AG2005/4338, Transcript of Proceedings [2005] AIRCTrans 1374 (22 June 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 11864-1

SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT DUNCAN
COMMISSIONER LARKIN

AG2005/4338

APPLICATION BY RAILCORP (RAIL CORPORATION NEW SOUTH WALES) & RAIL INFRASTRUCTURE CORPORATION AND ANOTHER
s.170MH - Application to terminate agreement (public interest)
(AG2005/4338)

AG2005/4337

APPLICATION BY RAILCORP (RAIL CORPORATION NEW SOUTH WALES) & RAIL INFRASTRUCTURE CORPORATION AND ANOTHER
s.170LC - Multiple business agreement
(AG2005/4337)

SYDNEY

2.24PM, THURSDAY, 09 JUNE 2005

Hearing continuing

PN1

MR P KITE: If the Commission pleases, I seek leave to appear on behalf of Rail Infrastructure Corporation, Rail Corporation of New South Wales and the State Rail Authority of New South Wales.

PN2

MR M THISTLETHWAITE: May it please the Commission, from Unions New South Wales. I appear for the following three other unions: the Australian Rail, Tram and Bus Industry Union, New South Wales Branch; the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch; the Association of Professional Engineers, Scientists and Managers Australia; the Australian Municipal Administrative, Clerical and Services Union, New South Wales and ACT Services Branch; and the Construction, Forestry, Mining and Energy Construction and General, New South Wales Branch, if it pleases.

PN3

MR R TRIPODI: May it please the Commission, I have with me W BAKER and I appear for the Australian Workers Union.

PN4

MR R CARCARY: If the Commission pleases, I appear on behalf of the CEPU.

PN5

MR N DAVISON: If the Commission pleases, I appear for the Association of Professional Engineers, Scientists and Managers Australia.

PN6

MS L CARRUTHERS: If the Commission pleases, for Rail, Tram and Bus Union.

PN7

MR I MORRISON: If it pleases the Commission, for the Australian Manufacturing Workers Union.

PN8

SENIOR DEPUTY PRESIDENT HARRISON: Mr Thistlethwaite, when you were announcing your appearances I didn't have in front of me a list of the unions bound by the proposed agreement. So I therefore do not know but I suspect you have announced appearances for unions that are separately represented. Is that right, or not?

PN9

MR THISTLETHWAITE: Yes, that's correct.

PN10

SENIOR DEPUTY PRESIDENT HARRISON: All right. Could you sort out amongst yourselves as to who's speaking?

PN11

MR THISTLETHWAITE: I'm doing the speaking, your Honour.

PN12

SENIOR DEPUTY PRESIDENT HARRISON: Very good. Now I understand. So, in the case of each of the unions that someone appears here, you appear with that person for that union? I understand.

PN13

MR THISTLETHWAITE: Yes. I understand that the AWU and the CEPU wish to make separate submissions.

PN14

SENIOR DEPUTY PRESIDENT HARRISON: Very good. Is there any difficulty for leave being granted to Mr Kite to appear?

PN15

MR THISTLETHWAITE: No, your Honour.

PN16

SENIOR DEPUTY PRESIDENT HARRISON: Is there any difficulty with Unions New South Wales being granted leave to intervene?

PN17

MR KITE: No.

PN18

SENIOR DEPUTY PRESIDENT HARRISON: I don't think we need any further leave then appearing directly for your affiliates. Mr Kite?

PN19

MR KITE: May it please. Could I just inquire whether both matters, that is the application for the certification of the multiple business agreement and the application for termination - a number of certified agreements - have they been called on today?

PN20

SENIOR DEPUTY PRESIDENT HARRISON: No, only the first. That was one of the questions I was to ask of you and the other parties.

PN21

MR KITE: I think that from our point of view, your Honour, it's convenient if they be called on and heard together. The evidence we rely on is the same in both.

PN22

SENIOR DEPUTY PRESIDENT HARRISON: Call the termination application. We maybe could do this the fast way. Are the appearances the same as in the matter earlier called on?

PN23

MR KITE: Yes, your Honour.

PN24

MR THISTLETHWAITE: From the union's perspective yes, they are, your Honour.

PN25

SENIOR DEPUTY PRESIDENT HARRISON: Mr Reporter, is it going to be an easy task for you to reproduce in this part of the transcript the same appearances as announced earlier?

PN26

REPORTER: Yes.

PN27

SENIOR DEPUTY PRESIDENT HARRISON: Thank you. Assume all of that's done and assume all of the leave where granted has been granted again. Mr Kite?

PN28

MR KITE: Yes. The first thing I should do is indicate to the Commission that we seek to amend the application in the termination matter, the 170MH matter. A matter came to our attention this morning about the scope of that order and the potential effect that it may have in relation to matters which we didn't intend to affect.

PN29

SENIOR DEPUTY PRESIDENT HARRISON: I'm sorry to ask you to pause for a moment, Mr Kite. Mr Kite?

PN30

MR KITE: Could I hand up to your Honour copies of the amended draft order, and I'll just speak briefly to that. The Commission will no doubt be aware from the material filed that it's a principal object of this exercise to bring into one instrument what at the moment amounts to something like 42 certified agreements relating to these rail entities and their employees. Because it is a multiple business agreement, issues arise as to the effect of the multiple business agreement in relation to other certified agreements. So it was appropriate to incorporate so far as permissible the existing certified agreements into the current agreement and to terminate the agreements themselves.

PN31

It came to our attention this morning following a communication from the ACTU that there is, to put it in as neutral a language as I can, a dispute between some unions and the Australian Rail Track Corporation about terms and conditions and whether the ARTC is a successor to a number of those certified agreements. As I come to the evidence the Commission will see that a number of employees have moved to ARTC on secondment and the ARTC has taken over activities and functions formerly performed by some of those rail entities.

PN32

It is not our intention in any sense to affect the operation of those certified agreements as against ARTC. It is only our intention to terminate those certified agreements in relation to their operation to the rail entities presently appearing. Accordingly, we have sought to amend the order in the form that I have now handed to the Commission and members of the Commission can see that what is sought is to terminate those agreements, subject to orders 2 and 3. Order 2 is the significant operative addition.

PN33

The Commission will see that it is in these terms:

PN34

This order terminates the agreements in the schedule to the extent to which those agreements apply to ...(reads)... formal part of the business to any of the applicants.

PN35

We take no part in the debate. I doubt whether ARTC is a successor but we certainly don't want to trespass on the position of any of the parties to that debate and accordingly we seek to amend our application in that form. As I understand it, the amended application is consented to.

PN36

SENIOR DEPUTY PRESIDENT HARRISON: That debate, wherever it might be had in whatever context it has arisen, is that before this Commission in any form?

PN37

MR KITE: I don't know the answer to that, your Honour.

PN38

SENIOR DEPUTY PRESIDENT HARRISON: Just pause for a moment, would you? How do we partially terminate an EBA, Mr Kite?

PN39

MR KITE: Your Honour, the language of the legislation is not entirely clear on that, I must confess. But section - the relevant sections are section 170MB(3) dealing with succession and section 170MH. The Commission will be well aware that a certified agreement will apply to a successor employer in accordance with the terms of section 170MB. Sorry, I said (3) but it is section 170MB(1)(e) that is really relevant.

PN40

SENIOR DEPUTY PRESIDENT HARRISON: Sorry, I was still back on turning my mind to whether they're all division 2 or division 3 agreements and whether there is a difference that applies in relation to their termination.

PN41

MR KITE: As I understand it they're division 3 agreements.

PN42

SENIOR DEPUTY PRESIDENT HARRISON: All division 3 agreements? All right.

PN43

MR KITE: I believe so.

PN44

SENIOR DEPUTY PRESIDENT HARRISON: Okay. Back to (1)(b)(e).

PN45

MR KITE: MB(1)(e).

PN46

SENIOR DEPUTY PRESIDENT HARRISON: MB(1)(e), yes.

PN47

MR KITE: Pursuant to that provision, assuming there is a successor to part of the business of any of these rail entities, the employer that was previously bound ceases to be bound by that certified agreement. So in effect - and of course subject to any order of the Commission under MBA, the new employer will be bound by the certified agreement. So the legal effect of that is to remove the name of the outgoing employer and replace it with the name of the incoming employer.

PN48

Although there's only one instrument, there is in law two instruments. That is, that part of the instrument which remains binding on the outgoing employer continues to apply to it; and there is a new legal instrument, that is the instrument which applies to the successor employer. So, effectively we have got a subdivision of what was once one industrial instrument, a subdivision in law. Then we have got the operation of section 170MH. Section 170MH permits an employer or other nominated parties to make application after the nominal expiry date of the certified agreement, to have the agreement terminated. The only application which any of these rail entities could make is the application as employer in respect of an industrial instrument, a certified agreement which binds it as employer.

PN49

In that sense, if there has been a succession, the industrial instrument which applies is the remaining legal industrial instrument, that is, that part of it which is operative on that part of the business that hasn't transferred. If section 170MH is to be effective, and indeed section 170MB is to be effective in accordance with the purpose of the legislation, it has to be read, in my respectful submission, so as to permit the employer to apply to the Commission to terminate the certified agreement as it applies to that employer.

