C2001/6169, Transcript of Proceedings [2002] AIRCTrans 1598 (13 May 2002)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS


O/N VT03665
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT HAMILTON

C2001/6169

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

and

SIMON CARVES

Notification pursuant to section 99 of the Act
of an industrial dispute re employer's alleged
refusal to apply the correct award

MELBOURNE

10.24 AM, MONDAY, 29 APRIL 2002

Continued from 4.3.02

PN1293

THE DEPUTY PRESIDENT: Any changes in appearance?

PN1294

MR C. MILNE: Deputy President, my recollection was that I appeared with Mr Glenn last time. Mr Glenn has just rung me and informed me that he is extremely ill and can't attend today, so I will be apologising for Mr Glenn and will be appearing on behalf of the company by myself.

PN1295

THE DEPUTY PRESIDENT: Thank you very much, Mr Milne. Right, since the last occasion, I have received a written submission from the AMWU, a written submission from Simon Carves, both on the form of the order, and I sent out a listing which referred to those two submissions and also stated as follows:

PN1296

A hearing to enable parties to address their submissions will be held on Monday, 29 April 2002. The parties are directed to bring copies of all documents referred to in their submissions and to specifically address the issue of the addition of a cost limit to the phrase, "minor construction, modification and maintenance work" in clause 3.2 of the workshop agreement in at least the range of $100,000 to the Victorian Building Industry Agreement site allowance provisions discussed in the Simon Engineering Australia's submission on the order.

PN1297

I think the order of submissions received was I think you were first, Mr Milne.

PN1298

MR MILNE: That is correct.

PN1299

THE DEPUTY PRESIDENT: Unless Mr Addison has a difficulty, perhaps we would start in that order, or do you think a different course of action is appropriate?

PN1300

MR ADDISON: Well, just one point, your Honour.

PN1301

THE DEPUTY PRESIDENT: Yes.

PN1302

MR ADDISON: I raised the point of VBIA and the VBIA is actually addressed in my supplementary submissions with regard to the matter. It seems to me to be inappropriate to refer to the VBIA with regard to these particular proceedings on the basis that that issue was not agitated at first instance. It seems to me that it is, in effect, a de novo type approach.

PN1303

THE DEPUTY PRESIDENT: It is in effect a de novo, yes.

PN1304

MR ADDISON: And I do have some difficulties in terms of the cost parameters, and I put that in a practical sense rather than a legalistic sense.

PN1305

THE DEPUTY PRESIDENT: Yes.

PN1306

MR ADDISON: The type of work envisaged according to the evidence of Mr van Dyke with regard to minor construction is of huge variance, and in terms of putting a dollar limit on it, that may, in some circumstances, be completely inappropriate for definition purposes.

PN1307

THE DEPUTY PRESIDENT: Yes.

PN1308

MR ADDISON: I have suggested, and I note that Mr Milne also has put in his supplementary submissions, that there ought to be some discussion between the parties to try and come to some understanding, if you like, as to what the term means.

PN1309

THE DEPUTY PRESIDENT: Yes.

PN1310

MR ADDISON: And I agree with that; I have no difficulties with that whatsoever. It would seem to me, your Honour, that the appropriate course of action would be for a draft order to be - or for an order to be issued from the Commission varying both of the agreements as put in your original decision - - -

PN1311

THE DEPUTY PRESIDENT: Yes.

PN1312

MR ADDISON: - - - with then a direction to the parties to further consult with regard to the meaning of the term, minor construction, so as to avoid further agitation of the issues on the next job down the track. That seems to me to be the most expeditious way of dealing with it.

PN1313

THE DEPUTY PRESIDENT: Yes.

PN1314

MR ADDISON: If the Commission pleases.

PN1315

THE DEPUTY PRESIDENT: As I recall, in the decision it was indicated that on a preliminary basis that the order would be to insert a reference to the site in question as being within the workshop agreement rather than the construction agreement. That is the order you are referring to, is it?

PN1316

MR ADDISON: Other way round, I think, your Honour.

PN1317

THE DEPUTY PRESIDENT: Yes.

PN1318

MR ADDISON: But yes.

PN1319

THE DEPUTY PRESIDENT: Yes, yes, of course, the other way round. You are quite correct.

PN1320

MR ADDISON: And that seems to me to deal with that particular aspect. That argument that was - - -

PN1321

THE DEPUTY PRESIDENT: Yes. So that is the proposal you are putting, is it?

PN1322

MR ADDISON: Yes, and I honestly think that is the best way to go.

PN1323

THE DEPUTY PRESIDENT: All right. Well, in that connection, I think - was it you, Mr Addison, who said that you had rung Mr Milne with a view to conferring - - -

PN1324

MR ADDISON: I had.

PN1325

THE DEPUTY PRESIDENT: - - - and that no response had been received?

PN1326

MR ADDISON: That is correct, and I still have had no response.

PN1327

THE DEPUTY PRESIDENT: That is paragraph three. I will just read that:

PN1328

I left phone messages for Mr Milne on Friday afternoon, 15 March, seeking a meeting for that purpose. To date a response has not been received.

PN1329

Mr Milne, what do you think of that particular proposal also in relation to that particular submission of Mr Addison?

PN1330

MR MILNE: Well perhaps if - - -

PN1331

THE DEPUTY PRESIDENT: Is it correct that you received a phone message which you did not return on the issue of discussions and a draft order?

PN1332

MR MILNE: Well that is technically true, however Mr Addison and I have discussed and commented to each other on a number of occasions subsequent to that when we have been in different proceedings - - -

PN1333

THE DEPUTY PRESIDENT: I see.

PN1334

MR MILNE: - - - and over different issues. In fact at Simon Engineering's boardroom we had a discussion about whether we should - about this particular issue.

PN1335

THE DEPUTY PRESIDENT: So there has been discussions, you say.

PN1336

MR MILNE: Yes and they have not been conclusive but they have not been detailed so we have had discussions. It is true that I didn't return that phone call but we have had discussions.

PN1337

THE DEPUTY PRESIDENT: All right. The substance of the issue is that there were discussions and there wasn't any undue delay and so on. Is that what you are saying?

PN1338

MR MILNE: Well the discussions that took place obviously were very preliminary sort of discussions but they didn't reach any outcome because I think the issue is one whereby Mr Morris - Mr Addison - it is Monday. Mr Addison's organisation has a different view to what the company has. Now I don't know whether we are able to reach agreement on any draft order and indeed - - -

PN1339

THE DEPUTY PRESIDENT: Mr Addison has put a particular view. He said that I should issue the order as discussed on a preliminary basis in the decision and secondly, that I should issue a direction for you two, for the two sides to have discussions. Do you agree or disagree?

PN1340

MR MILNE: I disagree totally and I disagree with that, your Honour, on the basis that it is putting the cart before the horse.

PN1341

THE DEPUTY PRESIDENT: Right. And - - -

PN1342

MR MILNE: It is inappropriate to issue an order and then have discussions about what that order pertains to.

PN1343

THE DEPUTY PRESIDENT: Yes. Well just one issue in relation to that, Mr Milne. The proposal I put would solve the issue of that particular site. It would not, of course, as I think you have pointed out and I think Mr Addison pointed out, solve the issue of other sites. Now having regard to that, is there any value - I mean if there is no value, tell me, Mr Milne, in discussions on the issue of other sites.

PN1344

MR MILNE: Well your Honour can I perhaps answer your question in this way; that you were prepared to issue an order to remove ambiguity in the agreements. That was the basis - - -

PN1345

THE DEPUTY PRESIDENT: Ambiguity or uncertainty is the - - -

PN1346

MR MILNE: Yes.

PN1347

THE DEPUTY PRESIDENT: So it is not just ambiguity. It is ambiguity or uncertainty.

PN1348

MR MILNE: Within the agreements.

PN1349

THE DEPUTY PRESIDENT: Yes.

PN1350

MR MILNE: As they apply.

PN1351

THE DEPUTY PRESIDENT: Yes.

PN1352

MR MILNE: Not as they apply to Lilydale. That might have been the effect of it but - - -

PN1353

THE DEPUTY PRESIDENT: But Lilydale is part of the problem, isn't it?

PN1354

MR MILNE: Well it is but there are significant other problems elsewhere.

PN1355

THE DEPUTY PRESIDENT: As I have just acknowledged.

PN1356

MR MILNE: Yes. So issuing the order that you were dealing with does not remove the ambiguity. In fact it complicates it, in our view, and the uncertainty.

PN1357

THE DEPUTY PRESIDENT: All right. Maybe it will remove the ambiguity for the Lilydale site, may it not?

PN1358

MR MILNE: For Lilydale it does, but you were asked to remove the ambiguity from the agreements, not just the Lilydale.

