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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:(03) 9672-5608 Fax:(03) 9670-8883
TRANSCRIPT OF PROCEEDINGS
O/N 6706
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
SENIOR DEPUTY PRESIDENT POLITES
C2001/481
YALLOURN ENERGY PTY LTD
AND
CONSTRUCTION, FORESTRY, MINING AND
ENERGY UNION
Application under section 170LW of the Act
for settlement of dispute re the use of an
existing on-site contractor
MELBOURNE
11.02 AM, WEDNESDAY, 4 APRIL 2001
Continued from 26.2.01
PN201
THE SENIOR DEPUTY PRESIDENT: The matter is listed this morning to hear argument about whether the proposal is or is not in contravention of the existing enterprise agreement. Yes, Mr McDonald?
PN202
MR McDONALD: Your Honour, I think when we adjourned on the last occasion, I think the position - and I may stand corrected - but I think Ms Doust had indicated that she did wish to cross-examine Mr Mether. Mr Mether is available to be cross-examined, if that is Ms Doust's intention. I see she is nodding her head. So perhaps it might be appropriate if Mr Mether resumes his position in the witness box.
PN203
THE SENIOR DEPUTY PRESIDENT: Very well.
PN204
PN205
THE SENIOR DEPUTY PRESIDENT: Yes, you are still on oath, Mr Mether. Yes, Ms Doust?
PN206
MS DOUST: Thank you, your Honour.
PN207
Mr Mether, Roche Thiess Linfox are one of the main contractors used by Yallourn Energy at the mine, aren't they?---Yes.
PN208
Would they be your largest contractor entity in terms of overall money expended in a year?---In the mine they would be.
PN209
And in terms of overall work load would that be true as well, just in terms of the quantity of work that they do?---The expenditure is related to plant as well, but it would be a fair assessment I would say.
PN210
Now, you have set out at clause 29 of the document that I think you adopted as your statement. Do you have a copy of that?---No, I don't.
PN211
Do you have clause 29 there, Mr Mether?---I have the clause with me now, yes.
PN212
Right. Okay. That covers a large range of work being performed by RTL, doesn't it?---Correct.
PN213
It is correct, isn't it, that RTL has never been used before this current project to remove over-burden for the purpose of assisting to meet dredger targets?---No, that is not correct.
PN214
Why do you say that is not correct?---In the over-burden, which is material above the coal, we have used RTL extensively in the past, and we had a river running through the middle of the mine, we took all of the difficult dirt out with RTL, we removed all the topsoil off the top, which is part of the over-burden with RTL, we have removed subsoil for rehabilitation with RTL, we have a gravel pit out there which we remove gravels out of with RTL, we remove spit-lock drains, which is difficult dirt at the end of each cut, with RTL, so I have a fair amount of support from RTL in over-burden.
PN215
And those tasks that you have just described, they are not tasks which are customarily carried out by the dredger, are they?---Not always.
PN216
Well, the tasks that you have described aren't included in your targets for dredger over-burden removal, are they?---Yes.
PN217
You say they are?---Yes.
PN218
Now, the scope of work in clause 29 of your statement isn't referred to in the umbrella contract, for want of a better term, is it, Mr Mether?---The scope of work is in the contract. We break the contract up into certain divisions, the scope of work and associated components; there is one division of the contract.
PN219
Well, just looking at the documents that the company provided to me, which have been marked exhibit M1, commercial-in-confidence. Can I inquire whether your Honour has been provided with a copy of that? I am not sure why it has been marked.
PN220
THE SENIOR DEPUTY PRESIDENT: Well, I have a document sealed here, yes. Yes, Ms Doust.
PN221
MS DOUST: Your Honour, I don't understand that it has already been tendered.
PN222
MR McDONALD: No, it hasn't been tendered. Someone has just made a mistake. It hasn't been tendered, your Honour. It is produced in response to the call. What I think the confusion is, what was tendered and marked exhibit M1 on the last occasion was an extract from the document.
PN223
THE SENIOR DEPUTY PRESIDENT: That is right, yes.
PN224
MR McDONALD: That is correct.
PN225
THE SENIOR DEPUTY PRESIDENT: I have the document in a sealed envelope. M1, however, is some extracts from it, Ms Doust.
PN226
MS DOUST: Your Honour, I wonder whether we might replace the new copy for the extracted copy.
PN227
THE SENIOR DEPUTY PRESIDENT: Do you have any objection to that, Mr McDonald?
PN228
MR McDONALD: No.
PN229
THE SENIOR DEPUTY PRESIDENT: Very well. Well, M1 will now become the full contract.
PN230
MS DOUST: Mr Mether, could you go please to clause 4 of the - clause A4, scope of contract. I am sorry it is not paginated, but it is about 10 pages or so into the bundle?---I have A4.
PN231
Do you have that?---Yes.
PN232
Now, that doesn't specifically outline the over-burden project which is currently being undertaken by RTL, does it?---It says a continued provision. In that part the over-burden is not mentioned.
PN233
You agree that this by itself doesn't give the company a right to enforce it against RTL, the performance of that particular work, does it?---No. I disagree with that.
PN234
You say that this clause by itself in the contract, and nothing else, would give Yallourn the right to insist on the performance of that work by RTL?---It is work covered under the scope of that claim, a continued provision of plant and earthworks services to Yallourn, that is the continued provision.
PN235
But there is no specific reference to that work, is there?---No.
PN236
And again, if you go to the consolidated general conditions of the contract which appear further in, I think about halfway through, that is the one dated June 1997; do you have that document, Mr Mether?---Yes.
PN237
Can I inquire, does the Commission have that one?
PN238
THE SENIOR DEPUTY PRESIDENT: Is it a separate document, or it is in this general?
PN239
MS DOUST: It is about a third of the way through.
PN240
THE SENIOR DEPUTY PRESIDENT: Yes, I have it. Yes, June 1997, yes.
PN241
MS DOUST: Consolidated general conditions.
PN242
THE SENIOR DEPUTY PRESIDENT: Yes, I have it.
PN243
MS DOUST: Now, Mr Mether, it is correct, isn't it, that this document replaces or consolidates the earlier document that I just took you to?---The whole lot is the contract we have with RTL, it is all part of the one document.
PN244
And there is no particular reference in that document, is there, the consolidated general conditions, to this particular project of over-burden removal currently being carried out by RTL?---No, that is not the intended general conditions in the contract.
PN245
And I suggest to you that on the basis of this document alone the company doesn't have any right to enforce as against RTL the performance of work in that over-burden project?---That document is part of the overall contract, it is not a separate document.
PN246
Do you agree with the proposition that I just put to you, that on this document alone Yallourn doesn't have an enforceable right as against RTL to demand the performance of work in that over-burden project?---No.
PN247
You don't agree with that?---I don't agree.
PN248
Do you suggest, do you, that absent any additional documentation, that this consolidated general conditions of itself gives rise to a right in Yallourn in enforce that RTL performs that over-burden work?---The document is a total document of a contract. Consolidated general conditions don't go into scope of work, but it is part of the overall document.
PN249
It is correct, isn't it, that Yallourn doesn't obtain a right to enforce as against RTL the performance of particular tasks until it sends an order to RTL which has then been accepted by RTL?---We place orders at the start of the year covering a broad range of work, and then we just draw on that throughout the year.
PN250
And did you send an order at the start of this year?---For general works yes, and conveyor works. It covers the whole range of works that we may do throughout the year.
PN251
Did you send an order at the start of last year?---Yes.
PN252
Do you say that order relates to the performance of the particular over-burden work that is in dispute in these proceedings?---We gave notice of additional material as part of that work to allow RTL to bring more plant on site to address it.
PN253
Could you answer my question now please, Mr Mether?---Can you give it to me again please.
PN254
Do you say that the order that you placed at the start of last year covers the particular over-burden work that is in dispute in these proceedings?---Not fully.
PN255
Partly?---Partly the order would cover an amount, and we have put another order to add to that.
PN256
So do you say that you sent an original order and then renewed it, and that that those two documents cover an entirety, the over-burden project being carried out by RTL?---As I say, RTL provide the full range of work, we top that up with a second order to ensure that we could meet the requirement to that particular project.
PN257
And that has all happened in the year 2000, hasn't it?---Yes, I would say that is correct.
PN258
And do you say that RTL accepted those orders in accordance with the contract?
PN259
MR McDONALD: I object to that. This witness can't give evidence about the basis upon which RTL has acted.
PN260
THE SENIOR DEPUTY PRESIDENT: Yes. She might like to rephrase the question.
PN261
MS DOUST: Well, Mr Mether, do you say that RTL accepted the orders that were placed by the company in the year 2000?---RTL are doing the work.
PN262
Do you say they accepted your orders?---They are doing the work, so they must have accepted.
PN263
Now, Mr Mether, are you able to indicate to me any circumstance in the term of the current certified agreement where the union has exercised a veto power over the use of contractors on the site?