PN50

SENIOR DEPUTY PRESIDENT HARRISON: Is ARTC represented here this afternoon?

PN51

MR KITE: No, your Honour, not that I'm aware of. Would your Honour pardon me for a moment?

PN52

SENIOR DEPUTY PRESIDENT HARRISON: Yes, of course.

PN53

MR KITE: Your Honour, I'm instructed there is at least one agreement which is a division 2 agreement and that is the Rail Infrastructure Corporation Enterprise Agreement 2002 moving forward, which is in print 921982.

PN54

SENIOR DEPUTY PRESIDENT HARRISON: I think there's also a section 134C agreement, Mr Kite, tucked in there as well.

PN55

MR KITE: Commissioner, you would undoubtedly know better than I.

PN56

SENIOR DEPUTY PRESIDENT HARRISON: Is your submission the same about - - -

PN57

MR KITE: It would apply - - -

PN58

SENIOR DEPUTY PRESIDENT HARRISON: - - - a successor to a div 2 agreement?

PN59

MR KITE: It would, your Honour, in order to give - - -

PN60

SENIOR DEPUTY PRESIDENT HARRISON: We'll have to come back to this, Mr Kite, because I had thought when an agreement is terminated it's dead.

PN61

MR KITE: Yes.

PN62

SENIOR DEPUTY PRESIDENT HARRISON: So we'll come back to this. The extent to which one can terminate an agreement in part and it still continues to bind a successor quite apart from other consideration including when - I'll leave that, we'll come back to it.

PN63

MR KITE: If your Honour pleases.

PN64

SENIOR DEPUTY PRESIDENT DUNCAN: One thing you might like to consider is who votes?

PN65

MR KITE: Who votes? Well, in that regard I should make clear that obviously the secondees are not affected by the succession question. They continue to be bound by the certified agreements operating on their employers and they're eligible to vote in relation to this and these instruments would apply to them. That is the making of new instruments. The employees of ARTC proper, it would be voting in connection with any certified agreement that was binding on - and the new certified agreement intending to be binding on their employer and them.

PN66

SENIOR DEPUTY PRESIDENT DUNCAN: Yes. I just raise it as a concept. I wasn't inviting you to cure any problem I saw or do something dramatic, Mr Kite.

PN67

MR KITE: We hope we can cure any problems that the Commission sees. As the Commission will appreciate it's been a massive exercise and I'm very hopeful that we haven't tripped anywhere in bringing it to the certification stage.

PN68

SENIOR DEPUTY PRESIDENT HARRISON: I understand that in due course we will need to also now give further consideration to the extent to which the consequences for what employees had described to them as being the termination of agreements they no longer apply but they're called up into the new EBA that no longer being an accurate description of what in fact is happening. What in fact is happening is that the EBA is going to continue in existence, albeit for ARTC people. I think we'll come back to that in the context of the application for certification of the 2005 agreement.

PN69

MR KITE: I'll bear that in mind. But could I just say that I don't think that's the effect, your Honour.

PN70

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Shall I perhaps mark that variation, Mr Kite, so we might then all be referring to documents in a way we all can follow each other. So that 4-page draft order, is it?

PN71

MR KITE: Yes, your Honour.

PN72

SENIOR DEPUTY PRESIDENT HARRISON: Well, it's a draft order and it has a schedule of enterprise bargaining agreements attached to it. That then becomes really the annexure to this application. We might in this matter, 2005/4338, mark Rail Agencies?

PN73

MR KITE: If your Honour pleases.

EXHIBIT #RAIL AGENCIES 1 4-PAGE DRAFT ORDER WITH SCHEDULE OF EBAS

PN74

SENIOR DEPUTY PRESIDENT HARRISON: Mr Kite - when this application was first lodged, it called up or identified a number of enterprise bargain agreements which on reflection perhaps had been misdescribed, didn't exist, combination of - merged with others. As a result of that a new list was drawn up and provided to the Commission. It was provided under cover of letter from your instructing solicitors of 7 June. May I assume - or is it the case that the schedule of enterprise and functional agreements referred to in this document I marked Rail Agencies 1, is the same as that which is annexed to the letter of Harmers dated 7 June?

PN75

MR KITE: Yes, your Honour.

PN76

SENIOR DEPUTY PRESIDENT HARRISON: Thank you. Mr Kite?

PN77

MR KITE: Your Honour, we rely upon the statutory declarations filed in connection with the application, in particular the statutory declaration of Mr Gregory Greenhalgh.

PN78

SENIOR DEPUTY PRESIDENT HARRISON: Still on the termination?

PN79

MR KITE: Well -

PN80

SENIOR DEPUTY PRESIDENT HARRISON: No, we're back onto service - - -

PN81

MR KITE: Unless your Honour wants to deal with other matters of the termination now. I want to go to the certification process that - effectively they're interconnected.

PN82

SENIOR DEPUTY PRESIDENT HARRISON: Really, that's best. But it's also, if there are issues that relate to the certification one assumes you don't want me to ask further - to deal today with the termination?

PN83

MR KITE: That's so, your Honour.

PN84

SENIOR DEPUTY PRESIDENT HARRISON: I assume so.

PN85

MR KITE: Yes. There was no doubt that the - - -

PN86

SENIOR DEPUTY PRESIDENT HARRISON: All right. We'll come back to that including - it will give us an opportunity to think a little more about the consequences of the variation to the termination orders. That is good. So we'll go onto - now, in relation to the application for certification there was an original statutory declaration of Mr Greenhalgh filed at the time of the application. Indeed one on behalf of each of the respondents or unions proposed to be parties. But we have recently, as recently last - late afternoon, yesterday - received an affidavit of Mr Greenhalgh. I see that it's an affidavit in both files and both matters before us, filed yesterday afternoon and there is a rather large folder containing the annexures to it.

PN87

MR KITE: Yes, your Honour. And I was about to come to that. It in some part overlaps with the statutory declaration and subsumes some of the matters addressed and most of those addressed. But obviously provides a great deal more detail in support of, for example, the public interest arguments in the background leading up to the inclusion of a number of provisions in this core agreement. I had intended before going to that to refer the Commission to a decision of the Full Bench in Schefenacker Vision Systems Australia Pty Ltd - and we have got copies of that available for the members of the Commission and the parties.

PN88

This is the decision in PR956575, a decision of the Full Bench of the Commission, his Honour the President, Lawler VP and Commissioner Simmonds given on 18 March of this year. It's a decision which looks at a number of clauses in the context of Electrolux. For present purposes I wanted to go to the Commission's summary, having looked at the decision in Electrolux in some depth. At page 12, paragraph 45, the Full Bench produced a summary in relation to the consideration of issues of what pertains to the relationship of employers and employees.

PN89

In paragraph 46 they make the point that there is no relevant distinction between an agreed provision and a disputed claim in so far as the application of the test is concerned. In paragraph 47 I set out a number of propositions which are relevant to dealing with applications to certified agreements pursuant to division 2. Of course, this is a division 3 agreement but the Commission will see at the beginning of paragraph 28 through to 36 that the Full Bench takes the view that the same concepts apply generally to division 3 and they say this:

PN90

Firstly, the Commission has no jurisdiction unless the agreement answers the relevant description in section 170LI(1) to certify the agreement. To be able to answer ...(reads)... do not pertain but are trivial in the sense that they can be disregarded in terms of legal enforceability such as aspirational provisions.

PN91

In paragraph (e) they say this:

PN92

When examining a provision to see whether it pertains in a relevant sense, regard must be had to the words of the clause in the context of the agreement as a whole and to any relevant evidence.

PN93

Then at (f) they point out that the mere fact that the clause may refer to some union rights does not of itself meet with the conclusion that it doesn't pertain. I wanted to emphasise paragraph (e) at this stage because in some part it explains the relevance of the material annexed to Mr Greenhalgh's affidavit to which I'm about to come.

PN94

Before doing that, can I hand to the Commission a chronology. These are dates drawn from Mr Greenhalgh's affidavit. I have set it out in this form because when we come to the affidavit the Commission will see that he deals with discrete sections of matters but it's important to keep in mind as one looks at the development of this agreement the timing of a number of matters in different respects. For example, the first item in the chronology is a reference to accidents leading to the deaths of workers at Kerrabee, K-e-r-r-a-b-e-e, in the Hunter Valley in Bell, in the Blue Mountains in August and October of 1998. The Commission will see in due course that that was a matter that was referred in the Waterfall Special Inquiry Report.

PN95

It has relevance in the context of those accidents involved trapped workers in the employ of one rail entity being killed as a result of the operations of trains under the control of another rail entity and the Waterfall Report strongly recommended the integration of safety considerations in respect of these rail agencies. This chronology - - -

PN96

SENIOR DEPUTY PRESIDENT HARRISON: The integration of safety - what was the word you said after "the integration of safety"?

PN97

MR KITE: Considerations I think I said.

