C2005/2815, Transcript of Proceedings [2005] AIRCTrans 1179 (23 May 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 11586-1

SENIOR DEPUTY PRESIDENT HAMBERGER

C2005/2815

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
AND
HYDRO ALUMINIUM KURRI KURRI PTY LTD
s.99 - Notification of an industrial dispute
(C2005/2815)

SYDNEY

1.07PM, WEDNESDAY, 27 APRIL 2005

PN1

MS M KENNEDY: I represent the AMWU. I also have with me today
MR C PILLIDGE who is AMWU delegate and MR P INNES, who is the CEPU delegate. I'll also be acting on behalf of the CEPU today.

PN2

MS H MCKENZIE: I seek leave to appear on behalf of Hydro Aluminium Kurri Kurri Pty Ltd with MR NAYLOR from the company.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Are there any objections to leave being granted?

PN4

MS KENNEDY: Yes, your Honour, we do have an objection. Section 42 of the act allows for appearances in relation to consent to the parties for a technical detail requiring legal knowledge or if no one else can adequately represent. We believe that's not the case today. We believe Hydro Aluminium have with their HR manager, Paul Naylor, and their CEO, Mr Trevor Coombs, who we negotiated the enterprise agreement with and believe that they have full knowledge of the company' history and the enterprise agreement.

PN5

THE SENIOR DEPUTY PRESIDENT: Ms McKenzie.

PN6

MS MCKENZIE: Yes, well I press the application for leave. Section 42(3) does not confine the circumstances in which the Commission can grant leave to matters where they are of a technical or legal nature. So that constriction doesn't appear in the terms of 42(3). The Commission may grant leave to a party on application by the party if the Commission is satisfied that having regard to the subject matter of the proceeding if there are special circumstances that make it desirable, the parties may be so represented and we rely on that.

PN7

There are two matters which are being heard together. Those two matters, although the dispute notification doesn't in itself provide the Commission with much detail, the two matters are firstly, the company moving forward in relation of proposed redundancies contrary to the spirit of the dispute resolution process. Without pre-empting what the union will say in relation to that matter, the company assumes that that is in effect a subset of or an issue which arises directly out of the other notification which is the proposed improvement strategy for the Kurri Kurri site, which in itself, as a notification says, involves proposed redundancies and a company's intention to outsource maintenance.

PN8

Your Honour, I know I may not be as familiar with other members of the Commission with this site, but the improvements strategy which Kurri Kurri Smelter has embarked upon and which is the subject of the notification, we say is a very significant initiative to try and effect major workplace change at the Kurri Kurri Smelter. There has been - and you will no doubt hear this when we get into the matter, there has been significant consultation and there are some very important and major issues relating to the viability of this business going forward. It is a significant matter. It affects three unions onsite and every employee on the site.

PN9

These matters are particular aspects relating to the overall improvement strategy which has been the subject of both detailed negotiations and discussion between the parties and, in different shapes and forms, previous matters before the Commission, the company has had the benefit of advice from me from the inception of the planning for this strategy and the company anticipates that these will not be the only occasions on which the parties - either these parties or the AMWU/CEPU and the AWU, which is the union which covers the production employees, will have matters before the Commission which raise issues or relating to the improvement strategy.

PN10

It is, as I say, a major exercise which the company has embarked upon. It's got some very important implications for employees. There are issues involving redundancy as notifications raise their issues relating to outsourcing of maintenance. There will be issues arising in relation to these matters to do with the application and interpretation of the enterprise agreement and in particular - and this is, I think, foreshadowed in one of the applications, 2187, the interpretation application for the dispute resolution process in the enterprise agreement.

PN11

It's the company's desire to be represented - have consistent and common representation throughout all issues to do with the improvement strategy. This is the first occasion which the matters have come before the Commission, but it will not be, I'm instructed, based on the company's expectations and, having regard to the important significant issues that are raised by the employment strategy, it's not going to be the last occasion. The company wishes to be represented, have legal representation throughout any proceedings concerning the improvement strategy and, in my submission, having regard to the subject matter of the proceedings, the Commission should be satisfied that there are special circumstances upon which leave should be granted on this occasion. If it please the Commission.

PN12

THE SENIOR DEPUTY PRESIDENT: Okay, thank you. I'll indicate now I will grant leave for Ms McKenzie to appear in the light of the circumstances and her role in advising Hydro over the overall strategy. It's not - it doesn't sound like it's a question of company that should be handling its HR itself, then brings in a lawyer at the last minute. It does sound like the lawyer is actually intimately involved in the matter. Okay, Ms Kennedy?

