C2002/2793, Transcript of Proceedings [2002] AIRCTrans 2878 (26 July 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 7, ANZ House 13 Grenfell St ADELAIDE SA 5000
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT ACTON

C2002/2793

ACI GLASS PACKAGING

and

THE AUTOMOTIVE FOOD METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION,
FOOD AND CONFECTIONERY DIVISION, SOUTH
AUSTRALIA REGION AND THE COMMUNICATIONS,
ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION,
POSTAL, PLUMBING AND ALLIED SERVICES UNION
OF AUSTRALIA

Notification pursuant to section 99 of the Act
of a dispute re implementation of a predictive
maintenance program in the company's Adelaide Plant

ADELAIDE

8.42 AM, FRIDAY, 12 JULY 2002

PN1

THE SENIOR DEPUTY PRESIDENT: May I have the appearances, please?

PN2

MR P.A. NOLAN: I appear on behalf of the Australian Industry Group and on behalf of ACI. I appear with Mr Gilhome and Mr Vine.

PN3

MR J. GRESTY: I appear on behalf of Australian Manufacturing Workers' Union. With me this morning are our delegates, Mr Bob Spane and Mr Steve Bowden, if the Commission pleases.

PN4

MR D. SWEET: I appear for the CEPU in this matter. With me is Mr Bob Johnston.

PN5

THE SENIOR DEPUTY PRESIDENT: Mr Nolan.

PN6

MR NOLAN: Thank you, your Honour. There is some history to this issue and I think for the Commission's benefit we might just trace some of the history leading up to us being before you today. For some time now the company has been nationally, across its plants, looking at ways and means of reducing downtime to try and measure up to world's best practice and quite obviously, your Honour, this is not a new issue. It is something that a lot of companies are trying to achieve. As far as back as 2000 the company in Adelaide endeavoured to implement competency standards as part of - as a an extended maintenance program or extended preventative maintenance program. Initially, the AMWU proceeded, the CPU chose to stand out of that implementation process at a time a bit later in 2000 both unions in fact refused to participate, arguing that - and it was one argument that was used, as a I understand it, that the Australian Submarine Corporation who is another organisation over here, had used competency standards to sack people and that was the argument as to why they weren't going to participate any further.

PN7

ACI didn't press the issue at that stage, your Honour because they have plants in other States, in Queensland, Victoria, New South Wales and Western Australia and they were able to roll out the competency standards model in those States and they concentrated on the plants in those States at that stage. So that sort of goes back to about 2000. In February this year, which brings it up to more recent times, management addressed the employees in Adelaide about the necessity to proceed with the implementation of - the terminology now is predictive maintenance program - to reduce the downtime to match best practice standards.

PN8

That presentation to the employees and Mr Gilhome was involved with that - I might hand up a copy of the overheads, the unions have a copy of it. I don't intend your Honour to take you through that slide by slide, however, I think it explains what the predictive maintenance system was about, what the objectives were of it, the fact that there is a significant plant ownership, if you like of this process when it is implemented and the objective that was put forward by the company was to achieve less than 1 per cent downtime, or current downtime by 50 per cent over 18 months. They were the objectives that were outlined in the presentation in February this year.

PN9

THE SENIOR DEPUTY PRESIDENT: I will mark this document of predictive Maintenance Overheads.

EXHIBIT #N1 DOCUMENT OF PREDICTIVE MAINTENANCE OVERHEADS DATED 28/02/2002

PN10

MR NOLAN: Thank you. At that presentation, your Honour, the employees asked if an alternative proposal to the competency standards implementation, or the competency standards model to achieve the same outcome was put forward by the employees would that be acceptable to the company. Clearly, there is still a reticence, certainly by the CEPU about the competency standards. The company advised that it didn't think that that was achievable, that there was another model that could be developed that would achieve the same outcomes but the company gave the employees until 31 May this year to come up with an alternative proposal for consideration.

PN11

There was a meeting on 1 May, your Honour, between management representatives and electrical union delegate to discuss this issue and a four point proposal was proposed by the delegate to sell the competency standards model. The proposal included automatic reclassification of existing electricians to a C6 level under the Metal Industry Award structure, a skills audit - and the fact that skills audits and job matrices would not be used against any individual employee that the cost of electrical licences be incorporated into all purpose rate and that there be no local issues at the next DBA, in other words, no local appendix in relation to local matters.