PN1359

THE DEPUTY PRESIDENT: Well, the procedure proposed is that I remove the ambiguity from Lilydale by making the order foreshadowed and deal with the other ambiguities by allowing yourself, your side, and the AMWU to have discussions. Is there any point in that procedure being followed, in your view?

PN1360

MR MILNE: Well I honestly don't know, your Honour, and the reason I say that is because I think we are a fair way apart and - - -

PN1361

THE DEPUTY PRESIDENT: All right. If that is the case, that is the case and on that basis, I am not - I will proceed to hear full submissions today and determine in the context of those full submissions how we deal with that submission of Mr Addison's and any others he may wish to put. Now there is a secondary issue raised by Mr Addison, which I would ask you to address, which is the VBIA. He has raised an issue. As I recall the history of this, you sought to refer to the VBIA in reply submissions only and you further raised this in your submissions on the order so those are the two - that is how the VBIA was raised in these proceedings. So in dealing with your submissions, could you also deal with the issues raised by Mr Addison.

PN1362

MR MILNE: Yes, your Honour. If I can deal with the VBIA firstly, the VBIA was used in our submissions not as a definitive document or - it was actually an indicator within the building industry, building construction industry, as opposed to the engineering industry, that it did recognise that site allowances were applicable on major construction projects but not on minor ones. Now in the VBIA, as it is written, and I am not sure whether they have actually upped it by the CPI at the moment but it was anything under $1.8 million didn't attract the site allowance, so our submissions on that were basically to put before the Commission that even within the building construction industry, there is a recognition that there are different types of construction works which are actually defined in the VBIA as being one that warrants site allowance and one that doesn't so even though the work is exactly same.

PN1363

So the VBIA doesn't have application as such because it quite clearly is not something that Simons is signatory to and in fact only applies in the building industry but it does indicate that there is a recognition as to whether there is minor construction work and we would say that even the VBIA puts forward the proposal that minor construction work is anything less than $1.8 million on the building permit.

PN1364

Now your Honour, that was the purposes of the VBIA, in our submissions. No one is bound by it. We understand that. But it was certainly there as an indicator as to what was minor construction work. Now minor construction work under the VBIA could be as it relates to site allowances and that is how I put it in my supplementary submissions as it relates to site allowances and the site allowance being what is normally, and can in some cases be called a major project allowance but - - -

PN1365

THE DEPUTY PRESIDENT: Are you saying, Mr Milne, that one option is to say that minor construction is anything below $1.8 million? Is that - - -

PN1366

MR MILNE: I am saying no, not in this particular case because - - -

PN1367

THE DEPUTY PRESIDENT: What are you saying then?

PN1368

MR MILNE: Well at some later stage in my submissions I am going to take you to what I referred to which is the Altona agreement that Simon Engineering has and that, in fact, quite specifically puts the figure at $10 million so there is a difference. I am using the VBIA figure as an indicator and what I am saying to your Honour is that there can be, on any work, it doesn't matter what work it is or where it is, there can be construction work or what could be deemed to be construction work.

PN1369

You simply have to pick up a saw and saw a bit of wood and it could be determined to be construction work so there is a recognition of what is and what isn't but we know that that sort of work can be carried out and it can be carried out where there is a component of an engineering job which could be - it might be - how should I put it? It could be - it is variable, as Mr Addison says. Putting a figure on it is very difficult because it could be the construction component of an engineering contract could be $100 or it could be $1000 or it could be putting in a site shed or something of that nature when the actual contract could be worth $600, $700 million.

PN1370

So it is a very difficult thing but, if I can then perhaps jump, your Honour, to the Altona area agreement that Simons has, and I did bring a copy in for you, your Honour, in accordance with your directions. Your Honour, that agreement - - -

PN1371

THE DEPUTY PRESIDENT: This is document AG809512, Simon Engineering Altona Area Certified Agreement.

PN1372

MR MILNE: That is the one, yes. Your Honour, that agreement has been entered into by Simon Engineering and the metalworkers and its basis is a pattern agreement that is put forward by the metalworkers to cover the Altona area. Now agreed that it is restricted to the Altona area but Simon Engineering are required to work in accordance with that agreement in the Altona area. Similarly, too, they work in accordance with the agreement for the workshop in other areas. The workshop agreement that we have got before the Commission already. Now I have a copy of that if your Honour wants me to hand that up. I am not sure whether we handed it up in the last proceedings. That is the Gippsland - - -

PN1373

THE DEPUTY PRESIDENT: Which document is this?

PN1374

MR MILNE: The Gippsland - it is the Simon Carves Australia Gippsland and Hastings Collective Bargaining Agreement. Now that is the workshop agreement.

PN1375

THE DEPUTY PRESIDENT: I think we have the workshop agreement and the construction agreement.

PN1376

MR MILNE: I think we probably have but I will hand one up just - I have got them, your Honour.

PN1377

THE DEPUTY PRESIDENT: You do have them? Well it might save some time locating the earlier documents. Yes.

PN1378

MR MILNE: Now they are very similar agreements, your Honour, in some respects. Their localities are different but they cover the same sort of work and if I can - and that is the agreement that we are particularly concerned about that relates to the Lilydale employees but it is the same work - - -

PN1379

THE DEPUTY PRESIDENT: Yes, this is the agreement in question, isn't it? This is the agreement that has been found to be uncertain or ambiguous, is it not?

PN1380

MR MILNE: Yes, it is. Yes, it is. However, your Honour, if we are talking about how to address that agreement, and we are talking about perhaps a figure, and I am addressing your question and Mr Addison's questions earlier on, if we are talking about putting a figure on it, in that agreement, if I can refer your Honour to - it is clause 3.1 which is the operation of the agreement.

PN1381

THE DEPUTY PRESIDENT: I have clause three. Yes, here we are, operation. Yes, I see it.

PN1382

MR MILNE: And I am sorry, your Honour, I am working off a photocopy so I couldn't say which page number. You have obviously got the internet copy but it then goes on from 3.1 down to the subheading, if I can use that term, where it says contract work, and that is the sort of work we are talking about when these employees go out onto other sites and do contract work, work that Simon Engineering is contracted to do on behalf of a client. Your Honour, it says:

PN1383

This will mean all other work carried out which is under the financial responsibility and direct supervisory control of the employer. The conditions as set out in this agreement are applicable on all sites, areas, work covered by this agreement and pay rates attached to these items are conditional on implementation.

PN1384

And the critical paragraph in that, your Honour, is:

PN1385

It is agreed that work up to a total project value of $10 million based on building permit value - - -

PN1386

Now that is the same basis that they deal with the VBIA is on building permit value, rather than total project price:

PN1387

- - - will be covered by this agreement and not by the National Metal and Engineering On Site Construction Industry Award.

PN1388

So that agreement that was struck and operates from 13 July 2001 is subsequent to the other agreement. Now I am not saying it has application. I am just simply saying that the parties to all agreements, all of the Simons agreements, including the metalworkers and Simons have, in this instance, determined what is applicable to be covered by a workshop agreement and when it becomes construction work and that is at the rate of $10 million.

PN1389

THE DEPUTY PRESIDENT: The phrase "building permit value", is that a well recognised and understood term?

PN1390

MR MILNE: Yes it is, your Honour.

PN1391

THE DEPUTY PRESIDENT: Right.

PN1392

MR MILNE: A building permit value is the permit you get from the council and it determines - well it is. It is a permit that the council looks at. Now it doesn't include costs of machinery or anything of that nature. It is simply the building permit - - -

PN1393

THE DEPUTY PRESIDENT: Yes.

PN1394

MR MILNE: - - - and for whatever works are required and I am not an expert on building permits but I do understand what they are and it is for whatever works you need a permit from the council comes under the building permit work and it relates to alterations etcetera as well as new work. In perhaps a - for example, your Honour, if I can use this to explain it to you, for example you were building a big warehouse and it had a whole range of other high tech machinery that was to be put inside that building, the building permit would not cover the cost of the machinery, just simply the building itself or in fact in a building like this that we are in now, your Honour, it would cover the building. It wouldn't cover the fit out, I wouldn't have thought, and certainly not the specific fit outs, for example, in this courtroom. So that is what a building permit is and that is how they determine it and yes, it is how they base VBIA and indeed obviously it has been agreed to be the process for this particular - - -

PN1395

THE DEPUTY PRESIDENT: So let me get this straight. You are saying that that phrase, "building permit value" means that contract work in clause 3.1 of the Altona agreement is the value of buildings and sets that out but not the value of what, installations?

PN1396

MR MILNE: Well it doesn't cover the cost of machinery, for example.

PN1397

THE DEPUTY PRESIDENT: Cost of machinery. What do you mean by that?

