU24.

EXHIBIT #AWU24 STATEMENT OF J.D. OTTOWAY DATED 09/10/2000

PN1130

MR GINTERS: That's examination-in-chief of Mr Ottoway.

PN1131

MR WATSON: I seek to reserve the rights to cross-examine Mr Ottoway, given that one of his statements we have not seen nor obtained instructions on.

PN1132

JUSTICE GIUDICE: Yes. Are there any matters you can cross-examine on or you don't wish to?

PN1133

MR WATSON: Your Honour, I had prepared on the assumption that there was not a response to Mr Taylor's statement, though it appears that that's the statement where there is a response and it is better that I - - -

PN1134

JUSTICE GIUDICE: Yes, I just didn't want to bring Mr Ottoway back, that's all.

PN1135

MR WATSON: I think that is inevitable.

PN1136

MR GINTERS: Might Mr Ottoway be excused with a caveat that he be required - - -

PN1137

JUSTICE GIUDICE: Mr Ottoway certainly can be, yes.

<THE WITNESS WITHDREW [3.25pm]

PN1138

MR GINTERS: I call Mr Stephen Peddie.

<STEPHEN DAVID PEDDIE, SWORN [3.26pm]

<EXAMINATION-IN-CHIEF BY MR GINTERS

PN1139

MR GINTERS: Mr Peddie, you've prepared three statements in relation to these proceedings?---That's correct.

PN1140

Do you have a copy of those statements with you?---I do.

PN1141

Could I first take you to the statement which was filed in this Commission on 9 October 2000. It's a statement that's some four pages in length. Do you have that with you?---That's correct.

PN1142

I understand there is an amendment that you would like to make to that statement, is that correct?---Yes, that's correct.

PN1143

Could I take you to paragraph 2(h) of that statement?---Yes.

PN1144

Is there something that you wish to change or add in relation to paragraph 2(h)?---I would like to delete that statement because the company has changed their policy now on the sampling since Zovitra has been fully commissioned that no longer applies.

PN1145

So you wish to delete paragraph 2(h)?---Delete paragraph 2(h).

PN1146

Could I also invite you to turn to paragraph 2(q)?---Yes.

PN1147

Is there something that you wish to add or delete from that paragraph?---Where it says "look after the security of the gate", it should be car park gate.

PN1148

I apologise to the Commission. The AWU doesn't read paragraph 2(q), your Honours, Commissioner. We would ask that paragraph 2(q) be excised.

PN1149

JUSTICE GIUDICE: Deleted?

PN1150

MR GINTERS: Yes.

PN1151

Mr Peddie, I'm sorry to backtrack. Where you made the amendment to paragraph 2(h) could I ask you to just initial the change you made to that. With those two changes made are the contents of that statement true and correct?---That's correct.

PN1152

Could I then invite you to turn to the fourth page and sign and date that statement.

PN1153

I tender that statement.

PN1154

JUSTICE GIUDICE: AWU25.

EXHIBIT #AWU25 STATEMENT OF MR PEDDIE

PN1155

MR GINTERS: Thank you, your Honours, Commissioner.

PN1156

Mr Peddie, the second statement that you've prepared is one dated on the first page, 23 November 2000. Do you have that statement?---24 November.

PN1157

Filed on 24 November?---Sorry, okay.

PN1158

If you can just look at the first paragraph, it says, "On 23 November 2000," do you see that?---Yes.

PN1159

Could I ask you just to delete 23 November 2000, and insert today's date? I understand that there is a change that you wish to make to paragraph 12C of this statement, that's at page 5?---That's correct.

PN1160

What is the change that you wish to make?---The date was wrong. Where it says, "As was the case on 7 November".

PN1161

Yes?---That should have been, "15 October".

PN1162

Could I ask you then to delete the words "7 November," and insert "15 October", and just initial that change? With that change made, are the contents of that statement true and correct?---That's correct.

PN1163

Could I then invite you to turn to page 6 and sign and date at the bottom of that page? I tender that statement.

PN1164

JUSTICE GIUDICE: AWU26

EXHIBIT #AWU26 STATEMENT OF MR PEDDIE

PN1165

MR GINTERS: Thank you, and Mr Peddie, the third of your statements is dated February 2001. Do you have that in front of you?---Yes.

PN1166

On the first page, can I again invite you to delete the February date and insert today's date? I understand that there's an amendment that you wish to make to paragraph 23 of that statement?---That's correct.

PN1167

What is the amendment that you would like to make?---In the first line it's got, "I seek to amend my statement of 15 October." That should have been 23 November.

