C2007/3003, Transcript of Proceedings [2007] AIRCTrans 508 (1 October 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17420-1

COMMISSIONER BLAIR

C2007/3003

s.170LW - prereform Act - Appl’n for settlement of dispute (certified agreement)
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
and
Venture Industries Aust Pty Ltd
(C2007/3003)

MELBOURNE

1.51PM, MONDAY, 17 SEPTEMBER 2007

Continued from 30/8/2007

Hearing continuing

PN106

THE COMMISSIONER: Good afternoon. Is there any change in appearances?

PN107

MR FELDMAN: Commissioner, you may recall that at the last hearing there was some talk about the attendance of Mark Walker, the international CEO.

PN108

THE COMMISSIONER: Yes.

PN109

MR FELDMAN: MR M WALKER is present in the Commission today. He has flown in, in relation to being able to try and negotiate this dispute. Also
MR L WANDMAKER, the IR manager of Venture Industries is present.

PN110

THE COMMISSIONER: Thank you, Mr Feldman.

PN111

When the parties last met, which was 29 August, there had been a return to work and there were supposed to be some discussions at a very senior level, including Mr Walker and Mr Jones. Who would like to lead off in terms of where we are at in regards to those discussions? Yes, Mr Feldman.

PN112

MR FELDMAN: Commissioner, there have been a number of discussions that have taken place over the last fortnight. I propose to just briefly outline the meetings that have taken place and Mr Walker might then comment on some of the substantive issues. In terms of the meetings, I believe in the first week which was the week commencing 3 September, there were a number of meetings held between directors of the company and senior officers of the union, regarding redundancy and the proposed process moving forward. In the second week Mr Walker flew into the country on the evening of Tuesday 11th and he met with Ian Jones and Paul Diffoleese on the Wednesday 12th, and there were substantial discussions about issues in dispute.

PN113

Further meetings also took place on the Thursday the 13th and Friday the 14th and they have been out for the discussions today. There has been an exchange of documents in terms of proposed terms of instruments to be put in place, both in terms of various - securing employee entitlements but also around the terms of the proposed collective agreement. There has also been discussion around a draft notice that the parties would put to employees about where they are at with the negotiations and matters in dispute.

PN114

But I might pass to Mr Walker who might comment on some of those issues.

PN115

THE COMMISSIONER: Thank you, Mr Feldman. Yes, Mr Walker.

PN116

MR WALKER: Yes, thank you. I think over the period I've been here I think we've been discussing a guarantee from another Venture company, Venture BB, to cover the shortfall that we see in entitlements at the moment; which is approximately 6 million after the employee numbers are reduced down to the 330 level. We've been discussing reasonable proposals to trade, increases, new entry rates of pay and a reduction in leave levels in order to be able to afford a higher level of volunteers, combined with the ....., and we've done some work on eliminating the restricted content on the EBA. I think that's where we are at the moment.

PN117

THE COMMISSIONER: Right. Thank you.

PN118

MR FAROUQUE: Yes, thank you, Commissioner. Commissioner, there has been - I don't think my learned friend would object to me saying this - some discussions this afternoon between the parties present and there has been an agreement about the fact that the company is going to provide some information to the unions, that that information is going to be directed toward the provision of audited accounts; and further what is known as management accounts, which are unaudited but more current documents which deal with the financial position of the company; and the company I think has also indicated a willingness to provide supporting information in that regard; and to provide information to the union parties about its financial position.

PN119

We are presently endeavouring to make arrangements to act with expedition to have people with capacity on our part, on our side, to assess that information and we hope to be able to have some arrangement with the company about putting that into place tomorrow or the day after. Furthermore, the company has agreed to provide us with some legal advice that it has about the issue of employee entitlements, and about the extent of certain securities that it has given to the banks in regards to fixed charges and its assets, and the extent to which those charges will apply to other assets that the company owns, in respect of receivables and stock. The company has indicated that it is prepared to do that this afternoon or early tomorrow morning .

PN120

Furthermore, we have put a number of proposals to the company this afternoon and the company has indicated that some aspects of those proposals are not acceptable to it, in relation to securing employee entitlements, but other aspects it wants something a bit more concrete. What we are going to endeavour to do this afternoon and tomorrow morning is to reduce those proposals to the form of a document, and put that to the company by tomorrow morning.