PN12

The demands were rejected by the company but I just ask the Commission to note that the commitment to the predictive maintenance system, it would appear, could be bought, if the company conceded those additional claims, on 9 May, representatives from both unions were invited to a Steering Committee meeting but refused to attend and that was a Steering Committee meeting for the predictive maintenance system. The company offer of an alternative proposal to the competency based system by 31 May has not happened. There has been no alternative proposal put forward and we say that the time has passed for such a proposal to be put forward because they had, in effect, 3 months to do it and nothing has been forthcoming.

PN13

As a consequence of a failure to meet 31 May alternative proposal deadline the company believes it had no option but to seek to progress the matter with the assistance of the Commission and hence the notification resulting in the hearing today. Your Honour, if I can turn to the terms of the agreement itself, and I hand up a copy of the EBA. Your Honour, under the terms of the current EBA which expires on 30 June 2003, there can be no misunderstanding about the intent of the agreement in relation to productivity which you will see, continuous improvement.

PN14

If I could take you to clause 7, appearing on page 4, at the bottom of the page, your Honour, there is - I don't intend to read all of those out but I think the Commission can see that there is a clear objective about - if I take you to 7.2:

PN15

The objectives of this agreement are to develop a company that is comparable by international best practice standard of the glass container industry.

PN16

At 7.3:

PN17

The performance improvement to be based on efficiency, flexibility, quality and delivery of service.

PN18

7.4:

PN19

The development of a flexible and skilled work force in order to sustain more secure and meaningful jobs.

PN20

And if I took you across to the next page, your Honour, at 7.8:

PN21

Develop a culture which is compatible with an attitude of continuous improvement through the enterprise.

PN22

If I could then take you clause 18. At the bottom of the page which is: reclassification and career paths - very brief terminology there.

PN23

...as per industry process/rules.

PN24

And over the page, on page 11:

PN25

e.g. competency and broadbanding.

PN26

Now there is a provision there that says:

PN27

This provision only applies to mechanical trades employees.

PN28

And I draw that to the Commission's attention as well. If I could take you to clause 25, which is under the heading of: continuous improvement.

PN29

THE SENIOR DEPUTY PRESIDENT: Sorry, which clause was it again?

PN30

MR NOLAN: Sorry, clause 25, on page 14. 25.1:

PN31

Continuous improvement to be an integral part of plant behaviour.

PN32

Details applicable to the Adelaide plant are outline in appendix A which I will refer to in a moment. I take you to appendix A which appears page 19.

PN33

THE SENIOR DEPUTY PRESIDENT: I'm still turning it up.

PN34

MR NOLAN: I'm sorry.

PN35

THE SENIOR DEPUTY PRESIDENT: Yes.

PN36

MR NOLAN: 1.1 under the heading of: continuous improvement matters.

PN37

The parties to this agreement accept that the plant is required to achieve certain targets that have been set in the context of overall ACI Glass Packaging Group requirements.

PN38

And at 1.3, in part:

PN39

Furthermore it is recognised and accepted by all parties to this agreement that this cycle is a never ending process that can and will be applied to all facets of the business.

PN40

And at 1.6:

PN41

Employees will be involved in projects to investigate improvement opportunities, recommend improvements and implement changes when approved in such matters as productivity, quality, safety and equipment performance and reworking.

PN42

Now, those very issues, your Honour, were referred to as one of the outcomes of the implementation of the predictive maintenance system in the presentation that was done in February this year. At point 2 on page 22:

PN43

Specific measures to achieve productivity and efficiency at 2.1. In order that productivity and efficiency measures can be pursued there will need to be a more flexible interface between trades employees and production employees.

PN44

And in the next paragraph:

PN45

This will occur through the sharing of on call trade work between trades employees and production employees and more effectively utilising core trade skills of maintenance personnel across the plant.

PN46

And let me say, your Honour, this predictive maintenance system, quite obviously, the major focus of that is in relation to the maintenance employees.

PN47

If I take you over to page 24, at item (e), towards the top of the page.

PN48

Through the process of implementing - metal industry competency standards, the parties will:

PN49

1. identify required high level core maintenance work to be performed by trades personnel. Central to this will be the development and implementation of an effective preventative maintenance system across the plant.

PN50

And I say, where it reads: preventative maintenance, you can read: predictive maintenance. It is only a change of terminology.

PN51

At point 3:

PN52

Consistent with 1 and 2 above, identify career path opportunities and review of classifications in line with the metal industry competency standards.

PN53

Again, there is a proviso there that says:

PN54

The provisions of this subclause only apply to mechanical trades employees.

