BP2002/4652, Transcript of Proceedings [2002] AIRCTrans 3190 (20 August 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

BP2002/4652

APPLICATION FOR TERMINATION
OF BARGAINING PERIOD

Application under section 170MW of the Act
by United KG Pty Limited for orders to
suspend or terminate a bargaining period in
BP2002/418

ADELAIDE

2.05 PM, MONDAY, 5 AUGUST 2002

PN1

THE SENIOR DEPUTY PRESIDENT: Good afternoon. Could I have some appearances, please?

PN2

MR GRANTHAM: Sir, I appear on behalf of United KG Proprietary Limited, if the Commission pleases.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Grantham.

PN4

MR DEAKIN: If the Commission pleases, I appear on behalf of the CEPU electrical division.

PN5

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Deakin. Mr Grantham?

PN6

MR GRANTHAM: Sir, this application is, as you would be aware, to suspend or terminate the bargaining period. In the application, we have specifically nominated two grounds. The first ground is broken into two sub-grounds, if you like, pursuant to section 170MW(2)(a). The second part of that subsection is (b) of the same section of the Act in that we claim, assert to you, that the union and the employees with whom the company has been attempting to negotiate an agreement did not genuinely try to reach, or are not genuinely trying to reach an agreement with the company before organising to take industrial action.

PN7

Placitum (b) is, obviously, worded very similarly, are not genuinely trying to reach an agreement with United KG Proprietary Limited. The second principal ground is that the union and the employees are engaging in what is commonly referred to as pattern bargaining, contrary to two specific objects of the Act - the first object found in the principal objects of the Act in section 3D, placitum (1) and the principal object of part 6B, being section 170L of the Workplace Relations Act.

PN8

I will just elaborate, sir, in that we say that one of the principal objects of the Act is to encourage and provide the means, sorry, for wages and conditions of the employment:

PN9

...to be determined, as far as possible, by the agreement of the employees and the employees at the workplace or enterprise level upon a foundation of minimum standards.

PN10

I am reading from section 3D, placitum (1) of the Act - sorry, section 3D, placitum (1) was the quote I just gave you and furthermore, of course, in section 170L of the Act:

PN11

The object of this part is to facilitate the making and certifying by the Commission of certain agreements, particularly at the level of a single business or part of a single business.

PN12

That was a quote from section 170L of the Act. Sir, the background to this matter is that there is currently an agreement in place pertaining to the company and this group of employees that is currently entitled: Kilpatrick Green, Port Pirie and Whyalla (South Australia) Enterprise Agreement (1999 - 2002). The nominal expiry date was 2 June of this year. Sir, I will hand that up if I may. I apologise for the quality of the copy, but I can assure the Commission that for whatever reason, it would appear that the two versions, if I can call them versions - really, "versions", I use the word loosely.

PN13

The two copies available through Osiris, for some reason, it appears that every second page is missing. I would say that, and I'm only guessing here, that not being involved in the making of this particular agreement, that a double sided copy was forwarded to the Commission and somehow, inadvertently, only every second page has been copied.

PN14

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, can I take it that a copy of this document has been provided to Mr Deakin?

PN15

MR GRANTHAM: It is my understanding, sir, that the employees themselves are in possession of a full copy. I must admit, I've always assumed that the union had a copy of the agreement given to them by the employees.

PN16

THE SENIOR DEPUTY PRESIDENT: Mr Deakin, is there any objection to my receiving this document?

PN17

MR DEAKIN: None at all, sir.

PN18

THE SENIOR DEPUTY PRESIDENT: Very well.

EXHIBIT #KG1 KILPATRICK GREEN, PORT PIRIE AND WHYALLA (SOUTH AUSTRALIA) ENTERPRISE AGREEMENT (1999 - 2002) ISSUED ON 03/06/1999

PN19

MR GRANTHAM: I can advise the Commission that the copy available from Osiris, of the two copies available via Osiris, notwithstanding every second page is missing, at least those pages that are present through Osiris do align exactly with the copy that I have just forwarded to you.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that, but I think if the document were to be relevant, it might be best that we didn't have to guess as to the alternate pages.

PN21

MR GRANTHAM: Indeed, this is a full copy. Could you just remind me, sir, what - - -

PN22

THE SENIOR DEPUTY PRESIDENT: KG1, Mr Grantham.

PN23

MR GRANTHAM: Thank you. Further, by way of background, employees were approached on March 21 of this year by a representative of the company and by further explanation, I should inform the Commission that effectively, we have had two sub-groups of employees who have been working pursuant to this Agreement. One group has been working entirely at the One Steel operations for the entire duration of this agreement in, fundamentally, a maintenance capacity. A second sub-group of employees has been engaged on what has been euphemistically called "project work", both at One Steel and at Port Pirie at the AHS smelters.

PN24

That work has been predominantly of a short term project-type nature, as opposed to the maintenance requirements at One Steel which has been ongoing, day in, day out, for the life of this agreement and, indeed, the requirement for that work continues to date. So returning to some formal chronology, the employees were approached on March 21, which is consistent with the agreement which talks about the parties holding negotiations some 3 months prior to the nominal expiry date. A series of discussions were had. The employees themselves undertook to put together a series of claims and put that to the company.

PN25

On May 13, 2002 the employees advised a representative of the company that they had decided to go for a claim for 6 per cent per annum over 3 years. They would present a document, however - it had been decided by the group of employees that they would present their document to the union for the union's advice. The company was aware that the employees' claims would go further than a wage increase of 6 per cent per annum and contain other items. Indeed, prior to that, the employees had indicated to the company that they were happy, and had decided that they would pursue, in the renewal of this agreement, a section 170LK agreement, being a non-union agreement as is the current, existing agreement that the parties have been seeking to replace.

PN26

On May 27 of this year, one of the elected spokespersons for the group of employees, a Mr Keith Young, advised a company representative that they had - - -

PN27

THE SENIOR DEPUTY PRESIDENT: What was that date, Mr Grantham?

PN28

MR GRANTHAM: 27 May, sir.

PN29

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN30

MR GRANTHAM: On that date, a representative of the employees, a Mr Keith Young, had advised the company representative that the employees had voted to change their position from having a non-union enterprise agreement to a union enterprise agreement. I'm using the language, as I understand it, as it was used at the time. On June 5, the company issued a memorandum to employees. It was decided by the company at that stage that, perhaps, to date, the discussions had been lacking inasmuch as in lacking in the taking of a proper record of discussions and minutes etcetera.

PN31

So the company made a decision that they would start formalising discussions and to that extent, they issued a memo to the electrical employees. I would like to hand that up, if I may, sir.

PN32

THE SENIOR DEPUTY PRESIDENT: In the absence of an objection from the union in this regard, I shall call that KG2.

EXHIBIT #KG2 MEMORANDUM FROM UNITED KILPATRICK GREEN DATED 05/06/2002

PN33

MR GRANTHAM: Sir, I was remiss when I gave my appearance in not alerting you to the fact that I had with me the Operations Manager for the company at the One Steel Whyalla steelworks. He, indeed, is present with us today to my immediate left, and he was the author of that memo or letter to employees. It would appear, sir, that people were thinking alike. The company received a letter from the union, indeed, dated 5 June - I must apologise. I can't actually advise the Commission, at this point in time, what date it was received.

PN34

I believe it was some days later, given that it was sent to 11 Jesop Street, Whyalla which is an office that the company has had there for many years, that is pretty close to being defunct, rarely used, and to that extent, subsequent to this, the union has been advised that that is not now an appropriate address to send correspondence to. I don't think anything turns on it, sir. I just make the point. I wish to, just for completeness, if I may, hand that up. It is signed by my friend here, Mr Deakin.

EXHIBIT #KG3 CORRESPONDENCE FROM THE CEPU TO UNITED KG DATED 05/06/2002

PN35

MR GRANTHAM: Sir, as is evident, it is a log of claims, albeit a partial log of claims. We note the second sentence:

PN36

We are seeking a 3-year agreement with the following as part of our log of claims.

PN37

As a result of the - perhaps either of those two correspondence a meeting was arranged to be held at United KGs offices on the One Steel site at Whyalla and attendance was Mr Mercer who is with me to my left, myself, a company representative John Leddington, Mr Deakin from the CEPU, and two employee representatives Mr Keith Young and Mr Shane Pocroft. Essentially, sir, at that meeting the - it was decided that there should be a proper record of meetings. There was some discussion as to how the meeting was to be recorded. Initially the union only wanted notes whereas the company were wanting minutes.