PN98

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN99

MR KITE: These are obviously dealt with in greater detail in Mr Greenhalgh's affidavit but many of these factors that I have summarised show a progression of concern about workplace safety. And the Commission will see in this core agreement that is a principal element of the agreement. The chronology goes as far as 23 March 2005. That is because in Mr Greenhalgh's affidavit in section 10 the Commission will find a further summary in chronological order of dates beyond that time. So, with that in mind - - -

PN100

SENIOR DEPUTY PRESIDENT HARRISON: Shall I mark that, Mr Kite?

PN101

MR KITE: If your Honour pleases.

EXHIBIT #RAIL AGENCIES 2 CHRONOLOGY OF DATES FROM MR GREENHALGH'S AFFIDAVIT

PN102

MR KITE: I come to Mr Greenhalgh's affidavit. It is here at the bar table if members of the Commission wish to ask any questions or any of the parties wish to ask any questions.

PN103

SENIOR DEPUTY PRESIDENT HARRISON: Is it not your intention to call him?

PN104

MR KITE: I am happy to call him but I - - -

PN105

SENIOR DEPUTY PRESIDENT HARRISON: Would there be nothing further you would wish to ask him if you did?

PN106

MR KITE: No, not unless there are any matters arising that the Commission wants clarified.

PN107

SENIOR DEPUTY PRESIDENT HARRISON: Mr Thistlethwaite, do you wish to cross-examine Mr Greenhalgh?

PN108

MR THISTLETHWAITE: No, we don't, your Honour. We support many of the contentions made in the affidavit of Mr Greenhalgh.

PN109

SENIOR DEPUTY PRESIDENT HARRISON: I assume it is not necessary to ask the same question of each of the unions' representatives because I think the extent to which the AMWU and CEPU want to say something to us it's not related to this issue?

PN110

MR TRIPODI: That's correct, your Honour.

PN111

MR THISTLETHWAITE: That's correct, your Honour.

PN112

SENIOR DEPUTY PRESIDENT HARRISON: All right. We may come back later then to the issue concerning questions we might have of Mr Greenhalgh and how we will tackle that, be it directing you to take some instructions on or if it's going to be more appropriate and easier, put Mr Greenhalgh in the - - -

PN113

MR KITE: We're happy to call him.

PN114

SENIOR DEPUTY PRESIDENT HARRISON: All right. The Full Bench will need to consider that so let's deal with something else just at the moment.

PN115

MR KITE: May it please. Can I take the Commission through the affidavit?

PN116

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN117

MR KITE: I don't know whether the members of the Commission have had an opportunity to read it.

PN118

SENIOR DEPUTY PRESIDENT HARRISON: We have certainly all done our best to peruse it and I think we're not too far off having said we have read it but the annexures might be another thing.

PN119

MR KITE: Indeed. I'll try not to bore the Commission by reading too much of it but I don't wish to be thought to be skipping matters unnecessarily.

PN120

SENIOR DEPUTY PRESIDENT HARRISON: Shall I mark it?

PN121

MR KITE: If your Honour pleases.

EXHIBIT #RAIL AGENCIES 3 AFFIDAVIT OF MR GREGORY ROBERT GREENHALGH DATED 08/06/05 WITH 50 ANNEXURES

PN122

SENIOR DEPUTY PRESIDENT HARRISON: I might just identify what I have just marked - the affidavit of Gregory Robert Greenhalgh dated 8 June 2005 together with a folder of annexures comprising some 15 annexures.

PN123

MR KITE: 15 precisely, yes. And we're in a position to hand up to your Honours an index for those annexures.

PN124

SENIOR DEPUTY PRESIDENT HARRISON: Thank you.

PN125

MR KITE: Members of the Commission will see that Mr Greenhalgh's affidavit begins in paragraph 1 one with an outline of the contents and you'll see that he deals with a number of discrete subject matters. In section 2 he deals with his professional background and suffice to say he's had approximately 16 years in the industrial arena in rail agencies and has a wide and extensive knowledge of industrial relations in those organisations. He is authorised on behalf of each of the organisations to make the affidavit and also notes in paragraph 2.13 that he is authorised on behalf of each of the agencies to make the statutory declaration which was filed on 27 May 2005.

PN126

In section 3 he deals with the background to RailCorp noting firstly that it was established as a state-owned corporation on 1 January 2004, its objectives being the provision of safe, clean, secure, reliable passenger, metropolitan and long distance services. And I quote paragraph 3.2:

PN127

RailCorp provides metropolitan passenger rail services by City Rail Services and long distance services by our ...(reads)... are set out in division 3, part 2 of the Rail Agencies Act.

PN128

He then summarises those matters and lists the statutory objects of RailCorp principally to deliver safe and reliable railway passenger services in New South Wales to insure that that part of the New South Wales rail network vesting in or owned by RailCorp enables safe and reliable railway passenger and freight services to be provided.

PN129

Skipping down to paragraph 3.4, he refers to the second reading speech in relation to the Rail Agencies Act. That speech is annexed as annexure 1. Could I take the Commission briefly to annexure 1. The Commission will see that it's the second reading speech of 2 December 2003, extracted from New South Wales Hansard. The Minister begins:

PN130

This government is committed to improving the safety and reliability and cleanliness of our rail system. This will ...(reads)... workers underway in the government's long-term plan to create rail clearways.

PN131

Then skipping down two paragraphs:

PN132

This bill provides the legislative framework for the merger of the State Rail Authority of New South Wales and the metropolitan ...(reads)... safety culture and a commitment to excellent customer service.

PN133

I don't need to deal with the balance of the second reading speech. The Minister goes on to deal with a number of aspects of the bill in some detail. Turning them to the affidavit, paragraph 3.6, Mr Greenhalgh refers to schedule 6 of the Rail Agencies Act and points out:

PN134

It contemplates as part of the further rationalisation of rail services in New South Wales the vesting of staff between each of SRA, RailCorp and RIC by order of the New South Wales Minister for Transport.

PN135

He then deals with the functions undertaken by RailCorp and the assets it owns and its responsibilities in relation to those assets. In paragraph 3.9 he says:

PN136

RailCorp has no infrastructure or maintenance role in the country network or the residual network formally managed by RIC and now managed by ARTC.

PN137

He then deals with the background of the State Rail Authority:

PN138

Prior to 1 January 2004 SRA was the body with primary responsibility for the provision of public rail transport ...(reads)... operate independently from RailCorp and RIC and to perform a limited number of functions. Those functions include -

PN139

And then he lists a number. I draw attention particularly to the first one:

PN140

Facilitating the transfer of its staff, assets, rights and liabilities to RailCorp, Rail Infrastructure Corporation and other bodies.

PN141

SENIOR DEPUTY PRESIDENT HARRISON: Which of its staff are to be transferred to other bodies and what are they - who are those other bodies?

PN142

MR KITE: It may be that they only transfer to ARTC and other unknown bodies at this stage, your Honour. Of principal concern in this matter of course is the potential for transfer to RailCorp and RIC in terms of the public interest in the multiple business agreement.

PN143

In section he deals with the background to Rail Infrastructure Corporation and points out that the body was formed in January 2001 by the merger of the Rail Access Corporation and the Rail Services Australia pursuant to the Transport Administration Amendment Rail Management Act 2000. At paragraph 5.3 he says this:

PN144

In November 2003 SRA, RIC, the New South Wales Minister for Transport and the Rail ...(reads)... with the amalgamation of the Rail Infrastructure Corporation and the State Rail Authority of New South Wales.

PN145

That MOU is annexure 2 and again I can go briefly to that, if I may. I just ask the Commission to bear in mind that at the time of execution of this MOU State Rail Authority still had responsibilities for the operation of public rail transport. RailCorp had not yet been formed. It was formed in January the following year. So the reference to State Rail Authority also includes a reference to RailCorp. The Commission will see that there is reference in the MOU to the establishment of the new rail entity which became RailCorp.

PN146

The purpose is set out in the first paragraph as quoted by Mr Greenhalgh in his affidavit. The life of the MOU is referred to in the second paragraph. In the third paragraph it says:

PN147

The staff occupying frontline operational roles will in the main be transferred to new the new ...(reads)... subject to the approved recruitment and selection strategy.

PN148

Then there's the reference to the new rail entity, the first paragraph dealing with its purpose. The second paragraph:

PN149

The parties agree that the amalgamation of RIC and SRA to create a new rail entity will require the formation ...(reads)... involved in consultation about the consequences of the proposed changes.

PN150

There is then reference to the transition process change management and disputes. Under the heading, "Working Conditions", this is said:

PN151

During the integration process the existing industrial instruments covering employees shall remain in place until new arrangements are negotiated and/or varied.

PN152

There are then a number of other particular matters noted arising out of the development of a new rail entity. Turning to the affidavit at paragraph 5.4:

PN153

In or about July 2004 the New South Wales Government determined RIC would operate separately from RailCorp and SRA ...(reads)... chief executive officer and some of the main distinctions between RailCorp and RIC are -

PN154

Then he makes four observations reflecting what he has already indicated about both organisations. In paragraph 5.9 he says:

PN155

From 1 January 2004 RIC was to continue to operate as a separate legal entity with responsibility for the management of its arrangements ...(reads)... services to RailCorp and other agencies.

