C2005/1648, Transcript of Proceedings [2005] AIRCTrans 1271 (8 June 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 11682-1

SENIOR DEPUTY PRESIDENT HAMBERGER

C2005/1648

AUSTRALIAN RAIL, TRAM AND BUS INDUSTRY UNION
AND
RAILCORP
s.99 - Notification of an industrial dispute
(C2005/1648)

SYDNEY

WEDNESDAY, 25 MAY 2005

Continued from 30/3/2005

Hearing continuing

PN12

MR M DECKER: I appear on behalf of the Rail, Tram and Bus Union and with me today are two witnesses, MR M JOURGHIN and MR M GODFREY who are actually the subject of today's hearing.

PN13

MR H POWELL: I appear on behalf of RailCorp and with me today is
MR M KEAT and MR G HARRIS.

PN14

THE SENIOR DEPUTY PRESIDENT: Now, we probably need to start by sorting out some procedural matters. Now, originally we had today and tomorrow listed. I gather there's some problems with tomorrow, Mr Powell?

PN15

MR POWELL: Yes, if the Commission pleases. At the time of submission we had a look at ..... as to the way they could move. We tried to contact them as to whether they can come to tomorrow's proceedings but weren't able to so we had to submit our application, just Mr Keat's testament. So as he is the key witness of our case, what we were hoping to do was to adjourn tomorrow's proceedings and in terms of the proceedings today, we could go forward with the RTBUs submissions and witnesses and we would leave our entire case for - - -

PN16

THE SENIOR DEPUTY PRESIDENT: Could you at least put your opening submissions today?

PN17

MR POWELL: We could, your Honour.

PN18

THE SENIOR DEPUTY PRESIDENT: And to at least to sort of get that on the record. I mean, look, I suspect - well, Mr Decker, what do you say? I suppose you're not given a lot of choice.

PN19

MR DECKER: Your Honour, we are pretty frustrated with the length of time it's taken to first of all try and get some solution about this matter. Given that our formal notice of dispute was issued on 19 August 2004, so you would understand that. As you have indicated, we have got probably no choice in the matter.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes, look, I'm quite frustrated probably from that.

PN21

MR POWELL: We appreciate that, your Honour, and we apologise and we acknowledge that as this case is going on we are anxious to bring this to finality as well which is why we wanted to go forward with the 111AA with the Commission's assistance rather than go through the ..... logistic arrangements. But as this is a key witness to - - -

PN22

THE SENIOR DEPUTY PRESIDENT: Who is this witness because we don't have a witness statement from him?

PN23

MR POWELL: That's right. The witness is human resources who was the previous general manager, but he's in charge of all the job evaluations under the Cullen, Egan and Dell process and pay processing for what was Rail and Construction Corporation and it is ..... RailCorp and it was primarily responsible and the only signatory of all the evaluations into Rail Infrastructure Corporation restructure of the Rail Access Corporation and Rail Services Australia which is a primary issue in relation to I suppose the gap between us in relation to what we're asserting.

PN24

THE SENIOR DEPUTY PRESIDENT: I mean we actually sent out an additional notice of listing last night and you may not have got it as it was quite late.

PN25

MR POWELL: No.

PN26

THE SENIOR DEPUTY PRESIDENT: Which is because the only day, or the next available day I have got is actually 17 June. I don't have any time before then and I'm actually going on annual leave the next week, the Thursday of the following week. So my aim would be to try and get this matter resolved and issue a decision before I go away which is on 23 June. So I will just have to do it, you know, work very hard between 17 June and the 23rd to actually get it all written out or whatever. I mean so I can still - but that's assuming the 17 June must go ahead.

PN27

MR POWELL: Yes, that's right.

PN28

THE SENIOR DEPUTY PRESIDENT: But I did actually have ..... so some other approach. So if we could at least perhaps then today, presumably -
Mr Decker, how long do you think actually your - well, firstly I will see how long your witnesses will be because it's dependent on Mr Powell I suppose, how long it would take today?

PN29

MR DECKER: I don't think it will be an all day session. I think we would be looking at probably 20 to 40 minutes with each witness, depending on the cross-examination of our witnesses.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes. Still I suppose if you haven't got your witness. Is it possible Mr Keats .....

PN31

MR POWELL: I suppose we could. It's just that as we notified the Commission yesterday by email and Mr Decker of Mr Keat has got an ..... situation that he needs to attend to pretty close to I suppose to lunch.

PN32

THE SENIOR DEPUTY PRESIDENT: Yes.

PN33

MR POWELL: So I mean the thing is that if we can see how we progress and when Mr Keat ..... will need to return at that point.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes. Well, let's see how far we can get, if we can get to Mr Keats, but we may not. So I guess perhaps without more ado, but it may be a matter for Mr Decker.

PN35

MR DECKER: Your Honour, just in opening I would like to make reference to the submission that we have tabled and I understand you also have a copy of that at the moment.

PN36

THE SENIOR DEPUTY PRESIDENT: You didn't send in a reply submission, did you, to - - -

PN37

MR DECKER: To the documentation, no.

PN38

THE SENIOR DEPUTY PRESIDENT: So it's just the one submission. Yes, good, I didn't have it. But I do have your original submission, yes.

PN39

MR DECKER: As in accordance with our agreement, this hearing is going to be heard under the 111AA recommendation and what I would like to do is just go through the history milestones of the matter and just refresh ..... to where we stand today. On page 2, I'm just going to work through those and make reference to a number of the attachments that I have got in the submission as well. January 2002 the corporation commences the integration of the various group functions of the commercial ..... of former SRA and Rail Access Corporation.

PN40

Godfrey and Jourghin each received letters confirming their appointment to their positions in the Rail Infrastructure Corporation which was ..... organisation created out of those two redundant agencies and I make reference to attachment B on page 15 and that provides appointment letters by John Cairns who was the Executive Manager Employee Relations working for Rail Access Corporation. In August 2002 the RIC EBA 2002 was certified and that's read in conjunction with the ARGUS '99 agreement and in the '99 agreement we make reference to the performance system and assessment process that we will look at shortly.

PN41

In December 2003 RAC ARGUS commenced issuing letters to ARGUS employees, informing them of their job evaluation outcome. Godfrey and Jourghin dispute the evaluations and make representations to management. And I will just make reference to page 26, and they're the letters which were issued to both Godfrey and Jourghin by Rail Infrastructure Corporation, signed by David Casey, acting manager commercial HR, and Michael Keat now I think has basically taken that role of David Casey - no?

PN42

MR POWELL: No, the previous role was ..... State manager.

PN43

MR DECKER: In June 2004 ARGUS completes the performance reviews for the year 2002 and 2003, and that's probably the nebulous of our dispute is that they're entitled, and sent letters to all ARGUS office staff informing them of their performance related increases.

PN44

THE SENIOR DEPUTY PRESIDENT: If I might just jump in there if it is okay.

PN45

MR DECKER: Yes.

PN46

THE SENIOR DEPUTY PRESIDENT: So just to clarify absolutely clear, just to confirm, what are you actually seeking from this hearing because there's potentially more than one thing. What is the actually thing you're seeking?

PN47

MR DECKER: Okay. The first thing was the appointment of Jourghin and Godfrey at a remuneration level of 75,000 and 85,000 respectfully. It is recognition of those total remuneration amounts or packages in relation to the RAC classification structure. So I suppose when we look at that and we make reference to the - I'm jumping around a bit here. We make reference to the page 38 where we have the classification matrix which provides a comparison between the old classifications and what are now the current classifications in RIC. What I have done in handwriting where Jourghin and Godfrey resided.

PN48

THE SENIOR DEPUTY PRESIDENT: So are you asking for a - because obviously what the outcome of the hearing will be a recommendation. Are you asking for a recommendation than Messrs Jourghin and Godfrey be classified at a certain level?

PN49

MR DECKER: That will be recognised and classified and for that period of time in which the performance management assessments that were done between 2002 and 2003, that that assessment process be applied on recognition of the original grades.

PN50

THE SENIOR DEPUTY PRESIDENT: So you want them to be - well, I'm a bit sort of confused actually.

PN51

MR DECKER: Okay.

PN52

THE SENIOR DEPUTY PRESIDENT: Well, no, sorry. Let me just - so now, so you're - I'm still a bit confused to be honest about exactly what it is you're seeking. You're seeking that their - sorry, I don't know what recognise their classification means. Are you saying Mr Jourghin should in - what are we talking about, 2002/2003 financial year?

PN53

MR DECKER: That's correct.

PN54

THE SENIOR DEPUTY PRESIDENT: You're only concerned about that year, is that right?

PN55

MR DECKER: That's correct.

PN56

THE SENIOR DEPUTY PRESIDENT: Okay. That Mr Jourghin's performance, that the performance appraisal system should apply on the basis that he was appropriately classified as an 8 at that stage?

PN57

MR DECKER: That's correct.

PN58

THE SENIOR DEPUTY PRESIDENT: And for Mr Godfrey, that he was appropriately classified in that year as a 9?

PN59

MR DECKER: That's correct.

PN60

THE SENIOR DEPUTY PRESIDENT: So you're not making any submissions about, you know, anything apart from, if you like, that performance payment and that year? You're not making submissions about what they should be classified as now for example?

PN61

MR DECKER: That's correct.

PN62

THE SENIOR DEPUTY PRESIDENT: Okay. Thank you. Sorry, I know I jumped in, because I was not entirely sure from your submissions exactly what it was you were seeking. Okay, thank you. That's clarified that I think.

PN63

MR DECKER: The original argument was that when we look at page 4 of my submission the classification levels prior to any job valuation review, Godfrey who was appointed at $85,000 would reside at a RAC classification level 7 and Jourghin, who was appointed at $75,000 per annum, would reside within the band of RAC6. Now, the conversion of those old classifications to the current classification stream would in effect, utilising the table on page 36, and if we look at Jourghin who was previously a RAC8 - sorry, a RAC6, would transfer vertically up the conversion table to an RL8. Jourghin, who was employed at 85,000 - sorry, Godfrey who was employed at 85,000 would reside under RAC7 and a vertical translation up to RL9 would apply.

PN64

THE SENIOR DEPUTY PRESIDENT: So this document that's on page 36, what was it status?

PN65

MR DECKER: What I have done is I have reproduced that document from the document sitting on page 38. I didn't include any dollar amounts. Why I used that table was just to provide a fundamental path for identifying where the old classification structures classification streams met the new classification streams in the current structure.

PN66

THE SENIOR DEPUTY PRESIDENT: So it's an extract essentially?

PN67

MR DECKER: It's an extract.

PN68

THE SENIOR DEPUTY PRESIDENT: Okay. Then what's the origins of the document on page 38, what actually is it?

PN69

MR DECKER: Page 38 was a document which was presented to the unions leading up to the finalisation of the classification stream for the RIC structures in the admin, technical and professional classification streams. It was used as a principal document of moving forward to translating the old classifications in RSA and RIC and RAC - sorry, to the RIC classification structure, as identified in the ATP section of the RIC 2002 enterprise agreement.

