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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:(03) 9672-5608 Fax:(03) 9670-8883
TRANSCRIPT OF PROCEEDINGS
O/N 6981
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
COMMISSIONER MANSFIELD
BP2004/2755
BP2004/2756
BP2004/2757
APPLICATION FOR TERMINATION OF
BARGAINING PERIOD
Application under section 170MW of the Act
by TXU Group of Companies and others for
orders to terminate or suspend bargaining
periods in BP2003/7166, 7168, 7169, 7180,
7188, 7228, 7230, 7232, 7233, 7372, 7373,
7374, 7375
MELBOURNE
10.02 AM, WEDNESDAY, 5 MAY 2004
Continued from 30.4.04
PN7411
THE COMMISSIONER: Is there any change in appearances from the previous occasion we were sitting? I don't notice any. No, good. Before we commence this morning I just wanted to refer back to a recommendation that I made last Friday in relation to concerns expressed by the TXU Company regarding bans which had been applied, in particular in relation to the Melbourne Cricket Ground and three other matters that I dealt with. Now, I have had two communications from TXU on Monday and yesterday indicating that insofar as the bans on the Melbourne Cricket Ground were concerned they were still being applied.
PN7412
I did have a communication yesterday from the ETA which indicated that the bans were in the process of being lifted. Mr Borenstein, can you help me out in terms of where the current position is in relation to my recommendation?
PN7413
MR BORENSTEIN: Your Honour, my instructions from Mr Arnett are that all of the four bans which were the subject of your recommendation so far as the CEPU is concerned have been lifted.
PN7414
THE COMMISSIONER: They all have been lifted?
PN7415
MR BORENSTEIN: They are my instructions.
PN7416
THE COMMISSIONER: And so in relation, for example, to the Melbourne Cricket Ground, if the companies were to proceed there and seek to do the work that they wish to do would be able to enter the ground and do the work?
PN7417
MR BORENSTEIN: They wouldn't be precluded by the CEPU, Commissioner.
PN7418
THE COMMISSIONER: Good. Thanks, Mr Borenstein. I trust, as I said the other day, we won't encounter a situation where when the CEPU has lifted its bans other unions, for whatever reason, then decide to effectively maintain them. But I make that as an observation, Mr Borenstein.
PN7419
MR BORENSTEIN: Well, your Honour, be that as it may, may I make the observation that we are not aware of any such situation.
PN7420
THE COMMISSIONER: Good, thank you, Mr Borenstein. Have you any comment to make, Mr Parry, on this particular matter?
PN7421
MR PARRY: Only two matters. With regard to the four bans this is the first we have heard of it. We understood this morning that the bans remained in place and we have not been advised at all about the lifting of the bans. So this is new as far as we are concerned.
PN7422
THE COMMISSIONER: But a pleasing development I would think, Mr Parry.
PN7423
MR PARRY: Well, it is a pleasing development, yes, if it is the case. We note that there is reference to the four bans not being the MCG. At Mallacoota as we understand the boards on which work is allocated indicate that work will occur subject to union direction. Now, what that means we don't know, but we have assumed that consistent with the bans that the bans will remain in place.
PN7424
THE COMMISSIONER: I am sorry, when you say - I thought you said a moment ago, Mr Parry, that you hadn't been advised of any lifting of the bans before this morning.
PN7425
MR PARRY: We hadn't.
PN7426
THE COMMISSIONER: I didn't hear Mr Borenstein talk about anything about subject to union direction.
PN7427
MR PARRY: That is what on the board at Mallacoota.
PN7428
THE COMMISSIONER: That is on a board at Mallacoota which has been observed by the company?
PN7429
MR PARRY: Yes. So as we indicate, we weren't aware of the lifting of any bans. But I can't take it much further at present, that is our position.
PN7430
THE COMMISSIONER: Thank you. Well, thanks, Mr Borenstein, that is a development but it certainly is a positive one and I am grateful for all the parties concerned in taking that action.
PN7431
MR BORENSTEIN: Commissioner, in relation to the report back this morning it may be of some assistance to us in terms of how we respond if you could indicate the process that you had in mind.
PN7432
THE COMMISSIONER: Yes.
PN7433
MR BORENSTEIN: In the transcript that I have read of 7 April you indicated the report back may involve a report back, may involve evidence, may involve other matters.
PN7434
THE COMMISSIONER: Yes.
PN7435
MR BORENSTEIN: So it may perhaps be beneficial if we identify how we should proceed today.
PN7436
THE COMMISSIONER: Good, thank you, Mr Borenstein. Well, my intention when I issued the statement and recommendation in early April was that the parties would be given a further opportunity to undertake negotiations on their enterprise bargaining agreements and as at that time we had a range of somewhat conflicting evidence. Evidence from the companies that suggested that the efforts to each agreement were at a point of almost stalemate. Evidence from the unions which suggested that yes, certainly there were some difficulties but the unions were open to the negotiating process and they were confident that an agreement could be reached.
PN7437
If I could quote from Mr Georgiou, for example, in relation to TXU, on the issue of introduction of change his evidence was that there were two or three words separating the parties. On the issue of contractors his words were that they were nearly there and on the issue of compulsory redundancy it wasn't a big ticket and it should be able to be settled quickly. Now, the evidence from the company was very much in contrast to that and there was this conflict in evidence and I was wanting the parties to re-engage in negotiation over the period of around four weeks and I was hopeful that there would be significant progress made that could be reported back to the Commission this morning.
PN7438
As you will recall, in paragraph 9, subparagraph 5, I indicated that this hearing this morning I would hear any additional submissions from the parties on the section 170MW applications, or if both parties agree, allow further time for negotiation, or adjourn the matters on hearing from the parties and proceed immediately, and I clarified the word immediately, to issuing decisions from the section 170MW applications. Now, I believe what we will be doing this morning is essentially focusing on the first of those three dot points, hearing any additional submissions from the parties on the section 170MW applications. But it is up to the parties themselves as to what material they wish to put.
PN7439
I am not looking for extensive further evidence to be put to the Commission on this matter. We have had our opportunity to do that. Essentially I am looking for an update and a report on the developments that have occurred since the statement and recommendation was issued in early April and in doing so the parties can present evidence that they believe is helpful to the Commission in reaching its decision on the application that has been made to terminate the bargaining period and that evidence would have to go to the issue of whether or not there is a reasonable prospect of an agreement being reached in the claims that have been made by the unions and the responses from the companies.
PN7440
In regard to how we will proceed, I had indicated earlier that there would be three separate hearings, one at 10, one at 1 pm and one at 3 pm and following indications of the preferred approach from the companies and the unions my proposal now is that we would commence with material relating to Citipower, Powercor and deal with that material. Whatever evidence that either Mr Parry, or yourself, Mr Borenstein, wishes to put forward, the indication from Mr Parry at a hearing on Friday was that he expected that his submissions wouldn't go possibly in the order of 15 minutes.
PN7441
Now, whether that turns out to be the case this morning is up to Mr Parry and we didn't get an indication from your side, but I got the impression that it could be somewhat longer than 15 minutes. Now, essentially what I am looking to do this morning, there was a number of issues set out in paragraph 9 of the statement of recommendations which indicated a number of key issues and they were introduction of change, no compulsory redundancies, apprentice/trainee recruitment, use of contractors, wage increases and related matters and the 36 hour week. It would be valuable for me if I could get an outline of the current position which clarifies what the current position is in relation to those issues because they were the ones that were identified as key issues in the hearings leading up to the statement of recommendation.
PN7442
I was hopeful given a range of the evidence that was presented and looking at the issues themselves, that given a further opportunity the parties would come back and say that at least some of those have essentially been resolved. Now, in relation to what has happened since early April, the parties have supplied Senior Deputy President Lacy with statements which set out the developments in the meetings which have taken place, some of which have taken place I notice in relation to TXU, there was a meeting that occurred two days ago on Monday and that set out the developments as at that point and I did receive a two page document this morning which set out developments and said that the next meeting was tentatively set for Tuesday, 11 May in relation to TXU and I have copies - - -
PN7443
MR BORENSTEIN: I think it is Powercor, Commissioner.
PN7444
THE COMMISSIONER: That was Powercor was, it? I am sorry. Actually it doesn't identify the company. Powercor. There is a range of - I wouldn't call them minutes because they are not minutes. They are just records of meetings obtained from the discussions that have taken place between the unions and the company. So I have got access to that information and to some extent it gives me a picture of, in some cases, agreement, in probably a greater number of cases, continuing disagreement. So that is where we are, Mr Borenstein. Does that clarify your question?
PN7445
MR BORENSTEIN: It does, Commissioner. The point that I was really - or one of the points I was concerned about was whether you had made aware of the notes, if I can call them that, of the various meetings that had taken place and if you have them then that saves us providing them to you again.
PN7446
THE COMMISSIONER: Senior Deputy President Lacy has provided me with copies of those as they arrive from time to time.
PN7447
MR BORENSTEIN: Yes. Yes, very well, thank you.
PN7448
THE COMMISSIONER: Good. So if those matters are resolved I will look to you, Mr Parry, please.
PN7449
MR PARRY: If the Commission pleases. This is the position with regard to Citipower, Powercor. As the Commission appreciates, final submissions were made with regard to Powercor and Citipower on 5 April 2004. At that time the employers provided to the Commission submissions both written and orally and in the submissions made there were various issues that were identified as between the parties, including the 36 hour week, the number of apprentices, the use of contractors and these matters are identified in exhibit P12.
PN7450
Matters in dispute included the no extra claims and this is in paragraph 104 in the summary part of that exhibit. Matters included the no extra claims clause, duration of the agreement, protection of employee entitlements, pay rises for staff on employment contracts, compulsory redundancies and pay increases generally. Now, the union made submissions at that time in respect of Powercor and Citipower dealing with some of those matters but in summary, and as is set out in paragraph 11 of their submission, their position was there are a number of proposals that had been advanced and the applicants were in the process of considering them.
PN7451
Now, the submission was also made at that time by the unions with regard to Powercor, Citipower and also with regard to the other employers and this is at paragraph 6589 where it was said, and this is specifically in respect of Powercor, Citipower, "Allowing for the fact that" - and this is quoting from what they have said:
PN7452
...what is to be said is a much more difficult issue -
PN7453
and this was the 36 hour weeks -
PN7454
it would be reasonable to allow a little further longer rather than less time to see if the parties can overcome ...(reads)... come to a solution.
PN7455
With regard to all the parties it was submitted at page 6658:
PN7456
The applications are premature. Why wouldn't one allow a little more time for the Act to play out. I mean ...(reads)... now make our application?
PN7457
Well, the unions have had their month. The recommendations - - -
PN7458
THE COMMISSIONER: You were quoting Mr Borenstein there, Mr Parry, were you?
PN7459
MR PARRY: I was quoting Mr Borenstein appearing for the unions, yes.
PN7460
THE COMMISSIONER: Yes.
PN7461
MR PARRY: The unions have - there was a recommendation made by the Commission on 7 April. That set out a process to be followed. That wasn't sought by the applicants in these proceedings but it was consistent with the propositions being advanced by the unions that more time would be utilised. Now, the companies accepted and in particular Powercor, Citipower, accepted the recommendation and thereafter meetings were organised and meetings took place on 21 April, 28 April and 3 May and priority was given to the key issues but also to the other issues that were between the parties.
PN7462
Now, your recommendation required, Commissioner, that there be an agreed brief written factual report and in respect of Citipower, Powercor, there was such a process followed whereby a factual report was provided and my instructions were it was agreed. Now, that report was prepared by Mr Pope and the Commission has heard of Mr Pope before no doubt and is aware that he was a facilitator in many of the negotiations involving Powercor and Citipower. Now, I note in discussions with my learned friend this morning you have indicated you have indicated that you have the documents provided to Senior Deputy President Lacy before you, and I also heard the exchange between my learned friend and yourself.
PN7463
There are really, I suppose, three very board options as to what can occur. Firstly, you can ignore what has happened in the last month. I don't - - -
PN7464
THE COMMISSIONER: Well, I won't be doing that, Mr Parry.
PN7465
MR PARRY: I would not so submit that you should. In my submission it is appropriate for you to make an assessment at the time of the decision, which presumably is not far off, as to section 170MW(7) requirements. The second is that you can make use of the reports and the submissions before you. Now, perhaps as to that use it is apposite to consider why you set that process in train and it is manifest, we say, from the statement and recommendations itself. It set up a process whereby the parties were, to quote from paragraph 9:
PN7466
Re-engage in negotiations to endeavour to reach agreement on the EBAs.
