C2004/1969, Transcript of Proceedings [2004] AIRCTrans 828 (9 March 2004)

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TRANSCRIPT OF PROCEEDINGS


O/N F9510
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

MUNRO J

C2004/1969

APPLICATION FOR AN ORDER TO STOP OR
PREVENT INDUSTRIAL ACTION

Application under section 127(2) of the
Act by Knorr-Bremse Australia Pty Ltd
for an order to stop or prevent industrial
action

SYDNEY

2.20 PM, FRIDAY, 20 FEBRUARY 2004

PN1

HIS HONOUR: This is matter C1969 of 2004. It is an application under section 127 of the Act lodged on 19 February in relation to alleged industrial action covered by the Knorr-Bremse Australia Pty Ltd Certified Agreement 2003. Could I have appearances please.

PN2

MR D. KLEPAC: I seek leave to appear as solicitor on behalf of Knorr-Bremse.

PN3

HIS HONOUR: Thank you, Mr Klepac. Mr Morrison.

PN4

MR I. MORRISON: Yes, your Honour, I appear on behalf of the Australian Manufacturers Workers Union. With me today is MR M. HOBAN an organiser from the site and MR MATTERAZZO the AMWU delegate from the site.

PN5

HIS HONOUR: Yes.

PN6

MR E. MITCHELL: I appear on behalf of the Australian Workers Union.

PN7

HIS HONOUR: Is there any objection to Mr Klepac being granted leave to appear?

PN8

MR MORRISON: Your Honour, as you may be aware, the AMWU historically opposes appearance by counsel in matters, however, I am given to understand that the best interests of today would be served by Mr Klepac's presence, so, we do not oppose his appearance.

PN9

HIS HONOUR: Yes. Thank you. I will note your reservation and I grant you leave to appear, Mr Klepac. What is the matter about?

PN10

MR KLEPAC: The application has been sought because there has been, or there is, ongoing industrial action at the company's premises, and on 13 February a stop work meeting was held at 10 a.m. and the employees of Knorr-Bremse left the site and took industrial action for the whole day. On 19 February, which was yesterday, a stop work meeting was held at 9.30 a.m., as a result of that stop work meeting, further industrial action was taken and the employees of Knorr-Bremse left the site and that industrial action is ongoing as we speak such that there has been no work today. We have been provided with two resolutions taken by the employees of Knorr-Bremse if I may hand up copies of those.

PN11

HIS HONOUR: Yes, I will mark as KB1, a resolution of 9 February 2004. Its a demand to the effect that Hung Chin Luo receives nothing less than full redundancy entitlements within seven days, threatening an escalation of the dispute. That is exhibit KB1. And KB2 a statement that the mass meeting of union members on 19 February, to the effect that the meeting believes that Hung Chin Luo is fully entitled to redundancy entitlements and they are taking industrial action until he is paid such entitlements. That is KB2. Yes.

EXHIBIT #KB1 UNION MEMBERS' RESOLUTION DATED 9/2/2004

EXHIBIT #KB2 UNION MEMBERS' STATEMENT DATED 19/2/2004 RE FULL ENTITLEMENTS TO BE PAID

PN12

MR KLEPAC: That was the material that was provided to the company as indication of stop work which subsequently happened and is ongoing. I also have a copy of the certified agreement which was registered.

PN13

HIS HONOUR: Yes, thank you, I have a copy of that. What is the certificate number of that? This is the one I did myself, is it not enforced until 1 March?

PN14

MR KLEPAC: This is the one that was registered or certified on 19 January, your Honour, it is AG2004/1280.

PN15

HIS HONOUR: Yes, I think that is the matter number.

PN16

MR MORRISON: If I could assist your Honour, print number 942717.

PN17

HIS HONOUR: Thank you. Yes. There is no need to tender that, I have got a copy on the Commission's record. Mr Klepac.

PN18

MR KLEPAC: The certified agreement was certified before your Honour on 19 January 2004. It is clearly in force. It clearly has comprehensive provisions dealing with redundancy and it also has an extensive dispute notification procedure in clause 11 of that Agreement, which incorporates at step 6, the final step in terms of that dispute resolution procedure which provides for, there is no resolution in respect of the dispute, the matter to go to arbitration. This situation in which the unions and their members have taken industrial action is not even one month after certification of an enterprise agreement, is a very serious matter and very troubling to Knorr-Bremse.

