C2001/6149, Transcript of Proceedings [2001] AIRCTrans 3552 (18 December 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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TRANSCRIPT OF PROCEEDINGS


O/N 1541

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT HAMILTON

C2001/6149

SIMON ENGINEERING (AUSTRALIA)
PTY LIMITED

and

THE AUSTRALIAN WORKERS' UNION
and ANOTHER

Notification pursuant to section 99 of the Act
of a dispute re withdrawal of labour at the
Peaker Power Station Project, Loy Yang

MELBOURNE

10.00 AM, MONDAY, 3 DECEMBER 2001

PN1

MR C. MILNE: I appear for Simon Engineering (Australia) Pty Limited. With me in this matter is MR P. GLENN, who is the southern area manager, or the manager for the southern area.

PN2

MS Z. ANGUS: I appear on behalf of the Australian Workers' Union. If I can just put an apology from the site organiser, who is Terry Lee, who unfortunately, due to the Yallourn Energy matters, is unable to make it down today.

PN3

THE DEPUTY PRESIDENT: Thank you. All right, Mr Milne, I think you are the notifier.

PN4

MR MILNE: Thank you, your Honour. Your Honour, this notification relates to a project down in the Latrobe Valley which is, in fact, known as the Peaker Power project.

PN5

THE DEPUTY PRESIDENT: As the which?

PN6

MR MILNE: Peaker Power. The project itself is the construction and the installation of five gas turbine power generation units to supplement the power supplies within the peak period during the summer. It is a critical project for the State of Victoria. It is necessary to have those power generation units up and running prior to the summer peak load, to avoid - obviously, to avoid power disruption at that time, or possible power disruption. The project is due to have on line two of those generators. There's five in total. It is due to have on line two of them. Sorry, I am advised there's six in total. I thought there was five.

PN7

There's two due to be up and running by 15 December this year and the others are progressively implemented, brought on line over a period of time through to January next year. Obviously, your Honour, they are there and essentially there is a need for the project to be completed by the end of January, that being the peak power load period for Victoria. Without those, or without the completion of the project, it is not in my view guaranteed that the power supplies are ensured for the period over summer.

PN8

Now, your Honour, prior to this project starting, there were some lengthy discussions with the unions that are involved and, in fact, the two unions that are here today or who the notification refers to, as well as other unions and that resulted in a certified agreement that relates specifically to this project. That agreement was certified by the Commission on 31 October this year, somewhat of a delay having it certified, but it essentially represents the terms and conditions that were agreed by the parties prior to the project commencing.

PN9

It is a short project, relatively short project in the terms of construction work, but it is an essential project. The terms and conditions were agreed by all of the parties and there were commitments given by the union officials at that stage that it was necessary and an understanding by those officials that this project was necessary, not only for the sake of the Latrobe Valley, but, indeed, for the State of Victoria. There were categoric statements given that they would support the project and their intention was to have the project completed, up and running on time and on budget.

PN10

Even with that EBA in place, if I can call it that, your Honour, there has been consistent industrial relations problems on this site, substantial problems, amounting to over a period since late September through to early November and these are the figures I have got at the moment, there have been in excess of 219 man days lost on a small project due to industrial and/or occupational health and safety issues. Now, we are not saying that it is all to the degree of being the responsibility of the unions that are here today or represented today. The occupational health and safety issues, there were some of those.

PN11

THE DEPUTY PRESIDENT: How many employees does - - -

PN12

MR MILNE: It varies, your Honour.

PN13

THE DEPUTY PRESIDENT: Of course it would.

PN14

MR MILNE: It is sort of ramped up at the moment because there is an effort to try and complete it by the 10th or get some on line. I think we have got around about 130. There is nearly 200 at the moment, your Honour, but it is sort of progressively ramping up in an attempt to complete the project and I will go into that in a little bit more detail for you shortly, but there is an attempt to work - some unions are working shift work and some were refusing to. Therein lies part of the problem, but there is up to 200 at this stage.

