C2005/2379, Transcript of Proceedings [2005] AIRCTrans 775 (30 March 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 10959-1

COMMISSIONER FOGGO

C2005/2379 C2005/2426

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
AND
AUSTRALIA POST ASSOCIATION OF PROFESSIONAL ENGINEERS, SCIENTISTS AND MANAGERS, AUSTRALIA, THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION
s.170LW - Application for settlement of dispute (certification of agreement)
(C2005/2379)

COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
AND
AUSTRALIAN POSTAL CORPORATION
s.170LW - Application for settlement of dispute (certification of agreement)
(C2005/2426)

MELBOURNE

10.07AM, FRIDAY, 18 MARCH 2005

PN1

MS C GEE: If the Commission pleases, I appear for the CEPU and with me is MS JOAN DOYLE who is secretary of the Victorian branch of the union, along with MR M DORNHANN, industrial officer with the Victorian branch of the union.

PN2

MR R FURLAN: If the Commission pleases, I appear in this matter together with Mr S Hehir, on behalf of the Australian Postal Corporation.

PN3

THE COMMISSIONER: Ms Gee?

PN4

MS GEE: Thank you, Commissioner.

PN5

THE COMMISSIONER: I take it that you're going to address both matters, since they're both applications by the CPU?

PN6

MS GEE: Yes, we are. I'll go through the first one and then - - -

PN7

THE COMMISSIONER: What do you call the first one?

PN8

MS GEE: The first one is the matter in relation to thought rates and performances estimates review and swipe cards. And then we'll move on to the other one. Commissioner, we would like to outline the concerns that we have in relation to thought rates, performance assessment and review and swipe cards proposed to be used on a manual modular frames and what is left to this notification. Then we have a proposal that we wish to put to you. First of all, though, I think I should probably inform the Commission that Australia Post is party to a section 170LJ agreement with the CPU called the Australia Post Enterprise Agreement 2004/2006, and this was certified on 24 November 2004, by Lawler VP. The agreement contains a dispute resolution procedure at
clause 12, which gives the Commission power to arbitrate over matters concerning the application of the agreement or any other industrial dispute arising during the life of the agreement.

PN9

A copy of the dispute resolution procedure was provided with the notification. Does the Commissioner have - - -

PN10

THE COMMISSIONER: Yes, I do.

PN11

MS GEE: I'll just take the Commissioner to clause 12 of the agreement.
Clause 12.1, 2 and 3 outlines a fairly standard dispute resolution procedure. Clause 12.3(d) provides that the Commission is able to conciliate and at clause 12.3(e)(f) and (g) that it may arbitrate if necessary. I can inform the Commission that the CPU has met with Australia Post at the local, state and national levels and that all of the issues which are the subject of this dispute, were raised during those discussions and were not satisfactorily addressed. Hence, in accordance with the disputes procedure, we are here today before the Commission. Before outlining the dispute, I should provide the Commission with some background information on the frame. The manual modular frame has a long history of which I propose just to put a few points as briefly as possible. As the name implies, the frame is used to manually sort mail and typically its reject mail returns redirections. Mainly, of standard letters and also C5 envelopes. I'll hand up copies of photographs of the frames for the Commission's reference during my submission.

EXHIBIT #G1 PHOTOGRAPHS OF THE FRAMES

PN12

The manual modular frame was first introduced in the Underwood Mail Centre of Queensland during the mid 1990's as a 72 way break frame. And that simply means that there are 72 apertures or dispersions on the frame. The frame was introduced to replace the 54 way break frame which was currently in use at that time. Can I just refer the Commission to the first photograph of the 72 way break frame. That's the Queensland frame that I'm referring to in that first photograph there. It is my understanding, that Australia Post advised the union at the time that the frame would not be rolled out into other states or other operational areas. As the requirements regarding postal sorting changed in Queensland, the Queensland frame was subsequently modified with the insertion of dividers to increase the number of apertures and the frame also began appearing in several other states.

PN13

The union expressed concerns that the modifications which had been made to the frame had not been approved by the section 39 Concare adviser and may not be compliant with the requirements of the Occupational Health and Safety Commonwealth Employment Act, 1991 and its regulations. And that these changes may increase the risk factors and health and safety. As well, the union identified a number of other concerns with the Queensland frame. Our preference was for a smaller frame, a frame comprising three to four modules, rather than five and a preference for seated work. It was against this background, Commissioner, that Australia Post informed the union in 2002 that it wanted to now introduce the Queensland frame nationally, in 72; 90; and 108 way break configurations. In addition, Australia Post advised the union that it also wanted several conditions attached to the frames. These were firstly, clustering. That is that the frames would be corralled together, in a small designated area on the processing floor.