PN7467
And paragraph 11 notes:
PN7468
A number of serious claims have not yet been agreed with any of the unions/companies.
PN7469
And in paragraph 12 you recommended the parties apply themselves to the task of reaching agreements. Now, clearly the purpose of the process that the Commission set up was to facilitate agreements being reached and to see if they could be reached. Now, in the case of Citipower, Powercor, you have before you agreed minutes. They are, as I have indicated, of the meeting of 21 April, 28 April 2004 and 3 May 2004. Now, we don't call these minutes. They are not minutes. They are simply, in the case of Powercor, Citipower, a record prepared by Mr Pope of where matters are, including those matters you identified in your statement and recommendations.
PN7470
We submit that what is relevant that comes out of this is that there have been negotiating meetings in accordance with your recommendations and there has been no agreement reached and that is uncontested from agreed material. Now, we also note that the ETU has increased its bans and the Commission may have, but may not have, the further MO notices that have been served on Powercor and Citipower increasing the bans. I am sure you - - -
PN7471
THE COMMISSIONER: I don't have those at the moment, Mr Parry.
PN7472
MR PARRY: You don't have those? If I could hand to the Commission a notice from the CEPU dated 28 April directed to Powercor and also a notice directed to Citipower.
PN7473
THE COMMISSIONER: Thank you. Would you like those marked, Mr Parry?
PN7474
MR PARRY: Yes, I tender those documents.
PN7475
THE COMMISSIONER: Can somebody help me with the - this will be P.
PN7476
MR PARRY: I would assume that it would be P13.
PN7477
THE COMMISSIONER: P13.
PN7478
MR PARRY: But that is only because the Powercor submissions are P12, so that is the basis upon which I - - -
PN7479
PN7480
MR PARRY: Now, this option the Commission can note that there have been meetings, note that there hasn't been agreement reached, note that there has been an increase in the bans and that taking into account all those matters, the Commission can proceed to make a decision with regard to the application of Citipower and Powercor. Now, the third option is to go into the detail of the reports and look at the matters that are raised in the reports.
PN7481
Now, for that third step we would - presumably the reports should be marked in these proceedings which they are not at present, and to follow that third track which we say is not necessary, but if the Commission were to go to that third track of looking at the reports and giving them some weight, then presumably we would need to tender those reports in these proceedings. So for the purpose of that submission I tender the reports. Now, that will be a document, and I have copies for the Commission, that will be an e-mail from Neil Pope to Mr Minster, dated 21 April 2004, another such e-mail - - -
PN7482
THE COMMISSIONER: I have one dated 20 April, is that the same one, Mr Parry, 9.02 pm? So he sent it quite late actually. It may have been - - -
PN7483
MR PARRY: I don't think that is - I am not sure what that one is.
PN7484
THE COMMISSIONER: It is an e-mail from Mr Pope to Mr Minster, dated 20 April, 9.02, and to go to the last full line in it:
PN7485
Trust this is agreed as accurate reflection of today's outcomes.
PN7486
Is that your last full line?
PN7487
MR PARRY: Yes, that is and it has a number of items. It probably is the same document.
PN7488
THE COMMISSIONER: It is the same document I suspect.
PN7489
MR PARRY: I perhaps should hand up a document. That is right, it may well have been re-sent, but I probably should provide to the Commission the document that I have which is dated 21 April 2004, time 4.40 pm, and if I could provide a copy of that. I am happy to put them up in a bundle. My learned friend doesn't - - -
PN7490
THE COMMISSIONER: It is better as a bundle, Mr Parry, if you wouldn't mind.
PN7491
MR PARRY: Yes, I will hand up a bundle.
PN7492
THE COMMISSIONER: Actually I do have what appears to be three separate records here. Do you have a bundle of all of the matters that you are going to be referring to?
PN7493
MR PARRY: Yes, I have a bundle that I am handing up now.
PN7494
THE COMMISSIONER: Good, thank you. I think I now have two bundles, Mr Parry.
PN7495
PN7496
MR PARRY: The Commission will see the summary of the first meeting on - I think it is the document that we are referring to from Mr Pope to Mr Minster, 21 April 2004. There were a number of issues that were obviously discussed. The Commission in its recommendation referred to a number of matters, introduction of change, compulsory redundancies, apprentice, use of contractors, wage increases and 36 hour weeks. The Commission will find within those that they are matters that were not agreed at the meeting on 21 April 2004. I am sorry, I am not going to be making a submission that there hasn't been any progress at all.
PN7497
THE COMMISSIONER: Yes.
PN7498
MR PARRY: There have been some progress on some matters.
PN7499
THE COMMISSIONER: Yes.
PN7500
MR PARRY: And my learned friend draws to my attention correctly that introduction of change was a matter that was agreed with regard to Citipower, Powercor. A number of other matters weren't agreed. Some matters were agreed and the Commission will note halfway through meal allowances and employment agreements, superannuation, employee entitlements, annual leave and so forth were agreed matters.
[10.30am]
PN7501
THE COMMISSIONER: Yes. Were they disagreed at the point that those negotiations were recommenced, Mr Parry? I think they weren't agreed matters as at the conclusion of our last hearing.
PN7502
MR PARRY: I think there has been some progress made on some of them and not on others, so I can't say they were all automatically not agreed, but there was progress made on that those matters were agreed. Now, the Commission will note that there were some of the matters, and it is following the first major paragraph:
PN7503
Electrical apprentice levels, contract labour, line worker registration, work site, leader allowance were to be discussed between management and the ETU off line.
PN7504
Does the Commission note that?
PN7505
THE COMMISSIONER: Yes, I do, Mr Parry.
PN7506
MR PARRY: Now, there was a further meeting that took place on 28 April 2004 which is attached. It has a summary of today's meeting and it commenced with a disappointment about the bans being intensified and the Commission has the seen the MO notice there. The next is the parties reported on the off line meeting held on Monday 26 April, so there was a further meeting that took place, and those four issues there was no resolution agreed. Then there was referred to constructive discussion on all outstanding issues but with little resolution and there is then some dot points.
PN7507
Some of those matters are then set out. Some of them repeat those matters that were agreed from the earlier meeting. The Commission will see at the bottom of the page that management rejected a package with regard to the 36 hour week and the parties agreed to meet on Monday, 3 May at 2 pm.
PN7508
THE COMMISSIONER: I am just curious on one item in that, Mr Parry. In the reference to contractors there is a note that unions responded to company document which was something described as a minor change and that is to delete, "Such agreement will not be unreasonably withheld" and replaced with "Reduced to writing." Is the description of that as a minor change reasonably accurate or not?
PN7509
MR PARRY: If the Commission pleases, I will have to get instructions on that.
PN7510
THE COMMISSIONER: These are Mr Pope's notes.
PN7511
MR PARRY: The position with the company is it is a called a minor change but it is a significant one and it is still a sticking point between the parties.
PN7512
THE COMMISSIONER: Yes, okay. Thanks, Mr Parry.
PN7513
MR PARRY: I should indicate where you are referring to I think comes under a heading:
PN7514
After caucus the unions proposed the following package to resolve the entire agreement.
PN7515
And then you have a number of matters set out.
PN7516
THE COMMISSIONER: Yes.
PN7517
MR PARRY: Apprentices, contractors, employment agreements and so forth. And for example you have hours:
PN7518
The company accept the latest 36 hour proposal of unions by extra days off.
PN7519
THE COMMISSIONER: I shouldn't misread that then, Mr Parry.
PN7520
MR PARRY: Yes. So I think it appears to be that that was the union was coming back with with regard to these matters.
PN7521
THE COMMISSIONER: Yes, and then the second last line says:
PN7522
Management rejected package as 36 hour week is not acceptable.
PN7523
MR PARRY: That is so.
PN7524
THE COMMISSIONER: Yes.
PN7525
MR PARRY: And the parties agreed to meet further on 3 May at 2 pm. This document was prepared by Mr Minster and not by Mr Pope. The Commission will see that there was a union position advanced by ASU, APESMA and the NUW which said it was dropping the claim for a 36 hour week, seeking 5.5 per cent pay increase for three years and also seeking two additional public holidays plus Anzac Day when it fell on a weekend and the ETUs position was that they hadn't considered an EBA without a 36 hour week and the position put by the unions was rejected.
PN7526
The unions came back with a claim for the - dropping the claim for the additional public holidays. This is not the ETU, but keeping the 5.5 per cent pay increase. It may also be assumed in that that the unions were continuing to pursue those matters set out over the page. Then there was debate about items that were not agreed and the Commission will see that over the page there are hours of duty weren't agreed. Employment agreements and employee entitlements, maternity, paternity and long service leave were. Then there were a range of matters that were not agreed.
PN7527
THE COMMISSIONER: What do the M and N in brackets after superannuation is a non agreed matter mean, Mr Parry? Just enlighten me on that. Does it mean anything or maybe nothing? In the list of matters.
PN7528
MR PARRY: I will have to get instructions. They are two matters that go to, which I think are in the EBA, which are not agreed matters but we would not say they are significant matters.
PN7529
THE COMMISSIONER: So there are two separate matters?
PN7530
MR PARRY: Two separate matters that are not agreed.
PN7531
THE COMMISSIONER: And in the item regarding the wage increase sought by the unions there is the note:
PN7532
Management advised that this was also unacceptable and that the original offer of 28 January was more than generous.
PN7533
Now, can you enlighten me as to what the original offer was on 28 January, please?
PN7534
MR BORENSTEIN: I think it is the 4.5.
PN7535
MR PARRY: 4.5 per cent.
PN7536
THE COMMISSIONER: Per annum for three years?
PN7537
MR PARRY: Yes.
PN7538
THE COMMISSIONER: Yes. Good, thank you.
PN7539
MR PARRY: We do indicate of course that - yes, I withdraw that. Now, the notes indicate that there has tentatively been further meetings set. We of course say that that is consistent with the position of the Commission originally in these proceedings which was encouraging the parties to continue to meet and of course there re some of the lesser matters either being agreed or in the process of being agreed that Powercor and Citipower will continue to progress to resolve.
PN7540
However, the position is with regard to Powercor and Citipower that there are significant issues being some of those matters that the Commission described as key issues which are not agreed notwithstanding the parties best endeavours to so agree. Now, in those circumstances we say the Commission can take into account those matters and can be satisfied the requirements of section 170MW(7) now with regard to Powercor and Citipower and we would request the Commission as per the recommendation to proceed immediately to issuing decisions regarding the applications. If the Commission pleases.
PN7541
THE COMMISSIONER: Thank you. Mr Parry, in 9(iv) of my recommendation I stated that:
PN7542
Either or both parties may seek the assistance of the Commission to engage in conciliation. If assistance is sought it will be provided promptly.
PN7543
Now, if I just give you a little illustration. In the last two weeks I have been engaged in conciliation of an enterprise agreement bargaining between a bus company in Melbourne and the Transport Workers' Union. The bargaining actually started in I think it was July last year. The enterprise bargaining agreement expired in December and here we are in May and despite constant efforts by both sides and a level of industrial action there was no agreement between the parties.
PN7544
Now, I am not saying the level of disagreement was as serious as perhaps the level of disagreement in the matters that we are facing right now, but there were very serious differences between the parties and I have to say that if it hadn't have been for the conciliation work undertaken by the Commission, and it was simply me on this occasion but it could have been any one of a number of persons, which went over several days, those parties had no possible chance of reaching agreement.
PN7545
As it is, and I am taking a bit of a gamble here in a sense, Mr Parry, you would be sympathetic with me on that one perhaps, that there is a mass meeting this morning of the particular members to consider the outcome of those negotiations. I am hoping the members are going to accept it. If they don't it will be four days of futile effort by all concerned. But I am simply saying that through the use of the Commission and the conciliation process significant progress to the point of an agreement, a draft agreement between the parties was achieved.
PN7546
Now, in this particular case neither party, neither management nor the unions sought the assistance of the Commission in conciliation. Certainly you had Mr Pope there in some instances, not in others, but can you help me as to why in this particular case of Powercor was not seeking the assistance of the Commission in conciliation?
PN7547
MR PARRY: Well, firstly, Powercor and Citipower had been to the Commission and had sought or advised of the conciliation process through the negotiating stages and - - -
PN7548
THE COMMISSIONER: Yes, and I am aware, Mr Parry, that the union said in all cases and they have said it to me, that they weren't prepared to engage in conciliation.