PN19

HIS HONOUR: What is it that Knorr-Bremse does? What is the site?

PN20

MR KLEPAC: It is manufacturing in terms of - - -

PN21

MR McLELLAN: Assembly and manufacturing of brake components for trains and trucks.

PN22

MR KLEPAC: My apologies, your Honour, I did not introduce Mr McLellan in my appearances.

PN23

HIS HONOUR: Yes. And did it have another name before?

PN24

MR McLELLAN: Western House Brakes.

PN25

HIS HONOUR: Sorry?

PN26

MR McLELLAN: Western House Brakes.

PN27

HIS HONOUR: I see, yes. And it has been under a state award or agreement for some time, has it? My recollection was this was the first time it had come under a Federal Agreement?

PN28

MR McLELLAN: I do not believe so.

PN29

HIS HONOUR: I was mistaken on that, right, thank you. Yes, go ahead.

PN30

MR KLEPAC: There is a clear dispute resolution procedure contained in the enterprise agreement, we say that that dispute resolution procedure has not been complied with by the unions and their members.

PN31

HIS HONOUR: What clause is that?

PN32

MR KLEPAC: It is clause 11 of the agreement, it is headed Avoidance of Industrial Disputes. So, clearly step 6 of that enterprise agreement has not been complied with. Further, an enterprise agreement which was certified and which the unions, who are present today, and their members supported before this Commission on 19 January, we say is clearly being breached some one month after its certification by those same unions and their members and that is a serious issue in respect of the Workplace Relations Act and the industrial action which has been taken by the unions and their members, which is ongoing.

PN33

The other issue, we say, your Honour, is that the issue on which the industrial action has been taken, and I refer to KB2 in this regard, on my instructions it is based on a claim or a demand that Mr Luo, who has since left the company's employ, should be entitled to redundancy payments, so, clearly if there was any entitlement or right to redundancy payments on Mr Luo's part, it is open to any of the unions here who have commenced proceedings to enforce what is in the enterprise agreement. If they say there is any legal right or entitlement that has not been observed, or they could have complied with the dispute resolution procedure.

PN34

HIS HONOUR: Where do the redundancy entitlements come from? Is there a redundancy provision in the agreement? It looks like clause 2 no, it is something 8.

PN35

MR KLEPAC: Your Honour, there was a 1998 redundancy agreement negotiated between the respective unions and their members and the company, and that redundancy agreement is incorporated into the enterprise agreement.

PN36

HIS HONOUR: I see, so that is clause 8.5, paragraph (h), page 12 and 13 of the agreement I have. Is that common ground?

PN37

MR HOBAN: Yes.

PN38

HIS HONOUR: It seems to go on to - there is three weeks pay for each year of service where there is a redundancy.

PN39

MR KLEPAC: That is correct, your Honour, and it extends for a number of pages thereafter.

PN40

HIS HONOUR: Yes. So, that is what the claim is in relation to Mr Luo, is it? Is it Mr or Miss?

PN41

MR KLEPAC: Mr.

PN42

HIS HONOUR: Yes.

PN43

HIS HONOUR: Yes. As I understand it the claim is that Mr Luo should have received redundancy pay. So, we say what this amounts to is a situation where industrial action has been taken and which is ongoing, which is of serious effect upon Knorr-Bremse. On my instructions, your Honour, each day of industrial action which occurs at the workplace will result in a loss of approximately $150,000 in sales for the company. It is industrial action which has been taken in the face of the enterprise agreement which has been signed and supported by the unions and their members some one month ago in the Commission. It is industrial action which has been taken even though there is a clear dispute settlement procedure which has not been complied with.

PN44

HIS HONOUR: I think I can find all those points, Mr Klepac. When was the last industrial action during the life of an agreement, is it a regular occurrence? Would it have some industrial action leading to the getting of the agreement, do you know, Mr McLellan?

PN45

MR McLELLAN: No, I have only been with the company for five weeks, your Honour, so, I am unsure of the history.