PN14

Secondly, swipe cards. That operators would swipe personal ID cards across a sensor when entering or exiting the manual processing area. The information recorded, would include the time, date and place of the clocking, a unique card number and the employee's personal APS number. Thirdly, performance assessment and review. A process would be put in place to assess whether mail officers are achieving and maintaining the required performance standard, that is sort rates and fourthly, sort rates. The expectation being that operators will achieve an individual sort rate of 25 letters per minute or 1500 letters per hour. Now, over the next many months, the union bent over backwards to assist Australia Post with redesigning the frame. I refer the Commissioner to the second photograph there of the redesigned manual modular frame.

PN15

In March 2003, a prototype of the new design was trialled at Dandenong Letter Centre. And following the trial, Australia Post proceeded with the implementation of the new equipment commencing in the Perth Mail Centre then the Adelaide Mail Centre. In Sydney, east and west letters facility and in Dandenong letters facility. The other items, that is, the sort rates, clustering, performance assessment review and swipe cards, were not agreed and were still under discussion. Nor was the change to work practice of someone other than the mail officer clearing the frame and bringing mail to and from the frame, which is the subject of the second dispute here today agreed. In the absence of an agreement on these outstanding issues, a van was placed on the rollout of the frames in New South Wales and the matter was placed in dispute in Victoria. That was in August 2003 and Australia Post notified a section 99 dispute and the matter was subsequently heard before Commissioner Cribb on 22 August 2003. The case number was 2003/5169.

PN16

Following a further conference on 25 August before Commissioner Cribb, it was agreed that the bans would be lifted and if the parties were unable to reach agreement, the matter may be referred back to the Commission at any time. Arising from that Commission hearing, a joint union management workshop was conducted in August 2003, to examine a number of things in relation to the frame, including training, concerns about the stability of the frame, the handing over of a MODAPTS work study by Carmel Bartolich on sort rates and a summary report on repetition and muscle fatigue by Judith Farrell, both of which were commissioned by Australia Post.

PN17

The issue of sort rates, performance assessment and review and swipe cards were not resolved during the workshop. These issues were subsequently raised in the CEPU log of claims served on Australia Post in November and December 2004, for the purpose of negotiating an Enterprise Bargaining Agreement No. 6. Even so, they were not the subject of those discussions. Now however, with the barely dry on the new EBA, Australia Post is proceeding to roll out those issues in the same terms as when the matter was before Commissioner Cribb and when there is clearly no agreement with the union on these issues. In our view the time for negotiating these matters was during the EBA6 negotiations. However in typical Australia Post fashion, management thinks it can now just unilaterally steamroll these issues through.

PN18

Turning now to the concerns we have regarding sort rates and performance assessment of view process and the swipe cards. These are as follows. In relation to sort rates, we say that in essence, the proposed training and assessment sort rate of 1700 letters per hour and the individual sort rate of 1500 letters per hour are unrealistic and are not be consistently achieved in any facility using the frames and may be injurious to the health and safety of mail sorters. By way of evidence to support our position, we draw to the Commission's attention the following.

PN19

Firstly, the fact that the type of mail sorted on the frame, that is reject mail, returns, redirections et cetera is more difficult to read and therefore takes longer to sort and curiously the assessment of the training rate that's being conducted at the moment is being done, not on live mail, but on test mail, which is designed according to some Australia Post managers to make sure that everyone can pass the training assessment.

PN20

Secondly, the fact that Australia Post are in Corporate Ergonomics in March 2002, confirmed that sorting at the 72 way break frame is in the range of 900 to 1200 envelopes per hour and that based on previous MODAPTS assessments, for every 10 apertures or breaks, the sort rate may decrease by 50 envelopes per hour and that's when you're using experienced mail officers. Now that range is supported anecdotally by union reps, HSRs and union officials around work places. Yet Australia Post want a single rate of 1500 letters per hour on a 78, 90 and 108 way break frame.

PN21

Thirdly, the fact that Australia Post own recent data demonstrates that sort rates currently being achieved are well under the demanded individual sort rate. I will hand up copies of DLC performance on the manual modular frame, over several days in February this year, for the Commission's information.

EXHIBIT #G2 COPIES OF DLC PERFORMANCE ON MANUAL MODULAR FRAME

PN22

I don't propose to go through it entirely but just a cursory glance at the first couple of pages there and Commissioner, you can see that the various categories of mail that have been sorted and over in that last column, the sort rate for each of those categories of mail and that's for 10 February this year. If you look down at the various sort rates achieved, you can see that its in the 800, 900 to - in this case, about 1000 letters being sorted and it's a similar story - - -

PN23

THE COMMISSIONER: Ms Gee, this may be something that is totally apparent to you but it's not to me. Why are these sort rates for overseas mail higher than for other mail?

PN24

MS GEE: I believe that's because that the overseas mail is generally more legible, clearer, more clearly written. I think that's the case and therefore easier to sort, whereas the other categories of mail are redirections and returns and window-faced letters that require tapping of the envelope in order for the address to appear, so that the mail sorter can then read it and put it in the appropriate aperture.

