C2004/6453, Transcript of Proceedings [2004] AIRCTrans 4494 (22 November 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
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TRANSCRIPT OF PROCEEDINGS

O/N 14908
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER ROBERTS

C2004/6453

OCEANIC COAL AUSTRALIA LIMITED

and

CONSTRUCTION, FORESTRY, MINING AND
ENERGY UNION AND OTHERS

Notification pursuant to section 99 of the Act
of an industrial dispute re implementation of
8.5 hour shifts at West Wallsend Colliery

SYDNEY

1.23 PM, WEDNESDAY, 10 NOVEMBER 2004

PN1

MR J. WHALE: I seek leave of the Commission to appear in this matter for the applicant. My application for leave to appear is made pursuant to section 42(c)(3) of the Act.

PN2

THE COMMISSIONER: We will see if it is objected to first, Mr Whale.

PN3

MR WHALE: With me I have MR N. IRELAND, the operations manager.

PN4

THE COMMISSIONER: Thank you.

PN5

MR S. MURPHY: I appear on behalf of the AMWU.

PN6

MS S. KERR: I appear on behalf of the CEPU, just for the record, your Honour, I oppose Mr Whale.

PN7

THE COMMISSIONER: You did what, sorry?

PN8

MS KERR: I oppose Mr Whale's leave.

PN9

THE COMMISSIONER: We will get to that but I note it.

PN10

MR K. ENDACOTT: I appear for the Construction, Forestry, Mining and Energy Union, Mining and Energy Division. With me at the bar table is MR G. KELLY, a vice president of that district of that union and in the gallery, we have MR Q.E. SULLINI, a MR WARREN PAYNE, who are both lodge officials of the CFMEU Lodge at the mine in question and a MR GRAHAM JENSEN who was the chairman of the site negotiating committee.

PN11

THE COMMISSIONER: Okay. Well, welcome to them. In relation to yourself, Mr Endacott, or CFMEU and I ask the same question of the AMWU, do you object to Mr Whale's appearance?

PN12

MR MURPHY: Yes.

PN13

THE COMMISSIONER: You do?

PN14

MR MURPHY: Yes, I object.

PN15

THE COMMISSIONER: Do you all wish to speak on it or do you wish to nominate one of yourselves to speak on the issue?

PN16

MS KERR: I guess it is me.

PN17

THE COMMISSIONER: Don't fight over it, just agree. Well, Mr Whale, I just want to find out how we are doing it first. You are going to speak on it.

PN18

MS KERR: Yes, I will speak on it.

PN19

THE COMMISSIONER: Mr Whale's obligation to tell us first why he should appear. Mr Whale?

PN20

MR WHALE: Thank you, Commissioner.

PN21

THE COMMISSIONER: Aren't you employed by the mine, Mr Whale?

PN22

MR WHALE: No, I'm not, Commissioner. I am a paid agent.

PN23

THE COMMISSIONER: Okay.

PN24

MR WHALE: This company, as with all the expired or related companies does not have full-time advocates and does not employ advocates but appears through either paid agents or counsel or where leave is not granted, by the relevant Commissioner, then the Commissioner appoints a person to speak on behalf of the company. Commissioner, it is put in the application, whilst this is a matter that has been sought by way of conference, I have indeed prepared the brief for the company and am in a position to present a reasonably succinct position for the company which, whilst going to some technical issues and interpreting issues of the certified agreement, albeit it is directed at directing these proceedings into a conference.

PN25

Notwithstanding that, Commissioner, the company does not engage persons who are skilled in advocacy and as a matter of principle, and one that I have put to this Commission previously is that the Commission ought, pursuant to section 42(c)(3) exercises the discretion so that there is a fair contest between the parties that appear before it. In principle, the Commission should adopt as a policy sense that parties should be represented by persons of their choice.

PN26

The section 42(3)(c) is about in the mind of a party that it needs a particular person to act for them, to give them fair and adequate representation. So by nominating me as an agent, the company has prima facie taken a decision that it does not adequately have within its ranks persons who can, with a fair deal of experience, represent the interests of the company before this Commission. I say that the company should be afforded this opportunity subject to an overall disadvantage test.

PN27

The overall disadvantage test should be, again based on a fair and even contest between the parties, that neither party or not a party should be disadvantaged by virtue of the appearance of advocates before the Commission. I would submit to you that the people at the bar table are experienced advocates and are engaged by their organisations to act in the capacity of an advocate and therefore a spokesman of some experience before this Commission.

PN28

THE COMMISSIONER: You are in great danger of being gracious, aren't you, towards your opponents?

PN29

MR WHALE: I confess I don't know two of the people here but certainly Mr Endacott I do have deal of respect for.

PN30

THE COMMISSIONER: It was just a moment of whimsy, continue.

PN31

MR WHALE: Mr Kelly I know from other quarters, more so than his current capacity. So I submit to the Commission that subject to no party being disadvantaged by virtue of my appearance that the Commission ought to exercise its discretion in favour of the company.

PN32

THE COMMISSIONER: Thank you, Mr Whale. Ms Kerr?

PN33

MS KERR: Thank you, Commissioner. I simply say in response that the Commission does have discretion in these matters and it is our position that the Commission ought not exercise its discretion in this matter. Commissioner, this is a section 99 dispute. So far as I am aware, it is listed for conciliation. It is a relatively simple matter, from what I can see, although it is a coal mining matter so it may not be. As far as a fair contest is concerned, we say that some of these matters can be resolved through discussions and there is no need, at this stage, Commissioner, for the expert representation of Mr Whale?

PN34

THE COMMISSIONER: I take it that you are finished?

PN35

MS KERR: Yes.

PN36

THE COMMISSIONER: I take it that Mr Whale's involvement would be more in the arbitral process if such was to occur. Given the history of Mr Whale's representation of this particular range of employers, I see no harm will come to the union parties by his appearance and certainly it is the wish of the company. I know that Mr Ireland is experienced in turning up here but I don't think he has had much experience in advocacy before me and probably does not want to become so. I will grant leave to Mr Whale. Mr Whale, I will hear you now.

PN37

MR WHALE: Thank you, Commissioner. Commissioner, what I propose to do is give you an outline of the issues before you and then seek the Commission to convene into a conference of the parties.

