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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:(03) 9672-5608 Fax:(03) 9670-8883
TRANSCRIPT OF PROCEEDINGS
O/N F5738
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
SENIOR DEPUTY PRESIDENT ACTON
C2003/6067
C2003/6062
APPLICATION FOR AN ORDER TO STOP
OR PREVENT INDUSTRIAL ACTION
Application under section 127(2) of the Act
by The Australian Workers' Union for an
order to stop or prevent industrial action
THE AUSTRALIAN WORKERS UNION
and
BASF AUSTRALIA LTD
Application under section 170LW of the Act
for settlement of dispute re an alleged
breach of clauses 19 and 20 of the BASF
Australia Ltd (BAL) Chemical Workers
Certified Agreement 2001
MELBOURNE
10.00 AM, TUESDAY, 16 DECEMBER 2003
Continued from 25.11.03
PN1448
THE SENIOR DEPUTY PRESIDENT: Mr Borowick?
PN1449
MR BOROWICK: Senior Deputy President, I wish to apologise for my late arrival at the Commission this morning.
PN1450
THE SENIOR DEPUTY PRESIDENT: Yes, Mr Pels.
PN1451
MR PELS: Your Honour, I also have an apology this morning, that Mr Borg, unfortunately at short notice, has advised that he is unable to attend, so obviously we can't call him as a witness. But I do have, or would like to submit Dr Morrison's statement as per your direction. Although I did e-mail it to you there are some changes, so the one that was e-mailed to you we would seek to withdraw that and put an amended copy in. Mr Borowick currently has a copy.
PN1452
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1453
MR PELS: And if I could hand up the revised statement by Dr Morrison. Subject to your approval of that, I would like to call Mr Morrison as a witness to attest to his statement and also to respond to the witness statements provided by Mr Borowick in regard to Mr Spezza and Mr Whelan. We indicated to Mr Borowick that we didn't seek to cross-examine his statements but we would like to put those outcomes to Mr Morrison.
PN1454
THE SENIOR DEPUTY PRESIDENT: Now, well, the upshot of all of this is, combined with the statements of Mr Whelan and Mr Spezza, would appear to be that only after the last proceedings are they now working in accordance with the award. Is that right?
PN1455
MR PELS: It clarifies - yes, it does clarify what the EBA provides and the practice of Dr Morrison was going to explain what the practice has been up until you gave the direction or the indication of what actually applies and what the company has now reiterated. The flexible arrangements of the workplace, in effect, in our submission, would be the EBA really hasn't been applied in the practice at all by either side, in fact the arrangements - the rates are so flexible that they actually take in excess of what is required in the EBA.
PN1456
THE SENIOR DEPUTY PRESIDENT: Well, where is that in Dr Morrison's statement because the first part of it just outlines what his understanding of the EBA is, isn't it?
PN1457
MR PELS: That is right.
PN1458
THE SENIOR DEPUTY PRESIDENT: That is very interesting. And the second part says, so if we applied the EBA this is what would happen.
PN1459
MR PELS: That is right. Well, that - - -
PN1460
THE SENIOR DEPUTY PRESIDENT: It doesn't actually tell me what has happened.
PN1461
MR PELS: - - - that is where the benefit of Dr Morrison clarifying what is the EBA, what the actual practice has been, and what had been agreed between the parties.
PN1462
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1463
MR PELS: Because that, as your Honour did agree that last time, there was a flurry of activity on both sides because the flexible arrangements I suppose to say didn't strictly comply with the EBA, but that was not - we would submit, that is not to the disadvantage of employees, there is positives on both sides of that. And what has happened since your direction to provide a statement was the company has confirmed or reiterated to employees what the EBA is. But all along both parties have been aware of what the EBA requires, that the very flexible arrangement of taking breaks has been in actual fact, we would submit, in excess of what is in the EBA.
PN1464
And the evidence provided by Dr Morrison would be that these hours in the EBA are only nominal hours that they attend and that the breaks taken in those hours in many cases could exceed what is required. An example of that would have been that when meal breaks are taken the EBA says that employees can't leave the site. The practice has been for many years that they do leave the site, and that is a mutual, I suppose, trust between both parties with flexibility that the company has no objection to employees leaving the site for example.
PN1465
THE SENIOR DEPUTY PRESIDENT: Mr Borowick, do you have any objection to Dr Morrison being called in respect of what Mr Pels has raised?
PN1466
MR BOROWICK: Well, Senior Deputy President, we had no advance notice of the request made to you to call Dr Morrison and we have only just received this morning the up to date document. We did receive on Monday the now outdated document. In any case we have no objection to Mr Morrison being called as long as his witness evidence is restricted to the matter of the breaks.
PN1467
THE SENIOR DEPUTY PRESIDENT: Mr Pels.
PN1468
PN1469
MR PELS: Dr Morrison, for the record could you please state your full name and address please?---Bradley Ronald Morrison, 50 Smith Avenue, Williamstown.
PN1470
Now, Dr Morrison, for the proceedings today you have submitted a statement, two page statement, with an attached proposed production operators roster, is that correct?---That is indeed correct.
PN1471
The statement before you, have you read that and are there any changes you wish to make?---The revised statement before me I don't wish to make any change.
PN1472
Yes, any changes. So you declare that a true and correct statement?---I do indeed.
PN1473
THE SENIOR DEPUTY PRESIDENT: Do you wish to tender that, Mr Pels?
PN1474
PN1475
MR PELS: Dr Morrison, in clause 7(h) of the current enterprise agreement, it is headed Breaks does your statement reflect what is currently in the EBA?---It does.
**** BRADLEY RONALD MORRISON XN MR PELS
PN1476
Yes. Whilst your statement reflects what is in the EBA, is this the actual practice which currently applies, or did apply at BASF between 27 October and 25 November?---The practice on site with regard to breaks has always been a very flexible arrangement. The breaks are primarily controlled by the supervisors and focused around getting tasks done. As we have said in here breaks may be interrupted to ensure that production does occur. My understanding that it is - that in general the supervisors will attempt to stick to the clauses within the EBA, however, a great deal of flexibility is shown because we are primarily focused on getting the job done rather than on watching the time that people are on site.
PN1477
Point 8 of your statement, the Commission indicated when you were last here that day workers had a 30 minute unpaid lunch break up until the time when they were advised in writing on 27 October that their shift - their roster would change. What happened after 27 October regarding to meal breaks and rest breaks?---Well, the meal breaks were then to be paid breaks, as defined within the EBA, and my understanding was that that is what the supervisors made clear to people, however it obviously transpired that there was some confusion regarding that and that was again clarified after the last.
PN1478
On 27 October employees were given a letter, which I think the AWU tendered to the Commission, and that letter indicated that breaks would be taken in accordance with the EBA. Is that your understanding?---That is my understanding, yes.
PN1479
Now did employees work in accordance with the EBA? What was the actual practice as a result of that?---My understanding is that the employees did work in accordance with the EBA. On the site we don't actually have a time clock and we aren't recording the hours which people work. The only system we have is a security system which records people coming in and out of the site. I reviewed that system for a number of people, and in particular those people who made witness statements, Mr Spezza, Mr Whelan, the other person who is currently on day shift, Mr Thomsitt, and I found that on average in the period between 27 October and when they said that the supervisor clarified their breaks, that people were on site for less than the eight hours 17, if they had
**** BRADLEY RONALD MORRISON XN MR PELS
have been following, as I said, the 30 minute unpaid break. So on average, Mr Whelan and Mr Spezza were on site for around about eight hours during that period of time and there was no noticeable change in their behaviour after the event was clarified. The other employee, Mr Thomsitt, is also on day work, he was on site for around about eight and a half hours and again there was no noticeable change in that period. Mr Thomsitt tends to start - or come on site about half an hour early. My understanding is that he has his breakfast before he starts work.
PN1480
So if employees continued to take a 30 minute break after they were advised of a shift change, even though the EBA said 20, were the employees penalised at all or did that alter their pay at all?---Not at all, they continued to be paid on a monthly basis 1/12th of their annualised salary. If they were taking a 30 minute break rather than a 20 minute break then that was clearly at the cost of the company or it was clearly that the production requirements weren't there in order for them to cut short their break. So I do not believe that they would have been penalised at all. As you also know, within our annualised salary concept we have 300 hours of overtime built in so people may stay longer on site if they are required to, for example, finish loading a road tanker, or finish some drumming, or whatever production requirements may be there.
PN1481
Between the nominated hours of shift hours, did employees take breaks strictly in accordance with clause 7(h) of the EBA?---Sorry, clause 7(h)? It is my understanding that people don't work strictly in accordance with the EBA. As I have said before, we are primarily focused on ensuring that the work is done and that our customer requirements are met. And for example it says that:
PN1482
Crib breaks are counted as time worked and to be taken when production is not adverse and it does not entitle the employee to leave the site.
PN1483
My review of the record clearly shows that people have left the site, this is a practice which is under the control of the supervisor and I have trusted that there were good reasons for them to leave the site at that time and they - - -
PN1484
Sorry, an employee who left the site, that would be by mutual agreement?---Yes.
**** BRADLEY RONALD MORRISON XN MR PELS
PN1485
Would employees take additional breaks than that contained in clause 7(h)?---Again exactly when and how many breaks they took is under the control of the supervisors. To my understanding that sometimes occurs; I can't give you any specific examples.
PN1486
Well, for example smoko breaks; do employees take additional smoko breaks?---They do take additional smoko breaks, so again that is actually shown by our security system because smoking is not allowed on site as we are a chemical plant, and people do have to leave the site in order to smoke. And so in some instances where the people are smokers then there are up as many as one smoko break per hour.
PN1487
So if an employee had a smoko break, you are saying they would have to clock off and leave the site?---Well, they don't actually clock off but they do have to swipe their - they have to, for our security reasons, they do have to swipe their card both out and in. For emergency purposes we always have to know exactly how many people are on site at any one time, so that is a requirement.
PN1488
Is that allowed by mutual agreement?---That is allowed by mutual agreement.
PN1489
Were employees penalised for taking those additional breaks?---They were not penalised.
PN1490
Now do you have a copy of the two witness statements provided by the AWU in regard to Mr Spezza and Mr Whelan?---I do indeed.
PN1491
Right. Now in regard to Mr Spezza's statement - - -
PN1492
THE SENIOR DEPUTY PRESIDENT: Hang on a second, Mr Pels, are these gentlemen being called?
**** BRADLEY RONALD MORRISON XN MR PELS
PN1493
MR PELS: You haven't - Mr Borowick sent them to all the parties but they haven't been - you haven't actually allocated them a - - -
PN1494
THE SENIOR DEPUTY PRESIDENT: I understood that you didn't require them to be called.
PN1495
MR PELS: As cross-examined, that is right.
PN1496
THE SENIOR DEPUTY PRESIDENT: Well, if you don't require them to be cross-examined, their statements would go in as fact - - -
PN1497
MR PELS: Yes.
PN1498
THE SENIOR DEPUTY PRESIDENT: - - - therefore there is no need to question Dr Morrison about them. Are you disputing aspects of them?
PN1499
MR PELS: Well, we think what has happened - what we are saying is what is indicated there, we believe, would be factual but there are doubts that Dr Morrison can clarify or indicate what he believes can assist the Commission, that is, for example, a number of points in there, whilst they are factually correct, but there are some missing - there are some gaps in there, there is some missing facts in regard to that, that is all. So in effect we are not disputing what has been provided by Mr Borowick but Dr Morrison can actually expand - to clarify some potentially ambiguity in there.
PN1500
THE SENIOR DEPUTY PRESIDENT: What do you say about this, Mr Borowick?
**** BRADLEY RONALD MORRISON XN MR PELS
PN1501
MR BOROWICK: Well, Senior Deputy President, it is highly irregular for - I believe the witness statements were being not challenged in any matter, that is why Mr Pels - I contacted him last Thursday and then he returned my call to say that these witnesses wouldn't be needed for cross-examination, and for that reason they are not here today. So that puts our case at a disadvantage if Mr Morrison is going to go to their evidence and seek to overturn their evidence. If the Commission pleases.
PN1502
THE SENIOR DEPUTY PRESIDENT: Well, Mr Pels, you either accept their evidence or you don't, and from what I understand you accept their evidence. If you think it is ambiguous you should have been cross-examining them on it.
PN1503
MR PELS: Yes.