PN1168

Yes, it's the document filed on 24 November?---24 November.

PN1169

Could I just ask you to make that change?

PN1170

JUSTICE GIUDICE: So it should read, "My statement filed on 24 November".

PN1171

MR GINTERS: I think that's appropriate, your Honour.

PN1172

JUSTICE GIUDICE: Although in fact it's now dated 1 March 2001.

PN1173

MR GINTERS: That has just occurred to me, too, your Honour. There is a second change that you wish to make to that paragraph, as I understand it?---Where is says, "Have read number one shift, Sunday, 5 October," it should have been, "15 October".

PN1174

Yes. Could I ask you to change the 5 to 15 and initial that change? With that amendment made, are the contents of this statement true and correct?---That's correct.

PN1175

Could I then invite you to turn to page 8 and sign and date that statement? I tender that statement.

PN1176

JUSTICE GIUDICE: Yes, it's AWU27.

EXHIBIT #AWU27 STATEMENT OF MR PEDDIE

PN1177

MR GINTERS: With the Commission's leave, just one further question for Mr Peddie. Mr Peddie, the document which is now marked AWU27, which is the latest of your statements, at paragraph 4, it's a responsive paragraph in relation to the new filter speed variators, is that correct?---It's correct.

PN1178

In the last sentence of that read, and I quote, "On 23 January 2001, there was a situation where a drop in instrument air pressure actually increased the workload of the filer house refinery technician, as the new speed variators on both filters actually stopped. In the past both would have remained running." Is there anything that you wish to add or clarify in relation to your statement there?---I would like to change, "The filters actually stopped".

PN1179

Yes?---They actually slowed down to a speed where they appeared to be stopped.

PN1180

Thank you. Perhaps if you could just add in those words. Delete the word, "stopped". I think the words you wanted to include were, "Slowed to approximately".

PN1181

JUSTICE GIUDICE: "Where they appeared to have stopped".MR

PN1182

MR GINTERS: I beg your pardon, I'm sorry, your Honour.

PN1183

JUSTICE GIUDICE: "Slowed down to a speed where they appeared to have stopped."

PN1184

MR GINTERS: Have you made that amendment, Mr Peddie?---That's correct.

PN1185

Thank you, I have no further questions of this witness.

PN1186

JUSTICE GIUDICE: Mr Watson?

<CROSS-EXAMINATION BY MR WATSON [3.35pm]

PN1187

MR WATSON: Mr Peddie, you know Mr Barry Willis?---Yes.

PN1188

He is the area specialist in your area, area 4 of the oil refinery?---That's correct.

PN1189

You are aware that he has been employed in that area for a considerable period of time?---That's correct.

PN1190

He has considerable knowledge of the processes in area 4, doesn't he?---Of, yes, some of the processes in area 4.

PN1191

The role of area specialist is to provide advice on the operations from a viewpoint of having good technical understanding of the processes?---Of the units he knows, yes, that's correct.

PN1192

Are you aware that he previously filled operating roles before assuming the role of area specialist?---That's correct.

PN1193

Your second witness statement is a response to Mr Willis' statement filed in the proceedings last year, in November?---That's correct.

PN1194

Your third witness statement is a response to Mr Willis' second witness statement, filed in January of this year?---That's correct.

PN1195

Where you disagreed with something that Mr Willis has said, you said so in your second and third witness statements?---That's correct.

PN1196

You accept that in general terms, the new technology introduced in area 4 has been designed to reduce the physical activities of refinery technicians in that area?---We've already had a de-manning case on that, yes.

PN1197

In a generalised sense, there has been increased computerised monitoring, which has led to the need for less physical activities?---The computer system that was installed has already had a de-manning case run before it.

PN1198

You accept the general proposition I've just put to you, that that's been the nature of the changes in general terms?---That's correct, from the old system, yes.

PN1199

Now, in your evidence you refer to the SAP system, if I can assist in finding the relevant part, to in your most recent statement AW27, paragraph 7, you refer to the SAP system. Now, in that you refer to the fact that your estimate of the time it takes to log on and act upon the work order is in the order of 40 minutes, Mr Willis indicated that it was in the order of five minutes, do you recall that? What do you say is the explanation for that significant difference in opinion?---The log of work order's reasonably simple. To trace the history that's actually been carried out is a lot more difficult. Mr Willis' statement says that for those who are more inexperienced it does take a lot longer. He uses the computer nearly all day, every day, R2s don't. We have got other jobs to do rather than to sit at a computer. His expertise on a computer is 50 times more than what an R2s is.

