BP2004/5395, Transcript of Proceedings [2005] AIRCTrans 1360 (22 June 2005)

TRANSCRIPT OF PROCEEDINGS

---


Workplace Relations Act 1996 11840-1

SENIOR DEPUTY PRESIDENT MARSH
SENIOR DEPUTY PRESIDENT HAMBERGER
COMMISSIONER GAY

BP2004/5395

APPLICATION BY BLUESCOPE STEEL LIMITED
s.170MW(8A) - Power of the Commission to suspend or terminate bargaining period
(BP2004/5395)

MELBOURNE

10.00AM, WEDNESDAY, 08 JUNE 2005

Continued from 12/5/2005

Adjourned sine die

PN976

SENIOR DEPUTY PRESIDENT MARSH: Is there any change in appearances?

PN977

MS Z ANGUS: I think we may be the only ones, your Honour. With me today is MR E WALTERS and we seek to intervene ..... .

PN978

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Is there any objection to Ms Angus's application to intervene?

PN979

MR BORENSTEIN: No, your Honour.

PN980

SENIOR DEPUTY PRESIDENT MARSH: Leave is granted. I think since we were last sitting, we have received a witness statement from BlueScope with some accompanying attachments and a short written submission from the AWU. That is the new documentation I have received. Has everyone received that documentation? I haven't overlooked anything? Having said that, I would have thought it is probably appropriate to deal with the witness evidence to finality first and then hear submissions. Is there any objection to that, a differing view?

PN981

MS ANGUS: Perhaps we could suggest an alternative. We have some submissions that really go to whether or not the Commission should arbitrate and then if the Commission is minded to arbitrate, we really have no substantive submissions, so perhaps that might be an appropriate way to proceed.

PN982

SENIOR DEPUTY PRESIDENT MARSH: We will be dealing with whether it is appropriate for the Commission to make an award as part of the submissions. That is one of the positions put, or the primary position put by the company, so unless there is a particular reason why you feel you should put your submissions first, I think it is probably more appropriate to deal with the evidence and then go to the submissions, including on the issue that you wish to raise. Did you wish to be excused after you put your submissions? If you are putting it that way - - -

PN983

MS ANGUS: Well, I suppose that is a more effective use of our time, but we are happy to proceed on that basis.

PN984

SENIOR DEPUTY PRESIDENT MARSH: Is there any objection to hearing the AWU short submission first? It is a short submission? I am just saying if it is not, I would rather deal with it with submissions.

PN985

MS ANGUS: Our preference, your Honours and Commissioner, is that we make some submissions and then we would seek to be excused from the remaining proceedings.

PN986

SENIOR DEPUTY PRESIDENT MARSH: Mr Borenstein, Dr Jessup, is there any objection to hearing the AWU written submission out of order? They are the intervener.

PN987

DR JESSUP: We don't have a view about that.

PN988

MR BORENSTEIN: I think we are in the same position. I am not sure if they will seek to do a reply submission afterwards, which may delay things, but I am happy for them to go ahead now if they wish to.

PN989

SENIOR DEPUTY PRESIDENT MARSH: Well, that is right. Ms Angus, if you are going to seek reply submissions, I think we will deal with it in submissions. If you are going to put a short oral submission and seek to be excused, you can proceed, but I don't want to spend any more time on this.

PN990

MS ANGUS: Your Honour, we are happy to proceed as you initially suggested.

PN991

SENIOR DEPUTY PRESIDENT MARSH: Thank you. We will proceed with any remaining witnesses or any cross-examination of any witnesses that were in the box last time.

PN992

MR BORENSTEIN: Well, your Honour, in respect of the CEPU, there was that issue about certain documents that were contained, or that were objected to at the last hearing. I am not sure if the Commission remembers the documents. They are the documents that have been replied to in the affidavit of Mr Elliott that has just been filed since the last hearing.

PN993

SENIOR DEPUTY PRESIDENT MARSH: We haven't marked that exhibit, pending Dr Jessup getting further instructions.

PN994

MR BORENSTEIN: That is right.

PN995

SENIOR DEPUTY PRESIDENT MARSH: So if I recall the position, the CEPU was cross-examining Mr Tunnecliffe with respect to material in that unmarked document and we adjourned on the basis of giving the company an opportunity to ascertain a position.

PN996

MR BORENSTEIN: To respond to it and they have responded in Mr Elliott's affidavit.

PN997

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is right.

PN998

MR BORENSTEIN: I would seek to tender those documents, have them tendered before the Commission and the company has now had the opportunity to respond and they have responded by their evidence that they seek to bring and we can leave the relevance and the weight of that evidence for submissions.

PN999

SENIOR DEPUTY PRESIDENT MARSH: I see.

PN1000

DR JESSUP: No objection to that, your Honour.

PN1001

SENIOR DEPUTY PRESIDENT MARSH: Very well.

EXHIBIT #B9 SUBMISSION TO MX COMMISSION HEARING

PN1002

MR BORENSTEIN: That is the evidence of the CEPU.

PN1003

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Dr Jessup.

PN1004

DR JESSUP: Your Honour, in response to exhibit B9, we propose to call another witness and his evidence has been reduced to the form of a draft affidavit, that is Gary Elliott. Does the Commission have that?