PN38

THE COMMISSIONER: Can you just point initially the provisions in the agreement which apply to what you are going to tell me?

PN39

MR WHALE: You have a copy of the agreement before you?

PN40

THE COMMISSIONER: I do.

PN41

MR WHALE: The provisions of the agreement which are the nub of the dispute, Commissioner, are clause 15, subclause 15.4, paragraph 15.4.1.

PN42

THE COMMISSIONER: Yes.

PN43

MR WHALE: In addition to that, paragraph 21.7.

PN44

THE COMMISSIONER: Yes.

PN45

MR WHALE: By way of background, Commissioner, the company operates the West Wallsend Colliery. It is a line colliery that has been in operation for many score years and has an extensive underground working. It is a mine that extracts coal primarily by Longwall and Longwall mining techniques and engages a number of employees and contractors in developing Longwall blocks. The company, over a number of years, has been a marginal operation and in the current circumstances, indeed having a window of opportunity in terms of its cost structure because the current price of coal gives the company a margin which makes it profitable today.

PN46

In relation to coal out of the colliery, Commissioner, this mine as part of the group of ex strata operations is subject to limitations upon coal being exported out of the port of Newcastle. The Commissioner may be aware that through the port of Newcastle, companies are given a tonnage allocation and therefore there is an absolute cap on the amount of coal that companies or groups of companies can shift through the port. This colliery is part of the ex strata group of mines, is simply one of those locations of which the company can meet its tonnage and quality requirements.

PN47

As a high cost of production mine, the company obviously looks at ways and means to maximum its revenue, to meet its contractual needs, and operations that are high cost operations are obviously operations which are then subject to some real concern and close review by the company. Most recently the ex strata notified the closure of the South Bulga Colliery for very much the same reasons that I've just outlined that as a high cost operation it was a more efficient use of resources and to meet its contractual requirements that the company discontinued mining from the South Bulga Colliery and produced that coal from other resources.

PN48

Recently, the ex strata corporate entity reviewed the operation of the West Wallsend Colliery as part of the company's budgetary preparation for the financial year ending 30 June 2005 and the company did a series of projections of coal operations extending through to the year 2009 and beyond. The company's initial budget, which was based on no changes to the current operations, meant that the company over time would be a loss making exercise and if one factors in changes to coal pricing, which are expected over time to decrease, so the current window of opportunity is a very limited one.

PN49

The review of the budget, Commissioner, resulted in the company at the corporate level rejecting the stay as you are proposal and put back to the operations management that they needed come up with ways and means of reducing the cost structure. In addition to the issue of cost structures, Commissioner, the mine is progressively getting into lower quality coal and over time the ratio of prime coking coal to steaming coal, that ratio in favour of steaming coal increases and decreases proportionately for coking coal.

PN50

So the price at which the company will achieve its revenue over time will progressively decrease, notwithstanding changes in coal prices because the price of steaming coal decreases relative to coking coal. There is a significant margin for coking coal. So the company has to look at the long time future of the mine. The budget that was put forward by the company, the stay as you are budget, was rejected and on the basis of that budget, in all probability, the mine would have closed in 2005 or thereabouts.

PN51

The company, the operations team, developed an alternate budget which is based on changes to mining sequencing and extending Longwall blocks, together with changes to working arrangements. The net product of that review, Commissioner, is that the company came up with a system of work whereby the mine, which currently works shifts of 8 hours 10 minutes, 5 days a week, would move to a shift system of 8-1/2 hours plus 10 minutes. The 10 minutes in both those cases, Commissioner, is bath time which is in addition to the normal shift length.

PN52

THE COMMISSIONER: So the current one is 8 hours 10 minutes?

PN53

MR WHALE: Currently it is 8 hours - - -

PN54

THE COMMISSIONER: Including the bath time?

PN55

MR WHALE: Yes, Commissioner. If in fact you have regard to clause 15.4.3 of the certified agreement, 15.4.3 where it discloses the shift times, you can see that the night shift/day shift and swing shifts are 8 hours 10 minute shifts and each of the other shifts are indeed 8 hour shifts.

PN56

THE COMMISSIONER: So you are talking about an 8 hour 40 minute shift?

PN57

MR WHALE: Correct, which includes the 10 minute bath time.

PN58

THE COMMISSIONER: Yes.

PN59

MR WHALE: The company ran a series of later models and determined that that was the most efficient way to meet its operational requirements and the continuity of mining operations. The company, Commissioner, commenced discussions surrounding the review of operations as far as back as July of this year. Since July, Commissioner, there have been many discussions involving all unions or indeed separate unions. If I can just give an indication of the length at which the company has sought to consult.

PN60

Commissioner, all of the unions were participant in meetings on 2 November, 7 October, 16 September and 27 July. There have been full shift meetings of employees on 30 September, 29 July and 1 July and there have been meetings with CFMEU officials only in addition to those other meetings on 22 October, 12 October and 7 October. So the company has been engaged in an exercise of consultation, both developing the particular later model and shift system that it sought to put in place and has taken into consideration the views that have been expressed by officials of the union.

PN61

Indeed, Commissioner, Mr Kelly who was involved in some of those discussions proposed an alternative to the company which was a 19 day month based on 8-1/2 hours to meet the company's requirements. The company evaluated that and did indeed indicate that it did not meet the company's requirements. We are confronted today, Commissioner, with a fundamental issue of whether the company can introduce 8-1/2 hour shifts Monday to Friday or whether it can't.

PN62

A second issue to that Commissioner - and I think perhaps truly the nub of the dispute between the parties is the application of paragraph 27.1 of the agreement, which is what is termed the "K payment". That is a payment in lieu of a meal break. Currently, the - - -

PN63

THE COMMISSIONER: 21.7?

PN64

MR WHALE: 21.7.1.

PN65

THE COMMISSIONER: Yes.

PN66

MR WHALE: It reads that:

PN67

Employees who are required to work more than half hours over time on any day or shift who will, as a result, be it work for more than the normal shift length will be paid an additional half hour at over time rates (K payment) in lieu of a meal break.