PN121

So, Commissioner, there's a lot of work to be done in that regard this afternoon and tomorrow. I can say that there has been progress with Mr Walker present in terms of the meetings with Mr Jones last week, and some progress this afternoon. We are heartened by the fact that he is here and because I understand - and Mr Walker can confirm this - he is I think going to be departing the country tomorrow afternoon, it may be useful Commissioner - and I haven't yet floated this with Mr Feldman, I should add - that the Commission reconvene tomorrow, maybe early afternoon, to review progress insofar as it has occurred. If necessary, program further meetings obviously with a view to getting the matter resolved, if that be necessary following a meeting tomorrow.

PN122

We think that there is benefit with Mr Walker being present and if there are meetings to be programmed, we would seek them to be programmed with Mr Walker in fact present. Mr Walker can perhaps give some indication as to his availability and we can marry up some times if necessary now, Commissioner.

PN123

THE COMMISSIONER: Right.

PN124

MR WALKER: Commissioner, if I could just address one or two of those items. I think in our opinion we see a number of items as being critical to a resolution of where we are at the moment. One is certainly getting the guarantee in place and we will work with our colleagues to ensure that that is done as timelessly as we can. However, before that guarantee is put in place, we would like some certainty as to the retrenchment process; the number of people and the cost to the company of that process. So that is one.

PN125

Then there are a number of other proposals which we have presented which we would like to take further, so that we can understand the position the company will be in, before I issue the guarantee. So yes, we will work with you on the guarantee but the other matters need to be progressed as well. Thank you.

PN126

THE COMMISSIONER: Thank you. How is it then that the parties intend to progress the issue about the redundancies that were foreshadowed prior to 29 August? Mr Jones.

PN127

MR JONES: Commissioner, just by way of background. We met last week with the company to address a range of issues that go to the whole question of affordability. One of the issues that we discussed was the redundancy proposal that has been presented or has been spoken of today. We have an agreed document that was referred to by Venture, effectively dealing with the means by which we go about approaching the issue of redundancies. We are going to be calling for volunteers from across the operation of Venture.

PN128

It will involve a mix of service, both long, short and medium term. It will be handled locally between the company officials and shop stewards. By and large there has been a figure identified of long term that, we believe, are capable of being addressed within the constraints of the financial situation of the company. We will only know that as a matter of certainty once we have seen the expressions of interest come in from employees at the plant, Commissioner.

PN129

We also in fact have addressed a range of other areas. The company has indicated to us that the whole issue of pay out of sick leave at Venture is a costly one and is of a view that there is some confusion in respect of the way that the current agreements are constructed. In short, we have effectively agreed that what people currently have, they keep, and the pay out system for new employees will cease as of April 2008.

PN130

In terms of leave entitlements, the company again have identified that the practice that has existed at Venture over a long period of time has been that employees have effectively accrued entitlements well beyond what the agreement or the award statute is. That, as you would appreciate Commissioner, provides a cost imposition upon the company that is a substantial burden.

PN131

The parties have agreed that that burden will be reduced to the minimum requirement under the agreements as they exist today. I mean that for people in excess of 13 weeks' long service leave, they have to reduce that to 13 weeks. For people with an excess of four weeks' annual leave, they will have to reduce that to four weeks and for people with in excess of the number of rostered days off that are relevant to that particular year, they will have to reduce those as well. That has been factored in the context of many of the proposals and financial positions that have been put to the company and is significant.

PN132

In terms of notice, the company have suggested that employees work their notice period; those employees that are to be made redundant. That has been agreed. The company has also agreed that employees may seek to find alternative employment during that notice period and will be given reasonable time off with pay to in fact do that. The company has also agreed, Commissioner, that redundant employees will be given first right of refusal for future job opportunities when and if they arise.

PN133

That's pretty much it, in summary, Commissioner. The outstanding issues that we have relate to a proposal by the company for a new entry rate. We have a difference of opinion as to what represents a new entry rate. The company's proposal is effectively that the current $19 entry rate for Venture be reduced to $14.90. We have proposed that the entry rate be capable of being reduced but be reduced to $16 for a period effectively of 12 months, and then you move into the career structures of the Venture operations.

PN134

There is an area of difference between us that potentially is incapable of resolution. The company maintains that an entry rate exists for five years before you start to move through the Venture payroll structures. That, to be quite frank, I would have to say, Commissioner, is one that is highly unlikely of being resolved.

PN135

There are some matters in respect to the enterprise agreement that are new. They are not new in the context of the company's position but they are new in the context of this debate, as they have been presented to us. We received a document today that clearly is a document that represents what people would have liked to have had before the agreement was in fact voted on by members. We will deal with the company on that. I don’t say that that's a threshold issue at this point, but that still requires some substantial discussion between the parties before we can reach some resolution on that matter.

