C2005/5202, Transcript of Proceedings [2005] AIRCTrans 2430 (29 November 2005)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 13492-1

SENIOR DEPUTY PRESIDENT ACTON

C2005/5202

NATIONAL UNION OF WORKERS
AND
PLIANT CORPORATION PTY LTD
s.170LW - Application for settlement of dispute (certification of agreement)
(C2005/5202)

MELBOURNE

9.36AM, WEDNESDAY, 16 NOVEMBER 2005

Continued from 26/10/2005

Hearing continuing

PN1

MR A PORTELLI: I appear on behalf of the National Union of Workers. With me is MR M KILKENNY.

PN2

MR T BOURKE: I appear on behalf of the Australian Industry Group and with me at the bar table are MR I RAYNER and MR K HUBBART from Pliant.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. I've received the witness statement of Mr Balloch and the witness statement of Kevin Hubbart and
Mr Rayner. Is that all I should have received.

PN4

MR BOURKE: Yes, your Honour.

PN5

MR PORTELLI: Yes, your Honour.

PN6

THE SENIOR DEPUTY PRESIDENT: We'll deal with the witnesses first, but does anyone want to make an opening statement?

PN7

MR PORTELLI: I'd just like to briefly reiterate our position, where we see the issues lying and ultimately what we're seeking from the Commission. As the Commission is aware, this dispute, the reason why we're here relates to the company's attempt to dramatically change the site rosters which in our view are enshrined in the enterprise agreement.

PN8

The practical outcome of this is a significant reduction in wages and entitlements for our members there in the order of $200 plus in terms of wage rates and an additional amount lost in terms of the entitlements which would from this point to the future be based on a lower rate of pay. We say that the employees and the union have not indicated their agreement to the company proposal. Therefore, the proposal should not be allowed to go ahead.

PN9

Moreover, we would say that the company's proposal is unreasonable for the reasons I've just given you. What we're seeking from the Commission is a determination that any change to the shifts be made in accordance with the agreement, in other words put with the wishes of the employees and the union or in the alternative that the Commission accepts the proposal that's to be put forward by the union today. Beyond that, your Honour, I would simply call my witness, Mr Bruce Balloch, and let the employer proceed then with an examination of their witnesses. If the Commission pleases.

PN10

THE SENIOR DEPUTY PRESIDENT: I might just take an opening from
Mr Bourke, if he wishes to give one.

PN11

MR BOURKE: Your Honour, I think what Mr Portelli has said clearly, he described the significance of the issues. Obviously we have a different view on the legitimacy of what the company is setting out to do. I'm just a bit at a loss now. I wasn't aware there was going to be an alternative proposal put and I just wonder whether there might be some value if we can have a look at that before we cross-examination witnesses.

PN12

THE SENIOR DEPUTY PRESIDENT: Certainly. Are you content with that, Mr Portelli?

PN13

MR PORTELLI: Yes. Your Honour, my understanding is that Ms Ellison put forward, well, discussed a proposal with both employer and yourself at the last hearing. What we're simply trying to do is to formalise that proposal so we've actually got it in writing, something that we were to provide to the Commission later on in these proceedings. My understanding is that proposal is unchanged from our current position.

PN14

THE SENIOR DEPUTY PRESIDENT: Is there any difficulty in spelling it out now?

PN15

MR PORTELLI: No, there isn't, your Honour.

PN16

MR BOURKE: Maybe I am the only one, then, that doesn't know about it, by the sound of it.

PN17

THE SENIOR DEPUTY PRESIDENT: I would like to be refreshed, too.

PN18

MR PORTELLI: I will go through it now.

PN19

THE SENIOR DEPUTY PRESIDENT: Just before you start, Mr Portelli, I need another pen. Yes, Mr Portelli.

PN20

MR PORTELLI: The proposal, your Honour, is made up of a number of points, the first being our agreement to reduce - a reduction of four days per eight week cycle, but the days would need to be either Monday/Tuesday or Wednesday/Thursday, in other words not Saturdays and Sundays.

PN21

Our estimate is that there would be a reduction in terms of a weekly rate to the employees of approximately $130 under this proposal which is certainly a significant drop for the employees, over $5000 per year, but certainly not as extreme as the company's proposal which is more around the mark of $10,000 per year.

PN22

THE SENIOR DEPUTY PRESIDENT: So it's a decrease of four days per eight week cycle, Monday/Tuesday or Wednesday/Thursday, is that right?

PN23

MR PORTELLI: That's right, so the two days to be reduced we would say would be either Monday and Tuesday or Wednesday and Thursday, in other words not the weekends. The second point, your Honour, is that all leave entitlements, superannuation and any redundancy be paid on the original seven day shift rate as opposed to the newer rate if that was to be accepted.

PN24

Thirdly and importantly, that the status quo remain until the new year. The reason for this is that the employees on site, they'll already be enduring a site shutdown which I believe runs from about mid-December through to early January. This is one of many shutdowns over the last year and a half that the company has brought on in an attempt to alleviate its financial difficulties, so certainly if this position was to be implemented, we'd be saying it shouldn't be implemented until the new year, so in other words, the status quo should remain until then and lastly, we would certainly be seeking something definite in terms of when the employees are able to return back to the seven day roster.

PN25

In the company's submissions and we'll see through their witness statements, they've indicated their willingness and their desire to move back to a seven day shift roster. There doesn't seem to be any set time or any clarity in terms of when that would occur. We would suggest and certainly submit that there should be a return to the seven day shift roster after three months or within three months.

PN26

THE SENIOR DEPUTY PRESIDENT: So under your proposal, that would put it about mid-April, is it?

PN27

MR PORTELLI: I am sorry?

PN28

THE SENIOR DEPUTY PRESIDENT: Under your proposal, that would put the return to the seven day shift roster about mid-April?

PN29

MR PORTELLI: Yes, it would, your Honour.

PN30

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN31

MR BOURKE: Can I just have two or three minutes, if your Honour please?

PN32

THE SENIOR DEPUTY PRESIDENT: Certainly. I will adjourn briefly.

<SHORT ADJOURNMENT [9.43AM]
<RESUMED [9.52AM]

PN33

THE SENIOR DEPUTY PRESIDENT: Mr Bourke, is there anything else you want to say at this point?

PN34

MR BOURKE: No, your Honour. We've conferred on the detail of those. There was a bit of confusion at one stage, but we're now all singing from the one song sheet and essentially, as I started to say before, as far as the company is concerned, this is legitimately within managerial prerogative. They've done the discussion, consultation that they recognise they are required to under the EBA and they will argue it on that basis, your Honour. If the Commission pleases.

PN35

THE SENIOR DEPUTY PRESIDENT: Mr Portelli, your witnesses.

PN36

MR PORTELLI: Yes, thank you. We have one witness, Mr Balloch, and I'd like to call him now so we can have a discussion on these issues with him.

<BRUCE BALLOCH, SWORN [9.53AM]
<EXAMINATION-IN-CHIEF BY MR PORTELLI

PN37

MR PORTELLI: Would you state your full name and address for me?
---Bruce Balloch, (address supplied).

PN38

Do you have a statement in front of you, a witness statement in front of you?
---No.

PN39

If I might provide Mr Balloch with a statement? Is that your statement,
Mr Balloch?---Yes, it is.

PN40

In your opinion, is that a true account?---Yes, it is.

PN41

Thank you. Mr Balloch, could I take you to the schedule of your statement, page 3? Is this a correct estimation of the losses that you'd be likely to suffer with the company's proposal?---Yes, it is.

PN42

Can I ask were you employed as a seven day shift worker?---Yes, I was.

PN43

As far as you know, were your co-workers employed as seven day shift workers?
---Yes, they were.

PN44

Were you provided with a letter of offer or documentation of any kind when you began your employment, indicating that you'd be employed on a seven day roster?---Yes, I was.

PN45

Do you recall the company ever discussing throughout your employment a potential change from a seven to a six day shift roster?---No.

PN46

Do you recall during the last enterprise bargaining negotiations of 2004 any discussion or mention by the company of converting a seven day shift roster to a six day shift roster?---No, I don't think so.

PN47

To the best of your knowledge, do you recall any offers made that contributed to the final enterprise agreement that made any reference to a six day shift roster?
---No.

**** BRUCE BALLOCH XN MR PORTELLI
PN48

I notice, Mr Balloch, you mention in paragraphs 4 through 6 that you have a number of financial constraints, as we all do. Do you have any other significant expenses, financial constraints that you might like to tell the Commission?
---Basically we've been planning to do some renovations at home. They may have to be put on hold. I just had a new hot water service installed and I've been told I have to renew the cold water plumbing. That needs to be renewed, it's all rusted out and I've also just installed a new gas stove and we'd planned to renovate the bathroom and the kitchen and that may have to be put on hold now and I've got a five year old son that's starting school next year which will cost us some money to get his initial uniforms and anything else he needs. If I have a big reduction in annual leave pay, that may be difficult. I may have to really look at the budget and cut out something.