PN7549
MR PARRY: Yes, they weren't prepared to and I think from that Powercor, Citipower is entitled to draw the view that the unions aren't going to be assisted by conciliation in any sense and it would become a one sided conciliation. Secondly - - -
PN7550
THE COMMISSIONER: What do you mean a one sided conciliation, Mr Parry?
PN7551
MR PARRY: Well, if one party doesn't party doesn't particularly want to have conciliation and the other party does, I doubt that conciliation will be of particular use. Secondly, there have been ongoing negotiations with an experienced facilitator where parties have been discussing their differences and the differences, I don't know anything about your bus case, Commissioner, but the differences here are significant ones and they are significant ones where the unions are making demands, for example, the 36 hour weeks, but the employers are also making demands as well, seeking to change some of the long existing practices in this industry.
PN7552
THE COMMISSIONER: It was the identical in the bus case, Mr Parry. There were concessions sought by both sides and concessions given by both sides.
PN7553
MR PARRY: Well, if it was identical, it was identical.
PN7554
THE COMMISSIONER: Well, in a general sense it was. I am not saying it was as serious as this particular matter.
PN7555
MR PARRY: We say these are very serious issues for the future of these businesses, the utilisation of contractors, setting the size of the workforce and being able to introduce change. Now, they are, and I am speaking broadly, not agreed matters and they have been pursued. So there is fundamental differences between the parties. We have continued to meet. We did notify the Commission last week when the bans came on and it came to the Commission and they gave a report to the Commission, but I suppose we see the conciliation, if it is to achieve something, should be conciliation consistent with 170MX in the Act now at this stage and that the - - -
PN7556
THE COMMISSIONER: But you realise, Mr Parry, sorry to interrupt you, but you realise that once the bargaining period is terminated there is compulsory conciliation between the parties and you then proceed from that point to an arbitration hearing if the conciliation is not successful.
PN7557
MR PARRY: Well, compulsory conciliation is a more desirable approach than the voluntary conciliation that the Commission has been referring to in its recommendation. If there is to be conciliation it is desirable it be compulsory and within the constraints of the Act. If there is to be, there might be, I don't know, but it might be that the next stage of arbitration has to be gone to. But if there is to be conciliation we submit that it should be conciliation that follows the dealing with of our application.
PN7558
THE COMMISSIONER: Yes.
PN7559
MR PARRY: If the Commission pleases.
PN7560
THE COMMISSIONER: Mr Parry, sorry, just before you sit down again. I did have submissions that you are aware of course from TXU in relation to a number of the bans that were applied which were causing serious concern to the company and I made a recommendation in relation to those. One of those involves the SCARDA system which I note is part of the MO notice that was supplied to Citipower, Powercor and so I imagine Citipower, Powercor also has a SCARDA computerised monitoring system. I just want to draw your attention to the fact that that was part of the recommendation I made in relation to TXU and it is part of the response from the union that the ban on the SCARDA system will not be maintained.
PN7561
There was also some live line work which was scheduled to be done in relation to Mallacoota as I recall and it would have been very difficult in terms of maintaining services to Mallacoota on a Monday to Friday basis if that live line work could not be carried out. I think it was scheduled to be undertaken on a Sunday, and again a recommendation was made to the union to cease that ban and the recommendation was accepted, according to what I have heard this morning. So I just make the point in relation to any of the bans that have been imposed on Citipower and Powercor and you might recall at the last hearing the companies were saying, look, these bans are difficult for us, they are causing services to be disrupted to customers but they are at a level which - if I could summarise them, that are tolerable and they are not causing the company to alter its stance in its negotiations.
PN7562
MR PARRY: That is so.
PN7563
THE COMMISSIONER: And the company certainly had a strong preference to the bans be discontinued. No question about that. I am leading to the question of do any of these bans which have been the subject of the escalation by the union alter that position from the company?
PN7564
MR PARRY: Not on my instructions, no, and we were before you last Friday and our position with regard to these bans is not an MW(2) argument or an MW(3) argument.
PN7565
THE COMMISSIONER: No, MW(3), yes.
PN7566
MR PARRY: It is not an MW(3) argument. We are saying to the Commission that no agreement is reasonably in prospect.
PN7567
THE COMMISSIONER: Yes.
PN7568
MR PARRY: And after the last meeting and before the next meeting the union increases bans. Now, we say that is simply consistent with our basis proposition. There is no reasonable prospect of agreements and the unions are doing what they are doing recognised with that and consistent with that. That is our submission on that.
PN7569
THE COMMISSIONER: Thank you, Mr Parry.
PN7570
MR PARRY: If the Commission pleases.
PN7571
THE COMMISSIONER: Mr Borenstein.
PN7572
MR BORENSTEIN: Commissioner, like Mr Parry can I start off with some general comments and then go to the specific situation with Powercor. As Mr Parry has indicated, there have been several meetings between the unions and the various employers in consequence of your recommendation on 7 April. The situation in your case is clearly that no final agreement has been reached, although different stages or different levels of agreement have been reached with different employers.
PN7573
As to how the Commission should treat what has happened since 7 April, we would say generally in relation to all three applications that the Commission should approach the assessment of these negotiations and the outcome of the negotiations with a health dose of caution for the reason that the negotiations have really taken place in a very artificial and unconducive atmosphere and I don't say that in a derogatory sense but in an objective sense.
PN7574
THE COMMISSIONER: You mean the last month, Mr Borenstein?
PN7575
MR BORENSTEIN: The last month.
PN7576
THE COMMISSIONER: What about the previous six months?
PN7577
MR BORENSTEIN: Well, I am coming to that. But in terms of the last month which Mr Parry has been addressing you on, and as I say, I don't say this in a critical sense, but in a sense of making a submission as to the weight that one can attach to what has happened. Now, you have here in each of these cases employers who come to the Commission and who have sought for whatever reason they think it is valuable to them to do so, to relieve themselves of the bargaining periods, to seek the termination of the bargaining periods so that they can presumably take advantage of the arbitral processes in the Commission.
PN7578
That is an aim which each one of them have set for themselves, as I say, because presumably they regard it as advantageous to them.
PN7579
THE COMMISSIONER: Are you suggesting they haven't been bargaining genuinely, Mr Borenstein?
PN7580
MR BORENSTEIN: What I am going to put to you is this, that in circumstances where the Commission says to them I have heard the case, I am going to give you another month in which to bargain and then I want to know what you do and then I am going to give my decision, where employers - - -
PN7581
THE COMMISSIONER: There is no indication of what that decision might have been, Mr Borenstein.
PN7582
MR BORENSTEIN: No, that is right.
PN7583
THE COMMISSIONER: It might have actually gone against them.
PN7584
MR BORENSTEIN: No, that is right. That is right. And I am not saying that they know which way the decision is going to go. But what I am putting to you is that their whole case, this whole litigation is based on the premise that it is not possible to reach an agreement. Now, if that is the position and if - - -
PN7585
THE COMMISSIONER: That is what the Act says, Mr Borenstein, whether we like it or not.
PN7586
MR BORENSTEIN: I understand that, Commissioner. My point is simply this, these companies have put a lot of resource and a lot of time and a lot of expense into advancing a case to take advantage of that provision in the Act and we don't criticise them for doing that. The Act allows them to do it, as you rightly point out. But what I am saying to you is that when they come along and say, well, we have gone through this process and we haven't reached agreement therefore you should assume that there is no prospect of agreement.
PN7587
What we say is that common sense tells you, human nature tells you that the companies over the last month since 7 April have been operating in a situation where if it transpires that the records of the meeting show a real prospect of movement, even though not final agreement, then their litigation is at risk of being prejudiced and that is a consideration which human nature and common sense tells you will be at play in the minds of a party to a piece of litigation where the whole purpose of their efforts for the last month or so, or two months before we got to 7 April, has been to terminate the bargaining period because they perceive it as being advantageous to them for one reason or another.
PN7588
THE COMMISSIONER: I am sorry, Mr Borenstein, but in relation to concessions, obviously there have been some concessions from some companies during the last month.
PN7589
MR BORENSTEIN: And I think as people would have understood, if the companies came back here this morning and said we have settled every matter rather than other than the 36 hour week issue which the unions are telling us that unless we settle that there will be no agreement, no agreement, then the conditions as required by the Act to the extent that it influences whether or not I should exercise my discretion are on the face of it satisfied. So the companies could have conceded every issue bar one, whatever that one may have been, and if the unions said unless they concede that we have no agreement, there is no agreement.
PN7590
MR BORENSTEIN: Yes. Commissioner, directly answering that, what you say is moves from a premise which is really not the premise or the position which we were at immediately prior to 7 April. You will recall that in almost - well, I think in each case the complaint that the companies were making about the unions was that the unions wanted a 36 hour week, all three of them, and were not prepared to talk about any trade offs for the 36 hour week.
PN7591
THE COMMISSIONER: That is so and each of the union witnesses said that wasn't the case.
PN7592
MR BORENSTEIN: That is right. Now, in relation to Powercor you will remember that there was a meeting which produced a meeting a couple of days before the hearing started. There was an exhibit, I think it is exhibit P9 which was a print off from a whiteboard of some notes of that meeting and Mr Minster gave some evidence about it and you will recall that at that meeting the company identified a number of trade offs which the union said they were prepared to talk about and the company then went away and then came back and said no, we don't want to talk about the 36 hour week.
PN7593
Now, the position of the companies in relation to the 36 hour week was as they said to you, that if we can't reach agreement on the 36 hour week that is a centrepiece to any agreement and so it is a make or break, perhaps one could describe it. But if you look at the documents that were produced, the notes of the meetings, you will see that the unions have continued at each meeting to put forward proposals to seek to ameliorate what the companies say will be the cost effect or the cost impact of the introduction of the 36 hour week and each of these meetings that is put you will recall that Mr - this is in the bundle exhibit P14.
PN7594
THE COMMISSIONER: I must say it hasn't come out all that clearly as you have put it to me, Mr Borenstein in the notes that I have read.
PN7595
MR BORENSTEIN: Well, if you look at the notes of the meeting that Mr Pope produced on 28 April you will see that - and you will recall you asked Mr Parry a question and Mr Parry said, oh, but you have misread that because this is a series of proposals that the union have put. It starts at about point 3 of the page with the words:
PN7596
After caucus the unions proposed the following package to resolve the entire agreement.
PN7597
And then there is a package of a range of items dealing with various issues and including the 36 hour proposal with various other matters withdrawn and so on. Now, the point that - - -
PN7598
THE COMMISSIONER: Yes, I see the point you are making particularly the last two, by way of example, the last two lines of that page.
PN7599
MR BORENSTEIN: Yes. Now, these are matters that the union put and if you look at the second last line of that page:
PN7600
Management rejected package as 36 hour week is not acceptable.
PN7601
So that rather than - in a sense there is a shift in the position because when we were before you at the hearing the company's position was, well, we are looking for trade offs. Here in negotiations management rejects the package because 36 hour week is not acceptable. There is no hint that the company says no, look, what you have offered us, let us say on the quantum, is too high, if you reduce it by another half a percent per annum then we are in the ball park or anything like that. It is just a point blank rejection and that is the point I am making.
PN7602
The whole dynamic of these negotiations from the company's point of view is that they can give a bit here and there because it doesn't cost them anything to say we will agree on the meal allowance and we will agree on the employment agreements, because they know full well that at the end of the day they can come back to the Commission and they can say today in the report back, look, we have done our best, we have settled the meal allowance. But on the critical issues if you look at these minutes, it is the unions that have put forward constructive proposals which have just been point blank rejected and no counter proposal is to be found.
PN7603
In those circumstances, again, what inference should one draw about the attitude that the companies have had to these negotiations since 7 April and it is the one that I outlined to you at the outset? Beyond that I can also say that there was a recent development, which again the unions sought to put forward as an avenue to resolving the 36 hour week impasse. In recent days the three unions have been able to reach agreement with another distributor for a settlement which does encompass a 36 hour week provision.
PN7604
In that case what happened was that the ASU and APESMA arrived at a separate agreement with the particular employer and the CEPU arrived at a separate agreement and they made different provisions about hours of work. So drawing on that experience as a possible positive, on 3 May you will see that there are propositions put, these are in the notes of 3 May, there are propositions put which are propositions on the one hand from ASU and APESMA and on the other hand from ETU.