PN38

Indeed I made the comment that it was often recommended by the Commission to take the proper record of such meetings. Sir, if I may upon the conclusion of that meeting the minutes were drawn up and were distributed to all the parties that were present including all of the entire work-force that would be covered by - were covered by the existing agreement or would be intended to be covered by the renewed agreement principally being all electrical workers or electrically trades people. I wish to hand that up sir. Indeed there were actually three meetings to date where there were three sets of minutes made and distributed.

PN39

I think it may be pertinent, sir, and more efficient if I actually hand up all three sets of minutes because of course a second set of minutes may seek to qualify previous minutes.

PN40

MR DEAKIN: If I may, sir, just jump in there, I have only received two sets of minutes.

PN41

THE SENIOR DEPUTY PRESIDENT: Well, we might - - -

PN42

MR GRANTHAM: What I was going to suggest - - -

PN43

THE SENIOR DEPUTY PRESIDENT: - - - receive this material individually in that case, Mr Grantham.

PN44

MR GRANTHAM: Fine, I was going to qualify the fact, sir, that the third - the last set of minutes by virtue of the fact that being the last, they are yet to have, if you like, the imprimatur or stamp of approval by the committee at any subsequent meeting that of course is yet to take place. I will therefore hand up separately the minutes of 12 July. Sorry, I apologise, that is the third set of minutes, the second set being dated from meeting dated 5 July.

PN45

THE SENIOR DEPUTY PRESIDENT: Let us start with the minutes of the meeting of 14 June 2002 and I will propose that they be called KG4.

EXHIBIT #KG4 MINUTES OF MEETING OF 14/06/2002

EXHIBIT #KG5 MINUTES OF MEETING OF 05/07/2002

PN46

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Grantham?

PN47

MR GRANTHAM: And the third set of minutes is dated 12 July or minutes of a meeting conducted on 12 July.

EXHIBIT #KG6 MINUTES OF MEETING OF 12 JULY

PN48

THE SENIOR DEPUTY PRESIDENT: I will note that they are unconfirmed minutes of the meeting of 12 July 2002.

PN49

MR GRANTHAM: Yes, sir, I accept that.

PN50

THE SENIOR DEPUTY PRESIDENT: Is that acceptable to you, Mr Deakin?

PN51

MR DEAKIN: Yes, sir.

PN52

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN53

MR GRANTHAM: Sir, I have been instructed that those minutes of 12 July being KG6 were E-mailed to the union's offices and obviously as I acknowledged earlier on those minutes are yet - certainly not confirmed by the committee that has - from which these minutes - meetings from the committee from which these minutes have been made. I would like to go to KG4, sir, and part 3 of those minutes talks - identifies the employee position, the union being Mr Deakin, related the position of its members is that two options be put to the company. The first option was that the current AMEC Agreement is accepted and implemented by the company for its natural life.

PN54

So what that means is the natural life or really the nominal life or remaining nominal life of the AMEC agreement and I must apologise because I am remiss in not providing - having with me today a copy or extra copies of the AMEC Agreement. I'm sure that my friend, Mr Deakin, is well versed in the contents of that agreement and will correct me if I make any errors but for the purposes of today, sir, it is - we say it is sufficient just to say that the AMEC Agreement's expiry date is next year in August of 2003, hence the reference to in 3A there of those minutes of 14 June:

PN55

The current AMEC Agreement is accepted and implemented by the company for its natural life 12-month term.

PN56

That was the first option. The second option put was that the company negotiates on the current log of claims being found in document KG3 and being reinforced in a notification of a bargaining period and item 5 of the minutes of that meeting over the page clarification was sought regarding the negotiability of the log of claims. The items in 5(a) to (g) are self explanatory. Some items were non-negotiable from the union's point of view with out of half a dozen or seven items a couple of items being possible for some movement or negotiation.

PN57

In the minutes of the meeting of 5 July, sorry, before I go with that, sir, in the minutes there on item 11 attributed to the initials MPM which is indeed Mr McMercer and I quote from the minutes:

PN58

Relay to the union's position was in effect accept our position or else from the union perspective with no real intent to bargain.

PN59

The minutes of the - as identified now in KG5 item 2 where Mr Deakin is proper and appropriate with minutes to clarify that - the comments of Mr Mercer [sic], obviously it is clear that Mr Deakin stayed and I quote from these minutes:

PN60

If we didn't intend to bargain we would not be here now.

PN61

The company put its counter offer to that meeting identifying that it was a serious offer without a lot of ambit. If agreement is reached by 31 July 2002 the company would back date wage increased to 1 July 2002 and I must admit that up until this point in time, sir, neither party has picked up on the fact that the agreement had expired on 2 June. What is expected that it is possible that the company would have considered back dating it to the expiry of the prior agreement being 2 June. The company was putting its offer up essentially seeking a 3 year agreement prepared to make move with an increase on the existing agreement to severance payments.

PN62

Prepared to consider rolling the daily fares allowance which is currently some $10.80 or thereabouts per day, rolling that into the all purpose hourly rate and offering up three wage increases each of 3 per cent. The first increase of 3 per cent and the further 3 per cent at 12 - two lots of 3 per cent at 12 monthly intervals. Offer of income protection insurance on the basis of a cost to the company of 1 per cent of wages and further allowing access and providing access through a renewed agreement of performance criteria base type increases. Similar to what applies with the mechanical employees engaged by the company at the One Steel site, albeit covered by another site.

PN63

An entirely different agreement which is currently in place at Whyalla which offers three possible increases or potential increases of an additional or 3 or 5 or up to 8 per cent. Just for - I note, sir, at that meeting, Mr Deakin raised the fact that he had forwarded correspondence to the company but unfortunately it had been sent to the Jessop Street address and the company had yet received it and it was about the re-classification of employees. It was agreed that this was a separate issue to the agreement negotiations.

PN64

At that meeting there was an adjournment of approximately 10 minutes where the employee representatives and Mr Deakin conferred prior to coming back and stating that there informal response on behalf of the rest of the employees was that the company's offer was entirely rejected. They restated the employees were still seeking the equivalent to the AMEC Agreement for 12 months, accepting some claim living away from home allowance and the clothing issue as they believe they were currently better off on both those issues with their existing arrangements with the company, that is they would seek not to pursue AMECs arrangements for industrial clothing.

PN65

The implication or inferred position there was that they were better off with what they were receiving or currently receiving. Further they were - or not interested in a performance based criteria for further wage increases. It was agreed that the next meeting would be set down for 12 July 2002 which leads us to the minutes of 12 July, the unconfirmed minutes being document KG6. I say, sir, that - sorry, before I do, the position was at that meeting that firstly, that the minutes of the previous meeting had been accepted as accurate, further to that, that the meeting of the employees held the previous day with Mr Deakin had resulted in the employers prior offer of 5 July being unanimously rejected.

PN66

A reiteration of the union employee's claim that either (a) it was the current AMEC Agreement for its nominal life or the company negotiates on the current log of claims. It was at that point that Mr Deakin suggested that there may - that if the AMEC Agreement was offered by the company there were some other items to be included after some prompting and I don't want to make any weight on that, sir. We sought a response as to what - it was sought from them what those other items were and they were listed as improvements to sick-leave, terms of the entitlement per annum, payment at any time upon request of an employee with - of the sick-leave balance or accrual, leaving a minimum balance of 10 days and payment of up to 40 days sick-leave accrual upon retrenchment.

PN67

There was some discussion about improvements to carer's leave and some concerns were raised about the seeming open-endedness of it. We say Mr Deakin stated that the excesses that were identified could be tied up with appropriate wording. The industrial clothing, we say, had been altered from the prior discussions in that we were led to believe that the employees whilst they were saying they weren't happy with the AMEC Agreements issue or provisions on industrial clothing that their language had been that they are better off with what they have got. Apparently the new claim that was first made at this particular meeting was to have fully laundered and maintained overalls which I have been instructed amounts to an additional $25 per week per employee.

