C2002/3671, Transcript of Proceedings [2002] AIRCTrans 4831 (3 December 2002)

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:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N VT775
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER TOLLEY

C2002/3671

THE ASSOCIATION OF PROFESSIONAL
ENGINEERS, SCIENTISTS AND MANAGERS,
AUSTRALIA

and

AUSTRALIAN GAS LIGHT COMPANY

Notification pursuant to section 99 of the
Act of a dispute re the alleged withholding
of salary increases for APESMA members,
changes to remuneration packages and the
introduction of job evaluation

MELBOURNE

2.01 PM, MONDAY, 18 NOVEMBER 2002

Continued from 15.10.02

PN145

MR M. GEORGIOU: I appear for APESMA.

PN146

MR M. RIZZO: I appear on behalf of the ASU.

PN147

MR B. TREGLOWN: I appear for AGL, along with MR R. MILES.

PN148

THE COMMISSIONER: I think you asked for another report back, didn't you, Mr Georgiou?

PN149

MR GEORGIOU: Yes, Commissioner. Following the last hearing before you where you instructed the parties to go away and report back to you on any progress in 14 days. I originally wrote to the Commission saying that I would agree to an extension of that time frame on the basis that the company had called a meeting of the effected employees and myself and Mr Miles, who is with us today, and also a fellow from Sydney, Tasman McManus from the company's head office in Sydney who is their remuneration expert. And the objective of that meeting was to go through the company's processes for remunerating senior managers in the organisation, as well as to field questions.

PN150

There were some 20-odd employees present at that meeting. Most of them were members of my organisation, but some of them were also members of Mr Rizzo's organisation. Mr McManus explained the company's remuneration policies to the effected employees and he and Mr Miles left, and then we went through the issues on the union basis afterwards. The company's approach to this problem is that they want to deal one on one with all of the employees, and try to resolve the issues on that basis, rather than trying to come up with a company position that would apply to all employees.

PN151

Mr Treglown had undertaken to put a position to the association and that was the attachment that I sent with the letter to the Commission on 7 November asking for this matter to be relisted, and I would like that marked as an exhibit if I could, Commissioner.

PN152

THE COMMISSIONER: Yes, dated 30 October?

PN153

MR GEORGIOU: There is no date on the letter. It is an e-mail from Mr Treglown. It just says "Dear Mark." And it is attached to my letter to you, Commissioner, of 7 November.

PN154

THE COMMISSIONER: Well, when I find it I will list it as an exhibit.

PN155

MR GEORGIOU: And I will read it just to fill the Commission in on what it says:

PN156

I would like to confirm the progress of the ongoing remuneration issues with engineering colleagues in Victoria following the meeting of Friday, 25 October. I understand that as a result the series of ...(reads)... I will contact you this morning to confirm.

PN157

Etcetera, etcetera. Of course, as is typical of this company, nothing was forthcoming the next week, and there has been nothing forthcoming since. The individual members who have met with both Mr Miles and also Mr McManus have still not had their issues resolved, and they are still unhappy with the way the company deals with their remuneration and their packaging. The proposal that my organisation put to the company was to have for superable salary purposes, because most of them are in a defined benefit fund, that the superable salary be the total employment cost.

PN158

The company has never in the three or four months that we have been negotiating on this given me a formal response to that position, either in this Commission or external to it. The other aspect of the claim, Commissioner, related to the job evaluation system, and that clause in the current enterprise agreement, which has been in three enterprise agreements, stated that the job evaluation system should be an agreed system. As previously indicated the company has tried to introduce its own job evaluation system and has not sought the agreement of either the ASU or ourselves, and we say they are acting contrary to the EBA.

PN159

But one of the more alarming aspects of this was that at the meeting that we had on the job evaluation system - sorry, on the remuneration system. The members present advised me that whilst they had all been allegedly evaluated under the Hay system, and a salary attached to that evaluation, not one of the members present, and subsequent to that I have sent a newsletter out asking for members to provide feedback, not one employee of AGL has ever been advised of the outcome of their job evaluation under Hay, and never has it been explained how the points that they would have received under a job evaluation system equate to any remuneration system.

