BP2007/4059, Transcript of Proceedings [2008] AIRCTrans 613 (8 October 2008)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 19160-1

SENIOR DEPUTY PRESIDENT LACY
DEPUTY PRESIDENT IVES
COMMISSIONER LEWIN

BP2007/4059

s.423(3) - Notice of initiation of bargaining period
Health Services Union
and
Austin Health
(BP2007/4059)

MELBOURNE

10.01AM, TUESDAY, 23 SEPTEMBER 2008

Continued from 22/9/2008

PN5004

MR PARRY: If the Commission pleases. Yesterday we tendered a determination and various schedules separately. I'm told that I promised the Commission a consolidated document with them all bound in one and we've so prepared a document for the Commission which contains the proposed workplace determination of the employers, the template one, along with the attachment of schedules.

PN5005

SENIOR DEPUTY PRESIDENT LACY: Thank you for that, Mr Parry. Did you want to take us to anything in that now?

PN5006

MR PARRY: No, no. Secondly, we have the transcript of the 1999/2000 proceedings which I tender.

PN5007

SENIOR DEPUTY PRESIDENT LACY: I note that was filed. A search of my chambers in any event didn't disclose that we have it here. I am just concerned that if it was filed we might have lost it somewhere along the way.

PN5008

MR PARRY: Well, I would be concerned the Commission might read it twice.

PN5009

DEPUTY PRESIDENT IVES: Don't concern yourself, Mr Parry.

PN5010

SENIOR DEPUTY PRESIDENT LACY: Thank you.

PN5011

MR PARRY: Was the Commission going to mark that?

PN5012

SENIOR DEPUTY PRESIDENT LACY: Yes, I did say yesterday that I would mark it when it was filed.

EXHIBIT #R50 TRANSCRIPT OF THE PROCEEDINGS IN 2000

PN5013

MR PARRY: And there was a further witness statement that unfortunately I omitted to tender yesterday of Dr Peter Smith which was filed with the Commission and as I was going through I went over it.

PN5014

SENIOR DEPUTY PRESIDENT LACY: Yes.

EXHIBIT #R51 WITNES STATEMENT OF DR SMITH

PN5015

MR PARRY: If the Commission pleases.

PN5016

SENIOR DEPUTY PRESIDENT LACY: Thank you, Mr Parry. Mr Djoneff, could you return to the witness box, please? Sorry, did you have any other preliminary matters, Mr Langmead?

PN5017

MR LANGMEAD: No, I don't, your Honour, no.

<ALEXANDER DJONEFF, RECALLED ON FORMER OATH [10.04AM]
<CROSS-EXAMINATION BY MR LANGMEAD, CONTINUING

PN5018

SENIOR DEPUTY PRESIDENT LACY: Yes, Mr Langmead.

PN5019

MR LANGMEAD: Mr Djoneff, we were talking yesterday about the amalgamated chief structure and the approach that the union in these negotiations. It's correct, isn't it, that the employers took the view that the amalgamated chief structure didn't apply to them for whatever reason or it meant something different to what the union contended it meant?---Yes, that was our position but frankly we regarded that as almost as a distraction in the context of the overall bargaining process that we were seeking to pursue in the kind of forward looking arrangements that we were hoping to achieve.

PN5020

It was suggested by the employers to the union that the union should go off to court and prosecute if it thought it was right, do you recall that?---Yes, that conversation I think was had on a couple of occasions in the context of a discussion about is there or is there not a breach. Our focus was frankly on trying to secure an agreement on a package basis and we were not inclined to be pursuing the intricacies of an alleged breach as part of a bargaining process.

PN5021

And indeed neither was the union in terms of it said that it didn't want to go off to court to resolve the matter, it sought to advance the matter through the bargaining to arrive at a position where there was a clear provision which everybody knew what it meant and would apply?---Well, the reasons why it chose not to go to court may be various but certainly the negotiations, though they were relatively short did, among other things, touch on that subject.

PN5022

And it was said by the union in those negotiations that it wasn't going to go to court on something which could be fixed by negotiation?---Yes, it did say that.

PN5023

In paragraph 16?---Of my statement?

PN5024

Your statement. You say that it's important -

PN5025

It's critically important that individual health services retain considerable autonomy and flexibility in order to alter their organisational management structures, staffing files and resource allocation in order to adapt to changes -

PN5026

which you've described?---Yes.

PN5027

That flexibility is always subject to funding constraints, isn't it?---I think it's not only subject to the realities of the funding regime that applies from time to time but also the nature of any industrial instrument that may constrain or limit or direct the manner in which such organisational arrangements can be constructed.

PN5028

And indeed the health services have got considerable restrictions on flexibility in respect to nurses, haven't they?---In the sense that the industrial instrument has some limiting effect, yes, that's true.

**** ALEXANDER DJONEFF XXXN MR LANGMEAD
PN5029

And the instrument provides nurse/patient ratio?---It does.

PN5030

Which are mandatory?---They are.

PN5031

The instruments provide for appointments of directors of nursing?---Yes, yes. There's a range of requirements.

PN5032

And nurse unit managers?---Correct.

PN5033

And assistant nurse unit managers?---Yes.

PN5034

And assistant directors of nursing?---Yes, there is a classification structure that is contained in the industrial instrument.

PN5035

Well, are they required to appoint to those positions?---Yes, they are in the context of the work and the nature of the organisation.

PN5036

And what the union seeks here is no more or less restrictive than that applied by the nurses industrial instruments?---Look, I'm not entirely accepting of that statement. The emphasis that the union has placed throughout the negotiations has been the addition of additional chief positions. We've had a consistent position about that all the way through. The workplace determination that we've put forward has largely retained the award structure. We have not emasculated that in any shape or form but in seeking what we are seeking we're seeking some additional flexibilities within the existing structure. So I would characterise what we're seeking as fine tuning rather than anything beyond that.

PN5037

I'm suggesting to you that what the union has been seeking is no lesser - sorry, no greater restriction on flexibility or provides no lesser flexibility than provisions in nursing instruments?---One could have a long discussion about that I think,
Mr Langmead. If you're asking me what I think of the nursing structure, other than the fact it's there we too would regard it as being excessively restrictive but the reality is it's there and we have to live with that as writ.

PN5038

And as something you've agreed to?---No, the good part of the structures and the ratios was the subject of a determination by Commissioner Blair in 2000 and those restrictions, particularly in relation to ratios, derived from that arbitration in 2000.

PN5039

That was an arbitration by consent of the parties?---Yes, it was.

**** ALEXANDER DJONEFF XXXN MR LANGMEAD
PN5040

And you agreed to be bound by the outcome?---Yes, we did and we remain bound.

PN5041

And it's been replicated in the current agreement?---Yes.

PN5042

And that wasn't the subject of any arbitration, was it?---No, it wasn't. It was certainly the subject of a very intense and demanding dispute though.

PN5043

Yes, well, we'll come to that but that seems to be a characteristic of this industry, doesn't it?---It's not unprecedented, is it?

PN5044

Now, the nurses also have as instruments prescribed the appointment of clinical educators?---Yes, it does.

PN5045

I suggest to you that the claims by the Health Services Union in this matter that clinical educators is not conceptually different from that which applies to nurses?
---In terms of the character of the claim it seems to be very similar.

PN5046

And the requirement for a chief structure is similar to that of nurse unit managers?---No, I wouldn't agree with that. I think I answered that partly in response to a question from Mr Parry yesterday.

PN5047

That's why you don't agree with it, is it? And the union's claim in regard to changing definitions for grade 4s, that would result in classifications which are similar in the way in which they're described to nursing classifications in that there is no ability of the employer to form a view about whether or not somebody is doing the work?---Well, the position we are putting is that there ought to be a discretion having regard to the work and the requirements. In other words, it shouldn't be a mandatory obligation to have grade 4s unless of course there is grade 4 work being done, in which case the appropriate classification should apply.

PN5048

You see, it's the union's position that the provisions in grade 4 have been relied upon by the employers to say, well, because we don't recognise these people as being grade 4s they aren't grade 4s and we don't have to classify them as grade 4s. Do you agree with that interpretation?---Well, I've put in my own statement that where there is an apparent classification issue the person should either be appropriate classified or a remedy be sought for a breach.

PN5049

COMMISSIONER LEWIN: I think what Mr Langmead is suggesting is that it would be a defence to a claim made by a person who was qualified to be a grade 4 and was performing the work of a grade 4 that the person had not been appointed by the employer to that position?---Well, our position is as I've put in my statement, Commissioner. If a person is doing grade 4 work and is being required to do grade 4 work - - -

**** ALEXANDER DJONEFF XXXN MR LANGMEAD
PN5050

And is qualified?---Well, clearly in the absence of qualification they couldn't even step through that door one assumes, but if they are required to do the work then they ought to be classified as grade 4.

PN5051

So the application on your evidence then would not seem to be dependent that - well, they're entitled to be so classified and remunerated?---Correct.

PN5052

It should depend objectively on whether or not they are being required to and are performing the work of a grade 4?---It goes without saying in my view.

PN5053

Good, thank you.

PN5054

MR LANGMEAD: I take it then the employers wouldn't have any issue with the deletion of that part in the literature?---Well, again it's a case of the employer has to have the capacity to define the work that they're required to do. It's no more than that.