PN15

The industrial relations problems are delaying the project. There can be no doubt about that. There are other delays, of course, which are impacting on the project, for example, wet weather. Wet weather has been a significant issue, but the man days lost from industrial relations are far more than that lost through inclement weather. There have been during that period of time from September onwards claims consistently put on the employer, where there's significant problems with demarcation issues. We have had significant problems with unions making claims outside the EBA. There have been claims for 100 per cent penalty rates for overtime or, sorry, for any shift work that may be implemented.

PN16

THE DEPUTY PRESIDENT: Sorry, say that again, 100 per cent?

PN17

MR MILNE: 100 per cent penalty rate for shift work, any shift work and, in fact, that has been extended by the AWU, for example, to cover all the shift work at 100 per cent penalty rate. There have been claims and stoppages over payments for lost time. There have been stoppages and problems resulting in assaults, in fact, over demarcation issues between the AWU and the CFMEU. There have been safety issues that are raised, been a number of issues, all of which could have been settled properly without people walking off the site.

PN18

There have been issues related to the employment of persons nominated by the unions and there have been issues related to pay and that being the matter that is before you today, your Honour. The matter of pay is only in our view one of the issues that gives serious concern to the employer and the client relating to this project. In all cases, or in most cases, your Honour, the claims, whatever they may have been, have resulted in lost time or, in fact, picket lines. At stages there have been picket lines put on by various unions. The police have had to remove some, etcetera.

PN19

Now, it is quite clear and it wouldn't have happened, that is the certification of the agreement would not have happened unless there was a disputes procedure involved in that agreement. There is one in the certified agreement, but in most cases and, in fact, in the majority of cases, that disputes procedure has been completely ignored, completely ignored by the officials and completely ignored by the employees.

PN20

Now, your Honour, this particular dispute, as I said, is only one of a number of disputes, but to give the Commission an example of how ridiculous the behaviour is, this dispute relates to payment of wages, a claim that the wages were not in the bank on time. Now, as a result of that, on last Thursday the employees left the site and lost five hours' pay due to the fact that their pay was not in the bank on time.

PN21

Your Honour, that pay was not due in the bank until four o'clock that afternoon. Now, this is not only the first time this has happened. A fortnight before, exactly the same issue arose on the Thursday morning, pay day being Thursday, the same thing happened a fortnight ago and the employees threatened industrial action and, in fact, stopped and sat in the sheds for a period of time. The delegates on site were advised of what the actual procedure was.

PN22

The procedure was explained to them in detail and they accepted that and went back to work after losing a period of time. Now, what was put to them and they accepted two weeks ago was exactly the same circumstances that occurred last Thursday, so the employees left site at around about 11 o'clock in the morning, after smoko, when the pay in fact was not due in the bank until four o'clock that afternoon. Now, we have checked with the bank records just in case and the bank has - or the electronic transfer out of Simon Engineering's bank went through - or out of their account, went through to the other banks.

PN23

There was a problem with some where it became a bit later, but in my understanding, the majority of people, if not all, were paid by the close of business on that day. Now, there may have been one bank in particular, the National Australia Bank, had some - for whatever its own reasons were, had some difficulty in putting it in early in the day, but, in fact, as we understand it - and it would take three days to check - they were all in there prior to the close of business, but essentially, your Honour, it doesn't matter when the pay went in there.

PN24

The employees had walked off at between 10 and 11 o'clock that morning, irrespective of when the pay was due, that being four o'clock in the afternoon. As I have said to you, your Honour, this issue is only one of a number of issues where the unions and the delegates and the employees at the direction of the delegates have completely disregarded, completely disregarded the disputes procedure. We would say to you, your Honour, that there is also a pattern of them doing so on this particular project.