PN49

What financial effect do you think, Mr Balloch, would have, the company proposal in concert with the shutdown of this plant from mid-December?---It's going to have a big effect, I think. Basically, half of my Christmas pay goes straight away on the mortgage and general bills and Christmas expenses, presents and lunches and things which doesn't leave a lot left to spend over the next three weeks while you're on holidays at home with the family.

PN50

Just a last question, Mr Balloch. Would you consider that the proposal put forward by the union and the employees, that you face a reduction of approximately $5000 a year as substantial?---Yes, it is.

PN51

Thank you.

PN52

THE SENIOR DEPUTY PRESIDENT: Mr Balloch, what is your remuneration?
---Take home $900 approximately.

PN53

So do you know what it is gross?---About 1250.

PN54

Okay, so 1250 gross per week?---Yes.

PN55

And as you understand it under the company's proposal, that would go down to what, approximately 1050, would it?---Yes, I think so.

**** BRUCE BALLOCH XN MR PORTELLI
PN56

Thank you. Mr Bourke.

<CROSS-EXAMINATION BY MR BOURKE [9.59AM]

PN57

MR BOURKE: Thanks, your Honour.

PN58

Bruce, you say you're employed on a contract which identified the conditions being seven days a week. Did you bring a copy of that contract?---No, I didn't.

PN59

I put it to you that your evidence in that way is incorrect, that there was no suggestion of seven day operation in anything purporting to be a contract of employment?---Well, I was under the understanding that I did sign a contract and that I was employed as a seven day fortnight operator.

PN60

Certainly a seven day roster was in operation, wasn't it?---Yes.

PN61

At the time you were employed. Are you aware that prior to you being employed that in fact they operated a six day roster?---No, I wasn't aware of that.

PN62

Would it surprise you to hear that that was the case?---Yes.

PN63

Bruce, do you agree that over the last 12, 18 months, thereabouts, perhaps even longer, that the company has lost market volume?---Yes.

PN64

Particularly through Woolworths and others?---Yes.

PN65

Do you agree that during this period of time that the inventories has increased?
---So I believe.

PN66

And clearly the best way to reduce this is to produce less stock?---That's correct.

PN67

And it's not practical to actually slow the machines down, is it?---No, I don't think so.

PN68

And as you've indicated already, there's been close-downs over the last 12, 15 months?---Yes, that's correct.

PN69

And these have been for that purpose, too, haven't they?---Yes, they have.

PN70

And I suggest to you that it's also important that the company stays in a mode which allows it to revert back to seven day operation if the circumstances permit. Would you agree with that?---Yes.

**** BRUCE BALLOCH XXN MR BOURKE
PN71

Now, you've identified a drop in pay of about $200 a week which I think is consistent with what the company has indicated, too. There' s no difference on that, is there?---No.

PN72

And that comes about because you're going to work less hours, aren't you, under the six day roster compared to seven?---That's right, yes.

PN73

And the hours that you work will include less hours which attract penalties?
---That's correct.

PN74

So in reality you can't have a six day roster and take home the same amount of money, can you?---No, you can't.

PN75

And the seven day roster is unsustainable in the current situation?---Sorry?

PN76

Do you agree that the seven day roster is unsustainable in the current situation?
---Unsustainable?

PN77

Unsustainable in the short-term, in the current situation, given the difficulties?
---What do you mean by that, sorry?

PN78

Well, that it's not practical to continue with the seven day roster?---That's what we've been told.

PN79

Are you comfortable with that conclusion?---Having to work less hours?

PN80

No, no, are you comfortable with the position put by the company that there has to be a reduction in hours in the current situation?---Well, I'm not really comfortable with it.

PN81

But you accept it as reasonable?

PN82

MR PORTELLI: Your Honour, Mr Bourke is asking Mr Balloch for an opinion. He's provided that and Mr Bourke seems to be badgering him into providing him with the opinion that he wants, namely that what the company is proposing is the only reasonable alternative to a seven day roster. It doesn't seem that Mr Balloch shares that opinion and yet Mr Bourke persists with this line of questioning.

PN83

THE SENIOR DEPUTY PRESIDENT: Mr Bourke.

**** BRUCE BALLOCH XXN MR BOURKE
PN84

MR BOURKE: Your Honour, I am not sure there was any badgering. I'm not sure that Mr Balloch actually understood where I was actually heading and I'm not sure he's actually answered it, if he considers that the company's position that they've adopted in the circumstances is reasonable or not.

PN85

THE SENIOR DEPUTY PRESIDENT: Ask the question again.

PN86

MR BOURKE: Yes or no?

PN87

THE SENIOR DEPUTY PRESIDENT: Do you want to ask the question again?

PN88

MR BOURKE: Sorry?

PN89

THE SENIOR DEPUTY PRESIDENT: Ask the question again.

PN90

MR BOURKE: Do you consider in the current situation the company faces that the reduction from the seven day operation is reasonable?---No, I don't.

PN91

Now, you're not under the company's proposal missing out on any award entitlement, are you?---I think they stated that we'll still be getting the same amount of annual leave accrued.

PN92

I will work you through those, if you like. You're not aware of any award entitlements you're losing?---No.

PN93

So you still get your four weeks annual leave - sorry, in your case it will be actually five weeks' annual leave?---I think so.

PN94

You still get your nine per cent super?---Yes, I think so, but these are all paid on the lower rate, on a base rate.

PN95

These things are all paid on the rate that applies at the time they're taken at any rate, though, aren't they?---I think so.

PN96

The long service leave you take in three years time will be paid on the rate that applies in three years time, correct?---That's right, yes.

PN97

And your entitlement to long service leave is still calculated the same way?---I think so.

**** BRUCE BALLOCH XXN MR BOURKE
PN98

The entitlement to severance pay is the same, the same formula applies?---I think so.

PN99

And most hours that you work attract the base rate of pay, don't they?---Yes.

PN100

And penalties apply for other hours?---Yes.

PN101

For working at night, working Saturdays, Sundays and overtime and these penalties relate to working specific hours, don't they?---That's right, yes.

PN102

And what you're suggesting is that the company should pay those or a proportion of them, anyway, even though you don't work the hours that they go with, don't you?---We're just suggesting that instead of having to not work a weekend, we'd not work a mid-week day.

PN103

That requires the company to in effect waste money, doesn't it? I recognise from your point of view it's not wasted, but from their point of view, it's not money that they have to spend?---Right.

PN104

So under the six day roster that's proposed, you will work less of those if I can call them unsocial times, won't you?---Yes.

PN105

And that's why the value of your entitlements will drop?---Right.

PN106

Now, the company has gone quite a way to actually reduce the impact on employees, hasn't it?---By doing what?

PN107

The $800 ex gratia payment that they've put on the table?---$800? I didn't hear anything about this.

PN108

Well, Mr Rayner will indicate in his evidence and it's attached to his witness statement that the company has offered a one off ex gratia payment of $800 in December?---I was unaware of that.

PN109

Just in general terms, the package that Mr Portelli outlined to us a moment ago, you would agree, wouldn't you, that the overall effect of that is to make the company less competitive?---Less competitive?

PN110

Less competitive, because they're spending money that they don't have to spend, from that point of view?---I'm not too sure. I hadn't really thought about it.

**** BRUCE BALLOCH XXN MR BOURKE
PN111

And so that as a result, if they get back to seven day operation, it would take longer because of those payments?---It's possible.

PN112

MR PORTELLI: Your Honour, I'm not really sure Mr Balloch - - -

PN113

MR BOURKE: No further questions, your Honour.

PN114

MR PORTELLI: - - - is in a position to make a judgment call on whether these proposals make the company more or less competitive.

PN115

THE SENIOR DEPUTY PRESIDENT: Well, he hasn't got any further questions, so re-examination?

PN116

MR PORTELLI: Yes. Thank you, your Honour.

<RE-EXAMINATION BY MR PORTELLI [10.08AM]

PN117

MR PORTELLI: Mr Balloch, can you confirm for me that you received a letter of offer containing the seven day shift roster as part of your terms and conditions of employment?---Yes.

PN118

In any case, Mr Balloch, isn't it true that it was discussed with you during your interview that you would be employed on that basis and that by conduct, you worked on a seven day shift roster?---That's right.

PN119

At any time during your employment, have you ever worked on any roster other than a seven day shift roster?---No.

PN120

As well as the $200 losses that Mr Bourke has referred to, can you confirm that there are other significant losses that you'll be suffering, along with all the employees, if you just turn to the schedule in the witness statement?

PN121

MR BOURKE: Your Honour, I'm not sure this is appropriate for re-examination. It's going over the same old ground for no other reason.

PN122

MR PORTELLI: Your Honour, I'm simply trying to clarify a number of issues, not the least of which is the amounts that the employees are to lose. In
Mr Bourke's cross-examination - - -

PN123

THE SENIOR DEPUTY PRESIDENT: I will let you ask the question. If
Mr Bourke wants to ask further questions, he can do so.

**** BRUCE BALLOCH RXN MR PORTELLI
PN124

MR PORTELLI: Thank you.

PN125

You can confirm then that as well as the $200 a week drop in pay which would amount to some $10,000 that there would also be a loss in superannuation, long service leave, annual leave entitlements and if the case for redundancy came about, a significant drop in redundancy, severance pay also?---That's correct.

