|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
DX 305 Melbourne Tel:(03) 9672-5608 Fax:(03) 9670-8883
TRANSCRIPT OF PROCEEDINGS
O/N VT05114
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
COMMISSIONER GRAINGER
C2002/3689
TEXTILE, CLOTHING AND FOOTWEAR
UNION OF AUSTRALIA
and
ROCKLEA SPINNING MILLS PTY LTD
Notification pursuant to section 99 of
the Act of an industrial dispute re
redundancies without consultation with union
and employees
MELBOURNE
3.22 PM, TUESDAY, 30 JULY 2002
Continued from 25.7.02
PN81
THE COMMISSIONER: Yes, Ms Wiles, I understand we have a new representative here for Rocklea Spinnings and I will just take his appearance. Thanks very much. Mr Wheelahan?
PN82
MR WHEELAHAN: Yes. If the Commission pleases, I seek leave to appear on behalf of the respondent company.
PN83
THE COMMISSIONER: Yes, thanks. Ms Wiles, do you object to Mr Wheelahan having leave to appear?
PN84
MS WILES: Commissioner, we do object.
PN85
THE COMMISSIONER: Yes.
PN86
MS WILES: And section 42 of the Workplace Relations Act, in our view, having regard to the subject matter of the dispute listed before the Commission we don't believe that they do constitute special circumstances. The company has been on notice since the hearing before you last Thursday as to the union's draft orders, in terms of what is has been seeking. I do understand that representatives from Maddocks were involved in discussions yesterday, but in terms of today's hearing, we believe the company is quite able to represent itself in this matter.
PN87
THE COMMISSIONER: Yes, good, thanks, Ms Wiles. Yes, Mr Wheelahan, what do you have to say to that?
PN88
MR WHEELAHAN: Commissioner, I rely on section 42(3)(b) and (c) for leave. This is an important matter that I have got instructions from the CEO who is instructing me today. If the company is unable to proceed with its retrenchments this week, it is at a cost of $29,000 per week thereafter, is an important matter as the Commissioner knows, that finance has been sought, specifically in regard to this retrenchment process.
PN89
THE COMMISSIONER: Yes.
PN90
MR WHEELAHAN: It is a special matter clearly going to the ongoing viability of this operation. There are currently over a hundred employees down at Moe and the whole operation itself should not be jeopardised. The concern that the company has and the CEO - the CEO himself has no personal experience. This is his first time, I am instructed, that he has even been to the Commission.
PN91
THE COMMISSIONER: Yes.
PN92
MR WHEELAHAN: And in those circumstances we would submit that he can only be adequately represented by Maddocks.
PN93
THE COMMISSIONER: Yes, thanks. Ms Wiles, anything further in response to that?
PN94
MS WILES: No, Commissioner.
PN95
THE COMMISSIONER: No? All right. Look I am prepared to exercise the Commission's discretion in this matter in favour of allowing Mr Wheelahan leave pursuant to section 42(3)(c), particularly in the circumstances of the Chief Executive not having had a great deal of experience of these sorts of matters before, and so I do grant leave to Mr Wheelahan to appear. Ms Wiles, would you now like to report to me on the state of the situation.
PN96
MS WILES: Thank you, Commissioner. The union received some correspondence by facsimile dated 26 July and I believe that the Commission has also received a copy of that.
PN97
THE COMMISSIONER: Yes.
PN98
MS WILES: We didn't see that till Monday morning. It came in quite late on Friday evening so we first saw that letter on Monday morning. The parties did meet, as arranged, yesterday at between 11 and I think 2.30 pm and senior officials from the union and from the company were present at those negotiations. In terms of just some brief information which came out of that meeting might be of assistance to you. The company confirmed to the union representatives there that it do owe approximately $34.7 million to its banker, GE Capital Finance. It also indicated that in terms of the decision to make the positions redundant that in fact that decision occurred much earlier than we had first thought, somewhere around 15 June, and that approval from the bank was subsequently given to fund those redundancies.
PN99
The union put a range of issues and claims to the company. There was some movement by the company, but not enough movement to satisfy the union or the delegates in terms of trying to resolve this matter. In terms of the order which you issued last Thursday on the 25th, what the union believes is that the company have satisfied clause 4(a), clause 4(c) and clause 4(d) of that order which you issued.
PN100
THE COMMISSIONER: Yes.
PN101
MS WILES: It has partly satisfied clause 4(e), but not completely.
PN102
THE COMMISSIONER: Not with a happy outcome.
PN103
MS WILES: Not to our satisfaction, no.
PN104
THE COMMISSIONER: Yes, yes, yes.
PN105
MS WILES: We also say that clause 5 of your order also hasn't been satisfied to the union's satisfaction either.
PN106
THE COMMISSIONER: Did discussions take place on 29 July? I think we have said they did.
PN107
MS WILES: Yes, yesterday.
PN108
THE COMMISSIONER: Yes, yes.
PN109
MS WILES: For several hours, I understand.
PN110
THE COMMISSIONER: Yes, so to that extent clause 5 has been satisfied has it not really?
PN111
MS WILES: Well, only since the discussions took place. In terms of an agreement being reached pursuant to clause 14 of the enterprise agreement - - -
PN112
THE COMMISSIONER: No, but I - look I understand you may not have been happy with the outcome of the discussions, but the discussions took place. The company has participated in discussions as I had put forward in the order what they should do. It just hasn't produced a result.
PN113
MS WILES: But they also haven't reached agreement which is a requirement under clause 14. Well, the parties haven't reached an agreement which is a requirement under clause 14 of the enterprise agreement.
PN114
THE COMMISSIONER: Yes, well, it would appear to me they are compliant with clause, but anyway go on. What about clause 6? We are reporting back.
PN115
MS WILES: Yes, we are here today.
PN116
THE COMMISSIONER: And the company has not taken any further steps in relation to the terminations as at this time. Is that right?
PN117
MS WILES: That is how I understand it.
PN118
THE COMMISSIONER: Yes, all right. I have to say it appears to me that both parties have complied with the orders, which particularly since they were agreed to by the consent of the parties is very good. I am sorry that there has not been able to be a happier outcome or an agreement between the parties. Ms Wiles, how far apart are you on - I mean you know very well redundancies have to take place in certain circumstances when a company is faced with difficult financial circumstances, so I don't suppose that you are saying to me that the union says no redundancies should be taking place in this situation. You are not saying that to me are you?
PN119
MS WILES: No, Commissioner. That actually isn't the union's position.
PN120
THE COMMISSIONER: Yes.
PN121
MS WILES: The union's position is that, on the information thus far provided by the company - - -
PN122
THE COMMISSIONER: Yes.
PN123
MS WILES: There would appear to be reasonable grounds for some redundancies occurring.
PN124
THE COMMISSIONER: Yes.
PN125
MS WILES: The issue in dispute is the conditions under which those redundancies are implemented and take place.
PN126
THE COMMISSIONER: Right. Yes.
PN127
MS WILES: And following on from that, we say that in terms of the process and the position of the company up until now, we say that position represents a breach of clause 14 of the agreement.
PN128
THE COMMISSIONER: It may very well do, but what does that - where does that leave us?
PN129
MS WILES: In terms of today's hearing, Commissioner, maybe if I just outline in particular what the union is seeking.
PN130
THE COMMISSIONER: Yes.
PN131
MS WILES: We are seeking a continuation of your order dated 25 July until such a date as the union has had an opportunity to inspect the financial records of the company. That is our first issue that we are seeking your response from.
PN132
THE COMMISSIONER: Yes.
PN133
MS WILES: The second is that we are wishing to proceed with the union's application - sorry, the union's draft order which we filed last Thursday in relation to inspection of financial records, and thirdly we are foreshadowing that if the matter cannot be resolved in terms of the interpretation of clause 14 between the parties, we will be seeking an order from the Commission in relation to that matter.
PN134
THE COMMISSIONER: Would you like to just illuminate that for me thanks, Ms Wiles.
PN135
MS WILES: In terms of the third matter?
PN136
THE COMMISSIONER: Yes, yes.
PN137
MS WILES: Commissioner, do you have a copy of the enterprise agreement?
PN138
THE COMMISSIONER: Yes, I do. Yes, it cuts off the side of the page but it will do, yes.
PN139
MS WILES: I have another copy if that would assist you.
PN140
THE COMMISSIONER: Yes, I might get that off you. It is - I have got sort of - I am not sure how many letters missing from the start of every word and have left out some of the page. It is 14.5 that I suppose you have concerns with. Well, rather parties will negotiate in good faith to reach an agreement on issues. Is that right?
PN141
MS WILES: Commissioner, there is two clauses that we would seek to rely on. That is one of them, 14.5 and the second is 14.8.3, which relates to extended notice being given to employees in the scenario of redundancy.
PN142
THE COMMISSIONER: Okay, good, right.
PN143
MS WILES: So just briefly - - -
PN144
THE COMMISSIONER: So what is the issue with regard to 14.8.3?
PN145
MS WILES: In the union's view, we say that the circumstances do permit that redundant employees should be entitled to the extended notice as indicated there.
PN146
THE COMMISSIONER: Yes.
PN147
MS WILES: That is, we say that the company thus far has not presented any evidence to the union which would negate the entitlement to those employees of that extended notice.
PN148
THE COMMISSIONER: Is the issue of circumstances permitting something which the company is raising concerns about?
PN149
MS WILES: It is. As I understand it from the discussions yesterday and from meetings last week, the company's position is that they have an incapacity to pay. We don't currently have access to the financial records of the company and what we say is that if we were allowed access, we could make our own assessment of that assertion made by the company.
PN150
THE COMMISSIONER: Yes.
PN151
MS WILES: The other issue, Commissioner, is that it relates back to an earlier comment that I made that our understanding is that the decision to make the positions redundant was made some time ago, and it was only relatively recently that the union or the employees were even notified of the redundancies, so they have sat on their hands, if you like, for some time and that if they had been more upfront at the time that the decision was made, even subject to the approval of the bank, then they may have partly satisfied that requirement.
PN152
THE COMMISSIONER: Yes. How much is involved? I mean how great is the area of disagreement under 14.8.3? I will come to you, Mr Wheelahan, but I am just wanting to hear from Ms Wiles.
PN153
MS WILES: My understanding of the two positions, Commissioner, is that there is complete disagreement about the interpretation of that clause. As I understand the company's position, their view is that they are not required to give that additional notice in the current circumstances and our view is that they do. So we are quite apart on that issue.
PN154
THE COMMISSIONER: Yes, but what is the difference in the entitlement to the employees who are made redundant?
PN155
MS WILES: Just bear with me. Commissioner, are you saying what is the difference between the parties about this?
PN156
THE COMMISSIONER: Yes, what is - for the employees who have been notified of an intention to make their position redundant, for how many of them is this a material matter? Is it for all of them or is it something which is - I am just wondering what the dollar value is of the difference between the parties.
PN157
MS WILES: Well, I understand it would apply to all of them.
PN158
THE COMMISSIONER: Yes, and so how much extra would an average person whose position is being made redundant?
PN159
MS WILES: It would depend upon who volunteers and what length of service they had.
PN160
THE COMMISSIONER: Right. Yes. Well, the clause obviously means something.
PN161
MS WILES: That is our position and we say that the clause was included for a reason and that the intentions of the party was that that clause have practical meaning in the worst case scenario that redundancies were to occur, and we are quite willing to lead evidence about - particularly in relation to that matter from the delegates or some of the delegates that are here today. In relation to 14.5, we say that the meaning of that clause is that the parties must negotiate in good faith and essentially reach an agreement about those matters which are listed there and one of those matters in the issue of severance payments, and that would include the quantum of severance payments.
PN162
THE COMMISSIONER: Yes. I must say, of course, I think - I have a problem with a clause if it is saying that parties must reach agreement. I just - it is really just not possible to say to parties, "you must reach agreement". Parties must negotiate in good faith to reach an agreement, but I personally think it is hard to actually order parties to reach an agreement, so I would just say that that is a problem, that is a problem with the clause. But anyway, doubtless if it comes to it, I will be hearing arguments about how I should interpret 14.5 and 14.8.3.
PN163
MS WILES: Commissioner, can I just say there was a particular context to the negotiation of this clause and we obviously need to lead evidence about that.
PN164
THE COMMISSIONER: Yes, yes. I suppose - I am just thinking about where we can get this afternoon. If you put to one side the issue of - well, if we just put to one side for the moment the issue of disclosure of financial documents, I guess my feeling is that there ought to be room on both sides to try and get to a point of agreement on the sorts of issues that are involved. I mean the company is not here because it particularly wants to be here, the company is here because it has got serious financial difficulties which, if they are not resolved, may further imperil its future and that may further imperil jobs.
PN165
So I don't think we should let the matter drag on indefinitely and I do actually think it is in the interests of both sides to try and move from fixed positions to reaching some kind of agreement. I am sympathetic to the motion of disclosure of some appropriate level of confidential disclosure of financial documents, but I am concerned about the sorts of time frames that might be involved because I think it is hard to keep the matter going on for too long without the company getting into further trouble, but is - I think not in anybody's interest, so I am just wondering how best you want to use this afternoon. Do you want to focus this afternoon on the disclosure of the financial documents first, and hear from both sides on that, and then I can move on to the next bit and ask the parties, "would you like my assistance in conciliation"?
PN166
MS WILES: Commissioner, I will just take some instructions.
PN167
THE COMMISSIONER: Sure. Well, Mr Wheelahan, you might seek some instructions as well from your client in regard to those matters, but if I just flag to you that I do have some sympathy in these sorts of situations for companies co-operating and making available on a purely confidential basis the certain financial information that might assist the union in the job it is doing. So you might just seek some instructions.
PN168
MR WHEELAHAN: Yes, could I actually just say two things on that point that might shorten things.
PN169
THE COMMISSIONER: Yes, yes.
PN170
MR WHEELAHAN: In my first submission they don't need to view the records because the reason that we can't employ these people past Friday is that weekend shifts have already stopped.
PN171
THE COMMISSIONER: Yes.
PN172
MR WHEELAHAN: I have got a document that says that there simply isn't the work, there isn't the orders and if necessary I will have the CEO give that evidence to the Commission. Secondly I have asked him to bring the records here anyway, so he has the records here.
PN173
THE COMMISSIONER: Yes.
PN174
MR WHEELAHAN: We would like to see the matter in the Commission finish this afternoon.
PN175
THE COMMISSIONER: Yes.
PN176
MR WHEELAHAN: I have submissions that I can make in relation to each of these points at the appropriate time.
PN177
THE COMMISSIONER: Yes.
PN178
MR WHEELAHAN: I can say that, in general terms, my submission is simply that there was a non-compliance issue, of course, when the application was made. Your order addressed that. We have now complied with the order. The company simply has to abide by the EBA. That has certain level of entitlements that rely on TCR. What we have offered in addition is four weeks paid notice on top of the entitlements and that offer was made in the discussions this week, and that is to each employee made redundant. Now that is above and beyond what we are required to pay under the certified agreement.
