C2003/221, Transcript of Proceedings [2003] AIRCTrans 3640 (20 August 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER HARRISON

C2003/221

CBI CONSTRUCTORS PTY LTD

and

AUTOMOTIVE, FOOD, METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION
and ANOTHER

Notification pursuant to section 99 of the Act
of a dispute re placement of a ban on the welding
of stainless steel by welders engaged by CBI
Constructors Pty Ltd on the Phase 4 Project,
North West Shelf

SYDNEY

11.13 AM, WEDNESDAY, 6 AUGUST 2003

THESE PROCEEDINGS WERE CONDUCTED BY VIDEOCONFERENCE IN SYDNEY

PN1

THE COMMISSIONER: Can I have the appearances, please?

PN2

MR P.J. COOKE; Thank you, Commissioner. I appear on behalf of CBI Constructors Pty Ltd and appearing with me is MR S. MACAREE of CBI.

PN3

MR C. SAUNDERS: I appear on behalf of the AMWU and with me is MR J. DEENEY the Shop Steward at CBI, North West Shelf, and MR C. BELL.

PN4

THE COMMISSIONER: Thank you. Yes, Mr Cooke?

PN5

MR COOKE: Thank you, sir. We notified this dispute yesterday. The sequence of events is such that CBI Constructors have a contract to build the fourth LPG processing train on the North West Shelf Project. They are engaging their labour under the terms of the North West Shelf Project CBI Constructors Pty Ltd Mechanical Phase 4 Project Agreement.

PN6

Arising out of that agreement, there are several welding allowances set out in clause 5 subclause (3)(iv)(b) of that agreement and they stipulate various allowances depending on the nature of the welding undertaken by the employees concerned. In March of this year, a dispute over the application of those allowances went to the Commission as constituted by Commissioner O'Connor. There was no agreement and ultimately the matter was referred for arbitration. That involved inspections up on the project in May of this year and a further hearing in Perth.

PN7

Arising from that arbitration, a decision was issued on 26 June of this year by Commissioner O'Connor found at PR933557. Amongst the four issues determined in that decision was - and it's set out in paragraph 2 of the decision:

PN8

...whether the welder currently ...(reads)... prescribed by clause (b).

PN9

In effect, sir, what that was whether the welders were to get an allowance that was basically worth about $33 a week all purpose or whether they got a higher allowance of approximately $45 a week all purpose.

PN10

Following the inspections and the hearing before Commission O'Connor, on page 2 of the decision at paragraphs 5, 6, 7, 8 and 9, Commissioner O'Connor determined that the pipe welders should be paid the allowance at the higher level, the $45.44 allowance. Commissioner O'Connor's decision then went on to deal with some other issues that are not relevant to the proceedings today.

PN11

In terms of the operative date of Commissioner O'Connor's decision, that particular application, C2003/53, came before the Commission on 18 March 2003 and Commissioner O'Connor determined that was the appropriate date to which to backdate the increase for the welders. That decision was handed down. I'm advised CBI, in terms of calculating back pay, etcetera, processed that into the pay packets of the welders concerned last week.

PN12

Following that, on Saturday, 2 August, a meeting was held after work hours by the welders employed by CBI Constructors on the fourth train engaged in the welding of stainless steel and they put a ban on the welding of stainless steel. That first had an effect on Monday, which was in fact a public holiday in Karratha but there were a small number of welders working, and they declined to carry out the work concerned. They then left the site but it was a public holiday so they were only working an overtime shift in any event.

PN13

The welders engaged by CBI on the night shift that night declined to carry out their welding of stainless steel as well; and then that followed on to the welders engaged by CBI yesterday. At the time I'm advised the welders declined to carry out the welding of stainless steel and sat in the sheds for most of the day. Today the welders are not at work. When the welders declined to carry out the full range of the duties they were engaged to do they were advised by the employer that, as far as the employer was concerned, they were engaging in industrial action and subject to the stand down provisions of the agreement.

PN14

That, sir, is basically what is happening currently. We would seek from the Commission today a written recommendation that the welders resume normal work and that their claims, which I understand run to two parts - and I'll stand corrected if I'm incorrect - seek that they not only be paid the $45 allowance but that those concerned also be paid the $33 allowance, that is, that the allowances be cumulative; and, secondly, as I understand it, the other limb of the claim is that the operative date be the time that the welders were first on the project by CBI Constructors; that those issues be the subject of conciliation between the parties on site in Karratha next week and pending that conciliation occurring that there be a return to work.