PN68

What currently happens, Commissioner, is that employees who work the 8 hour 10 minute shift, to attract the K payment, must work an additional half hour beyond that 8 hours 10 minutes before the K payment applies. In the current sense, Commissioner, the 8 hour 10 minute shift is the normal shift. With the implementation of the company's proposed 8-1/2 hour shift with the additional 10 minute time, that will constitute the normal shift and by application, 21.7.1 means that the additional half hour will only apply after the, in effect, 9 hours and 10 minutes.

PN69

Mr Ireland is somewhat of a pragmatist, Commissioner, in case you haven't noticed on previous occasions. A strict reading of the certified agreement, we would say, entitles the company to implement the changes that he proposes, and it can do so at minimal cost to the company - that is, the company is not bound to increase any provisions or allowances or payments in respect of such things as sick leave, long service leave or, indeed, the treatment of redundancy pay to implement those changes. As I indicated, Mr Ireland is somewhat of a pragmatist, and he had regard to the United Colliery, which is also an ex strata operated mine, working 8-1/2 hour shifts to ascertain what are the conditions under which those shifts are worked.

PN70

Mr Ireland took the view that to lessen the pain on employees and, indeed, to win employee support, it was appropriate that the company should apply the provisions of the United agreement to the shift system. I would like to hand up to the Commission a letter from the company which deals with the conditions under which 8.5 shifts are to be worked.

PN71

THE COMMISSIONER: While I'm waiting, I might just point out to you that there appears to be a strange provision that you might like to look at some time, coming at the very end of 21.7.2, the dollar figure?

PN72

MR WHALE: The $11?

PN73

THE COMMISSIONER: No, the $410.

PN74

MR WHALE: "Or paid a meal allowance of $410."

PN75

THE COMMISSIONER: Is that right, is it?

PN76

MR ENDACOTT: It should say "$9.10"

PN77

THE COMMISSIONER: Well, that is why I'm asking. I think somebody should pay attention to it at some stage.

PN78

MR WHALE: Well mine says "$410". I presume it must be wrong.

PN79

THE COMMISSIONER: It is just that you raised questions as to the strict wording of clauses. It just jumped at me. Anyway, I just note it for your attention perhaps at a later date.

PN80

MR ENDACOTT: We can establish the certified copy to the Commission and it does say $9.10.

PN81

THE COMMISSIONER: Does it? I thought I had the certified copy but there you go. If I were you, I wouldn't be arguing. Mr Whale, we will go to the letter. Do you wish to tender this document?

PN82

MR WHALE: No, Commissioner, not at this stage. I simply wished to hand it up as background to the company's position. I don't want to labour these points, Commissioner, but what it does is it looks at the agreement. It refers to the United agreement and, in effect, seeks to apply payments that are to be made or the company proposes be made in respect of the implementation of this proposed shift system. Following discussions, and those discussions were primarily with Mr Kelly, and the officials of the union, the company was informed that what it was proposing was not sufficient to win employee support.

PN83

Indeed, the company issued two following letters, one of which was to notify employees that the company did propose to implement its shift times from 1 January, 2005 and a second document which deals with increasing the company's preparedness to increase a number of the benefits that are contained in that first letter. If I could also hand up to the Commission these later documents. The document dated 13 October notifies the unions of the proposed changes to shifts. It also notifies that the company has evaluated the proposal put forward by Mr Kelly and, indeed, we believe that was put forward in good faith for a 19 day month, and the reasons why the company had to reject that proposal.

PN84

The second document, Commissioner is dated 22 October to West Wallsend Colliery Delegates, change of shift conditions with 8.5 hours, is to be read in conjunction with the initial letter dated 29 September, and if one looks down it, it notes changes to the company's position with respect to annual leave, sick leave, or clarification in relation to annual leave, changes to sick leave, public holidays and retrenchment. Now, Commissioner, the company's position in the discussions with the delegates and as notified to the employees is that the company is prepared to make these changes to the payment structure contained in the certified agreement as a means to secure their implementation in a manner which is consistent with achieving the objectives of employees working towards those changes to operations.

PN85

The company's position is that it is not bound to make these payments and if, indeed, the employees are not prepared to consent to the changes proposed by the company, and were this matter to ultimately come before the Commission for arbitration on the issue of whether the company can implement 8-1/2 hour shifts Monday to Friday, and the application of the co-payment, the company would not consent to changes to treatment of sick leave, long service leave, and retrenchment in accordance with the proposals that are contained in the documentation you have before you.

PN86

It is the company's view that the certified agreement, pursuant to clause 15.4.1, provides the company can introduce shifts up to 9 hours provided that where the company introduces 9 hour shifts, it is bound to do so in accordance with a 9 day fortnight roster.

PN87

THE COMMISSIONER: Your proposal does that, in your view?

PN88

MR WHALE: The company's proposal does not implement 9 hours shifts. It implements 8-1/2 hour shifts or 8 hour 40 minute shifts so the company is not, in our view, bound to introduce those shift systems in a 9 day fortnight configuration but we do accept that if we did introduce 9 hour shifts, we could only do so in the 9 day fortnight and obviously shifts greater than 9 hours can only be introduced by agreement.

PN89

THE COMMISSIONER: So you rely on the first sentence and say that you have the power up to but not including 9 hours?

PN90

MR WHALE: Correct. We also say that clause 21.7.1 - we also say that the 8 hour 40 minute shift, as I've described it, becomes the normal shift for those employees. We say that by application, 21.7.1, the co-payment, only comes into play where an employee is required to work half an hour overtime beyond what would be the normal shift time which, for those employees, would be 8 hours and 40 minutes. Commissioner, if indeed the Commission were to adopt - if, indeed, the company were required to pay the co-payment, as we understand it, in accordance with the employees proposal which is that all employees working the 8 hour 40 minute shift would automatically be paid the co-payment for any day worked, if indeed that were to apply, that adds a further $1.1 million in round figures to the cost structure.

PN91

That is not a cost that the company is further prepared to wear and would rather chance its arm before this Commission, perhaps in arbitral proceedings, win the principle of 8-1/2 hour shifts in accordance with its proposal, the application of the co-payment in accordance with the company's proposal, and then implement that system of work strictly in accordance with the terms of the current certified agreement, and employees would be deprived of the benefits that the company has been prepared to offer in accordance with the documents that you have before you.