PN70

THE SENIOR DEPUTY PRESIDENT: It's not actually part of the enterprise agreement?

PN71

MR DECKER: No. It was used as a vehicle and it was also admitted to during the negotiations and I have also thought and identification of that table. On page 37 I have also included a letter and this letter was penned together to our union and in particular to George Panagouros who is the organiser of our union and it was signed by Cole Strubb who is the General Manager of Business Services Group. Under Cole Strubb's portfolio there's also the Payroll Services Unit which is also responsible for administering the classification remuneration system. I bring your attention to two paragraphs which clearly denote the existence of the table in question but also the application of that table and highlight that the midpoint typically reflects the market value of the position and that the midpoint of those classifications streams are applied in translation from an old classification structure into the current classification.

PN72

That's where the argument begins because when both Jourghin and Godfrey were employed, if we look at the $75,000 total remuneration of Jourghin, that comfortably resides in the middle of RAC6, which is the old classification structure and then if you convert the RAC6 classification point into the RAC it clearly be a - into the RIC RL range, it would clearly translate into an RL8. Now, that RL8 band, the 75,000 as varied would sit at the midpoint or thereabouts and that for the year 2002 to 2003 when the performance claim is and the assessment would apply, they would clearly be within the boundaries of receiving that payment.

PN73

Now, it was because Rail Infrastructure has made a determination that both Godfrey and Jourghin sat outside that band and therefore there was a recognition that that translation between the old classification pay points and the new classification pay point isn't there and that even though we're in dispute about the job evaluations, they're still persisting in identifying that they sit outside that original classification stream and therefore were not entitled to the performance payments for that period. I suppose that's nebulous of the argument, is the 75,000 sat midstream.

PN74

When you look at Mr Godfrey however, he was appointed. His appointment letter indicated he was appointment at $85,000 total remuneration package in June 2000 and clearly in that letter of appointed stated that he was entitled to a performance bonus system, access to a performance bonus system and assessment which would materialise up to a 5 per cent increase in his total remuneration package for that 12 month period. Now, 85,000 per annum, when you translate that over and look at the key design principles on page 37 which have been applied to other translations, clearly would put him in the RAC or the RL9 classification stream which - - -

PN75

THE SENIOR DEPUTY PRESIDENT: Can I ask you about the issue of job evaluation because I mean part of the issue is you're sort of saying your team members were paid this when they came in and therefore you can say at RAC they were classified at this and when you apply the translation that puts to that in RIC and at that level they would be entitled to performance increase. Basically putting it in a nutshell as I understand it. And what RailCorp is saying, well, their jobs were never properly evaluated under the job evaluation system when they were first brought in and when they were evaluated what they were actually found to be was the jobs were at a level below what would have entitled them to performance increase and while they didn't have their salary reduced, even though their jobs had been evaluated at a lower because they had a ..... policy of salary maintenance, there was an agreement with the union that in fact people who were on salary maintenance wouldn't receive the performance increase.

PN76

They would get their across the board increases but they wouldn't get this performance increase. So I guess the main question in my mind, or one of the main questions is what your view is about this whole system of job evaluation what's its status, how does it square with the EBAs and everything else.

PN77

MR DECKER: Your Honour, I just make a reference point to the appointment letters of both Jourghin and Godfrey, in particular with Mr Godfrey on page 19. What I would like to do is just highlight a couple of points of that appointment letter and talk about the salary maintenance, which you have just raised. If we look at the appointment letter it clearly states that the total remuneration package is 85,000. It also indicates that there's a direct linkage of that 85,000 to the current enterprise agreement which at the time was the ARGUS RAC 1999 Office Enterprise Agreement for office employees.

PN78

It also spoke about the monthly pay cycle. It also added that the performance bonus of up to 5 per cent is available annually. Now, I have no mystery salary maintenance being applied to an appointment letter and I think when we look at that appointment letter of October 2000 that is 85,000 per annum. There's a direct linkage or relationship with the current enterprise agreement which is in the RAC '99 agreement of the classification structure which existed, which if you look at applying the key principles of that conversion table that would clearly indicate that Michael Godfrey would lock in under the enterprise agreement classification stream as a RAC7. Even if we look at Mr Jourghin for example - - -

PN79

THE SENIOR DEPUTY PRESIDENT: So he doesn't have a letter - the letter of appointment doesn't say what level he's classified at. It says he's going to be paid so much money. Are you saying that the RAC agreement - but it does also say, apart from the points about performance pay and salary review and so on, it does say:

PN80

The benefits and conditions of your employment are set out in the attached enterprise agreement.

PN81

Now, the attached enterprise agreement presumably was the RAC agreement that was named The Rail Access Corporation ARGUS Communication Office Staff Enterprise Agreement 1999, isn't it? That's the one we're talking about at this stage?

PN82

MR DECKER: Yes.

PN83

THE SENIOR DEPUTY PRESIDENT: And that sets out a classification structure with a remuneration range. You're saying implicit in there because
Mr Godfrey was employed 85,000, he must have been in the classification level 7?

PN84

MR DECKER: That's correct

PN85

THE SENIOR DEPUTY PRESIDENT: So you say ..... the implication.

PN86

MR DECKER: Well, even if we look at Mr Jourghin, for example, he was appointed at $75,000 with a similar letter of appointment.

PN87

THE SENIOR DEPUTY PRESIDENT: Which is also level 7 on that reasoning.

PN88

MR DECKER: Well, at 75,000 he would come in at a RAC classification - - -

PN89

THE SENIOR DEPUTY PRESIDENT: Sorry. Well, it could be a 6 or a 7. That's right, isn't it, 75,000 if you look at page 2 of the agreement? 75,000 is actually - - -

PN90

MR DECKER: If you could look at the principles of applying the midpoint principle.

PN91

THE SENIOR DEPUTY PRESIDENT: Yes, okay.

PN92

MR DECKER: It clearly indicated that he would reside under a RAC6.

PN93

THE SENIOR DEPUTY PRESIDENT: 6 probably, yes.

PN94

MR DECKER: So given the same principle of application both very clearly would be in a RAC7 band.

PN95

THE SENIOR DEPUTY PRESIDENT: If you accept that. I'm not saying I don't. I'm just saying if I find that reasoning that you can go from the remuneration to the classification rather than some other - - -

PN96

MR DECKER: And I admit - - -

PN97

THE SENIOR DEPUTY PRESIDENT: I'm not saying it's wrong. I'm just saying that's the logic you have to apply.

PN98

MR DECKER: And I've got to say in relation, your Honour, with moving to today that I understand from our discussions with Mr Keat that some documentation hasn't been on file and it's probably added to the difficulty of assessing exactly what was agreed to on the day of these people being appointed. So there was also the issue about the paper trail.

PN99

THE SENIOR DEPUTY PRESIDENT: Yes, but to take it onto the question I was asking about before about job evaluation, how do you see the job evaluation process squaring, because this is all based on saying, well, they were appointed at this level and they were told they get paid this, therefore you can say they're classified at that of RAC and then applying the translation principles that means they should be classified at this of RC? But what about this system job evaluation, where does that fit, in general, not just in relation to these two people? But, you know, where do you see the job evaluation system sitting in relation to the classification system, because what you don't have, I think I'm right in saying, in these two EBAs unlike some agreements, is you have classifications but you don't have the duties? That's right, isn't it, you don't have the duties set out in the agreement itself?

PN100

MR DECKER: No, we don't.

PN101

THE SENIOR DEPUTY PRESIDENT: You just have the pay rate. If you're this, you get paid that, but it doesn't tell you, well, arguably - well, I mean to say it doesn't tell you how you end up at this level, but what it doesn't do is set out what the duties are. That presumably - well, I don't know, what's that's left in, the job evaluation system or - - -

PN102

MR DECKER: That generally sits with the evaluation system of the CED or ..... methodology and obviously if we have a dispute with the outcomes either collectively or as an individual member that we're representing we would go through some form of review of those particular grades. Now, clearly both Michael Godfrey and Michael Jourghin would be in dispute about the evaluations that were presented to them on 23 December and that, you know, a number of representations were made in regards to those disputed grades. However, those grading processes occurred after the evaluation period of that performance payment period of 2000 until 2003.

PN103

THE SENIOR DEPUTY PRESIDENT: Right. I mean the evaluations would actually, it's a bit bizarre to be honest, but the evaluations weren't actually done until about 12 months after the end of the relevant financial year?

PN104

MR DECKER: That's correct.

PN105

THE SENIOR DEPUTY PRESIDENT: For reasons which I just don't want to go into. Obviously there was lots going on at the time I imagine. But nevertheless it's a bit bizarre to have a performance appraisal system that's actually about not the ..... but the one before. But that's true. So the evaluations were done between mid July 2003 and in fact about July 2004 or July 2004, is that right, they were done? So you agree though, don't you, that they were done before the payment was determined, people got that, because I mean it was done before the payments were announced or determined?

PN106

MR DECKER: Yes.

PN107

THE SENIOR DEPUTY PRESIDENT: But actually after what you would say is the relevant period, what is the relevant period?

PN108

MR DECKER: That would be correct, yes.

PN109

THE SENIOR DEPUTY PRESIDENT: Okay. Just on this issue though, you're not saying that - or are you saying that there's been any significant changes in duties, that's not part of your argument, is it? You're not saying that the duties changed during this - in a significant way?

PN110

MR DECKER: There have been some variations of duties.

PN111

THE SENIOR DEPUTY PRESIDENT: Okay.

PN112

MR DECKER: As a matter of fact, an increase in particular of Michael Godfrey. But we are in dispute with the levels, the RL levels which have been applied to both witnesses and I have got to say that the job evaluation was a later step to the period in which we're disputing in regards to the performance payment that's being made.

PN113

THE SENIOR DEPUTY PRESIDENT: Well, that's what I just want to - I mean we're obviously going to come to the evidence of Mr Jourghin and Mr Godfrey.

PN114

MR DECKER: Yes.

PN115

THE SENIOR DEPUTY PRESIDENT: But I mean what you have put to me and what's in your outline of submission is it's all based on the appropriate classification being based on what they were paid and what they had in their letter of offer rather than, well, they've just been wrongly - the job has been wrongly evaluated. So you do think the jobs as they stand have actually not been properly evaluated?

PN116

MR DECKER: That's correct.

PN117

THE SENIOR DEPUTY PRESIDENT: But that's not part of your argument today?

PN118

MR DECKER: No, sir.

PN119

THE SENIOR DEPUTY PRESIDENT: Okay. So you accept that nevertheless as a matter of general principle people's position on the classification structure of RIC is normally determined by job evaluation, because it's not set out - - -

PN120

MR DECKER: Yes, we accept that in principle.

PN121

THE SENIOR DEPUTY PRESIDENT: Yes.

PN122

MR DECKER: Even though it's not clearly defined in the enterprise agreement. When you look at say another area of the enterprise agreement where we have the competency based classified structure or the infrastructure area it's probably a little bit better defined than the admin technical and the - - -

PN123

THE SENIOR DEPUTY PRESIDENT: But you do accept the principle that generally people are placed on the classification level according to a job evaluation process?

