AG2004/8464, Transcript of Proceedings [2004] AIRCTrans 4877 (13 December 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

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

TRANSCRIPT OF PROCEEDINGS


O/N 9316

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER BLAIR

AG2004/8464

APPLICATION FOR VARIATION OF
CERTIFIED AGREEMENT TO REMOVE
AMBIGUITY OR UNCERTAINTY

Application under section 170MD(6) of the Act
by Simon Engineering Pty Ltd to vary the
Simon Engineering Certified Agreement 2003 -
2006 re rates of pay and conditions of employment

MELBOURNE

3.23 PM, THURSDAY, 2 DECEMBER 2004

Continued from 29.11.04

PN151

MR B. HOOPER: I appear for Simon Engineering and with me is MR R. MARASCO from the Australian Industry Group.

PN152

MS E. WALTERS: I appear for the Australian Workers' Union.

PN153

THE COMMISSIONER: And?

PN154

MS WALTERS: The AMWU.

PN155

THE COMMISSIONER: Thank you, Ms Walters. Right. Now this matter is for submissions arising out of the application for, under section 170MD(6) variation to certify agreement to remove ambiguity or uncertainty. The matter has been listed this afternoon, as indicated, to hear submissions and they follow inspections that occurred this morning on site regarding the work in question. Mr Hooper?

PN156

MR HOOPER: Thank you, Commissioner. Commissioner, as you rightly say we did conduct extensive inspections of the work this morning. I think perhaps the best way to proceed with the submissions that we would like to make, Commissioner, is for me to include some further exhibits which are photographs of the work which I think you already have at hand - - -

PN157

THE COMMISSIONER: Yes.

PN158

MR HOOPER: - - - and perhaps a floor plan of the site which indicates where the work in question, the pickling tank, is actually located on the site that we visited today. It would be helpful for the sake of the record. Commissioner, do you want to deal with the - there is also, Commissioner, I draw your attention there is exhibit AIG1 - - -

PN159

THE COMMISSIONER: Yes.

PN160

MR HOOPER: - - - which is an extract of the Simon Engineering Contract outlining the scope of work that is being done.

PN161

THE COMMISSIONER: Right.

PN162

MR HOOPER: Do you have that?

PN163

THE COMMISSIONER: Yes. My associate has just drawn my attention - they were exhibits AIG1 to AIG3 - were exhibits in 2004/6578 which was the application under 127. What we will do is use the same exhibit numbers and put on transcript that the files are actually related. That is file C2004/6758 and AG2004/8464 which is the application that we are now dealing with under section 170MD(6).

PN164

MR HOOPER: Thank you, Commissioner. Commissioner, then we might firstly deal with the floor plan of the site.

PN165

THE COMMISSIONER: What I will - what I have done whilst you were talking, Mr Hooper, is the first photo that I have which is I believe of the existing tanks in tact.

PN166

MR HOOPER: Yes, that is right.

PN167

THE COMMISSIONER: And we will mark that AIG4.

EXHIBIT #AIG4 PHOTOGRAPH OF EXISTING TANKS IN TACT

PN168

THE COMMISSIONER: The second photo - I assume that is a photo of new lifter. Is that right? Is that a new lifter?

PN169

MR HOOPER: Sorry, perhaps if you could show me the - - -

PN170

THE COMMISSIONER: It is the blue one.

PN171

MR HOOPER: That is the new steering unit - - -

PN172

THE COMMISSIONER: Steering unit.

PN173

MR HOOPER: - - - to be installed, Commissioner.

PN174

THE COMMISSIONER: Right. That will be AIG5.

EXHIBIT #AIG5 PHOTOGRAPH OF NEW STEERING UNIT

PN175

THE COMMISSIONER: The next photo is one which shows some corrosion.

PN176

MR HOOPER: Yes, your Honour.

PN177

THE COMMISSIONER: That is AIG6.

EXHIBIT #AIG6 PHOTOGRAPH SHOWING SOME CORROSION

PN178

THE COMMISSIONER: And the next photo is more - - -

PN179

MR HOOPER: Corrosion.