PN1398

MR MILNE: Well you could go out and you could import, for example, you could - I am trying to think of an appropriate - you could possibly go out and build a big factory for General Motors and then have someone come in and put in 20 computer controlled lathes or milling machines or something. Their cost would not go into the building permit. The original building that it was housing those things would go into it.

PN1399

Now in the case of something like an oil refinery, for example, in Altona, the work on that refinery may actually fit within it because it would be a requirement, I would think, from the council, to have some control over what was done in that sort of role so I think that that would - - -

PN1400

THE DEPUTY PRESIDENT: Well the submission you have just put wouldn't apply to structures erected on a site, would it? You are talking about, what was it, computers? They are not structures.

PN1401

MR MILNE: Computer controlled lathes or milling machines.

PN1402

THE DEPUTY PRESIDENT: Yes but if you, for example, were talking here in this present case about the installations at Lilydale silos and the like, where would they fall? They would fall within the phrase "building permit value", would they not?

PN1403

MR MILNE: And they may do so, your Honour. Yes, they may.

PN1404

THE DEPUTY PRESIDENT: I would have thought they would but - - -

PN1405

MR MILNE: If there is a building permit required to do the work, and I can't - as I say, I am not an engineer in that respect so I can't make a definite - but I would think if they were doing that then the council would precisely look at that and I would think you would need a building permit to put those sort of things up. Irrespective of whether it is construction work or not, it would be a requirement to have a building permit, I would have thought, to do that sort of work but in the cases I have indicated to you at General Motors, for example, if you put in - you could have a computer controlled milling machine that is worth three or four million dollars and you wouldn't - the price of that machinery wouldn't go on to the building permit.

PN1406

THE DEPUTY PRESIDENT: Yes. All right. Thank you.

PN1407

MR MILNE: It is again one of those things, your Honour, where some people make a judgment and in this case it would probably be the council as to whether they needed a building permit or not and the building inspector would probably say yes or no to that. But irrespective of that, whether that work at Lilydale was covered by that, there is also the recognition that that sort of work which is engineering work, as opposed to building work - building work determined by the VBIA is struck at 1.8. Engineering work and associated things with it is, even if you take the point that it is construction work and does require a building permit, it is struck at $10 million as being what both the AMWU and Simons, and as I understand it, everybody else that has signed a pattern agreement, determines to be the appropriate level for engineering construction work.

PN1408

Now to put any other figure than what is already in operation, already in operation by agreements, would in fact simply create more confusion and more ambiguity or uncertainty and ambiguity, in our submission, your Honour. We have - - -

PN1409

THE DEPUTY PRESIDENT: Uncertainty and what?

PN1410

MR MILNE: Uncertainty and ambiguity. I will stick with those two. But it would just complicate the issue. We would have people - - -

PN1411

THE DEPUTY PRESIDENT: What, even more than the uncertainty and ambiguity that currently exist in the phrase.

PN1412

MR MILNE: Yes, precisely. But in our submissions, your Honour, and indeed - - -

PN1413

THE DEPUTY PRESIDENT: Just bear with me for a minute. The current phrase is what, minor construction and maintenance work.

PN1414

MR MILNE: Yes it is.

PN1415

THE DEPUTY PRESIDENT: Yes. Now that has got no figure in it.

PN1416

MR MILNE: No.

PN1417

THE DEPUTY PRESIDENT: And it is not defined.\

PN1418

MR MILNE: No.

PN1419

THE DEPUTY PRESIDENT: Are you saying, for example, that the addition of $100,000 limit on that phrase would make that phrase more ambiguous and uncertain than it currently is? Is that your submission?

PN1420

MR MILNE: Yes, it certainly would.

PN1421

THE DEPUTY PRESIDENT: Why?

PN1422

MR MILNE: Firstly because it would alter what has already been agreed - - -

PN1423

THE DEPUTY PRESIDENT: In other places.

PN1424

MR MILNE: In other places but by the same parties.

PN1425

THE DEPUTY PRESIDENT: I have heard you on that. What is your next reason?

PN1426

MR MILNE: And within the VBI which sets another level - - -

PN1427

THE DEPUTY PRESIDENT: Okay, next reason is the VBIA, yes I understand that point, which is 1.8 million.

PN1428

MR MILNE: Yes. But also - - -

PN1429

THE DEPUTY PRESIDENT: Any other reason?

PN1430

MR MILNE: Yes, and that reason would be, your Honour, if you put a figure of $100,000 on anything that would almost apply to everything. $100,000 job is, in the words of - they are my words but I have heard them on many an occasion, are peanut jobs. They are peanuts. Every job that a builder or an engineering, an engineering constructor would contemplate in the normal sense of work is well in excess of $100,000. People don't even get excited about a $100,000 job so it would be inappropriate because that would be lowering the threshold of what is already the acceptable standard to a level that is totally unacceptable. In effect, what you would be doing, your Honour, would be saying that all work that has a value of $100,000, even if a component is construction work, is only $10,000.

PN1431

THE DEPUTY PRESIDENT: Well it would exclude machinery, Mr Milne, which you have already pointed out.

PN1432

MR MILNE: Machinery?

PN1433

THE DEPUTY PRESIDENT: Yes.

PN1434

MR MILNE: Yes, but if you go down and you - - -

PN1435

THE DEPUTY PRESIDENT: If you use the phrase "building permit work".

PN1436

MR MILNE: Yes, that is true. That is true. And the building permit work is determined and defined, either at 1.8 for a bare structure building and a $10 million or - - -

PN1437

THE DEPUTY PRESIDENT: I have heard that submission. There is no point in repeating it.

PN1438

MR MILNE: I just want to make sure you understand, your Honour.

PN1439

THE DEPUTY PRESIDENT: Well I will repeat it back to you so that you are sure that I do. VBIA uses $1.8 million. The Altona agreement that you have pointed to uses the figure of $10 million.

PN1440

MR MILNE: Yes.

PN1441

THE DEPUTY PRESIDENT: Now I have got those points.

PN1442

MR MILNE: And because they generally refer to different types of work, and engineering construction, a la say a refinery - - -

[10.53am]

PN1443

THE DEPUTY PRESIDENT: Yes.

PN1444

MR MILNE: - - - is a far more expensive and bigger task than building a warehouse to house, you know, to put in stock for example.

PN1445

THE DEPUTY PRESIDENT: Yes.

PN1446

MR MILNE: So that will be, in our submission, your Honour, why there is a $10 million value for a refinery, or a chemical plant, or a lime manufacturing plant, or any of those sorts of works.

PN1447

THE DEPUTY PRESIDENT: Yes.

PN1448

MR MILNE: That is why the people have - the parties to those sorts of agreements have structured that at $10 million where VBIA is $1.8 million, simply because it could be just precisely that. A warehouse in North Altona for, you know. 1.9 gets a site allowance. Now - - -

PN1449

THE DEPUTY PRESIDENT: If that was the case, wouldn't it be also the case that you would be able to reach agreement with the AMWU on those issues, if the issues are as clear as you suggest? And doesn't that give some force to Mr Addison's submission that I should issue the order that I foreshadowed in the decision, and direct you, perhaps under the conference of the parties, in case there are any difficulties in arranging meetings, to just go through all of those issues with the AMWU and come to an agreement.

PN1450

MR MILNE: Yes. And that is a possibility, your Honour.

PN1451

THE DEPUTY PRESIDENT: Yes.

PN1452

MR MILNE: And I don't have a problem with that. But what I do have a problem with is putting the cart before the horse. Because effectively you would be making a decision - - -

PN1453

THE DEPUTY PRESIDENT: Yes.

PN1454

MR MILNE: - - - that applies to the application of all of these agreements, and the principle wherein you may - it may - or I would have to say to your Honour I don't think it would fix it, if it came down to $100,000 for example, that figure. If the order was - and in fact it won't come - fix it if you issue the order in the way you originally contemplated it.

PN1455

THE DEPUTY PRESIDENT: Well, I think you agreed before, didn't you, that the order - such an order would fix the ambiguity and uncertainty for the Lilydale site?

PN1456

MR MILNE: No, no.

PN1457

THE DEPUTY PRESIDENT: You didn't?

PN1458

MR MILNE: I don't think I have agreed it in that sense. I think it may have the effect of making it more certain, but what it would do is create uncertainty too, because the employees who voted for, and certified, and approved this agreement, they know what - although it is not defined, they know what is construction work, minor construction work, and what is not.

PN1459

THE DEPUTY PRESIDENT: All right.

PN1460

MR MILNE: So I don't think that that would have the effect of doing it. And I have to say to you, your Honour, and it - I don't mean this to sound in any way, shape or form - if that order was issued in that form I suspect that we would probably have to look at our options under section 45. Because, it does not - it does not fix the problem. It just creates another step in that problem.

PN1461

THE DEPUTY PRESIDENT: Yes.