PN46

HIS HONOUR: You do not know whether there is a pattern of industrial action or not?

PN47

MR McLELLAN: I am unsure. I am not sure of the history, I am sorry.

PN48

HIS HONOUR: I see.

PN49

MR KLEPAC: I think, your Honour, it would be fair to say there has been some disputation about the redundancy provisions, however. Mr Morrison reminds me on 23 June of last year there was protected industrial action notified.

PN50

HIS HONOUR: I think my question sought to exclude that from consideration. What happens if you get the order? Are you going to enforce it? What are your intentions?

PN51

MR KLEPAC: Well, yes. We are seeking the order to ensure that there is not a continuation of industrial action. If there is a legitimate issue the unions and their members have a number of avenues open to them, they can sue on the agreement, they can pursue the dispute resolution procedure, but certainly the company cannot accept a situation where strikes and industrial action are called at short notice, and which are obviously disruptive to its business.

PN52

HIS HONOUR: Well, would I be mistaken in assuming that you have had recourse to section 127 because you seek to have some discussions about the underlying issue rather than using section 170MN?

PN53

MR KLEPAC: Your Honour, my instructions are that the company is always prepared to discuss any of the issues with the unions and their members, but not against a backdrop of ongoing or actual industrial action.

PN54

HIS HONOUR: How many employees are involved?

PN55

MR KLEPAC: On my instructions, your Honour, it is approximately 30 employees.

PN56

HIS HONOUR: Is that the total work force?

PN57

MR McLELLAN: Our total work force on-site, including clerical people and management people is approximately 80-odd people. Yes.

PN58

HIS HONOUR: So, there are 30 on the production side, that is production and maintenance that are out is it, or?

PN59

MR McLELLAN: It is production and stores and clerical people.

PN60

HIS HONOUR: I see. All the Award covered employees?

PN61

MR McLELLAN: Yes, I understand.

PN62

MR KLEPAC: Your Honour it is 38 employees, we say.

PN63

HIS HONOUR: So, 38 out of about 80, are the remaining 42 are effectively staff are they?

PN64

MR McLELLAN: Yes, they are.

PN65

HIS HONOUR: Very well, thank you, Mr Klepac. Mr Morrison.

PN66

MR MORRISON: Yes, your Honour. A few points. Mr Luo is also known as Michael to assist. The problem here is that the company does not come to this application with clean hands. What occurred is that, as Mr McLellan identified is new to the job, this matter regarding Mr Luo started well into last year and there was a previous manager at the company called Steven Betts who was aware of this situation, the matter was raised with him by Mr Hoban, the organiser, and Mr Betts says, well it is getting close to Christmas, let us deal with it after Christmas, the issue by correspondence of the issue regarding Mr Luo's potential redundancy. Unfortunately Mr Betts subsequently left the company and Mr McLellan comes in, and I can only surmise that he is perhaps not fully briefed up on the situation.

PN67

The issue relates specifically not to whether or not Mr Luo was redundant, but the circumstances and the case for putting the argument about whether he was redundant and the reason that all the employees have taken the action that they have is because if the company, they feel that if the company is allowed to do this to Mr Luo they can do it to all of them, which they say the company has disregarded very key words in the redundancy section of the enterprise agreement.

PN68

Now, with regard to the industrial action, and before I take you to how they have disregarded, the industrial action ceases today, in fact, would have ceased, because the last shift, I think, has ceased work by now and the workers will resume as normal on Monday morning, so, it is not ongoing, it was merely, I suppose, to vent their frustration at what they see as a certain arrogance from the new management in regard to what they see as a fairly important issue. Now, the issue of the redundancy agreement in clause 8.5(h) that you mentioned is in (h) 1.3 where it says in the preamble, that is in the definitions:

PN69

Redundancy shall be deemed to exist where

PN70

And then (iii)

PN71

The requirements of the business for employees to carry out work has ceased or diminished or are expected to cease or diminish.