PN136

Thank you, Commissioner.

PN137

THE COMMISSIONER: Mr Jones , sorry, could you just touch on the issue of the sick leave? If I understand it, those that currently have accumulated sick leave, a quantum of accumulated sick leave, will keep that quantum.

PN138

MR JONES: For the purpose of pay out.

PN139

THE COMMISSIONER: For the purposes of pay out?

PN140

MR JONES: Yes.

PN141

THE COMMISSIONER: Okay, and what date did you say, as of 2008?

PN142

MR JONES: April 2008.

PN143

THE COMMISSIONER: So what will happen in April 2008?

PN144

MR JONES: New employees, post-April 2008, which I suspect there won’t be many, will not be eligible for the pay out factor.

PN145

THE COMMISSIONER: Okay.

PN146

MR JONES: But they will be eligible to accrue the obvious entitlement for the purposes of taking that sick leave but not for the purposes of pay out.

PN147

THE COMMISSIONER: Okay. Thank you.

PN148

MR WALKER: Commissioner?

PN149

THE COMMISSIONER: Yes, Mr Walker.

PN150

MR WALKER: I think a lot of what my colleague has said is very accurate. I think we are working together on a number of issues to find resolution and a successful future for the business. I think it needs to be understood the guarantee will only go into place should we have a position, as a company, in which we believe the company would have a future in. So we would need to agree a reasonable list of retrenchees and come to a resolution on some of the other matters before that guarantee would be put in place.

PN151

I think the rationale behind the new rate of pay is the current rates of pay are well above industry norms, and with the new rates of pay that are in place at the moment we can attract limited amounts of automotive business. Our proposal is to get some non-automotive business in that we would need to ensure the long-term survival of the business, hence the new rate. So we need to be in a position where we see that that company will survive, before we can actually move forward.

PN152

THE COMMISSIONER: So the proposal Mr Jones touched on was that the company wants an entry rate of some $13-odd and they want that - correct me if I'm wrong - if I understood right, they want that fixed for five years before anyone can progress through the company structure.

PN153

MR WALKER: I think our proposal is the entry rate would be 14.90.

PN154

THE COMMISSIONER: 14.90, yes.

PN155

MR WALKER: There would be a 5 per cent increase on top of the EBA awards on an annual basis until it reached the position where it reached the normal company structures.

PN156

THE COMMISSIONER: Right. Is that your understanding, Mr Jones ?

PN157

MR JONES: Obviously it is now, Commissioner. That has not been presented to us but we understand why the company is seeking a new entry rate. The issue between us is not so much whether or not there be an entry rate, it's whether or not we are creating a new career structure under the existing career structure. That really is pretty much the nub of the issue.

PN158

Again we say this, Commissioner, that that is new. It was presented to us recently. We don't think it in itself goes to the issue of the immediate viability of the company. It talks about the company's long-term viability as it seeks to diversify its business. We simply have said to the company, Commissioner, we understand why you would seek to present a new career structure if y u were diversifying into general rubber and the plastics industry, and not in the automotive industry. The time for you to present those proposals to us is at the expiration of this agreement, not to pre-empt where you are going as a company.

PN159

At the moment we are restructuring the company. We are taking some 190 to 230 people out of the company. We are cooperating with the company to move some work to D & G, to outsource some work to China and to localise some larger manufacturing within Venture Industries at the Campbellfield facility. I think that's a pretty fair degree of cooperation. If the company has contracts in a diversified industry, then they should present those contracts and at that point we will give some consideration to its proposals. But I suspect that we are not going to get to that point in the life of this enterprise agreement. It would seem to us that the most appropriate time to present those proposals is at the expiration of this deal.

PN160

THE COMMISSIONER: Mr Walker.

PN161

MR WALKER: Commissioner, in response to that, at the moment we have a team of individuals looking at non-automotive opportunities. I think at the moment all of that work will be put into our other operation, as we can afford to do it there. I would like to be able to divert some of those opportunities as and when they arrive(sic), to the new entity or to the existing entity, the Campbellfield site, and with the rate of pay I've got at the moment I cannot do that. That would give me an ability to use some of the equipment and assets there, rather than re-investing. I prefer to do that but not at any cost.

PN162

Thank you.

PN163

THE COMMISSIONER: So we currently have a bargaining period still on foot. There's been a cessation at this point in industrial action and that was due to a week's suspension of the bargaining period and a return to work. But again the bargaining period is still active and so is the ability to take industrial action with the appropriate notice.