PN55

And let me say on that same page, your Honour, under the item 3: communication involvement, 3.2:

PN56

Our commitment to continuous improvement requires our people to have a total business understanding and to establish processes to deal with continuous change. These processes will ensure people are involved in changes to methods of operating and consultation that would normally be handled by managers.

PN57

Now, that consultation process has been taking place in that regard. They are the major issues I want to refer to out of the EBA itself but the purpose of taking the Commission through those provisions in the agreement clearly, the intent of the agreement was to improve a productive performance by a range of measures and in relation to maintenance employees, it was to develop improved maintenance systems which would in fact produce the required reduction in downtime if they are going to meet the best practice standards.

PN58

Now, your Honour, the employees, members of both the AMWU and the CEPU, are refusing to proceed with the company's objective to implement the predictive maintenance system which, the company has made it quite clear to all employees, nationally, is an imperative for improvement in downtime to align with best practice standards. Our submission, your Honour, is that the AMWU have no basis not to be involved in the process and as the agreement points out, the competency standards application is clearly enunciated in the agreement as the methodology to be used and there is no exclusion in relation to the FBA and AMWU members.

PN59

The CEPU are alleging they don't have to be involved because of their exclusion from the use of the MELS competency standards and I refer to those two provisos in the agreement where it says that they would only apply to mechanical trades employees. This, we would submit, your Honour, is a difficult position for the CPU to sustain as this union has been involved in the implementation of these new maintenance systems in all other ACI plants in Australia. There is correspondence that the CPU has signed off which confirms the proposed wage structures for all the plants including Adelaide which underpin the proposed skills career path for the predictive maintenance system that has been rolled out in other plants and if I could just hand up, your Honour, a copy of a batch of correspondence.

PN60

You will see that that top letter, your Honour, is signed off by both the AMWU and the CPU. There was some conjecture in that correspondence about the wage rates that would apply in the structure, but if you go 3 pages in, you will see that there is a chart there with the C level categories, down the left hand side and across the top, in small print: Penrith, Spotswood, in Victoria - Penrith in New South Wales, Brisbane, Adelaide, Perth, so there has been sign off by both unions in relation to the wage rate structures that underpin this introduction of the predictive maintenance system and I submit that for the Commission's information.

PN61

THE SENIOR DEPUTY PRESIDENT: I will mark the correspondence between the Company and the union and attached documentation, the first piece of correspondence being one from the AMWU to Mr Gilhome of ACI, dated 3 June 2002 as N2.

EXHIBIT #N2 CORRESPONDENCE BETWEEN THE COMPANY AND THE UNION AND ATTACHED DOCUMENTATION DATED 03/06/2002

PN62

MR NOLAN: There was an exchange of correspondence there about certain wage rates your Honour, but the point we wanted to make with that is that clearly, even Adelaide has been encompassed in those discussions about the wage rates structure. Your Honour, we would submit that given the CPU involvement as evidence, the company is at a loss to understanding why there is such resistance in Adelaide. The predictive maintenance system, for the Commission's information, predictive maintenance has three elements to it. One is break down maintenance, another is scheduled maintenance and then predictive maintenance which is the third part of the system really about gauging assessments of performance into the future of plant and equipment. So it is quite different to the traditional break down and schedule of maintenance. Condition monitoring and trend analysis forms the basis of the predictive element of this maintenance system.

PN63

THE SENIOR DEPUTY PRESIDENT: How does it differ from schedule, because you remember - - -

PN64

MR NOLAN: Schedule would be a normal preventative maintenance system, your Honour, which might say that this piece of equipment we know needs to be maintained at a particular point in time and a schedule is set up for that. This one projects even further out in the sense of trying to predict what the potential time of operating of the equipment might be and being able to assess the trends of that over a much longer time. It is different. The technicalities, I am sure, can be explained. As you see, I haven't implemented the system myself, your Honour.

PN65

THE SENIOR DEPUTY PRESIDENT: It is just that it occurred to me as a total lay person, that your scheduled maintenance might be based on a prediction about how the equipment is likely to perform and when it is likely to need maintenance and therefore, it was a prediction on - however.

PN66

MR NOLAN: Well, the company was of the view and the reason why I think the new wage rate structure was developed was that it would additional skills that employees would have to possess and - in the sense of this aspect of the maintenance system if the company who can probably explain that in more detail to you, your Honour. Do you want that now or?

PN67

THE SENIOR DEPUTY PRESIDENT: Will it be short?