PN160

So that the employees have been entirely at the behest of AGL management, not only in terms of their classification but the remuneration would be attached to that classification. We say that the actions of the company are illegal, and unless today we can make some progress in conciliation before you, Commissioner, my organisation will have no other choice but to take the matter to another jurisdiction and prosecute. If the Commission pleases.

PN161

THE COMMISSIONER: Yes, thank you, Mr Georgiou. Mr Rizzo, when you are ready.

PN162

MR RIZZO: Yes, thank you, Commissioner. Commissioner, my problems are largely those of Mr Georgiou. We are conscious that this has been going on for some time now and have - - -

PN163

THE COMMISSIONER: It is starting to grow hair it has been going on that long.

PN164

MR RIZZO: And we are still waiting on the company, really, to give us some worthwhile and formal responses. In the meantime, Commissioner, I have had an opportunity to meet with my members on this issue - well, on a number of issues. And the issues outstanding are, as you know, there is the issue of the lump sum payment - sorry, the first issue is the issue of the total employment cost of the TEC, and that what occurs is that the company discounts from the total employment cost the cost of superannuation and the cost of the car. And then uses for super purposes, if you like, the base rate, if we can term it that way, as opposed to the total employment cost.

PN165

And this obviously has an enormous affect on the FAS, or the final average salary. The second issue which is interrelated, Commissioner, is the issue of paying bonuses - sorry, of paying wage increases in the form of bonuses which do not go on the rate, be it the award rate, the EBA rate or the TEC rate. It does not go on any of those particular rates. And obviously again this has consequences for the final average salary. Because it is based on, as we all know, on the salary over two years as opposed to any bonuses which don't count.

PN166

So those two issues remain outstanding. And the third issue, as Mr Georgiou outlined, is this issue of the company wanting to introduce these family - job families, that is it. The job families. When I canvassed my members about this they actually had not heard of them, which was somewhat of a concern to me because I had understood from the company some time ago that they had spoken to the employees about the job families, but obviously either these guys haven't heard about it or the company hasn't spoken to them about it. I am not sure. But certainly the company has not agreed with the unions respondent to the agreement on how these things should be introduced and, in fact, whether they should be introduced at all. Because there is a current system in place. Commissioner, I also for your information have letters which members have provided me from the company, and I would like to tender this document.

PN167

THE COMMISSIONER: Do you have some copies for Mr Treglown?

PN168

MR RIZZO: Yes.

PN169

THE COMMISSIONER: Thank you.

EXHIBIT #A6 LETTER DATED 07/11/2002

EXHIBIT #A7 LETTERS RECEIVED BY ASU MEMBERS

PN170

MR RIZZO: Commissioners, these are letters that members of mine received. The first one is dated 31 March '98, the second is dated 1 July '98. It talks about their package and it talks about specifically that these people would not be disadvantaged. So if I can take you to the third paragraph of the first letter, it says, in the second sentence:

PN171

If in the future there are changes to your remuneration package it is AGL's intention that you will not be disadvantaged overall.

PN172

And similarly in the next letter of July, in the third paragraph it says:

PN173

The commitment was also made that if in future there are changes to your remuneration package it is AGL's intention that you will not be disadvantaged overall.

PN174

Now, it is our assertion, Commissioner, and certainly the view of my members, that they have been disadvantaged by the changing practices of the company, one, in relation to superable salaries and TECs, and two, in relation to the payment of bonuses, and three, which I think we have raised on a previous occasion, Commissioner, on the treatment of vehicles. And members at this stage were unsure about what happens when their current vehicles are to be replaced. They are confused as to under what conditions these vehicles will be replaced and whether they will be of an equal vehicle or vehicle value and how it will be treated.

