AG2005/5362, Transcript of Proceedings [2005] AIRCTrans 2049 (4 October 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 12913-1

SENIOR DEPUTY PRESIDENT KAUFMAN

AG2005/5362

APPLICATION BY VESTAS - AUSTRALIAN WIND TECHNOLOGY PTY LTD
s.170MBA - Order re extent to which successor employer is bound by cert. agt.
(AG2005/5362)

MELBOURNE

10.22AM, TUESDAY, 20 SEPTEMBER 2005

Hearing continuing

PN1

MS S ZEITZ: I seek leave to appear with MR A MYLES for the applicant in this matter.

PN2

MR G BORENSTEIN: I appear on behalf of the CEPU together with MR P COFFEY the relevant organiser of the CEPU. I am not sure whether I need to intervene or not in this matter seeing as we are party to one of the agreements.

PN3

THE SENIOR DEPUTY PRESIDENT: Yes, I doubt it. I think you appear as of right.

PN4

MR BORENSTEIN: Thank you, your Honour, I have got no objection.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, leave is granted, Ms Zeitz.

PN6

MS ZEITZ: Your Honour, this is an application by Vestas as the incoming employer with respect to the question arising as to the application of the NEG Micon Agreement 2003-2005.

PN7

THE SENIOR DEPUTY PRESIDENT: I have read the papers to some extent. Let me just see if I understand the way in which the case is put and then you can assist me. As I understand the position, Vestas Australia Wind Technology Pty Ltd is a wholly owned subsidiary of Vestas Australia Pacific A/S which is wholly owned by the Vestas group of companies incorporated in Denmark, is that right? And on 1 March of this year Vestas Australia Pacific acquired the business of NEG Micon Australia Pty Ltd or was that Vestas Australia Technology?

PN8

MS ZEITZ: If I could perhaps just go back a bit in time. I think it was towards the end of 2003. NEG Micon is also a company based with its head office in Denmark. It entered into an agreement on a global basis with Vestas Denmark for want of a better term for a merger of their businesses and that process has been gradually rolled out across the globe. Part of that involved the NEG Micon Pty Ltd company operations in Australia the shares of that being purchased by Vestas Asia Pacific which is the Pacific - - -

PN9

THE SENIOR DEPUTY PRESIDENT: Well, is that right actually because I am just looking at exhibit ASM2 which is a minute of a meeting of Vestas Australia Wind Technology Pty Ltd which resolved that that company acquire all assets, obligations, liabilities and undertakings of NEG Micon Pty Ltd.

PN10

MS ZEITZ: Yes.

PN11

THE SENIOR DEPUTY PRESIDENT: So it is Wind Technology that on 1 March acquired the business of NEG.

PN12

MS ZEITZ: Yes, basically take over the NEG business that is correct. In Australia that is how it is intended.

PN13

THE SENIOR DEPUTY PRESIDENT: I am not sure what the date of the resolution is but the effect of the resolution was that it be affected from 31 March. I see the resolution was 24 March?

PN14

MS ZEITZ: Yes. And you will see there that there is four documents which are effectively what they call circular resolutions of the directors.

PN15

THE SENIOR DEPUTY PRESIDENT: So is it your case that as from 31 March, Vestas Australia Technology Pty Ltd acquired the business of NEG Micon Australia Pty Ltd. Is that correct?

PN16

MS ZEITZ: Put in place the process to formally take over I think. You will see on that there is a list of subject to's and so those were the steps that were then put in place and have been recently undertaken. The last part of that process, of course, is to deal with the employee of NEG Micon Pty Ltd and that is really where this application has arisen.

PN17

THE SENIOR DEPUTY PRESIDENT: Has the business of NEG Micon yet been acquired by Wind Technology? I will refer to Vestas Australia Wind Technology Pty Ltd perhaps as Wind Technology and NEG Micon Pty Ltd as NEG. So has the business of NEG yet been acquired by Wind Technology?

PN18

MS ZEITZ: It is still in the process I think is the best way to put it. It is not quite finalised. As I understand it because they are related corporations ie. NEG and Vestas are related corporations in terms of their ultimate shareholding, in a sense what is referred to in section 170MBA as the transfer time started on 31 March and has really been ongoing since that time as the process has been going.

PN19

THE SENIOR DEPUTY PRESIDENT: Can you have an ongoing transfer time under the section?

PN20

MS ZEITZ: It doesn't define transfer time which is an interesting - - -

PN21

THE SENIOR DEPUTY PRESIDENT: Well, it does, it is either which incoming employer becomes the successor, transferee or assignee.

PN22

MS ZEITZ: Yes.

PN23

THE SENIOR DEPUTY PRESIDENT: So when, as a matter of law, do you submit that has happened or will happen? It's not easy, is it?

PN24

MS ZEITZ: It is not easy on this occasion. Normally, as the Commission would be aware, there is a very clear moment in time particularly with non-related corporations the two, you know, there is a moment in time where everything transfers across.

PN25

THE SENIOR DEPUTY PRESIDENT: Have the shares transferred across?

PN26

MS ZEITZ: Yes, the shares have transferred.

PN27

THE SENIOR DEPUTY PRESIDENT: They have?

PN28

MS ZEITZ: Yes, the shares have transferred on my instructions.

PN29

THE SENIOR DEPUTY PRESIDENT: So Wind Technology now owns all the shares in NEG?

PN30

MS ZEITZ: The shares in NEG Micon Pty Ltd.

PN31

THE SENIOR DEPUTY PRESIDENT: And NEG Micon continues to be a corporation registered under the Corporations Law?

PN32

MS ZEITZ: Yes and will cease its operation - - -

PN33

THE SENIOR DEPUTY PRESIDENT: And NEG is currently operating?

PN34

MS ZEITZ: It is currently employing the three employees at Challicum Hills and three at Starfish who is in South Australia that is the entire compliment of the workforce at the moment.

PN35

THE SENIOR DEPUTY PRESIDENT: And four at Starfish?

PN36

MS ZEITZ: Three at Starfish.

PN37

THE SENIOR DEPUTY PRESIDENT: And how many at Challicum Hills?

PN38

MS ZEITZ: Three.

PN39

THE SENIOR DEPUTY PRESIDENT: Three?

PN40

MS ZEITZ: So it is six in total. The agreement applies only to the three in Victoria.

PN41

THE SENIOR DEPUTY PRESIDENT: Yes, because the NEG agreement only applies in Victoria.

PN42

MS ZEITZ: That is right.

PN43

THE SENIOR DEPUTY PRESIDENT: So NEG is currently employing those people, who is operating the wind farm business at Challicum Hills?

PN44

MS ZEITZ: Vestas is operating the wind farm business.

PN45

THE SENIOR DEPUTY PRESIDENT: So it is likely that the business is transmitted by now?

PN46

MS ZEITZ: Yes. Now, with respect to those three employees, of course, their terms and conditions have been maintained, they are employees of NEG Micon and there are no other employees at that site.

PN47

THE SENIOR DEPUTY PRESIDENT: They continue to be employed by NEG Micon?

PN48

MS ZEITZ: Yes.

PN49

THE SENIOR DEPUTY PRESIDENT: Which continues to be bound by the NEG certified agreement?

PN50

MS ZEITZ: Yes. And if Vestas were to employ onto that site it is arguable that as a direct Vestas employee it is arguable that the NEG Micon agreement would then transmit to apply to that employee hence the application.

PN51

THE SENIOR DEPUTY PRESIDENT: If you look at section 170MB(2) this is where I am not certain about how you put your case. If an employer is bound by a certified agreement, that is NEG for the purposes of this application, and the agreement was made under division 2 and at a later time a new employer becomes a successor. I suppose that is Wind Technology?

PN52

MS ZEITZ: Yes.

PN53

THE SENIOR DEPUTY PRESIDENT: Although, you would say that Wind Technology is not yet the employer?

PN54

MS ZEITZ: No, the successor not the employer.

PN55

THE SENIOR DEPUTY PRESIDENT: So Wind Technology does not yet employee anybody who is covered by the NEG certified agreement?

PN56

MS ZEITZ: That is the case and hence the application because the business having transferred we now have an incoming employer a prospective employer.

