AG2005/4337, Transcript of Proceedings [2007] AIRCTrans 623 (4 December 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17739-1

SENIOR DEPUTY PRESIDENT HARRISON
SENIOR DEPUTY PRESIDENT LACY
COMMISSIONER LARKIN

AG2005/4337

s.170LC - Multiple business agreement
Application by Rail Infrastructure Corporation & State Rail Authority of NSW and Another
(AG2005/4337)

SYDNEY

2.12PM, THURSDAY, 08 NOVEMBER 2007

PN1

SENIOR DEPUTY PRESIDENT HARRISON: May we have appearances in each of these matters.

PN2

MR P KITE: In each of the matters or in the first matter, I continue my appearance for RailCorp. In the second and third matters to the extent necessary I seek leave to appear on behalf of RailCorp Investments.

PN3

MR A WOODS: I seek leave to appear on behalf of or to take over an appearance in the first matter, 4337, and seek leave to appear in respect of 609 for Rail Infrastructure Corporation.

PN4

MR G PANAGIRIS: I seek leave to appear on behalf of the Rail Tram and Bus Union in all matters.

PN5

MR M ELLERY: I seek leave to appear on behalf of the Australian Services Union in all three matters.

PN6

MS L BENNETT: I seek leave to appear on behalf of the Association for Professional Engineers Managers and Scientists of Australia.

PN7

MR G PRIME: I seek leave to appear on behalf of the CEPU in all matters.

PN8

MR P FARROW: I seek leave to appear on behalf of the AWU in all matters.

PN9

SENIOR DEPUTY PRESIDENT HARRISON: Yes, thank you. I note no appearance for or on behalf of the AMW or the CFMEU. I note from the notices of listing that these matters were brought to their attention. We have received no advice from either organisation in relation to these matters.

PN10

The first matter was originally the file number ascribed to the application then under section 170LC of the Act to certify the multiple business agreement. That Full Bench has been reconstituted following the retirement of Duncan SDP. The President has referred to this Full Bench. The other two matters also, each referral has been made under section 113 of the Act.

PN11

We received some correspondence from your instructing solicitors, Mr Kite, in particular a letter dated 5 November. It's a letter in a draft document titled Statement and Recommendation. At least the letter, we understand, outlines what the parties thought might usefully be attended to today.

PN12

MR KITE: Yes, your Honour.

PN13

SENIOR DEPUTY PRESIDENT HARRISON: We are happy to tackle that, at least to the extent that the letter has outlined what you would like to achieve, to the extent to which the statement and recommendation is sought, that can be addressed in that context.

PN14

I should indicate that we have also received a statement of Mr Mackie and there's a number of annexures to that. I assume at some stage you might want us to mark it?

PN15

MR KITE: Yes, your Honour.

PN16

SENIOR DEPUTY PRESIDENT HARRISON: You can attend to that later. I don’t think we have anything else. You had better let me know, or other parties know, as soon as possible if there was some other correspondence or something else that anyone else thought was going to be before us today.

PN17

UNIDENTIFIED SPEAKER: Not that we're aware of, your Honour.

PN18

SENIOR DEPUTY PRESIDENT HARRISON: No? Mr Kite.

PN19

MR KITE: Thank you, your Honour. Your Honour has referred to the letter from my instructing solicitors, Harmers, dated 5 November 2007. We hope it's not in any sense thought to be presumptuous of us in the way that we have advanced the matter. Rather it's to put the Commission on notice as early as possible of a common position between the parties as awe understand it, of what is to be sought today.

PN20

At least two members of the Bench are well familiar with the history of this matter. For Senior Deputy President Lacy's benefit I will deal briefly with the affidavit of Mr Mackie or the statement of Mr Mackie, with the history. But in short there were, on the certification of this agreement, a number of undertakings offered to the Commission which the Commission regarded as important in the certification process, particularly in relation to the public interest issues.

PN21

One factor in that was that the parties undertook to report back to the Commission from time to time on the progress in relation to those undertakings. It's perhaps appropriate in Melbourne Cup week, when we run the most famous marathon horse race on the Australian calendar, that we come before the Commission - albeit on Oaks Day or just an hour before the Oaks race; it's a matter of some personal ..... to me; I'll move on - to inform the Commission of where the parties stand. There have been at various times report-backs, particularly before Commissioner Larkin in relation to a number of these matters.

PN22

So the prime purpose is to report to the Commission on where the parties stand in relation to the various undertakings. Secondly to seek from the Commission, in relation to one undertaking in particular, and that was the undertaking to develop a classification structure for administrative, technical and professional groups a statement and recommendation; and I'll deal with that in a little more detail in a moment.

PN23

Thirdly, to seek from the Commission some further assistance in relation to another undertaking to develop a uniform set of conditions. The parties have gone a very long way to achieving that end and I have been briefed. I can tell the members of the Commission that I haven't read it, the document which is, in the interests of the environment, printed on both sides; representing a compilation of those conditions and for the most part a common position between the parties; the result of a great deal of work over the last couple of years.

PN24

Mr Woods in particular has had a role in relation to that, on behalf of RailCorp for some time. He tells me it has reduced the volume of paper from something approximating a metre to about 10 centimetres. But there are a few matters remaining which the parties seem to be at loggerheads about, and we would seek from the Commission the assistance of a member of the Commission to assist the parties resolve those few remaining issues.

PN25

Before seeking to deal with the matter of the undertaking by making an application to the Commission to vary the agreement under the former section 170MV(6). Now no doubt issues will arise as to the Commission's power in the light of the amendments to the Act, to effect such an agreement, but it's consistent with the undertaking of the parties to attempt that; and the parties acknowledge that they will need to persuade the Commission as to the power to do it, and that there is a proper basis to do it in this case.