PN1005

SENIOR DEPUTY PRESIDENT MARSH: Yes, we do. Thank you very much.

PN1006

DR JESSUP: The draft hasn't been sworn and there is one amendment that needs to be made, so with the Commission's leave, instead of swearing this as an affidavit, we will have it sworn to viva voce and then the amendment can be dealt with.

PN1007

SENIOR DEPUTY PRESIDENT MARSH: Certainly.

PN1008

DR JESSUP: Mr Elliott, please.

<GARY ELLIOTT, SWORN [10.07AM]
<EXAMINATION-IN-CHIEF BY DR JESSUP

PN1009

DR JESSUP: Is your full name Gary Elliott?---That is correct.

PN1010

And are you employed by BlueScope Steel at Western Port?---I am.

PN1011

And what is your position there, Mr Elliott?---I am the assets and manufacturing services manager.

PN1012

And have you had prepared a short statement in the form of a draft affidavit to form the basis of your evidence in this case?---I have.

PN1013

And that has two exhibits, does it not?---It does.

PN1014

Do you have a copy of the affidavit and the exhibits with you?---Yes.

PN1015

Is there a minor amendment that needs to be made to one of the exhibits?---There is, exhibit GE2, section 6, there is a typographical error, so at the very beginning, the plant infrastructure department section, so under the section manning - - -

PN1016

Does the Commission have that?

PN1017

SENIOR DEPUTY PRESIDENT MARSH: Yes.

PN1018

DR JESSUP: Yes, thank you?---So under the second manning heading, the second paragraph there, it says:

PN1019

Pre-maintenance alliance implementation.

PN1020

So it says:

PN1021

One planner, one leading hand and the apprentice.

PN1022

And if you go to the first manning section where it says:

PN1023

Pre-Silcar -

PN1024

It says:

PN1025

One planner, one leading hand, four tradesmen.

**** GARY ELLIOTT XN DR JESSUP
PN1026

The four tradesmen has been neglected to be added in that second section there, so the second part, pre-maintenance alliance implementation, should read:

PN1027

One planner, one leading hand, four tradesmen and an apprentice.

PN1028

Subject to that correction, is your statement true and correct?---It is.

PN1029

We tender that, if the Commission pleases.

PN1030

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

EXHIBIT #J7 WITNESS STATEMENT AND AFFIDAVIT OF
GARY ELLIOTT

PN1031

SENIOR DEPUTY PRESIDENT MARSH: Do you want the accompanying documents marked as exhibits?

PN1032

DR JESSUP: No, they are already identified as exhibits to the statement.

PN1033

SENIOR DEPUTY PRESIDENT MARSH: Yes, that is right. Mr Borenstein.

<CROSS-EXAMINATION BY MR BORENSTEIN [10.10AM]

PN1034

MR BORENSTEIN: Thank you, your Honour.

PN1035

Mr Elliott, is it true that you didn't prepare the exhibit GE2?---That is correct.

PN1036

Do you have any knowledge about the facts in that document?---Quite a lot of them, yes, I do.

PN1037

You do?---Yes.

PN1038

How come you didn't prepare it yourself?---I was only - this document was prepared prior to me becoming involved. I was only requested in the last couple of days to get involved with reviewing this.

PN1039

Can I ask why I think it is Mr Thomas wasn't brought here to swear the document?---I don't know.

PN1040

There is no reason that you are aware of?---Sorry?

PN1041

There is no reason that you are aware of?---No.

PN1042

In respect to the motor crew, is it true that there are seven experienced tradesmen in the motor crew?---That is the establishment number at the moment. It started out as four, but soon after, so probably about 12 months ago that establishment number was made up to seven. There is one employee that is on long-term sickness in that crew.

PN1043

Again, in your experience is there seven experienced tradesmen in the motor crew?---There's a combination, like any crew of experienced tradesmen and I believe there's one apprentice in the crew that has come through, done his time on site so he has probably got four and a half years' experience on site and will have had some motor crew experience, but I wouldn't class that apprentice as motor crew experienced.

PN1044

No. He did his apprenticeship somewhere else in the BSL organisation, is that true?---As far as I understand, he was on site.

PN1045

But not in the motor crew?---They would have cycled through the motor crew, so the apprentices cycle through all aspects of the facility, so they go through the manufacturing areas, the high voltage area, the motor crew, plant and construction.

**** GARY ELLIOTT XXN MR BORENSTEIN
PN1046

Is it true that three of those tradesmen are first year electrical tradesmen, just out of their apprenticeships?---I don't believe the number is three.

PN1047

Are you aware that BlueScope Steel has attempted to terminate three of these first-year tradesmen in the motor crew due to them not having an actual E-class licence?---We haven't attempted to do that at all. In fact, we gave those apprentices extensions to their time, so I am aware of discussions earlier in the year that if the apprentices hadn't passed their exam, they were given a three-month extension. At the end of that, if none of them had passed their exam, they were given a further one-month extension. Two of them have subsequently passed their exams and one failed right at the end of the period and that individual has been given a second extension, to have another crack at getting the exam, so, no, there has been no attempt. I would say it is quite the reverse. Every attempt has been made to keep these apprentices on board.

