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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
Tel:(02) 9238-6500 Fax:(02) 9238-6533
TRANSCRIPT OF PROCEEDINGS
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
JUSTICE GIUDICE, President
VICE PRESIDENT ROSS
SENIOR DEPUTY PRESIDENT POLITES (In Absentia)
COMMISSIONER SMITH
COMMISSIONER DEEGAN
C2002/4087, 4088, 4091. 4097,
4099, 4178, 4505, 4506, 4507,
4508, 4607, 4608, 5609, 4610,
4611, 4659, 4660, 4740 and 4772
C2002/4089, 4090, 4092, 4098,
4100 and 4179
STORAGE SERVICES - GENERAL -
AWARD 1999
RUBBER PLASTIC AND CABLE MAKING
INDUSTRY - GENERAL - AWARD 1998
RETAIL AND WHOLESALE INDUSTRY -
SHOP EMPLOYEES - ACT - AWARD 2000
METAL, ENGINEERING AND ASSOCIATED
INDUSTRIES AWARD 1998 - PART 1
GRAPHIC ARTS - GENERAL - AWARD 2000
CLERICAL AND ADMINISTRATIVE
EMPLOYEES (VICTORIA) AWARD 1999
RUBBER, PLASTIC AND CABLE MAKING
INDUSTRY - GENERAL - AWARD 1998
GRAPHIC ARTS - GENERAL - AWARD 2000
INFORMATION TECHNOLOGY INDUSTRY
(PROFESSIONAL EMPLOYEES) AWARD 2001
METAL, ENGINEERING AND ASSOCIATED
INDUSTRIES AWARD 1998 - PART 1
BUSINESS EQUIPMENT INDUSTRY - TECHNICAL
SERVICE AWARD 1999
RUBBER PLASTIC AND CABLE MAKING
INDUSTRY - GENERAL - AWARD 1998
STORAGE SERVICES - GENERAL - AWARD 1999
STORAGE SERVICES - GENERAL - AWARD 1999
LIQUOR AND ACCOMMODATION INDUSTRY -
RESTAURANTS - VICTORIA - AWARD 1998
RETAIL AND WHOLESALE INDUSTRY -0 SHOP
EMPLOYEES - ACT - AWARD 2000
GRAPHIC ARTS - GENERAL - AWARD 2000
METAL, ENGINEERING AND ASSOCIATED
INDUSTRIES AWARD 1998 - PART 1
LIQUOR AND ACCOMMODATION INDUSTRY -
RESTAURANTS - VICTORIA - AWARD 1998
Applications under section 113 of the Act by
the National Union of Workers and Others to
vary awards re redundancy
APPLICATIONS FOR EMPLOYMENT TERMINATION
ORDERS
Applications under section 170FB of the Act by
the National Union of Workers and Others for
orders giving effect to Article 13 of the
Termination of Employment Convention
SYDNEY
10.06 AM, TUESDAY, 12 AUGUST 2003
Continued from 8.8.03 in Melbourne
MR WATSON: Your Honour, just before Mr Moir calls his witnesses, we have a supplementary witness statement from Mr Patrick Holmes to tender. The tendering of that statement would obviate any need for ACCI to cross-examine Mr Holmes and that will resolve his evidence.
PN6023
JUSTICE GIUDICE: That will be ACTU 36.
EXHIBIT #ACTU36 SUPPLEMENTARY WITNESS STATEMENT FROM MR PATRICK HOLMES
PN6024
JUSTICE GIUDICE: Thanks Mr Moir.
PN6025
MR MOIR: Thank you your Honour. If I could begin by announcing a change of appearance. I now appear with MS S. PHILLIPS. I call Nicholas McGloin.
PN6026
MR MOIR: Your name is Nicholas McGloin?---Yes, it is.
PN6027
And you are the former Managing Director of Plastine Products Pty Limited?---That's right.
PN6028
And your current business address is 168 Carrington Street, Revesby?---That's right.
PN6029
Mr McGloin, you have completed two statements in relation to these proceedings. The first statement dated 17 December 2002?---That's right.
PN6030
Do you have a copy of that statement with you?---I do, yes.
PN6031
Are the contents true and accurate?---They are, yes.
PN6032
This statement is found at tab 2 of AIG10. And Mr McGloin you have completed an additional statement?---That's right.
PN6033
That statement is dated 13 May 2003?---That's right.
PN6034
Do you have a copy of that statement with you?---Yes I do.
PN6035
And are the contents of that statement true and accurate?---They are, yes.
PN6036
Yes, that statement is found from page 50 at AIG14. I have nothing further.
PN6037
**** NICHOLAS McGLOIN XXN MR WATSON
PN6038
MR WATSON: Mr McGloin can I take you to paragraph 8 of your first witness statement?---Yes.
PN6039
You say as at the date of purchase the company engaged 25 employees, including 15 factory workers and 8 admin staff, do you see that?---I'm sorry is this in my first statement?
PN6040
Yes, paragraph 13 of your first statement?---Yes.
PN6041
Engaged 25 employees including 15 factory workers and 8 admin staff
PN6042
?---That's right, yes.
PN6043
Yes, and you speak about the factory work force in subsequent paragraphs. The eight administrative employees, were they subject to award conditions only?---No, all of the staff were covered by the Enterprise Agreement which included the office staff as well as the factory staff.
PN6044
Right, and is that, as you are aware, a matter of custom and practice or is it the result of the terms of the agreement itself?---I don't think the agreement specifies who is covered by the agreement, but I think that the practice within the company was that the office staff would be covered in the same way.
PN6045
Right, well can I hand you a copy of the certified agreement.
PN6046
JUSTICE GIUDICE: Is this one of the attachments to the statement, Mr Watson?
PN6047
MR WATSON: No, it's a new document.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6048
That's a copy, is it, of the certified agreement which you negotiated and signed with the union?---It is, yes.
PN6049
JUSTICE GIUDICE: It seems to be annexure G to the statement.
PN6050
MR WATSON: It is, is it? I'm sorry I hadn't realised.
PN6051
THE WITNESS: Actually Mr Watson sorry can I retract that, that's actually not my signature on the document on behalf of Plastine. That may have been the administrator's signature there.
PN6052
MR WATSON: On 17 August 2001?---Yes, that's not actually my signature on behalf of Plastine.
PN6053
Well, but on 17 August 2001 the administrator had not been appointed?---Well that would be then Alan Scott I think, who was the production manager.
PN6054
All right?---Sorry, I don't recognise the signature but I suspect that's who it is.
PN6055
So you are not disputing that this is an agreement signed by Plastine on 17 August?---No.
PN6056
Can I take you to clause 7 of that agreement. The agreement only provides wages for factory staff, doesn't it?---Yes it does, yes.
PN6057
And the parties bound by the agreement in clause 4, if I could take you back to that, paragraph B:
**** NICHOLAS McGLOIN XXN MR WATSON
PN6058
All employees whether members of the organisations listed in C hereof or not who are engaged in any of the occupations, industries or callings specified.
PN6059
?---Yes.
PN6060
So do you say, do you, that the certified agreement applied to the clerical and administrative staff?---My understanding was that yes it did, and I think that their understanding was that it did.
PN6061
But it doesn't provide any wage rates for them. Did they vote on it?---Did they vote on the agreement.
PN6062
Yes?---No, well I'm not sure whether a vote was taken on the agreement by anybody.
PN6063
All right. I want to suggest to you that a vote would have been taken on the agreement. I'm asking you whether the administrative staff to your knowledge voted on it?---I don't think so.
PN6064
You don't think so?---No.
PN6065
Well I want to suggest to you that in that context it appears the administrative employees were not bound by the agreement, or covered by it rather?---Legally perhaps not, but I think in practice the expectation was, and I think that the previous owners of the company had accepted that they would be.
PN6066
Well did you have any problem with the level of award redundancies that applied to clerical and administrative employees?---Well, yes my understanding was that it would be the same as for the factory employees. When you say did I have a problem with it, I was concerned that it was very high.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6067
Even the award level?---Sorry, no, not the award level.
PN6068
No, well just listen to my question. Did you have any problem with the level of award redundancy that applied for clerical and administrative employees?---No.
PN6069
Can I hand you this document.
PN6070
I'm sorry, we're a bit short on copies. Can I suggest to you that that's an extract from the Clerical and Administrative Employees State Consolidated Award?---Yes.
PN6071
Can you see on the second last page of that there's a severance scale?---Yes.
PN6072
You see that's set out in a table and then in the final sentence on that page:
PN6073
Where an employee is aged 45 or over, the entitlement should be in accordance with the following scale.
PN6074
And then there's a scale over the page?---Yes.
PN6075
Then, you see there's also a definition of a week's pay in paragraph 3?---Yes.
PN6076
So, that level of redundancy pay, in relation to clerical employees, you would have had no problem with?---Well, this is the first I've seen of it. It seems, again, very high, but as I say, I thought all of the staff were covered by the enterprise agreement. That was my understanding of it.
PN6077
Well, I thought you said in evidence, that you didn't have a problem with the award level of redundancy for the Clerical and Administrative Employees?---Well, I hadn't seen it at that point.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6078
Well, when you proposed your deed of arrangement, you proposed that people go back to, if I can describe it, the Federal award standard of eight weeks plus an additional four weeks?---Yes.
PN6079
You had no problem with that standard once you'd, sorry, an additional four weeks if you had more than five years service, I think?---I think it was, yes.
PN6080
You had no problem with that standard. You will need to respond audibly for the - - -?---I'm sorry. Yes, looking forward for when we were trying to re-structure the business and looking at what we felt the business could afford, we thought that that was a reasonable offer.
PN6081
I want to suggest to you that the award standard for the Clerical and Administrative Employees which I've handed to you there, is a little bit more than the standard you were proposing but, in the case of an employee over six years and under 45 years of age it has an extra four weeks?---Yes.
PN6082
For employees over, six years and over, an extra eight weeks pay?---Yes.
PN6083
So, you would agree, wouldn't you that the award standard there, whilst it's a little more than you were proposing in your deed of company arrangement, you would have been prepared to live with?---Well, I suppose, based on the cash and the availability and the profit that the company would produce, that's the factor for me.
PN6084
Well, I'm asking you, as at the time you proposed the deed of company arrangement, if someone had said to you, look we're not happy with your formula of 8+4, but we are prepared to accept the New South Wales award standard, you would have accepted that, wouldn't you?---Well, I hadn't seen the standard at that stage and I probably wouldn't have made that decision on my own. I would have sought advice from the accountants to see whether it was an affordable option.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6085
Well, you can't say, can you then, one way or another, whether it was affordable or not?---No, I can't.
PN6086
So, it may have been?---It may have been, yes.
PN6087
Paragraph 59 of your first statement, sorry, I will tender that extract. We will need to make extra copies, I'm sorry, your Honour.
PN6088
JUSTICE GIUDICE: Could you just identify it?
PN6089
MR WATSON: Yes, its an extract of the Clerical and Administrative Employees State Consolidated Award New South Wales.
PN6090
JUSTICE GIUDICE: ACTU 37.
EXHIBIT #ACTU 37 EXTRACT OF CLERICAL AND ADMINISTRATIVE EMPLOYEES STATE CONSOLIDATED AWARD MEW SOUTH WALES
PN6091
JUSTICE GIUDICE: I see it comes from the web page of the New South Wales Department of Commerce.
PN6092
MR WATSON: Yes, your Honour. In a sad commentary on the state of the world, industrial relations has been overtaken by commerce in New South Wales.
PN6093
Can I take you to paragraph 59. You say, there, that you set up a business earlier this year?---Early last year.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6094
I see, early last year. Yes, that's right. Is that business still going?---Yes, it is.
PN6095
How many does it employ?---Only one at the moment.
PN6096
What, yourself?---Just myself, yes.
PN6097
I see. Now, at the purchase of the Plastene Products business from Bryden, a letter was circulated to all employees, was it not?---Yes.
PN6098
Can I hand you a copy of this document. Now, that's a copy of a letter from Bryden Australia Pty Ltd which was circulated to all employees?---I think it is, yes.
PN6099
This one has been faxed to Mr Campbell from the AMWU, presumably for him to have a look at?---Yes.
PN6100
Now, you had approved of the contents of that letter prior to it being circulated to employees of then, Brydens, soon to become employees of Plastene?---I'm not sure whether, I can't say with certainty that I saw that letter before it was circulated, but, can I just have a moment to read it?
PN6101
Certainly?---Thanks. Yes.
PN6102
You approved of the contents of that letter?---I think I did, yes.
PN6103
They accurately, where they speak of arrangements that had been undertaken by you in relation to employees, they accurately summarised those arrangements?---I think so, yes.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6104
So, in paragraph 2 of that letter, you advised employees, or rather Bryden advised, if you like, on your behalf, that their conditions of employment subject only to the provisions of any applicable award will remain as they are at present.
PN6105
Then, in paragraph 3, you indicated that their continuous service with Bryden would be treated as continuous service with Plastene?---That's right, yes.
PN6106
In particular, you refer there, to all service related benefits including redundancy entitlements too?---Yes.
PN6107
Then, you also indicate, in paragraph 4 that periods of service henceforth will be calculated on the basis of combined service with Bryden and Plastene?---That's right, yes.
PN6108
MR WATSON: Can I tender that?
PN6109
JUSTICE GIUDICE: Yes. ACTU 38.
EXHIBIT #ACTU 38 COPY OF LETTER FROM BRYDENS AUSTRALIA PTY LIMITED CIRCULATED TO ALL EMPLOYEES
PN6110
MR WATSON: You, I'm sure, engaged, did you, in some form of due diligence process prior to the purchase of Plastene?---Yes I did.
PN6111
And so you were, as a result of that, aware of the level of employee entitlements?---Yes.
PN6112
Yes, and you were also aware, were you not, of the contingent liability that might be associated with any redundancy pay under the agreement?---Yes I was.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6113
Yes, and you also knew, didn't you, that by the letter that was sent to the employees you were assuming the risk for all of those amounts?---Yes.
PN6114
Yes, and in those circumstances did you seek a discount on the purchase price, or an allowance in the purchase price, in relation to a sum equivalent to employee entitlements and contingent liabilities?---There was an allowance made I think in the sale for accrued long service leave, unpaid sick leave, annual holiday pay but not for any redundancy provisions.
PN6115
So you knew you were assuming the risk of the redundancy provision?---Yes.
PN6116
But you didn't seek any allowance in respect of that sum?---No.
PN6117
Now, can I take you to paragraph 22 of your witness statement, your first witness statement I should say. You say there:
PN6118
That in June 2001 the company suffered a major blow by losing a large annual contract with a US customer.
PN6119
?---Yes.
PN6120
And then you go on to say:
PN6121
That almost immediately the company faced difficulties.
PN6122
Do you see that ?---Yes.
PN6123
And then you say this in paragraph 23:
**** NICHOLAS McGLOIN XXN MR WATSON
PN6124
I immediately considered the possibility of a restructure to enable the company to maintain its competitive market position.
PN6125
?---Yes.
PN6126
Yes, so I take it that the effect of those two paragraphs is that in June 2001 you say you were considering the possibility of a restructure?---As a consequence of the effect on our cash flow forecasts we looked at several issues. One of them was, could the business be restructured given that we would not be able to afford to continue with the current level of overhead basically, but there were very little avenues to sort of reduce overhead, it was, the company was run very tightly, cash was at a premium and so you know there were very few avenues that we could look to to reduce out costs and certainly reducing staff was not an option.
PN6127
Can I just hold you a second. All I'm interested in now is when you say "I immediately considered the possibility of a restructure" are you saying, is the effect of those two paragraphs, that in June 2001 you considered the possibility of a restructure?---Yes.
PN6128
Right. Now I think in a sense you have answered this and in terms of some of your earlier evidence, but the possibility of a restructure, did it in your mind include, the possibility of a reduction in staff?---It did, but if we looked at the actual costs of doing that it was not, it wasn't a possibility, it wouldn't help the business.
PN6129
So you actually considered that issue?---Yes.