PN1462

MR MILNE: And in fact - - -

PN1463

THE DEPUTY PRESIDENT: Well - - -

PN1464

MR MILNE: It is changing the whole intent of what the original certified agreement was.

PN1465

THE DEPUTY PRESIDENT: Do you have any other submission to put, Mr Milne, or is - or have you finished?

PN1466

MR MILNE: I am - - -

PN1467

THE DEPUTY PRESIDENT: I have heard all of your submissions put today.

PN1468

MR MILNE: Yes.

PN1469

THE DEPUTY PRESIDENT: Do you have anything additional to put?

PN1470

MR MILNE: Not anything in addition to what we have put on the written submissions that I have put to you. I was just speaking to those written submissions.

PN1471

THE DEPUTY PRESIDENT: Yes. No, that is fine.

PN1472

MR MILNE: But they are our submissions.

PN1473

THE DEPUTY PRESIDENT: Yes.

PN1474

MR MILNE: And we believe they are appropriate. So - - -

PN1475

THE DEPUTY PRESIDENT: Is there anything additional, or is that it?

PN1476

MR MILNE: Well, no. I think that is it, your Honour.

PN1477

THE DEPUTY PRESIDENT: All right, then. Before you sit down, if I could take you to your written submissions - - -

PN1478

MR MILNE: Yes.

PN1479

THE DEPUTY PRESIDENT: - - - paragraph R of paragraph 11. You suggest a clause.

PN1480

MR MILNE: Yes.

PN1481

THE DEPUTY PRESIDENT: Now, you haven't taken me through that clause to explain in plain English each sub-set of that. Could you perhaps do so?

PN1482

MR MILNE: Certainly.

PN1483

THE DEPUTY PRESIDENT: Starting with the first section:

PN1484

The parties agree that the scope and application of work covered by this agreement does not cover any work covered by other MECCA award.

PN1485

MR MILNE: Yes. And that is precisely - - -

PN1486

THE DEPUTY PRESIDENT: In a sentence, what are you attempting to achieve with that?

PN1487

MR MILNE: What I am attempting to achieve there, your Honour, is that the original draft order that - or the original order that you were proposing, in general terms - - -

PN1488

THE DEPUTY PRESIDENT: Yes.

PN1489

MR MILNE: - - - was removed - was removing part of clause 3.2 in the original agreement.

PN1490

THE DEPUTY PRESIDENT: Yes.

PN1491

MR MILNE: We are saying there that - in fact, in R, our preferred position would be that you remove all of clause 38.2. Which would have the effect of then not determining it as - whilst it would be construction work - - -

PN1492

THE DEPUTY PRESIDENT: Yes.

PN1493

MR MILNE: - - - it would remove the ambiguity from that particular agreement, because it doesn't say - then we wouldn't have the two conflicting provisions within the agreement. One that says that it is minor construction work. The other one says that it is - if you recall, your Honour - - -

PN1494

THE DEPUTY PRESIDENT: Yes.

PN1495

MR MILNE: - - - it was clause 3.2 that created the difficulty because it said it doesn't cover work that is covered by the National - the Metal Engineering - I am sorry. The Construction - - -

PN1496

THE DEPUTY PRESIDENT: Well, clause 38.2 of the workshop agreement provided that, and I quote:

PN1497

The parties agree that the scope and application of work covered by this agreement does not cover any work covered by the MECCA award.

PN1498

MR MILNE: Yes.

PN1499

THE DEPUTY PRESIDENT: So that is what - - -

PN1500

MR MILNE: And that is - the first part of - - -

PN1501

THE DEPUTY PRESIDENT: So you would retain those words, would you?

PN1502

MR MILNE: No. No, your Honour. The first part of R, if I - not the ones in italics, but the first part of R - - -

PN1503

THE DEPUTY PRESIDENT: Yes.

PN1504

MR MILNE: - - - says that:

PN1505

... except in the case of an order which would clearly and simply remove the ambiguity as well as retain ...(reads)... by the simple mechanisms of removing clause 38.2 of the workshop agreement in its entirety.

PN1506

THE DEPUTY PRESIDENT: Yes.

PN1507

MR MILNE: If that was removed in its entirety there would be no confusion and no uncertainty. No ambiguity. That would be gone. Because the work - - -

PN1508

THE DEPUTY PRESIDENT: Okay. I understand.

PN1509

MR MILNE: Yes. Now - - -

PN1510

THE DEPUTY PRESIDENT: So the first option is to remove 38.2.

PN1511

MR MILNE: That is the first option, yes. Now, following that - - -

PN1512

THE DEPUTY PRESIDENT: So rather than remove clause 3.2 of the workshop agreement - - -

PN1513

MR MILNE: Yes.

PN1514

THE DEPUTY PRESIDENT: - - - you - or the reference to construction - - -

PN1515

MR MILNE: To construct minor - - -

PN1516

THE DEPUTY PRESIDENT: - - - minor construction, which is one option.

PN1517

MR MILNE: Yes.

PN1518

THE DEPUTY PRESIDENT: Which is supported by Mr Addison.

PN1519

MR MILNE: That is correct.

PN1520

THE DEPUTY PRESIDENT: You are saying remove 38.2. Fine.

PN1521

MR MILNE: In its entirety.

PN1522

THE DEPUTY PRESIDENT: Yes. I understand that. But I am talking now about the second - - -

PN1523

MR MILNE: Yes. Yes.

PN1524

THE DEPUTY PRESIDENT: - - - suggestion, which is that rather than remove it, you leave those words up to the - the comma after "National Metal and Engineering Onsite Construction Award." Do you see that? That is just the existing words of clause 38.2, is it not?

PN1525

MR MILNE: Yes, it is. No.

PN1526

THE DEPUTY PRESIDENT: Right. And then you add the words following:

PN1527

... except where that works constitutes a minor portion of, and is incidental to the principal purpose of the contract.

PN1528

MR MILNE: That is correct.

PN1529

THE DEPUTY PRESIDENT: Now, that is the first condition. What does that mean in plain English, Mr Milne?

PN1530

MR MILNE: Again, that becomes another issue, and I accept that it may create some other confusion. But it is minor work. One can't define it - - -

PN1531

THE DEPUTY PRESIDENT: Yes.

PN1532

MR MILNE: - - - and I am not trying to define it in a - well, in a money terms. Because, again, it might be a minor part of it. And that minor part may be as little as $5000 or something. Now, to put a figure of that minor nature in there, to define that work, the point about this part of the clause, the ones in italic or that part of the provision in italics, is that it - yes, it does leave it open to interpretation by the employer and the employees as to what is - - -

PN1533

THE DEPUTY PRESIDENT: Minor.

PN1534

MR MILNE: - - - minor construction work, etcetera, and what should be covered under the agreement. Now, that was the intent of the agreement in the first instance.

PN1535

THE DEPUTY PRESIDENT: Yes.

PN1536

MR MILNE: Now, had - - -

PN1537

THE DEPUTY PRESIDENT: Now - - -

PN1538

MR MILNE: Sorry.

PN1539

THE DEPUTY PRESIDENT: A financial - a financial reference rather than the term "minor" would be clearer, wouldn't it? You, yourself, have mentioned two figures. 1.8 million and 10 million.

PN1540

MR MILNE: Yes, it would. As long as the figure is of a significant - - -

PN1541

THE DEPUTY PRESIDENT: No. I understand your views - - -

PN1542

MR MILNE: Yes.

PN1543

THE DEPUTY PRESIDENT: - - - on the size of the amount.

PN1544

MR MILNE: Yes. And - - -

PN1545

THE DEPUTY PRESIDENT: I am talking here about the principle of a money amount rather than the phrase "minor".

PN1546

MR MILNE: Yes. And a money amount doesn't give us that concern in that sense, as long as it is at a level which - - -

PN1547

THE DEPUTY PRESIDENT: No, I understand.

PN1548

MR MILNE: - - - scopes the sorts of works that are there. And I think, your Honour, it would be fair to say if the figure is struck at a reasonably high level there, in accordance with any of those normally accepted principles, the employees also would understand what is - it would be very difficult for anyone, for example, to go out and say that there is a $12 million job - - -

PN1549

THE DEPUTY PRESIDENT: Yes.

PN1550

MR MILNE: And it could be seen as, you know, minor construction work. Just wouldn't happen. $12 million would be - - -

PN1551

THE DEPUTY PRESIDENT: Well, in my - yes. All right. Okay. So that is the first issue, "minor portion of".

PN1552

MR MILNE: Yes.

PN1553

THE DEPUTY PRESIDENT: The second condition you say "and is incidental to." What do you mean by that?

PN1554

MR MILNE: Well, incidental to, because there can be construction work. For example, your Honour, if - as happened at Lilydale.

PN1555

THE DEPUTY PRESIDENT: Yes.