PN25

Those few pages there are really telling the same story, if you go through and have a look at just the sort rates - you can see it is in that range that I just mentioned. If we look over on the A3 sheets, again we can see in that first section there, staff - I'm looking at 7 December and number of staff sorting in that staff movement log, first columns there, staff sorting during the various shifts and articles per work sorted over in the column just before the comments and again, we're only talking about sorting staff, we're not talking about ancillary staff being counted in this number, such as supervisors who might be in the area, but they're not actually sorting and again the sort rates are within the 800, 900, 1200 range.

PN26

The next couple of pages basically tell a similar story. We'll leave that for the moment. Fourthly, the fact that the MODAPTS assessment, which was used to determine the sort rates, is essentially a time and motion study. MODAPTS is not a method to evaluate ergonomic or other OH&S risk factors and as well, the study was done in a simulated environment and is not based on a whole system of work in a real life situation.

PN27

Fifthly, the fact that the Judith Farrell Report inappropriately confirms the MODAPTS study, that is the sort rates, when there is no indication that Farrell has any qualifications to evaluate production standards or sort rates. Sixthly, the fact that this type of work is classic repetitive upper limb work which is loaded with potential for injury and upper health problems. Lastly, the fact that hundreds of mail officers have signed a petition in the affected facilities advising that in their view the proposed sort rates are unfair, unreasonable and unsafe and overwhelmingly the majority of people who work on the floor on the frames are opposed to the new conditions of work on these frames. These people are professional sorters. They are the real experts and we would ask that the Commission pay some regard to their concerns. I will hand up for the Commission a summary of the petitions that have been collected in relation to this matter.

EXHIBIT #G3 SUMMARY OF PETITIONS

PN28

THE COMMISSIONER: Could I just ask you this? The petition that has been signed, has it been signed in opposition to the frames and the sort rates, to one or to both?

PN29

MS GEE: No, it's the issues attached to the frames. So it's the sort rates on the frame. It's the use of a performance and review process in relation to the frame and it's the swipe cards, the use of the swipe card system in relation to the frame.

PN30

In relation to the performance assessment and review, our concerns are that the whole process is driven by unrealistic sort rates and that employees are threatened with disciplinary action under the Australia Post Code of Ethics when those sort rates are not met. The performance assessment and review process is not about the development of employee skills despite Australia Post's claim that it is a supportive process. It is solely about assessing an individual's performance against a predetermined sort rate. There is no acceptance or tolerance of normal human variation in the way people work in the process. In reality the normal way in which human beings operate is within a bandwidth of performance. The consequences for employees who fail to meet the demanded sort rate are very serious. Employees may be dismissed for a breach of the code of conduct.

PN31

Putting aside for a moment that the sort rate is allegedly too high, there are other inherent problems with basing a performance assessment process on a sort rate. For instance in some states the manual sort area is used as an interchange bench so there is no opportunity for people to maintain their skills and therefore the required sort rate.

PN32

While the performance assessment review document lists a number of factors that need to be taken into consideration in assessing an employee's performance, our members have no confidence that all the factors that need to be taken into account would be and believe that the code of ethics will be used to bully and harass employees. In relation to the swipe cards, our concerns are that the productivity of people working in the area will be constantly monitored. That neither the union nor the people working in the area will have access to or control over what information is being collected or the accuracy of the information and that decisions which impact on employees will be based on data collected from the swipe card technology. As well, constant monitoring of employee, whether it be through swipe cards or sort rates or performance assessment review process, is considered dangerous to health because it causes work stress and adds to work strain injuries.

PN33

Commissioner, as mentioned previously discussions have taken place between the parties and have not resulted in agreement on these issues in relation to the frame. Alternative solutions for how to progress these issues put by the CEPU have simply been dismissed. In our view if Australia Post wants to consult with the union on these changes then there is an obligation on the management to participate in a genuine two-way communication that goes beyond simply being prepared to only discuss their MODAPTS, time and motion work study.

PN34

These are issues which the CEPU and its members feel very strongly about and in light of such anxiety among the people doing the work and some external advice in relation to production standards, that the MODAPTS and Farrell study have not dealt with a number of safety issues, we want an exercise to validate the sort rates. We would want to use our own ergonomists and OH experts in that process. We would require access to all the data on which the studies were based. It may also be worthwhile as part of this exercise to examine to what extent does MODAPTS fulfil compliance with the national code of practice for manual handling.

PN35

The CEPU, Commissioner, suggests that a process of conciliation between the parties with the assistance of the Commission to attempt to reach an agreement on the proposal just outlined, to discuss performance assessment and review, swipe cards and bundling issue and to report back to the Commission on the outcomes of the validation exercise. We are also of the view that any further implementation of the issues should cease until this process is completed. We've taken some advice on this matter and we believe that the kind of review we are seeking could be undertaken fairly quickly.