PN124

MR DECKER: That's correct.

PN125

THE SENIOR DEPUTY PRESIDENT: But you're saying with these two people that's not appropriate, is that right? Is that what you're saying, because of their history?

PN126

MR DECKER: Yes. Clearly in relation to Michael Godfrey, Michael Godfrey - or both Michaels were contractors prior to the formal level of offer. So they clearly understood the classification streams, structures and bonus payments within ARGUS and hallmark the incorporation of RAC and when they were engaged at that particular time the government's role or position on RAC was to move to the private sector. So these two employees came on board as contractors. They were very familiar with the remuneration system. So just on that familiarisation, when the offers were made to both Michael Godfrey and Michael Jourghin they were skill sets which were required of the organisation at that particular time and an offer was made.

PN127

Given that those two letters of offer made reference to the enterprise agreement, they were clearly under the enterprise agreement and the 85,000 would clearly reside under the RAC classification structure.

PN128

THE SENIOR DEPUTY PRESIDENT: Yes. Do you accept the principle though, leaving aside sort of a hypothetical scenario, I'm not saying that this is actually what happened, but if two employees were engaged and then their jobs were subsequently evaluated properly, assuming that it was done properly, at a level that was lower than what they were being paid and for some reason they had been engaged at a higher level, but when the job was actually properly evaluated it turned out to be a lower level, do you accept the principle that salary maintenance would normally - this is not, obviously, an agreement, this is a policy of salary maintenance, where there salary maintenance would be applicable?

PN129

MR DECKER: Well, in the RIC enterprise agreement the 5 per cent ruling which applied to the state rail agreement was removed for that purpose.

PN130

THE SENIOR DEPUTY PRESIDENT: Sorry?

PN131

MR DECKER: That 5 per cent rule. In other words, if a job was evaluated and it was outside the 5 per cent per annum increase, that that job would either be advertised or a direct appointment made by I think John Cairns who had the power at that stage to directly appoint individuals outside that 5 per cent ruling and I think it's carried on now where that 5 per cent ruling now is applied to the current CEA.

PN132

THE SENIOR DEPUTY PRESIDENT: Yes, okay. So you dispute that
Mr Jourghin and Mr Decker [sic] are on salary maintenance?

PN133

MR DECKER: I dispute that. At their level of appointment they would not have been on salary maintenance. The letter of offer clearly indicates that the two total remuneration offers resided clearly under the RAC classification stream. The argument at this stage is where they reside and I think that's got to be agreed to, and then the next step is to look at where they convert, now that we agree where they reside, is where they actually convert to the current classification structure. And if you apply midpoint principle they would still be entitled to a performance payment on their performance assessment which was carried and which both candidates here achieved a 3.3 score, which would activate a payment of an agreed bonus payment.

PN134

THE SENIOR DEPUTY PRESIDENT: Okay, thanks. Actually one thing, you haven't actually tendered, formally tendered any part of your submission. Do you actually want to, I didn't ask you when you first referred to it? Do you want to actually formally tender it?

PN135

MR DECKER: Yes, yes.

PN136

THE SENIOR DEPUTY PRESIDENT: It might be properly easier to. But we might start the numbering all over again. We did have some matters - but we can call it ARTBIU6 and I just want to make sure. This is the submission, does this include the witness statements?

PN137

MR DECKER: Yes, sir.

PN138

THE SENIOR DEPUTY PRESIDENT: RTBU6, that's the - - -

PN139

MR DECKER: The witness statements are at the back of that document.

EXHIBIT #RTBU6 SUBMISSION INCLUDING A SERIES OF EXHIBITS AND TWO WITNESS STATEMENTS

PN140

MR DECKER: So just in summary, the key point is the appointment letters, the reference point to the ARGUS '99 office agreement classification structure of both Jourghin and Godfrey. In particular, if you look at Mr Jourghin at 75,000 he clearly reside at the midpoint of RAC6. If you look at applying the same principle, Mr Godfrey would reside under the RAC7. Now, translating both of those applying the principles of the translation table, Mr Godfrey would clearly move to an RL9 and Mr Jourghin would move to an RL8.

PN141

That would clearly indicate that they would sit within the bands which would then apply the performance bonus payments and assessments clause in the '99 agreement, the ARBUS '99 agreement, and given that their scores for that period, 2002 and 2003, were 3.3, they would be entitled to receive a performance payment based on that positive assessment. With regards to the job evaluations, yes, we are in dispute and clearly when we look at the letters of appointment I would perceive that salary maintenance would apply to their functions. They were a key resource which was required by the organisation at the time in 2000.

PN142

Both employees were contractors and they were offered permanent employment to secure those skill sets for the organisation to move forward and salary maintenance would not have been applied at that date of appointment. With respect of a change in grade or a total remuneration package level as a result of a job evaluation, yes, salary maintenance is activated and continues to be activated for people who are working outside that grade. So there's no substantial loss of remuneration - - -

PN143

THE SENIOR DEPUTY PRESIDENT: So you do accept that salary maintenance is applied now to Mr Jourghin and Mr Godfrey?

PN144

MR DECKER: If they had been downgraded, yes.

PN145

THE SENIOR DEPUTY PRESIDENT: Okay, in principal but you're disputing that.

PN146

MR DECKER: In principle. However, I just need to remind all parties that the job evaluations were done post the period in which we dispute the payments and that we also are in receipt of a letter to say that as a result of our representations that the grading had been withdrawn and in light of further negotiations on the disputing claims. I also make reference to there has been, even though the document on page 38 which is the transition table is not clearly identified in the Rail Infrastructure Corporation 2002 Agreement, I also note on page 37 that clearly it's used as a fundamental principle of transition and in particular was used in its current restructure of State Rail and RIC merging in RailCorp. It's fundamentally used as a guidance for HR and IR practitioners to use in translation. I think that summarises my submissions.

PN147

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Decker. Mr Powell, do you want to put your opening submissions now or shall .....

EQUIPMENT MALFUNCTION

PN148

MR DECKER: Your Honour, given that it's 10.30 and I know Michael Keat want to have a leave of absence this afternoon, is there any .....

PN149

THE SENIOR DEPUTY PRESIDENT: It would actually help. I mean obviously we're not going to be able to finish this today and we're not ..... tomorrow, but the more we get on today the easier it will be for me to do as much work on this beforehand. So if we could do this now that would actually be good if you could ..... I wonder whether maybe we could do Mr Keats now and I know it's out of order but it doesn't really - - -

PN150

MR POWELL: Do you want me to do my opening submission and then we will call Mr Keat?

PN151

THE SENIOR DEPUTY PRESIDENT: I don't know when Mr Keats needs to go.

PN152

MR KEAT: Probably lunch time .....

PN153

THE SENIOR DEPUTY PRESIDENT: Okay. Well, perhaps if you can do an opening and I won't ask so many questions .....

EQUIPMENT MALFUNCTION
<SHORT ADJOURNMENT [10.27AM]
<RESUMED [10.34AM]

PN154

MR POWELL: I think basically it would be the preference of the Commission if I sort of reiterate where I was at before we adjourned.

PN155

THE SENIOR DEPUTY PRESIDENT: Yes.

PN156

MR POWELL: It's just that what RailCorp asserts is that in its detailed submission to your Honour that we have provided a lot of factual evidence in relation to this matter and what we believe my friend has submitted is that there has been, since the dispute notification last year, quite a lot of consultation in relation to bringing us to today. The gentlemen were a part of 28 people who disputed their evaluation outcomes into the Rail Infrastructure Corporation, their evaluated positions. Obviously as salary maintenance was a big issue and their acceptance of grades.

PN157

THE SENIOR DEPUTY PRESIDENT: Look, can I just ask, as I understand the situation it's a slightly, I suppose messy, if I could put it that way, situation. I just want to understand if it relates to all the other people in the group of 28. As I understand it from what Mr Decker said, that you had this 2002-2003 financial year, which is the year we are arguing about, performance increase for that year.

PN158

MR POWELL: Yes.

PN159

THE SENIOR DEPUTY PRESIDENT: The actual decision about whether people got the increase wasn't until, was it July 2004?

PN160

MR POWELL: That's right.

PN161

THE SENIOR DEPUTY PRESIDENT: July 2004. So there's this 12 month gap.

PN162

MR POWELL: Yes.

PN163

THE SENIOR DEPUTY PRESIDENT: And during that period that's when the job evaluation was done for Mr Jourghin and Mr Godfrey.

PN164

MR POWELL: That's correct.

PN165

THE SENIOR DEPUTY PRESIDENT: Is that true of all the other people who are in dispute?

PN166

MR POWELL: Yes, your Honour. We had an unfortunate circumstance in relation to incorporation two organisations to form Rail and Construction Corporation, being Rail Access Corporation and Rail Services Australia, to form an organisation of some 5,5000 people. Each of the positions into the new organisation had to be evaluated and put into the structures. The Messrs Cullen, Egan and Dell methodology was used in relation to evaluating all those positions, these two positions included.

PN167

The evaluations also obviously then related to our Rail Infrastructure Corporation Enterprise Agreement 2002 as part of moving forward, which provided a new salary classification structure incorporation both previous organisations because we had essentially two enterprise agreements coming into the one, the Rail Access Corporation ARCAS Office Staff and Rail Access White Collar Staff Agreement '99 and the Rail Services Australia Enterprise Agreement 1998. So essentially the classification table provided in section 4 of that agreement, the new agreement, provided broad bands levels ATP level 1 to 10. The review of the evaluations involved a consultative process where I believe these two gentlemen were a part of in relation to reviewing the methodology and also the evaluation.

PN168

The evaluation scores that resulted, which as my friend has put as part of his submission which is the remuneration conversion chart titled 2002, does have the CED points at the top of that table. Now, the evaluation scores for the positions for these two gentlemen which were offered in their letters that my alluded to signed by Mr Dave Casey, dated 23 December 2003, effectively them into Rail Infrastructure Corporation into the classified rates specified in RL7, which is the evaluated outcome, and specified the band width - - -

PN169

THE SENIOR DEPUTY PRESIDENT: Sorry, where? Okay, 23.7.2003. Yes, okay.

PN170

MR POWELL: That specifies the grade, the band width in terms of remuneration and what their TRP was.

PN171

THE SENIOR DEPUTY PRESIDENT: I suppose one of the potential problems might be that this letter has December 2003, the actual year the performance increase relates to is 2002-2003.

PN172

MR POWELL: That's right.

PN173

THE SENIOR DEPUTY PRESIDENT: Finished in 30 June 2003. This job evaluation was therefore after that. What do you say about that?

