C2003/1496, Transcript of Proceedings [2003] AIRCTrans 3662 (21 August 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT MARSH

C2003/1496

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY
INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES
UNION OF AUSTRALIA and OTHERS

and

AUSTRALIAN POSTAL CORPORATION

Application under section 170LW of the Act
for settlement of dispute re alleged failure
to engage in proper consultation

SYDNEY

10.30 AM, THURSDAY, 7 AUGUST 2003

PN1

THE SENIOR DEPUTY PRESIDENT: I will take appearances, please.

PN2

MR P. ROGAN: I appear on behalf of the Australian Postal Corporation, with me is MR D. SMITH and MR M. DAVIDSON.

PN3

MS S. HERRINGTON: I appear on behalf of the Communications, Electrical and Plumbing Union, Communications Division, with me is MR M. ETUE and MR P. CHALONER.

PN4

THE SENIOR DEPUTY PRESIDENT: I have received written submissions in accordance with the directions, thank you for them, they are must useful. Who goes first? Mr Rogan?

PN5

MR ROGAN: If I could by way of introduction cover the immediate history that has occurred since this matter was last before the Commission in conference on 3 July, the parties have had two separate rounds of discussions since that date on 14 July in Melbourne and on 24 July in Sydney. We had a couple of more days talking about the agreement. Coming out of those discussions, your Honour, early on in the piece there was one clear issue which the parties agreed was in dispute and would remain in dispute and which we would be seeking the assistance of the Commission through an arbitration process to get resolved and that is the matter that is before you today.

PN6

There are some other issues and subject to the availability of the Commission, once the arbitration is completed today, then we would like to use the services of the Commission in a conciliation process to work through some of those issues.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes, that's fine.

PN8

MR ROGAN: In terms of the matter that is to be arbitrated today, your Honour, you have got copies of our submission, I don't intend to go through that in detail, I think by and large it speaks for itself but I want to briefly traverse that submission and spend a bit more time talking about and going through the response from the CEPU to our submission.

PN9

THE SENIOR DEPUTY PRESIDENT: What about the jurisdiction to make a recommendation, what section of the Act are you relying?

PN10

MR ROGAN: From Australia Post's perspective, your Honour, we believe this would be conducted under section 111AA.

PN11

THE SENIOR DEPUTY PRESIDENT: The union concurs with that, Ms Herrington, so we can have that on the record?

PN12

MS HERRINGTON: We have a concern in relation to the section 170LW of the Act, we are happy to proceed on the basis of section 111AA at the moment.

PN13

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN14

MR ROGAN: Thank you, your Honour. In terms of submissions, I think they primarily rely on two factors, the first is that what the union is proposing will involve for Australia Post significant cost and service implications. Just by way of background, what we are talking about in terms of the Engadine trial is an arrangement whereby there would be a total restructure of the Engadine Group, it would be basically splitting two separate functions, it would be dedicated to every element what's currently done by that group at Sutherland, it would be done during the period of trial at Engadine and the sequencing part of it would be done at Sutherland.

PN15

That involves a fundamental restructure of that area. To revert back would involve inevitably cost implications and service implications and I'll touch on that in a bit more detail when I'm responding to some of the issues that the union has raised. The second major plank of our submissions is that there are simply no good reasons for making that change. Given the assurances that were given to the employees involved, both at the Engadine trial and those who remained back at the Sutherland DC, we don't believe that there is any prejudice whatsoever to the staff involved in this process in terms of continuing these trial arrangements pending the completion evaluation process and decisions about the long term arrangements that will apply at the centre and beyond.

PN16

THE SENIOR DEPUTY PRESIDENT: Can you just remind me or tell me the dates of the trial? Has that been finalised?

PN17

MR ROGAN: We haven't finalised the dates, that's one of the issues we would like to cover in conciliation today, your Honour.

PN18

THE SENIOR DEPUTY PRESIDENT: How long is the trial going to take? Is that for a month?

PN19

MR ROGAN: The trial will be for three months. There has been a dispute between the parties on whether the trial should be three months or effectively six months.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that issue.

PN21

MR ROGAN: We've just by way of clarification on that point and I'll be touching on it a bit later, in any event, we've now received advice from the external consultant in terms of how long the trial should run for and Meredith Wallace, from our point of view anyway, has confirmed that a trial of three months with measurements before the trial and at the end of the trial is sufficient. So, from our point of view, your Honour, we are looking at 3-month trial.

