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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
O/N 11008
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
COMMISSIONER REDMOND
C2004/2385
AUTOMOTIVE, FOOD, METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION
and
VISYPAK PTY LIMITED
Application under section 170LW of the Act
for settlement of dispute re redundancy
SYDNEY
10.18 AM, WEDNESDAY, 5 MAY 2004
PN1
MR I. MORRISON: I appear on behalf of the Australian Manufacturing Workers Union. With me today is MS V. SEAGROVE, the organiser from the site.
PN2
MR L. STEWART: I appear on behalf of VisyPak. Appearing with me today is Plant Manager, MR P. JACK.
PN3
THE COMMISSIONER: Yes, thank you, Mr Stewart. Gentlemen, are we going to call witnesses in this matter?
PN4
MR MORRISON: We intend to call one witness, Commissioner.
PN5
THE COMMISSIONER: Yes.
PN6
MR STEWART: We will also be calling one.
PN7
THE COMMISSIONER: I ask all witnesses to wait outside the Commission until they are called, please. Yes, Mr Morrison.
PN8
MR MORRISON: Yes, Commissioner. Just a brief outline. I attend to make a very brief opening statement, call Mr O'Neill as a witness and then have - obviously go through the process of witnesses. Mr Stewart, I believe, has one witness as well and then we will be putting, after calling witnesses, our submission in-chief. That is appropriate. Commissioner, as you are aware, we say the matter before you concerns a relatively straight forward issue. VisyPak wish to make four workers redundant.
PN9
The company is of the opinion that because of the introduction of new technology at the site at Smithfield, it is possible for them to change their staffing levels, basically from a 10 person to a nine person operation on various - on a shift and the AMW does not accept this. Commissioner, the union will be firstly putting forward a witness, as I said, then as I indicated the witnesses - the company will have the opportunity to put their witnesses and then, as I said, make our submissions to support our position that the redundancies should not occur as the company envisages them. So unless the Commissioner has any further questions, I would like to call my first witness, Mr Robert O'Neill.
PN10
MR MORRISON: Thank you, Mr O'Neill. Just for the Commission's information, could you give us your name, your place of work and the duties you perform at VisyPak?---My name is Robert O'Neill and I work at 102 Gibbs Road, Smithfield in a two piece camp plant for VisyPak and my duties involve a C8 classification with fitting duties and general operational duties of machinery and the plant.
PN11
I would like you now to let the Commission know your role at the site with regard to your activities in the union?---Okay. Commissioner, I've - I'm a shift delegate for C Shift and up until recently, I was also the plant - I'm trying to think of the terminology. I apologise.
PN12
Can I suggest convener, Mr O'Neill?---Convener of meetings. Generally I was the liaison between - there's a particular word and it's just lost me - between the AMWU and also the workers.
PN13
How long have you been at that site, Mr O'Neill?---Since 9 March, 1998.
PN14
What changes have you observed at that site, in that time?---Up to date, there's been a few specifically.
PN15
Specifically?---Okay. We've had improvements with a doubling box. That is making the line run a lot better. We've had improvements with the new choo-choo that's come in. There's a QTV testing machine there now. There's an ink dot system on the internal coders. That's all I can think of off the top of my head, sorry.
PN16
With all these changes, what has been the change in the work-force at the site?---Up until date, we've remained a 10 man shift. That's up until date and obviously we're even over a - - -
**** ROBERT O'NEILL XN MR MORRISON
PN17
But previous to when you commenced, what were the staffing levels like compared to now?---They are the same. They are 10 man crews.
PN18
The same as in 1998?---I think - - -
PN19
The starting levels at the site?---Okay. Well - - -
PN20
THE COMMISSIONER: If you can't remember, it does not matter. Just say - - -?---Yes, I apologise.
PN21
MR MORRISON: You can't remember?---I'm just thinking we did get an increase in a warehouse staff there but predominantly it was - it's always been two operators on the front end with a chemical process operator, two operators on the decorator, two operators on what we call the back end IC area, one palletise operator and one finished goods operator.
PN22
Where is the proposed change in staffing levels to occur in this line?---In the back end area, near the - with the internal coders.
PN23
That is reducing from two people that are currently there to one. Is that correct?---Down to one person. Yes. Correct.
PN24
Now, Mr O'Neill, I would like to show you a document called the VisyPak Operation and the Smithfield Certified Agreement 2003. Commissioner, could I ask for that document to be marked? It is known as the VisyPak Operation and the Smithfield Certified Agreement 2003.
PN25
THE COMMISSIONER: I will mark this. Any objections to it being marked, Mr Stewart?
**** ROBERT O'NEILL XN MR MORRISON
PN26
MR STEWART: No.
MFI #1 VISYPAK OPERATION AND THE SMITHFIELD CERTIFIED AGREEMENT 2003
PN27
THE COMMISSIONER: What page are you going to, or what clause?
PN28
MR MORRISON: Well, if you give me a moment, Commissioner, I will take Mr O'Neill through them. Just for the clarity of the agreement firstly, Mr O'Neill, is this the agreement that underpin - that is unpinned by the Metal Engineering Associated Industry Award that determines the wages and conditions at the VisyPak site?---Yes, that's correct.
PN29
Now, I intend actually now, Commissioner, to hand up another document before I actually go through this particular document.
PN30
THE COMMISSIONER: Yes.
PN31
MR MORRISON: Mr O'Neill, this is a document marked Report to the Industrial Relations Commission re Plant Upgrade and Subsequent Proposed Redundancies.
PN32
THE COMMISSIONER: Do you want it marked?
PN33
MR MORRISON: I would like it marked if you would not mind, Commissioner.
**** ROBERT O'NEILL XN MR MORRISON
PN34
THE COMMISSIONER: Mr Stewart, is it all right?
MFI #2 REPORT TO THE INDUSTRIAL RELATIONS COMMISSION RE PLANT UPGRADE AND SUBSEQUENT PROPOSED REDUNDANCIES
PN35
MR MORRISON: Thank you. First with regard to M2, Mr O'Neill, could you tell us about who prepared this document and why? This is M2?---Okay. Commissioner, this document was raised or predominantly written by myself with the assistance of information supplied by the rank and file members of the AMWU and that's actually reflected in appendix 5 from memory. I'm just flicking through. Appendix 5 and as such, you will see that with - what I've done is I've actually taken parts of their concerns within this matter and then massaged them into a - into the report with other issues that I found myself by working in the - in this particular area and put it together so as we could have something to go through and identify what happens in the actual plan itself.
PN36
Could you tell us though why the document was prepared?---It was prepared for today's - I guess today's meeting here. You'll have to excuse me. I think you're going to have to - - -
PN37
I won't try and lead you too much. What I would like to understand is what motivated you to prepare such a document?---Okay. The motivation for preparing this document was the concerns that myself and the other members of the union had in relation to the upcoming changes that the management wished to implement in the plant. We were concerned that from our observations that it wasn't justified what they were asking for and so this report come about from that.
**** ROBERT O'NEILL XN MR MORRISON
PN38
Now, I understand, Mr O'Neill, that this - that the company has previously been shown this document. However, I also understand that slight changes have been made to the document that was earlier supplied to the company at a previous - previous hearing in the Commission. Could you take us to those changes and explain what has been changed and why it has been changed?---Sure. Commissioner, if you can turn your copy to page - just looking for the actual page - page 9.
PN39
THE COMMISSIONER: Yes?---Of the body of the report. You will see there - and at this point, I'd like to make an apology to yourself and to the management. This report was prepared by myself on 3 and 4 April before our hearing date down in Melbourne on the 5th. I worked late into the night trying to get this ready and there is some editorial error in it. It doesn't - it's not the views of the members of the union nor myself. It is to be understood that it shouldn't be in there at all and it is my mistake and wholly my mistake and I'll just take you through it. It's in the third paragraph. You'll see there on your copy that I've ruled it out. It says: in fact the response to our request for a formal and comprehensive time and motion study was. Without making it too messy, I've deleted that because it's simply not true. We'd actually had discussion with our organiser at the time, Martin Cartwright, and it was discussed and agreed to by all parties that there wouldn't be a time motion study. That is my error and to try and make it more accurate, I've put there:
PN40
The preparation of a simple survey sheet by management was prepared.
PN41
And then put: was prepared after management. The other error was in the fourth paragraph and I'll just go through that:
PN42
A final interesting question to be raised in relation to the survey is independence or bias of the respondents in particular where the individual commissioned by management.
**** ROBERT O'NEILL XN MR MORRISON
PN43
Well, that's not true. It was actually where we had the survey at the same meeting that Martin Cartwright was at that we'd actually agreed to have these particular persons do the survey and it was not actually commissioned by the management at all and it was, in fact, agreed to by the management and the consultant committee and I've jotted that down there in that fourth paragraph. I apologise to everyone. It is an error in my editing.
PN44
MR MORRISON: Okay. Thank you, Mr O'Neill.
PN45
MR STEWART: Can I just - can I just clarify? Are we removing that whole paragraph? The second last or the final paragraph. Has that - - -
PN46
MR MORRISON: No, it has been amended. I will read the final paragraph. The words as it should be read is:
PN47
A final interesting question to be raised in relation to the survey is the independence or bias of respondents. In particular, were the individuals agreed to by management and the consultative committee to complete the survey, in fact, among those who had expressed an interest in taking one of those proposed redundancies.
PN48
Is that the correct wording?---That's correct.
PN49
Thank you, Mr O'Neill. Now, putting M2 aside for the moment, Mr O'Neill, if I could take you to M1, the certified agreement. Could you please look at clause 40 of that agreement, please. Have you found clause 40?---Settlement of grievance procedure.
PN50
Now, if you could turn to page 22 of the agreement, Part F?---Yes.
**** ROBERT O'NEILL XN MR MORRISON
PN51
It says:
PN52
If agreement cannot be reached, the matter may be referred by either party to the Australian Industrial Relations Commission for decision subject to the provisions of the Workplace Relations Act as varied from time to time. While this procedure is being followed, work should continue with the status quo maintained without either party being prejudiced as to the final settlement.
PN53
Is that correct?---Yes.
PN54
What do you understand this to mean, Mr O'Neill?---That we would go through the process. If it couldn't be resolved at the work site it would end up here in the Commission. Then should - and while that process is under way, we should remain in the status quo or we should remain continuing in the same operating capacity as we are presently.
PN55
So would you accept that the matter that has to be resolved is the redundancy of the tenth person in the shift?---Yes.
PN56
That matter has, to your knowledge, not been resolved?---No.
PN57
Now, I would like to take you to clause 36 of the agreement and if necessary could you read that clause if you are not familiar with it?---The entire clause out loud?
PN58
No, no. Just read it to yourself in case you are not fully - recall the entire agreement. All right, Mr O'Neill?---Yes, I'm fine.
PN59
Has the consultative committee investigated, determined or made recommendations regarding the introduction of new technology, the new technology that features in your report?---No. If I understood the question correctly - could you just repeat the question again, sorry?
**** ROBERT O'NEILL XN MR MORRISON
PN60
Has the consultative committee investigated, determined or made recommendations regarding the introduction of new technology, the new technology that features in your report?---My apologies. Yes, we have. Yes, we have. We've made investigations.
PN61
This is a consultative committee that is jointly consisting of an equal number of employees and union representatives?---Well, I'd have to say in that case no. I'm sorry if I'm getting a bit misled there by the question. When I think of consultative committee, I think purely of the rank and file members and not the management. I now understand the question better and I'd have to say no, it hasn't taken place.
PN62
So the consultative committee as envisaged in clause 36 has not done any of those things?---Not as a collective.
PN63
Not as a collective. So how would you describe the approach of management with regard to consultation as envisaged in the certified agreement, specifically clause 36?---I might have to say that they've come to the union members and basically said this is what is going to happen and that's it. There is no negotiation as such. There will be a reduction of four jobs on the completion of installation of the equipment.
PN64
PN65
MR STEWART: Yes, thank you. Sorry, just one second, Commissioner. Mr O'Neill, just a couple of questions based on what you told us today. You are a member of the consultative committee?---Yes.
PN66
You are also a member of the enterprise bargaining committee?---That's one and the same.
**** ROBERT O'NEILL XXN MR STEWART
PN67
So the two committees operate both functions, do they?---Yes. I'd say yes.
PN68
Now, you gave a breakdown of the work-force per shift of the 10 crew arrangement and you said there is two front end - correct me if I am wrong - one chemist, two decorators, two IC, one palletiser and one finished goods?---Yes. It's not so much a chemist. It's a chemical process operator.
PN69
Okay?---That's fine.
PN70
That is my terminology for it. Okay. So would you say that there is a split in terms of a front end and a back end and can you tell the Commission your understanding of the difference between the front end and the back end?---Okay. In general terms, the front end would be consisting of those areas that are the internal - sorry, the body-makers, the can wash and depending on shifts, there's a small variation there that sometimes the palletise operator is responsible with the front end team leader there and then the back end, it consists of your decorator, two decorator operators, two IC operators, your finished goods person. That's basically the - there is some variation between shifts but that's basically it.
PN71
I see. In terms of demarcation it is true, is it not, that people are not specifically restricted from assisting in a front end to a back end operation as needs be?---I think it's in our agreement that we don't have demarcation and as such, we operate that way.
PN72
Yes. Thank you. Now, M2 is the report that you prepared?---Yes.
PN73
In M2, you outline a number of things which in essence is the basis of your objection to the reduction in crewing numbers by one. Is that a fair comment?---Almost. Well, if I've got to give a yes or no, I'd say no.
**** ROBERT O'NEILL XXN MR STEWART
PN74
So can you explain then is there anything other than - if we go through part 3 or section 3 on page 5 of your report, you identify - well, it might be easier actually if I take you to your summary which is on page 10 and it is headed up: response to proposed redundancies continued but you outline a couple of four dot points there of an enamel rater, ink dot identification, choo-choo, additional IC and it is on that basis that you say that there is not, on the basis of those four points, that there is no saving in time to justify a reduction by one. Is that correct?---A yes or no answer?
PN75
Please?---You just want a yes or no answer?
PN76
Well, I want you - - -?---Or you want it explained? I think that's part of it. I think that's a good portion of it for sure. Yes, I'd say that. I think there's other elements there and I tell you, I'm drawing a bit of a blank here because I'm a bit nervous but that's the crux of it, to say that there's not enough time saving with the new equipment to warrant the loss of jobs.
PN77
That is what you have detailed in report M2?---Yes.
PN78
Now, you have taken us and you have identified a few issues I was going to raise with you in your amendments to page 9 and I thank you for that. But what I would like to touch on firstly is the amendment you made to the second paragraph from the bottom?---That's page 3, wasn't it?
PN79
Page 9?---Page 9. Yes, sure. Speak away.
PN80
You have now amended that so it reads: the preparation of a simple survey sheet by management was prepared. That is correct?---Yes, that's correct.
PN81
What you have removed is the reference to a time and motion study. Now, that is what I wanted to talk to you about. During the consultative committee meetings when this was discussed, is it not true that a time and motion study was suggested by Peter Jack?---I think that's a lot of dialogue that's gone on. It was a time and motion study suggested by Peter Jack.
**** ROBERT O'NEILL XXN MR STEWART
PN82
Well, let me suggest to you that - - -?---I can't - I can't remember specifically Peter Jack coming up with the idea, if that's what you're asking.
PN83
Well, let me suggest to you that this is what has occurred, that in fact, management went ahead and did the first time survey and when that was taken to the committee, the committee rejected that and Peter Jack suggested: all right, well, let us do a time and motion study. Isn't that what happened?---I don't think so. No, I don't think that's right at all. No. No.
PN84
Well, I will put to you that when that suggestion was put forward by Peter Jack, it was actually Martin Cartwright, the site organiser at the time, that rejected that idea?---The time and motion study. Yes.
PN85
So in response to the time and motion study, what in fact occurred then was the committee nominated two people to go into another two time and surveys as we have seen in your report here at B and C, I think you call them. Is that not right?---Yes.
PN86
Can you just tell us, if I take you to - the pages are not numbered. Apologies, Commissioner. I will take you through it. It is appendix number 5 which starts on page 17 but the page numbering ends at that point but it goes through five or six pages and you will come to a table. Commissioner, it is the first of a couple of pages of tables and it will be - - -
PN87
THE COMMISSIONER: Before upgrade survey. Is that the one?
PN88
MR STEWART: Yes, that is the one. Survey B in particular.
PN89
THE COMMISSIONER: Survey B. Yes?---I think I see - I see what you're saying now and I see now what you're saying is the preparation of a survey beforehand. I see what you're saying. The gentleman is quite correct and I apologise. I'm not trying to be misleading.
**** ROBERT O'NEILL XXN MR STEWART
PN90
MR STEWART: That is all right. No, that is fine?---I'm just a bit nervous.
PN91
So the time and motion was suggested by Peter Jack and it was Martin Cartwright that said no to that at the time?---My recollection of these particular - these surveys, if I can speak freely, was these - just give me 2 minutes to get my thoughts together. These surveys are actually before and after installation, from memory. I'm a little bit confused and I apologise for that because there was - I'm just - there was a gentleman that was asked initially quite a while ago to put together a survey that isn't in here. One individual. That's why there's a bit of confusion and I apologise but I see where you're coming from now. My understanding of these surveys is that there was a before and after installation, like what the plant is to run now with timing and what the plant would be, expected to be or the way the survey participants see it would run after the upgrade has been done.