PN72

Because, what occurred is the company moved from an old premises to the Granville site. Mr Luo, who was a fully qualified welder came to the new site and was given menial, demeaning tasks to do, well and truly below his qualifications and his expertise. Mr Hoban tried unsuccessfully through Mr Betts to have this addressed. We are saying that he clearly met that part of the enterprise agreement, that his tasks being diminished through last year and unfortunately the company did not see that and Mr Luo, because of his qualifications, chose to separate from the company.

PN73

That does not alter the fact that the company in their treatment of Mr Luo chose to ignore what our member saw as a very key part of the enterprise agreement that they negotiated. So, that is the basis for the action that has been taken by the AMWU members, and I am sure Mr Mitchell will want to speak on behalf of his members as well and, unfortunately, the ASU are not here, but I am sure that they would also have issues to say.

PN74

HIS HONOUR: Why did you not use the dispute resolution clause?

PN75

MR MORRISON: Well, I think, your Honour, if you turn to those dispute resolution procedures, and I actually have some recollection of the certification of this agreement.

PN76

HIS HONOUR: That is unfortunate, what did I say?

PN77

MR MORRISON: You commented on their, I cannot remember your exact phrase, but it is one that I have heard you use before with regard to its, shall I say, lack of detail, and it does not really allow matters to be resolved. It has got, if no resolution, matter to go to arbitration, but, it does not empower the Commission, it does not really empower anybody. I mean, it can go to arbitration, but for what purpose?

PN78

HIS HONOUR: That was not the only element in the dispute resolution procedure was it, Mr Morrison?

PN79

MR MORRISON: No, and there has been an escalation. Mr Hoban has had meetings with the highest level of the company, Mr McLellan's predecessor. We actually thought there might be some movement, but there was none, and there we are. Now, I am instructed today that the union would be more than happy to sit in the Commission to try and address, yes, certainly Mr Luo's circumstances, but actually the application of that clause so we can have a common understanding with the company on what it does actually mean so that in the future our members can be assured one way or the other what it means. If there is some need for the enterprise agreement to be varied to accurately reflect both parties' interpretation of it then so be it.

PN80

We are quite happy to participate in that process, that would avoid any more spontaneous, I suppose, show from the members who are very concerned about how this occurs, and I think then we can move on, but we are saying that because the action ceases on Monday, it is highly - in fact it has ceased now, because the shift is over, it is highly unlikely that it will re-occur.

PN81

We say that the Commission should really exercise its discretionary powers that it does have and dismiss the application, and instead we would be asking the company to accept our offer of using the Commission to sit, using the dispute resolution procedures that exist in the agreement to sit, and we can talk through what is - and I am sure Mr McLellan must now realise, a fairly contentious issue in the workplace.

PN82

HIS HONOUR: How many days have they lost? Two, is it?

PN83

MR MORRISON: Two and a bit is my understanding.

PN84

HIS HONOUR: Yes. Did you wish to add anything, Mr Mitchell? Whose member is he? Yours or the AWUs?

PN85

MR MORRISON: He is the Metalworkers.

PN86

HIS HONOUR: I am sorry, yes, that was obvious he was a welder maker.

PN87

MR MITCHELL: Your Honour, I would just like to take you back in history just a little while, if I could. I am probably the longest serving official around the table that has been looking after Knorr-Bremse, I know some of the particulars when we particularly worked at Five Dock and there were some issues then with the redundancy agreement. I think at the first meeting I ever attended where the company informed me there was an enterprise agreement meeting in the afternoon and when I turned up there was 30 people being made redundant. I think Mr Klepac and company at the time, Chris McCarghill can vouch for that. So, we have had issues at this company for a number of years over the redundancy agreement.

PN88

I have endeavoured, even this week, to meet with the senior management to try and resolve the issue. This has been ongoing for some time. Whilst my colleague Mr Hoban and myself have tried to fix this issue, because we could see that it was getting out of hand. If you look at the disputes procedure, out of the six in the disputes procedure, I believe, we have met with five of them. We have met with the leaders, the team leaders, we have gone right through from one through to five, met with senior management, well now we are obviously the step 6 we have ended up in the Commission seeking some sort of assistance from the Commission. Commissioner I think we can work together, provided we can do it in a manner where we can maybe ask for your assistance.