PN174

MR POWELL: Well, the thing is it wasn't only that, it was also with the assistance of the Commission during a dispute where the genesis of this $1000 was created with the assistance of the Commission, was that basically these things were happening and the applicable period was retrospective. But it was always with the acknowledgement of the unions what actually precluded people from that bonus payment. My friend alluded to the initial start that was available to employees which was up to 5 per cent on top of their total remuneration packages. When we went into dispute with the assistance of the Commission what was agreed upon by both parties was this $1000 bonus payment which was subject to a couple of criteria.

PN175

There was a compra ratio and there was also what they call a hard and soft three score which was based on the performance results. However, if the starting point of the employee was that they moved directly to be on salary maintenance it precluded them from that $1000 bonus payment and that's where we stand apart today.

PN176

THE SENIOR DEPUTY PRESIDENT: Yes. But I suppose it's a question of when. What we're not dealing with today as far as I can make out is actually what the appropriate, you know, what is actually job evaluation. I mean we haven't any evidence. Well, you know, the submissions from Mr Decker haven't gone to what the correct evaluation of the jobs is if you were to ..... job evaluation. That's in dispute.

PN177

MR POWELL: Yes.

PN178

THE SENIOR DEPUTY PRESIDENT: I accept that, but that's not what we seem to be arguing about today.

PN179

MR POWELL: Yes.

PN180

THE SENIOR DEPUTY PRESIDENT: So it's more about at the relevant time and that's the key issue what the relevant time is, they were classified at a certain level which made them eligible for the increase. Now, subsequently, arguably, subsequently the job was evaluated and you say, you may or may not be right but it obviously doesn't matter, that they're actually at a level where they wouldn't have been eligible except it's this strange timing that I'm trying to get my head around.

PN181

MR POWELL: Yes.

PN182

THE SENIOR DEPUTY PRESIDENT: I probably don't to need to know all the details but I mean obviously a result of the situation where you have this relevant period, then you had a job evaluation exercise and I mean, I suppose what you seem to be implying is job evaluation that's, if you like, retrospective that while they were paid something - - -

PN183

MR POWELL: See, all employees coming from the former Rail Access Corporation and former Rail Services Australia were given general letters appointing them into the new entity of Rail Infrastructure Corporation. Those letters have given those employees obviously the understanding that they were employees of the new entity, Rail Infrastructure Corporation, and that that would be then those positions then be subject to the evaluation. Now, those initial letters were at 2001. The actual evaluation for these employees happened in 2003 and then the subsequent letter of appointment specifying and clarifying that evaluation.

PN184

THE SENIOR DEPUTY PRESIDENT: Are you saying that their classification was determined retrospectively? That's what you seem to be saying.

PN185

MR POWELL: Well, because they were appointed into positions and project engineers.

PN186

THE SENIOR DEPUTY PRESIDENT: But that's not a classification, or it is?

PN187

MR POWELL: Yes, it is.

PN188

THE SENIOR DEPUTY PRESIDENT: OFN project Engineer.

PN189

MR POWELL: That's the position. That's the position title.

PN190

THE SENIOR DEPUTY PRESIDENT: Yes.

PN191

MR POWELL: The classification after the evaluation was RL7.

PN192

THE SENIOR DEPUTY PRESIDENT: Yes, but that was done, you know,
18 months later. That's what I'm saying, when they were put in - when
Mr Godfrey and Mr Jourghin were appointed to Rail Infrastructure Corporation they got a letter - I have got the letter here, Mr Godfrey's letter, and it said:

PN193

You're appointed to the position OFN project engineer.

PN194

But that's presumably not a classification level. That's just a job title.

PN195

MR POWELL: That's right.

PN196

THE SENIOR DEPUTY PRESIDENT: Okay. Then you're saying, well, then he was evaluated 18 months or whatever it is later and found that actually the job was a 7. Are you saying, well, if you like, that's retrospective application to the point when he was appointed because, well, we didn't know what the job was at that time because we had thousands of people to do, we didn't get round to them for 18 months; what we found out was, well, he was really a 7 - or not he was a 7, but the job was a 7. That seems to what you're saying or am I have got it wrong?

PN197

MR POWELL: No. If I could go through the detailed chronology.

PN198

THE SENIOR DEPUTY PRESIDENT: Okay. By all means. Because I think the issues aren't - - -

PN199

MR POWELL: Yes. I think I have skipped ahead where I should probably regroup and go back again. Okay. 2000, Godfrey and Jourghin were engaged as contractors with Rail Access Corporation. June 2000, Jourghin offered and accepted 12 month fixed term temporary employed as a field inspect RAC, Rail Access Corporation. October 2000, Godfrey offered and accepted 12 month fixed temporary employed as field inspector RAC. 1 January 2001, RAC and Rail Services Australia merged to form RIC. October 2001, RIC project engineer position description developed and issued. 14 January 2002, employees commence permanent employment at RIC.

PN200

Salary maintenance arrangement beneficially applied by RIC as a mater of policy results in the employees continuing to receive not less than their RAC TRP at RIC.

PN201

THE SENIOR DEPUTY PRESIDENT: Have you got any documentary basis for that claim that salary maintenance applied from the moment they started with - it was described as that.

PN202

MR POWELL: That's right. Well, I mean the thing is that the position descriptions were developed in 2001 for all the positions and as I said, we had to go through 5,500 employees merging into the new entity and those evaluations. So the actual letters of notification of 23 December 2003 identifying their classification as RL7 and the position as project engineer and their current TRP is obviously above that band - - -

PN203

THE SENIOR DEPUTY PRESIDENT: But that's in 2003.

PN204

MR POWELL: Well, the effective date of that is 29 August 2002, as my friend alluded to which is the certification date of the RIC 2002 EBA and the operative date of that enterprise agreement.

PN205

THE SENIOR DEPUTY PRESIDENT: So the operative date for their - - -

PN206

MR POWELL: For the new classifications in Rail Infrastructure Corporation.

PN207

THE SENIOR DEPUTY PRESIDENT: Right.

PN208

MR POWELL: So when they got their letters of 23 December 2003 that wasn't the operative date of that letter. The operative date was of the new classification structure which was part of section 4 in that RIC 2002 EBA which was certified on 29 August 2002.

PN209

THE SENIOR DEPUTY PRESIDENT: I mean it doesn't say that in the letter.

PN210

MR POWELL: No, I understand that. But the direct implication of their TRP being above the bandwidth of their remuneration. Their remunerated classification directly put them on salary maintenance. That was the direct effect of it.

PN211

THE SENIOR DEPUTY PRESIDENT: Yes. I'm concerned with this issue of the operative date and when actually. You're saying the operative date was when the EBA was certified, so in fact you're - so what were they - before they got this letter on 23 December 2003, between the time they started in the beginning of 2002, so it's actually two years virtually, what were they classified as?

PN212

MR POWELL: Well, project engineers in Rail Infrastructure Corporation but their positions hadn't been evaluated.

PN213

THE SENIOR DEPUTY PRESIDENT: Right. They didn't have a classification?

PN214

MR POWELL: They didn't acquiesce from the previous positions in Rail Access Corporation over to the new entity. They were put into new positions of project engineers in Rail Infrastructure Corporation under the ARGUS provision which is our telecommunications arm of the business.

PN215

THE SENIOR DEPUTY PRESIDENT: But they didn't have a classification effectively, is that what you're saying? It was just a question mark what classification - - -

PN216

MR POWELL: Well, that's right. I mean the thing is, as I said, we did have the enterprise agreement certified on 29 August 2002 which provided the new classification structure. The basis of them translating over from those old classifications was that they were appointed into those new positions in the new structure. For those new positions the Cullen, Egan and Dell methodology was used but the operative date of all classifications, be they white collar or blue collar under that enterprise agreement, was 29 August 2002.

PN217

THE SENIOR DEPUTY PRESIDENT: Can I just ask a question. Actually this is all about you're talking about flow on as far as I understand the implications of what it might or might not say. Purely hypothetically, please don't read anything into this, but if I was to say that Mr Jourghin and Mr Godfrey should get paid an increase just for that 2002-2003 year on the basis that at that time they were implicitly classified as a level - I'm not saying that that's what's being put, if you like, I'm not saying that. But how many people do you say would be, if you like, in the same boat, didn't get the - just so I understand what you're saying about flow on, didn't get the increase because they were in the same boat as these two people, so therefore, you know, would logically also be eligible for it on the same reason? How many people are we talking about? I mean if you don't know it would be perhaps useful to find out at some stage.

PN218

MR POWELL: I mean the thing is that if it was on the basis of the bonus payment, which is essentially what was the dispute notification that's brought us to the Commission, that's one thing, but what's sort of been conveyed by my friend here today is something a bit different in terms of disputing their engaged classifications and then their translation over into the new entity.

PN219

THE SENIOR DEPUTY PRESIDENT: Well, that is the basis for .....

PN220

MR POWELL: Yes, that's right. So I mean the thing is that what's basically being asserted from the current position today, which we have a lot of factual evidence backing us up on, regardless on that retrospective issue that you brought up, is that essentially that's moving one of them two bandwidths up and the other one bandwidth up without any factual basis. The thing is that in terms of that flow on effect - - -

PN221

THE SENIOR DEPUTY PRESIDENT: Yes, that could be devastating. But that's not necessarily issue that's being asked. See, I don't see, I mean that's what I'm trying to understand. If you ..... narrow a view of what was being asked. You're not being asked to say if they were properly evaluated they would be at this level. That's been dealt with elsewhere and I don't think I need to actually address that issue. If it's just a question of saying, look, they were caught in this odd period, this sort of interregnum where they come over and they were paid - I'm not saying you have to accept this.

PN222

MR POWELL: Yes.

PN223

THE SENIOR DEPUTY PRESIDENT: But if I accepted it, let me put it that way. If I accepted the union's argument that, you know, they were paid at this level and therefore implicitly at RAC they were classified as this, applying the translation methodology that means that they were then classified at that level, therefore were eligible for that performance improvement, productivity improvement increase. Okay. If you then took the view that okay, and then subsequently the job was evaluated and in fact the jobs were really only 7s, how many other people - so you don't need to challenge - so the argument isn't that they've been wrongly evaluated. That doesn't seem to be the argument and that's another argument for another day but we're not arguing that, I don't think, here today.

PN224

The argument seems to be, well, they weren't evaluated until the end of 2003, or late 2003, at that time they were classified - until then anyway, they were quite appropriately classified because there had never a job evaluation. But on whatever there was, they were classified at 8 and 9 - - -

PN225

MR POWELL: Well, we refute that.

PN226

THE SENIOR DEPUTY PRESIDENT: No, I understand. I know you don't accept that. But I'm saying if I was to accept it. It just want to understand the flow on implication. If I was to accept that, not about that their jobs should be 9s or not, you know, I don't need to go there, but just simply that, because of that funny timing I must accept that, well, they should at least get that increase even if now they'd be on salary maintenance because their jobs have been determined as 7s. How many other people could be - even if I was to accept that, if I was to accept the reason hypothetically I just want to understand the implications of that. How many other people would be in the same boat? If you don't know now it be useful maybe to find out at a later time.