PN68

Overtime provision as is stated there, improvements to living away from home allowance and a bargaining agent's fee. It was at this point, sir, that we sought clarification of the union employee's position and that is simply if the AMEC Agreement option one was rejected by the company and as the union has stated, the company was presented with option two, the log of claims, could the company expect that the outcome would have to be, if they went for option two, superior in terms of wages and conditions to the AMEC Agreement and the response was in the affirmative.

PN69

Sir, I - to put it perhaps in the vernacular, you can take the hammer on the toe, if you don't like that you can take the sledge hammer to the head. I use that language, sir, deliberately because the claims are excessive in anyone's experiences in bargaining and I will go to some of that detail in a moment. The company at the - towards the end of that meeting stated through myself as a representative of the company at the time, that - and I'm looking at item 4 in those minutes, albeit unconfirmed at this point in time that it was quite obvious that the parties were poles apart but whilst their instructions to make a further offer, it was obvious that the offer of an additional one per cent would still leave the parties poles apart and that through its agent, the company would undertake to put its position in writing and seek a formal response from the union.

PN70

The parties agreed not to set a further meeting at that stage. Sir, correspondence was forwarded to Mr Deakin dated 30 July which was a confirmation of the company's position and I wish to submit that to you.

PN71

THE SENIOR DEPUTY PRESIDENT: We will mark that as KG7, noting it is correspondence from you, Mr Grantham, to the CEPU dated 30 July 2002.

EXHIBIT #KG7 CORRESPONDENCE FROM MR GRANTHAM TO THE CEPU DATED 30/07/2002

PN72

MR GRANTHAM: Principally, sir, the company's position had changed as expressed in this correspondence from the position that it put on 5 July in that the - or the further 1 per cent that was indicated at the meeting of 5 July was confirmed, sorry - I'm getting myself confused here, sir. I must apologise. This correspondence confirmed an improvement to the offer that was encapsulated in the minutes of 5 July and hinted at or iterated, I should say, at the meeting of 12 July in that a further 1 per cent over the proposed life of 3 years was offered being now from 3 to 3½ per cent, albeit upon certification, 3¼ per cent from 3 per cent, 12 months from certification and 3¼ per cent, 24 months after certification from 3 per cent in the earlier offer.

PN73

Confirmation of the income protection insurance as previously stated and iterated to employed, severance payments confirmed, confirmation rolling the daily travelling allowance in to the all-purpose hourly rate. Confirmation of an offer to have access to a three tier performance-based payment scale and for the first time offering up the provision of laundered overalls. A without prejudice draft agreement was signalled as being shortly forwarded to the union, I can advise the Commission that as of today that hasn't yet occurred.

PN74

The covering facsimile header that accompanied the original correspondence, given that it was sent first by facsimile and then secondly, confirmed in post, sought that the union give their written response. I quote from the fax header attached to that letter:

PN75

Please find following written confirmation of the United KGs offer re the Whyalla electrical agreement. We would appreciate your written response.

PN76

It was shortly after that, sir, that the company received a notice of the giving of authorisation to engage in protected - or engage in industrial action. This authorisation was received via facsimile from the union at the company's offices in Whyalla in the afternoon of last Friday. I would like to submit that to you, sir.

PN77

THE SENIOR DEPUTY PRESIDENT: I will mark that as KG8.

EXHIBIT #KG8 ADVICE PURSUANT TO FORM R41 OF THE WORKPLACE RELATIONS ACT TO KILPATRICK GREEN FROM THE CEPU DATED 30/07/2002

PN78

MR GRANTHAM: Sir, the point that I will highlight is that it indicates that industrial action will take place commencing this Thursday, 8 August, and each Thursday thereafter until normal starting time, 20 September 2002 and I specifically highlight the first dot point, and I apologise for the quality of the document, sir. It is a scanned document sent via the Internet.

PN79

THE SENIOR DEPUTY PRESIDENT: I can read it, Mr Grantham.

PN80

MR GRANTHAM: The first dot point states:

PN81

Stoppages each Thursday commencing at 10 am until normal starting time the next day.

PN82

So by extrapolation, sir, the indication is that the industrial action will commence at 10 am this Thursday, 8 August. Sir, going to the first set of grounds in our application and I won't differentiate too much between the two sub-grounds in ground one, in that the employees had discussions with the company prior to the union becoming involved and the last indication to the company by the employees prior to the union becoming involved is that in regards to wages - and I mention wages because by far they were the largest claim in terms of monetary costs or total costs to the company and if you like monetary benefit to the employees and that was in relation to the claim for 6 per cent wage increase each year for 3 years of an enterprise agreement.

PN83

That on 14 June that claim has leapt, albeit now for an agreement to go to August 2003. The reflection of the AMEC agreement, and wages alone we are talking some 26.3 per cent over effectively 14 months, being from the expiry date of the existing agreement being 2 June 2002 to the expiry date of the AMEC agreement which is in August 2003, 1 August 2003. Then at a subsequent meeting of the negotiating party on 12 July the claim rises again, albeit, modestly compared to the previous rise in that specifically in the unconfirmed minutes identified in a document KG6, or being in document KG6, the sick-leave provisions in that they were seeking to go from 8 days to 10 days with very flexible arrangements in place to utilise the sick-leave, or have sick-leave paid out at any time upon request and to have sick-leave of up to 40 days accrual paid upon retrenchment and to have the clothing laundered.

PN84

So just to recap that, sir, we have seen, if you like, we have had three occasions that we have seen claims put by the union and the employees - well, the employees in the first instant, identified that 6 per cent per year over 3 years for each year of 3 years. A claim is raised significantly a couple of months later, as I said before, 26.3 per cent effectively over 14 months only. Then a, withstanding much more modest claim, some additional claims made.

PN85

We say, sir, that would test whether there is a genuine attempt at bargaining and indeed we say if that is bargaining in good faith, we say, sir, that the Act infers bargaining in good faith, indeed we would say that making a genuine attempt at bargaining in synonymous with good faith bargaining.

PN86

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, I don't appear to have before me the log of claims which was provided, as I understand it, from KG4 with the notification of the bargaining period.

PN87

MR GRANTHAM: No, you don't have that before you, sir, and I have been trying to ever so subtly find my copies of that to submit that to you.

PN88

THE SENIOR DEPUTY PRESIDENT: Well, the reason for asking for some clarification on that issue is that it appears to me from the minutes of 12 July meeting that the additional claims relating to sick-leave, carer's leave, clothing, overtime, living away from home allowance and bargaining agents' fees are predicated upon the so called AMEC agreement.

PN89

MR GRANTHAM: Yes, sir.

PN90

THE SENIOR DEPUTY PRESIDENT: Can I refer you to KG6 and to paragraph 3 of those minutes where Mr Deakin appears to make it clear that those additional items that I have just referred to are items that would need to be considered in addition to the AMEC agreement. What I don't see is reference to the current log of claims and the extent to which that current log of claims may or may not still represent an avenue or a mechanism by which the dispute might be resolved.

PN91

MR GRANTHAM: I'm not entirely sure, sir, that I'm with you there. Were you referencing in those minutes just then, it was in item 3, was it?

PN92

THE SENIOR DEPUTY PRESIDENT: Yes, I'm referring to KG6 to paragraph 3 and to the sentence that reads: WD, which I understand references Mr Deakin, stated that:

PN93

If the AMEC agreement was offered by the company there was some other items to be included after prompting from BG -

PN94

PN95

which I take it, is yourself, Mr Grantham?

PN96

MR GRANTHAM: Certainly, sir.

PN97

THE SENIOR DEPUTY PRESIDENT:

PN98

...seeking specific detail as to what these other items.

PN99

PN100

And I think it means "were":

PN101

... the following additional claims were made.

PN102

PN103

Now, as I read that statement, it is indicating that those items, and there are some six of them are additional claims being additional to the position that is adopted, whatever that may be, in the AMEC agreement. What I am wanting to clarify is the extent to which those claims may or may not sit along side the claims made in the original log of claims that I understand was forwarded to the company with the notice of bargaining period. If you need some additional time, if you want to take a quick break, Mr Grantham, to locate the relevant document I am happy for you to do so.

PN104

MR GRANTHAM: Yes, sir, I think it would be appropriate, sir, and I take you up on that offer.

PN105

THE SENIOR DEPUTY PRESIDENT: I will adjourn the hearing for 5 minutes to allow you to locate the document. Thank you.

