BP2002/4617, Transcript of Proceedings [2003] AIRCTrans 825 (12 March 2003)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS


O/N VT1775

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT LACY

BP2002/4617

NOTICE OF INITIATION OF
BARGAINING PERIOD

Application under section 170MI of the Act
by the Australian Workers Union for initiation
of bargaining period re BP Refinery (Kwinana)
Pty Ltd, Kwinana

MELBOURNE

8.03 AM, FRIDAY, 21 FEBRUARY 2003

PN1

MR W. ANDERSON: I appear on behalf of BP Australia Limited.

PN2

MR S. WOOD: I appear on behalf of the Australian Workers Union, together with MR R. TAYLOR.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. I have listed this matter for mention this morning. I thought it might be helpful if you could perhaps outline to me what the situation is at the present on the record, and then we will perhaps go into conference and deal with it.

PN4

MR ANDERSON: I would like to thank you, Senior Deputy President, for putting this on at such short notice. The parties are actually remarkably close to an agreement, I believe, but we do have a complication in terms of protected action being in place at the present, and that has got the capacity to cause serious disruption in Western Australia, and not just in terms of our refinery, but also to the economy in Western Australia.

PN5

I thought it might be useful if I could give a very brief background to where this has come from. I will not go back too far, but I think it is important to understand the context. We had a document which was actually agreed by the negotiating committee in principle put on the table on 27 October last year. That document was subsequently equipped to employees on 13 November, and it was rejected.

PN6

Now, since that time there has been a significant amount of discussion, but we haven't managed to conclude an agreement. We extended the initial proposal for a further, approximately three weeks, to 14 December, on the basis that a management of change process would continue. That was something which was a relic from the previous enterprise bargaining agreement which expired, I believe, in June or thereabouts of 2002, making very little progress and implementing what is a very complex change process at the refinery.

PN7

There has been very little attendance at management of change meetings, very little training undertaken. The company's concern is to get the agreement negotiated and to get the change under way. It is critical really for the future of the refinery, it is critical for obtaining future capital funding for the refinery. So on 11 December last year the union put an offer to us which was considered by the company and rejected. Subsequent to that, on 18 December, the Commission, in the form of Senior Deputy President Polites, met with the parties to see if, rather like this forum, we could break some of the impasse and move towards an agreement.

PN8

Unfortunately we couldn't get an agreement at that time, and protected action was put in place. On 14 January the AWU agreed to lift the bans and meet with BP on 23 January at Kwinana. It was agreed to use the document of 23 October, the original document, as the basis of discussions, with an acknowledgment that both parties wanted some amendments to that document. Mr Wood met with the company at Kwinana on 22 and 23 January, and BP provided the AWU with a counter offer as a result of those discussions.

PN9

The company's proposal was not accepted, and, again, on 30 January, protected action was again invoked. That was, again, lifted, like the previous action, and I have to say the parties were endeavouring to work hard to get an agreement. No damage had been done with the protected action. And discussions did take place between myself and Mr Wood to try and get something which would be agreeable between the parties.

PN10

As a result of our discussions - I think they were on 12 February, or during January - the union put a proposal to us which had really been the subject of discussions between Mr Wood and myself, and where the company believed it could reach agreement. The union subsequently did respond, and basically the union did put to us their proposal. The company responded, unfortunately, it couldn't accept the proposal because the union claim had increased somewhat during that period.

PN11

So subsequently, in rejecting that claim, the union has put on bans again which commenced yesterday, I believe. What we are hoping to do today is to finalise an agreement. And I don't believe that there are many issues that are actually outstanding, but I do believe with goodwill on the part of the parties today that we could be able to clarify some of the concerns and have something which hopefully the negotiating committee and the union can accept in principle, and give commitment to.

PN12

I think we would need to have a process that would allow the matter to go to a conclusion. Part of the difficulty that we have with the union's proposal at present is that it is a resolution from the employees. It is not actually - it is an offer which is framed in terms of a resolution, but it is something which they themselves have not yet accepted. So even if we agreed to it here and now, it is questionable whether it is actually an agreement.

