C2003/4822, Transcript of Proceedings [2003] AIRCTrans 4651 (22 October 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 4930
~~AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LEWIN

C2003/4822

NATIONAL UNION OF WORKERS

and

QENOS AUSTRALIA PTY LTD

Application under section 170LW of the Act
for settlement of dispute re alleged failure
of the employer to include a cashed out
defined benefit and ongoing failure to provide
training for operators

MELBOURNE

11.39 AM, TUESDAY, 7 OCTOBER 2003

Continued from 3.9.03

PN1316

THE COMMISSIONER: Good morning. There are no changes in the appearances? Good.

PN1317

MR LYONS: I think we were part way through Mr Aitken's cross-examination, sir.

PN1318

THE COMMISSIONER: Yes, go ahead.

<DAVID JOHN AITKEN, ON FORMER OATH [11.40am]

<CROSS-EXAMINATION BY MR LYONS

PN1319

MR LYONS: Mr Aitken, I think you recall the last time we were before the Commission we were discussing the way in which health insurance appears in EA3. Do you recall that?---Yes, I do.

PN1320

And do you have EA3 in front of you?---I do actually. I lost my copy.

PN1321

Does the Commission have EA3?

PN1322

THE COMMISSIONER: Yes, I do, thank you.

PN1323

MR LYONS: Mr Aitken, if I could take you to page 138 of that document please. Can you see there at paragraph 11, it describes replacement of private health insurance defined benefit with salary?---Yes.

PN1324

And do you agree that this is the provision of the enterprise agreement which deals with the effect of the private health insurance buy out?---I would say it is one of the provisions, yes.

PN1325

And do you agree there that it is described as being a salary increase; is that correct?---I would say it says an increase in pay, and that it is added to annual salary.

PN1326

Where does it say it is added to annual salary?---The clause in front of me says by an increase in pay of $2472 per annum. This will be added - the pay increase applies to all EA employees equivalent to the cost of family private health insurance for an employee at the top margin tax rate plus an escalation of 3 per cent. This will be added into annual salary.

PN1327

So do you agree that an ordinary employee reading this agreement and determining to approve it would understand that the 2472 amount was a pay increase?

**** DAVID JOHN AITKEN XXN MR LYONS

PN1328

MR DALTON: I object to that question. I don't know where that is going to take us.

PN1329

THE COMMISSIONER: That is a submission, isn't it, really? I mean, the witness' opinion about that is as valuable as yours, Mr Dalton's, anybody's. It is a matter of the logical construction of what meaning can be attributed to those words by a reasonable person reading them, isn't it?

PN1330

MR LYONS: Yes, I think I concede that, Commissioner. It is a matter for submission.

PN1331

THE COMMISSIONER: And therefore it becomes a matter for judgment to me if you submit that.

PN1332

MR LYONS: Mr Aitken, in EA3 are you able to point to anything in the document where your contention that there was an agreement that the buy out figure was included in superannuation by the mechanism of multiplier, is there anywhere in the document where what you say the agreement was is expressed?---In the multiplier, no, I don't think it is specifically in there, no.

PN1333

Well, in fact, there is no reference to the calculation of the super in relation to the multiplier on this issue, is there?---No, there isn't.

PN1334

Right. And it is your evidence, is it, that there was an agreement that it was to be included by virtue of the mechanism of the multiplier?---My evidence is that that was how it was agreed with the union lead time, as it had been agreed for previous components, which also aren't specifically listed in here.

PN1335

And I think at the last occasion you conceded that where that had previously been in the agreement there was written documentation supporting such an agreement?---Yes.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1336

And are you aware, or have you in the interim in the proceeding, in the gap in the proceedings, been able to discover any written documents which indicate that there was an agreement in relation to this issue?---No, I haven't. I haven't gone looking for them.

PN1337

Can I ask you, Mr Aitken, was the amount paid in lieu of the health insurance in the view of Qenos an allowance?---It was a component sometimes referred to as an allowance, sometimes referred to as a component, but I am not sure specifically how it was referred to in the enterprise agreement, but it was a component of salary.

PN1338

A component of?---Of salary.

PN1339

Of salary. Mr Aitken, if I can take you to page 35 of EA3, and you will see there 511 is titled, common employment conditions?---Mm.

PN1340

And you will see the last sentence of that paragraph reads:

PN1341

We are committed to moving to common employment conditions for all employees as an important part of this process.

PN1342

Do you see those words?---Yes.

PN1343

In relation to this provision, is all employees intending to be a reference to all employees of Qenos at Altona?---I am not sure whether it is or it isn't. What I know is, it is a statement of intent.

PN1344

It was the company's intention, I think, coming from your witness statement, was that as far as possible the terms and conditions of employment for everyone that works for Qenos at Altona would be standardised?---Could you point me to where I said that please, Mr Lyons?

**** DAVID JOHN AITKEN XXN MR LYONS

PN1345

It may have been under your examination-in-chief, Mr Aitken. It was an objective of the company though, wasn't it, to have some standardisation of employment conditions as part of that round of enterprise bargaining?---Yes. Yes, it was.

PN1346

And part of that was to ensure that the health component, when it was - sorry, the defined benefit condition, when that stopped for everybody, not just the EA employees?---That is right, yes.

PN1347

And the offer that was made to the EA employees, that is, the dollar value of the buy out, was identical to the offer that was, or the arrangements in place for the non EA employees at Qenos Altona, including presumably yourself?---Yes.

PN1348

Yes. If I can show the witness the bundle of documents that was marked as NUW N1. Mr Aitken, in the course of the enterprise bargaining negotiations with EA3, the company published a fair bit of what I might term propaganda. And I don't mean that with its negative connotation. But the company published a lot of material to employees about its offer, explanatory documents, etcetera, didn't it?---Yes, it did.

PN1349

And you were involved, in fact, in authoring many of those documents in relation to this specific issue?---Yes.

PN1350

Yes. And one of the ways in which that information was provided to the employees was direct mail outs to their homes?---I think it was.

PN1351

And one of the other key methods was using the electronic bulletin board that was maintained by the company?---That is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1352

Can you explain to the Commission how the electronic bulletin board worked in relation to this issue?---My recollection is that we had various - look, there is a company-wide electronic bulletin board that anybody who has access to a computer, and most employees have access to a computer, is able to read information on that. And I think that there was a section put aside for issues to do with the enterprise agreement, and there were also general company information sections, and updates were published by the company on that bulletin board. Employees also had the opportunity to ask questions about various issues that they had concerns with in an anonymous or an open way on that bulletin board, and the company or somebody would respond.

PN1353

So one of the functions of the electronic bulletin board was a Q and A type function, where an employee would ask a question, what does this element of the company offer me, and an appropriate officer of the company would provide an explanation and post that on the electronic system?---Yes.