PN26

We will lodge an application to make such a variation shortly. I should say that we can tend to do it now, though we perceive it would be better for the conciliation to continue under the report-back process of the agreement, the certification of the agreement, until we get to a final position where the only issue really is whether the Commission has power and should exercise it. So that we can come to the Commission and say, "Here's what we want to do in relation to the current EBA and here's why we say the Commission can do it and should do it". Undoubtedly that will require some address as to the power of the Commission and also the exercise of its discretion in its proper way, to remove uncertainty and ambiguity.

PN27

Again by way of background, perhaps more for the benefit of Senior Deputy President Lacy, the agreement has in schedule B, the current agreement, a reference to some 52 prior agreements and awards, and incorporates those terms from those awards and agreements as part of the current agreement. The object would be to replace all of those, insofar as they deal with conditions, by this document; and ensure we have one consistent uniform set of conditions in the one agreement, which was the ambition when we set out.

PN28

Now, no doubt the Commission will recall that the timeframes postulated on certification were or have long expired, not for want of any effort on the part of the parties, I would submit to the Commission. The work has been undertaken and I come to Mr Mackie's affidavit. The Commission will see the chronology. We can provide the Commission with a similar chronology in relation to the conditions process, if the Commission would like that. Indeed it was proffered to Commissioner Larkin on an earlier occasion in a report-back, and we can provide an updated version of that if it assists.

PN29

The statement and recommendations which the parties would seek from the Commission relates to the development of a classification structure that I referred to. It's proposed, as the Commission will see from the statement of Mr Mackie, to conduct a ballot of the affected employees and if that ballot is successful, to then come to the Commission in fulfilment of the undertaking and seek to vary the agreement to incorporate that new classification structure.

PN30

Again, we will face issues of power and discretion which will need to be satisfied to the Commission. If the Commission finds that there is a want of power or alternatively that the process proposed is not the appropriate one, is a matter of discretion. The object would be to take this classification structure forward into the next workplace agreement, collective workplace agreement, negotiated between the parties, which is due to be negotiated next year, and incorporate it at that point; in the meantime implementing it so far as legally possible administratively.

PN31

Now the statement and recommendation is really designed - - -

PN32

SENIOR DEPUTY PRESIDENT HARRISON: Mr Kite, let's assume that under section 170MD(6)(a) you persuaded us that there was an ambiguity or uncertainty and the manner in which to rectify that was to vary the agreement, to introduce an agreed classification structure.

PN33

MR KITE: Yes.

PN34

SENIOR DEPUTY PRESIDENT HARRISON: My question was about the discretion; the discretion is the second part of that exercise, is it?

PN35

MR KITE: Yes. Yes, that constitutes the - - -

PN36

SENIOR DEPUTY PRESIDENT HARRISON: Yes. You are not going to be arguing that the previous provision of section 170MD, that allowed a variation during the life of an agreement having obtained a valid majority, still survives?

PN37

MR KITE: No.

PN38

SENIOR DEPUTY PRESIDENT HARRISON: All right. Thank you.

PN39

MR KITE: No, we recognise the Commission's powers to approve a variation on much more - - -

PN40

SENIOR DEPUTY PRESIDENT HARRISON: There might be a limit to what we are prepared to do today, but I think we might chance our arm to say that would be a difficult argument to persuade us.

PN41

MR KITE: Yes.

PN42

SENIOR DEPUTY PRESIDENT HARRISON: Yes, so I understand.

PN43

MR KITE: Yes, we wouldn't seek to persuade the Commission.

PN44

SENIOR DEPUTY PRESIDENT HARRISON: No.

PN45

MR KITE: No.

PN46

SENIOR DEPUTY PRESIDENT LARKIN: Sorry, Mr Kite, in regards to the application being 170MD(6)(a), which is not an application that is before the Full Bench, but is part of that application to set aside the schedule .....

PN47

MR KITE: It will be.

PN48

SENIOR DEPUTY PRESIDENT LARKIN: Yes, because that's what I was thinking. The classification structure - well, that's one of the classification structures, and consolidated ....., that should be dispensed with all the schedule B instruments.

PN49

MR KITE: Not necessarily all because there will be some other classification structures.

PN50

SENIOR DEPUTY PRESIDENT LARKIN: Yes, it would only be the classification instruments.

PN51

MR KITE: Yes.

PN52

SENIOR DEPUTY PRESIDENT LARKIN: Yes.

PN53

MR KITE: Yes, that's the - - -

PN54

SENIOR DEPUTY PRESIDENT LARKIN: So the specific classifications like train drivers are - - -

PN55

MR KITE: Yes. Which are themselves the subject of another ongoing process.

PN56

SENIOR DEPUTY PRESIDENT LARKIN: Yes. There's lots of irons in the fire, Mr Kite.

PN57

MR KITE: There are. There are, Commissioner. There always are in this industry, as I see it. But that's the intent, Commissioner; it's largely schedule B, apart from those remnant classification provisions, will be replaced by this classification structure and by the terms and conditions.

PN58

SENIOR DEPUTY PRESIDENT LARKIN: Which is what was put to the Full Bench at certification, namely the undertaking.

PN59

MR KITE: Yes. It will simplify and clarify the document enormously, and indeed the industrial relations regulation enormously if we can achieve it. The statement and recommendation is designed to assist the employees when they come to look at the matter, by having the Commission's view of that process which has been undertaken in support of the undertakings given. So that the employees know that the parties have generally applied themselves to the undertakings and sought to achieve what they can achieve, notwithstanding legislative changes in the intervening period.

PN60

The reason for sending all of this material in advance was because we thought we would try and persuade the Commission to do these things today, rather than program them for later. So that we can move ahead on the timeline proposed to arrange for venues for the ballot and someone to conduct the ballot and the like. If the Commission is minded to adjourn the matter because of the concern about the availability of time today, then we would certainly be asking the Commission to do so, to re-list as expeditiously as possible for hearing further argument or evidence, if that were necessary. We would seek to adjust the timeline accordingly. But so far as we can - - -

PN61

SENIOR DEPUTY PRESIDENT HARRISON: You do not require anything at all from this Full Bench to proceed with the rollout of the MOA and a briefing as to how you say it's consistent with what was required by the EBA, and perhaps foreshadowing the 170MD(6) and also foreshadowing a potential problem.