PN179
That we see is moving and that we see as reasonable to resolved it today. As you rightly point out, the bankers are heavily involved in this in what monies are offered and we have stretched and got more money on offer, and we think that that is reasonable in the circumstances. The issue with - - -
PN180
THE COMMISSIONER: So if I can just go to 14.8.3.
PN181
MR WHEELAHAN: Yes.
PN182
THE COMMISSIONER: Mr Wheelahan, you have brought it up to the not less than four additional weeks notice. Is that right?
PN183
MR WHEELAHAN: Well, yes. There is two points if I could just - - -
PN184
THE COMMISSIONER: Yes, sure, sure, sure.
PN185
MR WHEELAHAN: Sorry to take you to it but that clause, as you pointed out, circumstances permit is a pre-condition. The circumstances don't permit us to keep workers on because we just don't have the work. The shifts aren't there any more. The said condition - - -
PN186
THE COMMISSIONER: Yes, I thought that circumstances permitting might relate to the circumstances permitting you to be able to make the addition - the payments in addition to what was in the award.
PN187
MR WHEELAHAN: No, because the last sentence makes it clear there is no requirement for payment in lieu of notice under that clause, so in fact it is not an entitlement to money, it is an entitlement to time, so in fact we are providing a benefit. Strictly speaking - yes, so the union, yes.
PN188
THE COMMISSIONER: Right, right. Where redundancy is known to be occurring and circumstances permit, you say that relates to time, not financial capacity.
PN189
MR WHEELAHAN: Precisely and that is what it says.
PN190
THE COMMISSIONER: Okay, right. Well, I understand that. Ms Wiles may want to argue against that, but I understand the argument that you are putting. Okay, fine.
PN191
MR WHEELAHAN: All right, sir. Now given that - I mean I find it difficult where to go from here, because given that is what it says and the Commission is here to apply it, well we are offering above and beyond a paid entitlement of an additional four weeks. Now my advice to the client is that that is beyond what it is required to pay under the certified agreement.
PN192
THE COMMISSIONER: Yes, so you are not going - you are not moving into the employees with ten years or more continuous service, not less than 12 additional weeks notice.
PN193
MR WHEELAHAN: Yes, well, I am instructed that companies simply can't - it doesn't have the work, it doesn't have the orders - - -
PN194
THE COMMISSIONER: Are you saying it doesn't have to because, in a time sense, circumstances don't permit?
PN195
MR WHEELAHAN: Correct.
PN196
THE COMMISSIONER: And secondly, separate and apart from this, you say the company is not in a position to pay but what it can do is offer the four weeks - what it is willing to do, without having an obligation you say to do so, is to pay the four weeks additional notice.
PN197
MR WHEELAHAN: Yes.
PN198
THE COMMISSIONER: Yes, okay, good, thanks.
PN199
MR WHEELAHAN: If I could just - there are some conciliatory issues but they are not - the company has also agreed if jobs do come up - the company's objective is to break even.
PN200
THE COMMISSIONER: Yes.
PN201
MR WHEELAHAN: That is its objective. If it turns the corner, it made the offer yesterday I am instructed, that if jobs come up the people who were made redundant will get the first offer.
PN202
THE COMMISSIONER: Yes. Mr Wheelahan?
PN203
MR WHEELAHAN: Yes.
PN204
THE COMMISSIONER: And Ms Wiles, can I just put it to you that one option that you have in regard to that issue is - I am very, very concerned I should flag to the parties. I am extremely concerned about the time frames operating. A company which is in serious financial difficulty is not going to assist either itself or continuing employees if it is compelled by some act of the Commission to keep people on the payroll when it really can't afford to do so. I - and the company is flagging loud and clear that it really can't afford to do so beyond the end of this week.
PN205
The company says that it has got an offer on the table of four additional weeks under that clause. Ms Wiles, is the difference then that - is the main difference outstanding on that issue alone, the issue of employees with ten years or more service?
PN206
MS WILES: Commissioner, it is two issues.
PN207
THE COMMISSIONER: Yes.
PN208
MS WILES: That is the first of them.
PN209
THE COMMISSIONER: Yes.
PN210
MS WILES: The second does relate back to 14.5 and the level of severance payments generally. There has been custom and practice at the Moe site that redundant employees receive two weeks pay per year of service.
PN211
THE COMMISSIONER: Yes.
PN212
MS WILES: It is so being a practice whereby the company's Bendigo site when it closed last year, that was the level of redundancy entitlements received by those employees.
PN213
THE COMMISSIONER: Yes.
PN214
MS WILES: And as I indicated earlier, the context in which this agreement was negotiated in the union's submission, was that the employees and the union would accept this clause in good faith that if redundancies did occur, and at that stage it wasn't an expectation that they would be, that the company would negotiate a similar type of redundancy and severance packages what had been the custom and practice in the workplace.
PN215
THE COMMISSIONER: Yes, well, I - - -
PN216
MS WILES: I should add, Commissioner, that the union is also concerned about timing. We do appreciate the company's position and also the impact that it is having on employees currently. There is a great deal of anxiety that you would imagine.
PN217
THE COMMISSIONER: Indeed.
PN218
MS WILES: But can I just seek clarification from my colleague here. In terms of the CEO having brought the financial records here today, if the company is prepared to reach a consent position in relation to the inspection of those documents in our original draft order.
PN219
THE COMMISSIONER: Yes.
PN220
MS WILES: And we would need to check that, then that may satisfy that issue.
PN221
THE COMMISSIONER: Yes. Mr Wheelahan, why don't you get some instructions from your client about the making available of those financial records. I might say I make absolutely clear that any information from those records is to remain entirely confidential and will be the subject of a confidentiality or that they won't enter onto the records of this Commission, or be otherwise available to any party outside the Commission. My understanding of the way the union likes to do this is usually to have someone with particular expertise in this area, rather than Ms - it is not about the competence of Ms Wiles or Ms O'Neil or anybody else, but it does require specialist expertise and normally they would require someone with an accounting background to look at them.
PN222
I am just wondering whether it would be possible to reach some agreement as to the making available of those records in the next 24 hours to a person from the union, on the order of the Commission that the information is to be confidential and not made available to any party apart from parties to these proceedings, not to be divulged in discussions with members other than in the most basic form, that the union is able to say to its members, "Look, we have inspected the book and we understand x, y, z to be the situation".
PN223
MS WILES: Commissioner, just on that issue, you have already raised the issue that it is the union's preference to have a financial adviser to assist us to examine the records. As you know we are not accountants ourselves, but also in terms of the conditions under which an inspection could take place, in our original draft order, in addition to the documents that we have sought, we have also included terms by which the inspection could take place.
PN224
THE COMMISSIONER: Yes.
PN225
MS WILES: And they reiterate what you are saying in terms of the material remaining confidential and that the union be allowed to draw conclusions from the material and communicate that to the members.
[3.50pm]
PN226
THE COMMISSIONER: What I would suggest, Mr Wheelahan and Ms Wiles, is that - Mr Wheelahan, there is a draft order of 25 July that - - -
PN227
MR WHEELAHAN: Could I make some submissions? I am a bit concerned - - -
PN228
THE COMMISSIONER: Well, perhaps if I just say to you that I personally think what would be helpful to me - I mean, I am happy for you to make submissions - is for you to actually look at that draft order and just indicate to me what in it you are happy - well, when I mean happy, what you are prepared to agree to and what changes you want to make to it. I mean, you could run through with me now if you want to or I could grant you an adjournment so that you could sit down with Ms Wiles and actually just go through and nut it out and reach agreement between yourselves as to what might be acceptable, including a place at which it is to occur and a timeframe. The timeframe, I might say, would have to be very quick because I think that - would you have somebody available tomorrow?
PN229
MS WILES: Commissioner, we don't know; we would have to make some calls this afternoon.
PN230
THE COMMISSIONER: Well, look, there is a very limited - it is Tuesday already, there is a very limited amount of time, so I think - you know, I think the union should be willing to really go a great deal of effort to get somebody with expertise. Yes, Mr Wheelahan.
PN231
MR WHEELAHAN: I do want to make the submission that our primary contention is the justification for the redundancies going ahead Friday is that there is no work, and we can - and this is despite anything to do with financial records.
PN232
THE COMMISSIONER: Yes.
PN233
MR WHEELAHAN: I am concerned that we are getting taken down a path which we actually don't want to consent to. They are here because we want it sorted.
PN234
THE COMMISSIONER: No, don't get concerned about that, Mr Wheelahan.
PN235
MR WHEELAHAN: Yes.
PN236
THE COMMISSIONER: This is a stand-alone request for information. I don't connect it - - -
PN237
MR WHEELAHAN: Yes.
PN238
THE COMMISSIONER: - - - to the issue of whether you should be able to implement redundancies at the end of the week.
PN239
MR WHEELAHAN: All right, I accept that, Commissioner.
PN240
THE COMMISSIONER: But I think it is understandable when the union is seeking to represent the interests of its members and where the company is saying that it must take this action for urgent financial reasons, that the union be put in a position to have some understanding of that and so that it can offer information to its members. But I do not connect the issue - the union knows very well and I don't - I do not connect it to the issue of whether you should be able to implement redundancies or not. That is a separate issue and I will hear separate argument with regard to these other things.
PN241
But I think if we can reach agreement on the provisions of the draft order - of any draft order that the parties - and my preference is for the parties to agree to the terms. If they are in disagreement, I would have to consider whether I was prepared to order the company against its will. I would prefer the company to actually look at that and say, well, what of that are we willing to agree to? I am willing to - I urge the parties to do it as quickly as possible, but I don't connect it to the issue of whether any redundancies are able to be proceeded with later in the week.
PN242
MR WHEELAHAN: Thank you, Commissioner, I accept that point. The other point which I was - - -
PN243
THE COMMISSIONER: So when we get to the point of an adjournment, you might just get some - perhaps if you and your client and Ms Wiles and Ms O'Neil could just talk through the issue what you may be able to agree to in an order.
PN244
MR WHEELAHAN: Yes. I have had some initial discussion with my client and I am sure - I would hope we would be able to agree something like that. Then we will leave, of course, the issue about the substantive application and - - -
PN245
THE COMMISSIONER: Indeed, indeed. And your client is tugging at your coat-tails.
PN246
MR WHEELAHAN: Yes.
PN247
THE COMMISSIONER: No, I thought you were - you are from Maddocks as well, Mr Freebairn?
PN248
MR WHEELAHAN: Greg Freebairn.
PN249
MR G. FREEBAIRN: Yes, Commissioner.
PN250
MR WHEELAHAN: And as I have said - as the Commission has rightly pointed out just briefly and there is a submission - clause 14.5 an agreement to agree is simply not enforceable, you can't do that, so we don't see that as being binding. We have already addressed 14.8.3. If it is a matter of strict interpretation or recourse under 413A of the Act, this is a matter that the union can pursue in the Federal Court. Alternatively, I have got one decision only that I will hand up and if I could hand it up before the adjournment. It is only a four page decision.
PN251
THE COMMISSIONER: Yes.
PN252
MR WHEELAHAN: It is just a recent decision of Commissioner Smith and it just neatly summarises what has been the longstanding principles of the Commission with respect to the management prerogative to run its enterprise and make decisions about its ongoing viability, and unless you want me to take you to some passages, I might just leave that with the Commission to have a look.
PN253
THE COMMISSIONER: No, that is fine. That is fine. Look, what I wanted to put, Ms Wiles, to the union and to the company in this difficult situation is that you consider some staged program and consider some - where the redundancy program can be under way, where the financial records can be made available urgent and where, to the extent to which there is any dispute about the quantum of entitlement, that you be able to reach agreement on the redundancies proceeding on the basis that the extent to which - I am just raising this with you for you to consider as a means of allowing the matter to move forward - that the extent to which there remains a dispute between the parties as to quantum that revolves around interpretation of the agreement, that the parties consent to the Commission arbitrating that issue and settling the issue of the interpretation of the agreement and therefore what additional redundancy payment might be due and that might take some little time after redundancies had actually been implemented.
PN254
It is an unusual course of action, but I actually think the company is probably in a situation where it must proceed from the end of this week and I am going to need some persuading that it shouldn't so proceed. I don't want the people whose positions are being made redundant to miss out on their payments, but equally, if there remains a question in dispute, I would like to actually try and resolve that issue here in the Commission, and it can't be resolved by Friday is what I am saying and I am putting it to the parties that you actually agree to the Commission arbitrating the matter, whether before me or another Commissioner I will leave for you to decide. I am happy to do it myself. I couldn't do it before the end of next week and I feel very reluctant to ask the company to delay implementation of the redundancy program beyond the end of this week.
PN255
Ms Wiles, what are your feelings about that? Would you like a few minutes to have a discussion about that?
PN256
MS O'NEIL: Commissioner, I would like to respond on our behalf, if that is all right, with your agreement.
PN257
THE COMMISSIONER: Yes.
PN258
MS O'NEIL: I understand the Commission's concern regarding the timing of the proposed redundancies and the union, as Ms Wiles has said, is equally concerned regarding the matter and it is not our intention to cause delay, but one of the substantive issues that affects the timing, Commissioner, is a requirement under the agreement and so far the agreement of the company to call for volunteers in relation to the redundancies.
PN259
You would appreciate the difficulty for workers in the Valley employed in this site in Moe as to a question as to whether they would volunteer for redundancy given the high level of unemployment in the area, and one of the things that impacts on that decision and from my discussions with the members involved is the key thing that impacts on that decision is the quantum of what they would be paid if they were to volunteer.
PN260
So I appreciate your proposal in the spirit of it and we also would like to quickly resolve the matter, but for our members to be in a position to be able to fully consider whether they will co-operate with the company by volunteering for redundancy, they need to be aware of the full facts regarding what is the quantum of payment that would be made available to them. So - - -
PN261
THE COMMISSIONER: Well, something they are able to be told, Ms O'Neil, is what the company's position is about what is to be made available to them. Anything else is a matter in dispute which would take some time to resolve, I guess.
PN262
MS O'NEIL: That is right, Commissioner, and that is the difficulty in that we, as you have heard, have a view that there is an entitlement that goes beyond what the company's proposal is and that that is an existing entitlement. That could make the difference for many of those employees as to whether they volunteered or not, and if there are no volunteers or a change in the number of people that volunteer, then that impacts on who actually would finish work this week if the redundancies were to proceed this week.
PN263
So, I mean, I am happy to consider your proposals regarding the matter, but that is our initial response, Commissioner, that it is a fundamental issue to the workforce knowing what they would be paid at the point of redundancy. So the need to resolve that issue is critical to us and we are keen to resolve that. We are happy to resolve it today if possible so that there would be no further delay to the process, but as we enter the Commission today and as a result of yesterday's negotiations, that matter is not resolved. So - - -
PN264
THE COMMISSIONER: Yes. Well, that appears clear. What the company has got on the table is clear. Thanks, Ms O'Neil.
PN265
MR WHEELAHAN: Could I interrupt, Commissioner?
