C2003/2529, Transcript of Proceedings [2003] AIRCTrans 2186 (6 June 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

JUSTICE MUNRO

C2003/2529

APPLICATION FOR AN ORDER TO STOP OR
PREVENT INDUSTRIAL ACTION

Application under section 127(2) of the Act
by Favelle Favco Cranes Pty Limited for an
order to stop or prevent industrial action

SYDNEY

2.23 PM, WEDNESDAY, 21 MAY 2003

Continued from 13.5.03

PN139

HIS HONOUR: This is a resumption of matter C2529. It was before the Commission on 13 May, the conclusion of which from recollection there was a direction issued to the parties. The matter has been re-listed at the request of the AIG on behalf of the company. Perhaps I will simply take appearances. Is there any change to appearances?

PN140

MR A. PRICE: If the Commission pleases, I appear on behalf of the Australian Industrial Group. With me is MR S. CHONG, General manager of Favelle Favco Cranes and MR H. NIELSON, their Production Manager.

PN141

MR I. MORRISON: Your Honour, there are no changes to the AMWU appearances from the previous hearing.

PN142

HIS HONOUR: Yes, Mr Price?

PN143

MR PRICE: Your Honour, since the parties were before you on 13 May I am pleased to advise that the parties have met in negotiations on two occasions and they have substantially conformed with the directions you issued on 13 May.

PN144

On 15 May the parties exchanged the wording of clauses on the remaining seven points that the union had indicated to the employer needed to be resolved. If I may hand those up in a document, your Honour.

PN145

HIS HONOUR: I will mark that as AIG4.

EXHIBIT #AIG4 CLAUSES

PN146

MR PRICE: The clauses that I have tendered represent the company's offer at the present moment. The company is offering the employees a 4 per cent annual increment from 1 April 2003 and thereafter annually and in addition it has discussed with the union representatives a productivity incentive scheme which could add between 3.4 and 4.4 to the basic 4 per cent increase.

PN147

The date and period of operation of the agreement. The company is proposing 31 December 2005. You may recall that it was originally proposing a date of 31 March 2004. So the company has moved a considerable way in the direction of the union's claim.

PN148

Long service leave claim by the union to have an entitlement of 13 weeks at 10 years was rejected by the company as it cannot afford that increase. The protection of employee entitlements, the company has made an offer to the employees that they will provide them with a properly executed and sealed deed of guarantee on the parent holding. The name of that parent holding has been clarified to the parties. There's also been discussions about the tabling to the consultative committee of the annual report of Muhebar Engineering which is the parent twice removed from Favelle Favco Prestons. In that would be the annual accounts for Favelle Favco Holdings in which Favelle Favco Prestons is situated. That annual report is published and tabled with the Stock Exchange in Kuala Lumpur.

PN149

In relation to local content the union ask that the company have a local content clause in its agreement which basically requests that wherever possible material and componentry for the manufacture of cranes is sourced within Australia and the company has agreed in principle and has in fact always been doing that.

PN150

Your Honour, the parties have come to an agreement about the conversion of a large number of labour hire people within the company and has set forward a timetable for the progressive completion of that process by 31 December 2003. Currently the work force is 78 employees of whom some 41 are currently permanent and the remaining employees will be gradually offered employment contracts with Favelle Favco. Those are labour hire employees are currently the employees of labour hire companies.

PN151

The last item, your Honour, was an item that the company wanted which was to reduce the number of paid meetings and to reconfigure the arrangement currently in the agreement and it proposes six paid meetings per year for the duration of 30 minutes.

PN152

The company considers that it has made considerable concessions to the unions demands and that it is offering a generous package of benefits to the employees. This package is creative and flexible. As explained it provides a base 4 per cent increase and the opportunity to earn an additional 3 to 4 per cent per annum based on achievement of 3 KPIs. By current standards this has to be a very good offer. It not only can form the basis to take the company forward in meeting its sales targets and securing more international orders but it offers an opportunity for employees to obtain a significant increase in their earnings in the first year.

PN153

As previously explained meeting custom and delivery time allows the company to offer permanency to the remainder of its work force and to maintain high employment levels. In every sense it is a win win offer.

PN154

The company's clauses which I referred to just a moment ago were put to members by the delegates on the afternoon of 16 May and the delegates reported that the members were substantially in agreement with what the company had proposed except for the expiry date. They sought time over the weekend to consider their position.

PN155

Your Honour may recall that the company had wanted a 1 year agreement only and it had maintained that position since negotiations began. Your Honour indeed recommended to the parties that they should consider a 19 month agreement. The company has changed its views to be substantially in the direction sought by the employees and the union with the operational period proposed from 1 April 2003 to 31 December 2005, a period of 33 months.