PN126

Mr Bourke discussed, I pose the question to you whether you believe the company was wasting its money by providing entitlements that he believes the company didn't have to provide. Do you believe the company is wasting money by, even if they accept the union's proposal, docking your pay by some $130 per week?---No, I don't.

PN127

Mr Balloch, one last question in terms of the ex gratia payment. How far do you think the $800 one off payment is going to go towards filling the $10,000 or so losses that you'd be suffering on an annual basis on your base rate?---Probably a month or so.

PN128

Thank you. Nothing further, your Honour.

PN129

THE SENIOR DEPUTY PRESIDENT: Mr Balloch, the letter of offer that you say you received, have you got a copy of that?---No, I don't.

PN130

Have you asked the company for it, a copy of it?---The proposed new roster you mean?

PN131

No, no, no. As I understand it, Mr Portelli asked you about the letter of offer of employment when you began employment with the company?---Right.

PN132

Do you recall that?---I recall just signing some sort of a contract.

PN133

When did you think you signed that?---When I first started.

PN134

Did you keep a copy of the contract?---No, I didn't.

PN135

Have you asked the company for a copy of the contract?---No, I haven't.

PN136

And is it that contract that you say provided for you to be a seven day shift worker?---I thought so, yes.

**** BRUCE BALLOCH RXN MR PORTELLI
PN137

Thank you. Anything else, gentlemen?

PN138

MR BOURKE: Nothing.

PN139

THE SENIOR DEPUTY PRESIDENT: You're excused, Mr Balloch.

<THE WITNESS WITHDREW [10.12AM]

PN140

THE SENIOR DEPUTY PRESIDENT: Mr Bourke, your witnesses. Before you do, we should mark the statement of Mr Balloch.

EXHIBIT #P1 STATEMENT OF MR BALLOCH

PN141

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Bourke.

PN142

MR BOURKE: Thanks, your Honour. I call Ian Rayner, please.

<IAN JAMES RAYNER, SWORN [10.12AM]
<EXAMINATION-IN-CHIEF BY MR BOURKE

PN143

MR BOURKE: Could the witness please be shown this document? Could you direct your answers to her Honour, please? Do you recognise that statement?---I do.

PN144

And it's a witness statement sworn by you or made by you?---It is.

PN145

Have you read it recently?---I have.

PN146

Do you wish to make any changes?---No, I don't.

PN147

Are you happy for that to be part of your evidence in this matter?---I do.

PN148

I tender that, your Honour.

EXHIBIT #B1 STATEMENT OF MR RAYNER

PN149

THE SENIOR DEPUTY PRESIDENT: Mr Bourke, is there any changes to that document you've just handed up compared to the document that was originally filed?

PN150

MR BOURKE: No, it's the same one.

PN151

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN152

MR BOURKE: Ian, I'll just ask you a couple of questions in relation to this evidence. Could I direct you to attachment C, please? Sorry, I should just say for the record, your Honour, that it is a witness statement with four attachments, named A, B, C and D. In attachment C there's a heading:

PN153

Offers made by client.

PN154

Would you please tell the Commission the status of that information, please, and what will happen in regard to that material when the six day roster, if it is introduced, is introduced?---Certainly. With regard to our proposal, the differences, your Honour, would occur as per the Sunday only operation, moving from seven days to six days. Currently $1285.55 per week per employee would move to $1088.29 per week, with a difference of 197.26. The offers made by Pliant Corporation are that the annual leave will be maintained at 210 hours per calendar year which would be payable at the rate applicable at the time they're taken. The company has further offered a once off ex gratia payment of $800 per employee, shift worker that is, which would be payable at the end of December. The superannuation would be maintained at the nine per cent level based on the revised six day base. Long service leave is as per the EBA, unchanged. Sick pay remains at 72 hours and we've agreed a redundancy period for six months. Should anything occur within the six month period, to be paid at the current seven day rate, then at the end of six months' time revert to the six day rate if that's what we're still on at the time.

**** IAN JAMES RAYNER XN MR BOURKE
PN155

THE SENIOR DEPUTY PRESIDENT: Sorry, what's this six months?---The redundancy offer.

PN156

This is the review date at the bottom of this page?---No, there's a further offer which is a redundancy window for six months from the time we go to a six day operation, which would be paid under the seven day rate, as opposed to the six day rate as it changes at the time.

PN157

Yes, okay, so if anyone is made redundant, say it's implemented, I don't know, next week, anybody who's made redundant within the next six months will be paid at the seven day rate?---Paid as if we're on a seven day basis, yes.

PN158

The review date at the bottom of the page here, is that what that's about?---No. My version had a redundancy comment on there for the six month period and it appears this document is subtly different to that one.

PN159

MR BOURKE: I don't have a review date on mine?---A review date every six months.

PN160

THE SENIOR DEPUTY PRESIDENT: The one you've just handed me has got it on attachment 7.

PN161

MR BOURKE: It's got date 2 November 2005. That's the last thing on my page.

PN162

THE SENIOR DEPUTY PRESIDENT: No, no, the second last, sorry. It's got review date every six months. I was just asking what that means.

PN163

MR BOURKE: Sorry, yes?---The redundancy seems to be missing off that sheet.

PN164

THE SENIOR DEPUTY PRESIDENT: So what does review date every six months mean?---What we're saying by that is that as we've mentioned previously, the period of this change we're looking at is somewhat undetermined and what we would propose is a six monthly review from the time that we effect any change, to review and see how we are performing at that time, how our sales are looking and obviously from that, determine our production need into the future, with a view to returning towards a seven day operation.

PN165

Okay. Can I just ask you about the annual leave?---Sure.

**** IAN JAMES RAYNER XN MR BOURKE
PN166

Setting aside the 800 one off payment:

PN167

All other leave based on 210 hours.

PN168

What is it currently based on?---210 hours.

PN169

Okay, so you continue to accrue 210 hours?---Correct, yes.

PN170

But it's paid at a lower rate, is it?---Yes. The accrual is a time accrual which is paid on the rate applicable at the time the leave is taken, so if we were to move from the seven towards a six day operation, that rate would change because the income to each employee on the shift rotation changes, so it reflects that adjustment from the seven day to the six days.

PN171

Okay, and what about leave I've accrued, how are you going to pay that? This is prior to say next week or whatever?---The company has always approached this on the basis that leave when it is taken is paid at the applicable rate, so even though leave accrued may have also become more valuable through annual increases and other adjustments over time, it's paid at the rate that it's taken at that time, so with this adjustment, we're looking at a one off ex gratia payment which does recognise that there is some loss through this process, but on an ongoing basis we would look to pay at the rate applicable at that time.

PN172

Okay, and the 72 hours on sick pay, you currently accrue 72 hours?---Yes.

PN173

Again that would be paid at the lower six day rate?---Correct.

PN174

And long service leave, where is that in the EBA? Is it specified in the EBA or does it just refer to State legislation or something? You can't remember the clause?---A bit weak on my number, I'm sorry.

PN175

I think it's clause 33.

PN176

MR BOURKE: Clause 33, your Honour.

PN177

THE SENIOR DEPUTY PRESIDENT: Okay, just let me turn that up just to see if I understand what you're saying:

**** IAN JAMES RAYNER XN MR BOURKE
PN178

This long service leave clause shall be read in conjunction with the long service leave provisions of the Long Service Leave Act Victoria.

PN179

That's the only reference to long service leave, so it's applying the State Act, it appears?---My understanding, your Honour, is it's .86666 recurring weeks per annum is the accrual rate.

PN180

But again would that be paid at the lower rate?---It would be paid once again at the rate taken at the time.

PN181

So basically you don't intend to affect the hours accrued on annual leave, long service leave and sick leave, but they would be paid at a lower rate?---That's right.

PN182

The sick leave provision I assume is also spelt out in this document, in the EBA? Yes? No?---I believe so.

PN183

Is it under family leave?

PN184

MR BOURKE: It would be under family leave, clause 37.

PN185

THE SENIOR DEPUTY PRESIDENT: Yes, it is. There's also clause 35 which is sick leave, non-continuous shift employees. In here, in this document is annual leave, clause 34 and clause 35 is sick leave/non-continuous shift employee. Who are the non-continuous shift employees?---We do have certain employees that are not on the shift rotation system. We have one chap who is an edge trimmer who operates a particular piece of equipment. We have an internal storeman and as per that award, I think that's it.

PN186

The sick leave accrual, if you can't answer this, by all means tell me, Mr Rayner, but clause 35 deals with sick leave/non-continuous shift employees, that's the header and then it talks about an employee on weekly hire and the other one is service with the employer who is absent from work on account of illness shall be entitled to leave of absence with docking of pay subject to the following. I can't quickly find the sick leave accrual for your continuous shift employees which are the ones we're really talking about, isn't it? Are you able to help me with that,
Mr Bourke?

PN187

MR BOURKE: I am sorry, I missed the last part of the comment, your Honour.

**** IAN JAMES RAYNER XN MR BOURKE
PN188

THE SENIOR DEPUTY PRESIDENT: I can see that the accrual for the non-continuous is eight days sick leave for each calendar year, that's 35.1.4, but I can't quickly turn up the sick leave accrual for the continuous shift workers. Are you able to help me with that?