PN1504
THE SENIOR DEPUTY PRESIDENT: The problem for me is that you haven't objected to their statements. You get your witness to give some different evidence, who am I to believe? The ones presumably that you didn't require cross-examination of? What purpose is there in you then asking the question of Dr Morrison? You see my dilemma?
PN1505
MR PELS: Yes, I understand that, yes. But it is - well, it is whether the Commission will - whether you rule that we can't cross - well, we can't respond to those statements, that is the question.
PN1506
THE SENIOR DEPUTY PRESIDENT: Well, you seem to miss the point. You have said that you don't require cross-examination of them, therefore I am to accept everything that is in them as factual. To then go about presenting a witness which would contradict what is in there goes against your submission by virtue of you not wishing to cross-examine these people, that what is in there is factual.
PN1507
MR PELS: Yes, he is not contradicting it, he is actually, I suppose, in a sense adding to what the practice is.
**** BRADLEY RONALD MORRISON XN MR PELS
PN1508
THE SENIOR DEPUTY PRESIDENT: Well, presumably then you can ask the question without having to refer to the statements.
PN1509
MR PELS: Yes. Yes, I take your point. Dr Morrison, did any employees, when they transferred from day work to shift, were they always - were those - any employees always on day?---I would take, for example, in this instance Mr Spezza. Mr Spezza was employed as a day worker, however his shift pattern did change in the period between the commencement of his employment and his most recent change to that of being a shift production operator. And he went from, I think, on around about the 30/11/2000 he changed his shift pattern from to a three day a week, 12 hour shift roster, and then on 1/1/2002 he returned to a what would be defined as a normal day worker roster under the EBA. So he has previous, Mr Spezza in particular, has previously changed his shift roster.
PN1510
Yes. So has Mr Spezza gone from shift work, to day work, back to shift work in a space of a few years?---He has, yes.
PN1511
Yes. And in accordance with clause 8(e), Change of Roster, did the company, in accordance with the EBA, give the appropriate notice to change that shift?---I believe that is correct, yes.
PN1512
In the letters to employees on 27 October, was there a reference to breaks in that letter?---The reference was that people would work according to the EBA, and within the EBA clearly the breaks are outlined, and would therefore we would expect that they would be adhered to given the normal practice that this is supervised by our supervisors and the breaks are taken primarily as production allows.
PN1513
Now when you gave that letter to the employees and they moved to the new shift roster, was there any challenge or complaint that they were not working in accordance with the EBA as far as breaks go?---That was never raised as an issue. Again mainly there was a focus on the site in making sure the job was done rather than on how many hours they worked.
**** BRADLEY RONALD MORRISON XN MR PELS
PN1514
Up until the last time we were before the Commission, I think it was on 25 November, was the issue of taking breaks, rest breaks or unpaid breaks, an issue with employees in the company?---It had never been an issue that had been raised with me.
PN1515
And after 25 November, what communication or correspondence went to employees regarding the taking of rest breaks or meal breaks?---I believe that the position within the EBA was reiterated to some employees via the supervisors.
PN1516
Is the company now applying strictly the EBA provisions for breaks for shift workers?---Currently we are continuing with our flexible arrangements, however it remains to be seen how strictly people wish the EBA to be applied.
PN1517
I have no further questions.
PN1518
PN1519
MR BOROWICK: Mr Morrison, you gave some evidence about your letter of 27 October 2003, is that correct?---About my?
PN1520
Letter dated 27 October 2003. Is that the letter to which you referred or is it a different one?---I am not entirely sure which letter it is you are referring to.
PN1521
The one Mr Pels has just handed me; it is addressed to Mr Geoff Port, Functional Polymers, Altona Manufacturing Site, dated 27 October 2003?---Yes, that is correct.
**** BRADLEY RONALD MORRISON XXN MR BOROWICK
PN1522
In your examination in chief by Mr Pels you referred to a letter; is that the letter to which you referred?---Yes.
PN1523
And Mr Pels asked you whether that letter made any reference to breaks?---Yes, he did.
PN1524
And what was your response?---My response was that it referred to the EBA and that the EBA conditions would be applied, so all other terms and conditions of your employment are as stated under our EBA, which is the last sentence in the third paragraph, which makes clear that the conditions within the EBA would be applied.
PN1525
Yes. In your witness statement, marked as exhibit P3, at paragraph 10, you state:
PN1526
The five production operators are assigned to a shift team and spend 60 weeks on rotating shift and 15 weeks on the day shift component of the roster.
PN1527
Is that a reference to the former day workers?---No, that isn't a reference to the former day workers. Well, in this particular instance it would be a reference to one of the former day workers.
PN1528
In the final paragraph of Exhibit P3 you state:
PN1529
To the best of my knowledge the above reflects an understanding between BASF Australia Ltd and the AWU employees and the AWU representatives on site.
**** BRADLEY RONALD MORRISON XXN MR BOROWICK
PN1530
On what basis do you say it reflects an understanding?---The understanding is on the basis that both BASF Australia and the AWU signed off on the EBA and as the Senior Deputy President Acton has already pointed out, my statement is essentially a restatement of the conditions of the EBA.
[10.28am]
PN1531
So that you believe this document is simply a restatement of the EBA?---In that it is seeking to clarify the conditions that would be appropriate for the day shift operators.
PN1532
Well, the paragraph goes on to say:
PN1533
However, the joint agreement was not subsequently endorsed.
PN1534
What is a joint agreement, Mr Morrison?---My understanding was that we were asked to supply a statement to the Commission regarding the basis on which breaks were taken on site and we prepared a number of statements which were to reflect what was in the EBA and we were hoping that they would co-signed by both the AWU representatives and the company and that was not agreed to.
PN1535
The third page of exhibit P3 is headed Proposed Rotation of Production Operators. When is it proposed that this rotation come into effect?---We were hoping to begin this rotation from the beginning of next year. As this says, this is a proposed roster that has been put up. We have always been open to negotiation on exactly how the rotation through shift and day shift works and that is still our position.
PN1536
I have no further questions, Senior Deputy President.
PN1537
THE SENIOR DEPUTY PRESIDENT: Anything else, Mr Pels?
**** BRADLEY RONALD MORRISON XXN MR BOROWICK
PN1538
PN1539
MR PELS: Dr Morrison, employees' entitlements or pay prior to 25 November where you clarified the taking of breaks and after, has that altered at all?---Could you repeat the question, please?
PN1540
Employees' salary or pay - - -?---Yes.
PN1541
- - - before 25 November and after that date when you clarified the taking of breaks, has that salary altered at all?---No, it hasn't.
PN1542
Are employees worse off as a result of the clarification or the direction to work in accordance with the EBA after 25 November?---They are not worse off.
PN1543
Thank you. No further questions, your Honour.
PN1544
THE SENIOR DEPUTY PRESIDENT: You are excused, Dr Morrison.
PN1545
THE SENIOR DEPUTY PRESIDENT: Mr Borowick, would you like me to mark the statement of Mr Whelan and Mr Spezza?
PN1546
**** BRADLEY RONALD MORRISON RXN MR PELS
PN1547
THE SENIOR DEPUTY PRESIDENT: Now, Mr Pels, you are no longer calling Mr Borg?
PN1548
MR PELS: No, that is correct, your Honour.
PN1549
THE SENIOR DEPUTY PRESIDENT: Do you object to his statement, Mr Borowick?
PN1550
MR BOROWICK: Mr Borg's statement?
PN1551
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1552
MR BOROWICK: Yes, we do.
PN1553
PN1554
THE SENIOR DEPUTY PRESIDENT: Does that complete the witness evidence?
PN1555
MR PELS: I believe so, your Honour, yes.
PN1556
THE SENIOR DEPUTY PRESIDENT: You are ready for submissions?
PN1557
MR BOROWICK: A five minute break would be handy, Senior Deputy President.
PN1558
THE SENIOR DEPUTY PRESIDENT: Yes, I will adjourn until quarter to.
SHORT ADJOURNMENT [10.33am]
RESUMED [10.53am]
PN1559
THE SENIOR DEPUTY PRESIDENT: Mr Borowick.
PN1560
MR BOROWICK: Thank you, Senior Deputy President. Senior Deputy President, the Australian Workers Union seeks the making of an order pursuant to section 127 of the Workplace Relations Act. Respectfully, the Australian Workers Union refers the Commission to exhibit B2, a draft order tendered on 28 October 2003. In the alternative, the Australian Workers Union respectfully requests the Commission make an order by virtue of the jurisdiction vested in it by both section 170LW of the Workplace Relations Act and clause 22 of the BASF Australia (BAL) Chemical Workers Certified Agreement 2001 to which I will refer in these submissions to the 2001 agreement.
PN1561
With respect, Senior Deputy President, any such order should have the effect of reinstating the day work team comprising five operators. Section 4 of the Act defines an industrial dispute as follows:
PN1562
An industrial dispute, except in Part XA means:
PN1563
(a) an industrial dispute, including a threatened, impending or probable industrial dispute
PN1564
(i) extending beyond the limits of any one state and
PN1565
(ii) that is about matters pertaining to the relationship between employers and employees or
PN1566
(b) a situation that is likely to give rise tot an industrial dispute of the kind referred to in paragraph (a)...
PN1567
The Australian Workers Union submits the industrial dispute in this matter pertains to the relationship between the employer and the employees. Whilst the industrial dispute does not extend beyond the limits of any one state the Commission has jurisdiction to deal with the industrial dispute by authority vested in it by section 493 of the Workplace Relations Act 1996. Industrial action is also defined in section 4 of the Act as follows:
PN1568
Industrial action except in Part XA means
PN1569
(a) the performance of work in a manner different from that which is customarily performed ...(reads)... or the offering for work that is adopted in connection with an industrial dispute.
PN1570
Senior Deputy President, I think it is common ground that paragraph (a) contained in the definition of industrial action is restricted to action taken by employees and it is our submission that the limitations and restrictions on the performance of work described in (b) can be performed by employers and it is on paragraph (b) that we rely when we say that BASF isn't undertaking industrial action. On the evidence it is clear that BASF are engaging in industrial action within the meaning of the Workplace Relations Act. The performance of work is now being undertaken in a manner different from that which is customarily performed.
PN1571
The transfer of the former day workers to shift work prevents these former day workers from performing work as day workers. The abolition of the day work team and the transfer of the former day workers to continuous shift is conceded by Mr Morrison at paragraph number 1055 and paragraph number 1062 of the transcript. Therefore, it is clear that the industrial action is happening and the action attracts the jurisdiction established in section 127 of the Workplace Relations Act. I believe there is no dispute between the parties that the terms and conditions of work are prescribed wholly or partly by the 2001 agreement.
PN1572
There has been considerable evidence about the negotiation of the 2001 agreement and whether or not the agreement reflected any agreement between BASF and the Australian Workers Union about so called manning levels. Mr Melhem stated at paragraph 389, and I quote:
PN1573
That was my strong belief because the manning levels was discussed and the day worker numbers were confirmed as the current numbers.
PN1574
This is reinforced at paragraph number 398 of the transcript where Mr Melhem states, and I quote:
PN1575
The company never sought or indicated the abolition of or the reduction of the day workers.
PN1576
And as I have said earlier, in fact we were led to believe during the discussions that the five day workers would be there for the life of the agreement. Mr Melhem reiterates this view at paragraph number 415, paragraph number 497, paragraph number 498 and paragraph number 673 of the transcript. Mr Melhem also gave evidence that the table contained within subclause 20(g) reflected the agreed position that there would be day workers and shift workers and the number of employees in each of the respective categories and I refer the Commission to paragraph 497 and paragraph number 521.
PN1577
This view is supported by the sworn evidence of Mr Belyea and I respectfully refer the Commission to exhibit B6, paragraphs 7 and 11 and paragraph number 858, paragraph number 860, paragraph number 909 and paragraph 910 of the transcript. Mr Morrison contradicts Mr Melhem and Mr Belyea on this point in his witness statement and during examination-in-chief. Significantly, however, Mr Morrison concedes during cross-examination when questioned about the nature of the table in subclause 20(g) of the 2001 agreement and whether or not it fixed so called manning levels, and I quote:
PN1578
I can't say exactly where that is right now, but the reason that it was written in -
PN1579
and I take that to be a reference to being written into the EBA -
PN1580
was simply the manning level that we had at the time.