PN68

MR GILHOME: I will endeavour it to be so, your Honour. Essentially, there's some equipment that you only fix when it breaks down because that is cost effective. There's some equipment that you can schedule. You know that when you are going to do this, you will replace the bearings because you know you have got, as you say, some predictive capability to schedule that and there's some equipment like key equipment that you actually condition monitor so the individuals involved in that maintenance and the production personnel get involved in this too, have to feed back information and have to have a trend analysis, etcetera, etcetera, so there is an ability to actually have an accountability for how that machine is operating and what best maintenance should apply not necessarily just scheduling and: we will take out all that or do all this, sort of business. That is probably - and you have to work in a slightly different way. There will be more of a team based orientation, in departments or sections where they will be accountable for trend analysis, for making recommendations, for looking into the history of how certain bits of equipment work, etcetera, etcetera, and recommending when they apply their resources accordingly.

PN69

THE SENIOR DEPUTY PRESIDENT: It is intended that predictive maintenance replace scheduled maintenance?

PN70

MR GILHOME: No. There's three distinct elements, as I understand.

PN71

THE SENIOR DEPUTY PRESIDENT: So would predictive maintenance only apply to certain equipment?

PN72

MR GILHOME: Yes, it will. It will apply to key equipment.

PN73

THE SENIOR DEPUTY PRESIDENT: Okay.

PN74

MR GILHOME: It might be eight pieces in a plant for instance of key equipment.

PN75

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes, Mr Nolan?

PN76

MR GILHOME: Thanks your Honour.

PN77

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Nolan?

PN78

MR NOLAN: Thank you, your Honour. Your honour, the company's competitive position is reliant on the implementation of this protective maintenance system and one way or another it has to be implemented, quite obviously the company's preferred position is to achieve progress and implementation through a cooperative consultative approach with the employees and from the unions. I think it would be fair to say that in the other States it has rolled out extremely well. There might have been some glitches early in the piece but the process has been a very orderly one apart from those early glitches in the other operations around Australia involving both unions.

PN79

If the unions and the employees continue to decide that they are not going to participate in the implementation of the system the company would just have to consider what other options it has to achieve those objections and there is one clear point that really does need to be made, your Honour, and that is the system must be implemented if they are going to get near best practice in relation to down time. We are here today, your Honour, to seek your assistance to try and achieve an orderly outcome to this matter to enable a position to be reached where there can be a moving forward on an agreed basis so that this very important system can be implemented and we, as I have indicated, are seeking the Commission's assistance for that. If the Commission pleases.

PN80

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Sweet, or Mr Gresty?

PN81

MR GRESTY: Thank you, Senior Deputy President. There is much we could take exception to Mr Nolan's comments but perhaps for this morning's exercise I would like to thank him for, for the first time, distinguishing between preventative and predictable maintenance though I am not totally sure I understand he did, to the best of his ability, make a distinction but then went on to qualify it by referring to clause 24(e) where you were asked to substitute "preventative" by "predictable." Again, I am thankful for that lesson. Nevertheless, coming from a marine engineering background we use to base our maintenance, you could predict it was going to breakdown if you didn't prevent it so I am still not terribly clear on the distinction.

PN82

With respect to the notice the Registry would have received from Mr Nolan, he alleges there is a dispute, we would argue there is not. Quite clearly there is not. He tells you there has been a number of discussions with respect to predictable maintenance, there has not been. The employees have been involved in a number of steering committee meetings, well, presumably if that takes place you have a steering committee, there is not one unless there is one that we don't know about. Maybe you can enlighten us towards that.

PN83

In accordance with the disputes resolution procedure, well, this is the first time we have been notified there is a dispute on this matter so again, with respect to the notification, we would suggest, Senior Deputy President, that it is an invalid notification as it touches infrequently on the facts of the matter. With respect to the all important meeting that took place on 9 May, my delegate that was asked to attend was actually in the middle of a maintenance program - I don't know if it was preventative or predictable but nevertheless he was working diligently on the job he was paid to do, some metres in the air. He came down to get a part, was told there was a video conference on, would he go. Well, he wouldn't go because there was a job to do and consequently went to finish his job.

PN84

I think the supervisor also required to be there, he never went either and again, if that meeting was - I am not disputing the importance of it, I assume there was one - one would have thought because there was no scheduling of people to be there, people didn't know until it was actually on they were required to be there so it begs the question of how much importance the company attach to this important meeting. Accepting there were limited people available to go, it is not a technically difficult thing to actually record that meeting so that people could participate later on and could be used for a reference point as the process developed. Regrettably, that wasn't recorded either, to the best of my knowledge, but the company may have a different view.