PN5055

You see, the words currently appearing in grade 3 is as recognised by the employer and grade 4 as designated by the employer. You - - - ?---I'm sorry, what are you reading from, Mr Langmead?

PN5056

They're the words that are in the current award definition?---Yes.

PN5057

It's the union's contention that the employers rely on that to designate people as grade 2s and grade 3s respectively because the employer is able to say, well, we don't recognise them as having that - sorry, as working in an area that requires high levels of specialised knowledge. So objectively they may be working, and this is a class 3, working in an area that requires high level of specialised knowledge but if the employer subjectively doesn't recognise it then they don't get to be grade 3s and you're saying that shouldn’t be the case?---No, what I'm saying is that given the nature of this work there can be a degree of subjectivity arising but that is capable of being tested and if the person is doing the work of a grade 3, as I've articulated, then it stands to reason that they should be appropriately remunerated accordingly. There can be debate as to whether someone falls into that basket or not and I don't think you can have a sort of general proposition that covers that. Rather, there ought to be capacity under the dispute settling procedure or the local consultation processes which are quite common for that to be resolved.

PN5058

It's a pretty unusual definition which allows the subjective view of the employer to determine the classification of someone, isn't it?---Well, at the end of the day the employer makes a call. If the employee and their representative want to dispute that there is a clearly laid down mechanism for dealing with it. I mean it is a very rare event, I have to say.

**** ALEXANDER DJONEFF XXXN MR LANGMEAD
PN5059

Well, I suggest to you they're rare events because the employer is able to rely on the subjectivity of its choice?---Well, to the extent that it can be contested then I'm not aware of many matters that have been so contested.

PN5060

Now, in the quest for flexibility and autonomy are you aware of any of the health services during the bargaining period negotiations and indeed subsequently at conciliation conferences that took place after the termination but prior to the employers developing their draft determination, are you aware of any employees who have sought to arrive at a separate or discrete arrangement with the union?
---No, they didn't but I'm happy to tell you why.

PN5061

Well, the VHIA have always made it clear that it represents the employers?---Yes, we're authorised to represent those employers.

PN5062

And of course you did so?---We did.

PN5063

And the union didn't take any issue with that?---No, it didn't.

PN5064

It was the employers' position that there should be common negotiations?---Yes, we were happy to proceed on a central collective negotiation basis.

PN5065

Can the witness be shown this letter, please? This is a letter that the union wrote to the CEO of each service, I think each and every health service but certainly the one subject to this proceeding, on 11 February. Have you seen that letter before?
---Yes, I have.

PN5066

And no health service to your knowledge took the union up on that offer, did it?
---I think that's correct.

PN5067

And negotiations continued with the VHIA?---Well, negotiations, they were rather desultory thereafter and the conciliation proceedings that were chaired by Vice President Lawler certainly didn't focus on what I might term the differences between employers but rather on the central themes that were being prosecuted by both parties.

PN5068

And no employer asked you to seek anything particular or peculiar to its needs?
---Not at that stage, no, because the focus was on other matters.

PN5069

And it wasn't until the draft determination was given to the union post determination that there was any suggestion that any health service would have anything other than a common outcome?---No, no, that's not correct. What we did signify at a relatively early stage was that we'll be seeking to pursue the structures that presently exist in each of the health services and to that extent it would have been well known to the union that they differed for the reasons that you're well aware of. But the whole thrust of the negotiations and the conciliation was about trying to find where the common points could potentially be to secure an agreement. As we well know, that agreement simply wasn't achieved.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5070

In your paragraph 17 you've described allied professionals including a number of classifications?---Yes, I hope I've included them all.

PN5071

That's your intention, is it, that it should include all?---It was certainly intended to give the best illustration of the range of occupations and classifications under that general heading.

PN5072

Is a dietician a health professional?---Dietician comes under the HSU4 area of coverage, if I recall correctly.

PN5073

SENIOR DEPUTY PRESIDENT LACY: Mr Langmead, did you wish to tender that document?

PN5074

MR LANGMEAD: Sorry, I did, your Honour, thank you.

EXHIBIT #A29 COPY LETTER DATED 11/02/2008 FROM HSU TO THE RESPONDENT HEALTH SERVICES

PN5075

MR LANGMEAD: What about the additional classifications that have been sought by the union, exercise physiologists?---I take your point, Mr Langmead. There are those other classifications that you are seeking and which one could characterise as emerging occupations or classifications.

PN5076

And all of the ones listed by the union are classifications which are descriptions of allied health professionals?---Well, they are descriptions of work that appears to be being done and is evolving out of the system. Whether they're all properly under one heading or another I don't profess to have a particular view.

PN5077

Is that claim resisted?---Sorry?

PN5078

Is the claim for those classifications resisted?---At this stage, yes, it is.

PN5079

And what's the basis of that resistance?---I think because they are simply evolving occupations and we're not yet convinced that they need to be a complete code of classifications.

PN5080

And if there are persons employed by the health services who undertake these functions and they have the appropriate tertiary qualifications are they to be left in a vacuum?---Well, some of them, I suspect some of them could be - sorry, accommodated under existing classifications but I'm not putting a black and white view on that position.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5081

Allied health professionals is a gathering together of people who don't fall into other categories, do you agree with that?---Well, certainly they're obviously quite distinguishable from the nursing profession and from the medical profession but I would say that the line between the classifications covered by your client and those of the HSU4 branch is a historical arbitrary one. One could well mount a case that they are all allied health professionals in that they provide a range of professional support services to the treatment regime of hospitals and other health services.

PN5082

As indeed do nurses?---Yes, nurses.

PN5083

And indeed probably doctors?---Of course.

PN5084

Have you seen a document produced for the Department of Human Services entitled Recruitment and Retention of Allied Health Professionals in Victoria a Literature Review?---Yes, I believe I have seen it.

PN5085

It says that -

PN5086

Considering allied health professions as a single group entity -

PN5087

I'm sorry -

PN5088

The strongest advocates for considering allied health professions as a single grouped entity have done so not because of any perceived natural synergies, but rather to obtain economies of scale in human resource management or efficiencies in service and personnel management.

PN5089

Do you agree with that?---I'm not quite sure what that - would you mind repeating that because I'm not sure I got the drift of that.

PN5090

The strongest advocates for considering allied health professions as a single grouped entity have done so not because of any perceived natural synergies, but rather to obtain economies of scale in human resource management or efficiencies in service and personnel management.

PN5091

?---I must say I’m not quite sure how to respond to that, Mr Langmead. If the question is how should allied health professionals be properly defined, it won't be done for one single reason. It will be done for a whole range of considerations.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5092

Yes?---I'm not sure I necessarily - - -

PN5093

COMMISSIONER LEWIN: I accept you're disagreeing with the assertion of the author?---Yes. I'm not sure that I accept that proposition as put.

PN5094

MR LANGMEAD: The authors go on to say that outside of this purpose, being human resource management or efficiencies and service, and especially if human resource issues are going to be addressed on an individual basis, grouping of professionals as a single entity potentially hinders the development of appropriate solutions and the appropriate solutions that are talked about are the recruitment and retention of Allied Health professionals?---Mm

PN5095

The thesis of the author is that there isn't any natural synergy between the various disciplines within what is generally called Allied Health and the focus on Allied Health as a group for the purposes of management or resource management does not contribute to - or potentially hinders the development of appropriate solutions to recruitment and retention?---I can't say I would buy that.

PN5096

In the 6000 approximately Allied Health professionals that you estimate are in the public health system, is that done on the basis of your broad definitions?---Yes, Mr Langmead.

PN5097

The costings document R48, that seems to think that there's 6 and a half thousand health professionals?---Well, I'm happy to defer to that.

PN5098

Their information is not necessarily going to be any more accurate than yours, is it?---Well, if it's a costing survey it's likely to be a little more accurate than my last figure. I'm happy to accept that it's 6 and a half rather than six.

PN5099

I think you told the Commission yesterday that the costings exercise was done by your organisation providing information to the department from your members?
---That's right.

PN5100

In passing through the VHIA's hands you didn't - - -?---No, it was a specific purpose to - - -

PN5101

- - - do any aggregation yourself?---No, that's correct.

PN5102

It could have been a unique opportunity, wouldn't it, to get an accurate picture of a significant part of the workforce?---I think that's a fair comment.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5103

VHIA didn't have any interest in doing that?---It's not a question of interest, I think it was a case of what we were focused on at the time with our resources versus the resources of the Department of Human Services which are infinitely greater than ours.

PN5104

You've spoken in paragraph 18 that:

PN5105

Allied Health professionals are involved in all stages of the care of patients in the public health system, that particular interventions delivered by Allied Health professionals to particular patients would vary according to their particular disciplines in the service.

PN5106

That's a statement that's equally true of doctors?---Yes, of course. Each health professional has their particular role to play within the treatment regime of a patient.

PN5107

Indeed, nurses?---Yes. They have a different relationship to the patient than other Allied Health professionals.

PN5108

In a multidisciplinary team the roles of the various health professionals are all of that nature?---Yes. I think it's a no-brainer that each of the professions contributes to the treatment regime according to their particular discipline and how that's brought to bear is determined by the care plan or other requirements of a particular health service. I think it's been ever thus.

PN5109

You say in paragraph 19 that:

PN5110

Larger services typically have dedicated departments for each Allied Health discipline.