PN1581
And then I asked him:
PN1582
The agreed manning level?
PN1583
And his response was, "Yes." On Mr Morrison's view, and I have just quoted from paragraph number 1158 of the transcript, it appears that the table does (1) represent the number of workers or manning levels, including day workers employed at the time of the negotiation of the enterprise bargaining agreement and (2) that these numbers were agreed. It is the submission of the Australian Workers Union that the only real point of difference between the parties is a small but significant one. BASF did not regard the EBA as fixing the numbers for the duration of the enterprise agreement, but simply reflecting a position in time.
PN1584
Clearly, the Australian Workers Union entered into the agreement on the basis that the EBA citation established the teams and the numbers in those teams outside any further agreement that may have been negotiated during the life of the enterprise bargaining agreement. Neither Mr Melhem nor Mr Belyea contended that the sole purpose of the table in subclause 20(g) was to establish fixed manning levels. Mr Belyea gave evidence that during the negotiation of the 2001 agreement BASF sought to delete the definition of day worker and substitute it with a definition of a five day shift worker and I respectfully refer the Commission to paragraph numbers 831 through to 851 of the transcript.
PN1585
When Mr Belyea refused to agree to this claim BASF dropped the proposal which is confirmed by BASF in its correspondence to the Australian Workers Union dated 10 October 2001. I respectfully refer the Commission to exhibit B7. Importantly, this evidence was not contradicted by Mr Morrison, who gave evidence that he was involved in the negotiation of the agreement and I respectfully refer the Commission to exhibit P1 at paragraph 4. This evidence in our submission reveals a desire by BASF held during the 2001 EBA negotiations to abolish the day work positions and transfer the relevant employees to shift.
PN1586
In our submission, BASF sought to achieve this by deleting the definition of a day worker and replacing it with a new definition not including the word "day" but rather the word "shift". When the claim was unsuccessful they agreed to continue with the status quo and the existing definition of a day worker being an employee other than a shift worker. I am sorry, employees other than shift workers. And I respectfully refer the Commission to the 2001 agreement, subclause (7)(d). The 2001 agreement reflects this. On that basis agreement was supported by Mr Belyea, a valid majority of employees and the Australian Workers Union.
PN1587
In our submission the recent abolition of the day work team at BASF can simply and accurately be described as BASF implementing an unsuccessful enterprise bargaining claim. Not satisfied with having reduced the day work team from nine operators to five, BASF has now abolished the team altogether. In our view this action can be correctly described as an extra claim. Mr Belyea also gave evidence that the intent of the agreement was that there would be five day workers - and I respectfully refer the Commission to paragraph number 858 of the transcript and paragraph numbers 909 and 910 - and that the agreement to have five day workers was reflected in the skills profile and I refer the Commission to paragraph number 860 of the transcript.
PN1588
There appears to be some conjecture as to whether or not the reduction in the number of day workers that occurred in 2001 was part of the enterprise bargaining negotiations. Clearly in the minds of Mr Melhem and Mr Belyea it was. Mr Morrison concedes that the EBA negotiations commenced as early as June 2001 and I respectfully refer the Commission to paragraph number 1150 of the transcript. It was acknowledged by Mr Morrison that the plant had operated with five day workers since August 2001 and I refer the Commission to paragraph number 1160 of the transcript. This was done prior to the conclusion of the EBA negotiations and the certification of the 2001 agreement.
PN1589
Whether it was an EBA discussion or not Mr Melhem and Mr Belyea believed that the resulting document represented the sum of the discussions. The distinction sought to be drawn between EBA and non-EBA meetings in our view is an artificial one. Senior Deputy President, the table appearing in subclause 20(g) of the 2001 agreement does not appear in the BASF Australia Ltd (BAL) Chemical Workers Certified Agreement 1998 which has the Commission reference of B1998 and, therefore, can't be described as a clause that was simply rolled over from one agreement to the next without proper consideration. It appears to be a new clause developed specifically for inclusion in the 2001 agreement.
PN1590
It is the submission of the Australian Workers Union that it was open to BASF to seek to introduce the changes it sought via clause 19 of the agreement. Mr Belyea gave evidence that BASF sought changes to clause 19 during the negotiation of the 2001 agreement and I refer the Commission to paragraph number 790 through to paragraph number 812 of the transcript. Mr Belyea gave evidence that whilst he initially opposed any alteration to subclause 19(b)(i) he agreed to it after assurances were given that it would have the same meaning as the existing clause and I respectfully refer the Commission to paragraph number 808 of the transcript.
PN1591
Senior Deputy President, Mr Morrison also recalled discussion of the clause during the negotiation of the 2001 agreement and I respectfully refer the Commission to paragraph number 1206 through to paragraph number 1218 of the transcript. When asked if BASF was happy with the revised clause he responded in the affirmative and that specific reference is to be found at paragraph number 1281 of the transcript. Senior Deputy President, BASF did not adduce any evidence which may have indicated they complied with the requirement established in clause 19 that, and I quote:
PN1592
The majority of all affected employees at the workplace must genuinely agree.
PN1593
When Mr Morrison was asked how he knew the majority had agreed to the changes or the proposed changes, he conceded he hadn't conducted a vote and that reference is to be found at paragraph number 1298 of the transcript. Paragraph 19(b)(1) was renegotiated and altered in the 2001 agreement. I withdraw that. Paragraph 19(b)(i) was renegotiated and altered in 2001 and cannot be characterised as a clause simply rolled over from one EBA to the next without proper consideration. Senior Deputy President, it is our submission that the granting of the application - or one of our applications is in the public interest.
PN1594
BASF has not led any evidence as to any detriment they may suffer if one of the applications were granted and, therefore, it can be assumed that they will not suffer any or at least it would be not significant if they were to do so. During the proceedings BASF did not seek to justify its actions in abolishing the day work team to the Commission. BASF did not seek to justify the changes by virtue of demonstrated savings, any adverse financial position the company may currently may be in, a relationship the changes may have had to any training plan and the number or skill of particular operators. There was no evidence in respect to the introduction of new technology or the introduction of any new product.
PN1595
Nor did BASF put on any evidence as to indicate what circumstances at all may have changed since the EBA was negotiated in 2001, which wasn't all that long ago. The Australian Workers Union respectfully submits that orders should be made to prevent the breaches of clause 19 and 20 of the 2001 agreement from continuing. In our respectful submission the Commission needs to perform its functions in a way that assists in ensuring parties meet their obligations under certified agreements of the Commission. Under cross-examination Mr Morrison gave evidence that at least three of the day workers transferred to day shift. Mr Spezza, Mr Porter and Mr Thomsitt were employed as day workers, and I respectfully refer the Commission to paragraph number 1164 through to 1189.
PN1596
He reiterated this position this morning in respect to at least one of the former day workers. These employees are suffering considerable inconvenience by the unilateral variation of their contracts of employment. As shift workers the former day workers may now as part of their shift roster be required to work on public holidays.
PN1597
THE SENIOR DEPUTY PRESIDENT: Mr Borowick, there are two issues, aren't there? One is the numbers and the other is the employees who are shifted. Doesn't one of the clauses of the agreement enable employees to shift from day work to shift work?
PN1598
MR BOROWICK: Yes, it does, Senior Deputy President.
PN1599
THE SENIOR DEPUTY PRESIDENT: So how can that be a problem?
PN1600
MR BOROWICK: In our submission, Senior Deputy President, it is open to the company to transfer employees between shifts and between day work and shift work. Our argument is about the abolition of a five person day work team.
PN1601
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1602
MR BOROWICK: And if a day worker was transferred to shift work it would be permissible under the enterprise agreement, even though it would be, if they had been employed as a day worker, a unilateral variation to their contract of employment, but the agreement provides for it.
PN1603
THE SENIOR DEPUTY PRESIDENT: So the real issue gets down to the numbers then, doesn't it?
PN1604
MR BOROWICK: Yes, Senior Deputy President, the numbers on day work. Mr Morrison conceded that as day workers they were not required to work on public holidays and I respectfully refer the Commission to paragraph number 1051 of the transcript. As shift workers, former day workers now have different hours of work and breaks. BASF did not produce any evidence that it considered the issues faced by long term day workers transferring to shift, for example, the impact on their family and child care responsibilities. Mr Jackson gave evidence that all three models presented to the day workers involved a compulsory transfer from day work to shift work and I respectfully refer the Commission to paragraph number 1378 of the transcript.
PN1605
In our submission it may have been possible to obtain the agreement of the employees as required by clause 19 and meet all or most of the objects set by BASF with an alternative model. In any case BASF did not seek to justify its proposal to the AIRC or to the employees. Senior Deputy President, in respect to the authorities in support of our application for a 127 order rather than an order made under section 170LW and the dispute settlement clause, we rely on, as I indicated in our outline of submissions, a decision by Senior Deputy President Watson to be found at print R3466 in relation to an application by the Construction, Forestry, Mining and Energy Union for orders to prevent industrial action by Carter Holt Harvey Wood Products Australia Ltd.
PN1606
Interestingly, Senior Deputy President Watson refused the application to make the orders, but at paragraph 21 of his decision he states:
PN1607
As to the second general submission on jurisdiction advanced by the companies ...(reads)... I see no reason to do so.
PN1608
He goes on at paragraph 22 to say:
PN1609
Industrial action can include action by an employer re City Power Ltd ...(reads)... needs to be determined in the context of the relevant facts.
PN1610
He then goes on at paragraph 26, halfway through paragraph 26 of that decision, to say:
PN1611
I am not satisfied that such an identifiable restriction on the performance of your work in accordance with the certified agreement has been made out in the circumstances of the present matter.
PN1612
We say that this decision can be distinguished from the circumstances in this case because there is a readily identifiable restriction on the performance of work in accordance with the certified agreement and, of course, I refer to the 2001 agreement.
[11.20am]
PN1613
I also rely on a decision of Commissioner Hingley in Tenix Defence Systems (2001), PR908, 675. Commissioner Hingley, in that decision, was dealing with three section 127 applications, one by Tenix Defence Systems Proprietary Limited and one by the Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union and another by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. Not unlike, Senior Deputy President, Commissioner Hingley declined to make the orders sought by each of the applicants because he determined he wouldn't exercise his discretion to make the orders sought. However, in paragraph 55 he noted, and I quote here:
PN1614
Accordingly, I find that the jurisdictional prerequisites have been met.
PN1615
So, Commissioner Hingley, in our submission, Senior Deputy President, found it was open to him to make the orders sought by the union applicants but declined to exercise his jurisdiction because he believed that the matters in dispute could be settled in a different manner. Those are our submissions, if the Commission pleases.
PN1616
THE SENIOR DEPUTY PRESIDENT: In essence, Mr Borowick, your position is this, that clause 20(g) of the agreement sets out the numbers of employees on each shift, their classifications and if you want to change those you can do so under clause 19 of the agreement but you have got to have, amongst other things, a genuine agreement of the majority of all affected employees.
PN1617
MR BOROWICK: Yes, that is correct.
PN1618
THE SENIOR DEPUTY PRESIDENT: So the company can shift day workers to shift work and shift workers to day work but they can't reduce the numbers?
PN1619
MR BOROWICK: That is correct.
PN1620
THE SENIOR DEPUTY PRESIDENT: And the numbers - can I take you to the outline of submissions of the AIG? Sorry, not that one for the AIG the - clause 20(g).
PN1621
MR BOROWICK: Which document are you referring to, Senior Deputy President?
PN1622
THE SENIOR DEPUTY PRESIDENT: Clause 20(g) of the agreement.
PN1623
MR BOROWICK: Yes, I have that.
PN1624
THE SENIOR DEPUTY PRESIDENT: The numbers are, in your submission, six supervisors including one relief. Tell me if I say something that you don't agree with. Two shifts of five operators - sorry, two shifts of five employees, classified as "structure", who are seven day continuous shift operations. One shift of five employees classified as PO Shift who are also on seven day continuous shift operation. Two employees who are classified as Relief Structure Filtration, who are also seven day continuous shift operation. And five employees classified as Product Operator who are on a nine day fortnight, Monday to Saturday with staggered starts, is that right?
PN1625
MR BOROWICK: That is correct, Senior Deputy President. Significantly, that column is headed Manning. It wouldn't have been headed Manning, in our submission, unless its purpose was to establish manning levels.
PN1626
THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Pels.