PN13

But I do think that the parties here, knowing the membership and knowing the situation, should have a fair idea of what could be acceptable, and on the basis of getting to that level once we have discussed the issues, one would hope they could go back with a document, as far as possible complete it, and also on that basis that we have agreement in principle that bans could be lifted pending the outcome of that vote.

PN14

THE SENIOR DEPUTY PRESIDENT: What do the bans entail at this stage?

PN15

MR ANDERSON: Basically it is working only 35 hours per week, and if an operator - normally we have an arrangement where operators will commence if someone else doesn't turn up for a shift or is unwell, whatever reason. In this instance they are not prepared to turn up unless they are paid at double their normal rate of pay for the entire shift, which is clearly a very significant change to the normal arrangements.

PN16

But there is also the difficulty of what happens if there simply isn't anyone to come in to work at all, because in that instance there is the likelihood that refinery units could have to be shut down, and that is part of a very complex process which really can have a serious impact on the running of the refinery, almost to the extent that one wouldn't know how far this would go, but it could result, given some of the safety issues, in the closure of the refinery.

PN17

That is unlikely, one would think at present, frankly, but it is a possibility. Our view is that perhaps, and proposing we can, having backgrounded roughly where we are at, what are proposal would be, to talk about the union's proposal and the response that we made to that, and isolate the two issues which I believe are matters for debate. Now, they relate to - well, probably three issues. One is just simply clarifying the positions of the two parties so there is no doubt whatsoever or no misunderstanding about what is intended, and the major changes in the document.

PN18

There is discussion on the way in which the refinery technician arrangement would operate, and finally there is the issue of rates of pay which would apply. I have deliberately left the rates of pay to the end because I think subject to us understanding what the refinery technician arrangement is, getting, I suppose, a clear commitment and understanding from employees that that is the arrangement, that could lead us to very close to simply addressing then the rates of pay issue, and then looking at a process to conclude it.

PN19

So, your Honour, is it preferable for me just to go straight into explaining at this stage the refinery technician arrangement?

PN20

THE SENIOR DEPUTY PRESIDENT: Perhaps I should hear what Mr Wood has to say, and just confirm that he agrees that what you say is the position, is the position.

PN21

MR WOOD: If the Commission pleases, whilst I haven't got a lot of disagreement with what was said by Mr Anderson on behalf of BP, it is probably not as clear cut as he would like to think it is. First of all, the only things that I want to add to what Mr Anderson has to say in terms of history and background, since 1992 there hasn't been any real EBA in place there. They have had sort of rollover agreements when the award got simplified, and a number of appendices to the award were taken out of it because they were not allowable matters, and the award was taken back to a minimum rates award.

PN22

It is fair to say that it has probably been only the goodwill of both parties that have kept the conditions going, but there has been no legal enforceable document that we could go back to and say, well, that is what we are entitled to. So this is a fairly comprehensive document that has picked up since 1992 all the rollover agreements, all the awards, all the conditions of employment, policy manuals, and it has taken some nine months to get to that position as we are now.

PN23

The other thing that we want to say is, this refinery is, in terms of petroleum output, is the biggest in Australia, and will, if it achieves these numbers, will be the least manned refinery in Australia. So the highest output with the lowest numbers. Now, there is a lot of other factors that go into that, and I don't want to mislead the Commission that it is as easy as that, because I have been looking after the oil industry for about 10 years, and I still don't understand all of it. But that factor weighs heavily in the mind of the union.

PN24

In terms of coming to the Commission, we came here in late December last year, and it was the union's application. It was because the employer had changed their position. When we were last before Senior Deputy President Polities it was the company that was, for the want of a better word, dogmatic about their position, they weren't going to change it irrespective of what was put forward by us, and they are entitled to do that, I suppose, as we were entitled to put industrial action on.