PN5111

You say:

PN5112

Smaller public health services and community health centres may not have dedicated departments for each Allied Health discipline.

PN5113

In the larger public health services and public hospitals, they have dedicated departments even where there are multidisciplinary teams, don't they?---Yes, they do.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5114

A physiotherapist, for example, who might be working in a multidisciplinary team, will still be allocated to the department - - -?---Yes. I wasn't seeking to convey something other than that. I was merely seeking to characterise the way things are generally organised.

PN5115

In paragraph 20 you said that:

PN5116

The management of these often occurs on a traumatic basis across several sites.

PN5117

It's also the case that they're often located to a particular area of operation at the hospital, for example the emergency department?---Yes, that's also true.

PN5118

In paragraph 22 you've said that:

PN5119

The health service may utilise labour from an external agency. Sometimes they're employed by the health service.

PN5120

Is that the case with, say, nurses from the banks?---Nurses from banks are typically employees of the health service as distinct from those who may be provided by an agency and in respect of those who are provided by an agency, they are either allocated as employees of the health service or they are placed off by contract through the agency. So there are variable arrangements depending on labour market realities and that will vary from location to location as well.

PN5121

Do the health services seek to use health professionals of any sort who are independent contractors?---I would have thought that's a pretty rare occurrence. Indeed, if you press me I couldn't cite you an individual case of that but we'd have to allow for that possibility from time to time.

PN5122

What are the circumstances in which they may utilise labour from an external agency?---Possibly for a locum service for short term replacement needs and those kind of things, particularly in locations where there is not, if you like, a critical mass of local Allied Health professionals upon which to draw for relief purposes. That's not confined to Allied Health, that's also common to doctors, particularly in rural localities.

PN5123

Nurses, there is the use of bank nurses?---Yes. Many hospitals have their own bank, nurse bank arrangements and they also use some agency nurses.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5124

Nurses are backfilled if anyone is sick, are they?---To the extent that the ratio obligations require it, yes.

PN5125

The backfill is in order to meet the nurse-patient ratios?---Yes. The industrial instrument covering nurses is couched in such terms that there must be a minimum ratio for the number of patients in a particular ward.

PN5126

If there is no such mandatory requirements, the health services don't backfill?
---They don't automatically backfill. That's a judgment they have to make on a daily basis as to whether they do backfill or can avoid backfilling and they'll do that for a variety of reasons.

PN5127

Do you know the incidence of backfilling in Allied Health professionals?---I couldn't cite you what the incidence is.

PN5128

In paragraph 23 you say:

PN5129

Allied Health professionals are in a very strong bargaining position in the current labour market, a requirement particularly set on rural Victoria.

PN5130

Are you suggesting there that there's a shortage?---Yes, there is a shortage. There is a relatively serious supply issue confronting health services. It's not confined to Allied Health. There's a variety of occupations that are in short supply and forward projections are that the labour supply issues will remain serious, if not worsen in the short term.

PN5131

It hasn't resulted, however, has it, in Allied Health professionals being paid any more?---It could have.

PN5132

It could have if the VHIA's members had conceded the 16 per cent claim in this matter?---Well, like all these things, Mr Langmead, judgments have to be made at every step of the way in the enterprise bargaining process. We can only bargain within the parameters that are available to us. I can't commit my members to remuneration arrangements that would not attract funding and hard choices are always being made as to what package will be able to secure or stabilise the existing workforce and give us reasonable prospects of retaining those that we presently have. None of these are easy choices.

PN5133

COMMISSIONER LEWIN: You said that there are certain limitations on the bargaining position that was adopted by VHIA?---Yes, Commissioner.

PN5134

They were what would be funded by government?---Yes, in broad terms, yes, that's correct.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5135

I take it from that that there's a certain logical connection between say the Austin Health's desire to have VHIA represent a collective position on behalf of all the employers. Is that right?---That's correct.

PN5136

Was that the general view of the members of the organisation that a collective view about what the outcome should be, consistent with available funding, should determine the approach to the bargaining?---That was the essential theme that was adopted, Commissioner.

PN5137

Please elaborate in a moment. If I could just ask you: so that would have led to a position where you are essentially presenting a uniform outcome?---The position we adopted was we had secured agreements with the nurses. We had secured agreements with the psychiatric services staff. We were close to securing agreement with the occupations covered by the HSU number 4 branch for what we say are reasonably compelling reasons. There was a desire to achieve consistent outcomes with those settlements.

PN5138

And uniform in relation to your members in respect of their Allied Health employees?---Correct.

PN5139

SENIOR DEPUTY PRESIDENT LACY: Do the health services charge any fee at all for their services?---Sorry?

PN5140

Do the health services charge any fee at all for their services?---Charge?

PN5141

Do they charge any fee or are they completely publicly funded?---No, no, they derive the overwhelming bulk of their funds from the state government. I think Mr Wallace from the department will be giving evidence on the detail of those funding arrangements in these proceedings.

PN5142

They can charge a fee for service?---They will derive income from, for example, compensable patients such as TAC and Department of Veterans Affairs. They derive income from private practice schemes involving their doctors. The overwhelming bulk of their funds comes from the state government through funding agreements.

PN5143

COMMISSIONER LEWIN: Would any of them have been in a position, should they have chosen to do so as a matter of policy, do you think, to enter into differential agreement outcomes for their particular services?---Can I answer it like this, the premise upon which we've proceeded is consistent with the state government's industrial policies of central collective negotiations and that has been the character of public sector negotiations, not only under the Labor government but under the previous Liberal government in the mid nineties. The character was central collective negotiations. That is not to say that in so doing one couldn't pursue individualised outcomes but the thrust and the consensus of the parties was that that should be done at the central collective negotiation basis.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5144

Thank you, Mr Langmead, I'm sorry to have interrupted your flow.

PN5145

MR LANGMEAD: Mr Djoneff, over-award payments or over-agreement payments are almost unheard of in this industry, aren't they?---In respect of?

PN5146

Certainly in respect of Allied Health professionals?---I think that's generally a fair statement to make.

PN5147

A strong bargaining position hasn't been reflected in higher payments?---There will be instances of not so much over-award payments but rather over-classification. Indeed that was regularised I think a couple of agreements ago where the commencement rates in rural Victoria were elevated in recognition of the recruitment retention concerns.

PN5148

COMMISSIONER LEWIN: Were they designated rural commencement rates or were they simply the recruitment practice of the service?---Well, there were practices that were then codified, if you like, into the industrial instrument in relation to a response to a recognition of the reality in rural settings.

PN5149

It was a proxy for a locality allowance?---That's another way of characterising it, Commissioner.

PN5150

MR LANGMEAD: Mr Djoneff, I suggest to you that Allied Health professionals are not in a strong bargaining position at all for the reason that in a traditional sense they really can't take industrial action, can they?---Well, the evidence is overwhelming they have and they do and of a kind that was particularly damaging to the health system.

PN5151

Any industrial action they take is likely to lead to a termination of the bargaining period, isn't it?---If it's of a sufficient severity, yes, because we can't take industrial action ourselves under the Act. The concept of a lockout I think would be bordering on bizarre.

PN5152

We'll come to that in due course?---Hope so.

PN5153

In 1997 the bargaining period was terminated?---Yes.

PN5154

What sort of action was being taken then?---I can't recall the precise details but it was clearly sufficient for the Commission to find that it was of such a kind that satisfied the test in the Act as it was written at that time. We've had two subsequent occasions as well since then.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5155

Yes, there have been some times; you agree with that ?---Yes.

PN5156

If it suits the VHIA and its members, they will always be able to get a bargaining period terminated, won’t they?---I don’t think it’s - I don’t think it’s quite as automatic as you’re implying. We have to go and make the case, and we make it here and we rise and fall on the quality of the material and the factual circumstance that arises. That’s the schema of the Act.

PN5157

Have you ever had a failed application?---Not in respect of your union, no.

PN5158

Similarly, you have successfully applied on a number of occasions for the termination of bargaining periods between VHIA and the ANF or the HSU?
---Yes.

PN5159

Indeed you applied to terminate your own bargaining period?---Well, the - the arcane mysteries of the Act and the tactical opportunities and obligations that arise, you sometimes meet yourself coming from where you’ve just been. But the reality is that we have availed ourselves of the provisions of the Act in an environment where we don’t - are not able to exercise our industrial action right under the Act. It would be a bizarre circumstance to - to contemplate that.

PN5160

Well every time there’s industrial action - I withdraw that. The bans that the union was imposing in 1997, I suggest to you, were similar to the sorts of bans that were applied in December of this year?---Yes, I - I suspect they were in a similar character.

PN5161

Yes?---I - I don’t have a detailed recollection of the 1997 bans.

PN5162

The VHIA didn’t make any application to terminate the bargaining period because it didn’t want to face an arbitration; is that right?---Sorry, when you - in respect of when?

PN5163

In December last year?---Because we didn’t want to what?

PN5164

It didn’t want to face an arbitration?---Well I would’ve thought subsequent history shows that going to arbitration was clearly an option and here we are. So whether you’re seeking to attribute to us a particular line of thinking or motive back in December is - I’m not sure where that takes us.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5165

The VHIA says, and its members say, that the HSU’s conduct in taking action, which was going to cause the termination of a bargaining period, is reprehensible and should be held against it in these proceedings; Mr Parry has not used those exact words but I paraphrase them?---Well to the extent that the Act makes provision for criteria which goes to the conduct of the parties, to me that’s just a relevant consideration, and each of us is - is entitled to give it the characterisation that - that will stand the scrutiny of the Commission.