PN62

MR KITE: Yes.

PN63

SENIOR DEPUTY PRESIDENT HARRISON: Problem I shouldn't say; foreshadowing that it's not going to be a matter that - okay, it's a matter that will need to be the subject of a hearing.

PN64

MR KITE: Yes. That's true, your Honour. We could do it and if the Commission were to say to us, "Well, we can't really provide you with a debate, appearing before a Full Bench to debate it for six weeks or something like that. We may well just go ahead and do it".

PN65

SENIOR DEPUTY PRESIDENT HARRISON: When you are saying debate it, namely whether or not we would publish the statement and recommendation in terms or terms similar to that.

PN66

MR KITE: Indeed. The reason for seeking it first is, of course, it would make it easier to distribute it in the information packs at the one time to all of the employees, if the Commission were mindful to make such a statement.

PN67

As I said, the draft statement and recommendation is attached to the letter from Harmers, and is a common position as we understand it between the parties. It was also a common position between the parties that if anything further was sought, they were free to approach the Commission and make submissions as to that. In that regard there is one matter that we would like to raise with the Commission, initially in private conference if that were possible. So I foreshadow that we would ask the Commission, before it adjourns to consider the statement and recommendation, that it consider adjourning into private conference briefly so that we could raise that matter.

PN68

SENIOR DEPUTY PRESIDENT HARRISON: Of course. The ..... really meant paragraphs 1 through to halfway through six, set out where we have got to thus far.

PN69

MR KITE: Yes.

PN70

SENIOR DEPUTY PRESIDENT HARRISON: I suppose the issues for the consideration of this Full Bench as to whether they would adopt them and make a statement in those terms or similar, start in paragraph 6 with the sentence that commences, "The Commission has not yet heard argument" and goes through paragraphs 7 and 8 and perhaps 9.

PN71

MR KITE: Yes.

PN72

SENIOR DEPUTY PRESIDENT HARRISON: I think perhaps they are the key ones.

PN73

MR KITE: They are the key parts.

PN74

SENIOR DEPUTY PRESIDENT HARRISON: I understand.

PN75

MR KITE: The rest is historical, to put it in context, if it please the Commission. So they are the things that we would seek to achieve today. If it's convenient I will now proceed to deal with the affidavit or statement of Mr Mackie, your Honour. He is present if the Commission or anybody else wants to ask him any questions.

PN76

MR MACKIE: I can indicate I have with me the statement and the attachments, Mr Kite.

PN77

MR KITE: I'm indebted to him.

PN78

SENIOR DEPUTY PRESIDENT HARRISON: Yes, I think happily we are all in that position. Have the unions received a copy of Mr Mackie's statement?

PN79

MR PANAGIRIS: We have, your Honour.

PN80

SENIOR DEPUTY PRESIDENT HARRISON: Obviously after you hear what Mr Kite has to say you might change your answer to this question, that currently is anyone wishing to cross-examine him?

PN81

MR PANAGIRIS: ..... the RTBU ......

PN82

SENIOR DEPUTY PRESIDENT HARRISON: All right. You are not precluded from making that request. Well then, Mr Kite, shall we mark it and then you can take us to any particular parts of it.

PN83

MR KITE: If your Honour please.

EXHIBIT #RAILCORP 1 STATEMENT OF KEVIN MACKIE DATED 6/11/2007

PN84

SENIOR DEPUTY PRESIDENT HARRISON: In that respect I'm reminded that I forgot to indicate that leave is granted to you, Mr Kite, in relation to new matters we are here for, and to you, Mr Woods.

PN85

MR WOODS: Thank you, your Honour.

PN86

SENIOR DEPUTY PRESIDENT HARRISON: I'm jumping ahead of myself. Of course there would have been no opposition to leave being granted, would there?

PN87

UNIDENTIFIED SPEAKER: Not on our side, your Honour.

PN88

SENIOR DEPUTY PRESIDENT HARRISON: Yes, I apologise for not giving you the opportunity to be heard on that. What shall we do now about ensuring that we all understand the sequence of marking of these documents? Strictly speaking they aren't joined, these matters, and I can think of some good reasons why you would not join them. But having said all of that, is that sufficient that this transcript will reflect that we have recommenced a marking of the exhibits.

PN89

I suppose the only confusion could arise out of the matter, to the extent that the multiple business application might not be said to have been fully disposed of, and it's still open. I might create some confusion for someone understanding what is happening, but hopefully not.

PN90

MR KITE: I don't think so.

PN91

SENIOR DEPUTY PRESIDENT HARRISON: No. Yes, Mr Kite.

PN92

MR KITE: Would your Honour also like to mark the letter from Harmers, dated 5 November?

PN93

SENIOR DEPUTY PRESIDENT HARRISON: Yes, indeed. That letter, which has I have earlier indicated also, has annexed to it a document titled "Statement and Recommendation", we will mark RailCorp 2.

EXHIBIT #RAILCORP 2 LETTER FROM HARMERS WITH ANNEXURE TITLED "STATEMENT AND RECOMMENDATION" DATED 05/11/2007

PN94

MR KITE: I am in the statement of Mr Mackie and he sets out from paragraph 2 his - from section 2 as it's described, part 2 - his background in the public sector as an industrial relations practitioner. It's extensive and it's not confined to RailCorp or rail entities. I will skip over these, given the Commission's familiarity, but if there's any particular matters the Commission wants me to address into greater detail, I invite an indication of that.