PN22

I think the other point that I would like to make at this stage is that adoption of what the union would seek to have happen involves potentially not just one reversion, it in fact would involve two reversions. It would involve at the end of the trial period reverting to what currently exists at Sutherland, that is, taking the function from Engadine and taking it back to Sutherland and combining it into a traditional postie job.

PN23

Then at the end of the evaluation process when decisions have been made about the long term, assuming that the view is that the long term arrangements should be the trial arrangements, that is, what has been trialled during the trial process, then it would involve another change.

PN24

That change being that it would involve going back to Engadine, splitting the function and going through all those operational cost network issues that we've got a concern with.

PN25

I would now like to turn to the union's submission and I'll get into more detail on some of the matters that are relevant to the issue that is between us. I would like to cover initially the four points that have been listed in their submission in support of their position but before doing so, your Honour I would like to draw attention to the third paragraph of the background segment of the start of their submission where they mention that the dispute was originally notified to the Commission because of the expression of interest document circulated by Australia Post whilst referring to a trial of the concept clearly envisaged the implementation of the concept immediately at the conclusion of the trial.

PN26

The CEPU rejected that process and made the position clear at the initial hearing of the matter. Without wanting to traverse what the Australia Post position was or wasn't at that time, it is very clear from the documentation and from all the discussions we've had with the union that that is not the process we are talking about in terms of the Engadine trial, as of today. The process we are talking about very clearly involves doing the trial, getting the results of that trial, evaluating that trial and then making decisions about the long term arrangements.

PN27

As our submission indicates, there are a range of possible scenarios that we might get to when we get to that stage. It certainly doesn't involve simply saying, well, we've got it in Engadine now and it doesn't matter what the evaluation says, we just continue. Going now through each of the points raised by the union, the first one relates to the term, limited trial of the dedicated delivery concept and your Honour will recall that when the parties were before you, I think it was back in March we reached agreement on the form of words to move this exercise forward. That form of words involved the words of a limited and genuine trial.

PN28

The union has taken those words and has said that from their point of view, limited simply meant a trial that took place and at the end of the trial those arrangements are taken out and referred to what was there beforehand and you go through an evaluation process. That was certainly not discussed on the day that that agreement was struck, your Honour, there was no discussion whatsoever about what would happen at the end of the trial and I can say from the Australia Post perspective and I was involved on that day, that our interpretation of limited related to the Engadine group. That we went into those discussions with a trial that involved a complete trial of dedicated delivery.

PN29

The proposal that we were looking at involved not just the Engadine group, it involved implementation of dedicated delivery in part, varying parts for all groups that are currently located at Sutherland. Now, from our point of view the term limited was meant to indicate that that particular child was simply about the Engadine group or some other group. Our preference was the Engadine group. You might recall, I think, on the day there was some discussion about was that the right group or should it be another group, but from our point of view the word limited was in the context of you would only involve one group. You wouldn't be looking at the whole centre.

PN30

I would also raise the issue of just in terms of its ordinary meaning, what does a limited trial mean. Now effectively what the union is saying to us is that a limited trial, sorry, that a trial that involves three months, revert to normal arrangements, do the evaluation and then make decisions about its long term arrangements, is a limited trial. Whereas process that involves a limited trial leaving your arrangements in there whilst you're evaluating and making decisions about the long term and then making those decisions and moving on, doesn't involve a limited trial and for Australia Post's part, we fail to see how that logically and necessarily follows.

PN31

I think our difficulty in accepting that is made even more pronounced by the fact that the parties have, in fact, had different views on the length of the trial. We've been saying the trial should be for three months as we've already covered. The union has been saying three month's acclimatisation and three month formal trial period which from our perspective effectively means a six month trial. So we're in the unusual situation where under the union definition of a limited trial, it would go for at least six months. Under our definition of a limited trial, you would have a three month trial, you would have an evaluation period which we would expect to be about a month, you would make decisions, have your discussions about what takes place beyond that and we would certainly expect that process to be completed well within the six month period.

PN32

So ironically under the union view what's been put to us to date is that the limited trial would in fact be longer than our limited trial. I'd now like to move on to the second point raised by the union which relates to the fact that there are still outstanding issues. The union is basically saying that whilst those issues are outstanding, that that will effect the union position in relation to implementation. We acknowledge, your Honour, that there are issues that are still being discussed and some of those issues I expect will still be under discussion after the trial commences. In fact, some of those issues have required the trial in order to advance the discussions further. They will be depending in part on what comes out of the trial experience.