EQUIPMENT MALFUNCTION

PN92

not successful in gaining a settlement of this issue, but I do impress upon the Commission that the powers that be within the company have given a window of opportunity to continue operations at the mine beyond 2005 based upon the achievement of certain parameters and we don't believe that the parameters that we are proposing to the employees are onerous or, indeed, unfair. We think they are quite generous and we seek the Commission's assistance in relation to the matter.

PN93

THE COMMISSIONER: You haven't finished?

PN94

MR WHALE: Yes, I have.

PN95

THE COMMISSIONER: I suppose you have virtually run your case in your opening brief statement, haven't you?

PN96

MR WHALE: Well, you didn't pull me up so I - - -

PN97

THE COMMISSIONER: No, actually I was interested in what you were saying. It does give me a bit of background to it and I will get the same from the unions.

EQUIPMENT MALFUNCTION

PN98

THE COMMISSIONER: Who wishes to speak first for the unions?

PN99

MR MURPHY: I will go first, Commissioner. I would like to draw your attention to the following clauses - 3.0, 4.0, 9.0, 15.4 and 25. Now, we have heard submissions from the company that they have consulted with all of the unions across the site, and consulted with all employees around the nature of the dispute. We have heard them determine that the nature of the dispute is whether or not they are able to introduce 8-1/2 hour shifts. We disagree with what the company has put forward there. If you look at, firstly, clause 3.0 under "the definition of unions", there are three unions there that are defined in the application which are the parties to the agreement, and it lists those three unions.

PN100

THE COMMISSIONER: Is that in dispute?

PN101

MR MURPHY: No, I'm just drawing your attention to that. The nature of the dispute, as the AMWU sees it, and we have put in a dispute form was that the company had not satisfied clause 9 of the agreement, "consultation."

PN102

THE COMMISSIONER: Well, take me through 4 first. We will just do it in a sequence. You have raised - what is in 4.0 that I should know about?

PN103

MR MURPHY: 4.0 just lists in 4.1 who the parties to the agreement are.

PN104

THE COMMISSIONER: Well, all of which I take to be non-contentious, so we will move on to 9.

PN105

MR MURPHY: The nature of the dispute, as the AMWU sees it, is that the company has not satisfied clause 9.0 when it seeks to implement the intended or proposed 8-1/2 hour shift change. From our perspective, the AMWU has not been consulted consistent with that clause.

PN106

THE COMMISSIONER: Well, in the consultation that was laid out by Mr Whale, who was that with? The consultation that Mr Whale has laid out, the discussions that have occurred, who were those discussions with?

PN107

MR MURPHY: They certainly weren't with the AMWU.

PN108

THE COMMISSIONER: Okay. Well, can only speak for your own union, of course. The other unions will speak for themselves. So your allegation is that the AMWU was not consulted?

PN109

MR MURPHY: That is right, and we have put in a dispute over that. We find ourselves here today going through clause 25, if I can draw your attention to that. That is the dispute settlement procedure, and we have raised the dispute. It has not gone through the disputes procedure. It has gone straight to 25.1.10 bypassing - - -

PN110

THE COMMISSIONER: When you say you have lodged a dispute, you mean internally in the company?

PN111

MR MURPHY: In the company.

PN112

THE COMMISSIONER: Not to the Commission.

PN113

MR MURPHY: Yes, and that is what the dispute procedure outlines, that it is meant to be handled in-house first. If it can't be resolved, it comes here for assistance, so we have lodged that initial dispute. As of yet, there hasn't been any type of consultation or discussion over the matter that we have raised in relation to consultation, and we find that clause 25.1.9, which talks about the parties agreeing to advance a couple of steps and perhaps bring it to the Industrial Relations Commission, has been bypassed and the company is looking at 25.1.10, straight to the Industrial Relations Commission.

PN114

THE COMMISSIONER: You are drawing my attention to 25.1.9, are you?

PN115

MR MURPHY: I'm drawing - yes, and 25.1.4 wherein in the first instance when a dispute is raised, there's some discussion over the matter, so I guess from the AMWU's perspective, we certainly need time to properly discuss this matter with our members. We certainly feel that the consultation clause has not been satisfied. So far, the company has met with one of the unions that is party to the agreement. We certainly recognise - - -

PN116

THE COMMISSIONER: You might as well be bold and tell me which union that is.

PN117

MR MURPHY: That was the CFMEU. The company has already put that, I believe, so from the AMWU's perspective, we see it inappropriate to make a determination in relation to this matter. We call for a recommendation that a meeting should take place with all the parties at the workplace to resolve the outstanding issues and report back to the Commission in a reasonable time period.

PN118

THE COMMISSIONER: Thank you, Mr Murphy. I will just go across the table to Ms Kerr.

PN119

MS KERR: Thank you, Commissioner. We are in much the same position as the AMWU. We feel that the dispute settlement procedure has not been followed appropriately. We say that consultation has not occurred, as set out by the enterprise agreement, very clearly in clause 9. We say that perhaps the first two steps have been followed but steps 3 to 11 certainly haven't been followed.

PN120

THE COMMISSIONER: So where do you say it is up to? Mr Murphy drew my attention to 25.1.4 and 1.9 and - - -

PN121

MS KERR: Yes, we support that, Commissioner. We, sort of, anticipate and I hope I'm not putting words in the company's mouth that the company - - -

PN122

THE COMMISSIONER: You can always try. They will object if they don't like it.

PN123

MS KERR: That the company may say that it has accelerated the dispute settlement procedure as allowable in 25.1.9 but we say that that clause says the parties may agree to advance or to bypass. There's been no agreement.

PN124

THE COMMISSIONER: It says, more importantly, "may agree in advance."

PN125

MS KERR: Sorry, Commissioner. The point I'm trying to make is that there has been no agreement in relation to that, so I support the submission of my colleague that the matter should go back to the company, have discussions with all the parties, appropriate consultation as required by the enterprise agreement, and perhaps a report back to yourself.

PN126

THE COMMISSIONER: Do you say that your union has not been consulted?

PN127

MS KERR: Not in accordance with this.

PN128

THE COMMISSIONER: Thank you, Ms Kerr.

PN129

MS KERR: Thank you.

PN130

THE COMMISSIONER: Mr Endacott?