PN25

And we took industrial action in late December, and the action really didn't start to take effect until, I think it was 14 January. As soon as the industrial action started to take effect, or had the potential to take effect, the company said, look, we want to, you know, negotiate. And I said, well, I am not lifting bans for the sake of lifting them. I need to know that we are at least starting from some point. They agreed with us that it would be - they would put back on the table the offer that was rejected by the employees on 14 December 1992.

PN26

It was on that basis that we agreed to lift the bans. I flew over to Perth for the umpteenth time, and the company tabled their document which, in my view, was almost laughable. It went way back to what originally was on the table. I made the comment to Mr Anderson before I left, that, don't get me to go over there and expect that I am going to come out worse. The starting point, I am either going to get that or I am going to get better, I am not going over to get worse.

PN27

When I asked the company, after hearing their offer, which they wanted to extend the agreement to 2006, and they wanted to offer a two per cent increase for 1.4 years, which was the extension from the previous offer.

PN28

THE SENIOR DEPUTY PRESIDENT: Sorry, what was that again?

PN29

MR WOOD: They offered two per cent to extend the agreement by another 1.4 years, and the agreement would have run out three years after the date of certification, which we expect it to be March this year, if it was accepted, so it would have been March 2006 the agreement would have run out. So this agreement we are talking about that is before you today, it runs out on 30 November 2004. So there was a considerable time of an extension that the company was seeking and, as I say, they were offering two per cent.

PN30

Now, as I said to the employer, well, there is one ray of sunshine out of all of that, in that I would sooner be out having a blue over this proposal than having a blue over the proposal that we are now, because I admit we are a far bit closer in this dispute than we would under the company's offer back in January. Now, I said to them at that meeting, I said, well, why wouldn't I just pick up the offer at the starting point? And they said, well, that is not an offer, that is where we are starting from.

PN31

So it seems to be that they got me to go to Western Australia on a false pretext, and they got the bans lifted on a false pretext. But in any event we had on the table to the company, on 14 December 2002, an agreement in terms of dollar terms no more than what - it wouldn't cost them any more than what they were offering back in October 2002. Now, that offer that was endorsed on 14 December 2002 has remained on the table until the most recent motion on 12 February 2003.

PN32

So they had an offer from 14.12.2002 to 12.2.2003, and they never picked it up, at no extra cost to them, and guaranteed to run the refinery. It is them who have postured on this dispute, not us. But on 12.2.2003, after speaking to Mr Anderson about how we could overcome this problem, and they, for the first time, identified a problem with our amendments that we were seeking back in December 2002.

PN33

So we took that into account, we said, all right, well, we will do this and we will do that, and we went right through the proposition to the rank and file, picking up all the company's suggestions, and them picking up some of our suggestions. We have now come down to a difference of opinion of 1.5 per cent between what they are offering and what we are demanding. I said to the company on many occasions that the offer that was put on the table in December 2002, I only had five votes. Only five people in that refinery managed to change their mind, and I would have lost the majority, and there was no agreement.

PN34

So my view was, pick it up. But they decided they didn't want to pick it up, they wanted these other changes. We have incorporated as much as we can, we are 1.5 difference. This went to a vote again, and it came out at 67 to 26 in support of the resolution. As I say, we are 1.5 the difference. I am here to - their application - I am here to hear what they have to say. But I can say to the Commission with hand on the heart, I don't want to go back to another mass meeting. There has been three mass meetings, there has been nine months of negotiation, there has been two sets of management, this is a new one now, got new ideas, want to rehash the whole agreement. Thanks, but no thanks.

PN35

We have got a resolution that if the company picks it up, 1.5 of what they want, we have got a deal. We can look at and provide ways to ensure that this is an offer from the rank and file, and not just a proposition that the union and the committee are putting up. There are ways in which we can deal with that, but there is no point in dealing with that unless it is an offer from them. If they say, all right, if you get that up, if you get your resolution up on 12.2.2003, we have a deal.

PN36

We can do what the Act requires, have the agreement sit on the table for 14 days, have it voted on, get it endorsed, and get this Godforsaken agreement certified. But any change to that resolution, any change that they are contemplating now means I have got to go back to another mass meeting, a fourth one. People are ropable about how long this has taken in the first place, and it is our respectful submission, your Honour, that we don't want to go back to another mass meeting. They know what the offer is, and it might just simply come down to, we have got to punch it out. If the Commission pleases.