PN1354

And in respect of queries about the private health insurance buy out, in fact, you were quite often, weren't you, the author of the company replies on those issues to explain the nature of the company offer?---Yes.

PN1355

Mr Aitken, if I can take you to what is marked as document 3 in the bundle you have got, which is the handwritten page 19?---Yes.

PN1356

Do you recall - and you will note this is an e-mail which you are the author of?---Yes.

PN1357

Yes. And if you see page 20 and following is a document entitled Health Insurance Changes and Pay Rises?---Yes.

PN1358

Which you were also the author of?---That is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1359

And that document was distributed to all EA and non EA employees at Altona in the course of the negotiations, wasn't it?---No, it wasn't.

PN1360

Who was it distributed to?---It was distributed to team leaders, who were to deal with staff employees on this document.

PN1361

Right. So the fact that it refers as dealing with all ex Kemcor employees?---It also says ex Kemcor staff employees.

PN1362

Well, the heading of page 20, Mr Aitken, says ex Kemcor employees. It doesn't contain the rider that it applies only to staff?---That is right. Although the opening line says, with the staff salary review, which refers to staff employees. But it was the document attached to an e-mail to staff team leaders requesting, I would appreciate if you could please ensure that all your ex Kemcor staff employees receive this information urgently from their team leader, are committed to the Qenos staff consultative group, that this form of communication would be effective and that the information would be passed quickly to employees.

PN1363

All right. Well, can I take you to page 20, and the heading that says Health Insurance?---Yes.

PN1364

And you recall your earlier evidence, that the intention was that the Health Insurance would apply the same way to staff and EA employees; is that right?---I am not sure that was what I said. I think I agreed that the dollar value was the same.

PN1365

Well, can I take you there to the third sentence, about halfway through that paragraph, where it says:

PN1366

The company has agreed (subject to agreement on pay rises in EA) to cease providing private health insurance, instead to increase all ex Kemcor employees salary by the pre tax amount.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1367

So what you were telling the staff was, they were getting a salary increase?---That is correct, yes.

PN1368

And can I take you then to the next heading, which is pay rise, and you will see there those bullet points. And the second bullet point says:

PN1369

The increase in salary also means that employees on retirement, resignation or redundancy will have - - -

PN1370

I am sorry, the first bullet point:

PN1371

The increase in salary means this will flow through to superannuation benefits, resulting in higher retirement and resignation benefits.

PN1372

?---That is correct, and that applies to all employees.

PN1373

That applies to all employees, not staff?---This document is specifically for staff, but that would apply to all employees.

PN1374

Right. And that is put without qualification in respect of superannuation?---That is right.

PN1375

All right. Well, if I can move over the page to document 4, which is at the top of page 22. This is a document which I think is a copy of what we were just looking at?---Yes.

PN1376

The document entitled, Health Insurance Changes and Pay Rises. You will see there that Mr Harvey, who, I think at the time, was the operations manager of Elastomers; was that correct?---That is correct, yes.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1377

Yes. And where you see to there, about who that document has been sent to, you will see where it says, ELA ops BR and ELA ops SBR, does that mean that the document was sent to all persons within operations at Elastomers?---I don't know.

PN1378

You are not able to answer that question, or you don't know the way the e-mail system works?---I don't know how the e-mail system works in terms of that.

PN1379

Right. So you can't say whether or not that was sent to all the operators who were EA employees at Elastomers or not?---That is correct.

PN1380

All right. If I can take you to document 6, which is page 27. Do you recall this document?---Yes.

PN1381

And this was a document, wasn't it, that was mailed out by Mr Fairley, who was the then managing director of the company, and this was mailed out to all the EA employees; do you recall that?---Yes.

PN1382

And this document was designed to present what Mr Fairley describes in the second last paragraph as the key principles of the EA?---I suspect so, Mr Lyons, but I didn't write this document. But if that is what it says, yes.

PN1383

Can I take you then - you weren't involved in the authoring of this document?---No.

PN1384

No. But you are in a position to say that this was the company's expression to the employees about what it wanted in the agreement?---That is my recollection, yes.

PN1385

Can I take you to page 30 then, and you will see there paragraph 8 is entitled Replacement of Private Health Insurance Defined Benefit with Salary?---Mm.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1386

So it is your position, isn't it, that there was an agreement by this point with the unions that the amount wasn't superannuable on a retrospective basis if you were in the defined benefit scheme?---That is right, yes.

PN1387

Given that that is the case, and you have put it as something of a matter of principle for the company, I think, that it wasn't retrospective, are you able to point to anything in this explanatory document which indicates that it was to be quarantined from superannuation in the manner you contend for?---No. But this was a summary document that didn't go into every particular point.

PN1388

No. It simply describes it as an increase in salary?---As part of the move to a fully annualised salary for employees, yes.

PN1389

Well, the heading actually just says a replacement with salary, doesn't it? It doesn't have the qualification?---Well, I am not sure that I would entirely agree with that:

PN1390

Why is it needed? The company is moving away from the provision of defined benefits and towards philosophy of fully annualised salaries for all employees. This will be the basis on which salary packages are rationalised across all of Qenos.

PN1391

And it then says:

PN1392

Private health insurance will no longer be provided as a defined benefit. Employees are to be fairly compensated for the loss of the defined benefit, and the company commits to using its buying power to look for low cost private health insurance cover for its employees with costs deducted from the employees pay.

PN1393

Okay. Well, if I can take you to document 8 then, which again is some e-mails which you are the author of. I think this is at the top of page 31?---Yes.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1394

And these are some responses of yours to some requests for information from some employees in respect to private health insurance?---That is right, yes.

PN1395

Mr Jose Antoville, who I understand to be an EA employee?---That is right, yes.

PN1396

And if I can take you then to page 32, which I think is the essence of your response there, headed, Response Bulletin Board?---Yes.

PN1397

In July of 2000. If I can take you to the third paragraph. Perhaps if you can read the first sentence there for the Commission?---Yes.

PN1398

For full-time employees your annualised salary will increase by $2472 per year ($94.82 per fortnight and $206 per month). Qenos will cease paying AXA directly for your private hospital insurance. We will, however, deduct from your past tax pay for a family member $1234 per year, $47.33 per fortnight, $102.82 per month, and pay AXA on your behalf for the hospital cover.

PN1399

And that was in answer to the question put by the operator, which was on page 31, which was how the annualised salary works in relation to health cover; that was the answer in relation to that question?---I am sorry, Mr Lyons?

PN1400

I am back on page 31?---Yes.

PN1401

At the bottom there you will see Mr Antoville's question originally. So that was your answer to that question?---The whole response was the answer to his series of questions, yes.

PN1402

So the answer is that your annualised salary will be increased by the nominal value that had been agreed in the negotiations, the 2472?---Which was later increased to 2490, yes, that is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1403

But at the time it was 2472?---Yes.