PN13

MS KENNEDY: If it pleases your Honour. I believe that it would be grossly unfair for the company to bring legal representation to hinder any processes. This is section 99 dispute. We keep the consolidation, we would hope to have worked through these issues today and if I need to take the matter further then we would certainly take the matter further. Certainly the company would then seek to bring in legal representation. But in the matter of the next issue that we've got coming up at 3 o clock, we've already been in front of the Commission, at which the company brought in legal representation which hindered the process to try and get the matter resolved. We're here to resolve the matter about progressing a dispute resolution process today and it's between the company and the employees - - -

PN14

THE SENIOR DEPUTY PRESIDENT: Yes.

PN15

MS KENNEDY: - - - and there's really no need for the representation from the company today.

PN16

THE SENIOR DEPUTY PRESIDENT: Well, I hear what you have had to say Ms Kennedy. I will do my very best to make sure that Ms McKenzie isn't allowed to, if you like, interfere with the matter being resolved as effectively as possible. I hear what you have to say but I have made my decision to grant leave to appear. Ms Kennedy?

PN17

MS KENNEDY: If it pleases your Honour. The reason we're here today is in relation to a grievance that was put forward to the company by the unions in regards to an improvement strategy, the company's announcement of the improvement strategy for the Kurri Kurri site. I have for your Honour a copy of the improvement strategy the company as tabled, thanks.

EXHIBIT #AMW1 IMPROVEMENT STRATEGY IN KURRI KURRI

PN18

MS KENNEDY: In February this year Hydro Aluminium announced this improvement strategy for the Hydro site. This strategy has outlined cost reduction exercises to improve the company's position and maintain it's viability for the future. As part of this cost reduction exercise, Hydro Aluminium announced that they would be reducing its workforce by up to 59 in three weeks, 35 of these employees in the maintenance department, predominantly AMWU - - -

PN19

THE SENIOR DEPUTY PRESIDENT: Sorry, can you - yes, sorry, how many in your maintenance department?

PN20

MS KENNEDY: 35.

PN21

THE SENIOR DEPUTY PRESIDENT: 35, to go?

PN22

MS KENNEDY: To go.

PN23

THE SENIOR DEPUTY PRESIDENT: Is that all of the people in the maintenance department?

PN24

MS KENNEDY: No, it's about three-quarters.

PN25

THE SENIOR DEPUTY PRESIDENT: Okay, thanks.

PN26

MS KENNEDY: The company believed that this would be a more cost-effective way in which they would outsource maintenance to contractors. This presentation outlines various maintenance areas earmarked for outsourcing and I would draw you attention in the improvement strategy, your Honour, to page 24 and it goes from page 24, 25, 26 and 28 and 29. On page 24, this talks about outsourcing of all services in the mobile workshop.

PN27

Then at page 25 it talks about outsourcing a majority of services in the essential workshop and its boiler makers and fabrication work. On page 26 it talks about outsource to an external provider in the central workshop fitting machine and hydraulics and on pages 28 and 29 it talks about outsourcing all specialist services in the carbon plant hot rooms and maintenance sections. What the unions were seeking to the company in the dispute resolution was for the company to reassess its position on the maintenance outsourcing and look at other possible alternatives using their own resources.

PN28

I draw your attention to an announcement that was made by Extrata last month where they're talking about bringing - hiring all their maintenance services together just to work specifically in the mine and hire their own employees because they had found that outsourcing was too costly and they weren't getting the knowledge, the intimate knowledge that an employee that has worked there for a period of time would give the company. The company talks about how in its improvement strategy, how they were going to work towards this and they're talking about doing this through a work redesign which is in the enterprise agreement. However, the problem we now have is that the company has forged ahead with its intentions while the unions are trying to work through the process.

PN29

The company has also talked about in this work redesign - they have outlined the amount of people they want to reduce their employees to and in the mobile workshop they're talking about a reduction of four employees, at least. In central workshop, boiler maker and fabrication they're talking about reductions of three employees with one to remain. In the central workshop with fitters and machinist on hydraulics, they're talking about a reduction of six employees with two to remain. In the carbon plant pot room and maintenance they're talking about a reduction of 22 employees and to retain a small core number.