PN7605
Now, because these are brief minutes it is not clear how that came about and the purpose of me telling you this background is to explain to you that that is how it came about, that in fact what was being explored was the possibility of ASU, APESMA in fact not pressing for a 36 hour week but pressing for quantum increases instead and the ETU taking a different course. Now, the potential advantage of that course for the employer is that most of the operational set offs or savings that can be made are in the hands of the CEPU and so trade offs that are to be negotiated may be more effectively negotiated and the cost of the 36 hour week can be restricted because it will only be one organisation and the employees of that organisation that will in fact have the 36 hour week.
PN7606
So there is a lower cost offset to be met and the cost offsets that were being sought generally would come from that group and so there is a greater scope to get a match. Now, this was ventilated on 3 May. My instructions are that management of Powercor were open to those discussions and that indeed it was expected that at the next meeting those discussions would be furthered. In terms of the ASU, APESMA decision, what you have really got is your classic industrial bargaining situation. You have got Powercor - because we are down to quantum.
PN7607
You have got Powercor which has offered four and a half, you have got the ASU and APESMA which say we want five and a half, and for those who have been engaged in industrial relations for any length of time, one can see that when you get down to that sort of level of bargaining about quantum there is a very real prospect in 99.9 per cent of cases that parties will reach a compromise agreement.
PN7608
THE COMMISSIONER: Are you suggesting that the ASU and APESMA in relation to Powercor, Mr Borenstein, were prepared to negotiate an agreement without a 36 hour provision in it?
PN7609
MR BORENSTEIN: It is in the minutes.
PN7610
THE COMMISSIONER: Yes, okay.
PN7611
MR BORENSTEIN: It is in the minutes. And so you see the response to that where the position of the company is put where you see second union claim, ASU, APESMA, halfway down the first page of 3 May:
PN7612
Dropped the claim for additional public holidays but keeping the 5.5 per cent pay claim.
PN7613
So that is a second proposition, so we are into the bargaining, the argy bargy of the bargaining backwards and forwards.
[11.03am]
PN7614
THE COMMISSIONER: Yes.
PN7615
MR BORENSTEIN: The company says no to the first offer. There is a bit of a tweak to the offer and the company then says no, we want to go back to the four and a half, so we are down to five and a half versus four and a half and in a sense it really does demonstrate the point that I am trying to make which is that the unions have in this period since 7 April, endeavoured to be constructive and imaginative in terms of trying to find a way through what was said to be an impasse and that certainly in the case of Powercor the notes that are there and my instructions as to the reception of the proposals received at the meeting indicate that there is a positive prospect of further negotiations achieving a possible outcome.
PN7616
THE COMMISSIONER: Yes. Now, you referred earlier to another company, Mr Borenstein.
PN7617
MR BORENSTEIN: Yes.
PN7618
THE COMMISSIONER: Now, I think we all understand in this room that the other company you are referring to is Alinta.
PN7619
MR BORENSTEIN: That is right.
PN7620
THE COMMISSIONER: And you are saying to the Commission that in the case of Alinta there was an agreement reached between the ASU and APESMA.
PN7621
MR BORENSTEIN: And a separate agreement between the CEPU and APESMA.
PN7622
THE COMMISSIONER: Which did not include a 36 hour week for the ASU and APESMA?
PN7623
MR BORENSTEIN: Yes, that is correct.
PN7624
THE COMMISSIONER: And the agreement reached with the ETU - are we going to be given the advantage of seeing copies of those agreements?
PN7625
MR BORENSTEIN: I am happy to hand one up. We have copies here. I didn't know whether the Commission would be interested in it but I have got a copy of the - - -
PN7626
THE COMMISSIONER: Well, I certainly am interested in it.
PN7627
MR BORENSTEIN: We have got a copy of the CEPU agreement. I think we have only got the one.
PN7628
THE COMMISSIONER: Thank you. Well, you have only got the one so we won't mark it. Do you need a copy, Mr Parry, or do you already have one?
PN7629
MR PARRY: What are you looking at it for?
PN7630
THE COMMISSIONER: I am just looking at it for information at the moment, Mr Parry.
PN7631
MR PARRY: Well, all right. If it is to be tendered I will want a copy of it but I don't see really where it takes anything. But I will make my submission about that in due course.
PN7632
THE COMMISSIONER: Sure. Thanks, Mr Parry.
PN7633
MR BORENSTEIN: Commissioner, we handed it up. You asked for information and we have the document in the court and we have handed it up.
PN7634
THE COMMISSIONER: Yes.
PN7635
MR BORENSTEIN: The position is - - -
PN7636
THE COMMISSIONER: I will get copies made, Mr Parry, and we will distribute them to all the parties.
PN7637
MR BORENSTEIN: Yes. The agreement makes provision for a process which ultimately culminates in the introduction of the full 36 hour week in the fourth year.
PN7638
THE COMMISSIONER: Yes. But the real point you are making here, Mr Borenstein, I take it to be that there is on the table a proposal from two of the unions to reach an agreement with Powercor without the 36 hours being included?
PN7639
MR BORENSTEIN: Yes, that is correct.
PN7640
THE COMMISSIONER: Yes. And the disagreement - one of the disagreements at least on the face of it, and you will notice on page 2 of the notes made by Mr Minster there is a whole range of things not yet agreed.
PN7641
MR BORENSTEIN: Yes.
PN7642
THE COMMISSIONER: One of the areas of disagreement is the level of wage increase.
PN7643
MR BORENSTEIN: Yes.
PN7644
THE COMMISSIONER: Now, are you suggesting that those other matters which are still very serious, contract labour, workforce size, well, apprentice numbers wouldn't be necessarily relevant to the two unions you are talking about, but superannuation, that they are either close or - - -
PN7645
MR BORENSTEIN: I can't - Commissioner, some of these matters are on their face significant and others are not significant. Mr Parry was good enough to indicate to you that, for example, the superannuation matters were not regarded as being significant. Matters like work site litre allowance just on its face is clearly not something that you would imagine would be a make or break and so on.
PN7646
THE COMMISSIONER: Yes.
PN7647
MR BORENSTEIN: Now, hours of work aren't agreed because so far the ETU haven't done it.
PN7648
THE COMMISSIONER: I understand, Mr Borenstein.
PN7649
MR BORENSTEIN: Contract labour, there has been an exchange of wording backwards and forwards and that process is continuing. So we can't say to you it is agreed but there is a process of trying to find the right words which everybody will be comfortable with on the contract labour. The parties know the parameters and they are trying to find some words. Workforce size, well, introduction of change has been agreed right in the first of the meetings. I am not sure exactly where that is at at the present time. Pay increases you have heard about.
PN7650
Apprentice numbers, again there has been a good deal of discussion about that. Again there has been an exchange of positions but not final position. But we have now been provided with some statistical material and there is some talks about an overall complement number of apprentices and we would say that certainly progress has been made. Line worker registration we don't see as being any sort of make or break type issue. Contact centre agreed in principle, as Mr Minster says in the document. And a number of other issues that were not agreed when we were last before you have been agreed, like employee entitlements and the agreements and so on.
PN7651
So one can't say there has been progress, but as you pointed out, the 36 hour week is clearly the major stumbling block. It is a stumbling block and the documents demonstrate that the unions for their part have sought to be positive about it, to put up ideas and so far they have been the only source of any ideas and the companies have simply rejected it and asked for the next ball to be bowled, so to speak. So it is for that reason that I made the opening submissions that when the companies come along to you and say look, we can't reach agreement, we are deadlocked, as a matter of human nature you have to factor in the fact that there is no incentive for them to make any major concession while this litigation is pending. So we say that - - -
PN7652
THE COMMISSIONER: There is no going back from that, Mr Borenstein, is there?
PN7653
MR BORENSTEIN: There is no going back but there is going forward, Commissioner, and what I was about to say to you was that going forward. The way in which the companies can be made to confront and address the reality is for the Commission not to terminate the bargaining period and to leave the companies in a position where they must deal with the unions in accordance with the prima facie objects of the legislation which is for the parties to resolve the matters between themselves.
PN7654
THE COMMISSIONER: How long does that go for, Mr Borenstein, because the parties - - -
PN7655
MR BORENSTEIN: Well, you gave us the example of a bus company.
PN7656
THE COMMISSIONER: Indeed.
PN7657
MR BORENSTEIN: And there are many examples where negotiations go on for lengthy periods of time. We have all seen them.
PN7658
THE COMMISSIONER: In the case of the bus company, Mr Borenstein, there was some disruption at one point that when the negotiations took place and the conciliation took place there were no bans imposed.
PN7659
MR BORENSTEIN: No, that is right. I was going to come to that.
PN7660
THE COMMISSIONER: There was a threat of them I must say. There was a bargaining period established.
PN7661
MR BORENSTEIN: Yes, I was going to come to that, Commissioner. The companies sort of want to have this business of the industrial action coming and going. On the one hand they raise the spectre of all of this industrial action and directly or indirectly suggest that the Commission should take account of that in deciding whether to terminate the bargaining period, but on the other hand they said, oh well, the industrial action isn't affecting us anyhow. Now, it seems to us that you can't have it both ways.
PN7662
But we say that as part of the scheme that the Act constructs for enterprise bargaining we are entitled to take industrial action within the scope of the Act in the same way as, absent intervention of the Commission, employers are entitled to play hard ball. They are entitled to take advantage of their industrial position in the same way as unions and workers are. It is only when the employers come to the Commission and say we want you now to solve our problem that the process is interfered with and the Act says the Commission can intervene in that way, but we ask the Commission to give serious consideration to the way in which the discretion under 170MW(1) should be exercised in a situation where one of the negotiating parties simply stands back and says I don't care what you offer me, the only basis on which I am prepared to settle is if you agree to everything I want and give up what you want.
PN7663
Now, if that is the attitude, and we say that that is the sort of stance that is being taken on the 36 hour weekly and particularly as illustrated by these documents, if that is the attitude that is taken then to allow such a party a termination of the bargaining period and access to arbitration a dangerous precedent would be set in our respectful submission because it would mean not just employers but unions too, could simply stand up and say this is a matter of principle, take it or leave it and if you don't take it we will go to the Commission and we will get an arbitration.
PN7664
Now, the whole process of the Act is to encourage and urge parties to solve their own problems by negotiation. Negotiation in its very essence involves give and take. It is not a process where people can simply come along and say I believe as a matter of principle that there shouldn't be a radial allowance. I don't care if it only costs me $10,000 and it is going to cost me a million dollars to fight about it, that is what I want. Now, that sort of an attitude is not an attitude that should be encouraged and it would be encouraged if the Commission allowed bargaining periods to be terminated in response to stances like that being taken by either party, be it the unions or the employers.
PN7665
The unions were criticised during the hearing for not being prepared to make concessions or trade offs and they gave evidence to you that they were prepared to do that. The evidence of the negotiations since 7 April shows not only that they were prepared to do that but they were prepared to think outside the box to try and find a solution and the evidence from the employer's side is that they were met with a dead bat on each occasion. So we say in relation to Powercor that the evidence is such that it doesn't justify an exercise of the discretion in favour of the employers.
PN7666
It doesn't justify a finding that there is no prospect of agreement being reached if the application is dismissed, but even if you found that the negotiations had reached a stalemate you still have a residual discretion to exercise and in exercising that, as we said in our major submissions, you should not reward people who have taken an unreasonable bargaining stance. That is what has happened in this case and for that reason we submit that in the Powercor matter you should refuse the application and allow the bargaining to continue in accordance with part VIB. They are all the submissions I have to make on Powercor, Commissioner.
PN7667
THE COMMISSIONER: Mr Borenstein, before you sit down, is it your submission that those issues of contract labour workforce size, superannuation and pay increase, that the unions have been actively seeking by putting up alternatives and concessions a resolution to those issues but management is basically not negotiating genuinely, or what is it?
PN7668
MR BORENSTEIN: Your Honour, in relation to matters like workforce size, contract labour and so on, my instructions are and I will be corrected if I misstate this, that there has been an exchange of positions backwards and forwards. The position where we complain of the dead bat treatment, if I could call it that, is in relation to the proposals which have been put repeatedly about ways in which to achieve a 36 hour week. I mean we don't say that the employers have failed to negotiate on every item because clearly there has been agreement on items. But what we say is that one can't read a great deal into that because the employers have said all through this case that unless they reach some sort of resolution on 36 hours there won't be an agreement.
PN7669
So they can afford to window dress the situation by agreeing on minor matters but holding in reserve their position on the 36 hour week. So we would submit that really your focus should be on the way in which they have responded to the various proposals that have been put forward for a 36 hour week and it is that that we complain about. Now, whether it falls into the category of genuine bargaining or some other thing I am not sure. What we simply say is, look at what has happened and whether it is genuine or not genuine the fact is that it is not a proper process of bargaining and it is not one that should be rewarded by an application to terminate.