PN95

In section or part 3 he deals with the structure of the rail sector prior to the establishment of RailCorp, and again summarises the various dis-segregation and re-aggregation of entities over the relatively recent past. In part 4 he deals with the establishment of RailCorp on 1 January 2004 and its roles. The translation from the SRA and RIC to RailCorp and the development of the multi-business EBA in 2005 in section 5. In that section he deals with the result of the different strategies applied, the different industrial relations strategies applied to the development of classification structures in the various organisations; and the difficulties that now creates in RailCorp which this classification structure seeks to address.

PN96

In paragraph 5.11 there's a reference to the decision of the Full Bench as annexure KMI. I'm sorry, the agreement itself is KM1, the decision of the Full Bench is described as KM2. It's in fact KM3 in the annexures and in paragraph 5.13 the undertakings are KM2. So it's simply a reversal of those two annexures.

PN97

At paragraph 5.14 he begins to deal with the progress in relation to compliance with the various undertakings. 5.14(a) deals with the new competency based classification structures for certain streams of the trade and non-trade employees, which made it to undertaking 6.

PN98

SENIOR DEPUTY PRESIDENT HARRISON: On that, to the extent it's implemented, that is by way of an administrative instruction and at least on the ground it's operating in a way such that it supersedes any existing structures and to the extent to which they are reflected in the EBA supersedes that operation too. That's how it's operating?

PN99

MR KITE: That's as I understand it.

PN100

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN101

MR KITE: Yes, I'm instructed that's right.

PN102

SENIOR DEPUTY PRESIDENT HARRISON: So far so good.

PN103

MR KITE: Yes.

PN104

SENIOR DEPUTY PRESIDENT HARRISON: Insofar as that part of the exercise is operating on your instructions.

PN105

MR KITE: On my instructions, your Honour, yes.

PN106

SENIOR DEPUTY PRESIDENT HARRISON: The fall back position should you not gain variation of the EBAs was the intention of the parties when it was entered into.

PN107

MR KITE: Yes.

PN108

SENIOR DEPUTY PRESIDENT HARRISON: I understand.

PN109

MR KITE: Although there are potentially different limitations, of course, as to what can be done legally. So the preference would be ultimately in this classification structure to get the variation. But if we can't, then so far as we can it will be implemented administratively.

PN110

SENIOR DEPUTY PRESIDENT HARRISON: Of course. May I ask you this question, because I'm interested in the answer and that does not mean to say that it's an answer that you may want to mention later or not give me at all, but I noted at one stage the preferred position of RailCorp - no, I'm sorry. If RailCorp was unable to perfect the exercise in the way it had intended, and indeed the parties had intended, by way of a variation to the EBA, a proposal was that it might be incorporated in a new free standing agreement. That seemed to be a position that did not meet with the attraction of the unions and it's not being pursued by RailCorp?

PN111

MR KITE: It's not being pursued by RailCorp and as far as we know it's not being pursued by any of the unions.

PN112

SENIOR DEPUTY PRESIDENT HARRISON: Yes. We might come - - -

PN113

MR KITE: One of the difficulties being how it could be done under the current legislative structures and the impact on the balance of the current EBA.

PN114

SENIOR DEPUTY PRESIDENT HARRISON: All right.

PN115

MR KITE: What we thought, as a potential legal possibility at one stage, is now thought not to be possible.

PN116

SENIOR DEPUTY PRESIDENT HARRISON: Not to be. Probably - not probably, largely for reasons because of the impact the provisions of the Act would have on the agreement later in time?

PN117

MR KITE: Yes, your Honour.

PN118

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN119

MR KITE: 5.14(b) deals with the classification structure for clerical, administrative and technical and professional employees, which relates to undertaking 3. That's the one in respect of which the statement and recommendation is sought, and subparagraph (c) deals with the conditions document which relates to undertaking 1.

PN120

A connected undertaking to the conditions undertaking was the production of an employee handbook. That has gone in parallel with the development of the conditions document to an extent. I'm instructed that there is now a handbook prepared, though the parties have agreed that it would be rather pointless to massively produce that document and distribute it, prior to when the new EBA is relatively close and there may be changes. Again it's an environmental override, as it were. Of course finality would need to determine the current conditions document in any event, and we are seeking the assistance of the Commission to finalise that, the last few matters. Some of which is I think just plainly drafting and what one party thinks is plain English and another thinks is plain ridiculous.

PN121

SENIOR DEPUTY PRESIDENT LARKIN: Do you think it will sell well, Mr Kite?

PN122

MR KITE: It should do. I'm sure it will. It's going to be autographed by all of the authors.

PN123

SENIOR DEPUTY PRESIDENT HARRISON: We will not be waiting for a 170MD(6)(a) application in relation to that document, I take it, now?

PN124

MR KITE: Not in relation to that document.

PN125

SENIOR DEPUTY PRESIDENT HARRISON: No.

PN126

MR KITE: There was no undertaking in relation to that document.

PN127

SENIOR DEPUTY PRESIDENT HARRISON: Wasn't there? I had the impression it might have been the subject of a variation, but there is no undertaking about that.

PN128

MR KITE: No.

PN129

SENIOR DEPUTY PRESIDENT HARRISON: Yes, okay.

PN130

MR KITE: No as to the handbook itself, your Honour.

PN131

SENIOR DEPUTY PRESIDENT HARRISON: I understand. Yes, I am so sorry. Yes, I know now what I have confused it with. Yes.

PN132

MR KITE: Yes. There will be one in relation to conditions.

PN133

SENIOR DEPUTY PRESIDENT HARRISON: Yes, that's what I had in mind.

PN134

MR KITE: In paragraph 5.15(b) Mr Mackie refers to the impact of legislative changes and I think deals with the question that was raised by your Honour a few minutes ago in at least a broad way. In (c) he deals with the consolidated document for drivers and guards and refers to some assistance which is being sought from the Commission in relation to the drivers' rostering conditions document; but indicates that progress has been significant and the players are approaching the final draft.