PN175

So it is our view that despite the company's well meaning letters in '98 that my members have been disadvantaged. So from the ASU's point of view, Commissioner, we would really like some answers from the company on the issues that we have raised, and more specifically of course, we would like to resolve the issue in terms of clarifying what is a TEC, what applies for super purposes, and clarifying the issue of bonuses and cars. And then aligned to that is, if you like, more of an issue directly related to the EB, is this job family stuff.

PN176

We still do not have a firm understanding - I certainly don't on behalf of my organisation, I suspect Mr Georgiou doesn't either - have a firm understanding of what the company is putting to us, and we would like to, at the very least consider it and agree upon it before we make any change, if we are agreeable to change. And at this point I can say from our point of view we do not have an objective means to assess whether the new system that they want to introduce is of benefit or not to my membership. If the Commission pleases.

PN177

THE COMMISSIONER: Thank you. Yes, Mr Treglown.

PN178

MR GEORGIOU: Can I tender - have you got a copy of that letter I referred you to, that is now exhibit A6?

PN179

THE COMMISSIONER: No.

PN180

MR GEORGIOU: No, can I - - -

PN181

THE COMMISSIONER: It is probably in the file. I can't find it.

PN182

MR GEORGIOU: Yes. Just for the record, Commissioner.

PN183

THE COMMISSIONER: Thanks, Mr Georgiou, I appreciate that. When you are ready, Mr Treglown.

PN184

MR TREGLOWN: Thank you, Mr Commissioner. Firstly, I will probably be dealing with these a little bit back to front, to go to Mr Rizzo's submission, the question of job families, one of us is nodding off here because at our first - the first time this matter was raised we were directed by this Commission to cease.

PN185

THE COMMISSIONER: I am not nodding off.

PN186

MR TREGLOWN: No, I think one of the parties at the bench may be, because we were directed by this Commission, at the insistence of the union, not to go any further with the job families. And so hence I would be very surprised if Mr Rizzo did know much about it. That remains work in progress as far as the company is concerned, but our direction, at the insistence of the union, was that that stop.

PN187

THE COMMISSIONER: Until it was all sorted out, so it could be put clearly, from memory.

PN188

MR TREGLOWN: Yes. Indeed, that was our first hearing on this matter.

PN189

THE COMMISSIONER: Yes.

PN190

MR TREGLOWN: With regard to Mr Rizzo and Mr Georgiou's submissions on the issue of TEC and lump sums, and their assertion that there has been changes that have effected or disadvantaged their members. Well, we do not accept that at all. The company's submission is that its remuneration policy and practices has remained consistent since 1994. It is good to see that now the union want to see some changes in that remuneration practice that will, I think, advantage members from what has applied since 1994.

PN191

So in fact what the union are after there, Mr Commissioner, is a new claim. We cannot - Mr Georgiou said that he wanted a response from the company with regard to the superable salary in making the TEC the superable salary. Well, that is simply a new claim. Our submission is very simple, that is a new claim.

PN192

THE COMMISSIONER: Well, when you - the difference between TEC and FAS, if you are paying, do you have to acknowledge that is what you are doing as against what is being claimed you are doing, if you are paying salary increases at bonus are people disadvantaged if that amount of money is not taken into account for the FAS because I presume you have got a policy where it is either the unions over the last two or three years for final average salary.

PN193

MR TREGLOWN: Taken simply, Mr Commissioner, you would be quite right. They would be disadvantaged in that particular component of their remuneration. However, that has been the case since 1994 and before.

PN194

THE COMMISSIONER: Yes, okay, well I am not going to argue the toss about that. My next question is simply this. How much in a ball park figure do these bonus payment rather than salary increases amount to?

PN195

MR TREGLOWN: How much do they amount to?

PN196

THE COMMISSIONER: Yes.