PN92
That is correct. Okay. You accepted that is what these reports - - -?---That's what they - - -
PN93
- - - go through?---Yes. That's what these people have put together.
PN94
Now, can you tell us then in your M2, you have got before upgrade survey B and C and then after upgrade survey B and C. Who is B and who is C?---As individuals?
PN95
Yes, please?---I think they are - that's Nevis Rodrickus and Mick Hudson.
PN96
Those two names, Nevis and Mick, were put forward by the consultative committee?---Yes. By the delegates of the consultative committee.
PN97
Were they chosen because they were experienced operators?---Yes.
**** ROBERT O'NEILL XXN MR STEWART
PN98
So management did not determine that they were the people that would do the study?---I think it went about, from memory, that it was - their names were raised by some of our members on the committee - that's the union side I'm talking about - and it was agreed to.
PN99
If we look at the two, first two tables, the before upgrade survey B, the before upgrade survey C, they come to a total minutes for B of 630 and the total minutes for C of 605. Do you agree with that?---Yes, I do.
PN100
Then if we look at after upgrade, we see a reduction to 445 and then - for B and for C to 480. Do you see that?---Yes, I do.
PN101
So do you agree then that although differing in terms of the amount of time in total taken, the comparable reductions - or the reduction between surveys B and C is fairly comparable?---Yes.
PN102
Now, you gave evidence earlier that what you - sorry, I rephrase that. You gave evidence that the consultative committee in clause 36 of the EBA - do you have that in front of you?---Clause 36. Yes.
PN103
You said earlier that, in fact, the committee did not investigate, determine and make recommendations on the introduction of new technology, did you not?---I did but I'd like to qualify that because I'm not trying to be misleading. The consultative committee is made up of management and the workers working together to get a result. What we have here is the management putting the survey together, okay, and we've put together this report. So it's not - this particular effort hasn't been consulted with in relation to the actual what will be in the survey. The survey was agreed to be had but what - how the survey would be arranged, to the best of my knowledge, was not agreed to. It was a simple survey sheet put up which you see in relation to survey - particularly to my mind particularly the second part, the reduced amount of time. Survey B and C were actually those - actually the list of questions were raised by the management of themselves, to the best of my knowledge. I am not aware of input from the rank and file coming into those questions.
**** ROBERT O'NEILL XXN MR STEWART
PN104
Did you raise that concern at the time that Nevis and Matt, was it? Nevis and the other gentleman were put forward as delegates of the committee to go and do the survey?---In relation to actually those questions being put forward to those guys? No, I wasn't aware of it. I wasn't aware of the - that particular survey arrangement. To the best of my knowledge, there hasn't been any negotiation with that particular survey sheet.
PN105
So are you telling us that you did not see that survey until after it had been completed by Nevis and the other employer?---That particular survey. Yes, that's what I'm saying.
PN106
Okay, but you said that two people were put forward by the committee and you sit on the committee so how was that possible?---Well, it's very easy because what happens is is that we agree to have a survey put together but then management takes control of the survey, drafts the questions to be answered and then they put that forward and I was not made aware of it. Now, it is very difficult to be made aware of it as well because it's in about the time I was interstate okay, but there was other members there that even came to me and said: Bob, you know, we knew all about this. I do not believe that the delegates, and I know for myself, that we were not aware of the actual - that sheet, Bob. We're going to put this sheet forward to the guys, are you okay with that? I haven't seen that.
PN107
Well, Mr O'Neill, if you were interstate, are you asking us to accept that you knew that that document was not discussed at the meeting?---I'm saying the configuration of that particular document I don't believe was discussed. I believe - I believe that it was prepared by the management and put forward, okay, to the guys, the outside guys and fill out this report, go and have a smoke and fill out this report at the chimney stack out the back and we want the fair dinkum numbers and I think that's what they've done. I think they've been realistic and fair dinkum, okay, but I do not believe there's been a consultant - consultative process as to what questions to be asked of the rank and file members in relation to that survey.
**** ROBERT O'NEILL XXN MR STEWART
PN108
So your problem is with the questions that are being asked, not with the outcome that there is a reduction in time of the questions that have been asked?---I don't want to get into semantics but we ultimately the last - - -
PN109
Mr O'Neill, it is an important question. I will try and make it simpler. I don't want to make it confusing for you. I need to know, based on what you have said, that your objection is to the questions that have been asked, not to the fact that the survey show a reduction in time. Is that correct?---No, that is not correct.
PN110
Can you explain to me why not?---Okay. Because it is my personal opinion, and only my personal opinion, that that wasn't done well, okay. However, when we had the next consultative committee meeting, we did not want to embarrass our members who took that survey. We did not want to have arguments in the factory and be finger pointing. So we accepted those numbers at our expenses, okay. But the reality is that survey was not jointly prepared but we will cop it.
PN111
Thank you. You have said you accept it and that you will cop it. That is the point that I wanted to make. You say that there has been no negotiation with you in regards to the introduction of the new technology. Do you recall giving that evidence earlier?---Yes.
PN112
Can you tell me where - or can you take me to the part of the EBA that says the company has an obligation to negotiate with you the introduction of new equipment. With you I mean the committee?---Yes. That's - I think we were just there a minute ago.
PN113
THE COMMISSIONER: 36 you were at?---36. Are you waiting for me or am I waiting for you?
**** ROBERT O'NEILL XXN MR STEWART
PN114
MR STEWART: I'm waiting for you, Mr O'Neill. Want I want you to do is to show me where the obligation is upon the company to negotiate the introduction of new equipment with the committee?---Well, it's clause 36: the parties agree to establish a consultative committee to assist in the parties to improve productivity efficiency and prove - and to improve for the effective involvement of union, non-union members in a decision-making process. The committee will consist of an equal number of employees - this is just the first paragraph: employees and union representatives. It's in relation to point I, introduction of new technology - or point 1. Is that what you're trying to say?
PN115
I want to know - well, let me put it this way to you. There is nothing in clause 36 that places a requirement upon the company to negotiate with the committee on the introduction of new equipment and in particular if we go down two paragraphs from where you are, in fact, the committee is there to investigate, determine and make recommendations on the introduction of new technology. Isn't that right?---Yes, that's - that's written there.
PN116
So what has actually happened is the committee has seen a report prepared by management. The operator, that then same report, when questioned, the company put to the committee: let us do a time in motion which was rejected. So the committee agreed to have two further reports done which have now both been accepted by the committee. Isn't that right?---Yes.
PN117
So on that basis the committee has done an investigation and it has made recommendations on the introduction of new technology?---It did an investigation into the perceived time it would take for an operator to do all these checks both before and after the installation of equipment.
PN118
That is right?---Well, that's all.
PN119
But that is the basis upon which the company is demonstrating to the committee that there will be a savings in time? See, Mr O'Neill, clause 36, I put to you does not require there to be agreement reached on the introduction of new technology. The requirement is to allow you to make recommendations and investigate and I put it to you that has actually occurred?---If I may speak - - -
**** ROBERT O'NEILL XXN MR STEWART
PN120
THE COMMISSIONER: No, no. You have got to answer the question. You can't make a speech?---Okay. Sorry. Okay. Well, on that particular point, yes.
PN121
MR STEWART: Now, you also said in your evidence earlier that the report that you put together, M2, was done by yourself?---Yes.
PN122
I understand you said you were rushed when you came down to Melbourne and you produced it in time so that we could have it - a copy of it in Melbourne. Is that correct?---That's not correct. Well, it was put together on the last 2 days to ensure the maximum amount of information could be - we could derive an answer from and that the latest point was that weekend before because we had to get on the plane and fly down to the Commission that Monday, as you know.
PN123
Yes?---So that report was left to the very last and there was a lot of work done in a very short space of time to be trying to be accurate and fair for all parties.
PN124
I accept that. My question is this then. The two survey sheets that I have been discussing with you, survey B and C, they were actually done in November of 2003. So why did it take you until the weekend before you came down to the Commission to put this report together?---B and C? November? Are you talking before the - are you talking before the upgrade or these sheets after the upgrade?
PN125
Or both?---Okay. All right. Well, it's not all the information. The information that's been put together here describes the amount of times that by the questions asked what is the amount of time to be spent on the line doing functions. Okay. Why did it take so long? Because there was no other machinery in between that November and we waited until we could see where the machinery was at and how it was going to function and how it would be before we put the final report together. It's actually taking a side movement. There's actually a part there that describes how the 202 gauge in the report we felt at the time of the writing of the report, if I can give an example, that the 202 gauge would mean the other line would have to stay there to cater to one
**** ROBERT O'NEILL XXN MR STEWART
customer but the 202 would cater to another customer and therefore create more work load. Well, as it turns out from the last consultative committee meeting with the management, the management were aware 5 weeks beforehand of this change, that there would not be 202 coming for quite a while and therefore it changed the whole - it changed that part of the report. At all times we've tried to be totally professional and honest in our report and balanced but it's very difficult when you - even when you leave it right to the last few minutes that you find out on 14 April that the report you've written and you tried to be fair dinkum, that you find out on 14 April that they had no - that the management had known 5 weeks beforehand of this change of not having the 202 gauge run for many years into the future. So there is variations within the report now, we find - - -
PN126
Okay?---We're prepared to discuss them but the reality is - - -
PN127
So if we take - - -?---The reality is, okay, we've done our best to give a level-headed report.
PN128
Well, on that - in your report you identify a number of points which you say show that there is no time saving going to be had. Now, you said that in particular on page 5 that there is a seventh IC being introduced. Now, in your basis upon saying that there is no time saving is that seven ICs are going to be operational instead of six in terms of checking, but in fact, six ICs are operating presently, are they not?---Just repeat your question again. Sorry.
PN129
I will shorten it. At the moment, there is six ICs operating, is there not?---Yes.
PN130
The seventh IC is intended to be there so that routine maintenance can occur on the batch of seven, so that six are running at any one time. Is that not right?---Do you want a yes or no answer to that?
PN131
Please?---Well, to pure that question, I've got to say no. It's my belief that that is not correct because it's a half answer.
**** ROBERT O'NEILL XXN MR STEWART
PN132
That is fine. You are entitled to say no. You raise another issue about - which is the main issue, as I understand it, that the introduction of the train replacing the necker flanger light tester is going to have issues because of can tolerance variations, is that right, from the front end?---I've got to say no again.
PN133
Okay?---Your questions, you are going the wrong way, mate.
PN134
THE COMMISSIONER: Don't make any extra comments, please. Just answer the questions yes or no?---Sorry. Sorry. Yes, sir.
PN135
MR STEWART: All right. Well, let us take you to the bottom paragraph of page 6 of your report. It reads: we therefore have serious concerns as to the ability of the front end to provide cans with tolerance ranges necessary. So my question was one of the concerns you have with the introduction of the train is that the can tolerance variations are going to create problems when they hit the train?---Yes.
PN136
Okay, and you rely upon the attachments that you have made in this report at the back showing the specifications of the front end cans, do you not?---Yes.
PN137
Now, these specifications are for a year basically, are they not, 12 months. Is that right?---I think they are. Yes.
PN138
Basically?---Yes.
PN139
In that 12 months, that is based upon the 360 point test that you currently have in place. Isn't that right?---Yes.
PN140
Thank you. Are you aware that you are moving to a four point test?---Yes.
**** ROBERT O'NEILL XXN MR STEWART
PN141
You go on on page 7 and you say in the first paragraph that you are concerned because using - with a different profile of can, there will be the use of new and old machinery. Okay. That is twice as much equipment to physically maintain and clean. Do you see that?---Page 7.
PN142
Page 7, top paragraph, first bullet point?---Yes.
PN143
Are you aware that the old equipment is being decommissioned?---Yes.
PN144
So you won't have to be cleaning the new and the old equipment and maintaining it, will you?---That's right.
PN145
You go down to the enamel rater on page 7 and your concern in the bullet points next to the drawing are that the time saving of the automated enamel rater will be lost in the maintenance of the automated enamel rater. Is that - is that how you put it or is there a - - -?---Just repeat the question again.
PN146
You say that - let us go down to the second bullet point under issues for consideration. Can you see that?---Yes.
PN147
Additional time now required, checking results, checking solution levels, re-filling the machine?---Yes.
PN148
Okay, and that you say there is going to be an increase of half an hour per shift?---Yes.
PN149
Okay, and on that basis you say that the time gained by having the process automated is lost by maintaining the automated cen-con rater?---Yes.
**** ROBERT O'NEILL XXN MR STEWART
PN150
Can you take me to the points in your survey B and C and show me where the additional time is going to be neutral or that it is time neutral with the introduction of a cen-con rater.
PN151
MR MORRISON: Commissioner, just a point of clarity. Mr Stewart referred to them as your surveys. I believe we have established earlier they were actually the company's surveys.
PN152
THE COMMISSIONER: B and C?
PN153
MR MORRISON: Yes.
PN154
MR STEWART: I mean your in the context of his report.
PN155
THE COMMISSIONER: Yes. All right?---In relation to after QTV checks every half hour, yes. 30 minutes it says here.
PN156
MR STEWART: What are the other checks?---All of them? Okay. Gun checks, three times per shift.
PN157
Sorry, I should clarify. With the enamel rater, just the enamel rater, what are the checks that are in - what are the items in this survey that relate to the enamel rater?---QTV checks every half hour. Point 2.
PN158
Yes, thank you. That is the only one?---Yes.
PN159
If we look at survey B after upgrade, which is the third table?---Yes.
**** ROBERT O'NEILL XXN MR STEWART
PN160
At item 2, QTV checks every half an hour?---Yes.
PN161
It says 30 minutes per shift, does it not?---That's what it says.
PN162
If we go to the first table before upgrade survey B, it says QTV checks are 120 minutes per shift?---Yes, it says that.
PN163
So when we look at that, there is actually a reduction of 90 minutes, correct, an hour and a half?---According to this, yes, that's correct.
PN164
Now, the maximum amount of additional time that you have put forward in the operation of the new enamel rater is half an hour, at page 7 of your report. So I put to you that even on your calculations, there is still a saving of an hour on that one process alone?---I've got to say no to that.
PN165
Well, explain to me you know there - explain to me how the second point, second dot point at the bottom of page 7 which says that an increase of half an hour per shift is going to be neutralised, does not mean that the savings you are going to contain through removing the QTV checks afterwards, how that does not correlate. Can you explain that to me?---Yes, I'll give it my best shot. When we do our QTV checks at the present time, we take the cans from the light tester and we take them over and we also do - on the way through we do it on a common foot print. We also do a waxer check. We check the oil in the can that's going through the necker and I make sure that's fine every half an hour or so. Then we also do a bar code check of the cans which means logging on the computer, doing your bar code check and getting off the computer. Then we walk over and we do a five can QTV check by logging on and checking that. Then we go over and we do a bottom rim varnish - we burn the can with copper sulphate to identify bottom rim varnish on the can. What we're trying to say in the report is that we've eliminated the - that part of the - that process of all those checks being done every half hour as is expected by the quality control and we've taken that element away, that five can QTV check element away and what we've found when we still do all those checks and we
**** ROBERT O'NEILL XXN MR STEWART
go through and we do all those checks again and we eliminate that five can QTV check but still have to perform all these other checks, we find that over 12 hours shifts, we save about - I think it's 29 minutes and some odd seconds - 30 minutes. That was done by myself and Brad Mitchell, who is the - my fellow delegate on C shift and we physically went and did that. In fact, we raised this particular issue on 14 April with plant management and we offered him, near begging him to come down to see us do this because we want to get this right and that was rejected. They wouldn't come down.
PN166
Well, two other operators - you say 29 minutes - two other operators have estimated the savings are well in advance of that. They are incorrect?---This is where we get that variation. That's where the confusion was before.
PN167
Can I take you now to clause 41 in your EBA?---Yes, I'm there.
PN168
Can you see anywhere in that clause where it says agreement has to be reached before the company can implement redundancies?---Okay. Yes, I see what you're saying.
PN169
Well, no. I want to know can you see anywhere in that agreement it says that there has to be agreement reached before the company can implement redundancies?---In that paragraph, no, I can't. Sorry.
PN170
Thank you. What it does say though is it takes you to attachment 1 as the agreed process. That is right, is it not?---It does say that. Yes.
PN171
That attachment 1, that agreement was put together for how the redundancy process is to go, is that not right?---Yes.
PN172
The first point is that there will be a call for voluntary redundancies?---Yes.
PN173
The company, in fact, did that, did they not?---Yes.
**** ROBERT O'NEILL XXN MR STEWART
PN174
They received expressions of interest, did they not?---Yes.
PN175
So they actually have not done anything in breach of the agreement with respect to following clause 41 or attachment 1, have they?---No.
PN176
No further questions. Thank you.
PN177
THE COMMISSIONER: Can I just get some clarification from you before Mr Morrison asks you any more questions? The survey before upgrade B and C and then after upgrade B and C, were they carried out - the two people that carried out that the committee recommended, were they members of the union?---One is and one isn't, to the best of my knowledge.
PN178
All right. Then of the 10 people on each crew, how were they divided up? Were they the classifications - I see the classifications in the agreement that start at C7 and work back. Are they all the - do they compare in each shift? In other words, they are six C7s and four of the others. How are the classifications lined up?---There is no set arrangement for classifications, Commissioner. I'll give you an example. Myself, I'm a C8. The two gentlemen that did the survey I believe are C10s. I work with a C12 with myself. Those two fellows themselves - - -
PN179
So they are a mixture?---They are a mixture. Yes.