PN33

We don't see that that provides any logical basis for an argument that says at the end of a trial you've got to revert what's there at the moment. We don't understand the link between those issues. One is about implementation and the union's concern that because these discussions haven't been concluded that their position in terms of implementation might be prejudiced. We're not talking about implementation in terms of those proceedings, your Honour, we're talking about what happens at the conclusion of the trial and whether we maintain what's there, checking the trial for the period of evaluation or whether we revert to the old arrangements and incur the cost and service importations that that would carry with it.

PN34

THE SENIOR DEPUTY PRESIDENT: So in the union's point 2, Ms Harrington might want to address this, it says:

PN35

Would effect the union's position in relation to implementation ...(reads)... criteria and process.

PN36

That means if the arrangements are implemented on a permanent basis, does it? It doesn't mean evaluation of the trial.

PN37

MR ROGAN: No, we're still talking about the evaluation of the trial.

PN38

THE SENIOR DEPUTY PRESIDENT: We are.

PN39

MR ROGAN: Yes, we've - - -

PN40

THE SENIOR DEPUTY PRESIDENT: So doesn't that need to be finalised before the end of the trial?

PN41

MR ROGAN: Absolutely, yes. Absolutely, and we accept that readily and that's the point I'm making that I don't see that that provides any reason for an argument that we need to revert at the end of that trial when, I'm presuming as your Honour is, that we will by that stage have reached agreement or reached some resolution on the evaluation issue and that won't provide any reason for reverting to what used to be there.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes, I understand what you say.

PN43

MR ROGAN: I think that point 3 is a better - perhaps even the same issue. Again, it's talking about implementation. We're not talking about implementation, we're talking about what happens at the end of a trial pending an evaluation and decisions being made about what implementation action is taken in the long term. We would also take issue, your Honour, with the suggestion there that somehow what we're proposing is a breach of good faith negotiations.

PN44

We are happy to accept that the parties left the proceedings that we had back in March with different understandings of what limited might mean, but to suggest that somehow that represents breach of good faith in negotiations, I'm most definitely not prepared to accept. The fourth dot point, your Honour, relates to the implementation by stealth issue which was covered in our own submissions. As I've already indicated on a number of occasions, this is not implementation. We are accepting that there needs to be a process where the results of this trial are properly evaluated and the decisions made about long term arrangements at Engadine, Sutherland and elsewhere needs to take into account the results of the trial. Until we've done that, decisions can't be made about implementation.

PN45

So to suggest that somehow this is implementation by stealth is, I think, flying in the face of a process that the parties have actually put in place. The union is also suggesting that somehow this is restricting the capacity for staff to make a decision, another issue which we covered in our initial submissions. Those submissions made it clear that the process that the parties have been talking about in terms of staff rights during this trial period and beyond, pending into the evaluation period, do give staff the right at any stage to say I want out of this process, this is not working out for me, it's not what I wanted, and they have got a clear right in the documentation which is agreed with the union to say to management "Find me somewhere else".

PN46

We will do that and we expect that we will be able to accommodate those requests within a week. I'd also like to hand up at this stage, your Honour, another document which is the Kirrawee document which also has a section which is relevant to the issue we're talking about here.

PN47

THE SENIOR DEPUTY PRESIDENT: Yes, I'll mark that as exhibit R1 for convenience.

EXHIBIT #R1 KIRRAWEE DOCUMENT

PN48

MR ROGAN: If I could take you to page 8 of that document, your Honour. This document I might add is not an agreed document, obviously, it's still in discussion. I think in large measure it's agreed that some areas are still in dispute and obviously section 11 on page 8 is one of those areas. So what you've got in front of you represents Australia Post's position.

PN49

THE SENIOR DEPUTY PRESIDENT: Page 8 comes after page 6, is that right?

PN50

MR ROGAN: It's about four actual pages into the document.

PN51

THE SENIOR DEPUTY PRESIDENT: I was looking at the wrong pagination.

PN52

MR ROGAN: It talks about the fact of the post trial arrangements. There will be this evaluation period, the trial arrangements to continue while that's going on. Unless, and we identified this in our written submissions, there is an identified safety operation imperative or agreement between Australia Post and the CEPU to cease. So if something comes up through the trial itself with which the parties agree and provides grounds for ceasing the trial at the end of that period, we don't expect that to happen but if it does this allows for the trial arrangements to cease. As I said, that's not our expectation. Barring that the staffing arrangements established will continue.