SHORT ADJOURNMENT [3.00pm]

RESUMED [3.05pm]

PN106

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, I understand the document you are looking for is being sent in to the Registry and will be brought in to the courtroom when it arrives.

PN107

MR GRANTHAM: Yes.

PN108

THE SENIOR DEPUTY PRESIDENT: It might be appropriate that we proceed, so I will delay my question on that issue.

PN109

MR GRANTHAM: Thank you, sir. Sir, as much for my benefit as anybody's, I am just recapping the position that we were put in is that we have had three - and I am dealing principally with wages, just to give an indication that we have had three movements seemingly upwards prior to the union becoming involved, the major items that the employees were putting to the company was 6 per cent wage increase per annum of each of 3 years for a 3-year agreement.

PN110

The union has come along and just in relation of wages alone and given that there were two options being put, the AMEC agreement and/or negotiating on a log of claims, the lesser of those two options was the AMEC agreement and that in itself would constitute a 26.3 per cent wage increase for a nominal life from June 2002 to 1 August 2003. Then at a meeting of 12 July, notwithstanding that the additional claims at this stage were, relatively speaking much more sober, there were additional claims being up.

PN111

I will now go to - given that we are waiting for that facsimile, I will now go to the grounds of bargaining. Sir, we say that the very request for the AMEC agreement is tantamount to patent bargaining in that it is contrary to the objects of the Act.

PN112

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, when you opened your case you referred to section 3 of the Act, if my memory serves me correctly, to 3D(1). Whilst I understand that section references an object of the Act, can you direct me to a section of the Act that prohibits pattern bargaining, as you call it?

PN113

MR GRANTHAM: I think it is by inference, sir, in extrapolation of that particular object and the object of principle, sole object of section 170L.

PN114

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, a great number of the agreements that are put to the Commission for certification bear an extraordinary similarity to each other on occasion.

PN115

MR GRANTHAM: Yes, sir.

PN116

THE SENIOR DEPUTY PRESIDENT: It could be that is just an accident but I suspect it is not the case.

PN117

MR GRANTHAM: No, I suspect strongly, sir, it is pattern bargaining.

PN118

THE SENIOR DEPUTY PRESIDENT: In which case are you suggesting those agreements are such they should not be certified because are contrary to the intent of both the Act and of part 6B?

PN119

MR GRANTHAM: I would go as far as saying this, sir, that I believe serious questions could be raised about whether it is indeed pattern bargaining and a contravention of the objects of the Act. I would say to you, sir, that the very fact that they come to this Commission having been lodged as an agreed document with supporting statutory declarations would be a fairly clear intention, I would suggest to the Bench, as however it is constituted that the parties are in agreement and hence there is no party before the Commission raising these serious questions in any of those hearings and of course, sir, the Commission in, I would suggest, the vast majority of cases would be certifying only one agreement and that there wouldn't be - and it is my understanding that the incidence of multi-employer agreements in this Commission is quite rare. So this Commission would be - perhaps there never have - a situation of having the same agreement or similar agreement being sought to be certified at the very same point in time so that therefore the question does not necessarily arise.

PN120

What I was going to say to you, sir, that if - and it is my understanding that the AMEC agreement is a very similar agreement to other agreements that exist in the electrical contracting industry in this state. Indeed my understanding is that you could probably source a number of those agreements and the rates of pay, for example, would be mirror documents. The AMEC agreement is out of sync, so to speak, it is not synchronised as with other agreements in the electrical contracting industry in the state inasmuch as its expiry date is some 12 months after the expiry dates of some other electrical contracts but the document is similar. I will say similar. It is my understanding it is not entirely the same. It contains wage rates that I believe are a mirror of the other agreements albeit the phasing-in dates are 12 months later. The AMEC agreement is slightly different as I recall just purely from memory in a couple of other areas as well I think, I believe in the daily fares allowance and travel allowance and in the amount of severance pay.

PN121

THE SENIOR DEPUTY PRESIDENT: Yes, I guess the point that I am perhaps most interested in is whether or not you are putting to me as part of ground 2 of your application that an agreement which has been formulated fundamentally on the basis of an existing other agreement is such that it should inherently not be certified.

PN122

MR GRANTHAM: I would say, sir, on the basis where one party objects. Now, it may be that two parties can come together, two negotiating parties can come together and say: look, we both like this other agreement, it is in the public domain and we both would prefer to have that type of agreement, albeit with some very minor obvious editorials, apply in this workplace for this group of employees. I believe, sir, that where one party says: no, we don't want that agreement, and the other party persists in its claim for that agreement and seemingly unwillingness to shift, I would suggest, sir, that that is tantamount to what we euphemistically know as pattern bargaining.

PN123

THE SENIOR DEPUTY PRESIDENT: Well, can we just take this a step further, Mr Grantham. If I'm understanding correctly the position you are putting to me, it is that the employers have been confronted with a proposition that they agree first of all to either the log of claims that were put by the union or secondly to the agreement that we will call the AMEC agreement. I don't know what is in that agreement. Let us call it for the purposes of this question the AMEC agreement - with some additional claims on top of that. Now, what is it that you say represents the concept of pattern bargaining? Is it firstly the proposal that any part of the AMEC agreement be adopted or is it the proposal that the AMEC agreement be adopted in its entirety?

PN124

Because as I understand the claim put by Mr Deakin and outlined in KG6, the union is not seeking the adoption of the AMEC agreement in its entirety but is instead seeking the adoption of the AMEC agreement with a number of changes, be they additions or detractions, from the provisions that are currently contained in that AMEC agreement. So can I ask you to clarify for me what it is that you say represents the concept of pattern bargaining in this context?

PN125

MR GRANTHAM: Sir, picking up on the words you just used then with some deletions or additions, we say that with the position being put in seeking the AMEC agreement it is not seeking the AMEC agreement with deletions, it is seeking the AMEC agreement albeit will have some additions. So I say for that reason it is pattern bargaining. It is not as if it is the AMEC agreement: but look, we would like some additions here and we are prepared to trade off some other provisions in the AMEC agreement. Hence you would have some additions and some deletions as part the negotiating bargaining process. No, it is the AMEC agreement plus.

PN126

Mind you, sir, I will say - remind that in the earliest meeting it was the AMEC agreement. It was only at a subsequent meeting that it was stated that - sorry, in an earlier meeting it was the AMEC agreement albeit they wanted to maintain the existing clothing and I believe existing travel allowance. It was at a subsequent meeting that those claims were increased. So it was the AMEC agreement, nothing less.

PN127

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN128

MR GRANTHAM: Sir, further to that, it is my clear understanding that the number of agreements certified in this jurisdiction that go to the electrical contracting industry in South Australia have reached a nominal expiry date, passed a nominal expiry date of 1 August of this year. I think I have already stated to you the AMEC agreement is different inasmuch as primarily it is 12 months out of synchronicity with a number of these other electrical contracting agreements. It is my understanding, sir, that the log of claims that the union served, inasmuch as we can - you can have the AMEC agreement or you can negotiate on the log of claims as indeed the log of claims has been served on the electrical contracting industry in seeking to renew what I would suspect strongly is a pattern bargaining agreement which has expired for a number of companies on 1 August 2002. I have, sir, the facsimile which has come through. If I may tender that, complete with fax header.

EXHIBIT #KG9 FACSIMILE NOTICE OF INITIATION OF BARGAINING PERIOD FROM CEPU TO KILPATRICK GREEN DATED 06/06/2002

PN129

MR GRANTHAM: Sir, as you would see in part C where it lists what the union proposed to be dealt with in the proposed agreement, it resembles - it is not entirely the same but resembles the part log of claims that was in correspondence identified in document KG3 in that the $27.50 per hour minimum wage is identified, $20 per day fares and travel, $55 per week redundancy, the 26-hour week, the $2 per hour disability One Steel site allowance. The income protection is first put in writing in the bargaining period notice as is nominated in the protect severance scheme and a new item: industry standard project conditions and allowances.

PN130

Of course it does actually raise the question about whether items not contained in the bargaining period notice are capable of being subject to a claim and the basis of taking protected industrial action such as the issue - well, sick-leave is an obvious issue. I note obviously that item 7, industry standard project conditions and allowances could be used tactically as a cover wall but I think then the onus would fall back in a challenge to whether the industrial action would be protected and obviously invite any comment from the Commission on this inasmuch as whether that would be subject to another notice perhaps or another application before this jurisdiction, perhaps a section 127 application or via a section 99 dispute notification having the protection of the industrial action, the protected aspect of the industrial action being questioned and/or challenged, given that the bargaining period notice, we say, does not go to some items that were subject to claims and hence by inference and logic a reason or part reason for the taking of protected industrial action commencing on Thursday.