PN25

Now, the Commission has certified the agreement and the Commission should ensure the integrity of that agreement. It is before the Commission and it is an instrument of the Commission. Your Honour, any further action will have a serious effect on the project. I have indicated to you that it is due for, or at least two of these units are supposed to be up and running within about two weeks. Now, that will have - if that doesn't occur, it will have a serious impact not only on the project itself, if it doesn't reach that time, if it is not able to generate electricity as it is proposed to do, then it will have an impact on how the project is carried on in the future, it will have an impact on the power supplies and it will have an impact certainly on the client, being it will have severe and a large impact on its financial dealings with the power supplies.

PN26

In other words, there will be serious financial impact on the client if it does not deliver power at that particular time. That may or may not, your Honour, mean that we are back here with another application at some stage or, in fact, in another jurisdiction regarding the financial damage against the client. That is yet to be determined. The previous industrial action that has occurred up until now has already had a significant impact on the program of the project, albeit in conjunction with other issues such as the wet weather and perhaps even some design and engineering things, but it has a serious impact on it and has caused substantial delay and associated costs.

PN27

Your Honour, section 111(1)(d) allows you to give a direction. We would be saying to you that to maintain the integrity of the certified agreement which was agreed by all the unions and in particular the two that are here today, or represented here today, the Commission must ensure the integrity of that agreement. We are saying to you that you should issue a direction and that direction should be clear and unequivocal that the unions and their members abide by the disputes settling procedure in the agreement.

PN28

Now, it may be, your Honour, that you believe that that is not necessary because one could understand that a union having given a commitment to the EBA and signed off on it, should actually have that commitment to the disputes settling procedure. That disputes settling procedure, had it been abided by, would have ensured that none of the industrial action would have reached a stage of walking off the site and lost time, so we believe there is nothing untoward or, in fact, unusual about asking the Commission to issue a direction, a formal direction to the unions that are notified here today, that they must abide by the disputes settling procedure that is contained in their certified agreement. Now, that would have the effect of ensuring that things such as these pay disputes, which are in our view obviously an abuse of the EBA - - -

PN29

THE DEPUTY PRESIDENT: I understand, yes.

PN30

MR MILNE: So we are asking that the Commission issue a direction on that basis and, in fact, if the Commission deems it necessary, should also issue a direction to the employees that the matters relating to pay, that the pay period does conclude and there is a requirement by the employer to pay the employees by the four o'clock or close of business on the Thursday, whichever shift these employees particularly work, close of business at their shift.

PN31

Now, we believe that there is a serious need to have this direction, your Honour, because of the lost time and there is a fairly strong rumour, if I can use that term, that at least one of the delegates is now moving towards a system whereby he intends to put bans on the project and for whatever reason, we don't know, but we believe that there is an intention by at least one of the delegates to start looking for excuses and implementation of bans in support of whatever agenda he may have. Now, we believe that a direction to abide by this disputes procedure would also encompass any bans that may or may not be implemented by the delegates, so we would say to you, your Honour, that we would ask you to issue that direction in the strongest possible terms as of today. If the Commission pleases.

PN32

THE DEPUTY PRESIDENT: Thank you, Mr Milne. Ms Angus.

PN33

MS ANGUS: Your Honour, there has been a lot of frustration associated with this job so far, since it commenced in late August. Worksafe, for example, have issued about 20 prohibition notices on various aspects of the job, dealing with things like the storage of chemicals, the unsafe electrical wiring, there has been problems associated with working in trenches and all those various occupational health and safety hazards have, you could say, resulted in a deterioration of trust between the parties and widespread concern amongst our members that the job is being done in a fairly shoddy manner.

PN34

MR MILNE: Your Honour, I am loath to interrupt, but I have to take exception to that. The job is not being done in a shoddy manner and for Ms Angus to sit there and say so, who has not been on the site, I find appalling.

PN35

MS ANGUS: Well, what I can say - - -

PN36

THE DEPUTY PRESIDENT: All right, all right, you will get your opportunity, Mr Milne. You have made your point. Let's just hear what Ms Angus has to say. You can then add whatever you wish in the way of additional information or even, may I say, flat contradiction.