PN30

In section 3 in this improvement strategy, the company talks about expertise allocation, maintenance section but nowhere are the words mentioned "work redesign". They talk about maintenance reorganisation. The company's attitude is that nothing is really negotiable and the company has already put out expressions of interest to companies to tender for the proposed maintenance contracts. The reason that both grievances have been listed for a hearing today is that there's been a major difficulty by the AMWU and CEPU senior delegates to have attempted to go through the grievance process, as outlined in part 14 of the enterprise agreement. The grievance dated - and I've got tabled for you a copy of the grievances that the senior delegates have put in.

PN31

THE SENIOR DEPUTY PRESIDENT: Okay, thanks. Do you want me to give this all one - - -

PN32

MS KENNEDY: Well, they're both the grievances, your Honour, so - - -

EXHIBIT #AMW2 GRIEVANCE REPORTS

PN33

MS KENNEDY: Now, the grievances as dated - I think it's 25 - 24 February - is related to the company's proposed improvements strategy. The maintenance unions, the AMW and CEPU seek that the company reassess its position on this matter, the matter being the company's position of outsourcing maintenance as outlined in the company document presentation, as I've given to you in AMW1. This grievance was initialled by step 1 as per part 14 of the grievance procedure and lodged on the 24 February. The company formally responded to the grievance on 25 February and the company's response was rejected and the unions requested that the grievance be taken to the next step, step 2.

PN34

A company notice titled, "Kurri Kurri Improvements Strategy Voluntary Redundancy" dated 24 February - I'm sorry to get you up again, I've got a copy of that. Is that all of them? Here they are, no, I've got them all here.

PN35

THE SENIOR DEPUTY PRESIDENT: Okay.

PN36

MS KENNEDY: Because I wanted to attach these.

EXHIBIT #AMW3 COMPANY NOTICE ENTITLED "KURRI KURRI IMPROVEMENTS STRATEGY VOLUNTARY REDUNDANCY" DATED 24/02/2005

PN37

MS KENNEDY: Yes. Your Honour, I draw your attention to the first page and the last page of that document that I've put there, employee support and the voluntary redundancy. Both of these were tabled - sorry, both of these were pinned on a notice board in the mobile workshop office in the morning of
Friday, 25 February. This is the day after the AMW delegates and the CEPU delegate lodged a dispute. The document detailed how an employee could apply for a voluntary redundancy form and also prove expression of interest form. On page 2 of the one I've just given you there is a copy of the expression of interest form that the employees had to go and get from the company.

PN38

Because the initial grievance was dated on the 24 February, it still had not been resolved and the company was still in pursuance of its agenda with the Kurri Kurri Improvements Strategy Voluntary Redundancy Notice, a second grievance was dated and lodged mid morning of Friday, 25 February. The grievance dealt with the company moving forward in relation to the proposed redundancies, the application and expression of interest forms contrary to the spirit of the dispute resolution process.

PN39

THE SENIOR DEPUTY PRESIDENT: Can you just - when you say "contrary to the spirit", what do you - I mean, do you mean it's inconsistent with - do you say that it's actually inconsistent with what - believing we're talking about - are we talking about clause 5? Just bear with me because obviously I haven't got as mush experience in relation to this firm as Commissioner Larkin, for example. I mean the - there's a separate redundancy enterprise agreement.

PN40

MS KENNEDY: Yes.

PN41

THE SENIOR DEPUTY PRESIDENT: In clause 5 it says this:

PN42

The company shall determine whether a voluntary retrenchment shall be allowed, after full consultation between the company, the affected employee or employees and the employer or employer's representatives including the relevant union units.

PN43

Is that the key point - your key sentence, if you like, you're referring to? That's the only reference to voluntary redundancy, or voluntary retrenchment as it's called in the agreement.

PN44

MS KENNEDY: Well, your Honour, no. What we're trying to say is that the company talked about they were prepared to work through work redesigns, yet before we even got a chance to go through the work redesign they have outlined there position. They made it quite clear that realistically if - in going through the processes outlined in the enterprise agreement and to our interpretation - - -

PN45

THE SENIOR DEPUTY PRESIDENT: So you're not saying - - -

PN46

MS KENNEDY: - - - it was the fact that they had to go through the process because it's in the enterprise agreement - - -

PN47

THE SENIOR DEPUTY PRESIDENT: Right.

PN48

MS KENNEDY: - - - but their mind was made up.

PN49

THE SENIOR DEPUTY PRESIDENT: Right, so your point is not so much about the redundancy agreement - - -

PN50

MS KENNEDY: What we're saying is - - -

PN51

THE SENIOR DEPUTY PRESIDENT: - - - or it's more about the enterprise agreement, the - - -

PN52

MS KENNEDY: Well, it's about the enterprise agreement and the fact that they were really hindering the process of the enterprise agreement.