PN15

What we would indicate, sir, is that on any reading of the agreement, and when one looks clause 5(3)(iv), the allowances are not cumulative. That is not the way they have been applied at any stage of this project starting in 1980 and carrying forward. The issue being determined by Commissioner O'Connor is plainly set out in paragraph 2(i) of his decision and further, under the heading of "Arc Welders", on page 2 of his decision where it was understood between the parties that the terms of the arbitration were that it was a question of whether allowance (a) was to be applied in lieu of the allowance prescribed by subclause (b); and plainly, we say, the welders concerned, having agreed to participate in this dispute settlement procedure and the matter having been arbitrated by the Commission under the terms of the agreement, can not now turn around and come back and act outside the system.

PN16

There was a decision; the company has implemented it. In the nature of these things sometimes you win, sometimes you don't. It's not good enough to say, a month down the track, "We don't like the decision" and take direct action to overturn it.

PN17

THE COMMISSIONER: Thank you, Mr Cooke. Yes, Mr Saunders?

PN18

MR SAUNDERS: Yes, there are a few matters, Commissioner. One is that the rate of pay for welders has been in dispute by welders probably from the first day of this project when the welders went on site. The welders are coded up to such an extent - according to welders and I have to say I'm not a welder - that it is beyond that of normal welding. The code itself - and as you would be aware, sir, on each job a welder needs to be recoded. You have to go from job to job and get re-coded up. You can't take your code from one job to the next. I suppose that in itself creates a position where it puts pressure on welders to be able to perform to a very high standard, and they said I'm told by the welders, as of day one that the code A's Australian Standards 1210 is to an extremely high standard and that when the agreement was negotiated, rightly or wrongly, that was taken into consideration.

PN19

I should say that this employer plus United KG, who is the other major contractor on the project, have tried to source welders as far wide as Korea because they said they didn't have enough welders with the skills or experience to be able to put on the project. We found that not quite correct but that was the submissions they were putting to us not more than six weeks ago that they wanted to import labour because the skills weren't available in Australia. They didn't look around Victoria and a few other places to recruit workers and when that was pointed out there were people with those skills to be able to go there.

PN20

The same as being for the day one the rate just isn't applicable for the skills that was required and the union has to take some blame for that because we agreed to the rates in pre-start agreement and not knowing the full circumstances. We raised that through the Chamber of Commerce, as high up as Kelloggs joint venture, that we were concerned about the rates for the welders because of the skills required and of course the contractors, the Chamber of Commerce of Industry and Kelloggs joint venture, says agreement is an agreement you're with them or wear it.

PN21

That's fine they can say those sort of things. I've always been a person if there is a problem there that we should raise the problem and work out way through them but that hasn't happened on this occasion. So the matter with a number of other matters had a matter heard and determined by Commissioner O'Connor and our industrial officer, Luke Edmonds, ran that on behalf of the workers in our union.

PN22

It is interesting where Mr Cooke reads out the issue of what should have been determined in the correspondence from CBI, undated mind you but prior to the case being heard. CBI said to the workforce and to the welders in particular, it said:

PN23

Tradesmen's rates and allowances being withheld, claimed that the pipe-welders be paid AS10 allowance.

PN24

Then it sets out some other matters being dealt with. It goes on to say the CBI believes that the claim made on behalf of the pipe- welders that they receive the Australian Standards 1210 allowance in addition to ASME B31 - and the appropriate words there were "addition to" not "in lieu of" - and that they are qualified. So when it went to the Commission at that particular time, of course, there was a different argument put.

PN25

The agreement itself doesn't preclude the accumulation of all the allowances but it's fair and true to say that past practice over the last three stages plus the LPG, that hasn't been the practice; but the agreement doesn't preclude that happening, it's just that the past practice hasn't been that they can have additional allowances added on.

PN26

When the welders are coded they're not coded just Australian Standards 12; they are also coded to ASME B313 and they are also coded to B54. So my understanding is, and the welders tell me, that they do six different tests. If they want to look at AS 1210 they do six different codes and they've got to pass those six different codes to be able to weld on this particular project. So, again, it's not usual on projects. Normally you're coded up to a certain level and that's what you weld to.