PN135

In paragraph D he refers to other strains of the trade and non-trade employees and the development of classification structure for them, in which there is ongoing discussion. Consistent with the various undertakings and a decision of the Commission under the agreement itself, we constructed some material which the Commission sought, answers from Mr ..... made on behalf of the unions on the certification process in relation to the undertakings.

PN136

Part 6 deals with the new classification structure for administrative, technical and professional employees and details the history of discussions and negotiations between the parties. In paragraph 6.2 to 6.5, he deals with the various offers which RailCorp has made over time with a view to achieving that common position on the classification structure. Those offers have formed the basis of the discussions between the parties as to the structure. No alternative basis has been proffered.

PN137

In paragraph 6.7, if I could just draw the Commission's attention to that because it will relate to a matter that I want to deal with in private conference. The Commission will see that one of the earlier offers - and it was an offer that preceded the Work Choices amendments - postulated the possibility that if agreement could not be reached there would be some arbitration by the Commission. We are concerned about the maintenance of that belief because RailCorp's position now is that such an arbitration would not be possible under the current legislative arrangements. I will deal with that later if necessary.

PN138

At paragraph 6.8 he sets out the position of RailCorp in the event that the vote is unsuccessful. Of course it's RailCorp's desire to do everything possible to ensure that the employees are fully informed and endorse the classification structure in that ballot. But if they choose not to, then the options that RailCorp sees are really to move administratively to implement a position which it regards as appropriate, that may or may not be the most recent offer.

PN139

In paragraph 6.9 he annexes the chronology of discussions as AM6 and in 6.10 he sets out the reasonings of RailCorp in approaching the development of the classification structure. Can I just ask the Commission to note that the reference to paragraph 6.8 at the very bottom of that page should refer to paragraph 6.11. Much of that goes into the merit of the proposals and by way of background. We of course don't ask the Commission to express a view on the merit of it. It's a matter for the employees and the parties to address in the ballot.

PN140

In paragraph 7 he details the various matters that were dealt with in the development of the classification structure to resolve particular issues, including the protection of individuals' positions on the translation to the proposed classification structure. That section also provides some further background to some of the difficulties in existence by reason of a variety of classification structures in different organisations throughout history and the ......

PN141

In part 8 he deals with the implementation steps proposed. In part 8.3 he summarises the significant features of the classification structure. One area to note is that it's effectively a seventh grade structure. There is a reference to 10 grades in paragraph 8.3(a). Three of those are the managerial grades, three to five, which are transitional grades only. Those grades equate to the management level 3 to five in the existing structures and those employees have the option, under the current EBA, to contract out of the EBA. Going forward it is expected that employees at that level will not be covered by the EBA, or in the future.

PN142

At paragraph 8.4 he deals with the proposed timeline and the immediate timeline to take into account subsequent developments. That will give the Commission an idea of how quickly the parties want to move on this if possible, and the value of an earlier statement and recommendation, if the Commission were minded to make one.

PN143

Then at paragraph 9 he sets out the perceived benefits of the classification structure. Many of those matters would need to be developed in greater detail before the Commission, where we would come back and seek a variation, and really provide some additional background.

PN144

The material, we submit, would allow the Commission to come to a view about the matter is set out in paragraphs 6, 7, 8 and 9 of the draft statement, can be made(sic). In particular, as I have indicated, I haven't gone back to the undertakings because I've assumed the Commission is well familiar with them. In relation to clause 9.8 of the agreement and the relevant undertaking, the parties are doing what they can in light of the legislative changes to fulfil the commitments they gave the Commission in this application earlier in relation to this matter. That is the essence of the endorsement that we would seek from the Commission, so as to inform the employees and of course the recommendation of the parties continue with the process envisaged, to attempt to finalise this matter.

PN145

SENIOR DEPUTY PRESIDENT HARRISON: May I ask you some questions about the memorandum of understanding?

PN146

MR KITE: Yes.

PN147

SENIOR DEPUTY PRESIDENT HARRISON: Which, amongst other things, you would like us to endorse.

PN148

MR KITE: Endorse the process at least, your Honour.

PN149

SENIOR DEPUTY PRESIDENT HARRISON: Well, that might be something we should talk about because it's an important difference, the terms of the memorandum and the process which involves a document that reflects an agreement of the parties. Yes, that might be a matter useful to discuss in conference.

PN150

MR KITE: If your Honour pleases.

PN151

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Mr Woods.

PN152

MR WOODS: Of the matters that Mr Kite has addressed relating to the statement and recommendation, are matters that don't have any direct impact upon RIC because it's an application for structure that's only RailCorp-specific, under clause 9.8 of the enterprise agreement and the undertaking.

PN153

In respect of the other issues in moving towards the compliance with the other undertakings, we are in agreement with what Mr Kite put forward in terms of coming to a conclusion and trying to complete those.

PN154

SENIOR DEPUTY PRESIDENT HARRISON: You are a party to the memorandum of agreement; you propose to be?

PN155

MR WOODS: No.

PN156

SENIOR DEPUTY PRESIDENT HARRISON: Aren't you? No, only RailCorp.

PN157

MR WOODS: Only RailCorp, because clause 9.8 talks about RailCorp - the 05 agreement.

PN158

SENIOR DEPUTY PRESIDENT HARRISON: Yes, 9.8, all right. So then tell me again what is going to happen with 9.6?

PN159

MR WOODS: 9.6, as Mr Kite said, the parties are close to completion in respect of that and there are some issues that we would join with RailCorp to seek some assistance in tyring to complete, as it's an exercise that's very much worth completing, as the Bench noted on certification. Then as Mr Kite indicated, the expectation of bringing an application under the old 170MD(6)(a), which we would be a party to, to have a variation and there would need to be argument about what hoped to be achieved under that.