PN53

THE SENIOR DEPUTY PRESIDENT: Can you just take me through that where you sort of say - - -

PN54

MS KENNEDY: Yes, of course.

PN55

THE SENIOR DEPUTY PRESIDENT: Where you say that, what the obligation would be and your view on your company if it goes through a work redesign process.

PN56

MS KENNEDY: Oh, okay - I've got - - -

PN57

THE SENIOR DEPUTY PRESIDENT: Is that what your - that's what you're referring to, isn't it?

PN58

MS KENNEDY: Yes.

PN59

THE SENIOR DEPUTY PRESIDENT: You're saying, if you do work redesign there are obligations on the process that you have to follow.

PN60

MS KENNEDY: Yes. I've got a copy of the work redesigns.

PN61

THE SENIOR DEPUTY PRESIDENT: I've got a copy of the agreement here if that helps.

PN62

MS KENNEDY: Yes.

PN63

THE SENIOR DEPUTY PRESIDENT: If you wanted - - -

PN64

MS KENNEDY: It's the process of the grievance we're talking about - - -

PN65

THE SENIOR DEPUTY PRESIDENT: Okay.

PN66

MS KENNEDY: - - - and a grievance and what we're saying is - yes, yes. In step 2 like we had - that went to the department manager's superintendent to carry out any necessary investigations, discuss the matter with the senior delegates and relevant team representatives and make a reply within two normal working days in an agreed timeframe of the formal referral of the matter. If the - a reply cannot be given a progress report would be made an agreement reached from the time of the reply to be given. If the matter is not settled then in step 3, the matter shall be formally submitted by the senior delegate union organiser and relevant team member - team representative to the chief executive officer and/or other appropriate officer of the company. We got stonewalled at step 3.

PN67

THE SENIOR DEPUTY PRESIDENT: So, did you get through step 2 and you got a reply of some sort?

PN68

MS KENNEDY: We got a reply, yes, of some sort and then the very next day they put up a VR. The delegate has just given me here - the two grievances were duly discussed on Tuesday, the 1 March 2005 at a step 2 meeting. So the document came out for the voluntary redundancies on 25 February. Brett Nixon, who is the company superintendent, Phil Innes from the CEPU, and Chris Pillidge from the AMWU were in attendance. The two grievances were discussed and neither matter was settled and it was requested by the unions that the matter be taken to step 3 of the grievance process.

PN69

THE SENIOR DEPUTY PRESIDENT: Now, can I just - - -

PN70

MS KENNEDY: We haven't got there to date, to this date we have not got there to that situation.

PN71

THE SENIOR DEPUTY PRESIDENT: Okay. Now, in a lot of grievance processes you have this sort of thing at the end that says, you know, and the status quo shall remain until the matter is resolved. Now, at the end of it, it doesn't appear to say something like that but is there just in the - it's worded in a slightly different way than your typical grievance procedure probably. I just want to have a quick look. I mean, are you saying - is there anything in the grievance procedure explicitly that says, if you like, the status quo must remain while the procedure is being used?

PN72

MS KENNEDY: Well, what we are saying about that, your Honour, is that we wanted to be able to discuss the issue and get to the point where we were going to go to the work redesigns because what is effectively happening now and what we were hoping wouldn't happen is that the company has put out voluntary redundancy notices. It makes it extremely difficult to try and negotiate a way through work redesign and how we are going to save jobs when the company is forging ahead.

PN73

THE SENIOR DEPUTY PRESIDENT: No. I understand that. I am just looking for, in terms of any agreements that the company has signed, because I mean these are quite recent agreements. There is the CEA itself, the enterprise agreements are only a matter of months old and the redundancy agreement itself is also, well, it's only about a year old. So do you think there is anything in the agreements themselves, and if so can you point me to them, that sort of says the company must consult - I am not saying there isn't, I mean it is a genuine question. Is there anything in your opinion in the agreements that says explicitly or implicitly if you can't find anything explicit, that says you can't make these changes until you have had a consultation. I mean, because you do sometimes see things like that in agreements but I am just having a look at this and seeing, and this is worded a bit differently from perhaps the most common type of procedure. It's not such a bad thing but is it a different - I am just saying, well, where is it if there is something that says you can't go ahead and do these things until we have resolved the matter.

PN74

MS KENNEDY: Just finding it, your Honour. It is - - -

PN75

THE SENIOR DEPUTY PRESIDENT: I mean, I did draw your attention to one thing, the redundancy agreement, in my view, one possible provision that might be relevant but there may be others.