[11.18am]
PN264
MR McDONALD: Well, I object to that. What is the relevance of that question? If I can just expand. As I understand the position which is being agitated before the Commission, it concerns the operation of contract labour provisions of the agreement, particularly clause A1 of that section of the EBA. And the question which Ms Doust has put to the witness, in my submission, goes well beyond anything which could be relevant to that issue.
PN265
THE SENIOR DEPUTY PRESIDENT: I will allow the question, Ms Doust.
PN266
MS DOUST: Mr Mether, do you recall that question?---No. If you can give it to me again.
PN267
Are you able to point me to any circumstance during the term of the current certified agreement where the union has exercised a veto power over the company's use of contractors on site?---If you are specifically talking the CFMEU, I have never necessarily sought that agreement in use of contractors in that area.
PN268
I beg your pardon? Sorry, Mr Mether, I missed that. Did you say you have never sought that agreement?---For CFMEU operational work that RTL do, I have never sought that agreement.
PN269
You have consulted the CFMEU during the terms of the current certified agreement about the use of contractors, haven't you?---I have fully consulted with the work force and the union.
PN270
And you have understood that you have undertaken those consultations in accordance with the certified agreement, don't you?---I have fully consulted. I have never sought to seek agreement as per the document on this project.
PN271
Well, does that mean that the consultations that you have had, you say that they are not in pursuit of your obligations under the certified agreement?---Consultation with the work force is something we do as a matter of doing business.
PN272
And does mean that the consultations that you have had have been or haven't been in pursuit of your obligations under the agreement?---Consultation, if you are referring to the over-burden, hasn't been done as part of the agreement, because I believe this work is excluded from the agreement.
PN273
Do you understand, Mr Mether, I am asking you a general question about your consultations with the CFMEU in total, don't you, during the term of the certified agreement?---Have I consulted on EB3 matters? I will say yes. I am not quite sure where the question is at, but I will say yes.
PN274
THE SENIOR DEPUTY PRESIDENT: Well, you shouldn't say less unless you understand the question, Mr Mether. So, Ms Doust, perhaps you could ask it again.
PN275
MS DOUST: Mr Mether, I will just clarify a few things to start off with. I am going to ask you some questions about consultation with the CFMEU during the term of the current certified agreement; do you understand that?---Yes.
PN276
And you understand the questions I am going to ask you don't relate simply to the issue of over-burden; do you understand that?---All right, yes.
PN277
Now, I am going to ask you whether you have undertaken any consultations with the CFMEU about the use of contractors on the site in the term of the current certified agreement?---The CFMEU on the use of contractors. Not under EB3; as part of the negotiations on the EB we have.
PN278
Do you say you haven't engaged during the terms of this certified agreement in any consultation in compliance with the terms of the certified agreement?---If you refer to new technology, certainly have. In putting changes on dredges, new technology, I have certainly consulted with the work force on those.
PN279
Mr Mether, I am asking simply on the issue of contractors. Do you say that during the terms of this certified agreement you haven't undertaken any consultation with the CFMEU about the use of contractors in pursuit of this certified agreement?---I would say no. I can't recall any.
PN280
All right. So it follows then, doesn't it, that you have never had your use of any particular contractor vetoed by the CFMEU during the terms of the certified agreement, have you?---No.
PN281
And you don't say, do you, that your consultations with the work force are an unreasonable burden upon your management of the mine, do you?---No.
PN282
You agree, don't you, that consultation with the work force constitutes sensible management practice?---Yes.
PN283
And it is sensible for a number of reasons, isn't it, Mr Mether?---Is there a question?
PN284
Yes, that was a question. It is sensible for a number of reasons, isn't it, Mr Mether? I am referring to consultations?---Yes.
PN285
And that is because you undergo communication with the work force about your intentions?---Yes.
PN286
So the work force knows what is going on, on the site?---Yes.
PN287
And you sometimes will receive from the work force their ideas about operations?---Yes.
PN288
And those ideas can be of assistance to you?---Correct.
PN289
In decision making?---Yes.
PN290
You don't say, do you, that any of your consultations that you have undertaken have had a direct impact on your progress towards over-burden targets, do you?---No.
PN291
So it follows, wouldn't it, that any consultation in the future couldn't impact on your achievement of those over-burden targets?---No.
PN292
Are you saying that you agree it couldn't impact on reaching over-burden targets?---Consultation is part of the way we do business and I do business, so I wouldn't believe it would impact on our target.
PN293
Yes. You have referred in your statement to your raw coal bunkers on the first page at paragraphs 1 and 5, Mr Mether. Do you have that page in front of you?---I do.
PN294
In addition to the raw coal bunkers you have also got the station bunkers that hold an extra 8000 tonnes, don't you?---I am not 100 per cent sure of the amount, but it is about that amount.
PN295
And it is the case, isn't it, that if both the raw coal and the station bunkers are full you can stop winning coal for up to eight hours without there being any impact on generation?---That would be a fair comment.
PN296
So when you refer in paragraph 1 to your just in time supply - do you see that, Mr Mether?---Yes, I do.
PN297
Well, if it is the situation that your raw coal and station bunkers are full, just in time gives you a lee-way of eight hours, doesn't it?---With both bunkers full, yes.
PN298
Yes. Eight hours is a bit of a conservative estimate there as well, isn't it, because it can be up to 15 hours?---No. The amount you have to run the power station with, you would have to - if you didn't have the power station knowing that there was a supply there they would have to start winding back probably before that.
PN299
Mr Mether, do you recall an incident when the number 12 dredger broke down?---I do. It has broken down many times.
PN300
Well, do you recall an occasion, one particular occasion where you went on to use contractors to dig the coal and to assist the dredge to dig the coal?---I do.
PN301
And on that occasion you had discussions with Mr Sceney, didn't you, about the use of those contractors?---I don't recall who I had discussions with at that time.
PN302
Do you recall having had some discussions?---Not specifically on that.
PN303
Well, you said you don't recall who you had discussions with. But do you say there were some discussions?---I would envisage I had discussions at that time with whoever would have been in.
PN304
You don't dispute, do you, that on that occasion you had a discussion with Mr Sceney from the CFMEU about the use of contractors, do you?---I don't recall specifically whether it was Stuart, but I would have had a discussion that particular time in using contractors.
PN305
You wouldn't deny it was with Mr Sceney, would you?---No.
PN306
And would this perhaps jog your memory; that Mr Sceney in those discussions made some helpful suggestions to you about how to use the contractors in that instance?---I don't recall the discussions, but it is possible.
PN307
Would this assist your memory, Mr Mether, if I suggested to you that in that discussion you reached agreement with Mr Sceney about the use of the contractors before the contractors were actually used by the company?---I said I don't recall the discussion.
PN308
Do you have any recollection of when that discussion took place?---Six months ago. I don't recall the date of that particular break-down.
PN309
Now, I suggested to you that you had discussions with Mr Sceney before you reached agreement about the use of contractors. That is not something you would outright deny, is it?---No.
PN310
And you wouldn't deny also, would you, that if that occurred that would be consultation in accordance with clause 7 of the agreement?---I haven't got a copy of the agreement with me to check clause 7.
PN311
So what was the question again?---Well, do you recall I put to you the proposition that you had discussions with Mr Sceney and reached agreement before the company appointed contractors to perform particular work digging coal in relation to the number 12 dredger break-down?---The discussions we had, as I say, but I can't recall them, they would have been with a problem we both would have been trying to address that problem.
PN312
Do you say you can take a guess about what happened in the discussions now after you have told us you can't recall what happened there?---No. I said I can't recall the discussions. There would have been an issue, we would have talked about that issue. If the break-down required support we would have talked about it.
PN313
And you say that, don't you, because you have every expectation that Mr Sceney is a sensible and rational representative who will have discussions with you to try and keep the mine operating on a proper basis, don't you?---Yes, I found Stuart that way.
PN314
Now, he is the relevant CFMEU delegate in the area that is covered by this over-burden contract, isn't he?---Yes.
PN315
So Mr Sceney is the person that you would have to be having your discussions with in relation to this over-burden contract, isn't he, assuming that the CFMEU is correct and you are required to consult in relation to that?---If I was required to consult, Stuart would be the person.
PN316
Yes. And you don't have any apprehension that he won't work in a constructive manner with you in any consultations you have with him, do you?---No.
PN317
You agree with this proposition, don't you, Mr Mether. That all of your over-burden removal work is currently done by your own employees, apart from over-height, over-burden or specific problem areas; that is a fair comment, isn't it?---The vast majority is.
PN318
And it is correct, isn't it, that the over-burden that is being removed by RTL in that particular area is over-burden that ultimately Yallourn employees would have moved to perform in the course of their duties?---It is over-burden that has to be removed to win coal.
PN319
Putting aside your having engaged RTL to perform the work, it is over-burden which within the next couple of months your own employees would have moved on to perform that work, isn't it?---The dredger, if we didn't remove that with RTL, would have covered that area in the next three or four months.