PN266
THE COMMISSIONER: Yes, I am just coming to you, Mr Wheelahan. Mr Wheelahan, what about the issue of calling for voluntary redundancies; have you actually gone through - - -
PN267
MR WHEELAHAN: This is the great problem. As far as arbitrating 4.8.3, and even a preliminary view, I have great difficulty with the last sentence. It says:
PN268
There is no requirement for payment in lieu of notice under clause 14.8.
PN269
That is what it says. There is no requirement for a payment.
PN270
THE COMMISSIONER: Well, what is your problem with arbitration?
PN271
MR WHEELAHAN: My point is delaying an arbitration and also the uncertainty of entitlements.
PN272
THE COMMISSIONER: No, no, no, I put forward a proposal, Mr Wheelahan, which is try and allow a way forward which would leave the issue to be arbitrated, but after the implementation of redundancies. Ms O'Neil is saying she is not happy with that proposal. I am just wondering what your concern is about arbitration.
PN273
MR WHEELAHAN: Right. My - - -
PN274
THE COMMISSIONER: I mean, anyone who arbitrates is going to have to do so on the basis of the documentation.
PN275
MR WHEELAHAN: I preferred your approach, Commissioner, when you said that - the company's position, of course, is it doesn't have to offer the extra four weeks. It is happy to do so if - and obviously there is only then those employees with more than 10 years service, they are the only ones who can possibly put a claim, and that is in dispute. There are remedies under the Act there. If they claim that they have been underpaid, well, then they will have to pursue it elsewhere. The company should not be - - -
PN276
THE COMMISSIONER: Well, no, if it is a matter which is covered by the agreement they are entitled to pursue it in the Commission surely.
PN277
MR WHEELAHAN: Well, what I am putting is a 178 claim under the Act, they can say they are entitled to a payment that they didn't get. They could go to the Federal Court, Magistrates' Court, there is a variety - - -
PN278
THE COMMISSIONER: Yes, well, I am not wanting to put the poor people of Moe to the trouble of going to the Federal Court, I must say.
PN279
MR WHEELAHAN: Sorry, I am not saying that they are going to. No, but the point I am making, Commissioner, is that it seems - and look, I might - no doubt I could easily be wrong, but it seems very clear that there is not a paid entitlement because it actually says that in the - - -
PN280
THE COMMISSIONER: I am saying to you, why are you worried about allowing the Commission to arbitrate the matter if you are so confident about the interpretation of that clause?
PN281
MR WHEELAHAN: Yes, the point I am getting to is do we then pay them out on Friday and give them the gratuitous extra four weeks or do we hold on to that, wait for what is determined? Because there are two issues; one my friend has already point out. It is hard for their members because there is uncertainty. They don't know whether, in fact, they get the four weeks or whether they get more, and she has already expressed the concerns about trying to advise members on whether they should accept or not, and to be told simply, well, that is something that will be in dispute, it is a difficult - - -
PN282
THE COMMISSIONER: Yes. Putting to one side the issue of interpretation of the agreement, there is an element of that which is a commercial issue for your client to ponder upon, and I can have a view on the issue, I could give a recommendation on the issue, but in the end there is an element of that which is a commercial decision which your client would have to decide upon.
PN283
My own view is that in the circumstances which face the company, the more goodwill that can be generated in an unhappy situation, the better for the ongoing relationship between the company and the union and the ongoing employees.
PN284
MR WHEELAHAN: Hence, the offers.
PN285
THE COMMISSIONER: But that is an opinion. I am wondering whether it wouldn't be possible during the next 48 hours - you have heard what I have said about my view about the end of the week - the union has heard what I have said. I will hear further on the subject, but you have heard what I have said about my understanding of - - -
PN286
MR WHEELAHAN: I gather we won't be constrained after today.
PN287
THE COMMISSIONER: Yes. Well, I am very busy - - -
PN288
MR WHEELAHAN: Your order constrains us till 6 pm.
PN289
THE COMMISSIONER: - - - from now till the end of the week, but you have heard what I have said about my belief that in the financial circumstances which appear to face the company on the representations I have heard so far, I can understand that there is a real need for the redundancies to begin to be implemented from the end of the week.
PN290
The union wants to inspect the financial records to better understand the company's position. The union is also saying that there is an obligation, and it appears quite clear under the terms of the agreement that - clause 14.6 says:
PN291
Involuntary retrenchments will be a last resort in any situation which requires reduction in employment levels.
PN292
I am wondering whether the company couldn't give 48 hours, which is really just from today to the end of Thursday, to call for volunteers and to make clear the basis on which the volunteers are being called for. The union will tell its members that it doesn't agree with that position and that it is seeking a larger figure, but the union can make clear - sorry - the company would be able to make clear the basis on which it was offering redundancies.
PN293
What I am not putting forward is - and what I am not hearing from either side is any willingness to reach an agreement which allows the matter to come to the Commission for arbitration after the implementation of redundancies, because it may well be when you have called for volunteers, at the end of 48 hours you may find you have got none and you have got to proceed with involuntary redundancies.
PN294
MR WHEELAHAN: Yes. And if I could just - - -
PN295
MS O'NEIL: Commissioner - - -
PN296
MR WHEELAHAN: I will come to you, Ms O'Neil.
PN297
MR WHEELAHAN: I don't want the financial records to be seen, and I know you have disconnected it.
PN298
THE COMMISSIONER: Yes.
PN299
MR WHEELAHAN: The reason why it has to happen Friday is we don't have weekend shift work any more. We don't have to work. It is not a matter of saying that you can borrow more money from the bank and pay them to stand around for another four weeks. That is not the reason.
PN300
THE COMMISSIONER: Yes, Mr Wheelahan, I understand that.
PN301
MR WHEELAHAN: Yes.
PN302
THE COMMISSIONER: Yes, I understand that.
PN303
MR WHEELAHAN: But otherwise that does - subject to - I will get instructions on obviously the 48 hours for volunteers.
PN304
THE COMMISSIONER: Well, it would give the union 48 hours to look at the records and it would give you 48 hours to call for volunteers on the terms on which you offer.
PN305
MR WHEELAHAN: Yes, that sounds sensible, and of course the company will be complying with its obligation under the EBA, as you have rightly pointed out, about calling for volunteers first and only then if - - -
PN306
THE COMMISSIONER: Yes, all right. Sorry, Ms - - -
PN307
MR WHEELAHAN: I will say we will just comply with the EBA.
PN308
THE COMMISSIONER: Yes, I am coming to Ms O'Neil now. Yes, Ms O'Neil.
PN309
MS O'NEIL: Thank you, Commissioner. Commissioner, there is another problems in terms of your proposal, and I appreciate you trying to find a way through a difficult situation. The company has already called for volunteers and part of the evidence we intended to lead today was the fact that a number of our members volunteered in a climate where there had been a meeting held at the site where extensive statements were made by the CEO of the company regarding the financial state of the company that led our officials and our delegates to report back to the employees in terms that basically suggested there was a serious risk for the entitlements of all employees, including those that were not to be made redundant.
PN310
THE COMMISSIONER: Yes.
PN311
MS O'NEIL: And as a result of the fear that was generated through that, there has been a large number of employees who have indicated, because they are not sure that their entitlements will be safe in the future, that they may wish to, for want of a better term, jump ship very quickly. And part of our concern about viewing the company's financial records is about being able to advise our members and hopefully being able to advise them in a manner where if any of that fear is unfounded, that they are able to properly consider the issue of whether they intend to volunteer.
PN312
So the volunteer problem is two-pronged. One is the question about what people are volunteering for in terms of the ..... payment, and secondly, the question of whether people are volunteering on the basis of a fear about the company's future that is either founded or unfounded. We need to be in a position to advise our members in relation to that given the serious nature of the statements that have been made by the company to our members regarding the financial state of the company.
PN313
So there is already a list of volunteers, Commissioner, and a large number of those people are unaware about what the payment will be. But they have also advised us that they may wish to withdraw their voluntary participation in the redundancy based on what we can tell them about the financial state of the company.
PN314
THE COMMISSIONER: Yes. Well, I understand that. I understand that, but I think there is a finite period of time before this redundancy program is going to have to start to be implemented, and I am just looking at trying to create a situation where both the company and the employees can proceed in as well informed a way as possible.
PN315
MS O'NEIL: Commissioner, can I make a proposal?
PN316
THE COMMISSIONER: Yes, sure, sure.
PN317
MS O'NEIL: It would assist greatly in terms of your concern about timing if we were able to receive some advice about how quickly we could view the records that we - - -
PN318
THE COMMISSIONER: Well, I understand they are here, but you haven't got a financial adviser.
PN319
MS O'NEIL: That is right.
PN320
THE COMMISSIONER: But to be honest, I would have thought you would be able to get somebody available tomorrow. You have had to get people to do this for you in other matters recently unfortunately.
PN321
MS O'NEIL: Too often, Commissioner.
PN322
THE COMMISSIONER: Yes, sadly.
PN323
MS O'NEIL: I think a very short adjournment, I would be able to confirm that.
PN324
THE COMMISSIONER: Listen, why don't I give you an adjournment, a very short one - sorry, Mr Freebairn.
PN325
MR FREEBAIRN: Yes, thank you, Commissioner. Commissioner, in the context of an adjournment, I think that is something that we are quite happy to go with as well. But just in relation to the issue of the financials and the viability of the company, another matter that was raised in the discussions yesterday went to the issue of a deed between the company and the union with respect to the company's stock against the employees' ongoing entitlements, if I can put it that - the statutory entitlements, and today we have been given a copy of a proposal from the union in relation to that.
PN326
So yesterday's discussions went to a broad range of issues that actually went beyond the fundamentals of the redundancy of people on Friday and what their entitlements might be. There were also discussions about the ongoing viability of the company, and it was made quite clear in those discussions - the Chairman of the Board made it quite clear to those that were present that the viability of the company at the minute is simply to get to a break-even point and - - -
PN327
THE COMMISSIONER: I understand that.
PN328
MR FREEBAIRN: - - - and that the financials will demonstrate that aspect and we will take that on board and come back to you afterwards. But I just think you needed to be aware that there was a breadth of discussion - - -
PN329
THE COMMISSIONER: Thanks for that. No, you - well, I am not in the least bit surprised and the union is entitled to pursue that kind of issue, but it is not a matter which is before me, it is not a matter which is covered by the agreement, but the union is trying to do the best it can by its members in a climate of uncertainty. Well, I will now adjourn. I will reconvene - what about I reconvene at 25 past? That should give you all enough time to talk about the various issues. I don't think you need my assistance in these discussions, I think you each need to be seeking information. Mr Wheelahan, you need to be talking to your client about that draft order about the financial things.
PN330
MR WHEELAHAN: Yes.
PN331
THE COMMISSIONER: But I just emphasise I understand there is a finite period of time available in this matter and I am really seeing the next 48 hours as being absolutely crucial both with regard to the financial records and with regard to the finalisation of the list of volunteers and any consideration of whether there is to be any involuntary redundancy process in this exercise. So I will now adjourn. I will reconvene at 25 past 4. Thank you.
SHORT ADJOURNMENT [4.15pm]
RESUMED [4.45pm]
PN332
THE COMMISSIONER: Yes, Ms Wiles, I will just ask for you to report back first. Thanks.
PN333
MS WILES: Thank you, Commissioner. We apologise for the delay, we just needed to - - -
PN334
THE COMMISSIONER: No, no, I can assure you I have a lot of other things to do.
PN335
MS WILES: We just needed to contact our financial adviser. We did manage to speak to Mr Ahmed Byers from Sims Lockwood in relation to this matter and he is available to inspect documents tomorrow - or he will make himself available.
PN336
THE COMMISSIONER: Yes.
PN337
MS WILES: The company proposed an alternative to our draft order and that was to give access to the audited statements of the company for the last four years, but the last year has as yet to be audited so that they are unaudited accounts.
PN338
THE COMMISSIONER: Yes.
PN339
MS WILES: We have spoken to Mr Byers and in his view that isn't sufficient to give the union and overview of the viability of the company.
PN340
THE COMMISSIONER: Yes.
PN341
MS WILES: And as I understand it, that is the end of the company's offer in terms of the inspection of the documents, so unless they have a different view, it would be our proposal to put submissions to you in relation to the documents that we are seeking. We are happy to amend some aspects of the order as it was drafted.
PN342
THE COMMISSIONER: Yes, yes. Why don't you both - how about we deal with this issue of the orders right now.
PN343
MS WILES: Yes.
PN344
THE COMMISSIONER: I am not going to make the orders right now, but why don't I hear from you with regard to what you are proposing with regard to the order. Why don't I hear from Mr Wheelahan about what the company has to say about that.
[4.47pm]
PN345
MR WHEELAHAN: Can I actually propose an order, first, because mine is very short?
PN346
THE COMMISSIONER: Well, no, I am going to hear from Ms Wiles first and then I will hear from you, Mr Wheelahan. And if you want to hand up an alternative draft, when it is your turn, Mr Wheelahan, you are welcome to do so. But I am not going to issue an order on the spot. What I would flag to the company is, that it can expect that it is going to need to make some of its records available, tomorrow and I am just - have you thought of a place? I mean it is not like they are here - is there a place.
PN347
MS WILES: Commissioner - - -
PN348
THE COMMISSIONER: Mr Wheelahan, I think your premises, are
PN349
the appropriate place, aren't they?
PN350
MR WHEELAHAN: Commissioner, I have the records here, as described.
PN351
THE COMMISSIONER: Yes.
PN352
MR WHEELAHAN: You do want to hear from Ms Wiles first, but - - -
PN353
THE COMMISSIONER: Yes, I do, but I am just flagging to Ms Wiles, it would seem to me that the office - whereabouts is your office, Mr Wheelahan?
PN354
MR WHEELAHAN: William Street and the head office of the company is in Abbotsford.
PN355
THE COMMISSIONER: In Abbotsford.
PN356
MR WHEELAHAN: Could I just say, the company is currently getting its accounts audited and I have been instructed there are severe resource problems and beyond this going to other documents, I have got time frames and simply they just can't comply with the draft order. In many respects - - -
PN357
THE COMMISSIONER: That is all right, I am not having a submission from you, I am only trying to pin down where any documents can be made available.
PN358
MS WILES: Commissioner, can I address you on the venue?
PN359
MR WHEELAHAN: I must say, the Brisbane head office, I am instructed.
PN360
THE COMMISSIONER: No that is just not practical. It has got to be somewhere here in Melbourne, so - - -
PN361
MS WILES: Commissioner, our view would be that the office of our financial advisers seems like it could be appropriate.
PN362
THE COMMISSIONER: Yes. I consider documents of this kind should not be let out of the custody of the company or its representatives and - but I do believe that they need to be made available, here, in Melbourne.
PN363
MR WHEELAHAN: I am concerned the additional documents are actually in Brisbane.
PN364
THE COMMISSIONER: No, I am not having submissions from you, Mr Wheelahan, I am coming to Ms Wiles.
PN365
MR WHEELAHAN: Sorry.