PN57

THE SENIOR DEPUTY PRESIDENT: Yes, I am just trying to get to that stage if we can. If I can just take you back a little bit. So NEG is bound by the NEG agreement which expires on 31 October that applies in Victoria?

PN58

MS ZEITZ: Yes, that is right.

PN59

THE SENIOR DEPUTY PRESIDENT: And Wind Technology operates wind farms throughout Australia, does it?

PN60

MS ZEITZ: Yes.

PN61

THE SENIOR DEPUTY PRESIDENT: And insofar as its operations in Victoria are concerned, it is bound by the Wind Technology certified agreement the nominal expiry date of which expires on 17 February 2008?

PN62

MS ZEITZ: That is correct, yes.

PN63

THE SENIOR DEPUTY PRESIDENT: And that agreement applies throughout Victoria?

PN64

MS ZEITZ: Yes.

PN65

THE SENIOR DEPUTY PRESIDENT: And currently Wind Technology employs people at Yambuk in Melbourne?

PN66

MS ZEITZ: That is correct.

PN67

THE SENIOR DEPUTY PRESIDENT: How many in all?

PN68

MS ZEITZ: Ten in total, ten in Victoria.

PN69

THE SENIOR DEPUTY PRESIDENT: The intention as I understand it is that all wind farm operations in Australia are to be undertaken by Wind Technology?

PN70

MS ZEITZ: Yes, that is correct.

PN71

THE SENIOR DEPUTY PRESIDENT: And has that occurred?

PN72

MS ZEITZ: The two outstanding sites are the two NEG sites. Starfish Hill in South Australia had applied the NEG Micon agreement that it was a common law arrangement so there is actually no agreement within the Commission's framework covering that site.

PN73

THE SENIOR DEPUTY PRESIDENT: Is there another or are there other certified agreements that apply in respect of Wind Technology beyond Victoria?

PN74

MS ZEITZ: Not certified agreements.

PN75

THE SENIOR DEPUTY PRESIDENT: Some of these mattes may not be pertinent; I am just trying to understand the whole picture.

PN76

MS ZEITZ: Because there are between three and five employees on site depending on the size of the site, there is a mix of arrangements. The agreement that is certified by the Commission has been used as the template as I understand it for some Australian workplace agreements to apply to some of the other sites in other states.

PN77

THE SENIOR DEPUTY PRESIDENT: When you say the agreement that is the Wind Technology agreement?

PN78

MS ZEITZ: Yes, the Wind Technology agreement. So essentially what Wind Technology has done is to say, okay, we have got an agreement that is certified by the Commission that sets certain terms and conditions of employment that is what we will effectively roll out to other states as business arises, and they do that either by collective agreement, there are some negotiations happening in South Australia at the moment, or they will do it by AWA depending on what is appropriate for the site and the Commission would be aware of the range of ..... that can impact upon that.

PN79

THE SENIOR DEPUTY PRESIDENT: Is it the intention, as I understand it, that the operations of NEG will cease on 31 October this year?

PN80

MS ZEITZ: Yes, that is correct.

PN81

THE SENIOR DEPUTY PRESIDENT: And as at that time all of its employees will have their employment terminated?

PN82

MS ZEITZ: From that company, yes.

PN83

THE SENIOR DEPUTY PRESIDENT: And will be or have been offered employment by Wind Technology?

PN84

MS ZEITZ: Yes. Mr Miles met with them on my instructions on 3 August this year and advised the Challicum Hill's employees that that was the intention, advised them that the intention was also to make this application, and formally advised them that there was an open offer of employment to them to join the Wind Technology company with effect from 1 November on the terms and conditions set out in the Wind Technology agreement.

PN85

THE SENIOR DEPUTY PRESIDENT: So from 1 November, Wind Technology will employ the three employees, do we know that?

PN86

MS ZEITZ: If they accept the offer.

PN87

THE SENIOR DEPUTY PRESIDENT: You don't know that yet?

PN88

MS ZEITZ: We don't know yet. My latest information is that they are awaiting the outcome of this application to determine their answer to that.

PN89

THE SENIOR DEPUTY PRESIDENT: Just a moment, please. I think you have answered this, but from 1 November the intention is that Wind Technology will employ all Australian power employees?

PN90

MS ZEITZ: Service technicians, yes.

PN91

THE SENIOR DEPUTY PRESIDENT: It is the legal effect of all of that that I would like to discuss with you as part of your opening because I am not certain about how it works. As I understand it, your case is that from 1 November the Wind Technology agreement will apply as the NEG agreement will have expired.

PN92

MS ZEITZ: Yes.

PN93

THE SENIOR DEPUTY PRESIDENT: Is that right? Won't they both apply?

PN94

MS ZEITZ: That in fact is one of the reasons for the application.

PN95

THE SENIOR DEPUTY PRESIDENT: That is a different issue, I can understand that, I just want to make sure that I understand the legal position and that I am with you on that or that if you make a submission contrary to what I believe to be the case you can dissuade me or the other way around. Would not the NEG agreement continue by virtue of section 170MB(2) would not Wind Technology become bound by the NEG agreement?

PN96

MS ZEITZ: There is certainly an argument to that effect. There is also an argument that says that the Wind Technology agreement has the effect of being the replacement certified agreement.

PN97

THE SENIOR DEPUTY PRESIDENT: Under section 170LX?

PN98

MS ZEITZ: Under section 170LX(2).

PN99

THE SENIOR DEPUTY PRESIDENT: Is that right? Do you have any authority for that?

PN100

MS ZEITZ: No, I don't, your Honour. I have done some searches on it, it is just that 170MBA is a relatively new section and, of course, not until you actually try and start to apply it that you realise the minefield that arises.

PN101

THE SENIOR DEPUTY PRESIDENT: Because I must say that my impression and understanding of section 170LX(2)(b) is that that operates when the employer and the union party to an agreement or the employer and the employees to an LK agreement that is about to expire make a new agreement intended to replace it.

PN102

MS ZEITZ: Yes.

PN103

THE SENIOR DEPUTY PRESIDENT: I would have thought that I am subject to persuasion that the effect of 170LX(1) is that the NEG agreement operates after its nominal expiry date has expired and continues to operate unless it is replaced by another certified agreement and query whether the Wind Technology agreement does replace it. If it doesn't is it not the position that by virtue of section 170MV(2), Wind Technology would be bound as a successor to the NEG agreement and also bound by its own Wind Technology agreement and, therefore, bound by two agreements as from the time that there is a transmission of business and it becomes the employer. I am not sure that it makes any difference to the thrust of your application; I am just trying to understand the legal background.

PN104

MS ZEITZ: It is, as I said, one of those interesting areas, the more you look at it the more complicated it becomes, and I am not sure that the legislature intended it to be this complicated.

PN105

THE SENIOR DEPUTY PRESIDENT: And it may not matter because in any event your submission, as I understand it, is that at some stage the way you have formulated your submission until the NEG agreement passes its nominal expiry date there will be a duality of agreement coverage or, if my interpretation is the correct one, at all times there will be a duality of coverage once Wind Technology employs the NEG employees in which case there is even an argument is there not that the NEG agreement would bind Wind Technology in respect of all of is Victorian employees.

PN106

MS ZEITZ: That comes back to the 170MB(2) which talks about binding a employer to the extent it relates to the whole or part of the business so I think, in the terms of 170MB, it is limited by its terms to that part of the business that transmits. It is by and large like an award would be at large.

PN107

THE SENIOR DEPUTY PRESIDENT: So it applies only to the Challicum Hills part of the business?

PN108

MS ZEITZ: Yes. Well, that is certainly the view I have taken that provision and if that make sense if the purpose of 170MB(2) is considered that the agreement would continue to have effect with respect to the employees who entered into it or the parties who entered into it.

PN109

THE SENIOR DEPUTY PRESIDENT: Would the Wind Technology agreement also apply to those employees because its field is all of Victoria?

PN110

MS ZEITZ: Yes. It would in its terms, whether it displaces it by force of law is problematic.

PN111

THE SENIOR DEPUTY PRESIDENT: Or whether both agreements apply to the Challicum Hills operation.