PN320
Yes. Now, one of the arrangements that you have got with RTL is for the dry hire of equipment, isn't it, Mr Mether?---It is part of the contract, yes.
PN321
So, in effect, you can just get their equipment and use it with your own employees under the terms of the contract?---Not all of it, no.
PN322
You could have done that with truck and shovel, couldn't you?---No.
PN323
You could have, under your contract, have hired a truck and a shovel, or however many of those equipment you needed, from RTL, couldn't you?---If I had operators I suppose I could under that contract.
PN324
Yes. So I am just looking at the terms of the contract, Mr Mether. It is correct, isn't it, that you could under that contract hire that equipment from RTL?---Whether that was that particular equipment or they hired in equipment under the contract, they can supply equipment.
PN325
Yes. It is correct, isn't it, that employees at Yallourn have operated trucks and shovels in the past, isn't it?---The employees of RTL were originally SEC employees, and as part of the out-sourcing contract the huge majority of employees that operated that plant went to RTL.
PN326
Well, if you say the huge majority went to RTL, it is correct, isn't it, that there is a remaining number of employees employed by Yallourn Energy that have the capability to operate that equipment; that is correct, isn't it, Mr Mether?---The remaining employees were the unsuccessful ones which RTL elected not to take up, I believe.
PN327
Do you say that you are privy to correspondence between your employees and other companies, do you?---No.
PN328
So you are just speculating about applications that some of your employees might have made for employment elsewhere, aren't you?---I believe the vast majority of the people applied to go with RTL. A couple of those people were not successful and remain in my day gang, I believe.
PN329
It is correct, isn't it, that you have employees employed by Yallourn Energy on your site who have the capability to operate the equipment that is currently being operated by RTL?---I can't say that. I am not aware of it. All the training - we haven't done that work since '93. I am not across who would have those skills currently in Yallourn Energy.
PN330
Are you suggesting to me that as a manager you have made a decision about contracting out a particular area of work to truck and shovel operations and haven't made any inquiries about the skills possessed in your own work force?---No, that is not correct. The skill base I have is on a database that we have there, and it is particularly associated with dredges and associated plant to support that.
PN331
Are you saying to me that you haven't made an inquiry whether employees of Yallourn possess the capabilities to operate the sort of equipment that is being operated by RTL?---I haven't inquired of individuals, no.
PN332
Well, making a thorough inquiry about that matter would be consistent with good management practice, wouldn't it?---Not necessarily.
PN333
It would be consistent with good management practice in this instance, wouldn't it?---No.
PN334
Are you not interested in ascertaining whether work can be performed in-house before you commit to decisions to contract that work out, Mr Mether?---My work force is fully utilised at the moment because of fixed to minimum man.
PN335
Does that mean you are or are not interested in ascertaining whether you can perform the work in-house before you commit to a decision to taking the work to outside contractors?---I am interested in that particular situation.
PN336
Not all of your work groups are fully utilised, are they?---Yes, at the moment they are under the present arrangements.
PN337
What about your seven hour or your day shift gang?---The day gang is utilised for track shifts, for putting rail on, for bits and pieces of clean up round under the raw coal bunker, and are utilised to their skill level at the moment on a full-time basis.
PN338
Yes. There is no fixed manning in that gang, is there?---No.
PN339
So it is open to you, you could have put more permanent employees on and have them perform this particular work?---I could have put more people on. I have not necessarily got the skills to manage that truck and shovel operation.
PN340
Your fire services group isn't fully utilised at the moment, is it?---They certainly are.
PN341
But that is at least one work group, that being the day gang, that could potentially have performed this work, isn't it?---I don't believe they have the skills in that group, and they wouldn't have the numbers.
PN342
Do you say you made any inquiry about their skills?---I have got a database on their skills and have a reasonable understanding of the skill base of that group.
PN343
When you say you have a reasonable understanding of the skills in that work group, Mr Mether, you are not denying that there is any individuals in that group that could perform that work, are you? You don't deny it outright, do you?---No. It depends which component.
[11.45am]
PN344
And if I suggested to you that there were at least three or four employees in that group with the relevant skills, you wouldn't deny that, would you?---I would question that.
PN345
But you wouldn't deny it?---Pure skill, no.
PN346
So when you qualify your response and talk in terms of a pure skill, do I take it then that you do have an understanding that there is some members of that work group who, in fact, have the skill to operate those pieces of equipment; is that your understanding?---There are people in that work group that have some limited levels of skill in operating a grader or a water cart that I am aware of.
PN347
Well, they are relevant skills for this over-burden operation, aren't they, Mr Mether?---Those activities are undertaken as part of a whole project.
PN348
The company has got a general intention under the certified agreement to try and perform work internally wherever possible, doesn't it?---Yes.
PN349
That is part of the certified agreement?---Yes.
PN350
And it would be consistent with that intention to endeavour to place any employees with the relevant skills to perform that work, wouldn't it?---They are already placed to perform that work.
PN351
To perform the over-burden work?---Their existing work would have to drop off if they did the other work.
PN352
But you accept, don't you, that that day gang isn't fully utilised?---No.
PN353
When you say no, are you saying no, they are not fully utilised, or are you disagreeing with my proposition?---I am disagreeing with your proposition.
PN354
Because you accepted the proposition before, didn't you, about the day gang?
PN355
THE SENIOR DEPUTY PRESIDENT: No, he didn't, no.
PN356
MS DOUST: I understood that he did give a response that - - -?---No.
PN357
THE SENIOR DEPUTY PRESIDENT: No, he didn't.
PN358
MS DOUST: The day gang perform ancillary work, don't they, Mr Mether?---Ancillary work around the conveyors and the raw coal bunker.
PN359
You have got considerable latitude in the allocation of those employees around the mine, don't you?---Yes.
PN360
And can I just confirm; I think you accepted before that that gang isn't affected by any fixed manning requirement under the certified agreement?---Correct.
PN361
So it is open to you to engage more employees on that gang?---If we were employing more employees I could employ more employees right across, I suppose.
PN362
And when you engage RTL to carry out this over-burden removal, I think you accept in your statement that that is a fairly inefficient way of removing the over-burden?---Truck and shovel is not as efficient as the dredger.
PN363
It would also be the case, wouldn't it, Mr Mether, that contract labour costs you considerable more than permanent employees?---No.
PN364
Did you undertake any costing for that particular project to establish whether you could do that project more cost effectively with internal employees than with contractors, Mr Mether?---No documented costing on that particular project. I don't have the plant, the equipment or the expertise to run that operation.
PN365
So when you say no documented costing, it is correct to say really that there was no costing at all, was there?---I know what it costs to remove dirt with the wheel, I know what a contractor can move it with truck and shovel.
PN366
The truck and shovel is the more expensive of those options, isn't it?---Correct.
PN367
So performing this work by contract is, in fact, more expensive than performing it using Yallourn employees, isn't it?---Incorrect.
PN368
Thank you. Your Honour, I don't think there is anything further, but if you would just indulge me for a moment.
PN369
THE SENIOR DEPUTY PRESIDENT: Yes, by all means, Ms Doust.
PN370
MS DOUST: Sorry, Mr Mether, just a couple more questions. There is currently about 6 million tonnes of coal reserves at the site, isn't there?---As of yesterday 6.6.
PN371
Now, that is about 140 days worth of coal reserves, isn't it, Mr Mether?---We use about 1.4 a month. If you have done the multiplication I will be advised.
PN372
About 1.4 a month are you saying?---We use about 1.4 million tonnes of coal per month. Last month was slightly in excess of that.
PN373
It is a good four and a half months worth of coal reserves that you have currently got?---That is a theoretical figure. Obviously you need dredgers in the right spot at the right time to be able to win that. You probably can't win all of that. When you get to about four and a half you are really sailing very close to the wind and are struggling, but it is a theoretical calculation.
PN374
I am just going back to this issue of the coal that is stored. When you add up all the coal bunkers there is - you wouldn't disagree would you, there 37,600 tonnes of stored coal?---If you can fill them all up.
PN375
And you burn 2400 tonnes of coal an hour at full power output?---Correct.
PN376
So if you have got your bunkers full, you have got 15 hours of generation at full power output, haven't you?---From a theoretical base, yes.
PN377
Well, there is nothing theoretical about 37,600 tonnes of coal, is there, Mr Mether, if it is in that bunker?---That is capacity. If I could fill them up like that all the time it would be a comfort zone that I would enjoy.
PN378
But even if you have got, say, 25,000 tonnes, Mr Mether, you have still got 10 hours of lee-way, a good 10 hours, haven't you?---No, it wouldn't be that much. It really depends if I have got plant operating, you could say I have got 10 hours of lee-way. If I haven't got plant operating, when we get down to round about 12 we have got strict communication channels, if I get to 10, we would be having to wind back some generation if we couldn't guarantee plant to come back into service.