PN1200

You see, in his most recent statement he says that he has watched experienced refinery technicians enter work orders, and they carry out this function within five minutes, do you say that doesn't occur or you are not aware of it, what do you say about that?---I'm saying that you can log a work order within five minutes, but if you have got to trace the history of whether it's been acted upon, that takes a lot longer. That takes on average about 40 minutes.

PN1201

And you say that it takes on average for anyone, any refinery technician, just because of the needs to operate that particular function in that sort of computer terminal, is it?---I have done a survey over a couple of operators trying to put work orders in, that's how long it takes. The actual - the time taken.

PN1202

You say that's the average period, so it sometimes could be longer than 40 minutes?---Could be, sometimes it's a bit less.

PN1203

Does that depend on how many orders are made within a single work order?---No, it's because the system's user-unfriendly.

PN1204

What do you mean by that?---It's hard to get into and operate, to find your way around it.

PN1205

What do you say is involved in, I think your term was tracing the history of the order?---Can you repeat that question, what do you mean by that?

PN1206

Do you recall saying that it might take five minutes to place the order, but if you want to track the history of it it will take 40 minutes, what do you mean by that?---If you have found a piece of defective equipment, and you find there's a work order been placed for it, and the equipment is still defective and you want to go back and find out whether that work order's actually been carried out and it's become defective again, or whether that work order was never carried out to begin with and it's still waiting there.

PN1207

So it's investigating the process of a previous work order which takes that time?---Well, if there is a work order been put in for it, and if there hasn't, to trace - if there has been one put in, to trace whether it's been acted upon.

PN1208

How long do you say it takes to trace whether one has been in before?---We have got a - well, in area 4 we have a system where a book, so you can go to the book, that speeds things up. That's the easy - that's why most operators can put a work order in, using that system, but to trace the history of it is the hard part.

PN1209

How long does it take to find out whether there has been a work order?---Probably five minutes, sometimes less, sometimes more.

PN1210

How long does it take to trace the history once you have discovered that there has been one?---Well, it depends how good you are on the computer and how user-friendly it is.

PN1211

What do you have to do - - - ?---Following the system, it's a very complicated system to follow.

PN1212

What do you have to do in order to trace the history of it?---What do you mean by, sorry?

PN1213

What's involved in tracing the history of a work order once you find that there has been a prior work order?---Well, there is a certain procedure you are supposed to follow into the computer.

PN1214

Yes?---And if you are not - depending how computer illiterate you are, it's hard to do it.

PN1215

But what's required to be done?---You just - it comes up on the screen, and you have got to follow it through.

PN1216

So you have to - what do you have to do, you say you have to follow it through, it comes up on the screen, what do you have to do?---What do we have to do? You just got to go back. I'm not computer literate either, but you just got to go back through the history section where the work orders are stored.

PN1217

Is this the function that you do, or that others do?---Well, everyone has a go at it.

PN1218

What's involved in going back to the history of it, what do you have to do in order to do that?---Well, I have had trouble doing it, so I - I'm one of the people who took a while to do it.

PN1219

Have you sought advice as to how to do it quicker or better?---Well, the only way I could find the history was I had to get someone to help me.

PN1220

Have you sought help from someone?---Sought help from someone? We have - on our shift we have two designated SAP people, that's what you would call them, who deal with SAP all the time.

PN1221

Have you sought help from those people as to how to carry out that function?---One of those was the person who helped me sort out the history problem.

PN1222

That person then showed you how to trace the history?---He did.

PN1223

And who was that?---Who helped me?

PN1224

Yes?---John Keys.

PN1225

Once he helped show you how to do it, you understood how to do it?---It didn't actually work, the next time it didn't actually work again. I had problems again, I had to have assistance again.

PN1226

So you then asked for someone to help you again in relation to that?---That's correct.

PN1227

Who did you ask then?---I asked John Keys again, because he's our - the other person who is our computer SAP person was on holidays at the time.

PN1228

And he showed you how to do it again?---He did.

PN1229

You say you sought to do it, it's taken more than 40 minutes?---It has.

PN1230

Less the 5 minutes that it takes to locate whether there is a work order or not, is that correct?---Sorry, can you repeat that again?

PN1231

Remember you initially said it took about five minutes to find out whether there was a previous work order or not?---That's correct.

PN1232

Then if you took approximately 40 minutes to find out whether there was a work order and then trace the history, then it was approximately 35 minutes to trace the history of that work order?---Well, it was an average of 40 minutes, but yes, the figures are close.

PN1233

Did the time that you took into account include either of the two times where you needed to get help as to what to do from Mr Keys?---Since those two times I have only ever - I haven't tried it again because it took up too much time.