PN227

MR POWELL: Probably 15, your Honour. Remembering it wasn't a lump sum. It was 100 on top of - - -

PN228

THE SENIOR DEPUTY PRESIDENT: They're built on the base salary, I realise.

PN229

MR POWELL: Yes, of the TRP.

PN230

THE SENIOR DEPUTY PRESIDENT: Okay, sorry.

PN231

MR POWELL: 29 August, RIC enterprise agreement certified and includes the following, single 10 RIC classification and remuneration structure for administrative, technical and professional, ATP employees. The ATP classifications have a corresponding remuneration level, RL, and the performance payment process to be developed following consultation with the unions and employees. 30 June 2003, the performance payment relates to performance during the year and in 30 June 2003. 23 December 2003, following detailed job evaluation Godfrey and Jourghin confirmed as occupying project engineer positions with certain grading under RIC agreement. Both confirmed as occupying RL7 positions at RIC.

PN232

April 2004, agreed criteria for administering the performance payment includes satisfying agreed performance goals and assessment process, $1000 increase to employees TRP effective 1 July 2003. So that was the effective date. And employees being ineligible when receiving by way of a salary maintenance TRP more than $1000 above the RIC agreement remuneration for their positions grading. 24 June 2004, Godfrey and Jourghin informed not eligible to receive an additional amount represented for performance payment. This is because at all relevant times and including on 30 June 2003, Godfrey and Jourghin occupy an RL7 position and receive TRP ..... and $1000 above the upper range of their remuneration attached to an RL7 position under the RIC agreement.

PN233

THE SENIOR DEPUTY PRESIDENT: You're saying that effectively even though evaluation was done late 2003, in fact the job they did throughout the whole financial 2002-2003 was in fact an RL7, is that what you're saying?

PN234

MR POWELL: That's right. September 2004, around this time the employees are informed that their employment transferred to RailCorp. October 2004, updated and agreed RIC project engineer position description developed in issue. Mid 2004 to date, consultation, discussions, Commission conciliations unsuccessful in resolving RTBU, Godfrey and Jourghin concerns about job evaluation grading, their ineligibility to receive an additional amount said to represent the performance payment. Godfrey and Jourghin again identified as occupying RL7 positions. 2005, January, RTBU notifies Commission of dispute and 25 May the Commission proceedings today, started 111AA.

PN235

Basically RailCorp respectfully submits that the RTBU carries the onus of establishing that the employees either as a matter of recognition of asserted enforceable right or industrial equity or fairness should receive an amount said to represent the performance payment in addition to their total remuneration package, which includes a substantial and RailCorp says, disqualifying salary maintenance component. It is RailCorp's respectful submission that in all circumstances of this matter the RTBU has failed to make a case for the discretionary relief it seeks on behalf of the employees.

PN236

The RTBU is not able to point to an enforceable right to receive by the employees of the performance payment or any sound industrial equity basis for additional allowance being paid to the employees. Even if the Commission reaches a different view contrary to RailCorp's submission, the Commission should not, consistent with paragraph 5(h)(vii) of the RTBU submission summary, make recommendations that have the potential to provide a precedent or a basis for the pursuing of additional payments at RailCorp by other employees. The issues arising for determination, whether the grading of employees positions under the RIC agreement at RL7 as 30 June 2003 is fair and reasonable.

PN237

Once it is established that the employees are fair and reasonably identified as occupying RL7 positions then it follows consistent with the agreed arrangements put in place by the parties that the employees are ineligible to receive the performance payment in addition to their generous continuing and substantial salary maintenance benefit that RailCorp currently provides. The RTBU approach is put forward on the basis that the claims by the employees remuneration as somehow being a strong or determinative indicator of the appropriate RAC and RIC ratings. The RTBU fails to have regard or any sufficient regard to the employees work and remuneration history, duties, roles, responsibilities, position descriptions and job evaluations.

PN238

Even in checking our human resource information system that we use which basically, you know, does everything from pay to training records to personal history. Even though it wasn't stated on their employment contracts there is actually a Rail Access classification under that '99 agreement attached to their positions that they formerly had. We haven't tendered it up because we believed it should have been in the employment contract on their engagement and what we're searching in our submissions is that they were appointed to a rate of pay into the Rail Access Corporation which we believe is reflective of probably their contracting conditions, not into a classification.

PN239

Getting even to that point, in relation to that retrospective period that you referred to, your Honour, there still was no clarification, other than what we have asserted, in relation to where their classifications were at that time. Our assertions were that they were in that RL7. The union by assumption of their remuneration without any clarification or evidence, assert that by their remuneration and appointment into Rail Access Corporation using their document of that conversion chart, would place them into classifications in that RIC 2002 EBA that would entitle them to that performance bonus payment, once again without any factual evidence.

PN240

In relation to job evaluation that determines the job level, positions of similar size falling into the spread of job points are grouped together in the same level or grade. The total remuneration package, TRP, which is paid to an individual does not determine the job level, ie. we do not a person into a convenient job level based on whatever TRP they may be paid or want to be paid, which basically was the general principles in relation to how we approached the TRP correlation with the evaluation. All the documentary evidence that we have in relation to the project engineer positions reflect the proper outcome of RL7.

PN241

In terms of the review period, the review when these positions were put in dispute by the employees not accepting the evaluation outcome, the review of that period didn't alter the evaluations or the outcome into RL7 bandwidth. Once again, we have agreed to maintain the employees paid TRP in circumstances where the range of remuneration to RL7 under the RIC agreement is significantly lower.

PN242

THE SENIOR DEPUTY PRESIDENT: This is indefinite, salary maintenance?

PN243

MR POWELL: Sorry?

PN244

THE SENIOR DEPUTY PRESIDENT: Is it indefinite?

PN245

MR POWELL: At this stage it is, your Honour. We have a new enterprise agreement, the RailCorp 2004 Enterprise Agreement that will hopefully be certified soon in the Commission which has a salary maintenance provision within that enterprise agreement, but as it stands today it is indefinite. The agreed criteria for administration and implementation of performance payment excludes employees whose remuneration is maintained at a TRP at least $1000 greater, as I mentioned before. Also at part A, paragraph 8.6 and annexure 25 of the Keat statement, the employees originally being engaged as RAC contractors, and accepting RAC employment with reference to their contract in terms of engagement, the absence of any job evaluation or grading process being applied to the employees in their former RAC employment, the thorough job evaluation process conducted at RAC which included extensive consultation with the employees and the unions produced comprehensive and consistent job descriptions.

PN246

The consistent principled grading of competence of RIC descriptions in accordance with the world recognised and appropriate CV job evaluation system, with the employees position descriptions at RAC and RIC have not been subject to any substantial change. The limited scope of the employees duties, responsibilities, qualifications and experience, particularly in relation to overall project and supervisory management functions as compared to specific requirements for the most senior gradings under the RIC agreement, the CED point score attached to an employee's position description of 308 is in the middle range of the scores associated with an RL7 grading.

PN247

If I can make reference to annexure 19 of Mr Michael Keat's statement. And the transition table is only a guide and cannot operate in the circumstances as is the case here, when the employees positions at RAC were never or properly evaluated or graded. The RTBU and the employees approach of placing substantial and determinative weight on actual remuneration to identify an appropriate grading is fundamentally flawed logic.

PN248

THE SENIOR DEPUTY PRESIDENT: I mean how many people are you aware at RAC, how common it was to engage people to jobs with a rate of pay where there position had been evaluated is the subject that is happening quite a lot?

PN249

MR POWELL: It wasn't common, your Honour. Are you talking about just RAC or the whole - - -

PN250

THE SENIOR DEPUTY PRESIDENT: RAC. Well, RAC I suppose.

PN251

MR POWELL: Okay. Well, in RAC at the time there was a government objective in relation to reviewing the amount of contractors in the rail system. There was an initiative to make a determination of whether contractors were to stay as permanent employees or basically to go and review their functions in the entities because they had been there for quite a long time and a lot of them are contractors. So in expediting that there were a lot of permanent employment contracts issued where people were appointed into rates of pay without any gradings attached to it.

PN252

Some were then articulated in writing, in letters, and some, like these two gentlemen, continued until they were appointed into positions in Rail Infrastructure Corporation. So there were a few circumstances ..... The limited scope of the employees duties, responsibilities, qualifications and experience, in relation to - the RTBU and the employees approach ..... substantial and determinative weight on actually remuneration to identify an appropriate rate of ..... As I said, are contrary to the objectives of the RIC agreement, RIC policy and well established objective of job evaluation and classification systems. It also ignores the beneficial effect of the salary maintenance agreement arrangements.

PN253

In support of the above submissions RailCorp relies in particular on parts 4, 5, 6, 7 and 8 of the Keat statement. The employees both report to the manager in RL9 position for reasons including those set out in paragraph 8.2 and 8.2.1 of the Keat statement. The RL9 position is an appropriately graded and far more senior position than that occupied by Godfrey who also seeks an RL9 grading. Indeed, consistent with the performance criterion applicable TRPs in the RIC agreement. In order to become eligible for the performance payment Godfrey would require grading and the upper range of RL9 to potentially qualify. This would require substantial increase over two classification levels.

PN254

The situation with respect to Jourghin is similar but to a more limited extent. However, again it would require a very significant increase in Jourghin's grading up until RL8 before potential eligibility for performance payment may arise. Nothing in the RTBU case discloses any fair or reasonable basis to consider that such a large up regrading of the positions occupied by the employees is warranted. In concluding, for the reasons set out in the submission and such additional reasons that may be advanced prior to or at the hearing, the recommendation sought by the RTBU should not be made in the terms proposed at all and that there is no valid or reasonable basis for the making of the performance to the employees.

PN255

Any alternative outcome risks giving rise to substantial inconsistencies, inefficiencies and anomalies across the rail organisations which have otherwise acted fairly and in compliance with applicable agreed industrial instruments and arrangements.

PN256

THE SENIOR DEPUTY PRESIDENT: Thank you. I wonder whether we could have Mr Keat's evidence now? Well, could we do that?

PN257

MR DECKER: Yes.

PN258

THE SENIOR DEPUTY PRESIDENT: Because then it might help him - - -

PN259

MR DECKER: Yes.

PN260

THE SENIOR DEPUTY PRESIDENT: Is that - - -

PN261

MR DECKER: I would be happy with that, your Honour.

PN262

THE SENIOR DEPUTY PRESIDENT: Okay. Well, perhaps we could call
Mr Keat.

<MICHAEL KEAT, AFFIRMED [11.11AM]
<EXAMINATION-IN-CHIEF BY MR POWELL

PN263

THE SENIOR DEPUTY PRESIDENT: Yes, you want to tender that?

PN264

MR POWELL: Yes. If it please the Commission, can I formally tender the statement of Mr Michael Keat?

EXHIBIT #RAILCORP2 STATEMENT OF MR KEAT

PN265

MR POWELL: Can you please state your full name?---Michael Keat.

PN266

And your occupation?---HR Coordinator with RailCorp.

PN267

And how long have you been in that position?---Since about July 2001, previously it was under RIC, working ARGUS.