PN1048

Do you know that some of the contractors engaged to work on the motors at BSL don't have actual E-class licences?---If we bring in - it is not a requirement to have an E-class licence necessarily to work on motors and unlicensed people can under given circumstances, so when we bring in say contractors from Bob White's, provided the equipment is isolated correctly, which it is under our safe system of work, then you don't under law have to have a licence to do cleaning, brush fitting, com-skinning, that type of thing, so some of these skills are non-electrical trade skills, so although on site we have A-class or E-class electricians predominantly doing this work, it is not a requirement.

PN1049

You would agree, though, wouldn't you, that those three tradespeople that you just brought on wouldn't be seen as being experienced in motor crew work?---They would have some experience and with anything, there's some things you learn, so it is like anything, you get your qualification, it doesn't matter what job you take on in life, you get a base qualification and the experience comes, so these apprentices will have been through the motor crew and there's jobs on the motors that, as I said before, don't necessarily - you don't have to have at trade qualification to undertake these tasks and they will learn with the more experienced tradesmen. That is how it is worked, so you have got this constant flow of people moving through your workforce and the idea is to keep a spread of ages there, so the skills can be passed down the line, so that is exactly what is happening. Those skills in the motor crew are being handed on.

PN1050

Now, on page 3 you refer to a previous supervisor not having satisfactory leadership and skills, at the top of page 3 I think it is. Is that true?---This is in
G2, is it?

**** GARY ELLIOTT XXN MR BORENSTEIN
PN1051

Yes, in that exhibit at the top there?---Yes.

PN1052

Are you aware of that supervisor?---No. This is before my time.

PN1053

What is before your time?---This supervisor. I didn't personally know him and it is before my time with the company.

PN1054

Do you know what the person's name is?---No.

PN1055

You don't know who he is referring to?---No, I don't know the person's name.

PN1056

Are you aware of that supervisor being terminated or that incident occurring?---I am not aware of the details of it, no.

PN1057

You are not aware of any details about it?---No, other than when the maintenance review was undertaken, there was a lot of people that either took redundancy packages or were given new positions and I don't know the details around this particular individual.

PN1058

Do you know who the particular individual is, though?---No.

PN1059

You don't know his name?---No.

PN1060

Are you aware that he is still engaged as a consultant by BSL?---No. Well, I don't know his name, so I don't know, but that is possible.

PN1061

Are you aware of the person named Ian Norris?---No.

PN1062

No further questions.

PN1063

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Dr Jessup.

PN1064

DR JESSUP: Nothing further, your Honour.

PN1065

SENIOR DEPUTY PRESIDENT MARSH: Thank you, Mr Elliott. You are excused. Thank you for your assistance. You are free to leave the court if you want to or you are welcome to stay.

<THE WITNESS WITHDREW [10.17AM]

PN1066

SENIOR DEPUTY PRESIDENT MARSH: No further evidence? Submissions, Dr Jessup.

PN1067

DR JESSUP: Your Honour, we have made our submissions, and the only thing that we need to address the Commission on is the question which the Commission asked at the end of the last sitting. Would it be convenient if I dealt with that now?

PN1068

SENIOR DEPUTY PRESIDENT MARSH: It would be very convenient.

PN1069

DR JESSUP: We have prepared a brief outline on this point, if I could hand that up. It might be convenient if I were to give the Commission a moment to read that. It is about two and a half pages of text and it is fairly self-explanatory.

PN1070

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN1071

DR JESSUP: If the Commission pleases, you will recall how this matter arose. It was common ground that section 170LY(2) would have the effect that if the Commission made an award, it would in effect nullify the agreement which was certified, and anticipating that that was an undesirable outcome, Mr Borenstein submitted that the Commission could fix that problem by making an award which would cover everybody on site, so that at least everyone would have coverage at or about the level proposed by the certified agreement.

PN1072

However, that would involve making an award under section 170MX which covered operators and the question is whether the Commission can do that and the Commission can only do that if operators, if the terms and conditions of operators were at issue in the CEPUs bargaining period, because a number of decisions of the Commission make it quite clear that the power under section 170MX is confined to things which were at issue during the bargaining period.

PN1073

Now, the question of whether the terms and conditions of operators were at issue during this bargaining period isn't quite as simply resolved as old-fashioned industrial relations practitioners might think. In the old days, you would simply say, well, of course it didn't cover operators because they haven't got eligibility to cover operators.

PN1074

Unfortunately, under a Division 2 agreement, a union is capable of making an agreement - not unfortunately, but, taking up the pejorative, it is a fact, that a union is capable of making an agreement which would cover everyone in the business, so long as they have got one member whom they can cover by way of eligibility, so as a matter of theory, one is brought to the conclusion that if the CEPU wanted to have made operators at issue during the bargaining period, they could have done so.

PN1075

They could have actually made a claim in relation to everyone on site. The question then is, in point of fact, did they do so? And we point to two things. We point first of all to their original bargaining period notice which was specifically confined to persons, members of or eligible to be members of, the CEPU, so that in a sense sets up a starting point and a prima facie position which was through the bargaining period unless there was a fairly clear change of position by the union and then in our document which we have just handed up, we take the Commission through the events that succeeded the bargaining period notice and we don't find any such change in position and furthermore, we have pointed out that the CEPU acted at all times as though it was only interested in electricians which is what you would expect.