PN7670
THE COMMISSIONER: Sorry, Mr Borenstein, before you sit down, you have handed up on my request a copy of the Alinta agreement.
PN7671
MR BORENSTEIN: Yes.
PN7672
THE COMMISSIONER: We have now provided copies to other parties. Do you wish that to be marked and what do you want to draw from that, if anything?
PN7673
MR BORENSTEIN: Commissioner, I don't need that to be before the Commission. I simply report to the Commission that agreement has been reached with Alinta. To the extent that it is necessary or it is in dispute such that an agreement has been reached then I do seek to tender it and what I say to you, Commissioner, is that the agreement that has been reached with Alinta has a process whereby in the fourth year, which is the year after the conclusion of the agreement itself, there will be a full 36 hour week in place. Clause 26 I am told.
PN7674
THE COMMISSIONER: What did the wage increases mean in clause 8, just by the way?
PN7675
MR BORENSTEIN: Can I just check clause 26.
PN7676
THE COMMISSIONER: It is five at 2 per cent and one at 1.5. It looks as though it is very close to 12 per cent.
PN7677
MR BORENSTEIN: Yes, it is more than 12 per cent. I told it is just over 13 I think, Commissioner. It is 11 and a half per cent plus these income protection - - -
PN7678
THE COMMISSIONER: I see. There are other aspects. But I am talking specifically about wages here, Mr Borenstein, but that is fine, thank you.
PN7679
MR BORENSTEIN: But it is 11 and a half per cent in the wages and in clause 26 and 27, on page 10 of 14, shows the introduction of the extra days off which lead to the 36 hour outcome. You will see in clause 27.2:
PN7680
Introduction of the additional 3.72 days off after the expiry of this agreement to achieve an overall 36 hour will be agreed in writing between the parties.
PN7681
THE COMMISSIONER: Yes, thank you, Mr Borenstein. Mr Parry, do you wish to reply to that? I am sorry. Mr Borenstein, you are continuing to represent the ETU and not the other parties?
PN7682
MR BORENSTEIN: Yes, that is right.
PN7683
THE COMMISSIONER: And not the other parties, I am sorry.
PN7684
MR BORENSTEIN: Yes. Just before Mr Rizzo starts, did you mark or give an exhibit number?
PN7685
THE COMMISSIONER: I haven't as yet. I have got it as BT5. Can I mark it that way?
PN7686
PN7687
THE COMMISSIONER: Mr Rizzo.
PN7688
MR RIZZO: I just wanted to supplement Mr Borenstein's report to you essentially on two matters, one to reinforce the point that has already been made to you and I refer to the minutes of 3 May which were prepared - well, not the minutes but the notes of 3 May that were prepared by Mr Minster and page 2. I have attended these meetings and on the issues that are listed as not agreed which are on page 2, certainly it is my interpretation that on some of these issues that agreement is very close. For example, on contract labour the other day I think we were within a few words of agreement. Workforce size, it is agreed between the parties at the end of the day that will go away.
PN7689
With apprentice numbers I thought we had gotten very close with the ETU putting a number of various submissions there. With superannuation I think the parties say that we are very close and with the contact centre, Commissioner, we have given agreement in principle to the change sought by the company there. So I think the Commission needs to understand that the items in question are few. On the more central issue of the 36 hour week, Mr Borenstein has reported to you that the ASU and APESMA have put a different scenario to the company where we have said that we won't be pursuing the 36 hour week but looking at a scenario where we look at a wage increase and other benefits in lieu of that situation
PN7690
Now, I think that is a radical departure on the unions side to try and reach agreement with the companies. We have put this position to all the companies over the last week and we believe that there is lots of scope to reach agreement with the companies on those sorts of issues and we are only apart on quantum and the like and I would say to the Commission that it is the ASUs submission that negotiations should continue and we believe that we will reach agreement with this company and others in the next period of time. If the Commission pleases.
PN7691
THE COMMISSIONER: Thank you, Mr Rizzo.
PN7692
MR GEORGIOU: One thing and I don't want this used as a precedent, the minutes that were presented from Mr Minster - - -
PN7693
THE COMMISSIONER: The record, Mr Georgiou.
PN7694
MR GEORGIOU: The record, whatever they are, were agreed between he and I and sent to the other unions. So they do reflect the agreed position of the parties, not just with the company and I have got nothing else to say.
PN7695
THE COMMISSIONER: Very wise submission, Mr Georgiou.
PN7696
MR GEORGIOU: Thank you. There is a first time for everything.
PN7697
THE COMMISSIONER: Mr Parry.
PN7698
MR PARRY: If the Commission pleases. The approach that has been taken by the unions is very much into the third of the alternatives that I referred to. That is, each of the ETUs and ASUs advocates have stood up and made a number of assertions from the bar table, some of which are contested. For example, Mr Rizzo jumps up and all of a sudden starts saying contract labour workforce size and apprentice numbers are all close or nearly settled and that is in contradistinction to the proposition that are in the agreed notes about these matters not being agreed.
PN7699
THE COMMISSIONER: He didn't say they were agreed, Mr Parry. He said he thought they were close. He said that they are not yet agreed, but I take your point that there was evidence on oath given at the last hearing about a number of these matters as well.
PN7700
MR PARRY: Well, I can as easily assert and I am so instructed that there are very significant differences on those matters.
PN7701
THE COMMISSIONER: Yes.
PN7702
MR PARRY: So you have those sorts of assertions before you. Mr Rizzo says with regard to the ASU we are only apart on quantum and the like. Well, I am not sure what the like is but it appears to be the position that there are those matters that are set out in the document being the last minutes that are still not agreed. Now, we contest that we are only apart with the ASU and APESMA on quantum and we say with regard to this issue about APESMA and the ASU that as we understand the position they were seeking still one EBA but an appendix attached to the EBA which had particular provisions which related to them.
PN7703
Now, how that appendix could come into existence without the other agreement being reached we don't understand. It is not a separate agreement that we understand was being advanced. It was the same agreement with an appendix in it. So whilst the other matters remain unagreed we don't see that there can be any proposition of agreement with the ASU or APESMA.
PN7704
THE COMMISSIONER: Yes.
PN7705
MR PARRY: Now, I note the Commission reaching for this document.
PN7706
THE COMMISSIONER: I was just curious as to how it was dealt with in this case but if you say you don't understand how it could be done, Mr Parry, it appears the other company has done it and they have reached an agreement in this particular case with one union and I expect there is going to be another separate agreement with the other unions. Is that correct?
PN7707
MR PARRY: We can only go on what we have been told.
PN7708
THE COMMISSIONER: Yes.
PN7709
MR PARRY: My instructions are this is what we were told. This is what was sought, an appendix.
PN7710
THE COMMISSIONER: Yes.
PN7711
MR PARRY: Now, I don't have any idea what is going on with this EB, whether it is signed or not, I don't know, and I can't assist the Commission with regard to that. Now, there are also a number of other submissions made about dead bats and so forth. Now, it doesn't - and my learned friend has been fairly coy about the questioning by the Commission about whether there has been genuine bargaining or whether there has been proper bargaining. We contend that there has been proper bargaining. If there was not proper bargaining, firstly, that is not an assertion that is made in the reports by an experienced Mr Pope.
PN7712
It is not something that the unions have notified the Commission about. They haven't come back here saying you made a recommendation, everyone said they accepted it but now they are going back on it and it was a recommendation that said there shouldn't be posturing and apply themselves seriously to the task of reaching agreements. Now, we would take strong issue with an argument that we have either postured or not applied ourselves to the task of reaching agreements. It hasn't been alleged at any stage. There has been nothing written to the Commission about it.
PN7713
Powercor and Citipower were before the Commission last Friday before the meeting on 3 May. They weren't saying then to the Commission, well, they have been posturing up to date and also can we say that there has been progress with regard to some matters. Some matters there has been significant progress made. Now, the issue appears to be with regard to the 36 hour week, an argument with regard to 36 hours and this proposition we have put all these wondrous deals. Well, let us go back to 28 April 2004. This was the unions proposal.
PN7714
The company accept the latest 36 hour week proposal (ie extra days off).
PN7715
That was the proposal. You take days off. It is not some magic trade offs that are being put forward here. The proposition is - - -
PN7716
MR BORENSTEIN: Why don't you read the rest of it?
PN7717
MR PARRY: Well, fine. Tell us what they mean?
PN7718
THE COMMISSIONER: Sorry, what are we looking at at the moment, Mr Parry?
PN7719
MR PARRY: I am looking halfway through paragraph 30 on 28 April. I am sorry, the document dated 28 April 2004.
PN7720
THE COMMISSIONER: 28th, yes. I see, extra days off, yes. Well, I understand what that means, Mr Parry.
PN7721
MR PARRY: Well, we understand what it means too. We know what it means. It means a proposal something like that is in this document, that is, there be days, that they don't be taken off as days in the week - I am sorry, hours in a day.
PN7722
THE COMMISSIONER: Yes. Instead of taking a reduction of one and a half hours per week, if the 36 hours was to be agreed I understand another mechanism of doing it would be to aggregate those and take them as X number of days in a year.
PN7723
MR PARRY: That is so. That is as we understand the proposal that is put.
PN7724
THE COMMISSIONER: I am not saying that it is any easier for the company to grapple with but that is the intent I understand.
PN7725
MR BORENSTEIN: Commissioner, that is not the sum total of the proposition. My friend misrepresents it and says just read the first six words, forget the rest. I mean, Commissioner, there is also propositions about unions foregoing other matters, for example, the ones you identified. That was my complaint, that it wasn't being put fairly as the proposal.
PN7726
THE COMMISSIONER: But in addition, Mr Parry, the next meeting on 3 May has modified that again, hasn't it, because two of the unions in the 3 May meeting said we may no longer pursue the 36 hour proposition.
PN7727
MR PARRY: They do say that. We say that their position was that that be an appendix which means that it must come before the other agreement. Secondly, that it requires that we have a wage increase in excess of that offered to the others, a significant wage increase. Thirdly, it left the other claims that were being pursued by the company as not agreed and they are significant ones and they are the ones set out in the second page. So to suggest that this - and might I say that my learned friend, Mr Borenstein, makes submissions from the bar table about the company reacting positively and this being a positive prospect and to sort of give some suggestion or a spin on the documents that we were encouraging this.
PN7728
Well, again, that is inconsistent with my instructions and inconsistent with the document that was rejected. So we maintain our position. My learned friend speaks much about the Act and the scheme of the Act and so forth, well, section 170MW(7) is in there so that those that bargain from the base of paid rates awards have a different consideration attached to them. Most bargaining is done in this Commission against the background of minimum rates awards. For those that bargain against paid rates awards they have a different criteria attached to their bargaining. That is section 170MW(7) and we contend that the requirements have been met with regard to that and we seek a decision with regard to that. If the Commission pleases.
[11.32am]
PN7729
THE COMMISSIONER: Thank you, Mr Parry. Now, I was thinking we might have a short adjournment, but, Mr Parry, just picking up your submissions in relation to the other issues that are before us today, do you intend to basically go over a similar set of submissions for each of the companies? I am going to ask Mr Borenstein the same question because it may be the submissions that have been made to date can be supplemented briefly in relation to the other companies, in which case we might get finished by lunch time. Now, there is no imperative to do that, but if people wish to do it and a 15 minute adjournment would prevent that being finished by lunch, I won't adjourn, but otherwise I will propose to the parties that we might adjourn for 15 minutes.
PN7730
MR PARRY: We would propose being much shorter and simply handing up the documents and making brief submissions about them and not covering the broad range of issues that we have covered.
PN7731
THE COMMISSIONER: So perhaps five to 10 minutes, Mr Parry?
PN7732
MR PARRY: Well, yes, 10. If the Commission pleases.
PN7733
THE COMMISSIONER: Mr Borenstein, what do you propose to do?
PN7734
MR BORENSTEIN: I would expect to be shorter with the other ones as well, Commissioner.
PN7735
THE COMMISSIONER: Well, let us press on, then, rather than break, because we might have an opportunity to finish, for the benefit of the parties, not for myself particularly, but for the benefit of the parties, finish by lunch time.
PN7736
MR PARRY: If I could have a five minute adjournment in any event, just to get the papers together.
PN7737
THE COMMISSIONER: That is fine. Actually, we will give you a benefit, Mr Parry. We will adjourn for 15.