PN36

THE COMMISSIONER: What do you call fairly quickly?

PN37

MS GEE: Perhaps about a month.

PN38

THE COMMISSIONER: Yes, thank you.

PN39

MS GEE: Commissioner, I think I might leave it there for the time being and allow my colleagues from Australia Post to present their submission or would you like to hear me - should we deal with the issue of bundling?

PN40

THE COMMISSIONER: No, I'll hear from Australia Post first and then we'll go on to the issue of bundling. Where does it fit into this? Well, I'll hear Australia Post and then we'll come to the issue of bundling. Yes, Mr Furlan?

PN41

MR FURLAN: Thank you, Commissioner. Commissioner, as Ms Gee has indicated this matter has a very extensive and somewhat laboured history. The manual processing initiative which generated the proposed implementation of manual modular frames at Australia Post, commenced, in a formal sense, with Australia Post's representation to the union in approximately April or May of 2002. The intention of that initiative was to focus on a number of key issues to do with the processing of manual letters in mail centres and focus in part on the measurement activities associated with that mail and that aspect relates to the Australia Post proposal for automated data collection, what has been colloquially referred to as the swipe card utilisation.

PN42

It also related to new equipment which was initially intended to be the 72 way Queensland frame that is pictured in the first picture on exhibit G1. It is also related to optimal mail presentation arrangements and performance in the manual sorting area and that latter matter relates essentially to the provision of an appropriate sort rate for operators sorting mail on the frame and also to a performance management process associated with managing the performance of work in that area.

PN43

These initiatives were discussed with the CEPU initially in a number of meetings, 8 and 10 May 2002, as a consequence of which some consultative arrangements were agreed. Commissioner, if I might provide a copy of formal advice that subsequently was provided for the union.

EXHIBIT #F1 LETTER DATED 09/09/2002

PN44

MR FURLAN: Commissioner, exhibit F1 comprises a letter from Australia Post management to the CEPU national office dated 9 September 2002, which followed the meetings of May 2002 outlining the present position that had been reached following discussions on that initiative, outlining the background to the initiative, outlining the intended implementation of the Queensland frame, which had been in use since approximately 1995 in Queensland operations and which had been the subject of appropriate occupational health and safety risk assessments and also the subject of a Concare adviser letter of no objection, which essentially constitutes an approval process as to the, I suppose, safe operation of that equipment.

PN45

It also addressed issues to do with sort rates, also addressed the issue of whether operators perform - or sorting mail at that equipment should be doing so sitting or standing. In that regard on page 2, Commissioner, there is reference to the provision of a report by Ms Carmel Bartolitch on sort rates applicable to that particular frame, that is the 72 way frame.

PN46

If I might explain, Commissioner, Ms Bartolitch undertook an analysis of sort rates or an analysis or appropriate rates for that equipment using what Ms Gee has termed a MODAPTS work study and if I might, with the Commission's indulgence, explain the MODAPTS approach. MODAPTS is an acronym for a modulated assessment of predetermined time standards and it is a study method that is used to determine the normal time to perform a combination of movements in a normally paced manner. So in other words it assesses the time taken to pick up a letter, place it in a particular aperture, move to place another letter, clear down aperture, etcetera.

PN47

THE COMMISSIONER: Say the initials for me.

PN48

MR FURLAN: The initials are MODAPTS M-O-D-A-P-T-S. That is the terminology used by Ms Gee. It is colloquial terminology for that work study and that translates to modulated assessment of predetermined time stands. So MOD is acronym for modulated and so forth.

PN49

THE COMMISSIONER: Yes, thank you.

PN50

MR FURLAN: That study includes provision for making decisions, reading words and was applied using smaller stature individual operators to base line the task movements. So in other words it is a conservative approach. It is not taken on the top of the range stature of individuals. It is taken as a base line meaning that it is a rate that could be expected to be achieved by the vast majority of employees within a defined normal range of statures.

PN51

Commissioner, this is a germane issue, and I am sorry if I am labouring some aspects of this, but I think it is important to actually understand the methodology that has been applied because it is, I think, critical to the issues that the union are contesting regarding the implementation of these frames.

PN52

The approach that is taken, Commissioner, looks at sort rates in a number of facets. The first facet is a pure sort rate and what is applied in effect for training purposes, that is training of new employees on sorting. That sort rate provides an allowance for fatigue, for micro pauses that occur during the activities, but does not apply any allowance to clear down apertures that are filling with mail, other than a clear down when an aperture is completely full. So partial clear downs are not incorporated in that rate. That is why that rate is the highest rate. The training rate will always be the highest rate in terms of any outcome of a MODAPTS study.

PN53

Then there is a production rate determined and that production rate incorporates the same allowances as the training rate, but also includes additional clear downs and other clearing methods that might be used in the actual practical sorting on a particular frame.