PN189

MR BOURKE: There's a reference to that in appendix B at the back of the document, your Honour. I am not sure where the reference to it is, but in appendix B it talks about an entitlement to sick leave, 72 hours and appendix B
is - - -

PN190

THE SENIOR DEPUTY PRESIDENT: Hang on, let me try and turn it up.

PN191

MR BOURKE: Sorry?

PN192

THE SENIOR DEPUTY PRESIDENT: I'll just try and turn appendix B up. Okay, so you're saying that's the provision?

PN193

MR BOURKE: They're the terms and conditions that apply to the seven day operation, yes.

PN194

THE SENIOR DEPUTY PRESIDENT: Thank you. Can I just take you to - does someone have a spare copy of this agreement? The page I'm looking at,
Mr Rayner, is page 51. I hope it's the same on yours. I'm looking at the Commission's copy of the agreement.

PN195

MR BOURKE: No, that's a Wagenet one, your Honour, so the page will be different.

PN196

THE SENIOR DEPUTY PRESIDENT: I'm looking at the one that was actually filed?---This is the same one. Page 51, yes.

PN197

Yes, and if you go back to page 49 which is just one back, this is appendix B, seven day shift arrangement?---Yes.

PN198

And it's between Pliant and the NUW on behalf of all appropriate associates who I assume are the people we're talking about in respect of this matter and it says:

PN199

Sick leave available -

**** IAN JAMES RAYNER XN MR BOURKE
PN200

If you go over to page 51:

PN201

Sick leave, each associate shall be entitled to 72 hours' sick leave per year.

PN202

And I understand you don't intend to change that?---Correct.

PN203

Then it says:

PN204

Average weekly earnings will be maintained whenever sick leave is taken.

PN205

And then the last paragraph on the page says:

PN206

The actual rate of pay will be the appropriate all purpose rate as set out in schedule C.

PN207

Right?---Yes.

PN208

And if you go to schedule C which I think is on page 55, at least in my copy, I've got, (1) ordinary hours and it's got:

PN209

Forty-two hour shift allowance all purpose per hour $29.43.

PN210

And then that's for 5 May 04 to 5 May 05 and then it's got 5 May 05 to 5 May 06, $30.60?---Yes.

PN211

Is the $30.60 the rate that's referred to on page 51 as the actual rate of pay, the appropriate all purpose rate?---Within this document, your Honour, yes, it is.

PN212

Okay, and is that $30.60 different to the rate you would be paying under attachment C to your witness statement?---Yes, your Honour, it would be.

PN213

Okay, so you'd be paying something less than $30.60?---That's correct. The schedule C here, ordinary hours, is 42 hours which is the averaging effect over a two week rotation cycle. With a six day operation, that would come back to 38 hours.

PN214

Okay, so have you worked out what it would actually be?---The all purpose rate, no, I haven't.

**** IAN JAMES RAYNER XN MR BOURKE
PN215

Yes, okay. Mr Bourke.

PN216

MR BOURKE: If you stay on that page, attachment C to your witness statement, just so that everybody knows where we're at, the $200 that was referred to in the union calculations, in Bruce's attachment, the 197.26, is that your equivalent?
---That's correct.

PN217

Can I take you briefly to the package that the union has put up as an alternative to what you've suggested and ask for your comments and if necessary any material that's already been put on the record about that, firstly the change of the days away from Saturday and Sunday?---Your Honour, we've looked at that. The effect to the company is that clearly we have this issue of our stock levels and so production time is one aspect. The other aspect is maintaining an appropriate cost structure within the business in what is a very low and becoming increasingly lower margin category, so therefore we have considered that, but clearly that would only increase our labour bill which does not increase our productivity and we would look at clearly utilising the Sunday or as per the rotation that we've been talking about, the Saturday/Sunday over a two week cycle to address that situation.

PN218

The second issue was the leave, superannuation and redundancies that are to be paid on the seven day rate?---Once again it's another impost financially to the company which artificially inflates the overall running costs of the business and the levels that we're proposing are respectful of the revised rate of pay, but clearly to maintain the higher levels is artificially increasing the cost of running our business and our competitive nature in what is a very competitive marketplace.

PN219

The status quo remain until after the resumption after the Christmas break?
---Your Honour, we put this proposal to the union initially I think it was 21 September which was the first stage at which we were able to do so after having been through quite a lengthy few weeks with our US parent company talking about the range of issues that lay in front of us and every week that we continued to discuss this topic is only running a seven day operation that frankly at the moment we can't support and from my perspective, we initially looked at suggesting 3 October. We moved away from that. We then suggested 24 October. We've secondly moved away from that. Further delays don't help Pliant and we need to act on whatever comes out of today as soon as we possibly can. The ex gratia payment was put up with the four week Christmas period very much in mind and we looked at that as a way of looking to try and assist the associates with that transition.

**** IAN JAMES RAYNER XN MR BOURKE
PN220

Just on that last point, you've committed at the moment in your evidence to those offers that you have made, including the $800. Just to focus on the $800, you've committed to that going forward. Under what circumstances would you be forced to actually withdraw that offer?---Going forward?

PN221

Yes?---It's a once off payment.

PN222

No, no, I mean you are planning on paying it now on the basis of what you understand is likely to happen?---Yes.

PN223

Are there any circumstances where you would be forced to say the $800 is off the table?---Well, I guess if we were unable to implement the changes prior to perhaps mid to late January which is I think my understanding of the status quo aspect, then I would withdraw that $800.

PN224

And the fourth of the elements in the package was a return to a seven day roster to be locked in with a maximum three months?---Yes, once again as we've covered before, we're in a phase where we're planning for next year. Mid-December is when our plan will become known fully as to what we're authorised to operate against. Right at the moment, I'm not in a position to be able to indicate any return back to a seven day operation, not because I don't want to. It's purely that it would be irresponsible of me to do so and clearly what we're looking at here is a whole myriad of customer issues and marketplace issues that relate in all sorts of different ways and what we have here in front of us is the short-term/medium-term way forward to address the situation that we're in.

PN225

I have no further questions, your Honour. Thank you.

PN226

THE SENIOR DEPUTY PRESIDENT: Mr Portelli.

<CROSS-EXAMINATION BY MR PORTELLI [10.36AM]

PN227

MR PORTELLI: Thank you, your Honour.

PN228

Mr Rayner, for how long has the seven day roster operated for?---I believe since 1994.

PN229

How many enterprise agreements have come and gone in that period of time at your estimation?---I would estimate four.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN230

Four? Including the current enterprise agreement?---I believe so.

PN231

During the most recent enterprise bargaining negotiations in early 2004, was the shift to a six day roster ever mentioned or discussed between yourselves or with the employees at large?---To be answering that question, your Honour, I actually wasn't involved in the discussions between the parties at that time. That was prior to my tenure in my position. To my knowledge, no, it wasn't.

PN232

Mr Rayner, in terms of the company's forecast which I think is at attachment B of your statement, I notice that the words forecast are mentioned, but there doesn't seem to be any forecast beyond 2005. Is this correct?---That's correct.

PN233

Am I missing something? I just wasn't sure. In what way what the company has presented us, in what way is that a forecast? I understand that it is indication of the financial difficulties that have occurred thus far. In what capacity is that document a forecast?---The capacity of this document is to say that we have a full year plan to which we obviously operate and we measured against that. As I just mentioned, we're in the process of setting our plan for 2006. In the short-term period, by that, what I mean is within the next three to six months, I see no new business opportunity immediately upon the horizon that will facilitate us returning to the seven day operation, but the full 12 month 2006 plan is yet to be, (a) submitted and, (b) approved.

PN234

Can I ask you in your opinion, how long would you expect these difficulties to continue before the seven day operation is able to be re-implemented?---Your Honour, I once again would wish to refrain from putting some sort of date to that because our plan will in all likelihood reflect much of next year as a six day operation and should other things come along, then that may have an effect that will change that, but at this moment in time I'm just not in a position to be able
to - - -

PN235

And I understand you're in a position where you don't want to commit to any specific date. Can I ask you to provide the Commission with an estimate, a ball park date, if you will, as to when the company might expect the employees to return back to a seven day shift roster?---As a ball park estimate, I think much of next year could be on a six day operation and to qualify that, because new business in our style of product, in our market and our region is slow and difficult to secure.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN236

THE SENIOR DEPUTY PRESIDENT: Mr Rayner, you report to the board of Pliant?---I'm a director of Pliant Australia, yes.

PN237

What have you told the board about the long-term prospects?---That the US parent, your Honour, as I kind of alluded to in the pre-notification period here, our US parent does not like the idea of going to a six day operation. The reasons for that, again there's a number of them, one is that the company's way is to run our equipment hard and constantly, because that's the nature of the business we're in. It's a high volume, low margin style of product that we manufacture, so we need to maximise our efficiencies. The effect on the company by going to a six day one is that next year our plan will look very shabby in terms of the reporting and the profitability. It's likely to look very poor and we need a seven day operation to support all of the costs of the business with our mix of customers and style of products that we manufacture. A six day operation is not in the company's best interests. However, where we have no opportunity to sell the product being produced on the seven days, the American management team obviously have indicated, well, you need to work very hard and very fast to secure new business, but in the meantime you clearly have no choice. You just can't keep producing product that's just tying up more and more cash.