PN76

MS KENNEDY: Yes. Okay. In part (d) of the grievance procedure:

PN77

In the event of any major change of employment conditions or award terms, in the event of any dispute arising between the company management ...(reads)...as agreed by the parties without interruption and without prejudice defining the settlement.

PN78

THE SENIOR DEPUTY PRESIDENT: All right. Okay. Thanks.

PN79

MS KENNEDY: Would you agree, your Honour, that it would be interpreted as status quo.

PN80

THE SENIOR DEPUTY PRESIDENT: Well, I am not just going to make a ruling on it but anyway that is obviously a potentially relevant provision. I suppose I am asking more your view about what do you think that actually means, in your opinion what do you think that entails in this current situation.

PN81

MS KENNEDY: What we would entail it - particularly the bit without prejudice, your Honour, because we believe that by putting out the voluntary redundancies they are kind of prejudiced the situation that we are trying to achieve through work redesign. It is sort of putting something hanging over your head that they're there all the time.

PN82

THE SENIOR DEPUTY PRESIDENT: All right. Okay.

PN83

MS KENNEDY: So if the union has requested that the status quo remain until the grievance was lodged on Thursday the 24th of the 2nd is resolved and be taken to the next step. The two grievances were duly discussed as I outlined to you on the 1st of the 3rd and requested that we go to step 3 of the grievance process. Enquiries were made on Thursday the 3rd of the 3rd to Mr Brett Nixon when the step 3 meeting would take place. Still to this stage, no date had been set. A further enquiry which the delegate believed happened either on Monday the 7th or Tuesday the 8th of the 3rd `05 to Mr Brett Nixon about the time and date for a step 3 meeting resolved in him being informed that he had to show, Mr Nixon asked him that he had to show where the company had breached the enterprise agreement in questioning him on the wording of what exactly he was trying to say. His understanding was that until such time this occurred the grievances would not progress to step 3 as taken to the company's CEO.

PN84

It was the delegate's understanding that under part 14 of the grievance procedure that if the matter is not settled then, as worded in the grievance procedure, the next step to be taken by the parties, which was go to step 3, and if the matter is not settled at step 2 then if one of the parties request further information discussion then these should be done at step 3. This would be the spirit of the dispute resolution process grievance procedure. The unions do not believe in this instance this has been carried out. That is why we are here.

PN85

THE SENIOR DEPUTY PRESIDENT: So you don't think step 3 has ever happened?

PN86

MS KENNEDY: No, it has never happened. This is an important matter, your Honour. We are talking about redundancies. The company is trying to move forward in the process to try and speed it up and get it bedded down for the redundancies to occur. The company put out a presentation to the union officials as well and it was my understanding that they wanted to have all this done by the end of May, early June and work out who is staying, who is going and why. We have been trying to progress this through to work to something that would be satisfactory between the employees and the company but yet the company won't progress the disputes procedure. So we are here for assistance from yourself to try and work through some resolution in the matter.

PN87

THE SENIOR DEPUTY PRESIDENT: Thank you. Ms McKenzie?

PN88

MS McKENZIE: Thank you, your Honour. First of all, the company does not accept in any way that it has obstructed or prevented the grievance procedure from being followed. In fact, the company's primary concern in the matter as being notified and listed before the Commission is that it appears to have been done so without the union's following, the procedure which the enterprise agreement sets down for, for the resolution of grievances. That procedure is contained in part 4 of the agreement and Ms Kennedy has taken you to some aspects of that. It requires first of all that a grievance form be used and the grievance reports that AMWU2 are in the form referred to in the agreement. The first grievance dated 24 February, some more than two months old, says that the grievance is a grievance as per part 14 of the enterprise agreement in relation to the company's proposed improvement strategy.

PN89

Now, that doesn't really say what the grievance is at all. It says there is a grievance in relation to the improvement strategy but it doesn't say what it is. The company reply is that the company will be reassessing its position as it works through the work redesign. The request sought by the union is to request the company to reassess its position. Now, that grievance was followed up with a second grievance lodged the following day which may be an attempt to provide some greater detail about the subject matter of the grievance. It says the grievance is in relation to the company moving forward in relation to proposed redundancies application of expression of interest form. So it appears to be, from
Ms Kennedy's submissions, a grievance in response to the posting of the notice which is AMWU3 which simply invites applications from employees to either apply for voluntary redundancy or to express interest in voluntary redundancy.