PN366
THE COMMISSIONER: But I am just wanting to let you all know what my view is about venue. Ms Wiles, it needs to be in Melbourne, but it needs to be at a venue which is in the jurisdiction of the company. So, Mr Wheelahan can be thinking about that while I am hearing from you. Now, you go ahead and you give me your submissions on this subject, otherwise Mr Wheelahan will be leaping to his feet again, you know.
PN367
MS WILES: Commissioner, in support of this order, we do wish to call three witnesses and you have a copy of those witness statements. It would be my intention to, essentially, ask each witness to swear to the contents of their statement and I will just ask each witness several other questions and then after the completion of witness evidence, actually, address you in each of the documents that are in the draft order.
PN368
THE COMMISSIONER: I am just looking for the witness statements. Okay, yes, right, yes.
PN369
MS WILES: So if you are happy for us to proceed in that order - - -
PN370
THE COMMISSIONER: Yes, okay.
PN371
MS WILES: Yes.
PN372
THE COMMISSIONER: Look, I don't want to spend all night on the subject - - -
PN373
MS WILES: I understand, yes.
PN374
THE COMMISSIONER: - - - in a sense, but I am happy to try and make as much progress as we can in the next half hour.
PN375
MS WILES: Yes, as we are, yes.
PN376
THE COMMISSIONER: Yes, thanks.
PN377
MS WILES: Commissioner, the union calls Mr Tony Flynn.
PN378
MR WHEELAHAN: Commissioner, before this witness is sworn in, it hasn't already been put on transcript, can I just reserve my position with respect to jurisdiction under the substantive application that has been filed.
PN379
PN380
MS WILES: Mr Flynn, could you repeat your name and address for the record please?---Anthony John William Flynn, 4 Garden Street, Moe.
PN381
And are you aware that a statement has been prepared on your behalf in this matter?---Yes, I am.
PN382
And you have a copy of that statement with you?---Yes, I have.
PN383
And, Mr Flynn, have you had an opportunity to read that statement today?---Yes, I have.
PN384
THE COMMISSIONER: Mr Flynn this is a statement dated 29 July 2002, is that so?---That is correct.
PN385
MS WILES: Mr Flynn, are the particulars of that statement true and correct?---Yes.
PN386
Thank you, Commissioner, I tender that statement.
PN387
THE COMMISSIONER: Yes, I will mark it A1. There have been no previous submissions in this matter?
PN388
MS WILES: No.
PN389
**** ANTHONY JOHN WILLIAM FLYNN XN MS WILES
PN390
MS WILES: Do you want me to tender that formally, now?
PN391
THE COMMISSIONER: I have got it.
PN392
MS WILES: Mr Flynn, I have just got a couple of extra questions for you. You have been a shop steward at Rocklea for a considerable period of time?---Yes, about 10 years, I was a consultative committee delegate before that.
PN393
And in your role of shop steward is it normally part of your duties that you would be involved in EBA negotiations?---Yes, that is correct, I have been involved in all of the EBAs.
PN394
So you were involved in negotiations for the 2000 agreement?---Yes.
PN395
Mr Flynn, I am going to hand you a copy of that agreement?---Mm.
PN396
I presume you have a copy of the 2000 agreement?
PN397
MR WHEELAHAN: Yes, we do.
PN398
MS WILES: Mr Flynn, if I could take you to clause 14?---14 yes, just a moment, yes.
PN399
Do you recall the negotiations in relation to that clause?---Yes, I do.
**** ANTHONY JOHN WILLIAM FLYNN XN MS WILES
PN400
And as someone who was involved in those negotiations, on behalf of the employees, what is your understanding of the meaning of that clause?---Understanding of the meaning was that if the case arose, for redundancies, the company would negotiate with us in good faith about the amounts and the timing, the length of time, give as much notice as possible. And, actually, those negotiations we undertook with the present CEO then which was Philip Gray. And basically they had said, look, you know, you need to take this on board, we have always done the right thing with negotiations and redundancies, we have always paid above the award, you know, as common practice, at Moe, Bendigo and places like that. And when, after this agreement, when the redundancies happened in Bendigo, they actually, the CEO then Philip Gray came back and mentioned, look we have done the right thing here, you know, this is an act of faith, look this is what we said we would do. And we believed them that was what was going to happen on, continue on, as a practice.
PN401
MR WHEELAHAN: Your Honour, could I just object to this line of questioning on the grounds of relevance. I thought this witness was giving evidence in relation to production of financial records.
PN402
THE COMMISSIONER: Yes, I note your objection. It is there and I will have to make what I will of it, in relation to anything else which may come up, but I note that - I am hearing this with regard to the orders sought on the - but I mean I just don't want to have to keep getting witnesses - I mean, you will all test my patience beyond endurance. If you keep me here all night, we will never get to the end of anything, so if this witness is going to may be called for another matter I am - I mean, in regard to another aspect of this matter, I am happy for him to be asked some questions about it here and now. You will have a chance to cross-examine him, Mr Wheelahan.
PN403
MR WHEELAHAN: Yes and I will confine that merely to financial records, on that basis, Commissioner.
**** ANTHONY JOHN WILLIAM FLYNN XN MS WILES
PN404
THE COMMISSIONER: Yes, thanks.
PN405
MS WILES: And Mr Flynn, if I could just draw your attention to 14, clause 14.5?---14.5.
PN406
And you see the words there "severance payments", I think it is in - - -?---Yes, second last line, yes.
PN407
What was your understanding of the meaning of those words in the context of the negotiations that you had?---The amount that would be paid on redundancy, i.e. what they paid before.
PN408
Thank you and in terms of the custom and practice at Moe, what has been the custom and practice in relation to severance payments?---Two weeks per year of service.
PN409
Thank you Mr Flynn, no further questions.
PN410
PN411
MR WHEELAHAN: Mr Flynn, you say in your statement that you attended a meeting where you were presented with slide show. Could I hand to you what are the printout of that slide show, and I just want you to confirm that those documents are, in fact, the printout of the slide show that you saw?---This is the one from the Monday?
PN412
This is the one presented by the CEO?---Yes. It looks like - it is the first hard copy I have seen, but yes, it looks like it.
**** ANTHONY JOHN WILLIAM FLYNN XXN MR WHEELAHAN
PN413
Thank you. If you could just hand those back. Commissioner, I will seek to tender these, but I apologise, I do not have copies, so if I could just show them to my friend and then pass them to yourself.
PN414
THE COMMISSIONER: Are you going to ask Mr Flynn any questions about what is in those?
PN415
MR WHEELAHAN: No, your Honour, all I am going to do is seek to tender them.
PN416
THE COMMISSIONER: Yes that is fine. Yes, well I will hear from Ms Wiles - - -
PN417
MR WHEELAHAN: They will speak for themselves and Mr Flynn's opinion of them.
PN418
THE COMMISSIONER: Yes. I might - - -
PN419
MR WHEELAHAN: I am not concerned about - - -
PN420
THE COMMISSIONER: I might get you to hold on to them, then, to tender a bit later on. Ms Wiles, you have no objection to those documents being tendered, in due course, not at this moment?
PN421
MS WILES: Commissioner, as long as we do get a copy, yes.
PN422
THE COMMISSIONER: Yes, I will get my associate to make a copy, in due course. Yes, I will be happy to receive them, but not right now. I will get my associate to come over and get them off you and make a copy so that there is a copy to give to Ms Wiles. Yes, go ahead.
**** ANTHONY JOHN WILLIAM FLYNN XXN MR WHEELAHAN
PN423
MR WHEELAHAN: The only other document, is the - I just want to pass you a letter dated 26 July 2002, to the state secretary of your union, from Peter Nathan the CEO. Have you seen that letter?---If you can just give me a second to read through it.
PN424
Yes?---Yes, I have.
PN425
I also seek to tender a copy of that letter for the Court file, your Honour. Whether I do that at a later date, Commissioner, I am in your hands.
PN426
THE COMMISSIONER: Yes, yes. My associate will get them and make copies of them.
PN427
MR WHEELAHAN: Yes, that letter as well, I seek to tender both documents. Do you have any expertise in accounting, Mr Flynn?---If you mean do I have an accounting degree, no, I am a textile worker, not an accountant, so.
PN428
Okay. No further questions, Commissioner.
PN429
THE COMMISSIONER: Yes, thanks, thanks Mr Flynn, I have no questions for you. Ms Wiles, anything further from you?
PN430
MS WILES: No, Commissioner.
PN431
PN432
PN433
MS WILES: Ms Krieger, could you repeat your name and address for the record, please?---Kim Krieger, 2 Breen Court, Traralgon.
PN434
And are you aware that a statement has been prepared,on your behalf, in this matter?---Yes, I am.
PN435
And do you have a copy with you?---Yes, I do.
PN436
Ms Krieger have you had an opportunity to re-read that statement, today?---Yes, I have.
PN437
And are the particulars of that statement true and correct?---Yes, to the best of my knowledge.
PN438
Commissioner, I would seek to tender that.
PN439
PN440
MS WILES: Ms Krieger, prior to the redundancies being announced, I understand that there was a period of stand down?---Yes, there was.
PN441
And can you recall when that occurred?---It was 8 July, Monday 8 July and we resumed work on 15 July, which was a Monday.
PN442
And from your memory what were the reasons given to the employees for the purpose of that stand down?---There was too much stock.
**** KIM KRIEGER XN MS WILES
PN443
And during those discussions with the employees, about the stand down, was there ever any mention made of any impending redundancies?---No.
PN444
Ms Krieger, were you present at the discussions, yesterday, held with the company?---Yes, I was.
PN445
And who, from the company, was actually present at that meeting?---Craig Grant, Peter Nathan, Olef and Greg - - -
PN446
This gentleman here?---Yes, I was trying to recall his name, sorry.
PN447
And was the discussion about when the company made the decision to make the positions redundant?---Yes.
PN448
And, from your memory, when did the company make that decision?---To my understanding it was back in June.
PN449
And was information given about the process after that time, in terms of the bank's approval?---What do you mean by that?
PN450
Was information provided to you, yesterday, in that meeting, as to how long after the decision was made that the bank made the approval to fund the redundancies?---Yes.
**** KIM KRIEGER XN MS WILES
PN451
And what was that, what time period was that?---It was after the week of the stand down.
PN452
No further questions, thank you.
PN453
PN454
MR WHEELAHAN: Ms Krieger, do you have any accounting qualifications?---I am just a textile worker.
PN455
Could the witness be shown the exhibit, the slide charts. I don't think it has been marked yet, but that document. Could you just identify those as a hard copy of the slide show that you were shown from the CEO, please?---Yes.
PN456
If I can ask you this. Weekend shift, both Saturday and Sunday, ceased at the Moe plant, as of Monday 22 July 2002, that is correct, isn't it?---That is what we were told at the meeting, yes.
PN457
And that, in fact, has happened, hasn't it?---No, we actually worked this weekend, just passed.
PN458
If I could hand you something that might - I just want you to look at it, I am not going to seek to tender it. You might read paragraph 3 of that letter?---What I am reading is true and I have read this, before, but we actually - - -
PN459
Well I am not, I haven't asked you a question.
PN460
THE COMMISSIONER: It is not like being in the lounge room?---Sorry.
**** KIM KRIEGER XXN MR WHEELAHAN
PN461
MR WHEELAHAN: It is true that the management has decided that as of 22 July no weekend shifts are to be worked, correct?---That is correct.
PN462
And that was communicated to employees, correct?---Yes.
PN463
Thank you. No further questions. Could you just hand that back.
PN464
THE COMMISSIONER: Yes. Ms Wiles, any follow up questions in regard to that?
PN465
MS WILES: Just a couple.
PN466
PN467
MS WILES: Ms Krieger, so, just for a point of clarification, your evidence is that people did work the weekend shifts last weekend?---This weekend just gone, yes.
PN468
Yes, thank you.
PN469
PN470
THE COMMISSIONER: Ms Wiles. We are making good progress.
PN471
PN472
MS WILES: Ms McKeown, can you repeat your name and address for the record please?---Julie Ellen McKeown, 10 Tarana Avenue, Glenroy.
PN473
And you are aware that a statement has been prepared, on your behalf, in this matter?---Yes.
PN474
And do you have a copy with you?---Yes.
PN475
And have you had an opportunity to re-read that statement, today?---Yes.
PN476
And are the particulars of that statement true and correct?---Yes.
PN477
Commissioner, I seek to tender the statement.
PN478
THE COMMISSIONER: Yes. Ms McKeown, that is dated 30 July 2002, is that right, just after your signature on the third page?---Yes, Commissioner.
PN479
PN480
MS WILES: Commissioner, I have no questions.
PN481
**** JULIE ELLEN MCKEOWN XXN MR WHEELAHAN
PN482
MR WHEELAHAN: Simply, again, to have the witness identify the hard copy that that was the presentation she - - -
PN483
THE COMMISSIONER: Of the overheads?
PN484
MR WHEELAHAN: Yes.
PN485
THE COMMISSIONER: Yes, thanks.
PN486
MR WHEELAHAN: And - - -
PN487
THE COMMISSIONER: Yes, show them to Ms McKeown, thanks.
PN488
MR WHEELAHAN: Could you look at those documents and confirm that they are a hard copy of the overhead presentation presented by the CEO?---Yes, they appear to be. I don't know that the figures are necessarily correct on it, I have a recollection of what they were, but the content looks familiar.
PN489
THE COMMISSIONER: They look familiar to you, as having been pretty much what you saw at the presentation, but you don't remember the precise figures. Thanks very much.
PN490
MR WHEELAHAN: Ms McKeown, do you have any accounting qualifications?---No.
PN491
Could you please tell me who wrote the statement for you, your witness statement, who wrote it for you?---Vivienne Wiles had draft it, but on my instruction, the information came from me.
**** JULIE ELLEN MCKEOWN XXN MR WHEELAHAN
PN492
Okay, thank you. Nothing further, Commissioner.
PN493
THE COMMISSIONER: Yes, thanks very much. Anything further in follow up?
PN494
MS WILES: No, Commissioner.
PN495
PN496
THE COMMISSIONER: Ms Wiles, it might just, for the tidiness of my file, be helpful if you formally tender - you don't need to but I will just get you to do it. Just formally tender the agreement.
PN497
MS WILES: The enterprise agreement?
PN498
PN499
THE COMMISSIONER: Yes, go on, Ms Wiles.
PN500
MS WILES: Commissioner, I now turn to the draft order, itself.
PN501
THE COMMISSIONER: Yes.
PN502
MS WILES: If I could take you to clause 1A, there, that relates to the schedule of employee entitlements.
PN503
THE COMMISSIONER: Yes.
PN504
MS WILES: The purpose for which we are seeking that document, is, that in order to fully assess the viability of the company we need to know what its liabilities are and in particular we need to know what the employee liabilities are, for our members, at that workplace and that includes both the members leaving and those who are to remain. In the witness statements, of the three witnesses you have just heard, all of those witnesses give evidence that representations were made to them in various meetings by company representatives, to the effect that the company had no money and or could not pay employee entitlements, if the company was to fold in six months time.
PN505
We say that the schedule of employee entitlements should not be an onerous task for the company because they have already done a breakdown, for each employee, as part of the voluntary redundancy process.