PN131

MR ENDACOTT: Thank you, Commissioner.

PN132

THE COMMISSIONER: There's no need to go over it if it is the same ground.

PN133

MR ENDACOTT: No, that is right. I will try to deal initially and comprehensively with consultation in accordance with clause 9. Certainly, we make a different assertion to that of the AMWU and the CEPU in regards to our members. In that, there has been some discussion involving the CFMEU. I mean, you know, one could technically argue that discussion has not occurred in accordance with the detail of the consultation proposal from our perspective but certainly, we weren't intending to turn up to today's proceedings and raise an issue on failure to consult from the CFMEU's perspective raised by the other unions.

PN134

In going through the process of clause 9, certainly. If you go to point 7, 8, 9 and 10, you know, specifically probably that has not happened but in saying that, there has been, at point 1, the tabled proposal and, you know, all those other grounds set out.

PN135

THE COMMISSIONER: You are telling me that in essence, the spirit of it is being complied with?

PN136

MR ENDACOTT: Yes, excluding that, you know, we probably haven't gone into detail about the implementation program. There certainly has not been the provided combined management and union feedback to employees.

PN137

THE COMMISSIONER: I suppose what I'm asking you is do you tell me that you have no complaints about the consultation process with the CFMEU? I will tick that off.

PN138

MR ENDACOTT: At this stage, that would be right.

PN139

THE COMMISSIONER: Well, I think we can move on to the substantive matter.

PN140

MR ENDACOTT: With respect to the other matters, we have had the opportunity to meet with employees and discuss the company's proposal but even though I haven't got detailed instruction on the co-payment issue, ultimately the dispute centred around whether or not 8-1/2 shifts could be implemented. We took the opportunity to have a meeting with all the CFMEU members and put the issue to them. Now, could I say the position that we have is the company can't introduce 8-1/2 hour shifts but in saying that, we acknowledge that when we met with our members that are employees and members of ours, there was a divided view expressed by the employees.

PN141

Some said they felt after reading the agreement they probably could - the company could introduce 8-1/2 hour shifts. Some say, "Well, we have looked at it," and their view is, they clearly can't implement it and there was a resolution moved that really, there was a process that they understood where disputes about the operation of the interpretation of the agreement occur and that process is the Commission would ultimately determine the dispute and they would say that they would accept the outcome of the independent arbitrator as they believe that is provided for in the disputes resolution mechanism. But I can outline why they believe certainly as a primary position, why the 8-1/2-hour shifts can't be produced. It can ultimately be found in section 15.4.2, which goes onto read:

PN142

The starting and finishing times for shifts at the commencement of this agreement will be as outlined below.

PN143

And it has certainly got the weekend roster and the Monday to Friday roster and it says:

PN144

As the mine continues to advance travel times will be monitored and alternative shift arrangements will be implemented if necessary to provide the hot seat changeovers and production panels.

PN145

Then it goes on:

PN146

The consultation procedures in clause 9 will be used to implement any changes.

PN147

I don't need to read the rest of the clause about the 8-hour shifts. Now, certainly as I understand it, where the dispute arises amongst - as identified at some of the meetings was that, look, the extended shifts that were discussed and 9 hours for a 9-day fortnight were discussed in the context of meeting those requirements and that is:

PN148

As the mine continues to advance travel times will be monitored and alternative shift arrangements will be implemented if necessary to provide for hot seat changeovers and production panels.

PN149

Now, the company says they will have the vote about the surface people as I understand it but with respect to the people below, well, there is 8-1/2-hour shifts is the go. "We don't need your agreement but we are not implementing it, we are not implementing it, Commissioner, for the purposes of the reasons set out in 15.4.2, we have just decided to restructure." We say if that is required from the employees that are saying they don't think it be implemented, therefore it has got to be for those reasons. Now, we are happy with conciliation, we are happy to try and sort the matter out, we would certainly be happy if the Commission complied with the other union's request where they say consultation hasn't occurred if the Commission identifies that as a real issue in these proceedings.

PN150

THE COMMISSIONER: Well, it is a real issue once the allegations are raised.

PN151

MR ENDACOTT: Yes. Should it be an issue - I understand consultation should be an issue which the Commission believes that the disputes resolution process, as the company - today, should be delayed to allow that to occur. So that is where we are. Certainly, we believe under our interpretation of the operation of the certified agreement, the Commission does have the power to resolve these matters should they remain unresolved between the parties and certainly, we would be prepared to agree to conciliation in an attempt to resolve the matter.

PN152

THE COMMISSIONER: Your union is being accused of bypassing the consultation or dispute resolution procedure in favour of coming here. I haven't had it turned this way around before. But do you say - without commenting on 15.4.2 which is an interesting provision which I have to read very carefully, that 15.4.1 really opens itself to ambiguity?

PN153

MR ENDACOTT: It does because we say that ultimately, all the clauses in 15.4 shifts need to be read together.

PN154

THE COMMISSIONER: Yes.

PN155

MR ENDACOTT: And we say, "Yes, sure enough, the introduction of the 9-hour shifts will - sorry, when it says:

PN156

The employer can determine shifts which need to be worked as long as the hours do not exceed 9.

PN157

Certainly, when you read the entire clause that talks about, well, the shift lengths then talks about the starting and finishing times then talks - and I note that the starting and finishing times for Monday and Friday actually appears below the clause that talks about weekend work.

PN158

THE COMMISSIONER: Yes, nothing would surprise me in terms of contradictions in some of these certified agreements but I just am intrigued by - and this is the highest I put it, by 1.5.4.1, the first sentence which seems to be the introductory provision, that is the right the employer has. Then it moves onto the fact that you need in excess of a 9-hour shift, there must be agreement. The right of the employer seems to be established in the first sentence for all shifts up to but not including 9 hours so 8 hours and 59 minutes I take it. If you are more than 9 it can only be done by agreement and then there are some more obscure provisions or obtuse provisions going on further.

PN159

MR ENDACOTT: Yes, and I understand that certainly that might have been how I say the issue manifested amongst employees about some have - and our members have a slight different interpretation about how it applies but - - -

PN160

THE COMMISSIONER: I would have to ask what does it mean?

PN161

MR ENDACOTT: Yes.

PN162

THE COMMISSIONER: Why is it there, what does it mean?