PN1627
MR PELS: Yes, thank you, your Honour. Your Honour, in submissions made by my predecessor Mr Bourke and the statements in evidence by Mr Morrison and Mr Jackson, the evidence is quite clear that the change implemented by the company was part of the company's strategic planning for the future. In the evidence by Mr Borowick, he indicated that in previous EBAs and the evidence by Mr Melhem and Mr Belyea, this was nothing new, this occurred previously in reduction of employees. And that was the evidence provided by all witnesses that there was previous change or reduction in operators and the evidence, quite clearly, was it wasn't in accordance with clause 19 at all, but in effect the company did implement redundancies which we say was consistent with clause 18, redundancy clause, which we say the company is quite entitled to do.
PN1628
THE SENIOR DEPUTY PRESIDENT: Mr Pels, when did the company make the reduction from five employees again?
PN1629
MR PELS: I think it was Mr Belyea, in his statement, said in 2001, I think it was.
PN1630
THE SENIOR DEPUTY PRESIDENT: No, no, no, the latest I am talking about. The one that is the subject of this dispute.
PN1631
MR PELS: He advised employees in the letter of 27 October that it will apply from 1 November, was the change of shift, and there were - employees made redundant - one voluntary and one forced - made redundant.
PN1632
THE SENIOR DEPUTY PRESIDENT: What days were they made redundant?
PN1633
MR PELS: 24 October, I am advised.
PN1634
THE SENIOR DEPUTY PRESIDENT: So from the 24 October you ceased to have five day workers?
PN1635
MR PELS: Yes. Now, the company, in the evidence by Mr Morrison and Mr Jackson is that the company is attempting to set itself up for future profitability by appropriate cost-cutting mechanisms, to capital investment and process change which we - it is said - Mr Morrison and Mr Jackson have indicated in their evidence, is an ongoing process. And in the past even Mr Melhem and Mr Belyea, in their evidence, indicated that - they acknowledge that that could happen even though they weren't happy with it, but I think Mr Belyea said that it was a reluctant agreement, for example, when they reduced from nine operators down to five. So his evidence was, and it is quite clear in his statement, he said at point 9:
PN1636
At a meeting I attended on 15 August 2001 I disputed with BASF management representatives their assertion that the plant could be successfully operated with just five day workers.
PN1637
He disputed that but the reality is after that date that they did operate with three day workers and it was subsequent to that - Mr Belyea, in his evidence, indicated that - and in cross-examination, when pressed, was that there was a tacit approval that that had occurred and the union accepted those changes. Now, what we submit to your Honour is the changes in manning and shift arrangements have been the end result of a long, involved process involving significant involvement of the union and the employees and, as indicated in our submissions and exhibits, that was a diary of events going back to May 2003, I believe, in attachment F of the BASF submission. That from early May 2003 there is clear evidence of ongoing consultation with the union and its employees.
PN1638
Now, the first communication letter to employees outlining the process to be followed and the expected outcome was back on 8 September. I am not sure whether your Honour has that copy of that letter.
PN1639
THE SENIOR DEPUTY PRESIDENT: 8 September?
PN1640
MR PELS: Yes.
PN1641
THE SENIOR DEPUTY PRESIDENT: And where do you think it would be? Is it attached to the outline? Do you have another copy? Perhaps you could hand it up?
PN1642
MR BOROWICK: I have got another copy, yes.
PN1643
MR PELS: I think your Honour is right. I think it is attached to the outline but I will reiterate there that the letter addressed to all employees:
PN1644
I wish to confirm recent communication regarding the need for the company to reduce manning levels in the production, operation area. Enclosed is a package of information which outlines the reason, numbers and processes that were used to determine those employees to be made redundant.
PN1645
And attached to that, your Honour, of course, is the - I think it was handed up as an exhibit - was the reason for the decision, attached to that letter. And the third paragraph, BASF reiterate that:
PN1646
The factors outside the control of the business such as raw material, price increases with consequent loss of margin, uncertainty over supply of a chemical, utedene -
PN1647
it looks like -
PN1648
...aggressive marketing by competitors continue to present challenges in meeting our profit goals -
PN1649
and that then these are the reasons why the decision was made. Further, the company, in writing, indicated the areas affected where the changes would take place. On the final structure and number of redundancies:
PN1650
...there will be eight production operator positions. The company will make two positions redundant. And the production operators not redundant will be reclassified or redeployed as continuous shift operation operators.
PN1651
And further, under the Process the company, in detail, sets out the date and time about the expressions of interest, are to be made in writing.
PN1652
And further, at point 9, the company also clearly sets out that:
PN1653
If the required number made redundant is not achieved by points 1 to 8 then the selection group will nominate employees for possible non-voluntary redundancy. Employees selected for non-voluntary redundancy will be interviewed to discuss the reason for selection and given the opportunity to respond.
PN1654
Quite clearly, these letters and outline of process were sent to all employees affected and their union.
PN1655
PN1656
MR BOROWICK: Senior Deputy President, this document hasn't been in the proceedings until now, is that correct?
PN1657
THE SENIOR DEPUTY PRESIDENT: I don't have a copy of it, as I am aware.
PN1658
MR BOROWICK: No, I haven't seen it in proceedings to this time. It wasn't a part of the evidence of Mr Morrison. It is now, I think, sought to be introduced in - - -
PN1659
THE SENIOR DEPUTY PRESIDENT: Do you object to its tender?
PN1660
MR BOROWICK: Yes.
PN1661
THE SENIOR DEPUTY PRESIDENT: Mr Pels, can you tell me when it was referred to?
PN1662
MR PELS: Mr Borowick actually received a copy, he would have seen this.
PN1663
THE SENIOR DEPUTY PRESIDENT: That is not the point really. The point is that if it hasn't been in evidence beforehand he hasn't had the chance to cross-examine on it.
PN1664
MR BOROWICK: Senior Deputy President, I don't believe it forms part of the outline of submissions. I have just had a look through now and I have never seen this document previously.
PN1665
MR PELS: I think it was handed up in conciliation proceedings earlier but notwithstanding - - -
PN1666
THE SENIOR DEPUTY PRESIDENT: Unfortunately, I can't have regard to conciliation proceedings.
PN1667
MR PELS: Notwithstanding that, your Honour, but I do make a point that Mr Borowick submitted a document half-way through his submissions out of left field which we didn't object to and that was - - -
PN1668
THE SENIOR DEPUTY PRESIDENT: Which document was this?
PN1669
MR PELS: Exhibit B7. When interviewing Mr Belyea he brought out of left field exhibit B7 and we had no advance warning of that either which, in the end, we didn't object to once we established and had a look at it. But what - - -
PN1670
THE SENIOR DEPUTY PRESIDENT: Yes, but that is the point. Once you looked at it you didn't object, he has objected. Can you point to me where, during the course of these proceedings, what I have said will be exhibit P4 has been previously referred to?
PN1671
MR PELS: In actual fact, in attachment F, your Honour.
PN1672
THE SENIOR DEPUTY PRESIDENT: Attachment F?
PN1673
MR PELS: Yes.
PN1674
THE SENIOR DEPUTY PRESIDENT: To?
PN1675
MR PELS: Attachment F of the BASF outline of submissions, 8 September. Meeting held at Altona, process and consultation. That was on 8 September, meeting with Cesar Melhem, Michael Borowick and other employees to talk about the issues, process and consultation. On 6 October, your Honour, in those - yes, 6 October, letter from the AWU with copy to Brian Webster, Process Outline. And it talks about - it is clearly in our submissions.
PN1676
THE SENIOR DEPUTY PRESIDENT: Yes, but where is this document, P4? Why do you need P4 if you have got attachment F?
PN1677
MR PELS: Well, it is there to assist the Commission, to show - to confirm that - this confirms the process which was outlined. It is, I would have thought, to be uncontentious, the fact that it will assist the Commission. All I am saying is that Mr Borowick has seen all this and there is nothing new to him and why would he object to it, because - - -
PN1678
THE SENIOR DEPUTY PRESIDENT: I will allow the document. It will be a matter for weight. I note Mr Borowick's objection.
PN1679
MR PELS: So, your Honour, the letter and the attached communication, the consultation pack, obviously reiterates and clearly indicates the need for a reduction in manning, outlines the reasons, numbers and process which we say complements clause 18 of the EBA and clause 18 of BASF Australia agrees it:
PN1680
...will not undertake redundancy or early retirement program for AWU members without prior consultation with the company delegates and officials of the AWU.
PN1681
So it is our submission that this process is clearly in line with clause 18 of the enterprise agreement. Now, in attachment F, I won't hand that up again, your Honour, but attachment F is this further evidence of in-depth consultation and process which we say, clearly, evidence is that there was adequate consultation and the union, as early as May 2003 onward, could have brought this matter before the Commission if necessary if, for example, there was a challenge to the right of the company to undertake the changes that it did and that didn't - in effect it is our submission that there is no challenge.
PN1682
The issue really is if the monetary compensation was right then there would be no dispute to this process. In effect, that is our submission, that in principle the union had not indicated that they would block or object to the changes as long as employees were adequately compensated and really that is the issue. The company say they have been adequately compensated by the fact that they have increased their remuneration package. The company says no employee has been disadvantaged. In fact, that employees have accepted the process.
PN1683
The submissions, or the evidence of Mr Melhem was he was looking for a trial. De facto, there has been a trial for the last six weeks and interestingly enough Mr Borowick doesn't bring that point up in evidence that they are now seeking a trial as such their position was - he has now changed their position, that in actual fact he is really - - -
PN1684
THE SENIOR DEPUTY PRESIDENT: This isn't just a trial, is it, you are implementing?
PN1685
MR PELS: The AWUs position all along, on the evidence of Mr Melhem, was that they primarily sought that this process should be a trial, a trialing of new arrangements, of the rostering arrangements.
PN1686
THE SENIOR DEPUTY PRESIDENT: But you rejected that?
PN1687
MR PELS: The company said that, de facto, there has been a trial for the last month or so. Yes, the rejected initially that it would be done on a trial basis. By the time it got to the Commission the employer submits that there is a de facto trial been going on for the last six weeks or so and as far as that goes it is interesting that Mr Borowick is now not pursuing that line.
PN1688
Now, Mr Borowick, in his submissions, has relied quite strongly on clause 19 and clause 20 as, in effect, where the company has breached the EBA or he is seeking to persuade the Commission that this in actual fact is a form of industrial action and he believes, or submits that the Commission should exercise its discretion to make the order sought. But the evidence, quite clearly from I think Mr Morrison and also Mr Belyea and everyone else, was that no agreement has ever been reached under clause 19 even though that clause has had some minor changes. And, of course, that clause - - -
PN1689
THE SENIOR DEPUTY PRESIDENT: There must have been agreement reached on clause 19, Mr Pels, it is part of the certified agreement.
PN1690
MR PELS: Well, what I am saying is it is a sort of a flexibility within - it is an agreement within an agreement. It says that once you reach agreement there must be a majority of employees - generally agree, no employees will lose income, the union won't reasonably oppose and there is an agreement - may be ratified by the Commission or an exchange of letters. And in evidence I challenged the witness - has it ever been done? And the evidence was, no, it has never been done.
PN1691
THE SENIOR DEPUTY PRESIDENT: What has never been done?
PN1692
MR PELS: That process in accordance with clause 19.
PN1693
THE SENIOR DEPUTY PRESIDENT: Quite, and that is Mr Borowick's complaint.
PN1694
MR PELS: Yes, yes. That is right. He is saying - well, that is the key part of his evidence. But what I am saying in the past - this same process has been in the past and - that clause in there and there has never been a problem. The parties haven't followed that process strictly, there has been a written agreement or exchange as such. And either way we would submit that even if that process was being followed either party - the disputes procedure process will apply if agreement can't be reached. So, in a sense, under section 170LW the union could simply apply to do that which is now before you.
PN1695
Now, they could have done that long before - or there is no need - what we - our submission is that there is no need to use the facilities under section 127(2) or to seek the Commission to exercise its discretion, or the Commission on its own motion issue orders under section 127 when, in actual fact, the disputes - clause 19 of - the disputes procedure in clause 22, I believe - clause 22 can actually achieve what the union is actually saying today and that is the union has a two-pronged approach - section 127 orders and/or failing that they are asking the Commission to exercise its jurisdiction under section 170LW.