PN1076

For example, if they were interested in operators, why didn't they address operators and press upon them the option which they gave to their own members of not voting upon the agreement? So we would think the Mr Borenstein - we don't know what he says yet, of course, but we think that he would be facing an impossible task to submit to the Commission that the terms and conditions of operators were at issue under this bargaining period.

PN1077

Now, if that is the case, then the consequences to which we have referred in the last couple of paragraphs of the outline then present themselves. The first is that the Commission cannot make an award which would cover operators, but any award which the Commission did make would nullify the agreement which would cover operators and we have got the operators' union here today saying we don't want you to do that and BSL certainly doesn't want the Commission to do that, so in a sense, it is a union which stands outside the legitimate industrial interests of operators which is contending for that kind of an outcome.

PN1078

Now, on the other hand, if you accept our position, and it seems also the AWUs position, and simply as a matter of discretion decline to make an award, then both operators and electricians would be covered. They would be covered by an agreement on which they all had a chance to vote. They would be covered by an agreement on which a valid majority of them did vote and of which they approved and they would be covered by an agreement which continues the pattern of site agreements established over many years.

PN1079

It is an agreement which we pointed out last time in very similar terms. It provides for across the board percentage updating of wages and money matters and those updatings run over the period of the agreement in the way we explained last time, so with respect, if the Commission pleases, this would have to be one of the strongest and most obvious discretionary outcomes the Commission has ever considered. There really isn't any legitimate point, we would say, in favour of making an award under section MX. If the Commission pleases.

PN1080

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Mr Borenstein.

PN1081

MR BORENSTEIN: Thank you, your Honour. I might hand up some folders which have cases in them and basically the submissions presented last time, notes referring to the transcript, et cetera.

PN1082

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Are you seeking to have this marked as an exhibit?

PN1083

MR BORENSTEIN: The submissions, yes.

EXHIBIT #B10 OUTLINE OF SUBMISSIONS

PN1084

MR BORENSTEIN: You will see there is an index also to the folder which sets out the cases I refer to, but you will also note in tabs M and N that I have included the proposed 170MX award and schedule to that that we seek.

PN1085

SENIOR DEPUTY PRESIDENT MARSH: Did you wish us to read these outlines? We could adjourn for a few minutes, read them and then you could just speak to them if that would - - -

PN1086

MR BORENSTEIN: That might be a quicker way of doing it, your Honour.

PN1087

SENIOR DEPUTY PRESIDENT MARSH: Would that be appropriate for everybody? We will adjourn.

<SHORT ADJOURNMENT [10.30AM]
<RESUMED [10.50AM]

PN1088

SENIOR DEPUTY PRESIDENT MARSH: Yes, thank you, Mr Borenstein. We have obviously read the outline. To some extent you have drawn the original outline of submissions into this final submission, so obviously to the extent that we have already been addressed, we don't need to be addressed on that again, so you proceed, but please proceed on the outline. We are familiar with a lot of it.

PN1089

MR BORENSTEIN: Yes, I will. There's probably just a few points I will seek to raise again, and that is it. I am not going to read through the submissions.

PN1090

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN1091

MR BORENSTEIN: I might firstly deal with the submission by my friend about the fact that the Commission doesn't have the power to arbitrate in respect to the operators. We say that that submission has no basis. We submit that it is clear from even the evidence of BSL that the issues concerning the operators were in existence during the bargaining period of the CEPU, and the CEPU were involved in negotiations in respect of such terms and conditions.

PN1092

Now, if I could take you to the statement of Mr Tunnecliffe and paragraphs 24 to 27, you will see in paragraph 24 that the bargaining periods were initiated on 3 May by the CEPU and at about the same time, the AWU bargaining period was also initiated and you will then see at paragraph 25 that the AWU and AMWU and CEPU advanced separate claims as put by Mr Tunnecliffe, then he says:

PN1093

However, at a negotiating meeting on 17 June 2004, the unions -

PN1094

being all three -

PN1095

jointly put forward a consolidated log of claims and those claims then formed the springboard for further negotiations with those unions jointly.

PN1096

So to try and artificially separate the unions as my friend tries to do, we say is wrong.

PN1097

SENIOR DEPUTY PRESIDENT MARSH: It is put that the bargaining period for the AWU came to an end. It was terminated by virtue of making the certified agreement, wasn't it?

PN1098

MR BORENSTEIN: Later in 2005, that is right. Well, I think once the certified agreement was certified in 2005, their bargaining period did come to an end, but all the Act requires is that the matters have to be at issue during the bargaining period, not at the time of the arbitration, not at the time of actually initiating a bargaining period, but between the start date and the end date and we say that it is clear that the issues concerning the operators, the AMWU and the CEPU were all at issue at a time during the bargaining period which was filed by the CEPU.

PN1099

SENIOR DEPUTY PRESIDENT HAMBERGER: Excuse me. Why do you say when it says the negotiating parties have not settled the matters that were at issue? I mean, they were at issue, but weren't they then that the issues in relation to the operators were settled by the making of the certified agreement? I mean, they were at issue, that is not the problem, but then they were settled, one would think. It is MX(3)(a).