PN160

So we would certainly be part of that going forward. It's a much smaller player in terms of employers, employer, now than in the past, through the changes in the rail industry. You will recall that there is Australian Railtrack Corporation, which had an appearance at certification. Most of our employees are seconded to that organisation and they have been informed about the process in going forward with the compilation, because they in effect apply the current terms in respect of the staff. So we are certainly, in respect of the compilation, seeking to progress that to finality.

PN161

SENIOR DEPUTY PRESIDENT HARRISON: As currently instructed, that application to vary would be filed later in time than maybe the application to vary in accordance with 9.8?

PN162

MR WOODS: That may not be the case, if it's a question of just bringing the parties together to attempt to get the resolution on the outstanding items. The compilation has gone through many and varied roles since being first provided by RailCorp to the unions and the most recent iteration was provided yesterday with relatively few amendments, following the last discussion. There are just some areas where we tend to state some disagreement. So if we were able to get the assistance of the Commission to facilitate and conciliate the remaining issues, that could all be dealt with at the same time.

PN163

SENIOR DEPUTY PRESIDENT HARRISON: Thank you.

PN164

Mr Panagiris.

PN165

MR PANAGIRIS: Thank you, your Honour. Firstly your Honour can I say that the RTBU's views may not reflect the views of the other unions in relation to the ..... classification structure. In relation to 9.6, we support the position in relation to a number of outstanding matters. We believe it's no more than a handful and subject to going through the process, we may seek the Commission's assistance in finalising those matters.

PN166

In relation to the Rail Infrastructure Corporation and its role in the re-classification structure, we had some discussions with them in relation to the secondment arrangements, and in particular if and when the Rail Infrastructure folds up, the redeployment arrangements for individuals coming back in to possibly RailCorp; and how those translations will take place in an environment with a different classification structure which will vary the pay points and will impact also on the capacity for people to be redeployed to those positions.
So we need to have some discussions with that employer about those arrangements.

PN167

In relation to progress on the reclassification structure within RailCorp, we have approximately 1000 plus members affected by this and the instructions I have been given by our principal delegates and membership is clearly we should move forward. We are keen to progress this matter to the basis of an election or a vote by our members and subject to the outcome of that, of course, will determine where we go. If it's rejected we may have a different position but at this stage we are quite confident a majority of our members will support this current approach. But again I will say to you that that's our position and I believe the unions have a different position to us. If the Commission pleases.

PN168

SENIOR DEPUTY PRESIDENT HARRISON: Yes, thank you. Mr Ellery.

PN169

MR ELLERY: If it pleases, your Honours and the Commission. The ASU would support RailCorp's comments with regards to clause 9.6, pertaining to the development of classifications - sorry, the consolidated conditions of employment; in that we would no doubt be following the position that they have put in relation to utilise the services of the Commission to address any outstanding matters before bringing it forward.

PN170

In respect to clause 9.7 the ASU recognises the need to complete the tasks associated with clause 9.6 and 9.8, to be able to move that forward in a final format.

PN171

In respect of clause 9.8 the ASU notes RailCorp's submissions in respect that the progress of the matter has been long and tedious. I will avoid the course analogies. We would support the RTBU's comments with respect to the need to involve RIC in discussions, in respect to secondment arrangements, the impact that they might have and redeployment in relation to members coming back into RIC and subsequently being placed elsewhere in the industry.

PN172

The ASU asserts that the RailCorp proposal will disadvantage a significant portion of its members in that they will be red circled or salary maintained, and not have access to performance related pay increases on an equitable basis to other RailCorp employees. Whilst at the same time the ASU acknowledges the RailCorp proposal will not adversely affect the remainder of our membership, we have members affected coming across from RIC and people ex-SRA, and the effects are disproportionate in relation to that.

PN173

However the ASU recognises the objectives of the parties to the agreement, as outlined in clause 2 of the certified agreement, and specifically but not limited to clauses 2.4, 2.5, 2.6, 2.7 and 2.11. 2.4 goes to develop classification structures that provide support for organisational means and career paths for employees and a number of our members are of the view that their career paths are impacted on by the proposal that is currently being developed and moved forward.

PN174

Clause 2.5:

PN175

To ensure all employees are treated with trust dignity and concern for their rights and individual needs. To provide a quality of opportunity with respect to recruitment, training, redeployment and promotion. To ensure that employees are given the opportunity to attain and utilise all relevant competency skills or qualifications as the business may require and to commit to timely and transparent dispute resolution in the workplace in order to avoid industrial complication and any associated disruptions to operations or services".

PN176

As I go through I will hopefully be able to bring those items to bear.

PN177

The ASU asserts that despite repeated requests regarding source documentation to allow it to assess the credentials of RailCorp's proposal, this has been not forthcoming. This has further hindered the ASU, in particular for instance, to develop any alternative to the proposals before us. This includes but is not limited to the following types of information. Salary point population, specific details as to the development of CBD job evaluation bandwidths, the number of and identity of employees who will be red circled or salary maintained, the number of employees affected, the identity of employees affected, the performance development procedure that underpins movement within the proposed RailCorp classification structure.

PN178

The ASU is concerned that RailCorp's status on certification issues is premature and that a focus on discussions between the parties should be reaching agreement, not to the proposed classification structure or associated arrangements and subsequent communication materials and strategy and endorsement by affected members and employees.

PN179

The ASU notes that there has been no effective consultation as to finalisation and a proposed question and answer document to support information provided to affected members. This is considered to be a key strategic document that needs to be jointly agreed, to communicate to members to assist members to evaluate the RailCorp proposal when it is presented to them.

PN180

The ASU further assets that whilst a communication strategy has been agreed, the time constraints and restrictions placed on information available to be communicated to members - and I have to say in fairness that we have participated in discussions about what could and could not be endorsed - will significantly disadvantage members in understanding the impact of RailCorp's proposal.