PN1696
So Mr Borowick's submission that the company breached 19, and clause 20, we reject. Clause 20 talks about structural efficiency, training and the like and that was subject, obviously, to contested evidence which I will come to when I do my submissions under section 170LW. Now I have got to clause 19 I will pursue that argument. So under clause 19 the company - obviously clause 19(a):
PN1697
The parties are committed to more flexible working arrangements, improving the quality of working life, enhancing skills and job satisfaction and assisting positively in the restructuring process.
PN1698
So what we submit is that the parties have done that in the past. This process is identical to what has happened in the past. The only thing, of course, now is that the union is saying that they believe that the reduction or removal of day shift they don't agree with and they want the Commission to exercise its powers or discretion to ask the company to almost wind the clock back and say, no, we will go back and reinstate the day shift as such.
PN1699
THE SENIOR DEPUTY PRESIDENT: What are you submitting, Mr Pels, that the plain wording of clause 19 should be ignored because it has been ignored in the past?
PN1700
MR PELS: No, what I am saying is that clause 19 - the Commission would be aware that that clause probably emanates from the early '90s in the early structural efficiency days, or the early '90s where that was put in with regard to award restructuring where parties could vary awards to provide more flexible arrangements and that was one of the criteria that was met when someone wanted to vary an award to provide for more flexible hours of work they could go to that process. And this appears to me to be a throw-back from the early '90s when in actual fact it really - it doesn't really assist the parties, in effect - well, the fact is the parties haven't followed that process, they have never followed that process. That is the evidence.
PN1701
THE SENIOR DEPUTY PRESIDENT: Well, you haven't followed it because you think it is irrelevant, isn't it?
PN1702
MR PELS: No, I am not saying the commitment to more flexible working arrangements is irrelevant. I am saying that the end result of getting an agreement - or ratified by the Commission, or exchange of documents, that process has been, in a sense, hasn't been followed - or the parties haven't seen the need to. It was in the past - the submission of the company is that it has been a co-operative arrangement, it is a good working arrangement between employers, employees and the union until we got to this stage where the parties obviously haven't reached agreement and therefore the AWU is seeking obviously the assistance of the Commission, or seeking recourse through the Commission.
PN1703
THE SENIOR DEPUTY PRESIDENT: Clause 19 is a double-edged sword for you, isn't it? I mean, if the union is right on clause 20(g), then under its submissions its concedes that if you follow the steps in clause 19 and get the outcome at each step that you want you can reduce the numbers. That is the effect of their submission.
PN1704
MR PELS: That is there submission, yes. And, quite clearly, there is no evidence to support that, that it was ever part of the EBA negotiations. The EBA doesn't say that there will be - - -
PN1705
THE SENIOR DEPUTY PRESIDENT: Well, then, what do you say if they are right about clause 20(g) that the numbers can never be reduced bar in the next EBA?
PN1706
MR PELS: That is right, that is what they are saying.
PN1707
THE SENIOR DEPUTY PRESIDENT: No, no. I am asking you - no, they are not saying that, in my view. Mr Borowick will correct me if I am wrong, but as I understand his submission it is - clause 20(g) sets the numbers. If you want to change them, follow the steps in clause 19. That is what he says.
PN1708
MR PELS: Yes.
PN1709
THE SENIOR DEPUTY PRESIDENT: Your submission is, as I understand it, clause 19 is irrelevant. Right? If you are wrong then, on clauses 20(g), and clause 20(g) does set the numbers, then by you saying clause 19 is irrelevant you can only change the numbers in the next EBA, or by following the procedures set out in the Act for variation of the agreement.
PN1710
MR PELS: Well, that would be something for the Federal Court to decide.
PN1711
THE SENIOR DEPUTY PRESIDENT: Well, with respect, I have got an application before me under section 170LW.
PN1712
MR PELS: Yes.
PN1713
THE SENIOR DEPUTY PRESIDENT: So I am actually having to deal with the issue, I think.
PN1714
MR PELS: That is - well, that is right because the - well, that is what the union is asking you to deal with.
PN1715
THE SENIOR DEPUTY PRESIDENT: Well, that is what I thought we were all dealing with, given the nature of the questions about the import of clause 20(g).
PN1716
MR PELS: Yes. It is our submission that clause 19 and accompanying clause 20 doesn't assist the Commission in the sense that clearly indicates that the part of the negotiations of this agreement and previous agreements - that manning levels were part of that and established.
PN1717
THE SENIOR DEPUTY PRESIDENT: I know that is your submission, but if you are wrong on that. If you are wrong on that and it is found - if I find as part of this 170LW or the section 127 that clause 20(g) does set the manning levels, right?
PN1718
MR PELS: Yes.
PN1719
THE SENIOR DEPUTY PRESIDENT: You are bound by that. Under your submission that clause 19 is irrelevant there is no other way to change it, is there, bar a variation to the agreement in accordance with the Act?
PN1720
MR PELS: Well, you may rule, you may rule, if you are satisfied that clause 20(g) is generally negotiated and agreed to, then the clause 19 will have to be activated and used to make those changes. That is a decision you may make which obviously we would attempt to persuade you didn't make, but you may come to that decision.
PN1721
THE SENIOR DEPUTY PRESIDENT: Well, I mean, I may find on your submission that clause - I know you don't accept this - but I could find - I reject your submission that clause 20(g) doesn't set the manning levels, I reject that and find that it does, but I accept your submission that clause 19 is irrelevant.
PN1722
MR PELS: No, what I am saying is - well, it is obsolete in the sense - or the parties haven't used it. Now, the parties in the future could very well use it, or they may change it in the next EBA - in fact they did change it at one EBA, but the fact is they haven't used it.
PN1723
THE SENIOR DEPUTY PRESIDENT: But it is there.
PN1724
MR PELS: I know. Well - - -
PN1725
THE SENIOR DEPUTY PRESIDENT: I mean, it is like legislation, you assume it has some purpose.
PN1726
MR PELS: But lots of legislation is not used and can be obsolete and out of date. In fact - - -
PN1727
THE SENIOR DEPUTY PRESIDENT: Until someone breaches them.
PN1728
MR PELS: In fact lots of legislation - - -
PN1729
THE SENIOR DEPUTY PRESIDENT: And then they are used.
PN1730
MR PELS: Yes. Lots of legislation is out of date and obsolete. But I take your point, I take your point on that. But if you are persuaded to what the union argument is and the company - reasonably the company can't activate or make changes under clause 18 or in the way it has done in the past. What you are saying is what was done in the past the company can't do without agreement with the union. That is a majority agreement, that they cannot restructure - cannot alter or make any changes whatsoever to manning levels, to staffing, to hours of work, to shift rosters without majority agreement. And we would seek to persuade the Commission that that wouldn't be of interest to all parties at all.
[11.50am]
PN1731
THE SENIOR DEPUTY PRESIDENT: Well, is that so? I mean even on the union's submission it is:
PN1732
Clause 19 applies and therefore the majority of affected employees must genuinely agree -
PN1733
etcetera, etcetera. The union won't unreasonably withhold agreement and then the disputes procedure applies if agreement can't be reached. They say your problem is that you haven't done 19(B)(1) to (5) to enable the disputes procedure on agreement not being reached to be performing.
PN1734
MR PELS: What they are saying is the company can't exercise its right to restructure the workplace. We say the Commission - - -
PN1735
THE SENIOR DEPUTY PRESIDENT: No, I don't think they are saying that at all. I mean Mr Borowick will correct me if I am wrong but as I understand it they are saying you have to follow clause 19 if you want to change the manning levels.
PN1736
MR PELS: Well, what they are saying is: You can only restructure with our agreement.
PN1737
THE SENIOR DEPUTY PRESIDENT: No, because clause 19(b)(vi) provides for disputes where there is no agreement to come to the Commission effectively.
PN1738
MR PELS: That is - well, ultimately, yes, but they are saying if you want a quick resolution to the problem you have got to get agreement from us. And if you don't, well, here we are, we will go through a process like this in effect every time the company wants to restructure or make changes. And we say that would be a very - that would not be a - that would be a retrograde step in regard to the good relationship in the past where the company have made changes, they have consulted and made changes which we would say was not to the detriment of employees in the past and haven't been and not a retrograde step now. This is not disadvantaging the employees, we would say.
PN1739
The consultation process, the restructuring process, we can say in the past the AWU has with maybe some reservations agreed with and not stopped the ongoing improvement in productivity. The obviously are there to protect their entitlements of employees to make sure that they are treated in accordance with the EBA and whatever and what we are saying, that has been done in the past and to now seek that the company now has to negotiate or somehow go through a long process because of their implied or interpretation of the EBA which never had been done before would not be in the interests of both parties.
PN1740
Now, your Honour, the reference to clause 20, well, probably you are more interested in one with clause 20(g) and that was subject to a lot of conjecture and conflicting evidence. And essentially, as your Honour has indicated, the essence of the union's claim is that the manning levels are being changed and are different with the shift roster being introduced and that somehow that these manning levels were part of a negotiation - an EBA negotiation and therefore cannot be changed without the process that we talked about, that Mr Borowick submitted was the process to be followed.
PN1741
But nowhere in evidence either side could persuade or it was suggested that these manning levels were exactly agreed outcomes apart from the evidence of Mr Morrison and Mr Jackson was that these were indicative levels or that the current levels at the time had indicated the relevant training or skills matrix to be - well, for those employees and I think Mr Belyea indicated that all employees to reach the skill level - to reach the skill level to obtain a wage level they would have to complete this level of training.
PN1742
And what we say the skills profile is indicative of at the time they were the staffing levels, that was the level of training required and that if you completed all that training that a production operator on shift or day work did exactly the same work once they had completed their training, the work was exactly - the skill level was exactly the same for the day shift - for the day workers and/or the shift workers if they were production operators.
PN1743
So quite clearly the evidence obviously was contested but we say that the union hasn't made out or persuaded or provided any reference apart from the assertions by their representatives that this was negotiated, manning levels as part of the EBA.
PN1744
THE SENIOR DEPUTY PRESIDENT: Can I just take you to 20(g) have you got it before you?
PN1745
MR PELS: Sorry?
PN1746
THE SENIOR DEPUTY PRESIDENT: Have you got clause 20(g) before you; the table?
PN1747
MR PELS: Yes.
PN1748
THE SENIOR DEPUTY PRESIDENT: It says there five employees, seven day continuous shift operation on PO shift. If one of those employees leaves and is replaced by a new employee, does that new employee need to be skilled in all those ticked areas to do that job?
PN1749
MR PELS: To be classified at that level, yes. Yes, to be classified. And the other thing in the evidence, your Honour, I think in examination or cross-examination of Mr Morrison was the issue of supervisors. Now, the supervisors are also indicated at that level as part of that matrix but it was clearly ascertained that supervisors are excluded from the EBA via the coverage and operation. And we say that that in a sense is also evidence that the company could not have possibly agreed to these manning levels because supervisory, as you indicated - you challenged Mr Morrison on would have to be part of the negotiations and it would be agreed that there would be six supervisors. It was in the re-examination by myself and Mr Morrison agreed or acknowledged that supervisors are specifically excluded from the EBA.
PN1750
THE SENIOR DEPUTY PRESIDENT: Where does it say they are specifically excluded?
PN1751
MR PELS: Under coverage, under clause 4(a), your Honour, the last line:
PN1752
...and this agreement shall not apply to employees appointed to the salaried staff.
PN1753
which Mr Morrison in evidence indicated that the supervisors were,t hat is my understanding from the evidence. And also - - -
PN1754
THE SENIOR DEPUTY PRESIDENT: Are supervisors salaried staff?
PN1755
MR PELS: Yes, that is my instructions, your Honour.
PN1756
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1757
MR PELS: Also at clause 6, now, the scope of the EBA went on to say that:
PN1758
This agreement shall be binding on the AWU and employees engaged in activity covered by Metals Award '98.
PN1759
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1760
MR PELS:
PN1761
And the classifications contained in clause 6(a) of this EBA.
PN1762
And of course 6(a) makes no reference to supervisors.
PN1763
THE SENIOR DEPUTY PRESIDENT: But does that - the fact that supervisors aren't covered, does that affect the argument that clause 20(g) sets out manning levels. Isn't it open to those who are covered the agreement to say we want X number of supervisors as part of their negotiations? I ask it in a rhetorical sense - - -
PN1764
MR PELS: Yes.