PN1100

MR BORENSTEIN: We would submit that the matters between the CEPU and the - the CEPU had not settled the matters concerning itself and the operators at the time that this conciliation occurred. I understand the point put by your Honour, but we would submit that the unions were negotiating jointly. Now, if the AWU has gone off and made an agreement, that doesn't mean that the CEPU has reached the agreement with the other negotiating party and therefore the matters, which is a total agreement, have not been settled between the negotiating parties.

PN1101

SENIOR DEPUTY PRESIDENT MARSH: But the scope of an MX arbitration is confined, isn't it, to matters at issue during the bargaining period and the authority that you rely on in the opening of your outline of submissions says that:

PN1102

The arbitration powers can only be used when the Commission has suspended or terminated a bargaining period on the ground that -

PN1103

et cetera, and they are the grounds available to making a bargaining period. It is a confined power and in the case of the AWA, the Commission did not suspend or terminate a bargaining period on the ground. As I said to you, the bargaining period for the AWU came to an end because an agreement was made, it was settled, as his Honour said.

PN1104

MR BORENSTEIN: That is right.

PN1105

SENIOR DEPUTY PRESIDENT MARSH: So how is 170MX invoked for the operators, when they are represented by the AWU and the AWU has reached agreement? It has not been subject to a termination or suspension of a bargaining period on the grounds of industrial action taken during a bargaining period is threatening to endanger life, et cetera?

PN1106

MR BORENSTEIN: In my submission the matters concerning the operators were at issue during the bargaining period of the CEPU and the CEPU never reached agreement regarding those matters with the other negotiating party, BSL, during its bargaining period.

PN1107

SENIOR DEPUTY PRESIDENT HAMBERGER: But do you have any evidence - I mean, okay, there was this joint log of claims at one point during the negotiations, but do you have any evidence that the CEPU in fact was ever doing anything more than negotiating on behalf of its own members, you know, the electrical employees? Now, if it was really going into bat, if I could put it that way, for the operators, continue to go into bat for them, then you could perhaps argue that, but is there any evidence that they - well, there may be in this joint log of claims that dealt with the operators that appears to have been settled by the making of the certified agreement?

PN1108

MR BORENSTEIN: I understand the point your Honour makes. We submit that it was never - even though the matters were settled by the AWU, there were joint logs of claims and I understand there might not have been evidence put exactly on that point and it was never actually put to our witness either that he wasn't doing this, but we submit that if you have a look at the agreement reached by the AWU, it is basically a joint agreement that applies, well, most, if not all, of the claims apply equally to whether you are an electrical tradesperson or an operator and therefore all the claims are joint. We submit - - -

PN1109

SENIOR DEPUTY PRESIDENT HAMBERGER: It doesn't follow that because the AWU entered into an agreement that covered the electrical employees that the CEPU was in fact also seeking to get an agreement that covered the operators. I mean, one doesn't follow to the other.

PN1110

MR BORENSTEIN: If you have a look at the AWU EBA, all the claims within it don't separate for the AWU, this is what applies, for the ETU, this is what applies.

PN1111

SENIOR DEPUTY PRESIDENT HAMBERGER: No.

PN1112

SENIOR DEPUTY PRESIDENT MARSH: No, but your MX award does,
Mr Borenstein. You are only seeking additional conditions by way of a schedule for the electricians - - -

PN1113

MR BORENSTEIN: In addition - - -

PN1114

SENIOR DEPUTY PRESIDENT MARSH: There is nothing different for the operators than what has been settled in the certified agreement. You want identical wording for the operators because they are their settled claims.

PN1115

MR BORENSTEIN: That is right.

PN1116

SENIOR DEPUTY PRESIDENT MARSH: The additional claims and therefore additional provisions of the MX apply to your members, the electricians.

PN1117

MR BORENSTEIN: Well, we don't see it as settling those - we don't see it as we settled the claim. We see it as a whole claim, unless the whole claim is settled, the rest falls over, so we are seeking the whole of what I propose for the MX award, i.e. the AWU EBA is the general terms and the separate schedule that is attached to the MX award that applies in excess of the general terms.

PN1118

But if you look at the preconditions to the arbitration and it requires that the negotiating parties have settled the matters that were at issue, well, we submit the negotiating parties are the CEPU and BlueScope Steel and they have never settled the matters that were at issue during the bargaining period which includes all the terms in the current AWU BSL EBA and in addition to that includes what we propose to be in the schedule 4. That is our submission. I don't think I can put anything further.

PN1119

Now, in respect of the submissions referred to last time, we say that the Commission's role in exercising its powers under 170MX, we refer the Commission to the Westrail case which is reported at 74 IR 423 and I underline and put in bold the basis on which the Commission should proceed on the first page of the submissions. You will see there that it says:

PN1120

It is an arbitration which concludes a bargaining period and so we regard the function of the Commission in arbitrating under section 170MX as being largely to assess the respective positions of the parties in relation to the bargain and to arrive at a conclusion which could be regarded as being an appropriate result in the context of the bargaining which has taken place and how to conclude it successfully.