PN238

But to get back to what you told the board as opposed to what they're saying?
---The board have been fully informed of everything here that we're looking at today and we've told the board that we're in discussions through the Industrial Relations Commission to seek a way through this and implement change.

PN239

Well, Mr Rayner, if I was on the board, I'd be saying to you, well, listen, from what you've told me so far, we're going to have a six day operation all of next year, what are we going to have the year after? How would you respond to that?
---That isn't a question that's been put yet because we're focusing at the moment on next year. Things can happen in our business fairly quickly and particularly in our region has happened over the last - - -

**** IAN JAMES RAYNER XXN MR PORTELLI
PN240

That's why I'd be asking you the question?---And our answer has been so far clearly we're looking at returning to a seven day operation and we do have a number of customers that we're targeting to aid us in that process, but once again it's a question of time to bring those on board and that's really why I'm saying it will be unlikely much before the end of next year that we'd be in a position to be able to go to a seven day operation once again, but we're obviously going to be working pretty hard to make that happen, because that's the company's desire.

PN241

Well, the impression I get from what you've said is that they're only prepared to operate on the six day operation in the short-term?---That would be their preference. We have also artificially managed our way through a seven day operation now for quite a while through these shut-downs and so since that started, this has always been something that's had to be considered as an option through all that period and today is no different to what it was 12 or 15 months ago when we first started the shut-down process, that there will be no more shut-downs was the comment that they would fairly constantly run out, ie. you get back to a seven day operation and you get back fast. Fortunately there is some understanding globally of the style of business that we're in. Australia is not the only PVC facility within the organisation and what we're facing here is no different really to any other plant, be it in Europe or be it in Canada or be it in North America. They understand our circumstances, they have sympathy, but clearly the management line is still we want you back, we want you back to a seven day operation. In terms of beyond 2006 at the moment, the way the company structures its forecasting reporting, we don't have a requirement to look at 2007. That will come fairly early next year, as we start forward thinking once again.

PN242

I mean, not to put too fine a point on it, if I were sitting on the board of Pliant, I'd be saying, well, if Australia's going no good, can we supply from one of our other manufacturing plants overseas and, if so, how quickly can we do it?---Logically that's an issue. It may be a thought process. It certainly hasn't been put to us and bearing in mind the organisation here used to be a five day operation, five/six day operation until 94 when it did go to seven days, it's not all about a seven day operation per se or close it. They understand that the business can cycle and, indeed, we're facing similar issues to other businesses, but the expectation is to reflect the needs of the business against the sales forecasts and the actual business that you have at the time and as I said, clearly the seven day operation is preferred from a profitability angle, it's preferred from an efficiency angle and it's preferred because then you say, well, your equipment utilisation is as high as you can get it, but under the circumstances, they do hear what we're reporting. It's not new. This has been potentially on the cards now for quite a while and fortunately they have understanding and they're going to work through this with us. The company isn't historically - I can't say forward, but historically Pliant has not been about shutting plants and doing things like that for no reason. Traditionally this business in our region has been quite profitable. We took an enormous hit in 2003 with the Woolworths tender. That significantly undermined the profitability going forward, but if we achieve our plan, they consider that acceptable. Right at the moment, as these figures here suggest for 2005, we're not achieving our plan and so we need to take action to ensure that we're trying to reflect the costs of our business with our production needs.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN243

Where is the geographical places of the Pliant plant that can produce what you're producing?---In Atlanta, North America. There is no other Pliant PVC plant within our region and geographically we do service quite a ranging market. We service New Zealand, we service parts of South-East Asia and we service parts of the Middle East with exports and at this stage I do not believe that China or South-East Asia is high on their agenda for a plant of any nature so in looking at our business going forward, they want us to move through this and move out of it. That's the instruction but I can't say where they're going to be in 2007.

PN244

Mr Portelli.

PN245

MR PORTELLI: Thank you, your Honour.

PN246

Mr Rayner, looking at paragraph 18 of your statement, you refer to one of the company proposals in relation to the calculation of severance pay and specifically that the calculation for the first six months - well, the first six months of the operation of this new roster system that the severance pay would be based on the old seven day shift roster rate of pay. What then, Mr Rayner, would occur if any employees were to be made redundant in the seventh, eighth or ninth month?
---Well, as that paragraph states, that would be a six month period and then after that time, the rate at which any redundancy would be payable would be on the rate applicable at the time.

PN247

The far lower rate?---The six day rate.

PN248

In terms of paragraph 22 of your statement, you make the point that in your view the company has observed their obligations in terms of consulting with the union and employees. Are you aware that there is a clause in the enterprise agreement, clause 30.14 to be exact, that requires employee and union approval before change is made on a shift roster?---Yes, I believe that's been raised previously.

PN249

Are you aware that specifically - - -

PN250

THE SENIOR DEPUTY PRESIDENT: Which clause are you going to, Mr Portelli?

PN251

MR PORTELLI: 30.14, your Honour.

PN252

Are you aware specifically that the agreement provides in the first paragraph there:

**** IAN JAMES RAYNER XXN MR PORTELLI
PN253

Subject to subclauses 32.3, 32.4 -

PN254

of which I might add there aren't any, those two clauses do not exist -

PN255

the method of working shifts may in any case be varied by agreement between the employer and the accredited representative of the union to suit the circumstances of the establishment.

PN256

Are you aware of that clause?---As it relates to the method of working shifts, yes.

PN257

That's right, that's right, that the method of working shifts of which clearly this is a change requires agreement between the parties, rather than simply consultation?
---My understanding actually as that paragraph stands there is more to do with the time, the starting and the finishing of the 12 hour roster, more than the six, seven day continual shift.

PN258

Wouldn't you think, Mr Rayner, that the second paragraph relates more to starting and finishing times and that the first paragraph which I've just referred you to refers to the change in the make up of the shift, in this case a seven day or a six day shift?---Your Honour, I don't have a legal background, but I read those two paragraphs together and under the same one heading and my understanding of that is that it relates to the times of commencing and finishing shifts and obviously then everyone agree to the change of those times.

PN259

Regarding paragraphs 23 and 24 of your statement, could you explain how the company would actually incur additional costs under the union's proposal in which the employees would still lose approximately $130 per week?---Well, as outlined in appendix C, which days are the days nominated for eliminating production, for want of a better expression, carry different financial figures with them. Now, in 23, if we were to look at - Mr Portelli, is that in relation to the entitlements or the actual rate of pay?

PN260

That's in relation to both entitlements and to the wage reduction. Specifically, my question, though, was related to the comments made in your witness statement where you mention that the prices are inflated, the wage prices are inflated in paragraph 23 of your statement?---My position there is to state that if we were to look at - as my understanding was the request of the Monday/Tuesday or Wednesday/Thursday which are all paid on an equal basis, the employees income in the plant reduces by a lower amount, that's what we're clearly showing here, but from the company's point of view, what we're saying is that we are therefore operating the business and our production on a higher cost base than would be logical to do so from the company's perspective.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN261

I will ask a similar question in relation to the point you made in paragraph 24 where you say that the union's focus appears to have been almost exclusively on how much additional cost the company are prepared to pay. Again I would ask the question, what additional cost are you referring to when under the union's proposal, employees would be losing approximately $130 per week? I'm just trying to understand how that could be an additional cost for the employer?
---Well, once again with the Sunday only option listed above, the reduction from the company's perspective to our labour bill will be $197.26 plus the other entitlements. The Monday/Tuesday or the Wednesday/Thursday, as I understand it, as per the alternate, is to reduce $100, so the difference between those figures would be the additional cost the company would carry for not seeing any other change to the output or the production.

PN262

Would you accept, Mr Rayner, that the proposal put forward by the company of approximately $130 per week cut in the base wages that the employees receive, however, is a significant cost saving for the company?---Again I come back to clearly there's a difference between $197 and $100 or 132, depending whether you're working on these costs here, 197 to 100, they're both a change. One is more significant than the other, that's granted, but once again you're looking at the wider picture of ensuring we're competitive against our market challenges.

PN263

I understand, Mr Rayner, that certainly the company would have a preference as to the change. I guess the question again, though, is regardless of the extent of the change or the extent of the drop in wages, would you agree that $130 per week approximately drop in pay which would amount to for every affected person on site, which I believe is around about 20, $5000 plus per year, would you agree that that is a significant cost saving for the company, if not the perfect cost saving for the company?---It is a significant cost saving for the company, but not the company's preferred option.

PN264

Under the company's proposal, Mr Rayner, is it correct that all entitlements regardless of when those entitlements were accrued would be paid for the new base rate, the new six day base rate, I mean?---Yes.

PN265

Mr Rayner, in 1994, would you know whether - this is when the seven day shift roster was introduced, would you be in a position to tell us whether or not all accrued annual leave at that time was paid out to the employees?---No, I wouldn't.