PN6130
You looked at the costs you say and you decided against it?---Yes, it wasn't a possibility given that we already had a substantial bad debt, or probable bad debt which - - -
**** NICHOLAS McGLOIN XXN MR WATSON
PN6131
And you say you did that in June?---Yes.
PN6132
Now, in the next paragraph you give evidence that as early as May you were seeking that the redundancy agreement be brought back into line with the company's actual ability to afford the payments, do you see that?---Yes.
PN6133
And so, I'm presuming that then in June when you lost this contract and you were looking at the possibility of restructuring that would have made that issue even more acute for you?---Yes it would have, yes.
PN6134
Yes, and so one presumes that at that point you would have raised it with the union in discussions, because you were still negotiating the enterprise agreement at that stage, weren't you?---In June I think we were just waiting for it to be registered I think by that stage. I think we signed it, is there a date there when it was signed, in August, yes.
PN6135
All right. Can I hand you this document. That's a faxed document to Mr Campbell and it contains something from Plastene Products to the Consultative Committee, do you agree with that?---Yes.
PN6136
And it is dated 5 July 2001, the fax?---Yes.
PN6137
Yes, you see that you say there:
PN6138
During the union meeting it was mentioned that the company is still going through a tough time with sales slightly up under the new ownership but still a long way to go.
PN6139
?---Yes.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6140
Yes, and then:
PN6141
The company understands why you are all asking for what you have but want you to understand in effect the financial position.
PN6142
?---Yes.
PN6143
And then you say:
PN6144
In regards to the resolution from the shop floor the company has come up with following.
PN6145
So it seems you would agree, wouldn't you, that the agreement had not been concluded by this stage, you were actually putting back something else?---Yes.
PN6146
Yes, and do you see paragraph 4?---Yes.
PN6147
Redundancy agreement?---Yes.
PN6148
The company believes the current agreement is extremely good and there will be no changes, i.e. 3.75 weeks per year.
PN6149
?---Yes I see that.
PN6150
So, after June when you say you had looked at this issue on restructuring and you had already decided that it was too costly and you could not do it, you actually go back to the union in negotiations and say, "The current agreement is a good one and we are going to keep it"?---No, that's not my letter Mr Watson, I didn't write that letter. I think that letter was, I'm sorry I don't know who wrote it, but I suspect it was written by the union delegate to the staff, not by the company.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6151
It's on Plastene Products letterhead?---Yes.
PN6152
JUSTICE GIUDICE: Who is the person named at the top there, do you know?---Sorry, Sargam Bedalley is one of the employee delegates for the union.
PN6153
MR WATSON: Are you denying that this was the company response on these issues of enterprise bargaining?---Mr Watson, I'm not sure who wrote the letter, I suspect it may be the union delegate. I mean he had access to a typewriter and the office facilities as part of the agreement and I suspect this is his letter to the staff.
PN6154
And it was company practice was it, that the union delegate had access to the letterhead of the company?---I said I'm not sure whether he wrote it or not. It may have been Alan Scott, the production manager. I'm sorry I can't tell you it's not signed, the document's not signed.
PN6155
Well, see I want to suggest to you that even in July, the company was not in any way indicating that it thought the existing redundancy agreement was a problem?---As I say, I'm not sure who wrote this letter, so I can't answer your question because this may have been a report by the union delegate to the staff as a result of the meeting in May. I'm not sure.
PN6156
Well, were you involved at all in the day-to-day negotiations for the enterprise agreement?---Yes.
PN6157
Would any correspondence in relation to the company's position in that agreement have gone in without your authorisation?---No, but that's why I'm surprised to see this isn't signed. I mean, if it was from the company, probably Alan Scott, the production manager, would have signed it. So, I'm sorry I can't answer your question. I don't know.
PN6158
Can I tender that document, sorry?
**** NICHOLAS McGLOIN XXN MR WATSON
PN6159
JUSTICE GIUDICE: Well, you may. Is there any objection to it? There seems to be some doubt about it, that's all Mr Watson. I suppose we can simply note - - -
PN6160
MR MOIR: Yes, there is an objection, your Honour.
PN6161
JUSTICE GIUDICE: Yes, well we can just note the evidence about it. Yes. ACTU39.
PN6162
MR WATSON: Well, can we go back to the copy of the agreement. Do you agree that this was signed in August?---Yes.
PN6163
It's Attachment G to your statement in request, for the purposes of the members of the bench, signed in August and you would agree, I think you agreed with me earlier in evidence that the document I've just taken you to suggests that negotiations were still ongoing in July?---Yes
PN6164
Then in this agreement you actually sign off on the redundancy scale, don't you?---Yes it does. Yes.
PN6165
So, notwithstanding that you say in June you lost a contract and you immediately contemplated re-structuring, and that you discovered that it was too expensive, in August you sign off on the redundancy scale?---Yes, the company did sign off on it. Yes.
PN6166
Not only that, but in clause 15, you also say that it's agreed that no redundancies are envisaged with the current workload and the current number of employees?---Sorry, that was in clause?
**** NICHOLAS McGLOIN XXN MR WATSON
PN6167
15?---Of my original statement?
PN6168
Of the agreement?--Sorry, that's right, yes.
PN6169
Well, was that right? At the time you signed that statement, or rather, at the time the company signed the agreement, was that statement in any sense a genuine representation of the company's belief?---I think that statement had carried on from the previous agreements and I think, as of May, when we were making all the main negotiations of the agreement, that was the case. We realised in June at that point that there may be a problem with the contract, with that in the US, we still at that stage were hoping to collect the money that was outstanding and had we done that then we probably would have been able to continue if we'd have been able to keep the contract. So, the actual contract wasn't confirmed as fully lost in June. We knew that we had problems with it, but we were still hopeful at that stage to collect the money.
PN6170
Well then, why did you immediately consider re-structuring if it wasn't fully confirmed as lost?---Well, we knew that it would be a significant problem for the business if it wasn't resolved, so, you know, at that point, as a manager you start to look at all the possibilities for the company and what can be done to pre-empt any of those difficulties, what can be done to help offset them.
PN6171
Let's go then to my question. As at the date this agreement was signed on 17 August, just over a month before the company was placed in the hands of the administrator, did the company genuinely believe that there would be no redundancies envisaged with the current workload and the current number of employees. I want to suggest to you that you didn't based on the evidence you've said. Can I put it to you this way? I want to suggest to you that in May when you were negotiating this, you may well have had that view, but by August when you signed off on the document you simply did not have that view. By August, you had reached the point where you knew there were going to be redundancies?---No, I didn't know that there would be redundancies. I knew that we would need the help, if things didn't change, of the advice of a consultancy practitioner. You know, whether that included redundancies or whether we were
**** NICHOLAS McGLOIN XXN MR WATSON
able to raise additional capital, wasn't really known at that stage. I mean, it was one of, I guess, a possibility and we would still continue to take all necessary steps to avoid it for the life of the agreement. I think that's true. It's agreed that no redundancies are envisaged with the current workload and the current number of employees. There probably is some doubt about that I would have to admit, given that by August, you know, we realised that the contract for the US business was looking shakier and shakier and we still hadn't been able to collect all the cash that was outstanding.
PN6172
Well, isn't the effect of your evidence that in August you knew that the current workload would not sustain the current number of employees, that something had to change. Either you had to get more workload or you had to get less employees?---Yes, and we were looking for additional workload. I think at that time we were dealing with Grain Corp and there was a possibility of obtaining a fairly large contract from Grain Corp.
PN6173
So, as at August, when you signed off on this agreement, the statement that you made in the second last sentence, or rather that the company signed up to in the second last sentence of clause 15 was wrong?---Yes, I think I would say that, you know, my position at that stage was that I didn't want any redundancies, that we wanted the business to secure this other contract and that that would have allayed that thing, but I suppose, it's a very difficult statement to say that no redundancies are ever envisaged given the variability of business.
PN6174
Nonetheless, you signed off on the agreement. You signed off on the agreement with the redundancy pay scale and that statement, did you not?---The company signed off on the agreement. As I say, I think it's Alan Scott who signed it.
PN6175
Employees of the company in August had, so far as they were aware, been guaranteed the continuance of their severance pay?---Yes.
PN6176
Following on from the guarantee in April in the letter that you sent them?---Yes.
PN6177
Not only that, but they had been told that the company didn't envisage that with the current work load and current number of employees there would be any redundancies?---Yes, that's true.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6178
That's true?---Yes.
PN6179
JUSTICE GIUDICE: Were there any discussions about the potential for redundancies. I'm looking at paragraph 24, where you sought, or the company sought some reduction. What was the context of those discussions?---Well, that was, as we looked through each of the clauses of the agreement, I mean obviously this was the first time I had been involved in negotiating the agreement, so a lot of it was new to me, but it struck me that the redundancy levels seemed very high.
PN6180
And was there any discussion of the reasons why you wanted a reduction?---Only that I knew that the history of sales of the company had been quite flat, costs were increasing, imported raw materials were increasing in price and those issues. I knew that the company was not generating a lot of profit and anything that we could do to reduce or control costs was going to be important.
PN6181
Was there any discussion about the US contract?---No not in May. That contract had only just commenced several months previously and several shipments had been made and at that point we had had no concerns about the quality of the product and we had no concerns about payment for the product.
PN6182
But prior to the finalisation of the discussions on the agreement was there any discussion?---About the contract?
PN6183
Yes?---No, I think at that stage it wasn't public knowledge that we had difficulties with that contract.
PN6184
So is it right that at that stage you were hoping that you might either be able to salvage it or to get business from elsewhere?---Yes, I was hoping that we would salvage the business. It took us a very long time to establish with the client what the problem with the product was and the reasons for his rejection of the product. We were seeking advice from other manufacturers as to was it a genuine problem and at the same time I was on the phone to the US every couple of days trying to
**** NICHOLAS McGLOIN XXN MR WATSON
get them to pay for the goods. One of the big issues with that contract was that all of the raw materials for that product had to be imported, not all of them but a large proportion of it, had to be imported from the US, had to be paid for up front and then processed in Australia and then we had to collect the money, so it was a big strain on cash flow and it also involved a large amount of money, I think a quarter of a million dollars was the debt that we suffered.
PN6185
Well given the situation you were in, I'm sorry Mr Watson to be interrupting, but given the situation you were in, why did you agree to a wage increase, maintaining the severance pay scale?---Well I guess the pressure from the union was very strong, it was always let's step forward not step backwards in terms of our demands and I was told by Alan Scott the history of some of the agreements was that there was always concessions given by the company and that even prior, it wasn't performing so well, but they had still increased things like severance pay scales and wages, so I felt obviously the union wasn't going to step back on all of its demands. They were pushing hard on manusafe, which we managed to, well which we simply couldn't fund anyway, so it was a concession that I felt would enable us to continue on with the least pain.
PN6186
Was there any industrial action connected with the re-negotiation?---Not with that negotiation no, although I understand that previous agreements there had been industrial action in the plant.
PN6187
Yes, thank you.
PN6188
MR WATSON: Mr McGloin, I want to suggest to you that notwithstanding what you say in paragraph 24 that throughout the course of the negotiations your concern in relation to the severance pay scales was to resist any increase in it, the union were asking for an increase, but that at no stage did you make the suggestion that it be reduced?---No, I didn't. When they asked for increases I said no we can't afford increases it should be going the other way.
PN6189
So you said it like that, did you?---Yes.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6190
Right, you didn't ever put a formal proposal for a reduced scale?---No.
PN6191
Now you say at the foot of paragraph 23, "that in many instances a single redundancy would have cost well in excess of $100,000", do you see that?---Yes.
PN6192
Now the length of service of your employees ranged, did it not?---Yes, it did.
PN6193
Yes, I want to suggest to you that based on the rates of pay in the enterprise agreement there were some employees who could have been retrenched for as little as $4600?---Yes.
PN6194
Yes, and indeed in your agreement, in the redundancy agreement, if you go to clause 8 of the redundancy agreement, which is appendix A to your certified agreement, you see that in paragraph B there:
PN6195
When retrenchments are inevitable the company accepts the principle of last on first off within classification taking into consideration the needs of the business and individual skills of employees.
PN6196
Do you see that?---Yes.
PN6197
So you would not have been making redundant those people who had the most years of service anyway, would you?---I think the protocol was that the union would amongst themselves elect who would volunteer for redundancies.
PN6198
Well that's not what this agreement says, is it?---Well it says that we accept the principle of last on first off within classification but it doesn't restrict it to that I don't think. My feeling was that the people who were interested in redundancy were the longer serving members of the company. My experience was that.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6199
Your experience was that they were the people interested?---Yes.
PN6200
What I am suggesting is that you would have wouldn't you, had you been considering a restructure, you would have been obliged to look at those people who had periods of lesser service?---I mean ideally that's what we would have preferred yes but as I say my experience was that the ones who had the longest service were the ones who were keen for redundancy.
PN6201
On 19 September you meet with Bruce Campbell, the AMWU organiser?---We did, yes.
PN6202
Yes, and Mr de Vries was there?---Yes he was.
PN6203
Yes, and in that meeting you said to him that the company had lost this large contract and as a result was looking at insolvency. That was the first he'd heard of that?---The union?
PN6204
Yes?---Yes, I believe so.
PN6205
And employees had not heard beforehand?---No, I don't think so.
PN6206
Now on that day the employment of all employees was terminated, is that right?---Yes it was.
PN6207
Yes, and then the following day the administrator reappointed 18 of them?---Yes, he did.
PN6208
And as I understand it seven were not re-employed?---Yes I think it was seven not re-employed, yes.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6209
And they actually brought proceedings against the company?---I'm not sure whether all seven did, but there were proceedings brought by some of the employees, yes.
PN6210
Now in the meeting on the 19th of the 9th you say then that you raised the possibility of restructuring the company?---Yes.
PN6211
And I want to suggest to you that you didn't put in terms anything like that you wanted to reduce the level of severance entitlements to employees?---I don't think that was raised at that meeting.
PN6212
It wasn't raised at that meeting, no. And in fact the notion of reducing the severance scale for employees came much later, did it not, came in November just before the second creditors meeting?---As part of the deed of arrangement that I proposed, is that what you mean?
PN6213
Well yes?---yes.
PN6214
The notion of reducing redundancy entitlements for employees came as part of the deed of arrangement which didn't happen until November?---And along with other structural changes, yes.
PN6215
Yes, and indeed, can I take you to attachment H of your, or H, whichever you wish, of your first witness statement. This is the administrator's report for the second creditors' meeting, is it not?---It is, yes.
PN6216
Can I take you to page 17 of that report. At 10.2, it said, that he says:
PN6217
As noted above the directors propose that the company ...(reads)... draft is not available to be annexed to this report.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6218
?---Yes.
PN6219
Yes. So, I want to suggest to you that whatever proposal there was to reduce severance entitlements for, or redundancy pay for employees, didn't come along until just before 12 November, it would appear?---That's right, yes.
PN6220
You didn't discuss this matter with the union before you floated the proposal with the administrator, did you?---No.
PN6221
No. So, we can safely assume then, can we, that the first the union would have found out about the proposal to reduce redundancy entitlements would have been when it received a copy of the report to the second creditors' meeting from the administrator?---That's right.
PN6222
I want to suggest to you that prior to that date, whenever there had been mentions of re-structuring the company or the like, they've been in general terms and been about the notion that the company will try and find a way of trading out of its difficulties?---Is this in discussions with the union, or just in - - -
PN6223
Yes. Yes, in discussions with the union and/or employees?---Well, look, from basically the point that the company went into administration, the management, if you like, and the discussions with the employees was conducted really by Devries and Co., not by myself. My position changed in my role within the company from that point on.
PN6224
All right. Well, any discussion with the union and employees from Mr Devries would not have referred to the notion of reducing redundancy pay in specific terms because he didn't have your proposal until just before he circulated that report?---I can't answer that. I don't know what the discussions were about.
PN6225
Now, under your proposal, yourself and your wife would have been better off in terms of the return you would have received?---Under the deed of company arrangement?