PN27

Can I just say that normally you would be coded up to 1554, which is plate-welding, and then someone else would be probably coded up for stainless steel or duplex on the job, their ASME would be B313. Some of those who are doing the stainless would be doing 1554 - on some jobs they employ people just to do stainless welding; they don't use them on plate work. So it's a different job to that degree and, as we are aware, Woodside are fairly stringent about the standard of work that is delivered by their contractors both in quality and in safety. So they made sure that they could get the best out of them.

PN28

That brings me to what is happening here at the moment. One is that, as I say, there has been a problem about the rates of pay for the majority of welders there. The contractors have admitted that they found it very hard to source labour with the experience and skills to get on the job. We raised with them at that particular time again that maybe the rates of pay were wrong - and we have done so on numerous occasions - and eventually, under some restraint, Commissioner O'Connor handed down a decision which in effect delivered $13 extra a week, which didn't satisfy the welders' claims.

PN29

I should point out also that the claim goes beyond what Mr Cooke put and trying to stay within the boundaries of the agreement. The welders put submissions to me that they should have their three allowances. I know John is here but the welders rang me and said they want three allowances, which are set out in - do you have the agreement there, Commissioner?

PN30

THE COMMISSIONER: No, I don't have it in front of me; I'm sorry.

PN31

MR SAUNDERS: All right. I'll just repeat it so that it's on transcript: the Australian Standards 1210 in addition to the ASME B313, and there's a small allowance ASME B313, flux form welding. So it's those three. So that's the claim that they wanted addressed.

PN32

Now, obviously the welders and the delegates understand that the matter has been dealt with by Commissioner O'Connor and that there were two things. One was a matter of the operative date and that he only moved the rate for welders from $31.56 up to $45.44. The welders had a meeting at the weekend. They understood that they had had their day in the Commission. They still weren't satisfied with the outcome. They put a resolution to their employer that, as far as they were concerned, if they weren't going to get paid the compounded rate then they would not weld stainless steel or duplex. They would only weld carbon.

PN33

That was relayed to the employer and on Monday, which was a public holiday in the Pilbara, those I understand some workers or the majority workers elected to take the public holiday but some workers didn't. A couple of welders were asked to weld stainless. They objected to it. They explained their position was that they were part of the meeting that was carried out on Saturday. They wouldn't weld the stainless and they elected to go home and participate in that public holiday. Of course Tuesday came and obviously they then as I understand selected seven people to go and weld stainless. When those seven people elected not to weld the stainless but asked for alternative work they said no there is no alternative work and you will be stood aside or stood down without pay for refusing to carry out those duties.

PN34

I suppose it has brought the other welders in to the dispute to the extent that they're party to the resolution and at this stage where those who are current up to at least AS1210 are now in dispute with CBI.

PN35

I think the Commission should know too that as far as - I think there's a couple of matters. I see a written direction or written recommendation to return to work. The welders won't accept that. I would have to say to you that I think even if they had done the proceedings in front of you and return to work orders the welders won't accept that. They believe that they deserve a better outcome than that and I am led to believe that the welders if it is not resolved to a degree in their favour on this occasion they have got two options. One is they will continue to pursue their claim on strike but I think the second option is the more likely option. A number of welders will leave the project.

PN36

I'd have to say that the employer that put those submissions, that's probably the worst thing that can happen to this project, welders leaving the project. They just wont - to be able to find other welders and carry them up and get them up there would cost them probably five times the amount the welders are seeking to address this claim. So that's the position we are in. It is not a pretty position.

PN37

We understand that the Chamber could argue that we are in breach of the agreement. I'd have to put me hands up and say we probably are. The facts of life are that the welders had made the position. To some degree they tried to negotiate through their problem. They took some advice from an employer, CPI industrial officer at one stage - he's not with them any more - about having the matter determined in the Commission, in front of Commissioner O'Connor. They probably wish they never did that now but that's the advice they took at that particular time. That's the luck of the draw, so I suppose that's where we are today. If it please the Commission.

PN38

THE COMMISSIONER: How many welders are involved, Mr Saunders?

PN39

MR SAUNDERS: I think there's about 47.

PN40

MR COOKE: Sorry, about 50 we would have said, sir, 55.

PN41

THE COMMISSIONER: But not all are coded up to AS1210.

PN42

MR SAUNDERS: No, you've got tack welders there or not.