PN112

MS ZEITZ: And I guess the way in which we had considered section 170LY was that it talks about in subsection (1) a certified agreement is in operation, it has no effect to the extent of any inconsistency with another agreement certified before it, whose nominal expiry date has not passed and what is not clear from those provisions the interaction between LX and LY is whether the certified agreement there referred to because it doesn't say it has no effect to the extent of another agreement certified. That, in my submission, clearly encompasses the situation such as the one that we have here as opposed to the LX(2) situation where you might say, okay, well an agreement has replaced a previous one.

PN113

THE SENIOR DEPUTY PRESIDENT: So the effect of LY is that until the nominal expiry date of the NEG agreement expires, the Wind Technology agreement would have no operation in respect of Challicum Hills employees but once that date is reached, 31 October, then arguably both agreements will apply to the operations at Challicum Hills?

PN114

MS ZEITZ: Or the Wind Technology agreement effectively replaces NEG.

PN115

THE SENIOR DEPUTY PRESIDENT: Either way you say an order should be made by the Commission to ensure that it is only the Wind Technology agreement that applies?

PN116

MS ZEITZ: Yes. The purpose of the application is to seek clarification really to obtain a very clear way forward for the parties so that everybody understands one way or the other what the outcome is going to be, and so hence the application being made.

PN117

THE SENIOR DEPUTY PRESIDENT: Is the main area of dispute between the parties as to whether the employees will be disadvantaged when the Wind Technology agreement replaces the NEG agreement?

PN118

MS ZEITZ: Yes. Our application essentially is based on the fact that when viewed overall there is no reduction. That issue in its essence is in dispute and Mr Myles is going to give evidence and has produced some further material in response that he would be able to go through on that particular aspect of the matter.

PN119

THE SENIOR DEPUTY PRESIDENT: Yes, well, I think I have sufficiently interrupted you, but I did want to make sure I understood the way in which this case is put.

PN120

MS ZEITZ: Would that it could be straightforward, but I don't know that it can be.

PN121

THE SENIOR DEPUTY PRESIDENT: No, very rarely is, Ms Zeitz.

PN122

MS ZEITZ: And, again, when one looks at 170MBA, of course, in its terms the way in which it defines an incoming employer and hence the reason for the application is that it says another employer becomes at a later time or is likely to become at a later time a successor, assignee, transmittee of the business so it is the act of transmission that creates the incoming employer not the act of employing.

PN123

THE SENIOR DEPUTY PRESIDENT: Yes, how can you be an incoming employer if - because of likely to become, yes.

PN124

MS ZEITZ: And is already an employer, but is also likely to employ and that is clear from what we say is the material.

PN125

THE SENIOR DEPUTY PRESIDENT: So you say you can rely on MBA even prior to the physical - - -

PN126

MS ZEITZ: Prior to the actual employment occurring as long as the business is likely to result in a transmission so hence we have relied on that for the purposes of meeting the criteria for the application and also on the basis that effectively although not an employer the business has otherwise transferred at this point in time which then meets the criteria required by MBA, I think it is (5).

PN127

I thought what I would do to start with perhaps just to outline what I understand to be the statutory scheme behind 170MBA. It contemplates - - -

PN128

THE SENIOR DEPUTY PRESIDENT: Just stopping you again for a moment. What is the transfer time?

PN129

MS ZEITZ: The transfer time is defined in 1(f) as the time at which the incoming employer becomes the successor, transmittee or assignee which is effectively what has happened in the case here. That gives standing to make application for the order under MBA(5).

PN130

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN131

MS ZEITZ: The effect of 170MBA is to contemplate that a certified agreement not transmit with the business and the tests that are to be applied differ from other provisions quite significantly and I think it is worthwhile just identifying what the tests are in applications that might have similar impact or effect because there is quite significant differences. For example, an application to terminate an agreement, which is a section 170NH application, of course, can only be made after expiry of the agreement. Its effect is to remove an agreement altogether with a default position involved either an award if there is an underpinning award or another agreement if there is another agreement available. It requires two things. Firstly, the views of the employees to be ascertained as a precondition, that is mandatory; and it also requires that termination can only occur if it is in the public interest that it do so, so the test for termination is different to the test under 170MBA.

PN132

At the time of certification of an agreement the Commission must be satisfied that it passes the no disadvantage test which is section 170LT(2) and the actual test is defined in section 170XA(2) in identical terms to that which is set out as the test in this provision in 170MBA(2)(a) with one distinct difference. The test is against an award for the purposes of certification. With respect to 170MBA what has been recognised is that the test is against what will occur as a result of the application being granted in terms of the terms and conditions applicable to the employees.

PN133

THE SENIOR DEPUTY PRESIDENT: Yes, so you compare the two certified agreements?

PN134

MS ZEITZ: Yes, in this case you compare the two certified agreements the test is not against the award and hence the level of effort that has gone into doing that comparison.

PN135

THE SENIOR DEPUTY PRESIDENT: I take it that there is a relevant award for both certified agreements, was it?

PN136

MS ZEITZ: I don't think it was, I think it was the Metal Industry Award.

PN137

MR BORENSTEIN: I think in the definitions it refers to both the Metals and the Electrical Award, I am not sure which one was used.

PN138

THE SENIOR DEPUTY PRESIDENT: Yes, I just made the assumption.

PN139

MS ZEITZ: And that is because perhaps just to back track a little, service technicians are the people who are employed on the wind farms and they hold two qualifications, one is an electrical qualification in the electrical trades generally or they hold a mechanical trades qualification so that would be the basis upon which the two awards were referred to.

PN140

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN141

MS ZEITZ: And perhaps just for clarification, on my instructions, the three employees at Challicum Hills, two have electrical trade's qualifications and one has a metal trade's qualification so that is the mix of the classifications at that site.

PN142

THE SENIOR DEPUTY PRESIDENT: Yes, okay.

PN143

MS ZEITZ: The conditions relied on in this application are that the proposed order does not disadvantage the employees so we don't rely on the agreement, and I think it is clear from the submissions of the CEPU that that is a reasonable assumption and, similarly, we don't rely on consent of the employees. Certainly, again is the information we have is that they are awaiting the outcome or my instructions are they are all members of the CEPU.

PN144

THE SENIOR DEPUTY PRESIDENT: Yes, the only section that you rely on is 170MBA(2A)(c)(i).

PN145

MS ZEITZ: Yes, that is the one which is a very long description but, yes, gets it there in the end. So what we say is that there is the certified agreement applicable to all of the service technicians engaged by Vestus Australia Wind Technology Pty Ltd and we say it is a comparable agreement, and we will go to more detail in that in a moment, and that given the relatively few number of employees in total in Victoria, even with the addition of the Challicum Hills employees, it will still number something less then, I think, it is 15 employees in total.

PN146

It is appropriate that there be common terms and conditions. Mr Myles will be giving evidence about the capacity to transfer service technicians between sites to facilitate them being able to work interstate and to providing them with opportunities to work overseas. He instructs me that there are currently service technicians working in both Japan and the United States with the company so the intention and purpose of the application is to ensure that standard terms and conditions apply to all service technicians which forms an appropriate and stable base for the degree of flexibility that they require and that they are able to offer their employees.

PN147

The one part of this exercise which creates again a complication that we perhaps hadn't anticipated before the High Court decision of Electrolux is that there are parts of the NEG Micon agreement that are unenforceable pursuant to section 170NHA which is the amendment that was passed - - -

PN148

THE SENIOR DEPUTY PRESIDENT: NHA? N for Nancy?

PN149

MS ZEITZ: Sorry?

PN150

THE SENIOR DEPUTY PRESIDENT: N for Nancy, NHA?

PN151

MS ZEITZ: N for Nancy. It is the provision that deals with agreements certified prior to 2 September 2004 which the NEG Micon agreement was.

PN152

THE SENIOR DEPUTY PRESIDENT: Yes, that is to preserve the agreement, but it doesn't preserve those clauses.

PN153

MS ZEITZ: So the NEG agreement has operation but there will be parts of that agreement that, for the purposes of comparison, can't be taken into account because they simply don't form this part of the agreement at this time as a result of the Electrolux decision.

PN154

THE SENIOR DEPUTY PRESIDENT: And you will develop that submission and go to those parts at some stage?