PN131

What I was suggesting earlier was that we believe the onus would perhaps lie on Mr Deakin to prove that it is an industry standard project condition that up to 40 days sick-leave is paid out on retrenchment or an employee can take sick-leave accrual leaving a minimum balance of 10 at any time upon their request. If you would just excuse me, Commissioner, I just want to seek instruction. Sir, I'm moving to summarising now and I think I've probably said enough about our claim in relation to the questioning of whether the employers and the union are genuinely trying to seek an agreement given that, we say, that on two separate occasions the claim has increased and in anyone books we would say that it is one thing to strike a hard line in a negotiation and be unwilling to move too much from the stated position but certainly it is a contradiction in terms of a genuine attempt at bargaining if the claim actually increases as you move through some negotiations.

PN132

It is apparent, sir, that since the union has been involved we have only had three meetings. Indeed, the company in putting its response to the meeting of 12 July where it sought confirmation, or a written response from the union that such written response wasn't forthcoming, that they immediately issued the notice of the intention to engage in industrial action. One would also question whether that is consistent with making a genuine attempt at bargaining given that that correspondence that was forwarded to the union dated 30 June actually was an improved offer over the previous offer of the company.

PN133

Sir, I note that our application cites any other ground the Commission deems to be proper and applicable. Where I'm going with that one, sir, is the issue of seriously questioning or call if you like to determinate the bargaining period on the grounds that the proposed industrial action for Thursday of this week actually goes to claim - protect industrial action, obviously in support of claims made that are subject to the bargaining period notice and finally, without labouring the point the mere fact that our, as we say, which we believe, we are absolutely confident Mr Deakin will not refute, is that the minimum position of the union has been the AMF agreement which we say tend to amount to pattern bargaining and in contradiction of the objects of the act. At that point, sir, I will conclude unless you have any further questions.

PN134

THE SENIOR DEPUTY PRESIDENT: Mr Grantham, not quite so fast, I do have some questions for you and I think it only fair that I ask you a couple of those questions now so that I can give Mr Deakin the opportunity to also respond to those issues. The application that is made is requested pursuant to section 170MW(8) of the Act. Section 170MW(8) references in both subsections (a) and (b), section 170MW(1).

PN135

MR GRANTHAM: Just bear with me, Commissioner, I'm still trying to move to that. Yes, sir.

PN136

THE SENIOR DEPUTY PRESIDENT: It is my view that the Act, in particular the provisions of the Act that relate to certified agreements, envisage that the parties that are endeavouring to reach an agreement, may on occasion, engage in, for want of a better word, some form of regulated industrial warfare in order to try to reach that agreement. The whole concept of protected industrial action appears to me to be founded on the concept that both the employees and the employer may engage in protected action in the pursuit of their various positions that are sought to be included in an agreement.

PN137

I'm inclined toward the view that the power that is outlined in section 170MW(1), is based on two key principles. Firstly, that I must be satisfied that a circumstance, described in paragraph 170MW(3)(a) or 3(b), must exist and secondly, that I need to be persuaded that jurisdictional power should be exercised given the circumstances of the particular case and it is on that basis that I need to ask you to comment first of all on the extent to which you consider that I need to have regard to section 170MW(3), and secondly, depending on your answer, the extent to which the circumstances of this particular case are indeed a circumstance which is appropriately described in section 170MW(3).

PN138

MR GRANTHAM: Sir, I don't believe that the circumstances do exist that would satisfy the criteria of section 170MW(3). Certainly, not to the extent, anywhere near the extent that was canvassed in a very large degree, and I can't quote the decision, you may be aware of Coal v Allied decision in New South Wales where the Construction Forestry Mining and Energy, sought a termination of the bargaining period. There aren't, I might add, on the basis of that, a significant part of the Australian economy was being adversely affected.

PN139

As you would be aware sir, that went to appeal. I stand to be corrected -it could have gone as high as - certainly I believe it went to the Federal Court, it could have gone as high as the High Court but I apologise if I'm wrong but in any event it was subject to a significant number of hearings and appeals and the final decision was that a strike going many, many, many weeks affecting a significant part of the Hunter Valley population and economy and involving the follow-on effect not only of hundreds of employees but contractors etcetera and it affected thousands of people.

PN140

It was not enough to satisfy the requirements of section 170MW(3). Indeed, we say sir, that we don't claim that those circumstance exist at this point of time and we don't believe, sir, I think this is an answer to the first part of your question, having answered the second part, that you need to be satisfied that those circumstances indeed exist before exercising the jurisdiction. We say that, any of the circumstances contained within 170MW(2), right through to (7), inclusive, are the number of different grounds that would need to exist and could exist in isolation to each other.

PN141

We specifically highlight grounds in 170MW(2), up to (a) and (b). Grounds (c) and (d) of 170MW(3) we say clearly do not exist. So they are principally the two grounds of Section 170MW that exist for our application pursuant to section 170MW(8), seeking you to exercise the jurisdiction of this Commission in terminating the bargaining period pursuant to Section 170MW(1).

PN142

THE SENIOR DEPUTY PRESIDENT: Thank you. Then can I take you to Section 170MW(2) and in your application you have referenced both 2(a) and 2(b). KG(3) being the letter from Mr Deakin to Kilpatrick Green. Concludes with the words: could you please contact me as soon as possible to set times for the meetings. I know this is of great importance to you to lock away this next agreement. The question that I have there, Mr Grantham is that, given the substantial similarity of the claims that are outlined in KG(3) with those that are articulated in the notice of bargaining period, on what basis do you suggest to me than that I ought to consider that there is either no genuine attempt to try to reach agreement before action is taken or no genuine attempt to reach agreement, full stop?

PN143

MR GRANTHAM: I'm not entirely sure, sir, whether there is anything to be inferred from it any event. I would concur that the claims of KG(3) and KG(9) are indeed very similar. I'm not - I don't know, I'm trying to struggle, sir, with your question in as much as I'm not entirely sure why that is relevant. We are not - - -

PN144

THE SENIOR DEPUTY PRESIDENT: Very well, thank you, and one last area of question then, Mr Grantham, can you tell me what impact the foreshadowed industrial action is likely to have on United KG, or indeed the clients for whom it undertakes work?

PN145

MR GRANTHAM: Yes sir, there are some 10 electricians that we assume by taking this industrial action on Thursday, it is - and those 10 electricians working across three different sections of the client's premises operations, the immediate effect on the company obviously sir, on United KG, sir, is obviously sir a commercial loss and obviously with the client, sir, it will suffer by virtue of the fact that it is having to make - attempt to make alternative arrangements and it could be that production at the plant is compromised.

PN146

A practical effect, sir, is that there are serious questions being raised as to what contingencies attempt to put in place. Indeed, the real concern that United KG have is that one still may, in looking at its own contingencies, and we can only try and guess as to what all the contingencies they may look at. We have no guarantee that they confide all of their contingency planning they confide with United KG but certainly sir, one would have to go to how reliable now is the service to be provided by United KGs via the electrical workers and hence, should they be reliant upon those employees at other times, post Thursday.

PN147

So it does, sir, and one of the immediate issues United KG may have to face is whether the client One Steel makes further - continues to require the services that United KG provides. That, sir, is a contingency that United KG are having to seriously consider in as much as United KG may be put in a very difficult position in as much as that if the client so chose that they would not expose themselves to using United KGs employees for any work post Thursday, 8 August in as much as following 8 August is presumably the three working days' notice has been given and on the assumption that the paperwork is incapable of being questioned in terms of its legitimacy that these employees could then engage in industrial action without notice post Thursday.

PN148

As I understand it the notice of the initiation of to take industrial action, the requirement is only that upon commencement there is a minimum of three working days' notice. Thereafter that it could be with little or no notice. Now, it could be that the client becomes quite concerned about this.