PN180
Thank you very much. Yes, Mr Morrison.
PN181
MR STEWART: Sorry, sir. Just to - before my friend gets to his feet. There is one issue arising out of that in respect to the two people who took the time surveys B and C. One of the amendments that was made to M2 reads: in particular were the individuals - sorry, agreed to by management and the consultative committee to complete the survey. In fact, among those who expressed an interest in taking one of these proposed redundancies. Is it your evidence that Nevis and the other employee were one of those, the employees, who have expressed interest for voluntary redundancy?---To me, yes.
**** ROBERT O'NEILL XXN MR STEWART
PN182
Can you tell me which one?---Nevis.
PN183
PN184
MR MORRISON: Yes, thank you, Commissioner. Just a point of interest, Mr O'Neill. What that means, redirect, is that I can ask you questions about matters that were raised by Mr Stewart. That is the simpler way of doing it. Mr Stewart spoke to you about that redundancy clause that - remember the last question?---Yes.
PN185
Specifically about clause 41. Had the company announced the redundancies and the union notify the company were actually in dispute with that?---Yes.
PN186
Did you point out that clause I asked you to read out earlier of the dispute settling procedure, while this procedure has been filed works will continue with the status quo maintained. Remember - - -?---Yes, I remember that. I'm just trying to find it.
PN187
You remember reading that? Did the company cease pursuing the redundancy or did they continue on despite the wording of the enterprise agreement?---They're still seeking the redundancies.
PN188
Thank you. Also you might recall Mr Stewart asking you about, on page 7 of M2, your document about the decommissioning of the old equipment?---Yes.
PN189
When were you advised by the company that the - they would in fact be decommissioning the old equipment?---On the consultative committee meeting of the 14th of this - no, last month. April.
**** ROBERT O'NEILL RXN MR MORRISON
PN190
14 April. That was after you had written the report?---That's correct.
PN191
So without stretching the point, you had no knowledge of the decommissioning when you wrote this report?---We found out on the 14th and the report was prepared on the 3rd and the 4th.
PN192
Another point that was raised about the workers in the crew floating along, do the work - does the work enable workers to be able to float along, the crew, or are workers confined to their particular workplace which is of the nature of the work?---In general terms, they remain in their position although they can be moved to another spot if the production requires it.
PN193
Is that common that workers move?---Yes. Relatively common. In relation to over a period of time, not day to day but certainly a worker may spend a year or two in one area but then move on to another area within the plant.
PN194
No, but the point as I understand that Mr Stewart was making in the question to you was that at any time during the day, a worker may float in front of it, the back of the equipment and anywhere along the line. Is that - - -?---No. They usually stay put for the shift.
PN195
Why would that be?---To make sure we have coverage of that particular area of the line. Leaving it unattended, you can't be sure that you're going to be able to keep an eye on the line and keep it running.
PN196
So in reality, there is no real capacity for a worker to float along the crew line?---No, not as such. No.
PN197
Lastly, if I could take you to those surveys that Mr Stewart mentioned, the before upgrade, after upgrade surveys that were drafted by management?---Yes.
**** ROBERT O'NEILL RXN MR MORRISON
PN198
Where did the data for the after upgrade information come from?---The data, to the best of my knowledge, came from the two gentlemen mentioned before. They basically got - they got the - were sent outside, to the best of my knowledge, and they were asked to go through and put - write down what they considered to be a fair amount of time for each of the jobs indicated and set out by management.
PN199
Where did they get the actual data from?---I'd have to say personal experience on the line. Some of it they can't possibly, I guess, get only to assume until the plant is up and running properly.
PN200
So this is presumed figures, not actual figures?---I believe that - if I can say yes. If I can say yes to that, if I can clarify it, Commissioner, is that some of these jobs haven't changed and the guys will know that yes, that's about right but some of these figures will be presumed to be what it would be.
PN201
Thank you.
PN202
PN203
THE COMMISSIONER: Mr Stewart, do you want to call your witness?
PN204
PN205
MR STEWART: Commissioner, before I start with the cross-examination of Mr Jack, I have just had a discussion with my friend and what I would seek to do is to tender this following folder. It is just a series of documents which I am going to take Mr Jack through and it would just be of assistance to the Commission and I have got copies for my friend as well.
PN206
THE COMMISSIONER: Yes. Mr Morrison, you have no objections? Do you want me to - this is not for the witness this one, is it?
PN207
MR STEWART: No, not for the witness. What I will do is I will take the parties through it as we go.
PN208
PN209
MR STEWART: Mr Jack, could you please outline for the Commission and address your answers to the Commissioner your role at the Smithfield plant and how long you have been there?---Yes, Mr Commissioner. I'm Plant Manager at Smithfield Can Plant. I've been employed at the particular site since the plant restarted back in 1998.
PN210
Can you also tell us do you have any previous experience in this industry?---I have. I was previously employed with Amcor Packaging and was there for 23 years. Of that 23 years, I was engaged in the same business, manufacturing aluminium cans for 21 of those 23 years.
PN211
Mr Jack, can you tell us a brief history about the Smithfield plant and its recommissioning in 1998?---Mr Commissioner, the plant was shut down in '95 due to loss of contracts. Receiver then was Coca-Cola. Back in '92 a decision was made to sell a section of Southcorp business which was the South Australian Brewery section of the business. A contention on that sale was the fact that Southcorp Packaging would get the Lion Nathan business in '98. A decision was made to transfer one of the can lines that was in our Clayton plant and move that plant to the Smithfield plant and rebirth it. That took place in '98. We moved into a mature market and supplied to Lion Nathan from 1 July. We initially engaged two shifts to operate the can plant but within the first month, myself being there, quickly realised that we needed three shifts to operate the can plant which we did so and we started the plant up in April of '98.
PN212
Can you tell us the line that was taken out at the Clayton site, is that the same line that exists today, save the introduction of the Belvac train?---Yes, it is. The line that was transferred out of the Melbourne plant was identical to the line that was there, except for individual pieces of equipment that were pertinent to both the lines and there was some new gear that was transferred to Smithfield that were unique.
PN213
We will get to that, the new technology, shortly but can you tell me is the Clayton plant still operating with that line as it was?---Yes, it is.
**** PETER ROBERT JACK XN MR STEWART
PN214
In relation to that - to the new piece of equipment, the Belvac train, can you give us some understanding of your involvement with the spending of the capital expenditure for that piece of equipment?---Mr Commissioner, I was asked by the company some years back to look at the introduction of new equipment to the line. There's been an increase in demand as far as Smithfield business was concerned. At the same time, what was required to look at crew reductions to remain competitive. I was given an opportunity to go overseas in October of 2002 to have a look at what technologies were being used in some affiliates that we have through Europe and through the States and also have a look at the piece of equipment that we mentioned as Belvac train and operation in Moscow and also in Sweden. Having come back from those 2 weeks of looking at the particular gear and equipment, came back and made recommendations and looked at seeking something like seven and a half millions dollars worth of capital to inject in the Smithfield plant with the introduction of the Belvac train, the synchro-automated enamel rater and some other upgrades that would take place as far as the line was concerned.
PN215
Mr Jack, the spending of that over $7 million in capital improvement, will that have the effect of maintaining the Smithfield plant's competitiveness?---It will do so. It certainly will give us the capacity to increase output annually by round about 90-odd millions cans above what we can manufacture today.
PN216
In terms of the competition within the market that you operate, is that a requirement to maintain internally competitive with your competitors, direct competitors?---Very much so. We hold nationally around about 40 per cent of the business. Our competitor holds 60 per cent but not only that, we really do remain competitive against the manufacturer of glass which is another package that we're competing against.
PN217
If I can take you - could the witness be shown exhibit M1, please? The EBA. Could you please turn to page 3, Mr Jack, which is - in particular clause 7?---Yes.
PN218
Now, it reads - and I will just lead him to this:
**** PETER ROBERT JACK XN MR STEWART
PN219
The purpose of this agreement is to promote employment relationships through which the contribution of employees for the efficiency and effectiveness of the enterprise is encouraged, recognised and appropriately rewarded. In achieving this purpose, three principles are paramount.
PN220
Can you read point (c), please?---Continuous improvement with total process and all parts of the process with a goal of achieving international competitiveness.
PN221
Is that provision one that is underpinning the company's need to introduce this machinery?---Yes, it is.
PN222
Can you, Mr Jack, describe for the Commission what the Belvac train does in terms of its replacement of existing machinery?---The current line that was transferred from our Melbourne plant was installed there in 1998. That's some 16 years old. To do the necking process of our - on our can line, we currently need to necker the can through one machine. We then transfer it to another machine to flange it. We then transfer it to another machine to test it. The Belvac train that we purchased is a replacement for those three pieces of machinery, with one machine that allows the necking process to take place through nine stages. There is a flanging process, a reform that we'll be introducing in some months to come and a tester. It will allow us to have a machinery speed rating of around about 2400 a minute, but our intention is to run that around the 1700-1900 can per minute mark. The current equipment is - has a problem as far as sheets pieces are concerned. It's currently at its limit of 16 - 20-16-50 and the tooling that we had supplied to us back in '98 is original. So it's been there since - for at least 16 years, whereas the new machinery is state of the art, brand new tooling and gives us more consistency in terms of where we've been for the last 6 years.
PN223
Mr Jack, have you had discussions with the consultative committee regarding the introduction of this new machinery?---We have, Mr Commissioner. We raised this issue when we were first looking at our negotiations for our EBA last May. We made the committee at that particular stage aware that the company was seeking to inject in excess of $7 million worth of capital into the plant and would be looking at a crew reduction of one per crew.
**** PETER ROBERT JACK XN MR STEWART
PN224
Can I show you this document please, which, Commissioner, you will find at tab 1. Now, Mr Jack, the attendees at that meeting, Mr O'Neill was present?---That's correct.
PN225
Under general discussions towards the bottom of the page, second paragraph, it says the Plant Manager explained that the plant would be expecting an upgrade. This upgrade would mean a crew reduction on the back end or one person per shift with subsequent redundancies?---Correct.
PN226
Did you discuss that with the committee?---Yes, we did.
PN227
Now, Commissioner, should we mark these individually or?
PN228
THE COMMISSIONER: I think I will mark them as one.
PN229
MR STEWART: Just all those as one? Okay.
PN230
THE COMMISSIONER: The document is quite expressive, once we go into it.
PN231
MR STEWART: Okay. Thank you. If I could show you another document now. What I might do is give you a bundle.
PN232
THE COMMISSIONER: Can you hand them up, to save my associate - - -
PN233
MR STEWART: Yes. That is right. Yes, save time. Thank you. Okay, Mr Jack. There is a bundle of documents before you. If I just work through them with you. The next two pages relate to a meeting dated 29 May 2003?---Yes.
**** PETER ROBERT JACK XN MR STEWART
PN234
Do you have that in front of you?---Yes, I do.
PN235
In attendance was yourself and Robert O'Neill?---Correct.
PN236
Does that list of attendees, does that make up the consultative committee?---It makes up the representation that we have across all crews, although we may not have had full complement with regards to the - of all crews being there at that particular time.
PN237
Right, but there is enough attendance there to put together a quorum, if you like, to have a meeting?---That's correct. That's correct.
PN238
In the boxed paragraph you have got there in the middle of that page the final dot point. Can you see that?---Yes, I can.
PN239
Can you read that out?---Crew reduction of one person per shift from 10 per shift to nine per production shift effectively dated 1 July 2004.
PN240
Now, under that you can - if you go down, can you see where it says capital works approved $.7 million?---Correct. Yes.
PN241
Increased line speed to 750 cans per minute?---That's correct.
PN242
Are you telling the Commission that this was information you provided to the committee at this time?---That's correct.
PN243
At the bottom of that page it says: back end, choo-choo train to be ordered and installed by Easter 2004?---Yes, that's correct.
**** PETER ROBERT JACK XN MR STEWART
PN244
Are you referring to the Belvac train?---Yes, I am.
PN245
If I could take you to the next document in your bundle there, which is EBA meeting number 3, 14 July '03?---Yes.
PN246
In relation to the minutes of that meeting at point 7, it says: the objection to the reduction of shift crews. Can you explain to the Commission why in an EBA meeting there was an objection to the reduction of shift numbers?---My understanding was that the objection was from the employees. They felt that this was not the appropriate time to raise a reduction as far as crew size was concerned, that it would be better presented to us outside the EBA and let's just focus on the EBA and put that behind us.
PN247
So was it your intention to write this reduction into the EBA?---It was. We were looking at doing the same situation at our Clayton plant, who was negotiating their EBA at the same time.
PN248
Was the - or who was the union organiser involved in those negotiations?---Martin Cartwright represented the union during the - with our negotiations.
PN249
Mr Cartwright's feeling on this, can you explain that?---Our understanding of things through the negotiations was that the company had the right to seek reductions. The union representing the employees had concerns that it didn't want to turn around and consent to reductions of manning in an EBA and that they would seek to look at those particular reductions presented by the company outside the EBA once it had been ratified.
PN250
So when we go over to the next page, that is a subsequent EBA meeting and at point 10, are you telling the Commission that at that point it was decided that this issue of crewing reductions would no longer be an EBA committee issue?---That's correct.
**** PETER ROBERT JACK XN MR STEWART
PN251
If I can take you over now to consultative committee meeting dated 17 December 2003. Do you have that document?---Yes, I do.
PN252
The final bullet point there: redundancy - - -
PN253
THE COMMISSIONER: Excuse me, behind what tab was that?
PN254
MR STEWART: 6. Sorry, Commissioner.
PN255
THE COMMISSIONER: Behind 6. Thank you.
PN256
MR STEWART: The final bullet point reads: redundancy notice was to be advised early March 2004. It was subsequently agreed that voluntary redundancy notice would be advised in early February 2004. So can you describe that consultative committee meeting and what you told the committee at that time?---Mr Commissioner, at this particular meeting, I was asked as to how I saw the redundancies occurring. I had stated to the committee members present on the particular day that I would be looking at drafting a letter up asking for voluntary redundancies. I had suggested at that particular point of time that I would be looking at putting what a pay out figure may be for those individuals at that particular stage. It was suggested to me by the representatives that they - while they may have the right to do that, that they would check it up with the union. We had discussions around the timing of that. The original attention was to put those notices out in March. The discussions with the committee were very sound and very sincere. We discussed whether, in fact, that may be appropriate, given that we were looking at these redundancies to take place around the middle of June, the end of June and whether that would be sufficient time for the four volunteers that we were hoping to turn around and get to seek further employment. Through those discussions, we felt that we could bring that forward to February, hence giving the volunteers more time to be able to know whether, in fact, that they were going to move from our particular site and seek employment so that they may leave the Smithfield site and essentially be re-employed the following day.
**** PETER ROBERT JACK XN MR STEWART
PN257
At that point in time, did you feel that there was agreement from the committee regarding that bringing it forward?---It terms of bringing that forward, yes. Certainly they were still not in agreement with the fact that we were moving from a crew reduction from 10 down to nine.
PN258
At any point, did they say that you were in breach of the redundancy provisions or the dispute resolution procedure because of your following of the redundancy clause?---No, not at all.
PN259
The document that you would have directly after that, that last meeting of 17 December, should be two tables listed operator 1, operator 2. Do you see that?---No.
PN260
You don't have those? Sorry, I've got those here.
PN261
THE COMMISSIONER: I don't have them either.
PN262
MR STEWART: Don't you?
PN263
THE COMMISSIONER: The next document I have goes straight to 21 January.
PN264
MR STEWART: Okay. Well, what I might do, Commissioner, is to show you these two documents then.
PN265
THE COMMISSIONER: Well, show them to the witness and I will look at them later.
PN266
MR STEWART: It appears that my friend does not have a copy of these either. So I might - - -
**** PETER ROBERT JACK XN MR STEWART
PN267
THE COMMISSIONER: Well, you can show him yours, can't you?
PN268
MR STEWART: That is the only copy I have. I actually thought they were in the folders.
PN269
THE COMMISSIONER: All right. We might take a short adjournment why my associate photocopies them for everybody.
PN270
MR STEWART: Thank you.
PN271
THE COMMISSIONER: The witness is still under oath and is instructed not to discuss this matter with anyone. We will adjourn for 10 minutes. The Commission stands adjourned.
SHORT ADJOURNMENT [11.34am]
RESUMED [11.55am]
PN272
THE COMMISSIONER: Yes, Mr Stewart.
PN273
MR STEWART: Yes, thank you, Commissioner. Before we adjourned, we made arrangements so that everybody could have copies of operator 1. I'm indebted to your associate for that. Mr Jack, if I take you now to the operator 1 before and after tables that you now have in front of you?---Yes.
PN274
Can you tell the Commission who undertook those tables - to fill in those tables?---Those tables were filled out by one of our operators in this area. His name was Andrew Francica.
**** PETER ROBERT JACK XN MR STEWART
PN275
Who is Mr Francica?---He's one of our back end operators working in the IC area.
PN276
Why was Mr Francica chosen?---At the particular point of time through discussions we had through our EBA, we were requested to provide some evidence as to how this crewing reduction would take place. On the particular day, Mr Francica was on shift, being one of our main operators in the area. He was asked if he could do a job analysis or element of what he does during his 12 hour day. He did that, provided the relevant elements and he was asked if he could put down how much time was involved on his 12 hour shift to undertake those particular job elements.