PN180

THE COMMISSIONER: - - - corrosion but more emphasis I think on a pipe. We will mark that AIG7.

EXHIBIT #AIG7 PHOTOGRAPH SHOWING CORROSION WITH EMPHASIS ON A PIPE

PN181

THE COMMISSIONER: And the site map indicating where the pickling plant is will be AIG8.

EXHIBIT #AIG8 SITE MAP SHOWING WHERE THE PICKLING PLANT IS LOCATED

PN182

MR HOOPER: Commissioner, there was one further photo which I do not know if you have, Commissioner, which is - which shows what the new - is the new pickling tanks in situ in another site.

PN183

THE COMMISSIONER: I do not - I cannot recall seeing that one.

PN184

MR HOOPER: No, to be frank I am not sure which site that is. It is - it looks similar to AIG4.

PN185

THE COMMISSIONER: Right.

PN186

MR HOOPER: But it is different - it is the poly - well, just let me - - -

PN187

THE COMMISSIONER: I cannot recall seeing that one, Mr Hooper.

PN188

MR HOOPER: Let me find a - if I have a spare. Perhaps if I could hand that up, Commissioner.

PN189

THE COMMISSIONER: Thank you. Okay. We will mark that AIG9. Thank you.

EXHIBIT #AIG9 PHOTOGRAPH OF NEW PICKLING TANKS IN SITU IN ANOTHER SITE

PN190

MR HOOPER: Thank you, Commissioner. Commissioner, I would like to make just some short submissions on behalf of Simon Engineering Pty Ltd in this matter. And, Commissioner, has now had I think it is fair to say the benefit of three days of hearings, discussions and conferences on regarding the work in question in the matter that is before the Commission. It concerns the work being conducted at Blue Scope Steel and the replacement of pickle tanks at that site.

PN191

AIG1, Commissioner, sets out in some detail the scope of the work - which I have now misplaced. Sorry. The scope of the work that is being conducted at the site and the work incidental to the replacement of the pickle tanks at site. I do not intend to go to that in detail, your Honour, Commissioner. I am sure you will be able to - - -

PN192

THE COMMISSIONER: Your Honour is fine.

PN193

MR HOOPER: Instant promotion. I was trying to be prescient, Commissioner. The - I do not intend to go in that detail. I think, Commissioner, you are well aware of that by now and you have also had the opportunity of viewing the scope of the work in situ. The company essentially has three submissions to make to you today, Commissioner. Firstly, that we would submit that the work that you have seen and heard from the parties on is clearly work that falls within the application clause of the Simon Engineering Certified Agreement 2003 - 2006.

PN194

That there is no ambiguity or uncertainty about the application clause within the agreement and that the Commission should find that the scope of work that the Commission has informed itself about is within that application clause and therefore the agreement applies to the work. Our second submission to you, Commissioner, is that if you reject that submission and do not accept that there is no ambiguity and uncertainty that you then, Commissioner, exercise your powers in accordance with 170MD(6) and amend the agreement in the terms set out in the application to make it absolutely clear that the agreement does apply and is applicable to the work being done, Commissioner.

PN195

So what we are putting there is an alternate proposition if the Commission does not accept our first proposition that was put to it. Our third submission to you, Commissioner, is that if the Commission determines that it is uncertain that the agreement does apply to the work and is unable to come to a conclusion of that or is certainly uncertain of it then the company would comply with a recommendation from the Commission under the provisions of section 111AA - would comply with such a recommendation made by the Commission which made certain what agreement applied to the work in question and the terms under which that work should be performed.

PN196

So they are our three propositions. I do not intend to go into any great detail about the particular work because I think the Commissioner would be bored silly by that having heard it ad infinitum over the last three days. If that is acceptable to the Commission?

PN197

THE COMMISSIONER: No, that is fine. Thanks, Mr Hooper.