PN5166

Would it not have been equally reprehensible, should it have come to an arbitration with the ANF and the HSU, that the VHIA had applied to terminate its own bargaining period last year?---I’m not sure where the word reprehensible arises. Our view is that we were conducting ourselves in accordance with the provisions that the Act makes available. How reprehensible arises in that context mystifies me.

PN5167

Well indeed, and the Act provides for certain things to happen if certain other things happen, and it is an almost inevitable consequence of industrial action by workers in this sector that the bargaining period will be terminated by the Commission?---If the industrial action is of a kind that would warrant it, that clearly happens. Our objective was actually to secure an agreement, an agreement that was broadly consistent with those that we had recently achieved with other unions in the health sector. It could - I think it’s not an unreasonable construction to say that your clients were rather more intent on securing an arbitral outcome than we were.

PN5168

So you were fearful of an arbitration?---Not fearful. Our pursuit was an agreement in terms broadly consistent with those that had been recently reached with other major health unions. It’s not a question of being fearful or engaging in reprehensible behaviour. It’s about pursuing something that is reasonable in the circumstances.

The only agreements that had been reached around that time of December was with the ANF, wasn’t it?---No. We had also reached agreement with the HSU number 2 branch in respect of psychiatric services staff. That was reached in, I think from memory, the 15th of November and the major nurses’ agreement was reached on about 2 am on the 25th of October, if I’m not mistaken; how could I forget?

PN5169

With the nurses’ dispute, industrial action was being taken?---Certainly.

PN5170

Yes?---A very severe industrial action.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5171

Yes, I think closing a third of the beds?---Something like 1500 beds were closed and many hundreds of elective surgery patients were cancelled, and so on. It was - it was a very damaging industrial action to the health system.

PN5172

Yes, a similar industrial action to what took place in 2004?---Yes, in a similar character.

PN5173

Yes?---I would agree with that.

PN5174

Then the VHIA tried to terminate the bargaining periods of the ANF?---Yes, we did.

PN5175

I think agreement was reached prior to Commissioner Cribb making a decision in that matter?---I think that may well be correct, Mr Langmead. But certainly agreement was reached. That is, we didn’t go through the arbitral door.

PN5176

The VHIA and indeed the government had seen what happens when you go through an arbitral door, with Commissioner Blair; hadn’t it?---Well you go into arbitration with your eyes open. There are no guarantees in arbitration. Everyone knows that, but then there are no guarantees in the enterprise bargaining process either.

PN5177

The arbitration, as you referred earlier, that’s where the nurse-patient ratio came from?---That’s correct.

PN5178

Yes, and your members don’t like it?---It was an extremely costly exercise and introduced rigidities that to this day we consider to be less than desirable.

PN5179

But not something you were able to convince the nurses to give up in the most recent agreement though?---That’s correct.

PN5180

The HSU health professional members aren’t able to achieve by industrial action very much at all, are they?---Well it depends what you mean by very much.

PN5181

You say that they’re in a very strong bargaining position?--- Mm mm.

PN5182

You don’t mean industrially though, do you?---Well they certainly in the - in the labour supply sense they’re in a strong position. That is not to say that that neatly translates into a - an industrial position that becomes irresistible.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5183

That would only be relevant if there was an alternative workforce that you could swing into use if there were industrial action?---It’s - it’s not a luxury that is available to us, regardless of the occupation in the health system.

PN5184

But the facts are you haven’t got an alternative workforce and there is a shortage and, if these people take industrial action - - -?---Yes.

PN5185

For the period that they’re taking industrial action, whatever it might be, that work does not get done?---That’s correct. It’s - it’s very damaging.

PN5186

If the union takes industrial action such as the sort it did this time, is it very damaging?---Clearly.

PN5187

Yes?---We’re very much on the public record to say just that.

PN5188

Not damaging enough to apply to terminate the bargaining period?---Well that’s a question of judgment at a particular moment in time.

PN5189

It’s also probably a judgment now for achieving your ends by alternate means too, isn’t it?---Alternate means?

PN5190

Well, you took the view that the industrial action was unlawful and made application for 496 orders?---Sure. Absolutely. It was - it was demonstrably unlawful.

PN5191

Just as you ultimately did with the nurses?---Correct.

PN5192

The termination of the bargaining period with the nurses made no difference, did it?---At that particular moment, no it didn’t.

PN5193

That was because the nurses were always taking unprotected action?---Yes, they were I think. Yes.

PN5194

To terminate the bargaining period would not have had the effect that it would in, say with the health professionals; that it would render any lawful industrial action thereafter unlawful?---Mm mm.

PN5195

The nurses were simply taking unlawful industrial action?---Yes they were, at a certain point in time.

PN5196

Can you recall whether they even had a bargaining period extant?---I think probably they didn’t at that point.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5197

Because the reason the VHIA terminated its own bargaining period, I suggest to you, was because there wasn’t a bargaining period?---Fine.

PN5198

The resolution of the nurses’ dispute was to seek 496 orders against the ANF?
---Yes.

PN5199

To then seek to enforce those orders in the Federal Court?---That’s correct.

PN5200

Agreement wasn’t reached until the period between the rising of the court and the ..... the decision was to be given, so we never saw a decision?---I think that was the essential sequence of events, yes.

PN5201

Yes, and that application was not only for interlocutory injunctions, it was also for final relief including penalties?---It would have ultimately gone to that point, yes.

PN5202

What happened to those proceedings?---What happened to those proceedings?

PN5203

Yes?---Well they ultimately didn’t proceed on the basis that an agreement was reached on - on terms that were acceptable to the parties.

PN5204

The ANF had still taken unprotected industrial action in defiance of the section 496 orders?---Yes.

PN5205

But you didn’t continue the application for penalties?---No.

PN5206

In relation to the HSU health professionals, the VHIA sought 496 orders?---Yes.

PN5207

Yes, because it took the view that the action was unlawful?---That’s correct.

PN5208

And it obtained those orders?---Yes.

PN5209

The action the subject of the orders continued?---Yes, it did.

PN5210

Yes, and you went to the Federal Court seeking interlocutory relief?---Yes.

PN5211

Which was granted?---Yes.

PN5212

The proceedings also sought final relief which included penalties on the union?
---Correct.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5213

Yes, and that proceeding remains on foot?---In a technical sense I believe that’s still in - in place.

PN5214

It’s coming up for directions, I’m instructed, next month?---Okay.

PN5215

The reason that’s on foot is to place pressure on the HSU?---Certainly.

PN5216

To return to the situation, Mr Djoneff, health professionals aren’t in a very strong bargaining position in an industrial sense because they are unable to take s sufficient industrial action which can cause an agreement to be reached?---Is that a question or a complaint?

PN5217

Well I’m suggesting to you that that’s the fact?---Well the reality is, I think, each of us has to operate within the schema of the Act and that’s all that’s unfolded.

PN5218

Workers in industries such as health are almost invariably going to be subject to be called in for arbitration if the parties can’t reach agreement; their bargaining strength has got nothing to do with it really?---Well it’s a bit like our bargaining strength. We can’t engage in the - the particular action that the Act provides for us, for all the obvious reasons. So we’re left in an imperfect world where perhaps both of us are then impelled towards the arbitral door.

PN5219

You will recall this, Mr Djoneff, that arbitral door was in large placed in the Act in the first place because of public sector workers like teachers, health workers and the like, and you recall that the, I think it was the Democrats, put some amendments in when the legislation was changed?---In the early 90s.

PN5220

Yes?---Yes.

PN5221

The legislative purpose is clear that it recognises that parties in sectors like this can’t be permitted to take action which does engender the safety or welfare or part of the population?---Yes, of course.

PN5222

The retention issues which you acknowledge in your paragraph 23, you would accept that there are issues other than pay involved in retention, and indeed recruitment, for that matter?---Yes. I mean, it’s not always just pay. It’s - it’s usually the package of conditions.

PN5223

Yes, and you would have seen the surveys from time to time that identify issues t such as career opportunities, professional recognition, which are said to be important to - - -?---There’s a whole variety of factors that influence a health professional in making a decision as to where they work.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5224

I think you clarified this with Mr Parry, but after the termination in 1997 the HSU in respect of health professionals reached agreement?---Yes.

PN5225

So there was no arbitration needed in that instance?---That’s correct.

PN5226

In 2000, again the bargaining period was terminated?---Yes.

PN5227

Again for, I think the section was MW by then, and I think it was PP or PO previously?---I take your word for it.

PN5228

But essentially the same provisions?--- Yes, that’s right.

PN5229

Yes?---That’s right.

PN5230

On that occasion agreement was not reached?---That’s correct.

PN5231

The arbitration that has been referred to - - -?---The MX arbitration.

PN5232

Yes?---As it’s commonly referred to.

PN5233

Yes. The 111 strip away, I think it is, arbitration of Commissioner Blair arose from the bargaining that commenced in mid-2002, following the MX arbitration?
---Yes, I think that’s - - -

PN5234

That was because the MX awards only operated for some very short period of time, I think?---Yes, that’s right.