PN163

MR ENDACOTT: Yes, well I gave you an explanation about what we understand it means when you read 15.4 because if you go to 15.4.2 it says:

PN164

The starting and finishing times for the shifts at the commencement of this experiment will be outlined below.

PN165

They are quite specific. Then it talks about how those things change and as I understand that in going through this process the company is applying, they don't dispute that the consultation required by - as set out in 10.4.2 that refers to clause 9, is occurring. I don't think they dispute that they will give the people that work on the surface, if I understand it, the vote to work 8 hours or 8-1/2 hours as set out. I think it is understood that the mine had been working certainly the 8-hour shifts for a while.

PN166

The company was talking in the negotiations about, "Look, we are getting further and further, this is going to take us longer and longer to get down there, we are going to have to look at lengthening the shifts," and they said, "Well, we understand, we are not going to hold you up for lengthening the shifts if you are going to do what was for those reasons set out in 15.4.2." So you know, I submit that for the purpose of conciliation as the understanding as has been identified as an issue by the employees, if the Commission pleases.

PN167

THE COMMISSIONER: Thank you. Mr Whale, just one issue that intrigues me. If you say that you have this power under 15.4.1 to do this, you have notified this dispute, what do you expect out of these proceedings? I would have thought that if you believed that you have the power that you would logically seek to invoke it and then a dispute would be coming from the other side.

PN168

MR WHALE: Well, precisely. The company has notified its position of the implementation of the 8-1/2-hour shifts in the letter of 13 October, Commissioner. The last paragraph on the first page:

PN169

For the reasons I cannot accept Graham's proposal, I hereby give you official notice under clause 9 of the introduction of the new shift system effective from...

PN170

So the company has in fact notified of the change. The decision has been made - - -

PN171

THE COMMISSIONER: And the unions haven't notified a dispute here but you have.

PN172

MR WHALE: Well, we are seeking to resolve the differences between the parties, Commissioner, and it seemed the most sensible approach to take.

PN173

THE COMMISSIONER: What do you say about the allegation of non consultation with the AMWU and the CEPU?

PN174

MR WHALE: Commissioner, as an advocate, it is always unfortunate to be thrust into these proceedings without really having had the full background of discussions that have taken place and I - - -

PN175

THE COMMISSIONER: Well, you can imagine the situation I am in, Mr Whale, I know less than you when it starts off.

PN176

MR WHALE: The problem I think the CEPU and the AFMEPKIU have, Commissioner, is that the great bulk of employees at the colliery are represented by the CFMEU, some 147 and the AMWU and CEPU have 23 between them.

PN177

THE COMMISSIONER: Yes, but that does not wash with me in terms of obligations.

PN178

MR WHALE: Well, I am just elaborating on the nature in which this matter is being dealt with on site. The company as I indicated have held four meetings which have involved delegates from each of the unions, not just the CFMEU, all of the unions on four occasions and whilst those discussions, Commissioner, have quite clearly meant that the parties have not agreed upon the form of 8-1/2-hour shifts, there has indeed be consultation on the proposed shift system. If I could just take you to clause 25 of the agreement, the disputes procedure, I would just like to take you in particular to 25.1.8. 25.1.8 says:

PN179

If the dispute remains unresolved having been through the previous steps it will be referred to the district union officials and the Mine Manager, Operations Manager for discussion.

PN180

"It" being whom? Does that provide an obligation upon the company to contact district officials of the AFMEPKIU and CEPU or is the obligation with the delegates who have been meeting with the company on four occasions to contact their own officials and say, "We are in dispute with the company." I don't want to push that particularly strongly but I - - -

PN181

THE COMMISSIONER: I would tend to believe that it's the latter.

PN182

MR WHALE: Invariably, Commissioner, we are at the hands of employees. By their election of their union representation and union involvement, the CFMEU, lodge officials - I understand it - notify Mr Kelly to act on their behalf in the proceedings. I am not aware that the delegates for the AFMEPKIU and CEPU did likewise.

PN183

THE COMMISSIONER: Well, I don't know. If the allegation is now made, is there some way there can be consultation with those two unions can be conducted and somewhat without letting this thing drag on forever?

PN184

MR WHALE: Well, the company did - the company has in fact met with other district officials of those two unions prior to these proceedings to inform them of the nature of the matter that was coming before the commission. And my understanding, Commissioner, is that the unions position has been to stonewall any discussion and simply to oppose the principle of 8-1/2 hour shifts. So those discussions have not been productive, but they have occurred.

PN185

So I think the unions objection to the disputes procedure not being followed is somewhat hollow. If I can also take you, Commissioner, back to clause 15, paragraph 15.4.2. Part way down after it has talked about changes to the mine - as the mine continues to advance, it then says:

PN186

The consultation procedure in clause 9 will be used to implement any necessary change.

PN187

Prima facie, Commissioner, we believe that clause 9 truly relates to the application of that clause. And not strictly to the application of 15.4.1 which is the one we believe is the operative clause. Notwithstanding that, Commissioner, the company has had discussions, if not in form then certainly in content, with matters that are listed in clause 9. And in our view, and it would appear to be supported by the CFMEU, that the intent, if not actually carried out in its true and absolute form, the discussions that have taken place have certainly covered the range of issues that are contained in clause 9. Even if that clause did apply.

PN188

Our principal view is, well, it doesn't actually apply but notwithstanding that, the company has substantively dealt with those issues. As I indicated, the company has been having discussions with the union since July of this year. Yes, and I'm reminded by Mr Ireland that, indeed, there have 3 full shift meetings of employees about the changes that are being proposed by the company so it hasn't been limited to just discussions with delegates, it has involved employees at large.

PN189

Now, I don't know what more the company could have done other than perhaps contacted district officials of those two unions and said: we have embarked upon these discussions, do you wish to be involved at your level, but we note that the delegates at the colliery have not sought fit - or sought it appropriate to indeed contact their own officials and inform them.

PN190

THE COMMISSIONER: I take it that you assert that you have the legal right, the power to implement these shifts?

PN191

MR WHALE: Yes.

PN192

THE COMMISSIONER: That you have notified the workforce after what you say is broad consultation, that these new shifts will commence in January 2005?

PN193

MR WHALE: Yes.