PN277
So the 13 individual items, did Mr Francica have an involvement in identifying those?---No. Mr Francica identified all of those by himself.
PN278
Did you influence him in any way?---I was not involved. It was undertaken, I believe, with the Production Manager. I believe Mr Francica was left to his own devices to evolve the job elements and times and the Production Manager could keep those in the current format that's there.
PN279
Is Mr Francica one of the employees who have nominated for voluntary redundancy?---No, he's not.
PN280
Now, if we look at the before and after, we can see a total minutes per shift move from 800 to 480. Do you see that?---I do.
PN281
Can you take me through the after upgrade sheet and explain to me where the reductions are made?---These reductions again were based with the discussions we'd had with Mr Francica in terms of the extent of what the new equipment would do and we asked him - or he was asked to put his own time values down at that. The first reduction there is the three, the gun checks which is occurring three times per shift. It looks like he has noted down there a 45 minute period to do those checks with the introduction of the new technology into the factory.
**** PETER ROBERT JACK XN MR STEWART
PN282
So that is a half. He has estimated that would take half as long now?---That's correct.
PN283
The QTV check?---QTV checks are checks that are currently have been undertaken by the operators every half hour. The cen-con enamel rater that's been installed on the line now does those automated - those checks now randomly every half hour.
PN284
So that reduction is from 120 minutes to zero?---Down to zero. It's now done by a piece of equipment.
PN285
Point 3?---Cleaning of boxes and sheets. It remains the same even with the introduction of one additional IC.
PN286
Point 4?---The dome reversal checks. They're checks that will not be affected with regards to the introduction of the new machinery. So that's still required. It remains at 60.
PN287
I will take you - I will lead you down to point 9 which is the next reduction in time. Is that correct?---That's correct. Yes.
PN288
Point 9 scrap bins. Can you explain that?---Currently out of the area where the existing necker flanger and tests are allocated, we average between five and eight scrap bins per shift. These bins hold about 1000 cans and require the operators to transport those bins to a baling area where the aluminium is scrapped and baled. The experience that we've got with regards to the machinery running overseas has indicated that it will generate less scrap out of the area and hence there was a reduction there put down to an average of five bins - sorry, between three and five bins per shift.
PN289
If the time saving the fact that the bin needs to be wheeled down to another area?---That's correct.
**** PETER ROBERT JACK XN MR STEWART
PN290
What is the distance between the Belvac train and the baler, where the bins are taken to?---It would be approximately 100 metres.
PN291
That reduction is indicated in the savings of 20 minutes outlined there at point 9?---That is correct.
PN292
Point 10, there is a saving of half?---Yes. The current practice and our old machinery required top up of waxer oil every 2 hours and also checking of O rings. The Belvac necker flanger test that we have purchased has an integrated waxer and that requires the oil to be added as required certainly. The frequency of late having run it out for some 48 hours is approximately once a shift.
PN293
Now, after that - I'm sorry, before we move on. That study, was that your response to the request from the committee to provide evidence of the time saving?---It was. Certainly the before one was provided to the committee at a meeting in January, 21 January. That subsequently had a response from the committee of requesting a further two operators may want to undertake a time and motion study or a - - -
PN294
Well, I will take you to that in just a second. Sorry to cut you off. If you maybe go over the page to your next consultative committee meeting note, which is under tab 7, Commissioner.
PN295
THE COMMISSIONER: Yes.
PN296
MR STEWART: Which is dated 21 January. Is that the meeting you are referring to?---I am. Yes.
**** PETER ROBERT JACK XN MR STEWART
PN297
Could you - sorry to interrupt you. Start again and take us through this?---Yes. At that particular meeting, we provided or tabled the before upgrade that Mr Francica had undertaken which was some 800 minutes and that's the first time I think the employees have seen the reduction here in terms of what a current employee believes was the before. It was suggested at that particular point of time by Gary Unsworth, I believe, that Michael Hudson and one of the other operators, Nevis Rodrickus, who are the two most experienced operators we have in the area that they should undertake further study to confirm whether, in fact, these before time job elements and times are correct.
PN298
Who is Mr Unsworth?---Gary Unsworth is an operator that is on the consultative committee, has worked in our front end area and currently is a decorator/operator in our back end area.
PN299
Is he a union member?---I believe he is.
PN300
Now, the suggestion of Mr Hudson and Nevis - Mike and Nevis, shall we say, was that objected to by the committee?---No, it wasn't. In fact, it was suggested that they would obviously call for volunteers but they were the two gentlemen's names that were provided at that particular point of time, subject to their approval to undertake the task.
PN301
The questions or the items identified originally by Mr Francica, were they called into question?---At that particular point of time, no.
PN302
Now, there has been a suggestion in evidence earlier today that Mr Nevis is one of the employees who has volunteered for redundancy. Are you aware of whether or not he has?---No, he has not at any stage made any application to myself or the company for any form of redundancy.
**** PETER ROBERT JACK XN MR STEWART
PN303
There was also evidence given today that calling into dispute whether or not the company suggested a time in motion study. Can you explain your understanding of that request to the Commission?---There was a suggestion by, I believe, Robert O'Neill for a time and motion study. My understanding of things that Robert had provided some - not evidence but an opinion that he had undertaken a time and motion study with himself and Brad Mitchell, which is one of our electricians. There was reasonable discussions with the union organiser, Martin Cartwright, and the consultative committee with regards to that. There was certainly objection by Martin in terms of a time and motion study.
PN304
Did you object?---No, not at all.
PN305
After the time and motion study was not supported by Mr Cartwright, was it a joint finding of the committee to proceed with Nevis and Mike?---Well, I was subsequently provided with two names which was Michael Hudson and Nevis Rodrickus to undertake the study and both those employees were shown the first sheet that was undertaken by Andrew Francica and I believe they were asked if there was any elements of that particular sheet that they felt wasn't on there they could add to it.
PN306
Mike, is he one of the people who have volunteered for redundancy?---No. No. He never has.
PN307
Now, if I take you to tab 8, Commissioner, which is the next sheet, consultative committee meeting of 18 February. Do you see that?---Yes, I do.
PN308
On the fifth bullet point, about half-way down the page, the findings from the time study with the two nominated employees and Drago Fehir were tabled?---That's correct.
PN309
You tabled the two studies then by Mike and Nevis. Is that correct?---That is correct.
**** PETER ROBERT JACK XN MR STEWART
PN310
What was the response by the committee members to those?---They - first they'd seen them. Obviously they wanted to have some consultation with the union because the union wasn't present at that particular meeting.
PN311
If I could take you to - if the witness could be shown exhibit M2. You have seen that report before, Mr Jack?---Yes, I have.
PN312
Towards the - about the middle of the document you will find a series of four tables before upgrade survey B and C and then after upgrade survey B and C?---Yes, I have that.
PN313
Now, these are the two surveys you are referring to with Nevis and Mike?---That is correct.
PN314
Now, can you explain the - what I will do is I will take you back into the operator 2 - sorry, operator 1 after upgrade table which shows a total minutes per shift of 480. Do you see that?---Yes, I do.
PN315
Then if we look at after upgrade survey B and survey C - - -?---Yes.
PN316
- - - can you see what the two minutes after upgrade total there?---Yes. 445 and 480 minutes.
PN317
So in one circumstance in C, we have exactly the same times afterwards?---Correct.
PN318
In survey B, in fact we have less time?---Correct.
PN319
Do you believe that these two after tables are accurate and reflective of the time saving that will be made?---I believe they are. I mena, these are the guys that are the most experienced operators we have. They're operating these particular equipment 12 hours a day. I believe they are very accurate.
**** PETER ROBERT JACK XN MR STEWART
PN320
Now, if I can take you forward to - sorry, take you back to the consultative committee meeting that occurred on 18 February?---Yes.
PN321
Had you at that time issued the notice calling for voluntary redundancies as far as you can recall?---No, not at that particular point of time. It was at that particular point of time that made it aware that it was now February. In the discussions we had back in December, we were talking about giving the employees the opportunity to volunteer for redundancies in February. I was mindful of the fact that we were now at 18 February and March was fast approaching as was the intention of middle of June, end of June with respect to the redundancies occurring and made it known at that particular point of time that I would be forwarding these letters out to all employees.
PN322
What was the response of the committee to that?---I think disappointed at the fact that the letters were going out, but as expressed, that I had an obligation to the volunteers that we were calling for to also look at their particular interests and give them every opportunity to be able to either take the redundancies and then seek employment prior to the actual termination taking place.
PN323
The letters that you put out, did you provide figures that individuals would receive?---No, I did not.
PN324
Why didn't you?---I took on notice what was put to me by the union and also by the committee members in earlier discussions we had and felt at that particular point of time that it was in - certainly in the interest of the company just to ask and call for people who may seek the opportunity to take that redundancy and to find out what they may be required as far as their individual pay out was concerned.
PN325
In response to that, how many expressions of interest have you received?---To the close of date we had five people who had - we actually had seven people - had seek for what their pay out figure might be of which we've only had five that were actively looking for the redundancy.
**** PETER ROBERT JACK XN MR STEWART
PN326
On that basis, the company would not be required to enforce any redundancies. Is that correct?---Certainly with five looking at four volunteers, no we wouldn't.
PN327
What I would like to do now is to take you through some of the elements raised by the applicants questioning the time saving. Now, you will find these in exhibit M2 which is the report produced by the union that you have in front of you and if I could start by taking you to page 5?---Yes.
PN328
Now, the first item there is the seventh internal coater. Do you see that?---Yes, I see that. Yes.
PN329
Can you explain to the Commission why a seventh IC is being installed?---Mr Commissioner, one of the main issues that the plant suffered in the last 6 years is the inability to be able to maintain one of their ICs off-line or certainly if we have a failure at those particular machines, we immediately go below our rated speed. It has been a problem to us in that particular 6 years with loss of efficiencies and certainly it would appear to be an oversight with the original installation of the equipment back in '97 and the commissioning in '98. The line upgrade with the introduction of seventh IC will allow us to be able to isolate one of these ICs and not drop below our rated speed off our decorator. So we'd be able to fully maintain our equipment at the same time. If there is a particular failure of one machine, we don't drop below our line rated speed.
PN330
Do you currently operate with six?---Yes, we do.
PN331
Will you be intending to operate all seven at one time?---No. The intention will be to operate six with the seventh machine being maintained, although there may be short periods where the seventh machine may be on line just to test it.
**** PETER ROBERT JACK XN MR STEWART
PN332
If we take you over the page to page 6 of the report, one of the major concerns relied upon by the union is that the Belvac train will not have the ability, or that the front end cans coming out, will not be within the tolerance ranges necessary to keep the train operating. Can you see that outlined half-way through page 6?---Yes, I do.
PN333
Can you explain your understanding of whether or not that will occur or if that is a problem?---Whether we operate with three necks or nine necks, control of the cans off a front end as far as top or variation is critical. Our current specification allows for a maximum of 13 micron variation. What we've been advised by the machine manufacturer, Belvac, is that we need to tighten it up and that needs to come down to 10 micron. So we're changing our specification from 8 plus - 8 micron variation from nominal to a minus 3 to 5 plus 5 minus 5. The check we currently do is a very aggressive check to determine its variation as opposed to what the equipment manufacturer would ask us to turn around and do.
PN334
Can I show you another document, please? Sorry, Commissioner, I'm one copy short again. Have you seen that before?---Yes, I have.
PN335
PN336
MR STEWART: Thank you. Can you tell the Commission what this document is?---Yes, Mr Commissioner. We've had a Belvac representative out here last week. The gentleman concerned has vast experience in the manufacture of equipment that produces the cans off our front end. We had asked the gentleman in question to do a quick audit of our front end, to advise us whether in fact what we were manufacturing off the line at that particular point of time was suitable to go through the necker. He confirmed to us that
**** PETER ROBERT JACK XN MR STEWART
what we were producing would go through the necker. However, we would certainly need to reduce the top or the can down back down slightly on a more continuous basis. What we were actually trying to try and do was to produce a hybrid can off the front end that would go through the new equipment and the old equipment in the commissioning phase.
PN337
So the concerns raised by the union on page 6 of their report, do you believe that this memorandum addresses those concerns?---I certainly - I think it puts at ease any concerns the employees might have with regards to additional work control that we may have to try and do off the front end. I think it just supplies to us the work that we've put in for many, many months now, making sure that we do have good control off - of concentricity off our front end.
PN338
You have explained to the Commission that this machine, the Belvac train, is replacing three separate machines?---Yes.
PN339
Can I show you another document, please?
PN340
THE COMMISSIONER: I have just been reminded that my accounting is out. I don't think we do have an S2, do we? So the document that I marked S3 we will leave at 3 and we will mark this one 2. Okay?
PN341
MR STEWART: Okay. Have you seen this document before?---Yes, I have.
PN342
PN343
MR STEWART: Thank you.
**** PETER ROBERT JACK XN MR STEWART
PN344
THE COMMISSIONER: Thank you. Sorry about that.
PN345
MR STEWART: Now, Mr Jack, this document you prepared, does this show the total time in terms of percentage lost due to machinery down time?---Yes, it does.
PN346
Would it be fair to say then that the average percentage of time lost would be around between 2.2, 2.4 per cent?---That's correct.
PN347
Now, those studies were taken on the three individual machines, the necker flanger test?---This is correct.
PN348
So this machinery you said was 16 years old?---That is right.
PN349
In fact, that machinery is separated by a period of line - - -?---Conveying system is correct.
PN350
- - - or conveying?---Yes.
PN351
So do you therefore believe that the introduction of the train will see a reduction in this down time?---I certainly do and it's certainly based on my observations that I saw the equipment running over in Moscow and through Sweden and the fact that bigger problems that we currently have in the line is the controller cans to and from those particular machines and that there is, in fact, only one in-feed conveying system went out for the conveying system - the new - in the new equipment.
PN352
Have you built in this time saving that you believe will occur through the reduction in down time maintenance into the time saving estimates that were tabled to the consultative committee?---No, nothing at all.
**** PETER ROBERT JACK XN MR STEWART
PN353
So would it be fair to say then that this time saving put to the consultative committee is, in fact, less once you build in this down time reduction?---I would certainly think that there is going to be a vast reduction as far as the frequency of our operators to have to go and attend to the new machinery as opposed to what they've had to do in the last 6 years with the old equipment.
PN354
I will take you back to page 6 of the report prepared by the union and it has a number of attachments to it which is 12 months worth of variance reports from your front end?---Yes.
PN355
Attached to the back. You have had a chance to look through those?---I have.
PN356
Those reports, are they based on the 360 point check?---Yes, they are.
PN357
Is it true that the Belvac methodology of testing is a 4 point, north, south, east, west check?---That is correct. That's what was asked by the machine manufacturer to at least comply with.
PN358
Can you describe which of those two checks, 360 versus the 4 point, is the more stringent?---The check that we do in the on-site currently are 360 degrees is far more stringent than what's required by the machinery supplier.
PN359
So is it the case then that the reports - the information attached to the back of the report is not the same methodology that needs to be considered for the operation of the Belvac train?---It's the same methodology we currently use but it certainly provided to us what our first thoughts were that the checks were doing what we're providing off the front end currently is certainly well within the manufacturing inspect that's required by the equipment to operate.
PN360
Yes, thank you. I will take you over the page now. It says: plant upgrade choo-choo continued. Can you see that?---Yes, I do.
**** PETER ROBERT JACK XN MR STEWART
PN361
In bold, half-way through that first paragraph it says: using the new and old machinery?---Yes.
PN362
The contention was put forward that there would be twice as much equipment to physically maintain. Is that the case?---No, it's not. It was certainly never the case to be able to swing between the old equipment and new equipment, once we converted over and in fact having run the machinery and commissioned the thing on Monday, we've got no intention to go back with - the cans we now have to produce off a front end to go through the new piece of machinery, the Belvac. They will not operate through the old equipment.
PN363
Is the old equipment to be decommissioned?---It is, Mr Commissioner. The old equipment is ear-marked for our Clayton plant and our plant in New Zealand.
PN364
Half-way down page 7 there is mention of an enamel rater and there is a position put forward that, in fact, any time saving through the automation of that process will be lost in maintenance of that cen-con rater. Do you agree with that?---I don't. I certainly fail to see what general maintenance will be doing on that particular machinery during the course of a 12 hour shift, other than topping up the solution or if the machinery does provide the operator with a fault which it's designed to do, is to then make - is then have the operator find the particular fault, not on the machine, but - and then correct it which would be back in the spray system.
PN365
One of the issues raised by Mr O'Neill in his evidence was the fact that that was only one part of - I think it was a five step process in terms of checking cans coming out of the rater and there was a requirement to pick up and look at the bottom of a can. Can you explain your understanding of that?---One of the checks the operators do with the three gun checks which occur three times a shift. The current process has the operators marking those cans off each machine with a texta. They then follow those cans through an oven process where it's cured. They're then required to bring those cans back and check for the integrity of the coating internally. We've installed an ink dot system that's
**** PETER ROBERT JACK XN MR STEWART
still being commissioned. The intention is that the operators won't have to mark the cans up nor wait for the cans to come out of the back of the oven. They can walk to the back of the oven, subsequently pick up the cans, look for the can that's identified of that particular machine, bring it back and no longer would they be required to do the check manually. They could do that through the automated enamel rater.