SHORT ADJOURNMENT [11.34am]
RESUMED [11.48am]
PN7738
THE COMMISSIONER: Mr Parry.
PN7739
MR PARRY: If the Commission pleases. As with the previous submissions with regard to Powercor and Citipower, we did make submissions on 5 April. Major issues were identified at that time in the TXU submissions which were exhibit PT28. Again, the unions contended that there needed to be more time and made those submissions in writing and orally. Now, the recommendation was accepted by TXU and there have been meetings that have taken place with the unions and the key priority issues have been the subject of discussions.
PN7740
Now, unfortunately the position was not that brief. Written factual reports were agreed and that has led to a position where the parties have each provided their own copies and I would again consistent with our other submission make the submission that all that needs to be dealt with is the fact that meetings have taken place and no agreement has been reached, but if the Commission wants to go to more detail, then we would tender the four documents, that is the four reports, being both the union reports and the company reports.
PN7741
THE COMMISSIONER: I think it would be useful, Mr Parry, to do that, just for them to be on the record in any case.
PN7742
MR PARRY: Yes. Well, I am simply tendering everything that has been provided to the Commission which is hopefully a document of 28 April 2004 from Baker and McKenzie which refers to the meeting on 21 April 2004. There is also a document headed minutes of the TXU negotiations, 21 April 2004, which we understand was prepared by the unions and, indeed, has Mr Georgiou's name at the end of it and there is another document of 30 April 2004 which refers to what occurred on 28 April. The Commission will also note there was a separate meeting held off-line between the CEPU and the company on 27 April 2004.
PN7743
THE COMMISSIONER: Yes, there is an additional one from the unions, too, Mr Parry, which you may or may not have dated 29 April.
PN7744
PN7745
THE COMMISSIONER: I do have copies on my file, but we will get additional ones coming through, but examining the correspondence of 30 April to SDP Lacy and also the minutes which were prepared by Mr Georgiou dated 29 April, there is a number of matters in both of those documents that are clearly nominated as areas of non-agreement between the parties.
PN7746
MR PARRY: There are some matters in Mr Georgiou's minutes that we would dispute and there may well be matters in ours that they dispute. However, there are some common matters between them and the meeting on 21 April, at that meeting the company put forward a variety of matters that it sought if the 36-hour week was to be progressed. I think they are also reflected in the minutes or, sorry, the notes of Mr Georgiou and in addition, in amongst those, there are a number of matters such as the expiry date of the agreement, disputes and grievance clauses, no extra claims, apprentices and contractors.
PN7747
Now, they were to be progressed at the next meeting. There was the meeting on the 27th that I referred to and the position was that at the meeting on 29 April, we contend that what occurred there was that APESMA and ASU had a proposal for a separate agreement. Now, our understanding of that proposal appears at the bottom of the page of the 30 April 2004 letter and the Commission may note that that proposal involved continuation of the current agreement, which would continue obligations in respect to introduction of change and use of contractors and also over the page, there was a wage claim, 15 per cent over two years and three extra public holidays and that being a claim which was rejected by the company. Now, the ETUs position is set out on the second page as my instructions and they involve significant disagreement on the 36-hour week, wage increases and the use of contractors.
PN7748
THE COMMISSIONER: That last reference to the ETU in the dot point which related to contractors obviously should be TXU rather than ETU, I guess, Mr Parry.
PN7749
MR PARRY: That is so.
PN7750
THE COMMISSIONER: At the earlier hearings, Mr Parry, my recollection of the evidence given on behalf of the ETU regarding the use of contractors is that the ETU indicated that it was not wanting to regulate the company's use of Jim's Mowing and minor contractors, but rather core contractors. Does the dot point which relates to the use of contractors indicate that the ETU is now saying that all contractors who are engaged by TXU would require an EBA with the ETU or a relevant union?
PN7751
MR PARRY: Would the Commission just excuse me? I don't think it was quite as broad as that, but it did certainly focus on core contractors and that was a matter of real substance as far as TXU was concerned.
PN7752
THE COMMISSIONER: It is just that it does refer to all contractors there in the second line.
PN7753
MR PARRY: Yes, I think if we are to look at those contractors, such as Jim's Mowing, I don't think their position is that they would be required - the union's position is that they would be required to have an EBA, but they are a minor part of all this, as the Commission will appreciate. Now, the minutes or the document called minutes of the TXU negotiations prepared by Mr Georgiou we contest some part of, but some parts of we do agree with and clearly where he records on the second page with regard to no extra claims, that apprentices - - -
PN7754
THE COMMISSIONER: So on the no extra claims point, Mr Parry, you are suggesting that that note by Mr Georgiou is not an accurate reflection of the current position?
PN7755
MR PARRY: No, I am saying that the company's position - these are things we do say that he has broadly got it correct.
PN7756
THE COMMISSIONER: I see, yes.
PN7757
MR PARRY: But there isn't agreement on no extra claims. However one reads the reference to apprentices and the florid language used, it is clear that it is not an agreed matter. Contractors, further down the page, again however one reads it, it is clear that it is not agreed. Introduction of change, again that is a matter that the Commission will recall was of some significance and it is not agreed. Workforce size, again not agreed, so when one looks at the material that has been provided to the Commission, one can see that there has been negotiations entered into, some matters there has been progress made and that appears in the documents. On other matters of significance, there has not been agreement reached and the parties maintain their position.
PN7758
Now, again we contend that the Commission can be satisfied with regard to the requirements of 170MW(7) and should terminate the bargaining periods. Now, one other matter is the industrial action and the Commission has had some evidence of that and there have been proceedings concerning that. With regard to the MCG position, TXU have made inquiries following the announcement in the Commission this morning and apparently the ETU shop steward has said that TXU won't be allowed on site without a letter from the ETU and TXU intend being at the site to conduct the work at one o'clock, so at the present, as it stands, they will be refused entry unless there is a letter from the ETU.
PN7759
THE COMMISSIONER: Well, just picking that up, Mr Parry, Mr Arnett, I am requesting you to give verbal advice to your senior shop steward at the MCG. There should be no need for the TXU to have a letter from the ETU and that verbal advice should indicate that when the TXU employees turn up to do that work, they are allowed to proceed without hindrance of industrial bans.
PN7760
MR ARNETT: Yes, Commissioner.
PN7761
MR PARRY: Now, I am not going to repeat the submissions I made with regard to Powercor and Citipower, but to the extent that they overlap, I make them again, so those are the submissions. If the Commission pleases.
PN7762
THE COMMISSIONER: Thank you, Mr Parry. Mr Borenstein.
PN7763
MR BORENSTEIN: Commissioner, I don't seek to repeat the general submissions I made. I ask you to take them into account here and I also ask you to bring to mind in the final decision you make the submissions we made at the end of the hearing. The only comment that I would make, the only matter that I draw attention to in the documents that have been handed up to you on this matter is that the issue which is raised with Powercor about the separate agreements is one that was a live issue in this case right from the beginning.
PN7764
The proposal for the two separate agreements was put at the meeting of 21 April and both of the minutes record that and both of the minutes, I think both of the minutes indicate that the parties were prepared to negotiate around that concept. Now, again I make the same submissions about that aspect or that development that I did on the last occasion. The other thing that I would simply seek to draw attention to is in relation to the letter from Mr Dixon's office, Baker and McKenzie, dated 30 April.
PN7765
On the second page of that, there is a reference to the ETU being asked to indicate its position for a resolution and in relation to the 36-hour week, the position was put that the 36-hour week be phased in as days off and then in brackets, Mr Dixon puts the argument, rather than the record, but the argument that the fundamental issue for TXU was that this was focusing on implementation rather than trade-offs for introduction.
PN7766
Now, I simply want to make the submission that this sort of game of semantics has been going on in this case right throughout and we would urge the Commission to look past the words and look at the substance. If you look at the next dot point, I don't think that even Mr Dixon could call that an implementation matter rather than a trade-off and what you will see is it was suggested that the unions would countenance, the ETU would countenance a reduction in the quantum to make up for the introduction of the 36-hour week.
PN7767
You will recall that that position of the unions was when we were last before you at the hearing that they were seeking I think something of the order of 5.5 per cent as a quantum increase and this figure is significantly less than that; 5.5 would be 16.5, so it is something of the order of a seven per cent reduction over the three-year period for a phased introduction of the 36-hour week. Now, it is not made clear, it is not indicated by the company, despite the submission that is made by Mr Dixon in the parenthesis, why that is not a matter that can be negotiated between the parties, if what we are talking about is the cost of the introduction of the 36-hour week.
PN7768
There is nothing in the documents to indicate that the company has ever put a figure that says seven per cent is not enough to make up for the 36-hour week and we need eight per cent or nine per cent or something of that sort. What this document does indicate and it corroborates the evidence that was given last time is that the unions were prepared to give up things in return for the 36-hour week. Now, of course, the 36-hour week is a one off, a one off cost. Once it is in, it is in and the cost is there and so we would submit that the evidence demonstrates - - -
PN7769
THE COMMISSIONER: When you say it is a one off cost, Mr Borenstein, you mean it costs the company an amount of money to introduce it in the first year and that cost will continue year by year.
PN7770
MR BORENSTEIN: The company makes the corresponding saving thereafter as well. If there is a trade-off, then it is neutralised and that is the end of it and then things are on a new balance, if they are balanced so that, for example, if the cost of the 36-hour week was seven per cent and the unions got a nine per cent wage rise as the trade-off instead of being a 16 per cent wage rise, then that would create a new level and that would continue into the future, so the next wage rise would be premised on a lower base than it would otherwise have been, so that the cost of the 36-hour week is met once and for all and then that meeting is continuing.
PN7771
Beyond that, we seek to draw attention to the fact that in Mr Georgiou's notes of 29 April, there is a record of the wage increase which the company proposed at that meeting and Mr Georgiou's record is that the company proposed a wage increase of 2.6 per cent for a roll-over. Now, I understand that to mean that if the agreement is simply rolled over without the dramatic changes that the unions seek - - -
PN7772
THE COMMISSIONER: So they weren't referring to the unions rolling over.
PN7773
MR BORENSTEIN: They may have been, but I won't give them that credit.
PN7774
THE COMMISSIONER: Okay.
PN7775
MR BORENSTEIN: But you will recall that in the hearing, the position of the company was that they have been making offers in the order of four and a half per cent, so that in these negotiations, for reasons best known to themselves, they have now dropped that by almost a half.
PN7776
THE COMMISSIONER: I was just wondering when I read that whether that was an accurate reflection of the company's position. Now, Mr Parry didn't correct that.
PN7777
MR BORENSTEIN: There is no reference to that in the - - -
PN7778
THE COMMISSIONER: What you are saying, Mr Borenstein, is the company at an earlier time had proposed a higher amount, I think.
PN7779
MR BORENSTEIN: Yes, something in the order of four.
PN7780
THE COMMISSIONER: And now it is 2.6 per cent?
PN7781
MR BORENSTEIN: Yes.
PN7782
THE COMMISSIONER: Okay.
PN7783
MR BORENSTEIN: So again we point to those matters simply to indicate the two things that we rely upon, one, the genuine good faith bargaining of the unions, seeking to find solutions and in the alternative, the failure of the companies to put forward anything positive that would see a way through to a solution. For those reasons, Commissioner, we make the submissions, the same as we did for Powercor, that you should not reward the company for this type of bargaining process and you should not terminate the bargaining period.
PN7784
THE COMMISSIONER: Thank you.
PN7785
MR GEORGIOU: Brevity I am convinced is a good thing. I made one mistake in the notes. I put 6 April at the end for the next meeting. It should be 6 May which is also my wife's birthday.
PN7786
THE COMMISSIONER: I wasn't assuming you were capable of travelling back in time, Mr Georgiou.
PN7787
MR GEORGIOU: No, no, I just needed that corrected for the record, Commissioner.
PN7788
THE COMMISSIONER: Good.
PN7789
MR RIZZO: Commissioner, I just briefly rise to make submissions similar to the ones that were made in the Powercor/Citipower matter. Ourselves and APESMA have put an alternative to the company, apart from the 36-hour week where we can reach resolution on different parameters in relation to quantum and other matters and we are serious in our endeavour to reach agreement with the companies around a different set of parameters which exclude the 36-hour week and we say to the companies that they should take that proposal seriously and we say the negotiations should continue, Commissioner, and support Mr Borenstein's submission that discretion should not be exercised in this case in relation to terminating the bargaining period and that negotiations should be allowed to continue between the parties. If the Commission pleases.