PN54

The third component of sort rates, Commissioner, is, if I could term it such, articles per work hour rate. That third component, Commissioner, is exactly the material that has been provided by the CEPU as part of exhibit G2. That material is a calculations that includes all resources in the area and the total mail processed over an hour.

PN55

I will not go specifically to the 78 way frame at this stage, Commissioner, because we are still I think moving historically through the initial discussions on the
72 way Queensland frame and if I could just refer back to exhibit F1, the exhibit talks about - or the letter that was provided to the union at that time in September 2002 talks about training for mail officers on that frame, training for process leaders or team leaders, supervisors, in the area and what impact that might have on staffing or on shift and rotation arrangements. You will note, Commissioner, that on the top of page 3 there was a clear indication that there would not be a significant impact on shift rotation or rotation arrangements and any impacts that would occur or that might occur would be the subject of State or facility level consultation.

PN56

In terms of the aspect of swipe cards, as referred to by Ms Gee, there was reference in the letter to the use of swipe cards. That use was intended and was subsequently confirmed as not to comprise individual monitoring of employees. I will deal with the specific aspects of the swipe card system separately or subsequently in my submissions. Suffice to say, Commissioner, that swipe card technology is intended to capture the total number of resource hours that are used on manual sorting on the manual modular frames. That technology cannot and does not, provide an individual monitor of an employee. It merely indicates the number of cards that have swiped into a particular area and the period of time within which those resources are in that work area, so it provides a total number of hours of labour in a particular work area and the output - - -

PN57

THE COMMISSIONER: Is the scheme capable of having that function, of identifying individual sort rates?

PN58

MR FURLAN: Not as we have implemented and we have provided an assurance to the union that we will not utilise the technology to monitor individual performance and as I said, I will come more specifically to that in further submissions. The other component that the union maintains is a disputed matter relates to the performance assessment process and the letter of 2002 advises that we intended to introduce a similar process to other programs that apply within Australia Post and that program was designed to assist people in a constructive and positive way to achieve and maintain performance standards. There has been a very extensive communication and consultation process related to all of those matters, to swipe cards to sort rates and to the performance assessment process. You'll note that the final paragraphs in Exhibit F1 relate to consultation and implementation and confirms that there will be further consultation on a number of issues and proposes that consultation process also entail state and facility level consultation.

PN59

Commissioner, since that letter of September 2002, there have been 19 national consultative forums related to the manual processing improvement initiative. There have been three, 2 day workshops, comprising various national and state representatives, including obviously management and union representatives, as well as union representatives who constituted part of a joint working party, whose role was to participate in the assessment of sort rates that was undertaken subsequently on the new frame, not the Queensland frame, Commissioner, but the 78 way frame, by Miss Bartolich in 2003. There were 2 union representatives on that joint working party and those representatives had approximately 20 working days of direct involvement in that process, which included a number of visits to facilities. The facilities were principally Perth Mail Centre and Dandenong Letter Centre, but also included some other interstate visits and ongoing communication process.

PN60

Commissioner, in that context, if I could submit a document that attempts to summarise rather than provide you with several dozen papers, attempts to summarise the process that has taken place in terms of a range of issues associated with the implementation of this manual processing initiative.

EXHIBIT #F2 SUMMARY OF DOCUMENTS

PN61

First page of exhibit F2 Commissioner, relates to a range of equipment issues associated with the manual modular frame and column 1 identifies the issues. Column 2 identifies our understanding of the union position. Column 3 what action has been taken and column 4, the outcome of those actions in relation to the specific issues. As I indicated, the first two pages relate to equipment issues and the Queensland frame was disputed. The implementation of the Queensland frame was disputed as Ms Gee confirmed in her opening submissions. Discussions took place with the union and further risk assessment was requested, ultimately leading to a proposed new frame design which was commenced following a national workshop in mid October 2002. That new design was developed in consultation with the union and a field trial methodology and evaluation process was agreed and that led to the implementation of the 78 way frame which is pictured at the second picture on exhibit G1.

PN62

THE COMMISSIONER: Briefly why was the 78 frame preferred over the
72 frame?

PN63

MR FURLAN: The union's view was that the 78 way frame or the 72 way frame rather, had some deficiencies and they required a smaller and lower frame that utilised a standard chair as opposed to a special chair, what would be a high chair for the purposes of the 72 way frame. If you examine the pictures in G2, Commissioner, you will see that the first picture has - the frame height is higher comparatively than the 78 way frame. The lowest aperture is higher on the 72 than it is on the 78 way frame.

PN64

THE COMMISSIONER: What about the bottom?

PN65

MR FURLAN: I'm sorry, Commissioner, the bottom?

PN66

THE COMMISSIONER: The height above the floor for the lowest frames.

PN67

MR FURLAN: That's what I mean, the height above the floor is higher on the 72 way frame than it was on the 78, so the 78 way frame was lower in terms of its distance from the floor.

PN68

THE COMMISSIONER: What about the upper limit?