PN1556

MR MILNE: There was the erection of a silo.

PN1557

THE DEPUTY PRESIDENT: Yes.

PN1558

MR MILNE: That is part of it. Even if - even if that was deemed to be construction work, there is also installation, as I understand it, and renovation to conveyor systems. Those sorts of things. And if my recollection serves me correctly, that was the sort of work that Ms Barnes conceded in evidence, it could have been done by the maintenance employees. Now, at page - - -

PN1559

THE DEPUTY PRESIDENT: Yes. We are talking about the phrase "incidental" here. So - - -

PN1560

MR MILNE: Yes.

PN1561

THE DEPUTY PRESIDENT: In plain English, in a sentence, what do you mean by "incidental to"?

PN1562

MR MILNE: Well, if there was construction work.

PN1563

THE DEPUTY PRESIDENT: Yes.

PN1564

MR MILNE: For example, let me put an example to your Honour. If there was - someone had to go out there and build a site - an office. An office. We will just put that - use that.

PN1565

THE DEPUTY PRESIDENT: Look, why don't we - yes. Okay. Yes.

PN1566

MR MILNE: The majority of the work was engineering work.

PN1567

THE DEPUTY PRESIDENT: Yes.

PN1568

MR MILNE: That was not construction work. Might have been maintenance work. But part of that was that there was a construction component.

PN1569

THE DEPUTY PRESIDENT: Yes.

PN1570

MR MILNE: Very small. But it is incidental to the major reasons for the project commencing.

PN1571

THE DEPUTY PRESIDENT: So you use a principle of majority, do you?

PN1572

MR MILNE: Well, I think you would have to.

PN1573

THE DEPUTY PRESIDENT: That was the phrase you used. Majority.

PN1574

MR MILNE: Yes. And I think you would have to.

PN1575

THE DEPUTY PRESIDENT: Yes.

PN1576

MR MILNE: Because I don't see any other way. And indeed, if we - and your Honour has been involved - - -

PN1577

THE DEPUTY PRESIDENT: All right.

PN1578

MR MILNE: - - - I think, in Loy Yang. And you can say that there is some building construction-type works down there, for example.

PN1579

THE DEPUTY PRESIDENT: All right.

PN1580

MR MILNE: There is no doubt about that. Doing work to the sheds and things of that nature. But the - - -

PN1581

THE DEPUTY PRESIDENT: Yes.

PN1582

MR MILNE: - - - majority of it is engineering construction work, and therefore minor construction work. But that is perhaps a bad choice of example, your Honour, because it could be - - -

PN1583

THE DEPUTY PRESIDENT: "Principal purpose." What is the principal purpose of a project? Is that, again, a majority issue, is it?

PN1584

MR MILNE: Well, the principal purpose of the project is to actually carry out, for example, shutdown work. Or it might be to - - -

PN1585

THE DEPUTY PRESIDENT: No, no. Sorry. You misunderstood. You just mentioned before "incidental", and you used the phrase "majority" in describing what you mean by that. Now here we have got a further phrase, which is "incidental to the principal purpose."

PN1586

MR MILNE: Yes, and - - -

PN1587

THE DEPUTY PRESIDENT: Are we again talking about - - -

PN1588

MR MILNE: And the principal purpose - - -

PN1589

THE DEPUTY PRESIDENT: - - - majority of the site, or what? Or the work?

PN1590

MR MILNE: Well, if you take Lilydale, for example.

PN1591

THE DEPUTY PRESIDENT: Yes.

PN1592

MR MILNE: In our submissions, if you recall, in the evidence that was given it was modification to existing plant and equipment.

PN1593

THE DEPUTY PRESIDENT: Yes.

PN1594

MR MILNE: Now, there might have been a minor component of construction work which was incidental to the purpose, the principal reason, or the principal purpose of the project.

PN1595

THE DEPUTY PRESIDENT: Which was?

PN1596

MR MILNE: Which was to make the modifications to the plant and equipment.

PN1597

THE DEPUTY PRESIDENT: All right. It seems to be, as far as I can tell, to be related to this majority issue again.

PN1598

MR MILNE: Yes. In some respects I could agree with you there, your Honour. But that would be the ultimate effect. But what we have done there is said it has to be a majority, and it must be also incidental to the principal purposes of the project.

PN1599

THE DEPUTY PRESIDENT: Yes. All right. Now, the final condition you put is:

PN1600

... where that work is carried out at a site other than a site established for the specific purposes of construction.

PN1601

MR MILNE: Yes, and that - - -

PN1602

THE DEPUTY PRESIDENT: Now, in plain English, what do you mean by that?

PN1603

MR MILNE: Again, if this - if we are talking about Lilydale - - -

PN1604

THE DEPUTY PRESIDENT: Yes.

PN1605

MR MILNE: - - - that was not established as a construction site, in our submissions. That was established specifically, and this should give the AMWU some comfort, that we are putting different steps in it that would mean that there are - to restrict the sort of work that would fall within that agreement. But that was not specifically set up as a construction site. Now, in the construction site is - I suppose that again comes down to what your knowledge of the construction industry is. But a construction site is a construction site. It is not a modification, and alteration site.

PN1606

THE DEPUTY PRESIDENT: Are you - what? Are you going to take me through the Omega Towers decision or something, Mr Milne?

PN1607

MR MILNE: Well, I could do that if you want to.

PN1608

THE DEPUTY PRESIDENT: No. But - - -

PN1609

MR MILNE: I don't have it here, but yes. But that is - - -

PN1610

THE DEPUTY PRESIDENT: I ask you that question deliberately.

PN1611

MR MILNE: Well, that was a - - -

PN1612

THE DEPUTY PRESIDENT: You have given me this clause, and it seems to me that on its face it is - that clause is susceptible to possibly as many arguments of interpretation as the existing clauses in the agreement.

PN1613

MR MILNE: It is possible that is the case, too. But I would say to you that it is not. It is possible, depending on people interpreted it, or - that is, the employees on the ground.

PN1614

THE DEPUTY PRESIDENT: Yes.

PN1615

MR MILNE: The Omega Towers decision was one that defined what was a building, and what was a structure, basically, for CFMEU, or BWIU I think it was in those days, and AWU. It might have been the BLF. Yes.

PN1616

THE DEPUTY PRESIDENT: Yes.

PN1617

MR MILNE: So it does have - somewhat different. We are talking here, your Honour, we are talking here about all the work that Simon Engineering carries out - is carried out under one of the Metal and Engineering awards.

PN1618

THE DEPUTY PRESIDENT: Yes.

PN1619

MR MILNE: Not the building awards. So that Omega Towers and the BLF involvement has really no relevance to this one.

PN1620

THE DEPUTY PRESIDENT: Yes.

PN1621

MR MILNE: I think we would all concede that this is Metal Engineering and covered by - - -

PN1622

THE DEPUTY PRESIDENT: yes.

PN1623

MR MILNE: - - - the Metal Workers, or perhaps the AWU in some respects.

PN1624

THE DEPUTY PRESIDENT: I - quite frankly, Mr Milne, that clause you have proposed in paragraph R seems to me to be susceptible to a wide range of interpretations. I put that to you quite frankly.

PN1625

MR MILNE: Yes. And you have a right to - - -

PN1626

THE DEPUTY PRESIDENT: I am not sure that it solves the problem.

PN1627

MR MILNE: It - perhaps it won't. Perhaps it won't. And certainly, that is why it is there as a secondary position. Our initial position is that 38.2 should be removed.

PN1628

THE DEPUTY PRESIDENT: I understand that. And Mr Addison's position is that clause what? 3.2 should be removed.

PN1629

MR MILNE: Yes. And that is the difference.

PN1630

THE DEPUTY PRESIDENT: And I haven't rejected that out of hand at the moment.

PN1631

MR MILNE: No. I understand that, your Honour. Certainly.

PN1632

THE DEPUTY PRESIDENT: I have given some consideration to it.

PN1633

MR MILNE: Yes. And then our third position - - -

PN1634

THE DEPUTY PRESIDENT: It is a live option, in other words, Mr Milne.

PN1635

MR MILNE: Yes. Yes, I understand what you are saying, your Honour, and I am understanding you are exploring all of those options. And we have put at least three options in there that we think do actually form - that do actually allow the ambiguity or uncertainty to be removed. And the third one is contained in S of that.

PN1636

THE DEPUTY PRESIDENT: Yes.

PN1637

MR MILNE: Which is the one that refers to the - - -

PN1638

THE DEPUTY PRESIDENT: We have already heard that.

PN1639

MR MILNE: Yes. Yes.

PN1640

THE DEPUTY PRESIDENT: And, just to summarise, your paragraph S would be a clause based on clause 3.1 of AG809512, the Simon Engineering Altona Area Certified Agreement.

PN1641

MR MILNE: Yes.