PN90

The grievance says that that is contrary to the spirit of the dispute resolution process. The reply is that the expressions of interest are part of the process being, I think, a reference to the improvement process and the company is continuing and the settlement requested by the unions is that the status quo remained. It is a bit unclear from the face of that report what the status quo actually is.

PN91

THE SENIOR DEPUTY PRESIDENT: Well, can I ask you, I mean, in relation to the potential voluntary redundancies - I will just have a look at what the - I mean, again, I actually read out this sentence just in the redundancy agreement as opposed to the other ..... It says:

PN92

The company shall determine whether voluntary retrenchment...(reads)... full consultation with the company if it affects the employee and the employee's representatives including the unions.

PN93

Now, you could argue that simply seeking expressions of interest is not actually determining whether a voluntary retrenchment shall be allowed.

PN94

MS McKENZIE: Yes.

PN95

THE SENIOR DEPUTY PRESIDENT: But when you actually look at the documents in AMWU3 it certainly doesn't look like this is just a sort of, well, we are just consulting to find out if people are interested. It reads, or it seems to read if I could put it that way, that it's a fait accompli that there will be voluntary redundancies. I mean, for example, towards the bottom of the first page:

PN96

Applications for voluntary redundancy will be accepted from all employees who wish to leave under the improvement strategy.

PN97

It doesn't sound like, well, we are just trying to find - I mean, certainly if you are just trying to find out whether anybody is interested I don't think that would be pre-empting a decision about whether you are going to have voluntary retrenchment. It might be quite a reasonable thing to find out first as information that might flow into a decision about it but this doesn't look like that I have to say, on the face of it, literally on the face of it, it says, we are going to accept, you know, if you apply we will accept you as long as you lodge before no later than Friday 29 April. Now, would you agree that there has already been a decision to have voluntary redundancy process.

PN98

MS McKENZIE: No. Perhaps if I can answer your Honour's concerns in this way. The voluntary redundancy notice has to be considered in the context of AMWU1 which as Ms Kennedy said was the subject of presentation to employees in late February and in fact it was on 21 and 22 February. So the starting point and the context in which the voluntary redundancy notice has to be considered is the improvement strategy presentation and that was quite a detailed presentation which was provided to all employees on site by Mr Coomb, the chief executive officer.

PN99

THE SENIOR DEPUTY PRESIDENT: I suppose that wasn't quite my question though unless you have come to - - -

PN100

MS McKENZIE: I will, your Honour, I hope.

PN101

THE SENIOR DEPUTY PRESIDENT: Okay.

PN102

MS McKENZIE: In the improvement strategy it identifies what the objectives are of the strategy and in particular it identifies proposed reductions in Manning but what is clear, what becomes clear from the presentation, is that those reductions in numbers will only be achieved through the outcome of a work redesign process. The work redesign process is something which is dealt with specifically in the enterprise agreement at part 7. So if I can just - - -

PN103

THE SENIOR DEPUTY PRESIDENT: Yes. I still - - -

PN104

MS McKENZIE: The point I think is this, your Honour. The primary process whereby anything happens is a work redesign process and the company accepts that. The company cannot pre-empt or circumvent the outcome of a proper work redesign process under the certified agreement by initiating invited or determining redundancies. So the work redesign process is the primary process by which any of the changes proposed in the strategy can be achieved.

PN105

THE SENIOR DEPUTY PRESIDENT: So you are not - I mean, my comment, this presentation was, sorry, again it was made in February?

PN106

MS McKENZIE: It was made on 21 February prior to the redundancy notice.

PN107

THE SENIOR DEPUTY PRESIDENT: So and then three days later a notice goes out signed by the manager of human resources not saying, well, we are just seeking expressions of interest because we might be having to downsize in accordance with what is set out in the agreement strategy, it says if you apply you will be accepted. Isn't that - explain to me how that - I know you can say context but, I mean, it's literally in black and white. It doesn't sound - - -

PN108

MS McKENZIE: But a redundancy, your Honour, can only legally arise if a position is no longer required by the employer.

PN109

THE SENIOR DEPUTY PRESIDENT: Well, exactly.

PN110

MS McKENZIE: Redundancies do not exist until a position has been reached through the work redesign process that positions are abolished.

PN111

THE SENIOR DEPUTY PRESIDENT: But isn't that the point. Exactly, redundancies can't arise until you have actually got rid of positions.

PN112

MS McKENZIE: The work redesign process is going on.

PN113

THE SENIOR DEPUTY PRESIDENT: What you have said here, what Mr Mailer has actually said is, we are going to be making people - you know, there are going to be voluntary redundancies which means, if you follow what you have just said, doesn't it, that we have already decided to get rid of the positions. It is not like we are looking at it, we have made that decision.