PN85

So we are currently in a situation where there is no dispute. There are no committers. There are no meetings taking place. There is not a clear understanding, amongst most of us, how we distinguish between preventative and predictable but maybe we will develop that a bit later on. If, as Mr Nolan suggests, we can refer to predictive as being preventable, well, we can tell the Commission we are participating in that. The workforce and I think Mr Bowden has actually got a preventative maintenance program. They are working to that. Perhaps the company can convince you on what date this organisation actually refused to participate in a preventive predictable maintenance program.

PN86

We have never ever done that. In fact, to the best of my knowledge, our delegates have said that they are more than willing to sit down with the company and discuss the issue so I can only again refer you, Senior Deputy President, to the notification that is before you and quite frankly dismiss the matter as there is no dispute and what is being claimed is simply not taking place. If the Commission pleases.

PN87

THE SENIOR DEPUTY PRESIDENT: Mr Sweet.

PN88

MR SWEET: Thank you, your Honour. My colleague from the AMWU, we do take some offence at the form of the notice. It is quite clear to us that no industrial action is taking place in this matter but, however, if we accept Mr Nolan's submission this was a vehicle to get this matter into the Commission but we do, again, take some offence, a sledge-hammer to crack a walnut if you like, to allege industrial action in this matter is not correct.

PN89

I think, your Honour, what we have here is a corporate mind going beyond its corporate body and I will explain a little bit about that later. I would like to address a couple of points, perhaps in two different ways. Firstly, address the issues raised by Mr Nolan - just briefly some of the issues that he has raise - secondly to perhaps take you through our perspective on this dispute. Mr Nolan took you through a time line, a truncated time line of events. Now, for my part, I wasn't necessarily involved with all of that but importantly in between the company's desire to implement competency standards and say February 2002 presentation an EBA was signed, the nominal expiry date of that agreement is 30 June 2003.

PN90

The EBA quite clearly, and Mr Nolan correctly took you to the provisions that say that in terms of competency standards this provision only applies to mechanical trade employees, that is another way of saying the ETU members are exempt from the competency standards but that was agreed between the parties. Taking you through some of the other parts of the EBA and I don't want to address all of what Mr Nolan said but I think, again it perhaps goes back to my view that in this case the mind has gone beyond the body.

PN91

Clause 9 of the EBA is the clause on consultation. Clause 9.1(b)(3) says:

PN92

For the purposes of such discussion -

PN93

that is when you want to discuss a change -

PN94

the employer shall provide in writing to the employees concerned and the union ...(reads)... provided that any employer -

PN95

I assume there is only one employer, ACI -

PN96

shall not be required to disclose confidential information the disclosure of which ...(reads)... employer's interests.

PN97

Now, in this matter, your Honour, and I certainly haven't seen it passed up by way of exhibit or anything like that, we would say that process simply hasn't been followed in this case. If I do take you to probably the most significant detail that the company has provided on predicative maintenance, that is exhibit N1, the slides - I was not at the presentation your Honour, but certainly representatives of the ETU were and the AMWU - there is nothing of a specific nature. I will not take you through all the slides.

PN98

It does set out a goal. It does talk in very general terms about what predicative maintenance is about. I think Mr Gresty made the point in his submission that what you have heard today is probably, in a substantive sense, as much as we have heard about what it is about but more importantly we are way off having specific details about what the company plans in the way of predicative maintenance. We will suggest a way forward on that perhaps later on in my submission, your Honour but it is quite clear that they have a general concept and they are, it is quite true, implementing this concept into other plants where we have members and the AMWU have members around the country.

PN99

However, as far as our membership in Adelaide is concerned, they simply, at least as I am advised, do not have the specifics about what is involved with predicative maintenance but that can be rectified. Again, I would say, a case of the mind. The corporate mind going beyond what they have actually provided to their employees. In fact, if you have a look - I will take you back to the slides, your Honour. It does say, under: Resourcing, that they are going to have a full-time officer of the organisation on this project. It allows for steering committees. It allows for a range of activities. It does not go into specifics. Then, in the final slide enclosing the very final point:

PN100

Consequently a predicative maintenance system is the future and is going to be put in place one way or another.

PN101

I think that probably reflects the attitude that has lead us into the Commission today, definitely a threatening attitude. Mr Nolan made some point about a discussion between the CEPU delegate and the local management about what it would take to introduce predicative maintenance into the Adelaide plant. I am advised that it was made very clear that an informal discussion did occur. It was informal. It is disappointing that they rely on such an informal discussion to attempt to make a point.