PN37

THE SENIOR DEPUTY PRESIDENT: Thanks very much, Mr Wood. Mr Anderson, would you tell me then what the issue is about the technicians arrangements?

PN38

MR ANDERSON: Certainly, Senior Deputy President.

PN39

THE SENIOR DEPUTY PRESIDENT: Would it better if we went into conference to deal with these matters?

PN40

MR ANDERSON: It may be. Perhaps if I put on record what we are proposing, and then we can debate it in conference.

PN41

THE SENIOR DEPUTY PRESIDENT: Yes, all right.

PN42

MR ANDERSON: The refinery technician arrangement is contained in the agreement, and it is a very substantial agreement that we have. It runs to over 50 pages - sorry, over 40 pages, closely typed. In that agreement it does refer at one point to the refinery technician arrangement. The company is not proposing to change that but to get a clearer understanding of what that actually involves, what that arrangement involves.

PN43

The arrangement consists of 15 refinery technician positions, and this is a conceptual arrangement. Whilst it is described in the agreement, it doesn't clearly define how the appointment is made, how the selection is made or how the appointment is made of refinery technicians. There is no very clear definition of what a refinery technician actually is, there is no clearly defined roster. All I wanted to do today was to put some shape to that proposal, and on the basis that we have a relatively clear understanding that it would work in this way, I don't think we should have much problem.

PN44

I will put down on record, and then perhaps we can debate the issue. Of the 15 refinery technician roles we would say that 10 of those would be permanent and five would be flexible roles. When we are talking about permanent refinery technicians we are talking about employees who would work a 10 hour day from Monday to Friday, and they would work between a roster which would be for 10 hours a day, but work between the hours of 6 am and 6 pm, doing four shifts one week and three shifts the next.

PN45

We would see those employees being appointed on a 12 month basis as a minimum, and reviewed at the end of each 12 months. I think for completeness, Senior Deputy President, I should say that refinery technicians are operators who would currently be on shift, but they are going to be working under this arrangement on a day basis. So it is not a radically different type of work that they are involved in.

PN46

The flexible refinery technicians would be, five of them would be appointed by the shift team, led by the shift team leader. There will be one on each shift, and the shift team would decide how long that appointment was likely to be, so it is a less definite appointment. Those employees are likely to flex on and off their shifts, to work on days or on the shift. Now, notionally one of the views was that these refinery technicians would work four consecutive 12 hour shifts.

PN47

Clearly at this stage there is no type roster that shows how it would work. I think there are some concepts about how it would work, but it is not firmly set down at this stage. The objective really is, with this whole arrangement, to ensure that the roster with the refinery technicians delivers the necessary number of refinery technicians to undertake the maintenance demand. It is really pre-maintenance demand work which would occur Monday to Friday. That is really what we are trying to achieve.

PN48

Because currently with the lower manning levels that we will be operating with in the refinery, it was recognised early on that there is a lot more activity during the day on Monday to Friday, and that is usually related to maintenance issues. And when there is a lower level of manning, clearly we have to provide some additional support so that activities relating to maintenance, for example, permits, hot work permits, isolation of equipment, all that can be completed for maintenance during Monday to Friday daylight hours.

PN49

It just would not be practical for that to be done by the shift team members because they are now covering bigger areas, possibly more complex areas. That is what the arrangement is. We have agreed in principle the whole notion of the refinery technician arrangement. It is an agreed arrangement in principle, but it is something which even the document has said will evolve during the course of the agreement.

PN50

From our point of view we want to ensure that this arrangement gets off to a good start, and because there are people currently working, technicians working on day work, and we have already got some people who are doing this work under the new roster, or under the new arrangement, they will be paid a bit more to do this work, but we have already got some people operating. We are now going to develop it into a much more structured arrangement, so there needs to be a degree of flexibility in the creation of the roster.