PN506
THE COMMISSIONER: Yes.
PN507
MS WILES: In regards to the document in clause 1B, that is the schedule of superannuation payments made since July 2001, we seek - - -
PN508
THE COMMISSIONER: Well that should be pretty straightforward, shouldn't it?
PN509
MS WILES: We would have thought so.
PN510
THE COMMISSIONER: Okay, fine, move on.
PN511
MS WILES: The - - -
PN512
THE COMMISSIONER: I will let Mr Wheelahan try and talk me out of it.
PN513
MS WILES: In terms of the documents sought, in clause 1C, that is the financial relationships between Rocklea Spinning Mills and any other companies, within the Rocklea group, if relevant. From our company searches, we have identified two companies, Rocklea Spinning Mills Proprietary Limited and Rocklea Proprietary Limited. We don't have any information about the relationship between those companies. So that - the seeking of that document, really, is to assist us to gain a picture of the corporate structure of the group and flowing from that, where the assets lie and in particular what assets are available or lie in the employing entity.
PN514
THE COMMISSIONER: Yes. That is a - what you have asked is, may be not so easy, not so straightforward and may actually require - I have no idea, of course, and I will wait to hear from Mr Wheelahan, but it may be something that they don't have records of, here, in Melbourne, but whatever will run. I understand what you are trying to get at. As opposed to documents, is it - - -
PN515
MS WILES: Commissioner - - -
PN516
THE COMMISSIONER: - - - is it possible that you could just ask for a statement of the relationships.
PN517
MS WILES: Yes, that was going to be a suggestion, yes. I should say, too, that in terms of any deed which may be entered into, between the parties, it would also go to the integrity of that deed so that we identify the correct corporate entity.
[5.15pm]
PN518
THE COMMISSIONER: So something like - sure, but, yes, that is not a matter which is before me.
PN519
MS WILES: Yes, I understand.
PN520
THE COMMISSIONER: I understand that you will be seeking information. A statement from Rocklea Spinning Mills Pty Ltd regarding its financial and legal relationships with any other companies within the Rocklea Group if relevant to any related companies. A letter from Maddocks, for example, could actually comply with that.
PN521
MS WILES: Sorry, I mis-heard you because you - - -
PN522
THE COMMISSIONER: A letter from Mr Wheelahan's firm could actually comply with that, I would have thought.
PN523
MS WILES: Yes, if it identified the corporate structure.
PN524
THE COMMISSIONER: If it - yes.
PN525
MS WILES: Yes.
PN526
THE COMMISSIONER: Okay, good. The next one - I think we are almost in agreement on this one, are we not. It is only with regard to the audit of documents. It is unaudited for 2001/2002.
PN527
MS WILES: Yes, and we understand, obviously, then there is a lag in terms of audited documents for this financial year. In relation to the documents sought in clause 1(e) we are prepared to remove that request.
PN528
THE COMMISSIONER: Yes. Number (e)?
PN529
MS WILES: Yes.
PN530
THE COMMISSIONER: Out, yes. Yes?
PN531
MS WILES: We are seeking the documents in clause 1(f), that is the aged debtors and creditors list.
PN532
THE COMMISSIONER: Yes, I am just wondering, in terms of where any of that documentation might be and how it could be satisfied in as expeditious a way as possible - I mean you don't want small debtors. Do you want to specify an amount of money? I mean, you don't want to know about their photocopy account or whatever.
PN533
MS WILES: Yes, more than a thousand.
PN534
THE COMMISSIONER: More than a thousand. Mr Wheelahan will have a chance to address me on that.
PN535
MS WILES: Commissioner, on our advice from our financial adviser, we understand that that is a critical document in terms of assessing liability.
PN536
THE COMMISSIONER: Yes, okay, thanks, go on.
PN537
MS WILES: And the same applies to the document in clause 1(g), that is the immature records for Rocklea Spinning Mills. In particular information relation to the last stocktake.
PN538
THE COMMISSIONER: So, particularly, with regard to the stocktake, for what period?
PN539
MS WILES: The last stocktake for the last financial year.
PN540
THE COMMISSIONER: At the end of the 2001/2002 financial year?
PN541
MS WILES: Yes.
PN542
THE COMMISSIONER: Yes?
PN543
MS WILES: In terms of the documents sought in clause 1(h) we are seeking those records because the identification of assets again goes to the potential protection of the entitlements of our members in terms of any potential insolvency and whether the employing entity has assets over which they may have priority.
PN544
THE COMMISSIONER: I am not expressing a view, Mr Wheelahan, I - - -
PN545
MR WHEELAHAN: I understand that, Commissioner.
PN546
MS WILES: The documents sought in clause 1(i), we would be prepared to amend that to monthly management accounts since April 2002.
PN547
THE COMMISSIONER: Since 1 April 2002.
PN548
MS WILES: And the rationale for that is that, given that the last financial year's records are unaudited, we need provisional or extra information for that, at least, for the last quarter of the financial year.
PN549
The documents sought in clause 1(j), that is, the records relating to statutory creditors. Again, we say that is critical based on the advice of our financial advisers.
PN550
THE COMMISSIONER: Yet, again, a statement from the company to that effect might be adequate.
PN551
MS WILES: Yes.
PN552
THE COMMISSIONER: A statement setting out statutory creditors including the Australian Taxation Office. Yes, Ms Wiles?
PN553
MS WILES: In relation to the documents sought in clause 1(k) we should probably particularise that further by saying that, on our advice, what is critical is information which relates to the facilities that the company has with its secured creditor, and in particular, its overdraft limits.
PN554
THE COMMISSIONER: With regard to unsecured creditors - - -
PN555
MS WILES: To secured creditors. So, the facilities that the company have with the secured creditor which will be the bank or financier.
PN556
THE COMMISSIONER: With secured creditors and who else?
PN557
MS WILES: And in particular in relation to the limits on overdraft facilities.
PN558
THE COMMISSIONER: Yes.
PN559
MS WILES: In relation to the documents sought in clause 1(l) we are prepared to remove those.
PN560
THE COMMISSIONER: All right, okay. Yes?
PN561
MS WILES: And similarly with the documents sought in sub clause (m).
PN562
THE COMMISSIONER: You are happy for that to go out?
PN563
MS WILES: Yes.
PN564
THE COMMISSIONER: Okay. Yes? In regard to clause 2 would you be happy for documentation to be made available at the premises of - is it, Maddocks, Mr Wheelahan?
PN565
MR WHEELAHAN: Yes, Commissioner, Maddocks, 140 William Street.
PN566
THE COMMISSIONER: Yes.
PN567
MS WILES: We are, Commissioner.
PN568
THE COMMISSIONER: From - I am just looking at the time, Mr Wheelahan. I think you better get back to the office. You have got to set this up in the morning. What about from midday tomorrow. I am not saying all these documents need to be available. I am just saying - I am just looking at you having a space in the office available for - - -
PN569
MR WHEELAHAN: I can book a meeting room.
PN570
THE COMMISSIONER: Yes. From midday tomorrow?
PN571
MR WHEELAHAN: Yes, I can have a meeting room available.
PN572
THE COMMISSIONER: Fine. Yes?
PN573
MS WILES: And, Commissioner, in terms of the remaining clauses, 3 to 6 of the order, we would submit that they remain as drafted.
PN574
THE COMMISSIONER: Okay, good, all right.
PN575
MS WILES: Commissioner, that concludes our submissions on the documents.
PN576
THE COMMISSIONER: Yes.
PN577
MS WILES: Would you prefer the union to make submissions to you about the rest of the matters before you?
PN578
THE COMMISSIONER: No. We are going to go over to Mr Wheelahan. I am just going to deal with this and then - I will have submissions from you now, Mr Wheelahan.
PN579
MR WHEELAHAN: Could I call a witness in reply?
PN580
THE COMMISSIONER: You certainly can.
PN581
MR WHEELAHAN: Are there no further witnesses - - -
PN582
MS WILES: No, Commissioner.
PN583
THE COMMISSIONER: No, no, no, on this issue, yes.
PN584
MR WHEELAHAN: Yes, I just - - -
PN585
THE COMMISSIONER: This is on the draft order sought in regard to - - -
PN586
MR WHEELAHAN: No, just on the financial matters. If I could call Mr Peter Nathan, the chief executive officer.
PN587
THE COMMISSIONER: Mr - - -
PN588
MR WHEELAHAN: Peter Nathan.
PN589
THE COMMISSIONER: Mr Peter Nathan.
PN590
MR WHEELAHAN: Yes.
PN591
PN592
MR WHEELAHAN: Thank you, Mr Nathan. Could you please tell the Commissioner your occupation at the respondent company?---I am the chief executive officer of the company.
PN593
Could you tell the Commissioner what your qualifications are?---I have a science degree with chemistry, majoring. And I did an accounting qualification in the UK. I am a fellow member of the Chartered Institute of - Chartered Management Accountants.
PN594
Could you tell the Commissioner that the purpose of audited account, could you tell the Commissioner what they say about a business?---The audited account is the one that certifies that the business is meeting all its legal obligations in terms of paying its debts as and when they fall due. And it also portrays the true financial position of a company.
PN595
Would a financial expert be able to - what would a financial expert be able to decipher from looking at audited accounts?---He can see from the balance sheet and the financial statements - he can get a feel for the level of profits or losses the company is making. He can also draw some conclusion as to the cash position of the company and the loan situations.
PN596
If I could just show the hard copy of the slide shows and have you identify this document as the hard copy of the presentation that you gave to employees and could you tell the - - -?---Yes, indeed.
PN597
And on what date did you give that presentation?---This was on Monday when we announced the - - -
PN598
THE COMMISSIONER: Give it a date?---22 July.
PN599
MR WHEELAHAN: It is Monday, 22 July.
**** PETER NATHAN XN MR WHEELAHAN
PN600
THE COMMISSIONER: Monday 22 July. So, it was a week ago you - - -?---That is right.
PN601
Yes, thank you.
PN602
PN603
THE COMMISSIONER: We will get some copies of it in due course.
PN604
MR WHEELAHAN: If I could just hand also to the witness the letter of 26 July. Mr Nathan, could you please just identify that letter. It is signed by you?---Indeed, that is true.
PN605
PN606
MR WHEELAHAN: What did you base the representations made in R1 upon? What material did you use to draft that presentation?---I went through a detailed analysis of the company. It took me about three months to understand what the company has been doing in terms of its sales performance, in terms of its costs performance and the cash flow and the balance sheet situation. So it is an extensive analysis of what the company has been doing over the last few years and at the same time I was asked to try and formulate a strategy going .
**** PETER NATHAN XN MR WHEELAHAN
PN607
It has been put by the witnesses called today that you have made a number of representations about the financial viability of this company outside of that presentation. What representations have you made to employees about the viability of this company?---I have clearly stated to the employees that the business has a financial constraint at the moment. It simply cannot exceed the level of redundancy that we have offered on the table and anything outside those limits will be detrimental to the long term viability of the business.
PN608
In other respects, that being equal, what is the long term viability of the company?---The long term viability of the company with the five day working program suggests that we can just about break even at profit level. But that is subject to a number of assumptions in terms of future sales performance, the cost and all the other things. So, nothing is certain.
PN609
You have a financial controller?---Yes, we have a financial controller based in Brisbane.
PN610
And an accounts team under him?---Yes, indeed.
PN611
How many staff under him?---I think he has about four - five people.
PN612
And what is their level of resourcing at the moment?---Right, now the whole team is involved with putting together annual accounts for the year ended June 2002. We have the auditors arriving almost - there next week and towards the end of this week. We have to send some claims to the Government on the statutory investment program claim and right now they are all fully employed and getting the year end accounts locked in time.
PN613
All right, if I could just hand a copy of the draft order to Mr Nathan in relation to the documents. I am not sure that I have an additional copy. Where are - apart from the audited accounts, copies of which I have given you, where are the financial records of Rocklea kept?---All the financial records are kept in Brisbane.
**** PETER NATHAN XN MR WHEELAHAN
PN614
In what timeframe can they be brought down to Maddocks, lawyers at William Street in Melbourne?---Well, I think if I have to provide all this information, you are talking weeks, rather than days.
PN615
All right, well, perhaps we will now address each item and see if we can narrow down. Point (a) - I won't read it on the transcript. You have got a copy of the draft order. In what timeframe can those documents be provided to Maddocks in Melbourne?---This is the sort of information, again, we have to write a dedicated program to pick up the information that is required to this particular format. So, if I have the resources we could do it, you know, in a day or two.
PN616
THE COMMISSIONER: Well, Mr Nathan, I must say that numbers (a) and (b), I would have thought if you are undertaking a redundancy exercise with the intention to make people redundant at the end of the week, I would have thought this is information that must actually be very readily available. And I understand that information in (a) and (b) is information which ought to be able to be made available some time in the next 48 hours?---Yes, I think - - -
PN617
Yes.
PN618
MR WHEELAHAN: I am concerned I have mislead the witness and the Commission. I must say that all these documents are in relation - you understand they are in relation to Moe only?---Yes.
PN619
And it is those documents relating to Moe are in Brisbane. Is that what you are telling the Commissioner?---Yes.
PN620
THE COMMISSIONER: So, don't you have any information in Moe about the Moe employees - employee entitlements?---We don't have an accounting team in Moe, Commissioner.
**** PETER NATHAN XN MR WHEELAHAN
PN621
Right, well, look, can I just say that I would need some mighty persuading that the information in (a) and (b) would not be able to be made available in some itemised form pretty readily, like, within the next 36 hours. So - - -?---Well, I think, you know, if those are the only two things, Commissioner - - -
PN622
Yes?--- - - - I think, you know, we can.
PN623
And the audited financial statements?---Well, yes - - -
PN624
And the unaudited statements of 2002?---If that is all we are talking about, I think, you know, yes.
PN625
MR WHEELAHAN: Right, so - - -
PN626
THE COMMISSIONER: Yes.
PN627
MR WHEELAHAN: To cut to the chase, if I can. The audited accounts are here. (a) and (b) you can comply within - - -?---I can comply - - -
PN628
- - - 24 hours or 36?---Well, if it is 24 hours, we will work 24 hours and get it done.
PN629
Let us say 36, we want you to sleep.
PN630
THE COMMISSIONER: Well, let us say they will be available by 9 am on 1 August.
PN631
MR WHEELAHAN: Right, this is (a) and (b)?
**** PETER NATHAN XN MR WHEELAHAN
PN632
THE COMMISSIONER: Yes?---(a) and (b), yes.
PN633
Number (c), I would have thought, Mr Nathan, this is something which Mr Wheelahan would be able to prepare on instruction pretty quickly?---Yes.
PN634
MR WHEELAHAN: Could I also - I note the audited accounts refer to Rocklea and subsidiaries, and related companies of course, depending on what Act you are talking about, can be quite a wide definition. I don't have instructions about it but in fact it might be a matter that is quite complicated.