PN149

United KG is aware that it is entirely possible or they believe it is entirely possible and it may lead United KG to seriously consider whether they have to in protecting their interests commercially consider lock-outs of employees, if you like not necessarily as a direct result of the employees taking industrial action and not as a knee-jerk: well you're giving us some curry, we'll give you some curry back, but if you like by virtue if you like via a third party that if the third party is too nervous to use his employees in the foreseeable future and may leave United KG with no option but to lock them out.

PN150

To do otherwise would mean that these employees could be in paid employment as permanent employees with the company unable to offer them any meaningful work.

PN151

THE SENIOR DEPUTY PRESIDENT: Your application, Mr Grantham, seeks an order to suspend or terminate the appropriate bargaining period. Do you have a form of order that you are proposing to me in that regard? You see there is at least the potential for an order to terminate the bargaining period to be something quite different to an order to suspend the bargaining period and it begs the question as to the sort of remedy and the long term effect of that remedy that Kilpatrick Green are seeking.

PN152

MR GRANTHAM: Sir, we don't have a draft order to present to you and the principal reason is the time frame in terms of being asked to give some advice in relation to this matter and then receiving instructions and getting them before you today and to juggle other demands and that is both for myself and the company. I apologise for not having that draft order for you. Our view was simply to seek to terminate the bargaining period for a period of time if you like to allow some cooling off and allow negotiations to continue without the threat of industrial action being placed by either party.

PN153

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Grantham. Mr Deakin, I am ready to hear from you now. I'm conscious that Mr Grantham gave me a reasonable amount of material. I'm also conscious that I have raised a number of questions with Mr Grantham upon which I invite you to comment. Do you wish to proceed straight away or is it more convenient to allow you a 10 minute time to collect your thoughts?

PN154

MR DEAKIN: No, sir, I'm prepared to continue now.

PN155

THE SENIOR DEPUTY PRESIDENT: You are armed and ready to go are you?

PN156

MR DEAKIN: Yes, sir. The application in front of you today, sir, is for the section 127 action on the grounds that the union has not - - -

PN157

THE SENIOR DEPUTY PRESIDENT: I'm sorry, Mr Deakin, can you just repeat that again?

PN158

MR DEAKIN: The application that Mr Grantham is seeking is a 127 as I take it down on the application there. He is seeking for us to cease all industrial action, an order.

PN159

THE SENIOR DEPUTY PRESIDENT: No, Mr Deakin, my understanding of the application is that it is an application founded on section 170MW.

PN160

MR DEAKIN: Sorry, yes, sir, you are right, 170. Yes, sorry, you were right.

PN161

THE SENIOR DEPUTY PRESIDENT: Are you sure you don't want that brief period to collect your thoughts?

PN162

MR DEAKIN: It is okay, sir, no worries. If I can, sir, I would like to just go back to another dispute that we've had with United KG which might throw a bit of light on the union's approach to this dispute. I would like to remind the Deputy President of the previous round of negotiations that we had with United KG. On 9 November 2001 United KG brought an action against the unions concerned and the employees at Modbury Hospital seeking an enterprise agreement and asking your involvement and to try to get the parties to reach an agreement.

PN163

As you are fully aware, we agreed to have your assistance in the matter which as it turned out was to the detriment to the employees because United KG will not agree to any compromise that the unions have put forward. When the union called upon the Deputy President to make recommendations that we would - and that we would accept those recommendations, in other words the umpire's decision, United KG immediately terminated its request to have the Commission involved.

PN164

The Commission was involved from 9 November 2001 until 8 May 2002 when the company terminated the action for a period and that was a period of 6 months. The last pay increase that those employees at Modbury Hospital received was on 4 October 2000. United KG deliberately used the Commission as a weapon to delay, limit the effect of the employees' attempts to seek a good outcome. Not once did United KG attempt to find a common ground or compromise.

PN165

Although the company has agreed to pay the first wage increase from 1 March 2002 it still means that those employees lost 6 months pay from 4 October 2001 and it also means that it has been 18 months since the last pay increase. The effect of that delay means the next agreement and all subsequent agreements will be 10 months late. Now, sir, once again Mr Grantham and United KG at Whyalla is trying to use the same ploy by attempting to use and abuse the intention of clause 170MW(8) of the Workplace Relations Regulations by using the Commission as a shield to insulate them from the industrial action as they did before.

PN166

However this time it is not going to work. Although the negotiations United KG has held this time, has held its same position and they are prepared to offer because on the basis upon the agreement that they have negotiated with the employees. United KG is trying to impose that agreement that it has with the engine employees on to the members. This union and its members had no input into that agreement because of the stop work and union coverage. By trying to impose the same agreement with the same clauses, wage increases, conditions and outcomes on to my members is patent bargaining.

PN167

Mr Grantham has stated that we are engaged in patent bargaining by asking for conditions, part of other agreements which is nonsense. Either he does not understand the meaning of patent bargaining or he is deliberately acting in a frivolous and vicious manner. The new industry agreement that Mr Grantham refers to at this point in time was just a log of claims put forward by the unions under current industry agreement that is known as a framework agreement.

PN168

Framework agreements are acceptable because they are clause conditions and outcomes are not identical because the wage rates and some other conditions are the same does not mean that it is a patent agreement. The position put forward by the union to United KG is not even a framework agreement. In the true sense of the word it could be seen as a hybrid agreement. In other words, a mixture of the AMEC agreement, the Electrical Contracting Industry Framework Agreement, the existing United KG Agreement and the log of claims of the Electrical Contracting Industry Agreement.

PN169

The union rejects Mr Grantham's application and does not accept that we have bargained in bad faith and that it sought patent agreements. The last time that the union met with Mr Grantham and United KG was on 12 July and I received a copy of the last offer by facsimile on 30 July 2002 and one by post on 1 August 2002. I received the minutes from the 12 July meeting on 1 August but not from the company. They were from the employee representative at Whyalla.

PN170

Those minutes, one can see that we asked for a mixture of the AMEC Agreement and existing United KG Agreement. There's nothing that has been put in front of the Commission today that says that this union has bargained in bad faith or that we've indulged in patent bargaining. When I heard Mr Grantham a few minutes ago talking about the AMEC Agreement he didn't say the exact say agreement. He talked about equivalent conditions of the AMEC Agreement.

PN171

I think the problem as you know, sir, that we've always looked at compromise in the past. We will look round. I think one of my problems I've come across when negotiating with United KG is the fact that I also look at the company competing against other companies and one of its main competitors at the moment in Whyalla is AMEC. The reason why we put the AMEC Agreement to the company as a compromise at our very first meeting is that if you look at the log of claims that Mr Grantham has shown you, we are talking about our log of claims for electrical contracting as a 36 hour week, $27.50 an hour, $20 a day fares and travel, $55 a week redundancy, total income protection and $2 a disability allowance for One Steel.

PN172

Now, we could continue with that argument and go for a 3 year agreement but as I said to the parties at our negotiations, I can understand that if we ask you to pay a considerable amount of money more than AMEC, you for the first company will be the first company, first cab off the rank in the negotiation for our log of claims. Rather than do that and put you at a disadvantage compared to AMEC, AMEC come out of their time in a year's time on 1 August 2003 and we would be prepared to look at that same wage rates that you have in the AMEC Agreement and the fares and travel so that you are not at a disadvantage compared to AMEC.

PN173

So that is how AMEC came into the scheme of things. It was to allow the company to compete on a fair market base compared to the other company AMEC. Now, I've got to say too, sir, that sometimes this company brings in AMEC employees when they don't have enough electricians to do the work and those guys come in and as of 1 August today, 1 August will be on $22 an hour. Mr Grantham has gone to great lengths to what I will call a fishing exercise. He has gone to great lengths to stress to you that the wage rates that we are now claiming is something astronomical.

PN174

They are not. The company that they sometimes bring in are already on those wage rates and they use AMEC. The issue of the - other issues identified in the agreement there, because like Mr Grantham said, it was faxed out to me. I got the 12 July one on Friday at 2 o'clock and that was from my representative up there, employee representative. So I've had no chance whatsoever to correct these minutes. It goes to a point where it does not make any suggestion whatsoever when those matters was raised about the extra conditions that the guys were prepared to look at or wanted to look at because this is something that they've - because it is such a dirty job that they have.

PN175

THE SENIOR DEPUTY PRESIDENT: Mr Deakin, can I interrupt you? I'm a little unsure as to what you are referring to in that respect. Can I take it - - -

PN176

MR DEAKIN: The clothing, sir.