PN155

MS ZEITZ: I will do that shortly. Just an historical note, the NEG agreement was entered into at the time when the wind farm at Challicum Hills was being constructed. In its terms, and it clear from the language of the agreement, it deals with the electrical contracting and construction industries although in its drafting it clearly has wider application and has continued to apply.

PN156

THE SENIOR DEPUTY PRESIDENT: Sorry, the electrical constructions and?

PN157

MS ZEITZ: Electrical contracting and construction industries. What is clear in my submission, and Mr Myles will go to this in the evidence, is that Vestas Australia Wind Technology is not engaged in the construction industry. It does establish wind farms and it arranges for construction but itself does not engage in construction and it is most certainly not involved in the electrical contracting industry. It has a stable permanent workforce of service technicians assigned or located at the wind farms that it operates and it is engaged in what is perhaps best described as the power generation industry.

PN158

The purpose of the application as the Commission would be aware from the discussion we have had is to seek clarity about the terms and conditions that will be provided on the NEG Micon business ceasing to operate and employees being engaged whether they be the current NEG Micon employees or new Vestas employees at the Challicum Hills site dealing with the issue of transmission. It might be useful, your Honour, if I perhaps go to the NEG Micon agreement which is ASM3. It is not formally before you, but I am happy to formally tender it.

PN159

THE SENIOR DEPUTY PRESIDENT: I don't think you need to tender an agreement certified by the Commission. The copy in the folder is the Commission copy, is it?

PN160

MS ZEITZ: I am something like 90 per cent sure, but I downloaded this off the wage net website so I have a reasonable degree of confidence that that is where it came from.

PN161

THE SENIOR DEPUTY PRESIDENT: Yes.

PN162

MS ZEITZ: Insofar as particular provisions that we say are matters effectively non-pertaining within the meaning of Electrolux, perhaps if I just go through and list them there if that is the best way?

PN163

THE SENIOR DEPUTY PRESIDENT: Yes. This isn't in your outline, is it?

PN164

MS ZEITZ: No. There are aspects of clause 3, application of the agreement, in particular clause 3.2, which deals with contracts, engineering construction projects requiring negotiation with the union for a specific site agreement; we say that is not a matter pertaining. Clause 7.3.3, again, an agreement to be reached between the union and the company, again, not a matter pertaining. Clause 7, dealing with commitments, in particular 7.3.3, which is clearing with subcontracting. Clause 7.3.4, which is the prohibition of subcontracting. Clause 7.4, which is effectively a right of entry provision consistent with the recent decision of the Full Commission and we would say that one is not allowable. Clause 7.5, which is site project closure.

PN165

THE SENIOR DEPUTY PRESIDENT: What is that decision?

PN166

MS ZEITZ: The decision of 9 September, it is the decision of his Honour, the President headed up the bench and I can’t remember. There are about nine agreements from memory.

PN167

THE SENIOR DEPUTY PRESIDENT: Yes, I know which one you are talking about now.

PN168

MS ZEITZ: I am sorry, I actually thought I had a copy with me but I haven't brought it. Clauses 7.10, 7.11, 7.12 and 7.14 are all matters that are non-pertaining. With respect to hours of work - - -

PN169

THE SENIOR DEPUTY PRESIDENT: Are any of those matters, matters that have been referred to by Mr Borenstein why his agreement is superior to yours?

PN170

MS ZEITZ: No.

PN171

THE SENIOR DEPUTY PRESIDENT: That will make it a little bit easier, perhaps?

PN172

MS ZEITZ: Yes. But really the purpose of this is simply to identify that there are a number of issues within the agreement.

PN173

THE SENIOR DEPUTY PRESIDENT: Yes, I appreciate that, thank you.

PN174

MS ZEITZ: Clause 8, insofar as hours of work can only be varied by agreement between the company, the majority of the employees and the ETU state secretary, we say that the requirements for the ETU state secretary renders that a non-pertaining matter. The dispute settlement procedure insofar as in clause 12.2 it requires facilities to be provided to shop stewards and the like we say it is non-pertaining. Clause 13 in its entirety I think is non-pertaining. Clause 15, the ETU picnic day which is a matter that is identified in the comparison, we say, is a non-pertaining matter.

PN175

THE SENIOR DEPUTY PRESIDENT: Doesn't that just fall within the decision in Schefenacker that says that if you can grant leave that leave is a pertaining leave, leave of absence?

PN176

MS ZEITZ: Yes, Schefenacker does say that. I suppose there are two things we would say about that. One is that it defines its terms, construction sites and other agreed sites so we would say that because the wind farms don't operate as a construction site perhaps I should qualify it as a more relevant matter.

PN177

THE SENIOR DEPUTY PRESIDENT: Yes, because there were no agreed terms.

PN178

MS ZEITZ: They are not a construction site and we would say it is not a comparison that can be drawn.

PN179

THE SENIOR DEPUTY PRESIDENT: Yes, we will relegate that to the other part of your submission.

PN180

MS ZEITZ: Yes. There is an issue under clause 18 dealing with payments for severance pay and insurances which is clause 19 dealing with income protection. I do note the recent decision of the Full Bench on dealing with income protection issues, however, what we would say is that there is certainly an argument about the extent to which those provisions in their terms are pertained to the employment relationship, and I will address more on the question of merit at a later point that the absence of a specific provision in the agreement does not, of course, absolve the employer from the responsibility to make severance payments in public circumstances so that goes to a weighting issue rather than an alternative.

PN181

Other issues such as safety management schemes and the like we say are not matters pertained because they involve third parties to the employment relationship.

PN182

THE SENIOR DEPUTY PRESIDENT: Sorry, which clause is that?

PN183

MS ZEITZ: That is clause 31, also an issue of relevance, your Honour. Perhaps also if I clarify in terms of the appendices to that agreement putting aside the allowances of appendix A, insofar as that site is concerned appendix B has no application.

PN184

THE SENIOR DEPUTY PRESIDENT: On what page do I find appendix B, please?

PN185

MS ZEITZ: It is page 38, your Honour. Page 62 is appendix C and that applies to non-construction work so has application. Appendix D which is at page 68 is workshop work which is not applicable. Appendix E which is the cottage sector metropolitan is not applicable. Page 78, which is appendix F, country work, is not applicable and that is as a result of the operation of the exclusion provision which specifically provides that the wages do not apply to employees who perform work in the electrical supply, power generation and electricity distribution and transmission industry which is what this business is.

PN186

Appendix G, which is found at page 85, which is drug and alcohol policy, we certainly don't ..... with the intention of it so, well, there might be an issue about some aspects of it, but the overall intent is not something that which there would be huge debate.

PN187

Where that leads to, in our submission, is that when an assessment is done of the general pattern of work that is undertaken or carried out by the employees in terms of their hours, the agreement that applies to Wind Technology is at least comparable to and, in some instances, more favourable then the NEG agreement, and most certainly will not, on balance, result in reduction in overall terms and conditions of employment particularly given that the agreement that is proposed, that is the Vestas Australia Wind Technology agreement, has a period of operation to run, and there are scheduled wage increases during the life of that agreement, whereas, the NEG agreement has a very short life span remaining to it and comes to end on 31 October but I think one wage increase in October and that is the last wage increase available to the expired agreements.

PN188

Just by way of some further background, the employees engaged on these sites are service technicians and that is what they are called. They are typically qualified in electrical and mechanical trades. They don't require specialist qualifications. Vestas undertakes all the training that is required to maintain and operate the turbines that apply.

PN189

THE SENIOR DEPUTY PRESIDENT: What did you say they are typically qualified in?

PN190

MS ZEITZ: Mechanical or electrical trades. Generally, on my instructions, the average hours worked are about 45 hours per week and that is, upon my understanding, consistent across all of the sites, and so we say that for the purposes of the most direct and relevant comparison those are the sorts of hours and rosters that it is appropriate for the Commission to be considering because that is the reality of what is applying in the workplace.

PN191

THE SENIOR DEPUTY PRESIDENT: And currently at Challicum Hills?

PN192

MS ZEITZ: Yes.

PN193

THE SENIOR DEPUTY PRESIDENT: So it shouldn't be too hard to make a comparison between what a person under the NEG agreement currently earns at Challicum Hills, and what that person would earn working those same hours under the Wind Technology agreement?