PN69

MR FURLAN: The upper limit also is lower on the 78 than it was on the 72.

PN70

THE COMMISSIONER: So the apertures in the 78 are smaller than the 72.

PN71

MR FURLAN: They are smaller but I believe they are marginally wider, no, the same width. I withdraw that, Commissioner.

PN72

There were extensive discussions on the design of that frame, a number of other aspects were addressed. I'll just draw the Commission's attention to the issue of availability of a chair to operate on that frame. The union's position was that sitting and standing should both be options in terms of employees sorting on that frame. That was agreed by Australia Post and chairs were provided, on the basis that performance would not be detrimentally effected and it is notably however Commissioner, that the more considered Occupational Health and Safety view was that employees were best advised to sort standing at that particular frame.

PN73

As I indicated Commissioner, the Queensland frame, despite the fact they've been operating since 2005, was opposed by the union. We did enter into a extensive consultative process addressing a number of frame design issues, leading ultimately to the development of a modified frame - - -

PN74

THE COMMISSIONER: Just a moment. You said the Queensland frame has been operating since 2005?

PN75

MR FURLAN: No, 1995, I'm sorry, Commissioner. Had been operating since 1995 and we had as originally proposed, intended to implement that frame nationally. Because of the unions concerns regarding that frame, we agreed to go through an extensive redesign. That redesign led to the implementation of the
78 way manual modular frame.

PN76

THE COMMISSIONER: That's a good outcome, isn't it?

PN77

MR FURLAN: Indeed, Commissioner.

PN78

THE COMMISSIONER: You're not being critical of that?

PN79

MR FURLAN: No, I'm not. All I'm indicating, Commissioner, is that this has a long history and there has been extensive involvement of the union in the process.

PN80

At the conclusion, about 8 September 2003, both Australia Post and the CPEU reported back to the Industrial Relations Commission, the then, Commissioner Cribb, that all of the equipment issues, the MMF equipment issues, had been resolved.

PN81

THE COMMISSIONER: When was that?

PN82

MR FURLAN: 8 September 2003. If I might, Commissioner, provide you with a copy of that advice.

EXHIBIT #F3 LETTER OF ADVICE FROM AIRC

PN83

MR FURLAN: Now, Commissioner, Exhibit F3 comprises 2 letters, first dated 2 September 2003 from Australia Post to Commissioner Cribb with copies of the union outlining that there had been a teleconference involving Australia Post and union representatives with Commissioner Cribb that this letter confirmed the outcomes of those discussions and more specifically the outcomes of a joint management union workshop which had been held on 28 and 29 August. It will show that there would be a further workshop on the 4 September on other matters and that the Commission would be further advised. The attachment to that letter indicates the number of issues were addressed regarding the frame design as such.

PN84

The subsequent letter of the 8 September 2003, confirmed that there would be no further workshop in September, 4 and 5 September - that some work was still required to complete a safe operating procedure and risk assessment but that other items had been resolved with three exceptions, sort rates, form assessment and review and swipe cards. A copy of that advice had been provided also to the union, and that was the understood joint position. I will be returning to that, Commissioner, in relation to the aspect of clear down or clear downs that has been raised by the union and which is the subject of the separate dispute notification in relation to Dandenong Letter Centre.

PN85

THE COMMISSIONER: Well perhaps you could deal with that after when I've heard from Mr Dohrhann?

PN86

MR FURLAN: Indeed, indeed, Commissioner. Sorry, Commissioner, at that stage there had been a resolution of equipment issues. If I might return to Exhibit F2, the next summary of issues pertains to the performance and assessment review on the manual modular frame. It indicates that a draft document outlining the performance assessment and review process had provided to the union in October 2003, that whilst the union did not respond specifically with comments, they rejected implementation of that process. We made further attempts to gain a union - or an appreciation of the union concerns. The union's response was that, they would not discuss the performance assessment until other issues were resolved. Obviously as noted in Exhibit F3, we advise the Commission in September 2003 that that matter was still outstanding.

PN87

Since that time, we have provided a further amended performance and assessment review draft paper for comments of the union in January of last year. The union advised Australia Post that they were in dispute on the sort rate issue and that they reviewed the performance assessment as integrally related to that and then notified the dispute in February 2004 under the then existing Enterprise Agreement in Australia Post. Subsequently, the union pursued the issues related to the outstanding three matters, sort rate swipe cards and performance assessment in EBA6 negotiations, an agreement in EBA6 - leading to EBA6 was concluded in October 2004 and certified as Ms Gee noted in November 2004 in this Commission. The only reference to any of the three matters, Commissioner, in the Enterprise Agreement is evident in clause 8.16 of the agreement. Do you have a copy of the agreement, Commissioner?

PN88

THE COMMISSIONER: Yes, I do.

PN89

MR FURLAN: Clause 8.16 states that:

PN90

Managers shall not use, sort or machine rates in an unreasonable and unfair manner in the management of an employee's work or performance.