PN1404

All right. And then if I could take you over to page 33, and you have provided some sample calculations there, depending on what pay point the person was at?---Yes.

PN1405

Do you recall preparing those?---I do.

PN1406

And, again, that the type in bold there that says current annualised salary plus health increase?---Yes.

PN1407

So do you agree that the employee reading this response - and I gather this was a generally posted response?---Yes.

PN1408

That is, it wasn't only available to Jose, it was available to anybody who looked at the bulletin board?---That is right.

PN1409

Yes. So the information you have provided the employees with, was that their salary was to be increased by 2472 as a result of the offer?---That is right, their annualised salary, yes.

PN1410

And if I can take you to where you say other points, and the dot point 1, it says:

PN1411

By including 2472 in salary Qenos pays superannuation on 12 per cent of 2472.

PN1412

?---That is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1413

Did you know Mr Antoville was a member of the accumulation fund, or if Mr Antoville is a member of the accumulation fund?---I didn't know, but the answer was the same for whether you are in the accumulation scheme or the defined benefit scheme, in terms of the company was paying a 12 per cent contribution to both the defined benefit scheme and the accumulation scheme.

PN1414

Well, that is not right, is it, Mr Aitken? I mean, the 12 per cent, what Qenos' liabilities depend on what the actuaries tell you are your obligations to the members of the defined benefit scheme. It is not based on 12 per cent, it is based on the formula?---No. The actuary had told us that the funding cost for the defined benefit scheme was 12 per cent, and that is what the company was paying at the time.

PN1415

So the company was actually tipping in 12 per cent?---Yes.

PN1416

Into the defined benefit scheme?---That is right.

PN1417

But there is no obligation to pay that 12 per cent in the event the fund doesn't require the money, is there?---No, that is right.

PN1418

On its face, that is a reference to the accumulation fund, isn't it, the reference to 12 per cent?---No. As I say, at the time the company was paying 12 per cent of employees salaries into the superannuation scheme, that was the real cost.

PN1419

That is a matter between the company and the actuary, isn't it? It is nothing to do with the employees?---In terms of the defined benefit scheme, no. Probably the employees aren't always aware of what the contribution is, but that was what the company was paying at the time.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1420

And so you didn't think to provide an explanation to the employees in response to his question, about how the private health insurance would work for those that were in the defined benefit scheme?---I thought about a lot of those issues, Mr Lyons. The issue is, superannuation is extremely complex, and part of this is trying to keep this at a higher level of helping people to understand what is happening with these benefits. So the statements are of a generic nature. The majority of employees are actually in the accumulation scheme at Qenos, and - - -

PN1421

But there is a significant minority in the defined benefit scheme, isn't there?---Yes. No, that is - there is a significant minority. But in communicating the emphasis was to try and hit the high points, if you like, and not get into interminable detail in a scheme that, to be honest, employees don't understand very well in the terms of defined benefit scheme.

PN1422

So you made the decision not to refer to the defined benefit scheme on that basis, to try and keep it simple?---Yes.

PN1423

All right. If I can take you to document 12, which is on page 41?---Could I just also add though, the points here were applicable to both defined benefit and accumulation employees in terms of their work, additional benefits for both.

PN1424

If I can take you to page 41, which is document 12, which is entitled, Health Insurance Proposal Bulletin?---Yes.

PN1425

Do you recall this document?---I do, although I didn't write this document.

PN1426

Can you inform the Commission who Ms Pine is?---This was written by the company communications person at the time, Barry Oosterhuisen.

PN1427

Communication. So he is a PR type person?---He was a senior communications adviser, I think, or something like that.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1428

Right, okay. But presumably that was prepared on the instructions of someone in HR or ER in relation to what the offer was?---Yes.

PN1429

And this document again was posted for general access by all Altona employees, or just EA?---Yes. Yes, it was.

PN1430

All Altona employees, staff and EA?---Yes.

PN1431

If I can take you to the first bullet point and the first sentence, where it refers again to the company proposal. It says it will become part of salary package?---Yes.

PN1432

And the second bullet point, I am particularly interested in the words that appear in bold type. Perhaps if you can read them for the Commission please, Mr Aitken?---

PN1433

This gross increase in your salary is $2472.

PN1434

So this was the company in August of 2000 telling all employees without qualification that they were receiving a gross increase in salary?---That is right. However, previously referenced to part of your salary package in the previous dot point.

PN1435

Yes. Well, that is a matter for some discussion. If I can take you to the fourth bullet point?---Yes.

PN1436

Where it starts to refer to superannuation. And essentially one of the selling points of this from the company's point of view, wasn't it, was that it had a knock on effect through to annual leave, long service leave and superannuation?---That is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1437

And you were selling it to the employees on that basis?---Yes.

PN1438

That was one of the good bits about the proposal?---Yes, that is right.

PN1439

And it is put there again in that fourth dot, isn't it, without qualification, that the amount is superannuable?---Yes.

PN1440

Yes. And then you give the example of how it would impact someone who is in the accumulation account by the application of the 12 per cent?---Well, I think as I said before, it says the company will pay an additional 12 per cent of this amount into your superannuation. That is both into the defined benefit scheme to fund this increase in benefit, and into the accumulation scheme.

PN1441

But, in fact, on your evidence, the company's intention was to pay more than 12 per cent for the staff employees, wasn't it, because it was going to be retrospective for them?---That is how in the end it turned out for the staff, yes.

PN1442

So it is your contention that the reference to 12 per cent applies to both the defined benefit and the accumulation account members?---Yes.

PN1443

And do you accept, however, that reading this document is impossible for you to know, as defined benefit scheme member, about how it will actually affect you?---I don't - so I would say there isn't enough specifics here for you to understand exactly how it applies, yes.

PN1444

Well, the company puts it without qualification. It says you get a gross increase in salary and it is superannuable. Isn't the logical conclusion of that for an employee, I get a pay increase and it is included in my superannuation calculations?---It is. But I would go further and say that as it has applied previously when you have had another component added into your annualised salary.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1445

All right. If I can take you through to paragraph 49 - page 49, I am sorry, document 15. And, again, this is an example from September of you answering another question from an employee. And essentially what appears below there, where you have signed, hope this helps, John, is the same text as you had previously sent to Mr Antoville?---Yes. Well, I guess my only comment would be, it was laid out better on the screen than it appears on here, but yes, that is correct.

PN1446

Yes. The numbers in the table don't line up any more because of the pagination?---No.

PN1447

And so am I to take it that your stock standard response to an employee when you were asked a question about how does this affect my salary and super and everything else, was to provide the text that appears in this e-mail, because you seem to have sent it to a number of different employees?---Yes, based on the questions that were asked, yes.