PN379
THE SENIOR DEPUTY PRESIDENT: In other words, you don't run it right out?---We don't run it right out. We have to close the power station down in a controlled fashion.
PN380
MS DOUST: You would accept, wouldn't you, that that sort of lee-way isn't what most people would accept is a just in time sort of situation?---No, I don't accept that.
PN381
I suggest to you that your suggestion along those lines in your first paragraph is misleading in that respect?---No.
PN382
I suggest to you that this current contract for that over-burden removal by RTL, the matter which is in dispute, won't have any direct impact on the supply of coal from the mine to the generator?---The RTL contract is a whole, the OB is being done under the existing RTL contract, which is just one contract. It is critical to coal supply.
PN383
RTL isn't actually supplying any of the coal from the mine across to the generator, is it?---No.
PN384
And it is working on an area where the coal won't be touched, I think you said, for another three or four months?---Correct.
PN385
So at best this particular work could only have an impact on coal supply across to the generator in three or four months time?---Correct.
PN386
That is the highest you can put the argument that you have put in your paragraph 5, isn't it, Mr Mether?---The over-burden work that is being done by RTL to assist the wheel is all about increasing coal reserves or maintaining coal reserves which we are foreshadowing could be an issue in the middle of this year.
PN387
So it could only come into play some three or four months down the track; you accept that, Mr Mether?---Yes.
PN388
And it would only come into play at that time if there is a situation where the dredger working on the over-burden fell behind, wouldn't it?---It has fallen behind all this year.
PN389
Could you answer my question please, Mr Mether?---Can you give it to me again please.
PN390
That scenario of this particular over-burden work impacting on coal supply could only come into play three or four months down the track if the dredger uncovering the over-burden fell behind?---No.
PN391
Thank you. There is nothing further.
PN392
PN393
MR McDONALD: You just gave evidence then that the over-burden removal being done by RTL, it is not simply a case of it coming into play if a dredger falling behind. What other circumstances?---The other circumstances would be if the coal machines fell behind or broke down and we needed to accelerate one cut coal and the over-burden was balanced, our coal reserves, a balancing act, and all the coal machines and their performance comes into that scenario.
PN394
Thank you. That is all, your Honour. Nothing further.
PN395
THE SENIOR DEPUTY PRESIDENT: Thank you. Now, you have got no further evidence, Mr McDonald?
PN396
MR McDONALD: No, your Honour, no further evidence.
PN397
THE SENIOR DEPUTY PRESIDENT: Ms Doust, have you got any evidence you wish to call?
PN398
MR McDONALD: I wonder if the witness can be excused?
PN399
PN400
MS DOUST: If your Honour would just excuse me, I will just ensure that all the documents have gone into evidence.
PN401
THE SENIOR DEPUTY PRESIDENT: Yes, by all means.
PN402
MS DOUST: Your Honour, can I just inquire; the document that Mr Mether adopted as, I think, in effect, his statement?
PN403
THE SENIOR DEPUTY PRESIDENT: Yes. It is MFI1.
PN404
MS DOUST: Yes. Well, only received that marking MFI number 1. Now, that document refers to the various documents that I wish to - - -
PN405
MR McDONALD: Sorry, your Honour. I would seek the formal tender of that document. At the time I initially sought the formal tender of the document, my recollection is Ms Doust indicated she had reservations because she didn't have time to take instructions about it, and so on, and she indicated that there might be particular aspects - - -
PN406
MS DOUST: I have addressed the matters I wished to address in cross-examination, your Honour.
PN407
PN408
THE SENIOR DEPUTY PRESIDENT: Were you concerned that all of the documents ought to be in evidence, Ms Doust, were you?
PN409
MS DOUST: Your Honour, the documents that I wish to rely on in the way of evidence include the letter of 19 September, which is referred to at paragraph 37 of the statement, the reply letter of 18 October.
PN410
THE SENIOR DEPUTY PRESIDENT: I am just checking whether they are there.
PN411
MR McDONALD: The correspondence was annexed to the application originally filed with the Commission, your Honour. I have certainly got no objection to those documents being admitted as exhibits. But I think your Honour will find they were actually attached.
PN412
THE SENIOR DEPUTY PRESIDENT: They are attached to the application, are they? Well, let us identify them. Sorry, could you go through them slowly, Ms Doust.
PN413
MS DOUST: Yes, I understood that they were with your Honour. I just with to clarify they are being accepted.
PN414
THE SENIOR DEPUTY PRESIDENT: Yes. Well, I think what Mr McDonald says is right, they were annexed to the application as part of the grounds in support. But if it is desirable to have them in evidence then I will remove them from there and we will mark them separately. So if you could go through them in order and we will give them a proper marking.
PN415
MS DOUST: Yes. The document which is a letter from Mr Mether to Stuart Sceney of 19 September 2000.
PN416
THE SENIOR DEPUTY PRESIDENT: Yes. And that had attached to it some maps; is that correct? Yes. Well, I have identified that. And can we treat these as your exhibits, Mr McDonald?
PN417
MR McDONALD: Yes, your Honour.
PN418
PN419
MS DOUST: Your Honour, there was a further letter. I think it will follow in the file. Yes, it is the letter of 18 October.
PN420
THE SENIOR DEPUTY PRESIDENT: From Mr Hart?
PN421
MS DOUST: Yes.
PN422
PN423
THE SENIOR DEPUTY PRESIDENT: Was that the next one, 24 January, that is to Mr Mether from Mr Sceney, is it?
PN424
MR McDONALD: That is correct.
PN425
THE SENIOR DEPUTY PRESIDENT: Is that the next in order that you wish, Ms Doust?
PN426
MS DOUST: There are a couple of documents. The first is a notice of dispute in regard to over-burden removal signed by Stuart Sceney.
PN427
THE SENIOR DEPUTY PRESIDENT: That is the later document?
PN428
MS DOUST: Dated 24 January 2001. Does your Honour have that one?
PN429
THE SENIOR DEPUTY PRESIDENT: Yes, I do. That was the one I was referring to. That is to Mr Mether, signed by Mr Sceney, and it says in the last paragraph "We now expect a dispute procedure under the enterprise," is that the one?
PN430
MS DOUST: Yes.
PN431
PN432
THE SENIOR DEPUTY PRESIDENT: And then there is a reply to that also on 24 January, I think.
PN433
MS DOUST: Yes, your Honour, to Mr Sceney from Mr Mether.
PN434
PN435
THE SENIOR DEPUTY PRESIDENT: And then I think the next one is the dispute notification; is that correct? It is a letter from Mr Sceney.
PN436
MS DOUST: Yes, the letter of 3 February.
PN437
PN438
MS DOUST: There is a response dated 8 February 2001, Mr Ward, Mr Lindsay Ward, mine manager, is the correspondent there.
PN439
PN440
THE SENIOR DEPUTY PRESIDENT: And then there is a further response from Mr Sceney in my file dated 14 February.
PN441
PN442
THE SENIOR DEPUTY PRESIDENT: Now, was there any further material you wished to rely on, Ms Doust?
PN443
MS DOUST: No, your Honour. I just rely on the material that is already before you.
PN444
THE SENIOR DEPUTY PRESIDENT: Thank you. I should indicate to the parties at this stage that I have got another matter at 1 o'clock, so we are going to have to adjourn about a quarter to one if we don't finish before then, and resume at about 2.30. Yes, Mr McDonald.
PN445
MR McDONALD: Thank you, your Honour. If your Honour has at hand a copy of the certified agreement, the enterprise agreement of 1997?
PN446
THE SENIOR DEPUTY PRESIDENT: Yes, I do.
PN447
MR McDONALD: And if I could take you to the contract labour provision, which is schedule A to that agreement.
PN448
PN449
THE SENIOR DEPUTY PRESIDENT: Yes, Mr McDonald?
PN450
MR McDONALD: The issue which the company submits is the issue for determination in terms of the application under section 170LW is to be found in fairly short compass within clause A1 of schedule A. Clause A1.1 it says:
PN451
This contract labour agreement applies to contracts which have the capability to displace work currently done by Yallourn Energy employees. Examples include routine maintenance in the mine and power station and installation of conveyor belts.
PN452
And then A1.2:
PN453
It excludes contract work that is currently not being done by Yallourn Energy employees such as power station outages and specialist plant.
PN454
Now, the actual dispute which arises for consideration, your Honour, is whether or not the terms of this contract labour agreement, contract labour schedule apply to the over-burden work which has been contracted to RTL. The position which is put by the company is that schedule A has no application. And the other side of the equation is that - from the union's perspective - is that it does apply and that as such the clause A3.3, the consult and agree provision, is operative.