PN198

MR HOOPER: Thank you, Commissioner. That completes the submissions that we need to make.

PN199

THE COMMISSIONER: I am a conservationist by heart so I have a strong view that the less air we breath and puff out the better it will be.

PN200

MR HOOPER: Thank you, Commissioner.

PN201

THE COMMISSIONER: Yes, Ms Walters?

PN202

MS WALTERS: If the Commission pleases. In the first instance on behalf of both union respondents we would submit that in relation to the section 170MD(6) application that is before you we oppose that application. In fact we believe that in relation to the section 170MD(6) application that the scope clause, that is clause 3 of the Simon Engineering Certified Agreement 2003 - 2006, is ambiguous or uncertain.

PN203

We would submit with respect to jurisdiction that there is no ambiguity or uncertainty and in relation to discretion that the Commission ought not be minded to vary the agreement in the manner sought by the applicant. However, as Mr Hooper has taken the Commission, in his submissions, through the proceedings over the last few days we would submit that should the Commission be persuaded by the applicant's submissions that there is some ambiguity in relation to the scope clause and in relation to the work being conducted on the acid tanks at Blue Scope the respondents would agree to abide by any recommendation that Commission may be minded in relation to the submission of the applicant pursuant to section 111AA.

PN204

THE COMMISSIONER: And, Ms Walters, you are appearing on behalf of your own union, the AWU, and the AMWU.

PN205

MS WALTERS: That is correct, Commissioner.

PN206

THE COMMISSIONER: The commitment in terms of 111AA is on behalf of both unions?

PN207

MS WALTERS: That is correct, Commissioner.

PN208

THE COMMISSIONER: Okay. Thank you. There is just a couple of questions just to confirm what I saw this morning. As I understand it each section that is being cut, and I will explain the way in which it is being cut in a moment, weighs approximately 29 tonne. Is that right?

PN209

MR HOOPER: That is correct, Commissioner. Yes.

PN210

THE COMMISSIONER: The capacity of the crane that lifts those sections is 36 tonne.

PN211

MR HOOPER: That is correct as I recall.

PN212

THE COMMISSIONER: The method in which the current pickling tanks will be cut is what is called a hydraulically driven wire saw.

PN213

MR HOOPER: Sorry, Commissioner?

PN214

THE COMMISSIONER: You are going to get me to say hydraulically, I said it, driven wire saw.

PN215

MR HOOPER: That is right.

PN216

THE COMMISSIONER: And the - this is a specialist type of saw that I think an example was given that the Kursk submarine that sank, the Russian submarine that sank, actually this type of saw was used on it to cut it to actually bring it to the surface.

PN217

MR HOOPER: That is right, Commissioner.

PN218

THE COMMISSIONER: And this is a saw that is a cable that has, for the want of a term, beads that surround that cable and those beads are impregnated with industrial diamonds.

PN219

MR HOOPER: That is correct, Commissioner.

PN220

THE COMMISSIONER: Right. Now each new section - the entry and exit of the new section - they weight 7 to 7.5 tonnes each.

PN221

MR HOOPER: Yes, I believe that to be correct, Commissioner.

PN222

THE COMMISSIONER: And the - the reason why there is such a difference in weight between what is being taken out and what is being put in is what is being taken out is an old system that has steel housing layered with rubber, layered with bricks.

PN223

MR HOOPER: That is right, Commissioner.

PN224

THE COMMISSIONER: And the new system is a polypropylene system.

PN225

MR HOOPER: That is right, Commissioner.

PN226

THE COMMISSIONER: And the middle sections of the new system weigh approximately 10 tonnes each.

PN227

MR HOOPER: That is right, Commissioner.

PN228

THE COMMISSIONER: And because of the rigidity, if you like, of the old system it was able to lay quite independently upon several structured steel struts, if you like.

PN229

MR HOOPER: That is right.