**** NICHOLAS McGLOIN XXN MR WATSON
PN6226
Yes?---When you say, better off - - -
PN6227
Well, you would have received more cents in the dollar than you would have if employees had received their full level of redundancy entitlement?---As employees of the company, I'll just have a look at the scales here. This is where the administrator has projected some returns under liquidation or under a deed of company arrangement. Is that what we are looking at?
PN6228
Yes?---We are looking at page 3 of the administrator's report.
PN6229
Well, my question specifically is directed to the issue of, not necessarily comparison in between liquidation and deed of company arrangement. The reduction in redundancy pay entitlements proposed under the deed of company arrangement had the effect, did it not, of giving yourself and your wife a potential greater return, more cents in the dollar, than would have been the case if employees had received all of their redundancy entitlements?---I don't think so. We were unsecured creditors and employees, and under, yes, as unsecured creditors, we would have received more cents in the dollar according to the administrators, but as employees we would have received less.
PN6230
Well, would you have been entitled to any redundancy pay under the agreement?---Under the existing agreement we were, although we didn't receive that, there was a limit put on it when we went into liquidation.
PN6231
Under the existing agreement you were entitled to it. Even as employees of the company, it had been in existence from April through to around about October, or November rather. So you are talking about seven months service. So you think you had an entitlement to redundancy under the agreement?---Well, as I say, the position that the administrator took, I think, in his assessment was that all of the employees would be treated the same way as they were all under the enterprise agreement.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6232
I want to suggest if you had, as I read the service payments under the redundancy agreement, that if you have less than a year's service you don't have an entitlement?---Okay, yes.
PN6233
That's as I read it. Do you have some other or different understanding?---No. I felt whatever the agreement says is what we would have been covered by, yes.
PN6234
All right. Now, do you agree that to approve the deed of company arrangement, employees had to be convinced in your capacity to run a re-structured business?---Yes. I think they did, along with other factors. Yes.
PN6235
To a certain extent they had to place a degree of trust in you?---Yes, they did.
PN6236
You would agree, wouldn't you, that you took over a 40 year old business in April?---Yes.
PN6237
And that less than six months later it was in administration?---Yes.
PN6238
You would agree, wouldn't you, that in August you signed off on an agreement that said you would guarantee them their redundancy pay and that in November you were saying you wanted to reduce it?---Yes.
PN6239
You would agree, wouldn't you, that in August you said that you didn't envisage there would be any redundancies and in September, you were saying that you thought there would be? Well, at any rate, certainly by November?---By November, yes.
PN6240
You would agree, wouldn't you, that in April, when you wrote them the letter, you said that you would guarantee their entitlements?---Yes.
**** NICHOLAS McGLOIN XXN MR WATSON
PN6241
Do you really think, in those circumstances, it was unreasonable for the employees not to trust you?---No, I think each of them had to make their own assessment of their own positions in going forward, I guess as we all did. I mean, any of the creditors had the opportunity to present a proposed deed of company arrangement. I was the only one who did. The union didn't. None of the other creditors did so, you know, it was the best that we could offer given the circumstances that we found ourselves in. I mean, my goal was to try and keep the company going, you know, and I think we had the support of the majority of the creditors, both in numbers and in dollar value, you know, there were some requirements under that deed also that the administrator would be involved and that he would manage the collections of the debt that was due to the company and so forth, so I think it was a creditable plan. You know, if there was a history of distrust of management in the company. I think that had existed a long time before I got involved, you know, I'm certain that I inherited some of that distrust and despite my best efforts, you know, they went I think in the - let's get the cash out, let's not - you know, and I think that at the end of the day, the longer term employees are the ones who benefited the most from that and the shorter term employees were the ones who suffered.
PN6242
JUSTICE GIUDICE: Any re-examination, Mr Moir?
PN6243
PN6244
MR MOIR: Mr McGloin when you just said that the shorter term employees suffered and the longer term employees didn't, what did you mean by that?---Well, I think in their own assessment that liquidation for the longer term employees was going to provide them with a larger windfall and if we look at the administrator's forecast it shows that his optimistic assessment that the employees would get 100 per cent of their entitlements under that scenario, and in his pessimistic assessment it said 84.2 per cent. I think it has ended up to be substantially less than that, unfortunately. But I think at the end of the day the longer serving employees who in their own mind had envisaged a large cash pay out were probably getting towards the end of their working life anyway, were keen to take that money and go and I think the response that I felt from the staff after the vote was taken was that the, I guess the younger employees were really keener to have job security than to take the cash.
**** NICHOLAS McGLOIN RXN MR MOIR
PN6245
And what's your current understanding about the position of the ex-employees of the company?---I think when the business was liquidated some of the equipment was moved up to Maitland by a company that was also involved in producing outdoor fabrics and things like that. I think they have employed one of the staff on a permanent basis, one of the supervisors off one of the coding lines. Some of the other equipment was taken by, which was the acoustic part of the product range, was taken and after that equipment was recommissioned they have employed I think one storeman and one operator from Plastene, so as far as I know within the industry that Plastene was involved with anyway, I think only three of them have found employment.
PN6246
And you were also asked some questions about the award standard as applying to clerical staff, do you remember that?---Yes.
PN6247
And you were taken to the scale set out in the document marked ACTU37, that's the extract from the Clerical and Administrative Employees State Award?---Yes.
PN6248
And you were taken to the last two pages which sets out the scale covering clerical staff and you were asked in reference to that scale whether you had any problem with that scale, given what you had said earlier on and your response was that you had not seen that scale at that point when you were asked earlier on?---Yes.
PN6249
What standard or scale did you have in mind when you were asked earlier on about whether you had a problem with the clerical award or the standard applying to clerical staff?---My understanding was that the entitlements in the enterprise agreement would apply to the clerical staff at Plastene.
PN6250
Do you remember you were asked about whether you had a problem with the award standard applying to clerical staff. You had not been presented with this document at that stage?---No.
**** NICHOLAS McGLOIN RXN MR MOIR
PN6251
You were just asked that in general terms and your response was, "No, you could not see a problem with it". You were then shown this scale and said "Well this is it", you have no problem or you would have had no problem with that scale then and your response was "Well I hadn't seen it at that point"?---Right.
PN6252
What did you have in mind then, when you had answered the original question?---Well I thought the clerical award was the same as the award on which we were working which was the eight weeks.
PN6253
And you were also asked about the purchase of the business and whether you had made allowance for redundancy pay. You said that allowance was made for certain entitlements such as long service leave, unpaid sick leave, and annual leave but not redundancy pay?---That's right.
PN6254
Why was there no allowance made for redundancy pay?---Well, I guess the vendor, if he was to make a full allowance for the redundancy pay would not have had a business to sell. I mean the value of the redundancies was well above the net tangible asset value of the business. So for him to discount that to its full amount would have meant giving me the business and handing me a large amount of money in the sale. So obviously from Bryden's point of view they were keen to relieve themselves of fairly substantial rate redundancy commitments, however there was no discount given to me for that. I took that on fully not expecting that we would have to pay the full amount in one hit. We realised that there were some long term employees there and we felt that if we traded reasonably well that we could see staff reductions just through normal attrition, if people reach retirement age and so forth that we would generate enough profit to manage that as time went by.
PN6255
So, is your evidence that the vendor was not prepared to make any allowance for redundancy payments?---That's right, yes.
PN6256
And you were also taken to the extract from your certified agreement which deals with redundancy and in particular where it is stated that it was not envisaged that any redundancies would be implemented based on the current workload and current number of employees?---Right, yes.
**** NICHOLAS McGLOIN RXN MR MOIR
PN6257
And in response to a question from his Honour, the President, "Why did you agree to that commitment given the loss of the contract prior to signing off on the agreement?" And you nominated one factor, namely being pressure from the union. Are there any other factors which led to that?---Well, look I think at that stage, even in August I was still hopeful that we would either recover the contract in the US, that we would recover the cash that was outstanding or that we would win the Grain Corp contract which was also quite substantial, and that we would manage through it, but I should probably also say that whilst we went through each of these items, item by item in May, I didn't go back and re-visit every clause in August because I think at that point it had been handed to Alan Scott to manage and Alan was the one who signed off on the agreement so at that point I didn't go back and re-visit all of those clauses.
PN6258
So it is your evidence that the main factor - - -
PN6259
MR WATSON: Well don't lead.
PN6260
MR MOIR: Well let's clarify - - -
PN6261
MR WATSON: Well, don't lead.
PN6262
MR MOIR: Well, I'll finish my question. Is it your - - -
PN6263
JUSTICE GIUDICE: There was an objection to leading. The witness has given the evidence about it, if you want to seek clarification to an open-ended question, that's one thing but to ask a question that suggests the answer is probably going to provoke some further cross-examination which Mr Watson would be quite entitled to embark on.
PN6264
MR MOIR: I'll leave it thank you your Honour.
**** NICHOLAS McGLOIN RXN MR MOIR
PN6265
You were also taken to that part of the enterprise agreement which deals with first on last off in the case of redundancies?---Yes.
PN6266
It was put to you that that would apply in the case then of any redundancies as per the agreement?---Yes.
PN6267
But you made reference to protocol in which the union and its members would elect volunteers, namely the longest serving employees. How did that protocol work in your understanding?---My understanding was that the members would discuss amongst themselves who would be elected for redundancy and that the feeling was that those who had the longest service would be the most likely to take that option up if redundancies were offered. There were several who had asked whether redundancies were available to me over the time that I was there and they tended to be the longer serving employees.
PN6268
Yes, and you were also asked whether under the proposed deed of company arrangement whether you and your wife would have been better off and your response was that you didn't think so?---No.
PN6269
Why not?---Well, we still had, we were still heavily in debt to the bank, we were being asked to take on more debt. I mean there was still some risk associated with the business. Those reductions in redundancies would have applied to ourselves going forward. The option of going into liquidation I guess had quite a few elements of uncertainty about it and our preference was that even though we were I guess, exposing ourselves to further risk, that we would have at least have some control over the money that we had invested if we got the deed of company arrangement going and as I say I still felt that the business had a future under the proposed restructuring.
**** NICHOLAS McGLOIN RXN MR MOIR
PN6270
Under the proposed deed of company arrangement, what was your understanding about what would have been the position of all the creditors under that proposal as opposed to via a winding up of the company?---Well, I think the, overall there was a fairer result for all the creditors, you know, the employees, the unsecured and the secured creditors in a deed of company arrangement. I think the administrator predicted a better return for the unsecured creditors. They predicted a reasonable return, I thought, for all the employees and the secured creditors had a better return as well, so I felt that there were quite a few suppliers to the company who dealt with the company for a long time who were entitled to something as unsecured creditors. They also had the option of having further business to do with the company which would over time help them recover some of their losses if the business was to continue. From the employees' point of view I felt well, you know, they would receive all of their sort of statutory entitlements plus a reasonable redundancy payment and there would be up to a dozen permanent jobs still there, and also given, I mean going forward we could also explore other options for the company in terms of getting capital partners for it or obtaining new contracts, further re-structuring to keep it going.
PN6271
Yes, I have nothing further.
PN6272
JUSTICE GIUDICE: Yes, thanks for your evidence, Mr McGloin, you are free to go?---Thank you.
PN6273
JUSTICE GIUDICE: Yes, we might take a break now Mr Moir.
PN6274
MR MOIR: Certainly, your Honour.
PN6275
JUSTICE GIUDICE: Would that be a convenient time to do that?
PN6276
MR MOIR: Yes certainly.
SHORT ADJOURNMENT [11.21am]
RESUMES [11.42am]
PN6277
JUSTICE GIUDICE: Mr Moir.
PN6278
PN6279
Your name is Neville Jukes?---That's correct.
PN6280
Your business address is 20 Mitchell Street, Cardiff?---Yes, that's correct.
PN6281
You are a director of Teglot Pty Ltd trading as P&J Welding, is that correct?---That's correct.
PN6282
Mr Jukes, you have completed a statement dated 5 April 2003 in relation to these proceedings?---Yes.
PN6283
Do you have a copy of that statement with you?---I do.
PN6284
If I could just take you to paragraph 1 of the statement where it refers to the name of the company. That should in fact read Teglot, T-e-g-l-o-t Pty Ltd trading as P&J Welding, is that correct?---Yes, that's right.
PN6285
With that amendment, are the contents of your statement true and accurate?---Yes.
PN6286
This statement is found at tab 7 of AIG 12, and Mr Jukes you have also completed a supplementary statement which sets out certain financial information relating to your company. Do you have a copy of that with you?---Yes, I do.
PN6287
Are the contents of that statement true and accurate?---Yes.
PN6288
This statement is found at tab 5 of AIG 15. If I could just clarify in relation to that statement, Mr Jukes, where you refer in the left hand column to a Mr Brian Carter, payments to related entities, directors, family members, who is Brian Carter?---He is my business partner, or he's a co-director.
**** NEVILLE JUKES XN MR MOIR
PN6289
Yes. So there are just the two directors of the company, yourself and Mr Carter?---That's correct.
PN6290
Yes. If I could just take you back to your original statement. In paragraph 10 of your statement, you refer there at the time of making the statement to a major customer being placed into liquidation, R. Delamine. Could you please outline to the Commission what is the current situation regarding the current situation regarding the liquidation of that customer?---There was a creditors meeting last Friday. There's been an offer put by Macquarie Bank to basically pay the minor creditors under $5000 in full. Anyone 5 to 14,000 would get $5000 then a bust-up of the remainder. Anyone over 15,000 would get a bust-up which they said would be 35 cents in the dollar, but after quizzing the liquidator, he said it could be as low as 12.
PN6291
Yes, so what effect might that have upon your business?---Well, it's a significant amount of your working capital gone and it's a customer gone. Yes, so it has had a fair impact.
PN6292
Yes and are you still relying upon your overdraft facility with the bank?---Yes, we only just renewed it last week.
PN6293
Has it had any effects with other customers or suppliers of your firm?---Yes, well there's other companies that were associated with Nardell mine that owe us money as well, and if they don't get theirs we probably don't get that as well, so it sort of snowballs a bit.
PN6294
Yes, so what sort of losses do you think you are now looking at?---It could be 60, 70, maybe more, thousand. Well it would be definitely probably 70, maybe more.
PN6295
And you referred a moment ago to the creditors meeting you attended last week?---Yes.
**** NEVILLE JUKES XN MR MOIR
PN6296
How did your attendance at that meeting come about?---I don't understand what you are saying.
PN6297
How did you end up at the creditors' meeting? I'm sorry, I should withdraw that. I think you attended, did you not, a meeting at Macquarie Bank recently?---Yes, I've been to a couple of meetings there. We had a meeting with David Clark, the CEO of Macquarie Bank and, in fact, he told us he would have a bit of a look at the situation. That was when they came up with the idea to divide and conquer by giving the little people $5000 to try and outvote the people who were owed a lot of money. We also bought some shares in Macquarie Bank and went to their annual general, if that's what you are talking about. No matter which way we look at it, they own 88 per cent of the place and they are not going to be responsible for the money.
PN6298
Nothing further your Honour.
PN6299
PN6300
MR WATSON: Mr Jukes, in your supplementary statement you say:
PN6301
That the last 18 to 24 months the company has experienced some of its most difficult trading conditions over the past 30 years of operation.
PN6302
?---Yes.
PN6303
And you still made a profit in 2001/2002 that statement shows?---Yes.
**** NEVILLE JUKES XXN MR WATSON
PN6304
So I take it the effect of that evidence is that prior to 2001/2002, prior to that period of the last 18 to 24 months the company has made substantial profits?---No, that's not the case, what I was trying to say there was that, our profits are probably pretty much the same but we're just working a lot harder for it, I go to work at half past four in the morning where I used to go to work at 7 o'clock and I get home at night where I used to get home at 5 o'clock or 6 o'clock, so I wasn't trying to say that profits are down. What I'm saying is that we're trying to keep the levels, we're saying we're working a damn side harder for it.