PN455
So the real issue, your Honour, is the question of whether or not schedule A has any application. And that focuses attention on what submitted is essentially question of construction as to what is the meaning of clause, in particular clause A1.1. Now, the position as put by the union on the last occasion is to be found at paragraphs 51 and 52 of the transcript. And on that occasion, in reference to clause A1.1, what Ms Doust submitted was this, starting in the middle of paragraph 51:
PN456
What it is about is the displacement of work, and in our submission the area of work that has been carried on by RTL is very clearly and directly work ...(reads)... however long is not relevant, off the work that they have to perform for the company. So that is the way in which it has an impact on members of the union.
PN457
So that, in short compass, in terms of the construction of clause A1.1, is the way in which the union puts it case. The company's construction is that that is not a true reflection of what clause A1.1 is directed to. And there are two approaches. It is submitted from the company there are two alternative approaches to the construction of clause A1.1 which your Honour could adopt, and on either approach this issue, that is, the application of the schedule, would be determined in the company's favour.
PN458
The first approach is to simply apply what is described as the golden rule of statutory construction, that is, what are the ordinary and natural meaning of the words where they appear in clause A1.1. And what we submit there is that - - -
PN459
THE SENIOR DEPUTY PRESIDENT: I thought that was the literal rule.
PN460
MR McDONALD: Well, whatever. Applying that approach - - -
PN461
THE SENIOR DEPUTY PRESIDENT: The golden rule is that you have got to make sense of things.
PN462
MR McDONALD: Well, hopefully those propositions aren't mutually exclusive, your Honour, that the ordinary and natural meaning of the words does make sense. What we say is this. The key focus is on the phrase, the capability to displace work currently done by Yallourn Energy employees. And what is submitted is that in its ordinary and natural meaning that expression, where it appears in clause A1.1, that is a reference to the contracting out of work which has the potential to impact on job security.
[12.16pm]
PN463
We make that submission particularly bearing in mind that the well established rule of statutory construction, that one has to have regard to the context in which these provisions appear. And in this regard, your Honour, what is very significant is that the next sentence which follows on, the second half of clause A1.1, examples include routine maintenance in the mind and power station.
PN464
So what is submitted by the company is that when one looks, firstly, at the reference to having the capability to displace work currently done by Yallourn Energy employees, and then the specific example give, routine maintenance in the mine and power station, this is a provision which is concerned with job security. And the alternative construction advanced by Ms Doust on behalf of the union, that is, that no, the concern is not with job security, the concern is with any impact, even if it be well down the track, is what the concern is.
PN465
And, of course, your Honour, the uncontested evidence in these proceedings, Mr Mether has given evidence that the mine plan which is in existence at the moment anticipates 30 years of dredging work. And also the uncontested evidence is, that when Mr Mether gave his evidence on 26 February, thereabouts, and RTL had been dredging at that point in time since early November - sorry, truck and shovel, not dredging. RTL had been truck and shovel operations since November, so a period of some three to four months.
PN466
His evidence was that that equated to about two weeks of the dredging operation. So on the construction contended for by Ms Doust, which appears in paragraph 52 of the transcript, her submission boils down to this proposition. That in circumstances where there is anticipated dredging work for the next 30 years, that where a truck and shovel operation such as that being operated by RTL, has the capacity to reduce by a period of, say, one to two months at its outer limits, the amount of dredging work which would have been done in that 30 year period but for the contract having been let.
PN467
THE SENIOR DEPUTY PRESIDENT: But is the magnitude at all important, Mr McDonald? I mean, the word says capacity, the word is capacity. I mean, it is like being a bit pregnant, isn't it? Either it does impact on the capacity or it doesn't.
PN468
MR McDONALD: Well, it either - - -
PN469
THE SENIOR DEPUTY PRESIDENT: Well, the capacity to displace, to use the whole phrase.
PN470
MR McDONALD: It says to displace the work currently being done. There is a temporal component there which, in my submission, directs attention to the present position, not what is going to prevail in 30 years time.
PN471
THE SENIOR DEPUTY PRESIDENT: I see, yes.
PN472
MR McDONALD: Yes. And in terms of that construction, your Honour, that is also consistent with the contents of clause 7. Really one needs to read this schedule, the contract labour schedule, in conjunction with clause 7 of the agreement. And it is relevant for a couple of reasons. Well, firstly, it is dealing with the same subject matter and the same agreement. This is on page 10, I think you will find, your Honour. Clause 7:
PN473
Contractors and subcontractors may be used to carry out work on Yallourn Energy assets, however, Yallourn Energy will not use contractors in a manner that erodes the job security, conditions or career prospects of its employees.
PN474
Well, insofar as there is an express reference to job security, in my submission that is pertinent to the context in which one reads A1.1. And then there is the four bullet points about what Yallourn Energy will ensure. And then there is this statement:
PN475
The provision of this clause 7 and schedule A shall apply to routine maintenance work which is currently carried on by Yallourn Energy employees.
PN476
And then this is significant, your Honour:
PN477
Where it is intended to let a contract which directly impacts and displaces work currently carried out by Yallourn Energy employees, then Yallourn Energy will consult and reach agreement with the affected group before letting the contract as contained in schedule A.
PN478
So there you have within clause 7, you have got express reference to schedule A, the two sections of the agreement are read in conjunction, and what is expressly contemplated here is the direct impact. In my submission, although that terminology, direct impact, doesn't appear in clause A1.1, it is clearly what is contemplated by the provision, and it is the inevitable consequence of focusing attention on displacing work currently being done by Yallourn Energy employees.
PN479
And we say that on proper construction, on the ordinary and natural meaning of the provision, it simply can't apply in these circumstances. Now, if you are against me on that, your Honour, if, for argument's sake, your Honour took the approach, oh well, you are either a little bit pregnant or that is the way it is, you know, if there is any impact at all, accept Ms Doust's argument, any impact at all, even if it is 30 years down the track, well, on a rigid strict application this applies.
PN480
Now, we would submit if that was the case, if that was the outcome, then this would be a classic example of an approach to construction where one would call in aid of those authorities which support the proposition that a court or a tribunal should shy away from an outcome which produces an irrational or unintended consequence.
PN481
And on the last occasion, your Honour, I provided you with the decision of Commissioner Smith. Do you have that still on the file in the David Syme proceedings? I have a spare copy of it again if your Honour doesn't have it with you. Does your Honour have that, the David Syme decision of Commissioner Smith?
PN482
THE SENIOR DEPUTY PRESIDENT: Yes.
PN483
MR McDONALD: He summarises on page 2 and page 3 of the decision, he summarises a number of authorities which he called in aid in his approach to a section 170LW, which application which was before him. And you will see towards the bottom of page 2 he makes reference to Cooper Brooks v Wollongong, and he says it is an elementary and fundamental principle, the object of the court interpreting the statute is to see what is the intention expressed by the words used. And then over the top of the page, the top of page 3, quoting from Cooper Brooks, he says - this is three lines from the top of the page:
PN484
There are cases where the result of giving their words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake and the mechanics of the construction are not so rigid as to prevent a realistic solution in such a case.
PN485
And to similar effect he makes reference - there is reference to Mason and Wilson JJ. And in the middle of that extract from the judgment of Mason and Wilson JJ, your Honour, the statement appears:
PN486
For the reasons already given in the discussion of the literal rule, departure from the ordinary grammatical sense cannot be restricted to cases of absurdity and inconsistency. In some cases in the past these rules of construction have been applied too rigidly. The fundamental object of the statutory construction in every case is to ascertain the legislative intention by reference to the language of the instrument viewed as a whole.
PN487
Now, those principles, your Honour, we submit, are apposite, if your Honour was inclined to the view that the ordinary natural meaning of the words, notwithstanding the context of the agreement, favoured the construction contended for by Ms Doust. And we simply submit that viewed in the context of this agreement as a whole, particularly an agreement, your Honour, which, in the preamble to the agreement, in clause 2.2, states:
PN488
Accordingly Yallourn Energy recognises success of its operation depends on involvement of its employees and respondent unions. The agreement will set up the environment to encourage employee empowerment, to actively participate in -
PN489
And then the third bullet point:
PN490
Consistent with the changes noted in this agreement look for ways to improve productivity and employee satisfaction.
PN491
Now, is it to be the case, your Honour - and I won't ask a rhetorical question. I got into trouble for doing that a week or so ago, someone had a go at me. My submission is this, your Honour. The evidence before you from Mr Mether, which is really not seriously challenged, is that the truck and shovel operation is necessary for the company to be in a position to maintain the integrity of its coal reserves.
PN492
Ms Doust elicited from Mr Mether the fact that the truck and shovel operation is a more expensive way of removing over-burden more expensive than the conventional means of removing over-burden. Nevertheless the company has gone down the track of removing that over-burden by that more expensive method. And Mr Mether's evidence comes down to this proposition.
PN493
The company, for operational reasons, has made an assessment that this is what it needs to do for the purposes of maintaining the integrity of coal reserves, even though it only buys a period of two or three weeks in terms of what might otherwise have been achieved. And I put this to him fairly and squarely, your Honour, at paragraph 135 of the evidence, I said this to Mr Mether:
PN494
Now, at face value that seems to be a lot of effort to have bought yourself the equivalent of what a dredger would move in two weeks. Why go to the trouble and expense.