PN1765
THE SENIOR DEPUTY PRESIDENT: - - - as opposed to the specifics of this agreement.
PN1766
MR PELS: Well, I can see that no doubt the employees could and probably do - - -
PN1767
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1768
MR PELS: - - - say, look, we won't - in fact they may say we would like supervisors to be covered by this EBA.
PN1769
THE SENIOR DEPUTY PRESIDENT: Yes, but I am not really asking that question. I am saying, as part of negotiations on manning and I ask the rhetorical question as opposed to the specifics of this agreement, to say we want 15 production employees and we want those 15 production employees to have five supervisors and we want that reflected in the agreement even though the agreement itself doesn't set out the terms and conditions of employment of the supervisors.
PN1770
MR PELS: As a rhetorical question, that could have been put but I don't think the evidence was there that it actually happened. In fact that was put to Mr Morrison to say, specifically as part of the 2001 agreement, was the supervisory manning levels or the manning levels of other employees part of the negotiations and he categorically said no.
PN1771
THE SENIOR DEPUTY PRESIDENT: And he says none were, doesn't he?
PN1772
MR PELS: Sorry?
PN1773
THE SENIOR DEPUTY PRESIDENT: He says manning levels just weren't part of the negotiations, full stop.
PN1774
MR PELS: That is right, yes.
PN1775
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1776
MR PELS: Which included supervisors. And the inference I drew was that if the supervisors are mentioned there as a indicative skill levels or just reflects what currently applies then there could also - the Commission might be persuaded that really that is right, the rest of the manning levels would reflect what currently applied were not part of the negotiations. And that was the point I tried to connect so that the Commission may be persuaded, on the basis that supervisors are excluded, and Mr Morrison indicated in his evidence that they were never part of the negotiations and we said, well, then - could then extrapolate that and follow that you might be persuaded that on balance that the company probably may not have negotiated or wouldn't negotiate manning levels. That was the - when I tried to draw the two together.
PN1777
So obviously the submission quite strongly on behalf of BASF is that there is absolutely no link between the manning column and anything else in the table or in the whole agreement and I think the evidence is that - even of the union evidence was when Mr Belyea was invited and Mr Melhem was invited to say what was - whether this manning level was connected to any other clause, they couldn't provide it. In fact Mr Belyea was really - I don't say this in a nasty way, lost for words when I said, well, what about when it comes to manning requirements under clause 8, that minimum manning requirements are to be determined by the site supervisor.
PN1778
He didn't have an answer for that, he probably - but we also say at clause 8, that minimum manning requirements are to be determined by the site supervisor. I think Mr Melhem indicated that that was maybe a safety issue but what it does say in the hours of work under manning requirements, it is clearly a management prerogative as to what manning levels there are and it is the prerogative - we seek the Commission to take that into account.
PN1779
That there is no evidence anywhere in the EBA to support the contention by the union that the manning levels were negotiated either - or it is even supported or connected to any other clause. Of course, your Honour, you made the point that clause 8(e) is a very significant one, change of roster and we say that the move from - when an employee is transferred from day work to shift work or from shift work to another during the week this is just a normal part of the EBA process. And we clearly say that Mr Spezza - Mr Spezza clearly falls within that definition.
PN1780
Clearly Mr Spezza, we would say, is actually in that division so in regard to Mr Spezza, if the Commission was persuaded by the union's argument, we say it couldn't apply to Mr Spezza because he has simply gone from that shift work anyway as part of the normal process which the company can - it can exercise its right under clause 8(b). Notwithstanding that, we - - -
PN1781
THE SENIOR DEPUTY PRESIDENT: I must say I thought clause 8(e) enabled you to transfer an employee who was a day worker to shift work.
PN1782
MR PELS: Yes, I - even on day work. Yes, I was just about to say, notwithstanding that, our submission would be that even the remainder who are on day work, clause 8(e) allows the company to exercise its right under clause 8(e) to move day work to shift work anyway and that is in the alternative way, in you like, yes, that is the submission. So we say that is a - we would say that is a strong persuasive argument to say what the company has done is quite within its rights under clause - under the EBA and clause 8(e).
PN1783
And assuming that 48 hours notice is given, they can do that. So on that basis we say that you shouldn't be persuaded to issue the orders under section 127 because you can't really submit - it can't be industrial action if, for example, it is an operation within the normal operation of the EBA. And I will come to those authorities a little later on. So we say here, where the union's claim relates to the reduction in manning or the conversion process under clause 8(e) the abolition of the day shift or the redundancy process, we submit that nothing the company has done can reasonably be considered as industrial action.
PN1784
That the agreement provides for a lot of flexibility, change and productivity enhancement and the history of the site has been that that has happened in the past. The EBA clearly covers redundancy under clause 18, it covers the change of shift, it gives the site supervisor a say over the manning levels and it also has process for changing the shifts as such. We simply submit that there is no industrial action happening, impending or probable.
PN1785
What there is, your Honour, is a company taking prudent steps in accordance with the EBA and as a managerial prerogative to ensure that its ongoing viability, your Honour, is continued. And of course ongoing viability means job security for the remaining employees. Your Honour, we now refer to in deciding whether or not there is substance in the union's claim is appropriate, in our view, that you consider the decision in Coal and Allied particularly the comment in that decision about the nature of a section 127 order. Do you have a copy?
PN1786
THE SENIOR DEPUTY PRESIDENT: Yes. Yes, Mr Pels.
PN1787
MR PELS: Your Honour, this is the Coal and Allied Operations Pty Limited v AMWU, a decision of the Full Bench of Munro J on 20 June 1997. I really need to emphasise in the last two paragraphs regarding section 127. His Honour went on to say that:
PN1788
Viewed in perspective with the provisions of the Act generally and the common law, the power in section 127 of the Act creates a discretion for the Commission to intervene where it considers it appropriate to itself prohibit industrial action.
PN1789
And further on, in the last paragraph:
PN1790
The exercise of such discretion requires that the Commission be satisfied that it is appropriate to direct that the ...(reads)... should be unlawful as a contravention of the Act.
PN1791
So we believe this makes it clear that how serious a section 127 order and specifically indicates that the action concerned must be illegitimate and if continuation of it follows the order, it constitutes a contravention of the Act. Your Honour, we submit that this cannot be said to describe the actions of BASF in this matter. They are attempting to shore up their future. They are acting in accordance with the EBA.
PN1792
THE SENIOR DEPUTY PRESIDENT: What if I was to find that the company was acting in breach of clause 20(g) and clause 19, would that be industrial action?
PN1793
MR PELS: Not necessarily. I think I go onto other authorities saying that the breach of an EBA doesn't necessarily - well, you might find that but it may not persuade you to issue the orders.
PN1794
THE SENIOR DEPUTY PRESIDENT: No, that is a discretionary issue. I am asking you a jurisdictional question.
PN1795
MR PELS: Well, it doesn't necessarily follow that when there is a breach of the EBA that it is industrial action. It doesn't necessarily follow. It has to be - well, you have to satisfy - you say that the actions constituted under the definition under the Act.
PN1796
THE SENIOR DEPUTY PRESIDENT: And why wouldn't it? If I found there was a breach of clause 20(g) and clause 19 and the company wasn't providing the number of persons at each classification level on each of the relevant shifts or day work, why wouldn't that be industrial action?
PN1797
MR PELS: Well, you may be persuaded if you were convinced that there was a clear negotiated outcome as part of the EBA, yes, you could very well find that. Yes, you could. But if, for example, they didn't pay meal allowance, for example, that could be a breach of the EBA.
PN1798
THE SENIOR DEPUTY PRESIDENT: Yes. No, I am asking about clause 20(g).
PN1799
MR PELS: But, yes, that is right.
PN1800
THE SENIOR DEPUTY PRESIDENT: Yes, okay.
PN1801
MR PELS: Yes. Also now if I can refer your Honour to a decision in the case of the AMWU v Hendersons Automotive.
PN1802
THE SENIOR DEPUTY PRESIDENT: You have only got one copy, have you or have you got copies?
PN1803
MR PELS: I think I have, I should have. Yes, I have.
PN1804
THE SENIOR DEPUTY PRESIDENT: Thank you, yes.
PN1805
MR PELS: Your Honour, this is the AMWU v Hendersons in print PR935979 dated August 2003, a decision of Senior Deputy President O'Callaghan. Now, in that decision, your Honour, Senior Deputy President O'Callaghan indicates in para 31 that:
PN1806
It is necessary to identify a specific action which is encompassed within the definition of industrial action.
PN1807
Para 31, the last line. Para 43, Senior Deputy President O'Callaghan indicates that:
PN1808
Claims relating to alleged breaches of the EBA are more properly dealt with in the relevant court.
PN1809
43:
PN1810
There are two key reasons for this: First the obligation to consult -
PN1811
and it talks about then that:
PN1812
A number of the contract workers working at the plant over the past 10 years have not previously been argued to be in breach of any of the certified agreements as they have existed throughout that time.
PN1813
And then he went on to say that:
PN1814
It should, in my view, be determined by the relevant court.
PN1815
And further, your Honour, at para 45:
PN1816
I cannot characterise the allegation relative to consultation as industrial action and that it is not action that can be described by subclause (b) and (c) of the definition of industrial action.
PN1817
Your Honour, we submit that the union has not discharged its onus of establishing the requisite jurisdictional requirements for the granting of an order specifically that industrial actions has been threatened or probable. And we submit that the matter should be dismissed on that basis. Now, your Honour, if you are so convinced and find that industrial action is happening, threatened or probable, the issue then becomes an exercise in discretion.
PN1818
And we submit that there are relevant considerations in comments - I think Mr Borowick also had an authority by Commissioner Hingley in a matter relating to Tenix Defence Systems. If I can just hand that up.
PN1819
THE SENIOR DEPUTY PRESIDENT: Thank you.
PN1820
MR PELS: At point 5, your Honour, of Commissioner Hingley's decision:
PN1821
The application pertains to an industrial dispute over Tenix's desire to implement an 19 day month work cycle which is opposed by the AMWU, the AWU and the CEPU.
PN1822
At point 10, it was submitted that:
PN1823
The 19 day work cycle option was contemplated in the award or the relevant provisions which set out how it may happen. The agreement contains no provision relating to hours of work and this resulted in a response of unauthorised stoppage on 25 July 2001. The company was prepared to enter into conciliation.
PN1824
And at point 12:
PN1825
Tenix's decision to revert to a 19 day work cycle relates to a slippage in work progress on current ship and building orders and concerns as to future viability.
PN1826
And we say that is similar to this situation, that the company has an ongoing requirement to ensure the ongoing viability of BASF. At point 16:
PN1827
The key question is then: Is the refusal to work the roster industrial action? If the Commission is satisfied that the company's request is lawful and reasonable then refusal to comply was industrial action because there is a ban on performance of normal work. And the agreement does not express -
PN1828
at point 17:
PN1829
The agreement does not express any specific limitation on the ability to work different cycles.
PN1830
Now, the point we wish to make, I won't belabour this too much, your Honour, is that the decision under discretion, your Honour, point 55, 56. Sorry, point 57. It says:
PN1831
I am satisfied that industrial action by Tenix is threatened.
PN1832
At point 57:
PN1833
The identification of considerations relevant to the exercise of discretion should be guided by the objects of the Act and an understanding of the relationship of the power that is exercised under the scheme of the Act.
PN1834
And it talks about Coal and Allied. And then he went on to say at point 58:
PN1835
The commercial concerns for Tenix are substantial in completing present contracts and gaining further contracts. For employees, their RDOs remaining available and the state of the work site.
PN1836
And at point 60:
PN1837
I have made it clear that I do not believe it is open to the company to implement its present proposal during the term of the agreement. However, in considering whether to exercise the discretion, I have given significant weight to the commercial interests of the employer and believe not to rigorously address the slippage is obviously amenable to those interests.
PN1838
So Commissioner Hingley indicated that whilst it may be termed industrial action he is going to take into account the commercial interests of the company and its obvious desire and ability to manage its business and the long term viability and the interests of the company and its employees. On that basis, your Honour, we seek to persuade you not to issue the orders as indicated. If I can now turn to the issue of the section 170LW, the company has indicated in its submissions that the Commission does have the power under section 170LW, under the disputes procedure to deal with disputes over the application of the relevant clauses in the EBA.