PN266

Mr Rayner, do you believe that the introduction of a new roster six weeks from today as opposed to today is unreasonable, in other words in January as opposed to mid-November?---Yes, I do. As I mentioned a little earlier, we were looking at this to have been implemented already and we have, as I've outlined in one of my paragraphs, quite a significant inventory bill position already to bear. Any further delays on this will certainly not help that situation.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN267

Mr Rayner, in your opinion, what effect would the introduction of a new six day roster system now in concert with the site shutdown that's planned in December among the employees?---Well, clearly their income will be adjusted prior to Christmas in line with the production needs, the change in the schedule. That will have this year an effect of, yes, the annual leave that any of the employees may be entitled to take or be reduced. That is why we've put forward the ex gratia payment to offset that this year and beyond that into 2005, we would be ongoing with the six day operation. Therefore, those sets of circumstances would continue.

PN268

Mr Rayner, just to confirm a comment that you made before, would you agree that a six day shift roster as proposed by the company if accepted or if the Commission directed employees to accept would remain in place for much of 2006?---Well, yes, as I mentioned, the short to medium term is what we're looking at here, so given that we are getting close now to the end of 2005, anyway, the likely period I would suggest is no less than six months. We have indicated there we would wish to review that with the employees and clearly the union on a six monthly cycle so that everybody is clear as to where the business stands and where it's going, but certainly as I mentioned earlier, in the first six months of next year, I do not see an opportunity to get back to seven days. I would be suggesting it would be towards the end of next year, should that eventuate.

PN269

A last question, Mr Rayner, in light of the company's proposal to cut the wages for employees at Pliant by some $200 per week plus significant reductions in entitlements, has there been any discussion between managerial staff of reducing their own remuneration? This is the business during what I understand is a time of financial difficulty?---Your Honour, there has and it's not always about discussion. It just happens. Without giving out all of the additional factors, a number of staff within the organisation's remuneration is linked to sales volume which hasn't happened this year, so when the business does not sell to its plan, that affects quite a number of people within the organisation in differing amounts, so what I would certainly say is that the effect of going to a six day operation is not limited to the employees in the plant.

PN270

Just to clarify, Mr Rayner, could I ask whether any managerial staff, including directors, have had their remuneration reduced as a result of this proposed change to the six day roster?

PN271

MR BOURKE: Your Honour, I am not sure that's an appropriate question.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN272

THE SENIOR DEPUTY PRESIDENT: I will allow the question.

PN273

MR PORTELLI: Thank you, your Honour?---Well, as I just mentioned, a portion of the income of a number of people, including myself, is linked to sales volume and if we do not achieve the sales volume, we do not achieve our full remuneration, so in answer to your question, yes, there will be changes that eventuate out of this.

PN274

Has there been any reduction to any managerial income directly outside of sales related income? In other words, there is obviously going to be a component of income that is based on sales volume, leave that to the side, the base rate upon which managerial staff, including directors, are paid, has there been any reduction or is there any planned reduction in the short term to that rate of pay?---Well, as I've already stated, it's not as simple as a base rate because that's not how the managerial team salaries are necessarily structured. The effect is that, as I say once again, if the business reflects a set of circumstances, then the income to a number of the managerial staff changes as a reflection of that. Further to that, we've already through attrition I suppose is the most appropriate expression, we've reduced our numbers within the administrational/sales function side of the business. When I moved into the role of managing director, I carried with me my responsibilities of sales and marketing manager and what have you and I didn't replace myself so that person has been sitting in the wings to be replaced and in the current circumstances will not be approved and has not been approved for replacing. One other of our staff members has gone to a part-time basis from a full-time basis, so I think it would be fair to say that there has been some impact on the management structure of the business and that is reflected today by the hours of operation and by the number of heads.

PN275

Thank you, Mr Rayner.

PN276

THE SENIOR DEPUTY PRESIDENT: Mr Bourke.

PN277

MR BOURKE: No further questions, your Honour. Thank you.

PN278

THE SENIOR DEPUTY PRESIDENT: Mr Rayner, there was mention in some of the previous evidence of Mr Balloch about a letter of offer of employment. Does the company offer letters of offer of employment?---I can't speak, Mr Balloch, at that stage. Today, yes, we do. The normal induction process is that when somebody comes in, they're stepped through a range of functions and then they begin their function, whatever that may be. In Bruce's case, I'm not familiar with Bruce's case at the time that Bruce was employed, but today, yes, we do offer a letter.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN279

Is there a personnel file on each employee?---There is.

PN280

So we could go to Mr Balloch's personnel file and see whether there's a contract of employment on it?---See if there is one.

PN281

MR BOURKE: Your Honour, Kevin Hubbart was around at that time and will be able to give evidence about that because he was involved and that may assist you with providing that information, rather than Ian, who wasn't.

PN282

THE SENIOR DEPUTY PRESIDENT: Thank you, and I assume if there was a contract of employment, the company is searching that down this minute.

PN283

MR BOURKE: Not until we leave this room, your Honour.

PN284

THE SENIOR DEPUTY PRESIDENT: In terms of what is done now, have there been people employed, we call them assistants, don't we?---Associates.

PN285

Associates, sorry. Have people been employed as associates in recent times?
---There was one quite recently. There would be probably two more going back two or three years, yes.

PN286

Were they given letters of offer of employment?---To my knowledge, the most recent was. Prior to that time, I wasn't involved in the other crew, so I couldn't tell you.

PN287

Mr Bourke, I should just let you know that I'd be interested in seeing whatever letters of offer of employment you have and we're only talking about 20 employees, so it shouldn't be too hard to deal with that number.

PN288

MR BOURKE: Certainly, your Honour, and we can see what Kevin has to say about it and then you can maybe issue directions on the basis of that. With 24 hours or so, we can certainly get that.

PN289

THE SENIOR DEPUTY PRESIDENT: Yes. It's just that if you want the matter speedily dealt with, the quicker you can provide such material, the quicker I'll be able to deal with it.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN290

MR BOURKE: Yes, I accept that, your Honour, and since you've raised that issue, can I just remind you, I really have to go by quarter past 12.

PN291

THE SENIOR DEPUTY PRESIDENT: I am sorry, I wasn't aware of that.

PN292

MR BOURKE: Sorry. I did notify your office last week and as long as the system has been fixed by the time I get back, I can have my final submission in early tomorrow morning, so I certainly don't want it to in any way hasten anything else, but we can have that material to you this afternoon, provided it's there, but I just raise that issue given that there was a brief interruption.

PN293

THE SENIOR DEPUTY PRESIDENT: I think you'd better tell me the story about how long we're going today, because I'm not aware of this. You're available until when?

PN294

MR BOURKE: Quarter past 12.

PN295

THE SENIOR DEPUTY PRESIDENT: Today? That's it?

PN296

MR BOURKE: Yes, I'm leaving town and I will be examining Kevin for maybe only five, maybe 10 minutes, so then I'm in everyone else's hands.

PN297

MR PORTELLI: Your Honour, our cross-examination shouldn't take a great deal of time. Our submissions should be fairly brief as well, so we'd hope to be finished up before quarter past 12.

PN298

THE SENIOR DEPUTY PRESIDENT: Okay. The next area I wanted to ask you about, Mr Rayner, is financial aspects of the operation of the company. Do the parties wish that transcript to be in confidence?

PN299

MR PORTELLI: I'm certainly not in a position to comment on that and I'd rely on the witness?---I would prefer it to be in confidence.

PN300

THE SENIOR DEPUTY PRESIDENT: We will go to transcript in confidence. Is there any view about who should be in the court room?

PN301

MR BOURKE: My instructions, your Honour, are that the fewer people, the better, involved with the company.

**** IAN JAMES RAYNER XXN MR PORTELLI
PN302

THE SENIOR DEPUTY PRESIDENT: Then if we can clear the gallery.

CONTINUED IN TRANSCRIPT IN CONFIDENCE
CONTINUED FROM TRANSCRIPT IN CONFIDENCE
<KEVIN ANTHONY HUBBART, SWORN [11.14AM]
<EXAMINATION-IN-CHIEF BY MR BOURKE

PN311

THE SENIOR DEPUTY PRESIDENT: Mr Bourke.

PN312

MR BOURKE: Kevin, please state your name and address for the record?
---Kevin Anthony Hubbart, (address supplied).

PN313

Could the witness please be shown his statement? Do you recognise that document?---Yes, sir.

PN314

It is?---It is my statement.

PN315

Have you checked it recently?---Yes, I have today.

PN316

And it's correct?---Correct.

PN317

And you're happy for that to be your evidence in this matter?---Yes, it is.

PN318

I would tender that document, if your Honour please.

EXHIBIT #B2 STATEMENT OF MR HUBBART

PN319

MR BOURKE: Just a couple of questions briefly, Kevin. In respect to the recruitment procedures, we've heard Bruce give evidence about when he was recruited to the company, you were around about five years ago when that happened?---Yes.