PN1448

And do you recall ever giving an answer which explained to an employee the way in which the company proposed to apply the buy out to those in defined benefit superannuation? I am not aware of any?---Apart from working with the union lead team, I don't remember specifically on the bulletin boards having been asked that question, and I don't remember, to be honest, in my walkings around the place, being asked specifically that question either.

PN1449

Okay. If I can take you to document 17, which is page 56, and to question 5. And, again, this is a series of answers you have given to questions raised on the bulletin board, I think; is that right?---Mm.

PN1450

And this is from late September of 2000?---Mm.

PN1451

In answer to question 5, which was:

**** DAVID JOHN AITKEN XXN MR LYONS

PN1452

What amount will I get if I take the allowance?

PN1453

Are you able to read the answer there that you gave to the Commission?---In terms of - I am not sure what you mean by giving to the Commission.

PN1454

Are you able to read the answer that you gave to that question for the Commission please?---Yes, I can. What amount - the question is, what amount will I get if I take the allowance? And the answer is:

PN1455

Full-time employees will receive 2472 added to their annual salary. This will increase with annual salary increases. The 2472 is not an allowance, it is added to salary and therefore is included in superannuation calculations and in payments of annual leave and long service leave on termination.

PN1456

And, again, you didn't see the need to add the qualification about its application to superannuation?---Yes. Look, I didn't.

PN1457

All right. If I can take you then to - - -

PN1458

THE COMMISSIONER: Sorry, can I just interrupt. Do you know whether that person was a member of the defined benefit fund? Is that clear from that question?---No. No idea at all. I think these were a bunch of general questions. My recollection is that if you look at actually question 6, that I was trying to distinguish question 5 from question 6, where people had previously taken the $1782 cash allowance in lieu of the health benefit, and my wording in answer to 5 wasn't, you know, reading it two years later, wasn't as clear as I would have liked it to have been, but I was getting question 5 and question 6 a little confused.

PN1459

MR LYONS: And just so I understand it, Mr Aitken. This document, health proposal queries, the bulletin board worked almost like with discussion groups on specific topics, that you can click on.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1460

THE COMMISSIONER: I understand.

PN1461

MR LYONS: Go to information about health or non rostered work, or whatever the particular issue you were interested in was?---Look, I think you could do some of that, Mr Lyons, but certainly it was an interactive where you could find information and ask queries.

PN1462

And if I can take you then to document 18, which is page 57?---Yes.

PN1463

And do you recall this document being posted on the bulletin board?---I don't, but I accept it has been put on the bulletin board.

PN1464

And this was the document that was posted immediately before the mass meeting on 4 October, where there was some in principle, or the company says there was some in principle acceptance of EA3; do you recall that?---Vaguely, yes.

PN1465

And, again, this has been prepared by Mr Oosterhuisen, that you referred to?---Yes.

PN1466

Was in communications on the instructions of someone in ER and HR presumably?---Yes, presumably, yes.

PN1467

If I take you to page 59 of that document then, and, again, the first sentence there says:

PN1468

Under the company proposal, health insurance will no longer be a defined benefit but will become part of salary. The gross increase is 2472 per employee.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1469

So in encouraging people to vote for the EA, which was the intention this document stated in page 57, the company is simply describing this as being a pay increase, isn't it, Mr Aitken?---Well, it is describing it as a gross increase in salary of 2472 per employee. There had been much - there had been a lot of other information communicated to employees on the bulletin board, there was also the enterprise agreement that had some description of how it was to apply in it as well.

PN1470

Well, I think we have been through most of that material that we are aware of, Mr Aitken, and none of it actually specifically supports your view that the increase was quarantined from certain aspects of superannuation, does it?---My response would be that for it to be in superannuation and not quarantined, it needed to be in base salary, that is the way the defined benefit superannuation scheme works. Everything ratchets off base salary. And there is nothing that I can remember going out saying it was in base salary.

PN1471

Except, well, none of what you have published to the employees on the bulletin board or in the EA bulletins actually refers to the phrase, base salary, at all, does it? It simply talks about a pay increase?---And it talks about an increase in annualised salary, which is the salary with all the components, which defined benefit members have had the various other components recognised in a prospective manner.

PN1472

Well, with respect, it sometimes says base salary - it sometimes says annualised salary, it sometimes says gross increase, it sometimes says increase - - -

PN1473

THE COMMISSIONER: Increase in gross salary.

PN1474

MR LYONS: Yes.

PN1475

THE COMMISSIONER: And sometimes pay.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1476

MR LYONS: Sometimes pay. So is it your submission that when you were - or is it your evidence that you were - the company was intending to use all those as meaning the same thing, or do they mean different things?---They can mean different things, they can be a generic term. I guess - sorry, I shouldn't say I guess. The company had agreed with the union lead team how this was to apply, and how the enterprise agreement was reflecting it, and therefore a lot of different terms were used. But the company had agreed with the people negotiating the agreement how this was to apply.

PN1477

I understand that to be your evidence. But the NUW, in examining the material that was posted to employees and on the Internet, or the Intranet, has been unable to find any example where that view was actually communicated to the employees. Are you aware of any?---No, I am not.

PN1478

All right. If I can take you to what is marked as document 20, which is marked as 62. I think in my handwriting, sir, I have marked two page 62. It is the one that says dot 20, P62. It is headed Private Health Insurance?---Yes.

PN1479

And this is a document that has been published by a Mr Nutter on behalf of the SBU. Can you inform the Commission who Mr Nutter is, or was at the time?---Mr Nutter was a plastics AWU representative as part of the broader union negotiating - not union negotiating team, union group I guess.

PN1480

And can I take you to the third - and do you recall this document being issued on behalf of the SBU?---Yes, I do.

PN1481

Can I take you to the third paragraph, where it says:

PN1482

Qenos will increase your gross salary by 2490.

PN1483

?---Yes.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1484

And are you aware of any other published statements by the SBU indicating their view of what the private health insurance buy out represented?---No, I am not.

PN1485

And so the only published document we have from the SBU simply says it is an increase in gross salary?---Yes.

PN1486

Can I take you to document 21, which is page 63, and this is an extract of a letter sent to an individual employee. Mr Aitken, I think a letter of this form was sent to each employee at the time the actual buy out occurred in early 2001; do you recall that?---Yes.

PN1487

And a letter in the same form was sent to all EA employees; is that right?---That is right.

PN1488

Can I take you to the third paragraph?---Yes.

PN1489

And the last sentence there says:

PN1490

This payment will also have a flow on to your superannuation.

PN1491

?---And that is correct, it did.

PN1492

Yes. And it also says:

PN1493

You receive an extra payment in your pay.

PN1494

Do you see that?---Yes, that is right.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1495

And, again, that is put without qualification; do you agree with that?---Yes.