PN156

He then deals with the ARTC lease. I'll come back - the Commission will see that later Mr Greenhalgh comes back to deal with the interconnection of the three entities and why it's now a multiple business agreement rather than a single business agreement as was originally intended.

PN157

SENIOR DEPUTY PRESIDENT HARRISON: It might be a good time for me to raise that with you. Clearly it has been considered by the parties and a decision made presumably on advice and consideration of the definitions in the Act that this could not be said to be a single business agreement?

PN158

MR KITE: That is so, your Honour. And we'll come to some evidence that further supports that but one of the reasons is these - - -

PN159

SENIOR DEPUTY PRESIDENT HARRISON: You don't need to convince us of it. We need to be satisfied that has been considered and advice taken on it and an understanding therefore held as to the alternatives and the significantly different tests that a multiple business agreement needs to be subjected to here. We're all here.

PN160

MR KITE: If your Honour pleases.

PN161

SENIOR DEPUTY PRESIDENT HARRISON: Presumably all of that is known?

PN162

MR KITE: It is. And we know that we have got to address the public interest argument.

PN163

SENIOR DEPUTY PRESIDENT HARRISON: Thank you.

PN164

MR KITE: Section 6 deals with the ARTC lease. Mr Greenhalgh says:

PN165

In this section I explain those aspects of the ARTC lease arrangements which resulted in the secondment of SRA and RIC employees to the ARTC. This section also ...(reads)... for a term of 60 years. The lease is annexed as annexure 3.

PN166

I don't think I need to trouble the Commission with the detail of the lease. It's been included for completeness unless there be any issue about external operations.

PN167

SENIOR DEPUTY PRESIDENT HARRISON: We might just look at it quickly in case it assists me with a better understanding as to where ARTC came from.

PN168

MR KITE: ARTC is a Commonwealth corporation which operates, to my understanding - - -

PN169

COMMISSIONER LARKIN: A Commonwealth corporation or a privately owned and the Commonwealth holds shares, Mr Kite?

PN170

MR KITE: Privately owned.

PN171

COMMISSIONER LARKIN: Yes. Has a board of directors?

PN172

MR KITE: Yes.

PN173

COMMISSIONER LARKIN: And the Commonwealth holds a number of shares, that's my understanding.

PN174

MR KITE: Commonwealth owned corporation.

PN175

SENIOR DEPUTY PRESIDENT HARRISON: Commonwealth owned corporation?

PN176

MR KITE: Yes. That's what I'm instructed.

PN177

SENIOR DEPUTY PRESIDENT HARRISON: Thank you. So is there some legislation that tells me a little bit more about it?

PN178

MR KITE: We haven't included any dealing with ARTC.

PN179

SENIOR DEPUTY PRESIDENT HARRISON: Yes. I don't know, I just might have to better understand its status, where it came from - perhaps, maybe not - for the successor argument, but certainly for the public interest argument.

PN180

MR KITE: If it please - well, I'll certainly - - -

PN181

SENIOR DEPUTY PRESIDENT HARRISON: Take that on board.

PN182

MR KITE: - - - take that on board.

PN183

SENIOR DEPUTY PRESIDENT HARRISON: Thank you.

PN184

MR KITE: I'll certainly be able to assist your Honour with that.

PN185

SENIOR DEPUTY PRESIDENT HARRISON: Not a lot of documents.

PN186

MR KITE: No.

PN187

SENIOR DEPUTY PRESIDENT HARRISON: Give me the three paragraphs that answer - - -

PN188

MR KITE: I can well understand that the Commission doesn't want that much more paper in relation to this matter. In any event - - -

PN189

SENIOR DEPUTY PRESIDENT HARRISON: I don't think I should be taking this lightly - anything that you think that we should have to persuade us about the task ahead of you, Mr Kite, you give it us and we will read it.

PN190

MR KITE: If your Honour pleases. In paragraph 6.6 Mr Greenhalgh summarises the effect of the lease briefly in these terms:

PN191

As a result of the lease being executed ARTC undertook responsibility for the management and operation of 3,400 ...(reads)... the lease agreement covers only the track referred to -

PN192

And I think that should be 6.6(a), that is the immediate - - -

PN193

SENIOR DEPUTY PRESIDENT HARRISON: What should be 6.6(a)?

PN194

MR KITE: The reference to clause 7(5)(a) of that agreement. There is no clause 7(5)(a) of the lease agreement.

PN195

SENIOR DEPUTY PRESIDENT HARRISON: No. I see.

PN196

MR KITE: 6.6(a), the summary that Mr Greenhalgh has given.

PN197

SENIOR DEPUTY PRESIDENT HARRISON: In 6.7, it should be 6.6(a). Yes, thank you.

PN198

MR KITE: The second sentence:

PN199

However, in New South Wales there exists further grain lines and so-called feeder lines collectively referred to as the residual network. By an ...(reads)... has been entered into whereby ARTC shall operate and manage the residual network.

PN200

Mr Greenhalgh then comes to deal with the background to the Waterfall Inquiry.

PN201

SENIOR DEPUTY PRESIDENT HARRISON: Before we leave ARTC, could you obtain some instructions on whether they are an employer bound by any industrial instrument of this Commission?

PN202

MR KITE: Other than by way of succession?

PN203

SENIOR DEPUTY PRESIDENT HARRISON: Correct.

PN204

MR KITE: As presently advised we believe not but we will - - -

PN205

SENIOR DEPUTY PRESIDENT HARRISON: Unless you come back to us on that we will proceed on that basis.

PN206

MR KITE: If your Honour pleases. The background to the Waterfall Inquiry:

PN207

On 31 January 2003 I became aware that the Tangara passenger train travelling from ...(reads)... random drug testing was introduced by RailCorp. On 8 March 2004 orders were made by -

PN208

Your Honour -

PN209

- Senior Deputy President Harrison, pursuant to section 127 of the Act. Those orders were made in relation to industrial action taken ...(reads)... union representation on the Waterfall safety review committee. A true copy of the minutes of that meeting are annexure 5.

PN210

I think it's sufficient to say if I could indicate to your Honours that in the minutes which is annexure 5, on page 3, the fifth document deals with that issue. Returning to the affidavit:

PN211

On 16 April 2004 RailCorp sent a letter to ...(reads)... consultative process the parties define the safety area.

PN212

That letter is annexed as annexure 6. The Commission will see in section 18, which is on the fourth page of the letter, the material extracted in Mr Greenhalgh's affidavit.

PN213

SENIOR DEPUTY PRESIDENT HARRISON: You might just take me back to something in the chronology - it might be in the document. When did negotiations for replacement EBA, whatever form they might have started off, single business, multiple business commence?

PN214

MR KITE: The SRA wrote to the unions on 2 October 2003 opposing negotiations and I'll come to - - -

PN215

SENIOR DEPUTY PRESIDENT HARRISON: You're going to come to that? I'm sorry. Yes, thanks.

PN216

MR KITE: Yes. That correspondence is part of the affidavit.

PN217

SENIOR DEPUTY PRESIDENT HARRISON: Sorry, where were you before I asked that question?

PN218

MR KITE: Paragraph 7.10 on page 10.

PN219

SENIOR DEPUTY PRESIDENT HARRISON: Yes, thank you.

PN220

MR KITE: I'm not sure if your Honour was distracted at the time but the quote contained in paragraph 7.9 is found in section 18 of annexure 6 which is on the fourth page of that letter. Paragraph 7.10:

PN221

On 16 April 2004 at a meeting held at the Labour Council during negotiations for the enterprise agreement attended by representatives ...(reads)... organisation and reflect the importance of the safety culture and that safety is a priority within the proposed enterprise agreement.

PN222

And the minutes of that meeting appear at annexure 7. Could I take the Commission to annexure 7, firstly to indicate that the meeting dealt with RailCorp's formal response to the union's log of claims as they then existed and on the fifth page under the heading, "Drug and Alcohol, Healthy Lifestyle, National Medical Standards", it's pointed out that:

PN223

The SRA is prepared to discuss with union's potential provisions in the EBA relating to education programmes to increase staff awareness ...(reads)... medical specialist referrals if needed to confirm or otherwise the examining doctor's prognosis.

PN224

Then returning to the affidavit, page 11, paragraph 7.11:

PN225

On or about 27 August 2004 I received a combined rail unions' proposed health standard clause.

PN226

And that is annexure 8 go over the detail of that at the moment. Paragraph 7.12:

PN227

On or about 27 September 2004 a working party was established at RailCorp to investigate a number of issues relating to health ...(reads)... on this date recording the terms of that agreement.

PN228

The letter is at annexure 9.

PN229

SENIOR DEPUTY PRESIDENT HARRISON: This might be a convenient time for me to ask for a document - I'm assuming it's a document that's been reduced to writing. I have a copy of the National Standard for Health Assessment Safety Workers. If I have overlooked the fact that I already have it, I apologise, but I see it's referred to on a number of occasions. It's been significant. Does anybody know how large a task that is that I have just asked of you?

PN230

MR KITE: We don't think it's a significant task, your Honour. We don't have a copy of available at the moment.