PN194

MS ZEITZ: And Mr Myles has actually gone through and done some - - -

PN195

THE SENIOR DEPUTY PRESIDENT: That is the part of the documentation I haven't looked at.

PN196

MS ZEITZ: What he has done in response to a matter quite properly raised in Mr Coffey's statement was that he had overlooked a wage increase which is to occur, I think, on 1 October, so Mr Myles has actually reworked the figures and prepared a further statement which I have provided to my friend this morning. The statement is prepared on the basis of, hopefully, being able to sort of get to the heart of what the factual issues are, and it is not intended to - - -

PN197

THE SENIOR DEPUTY PRESIDENT: Yes, I have forewarned Mr Myles that he will need to do a fair bit of fundamental explanation to get me to understand the figures.

PN198

MS ZEITZ: And he is the right person to do it, I am not even going to pretend, your Honour, that I ..... that is something that is well and truly across and it is probably appropriate at this point, unless you have any further questions, if I call Mr Myles and he start to give his evidence.

PN199

THE SENIOR DEPUTY PRESIDENT: Yes, I think I have disturbed you sufficiently, Ms Zeitz.

PN200

MR BORENSTEIN: Your Honour, just a point. I would like to seek an adjournment of the matter just for two reasons. One reason is that we have been given a hefty supplementary statement which raises some new matters as well as raising a lot of matters in reply. I have had no opportunity to go through this and analyse it and be in a position to actually cross-examine on it which I would like to be able to do and, secondly, in respect of the new submissions put by Ms Zeitz about the Electrolux issues which weren't raised in her primary submissions and really should have been because they were aware of the two agreements and in doing a comparison so in that respect I would expect Ms Zeitz to actually provide submissions on the basis upon which she says are the relevant clauses that don't pertain and the relevant authorities.

PN201

THE SENIOR DEPUTY PRESIDENT: I am not sure from the ..... that Ms Zeitz gave me this morning that any of them will really go to the no disadvantage test.

PN202

MR BORENSTEIN: I have circled about four of them. There is about four that would go to the no disadvantage test.

PN203

THE SENIOR DEPUTY PRESIDENT: How long are you seeking, Mr Borenstein?

PN204

MR BORENSTEIN: If Ms Zeitz is able to get to me her submissions I can give her the clauses which we have to reply upon so that shortens the amount of submissions she has to do on the Electrolux issues.

PN205

THE SENIOR DEPUTY PRESIDENT: They won't effect your cross-examination of Mr Myles, will they?

PN206

MR BORENSTEIN: No, they won't effect the cross-examination. In respect to the cross-examination, I would prefer to be able to have the rest of today to actually prepare in response to that.

PN207

THE SENIOR DEPUTY PRESIDENT: We will see what Ms Zeitz says first.

PN208

MS ZEITZ: I am just wondering in order to facilitate it if it wouldn't perhaps be preferable if Mr Myles at least gives the evidence-in-chief and we go through it and then that is all on the record and my friend has had an opportunity to hear it.

PN209

THE SENIOR DEPUTY PRESIDENT: That was going through my mind.

PN210

MR BORENSTEIN: I am happy with that.

PN211

MS ZEITZ: I am mindful that some of the issues that we are now raising perhaps we hadn't clearly identified. We didn't, however, raise the Electrolux issue in the actual application so it is identified as a ground in the application as filed.

PN212

THE SENIOR DEPUTY PRESIDENT: I missed it too I must say but, anyway, I think we will deal with Mr Myles's evidence-in-chief then we will adjourn until tomorrow.

PN213

MR BORENSTEIN: Okay. Some of the matters in the affidavit I would say aren't relevant and I just reserve my right in respect of those.

PN214

THE SENIOR DEPUTY PRESIDENT: Yes, do you want to deal with those, do you want to take formal objections?

PN215

MR BORENSTEIN: I might do that when we come back tomorrow.

PN216

THE SENIOR DEPUTY PRESIDENT: I will reserve that right.

PN217

MR BORENSTEIN: Thank you.

PN218

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Myles.

<ANTHONY SCOTT MYLES, SWORN [11.15AM]
<EXAMINATION-IN-CHIEF BY MS ZEITZ

PN219

MS ZEITZ: Mr Myles, by whom are you employed?---Vestas Australia Wind Technology.

PN220

What position do you hold there?---I am the human resource manager.

PN221

Do you have any responsibility for the employees engaged at the wind farms?
---Yes, I do.

PN222

What is that responsibility?---I am responsible for all employment related matters in Australia and New Zealand.

PN223

Who do you employ at the wind farms?---We employ service technicians and also at our larger wind farms we employ site supervisors.

PN224

Challicum Hills, is that one of the larger facilities?---No, it is not.

PN225

THE SENIOR DEPUTY PRESIDENT: What do you call them, windmills?
---Wind turbines.

PN226

How many are there at Challicum Hills?---There is just over 20. Some of our larger wind farms would typically have anywhere up to around 60.

PN227

MS ZEITZ: Just for comparison purposes, do they all have the same turbines or do they vary according to location, size, output?---There are a number of different wind turbine generators that are used at different sites. Different wind turbines are used for, I guess, to maximise their performance in different regional areas.

PN228

Can you just briefly explain the range of turbines that are used by Vestas in Australia?---In Australia we use turbines that, I guess, we refer to them as models ranging from a V47 up to a V90.

PN229

THE SENIOR DEPUTY PRESIDENT: Whatever that means?---Yes, the V is for Vestas. Basically in size, I guess, the diameter of a blade circumference can be as much as 90 metres so, effectively, you are looking at a blade that is getting along close to the length of a big swimming pool and they generate different amounts of power and output ranging from below 1 megawatt up to, potentially, 3 megawatts of power each.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN230

For those of us who don't operate in the industry, a megawatt would generally power how many houses?---A traditional turbine here in Australia that generates around 2 megawatts, 1.8 to 2 megawatts of power, will power up around two and a half thousand homes consistently.

PN231

For a wind farm of approximately 20, which is the Challicum Hills, there is how many employees engaged?---There is currently three employees.

PN232

THE SENIOR DEPUTY PRESIDENT: What do they do?---They undertake scheduled and preventative maintenance.

PN233

MS ZEITZ: Typically, what sort of maintenance is required?---It is scheduled maintenance, I am not an engineer by trade myself or anything, but we have a warranty operational maintenance agreement with the companies that purchase the turbines and through that we have to make sure that they are operating to certain standards. Our objective is to ensure that we maintain availability for our customers.

PN234

THE SENIOR DEPUTY PRESIDENT: Availability of how?---The availability of the wind turbine, we can't control the wind, but if our customer wishes to engage - - -

PN235

I think you said you had an obligation to customers who purchase the turbines, did you mean the turbines, or the power generated by them?---The turbines.

PN236

You need to explain that to me. I thought you owned the turbines and operated them?---We don't own the turbines, we just maintain them as part of the warranty operational maintenance agreement.

PN237

So different companies own the turbines and Wind Technology provides the maintenance for them?---The maintenance and management of them.

PN238

I had the impression that you install them and arrange for the construction of them, but that is on behalf of somebody else?---That is correct.

PN239

MS ZEITZ: Perhaps that is my failure to make that clear, and I apologise for that.

PN240

THE SENIOR DEPUTY PRESIDENT: It is so easy to assume knowledge when one hasn't oneself.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN241

MS ZEITZ: In respect of these proceedings did you prepare a statement that was filed with the application?---Yes, I did.

PN242

Have you had an opportunity to look at that statement?---Yes, I have.

PN243

Is it true and correct?---Yes, it is.

PN244

MS ZEITZ: I formally tender the statement of Anthony Scott Myles which was filed with the application together with the attachments to that.

EXHIBIT #A1 STATEMENT OF ANTHONY SCOTT MYLES DATED 23/08/2005

PN245

MS ZEITZ: Have you recently prepared a further statement?---Yes, I have.

PN246

Have you had an opportunity to look at that statement?---Yes, I have.

PN247

Is that true and correct?---Yes.

PN248

MS ZEITZ: I seek to tender that, if the Commission pleases.

EXHIBIT #A2 FURTHER STATEMENT OF ANTHONY SCOTT MYLES DATED 19/09/2005

PN249

MS ZEITZ: With respect to the further statement did you have an opportunity to look at Mr Coffey's statement?---Yes, I have.