PN177

THE SENIOR DEPUTY PRESIDENT: These are the extra items specified in KG6?

PN178

MR DEAKIN: Yes, sir.

PN179

THE SENIOR DEPUTY PRESIDENT: Is that right?

PN180

MR DEAKIN: Yes. Yes, sir, that is the one. How that come about, sir, is because Mr Grantham wanted to know is that all we are claiming on the AMEC document. So I asked the other people alongside me was there any other outstanding issues that the guys had thought about because this log of claims that we are going for here is no way near what we are going for initially. They then raised these matters for consideration and that is how that came about.

PN181

So for Mr Grantham to refer to these things as we were bargaining in bad faith because we were asking for more or if you take this offer or you don't take this offer we will kick you in the shins and take - you have to have the other one, that has never been our approach in our negotiations and you, sir, should know from experience that being in some negotiations with us that is not the case. What we've attempted to do, and may be a mistake on the union's side, is to compromise straight away is to come down from the $27.50 down to the AMEC or something similar.

PN182

So everything that has been said here today, sir, is not as it is. Just because the way it is written down on that paper does not mean that was not - that is the intention or the spirit and the intent of those negotiations but I've got to say to you this. Those minutes, the last meeting that we had was on 12 July. I received a copy of it on 1 August by post. We were already in the process of serving our own action simply because the discussions at that meeting from Mr Grantham and Mr Mercer was that the company is no longer prepared to move - sorry, the company will not, sir, agree to anything other than what is being proposed with the offer coming through to you.

PN183

We ask for that offer as soon as possible. They said yes, they will do it but the closing statements that Mr Grantham also made was: I don't think we're going to be in a position at all because we are still poles apart. And that was our opinion too, we are still poles apart. So I didn't want to get into the same sort of delaying tactics being put forward by United KG as we did with Modbury Hospital. It is not our intention to mess around. We just get down, get in and do what needs to be done and get an agreement in place.

PN184

I have no intentions of messing around with this company any further. Simply they've made their position quite clear. Every meeting that we've had it has been quite clear that they wanted our guys to adopt the same agreement that they've got with the engineering people. Our guys have made it quite clear to them that that is not going to happen. We have put our log of claims on the table but we've also put a major compromise and I will say in the true sense, sir, a major compromise from us on the table for Kilpatrick Green.

PN185

That was received as they are interested, here is your offer coming back and we are poles apart so why continue to sit around a table when - and us spending our time going up to Whyalla for meetings with people when there's nothing going to be achieved from it. So that is where we are up to as far as negotiations are concerned.

PN186

On the other part of the minutes from 5 July - and I haven't received them at all anyhow - when we talk about Kilpatrick Green and the history with Kilpatrick Green, I can honestly say to you, I was down negotiating a union agreement with Kilpatrick Green when the management from Kilpatrick Green was up at Whyalla, at the same time negotiating a document with them a non-union agreement with Whyalla and Port Pirie, while they had me negotiating a document down in Adelaide here for an electrical contractor. The unions and the employees at a point in time were quite unhappy with us because they thought that we were by-passing them.

PN187

Mr Grantham has taken the view that the guys were quite happy with this other offer coming to them until the union got involved. I've got to say to you sir, that is not true, because it was those people themselves running the union to seek the union's involvement on the EBA, and that is how it came about. We sat down, we talked about what we are doing as an industry and what we want to try and get workers on, that is true. Those people have chosen to go for a union agreement, not a non-union agreement, they chose not to accept the offer that has been put to the engineers because I believe that was either another union who negotiated, or it was a non-union agreement.

PN188

Now, for them to negotiate that document, then try to impose it on our guys to me is totally wrong. At least we have gone down the track of sitting down and negotiating with them. I think Mr Grantham has taken actions on the application of Mr Grantham. I don't think he has put anything in front of you here today, sir, that would support his application, nothing. To say that a patent agreement is an agreement where, even though the outcomes are different, and even though some of the clauses are different, that it still can be classified as a patent agreement.

PN189

Now, the intention of a patent agreement is where the clauses, the wage rates, conditions and the outcomes of that agreement are identical. This is not the case in this, this is like I said before, a hybrid of agreements where the AMEC was being chosen - and I've got to say, the AMEC was being chosen with the company in mind - the reason I say that is because one of its main opposition companies is AMEC, and rather than put this company at a disadvantage, we chose to just pick up the wage rates and fares and travel of the AMEC agreement. Once we started talking on those lines the company asked about the conditions of the AMEC agreement, so the guys then raised the issue of the clothing, the sick-leave, which they would want to be - or some of the clauses that exist in the Kilpatrick Green - to be included in the new document. They saw that as being better than the AMEC agreement.

PN190

Basically, sir, all we were asking for out of the AMEC agreement was the wage rates. The other things we weren't too fussed about. It was just a case of to see if we would not be putting this company at a disadvantage compared to some of its major competitors, and I've got to say this, it's major competitors out there are Ralph Emily, Nielsens, AMEC, most of those are all earning $20 an hour, plus more - project agreements - a lot higher than what we are asking for here. AMEC is one of the two companies who have actually got subcontracting work in BHP who are competing against them.

PN191

Now, we could go for the $27.50 an hour for a 3-year agreement, we could go for the 36-hour week that we have put in. We could put all these damn things in the agreement but we know that we would have a major fight with Kilpatrick Green and it is not the intention to try and put one company out of business. Now, they will come up to you and say: well, there is a small company in there that would compete against them. Well, our problem is it is a small company compared to the lights of United KG and AMEC, so our approach to it was a conciliatory approach in saying to them: you can pick up the AMEC document and it will not be as bad as the others.

PN192

You could go for the 3-year deal and because you would be the first cab off the rank, we would be going for the maximum we could possibly get because then we would be then trying to get the same wage rates in most of the other companies, but we didn't. We said: at least this way, we will put you a year behind the outcomes of the other companies. You can see then what the other companies are going to be paying and then at least you are not in the forefront. We are not using you as the company to go for higher wage rates, so all the stuff that you just heard from Mr Grantham is not correct. In fact, I could see it as major compromises from us to sit down and negotiate.

PN193

For the fact that we had to wait for 3 weeks for a response that Mr Grantham had on the Friday - on Friday morning and could have given to us by the Monday by fax - and having been told at that meeting that that was all it was prepared to offer, not being prepared to offer any more, there was no point, no point whatsoever, of sitting down and beating our chests and getting nowhere and just drag the issue on like we did with Modbury Hospital. That is why we then served unprotected action.

PN194

We had meetings with our guys and, in fact, I will say this to you, sir, after 12 July we had the intention to take early industrial action, but because Mr Grantham was going to get back to us with an offer, I suggested to the people to withhold that industrial action. We won't put it in the protected action until we get a copy of what the offer is, but when it wasn't forthcoming, we just said: well, we are not going to wait much long, we might as well just go now, so that is where we are up to right now, sir.

PN195

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Deakin. Mr Grantham.

PN196

MR GRANTHAM: Sir, just a few brief comments. Mr Deakin has several times in his submission to you then, stated that the company was seeking to impose the mechanical agreement upon the electrical employees, an agreement that this union had no involvement in. I stated at the outset of my submissions, sir, that by way of broader background to you, that the company employees mechanical trades people and trades assistance, etcetera, at the One Steel site, albeit covered by an entirely separate agreement. At no time has United KG in its discussions with the electrical employees stated that they are seeking to impose the mechanical agreement upon them.

PN197

Indeed, the only reference that has been made to the mechanical agreement has been indeed by the employees themselves, when they said: at the last meeting, we wish to have laundered industrial clothing, as has the mechanical employees. Sir, simply, they want to cherry pick the best conditions from the mechanical agreement and then add the other claims that they wish to make. So we totally refute that we are trying to impose the mechanical agreement and that there is some, I would suggest, a weird suggestion that the company is indeed patent bargaining in their own right.

PN198

I just note because I was astounded when my friend said very early on that I went to tender up the un-confirmed minutes of 12 July, that as I proceeded to do that, he immediately challenged me doing that by saying: he had not received them, and yet a moment ago we have heard he has indeed received them, albeit, not directly from the company. We say the company has sent them by E-mail, but whether he has received them from the employees, or not, he still received them.

PN199

MR DEAKIN: No, we haven't.