PN495
And he said:
PN496
Well, fundamentally we would like to get the output out with the dredger, that is why we planned to use it for the life, it gets larger volumes out. The reality is, we are down at the moment. We have no other means at our disposal to increase the coal reserve to get more over-burden off. We are very limited to when we can do that work. It is foreshadowing an issue in the middle of the year around about June or July when we could be in trouble.
PN497
Now, that evidence has not been seriously challenged. Now, in my submission it would be an entirely irrational and unintended consequence of the operation of schedule A to the Act - of schedule A to the agreement if it was to have the effect of precluding the company from taking steps by means of engaging a contractor for the purposes of maintaining the integrity of its coal reserves and the operation of the entire power generation - its entire power generation activities.
PN498
THE SENIOR DEPUTY PRESIDENT: Mr McDonald, this seems to be an appropriate point to ask this question about schedule A. Does it apply to a contract of this nature, or does only clause 7 apply? I mean, it may not matter much because the words are mainly materially the same.
PN499
MR McDONALD: Yes, your Honour.
PN500
THE SENIOR DEPUTY PRESIDENT: You see, the only reference I can find at schedule A is expressed to be in relation to routine maintenance work.
PN501
MR McDONALD: Well, your Honour, our primary submission, the company's primary submission is, it has got no application. And we would also submit that clause 7 has got no application for the reason that clause 7 is directed to, clearly in its terms directed to a contract which directly impacts and displaces work currently carried out. The company's submission is that no - - -
PN502
THE SENIOR DEPUTY PRESIDENT: Well, it applies, but then it self excludes.
PN503
MR McDONALD: It self excludes, precisely. And the second point that I wanted to make as a matter of construction about clause A, is that there is self exclusion there as well. Even if you were against me, your Honour, in everything I have said about clause A1.1, the company falls within clause A1.2. And the reason for that is to be found in part of exhibit M1, to which Ms Doust did not take Mr Mether, but which, on his evidence, clearly forms part of the contract.
PN504
His evidence is that the whole document constituted by exhibit M1 is the contract. Now, he was taken to the general conditions, which is about halfway through the document. We have got the consolidated general conditions of contract, June 1997, which runs for - that runs for about 25 pages, your Honour. And then immediately following on from the general conditions contract, and we would submit part of that contract ought to be read in conjunction with it, there are a series of annexures or schedules thereto starting off with section B.
PN505
And then we run right through to about 15 pages from the end of the bundle, we have got section E, work description and performance requirements.
PN506
THE SENIOR DEPUTY PRESIDENT: Yes, I have it now.
PN507
MR McDONALD: Yes. And then there is the contents page. And then turn over one page, you have got section E, work description and performance requirements. Does your Honour see that?
PN508
THE SENIOR DEPUTY PRESIDENT: Yes.
PN509
MR McDONALD: And then E1, scope:
PN510
The following broadly describes the type of work that will be required under the contract.
PN511
And then seven bullet points down, bulk earthworks and over-burden removal. Now, the company submits that this contract was in existence; it is apparent from the early pages of the document, it is signed on 18 July 1997. And the evidence of Mr Mether, which wasn't seriously challenged, is that RTL have been doing this work, over-burden removal work, well before the November 2000 engagement.
PN512
So the effect of the contract, in particular that section of section E of the contract, is that this is work which is caught by clause A1.2, that is, it was work which was currently not being done by Yallourn Energy employees. Now, that is an alternative basis, your Honour, upon which it is submitted that the clause A, and, indeed, the entire contract labour schedule to the agreement, and clause 7, of course - we make that submission as well - has got no application. Those are the only submissions I wish to make, your Honour.
PN513
THE SENIOR DEPUTY PRESIDENT: Ms Doust, would you like to go now?
PN514
MS DOUST: Yes. I will be brief, your Honour.
PN515
THE SENIOR DEPUTY PRESIDENT: Thank you. I don't want to rush you, that is all.
PN516
MS DOUST: I have not got much to say, your Honour. The first point is this. There is no serious dispute between the parties that the company hasn't engaged in consultation in accordance with clause 7 and schedule A of the agreement. It is the company's position that they are not required to. So, your Honour, we say all your Honour has to determine is whether or not this particular over-burden work is caught by those parts of the certified agreement so as to give rise to an obligation to consult on the part of the company.
PN517
I would like to take your Honour, first of all, to this point about whether or not this is a contract within the meaning of the agreement. Your Honour might recall that I asked Mr Mether some specific questions about the substance of the documents in exhibit M1. And Mr Mether did admittedly give some responses to the effect that it was all the documents taken together which formed the contract. But I would like your Honour to observe in particular that the document which your Honour saw before, the consolidated general conditions of contract of June 1997, which, just to remind your Honour, is about a third of the way into the bundle.
PN518
THE SENIOR DEPUTY PRESIDENT: Yes, I have it.
PN519
MS DOUST: Your Honour might see in the definitions in that document, on the page numbered 4, that under those terms contract means the concluded agreement between Yallourn Energy and the contractor concerning the work as constituted by the order and its acceptance. So, your Honour, what we submit is that there is a specific definition of what constitutes a contract within this arrangement.
PN520
Your Honour might recall that I referred to the umbrella contract, as referring to the substantial documentation. But there is also provision within those arrangements that each particular order and acceptance constitutes a contract whole of itself. And that makes sense at law that there could be an umbrella contract, and that there might be particular specific contracts which arise from time to time.
PN521
And your Honour might recall that I asked Mr Mether some specific questions about the orders that gave rise to this particular work. And Mr Mether's response was this. That he placed orders at the start of this year, that he placed orders at the start of last year. I asked him whether the order that he placed at the start of last year related to this particular work. He said partly, and then he said that there was an additional order during the year 2000.
PN522
I asked him to confirm did all those orders happen in the year 2000. He confirmed that. I asked whether or not the company or RTL had accepted each of those orders. And he said they are doing the work now, so they must have accepted the orders. So, your Honour, what we say is, this particular over-burden work either constitutes by itself a particular contract or is part of a broader contract which was formed in the year 2000, that is, during the period of currency of this certified agreement.
PN523
So it has got the capacity, provided it meets the terms of clause 7 and schedule A, to be a contract which is contemplated by those provisions and affected by them. So that is the first point we make, your Honour. The second point we make is this. Your Honour heard quite a deal of evidence from Mr Mether, and quite some submissions from Mr McDonald about it being an important or essential thing for the company to be able to perform this particular over-burden work using RTL as contractors.
PN524
Can I say this. Your Honour doesn't have to make a finding in relation to that point because that point is irrelevant. What your Honour has to determine is, whether the contract for that work is something in relation to which the company has got an obligation to consult. Your Honour is not making some final finding here that the company is not entitled to engage those contractors, or can't even consider it.
PN525
Your Honour is only determining whether or not the company has to abide by a consultation requirement that it signed itself up to when it entered into this certified agreement. So that is all your Honour has to consider. And, your Honour, we say this also about that. Your Honour is giving consideration to the issue of an obligation to consult in a context where Mr Mether accepted the description put to him of Mr Sceney.
PN526
He accepted that Mr Sceney was the relevant CFMEU delegate who would be involved in those sorts of consultations about use of contractors, and he accepted what I put to him about Mr Sceney. And I can't relate the exact words used, but your Honour might recall, he accepted that Mr Sceney was a sensible and helpful delegate who worked cooperatively with him. Now, your Honour, he didn't accept that proposition under duress at the other end of a piece of four by two.
PN527
I would suggest that it was clear from the way he gave that response, was that he wouldn't for a moment suggest anything to the contrary, didn't have a moment's hesitation in accepting that description of Mr Sceney, who he accepted was the relevant person for this sort of consultation. So what your Honour has to consider as well, is that we are asking your Honour to make a recommendation about consultation in circumstances where the particular company engaging in this contracting work is one which has been accepted by Mr Mether as being the largest contractor on the mine site both in terms of the quantity of the work on the mine and in terms of how much money they cost.
PN528
It flows from that, in effect, your Honour, they are the most important contractor on the site and of all the contractors do the most work. And your Honour can see that is confirmed by clause 29 of Mr Mether's statement. Clause 29, your Honour might recall, sets out the various types of work that might be performed by RTL under the arrangement that is in place.
PN529
So what your Honour is deciding is not whether this company can make management decisions about who it engages to perform particular sorts of work. Your Honour is being called upon to decide this. Should this company be obliged to engage in consultation with representatives that they have no reason to suggest would be uncooperative about work being performed by a contractor who is the biggest contracting proposition on the site.
PN530
That is really what your Honour has before you. Does the company have to consult about that? Your Honour, what the CFMEU seeks is this. Decision from your Honour in terms that this particular work is covered by the terms of clause 7 of the agreement and schedule A to that agreement, and we also ask for a recommendation that the company continue to abide by those obligations, and we ask the Commission to express that recommendation in strong terms.