PN250

MR BORENSTEIN: I might just hand up a copy it might be in a better form seeing as I emailed the documents through.

PN251

THE SENIOR DEPUTY PRESIDENT: Mine seems pretty good.

PN252

MR BORENSTEIN: Does it? Attachment 2 might be easier to read.

PN253

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Borenstein.

PN254

MS ZEITZ: With respect to the question of classification structure Mr Coffey writes that the NEG agreement provides for higher classifications by reason of incorporating the award classification structure. This agreement has only the service technician classification, I think, is that correct?---There is actually two, there is the service technician and the site supervisor.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN255

And what is the reason for the classification structure that has been adopted by Vestas?---They are the classifications that are pertinent and relevant I guess to the activities undertaken on the wind farms.

PN256

THE SENIOR DEPUTY PRESIDENT: Sorry, the only classifications that are permanent and relevant, did you say? Pertinent or permanent?---Appropriate, I thought I said.

PN257

I didn't hear you?---They are applicable and appropriate to the business activities.

PN258

How were those classifications derived?---We actually went through a process of consultation with our employees. Some of those employees who have worked with Vestas here in Australia for some time, but also Australians who had worked with Vestas overseas for extended periods of time.

PN259

I notice from that service technician classification there is no differentiation between mechanical and electrical trades, for example, is there a reason for that?
---No. That was certainly at the request of our employees they sought there to be no differentiation between any of the trades.

PN260

With respect to travel allowance, the attachment notes that where the employee starts and/or finishes at depot, there is a provision for payment of $4.84 a day, are you able to say what occurs with the Challicum Hills' employees?---The Challicum Hills' employees are required to make their own way to the depot, from there they are paid for all time worked.

PN261

And how do they actually get to the site?---They make their own way. From the depot to the site is all in service vans and the vehicles that are provided by the company.

PN262

Can you just explain while we are on travel in terms of how the employees are allocated across Vestas are they dedicated to one site only or is there a capacity for them to work elsewhere?

PN263

THE SENIOR DEPUTY PRESIDENT: Just before you go that Ms Zeitz, so does that mean under the NEG agreement that travel allowance would not apply to your employees because they don't travel from the depot in their own vehicle, is that what you are saying?---All travel from the depot to the site is paid time in company vehicles. All travel to the depot is in their own time.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN264

How do you say the clause 28 in the NEG agreement applies or doesn't apply to your employees? I am just trying to understand the basis of what you are putting to me?---I am sorry, I am making the statement that our employees attend work in their own time.

PN265

And what about under the NEG agreement?---There is mention of an allowance there of $4.84 which we believe is appropriate if they are working at a construction site or project site.

PN266

So that wouldn't apply to your employees covered by that agreement?---That is correct.

PN267

That is what you say, yes, Mr Borenstein may ask you some questions about that, at least I understand the way you are putting it, thank you.

PN268

MS ZEITZ: With severance pay there is an amount paid into a fund under the NEG agreement. What if any arrangements are there for Vestas employees?---No, the only arrangements available for the Vestas employees are those to any employee under the Workplace Relations Act. We don't make any additional payments to a particular fund.

PN269

Is that something that applies to just service technicians or is that company wide?
---That is a company wide policy.

PN270

Do you employ any transitional or casual employees?---No.

PN271

All permanent employees?---All permanent employees.

PN272

THE SENIOR DEPUTY PRESIDENT: Is that the intention for the future?
---Absolutely.

PN273

MS ZEITZ: I think before his Honour asked you a question I was asking about travel. What arrangements exist for travel between sites in Victoria?---There are arrangements for employees to travel within Victoria and/or to other states. The employees are provided with all accommodation, meals plus a daily allowance for time away, they are paid actually from the time they leave their accommodation until they return. The objective of that is a number of employees request the opportunity to work at other wind farms to gain experience on different wind turbines so then they can pursue other opportunities either in Australia, New Zealand or another country.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN274

Is it relatively common or uncommon for a service technician in Australia to be able to work overseas?---It is relatively common, it is encouraged widely throughout the company throughout the world. I have got a number of employees for whatever reason want to return to parts of the world where their family originates from et cetera.

PN275

Is that facilitated by the company?---Absolutely.

PN276

Does that apply to human resources managers?---No, it doesn't, not at this stage.

PN277

The attachment also talks about the working of ordinary hours and RDOs, rostered days off, how are hours established within farms?---The hours of work are established through agreement and consultation with the employees in line with the operational requirements and service obligation.

PN278

Do you go out to the wind farm and say these are the hours we want you to work or is something that the employees work out and come back to you and say this is the way we want to work it?---Typically the site supervisor will indicate these are the hours of work that they believe are necessary to do it unless there is any reason to disagree with them they implement them.

PN279

Does that facilitate people taking time off or days off?---Yes, we have had some typical examples particularly during the summon months employees wishing to start earlier or finish earlier and also for some employees to work longer hours during the day so that they can maximise and have a day off each week so it gives the flexibility to work that in.

PN280

Is that worked on a company policy basis or a self managed team basis?---The whole objective is that we get to a situation where the site teams is a very much a self managed team.

PN281

I note there is no income protection insurance as there is under the NEG agreement, what if any facilities are available for employees?---Under the - if an employee chooses, I guess, to take the employer default fund, they can elect to have an income protection life insurance and other benefits like that through that scheme but otherwise throughout the company it is not available.

PN282

So it is a matter for the individual?---It is an individual matter to decide.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN283

Direct their salary and they choose?---That's right.

PN284

THE SENIOR DEPUTY PRESIDENT: What cost is that to the employee to be covered by the company policy?---By the company policy it is just a cost taken from their superannuation company contributions they can elect to have that or alternatively understand that if they took up a private scheme that that is fully tax deductible.

PN285

And do you know what the cost is?---It does vary. I believe the cost is - I don't - I wouldn't be able to given an exact figure at the moment.

PN286

MS ZEITZ: Are you able to give an approximate figure?

PN287

THE SENIOR DEPUTY PRESIDENT: Perhaps you might find that by tomorrow?---Yes, I think I can, I can certainly do that.

PN288

MS ZEITZ: With respect to training, the attachment identifies no need to reimburse training expenses but that there is a requirement that if people leave Vestas within 12 months then they have to reimburse. What is the training scheme that applies?---With the service technicians there is a great deal of training they undertake which we generally refer to as compliance training everything from first aid, working at high voltage operator. There is no obligation on any employees to reimburse the company for that training. The reimbursement scheme within 12 months of leaving is for any training they elect or request to undertake such as pursuing an engineering degree, it could be a management degree or other sort of studies and that, that area.

PN289

Have you got some examples of the sorts of studies that service technicians have undertaken?---I have some service technicians - I know of one service technician I believe that is undertaking an engineering degree, an electrical engineering degree. I recently had some interest in some others who are looking to commence studies in front line management for the future.

PN290

Is that facilitated by the company?---That is, yes.

PN291

The repayment is if people leave in those circumstances within the 12 months?
---Yes, and employees are only required to pay back any costs incurred in the previous 12 months as opposed to the full cost of the study.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN292

There is a mention there of overtime penalties, but when we come to look at your material we will come to that. No annual leave loading?---There is no annual leave loading in the company.

PN293

Occupational health and safety training, is that undertaken by the company at all?
---It is, it is.

PN294

The call back allowance, there is a minimum of three hours under Vestas in four and the NEG, is that something that is a frequent occurrence?---It is not a frequent occurrence at all. Call outs are generally undertaken when absolutely essential.

PN295

Just as an example, what are the sort of circumstances where a call out will occur?---If there was a major shutdown of some of the wind turbine generators et cetera. The wind turbines can be remotely managed even from Denmark through the outside hours and a great number of faults can be dealt with from that and as such avoid the need for enquire.

PN296

Can you just explain that?---The starter systems et cetera allow them to take positive control of the wind turbine and as such I guess correct what might be errors that occur and basically switch the turbine back on and then the service technicians will come in in the morning and there will be reports on their laptop of what has occurred overnight.

PN297

And whether there needs to be any maintenance?---Absolutely, yes.