PN53

We also go on to say, not only are we saying in terms of people who put up their hand to participate in this trial and those people I might point out at this point can be in various categories. People who will be given first option in terms of participating in this trial will be the Engadine group. Certainly the union has been telling us for some time now that they don't believe we will get volunteers. We believe we would. What the current situation is and certainly from our point of view is unclear and that's in terms of the outdoor, the dedicated delivery part of it at the Engadine centre itself.

PN54

In terms of the sequencing role, the full time sequencing work that will be done back at Sutherland, we've always had issues as to whether we'll get volunteers for that group. The arrangements we put in place your Honour will be put in place and the union as we understand it have accepted these, is that if we don't get volunteers at Engadine we will after that go to the whole network, go across the State and seek volunteers on a broader basis for both the indoor part of it and the outdoor part of it and if at the end of that process we still don't have volunteers and that's at least possible in terms of the sequencing work because we don't have dedicated full time sequencers out there at the moment then we will recruit outside.

PN55

So those people have got the option at any time of opting out of the trial. The people who are currently working at the Engadine group are also provided with assurances through this process and those basic assurances say, once we've made decisions about the long term arrangements and assuming that they evolve retention of trial arrangements we would in fact go to the current Engadine group again and say to them, these arrangements are going to be in long term, do you now want to be considered for one of these jobs and if they do they will be given preference over the existing people who are doing the work during the trial.

PN56

Further, they would be given a one month cooling off period to decide whether in fact it was to their liking, so they would be given an opportunity to do it for a month and if at the end of that process they decided that it wasn't what they expected, it wasn't to their liking they would have an opt out right.

PN57

THE SENIOR DEPUTY PRESIDENT: Australia Post expect that that cooling off period would be not at the end of the trial, not through the evaluation but it would be after the evaluation period when a final decision would be made. You wouldn't count the time of the evaluation with the trial period.

PN58

MR ROGAN: No, that would start once we made a decision about volunteer arrangements, assuming that they were to retain a steady ..... arrangement as we have in the trial. So with those levels of assurances for both staff who were participating in the trial and people who were at Engadine, again, we fail to see how any staff involved in this are in fact going to be prejudiced by our position that the current arrangements remain in place and in the trial - sorry, pending the evaluation and decisions about the long term.

PN59

I would not like to move on to the response that the union has given to Australia Post arguments. I think the first point I would make is that the union doesn't dispute that there will be cost and service implications. The debate is about the significance of those costs and service negatives that we believe will exist. In their final paragraph the union says that they contend that such action, that is reverting to the pretrial arrangements, will have minimal impact on the cost of network co-ordination and service provisions at Australia Post delivery services. We read that as acceptance that there will be an impact about the significance of that.

PN60

In terms of the union comments on the various items that you've listed in our submission about the costs that are going to be involved, I would like to make one introductory comment and that is that a lot of those comments are directed at what takes place on a daily basis in a delivery round when marginal changes are made to an individual's delivery round and it is quite right, those changes that do take place on a regular basis don't involve significant cost implications or service implications.

PN61

This is quite different, your Honour. This is not about marginal changes to one beat. This is about a total restructure of the entire group and we certainly know from our experience that when you undertake a major change such as that in delivery you inevitably have implementation transitional issues. With the best will in the world they are simply unavoidable. We therefore don't accept the union comments that our assessment of the costs involved with things like maps, records and maintenance systems, amendments to sort plans are understated. The union comments are essentially directed at situations that might involve a minor change to a round and just to stress again, this is not a minor change, this is about fundamental restructuring a group.

PN62

They talk about contractors. The reality is, your Honour, that we have contractors to do things. This trial will never involve changes to those arrangements and we have to go through a process of renegotiating those contracts with the contractors. We will need to do that when we implement these arrangements, we would need to do it when we revert, under the union approach, to form arrangements and we will need to do it again when we revert back to the trial arrangements, assuming the trial is successful.

PN63

The union has taken issue with out inclusion of additional lease costs. I can assure you, Commissioner, that from our point of view, from a divisional point of view, that is a cost that's factored into our books at the start of this trial, that's not a cost that's on any of our divisional books, it's pre the trial, that's not a cost that's on any of our divisional books. Once the trial starts that will be a cost that will be factored into the evaluation and will be factored into the financial position of the division with which I work.