PN1496

And given your earlier view, that you were trying to keep it as simple as possible in answering people's queries, at the time of the introduction of the private health buy out, why was the opportunity not taken then to explain to people the different ways the private health buy out would be handled for superannuation?---I don't know.

PN1497

Was there any consideration given to explain to employees the way in which you intended to deal with the superannuation?---I don't know.

PN1498

All right. If I can take you to document 22, which is entitled, Introducing the new Qenos Employee Health Plan?---Yes.

PN1499

And I understand that what I have marked as doc 22, was mailed out as an attachment to the letter that was doc 21 at the same time to each of the employees; do you recall that?---That is the Trish Sykes letter are you talking about?

PN1500

No. Document 21, which was the letter from Mr Lindsay, attached to that was document 22, which you are the author of, by the thing on the front page. It says they were introducing the new Qenos employee health plan?---Yes, I think you are right, yes.

PN1501

So if I can take you - so this was published in early 2001, at the time the actual mechanical buy out occurred, and you actually implemented the buy out; is that right?---That is right.

PN1502

Yes. Now, can I take you to paragraph 67 then?---Page 67 or paragraph?

**** DAVID JOHN AITKEN XXN MR LYONS

PN1503

Page 67, sorry?---Yes.

PN1504

And I take you to the fourth paragraph there, and the second sentence, which says:

PN1505

Instead you will be able to purchase hospital cover with no excess from the additional 2490 per annum Qenos will be adding to your current annual salary.

PN1506

?---Mm.

PN1507

So, again, at the time of the buy out you are still telling employees you were increasing their salary?---Current annual salary, yes.

PN1508

So you are still referring to it essentially as to being a pay increase?---Yes.

PN1509

Just for the record, Mr Aitken, the agreement you say you reached with the union lead team, that superannuation would be handled in the manner that you contend for, or Qenos contends for, there is no written record of that arrangement?---I don't have a written record of it, except to say that it was not included in base pay, which it would have needed to have been included in for it to have any retrospective impact.

PN1510

And are you aware of any occasion where the material, very substantial material that was published to employees explaining the agreement, explained the way in which you intended to deal with it for a defined benefit superannuation?---No, I don't, I am not.

PN1511

If the Commission pleases.

**** DAVID JOHN AITKEN XXN MR LYONS

PN1512

THE COMMISSIONER: Thank you. Mr Dalton?

PN1513

MR DALTON: No re-examination, Commissioner.

PN1514

THE COMMISSIONER: Thank you for your evidence, Mr Aitken. You are released from your oath, and you are free to come and go as you please.

<THE WITNESS WITHDREW [12.28pm]

PN1515

MR DALTON: Commissioner, I call Peter Wayne Ritchie.

<PETER WAYNE RITCHIE, AFFIRMED [12.28pm]

<EXAMINATION-IN-CHIEF BY MR DALTON

PN1516

MR DALTON: Mr Ritchie, could you state for the transcript your full name and address?---My full name is Peter Wayne Ritchie, my address is 27 Greenglade Court, Blackburn North.

PN1517

And you are employed by Qenos as the Operations Manager for Olefins?---That is correct.

PN1518

Yes. And you have been employed by Qenos for some 24 years?---That is correct.

PN1519

And the position you currently hold, you have held that for about two years?---Yes. That started in April 2001.

PN1520

Okay. And you have prepared a statement for this proceeding?---That is correct.

PN1521

Do you have that in front of you?---I do.

PN1522

Are there any changes you wish to make to that statement?---Yes. At item 52.

PN1523

THE COMMISSIONER: Do you have a spare copy of this? I am sorry, I have just misplaced mine.

PN1524

MR DALTON: Yes, Mr Ritchie, changes to the statement?---Yes. At item 52, paragraph 52, I would like that to read, at some point after the group editing of the draft enterprise agreement.

PN1525

You will need to slow down so people can write it in?---I am a bit nervous.

**** PETER WAYNE RITCHIE XN MR DALTON

PN1526

THE COMMISSIONER: At some point after?---The end of the group editing of the draft enterprise agreement the NUW presented a new claim on first aid allowances. This was processed and an agreement reached. This issue was implemented by letter from Qenos to the NUW after certification of the agreement.

PN1527

Is that all?---That is all.

PN1528

MR DALTON: And what do you want to do with the rest of paragraph 52?---If we strike that, that would be fine, if that replaces 52.

PN1529

So that replaces paragraph - - -

PN1530

THE COMMISSIONER: So that replaces the two sentences that appeared in it originally, is that right?---That is correct.

PN1531

MR DALTON: Well, with that change, is the statement true and correct to the best of your knowledge?---To the best of my knowledge, yes.

PN1532

I tender that, Commissioner.

EXHIBIT #QR1 STATEMENT OF PETER RITCHIE

PN1533

MR DALTON: Could I take you to paragraph 29?---Yes.

PN1534

You refer to a compromise position being put by Qenos to some senior officials of the NUW. Were you at that meeting?---No, I was not at that meeting.

**** PETER WAYNE RITCHIE XN MR DALTON

PN1535

All right. Did you speak with Mr Clancy following that meeting?---That is correct.

PN1536

Yes. And at that point had the compromised position been accepted by the NUW?---No. It was a proposal.

PN1537

Okay. This position was incorporated into the offer to settle document dated 11 March, which is attachment PWR2?---That is correct.

PN1538

At that point, 11 March, was there an agreement between Qenos and the NUW on that issue?---No. The proposal was a position to be put to the NUW members.

PN1539

All right. So what was the position on the NUW? When you say at paragraph 24, while the offer to settle document accurately reflected the proposed position between the parties, what do you mean by that?---Basically we were trying to get to a position that the delegates were prepared to put to their members. Obviously they weren't going to put something that they were not happy with. And so we had worked together to eliminate a number of - or to work on a number of proposals, and that was the one that we got the most amount of feedback from the delegates that would be acceptable, I guess. It was always on the benefit that we were working together to get something to present to their members, which they would then come back and tell us whether that was acceptable or not.

PN1540

And what was happening with the 170LW proceedings on foot at that time?---Basically, in my understanding, it was that at the time of the offer to payment that Jonathan Clancy made, the NUW withdrew or deferred - I am sorry, Mr Lyons, if I get the wrong term - but the hearing that was to take place was cancelled at that point.

PN1541

Okay. Then you go on to talk about how that particular proposed position between the parties was incorporated into a proposed Olefins agreement?---That is correct.

**** PETER WAYNE RITCHIE XN MR DALTON

PN1542

And you say that that was finalised on 19 March, you say that at paragraph 43?---That is correct, that was a draft proposal.

PN1543

Okay. Now, that draft Olefins agreement, were there any changes made to that agreement after it was put to employees, or was that the document that was ultimately certified?---That was the document that was ultimately certified.

PN1544

No more questions.

PN1545

THE COMMISSIONER: Thank you. Mr Lyons?