PN156

The union is seeking an expiry date of 31 March 2006 as part of an industry-wide campaign to have all metal industry agreements expire on either 31 March 2005 or 2006. At a meeting on 19 May the union members decided that they wanted 31 March 2006 and they were seeking a meeting at 8.30am yesterday, Tuesday, 20 May, with the state secretary of the AMWU, Mr Paul Bastian, to be followed by a meeting with the company. Unfortunately Mr Bastian was detained by a family emergency and the meeting was re-scheduled to 1.30pm but he was still detained.

PN157

The meeting was attended by Mr Bruce Campbell an organiser of the AMWU and a meeting was then conveyed with the company at 2.20pm. The union asked for the expiry date to be in line with the union's log of claims but the company explained that its parent company found it convenient to line up the expiry date for budgetary purposes with a commencement of its new financial year which begins 1 January of each year. The union asked for another meeting with Mr Paul Bastian on either tomorrow, Thursday, 22nd or Friday, 23rd, which the company originally agreed to. However, at this meeting the union then advised that the overtime ban was being reimposed and the planned stoppage for the next day, today 21 May was going ahead despite the fact that the company had incurred a loss from a stoppage in the period of your directions namely the next day, Wednesday, 14 May.

PN158

The company views this is being in particularly poor form and not bargaining in good faith when in its view agreement is potentially so close. The honourable thing in the company's view would have been for the union to seek the assistance of the Commission to resolve the last hurdle. In the company's opinion it underscores the continual inability of the union and its members to understand that negotiation involves give and take.

PN159

Your Honour, the company has lost some 5,060 man hours in this dispute since 30 April which it estimates is worth something in the order of $170,000 in lost production.

PN160

Your Honour, the expiry date is the only stumbling block. The company seeks your assistance in reaching an agreement with the union. If that fails to be productive I am prepared to address the Commission on the issue of grounds for termination of the bargaining period based primarily on the grounds of bargaining in good faith, that the union's insistence on a common expiry date is contrary to the intent of section 170L of the Act and that further ongoing industrial action proposes an economic threat to the crane manufacturing industry in Australia of which Favelle Favco is the only player. Therefore we see it is in the public interest for the Commission to intervene and to assist the parties resolve the matter. If the Commission pleases.

PN161

HIS HONOUR: Mr Morrison?

PN162

MR MORRISON: Firstly I should explain the situation of Mr Bastian. He does have family emergencies except for today when he is in fact in the Supreme Court in a matter which I am sure the Commissioner has some knowledge of. It is his intention though to be attending the site on Friday for further meetings and also discuss matters with the membership.

PN163

What Mr Price did submit though is fairly accurate in that considerable steps have been taken between the parties and that the issues still in dispute is the date and period of operation and the difference of 3 months that currently exist between what the union members regard as the necessary expiry date and the offer of the company. The members feel that the only way that they can achieve that end when it became apparent at negotiations there was no give in the company's position was to continue with their protected industrial action. Action that was, and there's been no argument, I believe properly served and has been fully carried out and has been the subject of a great deal of negotiation. Both parties have had the opportunity to put their arguments as to why they feel that date is correct.

PN164

Therefore we are of the opinion that there is no basis for the company to proceed in saying that the union is not negotiating as we indicated - I'm just trying to find the words that was used.

PN165

HIS HONOUR: Genuinely trying to reach agreement.

PN166

MR MORRISON: Genuinely trying to reach agreement, thank you, where we have tried to reach agreement at many meetings and as far as compromising goes if I could draw your attention to AIG4 that was handed up.

PN167

HIS HONOUR: What difference is collateral - are there other differences in relation to AIG4?

PN168

MR MORRISON: I am advised no other differences.

PN169

HIS HONOUR: Well, what turns upon the difference?

PN170

MR MORRISON: I am sorry, your Honour?

PN171

HIS HONOUR: What turns upon the difference as to term? Is there a collateral price associated with it?

PN172

MR MORRISON: I am not clear. There's no extra money.

PN173

HIS HONOUR: If you're getting 12 per cent plus bonus over a term that expires 31 December 2005, is it?

PN174

MR MORRISON: Yes, we are virtually forgoing - - -

PN175

HIS HONOUR: What's the difference between and getting one over a term expiring 31 March 206?

PN176

MR MORRISON: In fact our members would be considerably forgoing a pay rise for whatever percentage is negotiated 3 months prior to the expiry of the agreement, whatever is determined by the next agreement. The position of the union members that the date of 31 March is the date that the union members prefer for their reasons.

PN177

HIS HONOUR: I can understand them preferring it.