PN366
Thank you. If I could take you over to page 8 of the report. The third paragraph has in bold: or the issue raised yet another red flag for us, again highlighting your apparent lack of thought that appears to have been devoted to plant management's analysis of the consequences of this upgrade. That has been stated in respect of an accumulation table. Can I ask you (a) do you agree with that; and (b) why was an additional accumulation table put in place?---I wouldn't say it was a lack of thought. I think all the way through that we've got a philosophy at Smithfield that certainly we don't have all the answers and all the solutions but during the course of the EBA negotiations where we had shift meetings and advised the employees of the content of the line upgrade, during one of those particular meetings, it was subsequently raised there was some concerns, was expressed by employees as to the reason why they felt they would be losing time with the reduction of conveying space or sponge, as we call it, through the old equipment versus the new. That was a very good point made by, I think it was Robert, and we took that on board and said: well okay, what should we try and do. We then essentially developed a plan by building an accumulation table and had that installed by, I think it was October of last year. This certainly increased the storage capacity or sponge that we now have between the existing necker and what we're likely to lose to what we've now gained with the introduction of that.
PN367
So the installation of a new accumulation table came as a direct result of a suggestion from the committee?---That's correct. Well, certainly by one of the employees through a discussion we had with the shifts.
PN368
It goes on in the second last paragraph there, it says: this suggests either a lack of management confidence in the espoused attributes of this machine or recognition that the tolerances demanded by the new machine will not be easily be provided by existing front end can quality. Do you agree with that statement?---No, I don't.
**** PETER ROBERT JACK XN MR STEWART
PN369
If I can take you now to page 11 of the report prepared for you and that speaks about - or puts together some figures that Mr O'Neill believes are representative of a fact that there will be no cost saving through the redundancy process. Can I show you this document? Have you seen that document before?---Yes, I have.
PN370
Can you tell the Commission what that document is?---It's a document that equates in terms of the savings that the company will have with respect to the - with the redundancy for employees and works back in terms of how much production time we'd have to lose before we rated those savings.
PN371
PN372
MR STEWART: Thank you. Now, where it - it goes through this document and it outlines that there is a marginal profit per million cans of just over $23,000 and you have done a comparison to show how much lost production days would need to occur before that savings was taken up. Is that correct?---That's correct.
PN373
Now, it lost production days of 7.2 that you have arrived at. Can you just explain what that actually means to the Commission?---That means that we would have to - we would have to have minor stoppages on the Belvac train that over a 12 month period would equate to those accumulated stoppages of 7.2 days before we erode the savings with regards to the redundancies.
PN374
Thank you. If I could take you now to minutes of the consultative committee meeting - well sorry, no. Before I do, I will just take you finally on page 11, do you therefore agree with the figures that have been put forward in this report?---No, I don't.
**** PETER ROBERT JACK XN MR STEWART
PN375
If I could take you to the consultative committee meeting minutes of 5 March '04 which is found at tab 9, Commissioner. Can you explain to the Commission what occurred at that meeting?---At that particular meeting we had tabled the findings of Nevis Rodrickus and Michael Hudson of which the union required time to look at those particular findings of the employees. Also at that particular meeting, we had - prior to that had sent the letters to all employees seeking voluntary redundancies.
PN376
At that meeting, was a new union organiser present?---Yes, it was. Yes.
PN377
Mr Cartwright had been replaced by Ms Seagrove?---That's correct.
PN378
Had she been privy to the previous consultative committee council meetings?---I can't comment. I'm not sure about that.
PN379
At that time, was any of the materials raised in - or any of the arguments raised in the report in two brought to your attention?---No.
PN380
Did you, during that meeting, have discussions regarding the operations of the Clayton plant?---Yes, we did and we made parties aware that our Clayton plant had moved to nine people and it had done so at the end of January and again reminded parties that the Clayton plant had always operated in its back end area with five people and that when we had taken our three shifts back in April of 2000 - sorry, April of '98 to Clayton plant to view the operation of the private plant starting up, that they were operating this particular area with only one person.
PN381
So the reduction that you were seeking to introduce to Smithfield had, in fact, already been operating at Clayton?---Had been operating its back end area certainly well before we started the plant back up in '98.
**** PETER ROBERT JACK XN MR STEWART
PN382
The Clayton EBA has written into the document a reduction clause to take the crew numbers from 10 to nine, does it not?---Yes, it does.
PN383
Can you explain where that reduction occurred at Clayton?---Yes. They had a - their tenth operator - I'll use the person, the tenth - this particular operator was their scrap person. They did not have an automated baling system like we have at Smithfield. This gentleman was required to accumulate the scrap bins for around the particular factory and then bale the scrap and then manually stack those particular bales on pallets. They introduced an automated baling system like we have at Smithfield that will allow that person to be removed from their particular operation and subsequent work that was conducted by - it will be shared evenly amongst all the remaining parties.
PN384
Was the reduction at Clayton from 10 to nine due to the introduction of an automatic baler?---That is correct. Yes, it was.
PN385
Have there been any subsequent meetings of the consultative committee following 5 March meeting?---No, we haven't because at that particular point of time, we requested a hearing of the Commission.
PN386
When the line was taken out of Clayton and set up at Smithfield, was it intended that there would be two designated people operating in the IC area?---It wasn't. We were advised when we started the plant up that we were going to have 10 per crew. At that particular point of time we really didn't know where we would be have our employees. We subsequently visited the Clayton plant and got an indication as to where they were operating. We made a decision consciously about the Smithfield plant, given the fact that when we were starting the factory up - a mature market on supply, we had little or no can making skills. I think out of some 30-odd employees that were going to operate the equipment, we had no more than about half a dozen had can making experience. So a decision that we made at that particular point of time was that we would put - I'll use the terminology floater - into our back end area where we thought that we would have a much greater impact on the line to meet the needs of our market place at the time.
**** PETER ROBERT JACK XN MR STEWART
PN387
Was one of the issues raised in the consultative committee meetings regarding this reduction a problem with shift coverage?---Yes, it was. There were concerns expressed by the employees that were going to be going down from 10 to nine and that this may give us issues as far as coverage is concerned with regards to annual leave or sickness that occurs from time to time.
PN388
Have you considered these issues and looked at this?---We have done, certainly now that we operate four crews 7 days a week. It is much easier to turn around and get shift coverage than it was when we were trying to operate the factory with three crews on a 5-6 day operation.
PN389
Can I show you the following document, thank you? Is that a report you prepared addressing this issue of shift coverage?---Yes, it is. It's a report that goes back and has a look at the shift coverage that we've had for the January, February and March period of 2004.
PN390
PN391
MR STEWART: Can you just take us through - maybe we will just use January as an example - how this table operates and what information it provides to us?---Yes. The table indicates the shifts that we've had during the course of the month and the number of shifts during that particular month where we did not man up to 10 people. It was the fact that we had sickness or we had annual leave and we couldn't get coverage on those particular shifts.
PN392
So the final column - sorry, second last column from the left which reads: shift run short by, where it indicates 1, does that mean less than 10?---That's correct.
**** PETER ROBERT JACK XN MR STEWART
PN393
I see. Now, do you - when you operate those shifts with one less than 10, do you have problems with the maintenance of the flow of cans or the production or any of the production processes?---No. Certainly we've not seen any evidence as far as our budget or performance is concerned or efficiencies. We actually gain where we've lost opportunity or production.
PN394
That is based on the old necker flanger tester three piece system?---That is correct. That's existing line. Yes.
PN395
I see. Now, have you ever run short of nine people on occasion?---Yes, we have.
PN396
How has that affected the production?---It has affected the plant from - on the odd occurrence and it's very odd. There's been occurrences there where we've had phone calls of numbers down as low as seven and we've left it to the team leader to make a call on what he wants to turn around and do. That call could be that he shuts our front end down and continues to operate the back end with supply out of dry stock or if there's insufficient dry stock, he may choose to turn around and shut the back end down and make dry stock.
PN397
If I can take you now to the agreement, M1, the certified agreement for Smithfield. I'm not sure if you have that there?---Yes.
PN398
Yes. Clause 28. Clause 28, Mr Jack, speaks of the company's requirement to consult with the union and the employees prior to the introduction of change. Do you agree with that?---Yes, I do.
**** PETER ROBERT JACK XN MR STEWART
PN399
Do you believe you have consulted adequately through the committee with the employees and the union?---I believe we have. I mean, the discussions regarding the implementation of the line upgrade and seeking approval and then actually getting approval for the seven odd million dollars was conveyed back in May last year. It has continued to be conveyed to the EBA negotiations and continually has been conveyed to the employees through shift meetings as we became aware of approval and then kept them in line with regards to when the equipment was coming in. We've even taken the opportunity to display photographs of the conveying systems that were being built by our overseas supplier as they had sent them to us during that period.
PN400
I will take you forward to clause 36 of the agreement which is on page 20 and that is in relation to the consultative committee where it says: the objects of the committee are to investigate, determine and make recommendations on matters including but not limited to one, the introduction of new technology. Do you believe that the committee has been able to investigate, determine or make recommendations on the introduction of the Belvac train?---I believe that they have. I believe they've made those - some recommendations as we've taken on board with regards to the conveying system that was added between the train and also the IC spray machines, but again the introduction of the Belvac train is one small element of the seven odd million dollars being spent in the factory.
PN401
One of the submissions that was put forward in evidence by Mr O'Neill was that the figures in the tables are only estimates. Do you agree with that?---I do.
PN402
So it is possible, is it, that in fact the process outlined in those graphs might, in fact, take less time?---There is a possibility that could occur. Yes.
PN403
Has the Belvac train been operating to date?---Yes. We actually brought the line - we brought the Belvac piece of equipment, making it on line as of Monday morning.
**** PETER ROBERT JACK XN MR STEWART
PN404
How have you found it operating to date?---Through the commissioning phase, quite well. Interestingly enough, we ran it last night which was our fourth shift and we got 131 pallets off the line with a change over which is pretty similar to where we were prior to the introduction of the machine. So in terms of running now for 48 hours, it certainly - and we're in a commissioning phase, we are more than happy with its introduction to date.
PN405
You believe it is meeting your expectations?---Certainly and it certainly will do once the commissioning phase is fully finished.
PN406
Finally, do you believe based on the experience of the Clayton site and the specifications from the time surveys that there is a need to reduce by the shift on the back end or the crewing numbers from 10 to nine?---I do. I mean, we have to do this otherwise we will not - we won't remain competitive and we will be looking at potential loss of more than four people. It has been the case through the history of the Smithfield plant since it was started up in '74.
PN407
Thank you, Commissioner.
PN408
THE COMMISSIONER: Mr Morrison.
PN409
MR MORRISON: Commissioner, in light of the time and in light of the vast amount of questions I will be putting to Mr Jack, can I suggest it might be appropriate perhaps to take a luncheon break down rather than continue on, but I'm in your hands on that.
PN410
THE COMMISSIONER: Well, I intend to adjourn at 1 o'clock anyhow. Mr Stewart, have you got a view? Are you opposed to lunch being taken?
PN411
MR STEWART: Commissioner, I'm not opposed at all.
**** PETER ROBERT JACK XN MR STEWART
PN412
THE COMMISSIONER: All right. Well then, rather than getting half-way through the witness cross-examination and Mr Stewart having to come back later, I think we will take an early lunch break and I will see the parties at 2 o'clock. The witness is reminded he is still under oath. The Commission stands adjourned.
LUNCHEON ADJOURNMENT [12.40pm]
RESUMED [2.00pm]
PN413
MR MORRISON: Thank you, Commissioner. Mr Jack, firstly are you aware of the equipment and staffing levels at your main competitor, Amcor?---I have knowledge of their operators on their varying sites.
PN414
Are you aware if Amcor are considering actually increasing their numbers on the similar crew lines?---No, I'm not.
PN415
No, you are not? You are aware of the union coverage at Amcor, are you?---Sorry?
PN416
Are you aware of the union that covers the workers and the line at Amcor?---I believe it's AMWU.
PN417
Yes. Now, I would like to take you to firstly in the documents that were submitted, S3?---Unfortunately these documents are marked up as S3 here.
PN418
It is the letter to you from Roger Baker, the memorandum?---Yes. I'm aware of it but I don't have it here.
**** PETER ROBERT JACK XXN MR MORRISON
PN419
Mr Roger A Baker PE, he is actually the director of technical sales and marketing at Belvac?---That's correct.
PN420
Belvac actually do not supply the body makers to your company, do they?---No, they don't but the gentleman in question had a prior life with Standom, who is the manufacturer of body maker equipment.
PN421
He may have had a prior life but currently, would you not agree, Mr Jack, he is actually in charge of their technical sales and marketing for a rival firm?---Belvac do not manufacture the same equipment. It manufactures body makers.
PN422
They - he has an interest in promoting Belvac's product.
PN423
MR STEWART: Well, I have to object, sir. I don't think this witness can give evidence as to what Mr Baker knows or does not know.
PN424
THE COMMISSIONER: Yes. I am not sure he can give evidence to what he knows or he does not know.
PN425
MR MORRISON: Well, I am sure he is aware that Mr Baker is responsible for technical sales and marketing.
PN426
THE COMMISSIONER: Well, it says that in the letter.
PN427
MR MORRISON: Yes. So we are establishing that.
PN428
THE COMMISSIONER: Yes.
**** PETER ROBERT JACK XXN MR MORRISON
PN429
MR MORRISON: So you did not surmise that he had any interest in promoting his products as a salesman, rather than as a pure technical - - -?---Absolutely not. I mean, we're talking about a $4 million piece of equipment that we're likely to purchase once off and it's to remain in the factory, I would hope, for the nest 30 years. So we're not talking about something that we're going to be buying every week.
PN430
But you were prepared to spend a lot of money on buying that?---We already had done that prior to the letter that we received when the audit was undertaken last week.
PN431
Well, I will pass on that for a moment and we actually talk about the moving to the one less worker on the line. Did you conduct a risk assessment on the consequences of one less worker on the line?---I believe there was a study undertaken of a proposal that was put to our - in our cap-ex with regards to - - -
PN432
I am sorry, I missed that. Who did you put it to?---It was put to - put to our management in seeking approval for the capital equipment.
PN433
So you are aware of a risk assessment. You have not seen the risk assessment?---I haven't personally seen it. No.
PN434
Who has seen the risk assessment?---I can't - I'd be speculating, mate, but I would assume that the relevant production engineering staff that put together the proposal has done that.
PN435
Who would that be?---That would be Mr Drago Fehir. He's the project control.
PN436
Is he based at Smithfield?---Yes, he is.
**** PETER ROBERT JACK XXN MR MORRISON
PN437
So it would very easy for the organisation to present the risk assessment to the consultative committee?---If Mr Fehir has it, yes.
PN438
Well, you informed us that, in your opinion, he had it so - - -?---If the risk assessment is there, then that could be presented to the consultative committee.
PN439
Do you think it should be presented to the consultative committee?---I think certainly, if it's certainly there. I don't have any issues. It certainly has not been raised previously by the consultative committee in any of the discussions that we have regards to that.
PN440
All right. Now, we shall move on to the surveys. Do you have the surveys?---Yes, I do.
PN441
There are those that are contained in M2 and the one that was solely undertaken by the company, for the lack of a better word, I think A was the one solely undertaken by the company and the ones in M2, were the ones - - -?---I have the document that was undertaken by Mr Francica.
PN442
Yes, that is A?---Which I gather is the one you are referring to.
PN443
Is that A?---Yes.
PN444
Yes, thank you. B and C are the ones in M2. Is that correct?---Yes.
PN445
Now, did the consultative committee have any role in preparing the surveys?---No, they weren't.
PN446
So did - the consultative committee were aware of the content of the surveys before they were given to either A, B or C?---I make a point there was no survey given to the parties concerned to do. These were the analysis of the individuals themselves.
**** PETER ROBERT JACK XXN MR MORRISON
PN447
When the surveys were given to either Mr A, B or C prior to them being given to those gentlemen, was the consultative committee shown the surveys?
PN448
MR STEWART: Sir, I will have to object again. I think the evidence was that a survey was not given to either A, B or C. That, in fact, they put together the list there so I don't think my friend can put that question.
PN449
THE COMMISSIONER: Well, I am going to allow the question. You can put the question. I think that it has been answered even by your own witness but we will hear the question. You can answer the question?---In respect to the document we have there from Mr Francica, Mr Francica was basically given a blank piece of paper and asked for his own job analysis of what he's done. That was presented to the consultative committee in a meeting in January and subsequently after that at the request of Gary Unsworth, that we should undertake a further study with regards to, as mentioned, Nevis Rodrickus and Michael Hudson. Now, I believe those two gentlemen were given the copy of what Mr Francica had done and were asked to either add to those particular things or validate what their time analysis was.
PN450
MR MORRISON: So the format of the survey that was filled in by A was fully the work of Mr Francica?---Francica.
PN451
He prepared it?---He prepared a list of which - the document that you see there now currently is a summary what was put down in a word document by the Production Manager.
PN452
So the Production Manager actually wrote up that survey?---He summarised the survey.
PN453
He summarised it?---That was a handwritten document by Mr Francica.
**** PETER ROBERT JACK XXN MR MORRISON
PN454
So you have not got with you today Mr Francica's actual document, have you?---No, I don't have Mr Francica's document. No.