PN1839
And we quite clearly we reiterate that the company relies on the clauses at clause 18, redundancy, we have already discussed 19 and 20, in a sense to support that its actions are in accordance with the EBA. And we say, your Honour, under clause 22 of the agreement provides for the orderly settlement of the matters in question and of course work shall continue in accordance with the directions of the company whist the Commission is dealing with the disputes.
PN1840
Now, the evidence to date quite clearly is the Commission needs to decide, on balance, the evidence provided by all parties. Now, what we say about the evidence of Mr Cesar Melhem is that it is very significant we say there is nothing in his statement about clause 20(g) and about the negotiation of manning levels. That is very significant. Mr Melhem has been around a long time as a union official, I think I can say he is well respected and I think that his non-reference to that in his sworn statement, it is a true and correct statement, we say is significant and the fact that he does not indicate that that was part of the 2001 negotiations.
[12.20pm]
PN1841
That is backed up, we say, obviously by the evidence of Mr Morrison and Mr Jackson. Mr Melhem talked about - or he was first-hand, did deal with the negotiations for the 2001 agreement. He does say on a number of issues about what his view is and his opinion in regard to breaches of the EBA, but obviously that is a matter for the Commission to determine. Similarly, in the evidence of Mr Cleveland and Mr Belyea, sorry, Mr Robert Cleveland Belyea, he did indicate that what has been changed in the past was done by agreement, but even in his evidence he had to concede that even though he asserted his evidence at clause 22 was negotiated as many levels were part of the negotiations, he could not relate or link to any other clause in the EBA which supported his contention that it was part of the negotiation.
PN1842
So, on balance, your Honour, we say that we believe you should be persuaded by the evidence of Mr Morrison and Mr Jackson in regard to, were manning levels which the union strongly relies on, part of the negotiations. We say there is no evidence or corroborating evidence at all in that sense that they were part of EBA negotiations.
PN1843
THE SENIOR DEPUTY PRESIDENT: What do you say I should make of the company's failure to call Mr Borg?
PN1844
MR PELS: Well, he did appear on the first day, and I was hoping to get him very early on, but he is a busy - he is working for another company now, and so we were at his mercy in the sense that we understood he would be here today, but now he is not, I - and the fact that we asked specifically to adjourn the matter, albeit it was fairly late in the day anyway, but Mr Borg regrettably hasn't appeared, but he would simply - obviously from the company's point of view would corroborate with what Mr Morrison indicated, that in clause 20(g) there is a training requirement, and that was that, it was clearly linked to the training.
PN1845
Mr Borg had been with the company for a number of years, and he worked with Mr Melhem as well. So, the company - well, the Commission has indicated that that statement was withdrawn, so regrettably, apart from I suppose summonsing Mr Borg here and - but on the basis of that, exactly that, there is no - we can't rely on his statement.
PN1846
THE SENIOR DEPUTY PRESIDENT: I notice you wanted to make some comment, Mr Borowick. You will have a chance at reply. Yes, Mr Pels.
PN1847
MR PELS: Now, Mr Borowick made reference to a number of decisions in his submissions, and he made reference to - he made reference to Commissioner Whelan's decision in his decisions, although he didn't address it in the submissions before you. I will make a response to that in the sense that Commissioner Whelan's decision which is also a section 127 application dated in Melbourne 7 August 1998 in print Q4688, she did find against the airlines, the old Trans-Australian Airlines. The fact was that there was a provision in the EBA that says that flight engineers are entitled to secure employment to age 60 and that the actions of Mr Marsh, representing the airlines, was in actual fact a breach of the EBA and therefore attracted an order under section 127.
PN1848
However, Mr Borowick made reference to SDP Watson's decision, but in that decision we also find that the statements made by the Senior Deputy President in that instance also support the employer's submissions. And that is that, under jurisdiction at point 29 his Honour went on to say:
PN1849
I am unable to discern that the actions of Wood Products constitutes the performance of work different from that ...(reads)... is adopted in connection with an industrial dispute.
PN1850
He goes on to say at point 33, in conclusion as to the section 127 orders, he says:
PN1851
If the exercise of such discretion requires the Commission to be satisfied that it is appropriate to direct that the relevant industrial ...(reads)... upon the Commission itself imposing a prohibition.
PN1852
In fact, I have actually probably read that straight out of Munro Js decision. I perceive in the present - under point 34 of his decision, your Honour:
PN1853
I perceive in the present circumstances an industrial contest between the parties in which negotiation and consultation has been ...(reads)... the orders sought in the circumstances.
PN1854
We would obviously seek that the Commission - persuade the Commission to do the same in these circumstances. And in his decision, the summary, he says:
PN1855
The Commission is not satisfied industrial action within the meaning of section 4 is happening, threatening, ...(reads)... order sought within jurisdiction in the circumstances.
PN1856
Your Honour, on that basis, it is our submission obviously that the - our submission would be that you not exercise your discretion under section 127(2) but under section 170LW. The company submits that - - -
PN1857
THE SENIOR DEPUTY PRESIDENT: Hang on, those are 127 matters you went to, wasn't it, not 170LW?
PN1858
MR PELS: Sorry?
PN1859
THE SENIOR DEPUTY PRESIDENT: Those decisions you have just been to are 127 matters, aren't they?
PN1860
MR PELS: Yes, yes. I am sorry, I have swapped them, yes.
PN1861
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1862
MR PELS: I actually was responding to Mr Borowick's submissions.
PN1863
THE SENIOR DEPUTY PRESIDENT: Right.
PN1864
MR PELS: In regard to the 127, yes. Under 170LW we say to the Commission, well, what the union is asking for is almost - what they are asking for is a retrospective order, it appears, or a decision that the company unravel or undo what has already been agreed to, in effect. The employees for the last six weeks in their letter have been advised of the new roster. We say that is in accordance with the EBA, so in accordance with their contract of employment and EBA we say they have complied totally with that, and - - -
PN1865
THE SENIOR DEPUTY PRESIDENT: But that is the dispute, isn't it? That is the dispute over the application of the agreement, the union says you haven't.
PN1866
MR PELS: Yes, but the union is seeking to you to unravel, to wind the clock back six weeks and reinstate, well, you can hardly reinstate the employees who have been made redundant.
PN1867
THE SENIOR DEPUTY PRESIDENT: Well, as I understand it, they want me to make a determination which under the provisions would be a private arbitration which if you don't need it they can take you for breach essentially of contract.
PN1868
MR PELS: Sorry, they can?
PN1869
THE SENIOR DEPUTY PRESIDENT: Take you for breach of contract.
PN1870
MR PELS: That is - - -
PN1871
THE SENIOR DEPUTY PRESIDENT: That is what they are asking under the LW.
PN1872
MR PELS: Yes.
PN1873
THE SENIOR DEPUTY PRESIDENT: That is the effect of an LW application.
PN1874
MR PELS: Yes.
PN1875
THE SENIOR DEPUTY PRESIDENT: The Commission makes a determination by way of private arbitration. Non-observance of the determination lets lie for further action.
PN1876
MR PELS: Yes. And we are saying that in actual fact, the employees, there was no breach of contract, obviously. That is our submission, that employees have accepted the new arrangement. What is really in dispute is monetary compensation. That is what is in dispute. And we would say that the Commission should not be persuaded to unravel a - I suppose - a flexibility or an efficiency process which in actual fact has been operating for six weeks now, employees have lost no benefits, they in effect, we would say, have accepted the new contract of employment, because if there was a breach of contract of employment or a simple non-compliance with the direction, then come last October the unions would simply not have taken up the new roster or accepted the new rosters, accepted the new contracts. They simply would have said to the Commission, no, this is industrial action, we will - - -
PN1877
THE SENIOR DEPUTY PRESIDENT: No, because the certified agreement at clause 22 provides that whilst the matter is being dealt with by the Commission, what the employer wants prevails, doesn't it?
PN1878
MR PELS: Yes.
PN1879
THE SENIOR DEPUTY PRESIDENT: So that is what has been happening for the last six weeks, isn't it?
PN1880
MR PELS: That is right, but the 127 they - if they thought they were hard done by, but I take it under 170LW that what - in effect they are asking to backdate or unravel the whole decision, and tell the company that it now must go back to three day workers - - -
PN1881
THE SENIOR DEPUTY PRESIDENT: Five, I think.
PN1882
MR PELS: Sorry?
PN1883
THE SENIOR DEPUTY PRESIDENT: Five.
PN1884
MR PELS: Well, there are two redundant. One is voluntary redundancy, he has already gone. The other one is a forced redundancy.
PN1885
THE SENIOR DEPUTY PRESIDENT: No, no, it is a separate issue. They say you have got to have five. Under the agreement you have got to have five, that is what they say.
PN1886
MR PELS: Well, whatever it is. So, we are saying that you shouldn't be persuaded to exercise your discretion even if you believe, even if you believe that the union is right, that somehow that clause 20(g) linked to clause 19, that the company has a case to answer or simply has breached that. We would say under your powers not to consent or agree to the union's request to reinstitute or - the five shift workers.
PN1887
THE SENIOR DEPUTY PRESIDENT: Do I have a discretion under 170LW?
PN1888
MR PELS: I think you do.
PN1889
THE SENIOR DEPUTY PRESIDENT: Well, 170LW I use almost colloquially, because the real power arrives under clause 22 of the agreement.
PN1890
MR PELS: Yes, clause 22.
PN1891
THE SENIOR DEPUTY PRESIDENT: Well, do I have a discretion under clause 22? I will have to settle, won't I?
PN1892
MR PELS: Well, that is right.
PN1893
THE SENIOR DEPUTY PRESIDENT: So where is the discretion?
PN1894
MR PELS: Well, there is a number of ways you can settle it. I mean, as I said, the union - - -
PN1895
THE SENIOR DEPUTY PRESIDENT: But it is a dispute over the application of the agreement.
PN1896
MR PELS: That is right.
PN1897
THE SENIOR DEPUTY PRESIDENT: It is almost a matter of law. How does the agreement apply? That is what you are asking me to settle.
PN1898
MR PELS: Well, no, actually - well, you will never settle the dispute, whether - - -
PN1899
THE SENIOR DEPUTY PRESIDENT: No. I am to settle a dispute over the application of the agreement.
PN1900
MR PELS: Yes.
PN1901
THE SENIOR DEPUTY PRESIDENT: Yes. There is a dispute about the meaning of clause 20(g).
PN1902
MR PELS: Yes.
PN1903
THE SENIOR DEPUTY PRESIDENT: How that applies, right, in conjunction with other clauses. That is what I have to settle. If I was exercising my discretion, how would you say I should exercise my discretion in that regard?
PN1904
MR PELS: Well, in one sense you can only do it - from what the union's submission is and what they are seeking, they are clearly seeking to reinstate the five days. We are saying that is not in the interests of the company, nor the employees. Even if you did come down in favour or were persuaded, which we hope you wouldn't be, but if you were persuaded we would say to reinstitute the five days would be a retrograde step for the company and also it virtually means that the company simply cannot restructure, it cannot make changes.
PN1905
THE SENIOR DEPUTY PRESIDENT: Well, that might be the effect of the agreement they have made.
PN1906
MR PELS: Well, that is right. And that is the union's argument which we are saying we believe you should be persuaded that you shouldn't take - - -
PN1907
THE SENIOR DEPUTY PRESIDENT: Yes, I understand what you - I understand your submission about how clause 20(g) applies.
PN1908
MR PELS: Yes. So, that is what we are saying, that it is a - in settling that dispute is that you not grant the union's application, in effect, it is - which we say is really just a dispute over the money.
PN1909
THE SENIOR DEPUTY PRESIDENT: Yes.
PN1910
MR PELS: So, on that basis, your Honour, that concludes our submissions. If the Commission pleases.
PN1911
THE SENIOR DEPUTY PRESIDENT: Mr Borowick.
PN1912
MR BOROWICK: Senior Deputy President - - -
PN1913
PN1914
THE SENIOR DEPUTY PRESIDENT: Yes, Mr Borowick.
PN1915
MR BOROWICK: Senior Deputy President, in respect to exhibit P4, it is the submission of the AWU that you give that no weight whatsoever in these proceedings. Mr Pels tries to draw an analogy with exhibit B7, which was shown to Mr Belyea during examination-in-chief. Mr Pels for BASF had an opportunity to cross-examine him on it, and Mr Belyea gave evidence prior to both Mr Morrison and Mr Jackson and the intended evidence of Mr Borg, so he could have easily shown the exhibit to Mr Morrison or Mr Jackson and called Mr Borg if they had wanted to seek to undermine exhibit B7.