PN194

THE COMMISSIONER: And you have made an offer in relation to certain payments?

PN195

MR WHALE: Yes. I also add a further point, Commissioner. Mr Endacott has indicated that the union does not accept - nor do the other unions - accept that the company has the right to implement 8-1/2 hour shifts. Can I direct your attention back to the letter of 13 October, the third paragraph down where Mr Ireland is dealing with Mr Kelly's proposal for a 19 day month which is based, I would submit, on a 8-1/2 hour shifts being worked for 42-1/2 hours per week.

PN196

So the union, I put back to you, has indeed put forward a proposal which is based on the working of 8-1/2 hour shifts.

PN197

THE COMMISSIONER: I think they'd put back to you that they would involve their agreement which they take to be a prerequisite.

PN198

MR WHALE: Well, quite clearly the parties have agreed that 8-1/2 hour shifts can work. One view is that it should be worked in a 19 day month. Well, that's a proposal. The company's view is that it needs to be worked Monday to Friday.

PN199

THE COMMISSIONER: Well, fascinating as such arguments are, it doesn't really cut the mustard when it comes to - - -

PN200

MR WHALE: It's part of the fabric of the dispute, Commissioner.

PN201

THE COMMISSIONER: Part of the fabric. All right, we will adjourn into conference. Sorry, you have a response about consultation, Mr Murphy?

PN202

MR MURPHY: Yes. Just in relation to the consultation agreement. On advice from the delegates we are saying that there hasn't been proper consultation with the AMWU. And in relation to the agreements procedure, if there was any grievance or dispute which could potentially interrupt the company's business or operations - it says in 25.1.1 - that is the obligation of the parties to adhere to that. If there was a pressing matter that could disrupt operations, both the company and the delegates should be having some discussion about: well, it's about time we got union officials involved.

PN203

THE COMMISSIONER: But is it your argument - is your argument a technical one that the union itself hasn't been consulted or what?

PN204

MR MURPHY: We are saying that the consultation process hasn't been through or even close to going through with any of our members. We still have to go back to our members and discuss these proposed changes.

PN205

THE COMMISSIONER: And you say you have spoken to them?

PN206

MR WHALE: I say they have on four occasions been involved in meetings. On 2 November, 7 October, 16 September, 27 July. And their members that are delegates and the employees have participated in full mass meetings or full meetings of employees on three occasions, 30 September, 29 July and 1 July.

PN207

THE COMMISSIONER: Just pause there. Are there members or delegates to the CEPU and AMWU here?

PN208

MS KERR: Yes, Commissioner, there are.

PN209

THE COMMISSIONER: We will adjourn for a few minutes. We will consult with your members and delegates on those particular factual issues. We will return in 10 minutes time.

SHORT ADJOURNMENT [2.20pm]

RESUMED

PN210

THE COMMISSIONER: Mr Murphy or Ms Kerr whichever you wish.

PN211

MS KERR: Commissioner, we have had the benefit of discussions, thank you, with our delegates. The meetings that were raised by the company were 2 November, 7 October, 16 September, 27 July, 30 September, 29 July and 1 July - that our members were involved in. If I can go through them one by one perhaps - would that be useful?

PN212

THE COMMISSIONER: I'm sorry?

PN213

MS KERR: If I could go through them one by one?

PN214

THE COMMISSIONER: Whatever suits you.

PN215

MS KERR: Okay. Thank you, Commissioner. Commissioner, 2 November was a meeting that our members were involved in. At this stage our members were trying to raise this issue with the company and it's our members submission that the company wouldn't speak directly about this issue. On 7 October there was - - -

PN216

THE COMMISSIONER: We are talking all about this year, are we?

PN217

MS KERR: Yes, yes, this year. 7 October was the other meeting that - another meeting that has been raised. The CFMEU chose to speak to their members alone, separately from ours. We were informed by the company that the company would get back to us late the following week. We are still waiting to hear from the company. On 16 September - that was a monthly delegates meeting. Issues raised at that meeting were budget and the H payment. We are a bit at a loss as to what 27 July was about.

PN218

THE COMMISSIONER: If you weren't there, I suppose it's fair enough.

PN219

MS KERR: That is very possible. Commissioner, 30 September was a crew talk. 29 July was a delegates meeting at which the bonus was discussed. And 1 July was a crew talk as well. Commissioner, we say that for whatever reason, whether it is because the AMWU and the CEPU are minority unions or not, we haven't been consulted adequately. Our members have had the benefit of a power point presentation which told them what was going to happen. No discussions were entered into, there was no genuine consultation and we just find that it is all a bit inadequate.

PN220

We say that this matter may not be before the commission if there had been adequate consultation and our members questions could be answered.

PN221

THE COMMISSIONER: I'm beginning to wonder about that as well. Mr Murphy, have you anything to add?

PN222

MR MURPHY: The only thing that I'll add is that any attempt by the AMWU and the CEPU members to get involved in relation to it, the company would refuse to talk or throw them out. At no stage were they given an opportunity to put forward our members concerns in relation to the proposed shift changes.

PN223

THE COMMISSIONER: Those allegations raise significant issues. Mr Whale, do you wish to respond now or do you need time to talk with Mr Ireland?

PN224

MR WHALE: No, I don't need time, Commissioner. I was on site being briefed about this matter on Friday two weeks ago. And contacted Mr Kelly and, indeed, contacted the Commissioner's associate in relation to having this matter listed. On that day, Commissioner - and I don't know that it's recorded in the dates that I've given you, the CEPU delegate, Mr Lonsdale, met with Mr Ireland, I would judge, about 45 minutes next door to where I was preparing this matter.

PN225

And at the end of the discussion Mr Ireland indicated that the he had had this lengthy discussion with Mr Lonsdale. Mr Lonsdale, as a result of that meeting - I'm not aware - invoked any requests for discussions with the district officials or state officials of the CEPU. My understanding is that he - he had foreshadowed some concerns about the income effects on him and his members if, in fact, the employees rejected the company's proposal.

PN226

So the company, Commissioner, denies strongly that it has not embarked upon appropriate and reasonable consultation with site officials. We do, however, acknowledge that those site officials of the CEPU and AMWU have not seen it fit to bump up the issue to their state officials. And we say that is not our problem, that is not our fault. We have included them in discussions and Mr Ireland is here, Commissioner, if you wish to go into the details of any particular day and what was discussed.