PN531
And we say wide terms, your Honour, because an obligation to consult is not an onerous one, it is one which is, Mr Mether said, consistent with sensible management practice. He indicated that he had consulted extensively because that was consistent with sensible management practice. And your Honour might recall he listed a number of benefits of engaging in that consultation.
PN532
And I draw your Honour's attention to Mr Mether's evidence in that regard for this reason. Mr McDonald made a submission that this Commission should shy away from an approach to the issues which would give rise to irrational or unintended consequences. And, your Honour, we simply say this. That this Commission should never entertain a submission that requiring an employer to consult with its work force would be something that was irrational or unintended.
PN533
That suggestion is inconsistent with Mr Mether's evidence, it is inconsistent with this Commission's understanding of good workplace relations, it is also inconsistent, I would suggest, with the documents which your Honour received into evidence from M3 and following. Now, I won't trouble your Honour to go through those in detail.
PN534
THE SENIOR DEPUTY PRESIDENT: I did at an earlier time read them all, Ms Doust.
PN535
MS DOUST: Yes. But your Honour will appreciate that it appears there the company is certainly going through some steps to undertake to certainly at least inform the work force about its intentions. At M4 your Honour will see that the reply from the CFMEU was to request a meeting to ensure proper information, and even at that early stage anticipated reaching agreement once it had presented its concerns and got all relevant information.
PN536
Your Honour, what we say about this is, there is simply nothing in what the CFMEU contends that this company can show poses any threat to it. Mr Mether gave evidence that he had never had experience of a situation where the CFMEU had tried to veto the use of any contractors, and, your Honour might recall, he recalled some discussions with Mr Sceney about using contractors in relation to the break-down of number 12 dredger. He wouldn't deny that in the course of those discussions there had been consultation and agreement about the use of contractors.
PN537
THE SENIOR DEPUTY PRESIDENT: Ms Doust, I think I am going to have to stop you there. I have got some documents to read before 1 o'clock.
PN538
MS DOUST: Yes. When was your Honour proposing to resume?
PN539
THE SENIOR DEPUTY PRESIDENT: 2.30.
PN540
MS DOUST: Thank you, your Honour.
PN541
THE SENIOR DEPUTY PRESIDENT: We will adjourn until 2.30.
SHORT ADJOURNMENT [12.56pm]
RESUMED [2.35pm]
PN542
THE SENIOR DEPUTY PRESIDENT: Yes, Ms Doust?
PN543
MS DOUST: Just to move on from where I left off when we adjourned, your Honour. I wanted to turn to the issue of construction of the agreement, and I will try and make the points that I wanted to make in some sort of concrete point form. And the first point I wanted to make is this. Clause 7 of the agreement, I think, expresses the intentions of the parties in relation to this issue of the use of contractors. It says clearly there that:
PN544
Yallourn Energy will not use contractors in a manner that erodes the job security, conditions or career prospects of its employees.
PN545
And there is a couple of matters that we submit deserves some attention in that respect. The first is the use of this term erodes. Because your Honour has had some submissions from Mr McDonald to the effect that unless it gets to the point where there is an identifiable job which is under threat, and there is no role for any of these provisions in the agreement about the use of contractors. Now, first of all, what that does is it talks about job security.
PN546
It doesn't impose a test for the application of the provisions. It simply states the intentions of the parties. But it is important, we say, that it talks about erosion rather than any sort of direct derogation from job security. We say that was a specific choice of words there. And your Honour would be well aware that job security is something that can be impacted upon not just directly by retrenchments, but something that in your Honour's experience of various industries is something that can be worn away over years and years and years, you know, like rocks being worn away by rain or whatever.
PN547
It is that sort of image or metaphor which is caught by this provision that is the death of a thousand cuts, in effect. So your Honour should give absolutely no credence to what Mr McDonald has said about there needing to be some sort of contract that comes in in one fell swoop, takes away a whole lots of jobs. That is not what this is about at all. The background is a concern that over time the accumulated effects of what the company might do in the way of making decisions about contractors will have a cumulative impact on job security.
PN548
And the second point that I want to make going to the end of clause 7 is this. That poses the test for the application of clause 7 because it talks about a contract which directly impacts and displaces work. And the important point I think that needs to be made there is, that it talks about work being displaced, not actual jobs. So there is no requirement for this clause to operate, that a single job be lost, only that work be displaced.
PN549
Now, the issue that arises for your Honour, is to consider what is caught by this term, work currently carried out by Yallourn Energy employees. And in our submission the proper way to apply that phrase in these circumstances is the work of over-burden removal at the mine. And in our submission that work is currently being carried out by Yallourn Energy employees. And we say your Honour has to ask the question, whether this contract would impact and displace that work?
PN550
And the answer is clearly yes, because Mr Mether's response in cross-examination was that RTL were performing over-burden removal work in a particular area which in the normal course Yallourn permanent employees operating the dredger would have moved to. And we say that is the proper approach to take to that section. Now, it was submitted, your Honour - I think Mr McDonald made a submission along the lines of, that the term about work currently being performed means that this clause can have no application.
PN551
Well, your Honour, we say your Honour should reject that submission, because if that is taken to its logical conclusion, so long as each time the company engages contractors to perform work perhaps some three foot in advance of where the employees are at this very second in time working, the obligation under the agreement to consult and agree could never arise, and the ludicrous situation would follow, your Honour, that you would have to have contractors physically coming in and wresting the Yallourn Energy employees away from their particular spot on the dredger, their particular station on the equipment, their particular place in the mine, and taking over that work that second for this clause to apply.
PN552
We say that is just a ridiculous construction. That your Honour should look broadly at the question of what is the work in question when looking at clause 7, and that the construction that we contend for is consistent with the stated concern about the erosion of job security. So it is consistent with that concern about cumulative long term derogation from job security that contracts to perform work in the particular area, but which may have an impact on the work of the permanent employees some short time in the future, would be caught by these provisions in the agreement.
PN553
Now, what we say is, that in addition to clause 7 of the agreement, schedule A also applies in these circumstances. What we say is this, your Honour, about those two areas. When the circumstances in clause 7 are satisfied, clause 7 directs that Yallourn Energy will consult and reach agreement with the affected work group before letting the contract as contained in schedule A. So clause 7 imports a particular approach to consultation and agreement which is described elsewhere.
PN554
But we also say, your Honour, that schedule A independently gives rise to obligations, and that is, when the circumstances in that schedule are satisfied. And that part of the agreement which is described as the contract labour agreement applies to contracts which have the capability to displace work currently done by Yallourn Energy employees. Now, I think your Honour raised the issue before that the term capability means that this part of the agreement must have a very broad application, indeed.
PN555
There is no requirement there that work is actually being displaced. It was only a requirement that the contract in question has the capacity to displace that work. We say that is an even broader test than is contained in clause 7. And again, your Honour, we say it is important to note that the clause talks about the displacement of work, not the displacement of particular jobs or positions. So we say any attempt to place a high threshold on the obligations which arise under this schedule is inconsistent with the terms of the schedule.
PN556
We say that the examples provided don't limit the scope of the clause, they are merely examples. Had the parties intended to provide an exhaustive list of the sorts of work caught by the clause, they could have either provided that exhaustive list or they could have expressed that the matters referred to there, the routine maintenance and installation of conveyor belts, were the only matters caught by the agreement.
PN557
Rather, the approach that the parties have used, which is to start off with a general sentence of application and to give examples, we say that giving those examples is consistent with the first sentence in clause A1.1, having a broad application. And what we say further about that, is that over-burden removal being one of the tasks or part of the work of a mine which is at the core of the work performed by permanent employees, is analogous to the example of routine maintenance, because routine maintenance is also at the core of the work that takes place at the mine and at the power station.
PN558
Over-burden removal is also this sort of core work, and the over-burden removal work is work which has the capability to displace work currently being done by Yallourn Energy employees. Your Honour, that being the case, we say that the obligation of consultation which is set out under clause A3 arises, and the real dispute in this case is that Yallourn Energy has proceeded in breach of clause A3.3, and it has let a contract which is subject to the agreement before the consultative process was completed and all the relevant parties were in agreement.
PN559
Now, your Honour, it is clear on the evidence that the contract has been let. I think the evidence was to the effect that the particular work started to take place in about November of last year. Mr Mether's evidence was that this work was covered by the contract that arose at some stage during last year by virtue of those orders having been placed with the company. In any case, Mr Mether's clear position was, none of this is caught by this part of the agreement.
PN560
So the company is saying, we don't have to apply this. In our submission what your Honour has to determine is whether, having regard to clause 7 and schedule A, whether this is the type of work that falls within those descriptions, that being - or whether the contract falls within those descriptions, that being contracts with the capability to displace the work currently being performed by employees, or a contract impacting and displacing work currently being carried out by Yallourn Energy employees.