PN1121

We would also like to draw your attention to the Curragh decision, 4464, on page 2 of my submissions where I underline a part where it makes clear that:

PN1122

The outcome of a section 170MX arbitration would not have any precedent value in arbitral proceedings.

PN1123

We therefore submit that as I set out at paragraph 4 of my submissions, the Commission should not be concerned about setting precedents that flow on to industry awards. A 170MX arbitration is a completely different creature and a number of the Full Benches have said that it has no precedent value for such proceedings and I will deal with that in more depth when I talk about the redundancy package which is in excess of the TCR provisions and this was raised last time by your Honour, that we say that the Commission should not be concerned about going above the TCR provisions because it doesn't have the same effect as that case had on other awards.

PN1124

You will see in my submissions from paragraph 9 onwards I talk about the merits for the redundancy process clause and I went through that in some detail last time and we reiterate that the redundancy process is the main issue we submit in the minds of the employees of BlueScope Steel and has been so for a long time before negotiations of this certified agreement and we submit that the matter really needs to be brought to finality and we submit the Commission can do this by making an award in the terms of this redundancy process clause.

PN1125

I draw your attention to paragraphs 32 to 34 of my submissions where we submit that this redundancy process clause will actually increase productivity at BSL and in those terms we rely on the transcript from the Acton SDP hearing that was in tab K in the folder that I handed up at the last hearing. You will note that there's references to tabs in my submissions. Those tab references are to the folder I handed up on 12 May, at the previous hearing.

PN1126

You will see in that folder at tab L that Acton SDP deals with this issue of what happens if Silcar signs the standard electrical industry agreement as well as what is the outcome of the partial outsourcing, so everyone else is outsourced except electricians and her Honour found clearly that there was a good business case, that the good business case required them all to be outsourced and that the good business case was not affected by the fact that Silcar - the terms and conditions that reflect the standard electrical contracting industry agreement. I refer you to paragraph 35.

PN1127

SENIOR DEPUTY PRESIDENT HAMBERGER: I am just trying to find that reference in these proceedings. I think it was Mr Tunnecliffe who gave evidence that in fact - I mean, the evidence you are referring to is now quite old, it is quite some time ago and more recently, in fact, I thought the evidence was that actually this wasn't necessary to improve productivity.

PN1128

MR BORENSTEIN: Well, the evidence of BSL has moved, depending on what benefits their case more, we would submit.

PN1129

SENIOR DEPUTY PRESIDENT HAMBERGER: Well, that is one inference you could draw, but it could also be that there is also the experience of the last two years.

PN1130

MR BORENSTEIN: Well, that is our submission, your Honour, and his evidence doesn't go so far as to say - he says, well, we are still considering it and balancing it and, you know, we might be able to proceed just keeping the employees in-house, but we would submit that you shouldn't rely on that evidence. We submit that the direct evidence by BlueScope Steel, by Mr Byrne saying that there is no way that they could proceed with the outsourcing if it was only partial is what the Commission should take into account, it should prefer.

PN1131

With respect to the redundancy package that we have included in the proposed redundancy process clause, as I referred to before, the formula is above the TCR provisions, but we submit that a 170MX is a different creature to an industry award or a TCR case. The Commission shouldn't be concerned about making an award above the TCR provision, especially where such a formula is indirectly referred to in the AWU certified agreement that currently exists and also has been applied previously by BlueScope Steel. We say it would be unfair to make different rules in similar situations at this workplace.

PN1132

SENIOR DEPUTY PRESIDENT HAMBERGER: Are you saying this is in fact the formula used?

PN1133

MR BORENSTEIN: Yes, and it is the formula as referred to in their - Mr Tunnecliffe refers to it in his evidence and gives the formula and is the formula that was proposed to apply as a result of forced redundancies from the maintenance review and that is the information that was provided to the employees.

PN1134

SENIOR DEPUTY PRESIDENT HAMBERGER: It is a company policy, is that right?

PN1135

MR BORENSTEIN: Yes. Well, we haven't seen the company policy, but Mr Tunnecliffe said it was.

PN1136

SENIOR DEPUTY PRESIDENT HAMBERGER: It is not in any formal finding?

PN1137

MR BORENSTEIN: That is correct, your Honour. The issue of acceptable alternative employment was raised by your Honour and that relationship to the TCR provision. Again we would say that this MX award is different to a TCR provision. Furthermore, BSL has previously done this in respect to the mechanical maintenance employees.

PN1138

They have paid them a full redundancy and have transferred them to Silcar which might be considered acceptable alternative employment. Therefore, we would submit that it would be unfair to make different rules for different employees. In addition, also BSL have communicated to the electrical employees already that they would be - if they were made redundant, they would be paid the redundancy pay and also offered - well, be able to get employment at Silcar, so to retract from that position we would say would be unjust.

PN1139

SENIOR DEPUTY PRESIDENT HAMBERGER: You are not saying that the company has guaranteed that everyone who would be made redundant through this kind of process would automatically get a job with Silcar?

PN1140

MR BORENSTEIN: Well, there is no guarantee. Our position was that it is very likely most of them would and I don't think that was controverted by BlueScope Steel. I did make lengthy submissions last time on the contractors' clause. I don't seek to repeat them, but just to reinforce, as I state at paragraph 44, that we would submit that Cock's case was reached, well, that decision is for situations where the award is restricting the employer from contracting third parties with respect to work that is entirely unrelated to the work being performed by the actual employees and outside of the premises.