PN635
THE COMMISSIONER: I am - - -
PN636
MR WHEELAHAN: I don't know but I am just - from experience - - -
PN637
THE COMMISSIONER: Statement - I have amended this to say:
PN638
Statement from Rocklea Spinning Mills Pty Ltd regarding the financial and legal relationships with any other companies within the Rocklea Group, if relevant.
PN639
It is just a statement.
PN640
MR WHEELAHAN: Mr Nathan - yes, Mr Nathan - - -?---It is a statement, yes.
PN641
- - - had no problem providing those instructions to Maddocks.
PN642
THE COMMISSIONER: Yes, yes.
**** PETER NATHAN XN MR WHEELAHAN
PN643
MR WHEELAHAN: Point (d), again, the financial accounts, Mr Nathan, are Rocklea Spinning Mills Pty Ltd and its subsidiaries. That is what the audited accounts show; correct?---Yes.
PN644
Do you have a different set of audited accounts for other related companies?---No.
PN645
If I just interrupt. You are seeking an order to confine it to what we have which is Rocklea and its subsidiaries.
PN646
THE COMMISSIONER: Rocklea Spinning Mills.
PN647
MR WHEELAHAN: All right - - -
PN648
THE COMMISSIONER: I am thinking about it. And I am thinking about it in terms of timeframe for being available as well. Mr Nathan, I would have thought that you must have audited financial statements with regard to related companies somewhere or another. It is - - -?---I am not part of the other side of - - -
PN649
Yes?---There is the family business, your Honour, and I haven't really been party to, you know, what the other side of the business does.
PN650
MR WHEELAHAN: It depends how we define, Commissioner, of course, related companies.
PN651
THE COMMISSIONER: Yes. Well, these, in any event, with regard to Rocklea Spinning Mills are available immediately?---Yes.
PN652
MR WHEELAHAN: Correct.
**** PETER NATHAN XN MR WHEELAHAN
PN653
THE COMMISSIONER: Yes, yes, so there by midday on 31 July - - -
PN654
MR WHEELAHAN: Now, if I can take you to point (f), Mr Nathan?---Yes. That is readily available (f), we can do that.
PN655
You can do that.
PN656
THE COMMISSIONER: When would that be ready - by 1 August?---Yes.
PN657
All right.
PN658
MR WHEELAHAN: All right and point (g), I note, Mr Nathan, that the inventory is actually dealt with in the audited accounts, is it not?---Yes, it is. The same with debtors. I mean - - -
PN659
Can - it is - yes, that is right. It is dealt with in the audited accounts. I note this years are yet to be audited. If you were ordered by the Commission to provide the documents in (g), what timeframe?
PN660
THE COMMISSIONER: Realistically?---I couldn't give you an answer straight away.
PN661
No, you couldn't even answer?---Yes, yes.
PN662
MR WHEELAHAN: With your - they are addressed in the audited accounts?---Yes.
PN663
Is that your answer?---It again, depends, which stocktake we are meant to be looking at. I need to go back and make sure that, you know - - -
**** PETER NATHAN XN MR WHEELAHAN
PN664
THE COMMISSIONER: Well, it is the stocktake at the end of this financial - - -?---End of June.
PN665
Just ended financial year?---They are right in the process of going through all of that at the moment. We haven't finalised it yet, so - - -
PN666
MR WHEELAHAN: I dealt with - is that dealt with in this audited report?---That is - no, you know, physical stocktake in there.
PN667
THE COMMISSIONER: Yes. It wouldn't be dealt with in there in a way - - -?---No.
PN668
- - - which would satisfy - - -?---Yes.
PN669
- - - the union's request.
PN670
MR WHEELAHAN: We still have the - so you - - -
PN671
THE COMMISSIONER: It might take you some time to actually - given the timeframe, it might actually take you some time to produce - - -?---But, you know, we can have a go and see how far we go. I mean, you know, I am quite happy to - - -
PN672
MR WHEELAHAN: Having a go is a difficulty if there is orders to comply with, Mr Nathan. You must be realistic - - -?---Yes.
PN673
You can't give a time that you can't comply with. If you can turn the page to (h). If I can just make a quick submission. The same issue. Whenever related companies is mentioned, Commissioner - I already addressed that issue about the - - -
**** PETER NATHAN XN MR WHEELAHAN
PN674
THE COMMISSIONER: I - yes.
PN675
MS WILES: Commissioner, can I just - - -
PN676
THE COMMISSIONER: Yes, Ms Wiles?
PN677
MS WILES: - - - seek some clarification. I am just - the point about whether my colleague is actually making submissions during his - - -
PN678
THE COMMISSIONER: Yes, he is.
PN679
MS WILES: - - - examination-in-chief.
PN680
THE COMMISSIONER: Yes, yes.
PN681
MS WILES: And if that is appropriate.
PN682
THE COMMISSIONER: Yes, it is all right, well - - -
PN683
MR WHEELAHAN: I am just trying to shorten things rather than - - -
PN684
THE COMMISSIONER: Yes, no, no, I appreciate that.
PN685
MR WHEELAHAN: (h), Mr Nathan?---Yes. That information is readily available.
**** PETER NATHAN XN MR WHEELAHAN
PN686
If that was confined to Rocklea Spinning Mills and its subsidiaries - - -?---We can meet the deadline.
PN687
Within what timeframe?---Within - - -
PN688
1 August, 9 am?---Yes.
PN689
Yes. (i), again, if it is confined to Rocklea Spinning Mills Pty Ltd - - -?---Yes, we have - - -
PN690
- - - and change the date to 1 August 2002?---We can meet that deadline.
PN691
All right. And your answer is, if I extend that to other related companies, can you comply with then timeframe?---Not that I know of because - I couldn't answer that.
PN692
All right. (j), if I changed that to read, statement relating to statutory creditors - - -?---Yes.
PN693
- - - and the rest remains the same, what timeframe?---That is almost instantly available as part of our normal - - -
PN694
So you can do that by 1 August, 9 am?---Yes.
PN695
All right, (k), if you read (k) please - - -?---Yes.
PN696
- - - and add to it, overdraft facilities and secured creditors. My note might be deficient, Commissioner, of what I should be putting to the witness.
**** PETER NATHAN XN MR WHEELAHAN
PN697
THE COMMISSIONER: I had added on at the end, with secured creditors and in particular in relation to the limit on overdraft facilities.
PN698
MR WHEELAHAN: Is that information available by 1 August 9 am?---There is a lot of work we are trying to get together in terms of secured documents and copying and all of that.
PN699
Yes, there is?---That is the only concern that I have. The information is there but - - -
PN700
THE COMMISSIONER: So, a question mark there?---Question mark.
PN701
MR WHEELAHAN: Okay.
PN702
THE COMMISSIONER: It is not easy?---Yes.
PN703
And not by the end of the week?---That is right.
PN704
MR WHEELAHAN: No.
PN705
THE COMMISSIONER: Thanks.
PN706
MR WHEELAHAN: (l) and (m), you need not worry about. I am just reading ahead, Commissioner.
PN707
THE COMMISSIONER: These are really more for you to be able to say to Mr Nathan, are you happy with those terms.
**** PETER NATHAN XN MR WHEELAHAN
PN708
MR WHEELAHAN: That is correct.
PN709
What would be the effect on the company, Mr Nathan, if the documents were used in the manner described in paragraph 6? If you could just read paragraph 6 and then answer my question?---Yes. I have some concerns about that. These are highly sensitive information and I think, you know, we must have a - if somebody is actually going to release some information about our company we must have a right of access first to make sure that they are substantially correct in their assessment.
PN710
THE COMMISSIONER: Yes, indeed.
PN711
MR WHEELAHAN: I have nothing further, Commissioner.
PN712
THE COMMISSIONER: No, no, I don't want you to have nothing further. I am just saying, Mr Wheelahan - - -
PN713
MR WHEELAHAN: To the witness, sorry.
PN714
THE COMMISSIONER: No, I am happy for Mr Nathan to stay there for just a minute.
PN715
MR WHEELAHAN: Oh, yes, I know that. I mean, sorry, I - - -
PN716
THE COMMISSIONER: No, I don't want you to sit down either.
PN717
MR WHEELAHAN: Okay.
**** PETER NATHAN XN MR WHEELAHAN
PN718
THE COMMISSIONER: I am just wondering, Mr Nathan and Mr Wheelahan what - how you might consider re-wording clause 6 to satisfy Mr Nathan's understandable concerns.
PN719
MR WHEELAHAN: I might say - I mean, I can this on the record of course. And I think someone's interpretation of financial records, as we have seen from the witnesses who have already given evidence, one must be very careful what they then say to others about the financial viability of the company or otherwise. Now - - -
PN720
THE COMMISSIONER: Absolutely.
PN721
MR WHEELAHAN: - - - obviously it is going to an expert. The people who have been present on behalf of the union are not qualified to give advice or learned information about the viability of this company. No doubt, I would - what I anticipated is that there would be a private report back. Obviously their expert will have a report.
PN722
THE COMMISSIONER: Yes.
PN723
MR WHEELAHAN: Essentially this is to justify the representations that the CEO has made to the people. I am not concerned about the interpretations given by the witnesses because we have overheads and we have a copy. Now, if the report comes back that the CEO has mislead them a private report back would clearly put you in a position to proceed with that knowledge. But if the report comes back that, indeed, Mr Nathan has properly interpreted the financial data available to him, then it really should go no further. Obviously with 6 - an industrial climate.
PN724
People get very concerned about financial records being used for an industrial campaign and Chinese whispers.
**** PETER NATHAN XN MR WHEELAHAN
PN725
THE COMMISSIONER: Sure, sure.
PN726
MR WHEELAHAN: So, my re-wording is - - -
PN727
THE COMMISSIONER: My observation is I don't believe that is how the union intends to operate but I do understand the sensitivity of the matter, Mr Nathan, and I am concerned to try and ensure that any clause that I might include in any orders I might consider making would provide you with the comfort that you want to have. While, at the same time, I am wanting to allow the union to be able to say something to its members - - -
PN728
MR WHEELAHAN: Maybe we addressed it - if they get their report, come back to private conference, then we make submissions to you about what can be addressed to members. The report might come back and say Mr Nathan is perfectly right. That is end of problem. If it comes back a little bit different, well - - -
PN729
THE COMMISSIONER: Yes.
PN730
MR WHEELAHAN: - - - as I said, there is a lot of other legal issues then about what one says to the general - - -
PN731
THE COMMISSIONER: Well the way to deal with it, I think, Ms Wise, is that - because I don't want it to have to come back to me if it does not have to come back to me. It may well be that a suitable way to deal with it is that the union prepare its statement that it believes would be appropriate to make to its members based on the inspections and that they present that to the company's representative for clearance. And if the company accepts the accuracy of what it is that the union is proposing to say, well, there is no problem. If there is a dispute, I am happy for it to come to me. I don't want it to have to come me unless it absolutely has to.
**** PETER NATHAN XN MR WHEELAHAN
PN732
MR WHEELAHAN: That sounds sensible and I would just only add to that of course we have a copy of the report upon which the statement is based.
PN733
THE COMMISSIONER: Yes.
PN734
MR WHEELAHAN: Because otherwise the company has to - well, does it then go away with pre-audited accounts and get another opinion to see whether the opinion of their expert is right?
PN735
THE COMMISSIONER: Yes, yes. It will move faster than that, Mr Wheelahan.
PN736
MR WHEELAHAN: If we have the report then it is short circuited.
PN737
THE COMMISSIONER: Thanks. Ms O'Neil.
PN738
MS O'NEIL: Commissioner I understand the concern regarding the confidentiality and you would be award that this is not the first time that the union has sought orders of this sort and I think our record in terms of how that information is dealt with is well known to you.
PN739
THE COMMISSIONER: Yes. It is to me but that may not make Mr Nathan feel very comfortable. I am trying to get Mr Nathan to the maximum level of comfort about what he is discussing so that is - and if you can help me with that then I would appreciate it, yes.
**** PETER NATHAN XN MR WHEELAHAN
PN740
MS O'NEIL: I appreciate that, Commissioner. The difficulty we have is that given the very short time frame involved, the normal approach that we would have in relation to our financial advice that we engage in in these circumstances would be for him to provide a verbal report to the union as to his general conclusions. The issue then, in terms of what would be communicated to our members, is very much in the context of us giving an undertaking that we do not disclose and would not disclose the detail of any of the specific financial information provided to us but we would make a report back to our members that dealt with their issues of concern and how what we had seen in relation to the financial records of the company responded to their areas of concern and in this case, Commissioner, that is not only the information that the company is relying on as far as the basis for the need for the redundancies but also the company's claims in relation to incapacity to pay and the members' understandable concern about the ongoing solvency and viability of the business.
PN741
My concern with us making some sort of statement from an independent person that would be given in writing to our members would be the legal position you are putting the union in in relation to whether that can then be relied upon by employees in the future as to suggest that we have somehow made a statement regarding the viability of this business. Now that is not possible with a viewing of records over a period of 24 to 48 hours. It would be untenable for us, as a union, to provide any type of written documentation to employees that could then be relied upon then to make a decision as to whether they remained in the business or not and then, for example, in a worst case scenario, if the business were to find difficulties some short time later that contradicted that information, there may be some action taken in relation to the union so it would be very difficult for us to be in a position to provide what was seen as an independent assessment of the company's financial state to our members of this time frame. We would be in a position to make judgments based on the information that is provided that will assist us in advising our members only.
**** PETER NATHAN XN MR WHEELAHAN
PN742
THE COMMISSIONER: No, that is right but what the company is saying is it has got a whole raft of things could spin off from any kind of inaccurate representation to your members of what arises from an inspection of the documents and they are saying well, we would like to know what the union plans to say to its members. They are not really very concerned with what the financial adviser says to the union. They are very concerned with what the union - and they accept your and Ms Wiles' entitlement to have information, provided that you hold that information on a confidential basis and don't disclose it.
PN743
The problem comes with where you go with the information with regard to your members. That is where the company is really concerned because that is when it goes out into the public domain. That is when it can go into the newspapers. That is when a great deal of excitement can be generated which can have devastating consequences, whether the information was accurate or inaccurate, and really what the company is flagging is that they might be comfortable if they knew and were able to comment in advance on what it is that you might go forward and say to your members based on the information you get from the financial expert after the expert has looked at the documents. I am just saying isn't there some kind of compromise we could reach.
PN744
MS O'NEIL: Commissioner, we would have no problem in terms of there being an opportunity in this Commission for us to advise the company on the conclusions that we had drawn on the basis of the information that had been received from our advisers so we would be happy to say the general tenor, in terms of what we will report back to our members, and we would be happy to do that in this Commission. What I am unable to do is to say that we would provide a written assessment of the company's financial status as a result of the viewing of a limited number of records over a short period of time.
PN745
THE COMMISSIONER: No, no, no. Mr Nathan, that is not what you're - - -?---No, not at all, Commissioner.
PN746
You are prepared to do - look, if it is going to help, I am happy to make myself available to be the go-between in the clearance process, Ms O'Neil and Mr Wheelahan.
**** PETER NATHAN XN MR WHEELAHAN
PN747
MS O'NEIL: We would have no problem with that, Commissioner.