PN200

MR GRANTHAM: Well, I'm sorry, but my friend did say that he had received the minutes from 12 July from the employees. He was making some point that he had not received them directly from the company. I just make the point there seemingly is a 180 degree turnaround in what MR Deakin is stating to this Commission.

PN201

MR DEAKIN: Sir - - -

PN202

MR GRANTHAM: I also note, sir, that - - -

PN203

THE SENIOR DEPUTY PRESIDENT: I'm sorry, Mr Grantham, I think Mr Deakin is objecting to something here. Yes, Mr Deakin.

PN204

MR DEAKIN: Yes.

PN205

THE SENIOR DEPUTY PRESIDENT: I understand you are objecting.

PN206

MR DEAKIN: I've got proof here, sir, because if you look on the bottom of this submission I may present, this is the only one I've got. If you look on the bottom of that the name - on the sender on the top it is PTO. If you look at when it was sent on the bottom of the fax there is "One Steel" and it is "1.8.2002" at 1 minute past 2, and that is the only ones I've got.

PN207

THE SENIOR DEPUTY PRESIDENT: As I understand the issue in dispute here, it is perhaps best characterised by saying that the parties are disagreeing, not about whether Mr Deakin has received the minutes of the meeting of 12 July, but when he received those minutes, and the options appear to be that he was either provided with a copy, courtesy of a Keith Young, on 1 August 2002, or he was provided with a copy by yourself, Mr Grantham, this afternoon. I have to say, I'm not quite sure what conclusions the parties would have me draw from either situation.

PN208

MR GRANTHAM: Sir, the only point I'm making is this, that I'm questioning what Mr Deakin is saying today, inasmuch as it is my recollection - and obviously at the end of the day only the transcript will bear it out - but I seem to recall that when I went to tender those documents he made a statement: he has not received the minutes of 12 July.

PN209

MR DEAKIN: No, no, no - - -

PN210

MR GRANTHAM: I'm not questioning now - - -

PN211

MR DEAKIN: 5 July. I have not received 5 July. I never received it.

PN212

MR GRANTHAM: Well, that sir I now find entirely implausible, because at the meeting of 12 July, the previous minutes there were numerous copies there and they were on the table. I mean, the minutes of the meeting of 5 July 2002 were accepted by the Committee as accurate, now, that is - - -

PN213

MR DEAKIN: I didn't get it.

PN214

MR GRANTHAM: - - - anyway, I won't go any further with that, sir, I don't think much turns on it. I will read the transcript with interest.

PN215

THE SENIOR DEPUTY PRESIDENT: Transcript seldom makes interesting reading, Mr Grantham.

PN216

MR GRANTHAM: Parts of it do at times, sir, I believe.

PN217

MR DEAKIN: Excuse me, sir, if I may interrupt for a few minutes.

PN218

THE SENIOR DEPUTY PRESIDENT: Yes.

PN219

MR DEAKIN: Is it possible I could go and feed the car-parking meter?

PN220

THE SENIOR DEPUTY PRESIDENT: Mr Deakin, you have your traditional motor car, car-parking problem.

PN221

MR DEAKIN: That is right, sir, I parked up the road.

PN222

THE SENIOR DEPUTY PRESIDENT: Perhaps before we do provide for an adjournment, Mr Grantham, are you able to tell me how much longer you will be?

PN223

MR GRANTHAM: I'm going to probably be a minute, sir, approximately, I will conclude very quickly.

PN224

THE SENIOR DEPUTY PRESIDENT: Very well. Mr Deakin, can you live in hope that a parking inspector won't arrive in the next minute or so?

PN225

MR DEAKIN: Yes, sir.

PN226

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN227

MR GRANTHAM: It seems - - -

PN228

THE SENIOR DEPUTY PRESIDENT: Mr Deakin, perhaps for the future you might think about a car-park.

PN229

MR DEAKIN: Very expensive in the car-parking.

PN230

THE SENIOR DEPUTY PRESIDENT: It might remedy some of your problems are associated with attendance.

PN231

MR DEAKIN: Yes, we pay for our own car-parking.

PN232

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN233

MR GRANTHAM: If my friend is correct in having to pay for his own car-parking, I suggest he includes that in his log of claims to his employer. Sir, it is obvious to me that at no time has United KG - could it be said that United KG have indicated in any way, shape or form and certainly not in written form, or verbal form, that they are taking their experiences from one unrelated site to another, but it is quite clear from Mr Deakin's experiences that he is and, that he is imparting that to the employees and news of that, or confirmation of that today is extremely disappointing.

PN234

With regards to whether Mr Deakin refutes that he and the employees engaged in patent bargaining, I notice with interest the reference to Ralph Emily and Nielsens. Sir, obviously, we don't have those agreements with us today, but I can suggest here and I could advise you, sir, that a reading of those agreements will reveal that they are almost identical and, certainly, the outcomes that matter in terms of costs, etcetera, wage increases that matter to employees, I think you will find that they are an identical mirror and, indeed, I would be as bold as to suggest that even a common expiry date, I invite my friend to confirm, or otherwise, whether what I have just said is true.

PN235

I mean, the language that my friend has used, I think it is so obvious, sir, that what the campaign of the union is in this regard is to seek to have industry-wide agreements and not enterprise agreements, his own language about talking about if United KG had have gone down the path to negotiate on the log of claims, you know, he used language like: they would have been the first cab off the rank for the industry agreement, and I believe the transcript will reveal:

PN236

...for the industry agreement.

PN237

Is a direct quote. Also, sir, my friend commented that because the company was not prepared to offer any more, and it was in the context of saying that, that that is one of the reasons why they now have undertaken protected industrial action and, albeit, seemingly from what Mr Deakin has said, based on their experiences at the Modbury Hospital. Perhaps Mr Deakin ought to re-visit the union's advice to employees in terms of outlandish claims and he may realise then that that may have been the predominate reason why he finds it difficult to conclude negotiations with this company.

PN238

I will state, sir, that at no time I think that whatever you have been presented today and, importantly, the letter dated 30 July, I do not see anywhere written there, where that is a final offer. I will sober my friend up by saying that, it is not intended to suggest that there is significant ambit in that offer. I will state to my friend that upon my instructions as intimated at the meeting of 5 July and encapsulated in the minutes of 5 July, there was not a lot of ambit in the company's offer - this is an improved offer, albeit, on the offer of 5 July - but nowhere does that say that is a final offer. What we clearly have is a situation where the company has moved in its offer, the union and the employees have not, indeed they have gone the other way. That is all I have to say, sir.

PN239

THE SENIOR DEPUTY PRESIDENT: I propose in this matter to reserve my decision. I can indicate to the parties that I am very conscious of the indication contained in exhibit KG8, that industrial action may occur from 8 August, and I can indicate to the parties that I would anticipate having a decision on the matter available within the next 2 days. That decision will be made available to the parties through the normal means and I can indicate that subject to what that decision may, or may not contain, I will be available to assist the parties further in this matter. I adjourn the matter on that basis. Thank you.

ADJOURNED INDEFINITELY [4.25pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #KG1 KILPATRICK GREEN, PORT PIRIE AND WHYALLA (SOUTH AUSTRALIA) ENTERPRISE AGREEMENT (1999 - 2002) ISSUED ON 03/06/1999 PN19
EXHIBIT #KG2 MEMORANDUM FROM UNITED KILPATRICK GREEN DATED 05/06/2002 PN33
EXHIBIT #KG3 CORRESPONDENCE FROM THE CEPU TO UNITED KG DATED 05/06/2002 PN35
EXHIBIT #KG4 MINUTES OF MEETING OF 14/06/2002 PN46
EXHIBIT #KG5 MINUTES OF MEETING OF 05/07/2002 PN46
EXHIBIT #KG6 MINUTES OF MEETING OF 12 JULY PN48
EXHIBIT #KG7 CORRESPONDENCE FROM MR GRANTHAM TO THE CEPU DATED 30/07/2002 PN72
EXHIBIT #KG8 ADVICE PURSUANT TO FORM R41 OF THE WORKPLACE RELATIONS ACT TO KILPATRICK GREEN FROM THE CEPU DATED 30/07/2002 PN78
EXHIBIT #KG9 FACSIMILE NOTICE OF INITIATION OF BARGAINING PERIOD FROM CEPU TO KILPATRICK GREEN DATED 06/06/2002 PN129