PN114

MS McKENZIE: No, I think, your Honour, as I understand it, as I am instructed, the reference to applications for voluntary redundancies being accepted is simply a reference to an acceptance of the application, not a decision or a determination of redundancy. Application being accepted does not result in an immediate or automatic redundancy.

PN115

THE SENIOR DEPUTY PRESIDENT: No, it is not an automatic - just bear with me for a minute while I read this because I haven't had a chance to read it. My first reading is that, you know, it's very clear - if I was an employee and I saw that or received that it would be very clear to me that you could apply - that there was a definite decision to have redundancies and that an application is to be considered for redundancy. Now, it says here that you don't have to at this point say you are definitely applying because you might choose to make an expression of interest but the implication is that if you are not making an expression of interest, you are actually applying to be made redundant. Then said, well, the exact timetable for people to leave the company will be considered through the consultative committee process.

PN116

Almost by implication it suggests that, well, the decision is going to happen, it's a question of the timetable but there might be some issues about interdepartmental transfers and so on. But the consultation - I mean, I am not making any judgements about the rights and wrongs or anything else in the matter, I am just saying as a matter of - I am just trying to get you to, I suppose, admit, if I could put it that way, that there was a decision made that there would be redundancies. I mean, certainly if that wasn't a decision I think you have potentially misled your own employees.

PN117

MS McKENZIE: Your Honour, perhaps if I can explain it this way. This is an invitation for employees to apply for a voluntary redundancy and voluntary as distinct from involuntary or compulsory.

PN118

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that.

PN119

MS McKENZIE: It is the fact that if one adds up the positions that have been identified in the proposal of the strategy, the applications for voluntary redundancy substantially exceed the number of positions.

PN120

THE SENIOR DEPUTY PRESIDENT: Sure. At least if there is no generous redundancy provisions.

PN121

MS McKENZIE: There are more people who have volunteered, more people and significantly more in some areas who have volunteered.

PN122

THE SENIOR DEPUTY PRESIDENT: But that is not the question I asked.

PN123

MS McKENZIE: Well, it answers it in this way, your Honour, that it was clearly explained in the presentations to employees. First of all, if I can perhaps put it in sequence. Here is the strategy for improvement at Kurri Kurri and when one goes through the detailed presentation, one will see in particular that the process whereby the necessary changes to the work redesign, the jobs, the work allocation which will create the vacancies which the company proposes will only be achieved through the work redesign process. So there is understanding by all employees at the site about the work redesign process. It is a very important provision in the enterprise agreement, it is part 7. The work redesign process says that this is the mechanism whereby changes in the workplace are to be affected at Kurri Kurri so the overriding context in which these changes are being progressed is in the knowledge of all employees of the importance and primary role of the work redesign provisions of the certified agreement and part 7 makes it clear that this is the mechanism whereby changes will be achieved.

PN124

THE SENIOR DEPUTY PRESIDENT: What it actually says, if I could interrupt again just as I am reading, it will be a negotiation process.

PN125

MS McKENZIE: Yes.

PN126

THE SENIOR DEPUTY PRESIDENT: In fact elsewhere, because I haven't finished all of the agreement but what I have read is that negotiation means it has to lead to an agreement which implies that it could almost, if you like, be vetoed, doesn't it?

PN127

MS McKENZIE: Well, no, (e) further on in the process says first of all there needs to be realistic timeframes so that the process doesn't drag on too long. If an impasse is reached then help should be sourced from a neutral party, someone who is acceptable to both parties. So there is a clear commitment that if the parties reach a stalemate in their negotiations then external help should be called upon. But your Honour is right in that the intention of the parties si to attempt to negotiate these processes and if the negotiations don't reach agreement on changes which will create redundancies in that certain positions or work will no longer be required, then there will not be redundancies, there cannot be redundancies.

PN128

THE SENIOR DEPUTY PRESIDENT: Well, exactly. I don't have a problem with the general proposition that if, you know, the employee's manager ..... outsource maintenance as a general proposition but if you have included in an agreement that you have signed, a legally binding agreement or agreements commitment to only undertake certain changes after a process of consultation - - -

PN129

MS McKENZIE: The process is going on.