PN231

COMMISSIONER LARKIN: Yes. Mr Kite, those national standards apply to all rail operators, do they not, across the industry and in all jurisdictions?

PN232

MR KITE: I can't say that I have read them, Commissioner, but that's my understanding.

PN233

COMMISSIONER LARKIN: Yes. So it would be privately owned rail operators as well that it would apply to, I presume.

PN234

MR KITE: I assume so.

PN235

COMMISSIONER LARKIN: If that's different you'll let me know?

PN236

MR KITE: We'll check that. Mr Thistlethwaite tells me that the answer is yes to your question, Commissioner.

PN237

COMMISSIONER LARKIN: Could I just - you have just taken us to annexure 9 at the attachments to Mr Greenhalgh's statement. Just on point 2, RailCorp - and correct me if I have misunderstood but RailCorp's position at that stage in October 2004, wasn't the single enterprise agreement to apply to SRA and RailCorp?

PN238

MR KITE: Well, to apply to RailCorp, yes.

PN239

COMMISSIONER LARKIN: And SRA, but not at that stage - and correct me again if it's wrong - the agreement that they were discussing at that point in time was not to apply to it?

PN240

MR KITE: Well, that was RailCorp's position. It wasn't the union's position, to be fair.

PN241

COMMISSIONER LARKIN: Was it RIC's position also?

PN242

MR KITE: It was RIC's position.

PN243

COMMISSIONER LARKIN: Yes. So between the period of, I presume, July 2004 when it was determined that RIC would be a separate or is a separate entity, and at least at November 2004 the position was that they would be separate and have a separate agreement.

PN244

MR KITE: Well, yes, in that period.

PN245

COMMISSIONER LARKIN: Could I ask you, do you know what occurred between November 2004 and December 2004, where that position changed?

PN246

MR KITE: Mr Greenhalgh's affidavit deals with that in a later section.

PN247

COMMISSIONER LARKIN: Yes, please, in your own good time.

PN248

MR KITE: If the Commission pleases, of course if there are any additional questions it would be perhaps easier to deal with them at that time.

PN249

COMMISSIONER LARKIN: I'll wait until that section.

PN250

MR KITE: It is dealt with as a separate section of how those matters progressed because it should be borne in mind that the original position was that the three entities were all under the control of one board and one CEO and it was thought at that time that they could be regarded as a single enterprise.

PN251

COMMISSIONER LARKIN: As a single business?

PN252

MR KITE: Yes. Until July when New South Wales Government made the decision to appoint a separate board and CEO for RIC and have it operate separately. So that was that period July/August through to November. That was the exception to the position rather than the prevailing position.

PN253

COMMISSIONER LARKIN: Yes.

PN254

MR KITE: There was a change of mind at least on the part of the rail entities but not on the unions' part, it has to be said. They were always seeking a single comprehensive agreement to cover the operations of all three. But I'll try - - -

PN255

COMMISSIONER LARKIN: Yes. But RIC is still a state enterprise?

PN256

MR KITE: It is. Although with much limited functions these days.

PN257

COMMISSIONER LARKIN: Well, it manages the lease arrangements to ARTC and a few other things.

PN258

MR KITE: Yes.

PN259

COMMISSIONER LARKIN: But the employees are their employees, they're seconded employees.

PN260

MR KITE: Indeed. I was about to deal with annexure 9 in the context of health and safety. It's dealt with in section 33 which is the third last page of the annexure, page 10 of 12.

PN261

SENIOR DEPUTY PRESIDENT HARRISON: I'm sorry, where are you, Mr Kite?

PN262

MR KITE: In annexure 9, in the bottom left corner there are page numbers, page 10 of 12, paragraph 33, "Occupational Health and Safety in ..... ". Of course, this was RailCorp's position at that stage and it effectively was the agreement reached at this stage. It says on page 11 of 12:

PN263

RailCorp has the responsibility to insure the health and safety and welfare of all employees, contractors, customers and ...(reads)... where they genuinely believe a risk of injury or damage exists.

PN264

A new paragraph 4 suggests:

PN265

RailCorp and its employees will continually work to improve their performance in relation to occupational health and safety ...(reads)... from time to time and any other applicable legislation.

PN266

Then paragraph 7.15 of the affidavit:

PN267

In January 2005 the final report of the Special Commission of Inquiry into the Waterfall accident was published. The final report ...(reads)... safety management of the organisation; page 232 of volume 1 of the report.

PN268

SENIOR DEPUTY PRESIDENT HARRISON: What organisation?

PN269

MR KITE: I think the report was looking at the SRA at that time:

PN270

The report identified two incidents where occupational health and safety issues arose involving the relationship between track workers and ...(reads)... and providing adequate facilities for the welfare of employees at work.

PN271

Mr Greenhalgh then turns to the background to the enterprise bargaining negotiations.

PN272

SENIOR DEPUTY PRESIDENT HARRISON: What's new, bearing in mind it has always been the case, and I do not understand there to be any modification to the requirements under the relevant state Occupational Health and Safety Act, or to the regulations made there under the requirements of the Rail Safety Act, regulations made thereunder, the obligations of - established by the Independent Transport Safety and Reliability Regulator and to the extent to which the Transport Legislation Amendment Safety and Reliability Act 2003 applies, the RIC specific safety standards and the numerous safety standards set out in - I don't know what this document is, but there's pages of them.

PN273

I don't think I have exhausted all of the legislation and regulations that place obligations in relation to safety and occupational health on these parties - have before now, will continue to do so. What's changed and why is this justification for a multiple business agreement?

PN274

MR KITE: Because these entities operate in an interconnected way as is evident by the Bell and Kerrabee accidents where you have got one entity which had the responsibility for the operation of the trains, another entity having the responsibility for the operation of the infrastructure work, maintenance work, and that was the - while one entity could be looking at all of those obligations in its own right, and the other entity maybe doing the same thing, they just need to cooperate. They need to work together and - - -

PN275

SENIOR DEPUTY PRESIDENT HARRISON: So you're imposing new obligations over and above the statutory obligations that each of them have?

PN276

MR KITE: No. What we're trying to do is make those obligations work better by making these organisations work or trying to get these organisations to work as one in their attitude to occupational health and safety, and acknowledging the interaction of the three organisations and making sure that the workers understand too that interaction.

PN277

COMMISSIONER LARKIN: Mr Kite, ARTC control the tracks outside the metropolitan areas. They have that responsibility to insure the maintenance of those tracks. So they also have that responsibility. Another - I'll give you a two-barrelled question, Mr Kite. Also Pacific National has its own train drivers. So it's not necessarily ..... in issue here.

PN278

MR KITE: No.

PN279

COMMISSIONER LARKIN: There are other rail operators that have those obligations with trainer drivers and ARTC also has an obligation as well.

PN280

MR KITE: Yes.

PN281

COMMISSIONER LARKIN: And they direct these employees, do they not, the RIC seconded employees?

PN282

MR KITE: Yes, they do. But in the sense that they're RIC employees they would be applying this certified agreement to - can I say that the immediately attractive argument of looking at ARTC and Pacific National and saying, well, this is a desirable proposition, why aren't they in the certified agreement as well/

PN283

COMMISSIONER LARKIN: I'm not proposing that, Mr Kite.

PN284

MR KITE: No. But the answer - well, one of the answers is that these three entities all operate under state legislation, the Rail Agencies legislation, they are responsible to a single Minister. The ARTC is not responsible to that Minister, it's not responsible to the New South Wales Government other than by reason of its agreements with that government, whereas all of these entities are New South Wales Government entities responsible to the one Minister and responsible through the policy framework set by the New South Wales Government through that Minister.

PN285

COMMISSIONER LARKIN: But ARTC also has its obligations in regard to health and safety.

PN286

MR KITE: Indeed.

PN287

COMMISSIONER LARKIN: And the reporting by its seconded employees to its managers and its supervisors.

PN288

MR KITE: There's no doubt about that. And the answer to your Honour Senior Deputy President Harrison question - there's no additional obligation arising here. What's sought to do is to make those obligations work more effectively in a practical sense rather than a legal sense. There's no doubt the obligations exist and they exist under the Occupational Health and Safety Act and the making of the certified agreement won't affect the scope of the obligations under the Occupational Health and Safety Act.

PN289

What this agreement tries to do and what the parties are trying to do is to improve the practical implementation of those legal obligations to enhance workplace safety.

PN290

COMMISSIONER LARKIN: Did that penny drop between November 2004 and December 2004?

PN291

MR KITE: Well, I don't think so. I think the penny has been on its way down for a long time on this issue.

PN292

COMMISSIONER LARKIN: Well, it was due in that period where it was decided that RIC would be part of a multi business agreement.

PN293

MR KITE: Yes. But again, Commissioner, up until July these entities were all going to be covered by a single agreement then there was a change in the position of RIC in terms of its independent board and CEO.

PN294

COMMISSIONER LARKIN: It's still a state-owned corporation, isn't it?

PN295

MR KITE: It's still a state-owned corporation. But under the Commonwealth legislation the view was taken that this can't be looked at as a single enterprise any more and so the rail agencies took the view that at least RIC and RailCorp would be covered by separate agreements and the unions, again to be fair, didn't change their mind. They wanted a single comprehensive agreement covering the rail agencies.