PN1916
The way that exhibit B7 is treated in these - or should be treated in these proceedings is completely different to exhibit P4 which was just introduced at the last stage. It wasn't possible to show it to any of their witnesses. It wasn't even possible to show it to Mr Morrison, who is the author of the letter. Mr Morrison's own letter wasn't shown to him during his examination-in-chief. Despite the assertions contained in exhibit P4 there is no evidence to support any of the material in that letter. There is no evidence before the Commission that the changes implemented by BASF will lead to cost-reductions.
PN1917
There is no evidence that the changes implemented will lead to a positive impact on profitability, and there is no evidence before the Commission about the commercial considerations of BASF. There has been - Mr Pels made some submissions about clause 19, and Mr Melhem gave evidence on that how work place change has been dealt with previously by the parties. That commences at paragraph number 557 of the transcript. And in paragraph 557 Mr Pels refers Mr Melhem to ongoing improvement. At paragraph 558 Mr Pels says:
PN1918
Yes. You are not happy with the process, but don't - you haven't objected or are saying the company can't review and restructure its work place as an ongoing process. You are agreeing that they can do that.
PN1919
Mr Melhem responds: Within certain limitations:
PN1920
Yes, as long as they do it in accordance with the EBA.
PN1921
Mr Melhem responds:
PN1922
With EBA, that is right.
PN1923
I think it is supposed to be: Within EBA, that is right:
PN1924
Yes. And why do you say at point 9, the abolition of the day work teams is a fundamental and significant breach of the 2001 agreement?
PN1925
Mr Melhem responds:
PN1926
Simple. We entered into negotiation, reached an agreement in good faith with the company. ...(reads)... is why we could have said, okay, you cannot change your manning levels on day shift.
PN1927
And it goes on. And then further down at paragraph 568:
PN1928
Yes, but the point I am saying, the question I am saying is that the only difference between now and in the past is that you haven't reached agreement.
PN1929
That is Mr Pels asking Mr Melhem, and Mr Melhem responds: That is right. Senior Deputy President, there is evidence before the Commission that clause 19 was reviewed in 2001, and the way it appears is different to the way it appears in the 1998 agreement. Mr Pels in our view incorrectly characterises it as a throwback to the early 1990s. That submission, in our view, is contrary to the evidence. The clause was changed. Mr Belyea gave evidence about that, and Mr Borg could also have given evidence if he had attended the Commission.
PN1930
There is no evidence before the Commission that clause 19 has not been previously complied with. That is just a submission from the bar table, we say. Mr Borg, BASF was granted an adjournment on the basis that Mr Borg couldn't appear on the last occasion, and Mr Borg has determined not to attend the Commission today. There was no notice provided to the AWU and we are saying in the circumstances he has been disrespectful to the Commission. Accordingly, no weight should be given to the material filed on behalf of Mr Borg and quite appropriately struck out in proceedings earlier today.
PN1931
The AIG on behalf of BASF submits that to have efficacy the table in clause 20(g) must be connected to another clause within the agreement. We don't believe that to be the case. The column to which the Commission has been referred is headed: Manning. And in its industrial usage, this means only one thing. It sets a manning level, the team 1 and team 2, and there are references to the team in the far left-hand column of the table. BASF has taken the Commission to a decision of the full bench, Munro, Harrison, Leary in Coal and Allied, and you were taken to the clause - the paragraph which in part states:
PN1932
Thus, for the Commission to exercise the discretion it will usually need to be satisfied that the industrial ...(reads)... appropriately a direction by the Commission that it cease or not occur.
PN1933
We believe that the actions undertaken by BASF in abolishing the day work team can quite appropriately be described as illegitimate because of the context in which it has occurred. There is evidence before the Commission that the day work was considered during the negotiation of the current enterprise agreement. There was evidence before the Commission that BASF sought to alter the definition to facilitate their definition of - to delete the definition of day work, and failure of the definition which would have in effect caused the transfer of the day workers to shift work.
PN1934
The context in which the abolition of the day work team occurs is also - I withdraw that. There was already a reduction that has occurred in respect of the day work numbers that occurred in 2001, and it occurred at the same time that the EBA was being negotiated, so it was a live issue at the time. The number of day workers went from nine to five. It is not like there was no change in respect of day work. It was clearly a matter in the minds of the parties, and that is in the evidence. There was a quite significant day work team that was almost reduced by half during the negotiations of the 2001 agreement.
PN1935
Clearly, had - I withdraw that. What we are experiencing now is not a further reduction of the day work team, it is the abolition of the day work team, a significant step, a significant step in the context that there was a dramatic reduction in the size of the day work team in 2001. It is an illegitimate, appropriately characterised as an illegitimate action because it is an extra claim, and I think it can be fairly characterised as illegitimate because the company failed to provide any real alternatives to the day workers being transferred to shift work. So, I believe, and it is our submission, that the actions of the company sits on all fours with the description or the discussion of illegitimate action of the full bench in Coal and Allied.
PN1936
Mr Pels submitted that Mr Morrison and Mr Jackson contradicted the evidence of Mr Melhem and Mr Belyea about the nature of the table appearing in subclause 20(g). The evidence of Mr Jackson is that he wasn't involved in the negotiation of the enterprise bargaining agreement, and that is to be found at paragraph number 1354 of the transcript. Mr Pels on behalf of BASF also sought to submit from the bar table what the evidence of Mr Borg would have been had he appeared, and we say respectfully that the Commission should just disregard that submission.
PN1937
Mr Borg had two opportunities to appear before the Commission to be examined and cross-examined about any evidence that he may have given. Significantly, BASF concedes the Commission has jurisdiction under Section 170LW to make an order, and they also concede that the Commission has that ability under clauses 22 and 19(b)(vi) of the 2001 agreement. That is an unencumbered jurisdiction. There was no submission that in some way the Commission was constrained in any matter which they may determine to exercise such discretion. Simply, it is a matter for the Commission to decide whether that discretion should be appropriately exercised on this occasion.
PN1938
For all the reasons that we have put to you, Senior Deputy President, and on the basis of the evidence before the Commission, we respectfully request that you make an order. Those are our submissions, if the Commission pleases.
PN1939
THE SENIOR DEPUTY PRESIDENT: Mr Pels.
PN1940
MR BOROWICK: Senior Deputy President, I actually meant to make reference to two decisions that Mr Pels took you to. In respect of PR935979, the matter before - signed by Senior Deputy President O'Callaghan in Henderson's Automotive. The Senior Deputy President says at 42:
PN1941
Notwithstanding the uncertainties over the context of the obligation on Henderson's to consult with the Unions prior to the engagement of the contract worker, and on the evidence before me, I am unable to characterise the absence of consultation as industrial action.
PN1942
And then at paragraph 44, it goes on:
PN1943
Had Henderson's adopted practice of recruiting contract workers during the past few months which is a new or changed process, or it had been demonstrated to be related to the current certified agreement negotiations, I may have arrived at a different conclusion in this respect.
PN1944
Quite clearly in this matter, Senior Deputy President, the matters in dispute go to matters that were negotiated as part of this current enterprise agreement. Now the evidence is clear on that. If the Commission pleases.
[12.49pm]
PN1945
THE SENIOR DEPUTY PRESIDENT: Mr Pels, am I right in the characterisation of what the company has done is reduce the number of employees on day work from five to zero and that has led to two of those five being redundant and three going to shift work?
PN1946
MR PELS: Yes, that is my understanding, your Honour.
PN1947
THE SENIOR DEPUTY PRESIDENT: Thank you. I will hand down a decision in this matter at 2 o'clock.
LUNCHEON ADJOURNMENT [12.50pm]
RESUMED [2.00pm]
PN1948
THE SENIOR DEPUTY PRESIDENT: I have before me two applications. One is under section 127 of the Workplace Relations Act. The second application arises from the operation of section 170LW of the Act and clause 22 of the BASF Australia Limited (BAL) Chemical Workers Certified Agreement 2001, which agreement enables the Commission to settle disputes over the application of the BASF agreement. The applications arise because BASF Australia Limited has reduced the number of employees on day work from five to zero, resulting in the redundancy of two employees and the transfer of three employees to shift work. The AWU maintains such action is contrary to the BASF agreement, however, BASF claims otherwise.
PN1949
In the circumstances, I am satisfied I have jurisdiction to deal with the matter under clause 22 of the BASF agreement. With that in mind, I have determined that on the material before me, BASF can transfer day workers to shift work. However, I have also determined it cannot reduce the number of employees on day work to below five employees unless it meets the requirements in clause 19 of the BASF agreement or the application of the disputes procedure in clause 19 allows it to so reduce the numbers.
PN1950
In my view, clause 8(e) of the BASF agreement enables BASF to transfer employees from day work to shift work. However, I am also satisfied the BASF agreement sets out in the table at clause 20(g) the agreed number of employees to be employed on each shift. And it requires five employees classified as "product operator" on a nine day fortnight, Monday to Saturday with a staggered start, two shifts, each with five employees classified as "structure" on a seven day continuous shift operation, one shift of five employees classified as "PO shift" on a 7 day continuous shift operation, two employees classified as "relief (structure filtration)" on a seven day continuous shift operation and six employees including one relief classified as "supervisor". I refer to these requirements as the agreed employee numbers.
PN1951
I am satisfied clause 20(g) of the agreement sets out the agreed number of employees for the following reasons:
PN1952
(1) there was no probable explanation given to me as to why the numbers set out in clause 20(g) refer to something else other than the agreed numbers;
PN1953
(2) the evidence was that there were negotiations on employee numbers in the lead up to the BASF agreement being reached between the parties;
PN1954
(3) the failure of BASF to call Mr Joseph Borg, the former Employee Relations Manager at BASF, who was intricately involved on behalf of BASF in negotiating the agreement with the AWU;
PN1955
(4) I am satisfied, having regard to the evidence of or given for the AWU and the evidence of Dr Morrison at paragraphs 1161 to 62 and 1271 to 1280 about the meaning of clause 8(a) on manning requirements; and
PN1956
(5) I am satisfied that clause 18 concerning redundancy in the agreement does not need to rely on BASFs view of the meaning of clause 20(g) for it to have effect. Clause 18, concerning redundancy, has effect once agreement is reached on reducing the agreed employee numbers or disputes procedure operating as a result of clause 19(b)(vi) enables such a reduction.
PN1957
While, in my view, such agreed employee numbers can be changed by the operation of clause 19 agreement flexibility in the BASF agreement, this change can only be done if the majority of all affected employees at the workplace generally agree and the AWU unreasonably opposes agreement or, if agreement cannot be reached, the change is allowed by the application of the disputes procedure. There was no evidence before me that processes have been put in train to ascertain if the majority of affected employees at the workplace genuinely agree to change the agreed employee numbers.
PN1958
Accordingly, clause 19(b)(vi) of the BASF agreement which provides for the disputes procedure to apply if agreement cannot be reached does not yet come into play. The operation of clause 19(b)(vi) in the circumstances of this matter is premature. In reducing the number of employees on day work from five to zero, therefore, BASF is in breach of the BASF agreement. Given the conclusion I have reached on the section 170LW application, I find it unnecessary to also issue an order under section 127. In the exercise of my discretion and assuming I have jurisdiction, at this stage I decline to issue the section 127 order sought by the AWU. I will now adjourn.
ADJOURNED INDEFINITELY [2.07pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
BRADLEY RONALD MORRISON, AFFIRMED PN1469
EXAMINATION-IN-CHIEF BY MR PELS PN1469
EXHIBIT #P3 STATEMENT OF DR MORRISON CONCERNING BREAKS PN1475
CROSS-EXAMINATION BY MR BOROWICK PN1519
RE-EXAMINATION BY MR PELS PN1539
EXHIBIT #B9 STATEMENT OF MR WHELAN PN1547
EXHIBIT #B10 STATEMENT OF MR SPEZZA PN1547
WITNESS WITHDREW PN1554
EXHIBIT #P4 LETTER DATED 08/09/2003 FROM DR MORRISON, SITE MANAGER PN1656
EXHIBIT #P5 OUTLINE OF SUBMISSIONS AND ATTACHMENTS PN1914
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