PN51

And what I am setting out now is an outline of the key aspects of the refinery technician arrangement which we would expect to operate from the commencement of the agreement. It puts a process in place which involves employees and makes some concrete statements about important aspects of the refinery technician arrangement which are not currently contained in the agreement, but I do think they are fundamental. These principles I can't see would present any difficulty. It doesn't materially change the RT arrangement, it simply puts more certainty and shape to the arrangement.

PN52

THE SENIOR DEPUTY PRESIDENT: So you are suggesting some variation to the terms of the agreement as it exists to accommodate the clarification of the technician arrangement; is that what you are saying?

PN53

MR ANDERSON: Well, I don't know that it is absolutely necessary to change the agreement, because it doesn't say how these things will happen anyway. It could be achieved possibly by some form of an exchange of letters, it could be a change to the document. It might be preferable if it was a change to the document, but therein lies potentially a problem in terms of time and agreeing what actually is put in there. So that would be something I think we would have to look at once we have gone through the issues here.

PN54

What we were proposing was, that initially the existing day workers would be appointed to the permanent refinery technician positions. I think there are five of them currently. Thereafter we would go through a process of appointing the remainder of the permanent RTs and basically be seeking expressions of interest from suitably qualified technicians, and selecting from them.

PN55

Now, the flexible RTs are appointed in a different way we would see, because they don't need to be - the people who are refinery technicians, doing refinery technicians in a flexible sense, can change from time to time. It is really, as we see it at the moment, much more of a shift issue. In terms of the roster, having appointed the five current permanent day RTs, we would see a sub group being established for the purpose of providing input to the development of an optimal shift arrangement over a period of probably two months.

PN56

We say two months because it would probably be two months before we have finally got the 10 permanent RTs in place. The sub group we would see being made up of the current day operators who are familiar with the work requirements, and the area team leaders who have got a fair idea of what is necessary from a company point of view. I will refer to him as the maintenance manager, but I believe he does have another title; plant capability manager.

PN57

So those are the people we would see as being inimical to the formation of this sub group and the development of the roster. And their role, as I say, would be the development of an optimal shift arrangement. Thereafter the sub group could meet periodically to review the effectiveness of the roster in terms of meeting its objectives, because we see that it could be an evolving process that needs to be reviewed to ensure it is working as it needs to be.

PN58

In terms of remuneration we would see that during the period of the agreement employees appointed as permanent RT1s maintain the rate of pay as per the agreement. Let me just say, they have got a current grade with shift loadings, etcetera. Whatever they would be entitled to under this agreement, they would continue to have when they are appointed into the permanent RT roles. We wouldn't see any change in the remuneration for the period of the agreement.

PN59

However, we would like to see this sub committee, as the roles become clearer and take on more a degree of certainty, that the sub committee would develop a definition for the RT permanent role and, in addition, the sub committee would provide input to the remuneration rationale for permanent RTs, with a view to taking effect on the expiry of the agreement. Now, this is because obviously we are talking about day workers who will be maintaining a shift loading.

PN60

Now, we have no preconceived view, but clearly it would be better to have a definition, we think, and a rationale for the rate of pay, irrespective of what it is, a rationale for how that rate of pay is constructed, given that they are not technically a shift employee any more, but clearly they do add a significant level of value to the new operating arrangement at the refinery. Those are the proposals that we are putting to get this arrangement off to a start, and that is simply because there isn't a very clear view about how it should start, but the agreement does contemplate it.

PN61

THE SENIOR DEPUTY PRESIDENT: All right. Thank you very much, Mr Anderson. Mr Wood, do you want to respond on the record before I adjourn into conference?

PN62

MR WOOD: No. We have said all we have to say on the matter, your Honour.

PN63

THE SENIOR DEPUTY PRESIDENT: Is it necessary, do you think, to have the court reporting back later on?

PN64

MR ANDERSON: I would say it is probably unlikely.

PN65

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Very well, I will adjourn into conference.

NO FURTHER PROCEEDINGS RECORDED