CONTINUED IN TRANSCRIPT-IN-CONFIDENCE
CONTINUED FROM TRANSCRIPT-IN-CONFIDENCE
PN6310
MR WATSON: Now have these profits been reinvested in the business over time?---They certainly have, we haven't taken a draw. In all my years we've never grabbed a dividend or anything like that, it's always been turned back into the business.
PN6311
So you pay a salary obviously to yourself and Mr Carter?---That's correct.
PN6312
And obviously that fluctuates a bit depending on how the business is going as well?---Well no, we would rather it not but there's times when, like in the 2001, 2002 when you're really struggling and you've sort of got to say, well how can we survive this and the only way to do it is to knock yourself back a bit. If you expect other people you have got to do it yourself, haven't you?
PN6313
Yes, but in those years when it's going a bit better then the sort of salary that we see in 1999, 2000, 2001, that's of the order of the sort of salaries?---Yeah mate, I don't know where it goes, I think my missus must spend it all because I never get to it but obviously that's what the accountants have come up with.
PN6314
You can come and give evidence in another case that we run later on. So, over time then the company must have built up reasonably substantial assets?---Only the business itself, bear in mind that we work in an industry that most of the year it gets knocked around pretty heavily so you're forever replacing it and there's been big issues with safety in the mines these days and you need probably ten times more safety equipment than you used to have, so yes the money has been put back in but you can't say, gee that's terrific, because a lot of the older stuff has been pensioned off, you know.
PN6315
Well, are you able to say on your balance sheet what the total asset base of the company is worth? If you're not just say so?---No.
PN6316
Now can I take you to paragraph 5 of your statement, you say there the company currently employs seven trades - - -?---Yes, that's five now actually, there's a couple have gone since then.
**** NEVILLE JUKES XXN MR WATSON
PN6317
A couple have gone since then so you've down to five?---Yes.
PN6318
A labourer and an apprentice?---Yes, the apprentice is my son actually yes.
PN6319
The apprentice is your son?---Is my son, yeah.
PN6320
Now, in the total that you did in annexure B about the additional costs that had resulted from our claim, you have included nine people, do I take it from that that you've included the apprentice, included your son?---Yes that's correct.
PN6321
Are you aware that our claim wouldn't result in any liability for severance in relation to apprentices?---That's probably correct unless we keep him on after he comes out of his apprenticeship and then he would be entitled to it.
PN6322
I understand that, so in the calculation that you've made of the additional cost you have actually factored in an additional cost in relation to the apprentice?---Yes.
PN6323
Now, at paragraph 12 of your witness statement you say:
PN6324
You're at a complete loss to say how I could afford redundancy payments.
PN6325
?---Yes.
PN6326
No money has been set aside for these payments and there are insufficient profits in the business to meet these liabilities.
PN6327
Now you know, don't you, that you are only required to pay a redundancy payment in circumstances where you terminated the employment of an employee for a reason of redundancy?---Yes.
**** NEVILLE JUKES XXN MR WATSON
PN6328
You know that, don't you?---Yes.
PN6329
Now in the last 18 to 24 months then you have as I understand it reduced your number of employees by nine it would seem?---Yes.
PN6330
By natural attrition?---Yes.
PN6331
And in the last 30 years do I take it that the company has been operating you have never actually made anyone redundant?---Yes we made a couple of blokes redundant back in the 80s, late 80s I suppose, we paid them redundancy and mate we struggled a fair bit after that because it was only a couple of people but mostly it has been by natural attrition. Fortunately these people knew that we were doing it tough and looked elsewhere for work.
PN6332
So in the last 30 years then it's your evidence that you have made two people redundant?---Yes, I would say so.
PN6333
Now, the two employees, if we could go back to annexure B, the two employees who have recently left, without identifying, which if you can by - - -?---I'm not sure which number they are, actually I was sitting out there looking thinking, who's that.
PN6334
The ages might give the game away a little bit and the years of service, are you able to identify which of the 9?---Could be number 6 I think, I'm really not sure.
PN6335
Number 6 is the person who only had two and a bit years service?---Yeah, I think, mate I couldn't really be totally sure how long they've been there and I had a look at that outside and I didn't put a whole lot of thought into it, I could have rang my secretary and asked her.
**** NEVILLE JUKES XXN MR WATSON
PN6336
If one of them was the person who didn't have much service then presumably the other one who has left must have been somebody who had a fair bit of service?---Yeah, it might have been the top one actually.
PN6337
Over 45?---Yeah, I'm only going on ages and not years, I think that may well have been.
PN6338
So again you would agree then that to whatever extent, and it's a bit hard in light of your evidence to calculate how much, to whatever extent this total amount owing would be reduced, further reduced because you now simply have less employees?---Yes.
PN6339
Now, your calculation in attachment B isn't a calculation of the net additional cost, is it, in that last document because you actually include the notice on termination and that's something that you've got to pay now in any event, isn't it? Really the way to calculate the net cost is to take the $23,000 figure from this other figure here?---That's probably correct, yeah sorry, I would agree with that, yes, it's around about a hundred, isn't it?
PN6340
Yes. Now, when you say in paragraph 12 that you're at a complete loss to know how you could afford redundancy payments, is that by reference, that statement made by reference to the total cost that you have calculated in annexure B, is it?---Yeah.
PN6341
You're not suggesting, are you, that the company couldn't afford a sum in the order of an additional $10,000 to $12,000 if it really had to?---Why, where would I get the 10,000 to 12,000, I don't understand what you're saying there.
**** NEVILLE JUKES XXN MR WATSON
PN6342
Well in the event that you had to make a person redundant and that was an additional $10,000 to $12,000 on top of your current obligations for notice you're not seriously suggesting, are you, that the company wouldn't be able to find that additional $10,000 to $12,000, either out of existing funds or that it wouldn't be able to approach the bank and obtain finance for that additional sum?---We're in a position now where if we lose any more employees or generate any less income that I reckon that you would have to end up shutting the doors and if you shut the doors you have got to take all of that into account. I don't see that I would be letting one more person go because we're just making enough to keep the doors open now.
PN6343
I see, so is it then the effect of your evidence that this natural attrition process has reached kind of the end point and that you're in a position where you can't really even afford to lose one more employee, if it's one more employee really the business shuts?---I need to generate more work which is extremely difficult. As it is now I would seriously say we're not making any money whatsoever because of our overheads and I think unless we do generate some more work and put someone on, yes we're in a situation where we're looking at the big number.
PN6344
Well, in circumstances where you're looking, you say you're looking at the bigger number, then really I want to suggest to you redundancy pay liabilities are in a sense the least of your worries, aren't you?---I don't know about the least of my worries, they're a worry.
PN6345
But I mean you're saying in effect, aren't you, I mean if you're at the point where you're funding redundancy entitlements for the entirety of your workforce you're saying you're shutting up shop completely?---I'm not saying that we're shutting up shop, I'm saying that we're in a position now where we're trading about break even. Well if we go worse than that you can't trade at a loss for very long, can you, I mean that's not overly sensible, so what I'm saying is that I would dearly love to get some more work, put some more people on. I have no intentions of laying one person off because if I lay another one person off I've got to generate some kind of work. I might not be explaining myself well but the way I see it we will be trading at a loss if we start, if we don't turn an amount over we will be trading at a loss and we're a borderline case now.
**** NEVILLE JUKES XXN MR WATSON
PN6346
Yes. I'm just trying to clarify, are you saying that you can't lay a person off because that will actually make the business go worse, is that what you're saying?---What I'm saying is yes, if I lay someone else off then you don't have the people to generate the work or to turn the work out out of the workshop, if you've got work and you're not turning it out well you're not getting any income, are you? You've got to have a decent ratio of work going out to clear your overheads.
PN6347
So you say, do you, that you're at a point in terms of your business where restructuring your labour force by further reduction is really not an option?---I'm in a position, well it's always an option but I don't think it's one that you would like to take because, I don't think you're understanding me. I reckon that if I lay any more people off and generate any less work I'm not making any profit, so I don't know what you're trying to get at there. Do you not understand what I'm saying there?
PN6348
I think I do understand what you're saying and I'm just trying to clarify, in that context is it your evidence that you're saying that, let's leave this case aside, is it your evidence that you wouldn't in the future be allowing your employee numbers to reduce further by natural attrition. In other words, if employee number 8 says, look I've got another job and I want to go off, is it your evidence that you would in the circumstances you're in you feel you would have to replace that employee?---Yeah, I don't think I would like to lose any more. I'm in a position where I think I'm at break even so yes, that's possibly the case. I would reassess it if it happened but bear in mind that these people have been with me for a long time and I don't think too many of them are looking at going, so it's not a situation that I've actually looked at in depth because it hasn't presented itself. If it presents itself then I would worry about it.
PN6349
Well can we return to my question of some time ago, if you had to find a sum in the order of $12,000 to $15,000, I know what you say about the likelihood of it but if you had to find a sum in the order of $12,000 to $15,000 you're not suggesting that you wouldn't be able to make some sort of an accommodation with your bank to get that sum of money?---I could sell a truck but that doesn't help you generate any profits, does it?
**** NEVILLE JUKES XXN MR WATSON
PN6350
So you would be able to find that sort of a sum?---Well yes but then it makes you less profitable because you've got less equipment to operate with, haven't you?
PN6351
Now employee number 8, he's, I presume it's a he?---Yes.
PN6352
62 years old, been with you for 23 years?---Yep.
PN6353
Do you think it's fair that you could terminate his employment tomorrow by reason of redundancy and he'd get nothing in the way of severance pay?---Do I think it's fair, or do you think I could afford it?
PN6354
No, I'm asking you do you think it's fair?---I would love to say to him, look mate, here's half a mil but mate it's a matter what you can afford not what you would like to do.
PN6355
Well, do you think it's fair that somebody who has worked in your business for 23 years could be terminated for reason of redundancy and not get any severance pay?---Well, he will get everything that's currently owing to him. He's been paid everything that's been owing to him over the years and let me tell you I've looked after him over the years. He would not have stayed with me that long otherwise.
PN6356
So the effect of your evidence is, is it then, that you do think it's fair?---I think it's fair.
PN6357
Right, and - - -
PN6358
JUSTICE GIUDICE: Can I just ask in that connection, is there any material here about what you pay the employees?---Sorry, your Honour - - -
**** NEVILLE JUKES XXN MR WATSON
PN6359
Is there any material in your statement about what you pay the employees?
PN6360
MR WATSON: There is some, yes your Honour.
PN6361
THE WITNESS: Probably in the EA.
PN6362
MR MOIR: Your Honour, paragraph 8 might assist.
PN6363
JUSTICE GIUDICE: 8?
PN6364
MR MOIR: Yes, it refers to the enterprise agreement which is attached to Mr Dukes' statement and that agreement sets out the rates applicable in clause 7 and other allowances.
PN6365
JUSTICE GIUDICE: Yes, thank you.
PN6366
MR WATSON: The charge rates are of the order of $100 above the award.
PN6367
Now, in relation to the person who is employee number 8, you would agree, wouldn't you, that if you were in a position where he was made redundant and you had to terminate his employment, he is aged 62, he's worked 23 years for you, lives in the Newcastle area, he's not likely to get another job is he?---I wouldn't think so and I think this case is not going to help that either with the bit about paying everyone over 45, I reckon it's going to make it harder for blokes like him to get a job.
PN6368
All right, well we'll come to that in a while. Now, in paragraph 14 you say:
**** NEVILLE JUKES XXN MR WATSON
PN6369
The claim would hit particularly hard on a business like ours given that we employ mostly long serving employees.
PN6370
Do you see that, in the first sentence?---Yes.
PN6371
And then you go on to say in the third sentence there:
PN6372
If the union's proposal became effective then our business would be put at a severe competitive disadvantage relative to companies with younger, shorter serving employees.
PN6373
Do you see that?---Yes.
PN6374
Well isn't that competitive disadvantage only going to exist if you actually make anyone redundant and isn't the effect of your evidence that you are at the stage in your business where you don't think you can make anyone redundant?---That's correct but what I was trying to say there is that people are going to employ the younger blokes and they are going to have a group of young blokes, you know if someone is looking for a job the will say, gee I might grab Harry because he's got a heap of young blokes whereas Neville's got a heap of older fellas, we might just grab the young energetic blokes to do our job. That's basically what I was trying to say. I might not have expressed it properly.
PN6375
But isn't that something that exists now independently of our claim because you have got an older workforce?---Yes, it does.
PN6376
Now, you are aware, are you, of the existence of age discrimination legislation?---Certainly am.
**** NEVILLE JUKES XXN MR WATSON
PN6377
Yes, and you are not suggesting, are you, that either directly or indirectly you would discriminate against people on the basis of age?---Mate, I don't discriminate against anyone. I have had multinational people work for me and as you can see a lot of older people but what I'm saying if two people rocked up for the job and one was 20 and one was 45 it would be a silly business decision to take the 45 year old if they both had the same credibility wouldn't they. If there was two apples there the same and one of them was going to cost you a lot more, you're going to grab the cheap apple aren't you. That's all I'm saying.
PN6378
Well, are you seriously suggesting that at the point of hiring an employee you are already factoring in their potential redundancy costs?---Absolutely not, it's never crossed my mind. I'm telling you what will happen if you go ahead with this over 45's, and I'm not saying it's going to bother me, I'm just saying, a general thing that will happen in the industry. If you don't understand that, well mate you are a lot smarter than me, you should understand that.
PN6379
Well then, finally your agreement requires you to consult with employees over employment levels, your certified agreement?---Yes.
PN6380
And I take it because it is in the agreement, if you ever had to you intend to do so?---Mate, if I ever have a problem we usually talk to the union anyway, yes.
PN6381
And it's no problem for your business that requirement?---What, talking to the union? I've never had a problem talking to them.
PN6382
Yes, nothing further.
PN6383
JUSTICE GIUDICE: Mr Watson. Any re-examination Mr Moir?
PN6384
**** NEVILLE JUKES RXN MR MOIR
PN6385
MR MOIR: Mr Dukes, you were taken to the profit figures set out in your supplementary statement and you were asked what happens with those profits and what's happened to other profits made in the past and you said that they are always turned back into the business?---That's correct.
PN6386
How are they turned back into the business and why is that the case?---Well the case is because there has always been a need. I would love to have said at the end of every year, let's draw a figure and put it in your can but that's never ever been the case in all the years that I've been there. So if we can afford to upgrade a truck, and bear in mind that we do a lot of work on site so we do carry a lot more vehicles than most people, if we can upgrade a truck or upgrade welding machines and things like that, we try and keep our gear at the best level possible.
PN6387
And why do you say there is a need to do that?---Well mate, probably one of the biggest things is the safety issues. These days there is big safety issues in the coal mines. I've had people just doing inductions recently and in fact every coal mine has a separate induction. I had a situation last month and I spent the money, which was about $200 or $300 plus a chap for two days doing an induction for a coal mine, and he left me just after that. So there's a lot of costs in just keeping your people trained up to the level that's required these days, safety levels, and there is more safety equipment required. It's just stacks of costs mate.
PN6388
All right. You were also taken to the fact that over past eighteen to twenty four months you have experienced some of your most difficult trading conditions over the past 30 years and that you have lost now nine employees through natural attrition. How did those employees come to leave the company at the point at which the company was experiencing its most difficult trading conditions?---I've always been a straight shooter with my people and I told them times were tough and a heap of them got other jobs, and that's basically how they left. They knew we were struggling so they said we'll have a look around and they went elsewhere.
PN6389
And if those employees had not left through natural attrition, then what would you have done in the context of these difficult trading conditions?---Well, we would have had to lay them off for sure.
**** NEVILLE JUKES RXN MR MOIR
PN6390
You were also asked whether you could afford a one off payment for redundancy in the order of $10,000 to $12,000, do you recall that?---Yes.