PN5235

Yes?---That’s right.

PN5236

So thereafter the parties commenced negotiations for a new agreement?
---Mm mm.

PN5237

The upshot of that was that they agreed to the arbitration by Commissioner Blair and to abide by its outcome?---That’s right.

PN5238

That happened and there was an agreement reached?---That’s correct.

PN5239

In terms of the Blair recommendations?---That’s right.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5240

That was without any industrial action?---I think that’s right, yes.

PN5241

Then in 2004 there was again a campaign by the nurses?---Yes.

PN5242

Which resulted in an application for a termination of the bargaining period?
---Yes.

PN5243

We have just canvassed previously, but an agreement was reached on it?---That’s correct.

PN5244

In the precincts of the Commission, I would imagine?---I beg your pardon?

PN5245

Agreement was reached in the precincts of the Commission, I would imagine?
---And a good place it was.

PN5246

Yes, and then the HSU, in respect of its allied health professionals, reached agreement?---That’s correct.

PN5247

In 2004?---Yes.

PN5248

That was without any industrial action being taken?---That’s correct.

PN5249

This year of course we have heard plenty about the industrial action and we will no doubt hear plenty more?---Well I hope not. I - we’ve heard a lot about it but I prefer to get a sensible settlement.

PN5250

Well certainly the parties, no doubt on both sides, look to this Commission’s resolution of the matter as vacating their positions?---Well, by definition, a decision of this Full Bench will determine all the matters and we’ll move on.

PN5251

Mr Djoneff, in paragraph 36 you talk about uplift in the wages of allied health professionals; when you use that expression, do you mean there was an upfront payment?---It’s a - it’s an expression that’s acquired some currency in this most recent enterprise bargaining round. In terms of the outcome for the nurses, the HSU 2 branch and the HSU 4 branch there has been a wage uplift at the front end, based on - on agreed productivity-related matters, which was not a feature of the 2004 enterprise bargaining outcomes.

PN5252

But when you say an uplift are you meaning the sort of one-off payment that the HSU number 4 branch negotiated?---No, no, no. I’m not talking about a one-off payment. I’m talking about an elevation of the prescribed rates of pay to some new level.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5253

SENIOR DEPUTY PRESIDENT LACY: A percentage increase, is it?---A percentage increase, yes.

PN5254

Yes.

PN5255

MR LANGMEAD: So it may be 3.25 plus two per cent?---Yes, it could be.

PN5256

Yes, and it’s the 2 per cent you are describing as an uplift?---Which was characterised - yes, that’s a - a term that’s acquired some currency in the recent enterprise bargaining rounds.

PN5257

But all it means that, in that instance I just gave, there was an initial 5.25 per cent increase followed by a three pre cent increase[sic] at some further point in time
?---In this most recent - for nurses, you’re talking about?

PN5258

Not only the nurses, but also the scientists?---Yes. Yes.

PN5259

And the psych nurses, there was a - yes?---What we have come to term an uplift.

PN5260

Yes?---On the commence - the commencement of the agreement.

PN5261

Which, as we saw from the DINF document yesterday - - -?---It’s on average two per cent but it’s variable up and down the scale, as I described in the evidence yesterday.

PN5262

Yes. Do you know how many nurses are employed at each year level, on each grade level?---I - I don’t have that information to hand. We have broad numbers but I couldn’t quote them to you.

PN5263

Because you say that it averaged two per cent, the uplift?---Yes, the average.

PN5264

Yes. Did you do that averaging exercise?---No that was a - a calculation done by the Department of Human Services.

PN5265

But certainly these figures are accurate, are they, in that chart that you saw yesterday?---I believe so.

PN5266

The government policy position was that you only get 2.5 per cent; would you agree with that?---Sorry, 2.5 per cent?

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5267

Yes?---Well the - - -

PN5268

And if you wanted any more than that you could get up to three and a quarter, but you had to demonstrate productivity improvements?---No, I think there’s two characterisations that need to be made clear. In order to attract 3.25 you would have to show that there are some service improvements. For increases beyond 3.25 you would have to enter into agreements relating to measureable and quantifiable productivity savings in going forward, and that is what the so-called two per cent average uplift relates to.

PN5269

Who determined the allocation to the various grades?---Well that was a negotiated outcome.

PN5270

DHS presumably agreed to fund this?---Yes, that’s correct.

PN5271

Through negotiations?---Yes, that’s correct.

PN5272

So if it can become a concern to the VHIA ..... as to the allegation between the classifications, as long as the bucket of money at the end of the day was the same?---Well no, it wasn’t quite as bland as that. There was negotiation about the distribution of the available dollars, having regard to all sorts of considerations that were relevant in the nursing negotiations. They were complex, sensitive. There were not always necessarily utterly internal consistencies. There were all sorts of constituency considerations that went into that negotiation mix, and similar considerations were entered into in negotiating the settlement with psychiatric services union, the HSU number 2 branch, and indeed with the HSU number 4 branch; and the same prospect was held out for your clients, that there was scope for appropriate negotiation of the distribution of available funds on a negotiated basis.

PN5273

COMMISSIONER LEWIN: Is that an uplift idea?---That was the - yes, again, the uplift notion, Commissioner.

PN5274

This idea where you just take a nominal amount of the full-time wages cost of the EFT population and then make that available for distribution across the scope of the occupations?---The spectrum - that’s right.

PN5275

According to agreement?---Correct.

PN5276

So that was available to allied health?---Yes, it was.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5277

Was there an amount - - -?---Again, it was a - it was a two per cent average uplift.

PN5278

So there could have been a two per cent uplift - - -?---Subject to appropriate - - -

PN5279

- - - plus - - -?---The 3.25 adjustments that have - that are characterised in all the other agreements. That’s correct. It was all contingent upon, of course - - -

PN5280

It wasn’t two per cent for everybody; it was two per cent of the - - -?---Of the wage base.

PN5281

This conceptual amount of money that’s - - -?---Of the wage base for that occupation.

PN5282

All right?---Mm mm.

PN5283

So that by following that process you avoided a 5.25 per cent increase for everybody, effectively?---That’s right.

PN5284

The net cost of the increase, was that ever identified in the process of formulating this offer?---No, no, it was - it was - - -

PN5285

Surely somebody, somewhere, if this was going to be funded, must have known for the purposes of decision making what a two per cent uplift plus a 3.25 per cent wage increase would have meant for allied health costs?---That’s right.

PN5286

Otherwise it would have been impossible to make a decision as to whether that would be funded, and your organisation could not possibly have been in a position to advise its members of whether or not this was an offer that was viable, unless you had an idea of whether it would be funded?---Correct. The - the whole schema is that there was on average a two per cent uplift available, based on
that - contingent upon certain productivity measures being agreed to, and we never really got to that point.

PN5287

What were the productivity improvements identified, where necessary, for the two per cent uplift plus 3.25 per cent in wages for allied health?---Commissioner, we didn’t get to the point - - -

PN5288

You had not identified them?---No, no, we hadn’t got to the point - the negotiation process was a very brief one, I think, as I mentioned earlier in my evidence, and we never really got to the point of going into the detail of what those things might be, because of the preoccupation of the negotiations, and indeed the conciliation process that was relating heavily to structural issues. Our impression was that, subject to appropriate productivity measures being agreed, the wages outcome was probably going to be acceptable, but - - -

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5289

The structural issues for these - - -?---Classification related - - -

PN5290

- - - classification issues about - - -?---Yes, chiefs and - - -

PN5291

- - - the numbers of chiefs, deputy chiefs, practice leaders, if you like, in various sites?---Yes. That’s correct.

PN5292

That structural issue, in general terms - - -?---Was - dominated the - the discussions, yes.

PN5293

All right.

PN5294

DEPUTY PRESIDENT IVES: So are you saying that you didn’t know what productivity improvements you wanted? I understand it didn’t get to that stage in negotiation, but are you saying that - - -?---No, no, no we - don’t get me wrong, your Honour, we were - we were looking at things like improved throughput of patients, which was a - a major that we had in relation to nurses as well; greater use of allied health assistance in a recasting of the distribution of work. So there was a number of matters that - that were capable of being discussed. All I’m simply saying is that they never got to the point of any - any serious dialogue at all.

PN5295

Sure, but the circumstances would presumably have been, “We can do this two per cent uplift if we can get one or more of the following”?---That’s right. That’s right.

PN5296

You must have known what one or more of the following were?---Well they were canvassed but not - as I say, the whole focus of the conversations was, “Assuming we can fix that, can we resolve the classification matters?”, and the preoccupation was with those classification-related matters. Now rightly or wrongly, that’s how it unfolded and then we got to mid-December or whenever it was when things went bad, to put it bluntly. I’m not being critical of the union in this respect. I’m simply saying that is how it factually unfolded.

PN5297

MR LANGMEAD: As part of that examination of wage increases and structural issues, the union sought information about how much money was available
?---Yes, it did.

PN5298

It wasn’t able to find that out, was it?---Well other than to be informed that, consistent with other agreements reached, that would be the approach that we would be taking.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5299

In terms of an analysis of the costings of the structural proposals, it sought the information such as EFT in each department and the like?---Yes.

PN5300

Yes, and that wasn’t forthcoming?---No.