PN455
So what we can only take is your organisation's word that that is what he put down?---No, I haven't. That's - that particular document was given back to Mr Francica to validate that it was correct.
PN456
Then Mr B and C, for lack of a better word because I can't recall their names, they used the format of the - Mr Francica/Production Manager to fill in their surveys?---Yes. Mr Hudson and Mr Rodrickus were shown the initial document from Mr Francica of which you can see that there's been additional items that's added there, taking it from 13 down to 17 tasks that they would suggest that they would turn around to - - -
PN457
By Mr B. Mr C used the raw data of the document, did he not?---Both B and C had used the original document provided by Mr Francica.
PN458
But only Mr B put additional information on it. Is that correct?---Looking at the particular documents, I believe that both of them had no further things to add to it. I can't comment whether, in fact, it was B or C who made the additional - - -
PN459
Could you look at the M2 please, Mr Jack? Could you look at document M2. Could you look at the surveys?---Which is Mr Francica's or the - Mr Hudson.
PN460
No. The M2. You will find Mr Francica's is not in M2?---Yes.
PN461
Now, if you look at Mr B's survey?---Yes.
PN462
Compare it to Mr Francica's survey?---Yes.
**** PETER ROBERT JACK XXN MR MORRISON
PN463
All right. Now, as you can see by looking at both B has different things on it to Mr Francica's?---If you're talking about the additional items from 14 to 17, that's correct.
PN464
Right, and a few other additions in the notes as well?---Correct.
PN465
Now, if we go to C before upgrade for Mr C compared to Mr Francica, he also has made changes. Is that correct?---That's correct.
PN466
THE COMMISSIONER: Excuse me, Mr Morrison, before you go on. Mr Morrison, the document you are quoting from, is that - that is the one that - - -
PN467
MR MORRISON: It is part of S1.
PN468
THE COMMISSIONER: S1. That is right but then there was a document that you tabled done by the delegate.
PN469
MR MORRISON: M2. Yes.
PN470
THE COMMISSIONER: M2. Did someone remove that from - - -
PN471
MR MORRISON: It would not surprise me what this company would do, Commissioner.
PN472
THE COMMISSIONER: I don't think that is called for, Mr Morrison. It is not here. It has gone from my table during the luncheon adjournment.
PN473
MR MORRISON: I think it may have been given to Mr Jack because Mr Jack was not in position at one - - -
**** PETER ROBERT JACK XXN MR MORRISON
PN474
THE COMMISSIONER: Right. Yes. I'm sorry. Yes, it has. Right. Mr Jack has it. Okay. As long as I - - -
PN475
MR MORRISON: We might be able to arrange for a - - -
PN476
THE COMMISSIONER: It does not matter. You are dealing with S1 anyhow.
PN477
MR MORRISON: S1 and M2. I'm reading them in conjunction - - -
PN478
THE COMMISSIONER: Right. Well, I will have to guess and read the - - -
PN479
MR MORRISON: Well, I won't be going on for much longer on the point. It is just that clearly things have been - they are not the same document throughout. It was things were added by Mr B and C to Mr Francica's document. That is the point I'm trying to make, Mr Jack?---Well, I think that's a valid comment that both mister - survey B and survey C were asked to look at what tasks that they undertake in their area and they had the ability to be able to add additional tasks that were either an oversight or Mr Francica had decided weren't relevant.
PN480
To be fair, it goes to the credibility of the documents, does it not, if they are intuitively tailored by the person who is doing the survey?---I think when you have four different shifts, you're going to get four different opinions.
PN481
Thank you. Now, how did they fill in those surveys, Mr Jack?---I'm not aware of the particular specifics on how they filled those out but they - my understanding of things is that they made comment there in terms of how many minutes per check were done and that was then totalled.
**** PETER ROBERT JACK XXN MR MORRISON
PN482
That is for the before the upgrade documents?---Correct.
PN483
Correct, but did they actually do it on the job, this is how long it takes me to do this part of the job or did they go and sit somewhere outside in the sun, filling it in?---No, I'm not sure of the specifics on how they developed their own job analysis.
PN484
What is your understanding of how they did it, Mr Jack?---I'm not aware of the particular specifics on how they developed the job analysis and the job elements of the upgrade before.
PN485
You are not aware whether they actually did it on the job or whether they did it elsewhere?---No, I'm not because this particular study wasn't undertaken by myself. Both B and C was undertaken by Mr Fehir who acted as the company representative as was the two names that were supplied to us for the further analysis of the job elements with regard in this particular area.
PN486
You have had no discussion with Mr Fehir on how these were filled in?---Absolutely not. No.
PN487
Well then, let us move then to after the upgrade documents. How were they filled in?---They were filled in in the same fashion.
PN488
Well, obviously they could not have been filled in as they go around doing the job because they had - the upgrade actually had not occurred, had it?---I'm not sure we're talking about the specifics on how the work is done. You asked me the question in terms of how the survey was filled out, in the same fashion as the first lot.
PN489
Well, they didn't - - -?---So it's an opinion of the operators in terms of the work load that they will have to undertake with the introduction of the new equipment.
**** PETER ROBERT JACK XXN MR MORRISON
PN490
So this - after the upgrade information is filled in from their opinion?---Correct.
PN491
How did they formulate that opinion? Are you aware of that?
PN492
MR STEWART: Well, I would have to object to that. I don't think - - -
PN493
MR MORRISON: I gave him: are you aware.
PN494
MR STEWART: I don't think this person could answer that question.
PN495
THE COMMISSIONER: No, no. I don't know that he can answer that, Mr Morrison. I think that if the union had wanted to know that, at least one of the two people who did the document was a member of yours and you could have called him as a witness.
PN496
MR MORRISON: I take your point there, Commissioner.
PN497
THE COMMISSIONER: I really - I'm not sure the witness can answer it. He has already said he had no role in it.
PN498
MR MORRISON: I don't know if he said he had no role in it, Commissioner. I think he said he had no participation in it. I'm not sure if he said he had no role.
PN499
THE COMMISSIONER: Well, he might have had the role as the manager in the overriding role running the place but he had delegated that as the delegates delegated it to two operators who they nominated.
**** PETER ROBERT JACK XXN MR MORRISON
PN500
MR MORRISON: Okay then. Mr Jack, what data, where did they acquire the data to fill in that information?---That I'm not sure of. I mean, I was not there at the particular time of the job analysis taking place.
PN501
So you have no - you are telling us you had no - you can't tell us where they got the data to fill in these particular figures in the after upgrade surveys?---As I stated earlier, it's the opinion of the operators. There may have been data provided to them in terms of what the new equipment is capable of doing and the opinion in those particular times that they've stated down is their own undertaking and their own views of what the new equipment may turn around and do.
PN502
Do you know who provided that information?---I could only speculate and would assume that Mr Fehir has provided the information for the relevant parties.
PN503
Can you speculate where Mr Fehir would have got that information?---He has got the information based on talking with Rexem, our affiliate, that we have a technical licence for and that information can be gathered from the particular plant, the equipment, that's running currently in Moscow or Sweden and with Belvac direct, if we're talking specifically about the Belvac. The information regarding the cen-con enamel rater, he would've done that with regards to talking to Rexem in the States who are operating these particular pieces of equipment and also with the machinery supplier themselves.
PN504
You doubt very much whether Mr Fehir - Mr A, sorry, Mr B or Mr C spoke with Rexem or Sweden or Moscow or anything like that?---I would suggest that those particular parties do not have direct contact with our international people.
PN505
They did or they did not?---They did not.
**** PETER ROBERT JACK XXN MR MORRISON
PN506
They did not. So they would have based their information on the after the upgrade survey statistics on information they gained from that gentleman you mentioned earlier?---They would've gained - they would've made their opinion based on the information that was provided in discussions with the employees based on the introduction of the new equipment.
PN507
So they would not have actually been - these were, as you said earlier, estimates. Is that correct?---That's correct and all the way right through, these are estimates.
PN508
As estimates, and you said earlier they could have been less. Mr Stewart - you told Mr Stewart the times actually could be less, could they not?---Certainly there's been no challenge to these particular figures by myself or any of management with regards to these figures being less. In fact, they could be quite less. Yes, that is correct.
PN509
They could be quite more?---They may be a little more. Yes.
PN510
They could be quite more. You have no way of knowing, do you?---I do because I've at least had first-hand knowledge. I've seen the particular - the equipment that we've put in place actually operating in a plant in Moscow and also in Sweden.
PN511
Yes, I had forgotten about your trip to Moscow and Sweden but you did not share any of that information with the gentleman who was, you speculate, supplying the information to Mr A, B or C?---No.
PN512
Now, with the surveys and staying with the surveys, this covers quality checks that are being performed. Is that correct?---Yes. There's job elements in there that are quality related.
**** PETER ROBERT JACK XXN MR MORRISON
PN513
Roughly on average it covers approximately 7 hours 25 minutes of the time that is spent there is spent doing quality checks. Is that right?---No, I don't think that's correct. I think what you're talking about - you're not talking about 7-odd hours. We're talking about those elements occupy those particular totals of minutes that's been supplied by the operators. If you want to be specific about the quality checks, I can certainly point those out and you could table them.
PN514
So you are telling us that these times are sometimes concurrent?---I don't quite understand what you mean if they're concurrent.
PN515
Well, I mean let us take, for argument's sake, the after upgrade in survey B. You have that incident in M2?---I do. Yes.
PN516
Total minutes per shift 445 minutes?---Yes, I see that.
PN517
You see that. How much of that 445 minutes is spent doing quality checks?---In summary there, item 1, item 2, item 4, item 5, item 7, item 8, item 5, item 17.
PN518
So that would be a fair amount of time, would you accept?---I haven't added those up so I wouldn't like to comment on that.
PN519
Yes. What are they doing the other part of the day?---The other part of the day, they may be waiting around for a machine to fail, to attend to. They may be doing maintenance on certain elements of the equipment. They may be asked by the Production Manager to overhaul pieces of equipment as far as the lines are concerned. They may be cleaning.
PN520
Bearing in mind that if a position was not there, how would the other work be done if someone say was so doing these checks, how could the other work that needs to be done be performed?---I'm not quite sure which other work you're referring to.
**** PETER ROBERT JACK XXN MR MORRISON
PN521
The general running of the line?---Well, you know, running the line, it's an automated piece of machinery. We physically don't have to turn around and - the equipment is automated. It manufactures our process fundamentally by itself. The interaction of our operators is when the equipment actually stops. We have to try and do something to it.
PN522
Apart from this quality time - - -?---Yes.
PN523
- - - is spent doing it. Moving on to the line, are you aware of any agenda to fill any problems that may occur on the line that can be caused from moving from a 10 staff operation to a nine by moving, if you like, the eleventh person on the shift, the person in the warehouse, across to assist on the line?---We do that currently.
PN524
Yes, but you don't do it regularly. You do it - - -?---We do it - we do it when the - when there's an occurrence and that occurrence may be a situation, we don't have any warehouse deliveries which means that the warehouse operators is not required to supply cans onto trucks for supply to our customers. In that particular case there, he may be required to assist on the line. At some stage, he's also required and asked to work in a line for meal breaks.
PN525
But it is not done on a regular basis. It is virtually done on an ad hoc basis?---It's on a needs by needs basis, depending on what the number of parties we have in in a particular shift maybe.
PN526
Do you intend that there will be a capacity to further reduce staff when the new decorator comes on line in November?---No, I'm not. I've actually been asked that question numerous times. What's proposed currently is the possibility of a new decorator coming on to the site with a line the company is looking at putting into our Melbourne plant but if it is a brand new decorator, that what we'll be looking will be just to swap our existing machinery with a brand new piece of machinery.
**** PETER ROBERT JACK XXN MR MORRISON
PN527
So you can assure us today that it is not the intention to reduce staff?---Certainly I'm not aware that there's any indication by the company to reduce the manning numbers any further with regards to the introduction of a new decorator in replacement of the existing machine.
PN528
Thank you. All right. Now, moving on to document S1 which Mr Stewart gave you copies of. Have you got it?---They're not marked up as S1 so you'll have to bear with me.
PN529
The first page is headed: Enterprise Bargaining Agreement EBA 2003?---Are you talking about the Smithfield certified agreement?
PN530
No, I'm talking about - - -
PN531
THE COMMISSIONER: May 8. The May 8 2003.
PN532
MR MORRISON: There was a group of documents?---Just bear with me while I find it.
PN533
Yes, sure?---Yes. Meeting one. Yes.
PN534
These - well, we will take the first document dated 8 May 2003. Who prepared this document? Are you aware of that?---This is a summary of the minutes that were undertaken by our Production Manager.
PN535
This is a summary of the minutes. These are not the minutes. These are a summary of the minutes?---That's right. These are the minutes that were taken by our Production Manager.
**** PETER ROBERT JACK XXN MR MORRISON
PN536
Thank you. What was the basis of this meeting?---It was the first meeting with regards to the renegotiation of our EBA.
PN537
You had been - had you received a notice of bargaining period from the union with a log of claims by this stage?---Not specifically for Smithfield but I believe that the company had received a log of claims that was a threat to business.
PN538
So the purpose of this meeting was to start the ball rolling on the various parties' positions with regard to the new - the forthcoming enterprise agreement?---We had our EBA that was expiring in August and May was the date set aside prior to that so that we'd have the EBA essentially finalised so that we could increase our employees' salary for that period.
PN539
You were part of the EBA bargaining team on behalf of management at the site?---Yes, I was with regards to - and also as a Production Manager.
PN540
I'm assuming the union put items up to negotiate?---I'm not specific about items that came up. We talked about, you know, things, what we wanted in the EBA. What we wanted in the EBA.
PN541
The union spoke to you about what they wanted in the EBA?---There were discussions that took place that surrounded what the unions were looking for and what management was looking for.
PN542
So management also put their agenda up on the EBA?---Yes.
PN543
Was part of your agenda the actual to have a clause specifically about the reduction on the - of the crew, shift crew?---It was and I think I mentioned that earlier. We had progressed that with regards to our plant in Melbourne and the company was certainly seeking support for a reduction in manning from 10 to nine in the EBA document.
**** PETER ROBERT JACK XXN MR MORRISON
PN544
So it was an agenda item at both the Clayton and the Smithfield EBAs from management to formalise in a clause the reduction of crew numbers?---The company was seeking in both operations to have consensus that there would be a commitment to moving from 10 down to nine in the EBA.
PN545
Did you achieve - and I actually have some recollection of you actually saying this in direct evidence to Mr Stewart but did you achieve that clause in the Clayton EBA?---No. The discussions that took place with regards to the union and the committee members made it fairly clear the reasons and the rationale why they didn't want to see it in the current EBA which myself and Mr Gordon had discussions about.
PN546
I think you might be talking about the Smithfield agreement?---I'm sorry.
PN547
I am asking about the Clayton agreement, the Clayton EBA. Are you aware whether they achieved in their enterprise agreement a specific clause?---My apologies. Yes, I was. Yes.
PN548
But you did not achieve such a clause in the Smithfield agreement?---No.
PN549
No. Is that - and the union - and the reason being the union fundamentally did not agree to have that clause in the agreement?---That's correct.
PN550
Did the union make any suggestion about what should be done with the proposal?---What was suggested to us was the fact that the company had the right to look at redundancies outside the EBA at any time.
PN551
That was suggested by the union?---It was suggested in one of the meetings we had. Yes.
**** PETER ROBERT JACK XXN MR MORRISON
PN552
Do you recall who made such a suggestion on behalf of the union?---I believe it was Mr Cartwright made mention of that.
PN553
Did the union give you any guidance as to where it would be appropriate to take such a proposal?---I'm not aware of any guidance but it was suggested that we would - we would continue looking at that particular matter once the EBA had been ratified.
PN554
Did the union also say to you though that it would be more appropriate that that matter be dealt with by the consultative committee?---Yes, they did.
PN555
So you recall that now?---Yes.
PN556
The union - I just want to be clear on this. The union objected to any clause on the reduction of shift crews?---That's correct.
PN557
The union also said this matter should be dealt with through the consultative committee process?---That's correct.
PN558
You eventually negotiated an agreement which was certified by Senior Deputy President Cartwright on 10 December 2003 and that agreement is the VisyPak Proprietary Limited Smithfield Certified Agreement 2003?---That is correct.
PN559
Which I believe you have a copy of as M1?---Yes, I do.
PN560
Then in those documents under S1 finally there was a consultative committee meeting on 17 December 2003?---That's correct.
PN561
At that meeting, did management take the proposal to the consultative committee on making one person in the crew redundant?---At that particular meeting, the meeting had opened up with the questions in terms of how do we see these redundancies taking place.
**** PETER ROBERT JACK XXN MR MORRISON
PN562
Who opened up with that?---The question came from the members, from our shift people, the delegates that were there in terms of how we saw these redundancies taking place.
PN563
Now, I'm just not clear on how that would occur, bearing in mind that the last, to my knowledge, that was occurring was it had been rejected as part of the EBA package. That - we have already established that, have we not?---We have done that. Yes.
PN564
Then you attend a consultative committee meeting and it is raised by the union members of the consultative committee on addressing the redundancies?---Correct.