PN7790
THE COMMISSIONER: Mr Rizzo, before you sit down, what do you say about this concern that Mr Parry has raised about the proposal from your organisation and APESMA that if you were able to reach a separate agreement, not including the 36-hour week issue, it would become an appendix to the agreement? Now, on the face of it, it appears as though in the Alinta company, you intend to reach a quite separate agreement with the company. Is that your position here, or what is it? Mr Parry is saying that he finds it difficult to comprehend how you can have an appendix to an agreement which includes a 36-hour week, if that is what they were prepared to concede to the ETU. What is your position?
PN7791
MR RIZZO: I say this, Commissioner, that current agreements already cater for different sets of conditions and appendices that apply to the various unions.
PN7792
THE COMMISSIONER: But, Mr Rizzo, if the company was prepared to reach an agreement with you, are you making it a condition that that agreement be attached to some appendix to some other agreement or not?
PN7793
MR RIZZO: We are open on that question, Commissioner.
PN7794
THE COMMISSIONER: So you could have a quite separate agreement, if it was simpler to do it that way?
PN7795
MR RIZZO: It is possible, yes. We haven't got to that level of negotiation. We have raised this new proposal with the company in the last week.
PN7796
THE COMMISSIONER: Well, one hopes, Mr Rizzo, if you ever do get to it that it doesn't become a serious issue.
PN7797
MR RIZZO: Well, Commissioner, as I say, we do not have a firm position on this. It is open for negotiation.
PN7798
THE COMMISSIONER: Thank you.
PN7799
MR RIZZO: Thank you.
PN7800
MR BORENSTEIN: Can I just comment on that, Commissioner, and I refrained from making any comments about that matter because Mr Parry had raised it in the other matter, I didn't want to go backwards, but certainly from my client's point of view, in the Alinta case there was a common bargaining SBU which resulted in two separate agreements and for our part, we are not getting hung up on labels and words and if - - -
PN7801
THE COMMISSIONER: But you are speaking for the ETU, Mr Borenstein, aren't you?
PN7802
MR BORENSTEIN: Yes, I am speaking for the ETU and we are saying that if an agreement can be reached and if the price of everybody being happy is that there be separate agreements, then that is not an obstacle that is insurmountable. On the other hand, if everybody is comfortable with having appendices, well, then that is the way to go, but the substance of it is that what we have done is we have opened up the possibility of reaching separate sets of conditions for two separate streams of workers which opens up the possibility of reaching an agreement. Even if it is in the one agreement, it just means that the cost of a 36-hour week doesn't have to be spread over the whole workforce and that in itself is a facilitating approach.
PN7803
THE COMMISSIONER: In regard to TXU, well, how do the numbers fall out, Mr Borenstein? Does the ETU membership represent a majority of the workers or is it less than a majority?
PN7804
MR BORENSTEIN: People are shaking their heads here, suggesting that it is less than a majority, but nobody has got the exact figures. Mr Parry might have them.
[12.13pm]
PN7805
THE COMMISSIONER: Thank you. Now, before we ask Mr Parry to reply, Mr Arnett, you have been out of the room. Can you report on what is happening at the MCG for us and Mr Parry might want to make some comments on what you say?
PN7806
MR ARNETT: I have spoken to the shop steward and he understands the position, as he is contacting site management at the moment to contact TXU to inform the people to come to site and continue on with their site induction.
PN7807
THE COMMISSIONER: Thank you, Mr Arnett.
PN7808
MR PARRY: If the Commission pleases. My instructions are that the ETU are in the majority. With regard to APESMA and the ASU, well, Mr Rizzo has made submissions. The 36 hours has always been a lesser matter as far as they are concerned. We have not got into whether it would be an appendix or a separate agreement with respect to TXU. With regard to Powercor and Citipower, in those negotiations, the ASU/APESMA position was as I have described it. That is what we are saying.
PN7809
Now, we should indicate that the position of APESMA and ASU, if one leaves aside the 36 hours, still was as represented on 30 April 2004, that is a continuation of the existing agreement which would continue the introduction of change and the use of contractors provisions and a very significant wage increase, plus extra public holidays. Now, the use of extra public holidays we say is another way of introducing reduced hours in any case, so again with regard to APESMA and the ASU, we say that the same position prevails.
PN7810
Now, at one stage I think - I have attempted to avoid concentrating on our documents and looking at both sets of documents. I haven't gone through every part of the document of Mr Georgiou that I contest and I don't want to take the Commission's time up with doing that, but, for example, in his 29 April document, he says with regard to 36-hour week flexibility:
PN7811
The company again undertook to present its position on shorter hours/flexibility.
PN7812
Well, my instructions are we don't agree that that was so undertaken and we say that is not the position. With regard to the wage increase at the bottom of the page which has been taken to, the 2.6 per cent per annum, that was a position that was advanced in respect of APESMA and the ASU and, of course, we do indicate that there were higher amounts offered generally in the negotiations at an earlier stage which were predicated on there being total agreement reached which did not include a 36-hour week.
PN7813
THE COMMISSIONER: Was the APESMA/ASU proposal on the basis that the 36-hour week was off the table, Mr Parry?
PN7814
MR PARRY: As we understand it, yes.
PN7815
THE COMMISSIONER: Thank you.
PN7816
MR PARRY: Now, of course, that needs to be considered with regard to the claim for the three extra public holidays, whether they are still being pursued. As we understand it, they are. Now, finally, I think the Commission has been taken to the second page of 30 April 2004 and the 9.5 per cent. On my instructions, that position with regard to a wage increase as being pursued, has been advised to us as 11.5 per cent and is not 9.5 per cent.
PN7817
THE COMMISSIONER: So the second dot point on page 2 of the advice to SDP Lacy which talks about in the vicinity of 9.5 per cent should be amended to 11.5, Mr Parry?
PN7818
MR PARRY: No, that is a reflection as I understand it of what was represented at the meeting, but as I understand it, the 11.5 is something that has been put subsequently.
PN7819
THE COMMISSIONER: Yes.
PN7820
MR BORENSTEIN: There has been no subsequent - - -
PN7821
MR PARRY: Well, I hear the statement we are making it up as we go. We can easily make that sort of accusation and when one is making submissions from the bar table on documents that have been provided that aren't agreed, that raises that spectre and that is why we have been cautious to take out of these documents the areas that we say are consistent which demonstrate disagreement. If the Commission pleases, that is the position of TXU.
PN7822
THE COMMISSIONER: Fine. Thank you, Mr Parry. Would you mind if I just sought clarification from the other side, Mr Parry, on this issue? This is an ETU proposal, not a proposal from the other unions. I just want to get clarification if it is available as to - it appears that at the meeting, the ETU suggested a wage increase in the vicinity of 9.5 per cent may be adequate in the context of the introduction of a 36-hour week and now Mr Parry is saying the company understands the ETU position, if a 36-hour week is agreed, still to be 11.5 per cent.
PN7823
MR BORENSTEIN: Mr Arnett's recollection is that the figure, the wage increase figure of 9.5 per cent is of the order that he was talking about at that time, but that is not to say that that reflects the overall cost of the 36-hour week.
PN7824
THE COMMISSIONER: No, we are talking about wage increases only here.
PN7825
MR BORENSTEIN: Yes, and he confirms that that is a figure of the order that he was putting at that meeting.
PN7826
THE COMMISSIONER: Thank you.
PN7827
MR RIZZO: Commissioner, just two things on what Mr Parry said. I don't want the Commission to - - -
PN7828
THE COMMISSIONER: There is not really an opportunity here, Mr Rizzo, for extra submissions. What is the point of your getting to your feet?
PN7829
MR RIZZO: Well, there is two points. One, he has claimed that the ETU is in the majority of employees there. That is simply not true. There is over 1400 employees of the TXU and I say that the ETU does not constitute 700-plus employees at TXU.
PN7830
THE COMMISSIONER: Yes, okay, so you are contesting the majority proposition.
PN7831
MR RIZZO: And it is an important issue in terms of costing of the 36-hour week, Commissioner. That is why I make the point.
PN7832
THE COMMISSIONER: All right.
PN7833
MR RIZZO: And also misrepresenting, that we are not claiming the three public holidays, Commissioner. It is two public holidays plus the Anzac Day holiday when it falls on a weekend.
PN7834
THE COMMISSIONER: Which is currently not paid as a public holiday.
PN7835
MR RIZZO: Exactly.
PN7836
THE COMMISSIONER: But only occurs every eight or nine years.
PN7837
MR RIZZO: Every five or six years, so that is a substantial lessening of the cost to any company on that last public holiday.
PN7838
THE COMMISSIONER: Yes, okay. Thanks, Mr Rizzo, but I have taken the company to indicate that it relies on the comment it made and that is that the ETU membership is in the majority of the employment at TXU.
PN7839
MR PARRY: Covered by the agreement.
PN7840
THE COMMISSIONER: Covered by the agreement?
PN7841
MR PARRY: Yes.
PN7842
THE COMMISSIONER: Covered by the agreement, yes. Good, thanks, Mr Parry. Mr Parry, do you want to go on to SPI now?
PN7843
PN7844
MR PARRY: Now, to ensure that P16 has - again, unfortunately, there hasn't been agreement on these documents, so each of the parties have provided their own. The first document is 20 April 2004 from SPI. The second is from the unions dated 16 April 2004. The next is an e-mail which has attached to it a document dated 22 April which refers to a meeting on 21 April. There is then attached to that - I am sorry, not attached, following that is the union document making a record of what occurred at the meeting and the third document as inevitably was to be the case was correspondence regarding the accuracy of what are described as minutes and that is 27 April 2004 and there is then the MO notices of 28 April 2004. I am sorry, they are not in that bundle, aren't they?
PN7845
THE COMMISSIONER: They may well be, Mr Parry, but after the letter of 27 April which was directed to SDP Lacy from Graham Broomfield, I have got another set of SBU meeting notes.
PN7846
MR PARRY: Of 29 April 2004.
PN7847
THE COMMISSIONER: Of the 29th, immediately afterwards, yes, and then I have got other material relating to negotiating positions and then I have got the human resources manual policy and then I have got the minutes of 29 April. These appear to be minutes prepared by Mr Georgiou. Yes, and then I have got a couple of attachments there, so the only matter I haven't - if you have you got those items in that order, Mr Parry, the only matter I don't have is the MO notices you have just handed up.
PN7848
MR PARRY: If I could hand up a copy of the MO notice.
PN7849
THE COMMISSIONER: I have got it, Mr Parry, so I will attach that to the back.
PN7850
MR PARRY: If the Commission pleases. Now, again with regard to SPI, there were submissions made in writing and orally. Again the items that were seen as between the parties were identified in the written document, exhibit SPI23. The unions' submissions deal with SPI and at paragraph 34 of those, there is again reference to more time being needed and desirable. The meetings were taking place on 16, 21 and 29 April. These documents contain within them are more detailed perhaps than the other documents.
PN7851
The first meeting started off with a debate about a draft agenda. The ETU tendered a proposal with regard to the 36-hour week and that is a document attached to those notes and we contended that what was proposed was an implementation proposal. Now, the Commission will see from the first page of the notes by the employers on 20 April 2004 the priority items that we have covered, being the extended hours, workforce size, employee entitlements and use of contractors. Now, again whilst we take issue with some of the matters in the union's minutes, again on a fair reading, those were matters that were discussed and negotiated and not resolved.
PN7852
There is then the meeting of 20 April and again from the company's document of 22 April 2004, the negotiations covered certain priority. Again those were matters upon which the Commission had made recommendations and were between the parties. There was significant debate set out in the company's document about introduction of change and the use of contractors and no extra claims. The company's view as to progress is set out at the end of that on the next meeting and, of course, that is as can be conceded a submission in effect as to whether progress was being made.
PN7853
Now, also attached, the Commissioner will see, is a proposed clause by SPI on introduction of change presented at the meeting, also a disputes resolution procedure and the Commission will recall the debate there about disputes resolution whereby there was debate about whether work practices could be changed. There was also a no extra claims provision. Now, Mr Georgiou's notes again deal with some of those matters, again on a fair reading show that those matters were discussed and agreement was not reached.
PN7854
Now, without getting into the he said, she said, the company took issue with some of the matters raised in the minutes of Mr Georgiou and wrote a letter to him which was copied to the Senior Deputy President dated 27 April where some issues were disagreed. There was then the negotiations on 29 April. Now, I should indicate that the MO notices were issued by the ETU on 28 April. On 29 April there was a debate firstly about apprentices and trainees. There was then this ASU/APESMA proposal for a possible separate appended agreement and they raised the meeting with Alinta.