PN181

The ASU does not accept RailCorp's assertion that it will refuse to participate in any way, in any other process, to meet its obligations as set out in clause 9.8 of the 2005 EA, if affected members fail to endorse the RailCorp proposal. Further, the ASU asserts that RailCorp's stated position that it will, as set out in Mr Mackie's affidavit at clause 6.8(c), revert to a former proposal and implement such a proposal in the absence of agreement from employees, is a stated intention to breach clause 12.1.3 of the EA which states that:

PN182

The parties agree that where any change proposed -

PN183

and it refers to a previous paragraph which I will, for the purposes of expediency, not retreat to at this point. But it's a no extra claims clause in the third portion of the no extra claims clause.

PN184

- where any change proposed impacts upon employees' existing rates of pay and/or conditions of employment under this agreement then it can only be implemented by agreement with the parties affected by the proposed change.

PN185

It's the ASU's assertion that if in fact the proposal went forward and it was not endorsed by the membership there would be an absence of agreement which would render a breach of clause 12.1.3. the ASU therefore requests that the AIRC not issue a statement in the terms requested by RailCorp on the basis that it could be seen to be unduly influencing members in their consideration of the proposed RailCorp classification structure, as set out in paragraph 9 of Mr Harmers' letter dated 5 November 2007.

PN186

If it pleases the Commission I would probably reserve the opportunity to make some comments in conciliation in relation to ways to address some of the issues that I have outlined. Thank you.

PN187

SENIOR DEPUTY PRESIDENT HARRISON: Do I understand that your position today is to not sign the memorandum of understanding?

PN188

MR ELLERY: Our position today is to specifically address the issues of the request to issue a statement that is going to be appended to information that is going out to members. We believe there are still some issues that we need to try and work with, in relation to how we do that. In terms of how we communicate the information to members and how we go through a process of getting their endorsement. We are clearly of the view that if there is a statement appended to any information that goes to our members, it could be seen to unduly influence our members into believing that they have no alternative. We believe the matter would be more fairly put to our members without that form of, I suppose, take it or leave it position put to them, as outlined by Mr Mackie's comments in his affidavit which I referred to earlier.

PN189

SENIOR DEPUTY PRESIDENT HARRISON: Ms Bennett.

PN190

MS BENNETT: Thank you, your Honour. APESMA's position is in relation to 9.6, we would support the comments made by the RTBU and the ASU. In relation to clause 9.8 we would support the comments made by the ASU. The situation for APESMA is that the majority of our members are ex-RIC. We are not looking at quite as many members as the RTBU has stated that they have, but we are looing at between five and six hundred affected employees.

PN191

Being from ex-RIC, the majority of those employees would in fact be grand-parented under this new proposal. The reasons for RailCorp taking this view are laid out in Mr Mackie's statement. However, it has been APESMA's contention throughout that to proceed with a classification structure that removes, in effect, promotional opportunities for a range of technical and specialist skilled employees including engineers, would in fact be a breach of the objectives of the enterprise agreement in respect of clauses 2.4, 2.5, 2.6 and 2.7.

PN192

We have in fact raised this on many an occasion with RailCorp. RailCorp has come to the consideration that it has done the best it can in the way that the proposed classification structure has been developed. However the reality is that there is a national shortage of engineers and specialist employees across Australia. My members have told me that they would be unable to approve a classification structure that in some cases would mean that in order to be graded at the salary at which they are currently paid, they would have to be promoted two levels in the proposed structure. They have therefore stated also that the likelihood is that if there were to go to a vote, that the majority of APESMA members would be unable to support it.

PN193

RailCorp have been unable to give us exact figures as to how many people's salaries would be grand-parented or red circled. The figure went from 500 to 400 and recently back to 500 employees. Given that APESMA has between five and six hundred members in this affected area, we would suggest that the majority of employees who will be affected will in fact be APESMA members.

PN194

The other issue being that in an area where there is an enormous shortage of skill and knowledge and engineering know-how, two areas specifically would be the electrical area and the signals area, why would the employer consider proposing a classification structure that in effect would support and assist the clerical and administrative strains to progress, but would stymie the progression of people who have the very skills that they are in short supply of. That is an issue that we have not been able to address successfully between the parties.

PN195

In relation to the performance development system, the proposal is that it become part of this classification structure. We have no problem with that, however we have not been provided with a final copy of the proposed performance development system for us to be able to take a view on. It is also our view that despite the fact we have had many consultations about the timeline and fully understand the reasons for the final timeline as proposed by the parties, the end result will be, in our view, given the complexity of the proposal, that the parties will not in fact give the employees enough time to consider the intricacies of what they are being offered, before they are being asked to vote on it.

PN196

We would suggest therefore - we have been seeking for many months that information be released to the employees around this and that the impact on their salaries of the new structure be released to them. A very small handful of union delegates have actually seen anything that comes close to the final proposal or the other information we have been asked to keep confidential, as it has been provided without prejudice. Certainly from APESMA's view we have adhered to that request which means that our members in fact have not had the full package of information in front of them, to a large degree. Mostly they are still uncertain as to how their careers and their salaries will be affected by this.

PN197

Therefore, in relation to the way forward today in relation to a recommendation, we also support the ASU's comments that if the Full Bench were to support the recommendation as stated, and it were to be included in the packet of information that is to go to the employees prior to the vote, that it would in fact appear to the employees that they do have no choice. RailCorp has actually said that there is no further choice, that if this proposal does not get up they will revert to an earlier proposal which had, even from APESMA's viewpoint, a considerable number of inequities in relation to how the differential classes or streams of employees were treated.

PN198

This proposal at least has attempted to address that, but has not gone far enough. I'm sure it was not the intention of the parties at the time the undertakings were given to say that the power in respect of implementing the classification structure would reside only with one of the parties. Yet it is APESMA's view that to go forward with the recommendation in the package as it stands, it would appear to employees as if that were the case; that if they don't approve this they will be given no opportunity to have it arbitrated. We understand that. No opportunity for further negotiation and the only document they would be faced with would be one that is lesser and it would be implemented administratively with no further ability for the employees to have input.