PN197

MR TREGLOWN: I could tell you quite - - -

PN198

THE COMMISSIONER: I don't what any particular person, but just a - - -

PN199

MR TREGLOWN: No, well, I can tell you the exact numbers that we would be talking, Mr Commissioner. Lumps sums. If I just read quickly down you will get a feel for it. This is an annual lump sum as opposed to an increase in the TFR, 2300, 3300, 5500, 5500, 5600, 2300, 2400, 2400 and 4000.

[2.21pm]

PN200

THE COMMISSIONER: So it is between two and five?

PN201

MR TREGLOWN: Yes. Of course they are just the raw numbers, Mr Commissioner, and they don't - obviously we haven't delved into the reasons behind it. But some companies have taken a view that when a position is in advance of the job rate, the salaries are simply frozen. Well this company has taken a view, as has other companies, to pay that difference as a lump sum. Hence not, in that year, disadvantaging the individual. The question about the Hay points and the value of Hay compared to the job not being done under the members, well that is also a bit of a surprise. It only now comes to the notice of the union after all of these years. For Hay has been in place in this organisation from well before it was AGL and indeed the days of Solaris and before that. So to say that is an issue now is a little bit strange and a bit cute, I think.

PN202

As far as the - I mentioned the job evaluation system, well that was stopped and it remains to be work in progress. And there are a number of issues that needed to be sorted out. But there was some discussion with the union and the membership about how the job family system would impact on the remuneration strategies into the future for these individuals that are currently getting lump sums. It was a swings and roundabout outcome, some gained, some didn't gain. But there was no real losers out of that particular exercise.

PN203

And as far as the issue that goes around the total employment cost and the lump sums themselves are concerned and the meetings that were held, well there have been a number of meetings with individuals and Mr Georgiou indicated that it wasn't satisfactory for the company to hold meetings one on one and they should be holding group meetings or at least dealing with it as a company wide issue. Well we can't agree with that. We don't agree with that. The salaries of people that have gone across to a TFR remuneration are very confidential and that is demonstrated as a confidentiality that people want maintained, by the fact that they have requested one on one meetings.

PN204

And those meetings have been held. Some have resulted in people better understanding their particular position but the company's methodology of calculating superable salary hasn't changed and, as I say, it hasn't changed since 1994. And nor has the company's position where salaries of people that are TFR based people, nor has the company's position changed that that should remain confidential. And I don't think that the company can really be held to ransom on this, with the union going through this fishing expedition time and time again, when what it really is is a new claim.

PN205

We haven't changed the methodology of calculating superannuation. The union have decided that this is a claim. The union have decided all of a sudden that they have an interest in this and that they will try to make a bit of yardage. Well, we don't accept that and Mr Georgiou said needed an answer, well the answer is that the company doesn't accept it. The company does not accept TEC as being the superable salary, the method for calculating superable salary. It has not done that since this company has owned the business and it doesn't have the intention of going down that track. The method is well established. It is not only this company that does it this way.

PN206

THE COMMISSIONER: Wouldn't the method of calculating salary for superannuation purposes be contained in a trust deed somewhere?

PN207

MR TREGLOWN: Indeed. I am glad you mentioned that, Mr Commissioner - - -

PN208

THE COMMISSIONER: I have only - I am not trying to be smart but I mean, a lot of people don't understand superannuation and I have only had to make some investigation on that because of my own situation.

PN209

MR TREGLOWN: Well the calculation of - for compliance reasons there is a very strict basis on which superable salary must be calculated. And in fact it came down that,f for SGC purposes, the methodology used to calculate superannuation could be one of two methods. And the method - if there was a method in place prior to 1991, that could continue on now, and that was prior to August 1991, 21 August 1991. That was the case with AGL. So we, in fact, have had this methodology since before 1991. Because if we didn't have this methodology we would have to adopt the SGC methodology of calculating superannuation. And, again, there could be no argument about it.

PN210

THE COMMISSIONER: But you are saying that you will maintain that '91 methodology?

PN211

MR TREGLOWN: That is correct.