PN130

THE SENIOR DEPUTY PRESIDENT: Well, I suppose I am at least positing the idea that, even leaving aside the - I haven't even come to the work redesign stuff although I know that's obviously probably more central, but just looking at the redundancy agreement itself, it says that, what I already thought, which is you won't determine that a voluntary retrenchment shall be allowed - well, it will only happen after full consultation with the union and the employees and so on. It didn't sort of say you make the decision and then you consult. What it looks like is that the company has made a decision about the way they need to go, and I don't have a problem when I say with that, the company needs to have an idea of where it wants to go.

PN131

I am not denying that the importance of this to the company's future - and I am acknowledging I don't know but obviously it may well be the case. But that it's gone ahead and basically made a decision and then the consultation is - there may be some consultation going on, we will come back to that because at the moment I haven't heard that much consultation but there has been some, but it's all about, if you like - well, on the face of it, it doesn't look consistent with the commitments the company has entered into. That is what it looks like. I am still looking to you to tell me where I am wrong.

PN132

MS McKENZIE: Well, I suppose I can answer it this way, your Honour. First of all, no decision has been made in relation to any position and nor can it be because the positions themselves have not yet been finalised because the work redesign process is going on. The company has certainly put out a proposal and has explained and communicated to the unions and the workforce exactly what the changes are that it wishes to make and the reasons why it needs to, it believes, make those changes. In the maintenance area which is the area that we are most immediately talking about at the moment, redundancies arise from decisions made to have maintenance work performed in a very different way and that involves some degree of outsourcing.

PN133

THE SENIOR DEPUTY PRESIDENT: But are you saying that that decision to outsource would have to be part of the work redesign process?

PN134

MS McKENZIE: The changes to the structure within the organisation, the maintenance positions, that are brought about by a proposal to outsource certainly need to be the subject of discussions in the work redesign process and they are. The work redesign process is a process which is undertaken through work redesign committees. The committees comprise of employee representatives and management representatives in the maintenance area, relevantly, there are three workplace redesign committees in operation at the moment and those committees have been since, I think early March, been meeting on a weekly basis to go through the detail of the matters contained in very broad terms in the improvement strategy. Those committees are talking about decisions such as the leasing of specialised vehicles which will mean that if you lease vehicles then you won't have planned and dedicated drivers, the outsourcing of particular services.

PN135

The philosophy behind the outsourcing is not so much to put the work outside as to take the ..... bring in particular expertise that specialist providers have externally which are not retained in a generalist workforce internally. It is not simply a matter of saying we have made a decision not to do this work in-house. It is as much - and I think the reference is to expertise allocations how it has been described. It is to give the company the benefit of sourcing particular expertise as plant and equipment becomes more specialised. But the end result will be, if those changes proceed, that there will be maintenance employees at Hedro who will be surplus to requirements. But we haven't reached that point yet. But it is a relevant factor in the course of the discussions to ascertain the degree of interest in voluntary redundancies amongst the workforce because that is a very important tool - - -

PN136

THE SENIOR DEPUTY PRESIDENT: Yes, and I wouldn't have a problem with that because I have to say, while I actually don't have a problem with that proposition, I have to tell you on the face of it that doesn't look like that is what you have done. I mean, that is the trouble. I mean, I agree that finding out whether there are people interested in VR is a useful piece of information to feed into a process like this. My problem is that the document doesn't look like it's that. It looks like there has already been a decision made and this is about actually implementing it, this is part of a process to implement a decision which is different really from what you have been saying to me. Now, I wonder whether at this point we might actually adjourn into conference. Have you got any problems with that? Is there anything you want to add on the record at the moment, Ms McKenzie?

PN137

MS McKENZIE: I don't think so, your Honour. I think we will be happy to proceed into conference. Perhaps just before you - can I just put on the record that this document, and it's clear I think from the top of it, was put out to the whole of the workforce including staff and the production operators as well as maintenance. The circumstances differ very much from group to group but this was a general notice across the workforce.

PN138

THE SENIOR DEPUTY PRESIDENT: The way that this looks worth going is that there is a conference room because you can't really have a conference in here very effectively. What I might do is I will adjourn and I will meet you in the - there is a little conference room around the - - -

PN139

MS McKENZIE: Meet us, the company?

PN140

THE SENIOR DEPUTY PRESIDENT: Well, all of you I think at this stage.

<NO FURTHER PROCEEDINGS RECORDED

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AMW1 IMPROVEMENT STRATEGY IN KURRI KURRI PN17
EXHIBIT #AMW2 GRIEVANCE REPORTS PN32
EXHIBIT #AMW3 COMPANY NOTICE ENTITLED "KURRI KURRI IMPROVEMENTS STRATEGY VOLUNTARY REDUNDANCY" DATED 24/02/2005 PN36