PN6391
And your response was that where are you going to get the money from? What did you mean by that?---Well, we just haven't got that kind of money floating around in our account, I mean, yes I said that we could probably dig it up, but we would have to do something like I suggested, sell a truck or run someone out to 60 days instead of 30, or actually we are probably trading at 60 days now, run someone out to 90 days and keep them at 90 days until such times as we can afford it. I don't know, there's always ways around things but it doesn't mean that it's nice when you do it.
PN6392
When you mentioned before the option of, for example, selling a truck to fund the payments, you said that that would make you less profitable. What did you mean by that?---Well, as I said before, we do a lot of work on site. It would mean that if you are sending a couple of blokes out and you run out of vehicles you would have to hire them in. Well, if you are hiring vehicles in, that's cutting into your profits isn't it?
PN6393
What would be the effect, then, upon employment levels within your firm do you think?
PN6394
MR WATSON: How does that arise from anything in the cross-examination with regards to prospective?
PN6395
JUSTICE GIUDICE: Mr Moir?
PN6396
MR MOIR: Yes, I'll withdraw that.
**** NEVILLE JUKES RXN MR MOIR
PN6397
You were also asked whether you thought it was fair that, and you are taken to an example - one of your employees - whether it was fair that person should receive no redundancy pay. You pointed out that if they were made redundant, they would get all of their existing entitlements, plus the fact that you have looked after them over the years. Are there any other factors in your view as to why it's fair?---I don't know what you, I'm sorry I can't understand the question.
PN6398
You referred to the fact that the exemption from severance pay was fair because they would receive all of their entitlements which they accrued over the years, plus they had been looked after over the years by the company. Are there any other factors in your view as to why that situation would be fair?---Only the fact that we can't afford anything. Look, I'd love to be able to say to them, look there's a nice little cherry at the end of this, sort of thing, but you have got to be able to fund it and we can't fund it.
PN6399
Yes, I have nothing further.
PN6400
JUSTICE GIUDICE: Yes, thank you for your evidence, Mr Jukes. You are free to go?---Thanks very much.
PN6401
MR MOIR: Your Honour, I call John Wisby.
PN6402
MR MOIR: Your name is John Wisby?---It is.
PN6403
Your business address is 12 Rays Farm Road, Minto?---Yes.
PN6404
You are the managing director of Wisby and Leonard Pty Ltd?---That's correct.
PN6405
Mr Wisby, you have completed a statement in relation to these proceedings dated 7 April 2003?---Yes.
PN6406
Do you have a copy of that statement with you?---I do.
PN6407
Are the contents of that statement true and accurate?---Yes, they are.
PN6408
The statement is found at tab 8, AIG12, and Mr Wisby you've also completed a supplementary statement that sets out additional information relating to your company, do you have a copy of that statement with you?---Yes I do.
PN6409
And are the contents of that statement true and accurate?---Yes they are.
PN6410
Thanks. I have nothing further.
PN6411
PN6412
MR WATSON: Mr Wisby your business, as I understand it, has been operating for about 23 years?---That's correct yes.
**** JOHN WISBY XXN MR WATSON
PN6413
As I understand the effect of your evidence, last year is the first year you have ever made a loss in that time?---That's true, yes.
PN6414
Indeed in paragraph 5 of your statement you say that in previous years you have achieved good profit margins?---Yes, that's correct, yes.
PN6415
Now, in paragraph 6 of your first statement you mention that you had to make three employees redundant in January 2003, do you see that?---Yes, that's right, yes.
PN6416
In your supplementary statement at paragraph 3 you say that the total cost to the company of that was about $9852?---That's right, yes.
PN6417
That comprised, as I understand it, payments in lieu of notice and unused annual leave in every instance?---That's right, yes.
PN6418
Now, you also say in your statement that in December 2002 it had become apparent that it was necessary to reduce the staff numbers. Do you see that at the top of the second paragraph in paragraph 3?---Yes.
PN6419
If that's not an oxy-moron, and then you say that because you didn't want to issue dismissal notices until after Christmas, you actually kept those employees on through until January 2003?---Yes, that's right.
PN6420
So, all up that was a period of what, six weeks, eight weeks, something of that order?---This situation didn't just happen overnight. If you have a look at the figures that are available to you, we've looked at the figures for the last three years and from those figures you will see that for the year of 2001, we had a fairly high turnover, okay, we had had an agreement with a large multi-national company here in Australia to be a preferred supplier for some of the equipment that we manufacture. Unfortunately, that arrangement didn't work out, it was a
**** JOHN WISBY XXN MR WATSON
commercial decision that we jointly made, both that company and ours, that we'd dissolve that agreement and the effect of that was that we went from about $3.5 million turnover down to about 2.8 the following year and we had some fairly high staffing levels that we tried to maintain over that period and the upshot of that was that eventually it got to the stage where business had declined to the stage where we could no longer continue to operate as we were, and it was apparent then that we had to look at the options of saving the business, and one of the things that we looked at was the alternatives and as you can see from my statement, we had to sell assets, but at the end of the day, I mean, there's a responsibility, and we take it very seriously, the responsibility of employing people, and there's in excess of 40 people that eat out of our workshop, including wives and families, and we don't take that lightly and I didn't think it was appropriate to be putting the people off just prior to Christmas. That wasn't much of a Christmas present I didn't think.
PN6421
This will go a bit quicker if you just try and focus on my specific question. So between the time that you had decided that it was obvious that you were going to have to reduce staff numbers, and the time that you actually dismissed employees, it seems to me that must have been a period of at least six weeks, perhaps eight weeks?---It was longer than that.
PN6422
It was longer than that, well how long was it?---Like I just said, I mean we have been looking at the declining business for almost twelve months and we have been trying to maintain the business and looking at alternative ways of supporting the business and to increase the business but that just was not happening.
PN6423
When had you made though a definite decision that you had to reduce employee numbers, a definite decision had been made?----To put a date on it, I can't, but I'd say it would be in the November-December period that we looked at it.
PN6424
So November-December you make a decision and then you actually terminated in January?---Yes, that's correct.
**** JOHN WISBY XXN MR WATSON
PN6425
The three employees who you made redundant, employee A, B and C, are you in a position to tell the Commission what length of service each of those employees had?---Excuse me, I have got it here. One chap he was under 45 years of age, he commenced with us in January 2000. Another fellow was over 45 years started in the February 2001, and the other fellow was under 45 years of age and he started in February 2002.
PN6426
So one of the employees had less than a year's service?---Yes.
PN6427
Then your other couple of employees, one had about two years and one had possibly three at the outside?---Yes.
PN6428
Now you say in paragraph 12 of your statement that:
PN6429
The payment of severance would have cost you in excess of $15,000.
PN6430
PN6431
?---Yes, that's correct.
PN6432
It must have cost you considerably more than that, must it not, to have kept these employees on from November through till about January?---I don't understand what you mean.
PN6433
Well, you don't have to understand what I mean just answer in the sense that you don't have to understand what I'm getting at. It must have cost you considerably more than $15,000 to keep the employees on for the period from November-December though to January. Their wages must have cost more than $15,000 for that period must they not?---It would have been getting close to the $15,000, yes.
**** JOHN WISBY XXN MR WATSON
PN6434
Well I want to suggest to you, that if you sort of look at the likely sums, if we are talking a period of sort of around about eight, perhaps even longer weeks, the most that any employee would have been entitled to under the proposed redundancy scale would have been seven weeks pay, seven weeks severance. So you have actually paid, haven't you, all of those employees, kept them in employment for a period longer than the proposed severance scale in this case?---I don't honestly understand what you are saying, I don't know what the answer is to that.
PN6435
Well, it may be that it's clear from your evidence in any event.
PN6436
JUSTICE GIUDICE: The point seems to be that you couldn't afford to keep these employees, that you had to make them redundant, yet you kept them on presumably bearing their salary for a period of perhaps a couple of months. I think that is the question that is being asked of you?---Yes, we did keep them on but it was not dead money. I mean these guys were actually working for us so we had some work going through the place and the other thing that we did is, we poured every bit of cash into the business to support these guys. There is a moral obligation, I certainly accept that we don't treat these people lightly but - - -
PN6437
I think you have explained that Mr Wisby. The question really was the one about the economics of keeping them on and I think you have probably answered that?---Well, we pay these guys nominally $2500 a month, round figures. So that's $7500 so it works out about the $15,000.
PN6438
Yes.
PN6439
MR WATSON: Well, except that there are three of them aren't
PN6440
there?---Yes, that's $7500 a month times two, it's $2500 a month.
**** JOHN WISBY XXN MR WATSON
PN6441
Times two months, I see what you are saying, yes. I prefer my calculation based on weeks I must say. You say at paragraph 4 of your supplementary statement that you think the worst is over?---When I made that supplementary statement I certainly believed it, but right at the moment I don't. Things are fairly tough at the moment. The last month was very tough for us and this month is shaping up to be very tough as well.
PN6442
Well, are you in a position where you anticipate any further reductions in your current level of employment?---At this stage, no.
PN6443
In the 23 years you have been operating the business, how many times have you ever made anyone redundant?---I can't tell you the exact number but there have been times when, due to the downturn in business, we have had to let people go.
PN6444
But in 23 years are we talking anything more than sort of five or ten people?---Probably five or ten occasions, yes.
PN6445
Five or ten occasions. Well, how many people are we talking?---Probably 12 or 14.
PN6446
12 or 14. And had your practice been to reduce people with the longest periods of service, or the shortest periods, or haven't you had a practice?---We don't have a practice, we look at the type of skilled people that we have got and what we would need to maintain for the skill level to maintain the business. So length of service normally does not come into our consideration, it's more the operational aspects of the business.
PN6447
Overall has it tended to be people, when you have looked at the skills, has it tended to be that you have wanted to retain the longest serving employees because they have got skills that are useful to your business and you tended to retrench those with shorter periods of service?---No, there is not a trend - - -
**** JOHN WISBY XXN MR WATSON
PN6448
Not a pattern one way or another?---No.
PN6449
Now in the supplementary statement you set out the wage costs payable to yourself and your wife. They seem very specific sums, $21,599, $20,299, is there some tax, or social security, or other reason for the specific nature of those sums?---No, there's not, to be honest, it's just that that's the salary we take every week. There's no other reason for that. As you can see we have not had a pay rise for actually four years.
PN6450
Right, and you say in the note that you draw as wages only, you don't receive payments in kind of any?---No, I don't. We have a company vehicle each. My wife drives a nine year old Land Cruiser and I drive a five year old Statesman, and that's company supported vehicles.
PN6451
Right, I see. If you don't mind my asking, why does a business person run a business for $21,600 per annum?---Because we are trying to build up assets. I'm trying to build up a business to the point of every bit of money that we make in the business goes back in to the business. We are trying to pay the business off, pay the factory off, and hopefully it will be my superannuation.
PN6452
So you will have at the end, what you are hoping is by not taking much out of the business now, you are hoping that by the end of it you will have a substantial asset which will, in effect, fund your superannuation?---That's the ultimate aim, yes.
PN6453
What is the factory worth on current values?---On current value, it's probably worth, I'm guessing here, probably 1.5 million. I also owe 1.2 million on it, so.
PN6454
So you have got equity of about $300,000?---That's what we put into it initially, yes.
**** JOHN WISBY XXN MR WATSON
PN6455
Now, you say that at paragraph 16 of your original statement you are pretty disparaging about the notion of consulting with your employees about contemplating redundancy. Do you see that?---Yes.
PN6456
MR MOIR: Your Honour, I object to the use of the word disparaging.
PN6457
JUSTICE GIUDICE: Well, the witness has agreed to it.
PN6458
MR WATSON: You don't think an employee has the right to have some sort of opportunity to discuss the possible termination of their employment in a redundancy situation?---It's not a matter of him having any rights to do that. These decisions aren't taken lightly and there's a lot of consideration that's gone into it and normally, when it's got to this stage and the business is in such a situation that we've got to start re-trenching staff, there's not a lot of discussion that can be taking place and we have had the incidence in the past where the rumour mill started at work and went right through the place in morale. I mean, it was atrocious and it was difficult to continue to operate the business.
PN6459
Wouldn't it, in those circumstances, have been better then to stop the rumours and let people know what was actually going on?---Well, we did. We actually re-trenched the people.
PN6460
That was in January just gone?---Yes.
PN6461
Well, what I'm suggesting to you is couldn't you have avoided the rumour mill starting by having a discussion with people when it was clear, earlier, when it was clear that there would be retrenchments necessary?---No. No, we couldn't do that because the operation of the organisation just about ceases when people are so concerned about their livelihood and what's going to happen in the next couple of months, that to continue to discuss this thing, it just destroys all morale and then the place becomes almost unoperational. I don't believe - - -
**** JOHN WISBY XXN MR WATSON
PN6462
So, it's better to not tell people, have the rumour mill operate, and then drop it on people with no notice that their employment is to be terminated. Is that the effect of your evidence?---From the operational point of view of the business, yes.
PN6463
Do you think that's fair from the employee's point of view?---From the point of view of fairness, it may be termed otherwise, but from the point of view of trying to make it short and sweet and not prolong the agony, these rumours had been around for about a week and we needed to do something, so, on balance, there needs to be a balance with this, too. You know, the employer has got the risk all the time and we are trying to salvage the business.
PN6464
Now, you say in paragraph 16, rather in paragraph 17, that you believe that the proposal is impractical because:
PN6465
Our organisation is not large enough to facilitate alternative employment or other options apart from redundancy.
PN6466
Do you see that?---That's correct, yes.
PN6467
Do you say, do you, that there's no circumstance in which employees might not be able to come up with, or unions, if they were involved, might not be able to come up with matters which would ameliorate the effects of any termination by reason of redundancy? It doesn't just have to be alternative employment, or, it doesn't just have to be alternative employment, does it?---Well, from the point of view of our organisation, if it's got to the stage we've got no work, we can no longer continue to pay wages, so there's not much alternative except to make somebody redundant.
PN6468
Right, but you don't think, then, there are alternatives about, perhaps, who is made redundant, whether you, whether it's a particular person or whether somebody else might be interested in going anyway, or you don't think that there are other possibilities?---The type of organisation that we are, we only employ trades people, so the decision to who goes is basically to have the least effect on the organisation so we can continue to operate.
**** JOHN WISBY XXN MR WATSON
PN6469
Yes, I understand that's your decision, I'm just wondering, is it then the effect of your evidence that input from employees on these matters is something that you believe could never assist in ameliorating the consequences of redundancy. Is that the effect of your evidence?---Yes, it is.
PN6470
JUSTICE GIUDICE: Any re-examination, Mr Moir.
PN6471
PN6472
Mr Wisby, you were taken to paragraph 5 of your first statement dealing with your profit margins, and also to your supplementary statement dealing with profits before income tax. What have you tended to do with any profits that are made in the business over the years?---It's always been poured back into business in the form of plant and equipment. This business is a very high capital intensive business, as most manufacturing companies are, and we've put in up-to-date technology, new machine tools and training of people to try and maintain the business and remain competitive.
PN6473
You were also asked some questions about those three employees who were ultimately made redundant in January this year and the questions, in particular, dealt with the payment of their wages during November and December last year, and in one of your responses, you referred to the fact that those payment of wages were not dead money. Could you just clarify for me, what did you mean by that?---Well, we were still utilising the guys' services. They were still operating machines. We had cut out all overtime at that stage but we were still getting a return on the machines and by virtue of the fact that we had operators on those machines, the type of equipment we've got doesn't operate automatically, so we had to have people on them, so we were getting some return from the actual machine being operating.
PN6474
Yes, so if you were getting some return, why did you ultimately have to make them redundant?---Well, eventually we ran out of work, as with that contract, over the 12 month period the business was declining and we got to the stage where we had to cut costs in all levels.
**** JOHN WISBY RXN MR MOIR
PN6475
Yes. I've nothing further.
PN6476
JUSTICE GIUDICE: Thanks for your evidence, Mr Wisby. You are free to go?---Thank you.
PN6477
JUSTICE GIUDICE: Yes, what's the program for the rest of the day? We have two or three more witnesses.
PN6478
MR MOIR: There's only two, your Honour.
PN6479
JUSTICE GIUDICE: Two more.