PN298

First aid allowance, how is that paid?---All employees on site are paid a first aid allowance regardless of whether they are a nominated first aid officer or not.

PN299

Long service leave, there is a reference in that attachment to the portable long service leave scheme. What happens with respect to your employees?---Our employees are covered by the appropriate state legislation and it is not a portable scheme. There is no portable scheme in place for any employees in Vestas.

PN300

The ETU picnic day, they don't get it?---No, they don't get it.

PN301

With respect to the attachment to the copy statement where it sets out, I think it is attachment 2, it sets out some calculations?---Yes.

PN302

Have you undertaken any calculations as a result of seeing that document?---I have taken further - I have only done some further calculations based on that information and on further additional set of calculations based on a subsequent increase in Vestas's agreement in January.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN303

Are they attached to that statement that has been tendered?---They are.

PN304

Perhaps we can just go to that statement and if I can just take you to paragraph 6. You there refer to the hourly rates are based on a qualified electrician?---Correct.

PN305

You said earlier that not all employees engaged on the sites are qualified electricians?---That is correct.

PN306

Are they all paid the same rate of pay irrespective?---No, there is a difference between rates of pay under the NEG agreement, but with Vestas all service technicians are paid the same rate of pay.

PN307

If I understand it at Challicum, for example, under the current NEG agreement the mechanical tradesperson would be on a lower rate of pay?---That is correct.

PN308

If that person came across and worked for Vestas they would go onto the service technicians rate, is that correct?---That is correct, the mechanical trade would be on a higher rate.

PN309

If I could perhaps take you to the summary of earnings as at September 2005, which the nominator is ASM6?

PN310

THE SENIOR DEPUTY PRESIDENT: Sorry, where are you? ASM6?

PN311

MS ZEITZ: ASM6.

PN312

Can you just explain to his Honour what the facing page is, what that represents?
---That is an overview of the three different rates of pay. They are those rates of pay under the Vestas agreement in comparison to those rates of pay under the NEG Micon agreement for those electrical and non-electrical trades. On the subsequent page they are, I guess, examples of the different working arrangements comparing one against the other.

PN313

THE SENIOR DEPUTY PRESIDENT: Are they real examples?---They are true and correct examples.

PN314

They are taken from actual rosters, are they, that have been worked?---Yes, that is an example of the common work arrangement that occur.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN315

MS ZEITZ: Looking at those different arrangements that you have identified, which of those do you understand is the one most likely to be applicable at Challicum Hills?---It is probably most likely around the 45 hours per week.

PN316

You have got two scenarios there, one is scenario one and one is scenario two. If you can just explain for the Commission the difference between the two and what you based that on?---The difference is on hours being worked. With the 38 hour week we have got a traditional 7.6 hours being worked each day and then scenario two, different hours of work where there is four days of eight hours and one six hour day.

PN317

At Challicum Hills, which of the two is worked most often?---Generally, they would be working a 40 hour week.

PN318

So that is the eight hour day?---That would be an eight hour day each day.

PN319

THE SENIOR DEPUTY PRESIDENT: Sorry, I am lost. I thought you said most of them work a 45 hour week and I'm looking at those scenarios under 45 hour week, am I looking in the wrong place?---No, typically throughout the Vestas business and it has been, I guess, typical of the Challicum Hills site on average employees would work around 45 hours per week.

PN320

MS ZEITZ: And that is made up of, just so I can be clear, about eight hours Monday to Friday and then some overtime on the weekend?---That is correct. It could be a weekend; it could be overtime on one particular day et cetera.

PN321

THE SENIOR DEPUTY PRESIDENT: So the scenario two is the most likely scenario is it for a 45 hour week?---That is correct.

PN322

MS ZEITZ: And you there set out your calculation for the NEG Micon and the Vestas agreements?---I have. Further to my last statement, if I can, actually scenario one, 45 hour week, is probably more of a realistic calculation, but it is fair to say that scenario two with some Saturday work would be worked at times.

PN323

But weekends are relatively rare?---That is the objective, yes.

PN324

When you say that is the objective, why is that the objective?---To maximise time off for employees et cetera.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN325

When you look at those two scenarios, am I correct in understanding that the total weekly earnings that falls under the Vestas agreement is $1533.43, is that correct?---That is correct.

PN326

And your calculation is that it is $1405.88 for NEG Micon?---For an electrician.

PN327

And without the electrician's allowance it is $1355.87?---That is correct.

PN328

Those figures, am I correct in understanding, don't include severance or income protection?---They don't include those allowances or payments.

PN329

And my rough calculation is that for the electrician, or the electrician's allowance, that is a difference of $53 a week approximately?---Yes.

PN330

THE SENIOR DEPUTY PRESIDENT: We can all do the figures, Ms Zeitz.

PN331

MS ZEITZ: Sorry, I wasn't sure if you wanted me to actually identify the actual difference and probably not to.

PN332

THE SENIOR DEPUTY PRESIDENT: Yes, you can do that either now or in submissions.

PN333

MS ZEITZ: I might do them in submissions.

PN334

THE SENIOR DEPUTY PRESIDENT: Yes. No doubt somebody will do a calculation that includes the severance and income protection allowances to tell me what those figures would mean.

PN335

MS ZEITZ: Generally, my understanding is the income protection is $16.50?
---$14.50.

PN336

And $55 for the severance which would make it $69.50?

PN337

MR BORENSTEIN: Set out in attachment two to Mr Coffey's statement.

PN338

MS ZEITZ: Going to the next attachment, which is ASM7, do I understand that you worked these figures out on the basis of the increase under the NEG agreement?---That is correct.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN339

So the calculation for the material - that summary is based on the same assumptions, is that correct?---That is correct.

PN340

Again, concentrating on the 45 hour week scenarios one and two, the Vestas stays the same because there has been no wage adjustment I assume?---That is correct.

PN341

And the NEG increases to $1440.69 again excluding severance and income protection?---That is correct.

PN342

And without the electrician's allowance, $1390.69?---Correct.

PN343

And going through finally to the last attachment, what does this incorporate?---An increase in January will occur in January 2006 from the Vestas agreement.

PN344

THE SENIOR DEPUTY PRESIDENT: Is that ASM8 is it?

PN345

MS ZEITZ: Yes.

PN346

THE SENIOR DEPUTY PRESIDENT: So that takes into account the Vestas increase from?---In January 2006, Vestas will pay for it in January 2006.

PN347

MS ZEITZ: Again, the calculations behind the summary sheet, are they still the same information?---That is correct.

PN348

And that shows an increase in the Vestas rate to $1579.39?---Correct.

PN349

And maintains the rates of the other two from .....?---That is correct.

PN350

If I can just take you to paragraph 7 of your further statement, you refer there to, I am assuming, Mr Coffey's calculation of overtime?---That is correct.

PN351

Can you just explain that to the Commission?---In the calculations presented under the current arrangements, employees work eight hours per day and .4 hours are accrued at normal time rates for an RDO. In the examples submitted by the CEPU that .4 hours has been included and, as such, represented as overtime rates incorrectly. So this comparison that has been put forward is not a correct indication of the earnings.

PN352

You dealt with the severance pay and income protection at paragraph 8. You say that the payments are not made direct to the employees, who are they paid to?
---Income protection under the NEG agreement?

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN353

Yes?---It is a protect scheme.

PN354

What about severance pay?---No, that is the protect scheme.

PN355

The income protection insurance?---That is the protect scheme as well under the NEG agreement.

PN356

You set out your understanding of severance pay entitlements at paragraph 9?
---That is correct.

PN357

Is there any policy or approach that is adopted by Vestas with respect to redundancy?---Entitlements are in accordance with the Workplace Relations Act. It is common practice for the company to base all entitlements on that and payable in the event that they are required.

PN358

When you say on the Workplace Relations Act?---That table as indicated there is exactly what we follow.

PN359

So in effect what you have done, if I am to understand it, is to pick up the most recent test case that led the Commission to apply that?---That is correct.

PN360

At paragraph 10, you refer to some specific examples here in the spreadsheet, can you just explain why you say they are not applicable?---There are some examples of nightshift work et cetera being undertaken on site, that has not and does not occur, we just do not undertake work outside of daylight hours et cetera like that, we couldn't and wouldn't so it is just an inappropriate example to put forward.