PN1141

It is a completely different situation to what we have here. We say following Moore's case which seems to take into account the actual circumstances of the dispute and rather than making a general proclamation, we submit you can take into account the unique circumstances of this matter where contractors have a direct influence on the employment relationship and we are also in a situation where the employees might actually become employees of these contractors as has been proposed by BlueScope Steel, so we say if ever a case would relate to the employment relationship, this is the case.

PN1142

Now, I would like to reiterate that if your Honour is against me on that point that we have put an alternative clause in there that requires contractors to have an industrial instrument in the form of exhibit SL4 to Mr Lean's statement which would be placed at attachment 1 of schedule 4 of the proposed 170MX award. You will see that in tab N of the folder I have just handed up, that the last page of that has a heading, attachment 1 to schedule 4, insert exhibit SL4.

PN1143

SENIOR DEPUTY PRESIDENT HAMBERGER: Can I just ask, Mr Borenstein, do you know how that would fit with the current contractors who work there now?

PN1144

MR BORENSTEIN: They would comply with it. That evidence is in Mr Lean's first statement where all of those contractors on site now who work alongside the employees all work - the certified agreement in that form.

PN1145

SENIOR DEPUTY PRESIDENT HAMBERGER: Okay, thanks.

PN1146

MR BORENSTEIN: Now, I will turn to wages now. I don't think I got to this stage last time.

PN1147

SENIOR DEPUTY PRESIDENT MARSH: No.

PN1148

MR BORENSTEIN: We would submit that the table which is exhibited to SL1 and which I have also placed in schedule 4 which is in tab N of the folder I have just handed up, which is the current wages table from the standard electrical contracting industry agreement, we would submit that they should be the wages for the electrical employees on the site.

PN1149

I go through a number of cases there and at paragraph 62 I set out the four dot points on which we seek to rely and what facts we seek to rely on in substantiating our wages claim. We again say that the Commission is not bound by the usual principles of wage-setting in awards. All the Commission has to do here is take into account the matters in MX(5) and any other factors it wishes to take into account and determine what they think is a fair bargain.

PN1150

Now, firstly, in order to come to what we seek, we submit that the market value of these employees is well above what their current salary level is and we submit this is evidenced by the current wages employees at similar companies in the manufacturing industry, as well as employees who work on competitor's sites such as the Smorgon Steel site in Laverton and Mr Lean refers to that in paragraph 37 of his statement, first statement.

PN1151

At the Smorgon Steel site, there are two contractors who perform all the labour on the site and they all have terms and conditions that are the same as the wages in exhibit SL4, so we state that the Commission can take that into account. We also refer to exhibit SL5 which is at tab E, F, G and H of the folder I handed up on the last occasion and you will see there at paragraph 67 I set out what the electricians are earning at those sites and the hours they work on those sites, what they receive and they are all in excess of what is being earned by the employees on the BSL site. We also submit that with respect to the current skills shortage in respect of electricians that that also has an effect on the market value of electricians.

PN1152

SENIOR DEPUTY PRESIDENT HAMBERGER: Just in relation to that, I mean, have you got any evidence on retention problems for these employees? I mean, if you are saying someone is being paid below their market value, after a period of time you would expect people would either leave - I don't think there has been any recruitment to speak of, but you wouldn't be able to get people to go and work there and you would have people leaving. Obviously, if there is a general issue you refer to in skills shortages generally, is there any particular issue?

PN1153

MR BORENSTEIN: I believe Mr Tunnecliffe was asked in cross-examination about whether they are finding it hard to recruit people with the necessary skills and experience and I believe he said yes, I believe he said yes, but without having the specific reference to it, which I might be able to provide - - -

PN1154

SENIOR DEPUTY PRESIDENT HAMBERGER: I can go back.

PN1155

MR BORENSTEIN: I believe there is some evidence about it. I am not sure how far it goes, but we would submit that supports it and just as a general proposition. In paragraph 69 I refer to the work value. We would submit that the exhibit that was tendered today, I think it was B9, if the Commission reads that document, it refers to less workers on the site and the electricians having to perform more work and that is what we submit that exhibit B9 goes to.

PN1156

With respect to hours of work, we are seeking the introduction of the 36-hour week over a staggered period. That is set out in schedule 4 of the proposed 170MX arbitration that I have handed up. That is at tab NO and we rely on the same merits arguments for the hours as we have for the wages. On that basis, we seek the proposed 170MX award.

PN1157

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Ms Angus.

PN1158

MS ANGUS: Your Honours, Commissioner, we wish our comrades from the ETU the best of luck. However, it is the argument of the AWU that the Commission should refrain from arbitrating this matter for three reasons. Firstly, our first position is that bargaining periods were properly initiated by the negotiating parties and I think there is reference made to it in a letter that was filed with the Commission, number 3092 of 2004.