PN5301

No, and indeed it wasn’t costed by the VHIA or DHS at the time?---It certainly wasn’t costed by us, and - but certainly DHS did do some costing exercises.

PN5302

The costing exercises, R48, that’s a very recent document, I take it, is it?---I’m sorry, I’m not sure which one you’re referring to.

PN5303

R48?---R48.

PN5304

It’s the costing process with the charts that we discussed yesterday, about the ones that look like that?---I have - no, I - that wasn’t put to me yesterday, I don’t think.

PN5305

SENIOR DEPUTY PRESIDENT LACY: Does can Mr Djoneff have a copy of that?

PN5306

MR LANGMEAD: Do you recall that you were asked some questions about this document?---Yes.

PN5307

Yes, and this is the document you agreed was compiled from information provided by your members, through you, to the department?---Yes.

PN5308

That document is very recent?---Yes, it is.

PN5309

When was the information provided to the VHIA?---To be honest I can’t quite recall, Mr Langmead. I’m not - I’m not being evasive, I honestly can’t recall just exactly when that was.

PN5310

Can you recall when you provided it to DHS?---Well we would’ve provided it on an ongoing basis, fed it through to the department as it came in.

PN5311

You would not disagree with the proposition that the union was seeing this for the first time in this court room?---I - yes, I - I - yes, I take that to be correct.

PN5312

So in order to perform a task like you say was performed in respect of the nurses in that chart which is exhibit A13, the parties would have to have available to them meaningful statistics so that they would know who got what, wouldn’t they?---Yes, there was - that’s right.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5313

Yes, so whatever the nurses had wasn’t the sort of information that was available to the HSU in its negotiation?---At - at a certain point in time, that’s correct.

PN5314

Well until this week it wasn’t and may still - - -?---Could well be.

PN5315

In terms of the actual data, it still isn’t?---Well this is fairly extensive data.

PN5316

I don’t think it tells you, for example, other than in the aggregate, anything more than the department’s costings of all of the HSU’s claims?---That’s correct.

PN5317

So it wouldn’t enable, for example, the claim that there be a chief at physiotherapy, or a social worker at the two campuses at East Melbourne in the social work department; it does not go to that level of detail, does it?---That’s correct.

PN5318

It wouldn’t have been possible for the HSU to know whether there was any possibility of allocating any uplift to meet its claims for structural matters?---Well as I took it, the HSU 3 took the position that that which was being offered was singularly insufficient, and we were so far apart that it really didn’t warrant much more detailed work, because we were just, frankly, on different planets.

PN5319

Notwithstanding that the HSU continually asked for this sort of information?--- Yes, that’s correct but it doesn’t alter the - the central proposition that we had offered a particular basis for dealing with classification issues, and that which the union sought as a bottom line was so far in advance of where we were capable of going that there was no prospect of agreement, and I think that’s been borne out by subsequent events.

PN5320

Well the union’s position was that it wasn’t a money issue, it was about addressing the, as you have described them, structural issues?---Well, I mean, you can’t divorce structural issues from financial reality.

PN5321

But no one had costed any of this; no one had costed the structural changes, had they?---Well there was - there was some ballpark figuring done which suggested figures well in excess of where we were capable of going , so no more detailed work was - was considered to be warranted because - because of that. Because what we were putting, unapologetically, was settlement terms that were consistent with other agreements that we’d reached, and that was a - a key driver for us.

PN5322

You agree that the HSU offered to discuss alternate models, and indeed proposed some alternate models of structure to that which was sought?---If what you’re referring to is elements of the New South Wales decision - am I surmising correctly there?

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5323

Well that was one of them?---Right.

PN5324

Yes?---Well clearly all -all sorts of options were canvassed during direct negotiations, and in the context of conciliation here in the Commission.

PN5325

COMMISSIONER LEWIN: This concerns the structural claims?---Yes. All manner of things were considered and debated.

PN5326

A number of variations were proposed?---All - all sorts of options were - were teased out and explored and right or wrong, agreement wasn’t reached.

PN5327

SENIOR DEPUTY PRESIDENT LACY: Did the options change the overall ballpark cost that you had reached?---There were variable - variable cost outcomes as a consequence of those options that have been canvassed, your Honour. But again none of them were - had within them - how do I put it? The prospect of a compromised settlement. I think the parties were just simply, frankly, too far apart.

PN5328

COMMISSIONER LEWIN: Did you identify the uplift fund; the value of it for the purposes of these negotiations?---Yes, there were - there were two elements that were being canvassed in the context of the discussions and indeed in the conciliation. One was the dollar uplift on the wages, and that was - - -

PN5329

So that was a gross amount?---And I think that was well understood.

PN5330

Right, the actual amount?---We always talked in terms of the - a two per cent uplift based on - yes.

PN5331

Yes, my question was whether or not you ever identified the gross amount?---No, we didn’t actually identify that specific amount.

PN5332

Right?---And the other - the other factor which I think you might have been asking about is in relation to the structural or classification-related matters. We did put a specific package proposal in settlement of that which, despite significant efforts on behalf of all the parties, including VP Lawler, we weren’t able to bridge that gap.

PN5333

When you put that proposal as to structure?---Yes.

PN5334

No doubt you gave consideration to the cost of it?---Well we - the way we approached it was that we were prepared to look at classification-related matters within a finite set of dollars. In other words - - -

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5335

Was that finite set of dollars separate to the uplift amount?---Yes, quite discrete.

PN5336

So there were three components to your position; first the uplift exercise?---Yes, based on productivity.

PN5337

The second, a restructuring exercise with a defined cost?---Correct.

PN5338

Thirdly, a general wage increase of 3.25 per cent, subject to certain improvements?---Yes, that’s a - that’s a fair characterisation of the key elements.

PN5339

Thank you.

PN5340

MR LANGMEAD: The HSU put forward a model which addressed your members’ concerns, didn’t it?---I’m just wondering if it had, why we’re here, but I - I must say I can’t recall, Mr Langmead, what - I’m trying to think of the specific proposal you might be referring to.

PN5341

I’m instructed it did but nevertheless, and nevertheless whether it did actually address your members’ concerns, again, it wasn’t costed and you have said that costings couldn’t be done because you didn’t know the EFT?---I must say I’m not very sure which particular proposal you’re referring to, but I don’t recall one that would’ve had the effect of - I’m not sure what your words were, but accommodating my members’ concerns, because at the end of the day we were still significantly far apart on the basis upon which we could move forward.

PN5342

But you didn't even know, as you told Commissioner Lewin, what the wages bill was, did you?---No. We were operating on the basis of a general two per cent uplift.

PN5343

Whereas with the nurses you must have known exactly what it was?---Look, I can't recall exactly what numbers they were, but that was some time ago.

PN5344

Now, a 2.5 per cent wage increase in October last year, that being the amount that was available without the demonstrated service improvements, that would have, if accepted, meant a decline in real wages for workers in the sector, wouldn't it?
---The 2.5 per cent is the indexation base that goes into hospital funding on an annual basis and each year the government, Victorian government determines the CPI adjustment component that goes into the wages - or into the funding base of health services. The government's decision, I think, for last year and this coming year is a basis of 2.5 per cent but the wages policy provided that with service improvements that there would be a base wage offer of 3.25 per cent and any increases above that would have to be derived from direct productivity savings that are realizable over the life of the agreement.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5345

The government's determination of that CPI increase is not related to CPI, is it?
---Well, I'm informed that it's based on forward estimates from Treasury about how that is constructed and the reality is that health services are required to live within those financial parameters that are determined from time to time by the State government.

PN5346

If you took a period from the last wage increase, the last agreement, 2004, to the present our calculations suggest that there's been a seven per cent reduction in real wages for these workers. Are you in a position to comment on that?---No, I haven't seen your maths, but like all those calculations, they're based on certain assumptions.

PN5347

Well, they're based on the movements of the CPI?---If you're basing it on CPI arithmetically, that would be the product.

PN5348

And certainly that's a considerably different figure than 2.5 or 3.25?---Assuming that figure is correct, then certainly there's a difference obviously.

PN5349

And that's just to bring them back to where they were. It's unsurprising that any wage offer in line with the government policy would not be received with enthusiasm?---I'll take that as a statement, Mr Langmead.

PN5350

Well, you wouldn't be surprised if that were the case in light of that situation?
---I'm sure views will vary on that, but it would be an understandable reaction.

PN5351

Well, government wages policy, if the government wage policy represents a cut to real wages it's not going to be profitable with the workers who have been offered it?---The health services I represent have to live within the reality of the financial framework that they are provided with. I'm unsure, there's all sorts of views about that, but that's the reality and that is the reality I have to deal with in seeking to negotiate an agreement with the relevant unions and we're able to do that in most instances, but not in this particular case.

PN5352

And at the time when negotiations commenced, CPI was running at about at least three per cent?---It could have been doing that, yes, but again there are - the whole premise is based on Treasury projections, the Victorian Treasury, based on the Victorian CPI and any other considerations that go into determining the funding base for health services.

PN5353

COMMISSIONER LEWIN: So can I just understand your evidence to be that this 2.5 per cent as a number represents a determined funding decision of the Victorian government in relation to the members of your organization involved in this matter, in relation to their overall costs?---That's right.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5354

It's not a figure which was directly determined by reference to one part of their costs, namely wages?---Wages, correct.