PN89

If we could do that I think we could resolve the issue and I am sure that the people who are prepared to go back to work at first shift on Monday, but we certainly would need your assistance to do that because of the track record of the company in the past. If the Commission please.

PN90

HIS HONOUR: Yes. What do you say Mr Klepac? Do you wish to add anything?

PN91

MR KLEPAC: Yes, your Honour. Firstly, we reject any suggestion that the company has done anything other than comply with its requirements under certified agreements or any awards that apply to it. The suggestion has been raised that Mr Luo in some way has been treated unfairly. On my instructions Mr Luo actually ceased his employment with Knorr-Bremse on 6 February 2004, and I think the obvious conclusions are in the circumstances where Mr Luo of his own choice, and I think Mr Morrison's own words, chose to separate from the company, clearly there is not any real issue concerning Mr Luo other than it appears that the unions and/or their members are trying to use Mr Luo as some sort of precedent.

PN92

It appears from what the unions are saying about the enterprise agreement that this appears to be a case of buyers regret in terms of this enterprise agreement. This agreement was certified not more than one month ago. On Mr Morrison's own submission to the Commission, this issue was raised with Mr Betts in November or December of last year. If there is some upset or disagreement with the certified agreement to which the unions agreed one month ago, we would say it is highly inappropriate and very damaging for the company that the unions and their members now seek to overturn what they have agreed not less than one month ago with the company before the Commission.

PN93

The suggestion that the redundancy issue is some sort of ongoing sore or problem in the company, your Honour. The agreement, I would say on any interpretation, is a generous redundancy agreement. It provides for service payment at sub-clause 13, three weeks pay for each year of service. That redundancy payment is uncapped and on my instructions, your Honour, there are a number of long-serving employees within the company who in the circumstances, were they to be made redundant would stand to receive a substantial redundancy payment under the enterprise agreement.

PN94

So, there is an interest in trying to spread or broaden what constitutes redundancy for the purposes of the enterprise agreement. It has also been our understanding up until this afternoon that the taking of unauthorised industrial action which has been over three days has not been fully supported by the unions and it is a matter that has arisen or been taken into their own hands by the membership of the respective unions here today, and certainly the understanding the company has had when talking to the union organisers that any issue about Mr Luo was not to be a problem and that position was communicated as late as Wednesday this week to the company.

PN95

Yet we find ourselves in circumstances where the unions and their members have now taken industrial action contrary to their own assurances to the company. We are certainly prepared to talk with the unions but the company needs to have certainty that the enterprise agreement from January of this year will be abided by the unions.

PN96

HIS HONOUR: Is there any reason why you did not invoke the dispute settling procedure? Because you are not here under it either, neither of you has thus far referred this matter under whatever clause 6 means, neither of you have had recourse to it.

PN97

MR KLEPAC: The reason why - excuse me your Honour. I am sorry, your Honour. The reason that the dispute notification procedure has not been invoked by way of way of the dispute notification, it was our understanding based on the company's discussions with the union organisers that the matter had been resolved on Wednesday and it was only the industrial action taken by the employees that prompted us to make a 127 application.

PN98

HIS HONOUR: Yes.

PN99

MR KLEPAC: We certainly see no reason why the further steps in the dispute resolution procedure, if there is an ongoing dispute, can be invoked, or cannot be invoked, but it should not be against the background of the individual employees and their unions taking industrial action in breach of something they agreed a month ago.

PN100

HIS HONOUR: Well, I will give a broad indication of my approach and then perhaps you can have some discussion between yourselves and think about it. It is pretty plain industrial action should not be occurring. I think it also fairly plain that the jurisdictional pre-requisites for an order under section 127 are made out. It is probably the case that there is a breach of section 170MN, that is established by the fact that it is a motion from the membership, that KB2, 19 February 2004 resolution says further, that the redundancy clause in the EBA be re-negotiated to a mutually satisfactory outcome.