PN64

At the end of the trial that cost will still be there and you won't be in a position to say to the rest of Australia Post, just suspend that for a few months. So from our point of view that is a real cost. The union claims that additional motor cycle costs are not acceptable. The reality is that the number of motor cycles we will require will vary. During the trial it will increase - sorry, during the trial it will decrease, at the end of the trial we will need to find additional motor cycles and from our point of view that is an additional cost.

PN65

The union claims that there is no evidence of productivity costs associated with ceasing and then re-introducing the trial. We would dispute that, your Honour. One of the issues that we were talking about through the trial has been the period of time that it will take people to get themselves familiarised with the different work arrangements. When, for example, we introduce dedicated sequencing into the Sutherland Delivery Centre, that will take a period of time and probably six weeks, perhaps longer for staff to get up to full efficiency. When we revert to the old arrangements inevitably there will be some impact on people's productivity. It is inevitable.

PN66

I would no like to talk about the cost associated with recruitment. I think the main point the union has made there that that is basically an assumption that no recruitment will in fact be necessary. The reality is, right now, now of us actually know. It is possible that we will go through this process, that we will get volunteers and that we won't have to recruit externally. But other scenarios are just as likely. That you will have to recruit and we may need to recruit externally.

PN67

In the event that that is where we end up the scenario we will be looking at will be a situation where we have recruited externally. Most likely that will be for the sequencing function which is undertaken. We will need to let those people go because they won't be suitable for undertaking the combined, the traditional, motorcycle sequencing role. It would be unlikely that they would have any skills that are required for the outdoor component, and we would need to go through a recruitment process to get additional people. We think there is every likelihood that at the end of this process if we are looking at converting there will be costs associated with recruitment, and significant costs.

PN68

Network efficiency. The union makes a statement it won't be compromised. Again, we rely on the fact that this is major change. All our experience in Post tells us that when we have introduced major change, with the best will in the world, you inevitably do have issues.

PN69

Customer service. The union acknowledges that this is important. They make the statement they don't believe there will be any adverse. And they provide a commitment on behalf of members involved in the trial that they will ensure that service standards will be met.

PN70

I would like to make to comments on that particular point, your Honour. The first is that nobody knows who is going to be involved in these Post trial arrangements at this particular point in time. We certainly don't know. It depends on who is doing the work. And I am not sure how the union can make that commitment on behalf of people that we are not entirely sure who is going to be involved. It could well be that we will be recruiting the people from outside, for example.

PN71

If the scenario that I painted earlier, about needing to recruit sequences from outside on a fixed term basis for this trial, proves to be correct and there is every possibility in our view that it will; we will need to recruit additional people. They will be from outside and they will inevitably raise issues in terms of customer services as well as costs. I also make the point on that one, your Honour, that that seems to be based on an assumption that the issues that we have when we introduced major change are in terms of negative impact on service standards and the like, are discretionary. They are things that we, the staff, managers, can avoid just with a bit of effort.

PN72

As I have said a couple of times already, your Honour, we don't believe that some of those downsides involved in major changes, with the best will in the world, are avoidable. They are simply part of the process.

PN73

Timing of the matter, timing of the trial. The union says it is a matter for Australia Post. They indicated they would be happy to talk about delaying the trial until next year. This matter has been going on for long enough, your Honour. It is time to get this trial started and we decline that kind union offer.

PN74

The volunteer issue. I think I have covered that already, your Honour. We don't understand how staff are prejudiced through this process or put at a disadvantage given the assurances that we give the people.

PN75

I think, your Honour, just in conclusion Australia Post's position essentially is that this will involve cost service implications, network implications for post, as always accompany major change. We don't believe that there is any good reason why Australia Post should have to incur those costs. Those negative implications. Not just once but potentially twice. We think that the union position is significantly influenced by their view that this is about implementation.

PN76

I have gone out of my way today, your Honour, and through the documentation to make it clear that it is not about implementation. This is about going through a proper evaluation process and making a decision about what is going to be implemented in the long term. That concludes my submissions, your Honour.

PN77

THE SENIOR DEPUTY PRESIDENT: Thank you very much, Mr Rogan. Yes, Ms Herrington?

PN78

MS HERRINGTON: Thank you, your Honour. Since March of this year the parties have been in intensive discussions over a number of associated issues surrounding appropriate delivery, staffing models in the delivery business unit of Australia Post.