PN230

THE COMMISSIONER: Or supports. Because the polypropylene system is not as rigid as the old system it is unable to do that so a steel base, a steel platform, has to be put down across the top of the existing steel structures. Welded into place and then the polypropylene tanks set on top of that. They are then bolted together but simply as a means of - not as a structural thing but simply to hold them together and then expert welders come in - will come in from America and they will weld the polypropylene tanks together. Is that correct?

PN231

MR HOOPER: That is right, Commissioner.

PN232

THE COMMISSIONER: And the additional work that will be required is work that is identified in AIG1 which is the scope of the agreement.

PN233

MR HOOPER: That is right.

PN234

THE COMMISSIONER: And that includes some modification to the pipe work - - -

PN235

MR HOOPER: Scope of the work.

PN236

THE COMMISSIONER: Yes. And so forth.

PN237

MR HOOPER: That is right, Commissioner.

PN238

THE COMMISSIONER: All right.

PN239

MR HOOPER: That is what we saw this morning.

PN240

THE COMMISSIONER: Thanks for that. All right. Well, the parties are correct - the Commission has been dealing with this matter for some time and it would be nonsensical to go over all the details that we have been able to deal with. So the Commission is in a position to deal with or issue a recommendation under section 111AA. It will provide detailed reasons later but it is important that is does provide its outcomes now so the parties can actually move on.

PN241

The work in dispute is described in the scoping clause as:

PN242

The scope of the work for the pickle tank replacement is: (a) remove existing steel / brick lined tanks and replace with poly tanks. (b) install replacement steam line pre-shut and hook up in shut so as to enable exit tanks to operate up to the shut and minimise the shut duration.

PN243

That is the shut down. Install overhead strip lifters:

PN244

Overhaul strip lifters -

PN245

Sorry.

PN246

(d) platform modifications as new tanks are slightly higher. (e) install new acid supply line. (f) modify exit fume duct and connect to new tanks.

PN247

And:

PN248

(g) install new replacement steering unit.

PN249

It is the Commission's understanding that the shut down might involve two 12 hour shifts continuously during the period of a shut down which is approximately 20 days. That is the window of opportunity as I understand it. With a peak manning of approximately 30 Simon Engineering employees per shift. I also understand that Simon commenced work on the project on 1 August 2004. The major part of the shut down work commenced on 1 October 2004 with preparatory work for the major work commencing on 22 September 2004.

PN250

Mr Hooper, the - in the application and in reference to the clause in the current agreement. He says:

PN251

This agreement shall regulate the rates of pay and define the conditions of employment of employees of Simon Engineering (Australia) Pty Ltd who work within 10 kilometres ...(reads)... workshop premises).

PN252

The Commission also understands that the application - or the application clause of the agreement is also qualified by clause 39 which states under the heading "Site Agreements":

PN253

Where an employee is employed at a site / client premises where there is a general provision that applies to contractors or clients employees that provides a better benefit than the provisions ...(reads)... and the like.

PN254

It also states:

PN255

The parties agree that the scope and application of work covered by the enterprise agreement does not cover any work covered by the National Metal and Engineering On Site Construction Award.

PN256

Now in line with the three points, Mr Hooper, that you have made as I understand it the first one is that the company submits that there is no ambiguity or uncertainty and that the Commission should find such and that therefore the agreement covers the work in question.

PN257

MR HOOPER: That is right, Commissioner.

PN258

THE COMMISSIONER: Right. Your second point is that if the Commission did not agree with that and found that the agreement was ambiguous or uncertain on the issue of coverage then it should vary the agreement in accordance with the company's application to make it absolutely clear that it does cover the work. Your third submission is that if the Commission rejects the first two points then in order for the matter to be resolved you are prepared to abide by a recommendation under section 111AA.

PN259

MR HOOPER: That is right.

PN260

THE COMMISSIONER: As I understand it the unions have two submissions. Firstly, the unions agree - or the unions argue, sorry, that the agreement is not ambiguous nor is it uncertain and the work, in their mind, that is covered in this project is in fact construction work. And, secondly, if that is not accepted by the Commission then the unions have also given a commitment in order for this matter to be resolved to have it resolved under section 111AA.