PN7855
The proposal put was for a three-year agreement at five per cent per annum with a day off for Easter Tuesday, Melbourne Show Day and Anzac Day when it falls on a weekend and the existing EBA be rolled over and, of course, the roll-over of the EBA means that matters such as introduction of change and contractors clauses and compulsory redundancy provisions, for example, remain the same. Now, SPI Powernet left the room as the notes say and rejected that proposal and advised the reasons why they were so doing.
PN7856
Now, then debate continued on workforce size, the introduction of change, use of contractors and again SPIs record demonstrates that those significant matters weren't agreed. The Commission has we note the radial allowance provision. Now, again there have been noted provided by Mr Georgiou which, whilst we would take some issue with, again they indicate that there has not been agreement reached on significant matters as he describes it, so the position remains that there are these significant issues that have been an obstacle to agreement that remain an obstacle, notwithstanding both the unions and the employers spending significant time attempting to negotiate them and again we contend that in those circumstances, the requirements of section 170MW(7) have been satisfied and the bargaining period should be terminated. If the Commission pleases.
PN7857
THE COMMISSIONER: Thank you, Mr Parry. Mr Borenstein.
PN7858
MR BORENSTEIN: I can be very brief in this particular matter. I have made the general submissions and we say that they apply with particular force in relation to SPI. I don't want to go through item by item the various documents that have been tendered, but no doubt the Commission will look at them in due course in light of the decision and our submission is that when you go through the documents, you will see that this company has taken a particularly hard stance in terms of the negotiations and in item after item, there are comments like this is a matter of principle and if you want to reach an agreement, you will have to accept our proposition or the matter is not negotiable and the stance seems to be taken irrespective of the significance of the item and this is the company which made the big issue of such earth shattering matters as the radial allowance and relocation allowance and again if you look at the records of the meetings here and, for example, Mr Georgiou's notes of 29 April, the radial allowance is prescribed as a matter of principle.
PN7859
The relocation item is described as not negotiable and we submit that you will form the impression when you read all of the documents that SPI has taken a particularly hard stance against the union. It has not been an employer that has been prepared to turn its mind to trying to find a compromise position, but has insisted on sticking to the position which it has taken at the outset and calling upon the unions to give ground in order to meet its requirements without being prepared to give any significant ground on the union's requirements. Again in relation to the splitting of the provisions for the ASU and APESMA, again you find from the notes that there is no indication from the employers that they are prepared to sort of go through a bargaining process when it comes down to matters of quantum.
PN7860
Their whole complaint throughout the case before you was that the unions weren't prepared to give trade-offs and they wanted a 36-hour week and they were only prepared to talk about implementation, but in a sense, they have been put to the test in these negotiations because two of the unions have said forget all that, just let us talk about money and every when they have been just talking about money - - -
PN7861
THE COMMISSIONER: I think there is a bit more than money on the table, Mr Borenstein, isn't there?
PN7862
MR BORENSTEIN: I beg your pardon?
PN7863
THE COMMISSIONER: There is a bit more than money on the table.
PN7864
MR BORENSTEIN: Well, your Honour, I am not sure what your Honour is referring to, but if your Honour is referring to days off - - -
PN7865
THE COMMISSIONER: Well, use of contractors, introduction of change.
PN7866
MR BORENSTEIN: Yes, I understand that, but - - -
PN7867
THE COMMISSIONER: Additional public holidays.
PN7868
MR BORENSTEIN: But on the issues of money, on the issues of money, there is no indication in the documents that the company has been prepared, the employer has been prepared to sit down and engage in a bargaining process. All that is said is, no, that is too much and we can't agree. There is no indication in these materials of any exchange, of any give and take, of any readiness on the part of the employer to say, okay, we will move a bit if it helps to make the deal.
PN7869
There is none of that in any of the materials that you get and when your Honour says - when the Commission says there is more than money on the table, it is true, you have that remarkable item, the radial allowance which is all of $40,000 and yet here we are sitting around the table arguing away with Mr Drew about whether or not we should have a radial allowance and the answer comes back, it is a matter of principle. Now, that is fine. You could have your matters of principle, but you can't come to the Commission and say we have got a matter of principle about this earth-shatteringly insignificant item and for that reason, we come to the deal and so we want you to terminate the bargaining period.
PN7870
Now, if that is the mentality of the employer that it brings to the bargaining table, it makes it very difficult to negotiate an agreement and what we say is that in the context of the employer coming here and saying to you throughout this case we want you to terminate the bargaining period because we can't reach an agreement, you are entitled to form a view as to where the obstacle lies to the successful conclusion of a bargaining agreement and if you form the view and we would urge you to do so, that it is the employer's conduct that has been the obstacle and it is the employer that seeks the benefit of an exercise of discretion by the Commission, then we say that that is a relevant matter and a telling matter in the exercise of the ultimate discretion you have under section 170MW(1), where even if you find that they haven't been able to reach agreement, you still have a discretion as to whether you should give them the indulgence of terminating the bargaining period or you should put them in a position where they can't shelter behind the decision of the Commission, they can't shelter behind 170MW and they have to confront the unions in the cold reality of enterprise bargaining as envisaged by part VIB.
PN7871
Now, we say that this company, of all of the companies, has taken a particularly hard position and we say that although there are other items, apart from the radial allowance and the relocation allowance and so on, we say that when you look at the documents, the impression you will get from all of the documents is that they have been not ready to negotiate in a way which would facilitate any movement towards an agreement and that at each stage it has been the onus of the unions to try and come forward with suggestions to try and make a breakthrough and at each stage, they have been cut out, so we say that you should exercise a discretion against SPI and you should not terminate the bargaining period with that company.
PN7872
THE COMMISSIONER: There does appear, Mr Borenstein, to be a greater level of disagreement between SPI and the unions and other companies. I notice from Mr Georgiou's notes of the meetings, if I looked at it, there was roughly eight or 10 items listed and there is only two that I could see which were apparently agreed between the parties.
PN7873
MR BORENSTEIN: Yes, I agree with that, Commissioner.
PN7874
THE COMMISSIONER: And virtually everything else was disagreed and I don't see anything here about remuneration increases or wage increases.
PN7875
MR BORENSTEIN: Only in terms of the ASU and APESMA making a proposal I think in the 29 April notes.
PN7876
THE COMMISSIONER: They may have made a proposal, but I must say I didn't see it.
PN7877
MR BORENSTEIN: I am sorry, you are right. It doesn't talk about that. There was an offer from them at an earlier meeting on 16 April which is a 2.5 per cent wage increase.
PN7878
THE COMMISSIONER: Per annum over the duration.
PN7879
MR BORENSTEIN: Yes. That was on the basis of the 36-hour week, I think, if I read that correctly.
PN7880
THE COMMISSIONER: Yes.
PN7881
MR BORENSTEIN: But, in any event, it is correct to say that there is nothing in the notice that says that the unions have put a figure forward. What I was thinking of, Commissioner, was the item on 29 April, the second item in those notes, where there is the proposal about the 36-hour week. Unless I can assist you further, they are the submissions.
PN7882
THE COMMISSIONER: No, that is fine, Mr Borenstein. Thank you. Mr Rizzo.
PN7883
MR RIZZO: Just two points, Commissioner. I refer to the notes by Powernet on 29 April and on the issue of the ASU/APESMA proposal for a separate agreement and the like, I just want to point out the Commission that when we did put the proposal that ASU and APESMA were prepared to look at an alternative arrangement to the 36-hour week, the company first said that it would consider the proposal and give us an answer I think by the Friday which was a few days later and then as the minutes read, it says:
PN7884
SPI Powernet left the room and considered the proposal. On return, SPI Powernet advised the new proposal amounted to a five per cent pay increase -
PN7885
etcetera, etcetera. Could I inform the Commissioner that they went out of the room for about five minutes to consider the proposal which I thought was an incredibly abrupt period of time to consider our serious proposal for just a period of five minutes and then rejected it.
PN7886
THE COMMISSIONER: And your proposal was for what, abandonment of the 36-hour week claim and instead extra days off and a wage increase of what, five - - -
PN7887
MR RIZZO: Five per cent.
PN7888
THE COMMISSIONER: Five per cent per annum in each of three years.
PN7889
MR RIZZO: Yes, which is probably one of the most radical shifts we have had in the negotiations and it was given a five minute think. Now, I think this company has been I think correctly characterised as being probably the more difficult company that we have had negotiations with in the last four weeks and when unions put a series of proposals to it and gets back to it in five minutes that it is unacceptable and then doesn't want to negotiate any further, I don't think that is very good bargaining on behalf of this particular company and on the issue of employment agreements, Commissioner, on that issue we had all but agreed before 7 April or 8 April when you made your recommendation.
PN7890
At the first meeting, when we reconvened, that was one of the first issues that was discussed and the company put a position that with employment agreements, despite the clause having been in the agreement for the past I think two or three EBAs, that they no longer believed in the employment agreement clause any longer and wanted it removed from the EBA altogether.
PN7891
Now, that is a completely different position to the one that was held for some months before 8 April and I had formed the view that this company had deliberately put up a whole bunch of stoppers or not considered the union proposal seriously in order not to reach agreement and I say that the company is trying to use the Commission for its own ends, ignoring serious proposals put by the unions and we say with further negotiations with this company, if they negotiate in good faith as they should, we should get to agreement and they should consider our proposals seriously, Commissioner.
PN7892
THE COMMISSIONER: Thanks, Mr Rizzo. Mr Georgiou, do you wish to - - -
PN7893
MR GEORGIOU: I am not saying a word.
PN7894
THE COMMISSIONER: Good, another wise decision, Mr Georgiou. Mr Parry.
PN7895
MR PARRY: If the Commission pleases. Again, it is asserted here today that somehow there hasn't been proper bargaining or negotiation. I have already made submissions that there have been plenty of opportunities for that complaint to be made and perhaps proceedings to be brought back before the Commission to either sustain that or have it tested. On any fair reading of the notes provided by SPI Powernet, there has been negotiation and proper bargaining.
PN7896
The parties have exchanged positions, they have discussed those positions. They have concentrated on the significant issues that were between them. It may be recalled that a number of issues had already been agreed between Powernet and the unions and they didn't require reaffirmation or renegotiation. On some matters there has been agreement reached. For example, employer entitlements and Mr Rizzo dispenses with that by saying, well, we were just about there, anyway, well, it wasn't agreed. It has been agreed.
PN7897
On other matters, there has been other offers put. For example, there has been an offer put on 29 April with regard to apprentices. Now, on any fair reading of the document, there have been other offers put. Now, the unions have chosen to reject those. The company has chosen to reject union positions. Coming along here and name calling simply because somebody has the temerity to have a strong position on an issue or reject a proposal doesn't advance the case. The position is that there has been proper bargaining between the parties and the parties have held strong positions and that remains the position.
PN7898
We strongly reject the suggestion that the employer's conduct has been anything other than consistent with the Act and consistent with the recommendation that the Commission made and we strongly assert that our bargaining has been to pursue those matters that we genuinely want in an enterprise agreement and again we say that the inability to reach agreement simply sets down one of the criteria for section 170MW(7). If the Commission pleases.
PN7899
THE COMMISSIONER: Thank you, Mr Parry. Mr Borenstein, I take it you are finished.
PN7900
MR BORENSTEIN: Yes.
PN7901
THE COMMISSIONER: Thank you. The submissions this morning are in addition to the submissions and evidence that was given in the Commission earlier in April. It is not my intention this morning to indicate to the parties where I believe this matter should proceed from here, other than to say that I regard it as a very serious matter to remove the rights of parties to negotiate and attempt to reach agreement in their own - without an agreement being imposed on them through an arbitration process. That has been my view all along.
PN7902
At the same time, the Act does provide that where there is no reasonable prospect of agreement being reached, there is a discretion in the Commission to terminate the bargaining period to make further action of an industrial kind by the unions or the employers unprotected and to impose a process on the parties for compulsory conciliation and failing that, conciliation, arbitration, so I am not yet in a position to indicate to the parties a decision in this matter.
PN7903
I propose to adjourn the proceedings until two pm on Friday, that is Friday, 7 May, at which time I will indicate to the parties my views as to the submissions and as to where the matter should proceed from here. I propose now to adjourn until two pm on Friday.
ADJOURNED UNTIL FRIDAY, 7 MAY 2004 [12.49pm]
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