PN227

THE COMMISSIONER: I am not sure that - I don't think it really advances. Somebody once said, what is to be done. Now, going back to my point, I have some vague wonderings as to why I'm hearing this matter, in that you said you assert your right to do it, you have notified the workforce of the date that you wish to implement this change. You maintain that you have followed the consultation procedures laid down in the award, in the agreement.

PN228

You have made an offer to employees of additional benefits in taking on these 8-1/2 hour shifts. The unions haven't notified a dispute here. I understand that you may wish these proceedings to result in the unions going quietly about the issue. But what do you really want from me today?

PN229

MR WHALE: Commissioner, we would hope that in conference the Commissioner could express the Commission's views as to the right of the company to implement 8-1/2 hour shifts in accordance with its proposal and indeed the application of the K payment to that proposed shift system. We would like to take on board, as we would hope the unions would take on board, the Commission's views. The disputes procedure does provide that by agreement and having convinced the Commission that the Commission has power to determine matters, the matters may come before this Commission for such a determination.

PN230

I'm reminded that that very clause was before the Commissioner about 4 weeks ago where we put forward that prima facie the operation of that clause requires the agreement of the parties. We don't propose to invoke that part of the disputes procedure at this time but we do believe it would be helpful to the parties if the Commissioner could express a view as to the operation of the two clauses insofar as they relate to the company's proposal.

PN231

THE COMMISSIONER: Whether it is fair for me to express such an opinion, if I may still be called upon by consent of the parties to arbitrate and determine is another issue. I think I know what you want. You are hoping that a view would be expressed which would obviate the need to go to formal proceedings.

PN232

MR WHALE: To be quite frank, Commissioner, the documentation you have put forward and the proposal that the company puts forward makes it eminently sensible that the employees adopt, in effect, a recommendation of the Commissioner that they do implement the proposal as proposed by the company. We've prepared a table of the comparison of what we are proposing versus - if we were to go to arbitration on the principle of the 8-1/2 hour shifts and the application of the K payment, what the employees would not get - and that is a significant amount of money, which the company is prepared - and I emphasise is prepared to grant to them if they do pick up the proposal as put by the company which would be lost, we say, if the matter is to be arbitrated.

PN233

THE COMMISSIONER: Well, I heard the threat before.

PN234

MR WHALE: It is, it is a very blatant and frank position, Commissioner.

PN235

THE COMMISSIONER: I appreciate you putting it to me bluntly as do the unions, I think. Look, I think we have done enough on the record. No, we haven't?

PN236

MS KERR: Commissioner, I am sorry to interrupt. I just want to put on the record that some of the allegations about the meeting with Mr Lonsdale, Mr Lonsdale would refute, if it came to evidence.

PN237

THE COMMISSIONER: Mr Lonsdale can tell me from the bar table now. We will enter an appearance for Mr Lonsdale on behalf of the CEPU. Just tell me in your own words, Mr Lonsdale, nothing frightening about it.

PN238

MR LONSDALE: The meeting that Mr Ireland refers to, I believe was a chance encounter outside of the buildings. I spoke to him for no more than 10 minutes I would say, and during that time he mentioned that we have to have a meeting next week with the AMWU people and we would go from there. I don't believe I was in any offices or anything like that and I don't really know what time they were referring to. If it is Friday 2 weeks ago, I don't even know if I was at work on that day because I was on a union business day up there. So if that is the one he is referring to, I'm not sure. The meeting was probably on a Thursday, I believe.

PN239

MR WHALE: If I could be of assistance, Friday, 29 October, I was on site at 9 o'clock and I think Mr Lonsdale came into Mr Ireland's room which is as you turn right into the offices, it is the first office on your right-hand side, I was in the office next door which is a conference room. That meeting would have taken place - it would have been about 10.30, 11 o'clock.

PN240

THE COMMISSIONER: Well, before anybody has the opportunity to hop up now, we are going to adjourn into conference.

OFF THE RECORD

PN241

THE COMMISSIONER: I must report that during the conference break, I have spoken to each of the parties separately and have expressed certain views to each separately. The parties have also met together. Who wishes to address me now?

PN242

MR WHALE: May it please the Commission, given that the others are looking at me, I think that was a cue to stand up. Commissioner, the parties have had a further conference and have agreed upon the following course of action. That a meeting will take place between Mr Ireland for the company and Lodge and District/State representatives of the AFMEPKIU and the CEPU perhaps on Tuesday, 16 November at 7.30 am to have further consultation in relation to the proposed changes that the company seeks to be implemented.

PN243

Also present at that meeting is an invitation to Lodge officials of the CFMEU to so attend if they wish. Secondly, Commissioner, the company will reconstruct its proposed shift changes together with the payments and treatment of accruals and submit that rejigged document to the parties for their further consideration. The parties have agreed that shift meetings will be conducted on 22 November at which the proposed document the company will put together will be considered by the employees and the representatives of the unions will advise the company subsequent to that meeting of the outcome of the mass meetings.

PN244

I believe it is one meeting, Commissioner, one meeting will take place with an expected duration in the order of up to 2 hours, I think would be reasonable, but the company does not have a fixed view on that, subject to it being a reasonable period of time.

PN245

THE COMMISSIONER: That meeting will be held on or before what date?

PN246

MR WHALE: It will be held on 22 November.

PN247

THE COMMISSIONER: Okay. I take it that meeting is when the members of the union will vote on the proposal?

PN248

MR WHALE: Yes, Commissioner.

PN249

THE COMMISSIONER: All right. Anything to add?

PN250

MS KERR: Only to confirm that that is the position, Commissioner.

PN251

THE COMMISSIONER: Well, just in case the wheels fall off this in some way, we will reserve 10 am on Thursday on 25 November for further proceedings, the form of which I am not sure what they will be but further proceedings, if necessary, will occur to finalise this matter on Thursday, 25 November at 10 am. I will leave it to Mr Whale to advise me by close of business on 24 November 2004, whether the hearing is required. We are adjourned.

ADJOURNED UNTIL THURSDAY, 25 NOVEMBER 2004 [4.15pm]