PN101

There is a redundancy clause in the agreement and section 170MN, which is backed by provisions that might be news to Mr Morrison or Mr Mitchell, is a penalisable offence, and I think it is 170MF says that you could go to a Court of competent jurisdiction and go for a penalty for breach of a penalisable provision of the Act, section 170MN. So, the employees probably need to be told that, if they have not been told already, but whether the union leads them into it or whether they lead themselves, they could face fairly substantial fines in the order of a couple of thousand dollars, I think, for what they have done already. In this context section 127 is a belt and braces provision that is open to me to refuse a section 127 order on the basis that I would think it a waste of the Commission's time to purport to make unlawful that which is already prohibited by the Act, namely taking action during the life of the industrial agreement.

PN102

I assume, and that was the reason I put the question to Mr Klepac, which he did not quite answer, that the company comes here because it wants a more moderate approach than would apply if it had to go to the Court to restrain action of this kind or, perhaps, in any event, it wants the Commission to intervene. That occurs against the backdrop that the industrial action, for the time being at least, has ceased by the time there is a resumption of work on Monday.

PN103

To some extent I think that you have got problems, not only in relation to the redundancy agreement if there is a genuine issue about what it means or how it should be applied. You have one also in relation to your dispute resolution procedure. Companies, and for that matter, unions, that bring in shabby, poorly thought through dispute resolution procedures only have themselves to blame when it goes into meltdown. You could find yourself in Court over this agreement. The Court may find, may respond, whoever takes it there and says, well I do not know why you come up with foolish agreements, why do you not go to the Commission for a variation? So, whoever gets to the Court finds that they have thrown costs away. Or you may find yourselves like Amcor I think it is, paying a lot for something that they thought they had paid already for.

PN104

Now, you can get out of that relatively cost free, apart from the verdict, by having an agreement dispute resolution procedure that makes sense. In other words, somebody might choose to read the Act the way people do in commercial arbitration clauses. Here, you have got an agreement binding on a company as operations costed $150,000 a day you say, and yet you have not got a sensible clause of a kind that you might have if you had an arbitration contract running to the same depth. At least the arbitrator would know what you mean, here you do not know what arbitration means, the employers do not know what it means, and in terms of applying your procedures, there would be a dead flap to show who of you has done what and with which and to whom, but that is your problem.

PN105

I do suggest that even in advance of the next agreement you try to work out what this one should mean at the same time as you try to work out the redundancy provision. The reason I asked about what is the history of going out the door while an agreement is in force was that if it was a serial recourse, where the delegate was inclined to take people out at the drop of a hat, or by mistake, or simply because the members are used to being a bit stroppy, and I would be fairly strongly inclined on proof of that to give an order under 127 for the life of the agreement, in other words you would have the belt and the braces with 170MN and an order restraining.

PN106

I hesitate to do that in these circumstances, because the industrial action has stopped, I do not know the history. I am prepared to make an order but to suspend it. Mr Morrison will vaguely remember the precedent at Rheem. This sounds as though it is an enterprise judging by the amount of effort you put in to getting your guarantee up where that is the last part of the agreement, the deed of guarantee, where you might have a few problems coming ahead. It seems to me highly desirable that you do work through in a productive way what you mean by your agreement if you want recourse to the Commission.

PN107

What powers do you want it to exercise? Now, you can do that on an ad-hoc basis, but if you have got a couple of years of, and this agreement runs, I think, until 2006 does it not? In a turbulent period with high exchange rates and free trade agreements floating, then it would seem to me it would behove both sides, particularly if you have got a stroppy shop floor, to have and clearly work through whatever the agreement says this is the way we are going to apply it, understanding in relation to your dispute resolution procedure, and similarly, I think you probably need one in relation to redundancy, so as the both sides know in advance that this is likely to put you into the redundancy stream and this is not.

PN108

The other thing I would say about redundancy is that you are probably seeing, if not early signs, perhaps advance signs of what might be called a redundancy psychosis. There will be people on the plant floor who at three weeks for each year of service uncapped, would probably rather see the company go down than the company go up. Their interests will be inimical to the younger people who might have a job there or who can hope to survive. That is a realistic problem for both groups and those with the psychosis can be part of a self-fulfilling prophecy almost that they will make life so difficult that the ability to continue is very much in jeopardy.