PN37

MR MILNE: Yes, your Honour.

PN38

MS ANGUS: Well, the fact of so many prohibition notices from Worksafe is an indication of something which we can all reach our own conclusions as to what that means, but the point I want to make is that - - -

PN39

THE DEPUTY PRESIDENT: Sorry, Ms Angus, 20 prohibition notices over what period?

PN40

MS ANGUS: Since late August, so that is the context, that is the backdrop that I guess we need to understand the whole issue of what happened last Thursday. A fortnight ago all people on the job didn't have their pay paid into their bank accounts on time. It was a day late and the same thing happened again on Thursday morning when it was clear that people actually weren't going to be paid on time. Now, the view of our members was, given it is a short-term project, it was estimated to take about five months' duration, was that the least the company could do was to, if you like, hit the ground running, to have a proper payroll system up and ready so that people would be over the course of that short-term project be paid properly for the life of that project.

PN41

THE DEPUTY PRESIDENT: Ms Angus, I think the suggestion was made that the pay was due at four o'clock on that day. Are you saying that is not correct?

PN42

MS ANGUS: Well, that is not what I have been instructed. I have been informed by the organiser that the pay was due on the Wednesday afternoon, that for the second time in a fortnight the pay didn't come through until the Thursday and that it was a late payment. Now, whether it be the National Australia Bank or the company - - -

PN43

THE DEPUTY PRESIDENT: Okay. Well, we can get into the details of the rights and wrongs of that later.

PN44

MS ANGUS: Sure, that is right, but the bottom line from our members' perspective was that for the second time in a fortnight, on a short project, their pay was being held up and that is in the context of, as I have pointed out, a bit of widespread frustration about a whole range of other things. Now, having said all that, on Thursday afternoon people did go home for the afternoon, but they turned up again the following day, Friday, and have been working as normal since, so everyone resumed work on Friday morning. They worked overtime for Saturday and Sunday.

PN45

Today is a public holiday, so they are not working today, but people will resume work as they normally would tomorrow morning, so there is no industrial action happening at the moment and I guess as far as we are concerned, as long as the payroll issues get sorted out, we wouldn't envisage that there would be any more in relation to that. The protest has been put out to the company and it sounds like the fact that we have got these proceedings in the Commission is some indication of the fact that the company has heard the message of the workforce.

PN46

In terms of the issue of directions, your Honour, certainly it would be our view that there is no need for directions. We are aware that there is a dispute resolution procedure contained in the agreement. It is our view that we have been following it and that, well, Mr Milne to his credit at least conceded that there are a number of reasons why there looks as though there will be a delay in the completion of this job and not all of them are the responsibility of employees.

PN47

He referred to wet weather, these design problems that we are all aware of and there was another incident, I understand, where employees were given 10 minutes notice of the need to evacuate both themselves and their cars because the neighbouring power plant was starting up, was recommencing and there was a blow-through of steam and that has implications for obviously people working in the vicinity and has the potential to damage cars in that vicinity. There was some frustration that the company knew about that at the commencement of the day, but didn't properly communicate that and only told people 10 minutes prior to the blow-through.

PN48

There are a number of problems that have occurred from both sides. Your Honour, it would be inappropriate in the absence of properly hearing the causes for each of these disagreements that have occurred up until now, it would be inappropriate for you to intervene and to grant a direction because that would be seen as, if you like, siding with either party. Now, the relevant organiser has just been unable to make it today and he sends his apologies to the Commission, but in my submission it would be - at this stage there is no need for a direction. If you are minded to issue a direction, then it would be proper for you to hear both sides of the argument as to who is at fault, if you like, before you issued a direction that arguably could be seen to side with one or other of the parties.

PN49

THE DEPUTY PRESIDENT: Thank you, Ms Angus. Mr Milne, I don't propose to get into a contest of fact at the moment. I have heard your views, I understand them. I have heard Ms Angus. I propose now to adjourn into conference.