PN6480
MR MOIR: Yes, Jennifer Hunt, followed by Stan Reynolds.
PN6481
JUSTICE GIUDICE: Yes. Then, I think there might be some other matters.
PN6482
MR MOIR: Yes, your Honour, I think that both the Commonwealth and NFF wish to put something briefly to the bench and there's one other matter that I need to take care of just briefly.
PN6483
JUSTICE GIUDICE: Well, it would probably be desirable if we could conclude by 4 o'clock. With that in mind, should we re-commence after lunch before 2.00, or do you think there will be adequate time?
PN6484
MR WATSON: I think before 2.00 would be more prudent.
PN6485
JUSTICE GIUDICE: Yes, we could resume at 1.45 pm.
PN6486
MR MOIR: Yes, that's fine with us, your Honour.
PN6487
JUSTICE GIUDICE: Yes, and we'll plan not to sit beyond four. All right, well we'll adjourn now.
LUNCHEON ADJOURNMENT [12.47pm]
RESUMES [1.52pm]
PN6488
JUSTICE GIUDICE: Mr Moir?
PN6489
MR MOIR: Thank you your Honour. Just before calling Mr Reynolds, there was something that I overlooked. During the cross-examination of Mr Jukes the witness was taken to some of that confidential financial information. I would therefore ask that the transcript in that regard be restricted.
PN6490
JUSTICE GIUDICE: Well, I can agree with that, but it will require to be some identification of the parts of the transcript in due course that you think you should be restricted. There's no problem with that, it's just a question of making sure we identify the part, that in your submission, should be restricted. Perhaps if you could talk to Mr Watson about that as soon as the transcript is available. Well perhaps the best thing might be to restrict the publication of the whole of the transcript until you have had an opportunity to agree as to which parts need to be and then we can release it more generally. Yes, we'll just restrict the transcript of Mr Jukes.
PN6491
MR MOIR: Yes, just Mr Jukes I think. Subject to what my friend has to say here, but it might be prudent also to do likewise in respect of Mr Reynolds.
PN6492
JUSTICE GIUDICE: Yes, well perhaps it we are to follow that course it would be more convenient to simply identify the point of the cross-examination where the transcript should be restricted and then identify where the restriction should cease.
PN6493
PN6494
MR MOIR: Your name is Stan Reynolds?---Yes.
PN6495
And your business address is Unit 2, 5 Kerr Road, Ingleburn?---That's correct.
PN6496
And you are the Managing Director of Reynolds Engineering Pty Limited?---No it's Brenita Pty Limited trading as trading as Reynolds Engineering Services.
PN6497
I see. And you have completed a witness statement in relation to these proceedings?---I have.
PN6498
And do you have a copy of that with you?---I do.
PN6499
If I could take you paragraph 1 of your witness statement dated 8 April 2003, paragraph 1 therefore should be amended to reflect the name of the company you have just given?---Yes.
PN6500
With that change are the contents of your statement true and accurate?---Yes.
PN6501
Mr Reynolds, you have also completed a supplementary statement which sets out certain financial information relating to the company?---Yes.
PN6502
Do you have a copy of that with you?---I do.
PN6503
And are the contents of that statement true and accurate?---They are, yes.
PN6504
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6505
Mr Reynolds, can I take you to paragraph 16 of your first statement. You know, do you, that there is no requirement pursuant to accounting standards to make provision in accounts for severance pay liabilities?---Yes.
PN6506
So when you talk in paragraph 16 about the consequences which would flow to the company if you were required to provide for the liability of redundancy, I take it it follows from that that those consequences would not flow if there was no requirement, or if no provision were made?---I'm not sure I understand.
PN6507
Well you say, for example, in that first sentence:
PN6508
If the company was required to provide for the liability of redundancy then it would need to go back into debt.
PN6509
But if you didn't make any provision for redundancy then you would not need to go back into debt, would you?---That's correct, yes.
PN6510
Now, you say at paragraph 18 of your statement that to close your doors would mean a severance pay liability of around 47,000, do you see that?---Yes.
PN6511
And you say a single redundancy would cost you up to 15,000?---Yes, we have calculated the average if we had to make redundancy provisions for the employees that we have at the moment that the average would be about $10,000 per employee.
PN6512
Well I just wanted to ask you, do those figures include or exclude those provisions?---That would be excluding those provisions - - -
PN6513
Excluding, so that's just severance you say?---That's if we had to, that was calculated on the redundancy provisions in the ACTU claim.
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6514
Yes, but just severance. Your are not including notice as well?---No, that amount is for the redundancy that we would have to find.
PN6515
You say a single redundancy could cost up to 15,000?---That's calculated on the ACTU claim, that's correct. Well, we said an average of 10, we have an employee that's, currently he is 44 years of age and he has had 10 years of service, and if we had to pay 16 weeks redundancy for that person it would be somewhere between 15 and 20K, $20,000.
PN6516
So he's earning more than $1000 a week?---Yes.
PN6517
Is he an award covered employee?---He is under the Metal Trades Award, yes. He is a design engineer. I've got fitters and turners, machinists, toolmakers that are earning, well $750, $800 a week. They are getting 30 per cent over the award and overtime and that's not including overtime.
PN6518
Right, you are paying very substantially over award then?--- I have to pay substantially over the award because, to attract the high calibre and the class of tradesman that we need to function in the business areas that we function.
PN6519
Now what is the longest period of service then for any of your employees?---Current employees, I have one guy that's 10 years, and another guy who has been with me for about seven years, but prior to 1998 we had an employee that had been with us for over 15 years, he left of his own accord for another job, but we had a struggling business situation there where we had to let some people go and one person had had almost 15 years of service and we let him go at that period of time. At the moment we have one guy with 10 years, another guy, as I said six years, over six years service.
PN6520
Now you mentioned 1999. In your supplementary statement you say you had to make a full time staff member redundant in early 1999. Is that?---Yes, 1998.
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6521
1998, yes. But I thought your evidence just was that in the end that person left of their own accord?--- No, I said one person that had had a long term employment with me, he left of his own accord, but we had another person that had been with us for nearly 15 years and we had to let him go.
PN6522
I see, so you have actually made one person redundant?---Yes.
PN6523
How long has the business been in operation?---Over 20 years, we started in 1998, 1980 rather.
PN6524
And in that 23 odd years is that single staff member in 1999 the only person who you have made redundant?---No, in 1998 we were in a dire business situation where we were struggling. We failed to secure some big contracts that we were chasing worth several million dollars and there was no business coming in so we had to cut back. In fact at that period of time we let about more than five people go, but most of the other employees that we let go had only had three or four years of service. I only mentioned that one chap because he had nearly 15 years of service with the company, but in that time we actually sold our house and put our house into the pot to save the business because we were at the extent of our overdraft and we were expecting that the bank was about to tap us on the shoulder and take over the business, so rather than lose control of the situation we sold our house and put the funds in to try and rescue the business financially. We pulled ourselves out of debt and we actually sold the factory that we were in at the time and, as fortune had it, we were able to secure some work and continue on.
PN6525
Now I just ask the question because in relation to other redundancies, because we had understood that in your supplementary statement you had indicated any previous redundancies that the company had made, but clearly the effect of your evidence is that whilst you have referred to that redundancy in 1999 you had others prior to that?---Yes, at the same period, but I mean we let go other people at the people at the same time.
PN6526
Well, can you just give me an idea in 23 years, or thereabouts of operation, how many employees in total have you made redundant in your business?---Over 20 years, probably six or seven from time to time, yes.
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6527
Six or seven in total?---In total, yes.
PN6528
So, in essence then is it that aside from that one bad patch in 1998/1999 there has perhaps been only one or two other employees made redundant in the 20 year period?---
PN6529
You will need to provide an audible response for the transcript?---Yes, that's correct.
PN6530
Now, in paragraph 21 you say you had hoped to pass the business one day on to your son and you say:
PN6531
However these additional costs leave me wondering whether it is worthwhile...(reads)... more money from my own pocket.
PN6532
Do you see that sentence?---I do.
PN6533
You would agree wouldn't you that there is simply no requirement to go, in any sense into debt, unless you actually intend to make someone redundant?---Well, I mean the only time that the company would be in a position where we would hopefully have to make anybody redundant, would be when we had no work and at the point we had no work, as has been my experience in 20 years of business, we also had no money, so when we have to pay out redundancies we - - -
PN6534
When you say you had no money, I take it what you mean is that your cash flow is affected?---Invariably yes.
PN6535
And generally that is on a temporary basis?---Well, it can be permanent and fatal depends on the condition of the business, but in most cases if you get to a point where you have got no work and no cash flow, in my experience in small business, it's usually fatal and the company usually winds up.
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6536
But in, have you been in a position where you have ever had to actually wind up the company?---I got very close to that in 1998/1999. As I explained earlier, we sold our house to put the money in to keep the business afloat.
PN6537
I understand. Well, what are the total level of assets that the business now has?---The business entity would have some plant and equipment which on the books might be worth, I don't know, a couple of hundred thousand dollars, but if you had a fire sale in a liquidation situation you might get $50,000, $60,000 for them. Apart from that, the business doesn't have any assets. The assets are owned by myself and my wife.
PN6538
I see, I see you - - -?---There's no business assets as such. I mean, let me explain that, in that we, my wife and I, don't take a wage as such out of the business, we leave whatever cash flow there is in the business, we just take from it what's required, you know our generally living expenses on a weekly basis. So, in fact the company owes us a lot of money because it owes us some money, let's say not a lot, but it owes us some money because we have always left the profits back in the business. So right now on our balance sheet there is very little cash and in fact the operating business, Rentals Engineering Services, that's operating there only has some plant and equipment basically.
PN6539
Well, is it the case, I want to suggest to you that if you had to find, well let's go back a step. You have given some evidence about the employees with the most length of service, what's the shortest period of service of any of your employees?---Permanent employees, one year.
PN6540
One year?---18 months I think, yes.
PN6541
And is that person under or over 45?---Under 45.
PN6542
Under 45, and how much do they earn per week?---That person is on a base rate of about $55,000 a year. He is a leading hand plus he gets overtime and he gets a vehicle to drive home.
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6543
So is it your evidence that if it came to it, your business would not be able to fund the redundancy cost associated with that employee of in the order of perhaps $5000 or $6000?---No, we wouldn't, not at the moment we wouldn't be able to fund it.
PN6544
So, is the effect of your evidence here today that a one-off sum of money, in the order of $5000 to $6000, would simply be too much for your business to survive, it would tip you over?---If we were in, as I have explained, I believe that if we were in a position where we had to make people redundant I would assume that our cash reserves would be zero or in overdraft, and in that case we would be tipped over for sure.
PN6545
Well, I have asked you today, would you be able to fund a sum of money in the order of $6000, or is it your honest evidence on oath that a single one-off payment of that amount is enough to tip your business over?---Today, I don't think it would be, today, not exactly today, no.
PN6546
No and because of the circumstances which apply to your business, you have never had to have you, a discussion with your bankers about whether they would be prepared to extend you credit in order to fund redundancies for a restructuring of your business have they?---Well, the case has never arisen, so I've never discussed that with the bankers, but in my experience with bankers over 20 years, if I went to them with that sort of discussion, I'm sure they would not entertain lending me money if the company was in a position where it couldn't fund itself. So then I would have to go into liquidation to find the funds, wouldn't I?
PN6547
Well, you have not had any discussion, because of the nature of your business having been exempt previously, you have never had, have you, a discussion with your banker about whether and under what circumstances they would be prepared to fund money to allow a redundancy program to occur?
PN6548
MR MOIR: Well, your Honour isn't that obvious - - -
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6549
MR REYNOLDS: - - - It's pretty hypothetical.
PN6550
MR MOIR: - - - the employer's exempt?
PN6551
JUSTICE GIUDICE: What's the objection, Mr Moir?
PN6552
MR MOIR: The question, isn't the answer to that question obvious, Mr Reynolds is not likely to approach the bank, or have approached the bank I'm sorry, about borrowing funds for redundancy because he is not liable to make redundancy payments at present, or in the past.
PN6553
JUSTICE GIUDICE: I'm not sure that that's an objection. You can ask a question to which - - -
PN6554
MR WATSON: If Mr Moir wants to give that evidence, I'm happy with the answer.
PN6555
Mr Reynolds,
PN6556
You say in your witness statement that you think the proposal to consider and discuss alternatives would also cause problems?---Yes, I said, in a small business, what alternatives do I have, particularly if I was in a position of having to make people redundant. The reason for redundancy is to cut back on staff because you don't have the work and if I don't have the work, what alternatives could I offer a person in a small business?
**** STANLEY GEORGE REYNOLDS XXN MR WATSON
PN6557
Is the effect of paragraph 22 that the only purpose you see for the particular course being proposed as being the discussion of alternative employment or re-deployment, because that's what you refer to in the second sentence?---The way I see it, if you've got five, six, eight employees and they're all specialist trades people, they're employed for specific tasks, what, am I going to ask a tradesman to sweep the floor, and I couldn't afford to have him sweep the floor anyway, so what alternatives could I ask the person to do? What alternatives would I be able to offer them, that is the question I have?
PN6558
Just perhaps listen carefully to my question. Is your objection to the cause that we propose in this regard, based on your understanding that it's directed only to the issue of alternative employment or re-deployment?---Yes, I guess you're right.
PN6559
I have nothing further.
PN6560
PN6561
MR MOIR: Thank you, your Honour.
PN6562
Mr Reynolds you were asked a question about how many employees has the company made redundant over the past twenty years of operation or so, and your response was about six or seven employees have been made redundant. During that same period, how many employees have actually left the company, including those who were made redundant?---I'm working a little bit on memory here because there have been times when we've had a reasonably high staff turnover and it's usually locked into the fortunes of business where we've got a lot of work, and as work reduces or dries up we have to put people on and off and quite often we'll employ people on a casual basis or from a labour hire company to increase our employment capability, or increase our staff when we've got a lot of work to do, so over twenty years, yes we've had to let go that many people that have been permanent employees that we've actually dismissed on the basis that we haven't had enough work to continue on with.
**** STANLEY GEORGE REYNOLDS RXN MR MOIR
PN6563
Right, and that was about six or seven?---Yes, working from memory. I mean, we've had a lot of staff turnover in twenty years.
PN6564
Right, but how many, let's just concentrate on full time employees then, forget about casual employees, how many full time employees have left the company during the past twenty years, including those six or seven made redundant, just an approximate figure?---Fifteen, twenty maybe.
PN6565
You were taken to paragraph 16 of your statement?---Yes.
PN6566
And you were asked whether you understood that under the ACT proposal there would be no requirement to make provision for redundancy pay. Why would you then make provision for redundancy pay?
PN6567
MR WATSON: I object to this question on two bases. Firstly, it is inaccurately put in regard to what was put to the witness. The witness was put that certain things were not required under accountancy standards. Secondly, and much more seriously, it leads the witness in respect of the very issue that the question is directed to, that is, whether or not, well I think we know, we all know where Mr Moir is headed.
PN6568
JUSTICE GIUDICE: Yes, what do you say, Mr Moir?
PN6569
MR MOIR: Your Honour, if we all know where I'm headed, then I'll leave it at that.