PN320

Are you aware of the procedures that applied in relation to recruitment?---Yes, reasonably. We use an employment agency and they would have sent a letter to Bruce which would have said, (1) what appointment he'd received in way of job title, the fact that he'd be on trial for three months, the rate of pay during say the first six weeks on day shift, while he was in the learning period and the rate of pay when he went onto rostered shift work and they would also nominate the shift number, either A, B, C or D that he'd be part of.

PN321

THE SENIOR DEPUTY PRESIDENT: How long have you been using a recruitment company?---We have been using that since - prior to 1992.

PN322

Okay, so presumably you've got these documents or you can get them from the recruitment company?---Yes. Well, no, we've got personnel records.

**** KEVIN ANTHONY HUBBART XN MR BOURKE
PN323

Good.

PN324

MR BOURKE: So my next question was going to be would you expect to find that when you go back?---Yes.

PN325

The change from the six day to seven day roster which occurred 10 years or so ago, are you aware of any impact that would have on existing accruals?---Yes. When we acquired - sorry, from 1994 we increased the accruals from 38 hours per week to 42 hours per week in line with the increase in the roster and we increased the rate of pay from four weeks to five weeks and that occurred from 4 July 1994 when we started our seven day operations.

PN326

THE SENIOR DEPUTY PRESIDENT: Was there a certified agreement in operation at that point?---I don't think we had one to start off with because all we did was move from a five day operation, a five day and overtime to seven days and I know that the rate of pay went from 29,000 to 45,000 for the blokes moving from a 38 hour week to the full seven day roster.

PN327

No, I was more interested I guess in what industrial instruments applied at that point?---I can have a look back, but I don't think that we had one at that point in time.

PN328

Would you have been respondent to the - it's the Rubber, Plastic and Cablemaking Award?---Yes.

PN329

You would have been?---Yes.

PN330

MR BOURKE: I have no further questions, your Honour.

PN331

THE SENIOR DEPUTY PRESIDENT: Mr Portelli.

<CROSS-EXAMINATION BY MR PORTELLI [11.18AM]

PN332

MR PORTELLI: Thank you. Mr Hubbart, in your statement you make reference to the last enterprise agreement and the severance entitlements or the increased severance entitlements that came about there. Why did the company provide increased severance entitlements as part of that negotiated outcome?---Well, that's a good question because what happened was the company was very frank with the employees prior to the EBA and we set out and discussed with them at length the hit that we were taking in a money sense from Woolworths with price reduction and the then managing director thought that that was going to be something that the guys would understand, but, in fact, what it really did was frighten the hell out of them and they then got this whole emphasis of wanting to worry about what the severance pay was going to be - sorry, the redundancy pay was going to be, so that was how that really came about.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN333

The 52 week cap of the increased severance entitlements, though, were part of a final offer put to the employees which the majority accepted, were they not?
---Yes.

PN334

And there are statutory declarations and a signed enterprise agreement that confirm that?---Yes.

PN335

In paragraph 8 of your statement you make the point that the company didn't consider that there would be a significant downturn, but you're unaware of the economic ups and downs that were coming. By the same token, are you in any way really able to anticipate the hopeful economic upswing in the next year?
---I can only reiterate what Ian's already indicated and that is that we're looking for every opportunity to get back to seven day operations as quickly as we can, but it's a matter of trying to find markets for our product in a very competitive environment and they just don't grow on trees and we just can't get - there are not lots of opportunities for chunky bits of business as we would call them, you know, for them to emerge, so that we've really - we're doing everything we can, (a) to be competitive and, (b) to produce what the market requires, ie. down-gauging of product to make it thinner so that it's cheaper, in order to compete with overseas as well as our local competitor and all of those things are designed to try and get ourselves up with as much - until we can get back to seven day operations, because as Ian has already indicated, the only efficient way to run the place is 24/7, but there's no point in running it 24/7 if we can't sell the stuff.

PN336

Mr Hubbart, in relation to paragraph 5 of your statement, you make the comment that in your opinion the union has given very little throughout negotiations. In your opinion, do you believe that the NUWs proposal of accepting a $130 decrease in wages per week is giving very little or unreasonable?---I recognise the significance that the union place on that $130, but quite frankly, again as Ian has already indicated, it wouldn't be realistic for us to accept, it just is not rational to accept anything other than the $200 because that's - just logic dictates that you would reduce the number of hours on the most effective day or near enough to the most effective day that the company could achieve in order to maximise the reduction possible.

PN337

You mention that the employees, in the view of the employees it would be significant and in the view of the union and, of course, a drop in pay that significant would have that effect. What I am asking, though, is if you believe the $130 that the union and your employees are proposing to cut off their wage on a weekly basis firstly is significant in terms of the cost saving for the company and secondly is reasonable in your opinion?---Well, in answer, yes, it is significant, but it is not as significant as what the company economically requires.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN338

Mr Hubbart, was there to the best of your knowledge a letter of offer provided to Mr Balloch referring to a seven day roster?---I wouldn't have thought that we would have specifically set out seven days, but it was certainly - he applied for a position which was a rostered position and that as I described earlier, he would have gone through this employment agency and this letter would have come to him that would have been couched in terms of training time and that sort of stuff and would have said - may have said that he would go on to a rostered system and his rate of pay would be X dollars.

PN339

Mr Hubbart, if there was no reference to the seven day shift roster in the letter of offer, would Mr Balloch or any other employee beginning with the company have been informed of the shift system by which they were employed, in this case a seven day shift roster?---Certainly, and as I indicated earlier, he would have been given the roster, that he would start on a day shift and they would normally take maybe up to six weeks to be indoctrinated or inducted and then they would know what team they were going to join which would be either one of four, A, B, C or D.

PN340

Would you concede, Mr Hubbart, then that even if there wasn't a letter of offer provided and there seems to be some disagreement about that, that as part of the offer of employment, certainly there would have been an oral offer or some verbal discussion about the circumstances by which individuals that have been employed, in this case a seven day shift roster?---Everyone other than for the two that were mentioned that do not - who only operate day shift, knows that they are on our roster system which is a seven day cycle.

PN341

In terms of the way that people work on a day to day basis, another basis for an employment contract is conduct. The 20 people that we're talking about that are affected by the roster or the changes to the roster system, have all those people since 1994 been employed on the basis of a seven day shift roster?---Yes, or, sorry, other than for the two day shift positions.

PN342

Yes, I understand. Thank you, Mr Hubbart.

PN343

MR BOURKE: Your Honour, I have no further questions for the witness. Thank you, and I have no further witnesses. We will certainly commit to looking for that document - sorry?

PN344

THE SENIOR DEPUTY PRESIDENT: No, keep going.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN345

MR BOURKE: I was going to say we'll certainly commit to getting that document back to you probably today.

PN346

THE SENIOR DEPUTY PRESIDENT: I would actually be interested in - we're only dealing with 20 employees - I'd actually be interested in receiving any contractual material, whether it be letters of offer, et cetera, you've got in respect to the 20 employees, so a small number shouldn't be too much paperwork handling, but that would be useful to me.

PN347

MR BOURKE: I am sure Mr Hubbart will find that task well within his capabilities.

PN348

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Hubbart, have you got the agreement there with you?---No. It's been pinched.

PN349

It's been pinched? Well, pinch it back. Could I take you to what is the last page of the copy I've got which is schedule A and it's a roster, four week cycle?---Yes.

PN350

Mine is actually a roster. It looks like this, a sort of table type form?---Okay.

PN351

And the very last page on my document?---No, I haven't got it on my document at all, but I know what it is, yes, but I haven't got it in front of me.

PN352

Has anyone got a copy of this document apart from me?

PN353

MR PORTELLI: Schedule A entitled roster four week cycle, your Honour?

PN354

THE SENIOR DEPUTY PRESIDENT: Yes.

PN355

MR PORTELLI: Yes, I've got a copy.

PN356

THE SENIOR DEPUTY PRESIDENT: Which I understand is part of the agreement.

PN357

MR PORTELLI: That's correct, it is.

PN358

THE SENIOR DEPUTY PRESIDENT: Okay, that says roster four week cycle?
---Yes.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN359

Presumably that's for one of the teams, is it?---That's in fact for all of the teams, one at a time.

PN360

Okay. Can you tell me what - - -?--- SA means?

PN361

Yes?---SA means shift allowance.

PN362

And what is 13?---That means they get paid 13 hours shift allowance.

PN363

Thirteen hours? So let's see, on week one on day shift, they work 12 hours, they get paid for 13?---Correct.

PN364

Okay, what sort of penalty is that? Is that day shift penalty or something, is it?
---Yes.

PN365

And then the next one down we go 12 hours on night shift?---Yes.

PN366

And that's 10, shift allowance, 13. What does that actually mean?---They get 10 hours shift allowance and they get paid for 13 hours, but overall for that particular week, they would have got 20 hours shift allowance for a total of 84 hours work - sorry, for 60 hours work, sorry.

PN367

So the 10 hour shift allowance, how does that relate to the 13?---It relates to sort of whether it's night shift and whether other penalties apply or not.

PN368

So they've worked 12 actual hours?---Yes, and for instance - - -

PN369

How many hours are they getting paid for for that 12 actual hours?---On the Fridays, I could refer your Honour to this other schedule which is schedule B and which is headed seven day shift arrangement.