PN178

MR MORRISON: It's a neat 3 years from the previous agreement which had an expiry date of 31 March.

PN179

HIS HONOUR: So it's a matter of symmetry is it?

PN180

MR MORRISON: I think it is more than just a matter of symmetry, your Honour.

PN181

HIS HONOUR: Or a linkage with the national move.

PN182

MR MORRISON: With the national move, yes. As far as compromise, as I was saying, in ASIG4, Part 7. where the company will allow no more than six meetings per year. This is a considerable change from what was in the previous agreement which was 24 meetings per year. Admittedly they were of 15 minute duration but on the same basis that's from 12 down to 6. That was done co-operatively by the union.

PN183

HIS HONOUR: You broadly agree though - is this company, remind me, I've already been told, in export competition of any kind?

PN184

MR MORRISON: I am not sure if they export but I know that they're the sole operator - sole manufacturer in Australia of the cranes. I am not sure if they export or not. Their parent company is a Malaysian company as Mr Price explained.

PN185

MR PRICE: If I may respond, your Honour. The company I am instructed exports 95 per cent of its product.

PN186

HIS HONOUR: I see. Well, I suppose so you do not die wondering, Mr Morrison, I've just had lunch with my erstwhile and still colleague the director of the ALO in Jakarta, whose better known here as Justice Bolton, who expressed unusual bemusement about ours as a nation we are going to be coping with 66 cents in the dollar plus rise and an expectation that people understand by our system, the name of the game in the parts of the world that has been inhabiting for the last year or so involves a pretty high level of co-operation between those areas where they've got unions and people are investing in the companies, where it is 3 months without any additional benefits hanging on it - and I am not trying to urge you to go and find some additional claims to back it up but isn't there an easier way than toughing it out over industrial action to try to persuade each other? I take it the troops are out for today, are they?

PN187

MR MORRISON: Yes, they are, your Honour. I do take your point and I would like perhaps - and this is without too much consultation with or instruction - there might be, if we went off record, there might be some mechanism that with your assistance we could use to perhaps emphasise that point you just made.

PN188

HIS HONOUR: Well, I would like to find one because as you know there are passing through the Commission an array of employers and the bargaining situations and all I can say is I think people who act reasonably should be treated reasonably as best as they can be.

PN189

MR MORRISON: Yes, I take your point.

PN190

HIS HONOUR: I don't want to erect a brick wall, all just for the purposes of battering your head against it, if it can be - to paraphrase something from a different generation of industrial negotiators.

PN191

MR MORRISON: Depending on what Mr Price will say I think perhaps if we did go off record we might be able to progress this further.

PN192

HIS HONOUR: Let's have a try at that. We will adjourn into private conference.

OFF THE RECORD [2.43pm]

RESUMES [4.21pm]

PN193

HIS HONOUR: i have had discussions in private conference with the parties. In the course of those discussions I explored with the parties together and separately aspects of the positions that they had each adopted. In the course of that series of discussions I did indicate that I would prepare a recommendation if it seemed likely to produce any advance or movement. I think there may have been some advance to order solution but before putting the recommendation formally on transcript is there anything you wish to add, Mr Price or Mr Morrison?

PN194

MR PRICE: No, your Honour.

PN195

HIS HONOUR: I have sought to point out to both parties it is highly desirable that there be a resolution of a difference between them as to whether the effective life of the proposed agreement should run for 33 months or effectively for 36. In the course of the discussions I have developed reasons in support of what I put as a strong recommendation that there be a compromise reached, both parties should move. I recommend as a step in the interests of all concerned that the parties accept an expiry of 15 February 2006 which is approximately an even split between the positions that were adopted.

PN196

I expressed the view that there will be no disadvantage relatively in my view at least through adopting that compromise and that it is desirable if practicable that the differences between the parties be resolved as quickly as possible. I note that there may be some clarification of provisions of the agreements eventually to be negotiated and I would hope that that could be done in a reasonably short space of time.

PN197

Is it required that that recommendation be reduced to writing or it is satisfactory that it remain on transcript?

PN198

MR MORRISON: Your Honour, it would be preferable in writing so that the delegates would have a document to take to a meeting which is scheduled I believe for tomorrow morning.

PN199

HIS HONOUR: Very well. Have we got the facsimile number here somewhere for Mr Morrison.

PN200

MR MORRISON: It might be more appropriate if possible for that document to be faxed to the company's address to be available for the delegates first thing tomorrow morning.

PN201

HIS HONOUR: Very well. My associate will check up with those before finishing tonight. Thank you, gentlemen. I will stand the matter over generally on that basis. The recommendation will issue in due course.

ADJOURNED ACCORDINGLY [4.23pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AIG4 CLAUSES PN146