**** STANLEY GEORGE REYNOLDS RXN MR MOIR
PN6570
Yes, if I could take you back to the example that you gave of the business almost closing back in 1998. You referred to that during cross-examination. What were the circumstances giving rise to that situation?---I think the economic situation as far as my business and the work that we do and the services that we offered at the time, it was somewhat difficult to find work, and also, too, we had spent an awful lot of time trying to win one particular contract, and that was to build a glass re-cycling plant, and we had several companies that we were bidding for at the time, Theiss Environmental and Recyclers of Australia, and in fact, I went to America and met the two prospective customers in America and showed them existing plants over there and we tried to get the contract to build the recycling plants for either of those two companies that I mentioned and unfortunately the plant didn't go ahead, but we had invested an awful lot of time and effort in that direction, and because the plant didn't go ahead we found ourselves in a position where we didn't have enough work to continue on and we had invested an awful lot of money and time and effort in trying to secure that order, and so we had to let people go over a period of a few months and still try and get more work, but we were unable to achieve any work at all, so we went down to a point where, basically, it was myself and my wife and had one employee left, and the reason I kept that one employee is because he was the only chap that I had with the skills to operate - I have computer-controlled equipment - and he was the only guy that was trained sufficiently enough to operate the computer-controlled equipment, and I managed to keep him only by sending him out basically on labour hire. I sent him out and sub-contracted him off to one of my customers and then kept him and, as fortune had it, we actually put our factory that we owned on to the market and sold that, and virtually two weeks before the sale of our factory we managed to secure an order with Sydney Airport and we put in some late baggage shutes prior to the Olympics. That was a $2,000,000 contract that we managed to survive and revive the business on and, subsequently, fortunes of the business have been stable over the last four years and we have been able to carry on. However, I mean, not every year as, you can see in my report, my submission, we don't make a profit every year.
PN6571
I have no further questions.
PN6572
PN6573
PN6574
MR MOIR: Your name is Jennifer Hunt?---That's correct.
PN6575
And your business address is Level 6, 34 Hunter Street, Sydney?---Yes.
PN6576
And you are currently the Solicitor, Workplace Relations, with Manpower Services Australia Pty Limited?---Yes.
PN6577
And Mrs Hunt, you have completed a witness statement in relation to these proceedings dated 10 April 2003?---Yes.
PN6578
Do you have a copy of that statement with you?---Yes, I do.
PN6579
And are the contents of that statement true and accurate?---Yes.
PN6580
Mrs Hunt, you have also completed a supplementary statement, and attached to that are certain financial records relating to Manpower. Do you have a copy of that with you?---Yes.
PN6581
Are the contents of that statement true and accurate to the best of your knowledge?---Yes.
PN6582
I have nothing further.
PN6583
PN6584
MR WATSON: Do you prefer Mrs?---Yes, I do.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6585
Mrs Hunt, can I take you to the table at the top of page 12 of your statement, your first statement I should say. You set out there, based on certain assumptions that you deal with on the previous page, an estimate of the number of employers affected by a claim. I just wanted to clarify, there is 770 people there, were they all engaged continuously on one engagement?---The way I calculated these figures was drawing together how many employees in the 2002 calendar year finished their assignment with Manpower, they no longer worked for us during that year. So they had more than 12 months service, they worked more than 20 hours a week, they worked for at least 46 hours, 46 weeks or had greater than 46 weeks service, and did finish up working with Manpower in that calendar year.
PN6586
Yes, my question though was, were all of them engaged continuously on one engagement, all of those 170?---They may have had one or more engagements, but they certainly had 46 weeks of service in that 52 week period.
PN6587
Yes, how many were actually engaged continuously as in without any breaks?---Again, all of these employees had 46 weeks service within that 52 week period, they may have had a day off here and there, but they certainly had 46 weeks service.
PN6588
Well can I take you to paragraph 31 of your statement, when you read that paragraph?---"The Manpower Application Form - - -
PN6589
No, no I'm sorry, I didn't mean out loud, if you could just read it?---Sure.
PN6590
I want to ask you a question about it. In light of that paragraph is it your evidence that whenever an assignment with a client ends employment with Manpower ends?---The person stops being an employee of Manpower and continues on as a candidate of Manpower. They are still on our books, we still have their registration details and we'll seek to find them alternative work. It's in all of our interests to do so, but the day that their assignment ends they technically stop being an employee and remain a candidate.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6591
I see, but you have included, I take it from your earlier evidence, people who fall exactly into that category in your calculation of the cost to the ACTU claim?---These people are people whose employment has ended during that 2002 calendar year. They have stopped being our employees.
PN6592
Yes, I understand that but you have included haven't you, can we go back to the table, perhaps we can do it by illustration. The 493 people who are in the one to two years service, some of them, perhaps a small proportion I suspect, have had one to two years service continuously on one engagement?---One or more engagement, I can't tell you if it was with the one client.
PN6593
Yes, so some of them in that category have been with more than one client?---May have been.
PN6594
Yes. Well, you are not saying, are you, that all of them, all of them are likely to have been engaged continuously on one engagement, all of those 493?---I can't say.
PN6595
You can't say either way?---I can't say if they have been with one client or whether they have been with more than one client. I know that they have been employed by us for that period of time, earning wages in each of those 46 weeks.
PN6596
Well, when you prepared this statement did you, or did you not, include people in this table who had been continuously employed in the sense that you have defined it, continuously employed, who had more than one engagement?---One or more engagement.
PN6597
Yes, so you did include people, you definitely included people who only had one, you did include people who had more than one?---Yes.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6598
Yes, now isn't it the case that you would say those people ceased their employment with Manpower at the end of one assignment and commenced a new employment at the next one?---No, that's not correct. These people in this table no longer worked for Manpower in the year 2002. Some of these people finished in February 2002 and were never again on our books. We never engaged them at any time further.
PN6599
Well, I just want to clarify then what you mean by the statement, or what you understand is meant by the statement in the application form that says that your term of employment with Manpower is limited to the duration of any temporary assignment?---Our employees cannot be guaranteed any further work beyond our communication on a daily basis that we need you to work today.
PN6600
All right. Say I work for client A for three months, there is a gap of two days and then I work for client B. Pursuant to your contract do you say that is one or two different sets of employment?---That is two sets of engagement. Those employees will only show up in this table at paragraph 39 if their assignment at client B has finished. They have not been further engaged, all of the employees in the table provided by Manpower.
PN6601
Now, Manpower's total labour costs, can you tell the Commission, in ballpark figures, what it is?---I'm not Manpower's financial director, but I understand that our sales are in the order of $400 and something million per annum. Out of that obviously comes our labour costs directly to employees, our statutory burdens, then the administrative costs in running our organisation, and then profit which in our case there hasn't been any in the last few years. So, I can't tell you directly out of the $400 odd million in sales generated, how much of that is labour cost.
PN6602
Let me just get this clear, you have been a Workplace Relations Manager since June 1999 and you were appointed as Solicitor, Workplace Relations now and you can't tell the Commission, in broad terms, what the labour costs for the organisation is?---No, I cannot. We have a financial director who could tell you that but I can't.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6603
So it's not a matter you concern yourself with at all?---No, I'm inhouse and I answer all inquiries that are asked of me, and at no point in time have I been asked to evaluate Manpower's labour costs. We have a very sophisticated financial team that deals with all of those matters.
CONTINUED IN TRANSCRIPT-IN-CONFIDENCE
CONTINUED FROM TRANSCRIPT-IN-CONFIDENCE
PN6612
MR WATSON: All right. Now, in that context, then, even if we were to take the 38 hour week figure that you've calculated in the table, the additional costs indicated in the table is about .8 per cent of your labour bill, labour costs?---If you calculated that to be the case.
PN6613
You say in paragraph 40 that you believe the calculation is quite conservative because you haven't included people with less than an average of 20 hours per week. Can we deal just with that issue first. Obviously, if they average less than 20 hours per week the costs associated with provision for the claim will be much less in relation to those employers?---Yes, it would but we might have a large number of employees in these figures, greater than the 700 odd that are currently in there.
PN6614
Well, you haven't made any assessment, have you, either way of whether it's a large number or a small number?---I discriminately put together 20 hours per week and 46 weeks of service because I thought that would be a fair estimate, but I do believe it is modest, but fair.
PN6615
Just answer my question. Do you have any idea one way or another whether the number of employees with an average of 20 hours per week and more than 46 weeks per year of service is large or small. Have you made any assessment of that number?---I believe that the number of employees falling under 20 hours a week over less than 46 weeks per annum would be a large number, given that some numbers of our employees are students at university who would not fall under these sorts of figures.
PN6616
Have you made any assessment? Did you actually check the figures?---Yes, well I decided to cull those employees, so it would have been much larger if those employees had been included.
PN6617
In relation to 46 weeks in each year of service, you say you've left out people who worked less than 46 weeks?---Yes.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6618
Well, why do you say a person whose worked less than 46 weeks would be entitled under our claim?---They worked 46 weeks in that particular year. They might have had three years worth of service with Manpower, but in their last day of employment in the preceding 46 weeks might have had some breaks, so I did not include those employees. They might have, for example, have taken a 10 week holiday during that particular year from their last date of employment. Those employees would not be included in my calculations, but might be entitled under your claim to be entitled to severance pay.
PN6619
So, you think that there might be circumstances where people have had the 46 weeks continuous service and there's a one-off gap, and in those circumstances they might be entitled?---They might be, depending on their individual circumstances as to what continuous service might be defined as. I don't believe it's clear.
PN6620
Then you go to the calculations in relation to the loading and the 300 professional services allowance. You've included those there?---No they do not include - - -
PN6621
No, I'm sorry, you have included those in paragraph B as reasons why the calculations are quite conservative?---That's correct.
PN6622
Well, I want to suggest to you that even if you take all of that into account, it's unlikely, isn't it, that if the 38 hours is worth about .8 per cent, it's unlikely that we are talking about anything more than an extra 50 per cent, i.e. an extra .4 per cent of your labour cost to take into account the things in paragraph 40?---No, I disagree. We have around about 25,000 employees, I understand that might go through our books on a per annum basis. We engage approximately 7000 employees on a daily basis, so there is quite a lot of turnover of employees. If I were to estimate, say 20,000 of those employees finished up because we did not have an assignment for them, and therefore may be eligible to the $300 allowance, 20,000 employees by $300, as I understand it is around $6,000,000 per annum. That's certainly something that we can't afford.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6623
I see, because you've worked the $300 on the basis that you've got to pay it to everyone regardless of their length of service and immediately they are made redundant?---The majority of our assignments would end at our initiative because we are not in a position to offer our employees any future work, so, if that $300 were to be paid on that basis, then it would be in the vicinity of that sort of dollars.
PN6624
Let's leave the $300 aside. Do you agree that leaving the $300 issue aside, the most we're likely to get to is something of the order of about 1.2 per cent of your labour costs, in other words the factors that you say lead to your calculation being conservative, if you threw them back in the mix we're unlikely to increase your total costs by more than 50 per cent?---If that's the correct calculation, yes.
PN6625
Now, you say in paragraph 41 that you operate in a very low margin industry and would be unable to pass the costs of the claim on to your clients. Are you seriously suggesting that you couldn't pass on a cost increase of the order of about 1.2 per cent on to clients?---Absolutely, we lose business on .1 per cent margin.
PN6626
I see, and who do you lose it to, the other big labour hire companies?---Any competitor.
PN6627
They would all have to increase their costs, presumably too wouldn't they?---They may do so.
PN6628
Yes, so why would you lose any business?---Well, interestingly figures came out today that the margin within the industry is 2.9 per cent. It is that cut-throat. We are losing business on .1 per cent margin.
PN6629
Well, I understand that, but you lose it to other competitors. If the claim is successful, all your competitors would have to pay as well, would they not?---If this is limited to the Federal jurisdiction.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6630
Well, so you're suggesting that because some of your competitors might operate in state jurisdictions, then you would be at a competitive disadvantage?---That is exactly what I am suggesting.
PN6631
Well, why would you be operating in a Federal setting and then your competitors operating in a State setting?---Because of our respondency to federal awards and our - - -
PN6632
Who are your major competitors?---Our major competitors are Adecco, Skilled, Integrated.
PN6633
Are all of them respondent to federal awards as well?---I believe so.
PN6634
Yes. Do you anticipate that if other major competitors came along they might end up being respondent to Federal awards?---We don't lose business only to major competitors, we lose it to very minor mum and dad type organisations as well who, as I understand, may not be respondent to Federal awards.
PN6635
I see. Now, Manpower has made losses you have mentioned for the previous three years. You would agree that that's after substantial amortisation of goodwill and significant payments to related entities?---No, again I'm not a financial accountant, nor director. I've obtained these financial accounts at the ACTU's request. I certainly have perused the documents. I understand we have made substantial losses, but that is as far as I can go. I do understand that we make some limited payments back to the US for our licensing fees which I understand are at the low scale of international licensing fees, and we also pay interest on loans and I have obtained this information directly by my financial director, enable to answer this question but that's really - - -
PN6636
So you have obtained the information from your financial director when you want to answer the question, but not on issues like what your labour cost is when it was convenient for you not to obtain that information?---It really was too much information for me to gather from my financial director. I needed to know the bare, basic facts and I obtained that information but if questions are going to be asked in relation to goodwill I honestly do not know.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6637
All right, well if you honestly do not know then perhaps that is the answer. As far as you are aware, the Australian entity of Manpower is not in any financial trouble?---I wouldn't know, I hope not.
PN6638
Could I hand you this document, it is an extract from Manpower US's, of Manpower Inc's 2001 Annual Report, do you see that?---Yes.
PN6639
And you can see in the first couple of pages that we have provided, the Report to Shareholders says that at about six or seven in the first column:
PN6640
We generated more than $193 million in free cash flow, a 49 per cent increase over 2000.
PN6641
Do you see that?---Sorry, which column is that?
PN6642
First column?---In the text?
PN6643
In the text, about point 7?---Yes, I see that.
PN6644
And then over in the second column of text, which is actually on page 25:
PN6645
We ended the year with a system wide sales of $11.8 billion and revenues of $10.5 billion operating profit was $237.6 million.
PN6646
?---Yes.
PN6647
Yes, and then over the page in the notes to the consolidated financial statements, you would agree that the total assets of the business are recorded as worth $US3.2 billion?---Yes.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6648
Can I tender that?
PN6649
PN6650
MR WATSON: Now in paragraph 42 of your witness statement you raised certain concerns about what you think the effect of the claim will be?---Yes.
PN6651
Yes, and I want to suggest too that in effect you are suggesting that there may be a churning of clients prior to the twelve months?---A churning of employees.
PN6652
Yes?---Yes, that could be a consequence.
PN6653
Do you currently churn employees to avoid unfair dismissal provisions and casual conversion provisions in the Metal Industry Award?---No we do not.
PN6654
Now, even on the basis of your figures in the table, there is about 770 employees listed there who have more than 12 months continuous service as you have defined it. You say that on any given day you employ around about 7000 but you gave a higher figure than that for a per annum figure. How many employees per annum?---I understand approximately 25,000.
PN6655
25,000. So, at least in relation to those who have worked 20 hours per week or more, you would agree wouldn't you that we are already talking about probably more than 97 per cent of your employees have less than a year's service on current figures?---No, I don't believe that this table can draw you to that conclusion because again this table talks about employees who did finish their assignment. I can't tell you overall how many employees have less than 12 months service.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6656
Well, how many, are you able to hazard any sort of guess at the proportion of employees who, you say on your books, currently have less than 12 months service?---I imagine given the itinerant nature of the industry it might be in the order of 90 per cent plus.
PN6657
90 per cent plus. So when you say you are concerned about the possibility of churning, you're concerned that it might go what, up from 90 per cent to 92 per cent are you?---Employees leave our employment for their various personal reasons. This issue could arise at our initiative. We would like our employees to continue on our books, we don't want to have to make that decision on the basis of the consequences of this case at nine months, ten months or eleven months. I don't believe that it is in anybody's best interests for that decision to have to go through our minds.
PN6658
Right, but it doesn't go through your mind now in relation to unfair dismissal or casual conversion provisions in the mental industry?---My branch staff are informed that once the Federal award employees hits 12 months service they then need to afford that employee procedural fairness in light of the unfair dismissal provisions.
PN6659
That's not what I asked. The possibility of churning doesn't go through your mind now because of the 12 months dismissal provision or the casual conversion provisions in the mental industry?---No, it does not, I think I've answered that.