PN296

SENIOR DEPUTY PRESIDENT HARRISON: But that much is clear for industrial reasons. I'm just not yet understanding why it is clear that the unions' motivation was the better coordination of legislative requirements of employers and employees that have always been there and continue to be there. That may be a question better directed to Mr Thistlethwaite.

PN297

MR KITE: Maybe so, your Honour.

PN298

SENIOR DEPUTY PRESIDENT HARRISON: Mr Kite, the manner in which the EBA reflects the types of matters Mr Greenhalgh has referred to in clause 7.2 or thereabouts, that is the reasoning behind the need for a multiple business agreement referable to these occupational health and safety matters. The enterprise bargaining agreement, for example, in clause 37, expresses that not in terms of trying to coordinate, not in terms of trying to better insure that one entity isn't cutting across or compromising or not speaking to the other about its obligations.

PN299

It talks about in terms of the duty and therein lies the basis for my asking a question: are these duties - well, what are they? Are they no more nor less than reflecting the legislative requirement? Well, in which case is it not a matter that we should consider the propriety or the sense of reproducing them in an enterprise bargaining agreement? I can understand what might be said about that. I would understand less though if the duties are articulated in a way that is at odds with the legislation. I would have thought that would be a matter at least in the public interest. I would be very interested in understanding.

PN300

There are obligations expressed in this enterprise bargaining agreement that look remarkably similar to obligations that have been and continue to be placed by way of legislation and regulations both common to all workplaces in this state and common to rail agencies. If they are to supposed to be duties and obligations and insuring, why are they expressed in those term in the enterprise bargaining agreement?

PN301

MR KITE: Well, your Honour, one has to look at all of these in context.

PN302

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN303

MR KITE: For example, looking at clause 38 dealing with health standards, it refers to:

PN304

The adoption by the New South Wales Independent Transport Safety and Reliability Regulator of the national standards requiring a new approach that ...(reads)... ways to deal with potential final impacts, such as mandatory health monitoring poses to such employees.

PN305

This clause applies to any employee:

PN306

- who may be directed to perform work falling in within the definition of rail safety work.

PN307

Then follows a number of conditions dealing with employer mandated testing protocols: who is responsible, the right to leave or payment while undertaking this testing responsibility for expenses; then into clause 38.9 and beyond, dealing matters of prevention and self-management of health and wellbeing. All of this in context of improved worker health, occupational health and safety, improved work environment, not only for the individual but for the individuals' work colleague. But the individual health of one rail safety employee can impact upon the health and welfare at work of his workplace colleagues - his or here workplace colleagues.

PN308

So these sorts of standards have to be seen in the context of the occupational health and safety environment standards. And your Honour's right, those provisions to which your Honour referred are effectively declaratory of the duties of the employer and the employees but they put it in context right in front of the employees and as part of the overall package in relation to occupational health and safety and health standards. There is no prohibition on putting declaratory provisions in certified agreements.

PN309

SENIOR DEPUTY PRESIDENT HARRISON: I understand there's no prohibition. Public interest considerations might arise if the obligation is expressed in a way that might give rise to some confusion between obligations expressed in legislation and obligations expressed in an enterprise bargaining agreement, a federal one, which is read in conjunction with the state legislation and obligations.

PN310

MR KITE: But the state legislation prevails in the legislation.

PN311

SENIOR DEPUTY PRESIDENT HARRISON: Yes. I'm just trying to find the Workplace Relations Act in the section in question.

PN312

MR KITE: 170LZ(2).

PN313

SENIOR DEPUTY PRESIDENT HARRISON: Is that what it is? Thank you.

PN314

MR KITE: I think it is, your Honour. 170LZ(2):

PN315

Provisions in a certified agreement deal with the following matters operating subject to the provisions of the state law.

PN316

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN317

MR KITE: And first among those is occupational health and safety.

PN318

SENIOR DEPUTY PRESIDENT HARRISON: That argument cuts both ways as to whether it endorses the argument about including these things in a federal enterprise bargaining agreement or whether it cuts across - or whether it endorses the argument it is wise not to, in a prescriptive form, rather than in a form of encouragement but in a prescriptive form when, for example, clause 38 expresses itself in terms of duties:

PN319

- need to insure an obligation on the employer to insure an employee's duties and employer's duties ...(reads)... are obliged to comply with any requirements.

PN320

So many of those words are very, very similar to what I recollect are the types of words, obligations, duties under the legislation and the regulations but I suspect not verbatim.

PN321

MR KITE: I think your Honour is right there in terms of not verbatim.

PN322

SENIOR DEPUTY PRESIDENT HARRISON: Yes. I don't think anybody is under any doubt about their duties under this legislation and the importance of it to everybody but not the least the rail services and rail agencies and its employees in the state. I don't think there's any doubt between that. It's just the way in which it is being encompassed in an agreement, an agreement that is for the first time a multiple business agreement and is one of the key grounds upon which you ask us to find in the public interest it should be certified. That's my concern, Mr Kite. And I have not yet seen the National Standards for Health Assessment and Rail Safety Workers. It may well be that that would raise again the same issue, namely it deals and imposes certain obligations, requirements, duties which are then in some way dealt with in this enterprise bargaining agreement.

PN323

MR KITE: Would your Honour pardon me a minute?

PN324

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN325

MR KITE: We'll take all those matters on board. By the time if we finish the evidence this afternoon we have done well.

PN326

SENIOR DEPUTY PRESIDENT HARRISON: I'm sorry to do this, Mr Kite. Do you want to have all of our concerns tonight, Mr Kite?

PN327

MR KITE: Undoubtedly, if I could get all of the Commission's concerns tonight but - - -

PN328

SENIOR DEPUTY PRESIDENT HARRISON: Well, we'll try.

PN329

MR KITE: I'm not sure the Commission would be prepared to go and ..... me that it would give me all the concerns tonight.

PN330

SENIOR DEPUTY PRESIDENT HARRISON: No, exactly, provided there is - we have got some homework ourselves to do, particularly that interesting point about successors but we might perhaps flag a few other matters that - - -

PN331

MR KITE: I would certainly be grateful if that could be done.

PN332

SENIOR DEPUTY PRESIDENT HARRISON: - - - we might need to be assisted on. Commissioner Larkin?

PN333

COMMISSIONER LARKIN: Mr Kite, the seconds of the - or the clauses of the agreement you have taken us to, clauses 37 and 39, what's preventing RIC or SRA from having those provisions in an agreement? What is unique about those provisions that it must be in a multiple business agreement, having regard to the history of separate agreements that these parties have had?

PN334

MR KITE: I don't think there's anything that - if these entities sought to have separate agreements and the unions with them sought to have a separate agreement with each employing entity, there would be no reason why these provisions wouldn't go in. But for reasons of taken as a whole, it's thought appropriate not only for occupational health and safety reasons, but classification structures and dealing with the commonality of structures, the movement of staff between the organisations and so on, are all facilitated by having a common agreement with common conditions so far as practicable.

PN335

COMMISSIONER LARKIN: This agreement doesn't contain classification structures at the moment.

PN336

MR KITE: It has got a commitment to develop them within a short time, Commissioner.

PN337

COMMISSIONER LARKIN: And of course that commitment will be honoured, Mr Kite.

PN338

SENIOR DEPUTY PRESIDENT HARRISON: This is a public interest this time, Mr Kite, not a single business agreement. We have each of us on several occasions seen a not dissimilar commitment including the revisiting and the consolidation of all of the enterprise bargaining agreements and awards dating back to 1960 that are called up.

PN339

COMMISSIONER LARKIN: Not to make light of commitments to terminate a particular section 134C agreement made 2 years ago.

PN340

SENIOR DEPUTY PRESIDENT HARRISON: We'll probably get all of this off our chests today.

PN341

COMMISSIONER LARKIN: Take that on notice, Mr Kite.

PN342

MR KITE: I'll take that on notice - I can see that the 134(1)(c) - - -

PN343

SENIOR DEPUTY PRESIDENT HARRISON: But we within the panel have obviously - have acquired over a period of time an understanding about how some of these agreements might in fact end up working rather than how they are said to work. That may or may not be a public interest issue that you will need to assist us on in the context of maybe the dispute settlement procedure. We can address that - how much longer do you think you will be on taking us through the evidence because I want to leave sufficient time for us to flag any other matters that may be - you may need to assist us with. You might be a little while, mightn't you?

PN344

MR KITE: It might be a little while.

PN345

SENIOR DEPUTY PRESIDENT HARRISON: Yes. What we think might be best is we might raise for your consideration overnight some matters that at some stage you'll need to assist us on and you would have come to an appropriate place for us to have asked these questions in the Mr Greenhalgh's affidavit. Mr Greenhalgh, I assume, will be attending tomorrow?

PN346

MR KITE: He will. Whatever his plans they have just died.

PN347

SENIOR DEPUTY PRESIDENT HARRISON: Whatever your plans were, Mr Greenhalgh, we would very much assisted if you attended because, I don't know, maybe all the questions we have that arise out of your affidavit we can rectify it but it might be at some stage it's going to be more expedient for Mr Greenhalgh to answer to them direct.