PN102

The point, in many ways, is well and truly addressed in the EBA where the CEPU and the company have reached agreement on not to go down the path of competency standards. I am also advised that certainly no demand in the formal sense was made on the company in relation to what it would take, certainly not disputing that a discussion did take place. It is probably inappropriate that such a discussion, at an informal level, is raised in the Commission, especially on transcript. I realise we will have an opportunity to go into - we would certainty request we go into conference a little later on, perhaps it could be discussed there.

PN103

In terms of a time frame for an alternative proposal, our members are willing to talk about and attempt to reach agreement about a predicative maintenance program but clearly are not willing to enter into issues of competencies and have made that clear on a number of occasions. I have taken it as an expressed provision in the EBA. Mr Nolan and the company relied on exhibit N2 to suggest the CEPU - tries to draw a bow that the CEPU nationally and therefore in Adelaide, has adopted competency standards for all its members that work for ACI. If you have a close look at the correspondence it is clearly labelled: Re classification rates Spotswood. That is the first letter.

PN104

The second letter is a letter from ACI which says - this is from ACI, in the first paragraph:

PN105

The attached will be the authorisation to promulgate appropriate Spotswood competency rates of pay where required.

PN106

The third document, as I understand it, is the rates and yes, the rates are based on the award classification without necessarily a holus-bolus adoption of the Metal Industry Competency Standards. I think the next document in the bundle in 2 is just a fax confirmation which again is about Spotswood. The next document is another fax confirmation about Spotswood. The next letter, which is a letter on CEPU letterhead but signed by the national officers of the CEPU and AMWU, is title classification rates dated 11 April and again relates to Spotswood.

PN107

The next letter, dated April 5, seems to be a general letter that certainly does not, in any form, indicate in between signing off an EBA and today's date that the Adelaide plant has any inclination towards competency standards. The final document is, again, that table which has the national, if you like, wage rates across all of the ACI plants. It should also be noted, in case it does come up further, that table does highlight the fact some of the - there is certainly not a national application in terms of rates of pay or classification for our membership across the country and might we suggest that is one of the issues, from our part, and not necessarily today, that we have been trying to press with this organisation.

PN108

THE SENIOR DEPUTY PRESIDENT: There is an award that underpins the enterprise agreement?

PN109

MR SWEET: The Metal Industry Award, your Honour.

PN110

THE SENIOR DEPUTY PRESIDENT: That has got competency standards in it?

PN111

MR SWEET: It has.

PN112

THE SENIOR DEPUTY PRESIDENT: The CEPU is respondent to that award?

PN113

MR SWEET: Yes.

PN114

THE SENIOR DEPUTY PRESIDENT: So on what basis do you say you reject competencies?

PN115

MR SWEET: Your Honour, what we - well, there is a general position amongst the CEPU that we don't necessarily accept - we are not saying we don't accept the structure but the actual competency standards we do not universally accept.

PN116

THE SENIOR DEPUTY PRESIDENT: Are they in the award?

PN117

MR SWEET: No, they are referred to in the award but there is processes for going in and out of those competency standards. There are other alternative means of reclassifying employees. There is a module type system.

PN118

THE SENIOR DEPUTY PRESIDENT: Who decides which one you use?

PN119

MR SWEET: I guess by agreement.

PN120

THE SENIOR DEPUTY PRESIDENT: Is that what the award says?

PN121

MR SWEET: That's a good question. We might get back to you on that, your Honour. In any event, it is expressly agreed in the enterprise agreement that those competency standards do not apply.

PN122

THE SENIOR DEPUTY PRESIDENT: I have got to say, on its face, clause 18 is almost meaningless to me. The heading is: Reclassification/career paths. What I am to understand by that is as per industry process/rules, whatever that means, eg, competency standards, broadbanding - this provision only applies to mechanical trades employees. Am I to assume that it is only mechanical trades employees that will be reclassified or have their career path based on competency standards or broadbanding?

PN123

MR SWEET: Mr Johnston might address that.

PN124

MR JOHNSTON: Your Honour, perhaps I can explain. The meaning of that clause is that CEPU members would not be, for reclassification, utilising the competency standards. They would be using the modular system, that is three modules per level as made reference to in the award. So we would be excluded from the competency based movement but we would not be excluded from reclassification across the board because there is modules available for the issue of reclassification.

PN125

THE SENIOR DEPUTY PRESIDENT: So what you are saying - telling me it means, is that to the extent there are different ways of classifying in the award, that clause is intended to say, for you, it is not the competency one or the broadbanding one.

PN126

MR JOHNSTON: That's correct.