PN43

MR COOKE: I think from my recollection of the last proceedings the decision of Commissioner O'Connor was they were all coded to AS1210 or equivalent. There were a small group that weren't, they were doing mainly structural welding but in any event the great majority of the pipe welders were in the terms of Commissioner O'Connor's decision were coded to equivalent of AS1210. I would have said that maybe three or four that aren't of the pipe welders.

PN44

THE COMMISSIONER: So, the current position is that yesterday they stayed in the shed and today they haven't reported for work at all?

PN45

MR SAUNDERS: Yesterday they offered themselves for alternative work, the employer rejected that as a position. Said that the seven welders had to weld stainless steel or equivalent. They refused to do so. The other welders then sheded up or cabined up until the night shift came on. There was a meeting and I understand they elected to go home.

PN46

MR COOKE: And they've not reported to work today. I mean effectively they're on strike today, sir.

PN47

THE COMMISSIONER: Are they due to meet again, Mr Saunders?

PN48

MR SAUNDERS: Well, it is a small town and that they've got communications. We can call a meeting fairly quickly if needed but there's no schedule meeting as I understand it at this stage.

PN49

THE COMMISSIONER: Well, I am sorry to hear you say that no matter what I say they won't be returning to work.

PN50

MR SAUNDERS: They're your words but I'll agree with it.

PN51

THE COMMISSIONER: Because I am prepared to come over there and try and attempt to work through the issues but I'd rather deal with it on the basis that the status quo prior to last Saturday's is in place and I think that's a better basis to try and resolve an issue.

PN52

MR SAUNDERS: I suppose the other alternative, of course, is that as I've said it is a fairly big issue to the welders, is that you put a proposition to the employer that they wouldn't weld stainless until the matter was at least explored. That is another option the employer could have a look at because they could still continue to weld in some other areas. That's an alternative, right. They may look for alternatives.

PN53

I understand what you're saying is that you are willing to explore a position that may assist a resolution of this dispute. The welders are saying well we've been down the track of the Industrial Relations Commission and we don't believe we were treated fairly. We are not going to go through that again. The other alternative is that the welders themselves have said look, we don't want to deal with stainless steel until the matter is dealt with and the employer could find alternative work for the welders to do carbon steel until you get there early next week.

PN54

THE COMMISSIONER: What's CBI's view about that? That's essentially asking them to accept a resumption of work with bans in place.

PN55

MR MACAREE: I mean that creates a difficult situation for us just in terms of finding work. It was something we did look at as an option but under the circumstances it was being workable.

PN56

THE COMMISSIONER: Well, I don't know what we can do in the interim.

PN57

MR COOKE: Perhaps if we may, sir, I wouldn't mind if just for a short period of time if we can split the conference, there is some thoughts we had in terms of proceeding to address it but I'd like to raise those with yourself. If you believe there's any value in it then perhaps you can raise it with the other party. I am not suggesting a lengthy break but we might put our minds as to how this might be addressed. Bearing in mind also Mr Macaree arrived in Perth about an hour ago and we've had a relatively short period of time to get detailed instructions. Subject to the Commission's view we wouldn't mind if we could just split the conference briefly.

PN58

THE COMMISSIONER: We will go off the record and adjourn into private conference.

OFF THE RECORD [4.41pm]

RESUMES [5.30pm]

PN59

THE COMMISSIONER: The Commission has conferred with the parties in private conference jointly and separately this afternoon. At this point in time the dispute remains unresolved. I have to say that it is regrettable that normal work is not being undertaken so that at least the Commission could inspect the work in question and in dispute some time early next week. It is my strong recommendation that normal work resumes as early as practicable so that I can inspect the work in question to allow me to at least make some objective judgments about the arguments. That is preferable to hearing some theoretical discussion about what is involved.

PN60

I will leave the application open and the file open and will re-list it at short notice in the interim but failing that I will be available on site on Tuesday morning of next week to either hear argument or, preferably, to conduct inspections of the actual work being undertaken so that the matter can be resolved. I understand the claims, I understand the feelings of the welders involved, but all disputes come to an end sooner or later and this one is no different to any other dispute and normal work should be resumed as early as practicable, as I have said earlier.

PN61

The company has its rights preserved in terms of any other applications it may make but the Commission remains available to conciliate in the interim before Tuesday if requested. Thank you. These proceedings stand adjourned.

ADJOURNED INDEFINITELY [5.33pm]