PN91

THE COMMISSIONER: What does that mean?

PN92

MR FURLAN: It means, Commissioner, that Australia Post will use reasonable processes that are clearly understood and articulated and communicated to employees about performance management. It will not use unreasonable and not place unreasonable demands on employees in terms of achieving particular sort rates, that the rates that have been applied or will be applied are determined through appropriate work studies and that the process is intended to assist employees to achieve the required outcome. It is not intended to be applied in a punitive or in a targeted manner. That is my interpretation, Commissioner.

PN93

THE COMMISSIONER: That's the problem, isn't it? It's a fairly broad-brush statement. I wonder whether there would be people who have a different views other than you in relation to that - anyway, I'm not critical of it, I think where they're broad like that it gives the Commission lots of scope, lots of work because the parties are unlikely to ever agree on the definition?

PN94

MR FURLAN: That was the point that was reached as an outcome of the negotiations, Commissioner.

PN95

THE COMMISSIONER: And you say that that 8.16 encompass the sort of issues that was raised regarding sort rates over the MFF?

PN96

MR FURLAN: I was not a party to the Enterprise Agreement negotiations in full, Commissioner, but it is my understanding that the union's position in relation to sort rates was or attempted to be addressed through that outcome.

PN97

As I indicated there was a further Performance Assessment and Review process document provided to the union, again in 2005, January of 2005. The union's response was that the process was open to potential abuse and that the process had a leap to disciplinary procedures. A response was provided to the union and some elements of the Performance Assessment and Review Process were revised.

PN98

The revised document - sorry, I should note in that context, Commissioner, that the revision related to a review panel process which the Performance Assessment and Review incorporated, and that relates to referral after a number of assessments that were unsatisfactory with unsatisfactory outcomes to referral of those type of employees in that circumstance to a facility review panel. That revised document was provided to the union but rejected in February. There - - -

PN99

THE COMMISSIONER: What year are we up to now?

PN100

MR FURLAN: 2005. Sorry, Commissioner, yes - and the final matter that had been raised, the only - well the second of the specific issues that the union has raised in relation to performance assessment was to indicate that their view was that the accuracy rate of 99 per cent which was provided as part of the sort rates requirement was too high and there was an indication that, that in response from Australia Post that we were prepared to revise the accuracy rate to 98 per cent. In response, the union notified this Commission of a dispute. In that context, Commissioner - - -

PN101

THE COMMISSIONER: Are you saying that the 98 per cent has been rejected by the union?

PN102

MR FURLAN: Well, we assume it's been rejected because they have notified a dispute. In that regard Commissioner, I might provide the Commission with a copy of the Performance Assessment and Review material. Commissioner, I will not deal in detail with the review process other than to indicate that it provides for an outline of the rationale in the purpose of the performance assessment review. It highlights that it is intended to benefit both employees and Australia Post, that there are several stages. There is an initial performance assessment. There is formal review and on page 16 is outlined the process for a review panel. That review panel process was, as I said, the subject of some revision following discussions.

PN103

Finally, that ongoing performance monitoring could occur and the union's concern regarding the disciplinary process, Commissioner, relates to the fact in the final, I suppose, analysis where there is deliberate under performance, that is where an individual has no satisfactory explanation for not achieving the required sort rates, there is capacity for the individual to be subject to a code of conduct or disciplinary process. However, that would not occur until there had been validation of the person's capability to perform at the required rate through the training assessment and through ongoing performance validation.

PN104

THE COMMISSIONER: With regard to the acceptance by Australia Post of the 98 per cent accuracy on page 21 where you talk about observation, you have still got the 99 per cent that was in there.

PN105

MR FURLAN: Yes. We indicated to the union, Commissioner, that we would be prepared to modify that. We have not actually modified the document.

PN106

THE COMMISSIONER: So you are saying that you agreed to 98 per cent
and - - -

PN107

MR FURLAN: Well, we said - - -

PN108

THE COMMISSIONER: Well, just let me finish the question.

PN109

MR FURLAN: Sorry, Commissioner.

PN110

THE COMMISSIONER: - - - as a way to reach agreement with the union, but that Australia Post does not believe that 98 per cent is the accuracy rate that should be struck. It still maintains that it should be 99.

PN111

MR FURLAN: Well, our view, Commissioner, was that 99 per cent was appropriate. We were prepared to compromise in securing an agreed outcome to revise the rate.

PN112

THE COMMISSIONER: So if you have got 1500 letters a day - - -

PN113

MR FURLAN: An hour.

PN114

THE COMMISSIONER: An hour, you say that you can only make a mistake of 1 per cent?

PN115

MR FURLAN: Yes, that is in the assessment and that is a standard that has applied in Australia Post since my employment with Australia Post.

PN116

THE COMMISSIONER: How long ago is that?

PN117

MR FURLAN: Going back to 1998.