PN1642

THE DEPUTY PRESIDENT: And, of course, you have also referred to the VBIA.

PN1643

MR MILNE: Yes, but I have already made submissions on that, your Honour - - -

PN1644

THE DEPUTY PRESIDENT: You have.

PN1645

MR MILNE: - - - to you, about how it was indicative rather than definitive.

PN1646

THE DEPUTY PRESIDENT: Yes, yes. You weren't adopting the number.

PN1647

MR MILNE: Yes.

PN1648

THE DEPUTY PRESIDENT: You were using it as an example of how a number could be used.

PN1649

MR MILNE: Yes. That is precisely right, your Honour. Your Honour, I think it is important also if - whilst we - and I have made mention of it.

PN1650

THE DEPUTY PRESIDENT: Yes.

PN1651

MR MILNE: I think. But I think I perhaps need to draw it to your attention. That this Simon Engineering agreement, the one that pertains to Altona, is also the pattern agreement that is - the Metalworkers Pattern Agreement. So there is out there, in the big wide world, there is a $10 million threshold for this sort of work, in the Altona area.

PN1652

THE DEPUTY PRESIDENT: Are you putting the submission that the $10 million figure is some sort of standard AMWU figure, are you?

PN1653

MR MILNE: Well, it is certainly as I understand it, and I checked with Mr Glenn this morning. He was the one that ended up dealing with this. And said yes, there are other people that do have that $10 million limit on it. It is the pattern agreement, and - - -

PN1654

THE DEPUTY PRESIDENT: Well, there may be some, but that is a different matter to say that it is the standard of pattern figure.

PN1655

MR MILNE: Yes. And I accept - well, perhaps I will be a bit more clear in my wording of it.

PN1656

THE DEPUTY PRESIDENT: Yes. All right.

PN1657

MR MILNE: The pattern agreement that the Metalworkers have put out and have had signed by a number of people - - -

PN1658

THE DEPUTY PRESIDENT: Yes.

PN1659

MR MILNE: - - - would contain a $10 million level, in the Altona Area Agreement. Those people who have signed that agreement would also be in exactly the same boat as Simon Engineering, and conducting works elsewhere as well. So there is an acceptance, in my view, that in engineering construction type work, the level that determines it at being major construction work has been set at $10 million.

PN1660

THE DEPUTY PRESIDENT: Yes. It is pity some of this wasn't explored in evidence, Mr Milne.

PN1661

MR MILNE: Yes, I know, your Honour.

PN1662

THE DEPUTY PRESIDENT: It actually might have assisted these proceedings.

PN1663

MR MILNE: Yes. And I wasn't aware of that.

PN1664

THE DEPUTY PRESIDENT: And made them more expeditious.

PN1665

MR MILNE: Yes. I know. And I wasn't aware of the Altona agreement quite frankly, your Honour, until after those proceedings. Of its detail.

PN1666

THE DEPUTY PRESIDENT: Well, all right. You are not putting the submission, are you, Mr Milne, that the existing clauses lack ambiguity or uncertainty, are you? In the workshop and construction agreement?

PN1667

MR MILNE: What I am - - -

PN1668

THE DEPUTY PRESIDENT: Are you putting that submission, or not?

PN1669

MR MILNE: Yes, I am, your Honour. Yes, I am. Precisely. Because the employees who struck that agreement, the employees who struck that agreement knew exactly what it meant, and have been working under it for years.

PN1670

THE DEPUTY PRESIDENT: Yes. I find that submission very hard to follow, Mr Milne.

PN1671

MR MILNE: And I am sure you would, your Honour. But the - because, we wouldn't be here otherwise, other than someone felt that there was some uncertainty in it. But the pattern and the practice has been that these employees have been covered by that same provision, that same provision, and have worked with it, not only in this agreement but in previous agreements, and have - - -

PN1672

THE DEPUTY PRESIDENT: Yes.

PN1673

MR MILNE: - - - what I could perhaps call, from their experience, an experienced understanding of what is construction - minor construction work, and what is not. And what should be covered by agreements other than the workshop agreement.

PN1674

THE DEPUTY PRESIDENT: Well - - -

PN1675

MR MILNE: And which they are. They - - -

PN1676

THE DEPUTY PRESIDENT: All right. Is there anything else you wish to put in relation to your written submission, Mr Milne? Or is that - - -

PN1677

MR MILNE: No, I think that is all, your Honour.

PN1678

THE DEPUTY PRESIDENT: Have you completed your submission?

PN1679

MR MILNE: Yes, your Honour.

PN1680

THE DEPUTY PRESIDENT: Mr Addison?

PN1681

MR ADDISON: Yes. Thanks, your Honour. Your Honour, I think the full submission that has just been given by Mr Milne simply reinforces the proposition that I put in my supplementary submissions. That is, that the term "minor construction" is, in our respectful submission, a meaningless term. Further on, I say that it is therefore the submission of the AMWU that the whole concept of minor construction is nebulous. The matter can only be resolved by substantial discussion by the parties on the meaning and effect of the term.

PN1682

In terms of the propositions that have been put by Mr Milne, it reinforces that whole view, that it is nebulous. It is a very difficult concept to get a hold of. Mr Milne has indicated, I think we said to you, your Honour, that you have had some experience at Loy Yang. If I can give you a bit of a scenario centred around Loy Yang. 18 months ago there was a major piece of maintenance work at Loy Yang. That major piece of maintenance work, and I concede it quite clearly maintenance work, was worth $26 million and occurred over an eight week period.

PN1683

If one was to adopt Mr Milne's proposition of "majority", then a $20 million construction associated with that maintenance work would not fall within the scope of MECCA. Now, in my submission, that is an absolute nonsense. An absolute nonsense. I presume the submissions of Mr Milne are prospective submissions, that deal with the future. Your Honour, in our submission the matters which were agitated in front of the Commission, with regard to Lilydale, have in essence been settled. You have made a decision. The decision has been printed. And you deal with the issue in paragraph 45 through 48 of that decision, where you indicate that you would vary the maintenance and the construction award - agreements to withdraw the ambiguity, or to remove the ambiguity and uncertainty.

PN1684

We support that proposition and we say at the end of our written submissions that we support that proposition to resolve the particular issue in dispute. And we say that that matter has been aired. It has been dealt with. There has been an evidentiary base for the decision which was - which came out of that. And that matter ought to be put to one side, and the Commission ought to issue its order with regard to that. If Mr Milne then wishes to challenge that, pursuant to section 45, well, that is his right.

PN1685

And if he seeks the leave of the Full Bench to appeal that decision, that is his right. And we will respond appropriately to that application. But we are entitled, we say, to enjoy the fruits of that victory, if you like, or the fruits of that proceeding. We each, in an adversarial sense, put propositions. As was put, without wanting to repeat all of the submissions in evidence, as was put the Commission could be convinced it was construction work. Now I think the submission of Mr Milne to remove 38.2 once again is a nonsense submission. 38.2 of the Simon Carves agreement has quite clear work to do. And that quite clear work is to clarify the intent of clause 3.2.1*2. *2 talks about minor construction within the confines of an agreement which is underpinned by the Metal and Engineering and Associated Industries Award. 38.2s work is to say should work not covered by the Metal Engineering and Associated Industries Award be undertaken, then MECCA shall apply.

PN1686

And that is quite clear work. And the work itself determines the award coverage, as we went through on the last occasion, your Honour. To remove 38.2 would not resolve any ambiguities. In fact, it may even compound them. Because there could be then further arguments that the workshop agreement does not apply at all, because Simon Engineering is a member of the AIG, and is, prima facie, bound not only by the Metal Engineering and Associated Industries Award, but also by MECCA. And the work itself will determine the award basis. So the removal of 38.2 we say doesn't assist at all.

PN1687

THE DEPUTY PRESIDENT: All right.

PN1688

MR ADDISON: With regard to the issues that have been put, once again, the VBIA has been put. We say that that has no impact on the Lilydale job, on the basis it was not put as part of the issues agitated, and shouldn't enter the Commission's view of the matter on that basis. Unless Mr Milne does exercise those options under section 45, which he has a perfect right to do, and can raise as part of his application for leave to appeal that issue of VBIA. It was mentioned in closing submissions. We say it was too late, that the evidence was closed, and ought not be taken into consideration.

PN1689

However, Mr Milne could raise that as part of an application under section 45. And we would respond appropriately with regard to that. With regard to the Altona area agreement, once again it was not a matter before the Commission.

PN1690

THE DEPUTY PRESIDENT: Yes.

PN1691

MR ADDISON: So it is a prospective issue, one presumes.

[11.20am]

PN1692

THE DEPUTY PRESIDENT: Mr Addison, could I ask you, if you were to strike a monetary amount would it be - we have got a range now or if - I think I have mentioned under $100,000. Mr Milne has in his submissions a figure of 10 million dollars. The VBIA, I suppose, has been referred to.