PN268

Are you formally attesting today that the statement tendered up as RAILCORP2 is a full and accurate statement of the events that bring us here today?---Yes, yes.

PN269

THE SENIOR DEPUTY PRESIDENT: Okay, thank you.

<CROSS-EXAMINATION BY MR DECKER [11.12AM]

PN270

MR DECKER: Mr Keat, with regards to Michael Godfrey's records and Michael Jourghin's records, when we both engaged to try and resolve the issue what was your understanding of what should be on their personal files in regards to their appointment?---We, with those guys and with those two gentlemen and with some others, as per our discussions about this matter, we gave a commitment we would try and find some sort of documentation or evidence as to what their grading may have been when they were appointed into RAC. We gave that undertaking to the RTBU which in fact because as Mr Powell said earlier, some of the records were not very good, I have to say, there was a bit of a paper chase issue, we gave a commitment we would try and ascertain exactly what grading they were given that there was no grading on their letters and we researched their files and we couldn't find any confirmation as to what they were employed as when they were employed within RAC.

PN271

With regards to on my submission, page 16, I don't know if you have got it in front of you?---No, I haven't.

PN272

With Michael Jourghin on his remuneration of 75,000 per annum and I know that the argument today has been based on where they sit in the new classification structure with respect to the job evaluation as a separate issue, but with regards to the letters of appointment were you of the understanding that they would have received a copy of the enterprise agreement along with their appointment letter?
---Yes, it was stated on their appointment, that's the one in the RAC from memory. It was stated on that so they should have got a copy of the enterprise agreement, yes.

**** MICHAEL KEAT XXN MR DECKER
PN273

Now, in regards to the dispute that we'd formed a working party to look at 28 employees who were disadvantaged by the regrading process and that included Michael Jourghin and Michael Godfrey, we have resolved I think 26 of the 28?
---That's been part - that's been incorporated into part of the total processes that we were going through in reviewing all the position descriptions for all of what was ARGUS staff and that's an ongoing process. In our agreement with our undertakings with the RTBU there was an issue that the previous evaluations there was a general feeling or statements given by a number of staff that there was a lack of consultation and we gave a commitment, as you're well aware, Mr Decker, that we'd embark on a process to go through and interview every PD and certainly get that staff consultation, which we have. In the case of these two gentlemen, they were certainly involved in that process in terms of re-examining their current PDS and they were certainly involved with a process when they were evaluated. The evaluation process we had some contractors, some professional evaluation people coming in and actually doing that, using the CED methodology. But as part of that process they do the PED, do a provisional evaluation, but then they talk with the manager and in this case talk with a job expert and in this case these two fellows they were involved with that process. They actually were interviewed regarding their jobs with the new PD. So that's been a general, we have done that across the whole section, communications and control systems to alleviate some of those problems and try and address some of those perceived issues before. So it's part of a general process. Yes, I think in terms of the initial 26 or 28, or whatever it was, these two are probably the only ones that have continued this matter.

PN274

I pick up the point where you made a comment of what sort of flow on effect was that, you know, a potential payment of the bonus payments to both Mr Godfrey and Mr Jourghin would impact on approximately 15 employees?---It's a bit of a guess.

PN275

In what context what that flow on?---Look, we'd have to go back and examine the data sheet because there was quite a - and I can't remember exactly off the top of my head, but it could be in the order of 15 people. There's quite a few people within what was ARGUS paid above the top of their evaluated range at this point in time. So the impact, yes, I mean if there was to go ahead, yes, they'd certainly be putting their hand up and saying what about us and I think that goes without saying and I'm sure the relevant unions would be in touch with them very smartly to suggest they do that. But as to the exact number I couldn't tell you but probably in the order of 15. There's certainly other people that have come under - I know one in particular who is coming under similar circumstances to Mr Godfrey and Mr Jourghin who came in as a contractor at a higher salary level and that particular person did not get an increase under this arrangement and that hasn't been pursued any further by her after we went through the explanation, you're paid quite significantly above the top of the range for your evaluated position and that hasn't been pursued any further. Certainly that particular person disputed the grading of the position initially but that's been resolved through this overall process.

**** MICHAEL KEAT XXN MR DECKER
PN276

I know in particular with Mr Godfrey there is a dispute which is outside today's hearing regarding the additional duties and functionalities associated with his role at present?---Do you wish me to comment on that, do you?

PN277

No, I made a statement. With regards to with the '99 agreement, the ARGUS office staff '99 agreement, when we look at the performance assessment and I just note on page 12 for the Commission, the way it's applied in the agreement is there will be two assessments carried out by the relevant management team annually of the performance of each employee based on the content of the performance agreement. The first agreement will take place after six months of the commencement of the financial year and will be an informal assessment. The second assessment however will be the formal one and that's done at the end of the financial year. Given the assessment, if that assessment process was done at that particular time for Jourghin and Godfrey, at that particular time would they have been entitled for that performance payment as agreed to in that '99 agreement?---Not being in the position of the HR manager at the time, well, I'm not an HR manager now, but the previous HR manager, I don't know if I can speak on his behalf, but most likely I would suggest that that probably would be the case, they would have got a - they were a bonus payment, it was a one off bonus. It wasn't added to their remuneration. I would suggest that they may have got it but I couldn't answer that with any certainty I've got to say, because I wasn't involved with that process at the time.

PN278

Would it be fair to say that given the length of time the organisation has taken to process job evaluations and the restructure and all the other supplementary processes which are involved in merging one organisation to the other, but both Jourghin and Godfrey were victims of time?---No, I wouldn't necessarily agree with that. Yes, look, it's been unfortunate. I think there has been unfortunate. I think there has been general agreement from all parties that it has been unfortunate the length of time and it's been quite a convoluted process, I accept that, but I think in terms of being consistent and being fair with all staff and we have staff not exactly the same but certainly similar situations, I think we need to be fair and consistent in the application of this policy. And also given - I mean so we have been through the evaluation process and they came out at an RL7 and granted the guys said no, we don't agree with that and now we go through that process now, and I have to say provisionally it's looking a similar grading. But they're still up for approval at the moment. I think these two gentlemen have been quite well paid for what they're doing and my advice from - well, not quite well, very will, particularly Mr Godfrey, and my advice from their managers is that the jobs that they're doing now and granted the separate issue with Mr Godfrey there is some changes there and that's another issue which we're dealing with; but in terms of their current project engineering positions the duties haven't significantly changed since they've been employed in the place. So I don't think they're been disadvantaged. In fact I think to my mind I think they should say, well, we've had a bit of a bonus, the amount of money we're earning, why are we chasing another $1000 to be quite frank, but that's my opinion.

**** MICHAEL KEAT XXN MR DECKER
PN279

So given that there's been no substantive change in their duties from the date of appointment, how do you see the remuneration offered on the letter correlating with the enterprise agreement classification stream?---Well, I don't accept your position that it correlates across. I mean, so you've made some assumptions there. But as was stated here earlier, I mean, so you could say it may to go a couple of classifications. They're broad classifications that fit within a couple of ranges and I don't think we can make a determination that they automatically match across to either one, I really don't. To the best of my knowledge, my understanding from talking with various people and as I said, the HR manager who was looking after all of this is no longer with us, I think I may have had some informal discussions with him. But to the best of my knowledge a lot of the contractors that were put on the market dictated that they were paid fairly handsomely at the time and that was certainly given consideration to that when they were offered full time appointment in terms of, generally speaking, they maintained that higher rate of pay and that certainly came into the negotiations when they were discussed. That's my understanding and that's why these guys have got the higher pay.

PN280

Mr Keat, could you confirm if Michael Godfrey and Michael Jourghin received a bonus payment for the year 2001 through to 2002?---No, I can't. Not off the top of my head I can't. I can't.

PN281

Could you confirm the evaluation outcome or the assessment outcome for both
Mr Godfrey and Mr Jourghin just for the record?---Previously, the current one?

PN282

For the 2002 and 2003 - - -?---RL7. An RL7, yes.

PN283

Sorry, the performance assessment outcome?---You mean in terms of what they scored?

PN284

Yes?---Off the top of my head, no. But I certainly that they were above. I think your figure you quoted before, 3.3 or something.

PN285

3.3?---I've got no reason to doubt that. I've seen the charts and I know they were certainly above the three. They certainly performed very well. There's no dispute or question or question about that.

PN286

So given the context of the original '99 agreement they would have been eligible for a payment?---As I said, I can't give a definitive answer to that but certainly that may have occurred. It may have occurred under the previous management. It may have.

**** MICHAEL KEAT XXN MR DECKER
PN287

Thank you, Mr Keat.

PN288

THE SENIOR DEPUTY PRESIDENT: Re-examination, Mr Powell?

PN289

MR POWELL: No, your Honour.

PN290

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Keat. You are excused if you wish to leave?---I can hang around for a bit longer now.

<THE WITNESS WITHDREW [11.25AM]

PN291

MR POWELL: If it pleases the Commission, could we have a 10 or 15 minute adjournment?

PN292

THE SENIOR DEPUTY PRESIDENT: Yes, okay. And then we will go on
to - - -

PN293

MR POWELL: Before we call the next witness.

PN294

THE SENIOR DEPUTY PRESIDENT: Okay. I am happy to adjourn no.

PN295

MR POWELL: Thank you, your Honour.

<SHORT ADJOURNMENT [11.25AM]
<RESUMED [12.06PM]

PN296

THE SENIOR DEPUTY PRESIDENT: Mr Decker.

PN297

MR DECKER: Thank you, your Honour. I would like to call on Mr Jourghin as my next witness and Mr Godfrey next.

<MICHAEL FRANCIS JOURGHIN, SWORN [12.07PM]
<EXAMINATION-IN-CHIEF BY MR DECKER

PN298

MR DECKER: Mr Jourghin, I want to ask a number of questions and I suppose I want to focus on three key areas of the matter before us today. The first one is the arrangements of your employment from contractor to full time employment with RAC in 2000. The second one is the performance bonus payments expectations under your engagement of employment and the third area is, whilst it's not part of this dispute, the processes in which you have been involved in with regards to the review of your position, so I might just start off. On the statement provided by you Rail Access Corporation they've indicated that you're engaged as a contractor mid 2000. Can you just for the record just explain what arrangements were in place with regarding your contract of employment?---I was contracted for two and a half months through to 1 July 2000 and then I was offered temporary employment.

PN299

And that temporary employment period?---Yes, that went through to it was a bit over 12 months, which I have a copy of the letter here. To 30 April 2002.

PN300

When you were offered full time employment with the organisation and I understand a remuneration of 75,000 was struck?---Correct.

PN301

That appointment letter, did it contain a copy of the enterprise agreement which was current at the time?---Yes, it was attached to that letter, yes.

PN302

When you assessed the offer of employment at that remuneration level what other things or what other factors that you considered prior to accepting an offer?---It was the level I was going to be employed at at that time, which was an RAO6. It refers to - the letter refers to the EBA and I had a look at the scale of what was in the EBA and I believed I fitted in as a 6. RAC6 at that time.