PN565
Now, what did you say to them at that consultative committee on 7 December about those redundancies, do you recall?---I recall the discussions that took place regarding the redundancies that we would be - they would be looking at sending out letters to the - all employees with a view of letting them know what their redundancy pay outs may be and that I will be looking at doing that around about March of 2004.
PN566
So that is what you bought to the table on 17 December?---No. That's what I was asked to turn around and comment in terms of how I saw the redundancies taking place.
PN567
So when were you asked to come up with that proposal to bring to the consultative committee?---I was asked at that particular meeting.
PN568
You said that is what you will do?---That's correct. It's what we were proposing to do.
**** PETER ROBERT JACK XXN MR MORRISON
PN569
What you were proposing to do. Did you not feel that you were really obliged to take a proposal for consult - to the consultative committee and let them work through the proposal?---I thought that's what we were doing. Our EBA was registered in December. This meeting was taken place virtually after that. There was further discussions around the EBA with regards to the establishment of training committees, consultative committees, who the members would be. There was still some concerns expressed by the employees on who the actual consultative committee representatives would be from the shifts. So the question that was raised by my, you know, my employees about redundancies were just one element of that first meeting.
PN570
Do you not see though that the purpose of the consultative committee is actually to take proposals to them, not to present them with a fait accompli, so to speak?---Well, I don't believe it was a fait accompli. It was a proposal that we were looking at based on the questions that were first asked of me on how we see the redundancies taking place.
PN571
On 20 January 2004, do you recall a meeting of union members occurring at the site?---Yes, I do.
PN572
Do you recall on 21 January Mr Cartwright informing you of the outcome of that meeting?---Yes, I do.
PN573
Would you tell us what you recall Mr Cartwright telling you at that meeting?---That there had been a rejection of the retrenchment letters that the company was proposing to send out.
PN574
He said nothing about the arguments about whether they accepted the position that a reduction was necessary?---That may have been discussed. I can't recall that specifically.
PN575
There was a consultative committee meeting also on that day of 21 January?---That's correct.
**** PETER ROBERT JACK XXN MR MORRISON
PN576
At that meeting, that is - if you could actually turn to the minutes of that meeting which I believe you have got in your package?---Yes.
PN577
In the S1. In item 5: Gary suggested someone like Mike Hudson or Nevis used in the time and motion study to analyse difference and time consumed in the back end before and after the line upgrade?---Yes.
PN578
So the consultative committee, would you say, was still having doubts about the need to make someone redundant?---I think the doubt came about given the fact that at that particular meeting we had provided the summary from Mr Francica of what he believed to be the time taken for his job analysis done and again that was the first time that either the union or the employees had seen that document. There was varying debate that took place surrounding the particular document the first time around and it was a rather good suggestion of Mr Unsworth which is the summary there of clause 5 as opposed to getting the two most experienced operators in the area to undertake the time and motion study as been suggested.
PN579
For the record, that Gary being Gary Unsworth?---That's correct. Yes.
PN580
So you - the company was significantly progressed in its making that position redundant by the time it actually presented it to the consultative committee?---The company made it clear back in May that - - -
PN581
Yes, it made it clear in May in the EBA negotiations?---That it was moving and was seeking to go from 10 down to nine.
PN582
In EBA negotiations?---Yes.
PN583
But the EBA negotiations had moved well on from that stage, had they not?---It may be but I'm not sure whether, in fact, we're splitting hairs.
**** PETER ROBERT JACK XXN MR MORRISON
PN584
Well, you had actually certified a new agreement so the EBA negotiation, that door - that gate was well and truly gone as far as being able to close it?---If we're talking about consultation with the employees, the employees were made fully aware of the company's intention to move from 10 to nine back in May of last year and continued through the process with regards to the EBA until such time as the company withdrew that clause to be inserted into the EBA and there was no further - no further discussion took place until the agreement was certified.
PN585
Well, I put it to you that the threat of reducing from 10 to nine was actually part of an EBA strategy similar to the union putting in a claim of the 6 per cent times 3 pay rise was part of an EBA strategy and as part of the negotiating process, things drop off or get shifted to other areas so you actually concentrate on the reality of what the final EBA will look like. All because you put it on the table in the EBA negotiations. That does not make it a proposal to the workers. It is part of the EBA negotiations, do you agree or not?---I would have a different opinion of that. I think that there's a responsibility that we as a company to inform all the employees as early as possible of what the company's intentions may be going forward and we saw that May of last year and being as honest as we could be with the EBA negotiations, that it was the company's intention to look at moving from 10 down to nine with the introduction of new technology.
PN586
But it quickly dropped off the EBA negotiations?---It was - it came off the EBA negotiations at the request of the union which we viewed their opinion and seek to look at the reductions outside the EBA.
PN587
What do you understand consultation to mean, Mr Jack?---Communication with the employees, talk with the employees, discussions.
PN588
What if the employees say no?---No further discussions take place.
PN589
Where do you go?---At some particular time, if we cannot get agreement, then I believe we take it further such as we have done today.
**** PETER ROBERT JACK XXN MR MORRISON
PN590
Do you? I thought this was our application, Mr Jack?---I believe it is.
PN591
You did not take it anywhere here. You just implemented it and implemented and implemented, despite the fact that you were told that we were in dispute on this matter by Mr Cartwright on 21 January. You have continued to implement your agenda of making one person in the line redundant?---I don't see where I've just implemented anything. At the moment we're still operating with 10 people. We still haven't had any redundancies.
PN592
Well, you have formalised the process?---We were only - by the stand of things, we were only called in to dispute during - at the end of March.
PN593
Yes, but you - - -?---Negotiations and discussions were taking place through December-January.
PN594
Negotiations and discussions. What negotiations and discussions have you had with the union or with the consultative committee on your proposal to make one position redundant?---Some of it has taken place here of the minutes that's been presented or the minutes that your members may have with regards to the consultative committee meeting in December, January and then in February.
PN595
I can see in those minutes the company imposing an outcome. I cannot see - and we have heard nothing of any actual negotiations or discussion?---Well, you weren't there. However, the fact that we were asked to provide evidence of where we believe the reductions and how the savings were occurred was tabled by Mr Francica. I would have thought as well that the suggestion by Mr Unsworth to clarify that further was evidence to the fact that we were in discussions and negotiations about it.
**** PETER ROBERT JACK XXN MR MORRISON
PN596
Did you not see that it is in the terms of your enterprise agreement it is the most appropriate mechanism for determining the outcome of the introduction of new technology, the consultative committee should not have been - it should have been the process by which you addressed firstly the proposal and secondly the, if you like, the reasons behind it and whether it can be supported and whether it was appropriate?---I believe we've done that in terms of the discussion with the consultation committee. I mean, we haven't sent the letters out under handedly.
PN597
I'm not talking about consulting with the consultative committee. The proposal should have been bought up through the consultative committee. Do you accept that?---I believe the proposal was.
PN598
Well, I put it to you you presented it to the consultative committee. You didn't bring it up through it. You just said: this is what we want, do what you like with it but it is going to happen?---I think the company has been focussed on what its outcome wanted.
PN599
Its outcome has always been?---As we clearly stated in May that the company was looking to reduce numbers from 10 down to nine.
PN600
You don't think it is appropriate for the consultative committee to actually examine it, examine the proposal?---I believe they have done that and hence if the report that was presented at the hearing in Melbourne.
PN601
So you accede that the consultative committee have presented a report which is M2?---Correct.
PN602
That is the consultative committee's view on the proposal. It differs from management's position on the proposal?---Correct.
**** PETER ROBERT JACK XXN MR MORRISON
PN603
Because of the difference, you say that you are going to go ahead, the union - and I'm just trying to get the sequence right - you can say: well, we don't think you should and so that is the reason we are here today. Would that be a fair summation?---I think that's a fair summation.
PN604
So what is the - what does the enterprise agreement mean to the company, and that is a fairly broad question, Mr Jack. So if you are not sure, I can - - -?---It represents a continuous, a harmonious manufacturing facility for the next 3 years.
PN605
Does it provide, in your opinion, a way for management and the workers to come together to address issues as they arise in the workplace?---Yes, it does.
PN606
Why then, when the workers have raised a concern, has the company not sat down and actually worked with them but instead ignored the proposal by the company?---I don't understand which proposal you're talking about.
PN607
By the workers, sorry?---Which proposal by the workers are we talking about?
PN608
That positions will not be made redundant?---Well, I think it gets back to what you mentioned earlier. We had the different Act. We've got a difference of opinion. The discussions that took place and negotiations with regards to the meeting through December, January and February clearly indicated that there was going to be no movement on either side. In the last meeting that we had - in fact, the meetings that we had following the hearing in Melbourne, when there was a reply given back to the particular document, at the end of that I was asked where do we go to from here?
PN609
What documents have you supplied to the consultative committee to justify the loss of the position?---The document that was presented by Mr Francica which was his own analogy in terms of the work he currently does and what he believes to take place after the new equipment is installed, followed then by the request by Nevis Rodrickus and Mr Hudson as opposed to what they felt their current work role was before and after.
**** PETER ROBERT JACK XXN MR MORRISON
PN610
Yet all there is on that is figures in the after upgrade times that by what you have told us are an estimate?---Estimate by the operators. What I haven't seen currently by the employees is any breakdown in their own, other than the three parties concerned, any detailed job analysis of what the guys physically do in the area. That's not represented.
PN611
But we are talking about after the upgrade can only be filled in by an estimate. Is that correct?---In terms of new equipment going through, correct. Yes.
PN612
That estimate can only be based on some information they might receive from a supplier, by someone who saw it in Sweden once?---Correct.
PN613
Any other way they can base their estimates?---I would think analysis of the last 24 hours may give some indication as to whether, in fact, things that we've presented or suggested or are likely to occur going for will do so.
PN614
Well, analysis of the last 24 hours, none of us could catch a train in Sydney. So you know, you would need it for a longer period, would you accept that, before you can really use that information?---We're not talking about these redundancies taking place tomorrow because the train was introduced as of yesterday. We're talking about the redundancies taking place at the middle of June, towards the end of June.
PN615
So if the performance from the last 24 hours is not sustained, are you saying then that the redundancies may not occur?---No, I'm not saying that. I have an expectation that what we've seen in the last 24 hours will be exactly what we presented to the employees as far as reliability of the new machinery is concerned.
PN616
But if it is not?---The problem that I have is is that we all tend to be focussing on one piece of machinery, which happens to be the train. The bigger time factor that's taking place here is the enamel rater where we have something like 2 hours of work that physically had to be done by the operators and now being undertaken by one piece of machinery.
**** PETER ROBERT JACK XXN MR MORRISON
PN617
But if performances don't reach the expectations of the after upgrade surveys by A, B and C, does the - is there capacity there in the company to change its opinion about the redundancy?---I mean, I think the company always has the opportunity to be able to put people back on.
PN618
Not the people you have made redundant?---Well, obviously not. No.
PN619
PN620
MR STEWART: Yes, thank you. Just a couple of points that were raised. The question was asked of you what were the additional items raised in survey B as from survey A. Do you recall that question?---Yes.
PN621
You said the additional items were 14-17, I recall?---That's correct. Yes.
PN622
What is the time, the total time, in items 13, 14 through to 17?---In the before or the after?
PN623
The after, please, because the ones to that question was put to you in regards to - - -?---Survey B states 15 minutes. Survey C 5.
PN624
Thank you. So the additional four items were put in at a total of about a maximum of 15 minutes?---That's the case.
PN625
You were then asked in relation to the fact why didn't you - sorry, no. In fact, you were asked why when you put something on the table to an EB committee, why you think that automatically means it has been communicated to the consultative committee. Do you recall that question?---Yes, I do.
**** PETER ROBERT JACK RXN MR STEWART
PN626
We heard evidence from Mr O'Neill earlier today that he said, in fact, those two committees were one and the same. Is that your understanding?---No. The EBA committee that negotiated the EBA, it's fair to say that in our prior EBA the regularity of any consultative committee was none. It certainly - with the new EBA that we've negotiated, we have made it clear that we wanted to meet on a regular basis, hence the consultative committee that took place in December and consultative committee members being supplied for each shift, as opposed to union - as opposed to shift delegates.
PN627
What the - how many people that sit on the consultative committee presently had an involvement in the EB committee?---There's a reasonable percentage of some of those guys.
PN628
Thank you. Now, you said - well, it was put to you that, in fact, in enterprise negotiations, items get put forward such as the 6 per cent pay increase from the union and these items get dropped off in negotiations. You - is it the case that the company dropped that item off the agenda because of the discussions it had with Mr Cartwright?---It was - it was dropped off the item with regards to discussions we had through the EB negotiations because we felt that we were not going to get anywhere and subsequently we would be at - it would hold up and stall the EBA negotiation process and it was suggested to us that it could be handled outside the EBA, we would do so.
PN629
When you say handled outside the EBA, do you mean the EBA negotiations?---Outside the EB negotiations.
PN630
I see. Did you ever drop the item from - like did you ever communicate to the committee that you had, in fact, stopped pursuing your agenda of a reduction from 10 to nine?---No.
PN631
Is there any way that they could believe that was no longer an issue for the company?---I don't believe that's the case. I think that was indicative of when it was raised at the first consultative committee meeting, how did the company see these redundancies taking place.
**** PETER ROBERT JACK RXN MR STEWART
PN632
It was put to you that, in fact, you didn't adequately consult. In response to that, you said that you put forward three time surveys, which we have discussed. Did you receive anything prior to the hearing in Melbourne from the consultative committee about any material where they disputed the findings you put forward?---There was - the only information provided for us was the - I think an additional time regarding the enamel rater of about savings, I think, approximately 29 minutes, 30 minutes but again there was nothing tabled that was hard core evidence showing what that might be. It was just a statement that was made.
PN633
I see. Nothing further.
PN634
THE COMMISSIONER: Yes. Are you ready to make your final submissions, Mr Morrison?
PN635
MR MORRISON: Yes, Commissioner, and I will be brief, Commissioner.
PN636
PN637
MR MORRISON: Firstly, Commissioner, I'm stating the obvious. I think it would be fair to acknowledge that you have received a great deal of written information today and heard a great deal of oral submissions of a technical nature and you have heard from witnesses as to the possible impact of the new technology in the VisyPak workplace. Yesterday you conducted an on site inspection so that you can place much of the information that has been presented to you in proper context and location.
PN638
So what the AMW is seeking from you is firstly, we say, is to re-affirm the proper process that exists in the enterprise agreement to achieve the introduction of the technology and we say that is rightly by the utilisation of the consultative committee structure that is found in clause 36 of the certified agreement. I cannot emphasise that. That is the proper process, we say, that should have been used for the introduction of the new technology. As Mr O'Neill stated in his evidence, that proper involvement did not occur.
PN639
We say that it is appropriate that until a process that has envisaged in the certified agreement has occurred, then the opportunity to exercise redundancies, you know, should not occur and in M2 the union has raised and emphasised the importance that occupational health and safety impacts on the workplace. I won't take that particular course because it is - I am trying to - you would like an opportunity to read it. We have raised the real concern of the workers as far as the viability of the company, by this proposal.
PN640
All those arguments are there and are there for you to consider because, Commissioner, what we are saying is what we are seeing here by VisyPak is, for lack of a better word, blind faith on what they hope will be a seamless introduction of new equipment. They don't know that they don't need 10 workers plus one in the work-house - one in the warehouse and replacing that 10 plus one with nine plus one. They have not even substantiated to our thinking that need except for some surveys which at best are fairly a mish-mash and written by somebody else and have no real basis on fact.
PN641
What the union has said in the document that was marked as M2 is that there are sufficient questions, we say, to tread cautiously rather than to make workers redundant and then see after the event whether they got it right. Commissioner, what we say you should - that you should decide in this matter is that the various opinions should be debated through the process that is in the enterprise agreement and we say that then - after that debate has occurred, then the possibilities of redundancies and only then should be envisaged.
PN642
So what we are saying in our proposal is fairly consistent with the Workplace Relations Act, section 3 of the Workplace Relations Act, the principle objects of the Act which is about workers and management coming together to achieve an outcome, about maintaining employment and maximising employment within Australia. If however, Commissioner, you were of the opinion that you must decide on behalf of the parties a way forward rather than what we say is the proper way is to decide that the consultative committee is the proper forum for this then, Commissioner, we ask you to read both M2, our reports, to read the documents that have been put forward by the employer and consider the arguments, we say, objectively.
PN643
That is something we doubt that management have done. Then and only then issue what we say would be a considered decision, not a decision that assumes many things, you know, all going right but a decision that would prepare the parties if something - if it does not go 100 per cent to plan because, Commissioner, that is our great fear. That is the union's great fear that if it does not work out exactly as management anticipated, it is going to be the workers who will suffer. They will suffer because some have lost their jobs and taken a redundancy.
PN644
Those still in the workplace will face an occupational health and safety risk and that again is set out in M2 and more importantly, those who are also there, they also face an employer who, because of what we say will be a poor business decision, they have placed the long term viability of the Smithfield workplace in jeopardy. The company should reconsider its proposal. What we are seeking from you is a decision that says to the company: this should be handled through the processes of the enterprise agreement.
PN645
It is not appropriate just to implement without proper consultation and the consultations they already have in their enterprise agreement, that is how the decision on whether the redundancies in this should be made. The documents M2 and whatever documents the company have should be considered by the consultative committee and only then, if necessary, if redundancies are to be made, should they occur through that process and not through any other.