PN561
In our submission that is the case. In our submission your Honour should so find. Your Honour should find that the company had an obligation in respect of this particular contract to apply the provisions of clause A3.3. We say your Honour can be led to that conclusion either by being satisfied that the obligation arose under clause 7 or under schedule A. We say either of those provisions gives rise to that obligation.
PN562
THE SENIOR DEPUTY PRESIDENT: Do you say they operate independently, do you, Ms Doust? This is the same question I asked Mr McDonald. I am just trying to get both parties views on it.
PN563
MS DOUST: What we say is, that for the present purposes what your Honour has to consider is whether either of these clauses has any application to the circumstances at hand. What we say about the construction of clause 7, is that when the circumstances which are described there arise, and that is set out in the final paragraph of clause 7, that is where it is intended to let a contract which directly impacts and displaces work currently carried out by Yallourn Energy employees. Then we say clause 7 points to the consult and agree provisions in schedule A.
PN564
THE SENIOR DEPUTY PRESIDENT: Yes. I mean, that is the issue I was trying to get your view on. Whether that is the, if you like, the trigger for schedule A operating.
PN565
MS DOUST: No, your Honour. Because we say that even if your Honour wasn't satisfied on the issue of this contract directly impacting and displacing work currently carried out by Yallourn Energy employees, our submission is that schedule A operates in accordance with its own terms in any case.
PN566
THE SENIOR DEPUTY PRESIDENT: I see. Yes, thank you. That answers the question. You say it has an independent operation as distinct from any operation given it by clause 7.
PN567
MS DOUST: We say its scope is defined in clause A1.1, which talks - I think your Honour may accept - in broader terms than clause 7, with the use of the term capability.
PN568
THE SENIOR DEPUTY PRESIDENT: That is why I asked the question, Ms Doust.
PN569
MS DOUST: Yes. So we do say that either because it meets that definition in clause A1.1, or because it meets that definition in clause 7, the obligations arise.
PN570
THE SENIOR DEPUTY PRESIDENT: Yes.
PN571
MS DOUST: One further point I think your Honour may wish to observe is this. Clause 7 only refers to the consult and reach agreement provision, which, on my reading, is only clause A3.3. Whereas under schedule A there is a number of provisions about consultative steps, consultative arrangements, and so on.
PN572
THE SENIOR DEPUTY PRESIDENT: Yes. It is a curious form of word. As you say correctly, it refers, clause 7 refers to consult and reach agreement before letting the contract as contained in schedule A. That may be a reference to the particulars of consultation, which are quite detailed and set out in the schedule.
PN573
MS DOUST: What we would say about that; I think maybe splitting your infinitive is the term used to describe how that last paragraph of clause 7 is drafted. And perhaps as contained in schedule A, it reads more logically if you read it back after reach agreement. But we say, look, nothing hinges on there being any clumsiness of drafting. There is clearly a reference there to consult and reach agreement, there is clearly a reference to schedule A. The relevant part of schedule A is clause A3.3.
PN574
There is no dispute here, your Honour, that the company didn't undergo this process of consulting and reaching agreement before letting this particular contract. We say your Honour should so find and make a recommendation about the company's future approach to these issues simply for the reason that I have highlighted at the beginning of my submissions, your Honour, and that is this. That in his evidence Mr Mether accepted that RTL was, in effect, the single biggest contractor entity on the mine site with a wide range of work.
PN575
So it is fair to conclude, your Honour, that this sort of issue will arise again in the future and will raise similar issues about whether these contracts are affected by the clause. And also we say it is an important issue for your Honour to consider and make a recommendation about, because it touches on over-burden removal which we say is, you know, one of the primary tasks being carried out by our employees at the mine.
PN576
Your Honour has, in effect, been given the submission day minimus, this is a trifle. What we say is that the agreement talks about eroding job security. And from our point of view this is the thin edge of the wedge, to use an old industrial cliche.
PN577
THE SENIOR DEPUTY PRESIDENT: You would have got in trouble from some members for using a latin expression, Ms Doust.
PN578
MS DOUST: Probably. And I might have got in trouble if I hadn't used the term, thin end of the wedge as well, your Honour.
PN579
THE SENIOR DEPUTY PRESIDENT: Yes.
PN580
MS DOUST: But that is clearly the direction that the union is coming from, to set in place a protocol, as it were, an understanding about the continued application of this clause of the agreement in the event of future contracting out of this core task. Now, unless there is anything further, those would be my submissions, your Honour. Could I just have a moment to confer and see whether there is anything?
PN581
THE SENIOR DEPUTY PRESIDENT: Yes, by all means.
PN582
MS DOUST: No. I think I have covered it, your Honour. Thank you.
PN583
THE SENIOR DEPUTY PRESIDENT: Thank you for your submissions, Ms Doust. Anything in reply, Mr McDonald?
PN584
MR McDONALD: Just quickly, your Honour. As to the relationship between clause 7 and schedule A, my submission would be that - and I must apologise, I don't think I have really grappled with this matter when you raised it with me earlier, your Honour. I don't think I really appreciated the issue that was being raised, which you have just raised with Ms Doust.
PN585
The question being, whether or not the two provisions have an independent operation. And that is, to put it bluntly, could schedule A apply in circumstances where clause 7 doesn't? Now, in my submission, when you look at the terms of clause 7, particularly the final paragraph of clause 7, on a proper reading of the first sentence of that final paragraph, one only goes - schedule A is only activated in circumstances where one satisfies the criteria prescribed in that final paragraph.
PN586
That is, unless it can be shown that the contract in question is one which does directly impact and displace the work currently carried out, one has no cause to have regard to schedule A. That would be my submission, your Honour. Now, I don't say anything further in relation to the issues of construction, I would just be repeating myself. But can I say something in relation to the question of the construction of the contract.
PN587
This went to the second matter that I raised, which concerns the issue of clause A1.2 of schedule A, that is, the proposition advanced by the company that there was already a contract in existence on 11 September 1997, when the EBA came into operation. The submission that I advance is this, your Honour. I have drawn your Honour's attention to section E annexed to the general conditions contract, which is in the terms of, it says scope:
PN588
The following broadly describes the type of work that will be required under the contract.
PN589
And the reference to the contract then simply takes you back to clause 3 of the general conditions contract. Clause 3.1 says:
PN590
A contract shall exist from the time that Yallourn Energy shall have received an unqualified letter from the contractor accepting the order from Yallourn Energy.
PN591
And Mr Mether has given evidence about what occurred in the course of the year 2000 and the year 2001 in terms of orders having been placed and accepted, and his evidence was, well, the work is being done, and that is consistent with the order having been accepted. And in my submission what flows from that is simply that consistent with the terms of clause 3 of the general conditions contract, that is then read in conjunction with section E, which means that within the scope of that contract as constituted by the order and the acceptance thereof, one of the works required under that contract is bulk earthworks and over-burden removal.
PN592
So it does seem, with respect, on the face of the contract, there really doesn't seem to be any real room for doubt that that was a matter which was subject to the contractual arrangements between RTL and the company and which pre-dated 11 September 1997. If the Commission pleases.
PN593
THE SENIOR DEPUTY PRESIDENT: Yes, Ms Doust?
PN594
MS DOUST: Your Honour, I apologise. There is just one matter at the end of clause 7, and I neglected to point you to this, and Mr Harding has helpfully raised it so that your Honour won't be misled. It does provide about schedule A being enforceable as a term of this agreement. Just on that last issue.
PN595
THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Well, can I thank you both for your submissions. They have been exemplary in their clarity. I will have to consider if there is a nice technical point involved in this, I think, and I will reserve my decision and I will hand it down as expeditiously as I can.
ADJOURNED INDEFINITELY [3.02pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
RONALD CLYDE METHER, ON FORMER OATH PN205
CROSS-EXAMINATION BY MS DOUST PN205
RE-EXAMINATION BY MR McDONALD PN393
WITNESS WITHDREW PN400
EXHIBIT #M2 STATEMENT OF RONALD METHER PN408
EXHIBIT #M3 LETTER FROM MR METHER TO MR SCENEY DATED 19/09/2000 PN419
EXHIBIT #M4 LETTER FROM MR HART DATED 18/10/2000 PN423
EXHIBIT #M5 LETTER FROM MR SCENEY TO MR METHER RE NOTICE OF DISPUTE DATED 24/01/2001 PN432
EXHIBIT #M6 LETTER FROM MR METHER TO MR SCENEY DATED 24/01/2001 PN435
EXHIBIT #M7 LETTER FROM MR SCENEY TO MR METHER DATED 03/02/2001 PN438
EXHIBIT #M8 LETTER FROM MR WARD DATED 08/02/2001 PN440
EXHIBIT #M9 LETTER FROM MR SCENEY DATED 14/02/2001 PN442
EXHIBIT #M10 1997 ENTERPRISE AGREEMENT PN449
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