PN109

Now, that is all the more reason why you may need recourse to enforce the agreement for better or worse, this is the agreement that you have struck for three years. For better or worse it should be made to work so as the genuine disputes can be sorted through, hopefully by a less costly process than going to a Court to resolve them. And, for better or worse that by saying that action will be unlawful and if there is a breach again, then the order will be made fairly automatically to apply, and that way it will go the Court without fuss.

PN110

It has been my practice in a number of matters to ask the employer do they intend to enforce orders. I do not say that Mr Klepac at this stage knows the answer, but one reason I ask it is that it does not seem to be much point of the Commission adding the braces to the belt of 170MN if it serves no particularly useful purpose. If the Commission tells people, look, it will be unlawful for you to take industrial action and penalisable if you breach the order saying it is unlawful, and then nobody really takes much notice and two or three weeks later the delegates think, oh well, it is time we had a stop work action. The manager looks sneering about that redundancy issue and we have not got far, or the manager is sneering about it and they have a bad feeling in their water just before Easter.

PN111

I indicate that if the order is eventually to be made then it would be the Commission's expectation that it would probably be enforced. Likewise, I would in relation to making an order of this kind, try to make it in a way that means that if it is breached, whoever is in breach of it can, to use the prosecutorial term, be potted. I do try to form orders so as that they work and I try not to make orders unless I really think I have to so as they do not become too much like confetti, meaning nothing. So, in this circumstance, what I am indicating is that I will formulate an order, I will suspend its operation, I will allow liberty to apply to the Commission for the order to be brought into operation on short notice, any such application should be made in writing and set out the grounds and be supplied upon the parties to the suspended order.

PN112

I direct as a condition of the order that the parties enter into consultation with a view to clarifying the steps and full process that they consider should be adopted in implementation of clause 11, that is the dispute avoidance procedure, over the term of the agreement, and similarly, enter into discussion with a view to clarifying any outstanding issues about the application to particular circumstances of paragraph (h) of clause 8.5, conditions of employment.

PN113

Now, in relation to those last two conditions or directions, they are more in the nature of recommendations. I would put them into the order because it is a convenient place to put them, but in relation to the wording of those I essentially reserve to the party as an opportunity, if they wish, to go into private conference now to speak to me about them. I see them more as recommendations than as directions, because they are trying to channel you into looking at some time in the near future about where you are headed with the disputes avoidance procedure and likewise in relation to the redundancy provision, but with an open ended framework about it, whether it is in principle or in relation to the specifics. I am certainly prepared to be persuaded to frame something that might be mutually satisfactory in private conference about how I word both those aspects of it.

PN114

In relation to the order though, I would have in mind that I basically ruled upon that and it will be something that I will get done up early next week. It would be like the Rheem suspended order that operated, I would think, for three months, but in suspension with the capacity on the part of the employer if there is a resumption of industrial action within that time, actual or threatened, to supply evidence by statutory declaration and make application for the order to be brought into operation.

PN115

I would make clear on the record that the purpose of that approach is very much to try to get the troops on side to say, look we are exposed as unions, you are exposed as employees, we do have obligations to abide by these agreements and we may have a pretty ticklish problem with this enterprise over the life of the agreement and we need to be able to work it through in a rational way. There are some gains for us if we have a dispute resolution procedure that works properly, but the quid pro quo is we have got to work it out and we need to abide by it. I have to say, I think Rheem, and one always touches wood about Rheem, but it seems to have worked out quite a few of their problems in circumstances that were very difficult to start with and probably no more difficult than, in some ways, the manufacturing brakes and the current unforeseeable market in Australia.

PN116

Very well, is it acceptable that we adjourn into private conference, both sides, now?

PN117

MR MORRISON: It is acceptable for us, your Honour.

PN118

MR KLEPAC: Your Honour, we have no objection.

PN119

HIS HONOUR: Well, I will adjourn the hearing into private conference.

OFF THE RECORD [3.09pm]

NO FURTHER PROCEEDINGS RECORDED

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

PRIVATE EXHIBIT #KB1 UNION MEMBERS' RESOLUTION DATED 9/2/2004
PRIVATE EXHIBIT #KB2 UNION MEMBERS' STATEMENT DATED 19/2/2004 RE FULL ENTITLEMENTS TO BE PAID