PN212

THE COMMISSIONER: Yes.

PN213

MR TREGLOWN: And that also applies to new members coming in.

PN214

THE COMMISSIONER: Yes. Well that is what I thought the Act provided in the legislation.

PN215

MR TREGLOWN: And if we didn't, that part of the fund wouldn't be a complying fund. So the question of superable salary is not one to be directed at the company, in fact. It is a question of compliance. And as far as the union trying to get extra benefits for their members, as acceptable as that is, it remains the fact that it is a new claim and we can't accept that. With that, Mr Commissioner, I will leave our position at this point, unless there are any questions to it.

PN216

THE COMMISSIONER: No. I have nothing at the moment, thanks very much. Thank you.

PN217

MR GEORGIOU: Just a brief response, Commissioner. With regard to the superannuation guarantee and the position that Mr Treglown just put that that does apply to people who are in the accumulation fund, not in the defined benefit fund. The defined benefit fund contributions from employers varies according to how well the fund is performing and - - -

PN218

THE COMMISSIONER: Yes, but there is still a methodology of working it out, isn't there. It has got to be contained in a trust deed or in the funds rules?

PN219

MR GEORGIOU: No, Commissioner. The liability, because it is a - that is not true. What Mr Treglown put - - -

PN220

THE COMMISSIONER: Just hang on, just hang on. I am not saying what he just said. Any super fund has got to have a methodology because it has got to be covered by the guarantee legislation. I don't care how long it has been in, whether it is new or not, there are rules providing for the methodology in working out the benefits for super funds, whether we like it or not.

PN221

MR GEORGIOU: Well in the defined benefit that is stating the bleeding obvious because if it is a defined benefit, benefit is defined. Yes, that has been - the SEC has been around for 70 years and the defined benefit fund has been around for about 50 and it makes no difference what the super fund says with regard to that, with the argument we are having with the company.

PN222

THE COMMISSIONER: As long as it complies.

PN223

MR GEORGIOU: No, the issue of compliance in a defined benefit fund, the superannuation guarantee compliance rules do not apply to defined benefits. They apply to accumulation funds.

PN224

THE COMMISSIONER: Now I understand what you are saying to me.

PN225

MR GEORGIOU: Thank you.

PN226

THE COMMISSIONER: That is question I was asking you.

PN227

MR GEORGIOU: Yes. So Mr Treglown might have been doing it since 1991, which he wasn't because there was only a defined benefit in 1991. It was the SECV fund. His dates might be wrong. But Solaris, AGL - - -

PN228

MR TREGLOWN: I must interject there, Mr Commissioner. If that is the case there still remains no argument. There was only a defined benefit fund in 1991 and we were doing no different to what we are doing now.

PN229

MR GEORGIOU: But you weren't in the fund at that stage because - - -

PN230

MR TREGLOWN: Our predecessor was - - -

PN231

THE COMMISSIONER: Gentlemen, come on.

PN232

MR GEORGIOU: The SEC which is the current equipped super fund, had rules in place in 1991, they haven't varied. The issue was what was superable salary because the multiples - - -

PN233

THE COMMISSIONER: That is what I understand the argument to be about, what is a - - -

PN234

MR GEORGIOU: And the submission that Mr Treglown made about the rules not changing is an extreme nonsense, because what is calculated as superable salary is entirely determined by the employer. It is not defined by the fund, it is not defined by the employee and as an example, Commissioner, at United Energy, and this example was given to the company at the information sessions, and was given to all the employees. United Energy and Multinet Gas, companies comparable to AGL and indeed AGL has just purchased the retail arm of United Energy, a company called Pulse. That company paid - sorry - defined as superable salary 70 per cent of TEC. When it was pointed out to them that those employees were disadvantaged compared to those on the award, the company changed the rate to be superable salary equals TEC.