EXHIBIT #F4 REVIEW PROCESS

PN118

MR FURLAN: Commissioner, we have not reached agreement on that, but we have been endeavouring to secure agreement on this process since October 2002. It is only really in the last probably 3 months that we have some specific concerns regard the performance assessment process raised by the union and those concerns really have only emerged as a consequence of advice from Australia Post of our intention to implement. So you know we have had a stonewalling, if I could characterise it as such, up to a certain point and more recently we have had two specific issues.

PN119

As I indicated, we have responded to the disciplinary process and we have responded to the accuracy rate aspects and we believe that the performance assessment process is a method that is both applied more broadly within
Australia Post, is a reasonable process, has been a process that has been the subject of review in a contested matter in the Australian Industrial Relations Commission recently and has been effectively regarded as being an appropriate method for performance assessment in determining or managing employees' performance. It is, Commissioner, a process that has existed in other operational areas within Australia Post for many years. It in fact is a process that is based on the very same procedures, similar procedures, to what apply in the delivery operations of Australia Post. That is it has an initial assessment and ongoing reviews, assistance and referral of failures to meet the standard to a review panel initially and the review panel would then be making recommendations in relation to the specific cases that are referred.

PN120

I might note, Commissioner, that the union's concern about potential abuse or targeting of employees, abuse of the process or targeting of employees is something that is not evident in terms of the application of that process within Australia Post generally and we believe that the review processes that we have in place would ensure that those instances would not occur or would be remedied if they do occur within the context of the review panel process.

PN121

THE COMMISSIONER: Who is on the review panel?

PN122

MR FURLAN: That is outlined, Commissioner, at page 16 of the exhibit F4.

PN123

THE COMMISSIONER: I can't find it.

PN124

MR FURLAN: I am sorry, you are right, it is not at 16. If I could just have one moment, Commissioner. Commissioner, the review panel comprises the facility manager at a facility and a union representative.

PN125

THE COMMISSIONER: Where does it say that?

PN126

MR FURLAN: It is in separate advice that has been provided to the union.

PN127

THE COMMISSIONER: I see. In relation to the undertaking which Australia Post said it would give to the CEPU regarding the application of the system not being - - -

PN128

MR FURLAN: The swipe card system.

PN129

THE COMMISSIONER: - - - not being used for disciplinary purposes, is there correspondence to that effect which has been provided by Australia Post?

PN130

MR FURLAN: Yes, there is, Commissioner, if I might just provide you with - there was as early as October 2002 an assurance provided, which has subsequently been restated. The assurance was in a letter to the federal office of the union dated 25 October 2002. It talks about the manual processing initiative workshop that was conducted and I think I referred initially to that workshop in September, I think, of 2002 and it talks about the use of swipe cards. It indicates that we have indicated that the data obtained will not be used at an individual level.

PN131

THE COMMISSIONER: Where are you?

PN132

MR FURLAN: I am sorry, Commissioner, the third paragraph of that letter talks about discussions about the concern of the union that information obtained would be used at an individual level for management and indicates that, that would not occur and we have offered to discuss written assurances to address the concerns and explained that from a practical viewpoint the data cannot be used for performance management purposes at an individual level. It also highlights that the swipe card system had been in operation at the Underwood Mail Centre in Queensland, which was the actual origin of the 72 way or the original site for the 72 way frame for a number of months at that time and there were no instances of alleged misuse of that data. Just in that context, Commissioner, it might be appropriate if I provide you with a copy of a document that has been provided to the union on the swipe card operations.

EXHIBIT #F5 LETTER DATED 25/10/2002
EXHIBIT #F6 SWIPE CARD OPERATIONS MANUAL

PN133

THE COMMISSIONER: Mr Furlan, are you going to be much longer?

PN134

MR FURLAN: Commissioner, the other matters I wish to address - we're on to the swipe card matter at the moment. I did want to move on to sort rates, so that would be possibly another 20 minutes.

PN135

THE COMMISSIONER: Yes. I am just going to hold you there. I think it might be useful if we moved into conference to discuss some of these issues in regard to processing.

<NO FURTHER PROCEEDINGS RECORDED [11.56AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #G1 PHOTOGRAPHS OF THE FRAMES PN11
EXHIBIT #G2 COPIES OF DLC PERFORMANCE ON MANUAL MODULAR FRAME PN21
EXHIBIT #G3 SUMMARY OF PETITIONS PN27
EXHIBIT #F1 LETTER DATED 09/09/2002 PN43
EXHIBIT #F2 SUMMARY OF DOCUMENTS PN60
EXHIBIT #F3 LETTER OF ADVICE FROM AIRC PN82
EXHIBIT #F4 REVIEW PROCESS PN117
EXHIBIT #F5 LETTER DATED 25/10/2002 PN132
EXHIBIT #F6 SWIPE CARD OPERATIONS MANUAL PN132