PN748
THE COMMISSIONER: Mr Wheelahan, is that a satisfactory compromise?
PN749
MR WHEELAHAN: I am not sure we still answered the last issue about what they then tell their members.
PN750
THE COMMISSIONER: Well they won't tell their members anything other than what they have really said to us. They are not going to run off on a frolic and make more out of it than they will have made in any information they convey here in the Commission.
PN751
MR WHEELAHAN: I don't want to be obstructive but if, for example, the union were to come here and say we are going to say x, y, z and Mr Nathan said oh, my God, no you're not, that is not right, we don't have an agreement that well, if we are not happy with what they are going to say - - -
PN752
THE COMMISSIONER: No, I would be looking at some wording of clause six that covered that, yes.
PN753
MS O'NEIL: I am happy with that, Commissioner.
PN754
THE COMMISSIONER: Okay. Nothing more then, Mr Wheelahan? Yes, Mr Nathan. Thank you very much. You can - sorry, Ms Wiles, did you have any questions for Mr Nathan? I didn't give you - - -
PN755
MS WILES: Ms O'Neil is actually going to do the cross examination.
PN756
**** PETER NATHAN XXN MS O'NEIL
PN757
MS O'NEIL: Thank you, Mr Nathan. Mr Nathan, how long have you been with the company?---Since January this year.
PN758
And your original employment, I understand, was not as a CEO?---I came as a management consultant.
PN759
And the brief in terms of your employment as a management consultant at the time?---To understand where the company had gone wrong in the past in terms of its trading performance and come up with some sort of recovery plan to bring the business back to a break even or better.
PN760
And do you have previous experience in relation to the textile industry?---Not the textile but I have been a management consultant for the last 16 years.
PN761
But this is the first engagement in relation to a textile company?---Yes.
PN762
And the - could you outline to the Commission why the company has been unprepared during the period of this dispute to make any further severance or notice payments to the employees?---I think it was made very clear to all the employees in my presentation. The company has been losing money for 24 months, month in, month out, and we simply haven't got the capacity within the ..... limits that we have.
PN763
And the financial records of the company, are they kept electronically? You outlined earlier a team of people - - -?---Every information is, you know, maintained in the computer yes.
PN764
So it is electronic records?---Electronic, yes.
PN765
So given that the records are kept electronically, is there any problem in terms of the transfer of that information from Brisbane to Melbourne?---We can, we can do that.
**** PETER NATHAN XXN MS O'NEIL
PN766
And you mentioned the preparation of documents in relation to the SIP program, or the strategic investment program?---Yes.
PN767
Could you outline to the Commission what the basis of that application to the government's program is?---Well we have made certain capital investment so we made a claim on what our qualifying expenditure.
PN768
And the claim on the SIP program was for how much?---I couldn't tell you the exact answer.
PN769
Approximate?---It is being finalised at the moment.
PN770
Approximate, Mr Nathan?
PN771
THE COMMISSIONER: He doesn't have to answer that question.
PN772
MS O'NEIL: Commissioner, the reason I was asking the question is it does relate to the issue of the current amount of money available to the company. Well we actually removed from our order the issue in relation to SIP on the basis of thinking it wasn't necessarily relevant, but given it has been raised in evidence by Mr Nathan, we would perhaps seek that that aspect of the order be included.
PN773
THE COMMISSIONER: But I don't expect Mr Nathan to have that information available to him now.
PN774
MS O'NEIL: And Mr Nathan, were you involved in the discussions with the bank that were held in June of this year?---Yes, I have.
**** PETER NATHAN XXN MS O'NEIL
PN775
So at what point was it clear to you that there would be a need for redundancies on the site?---The banks were given a presentation on 19 June but since that time, we are still in negotiation with the banks until the first week in July, to determine how much money we can actually raise to support the company.
PN776
THE COMMISSIONER: And to support a redundancy program?---And both.
PN777
MS O'NEIL: So - - -?---We had a - if I can just elaborate on that point.
PN778
THE COMMISSIONER: Yes, do go on, Mr Nathan?---We had a requirement of the working capital requirement because the company has been struggling with the lack of sales and that created a bit of an issue.
PN779
How long has the lack of sales been going on, though, Mr Nathan?---The lack of sales has been - Commissioner, if you look at those charts I presented to the members, over the last 24 months, except for five months out of the 24, the company were making huge losses and if you add the profit they made in the five months over the time, just one month lost just simply swamps what they made in the five months where they were just about break even.
PN780
Yes. I am just wondering what the cause of the - has it been an ongoing decline in sales?---It is an ongoing decline in terms of - there has been industrial action in Australia. A lot of our customers have gone under, sadly, and that left us a big vacuum and we have been trying to sort of fill that void with doing deals with companies which came out of spinning yarn, for instance. We did special deals with Pacific Dunlop, with Bruck and tried to sort of keep the business going. We also tried to establish an export market for our product. Unfortunately again, we are under severe pressure from overseas yarns, particularly Asian countries at the moment. We are being hit on prices. It is ever so difficult to sell yarns overseas. Even in Australia today, the fact is that people can import yarns from India and Indonesia in particular, at prices far advantageous than one that we are demanding from our customers.
**** PETER NATHAN XXN MS O'NEIL
PN781
So is that your biggest difficulty?---That is exactly the difficulty, Commissioner. We simply haven't got sales. There are customers who are threatening to not trade with us because, you know, we are not giving them price reductions but they are matching our prices with what they can get in the open market. I have been going into negotiations with some major customers, they are all looking for price reductions. One or two customers are withholding putting orders this years and they are looking at trialing imported yarns from Indonesia, India and Pakistan and other countries.
PN782
Yes, all right, fine. Thanks for that. I am just wanting to understand - we want to have some understanding of the background to the situation. Thank you. Yes, Ms O'Neil.
PN783
MS O'NEIL: And in the original approach to the bank on 19 June, was there an outline to the bank in terms of the number of redundancies that were seeking their support?---Yes. It was very clear to us because, you know, we were looking at what the capacity was and I put out a chart in the presentation. You will find that both of our mills in Brisbane and Moe, we couldn't sell the volumes that we were producing over the weekend shifts.
PN784
MR WHEELAHAN: I just object here on the grounds of relevance, Commissioner. I think we are straying from the issue to be determined, asking that question.
PN785
THE COMMISSIONER: Yes, we may be.
PN786
MS O'NEIL: It is - - -
PN787
THE COMMISSIONER: I am prepared to, at this late stage, to allow a little bit of latitude but I don't want to go on forever, Ms O'Neil.
**** PETER NATHAN XXN MS O'NEIL
PN788
MS O'NEIL: Thank you, Commissioner. I appreciate the lateness of the time.
PN789
THE COMMISSIONER: I am just - I want to know whether the transcript taker is okay as far as the time is concerned. Yes, good, thanks.
PN790
MS O'NEIL: There is one further question in relation to a query regarding the statement of Mr Tony Flynn that I would ask to have shown to Mr Nathan, if that is possible, Commissioner.
PN791
THE COMMISSIONER: You want him to be shown the statement of Mr Flynn.
PN792
MS O'NEIL: Is it possible, Commissioner, if I show your statement to him?
PN793
THE COMMISSIONER: Yes, yes.
PN794
MS O'NEIL: Thanks very much. Thank you, Mr Nathan. Can I take you to clause 5 of Mr Flynn's statement?---Yes.
PN795
And if you look towards the end of that paragraph, Mr Flynn is referring to a statement made by you regarding the financial situation and he says:
PN796
I then asked Nathan to confirm that the company had got approval for a certain amount of money from the bank to pay for the redundancies and Nathan said "yes".
PN797
And he goes on to say:
**** PETER NATHAN XXN MS O'NEIL
PN798
I then asked "what if everyone got the bullet tomorrow, would everyone get paid" and Nathan said "no" and that there was no money for entitlements.
PN799
Could you just confirm that that was what was said?---Well let me put it to you again. It was a hypothetical question. We were in the process of putting together a viable plan for the company going forward. The last thing I had in mind was to, you know, make everyone redundant and provide for it. It is also very important to understand that the company has certain legal obligations. Every month we have to make sure that statutory entitlements for employees are provided in full so on an ongoing basis we are meeting our obligations to our employees in terms of their superannuation, in terms of the long service leave, annual leave. That is protected as long as the business continues to trade. Now the hypothetical question is if something happened tomorrow and the company goes into bankruptcy, I can't even begin to predict, you know, how somebody else would come in and - - -
PN800
THE COMMISSIONER: Mr Nathan, I am going to cut you off at that point. Yes, you can't begin to predict?---Yes, that is right.
PN801
Yes, thanks.
PN802
MS O'NEIL: So just in relation to my original question though, Mr Nathan, that was the statement that was made to Mr Flynn in that meeting?---I have given the right answer, I think.
PN803
THE COMMISSIONER: Yes, I can understand the answer he has given.
PN804
MS O'NEIL: And just in terms of your answer to that question, and how is it that you make their provisions in terms of entitlements secure for employees on a monthly basis? Is that money put aside for employees?---We have an arrangement with our lenders that there is, you know, certain money out of the money that we have arranged as a loan to make sure that we have that sums of money to be put away for employees.
**** PETER NATHAN XXN MS O'NEIL
PN805
So you are saying the money that is put away - - -?---On an ongoing basis. On an ongoing trading basis, yes.
PN806
There is money that is put away for employees on an ongoing basis?---As far as the superannuation is concerned, leave entitlements are concerned, sick leave, long service leave. That is provided in full.
PN807
I would have to put to you, Mr Nathan, that in the meeting that you were present at yesterday, the Chairman of the Board, he actually indicated that that was not the case and that there was no money put aside in relation to this matter?---The question that we gave - - -
PN808
MR WHEELAHAN: I object again, Commissioner. This is only about an issue about the production of documents.
PN809
THE COMMISSIONER: Yes. As I have indicated, I am prepared to allow some latitude but I have actually reached the end of the latitude I am prepared to allow, Ms O'Neil. You gave it a good go, though. Mr Nathan, can I just say to you I am sure your lawyer would advise you to go back and sit down now but off you go. Thanks.
PN810
THE COMMISSIONER: Sorry, we are trying to get something else out. Yes, Ms O'Neil.
PN811
MS O'NEIL: The - I have a proposal to put to you in relation to how we might proceed in relation to the broader issue, given that we seem to have finished the evidence in terms of the orders.
PN812
THE COMMISSIONER: Well why don't I just say I will take into - just first of all, thanks very much, Ms Wiles and Mr Wheelahan for your submissions with regard to the orders for disclosure and I will take all of that on board and look at issuing orders but I understand that the company has no problem with regard to the making available of a certain number of and certain category of the documents in the next 36 hours and I will take that into account in the order and the most contentious issue is reaching the resolution on what it is that the union might be able to go and say to its members after they have discussed the matter with their expert and I will have a think about how I might tackle that, having considered the submissions from the parties. But I will look at getting those out, whatever orders I am disposed to make, I will look at getting out first thing in the morning, so that wraps up the orders issue. If the union feels that there are a wider range of documents from a wider range of companies, then it will need to actually tackle me on that issue afterwards. Let's get over this issue with regard to the company and the documents over the next 36 hours. Thanks.
PN813
MS WILES: Commissioner, just an issue of practicality. Are you saying that the union can safely go ahead and engage our financial adviser for 12 o'clock tomorrow?
PN814
THE COMMISSIONER: Yes, yes.
PN815
MS WILES: Okay.
PN816
THE COMMISSIONER: 12 o'clock tomorrow was the making available of the audited accounts and the unaudited accounts for the 2002/2002 financial year.
PN817
MR WHEELAHAN: The audited accounts?
PN818
THE COMMISSIONER: I thought we had agreed on the unaudited accounts for the 2001 - - -
PN819
MR WHEELAHAN: It is point D, if it was reworded in the Rocklea Spinning Mills Pty Ltd. That is fine.
PN820
THE COMMISSIONER: Yes. Thanks.
PN821
MS O'NEIL: Commissioner, I have had the opportunity to consider your earlier comments in relation to timing and the need for all parties to try and resolve this matter and also we would draw you back to my response in relation to the difficulties that the employees currently face in terms of the decision making process and we have had an opportunity to also consult with the delegates from the site who are present with us in the Commission today and it is true to state, Commissioner, that the decision making process of the employees in relation to this matter rest on two things; they rest on both the issue of the quantum of payments that would be available but also on the issue of the financial state and any arrangements that would be put in place regarding the security of entitlements for employees which remain.
PN822
I appreciate, Commissioner, that we haven't brought the detail of that issue before you and I understand from our discussions yesterday with the company, and from the comments made by our colleagues today, that we are close to an agreement in relation to how the issue of the security of entitlements ongoing will be dealt with by the parties, so it is in that context that I put the following proposal to you. That would be, Commissioner, that we would seek the extension of the draft order that was issued on 25 July until 6 pm on Thursday, 1 August and that that draft order be amended in the following terms, to include (1) the opportunity for the TCFUA to inspect the company's records in accordance with the further order of this Commission.
PN823
THE COMMISSIONER: Yes.
PN824
MS O'NEIL: (2) that the parties would use their best endeavours to resolve by agreement (a) the quantum of payments payable under clauses 14.5 and 14.8.3.
PN825
THE COMMISSIONER: Yes.
PN826
MS O'NEIL: And (b) arrangements to apply regarding the security of employee entitlements on the site.
PN827
THE COMMISSIONER: Yes.
PN828
MS O'NEIL: And I would seek your guidance, Commissioner, in terms of the inclusion of a further report back to this Commission to enable the issues we previously discussed regarding the reporting to our members apply.
PN829
THE COMMISSIONER: Yes. My concern is I won't be available on Friday or Monday or at least not until very late on Monday so that is the concern I have. I am just wondering what your time frame is for a report back.
PN830
MS O'NEIL: Obviously we have proposed Thursday 6 pm as the deadline so that there was an opportunity for us to communicate the results, hopefully, of those discussions to employees in a way where they are still in a position to make some decisions and meet the company's preferred deadline. We have no problem in relation to Monday, Commissioner, but it was in an attempt to consider your and the company's earlier comments that we suggested Thursday, but Monday would be acceptable to us.
PN831
THE COMMISSIONER: Yes. My worry is that I don't - I am going to come to Mr Wheelahan. I mean where do we go beyond Thursday, I suppose. That is the question I ask. What would you be - say there are unresolved issues on Thursday, what would you be proposing to - - -
PN832
MS O'NEIL: It may be that if we are able to limit the number of unresolved issues, Commissioner, there may be some consideration by the parties of your earlier proposal regarding consent arbitration. It might be that we have reduced the number of issues of difference between us and that allows some comfort on both sides. It is on that basis, Commissioner, that I proposed that the order deal with attempting again to resolve our differences regarding 14.5 and 14.8.3 as well as the opportunity to, I think, finalise an agreement that we already have in principle regarding the security of employee entitlements, which make a difference in terms of the employees' decision making.