PN79

The current enterprise agreement commits the parties to developing staffing principles for delivery centres. As part of the discussions surrounding the development of those staffing principles, Australia Post indicated that it wished to trial the concept of full-time, dedicated, delivery. Corresponding with that particular request goes, at least in the current trial proposal, full-time, indoor sequencing as well. And that seems to be something that is missed in a lot of the documentation that has been referred to, to this point.

PN80

The negotiations since March have centred on the requirements for a trial of dedicated outdoor delivery. There has been some limited discussion on staffing principles and we acknowledge that those discussions are continuing but they are not, to this point, concluded.

PN81

In relation to the trial a number of documents remain in discussion, and one of those has been tendered today, and are close to finalisation; we accept that. But there are still a number of outstanding matters. That includes an agreed parameters and OH&S management arrangements documents. In relation to that the union has advised Australia Post that we have our own consultant looking at that documentation and we will be coming back to them in relation to the drafts that are on the table. We should be in a position to do that fairly shortly.

PN82

The trials specific scoping document, which is the one referred to by Mr Rogan, includes the expression of interest form. While there are a number of outstanding issues in relation to the documentation required for the trial there is this fundamental issue which requires resolution for the trial to proceed. That is, what the work arrangements will be at the conclusion of the trial.

PN83

In relation to the comments made briefly by Mr Rogan at the commencement of his submission, if I could just make a couple of points. The Engadine trial as it is proposed, or as it was originally proposed when these proceedings commenced, did look like implementation. Yes, that may have changed since then, but the comment in our background part of the paper of our submission is, and remains, accurate.

PN84

There was clearly in the original an expression of interest form, and acceptance that the volunteers would indicate what position they wished to go into long term. That, to us, amounted to implementation and that was clearly what was on the table when the proceedings commenced in March. There is no argument that that has now changed to some extent. But clearly that was the critical issue that brought the matter into these proceedings.

PN85

The union did agree in those initial proceedings to a genuine and limited trial. And it is still our view that "limited" in this context means "limited in time". We have always regarded the trial as having a commencement point, an end point, an evaluation period. And only after the evaluation period - if all the issues are resolved from our perspective - an implementation strategy. That has been the way that most major has been negotiated within Australia Post with the union over a number of years. We don't think that this is any different in that concept.

PN86

We do the trial. We evaluate the trial. If the issues that are thrown up by the trial, or that we have already put on the table in relation to staffing principles, and maintenance and skills are addressed, then there needs to be an implementation strategy. That is the point at which we would look at implementation. Not at the point in which we are still in trial arrangements.

PN87

It is clear from the documentation that a number of issues we have agreed to be discussed during the trial. Those include skills maintenance for the delivery staff. We have consistently said on that issue that that needs to be resolved before there is any implementation of the concept.

PN88

The trial will begin to look at that issue but there is no guarantee that the matter will be resolved in the trial timeframe. Agreeing to a trial while this issue is unresolved is, from our perspective, a major concession. The union is not in a position to agree to implementation while that issue remains unresolved. And we are not sure that the actual trial itself will go all the way to resolving that issue. We will commence the process but it is unclear as to whether we will get finalisation.

PN89

Equally the issues associated with the EBA commitment to develop staffing principles remain in discussion. To implement only one part and that is the part relating to dedicated outdoor delivery, which is the one part which Australia Post wants, without finalisation of the other parts of the whole is, from our perspective, not acceptable.

PN90

If the trial arrangements continue there will be significant impacts on the work arrangements and conditions of the staff. The union does not believe that staff should be expected to continue in arrangements which may decrease their future options until all matters are resolved and they can make an informed choice of where they want to be.

PN91

Yes, your Honour, Australia Post do have two major concerns and that relates to the cost and service implications by this particular proposal. If I may just go through some of the cost issues that have been raised by Mr Rogan at this point. We do say there is a cost, but every action taken by Australia Post in any normal operations associated with delivery has cost. There is constant and continual reconfiguring of rounds, recasting of rounds, changes to sort plans, changes to maps, changes to strip maker, it goes on across the country every day. That is normal operational cost. To say there is any additional cost in this process, we think is incorrect.

PN92

Yes, there is normal cost of daily operations which Australia Post changes on a daily basis. In comparison, the potential cost to an individual employee, if they find themselves ongoing in a work arrangement that restricts their career options, has the capacity to restrict their earning capacity, is far greater we would suggest than any operational cost in actual dollar terms that Australia Post will bear, in terms of both the trial and the reversion costs.