<CROSS-EXAMINATION BY MR LYONS [12.36pm]

PN1546

MR LYONS: Mr Ritchie, the course of the negotiations in the early part of this year, there was both the draft enterprise agreement and the draft offer to settle were works in progress?---Correct.

PN1547

And each time the parties met together there would be small, sometimes large changes made to those documents?---Correct.

PN1548

And do you agree that what occurred on the morning of 20 March was that the NUW negotiators returned from the mass meeting and put to the company that the members are happy to accept the agreement provided we can maintain our claim that the health insurance is fully superannuable, in this Commission?---My recollection is it was provided that you could pursue your claim, that is correct.

PN1549

So essentially the position was, we had a deal provided that we could maintain our claim about the effect of the health buy out on superannuation?---I guess what we took it to be was that, yes, basically you would accept the document as we had presented it, and you would be taking a section 170 action around your claim, that is correct.

**** PETER WAYNE RITCHIE XXN MR LYONS

PN1550

And the company actually broke from the negotiations to consider that position, didn't it?---Yes, that was something that we hadn't considered, so we needed to consider that.

PN1551

Because the company's original position was that part of doing the new deal had to be that we dropped those proceedings?---That was the original understanding.

PN1552

Yes. That had been one of your negotiating positions?---Correct.

PN1553

And, in fact, the negotiating position you stuck to right to the morning of the 20th?---Correct.

PN1554

And do you recall that when, after the company's caucus meeting, to which I have just referred, when you returned to the negotiations Mr Higgins acted as the company's spokesperson?---That is probable, yes.

PN1555

And said words to the effect, that the company would agree to the NUWs proposal to continue to run its claim?---We agreed that you would have the ability to do that, that is correct.

PN1556

But that he also said that there wouldn't be any money to pay for it in the event that we did win?---He was pretty well upset that that was presented at the late stage of the negotiations, and would have liked to have had you propose that a bit earlier, so he was probably a bit upset, yes.

PN1557

Well, in fact, that was the position the NUW - the NUW had maintained the claim about superannuation right the way through - - -

**** PETER WAYNE RITCHIE XXN MR LYONS

PN1558

THE COMMISSIONER: Actually, just before you go to that, I would appreciate it, however - I mean, I understand the commentary about the situation in the negotiations. But was that said, what Mr Lyons put to you, that certain things were said, namely, that you could pursue the claim, but there wasn't any money to pay for it if you were successful?---Yes, that was said.

PN1559

Or there wasn't any money to pay for it, or something like that?---That was a throwaway line, I believe.

PN1560

That was said?---Mm.

PN1561

MR LYONS: And - - -?---I am sorry, you asked a question, Mr Lyons?

PN1562

THE COMMISSIONER: Well, the next question hadn't been completed. I have interrupted that, Mr Lyons. Unfortunately you have to put it again.

PN1563

MR LYONS: And did any representative of Qenos, as part of agreeing to the NUWs proposed settlement, which is, we take the document while we run the case, did any representative of Qenos at any point indicate that it believed that the making of a new agreement was fatal to the NUWs claim?---No, I don't believe that we mentioned that. I don't believe it was our need to mention that.

PN1564

So, in fact, all that was said to the NUW was, we agree to you continuing your Commission proceedings, we withdraw our requirement that you withdraw those proceedings, and we will do the deal?---What we - assuming that we got an agreed document, we didn't see that we had any ability to stop you running a section 170. That was your right, you could only give that up by your choice. We couldn't make you give that up.

**** PETER WAYNE RITCHIE XXN MR LYONS

PN1565

Well, you had taken the position that you wanted us to give that up as part of the negotiations?---Correct. But when you decided not to give that up, we had no power to make you do that.

PN1566

Well, in fact, what the company did was, wasn't it, was consent to this process?---We agreed that we would make the agreement and that you would run the case.

PN1567

Well, the NUW put it as a condition of its agreement based on the instructions of its members, a condition of making the agreement, that these proceedings would remain on foot. Do you concede that?

PN1568

THE COMMISSIONER: The witness has answered for the company, hasn't he? He said we agree to the terms of the document and that you would run the case. Now, he is speaking for the company there. The question you were about to put to him was about the NUWs position, wasn't it?

PN1569

MR LYONS: I have no further questions, Commissioner.

PN1570

MR DALTON: No re-examination.

PN1571

THE COMMISSIONER: Thank you for your evidence, Mr Ritchie. You are released from your oath. You are free to come and go as you please.

<THE WITNESS WITHDREW [12.41pm]

PN1572

THE COMMISSIONER: Yes, Mr Dalton?

PN1573

MR DALTON: Commissioner, there are two more witnesses. One of them is Mr Chris Harvey, he is employed by another company, and we have made arrangements to see him during the luncheon adjournment. He will give his evidence straight after lunch. Mr Clancy is not available to give evidence today, however, in some discussions with Mr Lyons, I think we have agreed with some minor deletions from his statement, that his statement can go in without the need for cross-examination. So perhaps if I take you through those, and we might adjourn until Mr Harvey is - - -

PN1574

THE COMMISSIONER: Well, you might actually produce and file an amended witness statement. I would prefer that.

PN1575

MR DALTON: Yes.

PN1576

THE COMMISSIONER: There is no hurry for that. So that means that Mr Harvey is due to arrive when?

PN1577

MR DALTON: I have arranged to meet him at 1 o'clock.

PN1578

THE COMMISSIONER: All right. So it will be after the - - -

PN1579

MR DALTON: So he will be in a position to give his evidence, I would have thought, any time after 1.30 should be okay.

PN1580

THE COMMISSIONER: All right. Well, let's make it 2.15. Good, thank you.

LUNCHEON ADJOURNMENT [12.43pm]

RESUMED [2.18pm]

PN1581

THE COMMISSIONER: Very well, Mr Dalton?

PN1582

MR DALTON: I call Christopher John Harvey.

<CHRISTOPHER JOHN HARVEY, AFFIRMED [2.19pm]

<EXAMINATION-IN-CHIEF BY MR DALTON

PN1583

MR DALTON: Mr Harvey, could you state for the transcript your full name and address please?---Christopher John Harvey, 673 Hawthorn Road, East Brighton.

PN1584

And you were employed by Qenos as the operations manager for the Elastomers site?---Yes, that was a previous role, yes.

PN1585

Yes. And when did you finish in that role?---I actually finished at Qenos in July of this year, but finished in the Elastomers role somewhere around 2001. My role got expanded to include Elastomers and plastics.

PN1586

Okay. And you have prepared a statement for the purposes of this proceeding?---I have.

PN1587

Do you have a copy of that in front of you?---I do.

PN1588

Are the contents of that true and correct to the best of your knowledge?---They are.

PN1589

I tender that.