PN5355

It is actually a total cost figure increase, so total cost of the organization established for a period of time in a year and then the decision is made that 2.5 per cent, in addition to those costs, will be funded for the following, and that is the baseline increase?---That's the baseline - - -

PN5356

Less than that. And is the way in which this has been extended into the negotiation of the enterprise bargaining between your member organizations and employees and registered organisations that the 2.5 per cent was then turned into an increase in wages as well as an offer to those organisations?---Yes, that's right. Well, can I - before I answer that, I don't profess to be an expert in the arcane funding mechanisms that go into the health system. Another witness, Mr Wallace, who is central to that whole process is going to be giving evidence. He will give detailed evidence about how the entire funding mechanism process works, cascading down from major government decisions through to health services.

PN5357

He'd probably be in a better position to answer the question?---I must say I'd prefer to have him respond to those kinds of questions because I don't hold myself out as being authority on the overall funding systems of health services.

PN5358

His evidence though will go to how this 2.5 per cent figure is arrived?
---Absolutely.

PN5359

My question to you was how that suddenly becomes a wages offer and how that works?---Well, the way it's built up is that there's a 2.5 per cent base built in. The wages policy that the government has stipulated openly that the expected wage offer will be 3.25 based on service improvements and they're assumed to it - and I hesitate to say - cloaked in those terms, but broadly that there'll be service improvements.

PN5360

I'm really just focusing on the 2.5 per cent?---Mm.

PN5361

And how it becomes a wages offer. It seems to me that what you're saying is because the government has decided that there'll be a 2.5 per cent increase in the presumably recurrent costs?---That's right.

PN5362

Of the health services involved, then there'll be a 2.5 per cent offer to the employees as an increase in their wages?---As an absolute minimum.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5363

Yes, and my question really is to try and understand a correlation between these two things because I would have thought that the costs of a health service, particularly of a hospital like the Austin Hospital, highly complex and there may be savings being made in certain areas?---Correct.

PN5364

Increased costs being incurred in others?---Quite so.

PN5365

And developments such as perhaps some of the services being allocated to other health services across a year. So I can understand that there may be an art, if you like, of health funding that leads to a conclusion that 2.5 per cent is the appropriate allocation to Austin or indeed, another hospital or health service?
---Mm.

PN5366

But how you actually turn that into a wages offer escapes me?---Can
I - Commissioner, I think this is a question that is better directed to Mr Wallace.

PN5367

You can't - - - ?---I'd prefer not to because I don't speak for the government and I think it's important that the Commission understands it clearly in a manner that's not my province to frankly articulate.

PN5368

But it hasn't been explained to you why the 2.5 per cent is appropriate as a wages offer as opposed to an increase in the costs of funding for a large hospital?---Well, I think the reality is very much to be articulated, that there's a whole range of factors going into the real costs of operating a hospital and the potential savings that might derive in certain areas. So I think it's a very intricate complex setting which I prefer Mr Wallace to articulate.

PN5369

All right.

PN5370

MR LANGMEAD: Mr Djoneff, the Reserve Bank originally forecast a three per cent forward estimate of inflation around about October last year. Were you aware of that?---Look, it probably did. I don't know for a fact that that's so.

PN5371

And the government wages policy was for 3.25 per cent annual increase?---Yes.

PN5372

With ongoing service improvements?---Yes.

PN5373

Each year?---Yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5374

Are you aware that the Reserve Bank amended that forecast in November last year to 4.5 per cent?---They may well have done.

PN5375

Again, that makes it a lot harder for a union to recommend to its members that they vote in favour of a proposition that starts them off behind the eight ball and sees them end up even further behind it?---Enterprise bargaining in this sector at its kindest is very difficult and very complex and they're the kind of factors that contribute to that complexity and difficulty. Nobody pretends that what's available to us will meet all aspirations and all needs. It simply doesn't.

PN5376

And indeed, that's part of the explanation for what you identify in paragraph 39 where you say that, interstate comparisons or parities fades away as an issue. I suggest to you that that's because pay itself isn't often a key issue but it's issues like career progression, professional recognition, sufficient staffing that become more important to the business sector and that's why the focus is often not on wage parity with interstate colleagues which would presumably directly affect retention in recruitment in a highly mobile workforce, but the focus might initially come out on wages, but ends up being on these other issues, do you agree with that?---There's no doubt of that.

PN5377

And indeed, the constraints of government guidelines often are manifested by concentrating on these other areas?---That at least is partially I would accept as a fair proposition.

PN5378

The nurses, for example, were so keen to establish the nurse/patient ratio, it's a professional issue for them?---Yes, it was a significant issue in 1999/2000. Work load related issues.

PN5379

And that remains the case, of significant concern?---Nurse/patient ratios?

PN5380

Yes?---It's there at the industrial instrument. The health services abide by it.

PN5381

And the ANF and the HSU were very keen to retain it?---Obviously.

PN5382

Now, in paragraph 42 you've identified the wage increases linked to agreeable and measurable service delivery improvements?---Mm.

PN5383

The improved nurse immunisation rates, are any of these improvements contained in a document?---They are in the agreement that was reached with the relevant union as a heads of agreement. In respect of the nurses' agreement which was reached at an ungodly hour one night in October last year, it was only about a two page dot point document as to the items to agree.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5384

Did it find its way into the certified agreement?---Well, we haven't yet got a certified agreement.

PN5385

Well, the proposed agreement?---Yes, if I recall correctly those elements will be reflected.

PN5386

Have you seen the document which is attached to Fleur Harbridge's statement in these proceedings, as FH6?---I may have.

PN5387

Could we have a copy of that to hand to Mr Djoneff, please. This document has a deed, with a proposed agreement attached. Sorry, the proposed agreement. Is that a draft of the agreement which has been agreed?---It would appear so, yes.

PN5388

And are you able to identify in that where the service improvements are contained?---I'm just trying to remember where they were. It must have been contained in the original draft. No, I'm just trying to recollect where we recorded those agreements, Mr Langmead.

PN5389

It doesn't appear to be in that draft agreement, does it?---Of itself, no.

PN5390

Perhaps it was in the - - - ?---Yes, I think it was. I'm just trying to recall where, but it just doesn't immediately spring to mind.

PN5391

It's not proposed to include it in the agreement which becomes filed or lodged?---I think those obligations will have to be recorded in an appropriate fashion, yes.

PN5392

They may have to be recorded in an appropriate fashion, but this is that they form part of the instrument which is in accordance with the Act?---Although the obligations that the parties have entered into, yes.

PN5393

So that draft which appears there is going to be amended, is it?---Well, we are working on finalizing full agreement reflecting all elements of the agreement so that the matter can go to a vote and in old parlance, to be certified.

PN5394

Now, in para 42 you've given us comments about some of the service delivery improvements?---Yes.

PN5395

Improved nurse immunization rates?---Yes.

PN5396

What's the rate to be achieved?---There was no specific rate identified. It was a general commitment to increase the immunization rates to deal with - to minimize absenteeism and thus avoid replacement costs.

PN5397

Presumably it was also considered by your members that it would be desirable to improve the occupational health and safety of its employees?---Of course.

PN5398

Now, what is the target rate?---Sorry?

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5399

What is the target rate of immunisation?---We didn't establish a particular target rate.

PN5400

COMMISSIONER LEWIN: Was that suggested in these negotiations?---These kinds of - yes, yes, they were suggested.

PN5401

This particular subject, was it done?---Yes, it was clearly suggested.

PN5402

You put it - - - ?---These kind of measures.

PN5403

Was this particular measure?---Yes, it was. But I hasten to add, Commissioner, that there was not much focus on those issues for the reasons I described earlier.

PN5404

But you did advance it?---Yes, sure.

PN5405

MR LANGMEAD: And both the employers and the unions had always encouraged nurses to become immunised?---I believe so, yes.

PN5406

Particularly against things like Hepatitis?---Yes, whatever the relevant immunization processes were considered to be desirable.

PN5407

And hand hygiene rates, improving hand hygiene rates?---Mm.

PN5408

In fact there's a program for improving hand hygiene rates?---Yes, yes, I believe so.

PN5409

In place now for about three years?---Look, you could be right there, I'm not sure, but certainly that's in place.

PN5410

And again was there any target for the rate to be achieved?---No specific target was identified.

PN5411

Patient satisfaction ratings, are you aware that they have been increasing each year up until this last most recent year?---I believe that's probably correct.

PN5412

And clearly that would be an ongoing goal for all the employees and indeed, the employees?---Yes, it would.

PN5413

And it's a bit of concern that it's fallen off a bit this most recent year?---Health services are always concerned about any deterioration in performance measures that they are subject to. Infection control and the like is taken extremely seriously in the health service.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5414

As is patient satisfaction?---Quite.

PN5415

You would notice that Mr Brumby, the Premier, recently described the health services in Victoria as stretched to the limit?---There's been various utterances about the state of the Victorian health services. But they all can generally be characterized as services working under some strain.

PN5416

So you wouldn't disagree with Mr Brumby's statement?---Far be it for me.

PN5417

The fact that the services might be in that position might have affected patient satisfaction, mightn't it?---It has that potential.

PN5418

The treating of the additional 37,000 emergency department patients and 16,000 elective patients over the life of the agreement, that is something which will be the object of the health services in any event?---In any event they are working extremely hard to contend with the demands placed on them.