PN93

If I could just point out a number of the costs that have been referred to by Mr Rogan are actually talking about the reversion cost to the traditional current working arrangements and then an additional cost which is described, I think, by Mr Rogan, as a reversion back to the trial arrangements. Now that is an assumption that implies implementation.

PN94

We are discussing here, surely, what is trial arrangements and what is the post trial arrangements? Yes, there will be costs for implementation, we would suggest that those are a quite separate cost and a cost, if it is implemented beyond the Engadine group in the Sutherland area, will be borne across the network. It is not a cost that is just specific to that particular trial. That version is very clearly an implementation cost if you go back to the original arrangements at the conclusion of the trial.

PN95

The cost of actually reverting in terms of the Australia Post submission, if I may take you to that, your Honour. There are a number of costs that are documented at the conclusion of that submission and again we would simply refer to our submission and say most of those costs are daily operation costs. There is nothing unusual in those costs, they are costs that are borne every day. The major costs seem to be associated with the recruitment and we would simply reiterate the position, your Honour, in our submission, we do not know whether there will be any recruitment needed.

PN96

Australia Posts' initial position was that there would be volunteers for this matter. If that is, and remains the case, then there will be no recruitment costs because those people will already have the skills required.

PN97

In relation to the issue of lease costs, my understanding within the retail network framework is there is a process called Retail Transfer Pricing, and that actually works to cost space used by delivery in a retail facility back to the delivery business unit. My understanding of that is delivery pays for the space that it is using or the time it is using and our experience is that over a number of years there is a continual push back between delivery and retail where the two co-located in the one building about the cost.

PN98

Delivery is continually trying to minimise the cost so that retail doesn't get the money, and retail is continually trying to maximise the usage of space so that it does show up on their books. That is nothing unusual. We would suggest that as the Australia Post policy current stands, delivery in this context will pay for the outstation area while the trial is proceeding. If there is no one in the outstation area at the conclusion of the trial there will be no cost going back to delivery. Retail will continue to bear the cost of that facility.

PN99

In terms of motor cycle costs, we are a little perplexed by the argument that there will be additional costs of bikes having to be borne. It is our understanding that during the trial those people will be, in effect, used within the Kirrawee area. They will be filling existing positions that are vacant or relief positions and in those circumstances they will continue to use their motor cycles. We cannot see how, given the commitment that Australia Post have made, that that can be construed as an additional cost.

PN100

We are equally confused by the issue of the uniforms or personal protective equipment. Yes, additional, shall we say, slightly different uniform requirements will be required for the dedicated outdoor, because the assumption is that it will be long sleeves and long pants for the process of the trial. We are talking about six people and we are talking about the cost of PPE for six people for that period of time.

PN101

I don't somehow see that that translates into the cost that is factored in there and I would suggest, given that the material can continue to be used even if the people are working as a traditional postie doing indoor and outdoor work, that that simply gets factored into the normal cost of PPE and uniforms that Australia Post wears on a daily basis.

PN102

In relation to the contracts with the contractors for the depot bags, it would, in our view, be quite feasible, given they have to renegotiate that for the trial itself to put in as part of that negotiation a cease point and a reversion point that would not require any additional negotiation outside the costs they already have to wear in terms of the trial.

PN103

In relation to the argument that this is a fundamental restructure of the entire group and therefore a major impact on service delivery. Your Honour, we are talking about a group of 12 people. We are talking about reconfiguration of a small part of a network down to six beats, six runs. We are not talking enormous substantial major network change at this point in time. We might in the future, quite conceivably, if there is implementation of this proposal and roll out beyond this area. But for the trial period we are talking about 12 people being reduced to six outdoors and the other six, in effect, moving somewhere else. Or eight or ten, depending on who volunteers or if there's no volunteers, those twelve people will be, in effect, relocated in the Kirrawee area and you will have an additional six people coming in.

PN104

The maximum impact is 18 people in that circumstance. We fail to see how that translates into major network change, fundamental change, to such an extent that is going to change the service delivery standards for the Kirrawee area. Those people are already meeting their service requires and our suggestion is that by reverting they won't have lost any skills or minimum skills in a three month period, they will continue to be able to provide that service standard.