PN348

In no particular order, I regret - perhaps maybe there is an order, and this I think is a matter you will certainly need to assist me with as will the unions. It is against the basis - it is the background to the manner in which terms and conditions have been traditionally reflected in industrial instruments have comprised a core agreement and numerous functional agreements. The core agreement will on many of course grant a salary and the functional agreement will grant an additional amount for at least set up a basis upon which additional amounts may be granted certain preconditions being met. Those functional agreements as is obvious from the large number of them to be terminated have all been free standing separately certified single business enterprise bargaining agreements.

PN349

It is intended in the 2005 agreement that groups of employees, occupational groups, all have an opportunity during the life of the agreement to enter into discussions in relation to competency, wages classifications and to reach an agreement. When that agreement is reached, there is a schedule, schedule C, which is going to presumably reflect the terms of the agreed reforms in those functional areas. It is intended in terms of the 2005 agreement that that will be done by way of a variation to the agreement. Such a variation to an agreement must be made in accordance with section 170MD of the Act and, in particular, under section 170MD(3):

PN350

- cannot be approved unless a valid majority of the employees whose employment is subject to the agreement at the time genuinely approved the variation.

PN351

My understanding in the terms of that section is the agreement will be the whole of the 2005 agreement. It will not be the subset of employees who may have reached agreement on a functional agreement. In practical terms, each time a functional agreement is met, it will need to be put to the vote of all of the employees under the 2005 agreement. Many of them will have limited interest in the functional agreement. Questions will arise in relation to that.

PN352

There are other issues that arise, namely - I don't need really to make further observations about all of the permutations that could arise from the fact that there must be a valid majority of all of the employees under the 2005 agreement agree to the functional agreement. Secondly, if a 2005 - all of the employees under the 2005 agreement comprise a valid majority agreeing to a functional agreement, part of which or all of which they have no immediate interest in, is that not a public interest consideration and is it not likely to lead to flow ons?

PN353

My reading of documents and the agreement suggest to me that there is a view held about section 170MD(3) that is at odds with my view. If I am wrong I will need to be assisted. That will go also to the explanation given to employees of the impact, namely the fact that they have been led to believe that during the life of this agreement they will be able to obtain increases in their wages, in their functional areas, in accordance with a vote of the relevant subset rather than, as I say, if I am right, it is a vote of all of the employees under the 2005 agreement. I would have thought that significant to have been properly understood.

PN354

In clause 30 there is a very long list of leave provisions. In order to understand whether they all relate to matters that pertain, would you ascertain, Mr Kite, whether all of those leave provisions are encompassed in documents? If they are, I suppose we have to have them. And if they're not, well, we can then talk about that - I'm so sorry that these are in no particular order.

PN355

Is if of any consequence that schedule B that is called up in the certified agreement and the agreements that are named therein have now changed? I don't think they have changed in a - well, are the differences in the description of the agreements that are now sought to be called up and set aside - are those differences in the original schedule B to the list there? Is that of any significance?

PN356

In clause 12.1(a) and (b), the train crews are referred to. Are the matters in those subclauses contained in written procedures or documents? If so, and they are intended to be called up, we need to see them to be satisfied they pertain.

PN357

Are there any enterprise bargaining agreements in existence that are not to be terminated, namely still within their life? Well, within their life or not, but not to be terminated. If so, what are those agreements? There are a couple of documents I have already asked for today so I won't return to those.

PN358

For myself I will have a number of questions that relate to what I call flow-on type consequences for the way in which the agreement is going to work referrable to being persuaded about public interest but I have flagged one area where I think I need to be assisted that it is not a real likelihood it is going to occur. I'm sorry for that to be a bit disorganised in terms of the statutory considerations but - - -

PN359

MR KITE: We're grateful for - - -

PN360

SENIOR DEPUTY PRESIDENT HARRISON: - - - they're all important. A couple of them are very important. Commissioner Larkin? Deputy Duncan?

PN361

SENIOR DEPUTY PRESIDENT DUNCAN: No.

PN362

COMMISSIONER LARKIN: I hope I don't cross over on her Honour, Mr Kite, but this goes to clarification of clauses but it also goes to mattes pertaining. Clause 8.1(a)(3), this goes to the dispute settling provision. I would like your submissions or views in regards to whether that particular provision pertains. Clause 16.3 on page 24, provision with information, to pick a consultative committee - the definition provides the definition of that committee. Is there a concern in relation to that provision, having regard to a number of decisions of the Commission?

PN363

I will raise this and you can give me a submission on it: clause 39.3(vi), in regards to the dispute settling provision again, clarification. 8.9, page 15, in regards to safety issues. I would like the intent of that clause in regards to the role of the AIRC. Also, your submissions in regards to clause 8.13 on page 16, and it's part of the dispute settling provision as well. Just in regards to clause 9.5(b), the provision appears to suggest an undertaking. I wonder whether at the end of the day an undertaking of that nature can be given but you might consider that one.

PN364

SENIOR DEPUTY PRESIDENT HARRISON: The Commissioner's observation - request to be assisted with 9.5(b) reminds me that I have left out another very significant matter, the whole of clause 9.

PN365

MR THISTLETHWAITE: If I may, your Honours, Commissioner, in respect of - Commissioner, you mentioned clause 39.3(vi).

PN366

COMMISSIONER LARKIN: (iv), wasn't it? I'm sorry. I was never a good typist.

PN367

MR THISTLETHWAITE: Is it the intention that you wish to hear from the parties in relation to subclause - - -

PN368

COMMISSIONER LARKIN: I did raise (vi), my apologies. (vi) and (iv), yes I did.

PN369

MR THISTLETHWAITE: And it is the matters pertaining issue that you wish to hear from the unions in respect of those clauses?

PN370

COMMISSIONER LARKIN: Well, whoever can explain that to me and clarify what the provision actually does mean.

PN371

MR THISTLETHWAITE: Yes. Thank you, your Honour.

PN372

SENIOR DEPUTY PRESIDENT HARRISON: I'm sorry for the tag team here. Mr Kite, may I return to clause 9, the whole of clause 9, and this is Electrolux. And this is the fact that no matter how bordering on ingenious the proposal here is, to not have to date spot and deal with matters that do not pertain whether it really is going to achieve the end. If this is not a valid application, it is not, and for us to certify it, and to do so with a real doubt that it only deals with matters pertaining is a very significant issue.

PN373

That arises in a number of ways but it particularly arises in this way: the agreements that are to be set aside are in their terms all called up in this agreement with the exception of certain identified clauses that don't pertain and certain subject matters that are described whatever are to be found in those agreements. They don't pertain. Now, putting to one side whether those subject matters are found in nice neat clauses so we all know it's that clause that goes rather than a part clause, that's a question we can return to. But the real problem I have is all of those agreements themselves call up agreements and awards going back to 1960 although I think now probably they're as a result of simplification 2002.

PN374

But the agreements refer to 1960 awards and it's not just read in conjunction - it is this drafting mechanism that has been used for years now, calling up all of the terms and the parties as I understand, being of the understanding that it's as if all of those terms were in the agreement although the shorthand drafting has been used. Now, it's one thing for us to be satisfied that the agreements that we have a hard copy of in four volumes do not contain matters that pertain but they in turn call up many, many earlier agreements and awards. How can we be satisfied all of those do not have matters that do not pertain?

PN375

MR KITE: I wasn't anticipating a question on clause 9, your Honour.

PN376

SENIOR DEPUTY PRESIDENT HARRISON: Weren't you, Mr Kite.

PN377

COMMISSIONER LARKIN: It's your day, Mr Kite.

PN378

SENIOR DEPUTY PRESIDENT HARRISON: It is a very interesting drafting mechanism to get around what is a difficult issue in any industry but, to my knowledge, in this industry the most difficult I have had to tackle to be sufficiently confident that what I'm being asked to do is not - is to certify a valid application. Because if it's not valid, for myself it's not good enough to be told we have got a mechanism to deal with any surprises that we get when we identify a clause that doesn't pertain. The parties might have reached an agreement about that but for the Commission to be leading 15,000 employees into believing they have got a certified agreement, is a big decision when there are doubts that there are clauses in there that do not pertain.

PN379

MR KITE: Could I must deal with one matter, your Honour? That is that we would obviously do our utmost to persuade the Commission that the matters in the agreement do pertain.

PN380

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN381

MR KITE: And we wouldn't be asking the Commission not to inquire because of the operation of clause 9, by any means. Clause 9 is meant to be a protective provision to say that we're trying to create one - that is the parties are trying to create one comprehensive industrial instrument and I appreciate the Commission lauds the objective but is questioning the process at the moment. And, as your Honour has observed, that's a difficult task in this particular industry - in any industry but in this particular industry, a huge task.

PN382

The intention with the schedules is to - that parties have looked at those agreements and attempted to identify the specific clauses, all of them, that raise matters that are on the current authorities not pertaining and they're identified and excluded. For more abundant caution, they have adopted the third part of the schedule dealing with subject matters. So in case we have missed something in our search and this agreement doesn't pick up clauses in past agreements dealing with subject matters because those subject matters on the current authorities do not pertain.