EXHIBIT #QH1 STATEMENT OF CHRISTOPHER HARVEY

PN1590

MR DALTON: Mr Harvey, could I take you to paragraph 37. This paragraph follows a reference by you to the ULT requesting that the health component be paid out and included in the base salary, and in 37 you say:

**** CHRISTOPHER JOHN HARVEY XN MR DALTON

PN1591

I understand that Mr Aitken explained the defined benefit superannuation formula to the ULT, and illustrated how an increase in base salary would have a multiplier effect on an employee's benefit, and then how he explained notional years of service, ensuring that the health insurance buy out would operate prospectively rather than retrospectively.

PN1592

How did you know that that happened?---I recall during the period which the EBA was negotiated that the need for explanation to the ULT members came up during a meeting, and that at the time I was working on the negotiating team with a Mr Roger Budd, who is no longer a Qenos employee, and he agreed to make Mr Aitken available to come and talk to the ULT members, and I am aware that that meeting, in fact, was set up and took place, and subsequent to the meeting I was present in an AACT meeting where Mr Aitken reported back to the AACT on what had occurred during that meeting.

PN1593

And what did he say that occurred?---My understanding is that - - -

PN1594

Well, I am just asking you what - - -?---Mr Aitken said that he explained that he would need to make an adjustment in the defined benefit scheme, and that it was an actuarial adjustment of years of service.

PN1595

Well, did you participate in further ULT meetings where this issue was discussed or dealt with?---I participated in negotiating meetings with the ULT throughout the period of the negotiation of the EBA, yes.

PN1596

And what was the ULTs position after Mr Aitken had reported back to AACT?---Basically following that period the matter was - there was no further discussion on that matter, particularly in reference to the defined benefit scheme. It wasn't until the very end of the negotiating period that further discussion occurred around the health buy out, which was in terms of the magnitude of the buy out amount.

**** CHRISTOPHER JOHN HARVEY XN MR DALTON

PN1597

Yes. No more questions, Commissioner.

PN1598

THE COMMISSIONER: Thank you. Yes, Mr Lyons?

<CROSS-EXAMINATION BY MR LYONS [2.24pm]

PN1599

MR LYONS: Mr Harvey, I think your evidence is that yourself, Mr Budd and Mr Gilbert were the company negotiating team?---That is correct.

PN1600

And were you from the company's side responsible for the drafting of EA3 as well, actually for writing up the agreement?---No. We actually had some people working as a secretariat who were responsible for actually drafting the document.

PN1601

Did the negotiating group have oversight of what they produced?---Certainly.

PN1602

So it was your responsibility to be part of the group that actually reached the agreement with the unions?---Yes.

PN1603

And what was the process then to convert that into a drafted agreement?---As we were progressing through negotiations, where we got to a point of reaching agreement, we were, if you like, in the process of drafting the agreement as we went along.

PN1604

Right. So you gave instructions to somebody, did you, to draft the agreement?---Yes.

PN1605

But in the end the group that you were on had the final say on whether or not the draft that was produced reflected, in the company's view, what had been agreed?---Well, in fact, there was a meeting held between the company representatives and the ULT representatives which read out word for word the document as a final check. So, in fact, many people ultimately had the say that, yes, that represented the agreement between the parties.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1606

And you were involved in that line by line check?---I was.

PN1607

Mr Harvey, if you think back to the terms of - and I am happy to provide you with a copy of it, the terms of EA3, are you able to point the Commission to where your - Qenos' contention about the way in which the health buy out is to apply to defined benefit super actually appears in the document?

PN1608

THE COMMISSIONER: It is not a trick question.

PN1609

MR LYONS: I am unable to locate it. I appreciate it I have handed you a 140 page document, Mr Harvey.

PN1610

THE COMMISSIONER: There are no lifelines and 50/50?---Thank you for your reassurance, Commissioner.

PN1611

I think the question is, do you have any knowledge of where it appears, if it does appear, and if so, where is that?---Commissioner, I am aware that there is a section here on health care buy out. What it states about defined benefit specifically, I can't tell you without actually going - referring to the section myself.

PN1612

Well, would your evidence and response to that question have to be that you are unable to state precisely where in the document the reference appears?---As of this time, yes, I would.

PN1613

But if you look through the document, there is a part of it that you are familiar with; is that right, that deals with this subject?---I am familiar with the document, yes.

PN1614

Right. Is there a part of it that deals with the subject of the buy out?---My recollection is that there was a section here on health care buy out.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1615

And is that the best recollection you have of the contents of the document on the subject of the way in which that is to occur?---Without further reference to the document at this time, yes, Commissioner.

PN1616

MR LYONS: Mr Harvey, can I take you to page 138 of the document please. Do you have that there?---I do.

PN1617

You will see there at what is marked as paragraph 11, there is a provision entitled Replacement of Private Health Insurance Defined Benefit with Salary. Is that the provision that you were referring to when you recalled that there was a provision that dealt with the subject of private health insurance?---My recollection was there are other paragraphs within the body of the document as well as that. I think what we are referring to here is a summary section, is it not, you know, of changes. I do recall that paragraph being there, Mr Lyons, if that is what your question is.

PN1618

And you agree that that provision makes no reference to the impact of the salary change to superannuation?---Yes, I agree with that.

PN1619

And simply, in fact, says that there will be a salary increase?---There will be a pay of $2472 per annum, yes.

PN1620

And that that was what was before the employees when they voted on the agreement?---In fact, my belief is that the dollar amount was changed to $2490 per annum.

PN1621

I think that is right. But the text, aside from the dollar value figure which was increased at the last minute because of a taxation issue?---Yes.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1622

I think, from memory, that the remainder of that is the text that was actually voted on by the employees. If I can take you to paragraph 37 of your statement, which was the point that my friend took you to. It is your evidence that you weren't actually present at the meeting with the ULT where there was allegedly this discussion about the way in which the health would apply to defined benefit super?---Yes, your interpretation is correct.

PN1623

And there was actually - you don't recall any other discussions that specifically were about the impact of that on defined benefit super with the negotiating group from the unions?---There was certainly lots of discussion about health care buy out. I don't recall extensive discussion around the defined benefit scheme.

PN1624

So you were talking about the health, but you weren't talking about how it related to defined benefit super?---There was, as I mentioned earlier in my evidence, there was some discussion prior to that meeting with Mr Aitken, which, in fact, facilitated the meeting taking place.

PN1625

Was that discussions with Mr Aitken and the unions, or with your company representatives and Mr Aitken?---That was, as I mentioned before, the meeting with Mr Aitken took place after discussions between the company negotiating team and the ULT representatives.

PN1626

THE COMMISSIONER: Who was at that meeting?---From the company's perspective or the ULT perspective, Commissioner?