PN646
THE COMMISSIONER: Thank you, Mr Morrison. Mr Stewart?
PN647
MR STEWART: Thank you, sir. Sir, we are here today under the application C2004/2385 and it only occurred to me last night when I was preparing my closing submissions and I went back and reviewed this document, that what we are here today for is the matter in dispute relating to positions being made redundant and that is under the notices that has been filed with the Commission. On that basis, I did a bit of research, Commissioner. I have an obligation, a duty, to put before you something in relation to that.
PN648
As we are all aware here today, section 170LW of the Act is where the parties wish to have a matter relating to an agreement settled by the Commission and the authority that comes before that is out of the private arbitration case, as we are aware, and that requires that a clause within the EBA provides such powers of private arbitration to the Commission. In this instance, clause 41 of the Smithfield enterprise agreement is that clause - sorry, no it is not. It is indeed. Yes, sorry, it is 40, not 41. Now, the union in its application is seeking to have you, as we have just heard, make a determination that the reduction by one person per crew not occur at this time and there have been further consultation.
PN649
Now, the union is therefore asking the Commission to exercise those arbitral powers conferred upon it. Now, clause 43 - sorry, clause 40 as we have heard - not 43 - says that where the matter remains unresolved, it is to go to the Commission for decision. That is at subparagraph (f) of clause 40. Now, what we would say is this, Commissioner. Section 170LW requires that the applicant in discharging its onus must satisfy you of this threshold issue that you have such rights of private arbitration.
PN650
In particular I looked up a decision last night of Telstra Corporation and the CEPU which I will tender a copy now and I have a copy for my friend. Now, Commissioner, this decision was handed down by the Full Bench on 18 November last year. It is a decision involving the President, SDP Harrison and Commissioner Simmonds and it is quite similar in terms of the factual background to the issue before us now. However, it turns on a different element.
PN651
However, one of the propositions laid down by this decision is that one of the first threshold issues to be discharged by an applicant under section 170LW is to satisfy the Commission that there is a dispute over the application of the agreement. Now, the union has the onus of establishing that matter and we say that they have failed to do so. Now, we submit that the issue in dispute here is not an issue over the application of the agreement and therefore the Commission has no power to make the determination that is being sought in the terms we have heard today by the union.
PN652
Now, I take support for that submission from the Full Bench decision that I have just handed up to you which, for the record, is PR940569. Commissioner, what I might first do is take you to paragraph 11 of that decision which you will find on page 5.
PN653
THE COMMISSIONER: Yes.
PN654
MR STEWART: Now, paragraph 11 provides that - and in that context is says the appeal, starting at the second sentence:
PN655
The appeal raises some important questions concerning the Commission's jurisdiction and power pursuant to dispute settlement provisions in certified agreements ...(reads)... under the Workplace Relations Act.
PN656
So that - I take you to that point, sir, just because this decision was decided under the old Act but the principle being that the provisions are similar to LW, which we are here for today. Now, the facts of that case are, we say, comparable to the ones before us today and perhaps if I take you to paragraph 14 on page 5. It gives some background as to the facts that were involved in that decision. Commissioner, it goes on, it says:
PN657
Telstra in that case contends that the issue at the heart of the CEPU's dispute notification was whether the selection of particular employees for redundancy by Telstra was bona fide ...(reads)... prior decision as to redundancy.
PN658
Now, what occurred in that case is that the matter turned on the fact that - and in fact that the Full Bench upheld that there was power because the Telstra decision had a definition of redundancy. So the orders being sought were directly comparable to a provision within the agreement. Now, that is different than what we have here today. There is nothing in the Smithfield EBA that provides on where - whether or not a redundancy can occur. In fact, if I take you to clause 41 of the Smithfield EBA which is tab 10 of S1, and Commissioner, you will find clause 41 at page 22 of that agreement.
PN659
THE COMMISSIONER: Yes.
PN660
MR STEWART: Commissioner, what it provides is that if redundancies are to occur during the period of this agreement, the parties agree that the beverage packaging division redundancy agreement as per attachment 1 will apply to employees. It does not actually provide any scope for whether or not the redundancy should occur. What it does provide is a process to be followed where redundancies are to occur. Now, we say that the agreement provides no scope for the union to challenge the definition of redundancy.
PN661
On that basis, when we refer that back to the Telstra decision, we would say that in this case the Full Bench proposition put forward in the Telstra decision supports our submission today that there is no jurisdiction for the Commission to issue the determination that is being sought by the union. We would say that proper construction of clause 41 is that the company has the discretion to implement the redundancies by the wording "if redundancies are to occur." We submit that the agreement pre-supposes that the decision to make redundancies has already been made.
PN662
By its own wording, there is nothing in the Smithfield agreement that provides the union and by implication this Commission under LW with the power to challenge the grounds upon which the redundancies are made because if the company follows clause 41 and by implication attachment 1, then there is no matter over the application of the agreement. We say this is the direct point which the Full Bench addressed in the Telstra decision. Now, in fact, there is anecdotal evidence in support of that as well we have heard today.
PN663
The evidence of Mr Jack was that when the issue was raised in the EB negotiations at the start when the 3 month period kicks off leading into the negotiations, they requested this issue be written into the agreement. Clearly in that case the fact that it is not written into the agreement shows that the parties were consenting to this wording of clause 41 that we have today. From what we have heard of the statements made by - Mr Cartwright was his name - we would say that supports that as well.
PN664
Now, Commissioner, as we have said we believe that this is the very issue that was addressed by the Full Bench in the Telstra decision and in that case, the Bench held that it was the existence of the clause actually defining redundancy which is outlined - the Full Bench replicates that clause on page 3 of the decision about half-way down the page, 17.3. The Full Bench said that it is because that Telstra agreement actually defined redundancy that it placed the issue in dispute within the application of the agreement for the purposes of section 170LW.
PN665
Therefore the dispute resolution procedure could deal with the issue of Telstra implementing the redundancies in that case. Now, again we would submit that there is no such clause in the present agreement and on that case, our primary submission today is that the applicants have failed to discharge their threshold issue of establishing the Commission's jurisdiction to issue the orders that they seek. The respondent therefore submits that the matter should not continue and no orders as sought should be made and we would rely upon that Telstra decision.
PN666
So that is our primary submission. Should you find against us on that basis, we would go to our secondary submission which is that in determining this issue the settlement clause provides for, as we have seen in clause 40(f) decision, and we have heard what the union is seeking. Now, the evidence that was put forward by the union was through Mr Robert O'Neill and the document M2 which is the report. In essence, the arguments of the union are that the introduction of the new equipment will not make the time reductions significant enough to justify the company's decision.
PN667
I put that point specifically to Mr O'Neill in cross-examination and he confirmed that that was the basis upon their rejection to that. They say that it does not justify the reduction by one and that insufficient consultation has occurred as we have heard in closing from my friend. Now, if we look at each one of those issues that they raise we will start with the seventh IC. Now, the union would argue that this creates an extra workload in terms of cleaning and maintenance. Well, clearly we would say that the evidence of Peter Jack was quite succinct on this point.
PN668
He said that at no point will six machines, more than six machines, operate and that, in fact, the seventh has come on line to allow routine maintenance. So if we think about that, that is no different to what is actually happening now, save the fact that they will be able to shut one off and maintain it. So that, in fact, there will probably be less down time than what we have already considered and what you have already seen in the evidence put before you.
PN669
We say there is no increase to the operation times by the introduction of the seventh IC and so therefore we would reject the submissions that they make in that regard. The major part, or one of the major other parts of their points in M2 is that the Belvac train has been introduced. Now, they actually wrote a three part argument in that regard. Firstly, they say that the tolerance levels are not accurate enough for the train, for the parts coming out of the front end and that blockages will occur creating extra maintenance and down time.
PN670
Now, Peter Jack explained how the company has already looked at this situation and how they have had a front end audit undertaken. We have seen the document S3 which is the memo from Belvac where that audit was undertaken. Now, my friend, in cross-examination of Mr Jack, tried to draw him into some admission that in some way that document is tainted and under cross-examination, Mr Jack explained that that is not the case. What we have failed to seek from the union is any recognition that this is a state of the art piece of equipment.
PN671
This, in fact, removes three separate pieces as equipment, three bits of conveyer line and, in fact, reduces the probability of down time in the future and significantly increases the speed of the production process. We have heard that the old equipment was some 16 years old and was worn down through years of use and when we look at the total down time in exhibit S2 that the company has tendered today, we can see that the average down time that was being - or was occurring, in fact, is going to drop when we look at the introduction of the new Belvac train.
PN672
Now, the unions have also argued that, in fact, down time will increase and we say that this is not acceptable, based on the evidence in S2. One of the secondary arguments in relation to the train is that they replace reliance upon the claims again that the front end variance was too great and they sought to include a year's worth of schedules showing the variance levels which are attached to the back of S2. Now, when I took Mr O'Neill to that, he conceded under cross-examination that, in fact, that was on a 360 point checking system and that that is, in fact, a higher system in terms of its rigidity than the four point system which is required by Belvac.
PN673
So therefore those reports are not truly representative of the claims they make in M2 and so we would reject those. That question was also put to Mr Jack and he explained with some accuracy how that occurs. Now, we submit therefore that any of the materials attached to the back of M2 need to be read in conjunction with that understanding and, in fact, are not a true representative description of how the Belvac train will operate and in terms of the tolerance variations. Now, the final concern they have with relation to the train, Commissioner, is that there was this old and new change over.
PN674
I won't labour that point. I think we have heard the evidence today that that will not be the case. Another point raised in their M2 was that the enamel rater will not save time and, in fact, the time savings that they do agree upon will be balanced out by additional work. Well, Mr Jack explained this in some detail how the new automated system saves time because all the manual checks that used to occur are now fully automated and that, in fact, he has addressed that in the surveys that have been put forward.
PN675
We submit strongly that the introduction of this automotive enamel rater will save approximately 2 hours per shift and we say that the evidence supports that. Now, Commissioner, every argument that has been raised by the unions in their report M2 have been shown to be incorrect. The time studies. All the time studies show a reduction in time and the interesting part is that they all come out quite even. One at 445 minutes, one at 480 and another at 480. So we talk about there being estimated figures.
PN676
Well, the estimations are obviously based on the understanding of the operators because they have all come to very similar report in terms of the time that is going to be taken. We would say that that is a good indicator for the Commission that these people are all fairly aware of what is involved in the process. If there was massive variations between the times that it was going to take it would put the surveys into a less credible position in terms of a true reflection of the time to be taken and we say that the fact that they are all very similar increases their credibility.
PN677
So we come then to which is the secondary part of the union's argument today regarding the consultative process and they base that upon clause 28 of the EBA which requires consultation which the management is to consult genuinely prior to the introduction of change. Well, Commissioner, we say that such consultation has taken place. This matter was first raised with the consultative - sorry, the EBA committee in May 2003. It was obviously discussed in the EBA negotiations because it was taken off the agenda.
PN678
The company at the first opportunity following the certification of the EBA put it back on to the consultative committee agenda. We have heard that why they took it off the EB agenda to start with and we would say that the obligations in clause 28 to consult had clearly been met and we are dating back some 12 months now since this issue was first raised. So consultation does not mean agreement being reached. It means consultation and that is what the company has done. The basis is that there has been a lack of, I suppose, due process under clause 36 of the EBA.
PN679
As I understand it, that is the premise of the union argument in closing. Now, when we look at that issue, clause 36 of the EBA states that the objects of the committee, and it is a consultative committee, are to investigate, determine, make recommendations on matters including but not limited to the introduction of new technology. It does not require agreement to be reached. Now, the company has agreed to take the issue off the EB agenda. It is then requested - there has been a request from the committee to put material to it as to where the time savings are going to occur.
PN680
They have done that. They put it through Andrew Francica who, as we have heard, was not influenced or handed a pre-determined survey but developed it himself. When that report was tabled with the committee and the time and motion study idea was rejected, agreement to have two further experienced operators came forth from Gary Unsworth who is one of the delegates on the committee. So the company has then put in place two further surveys with the two people represented and these reports again show the time savings that we have already identified.
PN681
Now, the respondent submits that the similarity is important to the Commission and weight should be given to it. We also submit that these reports have not been challenged in terms of the time themselves. The only thing that Robert O'Neill challenged was the fact that he was not involved in drafting the questions. He has not sought to challenge the actual times themselves and we say that is significant. Basically they are raising a breach of section 36 and asking this Commission to restrain the redundancy process.
PN682
Well, we say that there is no breach of clause 36 and we say that that is quite plain on its face. Another issue that is significant, Commissioner, is the issue of the Clayton site. The union have raised this issue that: well, it is all speculation, we don't know if you can run with nine. Well, we do. It already runs with nine. It has been running with nine - sorry, with five on the back end since 1998. One IC operator as opposed to two. So any - and that is with the old equipment. That is not with the new enamel rater or the Belvac train.
PN683
So any submission that we don't know whether or not this is going to occur is just flawed. We also note that the AMWU and the Commission ratified that agreement and the Victorian branch of the union had no problems with that. Now, the Smithfield operations re-commissioned and took that same Clayton line and put it in place and as we have heard from Mr Jack, operated with six on the back end so that the training could get up to speed but it was always the intention, as we have seen through Clayton, that where the new machinery is introduced, that there would be a reduction.
PN684
That has not changed. Now, we say that the union arguments which have been put forward today are based on a misconceived understanding of what the obligations are upon the company with the consultative committee. There is no obligation to reach agreement with the consultative committee and we say that the consultative committee processes have been followed and that in accordance with the dispute resolution procedure we are now here before you today. So we don't see that there is any breach of the EBA.
PN685
Now, there is a number of other clauses of relevance in the EBA. They are international competitiveness. The company spent over $7 million to ensure that the Smithfield site - that the Smithfield site operates and maintains competitive. We have seen what happened in 1995 when it failed to maintain its competitive position in the market and it was decommissioned. So we say that that clause in the agreement is - was an undertaking by the union that they would not restrict the company from remaining competitive.
PN686
In lieu of that and in consideration for that, they received EBA pay increases. Well, Commissioner, we would submit it goes both ways. The company is doing this to remain competitive and we do not believe that the union's attempts to stifle the process now are justified, based on that commitment that they have given. We have gone through consultation. We have gone through the redundancy clause. There is nothing being put to you in evidence today to show any breach of the EBA and on that basis, we say that the orders being sought by the union today are not ones that the Commission should endorse.
PN687
When we come to the orders being sought, the Telstra decision which I have put to you, if I take you to paragraph 50 which is contained on page 12 of that decision. It actually - the Full Bench overturns VP Lawler's decision in that case. I assume you are aware of that decision, sir. In that case, VP Lawler actually stopped interim orders to stop Telstra implementing the redundancies. Now, we say that is completely analogous to what we have before us today. We say that the orders that are actually being sought by the Commission cannot be issued. We would say that the Full Bench authority - - -
PN688
THE COMMISSIONER: I am not seeking any orders by the union.
PN689
MR STEWART: No, sorry, being sought by the union. Yes. Thank you. We could say that the Telstra decision is clear authority on that point and we would say that the orders being sought are beyond the scope of the Commission's jurisdiction. However, if we are unsuccessful in that regard, we would say that the merits of the case support that the company be allowed to proceed. There is no forced redundancies. There have been volunteers in place and we have sufficient evidence which is put to the committee to show that it is justified.
PN690
THE COMMISSIONER: Yes, thank you, Mr Stewart. Any - - -
PN691
MR MORRISON: No, Commissioner.
PN692
THE COMMISSIONER: Thank you. Yes, thank you, gentlemen. After hearing your submissions today, there are two questions I have got to decide upon. Firstly, as pointed out by Mr Stewart today, is whether or not I have jurisdiction to, in fact, deal with the matter brought by the union. If, in fact, I find I have no jurisdiction, it seems to me to be a fairly simple decision and the parties will have it very quickly. However, I wish to read the material and the matters quoted to me and the documentation put to me today.
PN693
I shall do that in conjunction with the transcript of today's proceedings before I make a final determination. Therefore I reserve my decision.
ADJOURNED INDEFINITELY [3.24pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
ROBERT O'NEILL, SWORN PN10
EXAMINATION-IN-CHIEF BY MR MORRISON PN10
MFI #1 VISYPAK OPERATION AND THE SMITHFIELD CERTIFIED AGREEMENT 2003 PN27
MFI #2 REPORT TO THE INDUSTRIAL RELATIONS COMMISSION RE PLANT UPGRADE AND SUBSEQUENT PROPOSED REDUNDANCIES PN35
CROSS-EXAMINATION BY MR STEWART PN65
RE-EXAMINATION BY MR MORRISON PN184
WITNESS WITHDREW PN203
PETER ROBERT JACK, SWORN PN205
EXHIBIT #S1 FOLDER OF A SERIES OF DOCUMENTS TC
EXAMINATION-IN-CHIEF BY MR STEWART PN209
EXHIBIT #S3 DOCUMENT PREPARED BY BELVAC REPRESENTATIVE PN336
EXHIBIT #S2 DOCUMENT PREPARED BY MR JACK PN343
EXHIBIT #S4 REPORT PN372
EXHIBIT #S5 REPORT ADDRESSING THE ISSUE OF SHIFT COVERAGE PN391
CROSS-EXAMINATION BY MR MORRISON PN413
RE-EXAMINATION BY MR STEWART PN620
WITNESS WITHDREW PN637
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