PN127

THE SENIOR DEPUTY PRESIDENT: It is the module one.

PN128

MR JOHNSTON: It is the modules.

PN129

THE SENIOR DEPUTY PRESIDENT: Is there another one?

PN130

MR JOHNSTON: Not that I am aware of. We have had the modular system in for 25 years. Competencies are there in parallel with the modules.

PN131

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes, Mr Sweet.

PN132

MR SWEET: I guess a similar provision, and Mr Nolan took you too it, was found in appendix 1 of the agreement at 2.4(e). I have only got a downloaded Internet copy so I cannot take you perhaps to the page you have got in front of you but it is the clause that relates to preventative maintenance - - -

PN133

THE SENIOR DEPUTY PRESIDENT: This is clause?

PN134

MR SWEET: It is in appendix 1 of the agreement.

PN135

THE SENIOR DEPUTY PRESIDENT: Appendix A, I think it is and it is - is this the one which is 2.4(e)(1)?

PN136

MR SWEET: 2.4(e)(1). Similar clause again says that the provision of this subclause only apply to mechanical trade employees. I think the intent is throughout the document. Might I say, with respect to that provision, your Honour, I am certainly advised - I mean, at first blush - I mean, I must say, preventative maintenance, predicative maintenance look like the same thing. I am advised though that they are, well certainly from our side's perspective, considered to be different things. I think perhaps if we go into conference we might be able to establish what the difference is.

PN137

I think we have probably covered most of Mr Nolan's submissions from our perspective. There might be parts that we have missed, however, but for today's purposes that is probably sufficient. From our perspective it is very clear what the EBA says in relation to the competency standards. Notwithstanding that, we are willing to try and reach some sort of an agreement and we stress this is a process that requires agreement on predicative maintenance. I don't think any useful purpose is served in this process by the company trying to beat this group of employees into some sort of submission.

PN138

They have made their point of view very clear. I think there probably is some use in sitting down and talking with these employees about the change that they are seeking to address. Might I say, we have taken issue with the notification but we don't press that any further. With respect to the jurisdiction over this matter, we don't press that either, we just say we reserve our rights with respect to the jurisdictional issues over this matter and the section 99 application. In another context, it could very well be these group of employees bringing an application but that is not what we have before us today.

PN139

Again, we are happy to sit down and talk about the predictive maintenance. What we would suggest though is that what is lacking from management side in this whole process and perhaps, and in fairness to them, I think it is more, perhaps it hasn't been patently obvious but I think it is a bit obvious from the perspective of our membership, what is lacking is the lack of real detail on what it is the company wants these employees - how the company wants these employees to perform their work differently. Now, we haven't heard it yet from management but I think we probably will.

PN140

There are certainly issues of team based work that seem to be involved and I am certainly aware of it because we do have other sites that are going through this process. I might, if your Honour, and I think this will assist the process to an extent, but I think it is more a little more accurate letter with respect to the national position of the CEPU and the AMWU in relation to this whole predictive maintenance. I might hand up a letter dated 2 July 2002. It is on ETU letterhead. It is signed by the AMWU and ETU national officials. There's nothing specifically, your Honour, that I would take you to but it is a more general letter and does not just relate to Spotswood, but it gives in a fairly, I would say, a succinct way because I wrote it, a decent outline from our perspective of where we are at and if you want your Honour, I could take you through it or you could take the time to read it.

PN141

Just note that we are dealing - and I don't think there's any dispute about this - we are dealing with these issues on a site by site basis. We note at point 1 that some sites have not reached agreement on principle of the introduction of team based work or the application of metal industry competency standards. Even at sites where there is agreement about the introduction of team based workers, our observation is that many of the details have not been sorted out. We go on to talk about some of the more specific issues that have arisen in some of our other sites which, in all likelihood, will arise in sites in other States and in the end we say: while they are being dealt with on site by site basis, we are happy to meet and discuss these issues at a time of mutual convenience. Your Honour, we would also suggest that we go into conference, your Honour.

PN142

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. It has been suggested we go into conference. Any objection to that course?

PN143

MR NOLAN: No, your Honour, if I could just make a couple of observations on Mr Sweet's - - -

PN144

THE SENIOR DEPUTY PRESIDENT: Yes, just before you do - Mr Sweet I will mark the letter you have handed up.

EXHIBIT #S1 LETTER FROM ETU TO MR GILHOME AT ACI DATED 02/07/2002

PN145

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Nolan?