PN164

I understood Mr Walker to say that in terms of the guarantees the company would be looking at guarantees in terms of entitlements, once the issue of the current round of the redundancies was dealt with. Now I understand that to be slightly different, where it's not only the current round of redundancies, it's the way forward in terms of all those other issues; as an example, entry level rate and so forth. So I've got to say the Commission is a bit confused about that.

PN165

So it's whether or not current redundancies need to be dealt with in order to provide the guarantees or whether it's the entire negotiating process, including the redundancies, and a possible new EBA.

PN166

The other issue is what is the parties' view, given that Mr Jones has touched on, as an example the entry rate, if an agreement cannot be reached around that particular issue? Two questions arise. How do the parties intend to resolve that, kicking the daylights out of each other? Secondly, where does that leave the broader issue of the guarantee of entitlements, if that is the outstanding point? Mr Walker.

PN167

MR WALKER: Well, I think in answer to that the business at the moment is getting to the stage where in the near term it will be bankrupt. I think I'm happy to put almost $13 million into the business, in terms of cash to fund their retrenchment and a guarantee of an additional six, but in order to do that I need to know that I've got a business that will survive. So in order to have a business that will survive I need a reasonable retrenchment agreement and I need a way to get some additional business into that in the future. I think if we are not able to get past that what is likely is that I will sign the EBA the way it stands, I will not give the guarantee, and I will look for a buyer for the business.

PN168

THE COMMISSIONER: Well how do we move forward? You propose that we report back, Mr Farouque, some time tomorrow?

PN169

MR FAROUQUE: Yes.

PN170

MR JONES: But that's on the basis that you would prefer to have Mr Walker in attendance. You have indicated that it's your understanding Mr Walker is due to fly out some time tomorrow afternoon.

PN171

I don't know whether that's correct, Mr Walker; is that correct?

PN172

MR WALKER: That is correct. I have a flight at about 6.30 tomorrow evening.

PN173

THE COMMISSIONER: Tomorrow evening, right. What is your company's view on a report back tomorrow to allow a whole range of things to occur which aren't easy to occur in a short timeframe.

PN174

MR WALKER: Yes.

PN175

THE COMMISSIONER: Report back tomorrow afternoon and possibly a conference. I'm not sure whether you want the Commission involved in that. If you do, that's fine. If not, then I'm happy to leave you to your own devices and see what happens.

PN176

MR WALKER: I think I'm happy to give a report back in terms of where we are, in terms of the guarantee and making our colleagues comfortable that the guarantee we put in place be meaningful.

PN177

THE COMMISSIONER: Right.

PN178

MR WALKER: I’m happy to give that report back.

PN179

THE COMMISSIONER: Okay.

PN180

MR WALKER: I’m happy to give a report back on a proposed timetable to resolve additional matters.

PN181

THE COMMISSIONER: Right.

PN182

MR WALKER: As and when necessary I'm happy to participate by telephone or at a later stage another trip to resolve the matter.

PN183

THE COMMISSIONER: Right. What part of South Africa are you based in?

PN184

MR WALKER: I'm in Pretoria.

PN185

THE COMMISSIONER: Pretoria. Is that a pretty place? We might all go there.

PN186

MR JONES: Commissioner, look it's a hell of a time for the automotive industry. We have this to resolve and indeed that's an issue that deals with the entirety of the car industry. Simultaneously though we have negotiations that are taking place with Ford that we had to cancel last week, over their engine plant closure.

PN187

THE COMMISSIONER: Right.

PN188

MR JONES: We cancelled them last week because of this issue. They are on tomorrow, which is not to suggest that these discussions ought to stop. I just won't be available for them, that's all, and neither will Mr Arnett. So in terms of the technical issues dealing with the financial matters that we need to have some understanding of, we are currently trying to contact the union's auditors to make them available to attend the plant with the relevant officials to look at that material. Out of that, hopefully, we will come away with a view that will be a positive one.

PN189

In terms of the outstanding industrial matters, look I think to be quite frank it is necessary for myself and the other officials to be present and involved in those discussions. It is I think unrealistic of the company to think that it can tie all of these issues to the outcome of guarantees. I emphasise too that the suggestion that we implement a rubber and plastics industry career structure under the existing automotive industry career structure for a period of five years I think is unrealistic. I think it's unrealistic to expect that in the absence of us seeing some tangible contracts at the Venture operation, for us to be asked to say, "Trust me, that we're out there busily working to try and bring these contracts in".