PN1627

No. You said to me a minute ago that your recollection is that there was a meeting that took place after Mr Aitken had had discussions with the ULT?---Yes. That was - - -

PN1628

My question refers to the meeting that took place after that, the one that you are referring to afterwards?---Right.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1629

Who was at that meeting?---The AACT was, if you like, the company's strategic negotiating team, so it included operations managers, the operations general manager, the HR manager, Mr Aitken, the IR manager. They are the - I couldn't recall whether each of those individuals - - -

PN1630

All management employees?---Yes, correct.

PN1631

MR LYONS: It was the company's strategy committee, the company caucus, if you like?---Correct.

PN1632

I recall, Mr Harvey, at the time you prepared this statement you were still an employee of Qenos at the time?---That is correct.

PN1633

It has been Mr Aitken's evidence that essentially after the meeting that he had with the ULT, that the unions dropped any claim about retrospective application of superannuation. In the course of you preparing this statement were you able to find, in either your own records or the company's, any written document that is produced contemporaneously which supports the view that that was what the agreed position was?---I personally didn't go looking for such a document.

PN1634

So the statement has been prepared entirely from your recollection of events without recourse to notes of meetings or things of that nature?---I looked through my notes, but apart from - which I wasn't responsible for taking notes in the meetings, so I only had sparse notes personally, but yes, predominantly it was from my own memory of the events.

PN1635

Did bodies like the AACT and the company strategy meetings, and that nature, produce written minutes?---I don't recall formal written minutes.

PN1636

But you are not in a position to say whether such records exist or not, because you didn't look?---I am aware that some of the negotiating meetings there was - I know we had a secretariat person in there who was taking some notes. When notes were taken and what they were taken about, I couldn't respond to today.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1637

All right. If I can take you to paragraph 18 of your statement, where you say:

PN1638

Employees were notified of the company's proposed health insurance buy out by information bulletins distributed to employees and placed on electronic noticeboards. Employees were encouraged to speak to their team leaders or use the Intranet to ask any questions they had about the operation of the proposal.

PN1639

In fact, because the negotiations took so long and there was actually quite a lot of material produced, wasn't there, Mr Harvey, there was a number of updates? I think you had got to about update 21, there was a bulletin board with ongoing questions?---Yes, there was.

PN1640

There was a fair number of trees killed in service of EA3?---Regrettably there was.

PN1641

Are you aware of any occasion where the company published material which specifically explained the way the company now contends the private health buy out was to affect defined benefit super, that is, explain that it wasn't to be retrospective, in summary?---That is a difficult question for me to answer off the top of my head. I don't - I can't recall off the top of my head the contents of each of those particular documents.

PN1642

In the course of preparing your statements did you undertake a review of what actually was contained in the company information bulletins and electronic noticeboards?---Again, where I had reference to them from my own notes, yes. I wouldn't swear that I had every single document that was published with respect to the EBA.

PN1643

Well, the NUW has reviewed that material, Mr Harvey, and discovered no occasion where the version of the way this is to apply that is now contended for actually appears in explanatory documents to employees. Are you in a position to contradict that?---No, I am not today.

**** CHRISTOPHER JOHN HARVEY XXN MR LYONS

PN1644

If I could take you to paragraph 23 of your statement, and you will see the heading there, No Retrospective Operation of Buy Out. You then go on from paragraphs 23 through 29, to discuss concept of fully annualised salary; is that correct?---Yes.

PN1645

It is fair to say, isn't it, that none of the operator employees engaged under the EA3 were actually employed under fully annualised salary, were they?---The EA3 agreement provided a pathway to move to fully annualised salary is correct, that at the start of the agreement no one was - none of the operating work force were working under fully annualised salary.

PN1646

In fact, the only people that have ever been - EA employees that have been under the fully annualised salary, even to this day, are a small group of stores employees, that is right, isn't it?---As of when I left the business, that would be my understanding.

PN1647

And so, for example, relevantly, the Olefins operators were not on fully annualised salary?---Correct.

PN1648

No further questions, Commissioner.

PN1649

THE COMMISSIONER: Thank you. Any re-examination?

PN1650

MR DALTON: No, Commissioner.

PN1651

THE COMMISSIONER: Good. Thank you for your evidence, Mr Harvey. You are released from your oath. You are free to come and go as you please.

<THE WITNESS WITHDREW [2.38pm]

PN1652

MR DALTON: Commissioner, I mentioned to you before lunch that, in discussions with Mr Lyons, I think we had agreed on some deletions to Mr Clancy's statement, that means that his statement can be tendered without the need for Mr Clancy to be here. Mr Clancy was unable to attend today. And so if I could hand you a copy of his statement with the marked up deletions.

PN1653

THE COMMISSIONER: Yes.

EXHIBIT #QC1 STATEMENT OF JONATHAN CLANCY

PN1654

MR DALTON: And that is the evidence of the company, Commissioner.

PN1655

THE COMMISSIONER: Thank you very much, Mr Dalton. Are the parties are going to make some submissions in writing. I think it is probably the most convenient course for me.

PN1656

MR LYONS: Sorry, I didn't quite hear that, Commissioner.

PN1657

THE COMMISSIONER: Did you have something to say? I am sorry, did I interrupt you?

PN1658

MR DALTON: I was going to propose, given the matter finished slightly quicker than I proposed, that the parties file a written submission dealing with the material they wish to deal with, and perhaps in the event there is anything arising, that a very short period after that, to reply to anything in the other side's material, and then have the Commission issue a decision.

PN1659

THE COMMISSIONER: All right. Well, you might just let me know what your timetable will be. Perhaps you could agree it amongst yourselves.

PN1660

MR DALTON: Perhaps if we could just have a moment.

PN1661

THE COMMISSIONER: That is all right, you can just notify my office by e-mail.

PN1662

MR LYONS: If the Commission pleases.

PN1663

THE COMMISSIONER: Very well, thank you. I will reserve my decision, thank you.

ADJOURNED INDEFINITELY [2.40pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

DAVID JOHN AITKEN, ON FORMER OATH PN1319
CROSS-EXAMINATION BY MR LYONS PN1319
WITNESS WITHDREW PN1515
PETER WAYNE RITCHIE, AFFIRMED PN1516
EXAMINATION-IN-CHIEF BY MR DALTON PN1516
EXHIBIT #QR1 STATEMENT OF PETER RITCHIE PN1533
CROSS-EXAMINATION BY MR LYONS PN1546
WITNESS WITHDREW PN1572
CHRISTOPHER JOHN HARVEY, AFFIRMED PN1583
EXAMINATION-IN-CHIEF BY MR DALTON PN1583
EXHIBIT #QH1 STATEMENT OF CHRISTOPHER HARVEY PN1590
CROSS-EXAMINATION BY MR LYONS PN1599
WITNESS WITHDREW PN1652
EXHIBIT #QC1 STATEMENT OF JONATHAN CLANCY PN1654