PN1234

When you say that it's taken you in the order of 40 minutes, are you referring to the two times that you needed help from Mr Keys?---We did a survey over six operators.

PN1235

But in your case you're talking about those two instances, are you?---I am.

PN1236

And you said you have only had to do it once since?---I have.

PN1237

Once since, when did those two instances occur roughly?---I don't know, it's in the last six months I suppose. I'm not sure.

PN1238

When was the most recent time you had to do it approximately?---End of last year sometime, or last October, or something like that.

PN1239

Right and did you consider you were more familiar with the processes at that time, having been helped by Mr Keys the two previous times?---No, I stated I don't use that system now. I leave it to someone who is a bit more expert.

PN1240

I see. But nevertheless you did on that occasion, the third occasion?---Actually I didn't finish it on the third occasion either, I let someone else take over.

PN1241

Now in your most recent statement, again at paragraph 29, you refer to Yield accounting?---Sorry, was that page 29? Yes.

PN1242

Now do you accept that when the Yield accounting system fails, that becomes a specialist IT problem and a specialist IT person needs to come and attend to that, usually the next working day?---After you have proved it has failed completely, that's correct.

PN1243

Yes. So you say that that's only where it fails completely which, in your statement of February of this year, you said occurred five times in the last four months?---That's correct.

PN1244

You say that in paragraph 29?---Yes.

PN1245

You say there were 17 times when it has partially failed. What do you say needs to occur then?---Even when it has completely failed, you keep trying it, probably try it three or four times.

PN1246

Yes?---And if you can't get it to go after three or four times, you leave it till the morning and the IT people recall the data then. When it partially fails, you just keep trying until it eventually comes good.

PN1247

So there might be some delay in it working?---That's correct.

PN1248

That's what you describe as partially failed in your paragraph 29?---It's where it doesn't operate correctly the first time.

PN1249

I see. In the second statement, the November statement at paragraph 18 which is exhibit AW26 - in paragraph 18 on page 6, if you can find it. Have you got it there?---Yes.

PN1250

See how you say:

PN1251

In respect of paragraph 32 in which Mr Willis comments on the new task of Yield accounting, it should be noted that the computer system performs an error on at least one occasion per night shift which results in significant delay for the RTs involved

PN1252

Is that what you talk about when you refer to a partial or complete failure?---No, a complete failure is where, like I said, after four times of trying to operate it it just doesn't print out anything.

PN1253

Right and that's what you say has happened five times in four months?---That's correct.

PN1254

What are you referring to there in paragraph 18 then?---If you can print it out after a short period of time and it corrects itself, that's okay. But if you have got to keep printing it out four times or five times before it starts printing correctly, I would say it's a part failure because you have had to perform that task five times.

PN1255

Yes, well that's what you call - that seems to be the same thing as a partial failure that you previously described?---If it only fails once, actually that's normal at this stage. But if you have got a - if it fails four or five times and then comes good, that's a partial failure.

PN1256

Yes. Where you say:

PN1257

It only fails once, that's normal

PN1258

is that what you mean by saying:

PN1259

...an error on at least one occasion per night shift

PN1260

is it?---Sorry, can you repeat that question again?

PN1261

See in paragraph 18 you say that the system performs an error on at least one occasion per night shift?---Yes.

PN1262

Is that what you mean by it not working the first time you seek to have it print?---Sorry, could you just repeat that question again, what you just asked me?

PN1263

I'm trying to understand, is that what you mean by a partial failure, as you describe in your third statement?---A partial failure is when it, after several operations, it still doesn't print out properly and you have got to enter manually some of the information.

PN1264

Is that what you say happens one occasion per night shift?---What might happen - what happens is it might have one error and if you reset it, it will fix itself. The next time it prints out it will fix it, all right.

PN1265

Yes?---A partial one is where, after several operations, it still won't print out all the information, so you have got to manually enter it.

PN1266

Didn't you say that after four times of trying and it still won't work, then that's regarded as a total failure?---A total failure, it's not printing. It just doesn't print anything.

PN1267

I see?---You get nothing, nothing comes out. Where a partial failure, it prints out half the information, but not the rest.

PN1268

How would you describe the function of the Yield accounting system?---What do you mean by that question?

PN1269

Well the question is, what does the Yield accounting system do?---It calculates the inventory inside the refinery at any particular time.

PN1270

Yes and prior to that system being in place, what was required to be done?---They used to tank gauge it over a month, over a month period. I think they used to tank gauge all the gauges and at the end of the month they used to come up with a figure.