PN383

The effect is to - the clause is drafted so that any clause which is ultimately found not to pertain is effectively severed from the agreement. It's not a part of the agreement. The agreement makes that provision itself.

PN384

SENIOR DEPUTY PRESIDENT HARRISON: I don't think Electrolux and Schefenacker allow you to do that, Mr Kite. Well, perhaps persuade me that Schefenacker and Electrolux allows you to do that.

PN385

MR KITE: There is another exhibit which we need to give you.

PN386

SENIOR DEPUTY PRESIDENT HARRISON: Do I need it tonight or shall we look forward to it in anticipation?

PN387

MR KITE: Well, I'll give it to you tonight in case it prompts more questions. It's only a one pager.

PN388

SENIOR DEPUTY PRESIDENT HARRISON: All right.

PN389

MR KITE: And it deals with the ballot paper. We notice that the ballot paper itself was not included in the materials. It's referred to but it's not included.

PN390

SENIOR DEPUTY PRESIDENT HARRISON: Thank you. And in the context of the explanation that you have given me, I understand that in relation to the identified agreements in schedule B, it still doesn't give me a level of confidence that all the other agreements that the schedule B agreements call up have been considered in relation to them being - falling on the right side of the line.

PN391

MR KITE: I understand that.

PN392

SENIOR DEPUTY PRESIDENT HARRISON: Can we put this in a place in these documents rather than mark it separately? Mr French, where is his - - -

PN393

MR GREENHALGH: It is in the statutory declaration, your Honour.

PN394

SENIOR DEPUTY PRESIDENT HARRISON: And it's an annexure the result of the ballot, isn't it?

PN395

MR KITE: It's annexure A.

PN396

MR GREENHALGH: Yes, it's annexure A to the statutory declaration - - -

PN397

SENIOR DEPUTY PRESIDENT HARRISON: Yes, that's - yes, very good. Is that where we should put it or should we mark it?

PN398

MR KITE: That deals with all the ballot issues and the results are in a convenient place.

PN399

SENIOR DEPUTY PRESIDENT HARRISON: Yes. That's where we will put that.

PN400

COMMISSIONER LARKIN: Just one thing, just on your submission in regards to schedule B, part 2 of 2, on the subject matters, one of the difficulties, Mr Kite, also that minds differ as to the terminology of provisions and the provision itself must be read as a whole to determine whether it does pertain or it doesn't pertain. Simply a reference to a subject matter "trade union delegates" doesn't mean that all provisions going to trade union delegates do not pertain. It depends on the character of the clause.

PN401

By simply stating that, who interprets those particular provisions from the earlier agreement to determine whether they do pertain or not pertain? Are the parties left with that?

PN402

MR KITE: The delegate provisions in the core agreement would prevail over any of those other agreements. For example, if it's in the core agreement, it prevails over any other agreement.

PN403

COMMISSIONER LARKIN: Therefore, would you not just exclude the particular provisions in there in totality? I'm just wondering why do we have a list of subject matters if this agreement is going to override them anyway? It only leads to confusion in a sense, does it not? It just confused me, Mr Kite.

PN404

MR KITE: In some of the categories one can answer it that way because if the matter pertains and it's dealt with in the core agreement, then it will override any other clause in which a matter that pertains deals with a similar subject matter to the extent that it does pertain. But the second part of the schedule is designed to exclude matters which don't pertain. So if the provisions dealing with delegates in the core agreement, which we submit notwithstanding that they deal with delegates are matters which pertain and therefore can be the subject of a current certified agreement. The subject matter definition is aimed at a different proposition to say that to the extent there may be a clause that they're dealing with delegates which doesn't pertain, then that clause will not be part of this agreement.

PN405

COMMISSIONER LARKIN: And employees understand all that, Mr Kite?

PN406

MR KITE: The material addressed them on those issues. Obviously, the niceties of Electrolux are difficult to explain to 15,000 workers. They're difficult enough to explain to lawyers or - - -

PN407

COMMISSIONER LARKIN: The Bench.

PN408

MR KITE: - - - amongst lawyers and members of the Commission even. But the concepts were explained and as the Commission will see and the reason for tendering the ballot paper now is to show that the ballot particularly drew attention to that point and asked them if they wanted to approve the ballot with those variation provisions in it.

PN409

COMMISSIONER LARKIN: Yes.

PN410

MR KITE: And if they didn't they could say no. So, in that sense, the Commission could be satisfied, in our submission, that if a clause were excluded by the operation of clause 9, that is the Commission found that a particular clause did not pertain, the agreement that remained would still be the agreement that the employees approved because they approved the clause and allowed the excision or severability. In the same way that a common law agreement, typically any contract will contain a severability clause saying - any modern contract, I should say - that notwithstanding that a clause of this agreement is found to be invalid it can be severed and the balance of the agreement will remain.

PN411

COMMISSIONER LARKIN: That might be the answer to the employees for us being satisfied the employees had the terms adequately explained to them in terms they could understand it. It's probably not the answer though to Schefenacker that says that the agreement containing such a non-pertaining clause is not a valid agreement.

PN412

MR KITE: That then comes to the ingenuity of this provision.

PN413

COMMISSIONER LARKIN: Indeed.

PN414

SENIOR DEPUTY PRESIDENT DUNCAN: Yes.

PN415

SENIOR DEPUTY PRESIDENT HARRISON: Could you just pause for a moment, Mr Kite?

PN416

MR KITE: If your Honour pleases.

PN417

SENIOR DEPUTY PRESIDENT HARRISON: We'll just take a brief adjournment, Mr Kite. May I let you know what we have been talking about? It might be that our further consider is not necessary depending on your answer. I would have thought that we have given you at least if not all of the unions a fair bit of homework. You have given us things to consider and there might be some documents you can send in to us that we can consider but there are quite a few matters that we need to be assisted with and it would not surprise if not only from your side to consider them, there will need to be some discussion with the other parties. Is it going to be useful for us try and identify a time next week to come back and abandon tomorrow? That is what I am considering.

PN418

MR KITE: Your Honour, could excuse me?

PN419

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Mr Kite?

PN420

MR KITE: I think the consensus at the bar table is that that's a good idea.

PN421

SENIOR DEPUTY PRESIDENT HARRISON: We just need as efficiently - speedily to reach some consensus. We might just take a short break. I'm sorry, did I cut you short as to - we'll just take a short - yes. Mr Kite, any insurmountable difficulties you have on Tuesday or Wednesday of next week? We cannot do Thursday or Friday.

PN422

MR KITE: I think the answer from me is no but - - -

PN423

SENIOR DEPUTY PRESIDENT HARRISON: All right.

PN424

SENIOR DEPUTY PRESIDENT DUNCAN: It sounded as though you - - -

PN425

MR KITE: - - - the other end of the bar table is not in the same position.

PN426

SENIOR DEPUTY PRESIDENT HARRISON: Mr Thistlethwaite?

PN427

MR THISTLETHWAITE: Tuesday is a difficulty for me, your Honour. I have submissions to prepare for the state wage case.

PN428

SENIOR DEPUTY PRESIDENT HARRISON: All right. Wednesday afternoon? We can't do Wednesday morning.

PN429

MR THISTLETHWAITE: That's okay with me. Yes, that's suitable.

PN430

SENIOR DEPUTY PRESIDENT HARRISON: Then I don't think we need to have that short break after all.

PN431

MR KITE: The only apprehension - I'm sorry, your Honour, we're a little worried that even one day may not be enough.

PN432

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Ideally we would have liked to have found a whole day next week but we can't do it.

PN433

MR THISTLETHWAITE: Apart from Tuesday which we can't do. We accept that.

PN434

COMMISSIONER LARKIN: Well, there's Monday.

PN435

SENIOR DEPUTY PRESIDENT HARRISON: There is a possibility for starting a little earlier on Wednesday. We all have a commitment that will take us through to late morning. I know it's not ideal but we could, for example, start at 12. That would insure an additional hour hearing time rather than, for example, start at 2. Mr Thistlethwaite, did I just overlook something you said about your availability on Wednesday?

PN436

MR THISTLETHWAITE: No, I'm available on Wednesday. If you could just bear with me a moment.

PN437

SENIOR DEPUTY PRESIDENT HARRISON: Mr Reporter, may we go off transcript.

<OFF THE RECORD

PN438

SENIOR DEPUTY PRESIDENT HARRISON: These two matters are now adjourned and they will be listed again for hearing at 9.30 am, Tuesday, 14 June. The Commission now adjourns.

<ADJOURNED UNTIL TUESDAY 14 JUNE 2005 [4.47PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #RAIL AGENCIES 1 4-PAGE DRAFT ORDER WITH SCHEDULE OF EBAS PN73
EXHIBIT #RAIL AGENCIES 2 CHRONOLOGY OF DATES FROM MR GREENHALGH'S AFFIDAVIT PN101
EXHIBIT #RAIL AGENCIES 3 AFFIDAVIT OF MR GREGORY ROBERT GREENHALGH DATED 08/06/05 WITH 50 ANNEXURES PN121