PN50

MR MILNE: Perhaps, your Honour, if I may - - -

PN51

THE DEPUTY PRESIDENT: If there is a brief issue, go ahead, Mr Milne.

PN52

MR MILNE: I simply wanted to make some comment about what Ms Angus has put to you.

PN53

THE DEPUTY PRESIDENT: Well, there will be opportunity for that later. Do you wish to do - - -

PN54

MR MILNE: Are we going back on the record later, your Honour?

PN55

THE DEPUTY PRESIDENT: I think that is very likely, depending on the outcome of the conference.

PN56

MR MILNE: Well, I just simply wanted to make and it would only take about a minute, but I think just in case we get carried away with the procedure, but I particularly wanted to talk about the Worksafe issue.

PN57

THE DEPUTY PRESIDENT: All right, proceed, Mr Milne.

PN58

MR MILNE: Thank you, your Honour. Ms Angus has raised the issue of 20 prohibition notices.

PN59

THE DEPUTY PRESIDENT: Yes.

PN60

MR MILNE: Now, I think there has been 19. Now, this project - the prohibition notices have been put on in a yard which is not located with this project. There have been 15 prohibition notices put on that relate to asbestos. Now, these power units have come from New Zealand and were supposed to have been cleaned of asbestos prior to them arriving. They weren't and a yard has been set up, agreed procedures and that is procedures that are agreed with the unions are put in place to clear that asbestos. Now, on every one of those 15 prohibition notices, the work as agreed was in place in the yard, in the yard, your Honour, which is 10 kilometres away and set up specifically to do that work. It is not prohibition notices and it is quite misleading to say that the jobs is unsafe because of 20 prohibition notices and 15 of them relate to the other areas. Every one of those prohibition notices has been dealt with in accordance with the Worksafe inspector's directions and, in fact, it is totally misleading to say that the site is unsafe. There is a safety committee. That safety committee deals with all of those issues, but I thought, your Honour, you should be aware that the 15 related to something entirely different.

PN61

THE DEPUTY PRESIDENT: All right, I now propose to adjourn into conference and we will go off the record.

SHORT ADJOURNMENT [10.26am]

RESUMED [11.49am]

PN62

THE DEPUTY PRESIDENT: After hearing submissions and conducting a conciliation conference, the Australian Industrial Relations Commission strongly recommends that the AWU and AMWU shop stewards place the following points of agreement before respective meetings of their members within 48 hours and, further, that they recommend that those meetings endorse the following points:

PN63

(1) the composition of the consultative committee shall be urgently reviewed, with a view to as widespread representation as possible;

PN64

(2) the consultative committee will urgently review the time of payment of wages and reasons for variation between Wednesday night and Thursday afternoon in receiving pay;

PN65

(3) the consultative committee will urgently review ways of reducing demarcation disputes;

PN66

(4) claims in breach of the enterprise bargaining agreement should not be made;

PN67

(5) better and earlier information sharing about production decisions that have an impact on employees will be undertaken through the consultative committee;

PN68

(6) the parties shall make every endeavour to make the disputes settlement procedure work;

PN69

(7) these points shall be agreed to in writing between the company and trade union delegates.

PN70

The Commission is available for any further proceedings or notifications.

PN71

MS ANGUS: Your Honour, I am sorry, I don't mean to be difficult, but it was my understanding of discussions between the parties that the following points 1 to 7 would be put to the consultative committee based on the Commission's recommendation and that the outcome of those discussions in that committee would be agreed to in writing and that it would be that written agreement that would then be signed by those people involved in the discussions, rather than the agenda itself, as it were.

PN72

THE DEPUTY PRESIDENT: We will go off the record for a minute, if we could.

OFF THE RECORD

PN73

THE DEPUTY PRESIDENT: Subject to those further hearings or notifications which will be available on notice from either party, this Commission stands adjourned.

ADJOURNED INDEFINITELY [11.54am]