PN1693

MR ADDISON: Yes.

PN1694

THE DEPUTY PRESIDENT: While Mr Milne doesn't support it it raises the issue of 1.8 million dollars in terms of building permit value. That is an issue before the Commission not supported by Mr Milne, nevertheless an issue. Where would you strike the amount? Would it be the 100,000 or the 1.8?

PN1695

MR ADDISON: I wouldn't.

PN1696

THE DEPUTY PRESIDENT: You wouldn't?

PN1697

MR ADDISON: Your Honour, I wouldn't.

PN1698

THE DEPUTY PRESIDENT: It does have - - -

PN1699

MR ADDISON: And I say that - - -

PN1700

THE DEPUTY PRESIDENT: Yes.

PN1701

MR ADDISON: I say that on a realistic basis.

PN1702

THE DEPUTY PRESIDENT: Yes.

PN1703

MR ADDISON: The Altona Area Agreement - I have now been working with the Altona Area Agreement for about 18 years. The Altona Area Agreement is at least 25 years old and the monetary value in the Altona Area Agreement was struck bearing in mind the work that was carried out in the Altona area.

PN1704

THE DEPUTY PRESIDENT: Right.

PN1705

MR ADDISON: You had PRA, you had Hoescht. You had BESF. A whole range of oil and chemical companies carrying out huge works and construction costs - as I think Mr Milne conceded in his submissions - - -

PN1706

THE DEPUTY PRESIDENT: Yes.

PN1707

MR ADDISON: - - - are particularly expensive.\

PN1708

THE DEPUTY PRESIDENT: Yes.

PN1709

MR ADDISON: So a 10 million dollar job in the complex - in the Altona complex wasn't necessarily a big job. It might have been a 10 or 12 week job; 10 million dollars. Not a lot of dollars. And in the same sense the Loy Yang job that I referred to earlier, an eight week job, 26 million dollars. In the context of the power industry, particularly plants like Loy Yang, to put a dollar value on it may well increase the ambiguity. Does it mean if you say 10 million dollars. That every time there is a major outage at Yallourn W power station, which Simon Engineering is involved in from time to time, does it mean that that is now covered by MECCA.

PN1710

THE DEPUTY PRESIDENT: Yes.

PN1711

MR ADDISON: I don't think so.

PN1712

MR ADDISON: - - - because it is the work itself that determines not the value of the work. Now, I understand where Mr Milne is coming from in a sense of incidental and peripheral. I understand that. I can get to grips with that. But that is an issue that needs maybe to be dealt with by some examples being written into the agreement. And there certainly have been examples or instances where agreements have had examples written into them.

PN1713

THE DEPUTY PRESIDENT: Yes.

PN1714

MR ADDISON: Scenario A, there is a maintenance job. It is clearly a maintenance job, it is clearly covered by the Metal Engineering and Associated Industries Award. There are some base plates to be manufactured and then installed. That is not construction, that is maintenance, that is part of the maintenance work. Now, that sort of example approach, we think, is a much more practical way to go because you are then not locked into a figure where automatically if it is - if we take 1.8 million - or does that mean 1.79 million is not construction but 1.8 one million is construction.

PN1715

It becomes really, really nonsensical. It is the actual work itself that is important.

PN1716

THE DEPUTY PRESIDENT: If this scenario approach were adopted, you say, it has been used in the past?

PN1717

MR ADDISON: It has. I can't actually - - -

PN1718

THE DEPUTY PRESIDENT: No.

PN1719

MR ADDISON: - - - point to the actual agreement but I have certainly been involved in it myself.

PN1720

THE DEPUTY PRESIDENT: Yes, of course. And that is something that could be prepared by you in consultation with Simon Engineering, is it not?

PN1721

MR ADDISON: Absolutely and we welcome the opportunity of sitting down with Simon Engineering - - -

PN1722

THE DEPUTY PRESIDENT: Yes.

PN1723

MR ADDISON: - - - and going through the issues and trying to get to grips with it. We would seek to involve - and Simon Engineering is bigger than it was a few months ago. Mr Milne has indicated I had a meeting with them at Laverton a couple of weeks ago with regard to other issues and they have got construction down in the Valley and they have got a whole range of stuff going on.

PN1724

THE DEPUTY PRESIDENT: Yes.

PN1725

MR ADDISON: So the scenario approach may well be better for both parties, in my submission.

PN1726

THE DEPUTY PRESIDENT: All right. If necessary, you could provide those scenarios on your own, could you not?

PN1727

MR ADDISON: I would be more than happy to do that. More than happy to do that if that was the approach taken. But, your Honour, in all good conscience I think the Commission ought to issue the order as foreshadowed. Mr Milne has his rights and within 21 days if he doesn't like that he can deal with it.

PN1728

THE DEPUTY PRESIDENT: Yes.

PN1729

MR ADDISON: And we can respond appropriately and the Commission ought direct - well, maybe I am being a bit harsh there because at the end of the day it is up to Simon Engineering whether in fact they want to resolve this problem between now and March 2003. We put the invite on the table. We are happy to sit down. We are happy to try and work the thing through. I am not sure that the Commission as constituted actually - no, you would. 111(1)(t) you would have the power to direct, your Honour.

PN1730

So, we would comply with any direction. We would comply with any recommendation to sit down and have discussions with the company to try and de-nebulise, if you like, the whole concept of minor construction.

PN1731

THE DEPUTY PRESIDENT: See, one option would be for a conference to be set down at which the scenarios you mentioned could be thoroughly explored.

PN1732

MR ADDISON: We are happy to comply with that too, your Honour. Have no difficulties. It will obviously depend on people's diaries.

PN1733

THE DEPUTY PRESIDENT: No, of course - - -

PN1734

MR ADDISON: But more than happy - - -

PN1735

THE DEPUTY PRESIDENT: - - - and that would be arranged. Yes.

PN1736

MR ADDISON: Because I would seek to have a couple of officials involved. I would seek to have Mr Warren involved from La Trobe Valley where Simon is a major player and I would probably seek to have Mr Diehm involved from the Melbourne end because he now has responsible - quite a substantial Simon Engineering workshop in the Laverton area - - -

PN1737

THE DEPUTY PRESIDENT: Yes.

PN1738

MR ADDISON: - - - where Simon have done a whole range of various contracting work.

PN1739

THE DEPUTY PRESIDENT: I would prefer this issue to be resolved to the satisfaction of all sides. The prima facie suggestion you have made seems to have a lot of merit in that respect.

PN1740

MR ADDISON: As I say we are quite willing to do that and we seek that the Commission issue the draft order - - -

PN1741

THE DEPUTY PRESIDENT: Yes, I understand.

PN1742

MR ADDISON: - - - as proposed.

PN1743

THE DEPUTY PRESIDENT: All right.

PN1744

MR ADDISON: And I am just saying that I want to go to paragraph 49 of your decision because I think it is important. I think it is extremely important where you emphasise that the decision is on the particular evidence and the submissions in this particular instance. It doesn't go beyond that.

PN1745

THE DEPUTY PRESIDENT: Yes.

PN1746

MR ADDISON: So we remove the uncertain - ambiguity with regard to this particular job.

PN1747

THE DEPUTY PRESIDENT: Having regard to the evidence, yes.

PN1748

MR ADDISON: That is put aside, that is dealt with. If Mr Milne wants to repeal it, that is fine, he can, but that deals with that issue. And then we have some proper discussions with regard to the future. That is my submissions, if the Commission pleases.

PN1749

THE DEPUTY PRESIDENT: Well, thank you very much for those submissions. Just bear with me for a minute before I call on you again, Mr Milne. Oh, yes, sorry, Mr Addison, I wanted to ask you about paragraph (r). Your suggestion of Mr Milne - the alternative suggestion, the amendment to clause 38.2. I think you have mentioned the issue of minor portion of and possible scenarios to - is there - are there any other phrases in there you wish to refer to?

PN1750

MR ADDISON: Your Honour, I - - -

PN1751

THE DEPUTY PRESIDENT: Minor portion of the principle purpose he says - he refers to.

PN1752

MR ADDISON: Well, I think I have addressed 38.2 and 38.2 very clearly has work to do within the agreement, in my submission.

PN1753

THE DEPUTY PRESIDENT: Yes.

PN1754

MR ADDISON: With regard to the proposed clause I think there are at least five ambiguities in there.

PN1755

THE DEPUTY PRESIDENT: I think so.

PN1756

MR ADDISON: At least.

PN1757

THE DEPUTY PRESIDENT: If you counted them.

PN1758

MR ADDISON: If the Commission pleases.

PN1759

THE DEPUTY PRESIDENT: Yes. Mr Milne?