PN199

SENIOR DEPUTY PRESIDENT LARKIN: Ms Bennett, just while you pause, are your members operating on a view that the Commission can arbitrate at their discretion?

PN200

MS BENNETT: No, Commissioner, I don't think they are. That certainly has not been the message that we have put out. Prior to this final structure coming out we did have meetings. I think that we, from the office perspective, have made it quite clear to our members that that is not a possibility. But our members have assumed that there would be a further possibility for negotiation, given the problems that they have with the proposal.

PN201

SENIOR DEPUTY PRESIDENT LARKIN: Of course, RailCorp's position is their final position.

PN202

MS BENNETT: That's correct, Commissioner. In fact on that basis I have nothing further to say.

PN203

SENIOR DEPUTY PRESIDENT LARKIN: I didn't mean to take the wind out of your sails, Ms Bennett.

PN204

MS BENNETT: You didn't, Commissioner. I think that it has all been covered in previous comments by the ASU, as well as by what we have just stated. Thank you. If the Commission pleases.

PN205

SENIOR DEPUTY PRESIDENT HARRISON: Mr Prime.

PN206

MR PRIME: Thank you, your Honour. I will just start by saying that the CEPU does concur with our colleagues in the ASU and APESMA in reference to clause 9.6, we support the implementation of the consolidated conditions and the work that has gone into that. However when it comes to the other matter, the proposed new salary classification structure, I can only support what Ms Bennett has just stated.

PN207

Regarding our membership it is interesting to note that our membership demographically is exactly the same as APESMA's, meaning that all of our affected people come from the old RIC Corporation. We have approximately 70 people so possibly the tail that wags the dog here. Nevertheless we have 70 people who will be stood outside of the structure and red circled and we believe not have been given the opportunity to access the benefits contained in clauses 2.4, 2.5, 2.6 and 2.7 of the current EBA.

PN208

SENIOR DEPUTY PRESIDENT HARRISON: Well, I don't know that they are benefits. It's a clause that is titled Objectives, but I understand the submission you make.

PN209

MR PRIME: I'm sorry, your Honour. The CEPU believes that all of our members who are field operational should be recognised as such and excluded from any proposed first round of salary classification structure negotiations. The operational consideration - - -

PN210

SENIOR DEPUTY PRESIDENT HARRISON: How does that fit with the undertaking that they gave, Mr Prime?

PN211

MR PRIME: I'm sorry?

PN212

SENIOR DEPUTY PRESIDENT HARRISON: How does that fit with the undertaking that was given and which - - -

PN213

MR PRIME: Under 9.8?

PN214

SENIOR DEPUTY PRESIDENT HARRISON: - - - which was partially the reason persuading the Full Bench to certify the agreement in the public interest? The same question to everyone else, but in any event.

PN215

MR PRIME: Okay, I'm sorry.

PN216

SENIOR DEPUTY PRESIDENT HARRISON: Any matters we can tackle again but that will be one issue obviously. Yes, I'm sorry, I interrupted you, Mr Prime.

PN217

MR PRIME: That's okay. I'm basically finished, and I'm concurring with the previous submissions on behalf of all the unions. I recognise Mr Panagiris's members' ability to be able to access the new classification structure for their own reasons.

PN218

SENIOR DEPUTY PRESIDENT HARRISON: I understand. Mr Farrow.

PN219

MR FARROW: Thank you, your Honours. I suppose the AWU's position is very similar if not identical to the ASU, the RTBU and APESMA to some extent. We are probably the least affected union in terms of numbers affected. We only have a handful of members affected by it but nevertheless our members would be red circled and somewhat disadvantaged by the process.

PN220

Picking up on what Mr Prime has just said in regards to the RTBU having the biggest numbers involved in this and they are going to get a benefit out of it, it would appear that the structure has probably more been developed along the lines of numbers rather than the objectives set out in 2.4, 2.5, 2.6 and 2.7 of the agreement. So we share the concerns of our colleagues, the ASU, the RTBU and APESMA and support their submissions.

PN221

With regards to 9.6 and 9.7, we support RailCorp's submissions. Thank you.

PN222

SENIOR DEPUTY PRESIDENT HARRISON: Mr Kite, do you want to say something in reply?

PN223

MR KITE: Well, it depends on whether the Commission wants to hear a debate as to the merits of the matter.

PN224

SENIOR DEPUTY PRESIDENT HARRISON: No.

PN225

MR KITE: We are not really asking the Commission to make a comment.

PN226

SENIOR DEPUTY PRESIDENT HARRISON: One thing is pretty clear is that you don't all come here with an agreed position.

PN227

MR KITE: No, that position seems to have changed since last Friday.

PN228

SENIOR DEPUTY PRESIDENT HARRISON: Slightly.

PN229

MR KITE: Yes.

PN230

SENIOR DEPUTY PRESIDENT HARRISON: So, look you might want to reserve your right to say something on another day.

PN231

MR KITE: Yes.

PN232

SENIOR DEPUTY PRESIDENT HARRISON: Should the need arise. There are probably a few things that can usefully be discussed in conference.

PN233

MR KITE: If your Honour pleases.

PN234

SENIOR DEPUTY PRESIDENT HARRISON: After that if you want to say something on transcript, I'm sure we can do that. We might just rise for a short time and then come back and join the parties down at the bar table.

PN235

MR KITE: If your Honour pleases.

PN236

SENIOR DEPUTY PRESIDENT HARRISON: But assume that we will have a, say, 10 minute break.

<NO FURTHER PROCEEDINGS RECORDED

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #RAILCORP 1 STATEMENT OF KEVIN MACKIE DATED 6/11/2007 PN83
EXHIBIT #RAILCORP 2 LETTER FROM HARMERS WITH ANNEXURE TITLED "STATEMENT AND RECOMMENDATION" DATED 05/11/2007 PN93