PN361

When you say couldn't and wouldn't is there particular reasons why not?---We would probably have to put up some lights like at the MCG just to go and work at night so it is just impractical and unsafe and we wouldn't do it.

PN362

Just so that we can perhaps get an understanding of the nature of the work, I assume that these turbines or these blades sit on top of a fairly tall tower?---On a nacelle, a square box.

PN363

So if there is to be maintenance work done on the turbine, how do people access that?---Access it through the internal and upper ladder et cetera, full safety equipment et cetera, and they are able to alight and descend through the internal tower.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN364

You don't have people trying to scale up the outside?---No, and we have not undertaken work in those hours, it just doesn't happen. I have further asked our service manager if he is aware of those sort of hours being worked and he suggested not, and we would support it.

PN365

In example five you also refer to - - -

PN366

THE SENIOR DEPUTY PRESIDENT: I thought we were talking about example five, weren't we?---Sorry, I was referring to example one in that last example. In example five, the break between working on Monday and Tuesday is less than ten hours. The hours worked under the Vestas agreement, I believe, are being listed as ordinary hours, and that is incorrect, they would actually be penalty rates and be paid at double time and that is covered in the Vestas agreement and clause 24.5.

PN367

You have talked about the first aid allowance, is there some reason why it is paid to everybody?---The objective is always to have everybody skilled up and trained and so that anyone is available to render first aid if necessary. People do move around to other wind farms if they wish to encourage that. People do go on holidays, sometimes teams find themselves working odd rosters et cetera, so everyone is trained up to administer.

PN368

In paragraph 13 and following there is a whole series of calculations, can you just summarise those for the Commission?---The calculations put forward there are those that we refer to in the attachments. The clearly indicate, I guess, the three different scenarios that have been reviewed. Those current, I guess, that were in the time of September then undertaken in November which includes an increase under the NEG agreement and then those again in January following the increase in the Vestas agreement. In all the examples the Vestas agreement provides additional earnings. It clearly does in all examples. This currently - that varies under a 45 hour week for almost $130 for an electrical trade, up to almost $180 for a non-electrical trade. Employees will be better off under the Vestas agreement. In January 2006, again, electrical trades would be almost $140 better off. Non-electrical trades would be almost $190 a week better off.

PN369

At paragraph 13.2 you talk about flexibility in working hours. Is there any bar to working RDOs or to have any system of RDOs operating?---There is no bar to that at all. What we have introduced is a system where there is flexibility with the working hours that can be worked. I have given some examples there I have where should employees agreed to it is possible for them to work, for example, ten hour days over four days and as such work a four day week, get paid their 38 hours plus two hours overtime. In summary if we compared that against the NEG agreement, after four weeks you could effectively work 152 hours at Vestas at normal time, you would be paid eight hours of time and a half and you could have worked on 16 days. Under the NEG agreement you would have worked a total of 160 at normal hours at normal time and worked 19 days. So clearly the earnings and payments, wages made to employees is superior under the Vestas agreement and they are enjoying more time off. Those work rosters and everything is determined by the site team.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN370

If you could perhaps look at clause 13.3.9 which is the living away from home allowance?---Mm.

PN371

How does that operate compared to the NEG agreement?---The NEG agreement makes the same that the company is required to provide suitable accommodation and three meals a day or pay the employee $80 per day. Under the Vestas agreement, Vestas provides all transport, accommodation, meals plus an additional $20 per day.

PN372

Is there a particular standard of accommodation?---There is a minimum of 3.5 star. With our employees that travel overseas et cetera they are also issued with company credit cards for miscellaneous expenses et cetera such as that.

PN373

The supervisor allowance at 13.3.10, how does that work?---At the sites the supervisor is appointed. Under the Vestas agreement where they are in charge of a certain number of employees an appropriate allowance is paid. That is actually factored in to their normal time earnings and overtime rates and the Vestas agreement is far superior to that of the NEG agreement.

PN374

How is a site supervisor appointed?---At each site employees are requested to nominate themselves then an area service manager and the service manager will meet with them and interview them for the position.

PN375

Is there any rotation of that between employees?---The rotations generally occur if the site supervisor departs. Some teams have indicated that it maybe something that they want to look at rotating through so everyone gets an opportunity, I guess, to develop themselves, we are agreeable to that.

PN376

THE SENIOR DEPUTY PRESIDENT: Did I understand you to say there is no site supervisor at Challicum Hills?---There is not one at the moment, but there is one employee that has indicated that he is interested in that.

PN377

And is it the intention to appoint an employee as a site supervisor?---Yes, there is.

PN378

MS ZEITZ: Why is there not a site supervisor at the moment?---The site supervisor is no longer there.

PN379

Just going to the attachment, looking at example two, day shift, is that a fairly typical set of hours?---Under the NEG agreement if they were to work that type of arrangement then there would be no accrual for RDOs at all.

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN380

THE SENIOR DEPUTY PRESIDENT: Which one are we looking at?
---Example number two, day shift. There is actually no accrual in there for an RDO which I believe is a requirement of the NEG agreement.

PN381

MS ZEITZ: And example three?---Again there is no accrual there for RDOs at all.

PN382

THE SENIOR DEPUTY PRESIDENT: Does that have a bearing on the income?---It is actually reduced so the normal hours that an employee under the NEG agreement is required to work. Typically, they are required to work 40 hours per week to accrue time for an RDO. When compared to the Vestas agreement, 40 hours would entitle the employee to two hours of overtime, which they are not entitled to under the NEG agreement.

PN383

MS ZEITZ: That structure of working hours, the 7.6 hours, and then some overtime on Saturdays, is that common?---No, typically we avoid working routines like that as much as possible. There is an indication of a 7.6 hour day on a Saturday so that is not a typical working routine at all.

PN384

Example four, which is a 50 hour day shift with 10 hours Saturday overtime, how does that compare to your or to the Vestas sites?---Well, under that example there, again, there has been no accrual for RDOs taken. That would be a work routine, I guess, worked at a - where there was a significant work load required, it would be a somewhat unique situation.

PN385

Would that sort of situation potentially occur if a commission project was happening?---That is true.

PN386

Can you explain what a commission project is?---I guess the life of a wind farm goes through an installation process and then there is a commission process which can, depending on the size of the wind farm, take anywhere between one to two months and then we enter into the service and maintenance period.

PN387

Is that sort of roster more appropriate for what you would call a commission phase?---That would be typical for a commissioning phase or some exceptional requirement to work, a retro fit, if there has been a recall on a particular part that had to be attended to, it is an exception.

PN388

That would be what you would call an atypical roster, is that correct?---Sorry?

**** ANTHONY SCOTT MYLES XN MS ZEITZ
PN389

That would what would be called an atypical roster, something that might be worked occasionally?---That is correct, yes.

PN390

If I can just take you to the fifth example, is it common for people to start work at 4 am?---It is not, not at all.

PN391

I understood for you to say earlier that predominantly daylight hours so people wouldn't be allowed to start before dawn, effectively?---It would have to be some exceptional requirement for that to occur.

PN392

Similarly, with the hours referred to there as 6 pm to 10.30 pm for four hours?
---Correct.

PN393

I note these are all finishing at 10.30 and 11.30 at night so that is a shift that simply wouldn't be worked?---No.

PN394

MS ZEITZ: Your Honour, I have finished with my questions.

PN395

THE SENIOR DEPUTY PRESIDENT: I have no further questions at this stage.

PN396

MS ZEITZ: I am assuming my friend would like to reserve and consent.

PN397

MR BORENSTEIN: Yes.

PN398

THE SENIOR DEPUTY PRESIDENT: In accordance with the agreed procedure, we will adjourn until 10.15 tomorrow morning.

<ADJOURNED UNTIL WEDNESDAY 21 SEPTEMBER 2005 [12.05PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

ANTHONY SCOTT MYLES, SWORN PN218
EXAMINATION-IN-CHIEF BY MS ZEITZ PN218
EXHIBIT #A1 STATEMENT OF ANTHONY SCOTT MYLES DATED 23/08/2005 PN244
EXHIBIT #A2 FURTHER STATEMENT OF ANTHONY SCOTT MYLES DATED 19/09/2005 PN248