PN1159

An enterprise agreement was properly certified. It is a valid agreement. The scope and application clause of that agreement unambiguously defines the operation of that agreement and there we say that under 170MX(3), those matters have been settled. The second reason why we argue that the Commission should decline to arbitrate is that while we completely support the ETUs legitimate right to advance its industrial claims through the form of a 170MX award, in principle, in this instance there is a significant detriment to AWU members that we would raise in two respects.

PN1160

Firstly, it appears that the operation of 170LW serves to, were the Commission minded to arbitrate, serves to nullify the existence of the agreement in place. Now, that would mean that AWU members are completely unprotected in terms of all their terms and conditions of work - - -

PN1161

SENIOR DEPUTY PRESIDENT MARSH: Are you saying 170LW or 170LY?

PN1162

MS ANGUS: My apologies, your Honour, it is 170LY(2). That is my mistake.

PN1163

SENIOR DEPUTY PRESIDENT MARSH: Thank you.

PN1164

MS ANGUS: That is the first potential detriment to our members and it is a serious one. The second one, even were the Commission minded to issue an award that extended to cover operators as well in the terms sought by the ETU, our members would still be potentially subject to a disadvantage, that is that the provisions of Part VIB, Division 5, most notably 170LW, would no longer operate and extend to our members and that in itself constitutes a disadvantage to our members.

PN1165

And the third and final reason why we would argue that it is not appropriate for the Commission to arbitrate this matter is that in our view in this case, it is contrary to the scheme of the Act as a whole, most notably the objects of the Act which are that the Commission's role is to facilitate agreement-making between the parties and in this case an arbitration would serve to diminish our rights retrospectively.

PN1166

They are the essential arguments that we would put to the Commission as to why the Commission should decline to arbitrate. If the Commission is minded to issue a 170MX award regardless, we have no submissions in relation to the content of the ETUs claim in relation to its application to ETU members and the organisation.

PN1167

We would ask that the AWU be party to a 170MX award and that it be issued at least in terms of the operators and AWU members in identical terms to the existing enterprise agreement as submitted by the ETU and that we make that submission on the basis that we have behaved in a manner that is proper and consistent with the terms of the Act and our organisation and our members should not suffer any detriment as a result of this process. They are our submissions, if it please the Commission.

PN1168

SENIOR DEPUTY PRESIDENT MARSH: Thank you, Ms Angus. Anything in reply, Dr Jessup?

PN1169

DR JESSUP: Yes, your Honour. Can I ask the Commission to turn to the CEPU outline? We want to submit and we do submit that paragraph - the second sentence in paragraph 7 is wrong. The MX award would change the terms and conditions of the AWU members because it would nullify the agreement already entered into.

PN1170

The main thing I push to be heard about in reply, if the Commission pleases, is the submission made with respect to the operation of section 170MX. Now, as I understand the submission, it is sufficient if there were matters at issue during the bargaining period, even if they weren't at issue as between the CEPU and BSL. That is to say Mr Borenstein seems to be saying that temporal coincidence is enough to enliven 170MX.

PN1171

In our submission that isn't right and that can't be right. Part VIB of the Act sets up distinct bargaining period regimes with distinct negotiating parties and when it says at issue during the bargaining period must mean at issue as between those parties, as between those parties who were negotiating parties to the bargaining period.

PN1172

Now, the CEPU I believe I am right in saying should have opened the bargaining period and named the AWU as one of the negotiating parties, but whether or not it could have, the fact is it didn't and the AWU is quite outside the range of matters that were at issue under this bargaining period which was terminated by the Commission recently.

PN1173

Now, there was a joint log of claims, but the use of the word joint might have been unfortunate there, but it wasn't used in a technical sense. Really it would be better to describe it as a several log of claims or as a log of claims severally put forward at the same time by the three unions. True it is they had joint negotiations and there were common negotiations and there were very many common matters.

PN1174

That didn't mean that the ETU were making claims in relation to operators any more than it meant that the AWU was making claims in relation to electricians and finally on this point, the matter can be tested this way. If Mr Borenstein is right that the existence of the joint log of claims and joint negotiations meant that each union was making claims in relation to the members of each other union, then we shouldn't even be here at all because the CEPUs bargaining period matters have all been settled by the making of the AWU agreement. If the Commission pleases. There is one other thing I will mention. It is a factual matter. The question was raised that Mr Byrne's evidence in the previous case might have been dealt with in a more contemporaneous way by Mr Tunnecliffe in his evidence in this case and I just want to give the Commission the reference to that. It is paragraphs 568 and 592 and that shows that Mr Tunnecliffe said about those matters. If the Commission pleases.

PN1175

SENIOR DEPUTY PRESIDENT MARSH: Thank you. Anything further? Thank you for your submissions. We will reserve our decision. The Commission is adjourned sine die.

<ADJOURNED INDEFINITELY [11.28AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #B9 SUBMISSION TO MX COMMISSION HEARING PN1001
GARY ELLIOTT, SWORN PN1008
EXAMINATION-IN-CHIEF BY DR JESSUP PN1008
EXHIBIT #J7 WITNESS STATEMENT AND AFFIDAVIT OF G ELLIOTT PN1030
CROSS-EXAMINATION BY MR BORENSTEIN PN1033
THE WITNESS WITHDREW PN1065
EXHIBIT #B10 OUTLINE OF SUBMISSIONS PN1083