PN235

The only other company that does it the way that AGL does it is Powercorp. And following negotiations with my organisations and Mr Rizzo's organisation, that issue is being examined. Because in the EBA it states, both in AGLs EBA and in Powercorp's EBA and in every other EBA, on the issue of contracts and employment agreements, it states that:

PN236

No employee can be disadvantage in terms of their contract or employment agreement than would accrue under the terms of the EBA.

PN237

In other words - - -

PN238

THE COMMISSIONER: Can you tell me what clause it is?

PN239

MR GEORGIOU: Yes, I knew you would ask me that and was trying to find that while I was talking. Clause 37, Mr Rizzo - page 18. And it is the second paragraph there, Commissioner:

PN240

It is agreed by the parties that no employee...

PN241

Not no employee who is a TEC.

PN242

...shall suffer any overall disadvantage by entering into an employment agreement/contract and that the employment agreement/contract shall contain no overall diminution in wages, conditions or benefits than would otherwise accrue from this agreement.

PN243

And there is a section on superannuation and the improvements in the defined benefit. That is clause 13, Commissioner. Can I also say, leaving that to one side because Mr Treglown has made his position very clear, today, that the company is not going to change its position with regard to the calculation of superable salary. So the conciliation should perhaps not be confined to that but to the job families. Mr Treglown stood before you a couple of minutes ago in response to Mr Rizzo and said, the company has put on hold the issue of job families. This is and I won't give the name of the person but, this is an e-mail and I will show it to the Commission but not to the company. This is an e-mail from one of my members, who doesn't want to be identified, to me, dated 11 November, and he says:

PN244

Concerning my classification I advise, "I confirm our earlier conversation, that is that I have been advised by...

PN245

X, that is the manager:

PN246

...that your classification under job families is senior engineer/specialist".

PN247

That is 11 November of this year. So the company has been acting on the job families situation, well after they gave a commitment in this Commission that they wouldn't do it. And to further confirm it, here is another one:

PN248

With respect to your e-mail sent to Colin Harrison...

PN249

Who is my rep, the newsletter:

PN250

...I am one of the people being paid a "project allowance" which is in lieu of the pay increase which is being reviewed under job families.

PN251

That newsletter - sorry - that e-mail to me is dated Thursday 7 November. So for Mr Treglown to stand here and say they have done nothing on the job families issue since you directed that they don't do it, is an absolute lie, whether he has deliberately done it or he doesn't know because he is in Sydney, I don't know.

PN252

THE COMMISSIONER: I think the word "lie" is a bit strong.

PN253

MR GEORGIOU: Well he can't stand here and say we haven't done it.

PN254

THE COMMISSIONER: Well, we can say that is not correct, that is sufficient.

PN255

MR GEORGIOU: And in terms of the individual classifications - sorry - the individual negotiations and the resolutions, I have had seven replies from members who were there. None of them advising me that there has been any resolution to their issues. If we could - unless someone else has got something to say I think we should go into conference.

PN256

MR TREGLOWN: Well I think I had better respond, Mr Commissioner, to the question of me lying to this Commission. That is of course not the case. The note that Mr Rizzo has almost put to the Commission, may be citing where a leader or a manager has indicated where the individual would come out on the job families. The job families has not been rolled out. People may, as it is developed internally, people may be advised of where they would wind up with the job families put in place. Because, clearly, the company sees that as being in an advantageous position for both parties.

PN257

We recognise that for people that are covered by this agreement that the job families can't be rolled out until there is agreement. That is clearly part of this document. There is certainly no attempt to deceive. The job families has not been rolled out in fact. There must be agreement and that is clearly accepted.

PN258

THE COMMISSIONER: Thank you.

PN259

MR GEORGIOU: Just to finish on that one. If Mr Treglown is saying people covered by this agreement, I take the Commission to clause 3 of the EBA and it says:

PN260

This agreement shall be binding on AGL Electricity as successors to and their employees.

PN261

The companies are listed. It does not say excluding any class of employee.

PN262

THE COMMISSIONER: Yes. Mr Rizzo.