PN261

The Commission has had the benefit of inspecting the work this morning and has had the benefit of discussions with the parties over the last few days and also some submissions from the parties in the formal sense. The Commission is satisfied that the work is not construction work within the scope of the National Metal and Engineering On Site Construction Award. Although it is clear that certain aspects including some erection and installation may be construed as construction work and I put it no higher than may.

PN262

It does not say that it is but it no higher than may. Notwithstanding that the work is not construction work it is the Commission's view that it does not automatically follow that the agreement covers the work in question. The Commission is satisfied that the work in question is somewhat unique and was not foreshadowed, if you like, in the putting together of this award to cover this particular type of work. And I will provide the reasons why that is quite evident - but I will provide them in detail along with a detailed decision under 111AA.

PN263

In being satisfied that there is some uncertainty as to whether the agreement properly covers the work the Commission is of the view that it is important for the sake of the project and the parties that things be made certain for all those concerned. With that in mind and with the commitment by the parties to abide by 111AA recommendation I would recommend the following. One, that Simon Engineering Certified Agreement 2003 - 2006 shall apply to the work with only the amendments that I will now identify.

PN264

Two, the C10 rate shall be $28 per hour and with current relativities thereto maintained. Three, that the hours shall be 36 and all purpose payments shall be calculated on that basis, that is 36 hours per week. Four, that a site allowance of $3 per hour shall be paid in lieu of the shut down allowance in the agreement and the allowance shall be paid for all purposes. Five, that the maximum weekly contribution rate for severance shall be $65 a week. Six, there will be no Picnic Day. It simply does not fit within this type of operation.

PN265

Seven, fares and travelling payments shall remain the same. Eight, that what did arise out of the discussions were claims concerning a living away from home allowance not being properly applied. It is the Commission's recommendation that the living away from home allowance shall be dealt with in accordance of clause 22(d) of the agreement. In all other respects the Simon Engineering Certified Agreement 2003 - 2006 shall apply as in accordance with clause 1.

PN266

And, finally, in terms of operative date it is the Commission's belief that because preparatory work did begin on September 22, 2004 then it is appropriate that the recommendations outlined above shall apply from the first pay period to commence on or after 22 September 2004. Hopefully that now puts the matters to rest. There is the issue of the application under section 127 and having hopefully resolved the matter in terms of 170MD(6) - Mr Hooper, is it the company's intentions to withdraw that 127(2) application?

PN267

MR HOOPER: Yes, it is, your Honour.

PN268

THE COMMISSIONER: Thank you. And, Ms Walters, there are two bargaining periods. One is BP2004/5467 which is an application by the Australian Workers' Union and the other one is BP2004/5469 which is an application by the AMWU. Both with Simon Engineering being the subject of the bargaining period. Given that - and these two bargaining periods relate to this specific project. Given that the Commission has now issued the 111AA recommendations is it the unions' intentions to withdraw those bargaining periods?

PN269

MS WALTERS: Yes, it is, Commissioner.

PN270

THE COMMISSIONER: Okay. All right. Hopefully that now puts the matter to rest. The Commission does thank the parties for their co-operation and their assistance in resolving this matter. It is very much appreciated. Commission will stand adjourned.

ADJOURNED INDEFINITELY [3.48pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AIG4 PHOTOGRAPH OF EXISTING TANKS IN TACT PN168
EXHIBIT #AIG5 PHOTOGRAPH OF NEW STEERING UNIT PN175
EXHIBIT #AIG6 PHOTOGRAPH SHOWING SOME CORROSION PN178
EXHIBIT #AIG7 PHOTOGRAPH SHOWING CORROSION WITH EMPHASIS ON A PIPE PN181
EXHIBIT #AIG8 SITE MAP SHOWING WHERE THE PICKLING PLANT IS LOCATED PN182
EXHIBIT #AIG9 PHOTOGRAPH OF NEW PICKLING TANKS IN SITU IN ANOTHER SITE PN190