PN105

In relation to the commitment we made in relation to customer service and meeting certain standards, we made that commitment on behalf the members, clearly we can't make it on behalf of anyone else, but we are more than happy to work with any members that are participating in the trial and that would revert in the post trial arrangements to the current existing ones, we would be more than happy to work with them and to work with both to ensure that those certain standards are, in fact, met.We think the staff in the trial - because unless they have to recruit from outside, which we don't know at this point whether they will have to do - will both retain the skills appropriate at the reversion to make any productivity loss absolutely minimal. No different to a person taking three months long service leave and coming back to work. We say that is a normal cost that Australia Post wears in terms of, perhaps, six people that we are talking about. We think that cost is absolutely minimal in terms of any reversions.

PN106

Overall, your Honour, the union considers that the issues associated with the outcome of the trial, that is the potential impacts on the overall delivery structure as a whole, equally importantly the impacts on the individual volunteers and their choices, are of such significance that they outweigh the minimal cost associated with the reversion to pre-trial arrangements.

PN107

It is unclear, your Honour, if a person at the conclusion of the trial - and that is both indoor and outdoor - says they do not wish to continue at this. So we are at the conclusion of the trial and we are into the evaluation process. If someone says at that point, I no longer want to participate. Does that mean Australia Post will then bring in someone else to replace that person? In which case we are out of the trial parameters and from our perspective we are into implementation.

PN108

That is the assumption that I would have to draw from the submissions that have been made by Australia Post. They want to continue those arrangements irrespective of who is doing it. Irrespective of the fact that the trial may have ceased and that people may have indicated that they don't want to proceed with it. We don't know. We don't know until we get to the end of the trial what that circumstance will be. Certainly, if that were to be the case, then we would be outside of the trial at that point and from that perspective bringing anyone in would in our view amount to implementation.

PN109

One other point if I may just say in relation to the limited nature of the trial as against the three months, and our proposal of six months. We have, at this point in time, made it quite clear to Australia Post that we accept the advice that it is three months, pending any further advice we get from our consultant that we would then have discussions with Australia Post in relation to the period or the time of the trial.

PN110

We accept the advice that has come in from the consultant at this point in time. But our consultant is looking at that and will come back to us with advice on the time of the trial. Unless there is any other evidence or suggestions made in terms of timing then the three months with potentially a week to two weeks at either end of it for the actual measurements is what has been put on the table and we have no argument with that.

PN111

We think that continuing with the trial arrangements while we are in the evaluation process does in fact amount to implementation. We would say that that is a process that needs to be undergone after evaluation, and after full consideration that the other issues that are still under discussion have in fact been addressed. That would be our submissions, your Honour.

PN112

THE SENIOR DEPUTY PRESIDENT: Did you want to say anything in reply, Mr Rogan?

PN113

MR ROGAN: There are a couple of points, your Honour. Ms Herrington made comment that most of our major change exercises involve what the union is currently proposing, reverting to what is there, evaluating and then moving on. I don't accept that, your Honour. I would instance the V-sort program. The most recent major change program that was undertaken in delivery. Certainly didn't involve putting frames in, having a trial period and then taking them out whilst they were evaluated. Those frames were left in there whilst that evaluation process was going on.

PN114

We are also going through a process at the moment, in another part of the business - mail processing - where we are evaluating looking at a new frame. That has involved a trial period. Again, at the end of that trial period we didn't take the frames out and revert to pre-trial arrangements.

PN115

Ms Herrington has made a number of comments about costs and about why is this any different from what we do at the moment day-to-day. The reality is that there is a big difference. What we do day-to-day does not involve avoidable costs. There are things that we need to do to keep the business current. What the union is proposing under its position is, from our point of view, a cost that is eminently avoidable.

PN116

I get back to the point that I made during our submissions that we simply don't believe that the union has put forward any good reason why Australia Post should have to incur those additional costs and why customers should have to incur any degradation of service standards.

PN117

The only reason it has come out today in terms of why that should happen - certainly nothing in terms of the staff point of view - has been a union position that they want these arrangements pulled out for negotiating purposes. We simply don't believe that provides an acceptable reason for Australia Post to have to incur those costs, or our customers those service degradations. That concludes my submissions, your Honour.

PN118

THE SENIOR DEPUTY PRESIDENT: Thank you for those submissions, they are most helpful. I will reserve my decision and will bring it down as soon as practicable. It shouldn't be in the too distant future. We will now adjourn into conference.

ADJOURNED INDEFINITELY [11.26am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #R1 KIRRAWEE DOCUMENT PN48