PN1271

Yes?---The Yield accounting actually does it every night, so that every day they know how much is in the refinery and how much has gone.

PN1272

That information then is available to the operators?---Which information?

PN1273

The information of how much is in the refinery?---I'm not sure.

PN1274

Having that information assists you and the refinery technicians in understanding more of the state of the refinery and the inventory that exists and was previously the case?---Sorry, what was the question there?

PN1275

The question is do you accept that?---Accept what. What is the question?

PN1276

The question is do you accept that with the yield accounting system you have more information available to you about the inventory than you had prior to the introduction of this system, where, in your description, there needed to be monthly physical measures?---Because the gauging system is unreliable out there, you've still got to go out and manually gauge a lot of the tanks.

PN1277

Do you say you don't use the information that comes from the yield accounting system?---I think they double check it because of the unreliability of the gauging.

PN1278

Thank you, nothing further.

PN1279

MR GINTERS: No re-examination.

PN1280

JUSTICE GIUDICE: Thank you, Mr Peddie.

<THE WITNESS WITHDREW [4.00pm]

PN1281

JUSTICE GIUDICE: One of our number has to deal with a matter at 4.15 pm, so this might be an appropriate time to adjourn for the day. We resume tomorrow at 10 o'clock.

ADJOURNED UNTIL FRIDAY, 1 MARCH 2001 [4.01pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #CALTEX 6 CONTENTIONS RE DRAFT AWARD PN436
EXHIBIT #CALTEX 7 DRAFT AWARD PN437
EXHIBIT #CALTEX 8 COMPARISON OF PROPOSED AWARDS DOCUMENT PN440
EXHIBIT #AWU8 OUTLINE OF CONTENTIONS PN463
EXHIBIT #AWU9 DRAFT AWARD PN463
JOHN ALEXANDER CRAIK, SWORN PN529
EXHIBIT #AWU10 FIRST STATEMENT OF MR CRAIK FILED 09/10/2000 PN537
EXHIBIT #AWU11 SECOND STATEMENT OF MR CRAIK, FILED ON OR ABOUT 24/11/2000 PN544
EXHIBIT #AWU12 THIRD STATEMENT OF MR CRAIK, FILED FEBRUARY 2000 PN548
WITNESS WITHDREW PN667
WARREN GRAEME GRACE, SWORN PN668
EXHIBIT #AWU13 FIRST STATEMENT OF MR GRACE PN676
EXHIBIT #AWU14 SECOND STATEMENT OF MR GRACE PN682
EXHIBIT #CALTEX 9 EMAIL FROM MR SCULLARD PN779
WITNESS WITHDREW PN806
ROBERT WILLIAM JENKINS, SWORN PN809
EXHIBIT #AWU15 FIRST STATEMENT OF MR JENKINS PN816
EXHIBIT #AWU16 SECOND STATEMENT OF MR JENKINS PN821
WITNESS WITHDREW PN909
JOHN GEORGE KEYS, SWORN PN912
EXHIBIT #AWU17 FIRST STATEMENT BY MR JOHN GEORGE KEYS DATED 01/03/2001 PN922
EXHIBIT #AWU18 SECOND STATEMENT BY MR JOHN GEORGE KEYS DATED 01/03/2001 PN927
WITNESS WITHDREW PN1018
JOHN WILLIAM MORAN, SWORN PN1019
EXHIBIT #AWU19 FIRST STATEMENT PREPARED BY MR J.W. MORAN PN1027
EXHIBIT #AWU20 SECOND STATEMENT PREPARED BY MR J.W. MORAN PN1032
WITNESS WITHDREW PN1076
IAN DOUGLAS OTTAWAY, SWORN PN1077
EXHIBIT #AWU21 STATEMENT OF MR IAN DOUGLAS OTTAWAY DATED 01/03/2001 PN1095
EXHIBIT #AWU22 STATEMENT OF MR IAN DOUGLAS OTTAWAY DATED 01/03/2001 PN1102
EXHIBIT #AWU23 STATEMENT OF J.D. OTTOWAY PN1112
EXHIBIT #AWU24 STATEMENT OF J.D. OTTOWAY DATED 09/10/2000 PN1130
WITNESS WITHDREW PN1138
STEPHEN DAVID PEDDIE, SWORN PN1139
EXHIBIT #AWU25 STATEMENT OF MR PEDDIE PN1155
EXHIBIT #AWU26 STATEMENT OF MR PEDDIE PN1165
EXHIBIT #AWU27 STATEMENT OF MR PEDDIE PN1177
WITNESS WITHDREW PN1281