PN303

You moved onto the first financial year in which a performance payment was made and I'll talk about the period between 2001 and 2002. From that date of employment did you receive a payment under the terms and arrangements identified in the ARGUS RAC?---Yes, I did.

PN304

'99 office agreement?---I did.

PN305

And what was that period for?---2001. It was 2002.

PN306

So it was your expectations as you moved into the next financial year, 2002-2003, was there any change or notification by the employer that there would be a change in paying of that performance payment?---No.

**** MICHAEL FRANCIS JOURGHIN XN MR DECKER
PN307

So with regards to the dispute and the letter notification that you're ineligible to receive a payment for that 2002 to 2003, when were you notified of that?---Well, I received a letter on 23 December 2003, position evaluations, from David Casey it was signed off by.

PN308

And on that letter there was a previous RAC grade as identified?---No, they have here it was at RL7, was identified here.

PN309

Of the previous grade?---Yes, it was an R8.

PN310

R8?---An RAO5, yes.

PN311

RAO5?---Yes.

PN312

So there was some linkage to the '99 enterprise agreement, the ARGUS enterprise agreement?---Well, there was, yes.

PN313

In regards to your engagement?---Correct.

PN314

That RAO5, was that what was principally agreed to at the time of your employment?---No, no.

PN315

So what was agreed to?---Well, the way the RAO5 came about was that was reflected on my payslip and there was no negotiation with me from Rail Access or RIC or RailCorp of what level I should have been on. I was referring to the statutory instrument at that time that relates back to my initial letter of appointment on 1 July 2000 which refers to the EBA and they had the EBA attached to that and 12 months later I get a payslip where they have given me a grading of an RAO5 on there and that's when I brought that to your attention, but I was never put on the right grading.

PN316

With regards to the 2002 and 2003 period where a retrospective assessment was applied, what was your compra score?---3.3.

PN317

3.3?---Yes.

PN318

So was your expectations if that score had been done?---Yes.

PN319

Within that financial and as per the arrangements in the ARGUS office '99 agreement would you be comfortable to say that you would be entitled to a bonus payment at the time?---Yes.

**** MICHAEL FRANCIS JOURGHIN XN MR DECKER
PN320

Some mention has been made about your involvement with the regrading of the role that you currently hold. Can you just for the record give an indication of when you first entered the working party or an opportunity of looking at reviewing or assisting in reviewing the functions underpinning your role?---It was approximately I think about six months ago. Six months ago, yes.

PN321

So it was certainly well after?---Well after the event, yes, definitely.

PN322

The assessment period?---Yes.

PN323

So your expectations is that a payment be activated on the basis that one, that you reached a satisfactory level of performance for that qualifying period?---Yes.

PN324

The position evaluations, the letter dated 23 December 2003, what was your main area of dispute with respect to your job evaluation?---Well, that letter has been withdrawn.

PN325

And it was withdrawn in reference to a letter addressed to George Panagouros and that's on page 23 - sorry, 33. That's dated 26 August 2004 and the signature to that letter which is responding to the RTBU 72 hour notice of dispute, the signature to that letter was Mark Benham and it was withdrawn pending a joint working group being established to work through the issues of the dispute, in which case we referred earlier to 28 incumbents who were in dispute with the gradings and you were actively involved in that committee at that stage?---Yes.

PN326

So the series of events, what's occurred since then, Mr Jourghin?---Well, I haven't received the bonus.

PN327

Have you received any further letter indicating what your regrading or your functions?---No.

PN328

Or position was going to be for the new merged identity?---No, I haven't.

PN329

No further questions.

<CROSS-EXAMINATION BY MR POWELL [12.17PM]

PN330

MR POWELL: If you go back in time to page 16 of the RTBUs submission?
---16, okay.

**** MICHAEL FRANCIS JOURGHIN XXN MR POWELL
PN331

Now, I believe that is your temporary employment contract for 12 months offered by Rail Access Corporation?---Yes.

PN332

Which is signed by Grant Doyle per John Cairns?---Yes. I have it here, yes.

PN333

Now, that specifies remuneration?---It does, yes. Correct, yes.

PN334

Now, there's no classification in that document that specifies the industrial instruments that may underpin that contract?---Yes, it says refer to the EBA.

PN335

And also refers to an offer of a meeting with Grant Doyle post the issuing of that contract?---Yes.

PN336

Did that meeting occur?---Yes, I did see Grant Doyle, yes.

PN337

Now, following that meeting there was nothing in writing that basically specified a classification?---No, there wasn't, no.

PN338

So at that time there was nothing concrete in relation to your classification in relation to your engagement into Rail Access Corporation under a temporary employment basis?---No, it wasn't. I just took it on the value of this letter where I asked him the question where I did fit in and he said refer to the EBA.

PN339

..... documentation?---That's correct.

PN340

So it's just specified your remuneration?---Yes.

PN341

Now, that temporary employment contract basis translated over to permanent basis later on down the track?---It did, yes.

PN342

And there still was no document specifying a classification?---No, no, except what appeared on a pay slip. Yes, that was all.

PN343

And what appeared on that pay slip?---An RAO5.

PN344

And by the conversion table submitted by RTBU which was the actual conversion table?---Yes.

PN345

If we look at the RAC grades RAO5 did translate to RL7?---Yes.

**** MICHAEL FRANCIS JOURGHIN XXN MR POWELL
PN346

But we are but contending that that was relevant at that time. Now, in relation to the letter dated 23 December. What was the page again?

PN347

Page 27?---27, okay.

PN348

If you go to the area in bold, the position of project engineer, was that the title of your position that you were appointed to in Rail Infrastructure Corporation?---No. No, it wasn't, no.

PN349

I'm not talking about Rail Access Corporation. And Rail Access Corporation the title was field inspector?---Yes, And Rail Access, yes.

PN350

And then the appointment letters that we have here under the RTBU submissions, the first one was signed by Mark Denham and the second one signed by David Casey, relates to a project engineer position?---Correct, yes.

PN351

Now, the grading of that position is found in the David Casey letter of
23 December?---Yes.

PN352

And that is an RL7. Do you agree that that's the bandwidth the underneath, the TRP bandwidth for RL7?---TRP. Well, the dispute I have, I should have been an RL8.

PN353

If you could just answer the question. That's what currently is in the RIC enterprise agreement?---Yes, that's in the agreement, yes.

PN354

And your current TRP underneath that at that time was correct?---Yes, correct.

PN355

So regardless of your position?---Yes.

PN356

The direct effect of what it states there, are you aware of what our salary maintenance policy is?---Yes. Okay, yes.

PN357

So as a direct effect of that current TRP as well as fitting outside that bandwidth under our current policy would be a salary maintenance situation?---Yes.

PN358

And is that what's currently reflected on your pay slip, this RL7?---Yes, it is. Yes.

PN359

The letter on page 33 that Mr Decker refers to, there's nothing in that letter that actually withdraws that 23 December letter, is there?---Well, okay. In this - yes, right. Well, if we're looking it up, what's the name of the letter you're looking at? I'll just make sure I have got the right letter here.

**** MICHAEL FRANCIS JOURGHIN XXN MR POWELL
PN360

It's re RTBU - - -?---72 hour notice.

PN361

It's signed by ..... per Mark Benham, Acting General Manager Systems, which is page 33 of the RTBU submissions. What I'm basically getting at, post 23 December there's no formal letter from the organisation withdrawing the status of that letter. There is a commitment to a review?---Okay, yes. That's right, correct.

PN362

That you were a part of?---Yes.

PN363

But there is no formal letter retracting that initial letter of 23 December. I understand that was still in dispute here?---Yes.

PN364

That's why we're here today?---Okay, yes.

PN365

That's all the questions I have, your Honour.

PN366

THE SENIOR DEPUTY PRESIDENT: Any further questions, Mr Decker?

PN367

MR DECKER: No, your Honour.

PN368

THE SENIOR DEPUTY PRESIDENT: Okay, thank you. You can step down.

<THE WITNESS WITHDREW [12.24PM]

PN369

MR DECKER: I would like to call on Michael Godfrey.

<MICHAEL ROBERT GODFREY, SWORN [12.24PM]
<EXAMINATION-IN-CHIEF BY MR DECKER

PN370

MR DECKER: Mr Godfrey, I just want to make reference to - have you got a copy of - - - ?---Thank you.

PN371

Make reference to page 19 which is offering you a permanent employment booth what was then Rail Access Corporation. Can you provide some outline on what your interpretation of the correspondence or the letter in regards to your appointment?---Well, at the time my interpretation was based purely on the 85,000 that I'm familiar with the bands that the company used and the 85,000 as far as I was concerned fell within the RAC7 bandwidth and as it states:

PN372

A performance bonus of up to 5 per cent is available annually which I understood as well.

PN373

So roughly would you see 5 per cent in monetary adding to that 85,000?---Well, it will be 85 per cent of 85,000.

PN374

So with reference to the dispute that we currently have in regards to the non payment of your performance payment I want to just pull back to the enterprise agreement and if we look at page 4 of the document?---Yes.

PN375

There's obviously some dispute of where you sat within the RAC office staff enterprise agreement. The classification level of 6 and 7 are really a disputed claim at the moment. If you had accepted the job offer of 85,000 total remuneration package plus an opportunity of up to a 5 per cent performance increase, if you look at the band at the time of the RAC6 in which RailCorp want to pigeonhole you in, what will happen in a very short space of time with regards to your performance payments in regards to that band given that you had entered that band at the top of the scale at 85,000?---Well, clearly the 5 per cent of 85 would take me out of the classification level 6 and into a 7. So when I was appointed my understanding was I appointed to the mid range of classification 7.

PN376

That's the RAC7?---RAC7.

PN377

In which fact the activation of an annualised performance bonus system and assessment would be comfortably administered in that band?---That's correct.

PN378

I know that you have had some overseas involvement in a similar industry?---Yes.

**** MICHAEL ROBERT GODFREY XN MR DECKER
PN379

And a remuneration system very similar to what was offered to you at the entry of employment. The engaged of you as a contractor was surrounded by a sponsorship arrangement. Can you for the record provide some details of that sponsorship?---Well, when I came to Australia I contracted to the rail. I had my own company. I was required to open my own company and contract my own company to the rail and then I applied for rail to sponsor me for four years, which they did, and I remained in the country under the sponsorship for four years.

PN380

So in consideration of an offer of permanent employment you would certainly be looking at the monetary side given that you are moving from one country to this?
---That's correct.

PN381

And you'd certainly be looking at the financial implications of the total remuneration package provided?---Definitely.

PN382

But also the potential of an increase through the bonus system?---Yes.

PN383

Between the period of 2001 and 2002 were you assessed and did you receive a bonus payment under the ARGUS office EBA?---Yes, I did.

PN384

When was that paid, roughly? Towards the end or after the financial year?---I don't recall but I think it was towards the end of the financial year.