PN263

MR RIZZO: Commissioner, just quickly. Mr Treglown has answered one of my questions and that is on the TEC issue. That they won't be using the TEC for super purposes. The second point I had, Commissioner, which I would like my organisation to be clear on, is the issue of paying bonuses in lieu of increases in the rate. This again has FAS implications, as I mentioned to the Commission previously.

PN264

THE COMMISSIONER: Yes, that is why I raised the question.

PN265

MR RIZZO: And I would like an answer if possible on that question from the company, Commissioner, if possible.

PN266

THE COMMISSIONER: Can you address that Mr Treglown? Is it possible for you to address it?

PN267

MR TREGLOWN: I am not sure, Mr Commissioner, because I am not sure how many times I have to say it. But the strategy of paying lump sums to some people, where their remuneration is above the job rate, has been long established within the industry and long established within AGL. And that strategy has been accepted since 1994. Now the unions have decided to put a new claim on the company to change that strategy and we simply don't accept it. And Mr - - -

PN268

THE COMMISSIONER: Can I ask a question. I mean, if, for example, employee A is on a salary of $50,000 a year and the job rate contained in the EBA was $49,000 a year and there is an increase of say 1 per cent or whatever that broad it to $49,800 a year, are you saying to me that people on the $50,000 would still receive the bonus on top of that?

PN269

MR TREGLOWN: People on the 50, that were above the rate - - -

PN270

THE COMMISSIONER: Because they are above the set rate?

PN271

MR TREGLOWN: Yes, they would receive a lump sum. And I am not sure that that is across the board but they would normally expect to receive a lump sum, yes.

PN272

THE COMMISSIONER: You have got a note there.

PN273

MR TREGLOWN: Sorry, I deferred to - the practice is that I had forgotten, is that the lump sum kicks in when the job rate is 10 per cent above, after 10 per cent above. And given that, you know, it is down to some - there is some 16 people involved, there is not a lot of people involved any more in that. But that is the case, a long established case and I don't know how many times we have to go back and say it is disadvantage. But it has been a disadvantage since 1994 and the company has applied this methodology since 1994 and before that.

PN274

So is the disadvantage a year on year disadvantage or is the disadvantage one that goes back to 1994. It is the same question as people didn't know or the union didn't know that Hay was, what the value of the Hay was. All of a sudden that is an issue. It has been in place for - - -

PN275

THE COMMISSIONER: Well, as an outsider so to speak, a reasonable question may be, if it has been a disadvantage since 1994, why isn't it dealt with in the EBA at least, which was certified on 22 May 2002?

PN276

MR TREGLOWN: I think that is an extremely good question. It is because it is not a disadvantage, it is an accepted position that people would prefer to have lump sums paid than to have their salaries frozen, as is the case in many other industries and in fact this industry.

PN277

THE COMMISSIONER: Because what is circulating in the back of my mind is no criticism of Mr Rizzo and Mr Georgiou or yourself, of what may be going on. And I might be dead wrong but what may be going on is that some of their members, who are your employees, may be running things to suit themselves, so to speak, in respect to those increases. And that would not be the first time that has happened in industry as a generality.

PN278

MR TREGLOWN: Well I can't really comment on that. But a lot of this has washed out as people are promoted, too. They may be affected one year and unaffected the next year. To change it the way Mr Rizzo and Mr Georgiou are alluding to, completely breaks up a remuneration strategy that takes away a base rate type approach the union would have. But it is all base rate with loadings going on the top of it. Everyone - a fitter is a fitter is a fitter, if you like. But this is not the case. We individually assess people and individually pay people within a band. And have done since 1994.

PN279

THE COMMISSIONER: Thank you. Anyone got anything else? Very good. I will adjourn into conference.

NO FURTHER PROCEEDINGS RECORDED

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A6 LETTER DATED 07/11/2002 PN170
EXHIBIT #A7 LETTERS RECEIVED BY ASU MEMBERS PN170