PN146

MR NOLAN: Your Honour, just two points. Mr Sweet referred to the correspondence that appeared in N2 and he made the observation that the letter from the CPU dated 11 April, which is the third last sheet of paper in that bundle of papers, only referred to Spotswood. That is not right. That letter is response to Mr Gilhome's letter of 5 April which is the second last sheet of paper and on that the attachment is the wages classification structure for all sites. It is not just in relation to Spotswood. So that is one point I'd make. The other is that the CPU maintain a position which says: well, we don't have to participate in competency standards under the EBA, clearly the Metal Industry Award talks about, under clause 5 and 5.1.3, your Honour: procedure for classifying employees.

PN147

The procedures for reclassifying employees under this award are set out in the national metal engineering competency standards implementation guide distributed by the Manufacturing, Engineering and Related Services Industry Training Advisory Body.

PN148

At 5.1.3(b) it says:

PN149

Any disputes relating to the terms of the National Metal and Engineering Competency Standards Implementation Guide should be handled in accordance with the disputes resolution procedure in clause 3.2 of this award.

PN150

In 5.1.3(c)1 is important as well, your Honour.

PN151

It shall be a term of the award that where there is agreement to implement the standards of the enterprise or in event that the classification of employees called into question the issue shall be settled by the application of competency standards in accordance with this clause and the National Metal and Engineering Competency standards implementation guide or by reference to the minimum training requirements in the relevant classification definition.

PN152

So clearly all the issues of classification and reclassification of employees under this award is dealt with by the competency standards or in the event that there is some disagreement about that that the disputes procedure would apply.

PN153

Now the EBA, the Enterprise Agreement for Adelaide does say that the competency standards are only apply to mechanical trades employees. There is no alternative process cited in the EBA about what will happen to the CEPU members, so in light of that it is almost creating a position that says: well, we don't want to be reclassified. Mr Johnston talks about some modular system that has been in place for 25 years. If they were so keen to use it, why didn't they put it in the agreement? It is not there. So we think there is a fundamental - - -

PN154

THE SENIOR DEPUTY PRESIDENT: Is it in the award.

PN155

MR NOLAN: No. We do not know what the modular system is, Mr Johnston, refers to. The point we do want to make is, by the way the EBA and the Award is structured, the CEPU has almost cut itself off from the process of reclassification. We don't object to going into conference, your Honour.

PN156

MR GRESTY: Commissioner, before we do, can I hand up to you, a Preventative batch house maintenance mechanical schedule , clearly demonstrating that we are anticipating, albeit we may not be aware of the process and if I could - I suspect it may be one of a many of a large file we will be making up with respect to technical information, so - - -

PN157

THE SENIOR DEPUTY PRESIDENT: Yes, very well I will mark that and my associate will get it in due course.

EXHIBIT #C1 SCHEDULE TO INCLUDE IN FILE OF TECHNICAL INFORMATION

PN158

THE SENIOR DEPUTY PRESIDENT: I will adjourn to conference.

OFF THE RECORD [9.38am]

RESUMED [10.48am]

PN159

THE SENIOR DEPUTY PRESIDENT: There has been discussions in conference about the differences between the parties. In light of that the following process has been agreed to. The company will range a presentation to all relevant employees including written documentation on the predictive maintenance program and its operation in other areas. Secondly, there will be a steering committee developed comprising two delegates from the CEPU and two delegates from the AMWU and three representatives of ACI. That steering committee will look into the predictive maintenance program for ACI here in Adelaide, at the Adelaide plant.

PN160

That steering committee will conduct a visit to the Penrith site for the purpose of looking at the implementation of the predictive maintenance program at that site and will involve discussions with management and delegates at that site. There will be a report back on this matter to the Commission at some stage during the week beginning 5 August 2002 here in Adelaide. That report back will be subject to the availability of Commissioner Cribb. Is there anything else that needs to be put on the record? If not, I will now adjourn this matter. I encourage the parties to have discussions about proposed dates in respect of it. I will now adjourn.

ADJOURNED INDEFINITELY [10.52pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #N1 DOCUMENT OF PREDICTIVE MAINTENANCE OVERHEADS DATED 28/02/2002 PN10
EXHIBIT #N2 CORRESPONDENCE BETWEEN THE COMPANY AND THE UNION AND ATTACHED DOCUMENTATION DATED 03/06/2002 PN62
EXHIBIT #S1 LETTER FROM ETU TO MR GILHOME AT ACI DATED 02/07/2002 PN145
EXHIBIT #C1 SCHEDULE TO INCLUDE IN FILE OF TECHNICAL INFORMATION PN158