[6.11am]
PN833
THE COMMISSIONER: Indeed, indeed. Good. Thanks for that. Yes, Mr Wheelahan.
PN834
MR WHEELAHAN: Commissioner, I rely on the decision I handed up earlier of Commissioner Smith.
PN835
THE COMMISSIONER: Yes, yes.
PN836
MR WHEELAHAN: The company shouldn't be impaired managing its business and should be told to pursue its course. I have never consented to jurisdiction on behalf of the company for the Commission actually making orders of the type that have just been - - -
PN837
THE COMMISSIONER: No, and you run the risk that I will actually require written submissions from you with regard to jurisdiction, Mr Wheelahan.
PN838
MR WHEELAHAN: Well, let me just address a few quick issues. A range of - - -
PN839
THE COMMISSIONER: Don't address a few quick issues with regard to jurisdiction.
PN840
MR WHEELAHAN: All right. No, no, I was just going to say with what is sought.
PN841
THE COMMISSIONER: Yes.
PN842
MR WHEELAHAN: The security for entitlements on site is just - it is not even in the application so a fresh application can be made for that. That is reference to the deed securing entitlements by a lien for everybody on site.
PN843
THE COMMISSIONER: Sure, sure.
PN844
MR WHEELAHAN: This company - if I rely on Smith's decision and cut to the chase - - -
PN845
THE COMMISSIONER: Yes.
PN846
MR WHEELAHAN: - - - it wants to proceed as it is entitled to do in running its business. You have heard evidence from the CEO. The offer of an additional four weeks - and that is an additional four weeks beyond what the company is advised it is required to pay under 14.3.8 I think it is - under the certified agreement anyway - that is if it proceeds on Friday. For financial reasons I am instructed that if this was all delayed by another week the offer of four weeks doesn't remain on the table, it is then three weeks and, accordingly, with the timeframe I am instructed that that is - because that is the money they have borrowed, that is what they have available.
PN847
This isn't an ongoing reset the platform for a negotiating position for the union to resolve it at an amount higher than what we have already offered.
[6.14pm]
PN848
THE COMMISSIONER: Yes.
PN849
MR WHEELAHAN: We have had good will, we have put all those matters, but essentially, I rely on Smith's decision that the company should not be impaired, or that the Commission should not be directing it how to run its business from here on. There are remedies under the unfair dismissal legislation. There are all sorts of remedies if it does it wrong, but any delays, for example, we would be seeking concessions from the union that if there was an unfair dismissal claim, they wouldn't be relying on a ground that they even have enough time to consider because of the delays here today in the Commission.
PN850
THE COMMISSIONER: Yes. Mr Wheelahan, what do you say with regard to the comment I made earlier on about the desirability of just going through any further exercise with regard to volunteers for redundancy?
PN851
MR WHEELAHAN: I have got instructions on that, and Mr Nathan instructs that he is happy to put it out again - the volunteers - for 48 hours. He needs an answer in 48 hours.
PN852
THE COMMISSIONER: Yes, by - when is the 48 hours to run?
PN853
MR WHEELAHAN: I will just get instructions, sorry.
PN854
THE COMMISSIONER: By close of business - by 5.00pm Thursday?
PN855
MR WHEELAHAN: If we could make it during the day, because, of course, if they don't get enough volunteers they then need to actually select employees - - -
PN856
THE COMMISSIONER: All right. Well, you will need to get cracking, Mr Nathan, tomorrow morning, on this exercise.
PN857
MR WHEELAHAN: Yes.
PN858
THE COMMISSIONER: I understand, from the information from Ms Wiles and Ms O'Neil, that you have actually been through some aspect of this. So you actually know - but what those people didn't know was what it was that you would actually be offering them. So I think you need to make clear what it is you are actually putting, and see where you get.
PN859
MR WHEELAHAN: Correct.
PN860
THE COMMISSIONER: What time on Thursday?
PN861
MR WHEELAHAN: 3.00pm.
PN862
THE COMMISSIONER: 3.00pm Thursday.
PN863
MR WHEELAHAN: And we will put out a note first thing tomorrow morning, and notifying that if we don't have enough volunteers, of course, and what the package is that the company is, in fact, offering, as we have discussed today, Commissioner. We will take it all on board, and make sure that we get cracking.
PN864
MS O'NEIL: Commissioner, can I just bring to your attention that there are, in fact, a number of shifts, including a weekend shift, that a note put out on the site tomorrow would not effectively communicate with all of the employees. There is employees who are working in the daytime. There is employees who, in fact, aren't due to work again until Saturday.
PN865
THE COMMISSIONER: Yes. Mr Nathan, I think this is an exercise where it is worth your going the extra mile, and - - -
PN866
MR NATHAN: Indeed, we will do the extra yard.
PN867
THE COMMISSIONER: - - - getting that information out to them by express post tomorrow morning.
PN868
MR NATHAN: Yes, we do that.
PN869
THE COMMISSIONER: You have got how many people involved?
PN870
MR WHEELAHAN: There is approximately 138 employees at Moe.
PN871
THE COMMISSIONER: Well, it just means you have got to get your clerical staff on to get that stuff out in express post.
PN872
MS O'NEIL: Commissioner, I am not sure about your experience of Australia Post, but if it was sent by express post tomorrow, then some employees won't receive it until the middle of the day, or conceivably, 3 o'clock on Thursday.
PN873
MR WHEELAHAN: Perhaps the union might assist, considering that all their employees, no doubt, know they are here today, and would be anxious to hear what the result of the proceeding is.
PN874
THE COMMISSIONER: Yes. Look, I can only ask the company to use its best endeavours to communicate directly with employees. You should be - I would suggest that you use your channels of communications, Ms Wiles and Ms O'Neil, to have the employees, if they are interested, contact the office for a copy of any letter that the company is in the process of sending to them. You might even have copies waiting there for people to come and collect from the office if they wish to. I understand the difficultly, but the time frame is short, and indeed, all the employees know that this issue has been pending for the last week and a half, so it is not fresh news to them. I am sure they are all waiting rather anxiously to hear.
PN875
MS O'NEIL: Commissioner, that is true, and they are also waiting for our report back in relation to the two matters, which is not just what the company has proposed, but in fact, what their entitlements are in relation to the redundancy, which will not be known to them, or not communicated to them by the company.
PN876
THE COMMISSIONER: They do, indeed.
PN877
MS O'NEIL: And also, they are waiting for a report in relation to the financial situation of the company. So both of those things I have to put on the record as saying are the basis of what employees, in a process that was a considered process, would need to have before them to make a decision. So I have serious concern about requesting employees to make that decision without either of those bits of information being available to them.
PN878
MR WHEELAHAN: There is a mass meeting on site tomorrow. 3 o'clock.
PN879
THE COMMISSIONER: No, but they are individual human beings who have - who, in the end, must consult their own best interests, on the basis of the information as they actually have it, over the next 48 hours. The next 48 hours is absolutely crucial, and I - but unfortunately, I can't list the matter for report back before me until either late Monday or - it couldn't be before 4.00pm on Monday - or first thing Tuesday. I am concerned about that, but I - if it was listed for report back for me on Friday, I am not sure what I could do to actually change anything anyway, so.
PN880
MR WHEELAHAN: I am instructed there is a mass meeting on site tomorrow at 3, if that assists in notifying employees. Look, we will give it to the union as soon as we have it. They are obviously in contact with their employees about this issue, and as you have said, we will do our very best to get it quickly, and notify employees.
PN881
THE COMMISSIONER: Yes, thank you. Yes, Ms O'Neil?
PN882
MS O'NEIL: Commissioner, the reason that I propose the amendment to the order in the way that I had was so that there was still the opportunity for the company to finalise the arrangements on Friday, and it was predicated on the notion that we would attempt to resolve all of the outstanding issues between us, so that, hopefully, there would be no further requirement in terms of the Commission, but if there were remaining issues, that we would be able to propose a course forward that would still not delay the company's redundancies, but may resolve the outstanding issues.
PN883
Given your time constraints, Commissioner, we would still seek that the matter was listed either late Thursday or Friday, before a member of the Commission, and - - -
PN884
THE COMMISSIONER: Yes. I could actually do it by video conference if I have to, first thing, if I had the material before me. I will consider that. I may be able to do it by video conference. As I say, I will be in Canberra on Friday, but I could have a report back from you by video conference on Friday morning.
PN885
MS O'NEIL: Well, I think, Commissioner, regarding the company's earlier concern about the report to our members, there is some requirement for there to be a discussion in the Commission that deals with that issue, and then some opportunity for us to actually give the report back to our members. With all respect, if the deadline for volunteers is to end before that happens, then it seems to in some ways make redundant some of the areas we are attempting to resolve. It would, I think, still be feasible for the company if we were to do a report back in this Commission on Thursday afternoon, advise our members Friday morning for them to still proceed with their schedule in relation to employees advising them on Friday, regarding their view to whether they are volunteering or not.
PN886
They already have a list in terms of, I am sure, who would be selected if there is insufficient volunteers, and I think there is a fair likelihood that they may receive sufficient volunteers. So I would seek that that time period allowed the discussions and negotiations to try and come to fruition, a report back here, including what we intend to inform our members regarding the financial state - - -
PN887
THE COMMISSIONER: Well, you know, I only have a finite amount of time in my day, Ms O'Neil, and I have allowed fairly generously of my time today, and I am just not sure where all of that is actually going to get us by close of business on Friday. So - look, I am just going to have to take it - I will have to consider it and decide what I will do. Yes, Mr Wheelahan?
PN888
MR WHEELAHAN: I can put one offer I am instructed to put: the time issue. If the offer we have of four weeks; if the union is to accept that we reduce that to three weeks, and we can delay it all by a week, but we will have to reduce the offer to three weeks additional notice. It is something to consider, and it is an offer I am instructed to put for buying time. Other than that, we will await the orders in relation to documents. The only - - -
PN889
THE COMMISSIONER: Well, I think that should be made clear - that is something that should be made clear to the employees when you are writing out.
PN890
MR WHEELAHAN: They will actually be given - when they say there is uncertainty, no doubt - there is a dispute about what notice should be given. We will have our figure of the four weeks. It is there. If you leave on Friday that is what you get. So at least they know what the company is offering.
PN891
THE COMMISSIONER: Well, as I say, I think you need to make that clear in what it is you tell your employees, and the union will say what it chooses to to its members.
PN892
MR WHEELAHAN: I think that would be reasonable. Say it is in dispute. The only two issues I - - -
PN893
THE COMMISSIONER: But the company's bottom line is that if the redundancies don't commence to be implemented from this Friday, then the company is moving back from a four week offer to a three week offer.
PN894
MR WHEELAHAN: On the two remaining issues which I have to address, just about - which you ask earlier about arbitration for quantifying 14.3.8: I would have a lot to say about the question of jurisdiction of this Commission. If we are having it for a report back again this week, I would seek for it to be a report back only. I don't want to be ambushed and go into a hearing about that unless I am directed to by the Commission. My present instructions are that given the cap on the four weeks, although we have a certain opinion about our entitlements and what we have to do under the agreement, that the CEO, without going to the Board, can't chance his arm, if you like, and consent to private arbitration about how that provision should be interpreted, and accordingly, following on from that, he is just not in a position to consent. I am not saying no but - - -
PN895
THE COMMISSIONER: Yes. Ms Wiles and Ms O'Neil hear what you say.
PN896
MR WHEELAHAN: He doesn't have the authority.
PN897
THE COMMISSIONER: I was trying to offer a safety valve that allowed some way to implement the redundancies this week, but to allow some opportunity for summary visiting of - - -
PN898
MR WHEELAHAN: I might say he can speak to the Board tomorrow, but I was going to finish. I am saying it is not the end of the matter, but in my submissions tonight I can't say that I am instructed to set that course of action, but will seek instructions from the Board. I see utility in it, and it is a matter for the Board, of course, whether they do as well, and they are all the matters unless there is anything further, Commissioner.
PN899
THE COMMISSIONER: Yes, thanks, Mr Wheelahan. Ms O'Neil and Ms Wiles?
PN900
MS O'NEIL: Commissioner, I will just clarify that we weren't seeking today any consent in relation to the arbitration issue, we were just raising that, in terms of the extension of the order - - -
PN901
THE COMMISSIONER: And I was too.
PN902
MS O'NEIL: - - - we will use our best endeavours to try and reach agreement regarding those two matters, and we would have the opportunity for both parties to consider your suggestion.
PN903
THE COMMISSIONER: Yes, that is right. Good. All right. Nothing further, Ms Wiles?
PN904
MS WILES: I have just remembered one thing: in speaking to - this relates back to the order in relation to the documents - in speaking to our financial advisers, he did say that it would be useful if the company's accountant, or someone from the company was available to answer any questions.
PN905
THE COMMISSIONER: That is going to be tricky, but Mr Nathan, if you will take that on board, and instruct Mr Wheelahan how that could be effected. It could be done by telephone, but I don't expect the company to have an accountant sitting around Mr Wheelahan's office waiting to answer questions.
PN906
MR NATHAN: We will try and be as co-operative as we can.
PN907
MR WHEELAHAN: We try to keep accountants out of our office.
PN908
MS O'NEIL: The alternative is that he may be able to take questions on notice from Mr - - -
PN909
THE COMMISSIONER: Yes, sure. That is just like parliament. Okay? Good. All right, if there is nothing further, I think it is probably time for all of us to adjourn. I will consider the orders, and I will issue whatever orders I see appropriate in regard to the two matters in the morning. Thank you.
ADJOURNED INDEFINITELY [6.26pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
ANTHONY JOHN WILLIAM FLYNN, SWORN PN380
EXAMINATION-IN-CHIEF BY MS WILES PN380
EXHIBIT #A1 WITNESS STATEMENT PN390
CROSS-EXAMINATION BY MR WHEELAHAN PN411
WITNESS WITHDREW PN432
KIM KRIEGER, SWORN PN433
EXAMINATION-IN-CHIEF BY MS WILES PN433
EXHIBIT #A2 WITNESS STATEMENT PN440
CROSS-EXAMINATION BY MR WHEELAHAN PN454
RE-EXAMINATION BY MS WILES PN467
WITNESS WITHDREW PN470
JULIE ELLEN MCKEOWN, SWORN PN472
EXAMINATION-IN-CHIEF BY MS WILES PN472
EXHIBIT #A3 WITNESS STATEMENT PN480
CROSS-EXAMINATION BY MR WHEELAHAN PN482
WITNESS WITHDREW PN496
EXHIBIT #A4 ENTERPRISE AGREEMENT AS CERTIFIED BY SENIOR DEPUTY PRESIDENT WILLIAMS ON 1 JUNE 2000 PN499
PETER NATHAN, SWORN PN592
EXAMINATION-IN-CHIEF BY MR WHEELAHAN PN592
EXHIBIT #R1 HARD COPY OF SLIDE SHOW PRESENTATION PN603
EXHIBIT #R2 LETTER DATED 26 JULY PN606
CROSS-EXAMINATION BY MS O'NEIL PN757
WITNESS WITHDREW PN810
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/other/AIRCTrans/2002/3129.html