PN6660
Now the reality is, isn't it, that the problems you identify for Manpower in relation to this claim are actually more about Manpower being concerned that the claim will make it more attractive to hire permanent workers, the cost of casuals will go up, it will be cheaper to hire permanent compared to casuals?---It will certainly be an expensive way to engage casuals if they are receiving both their casual loading and severance pay.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6661
Yes, is it your evidence that it will actually be more expensive in a comparative sense, to engage someone as a casual employee than a permanent?---Well again, if they are receiving a casual loading which already factors in payment for severance pay and receiving a severance pay, there has to be some double payment there, so therefore comparatively relatively yes, I do believe that it will be a more expensive way to engage employees.
PN6662
And so is your concern then that the consequence will be that it will be actually more attractive, in certain circumstances, to employ a permanent employee than to employ casuals?---It may be.
PN6663
Now in paragraph 46 you talk about the administrative costs being extremely onerous in relation to our claim. Why would it impose any additional administrative cost for a labour hire agency, such as yourself, to determine the length of service of each casual employee. I mean surely you do that anyway, don't you?---Well, not in consequence of any matters that now arise. The 12 months provision for casual employees in relation to unfair dismissal does not concern us. It simply is a matter for determination at the branch level as to when an assignment ends, does the employee have rights for unfair dismissal. We will be mindful, if this case is successful, of employees reaching their 12 month mark and being eligible to receive severance pay when their assignment ends. So administratively our branches will have to keep an eye on the employee's length of service, have discussions with clients as to whether or not they would like the employee to remain on our books for greater than 12 months and would they like to contribute in any way to that payment that Manpower would likely to become eligible to pay. So therefore there is a lot of administrative burden at branch level to have those interactions with the various clients, the employees, bringing the employee in at 10 months or 11 months to say we can no longer afford to engage you because the likelihood of this assignment ending at 13 months is there and we are not prepared to pay severance pay. They are the bare facts that we would have to do that in order not to attract severance pay for our casuals once they hit the 12 months mark.
PN6664
So, is it your evidence that you would actually call someone in at 10 months and say we're not going to continue your employment past the 12?---We may do so, if his claim is successful and the employee has no remedy.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6665
So, it's the evidence of you sitting here now that you would engage in the most blatant form of avoidance of the award provisions notwithstanding that it's your evidence that you don't do that in relation to unfair dismissal and casual conversion?---We have no concern now in relation to the 12 month unfair dismissal provisions.
PN6666
Well, what about casual conversion?---Under the Metals Award, no problem whatsoever. We comply with the award 100 per cent.
PN6667
When that came in, did you get people in at five months with a view to saying whether or not you were prepared to have them go past six. Did you say, look, you're coming up to your six months. If you're going to convert to permanent, we are going to have serious problems about you converting?---The award expressly prohibits that and we have no problem in supplying a letter to our employees at the four month mark, between four months and six months, if the branch so desires, to ask the employee to convert the matter through to 12 months - - -
PN6668
So really what you're saying, is it - - -?---May I finish.
PN6669
MR MOIR: The witness should be allowed to finish.
PN6670
MR WATSON: Yes, I'm sorry?---In other instances the branch determines that they do not have an issue in providing the offer letter at the six month mark and therefore that letter is provided to the employee. My evidence is that only two employees out of 500 have wished to become permanent employees. All others have said that they wish to remain as a casual employee.
PN6671
So, really then your evidence is, is it, that if the Commission is to consider awarding severance pay to casuals, all it really needs to do to ensure your compliance is to award specific provisions which preclude the sort of deliberate churning that you had suggested?---I don't know at which point that you would make that call, at what month mark do you then decide that an employer can't, within its own operational business requirements, call its employees in and say that we can no longer engage you.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6672
Well, if it was a requirement, as I understand the effect of your evidence, if there was a requirement in the award provision that you couldn't terminate someone in order to avoid any obligations about employment extending beyond 12 months, as a good corporate citizen, you would comply with that?---We would necessarily comply with that, of course.
PN6673
Getting back to these administrative costs, the administrative costs associated with determining the length of service of each casual is zero, is it not?---No, that's not correct.
PN6674
Are you seriously suggesting to the Commission that Manpower is not in a position now to tell anyone how long a casual has been on their books?---We would need to re-organise our systems to flag to the relevant branches this person has X amount months of service and discussions should take place with that individual and the client.
PN6675
No, no, not about discussions with the individual on the client. Are you seriously suggesting that you are not in a position now to tell how long casuals have been on your books? Are you seriously suggesting that?---A branch, person, a consultant - - -
PN6676
No, you?---If you let me answer the question.
PN6677
JUSTICE GIUDICE: I must say, I don't entirely understand that question, Mr Watson. I don't know whether the witness does, or not, but perhaps you could just take it back a step and just make it clear exactly what you are driving at.
PN6678
MR WATSON: Are you seriously suggesting that Manpower, the company, is not in a position to assess how long casuals have been on its books, how long they've been engaged by Manpower?---Of course we can assess that, but is it at no cost? Of course it's at a cost. The branch member would need to go in and manually have a look at that person's particular length of service. They might have to run a payroll data run on that particular person to see gaps in their employment. If there is a gap of weeks, they might need to ask the employee why they were not on our books for those weeks. So, it does come at cost.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6679
JUSTICE GIUDICE: I'm not sure when service ends for your purposes. Mr Watson asked you some questions about the table and you said that it included people whose service had finished, I think, I think that was the expression, during a particular calendar year, but do those people remain on the books and might they, for example, next year or in the succeeding year, get another assignment with Manpower?---For the purposes of the table, these people were no longer employed at their last end date in 2002. They finished up at some point in 2002 and we did not engage them any further.
PN6680
And did not get another engagement?---And I prepared this in April 2003. So, they are no longer there. They are still registered with us. We have their personal details, but they have not made themselves available for an assignment.
PN6681
Does everybody who is ever engaged by Manpower for any length of time remain, as it were, on the database?---Yes, we are required under relevant legislation to keep personal details for six, seven years. They can indicate to us that they no longer wish to be considered for a role and they will be an inactive candidate and we will indicate that on our database, so that they aren't contacted.
PN6682
Yes. Thank you.
PN6683
COMMISSIONER SMITH: There's just, sorry, one matter arising from that. I also understood you to say that those persons could have had more than one assignment?---Yes, they could have. I can't evaluate that.
PN6684
Hence, for your purposes, do you believe that that's continuous service with Manpower?---For the purposes of this table, they had more than 52 weeks of service, of course, to get over the 12 months and, on their last day of engagement, had at least 46 weeks of service in the preceding 52 weeks. It could have been for more than one client. I don't know.
PN6685
Would you regard that as continuous service with Manpower?---Yes, 46 weeks out of 52. Absolutely.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6686
I see, thank you.
PN6687
MR WATSON: In paragraph 46 the other matter you specifically refer to is the need to commence to approve moneys to cover contingencies for the incidence of redundancy. Do you see that?---Yes.
PN6688
You would agree, wouldn't you, that there's no specific need to accrue money to cover the contingency?---There's no legislative need, but there is a business need. Given that we know that the casual assignment will end at some point in time, we will lose the business at some point in time.
PN6689
Well, why is there any need to accrue contingencies in particular circumstances? Wouldn't it just be easier to make an assessment of the additional costs on a global basis and factor that into your pricing?---No, because each business unit is run independently and needs to be responsible for their own business unit costs. If matters such as unfair dismissal cases arise at a particular business unit, that business unit pays for my airfare to get to the Commission. I appear for free, of course, and any settlement that arises out of that unfair dismissal case comes out of that particular business unit. There's no cost subsidisation.
PN6690
Couldn't each business unit, in effect, make an assessment of its costs in this regard and factor that into its prices generally? Why does it need to make specific accruals in respect of each employee?---If they could attach the money to the charge rate to the client, that is the only way that they could actually accrue the moneys. If the client is unwilling to pay for this particular cost, then it comes straight out of that particular business unit's margin.
PN6691
You've already given evidence about your view, about the capacity to raise prices to clients?---Absolutely.
PN6692
Yes, nothing further.
**** JENNIFER LEIGH HUNT XXN MR WATSON
PN6693
JUSTICE GIUDICE: Mr Watson. Any re-examination, Mr Moir?
PN6694
PN6695
MR MOIR: You were just asked some questions about having to commence accruing money to cover contingencies as in paragraph 46 of your witness statement, you agreed that there was no legislative requirement but a business need. Could you just clarify what you meant by that?---We have business units that service particular clients and we may only have the work for a particular period of time. If that business is lost and the redundancy does arise, and the employees have more than 12 months service, that business unit will need to pay for those particular individuals severance payments. So that business unit, it would be absolutely prudent for that business unit to start accruing those moneys once the employees were getting towards the 12 months service.
PN6696
Yes, and you were also asked some questions about the cost of the ACTU claim and you mentioned that if you were liable for the $300 professional services allowance then that could cost in the order of $6 million, and that you couldn't afford it. Why wouldn't you be able to afford it?---Well we already suffer - - -
PN6697
JUSTICE GIUDICE:That's a lot of money presumably.
PN6698
MR MOIR:Well, particularly in the light of the accounts of the parent company that you were taken to?---Well, the parent company is exactly that - - -
PN6699
MR WATSON: Is the witness now qualified to give financial - - -
PN6700
JUSTICE GIUDICE: You might be on dangerous ground here Mr Moir, but you proceed.
**** JENNIFER LEIGH HUNT RXN MR MOIR
PN6701
MR MOIR:Yes, well I won't take it any further then. You were also taken to the table on page 12 of the witness statement and you made it clear there that those employees included in the table were persons whose assignments ended during the last calendar year. How many of those, or what proportion of those assignments would have ended due to redundancy, that is Manpower no longer had the position available for them?---Through my experience with discussions with my internal employees, I'd estimate in the order of 80 per cent or greater of our assignments would end at Manpower's initiative because we are unable to offer future work, either because the client no longer wishes us to service the account or we have lost the business to a competitor. Roughly around 15 per cent of employees would leave at their own initiative for personal reasons. They may wish to work for another agency or gain permanent employment or advance their studies and approximately say five per cent, the remainder, would be performance issues that we need to address with individuals.
PN6702
Yes. I have nothing further your Honour.
PN6703
JUSTICE GIUDICE:Thank you for your evidence Mrs Hunt, you are free to go?---Thank you.
PN6704
MR MOIR:Your Honour that concludes our evidentiary case. There was just one other matter. In AIG15 there was a missing supplementary statement at tab 4 and I just hand up that statement which can be inserted in the exhibit.
PN6705
JUSTICE GIUDICE: Thanks Mr Moir. Who's next, Ms Harris?
PN6706
MS HARRIS: Thank you your Honour. The NFF statement he wants to formally seek to tender is two submissions that have been filed in relation to this matter, they are one dated 20 December 2002 in their submission - ACCI application. The second is dated 11 April 2003 which is the NFF outline of closing contentions. We seek those exhibits in this matter your Honour, NFF does not want to make any opening remarks, we will limit our remarks until closing.
PN6707
JUSTICE GIUDICE: Yes I understand. The submissions dated 20 December 2002 will be NFF1.
PN6708
JUSTICE GIUDICE: The submissions dated 11 April 2003 will be NFF2.
PN6709
MS HARRIS: Your Honour, I have nothing further.
PN6710
JUSTICE GIUDICE: Yes, Mr Stewart.
PN6711
MR STEWART: Thank you your Honour, the Commonwealth also would seek this time to formally tender material that it has already lodged with the Commission and in addition hand up a short additional written submission. The additional submission deals with the ACTU assertions about what database and about what the database has to say about the level of severance pay in Federal certified agreements. I've just handed up two documents, one is a list of the five materials that we're tendering and the other document is the short additional written submission about what data and it also contains the data that I understand the ACTU was seeking that the Commonwealth put before the Commission.
PN6712
JUSTICE GIUDICE: What's the outline of supporting contentions?
PN6713
MR STEWART: That's the volume of materials that we submitted on 20 December 2002 your Honour.
PN6714
JUSTICE GIUDICE: Yes and that's not yet been marked?
PN6715
MR STEWART: No.
PN6716
JUSTICE GIUDICE: Well that document will be Commonwealth 1.
EXHIBIT #COMMONWEALTH 1 VOLUME OF MATERIALS SUBMITTED ON 20/12/2002
PN6717
JUSTICE GIUDICE: The volume 1 of the Commonwealth contentions dated April 2003 will be Commonwealth 2.
PN6718
JUSTICE GIUDICE: Volume 2 dated April 2003 will be Commonwealth 3.
PN6719
JUSTICE GIUDICE: Volume 3 dated April 2003 will be Commonwealth 4
PN6720
JUSTICE GIUDICE: Document headed, data from the workplace relations database etcetera will be Commonwealth 5.
EXHIBIT #COMMONWEALTH 5 DATA FROM WORKPLACE RELATIONS DATA BASE, ETCETERA
PN6721
JUSTICE GIUDICE: Is there anything else before we adjourn until 27 October? Thank you for your assistance, we will adjourn now until 27 October.
ADJOURNED UNTIL MONDAY, 27 OCTOBER 2003 [3.10pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
EXHIBIT #ACTU36 SUPPLEMENTARY WITNESS STATEMENT FROM MR PATRICK HOLMES PN6024
NICHOLAS McGLOIN, SWORN PN6026
EXAMINATION-IN-CHIEF BY MR MOIR PN6026
CROSS-EXAMINATION BY MR WATSON PN6038
EXHIBIT #ACTU 37 EXTRACT OF CLERICAL AND ADMINISTRATIVE EMPLOYEES STATE CONSOLIDATED AWARD MEW SOUTH WALES PN6091
EXHIBIT #ACTU 38 COPY OF LETTER FROM BRYDENS AUSTRALIA PTY LIMITED CIRCULATED TO ALL EMPLOYEES PN6110
EXHIBIT #ACTU39 DOCUMENT PN6162
RE-EXAMINATION BY MR MOIR PN6244
WITNESS WITHDREW PN6273
NEVILLE JUKES, SWORN PN6279
EXAMINATION-IN-CHIEF BY MR MOIR PN6279
CROSS-EXAMINATION BY MR WATSON PN6300
NEVILLE JUKES, CONTINUING.................................... PN6310
CROSS-EXAMINATION BY MR WATSON PN6310
RE-EXAMINATION BY MR MOIR PN6385
WITNESS WITHDREW PN6401
JOHN WISBY, SWORN PN6402
EXAMINATION-IN-CHIEF BY MR MOIR PN6402
CROSS-EXAMINATION BY MR WATSON PN6412
RE-EXAMINATION BY MR MOIR PN6472
WITNESS WITHDREW PN6477
STANLEY GEORGE REYNOLDS, SWORN PN6494
EXAMINATION-IN-CHIEF BY MR MOIR PN6494
CROSS-EXAMINATION BY MR WATSON PN6505
RE-EXAMINATION BY MR MOIR PN6561
WITNESS WITHDREW PN6573
JENNIFER LEIGH HUNT, SWORN PN6574
EXAMINATION-IN-CHIEF BY MR MOIR PN6574
CROSS-EXAMINATION BY MR WATSON PN6584
JENNIFER LEIGH HUNT, CONTINUING......................... PN6612
CROSS-EXAMINATION BY MR WATSON PN6612
EXHIBIT #ACTU40 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PN6650
RE-EXAMINATION BY MR MOIR PN6695
WITNESS WITHDREW PN6704
EXHIBIT #NFFI SUBMISSIONS DATED 20/12/2002 PN6708
EXHIBIT #NFF2 SUBMISSIONS DATED 11/04/2003 PN6709
EXHIBIT #COMMONWEALTH 1 VOLUME OF MATERIALS SUBMITTED ON 20/12/2002 PN6717
EXHIBIT #COMMOWEALTH 2 VOLUME 1 OF COMMOWEALTH CONTENTIONS PN6718
EXHIBIT #COMMONWEALTH 3 VOLUME 2 COMMONWEALTH CONTENTIONS PN6719
EXHIBIT #COMMONWEALTH 4 VOLUME 3 COMMONWEALTH CONTENTIONS PN6720
EXHIBIT #COMMONWEALTH 5 DATA FROM WORKPLACE RELATIONS DATA BASE, ETCETERA PN6721
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