PN190

But having said that, right throughout this bargaining period we have been prepared to look at and examine all of the issues as they have been presented to us. I want to emphasise, Commissioner, that we received this document today, I received it today. It's a substantially amended document from the one that members voted on and I have to say that many of the issues in here are not just trivial issues that have been changed, they are matters of great substance. So it's not going to be an easy discussion that we have in respect to these matters.

PN191

I again will emphasise that ultimately we have been dealing in bargaining with matters that go to the restructure of this company to make this company viable. The centre of that has been moving the business and shrinking the business and providing for the redundancies that allow that to occur. To introduce what amounts to a substantial number of new claims, we think, is an act of bad faith and will only prolong the difficult bargaining that we have at the moment.

PN192

But we will sit down with the company, we will work our way through it and ultimately hopefully, like they have done on previous occasions, they will accept our arguments. If the Commission pleases.

PN193

THE COMMISSIONER: Where does that leave, though, the proposal put forward by Mr Farouque about a report back tomorrow, if there might be some difficulty in the union's auditors accessing documents and at least trying to draw something from those documents; and the availability of Mr Walker and yourself, given that you have got other serious issues in regard to the Ford engine plant and Mr Walker due to fly out tomorrow evening at 6.30? I mean, I'm always happy to have the parties in here because we are a customer-focussed organisation, but at some point you have got to ask the value of getting people here if the key players, Mr Walker and yourself, are not going to be here.

PN194

MR JONES: Commissioner, may it well be - and I agree with Mr Farouque's assessment that his presence has been beneficial to the bargaining. Mr Walker will be here and available until, I suspect, the early hours of the afternoon, not past mid-afternoon. The issues that I think can be advanced tomorrow go to the issue of a proposal that we have been asked to present in respect to entitlements.

PN195

If in fact we are able to prepare that document overnight, and we think we will be able to, that meets some of the commitments that the company has given us here today and some of our own requirements, then I suspect that that can be discussed tomorrow and hopefully agreed. It can be agreed subject to the financials measuring up and some of these other issues being ironed out. But at least we would have made some movement in respect to a document that one way or another we are going to have to agree upon anyway.

PN196

THE COMMISSIONER: Right. Mr Walker.

PN197

MR WALKER: I think in terms of the comment of bargaining and that, I don't think that's a fact at all. I think where we were is we had got to the stage where we had a strike and we are back to work and we started the bargaining period again. I think then we proposed significant gives in terms of the guarantee and in terms of looking at further retrenchment of volunteers. I think in turn we would ask for some consideration to our proposals to be given, and we are not there yet. So I think we need to look at the proposals and I think the rates of pay, as you say, would only come into effect when we had work and new employees going in. So no, you don't need to trust me. We would only be taking work on and people on when the work was in hand.

PN198

Tomorrow I'm happy to come back and report and happy to work with your colleagues to get resolution on the form of the guarantee, should we reach resolution. I'll be happy to look at the proposal you make and report back.

PN199

THE COMMISSIONER: What is a convenient time, Mr Feldman and Mr Farouque?

PN200

MR FAROUQUE: I was going to propose midday, Commissioner. Mr Feldman has indicated that might not be his preference, but to give sufficient time to work through the issues during the course of the afternoon, and with regards to Mr Walker's need to depart the country, midday might be an appropriate time.

PN201

THE COMMISSIONER: Mr Walker.

PN202

MR WALKER: Yes, I'm very happy with midday. I would just like to add one thing. In terms of the changes to the EBA that we proposed, you see most of them were agreed, accepted and are necessary to remove the prohibited content. There was probably one page of the EBA where we made significant changes and said, "This is our proposal. Our legal advisers have advised us that this would be a good thing to do. Please give us your proposal". So no ill intended.

PN203

THE COMMISSIONER: Right. My understanding is the union is putting a response to that; is that correct?

PN204

MR JONES: Yes.

PN205

THE COMMISSIONER: Right. Okay, what we will do is set down for midday tomorrow a report back and if necessary that report back will go into conference. If the parties would give some consideration as to whether they require the Commission to be involved in that conference, or whether the parties are happy to continue with the negotiating process on their own, I'm not fussed either way. If they require the Commission, it will make itself available for whatever time is required. If that means Mr Walker has to depart, and I would assume you have got to be at the airport probably about 2 hours before you are due to fly out, but if it means working well past the time at which Mr Walker leaves, then we will do that in order to try and resolve the matter. Is that okay?

PN206

All right. Thanks for that. We will stand adjourned till tomorrow at noon, 18 September.

<ADJOURNED UNTIL TUESDAY 18 SEPTEMBER 2007 [2.27PM]