PN370

What page is it again?---It's on page 49 and page 50 and 51 and that sets out for each of the day shifts, for instance, on day shift they work - over a four week cycle they would work 65 hours Monday to Friday, get paid 21 hours for Saturday and 24 hours for Sunday, so that they get 110 hours over the seven cycled shifts. On night shift, you can see that they go through and they get 10 hours at 15 per cent award shift allowance.

PN371

Yes, I see?---So that's how those numbers all come about and then over the averaging, they get paid for 55 hours for 42 hours work.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN372

Okay, when I look at this roster over a four week period and if I'm an employee, I just work my way through it, so week one might be - in any one week you will have one team doing the Wednesday/Thursday, another team doing what is effectively week two, another team doing what is effectively week three and another team doing what is effectively week four?---Correct.

PN373

How are you proposing to change what is there? What day should I slash out?
---Slash out Sunday.

PN374

So whenever I see a Sunday with work on it, I take it out, do I, so in week
two - - -?---You could effectively do that, although in a practical sense, that's not how it would work in practice, because we would not shut down every Sunday, we would shut down every second Sunday, so that we would get the Saturday and the Sunday together. Rather than every Sunday, it would be a Saturday/Sunday, then we'd work the whole seven days the following week and then the week after that, we'd work only five days.

PN375

Okay, let's assume I've got two of these documents which gives me eight weeks?
---Yes, and you could have 16 if you wish.

PN376

Okay, over the eight weeks, which days would I cross out?---You'd still cross out - if you wanted to, you could cross out every Sunday or you could cross out every second weekend, Saturday and Sunday.

PN377

So what in actual fact are you going to do?---If we could just tender that, your Honour.

PN378

MR BOURKE: Your Honour, this is a document with the days off actually shaded which should make it easier.

PN379

THE SENIOR DEPUTY PRESIDENT: Okay. I might mark this, Mr Bourke. Shift rotation it's entitled, date of shift 20 October 2005.

EXHIBIT #B3 SHIFT ROTATION DOCUMENT, DATE OF SHIFT 20/10/2005

PN380

THE SENIOR DEPUTY PRESIDENT: Now, can you just take me through this, Mr Hubbart?---Yes. If we forget the dates that are appearing down there, because they haven't happened - - -

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN381

That's fine, yes?---Week one, we have shifts A and B work Thursday and Friday, shift A working night shift and shift B working day shift.

PN382

Now, let me just - let's just say I'm on team A?---Okay.

PN383

So team A, week one I'm working two nights?---Correct.

PN384

And then week two I'm working Monday/Tuesday day shift?---That's right, so two days.

PN385

And three days night shift?---Correct.

PN386

In week three I work Thursday/Friday day shift?---That's correct.

PN387

And week four I work two night shifts on Wednesday and Thursday?---Correct.

PN388

And then I work week five three day shifts?---Correct.

PN389

And then what's this yellow bit?---That means it's hatched out, that's where we're shut down.

PN390

So would I have normally worked then, would I?---Yes, normally you'd - well, no, you probably would have worked - in the second week you would have worked a slightly different number of days because - anyway, over four weeks you'd have worked 14 days.

PN391

Okay, so normally I would have worked 14 days, 14 shifts?---Yes.

PN392

And I'm now working 11 shifts over those, so I've lost three shifts. Is that right, or have I counted wrong?---It's nine, I think, your Honour.

PN393

Let's see. Week one, one, two?---Yes.

PN394

Week two, three, four, five, six, seven?---No. Well, okay, yes.

PN395

Week three, eight nine?---Yes.

PN396

Week four, 10, 11, is that right?---Correct.

**** KEVIN ANTHONY HUBBART XXN MR PORTELLI
PN397

Whereas I normally would have worked 14 do you say?---Yes, I think that's right.

PN398

I can probably count from schedule A, can I? Yes, under schedule A it's got 14, here it's got 11?---Now, you just have to keep working through it because we have to provide for switching over the teams in order to be equitable in terms of who has to in fact - the number of Saturdays and Sundays, they've all got to share because we average their pays.

PN399

Okay, is it suffice to say that those yellow blocks would have normally had night and day shifts on them?---Correct.

PN400

Okay, and you're taking those out?---Correct.

PN401

Yes, okay?---And the sophisticated hatched area is the Christmas shutdown, as it happens to be sitting in there, but we continue that on as though the roster is kept going.

PN402

Okay, so I can see the loss from looking at the yellow areas?---Yes.

PN403

Yes, fine. Any questions?

PN404

MR BOURKE: No, your Honour. I think you've done admirably with all of that.

PN405

THE SENIOR DEPUTY PRESIDENT: You're excused, Mr Hubbart?---Thank you.

<THE WITNESS WITHDREW [11.36AM]

PN406

THE SENIOR DEPUTY PRESIDENT: Now, gentlemen, timing, given we have to finish shortly. I must say it's most convenient for me if you come back Friday afternoon.

PN407

MR BOURKE: Your Honour, I'm in Hobart.

PN408

MR PORTELLI: I'm unavailable. I'm also out of town.

PN409

THE SENIOR DEPUTY PRESIDENT: I will tell you why. It's because my intention would be to sort of absorb all I've been told today and whatever other material you get me over the next few days, listen to your submissions and then hopefully give a decision very quickly, an ex temp one and that's why I prefer to sort of do that rather than sort of, you know, you write to me, we then have a delay while I do a written decision, et cetera - - -

PN410

MR PORTELLI: Your Honour, could I suggest if it's convenient for all the parties that the matter is re-listed for some time early next week?

PN411

THE SENIOR DEPUTY PRESIDENT: I could do that.

PN412

MR PORTELLI: I couldn't do Monday, your Honour, but Tuesday is fine, as is most of Wednesday.

PN413

MR BOURKE: I am in Tasmania again Tuesday all day and in Geelong all day training on Wednesday. I've got Thursday available.

PN414

THE SENIOR DEPUTY PRESIDENT: Unfortunately I'm Full Benching all day Thursday.

PN415

MR PORTELLI: What about Friday, your Honour.

PN416

THE SENIOR DEPUTY PRESIDENT: I have about 400 U matter conciliations on Friday. We're likely to only need a couple of hours, aren't we, tops?

PN417

MR PORTELLI: I would think, yes. All that we'll need to do, at least from our perspective, I'd make some closing submissions, that wouldn't take any more than about 20 minutes.

PN418

MR BOURKE: Likewise.

PN419

THE SENIOR DEPUTY PRESIDENT: Okay, so we need probably about an hour and a half.

PN420

MR PORTELLI: Monday afternoon I might be able to do, your Honour.

PN421

THE SENIOR DEPUTY PRESIDENT: Because I've got Monday afternoon.

PN422

MR BOURKE: I will give somebody else the privilege of appearing before Commissioner Foggo on Monday afternoon.

PN423

THE SENIOR DEPUTY PRESIDENT: So is say 1 o'clock good?

PN424

MR BOURKE: I've got an unfair at 11.30 which might be just a bit tight.

PN425

MR PORTELLI: Yes, I do as well. It might be the same one.

PN426

THE SENIOR DEPUTY PRESIDENT: So 1.30?

PN427

MR BOURKE: I think 1.30 would be fine, yes.

PN428

THE SENIOR DEPUTY PRESIDENT: Let's put 1.30 in. If you both get tied up on your U matters, you can always let my chambers know, but it might encourage you also to settle your U matters as well. I speak with another hat. I will re-list this matter for 1.30 on 21 November here in Melbourne for the purpose of oral submissions. Mr Bourke, if you're able to get that documentation that we've talked about to me as soon as possible, that will assist me in the process.

PN429

MR BOURKE: Yes, I'll have to delegate that, your Honour. As I said, as I leave here, I'm leaving town.

PN430

THE SENIOR DEPUTY PRESIDENT: That's fine. I mean, it can come by the company or whatever and the sooner, the better, for me. I will adjourn until that time.

<ADJOURNED UNTIL MONDAY 21 NOVEMBER 2005 [11.39AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

BRUCE BALLOCH, SWORN PN36
EXAMINATION-IN-CHIEF BY MR PORTELLI PN36
CROSS-EXAMINATION BY MR BOURKE PN56
RE-EXAMINATION BY MR PORTELLI PN116
THE WITNESS WITHDREW PN139
EXHIBIT #P1 STATEMENT OF MR BALLOCH PN140
IAN JAMES RAYNER, SWORN PN142
EXAMINATION-IN-CHIEF BY MR BOURKE PN142
EXHIBIT #B1 STATEMENT OF MR RAYNER PN148
CROSS-EXAMINATION BY MR PORTELLI PN226
KEVIN ANTHONY HUBBART, SWORN PN302
EXAMINATION-IN-CHIEF BY MR BOURKE PN302
EXHIBIT #B2 STATEMENT OF MR HUBBART PN318
CROSS-EXAMINATION BY MR PORTELLI PN331
EXHIBIT #B3 SHIFT ROTATION DOCUMENT, DATE OF SHIFT 20/10/2005 PN379
THE WITNESS WITHDREW PN405