PN1760

MR MILNE: Thank you, your Honour. Mr Addison has put to you that it is a meaningless term.

PN1761

THE DEPUTY PRESIDENT: Sorry, what is?

PN1762

MR MILNE: That being minor construction work.

PN1763

THE DEPUTY PRESIDENT: Yes.

PN1764

MR MILNE: Well, it is not a meaningless term to the employees. They do have an understanding. Now, I won't go through that too much because I have already put that to your Honour. But we would refute that assertion that it is meaningless to the employees. The employees know what is minor construction work and what is not minor construction work. Now, I think one of the indicators - is what the intent was here - and Mr Addison has referred to clause 3.2. There are two aspects about 3.2 that I think needs to be taken into account very, very carefully.

PN1765

And one is that this whole exercise is over minor construction work. It is not over modification and maintenance work. It is not over any of the shutdowns or turnarounds. The Loy Yang - I think the figure that Mr Addison spoke about - maintenance - and in fact I think agreed with us. Agreed with our submissions that it was maintenance work and therefore was not covered by MECCA. So the minor construction work is the only component we are talking about here not any dollar figure that is attached to a maintenance contract, for example. That is not what we are talking about.

PN1766

We are only talking about minor construction being covered because maintenance work is actually covered by the Metal Industry Award or Metal Engineering and Associated Industries Award rather than MECCA which is the award that underpins this work. So it only these two words, minor construction work. Now, an important part about 3.2 and that is in dot point 2 is the last few words in it, "Except where site agreements are in place." So, minor construction work - if there is no site agreement in place then minor construction work does not fall or is - - -

PN1767

THE DEPUTY PRESIDENT: Sorry, Mr Milne, you are responding, are you not to - - -

PN1768

MR MILNE: Yes, I am.

PN1769

THE DEPUTY PRESIDENT: - - - submissions of Mr Addison. I am just clarifying.

PN1770

MR MILNE: Yes, I am.

PN1771

THE DEPUTY PRESIDENT: All right.

PN1772

MR MILNE: I am responding, and in particular about the VBIA and he said it has no relevance. Now, we know it doesn't apply but it has relevance because this 3.2 talks about, "Except where site agreements are in place." Now, site agreements are struck by the VBIA and in fact in a lot of cases under an engineering agreement that is struck on the same basis. However, it does have that relevance. So the intent of the drafting people on this document under 3.2 is that if there is a site agreement in place it falls under MECCA not under this agreement and/or the National Metal - sorry, the Metal Engineering and Associated Industries Award.

PN1773

That is why it specifically says where site agreements are in place. That is where the definition - and is what is determined, I think, in the mind of the people who drafted this document and that was the employees. So they do have an understanding of what is minor and what is major construction work.

PN1774

THE DEPUTY PRESIDENT: I am sure the employer had a role as well, Mr Milne.

PN1775

MR MILNE: Yes, he did.

PN1776

THE DEPUTY PRESIDENT: Not just employees.

PN1777

MR MILNE: No, they did. They sat down and dealt with it together and have been working under the same provision for years. And in fact the evidence before your Honour is that the metal workers organiser did not have any role in drafting this document. Came in at the last particular - and made a couple of minor changes to it.

PN1778

MR ADDISON: I don't know whether that is true.

PN1779

MR MILNE: Well that - - -

PN1780

THE DEPUTY PRESIDENT: Mr Milne?

PN1781

MR MILNE: Yes.

PN1782

THE DEPUTY PRESIDENT: Mr Milne - - -

PN1783

MR MILNE: That was in the evidence.

PN1784

THE DEPUTY PRESIDENT: You made the point that employees had a role in this. Are you simply making the point that the employer had as well?

PN1785

MR MILNE: Yes.

PN1786

THE DEPUTY PRESIDENT: That was all?

PN1787

MR MILNE: Well - - -

PN1788

THE DEPUTY PRESIDENT: Yes.

PN1789

MR MILNE: There is an agreement that has been reached so the employer certainly did have a role in it.

PN1790

THE DEPUTY PRESIDENT: Sorry to interrupt you, please proceed, don't be diverted by - too much from your submissions.

PN1791

MR MILNE: Yes, and just to respond to Mr Addison. Well, firstly, let me just summarise that point of view. We shouldn't confuse this issue with anything that is of maintenance, shutdown or modification work. This purely and simply relates to minor construction work. And the fact that site allowances would apply if it wasn't minor construction work. Now, by accepting what Mr Addison has put to you in his submissions, and that is that you should go ahead with that order on the basis of dealing with Lilydale. Dealing with Lilydale to remove - you may fix the problem at Lilydale but it doesn't fix the problem elsewhere.

PN1792

And in fact it changes the whole intent of the agreement. So, to vary an agreement that applies across the board to the Simon Engineering employees at Morwell and Hastings out of their plants there for a job that was of minor nature, basically - a minor job in the scheme of things with a small number of employees - to vary an agreement that applies to a large number of employees, to take into account that factor, would be incorrect, in our view. It would not solve the problem. And it would be, basically, as I said earlier, your Honour, I think putting the cart before the horse.

PN1793

If we sit down with the metal workers and we don't - let me put this clearly on the record, your Honour, we don't have a problem sitting down with the metal workers and trying to resolve that. But to put an agreement - sorry, to issue an order prior to the outcome of those discussions would simply mean that confusion would reign. Why would it be different then for Lilydale than what it may be prospectively. And why would it be different from what the employees understand it to be, restrospectively, in fact.

PN1794

THE DEPUTY PRESIDENT: You say what they understand it to be; that is your assertion?

PN1795

MR MILNE: Well, that is - yes, well, your Honour, I think it is more than that. I think that Mr Van Dyke gave some evidence on that too, as well, relating to that they had been spoken to before the went to the job and explained what it was and they all took the transfer out to that particular place at the time. So, I think it is quite clear in the evidence that that was the case. So, your Honour, that was just my response to what Mr Addison has put to you this morning, but other than that, I don't think there is anything further to say.

PN1796

THE DEPUTY PRESIDENT: So that is all you have got to say about the various proposals put by Mr Addison? That is it?

PN1797

MR MILNE: Well, the basic proposal that has been put - - -

PN1798

THE DEPUTY PRESIDENT: Sorry, that was a yes or no.

PN1799

MR MILNE: Yes.

PN1800

THE DEPUTY PRESIDENT: If the answer is no you are at liberty to put another submission.

PN1801

MR MILNE: Well, there were two proposals that were put by - - -

PN1802

THE DEPUTY PRESIDENT: Yes, so - - -

PN1803

MR MILNE: Well, there was one which was made out of two points. One, being that the draft order should be issued - - -

PN1804

THE DEPUTY PRESIDENT: Mr Milne, I just asked you a question which required a yes or no answer. Do you have anything else to put on the submissions and alternatives put by Mr Addison? Yes or no? Do you have anything else to put?

PN1805

MR MILNE: Your Honour, yes, I do.

PN1806

THE DEPUTY PRESIDENT: Right, thank you, now, please proceed.

PN1807

MR MILNE: Well, I was attempting to, with due respect, your Honour. And there were two points to Mr Addison's submissions when he summed up. And one being that the order should be issued. The second point was that we should sit down and have some discussions.

PN1808

THE DEPUTY PRESIDENT: Yes.

PN1809

MR MILNE: And I intended, with due respect, your Honour, before I was stopped, to make a point on both of those particular issues. Now, the first issue is that, yes, we oppose the order because we don't think it is practical in the way Mr Addison has put to you. We object to that course of action - that option.

PN1810

THE DEPUTY PRESIDENT: Yes.

PN1811

MR MILNE: The second point, that being whether we can sit down and deal with the issue and try and work out something on whether or not it comes down to scenarios or whatever; we are happy to do that because we don't see that anyone can win in this particular thing in any way shape or form. Someone will be disadvantaged at some stage or another. So that is my answer to your question, your Honour. I have - - -

PN1812

THE DEPUTY PRESIDENT: I think you have already put that submission.

PN1813

MR MILNE: Yes.

PN1814

THE DEPUTY PRESIDENT: It is not a new submission, is it?

PN1815

MR MILNE: No, it is not a new one.

PN1816

THE DEPUTY PRESIDENT: No.

PN1817

MR MILNE: But I was just reinforcing that.

PN1818

THE DEPUTY PRESIDENT: Well, there was no need, I had heard you. I was simply asking - - -

PN1819

MR MILNE: Yes, your Honour.

PN1820

THE DEPUTY PRESIDENT: - - - you if you had any additional submissions to put. My impression is that you have already put that particular submission. I could be wrong but I think that is the case. All right, thank you very much. Is there anything else or - no. On that basis, this Commission will stand adjourned.

ADJOURNED INDEFINITELY [11.39am]