PN385

So given that that was paid that would have, if you were in a RAC6, that would have ultimately exhausted any further opportunity of being paid?---Yes.

PN386

You make reference to the period in which we're disputing where the bonus payment should be administered between 2002-2003. What was your compra ratio score?---3.3

PN387

And that was done after the event, after that period that was applied?---Yes.

PN388

So with regards to a retrospectivity on the bonus payment and bonus assessment, if that process was applied immediately after that financial year would you see that you would be entitled to a bonus payment?---Yes, I would.

PN389

For that period?---Yes, I would.

PN390

The other question that has been raised this morning is a process of the job evaluation. Just for the record can you give some input to what involvement you've had in reviewing your current role leading up to that - if any, leading up to the disputed bonus period and post bonus period, if you can give us roughly some dates, rough dates and where you have had involvement in the assessment of your role?---The assessment of the role during the disputed period I had no input whatsoever. However, from September - its' roughly around September 2004 I was asked to have a bit of input regarding my evaluation, my position description, but that's all.

**** MICHAEL ROBERT GODFREY XN MR DECKER
PN391

Now, I suppose the argument culminated on the 23 December when letters of the review of the gradings for all of ARGUS staff was administered and that you were issued with a letter giving you - that's on page 29 - sorry. I make reference to page 26 of my submission, 23 December 2003. Mr Godfrey, the position of project engineer and the nominated grading of RL7, that was in dispute?---Yes.

PN392

From that letter, given that those letters were rescinded on the basis of that joint working party being established and working through the issues, now, we have still got an issue with the gradings as we sit here today, have you been informed of any revised evaluations with regards to your position?---No.

PN393

I have no further questions.

<CROSS-EXAMINATION BY MR POWELL [12.36PM]

PN394

MR POWELL: Thank you, Mr Godfrey. If I could first of all take you to
page 19 of your submissions. Is it my correct understanding that what you asserted in relation to that document is that you were engaged on a remuneration of 75,000?---Yes, yes.

PN395

Now, in relation to the subsequent letters in relation to the extension of your temporary employment contract and then your eventual appointment to permanent employment, there was still no clarification in relation to the classification on those documents, was there?---No.

PN396

Now, if you go to page 26 which we have just gone, that is a follow up appointment letter from the original one you received from Mark Benham in relation to your appointment with the Rail Infrastructure Corporation and it was the first time that a classification had actually been specified on an appointment document?---That's correct.

PN397

And that you did understand that that classification fell under the then RIC 2002 enterprise agreement?---Yes.

PN398

Under that section ATP classification. If you go to the bold, the position of project engineer, that was your understanding in relation to the position you were appointed to into Rail Infrastructure Corporation?---Regarding this letter, yes.

PN399

But also the previous letter from Mark Benham appointing you to the Rail Infrastructure Corporation that also had the title of - - -?---I think it was OFN project engineer.

**** MICHAEL ROBERT GODFREY XXN MR POWELL
PN400

Yes?---That's correct.

PN401

The same thing really, isn't it?---I thought it was more of a specialised position than just a general project engineer.

PN402

Now, underneath that is the grading of RL7?---That's correct.

PN403

And I understand this letter is in dispute?---Okay.

PN404

Now, under that RL7 classification grading, the TR bandwidth, is that your understanding of the bandwidth that's contained in the RIC 2002 enterprise agreement?---Yes.

PN405

Is that also the classification that's on your current pay slips?---The RL7 classification?

PN406

Yes?---Yes, it is.

PN407

Now, your current TRP that's stated underneath the TRP boundary, that obviously is outside the RL7 bandwidth?---That's correct.

PN408

Are you aware of the salary maintenance policy that applies to all of our employees?---I am aware of it, yes.

PN409

Now, still understanding that this is under dispute with the unions. Now, looking at this document the direct effect of that current TRP on top of that current TRP bandwidth has the effect of salary maintenance applying?---Yes, it does.

PN410

Now, in relation to any the union document or any RIC document forming subsequent to this letter there's nothing actually retracting that from the organisation?---No, I was under the impression the letter from Mark Benham - - -

PN411

Well, if you go to page 3 of the agreement?---Page 33.

PN412

Take your time. If you would like to point to me where that actually rescinds the letter of 23 December located on page 26 of the submissions?---Okay. That bottom paragraph, it says that management should involve unions and employees when the process is being used but that wasn't the case. So my understanding of that was any letter that we received and this we did consult with the union, any letter that we received is not appropriate.

**** MICHAEL ROBERT GODFREY XXN MR POWELL
PN413

I'm just taking you to this document. There's nothing in that document that actually rescinds that letter of 23 December?---Not specifically, no.

PN414

I understand what you're saying it was to your understanding?---Okay.

PN415

But in relation to that document, from what I can see it sets a terms of reference for the joint working group to operate?---Okay.

PN416

But it doesn't actually rescind that letter of 23 December that you were dealing with?---That's correct, yes.

PN417

Now, in relation to the 5 per cent performance payment?---Yes.

PN418

Up to 5 per cent. Is it your understanding that that was preceded by the agreed agreement between the unions and the organisation at that time about the $1000, that succeeded the 5 per cent?---Yes.

PN419

So that made that 5 per cent irrelevant under that agreement?---That's correct, yes, yes.

PN420

Now, in relation to your understanding, employees that were on salary maintenance under the methodology of receiving that $1000 payment would be precluded from that $1000 increase to their TRP?---I wasn't aware of that at the time but I did go up and see Mr Michael Keat about that and he explained that to me, yes.

PN421

So that became a subsequent understanding to that - - -?---That's correct, yes.

PN422

I think that's about it?---Okay, thank you.

PN423

THE SENIOR DEPUTY PRESIDENT: Mr Decker?

PN424

MR DECKER: Your Honour, with respect to the rescindment of the dispute gradings I did point to the wrong letter. I really should have made reference to a letter under Mark Benham's signature on page 31 of my submission. In that letter he makes reference to - - -

PN425

THE SENIOR DEPUTY PRESIDENT: I think it's supposed to be re-examination. Are you asking another question of the witness?

**** MICHAEL ROBERT GODFREY XXN MR POWELL
PN426

MR DECKER: Sorry, I just wanted to clarify that without examining that letter I should have made reference to page 31 with regards to the disputed gradings from the relevant individuals pay slips be replaced with whatever was previously in this field. So my interpretation of RailCorp's rescinding - - -

PN427

THE SENIOR DEPUTY PRESIDENT: Sorry, it's just that you're not really back to your submission at this point. You can make a submission but if you want to ask another question on that issue?

PN428

MR DECKER: I have no further questions. Thank you.

PN429

THE SENIOR DEPUTY PRESIDENT: Okay. Thanks very much.

<THE WITNESS WITHDREW [12.45PM]

PN430

THE SENIOR DEPUTY PRESIDENT: You will get a chance to make your point.

PN431

MR DECKER: No worries. Thank you, your Honour.

PN432

THE SENIOR DEPUTY PRESIDENT: You can stay there.

PN433

MR DECKER: I have got my L plates on today.

PN434

THE SENIOR DEPUTY PRESIDENT: So Mr Decker, where are we now, do you have anything further to -well, you can I suppose you can make that point now really.

PN435

MR DECKER: Just for the record, with regards to the disputed gradings I want to make reference to page 31 of our submission on a letter which is signed by Mark Benham which is a precursor to the establishment of the work party in attachment F. So I have requested people in performance to remove the disputed gradings from the relevant individuals pay slips and I understand at that stage there was about 28 employees that were impacted by the disputed gradings, and replaced them with whatever was previously in this period.

PN436

THE SENIOR DEPUTY PRESIDENT: What maybe would have been useful to ask him was what Mr Jourghin and Mr Godfrey's - I may have got this wrong, I should have known this perhaps, but what was on their pay, what was put back into their pay slip then if the - - -

PN437

MR DECKER: May I ask Mr Godfrey?

PN438

MR GODFREY: Mine was put back to RACM which that's what I was employed under, RACM.

PN439

THE SENIOR DEPUTY PRESIDENT: Okay.

PN440

MR DECKER: You were a RAC5 in dispute. RAC5 in dispute, yes.

PN441

MR POWELL: So didn't clarify the standing of that 23 December letter, if I can make that point.

PN442

THE SENIOR DEPUTY PRESIDENT: No, but that's sorted it all out. Okay. Do you have anything further to put at this stage, Mr Decker?

PN443

MR DECKER: No, your Honour.

PN444

THE SENIOR DEPUTY PRESIDENT: Well, I'm just wondering as to whether we can take this any further today. I mean, are you - it's entirely up to you, but are you absolutely sure you need your witness, the other witness, because there hasn't been much put on about job evaluation as such?

PN445

MR POWELL: Well, that's within his expertise so that's essentially what my witness is here for.

PN446

THE SENIOR DEPUTY PRESIDENT: No, I know. But is that critical to the - because what we're not having - as far as I can make out, what I'm going to have decide is what the correct - is the review process still going on?

PN447

MR POWELL: Yes.

PN448

THE SENIOR DEPUTY PRESIDENT: I mean I'm not really being asked to, if you like, second guess, if I can put it that way, the actual - I mean the union's case is based on me second guessing some job evaluation exercise. It's not really based on that principle, so I'm just sort of wondering whether you're - because the argument might - well, it could be from a procedural point of view we might still be able to finish this much sooner if we didn't need his evidence. I mean if you feel you want to put his evidence on then I wouldn't want to stop you.

PN449

MR POWELL: I would feel more - - -

PN450

THE SENIOR DEPUTY PRESIDENT: Okay, okay. Well, then really there's not much more we can do, nothing more we can do about it today. Is that right?

PN451

MR POWELL: Yes.

PN452

THE SENIOR DEPUTY PRESIDENT: Then we will resume on the 17th, I think is the date we agreed, to have RailCorp's further witness evidence. And there's no other evidence you're putting on - - -

PN453

MR POWELL: No.

PN454

THE SENIOR DEPUTY PRESIDENT: And then closing submissions on that day. Okay. Well, we will adjourn until then.

<ADJOURNED UNTIL THURSDAY, 17 JUNE 2004 [12.48PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #RTBU6 SUBMISSION INCLUDING A SERIES OF EXHIBITS AND TWO WITNESS STATEMENTS PN139
MICHAEL KEAT, AFFIRMED PN262
EXAMINATION-IN-CHIEF BY MR POWELL PN262
EXHIBIT #RAILCORP2 STATEMENT OF MR KEAT PN264
CROSS-EXAMINATION BY MR DECKER PN269
THE WITNESS WITHDREW PN290
MICHAEL FRANCIS JOURGHIN, SWORN PN297
EXAMINATION-IN-CHIEF BY MR DECKER PN297
CROSS-EXAMINATION BY MR POWELL PN329
THE WITNESS WITHDREW PN368
MICHAEL ROBERT GODFREY, SWORN PN369
EXAMINATION-IN-CHIEF BY MR DECKER PN369
CROSS-EXAMINATION BY MR POWELL PN393
THE WITNESS WITHDREW PN429