PN5419

Yes, and in the context of an ageing population?---All sorts of factors of which ageing population is one.

PN5420

Yes, and a booming population?---Yes, certainly there's been a population increase.

PN5421

And the health services have been in recent years seen an increase of patients in both emergency and elective and otherwise?---Yes. The Victorian hospital system is performing very strongly in pretty difficult circumstances, but it's coping with the very significant demands.

PN5422

And you wouldn't know whether the increase through-put and other additional instances of treatment with patients has been met by commensurate increase in EFT?---Yes, there's obviously some growth in EFT. I couldn't quote you what the nature of those particular growths are.

PN5423

So except for the additional patients, the other factors that you've mentioned aren't going to be measured?---They will be measured.

PN5424

Well, they don't have targets?---They don't have specific targets.

PN5425

So they're not measurable in that sense. Just measurable because you can measure them?---Yes, that's right.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5426

Do you know if the immunization rates are measured at the moment?---I think that's something that would come from individual health services. I'm not sure of that, Mr Langmead.

PN5427

Were any of these propositions put to the HSU in negotiations or conciliations?
---Yes, they were and the context in which they were put was our position that we are seeking an agreement outcome consistent with those that we'd reached with others and it's in that context - - -

PN5428

COMMISSIONER LEWIN: So is it your evidence that these matters were not specified?---No, no, no.

PN5429

They were specified?---Absolutely and in articulating why we said that that was a sound position to put we articulated those elements.

PN5430

Specifically?---Yes.

PN5431

SENIOR DEPUTY PRESIDENT LACY: And any others?---No. The articulation was, this is what we've achieved over here. We would expect something very similar from you in return for a similar outcome. Again - - -

PN5432

COMMISSIONER LEWIN: You didn't list them?---Well - - -

PN5433

Or did you?---Well, not in a formal sense. They were the subject of dialogue with the union.

PN5434

So they were referred to verbally?---Absolutely.

PN5435

So the immunization issue, for instance, was raised?---Yes, it was, as was the hand washing and those other things because there was an inquiry from the other side, well, how did you come to this, and there was a clear articulation that had these elements.

PN5436

The list wouldn't have been any greater, I gather, therefore in this context at least that Mr Langmead is now putting?---No. It was done in the sense of seeking to characterize broadly what we're seeking and why we were seeking it and our driver of course was, we had these other outcomes and we were looking for something that's consistent with those.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5437

But insofar as you put to your negotiating partner specifically what you were seeking their agreement to, it didn't extend any further than this list that Mr Langmead has identified?---That's correct. That's right.

PN5438

MR LANGMEAD: You've said, Mr Djoneff, that health professionals have participated in immunization programs and health courses?---Yes, I accept that, yes.

PN5439

And in the hand hygiene program?---Yes. There is a high consciousness about hygiene and infection control in all health services.

PN5440

And that's had particular focus in recent years because of outbreaks of things like Golden Staph?---Yes, of course. It's a major issue confronting health services.

PN5441

And health professionals, as indeed any other employee in a health service, would be concerned about patient satisfaction?---Of course they are.

PN5442

And they too will be treating those additional patients?---They would have a role. As I said in earlier evidence, health professionals have a role in the care path and they brought to bear at appropriate stages. Not all of them will deal with the volume of patients that nurses do because they may not require physiotherapy or speech therapy or the like, but as a general proposition, they are an integral part of the care path process.

PN5443

And you've got no doubts that the HSU members would continue to participate in those service delivery improvements?---I have no reason to think otherwise.

PN5444

And indeed, they've participated in many service delivery improvements other than those ones listed over the recent years?---I think allied health professionals, like many others, do participate in the evolving processes of treatment and technology and pharmacology and what-have-you. They are subject to those things and they contribute to those things.

PN5445

In respect of getting in excess of 3.25 there has to be quantifiable savings measures that have been agreed to?---Yes.

PN5446

And again you have referred to nurses as an example. These savings aren't in the draft agreement either, are they?---Of itself, no.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5447

Now, the removal of the short shift starting and finishing times, can you explain to the Commission what that means?---Yes. In the - this is in the nurses' agreement.

PN5448

Yes?---There has been up until that point particular restrictions in the industrial instrument as to the starting and finishing times for shifts which have certain rigidities and restrictions inherent in them as part of the pursuit of flexibilities in the nurses' EBA negotiations. Our agenda was a much more ambitious one than we ultimately ended up with, needless to say, but we did secure some loosening up of the restrictions on those starting and finishing times so that health services could operate more flexibly having regard to the nature of their labour supply and the nature of how they actually provide services in any given setting. It wasn't a major breakthrough but it was better than nothing.

PN5449

I take it a short shift starting and finishing time, the short shift being one that is less than the - - - ?---The six hours' minimum.

PN5450

Yes, and what were the harvestable savings in relation to that?---The harvestable savings related to the amount of hours that one needed to dedicate to a particular ward, having regard to the starting and finishing times. We don't pretend that they were going to yield significant savings, but they were part of the overall flexibility package that we were pursuing.

PN5451

So was any costing done of that?---There were some costings done on that.

PN5452

And do you know what the outcome was?---I haven't got the specific figures.

PN5453

Do you remember roughly what they were?---No, I don't.

PN5454

Now, assisting hospitals in increasing up to 15 per cent of employment of Division 2 nurses in acute settings?---Yes.

PN5455

What savings is that going to deliver?---Look, I don't have the exact dollar figure, but clearly with a relatively greater utilization of division 2 nurses, which is a cheaper labour cost, then that difference was going to generate a level of saving. Now, that's a target. At present I think we're at about five per cent of division 2 so that was going to be over the life of the agreement about a 10 per cent saving on the wage differential over time.

PN5456

Now, it could of course be met or achieved by not engaging Division 1 nurses, but engaging Division 2 nurses?---Yes. Well, the ratios permit the use of Division 2 nurses as part of the ratio prescription and if we're able to achieve a different mix of labour over time then that will over time generate a saving.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5457

How do you determine whether the ANF or HSU are assisting hospitals?---Well, that will be an ongoing process. Under the agreement we have a mechanism called the Agreement Implementation Committee which is, among other things, charged with the implementation of the agreement and the monitoring of its implementation. That's a tripartite body comprising VHIA, the unions and the Department of Human Services that has begun to meet and will continue meeting and those items are matters that are, if you like, standing agenda items that will be dealt with. Now, if you were to ask me, well, precisely how are you going to go about it, we get to have that dialogue as to how that precisely will be done. That's the commitment we have.

PN5458

There won't be any mechanism in the agreement for reclaiming the two per cent increase uplift, if it were found that the unions were not assisting?---No mechanism has been built in for the prospect of reclaiming at two per cent uplift, Mr Langmead.

PN5459

And indeed, if the employers are able to find Division 2 nurses to employ and have the budget to do so or the turnover in staff to do so, it's entirely conceivable that that figure would be achieved without the ANF or the HSU doing anything?
---Well, on one construct, yes. The object of this agreement was to secure cooperation and support for this. It's far from a perfect set of outcomes but it's the best we can achieve in the circumstances and the targets that you've set were negotiated and assessed by the parties as being achievable. But there are no guarantees in this game.

PN5460

The harvestable savings are related to being able to increase to the 15 per cent, helping assisting them at the hospitals?---Of course, of course.
That's - arithmetically that's where it comes from. But this is an industrial agreement about securing cooperation and commitment to and I guess we can't really ask more of the unions than that which they've signed up to. Clearly what it does do is, if you like, preclude them from opposing, obstructing or in any way frustrating such a process.

PN5461

COMMISSIONER LEWIN: I gather that wasn't at issue in relation to the allied health - - - ?---No, Commissioner, it wasn't.

PN5462

By definition it's a subject matter that excludes it, relevantly, to nursing?---It was in that circumstance and as I've said earlier in my evidence we never got to the point with this union given the circumstances of getting down to the nitty gritty of what those harvestable savings would be. Regrettably, but that's the fact of the matter.

PN5463

MR LANGMEAD: Mr Djoneff, the wages policy doesn't use the expression "harvestable savings". It uses the expression "productivity cost offsets", do you accept that?---Yes, I think that's what it says.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5464

This might be debatable, but do you understand that the harvestable savings or the productivity offsets have to add up to the two per cent?---Yes. That's the concept under which it operates, yes. Over the life of the agreement it can add up to those kind of figures.

PN5465

COMMISSIONER LEWIN: This is the outwards two per cent?---Yes, Commissioner.

PN5466

It may be the concept, but it strikes me as a difficult measurement?---I'd have to concede that as well.

PN5467

MR LANGMEAD: In fact - - - ?---This is not an exercise for accountants. In one sense it is. In another sense in terms of an industrial outcome, negotiating these kinds of settlements, there is an element of imprecision in them as well. It's inescapable.

PN5468

COMMISSIONER LEWIN: This type of exercise of productivity and efficiency outcomes having been identified for the purpose of the settling of a wage increase being conducted in the past?---In the past there has never been, until now, this very explicit emphasis. It has always been part of the wages policy that increases I think at that time was three per cent, could be achieved via productivity improvements, but I think it's also fair to say that on this occasion this round of enterprise bargaining, there has been a far greater rigor attaching to that componentry than has previously existed.

PN5469

So you will recall earlier I asked you whether or not you agreed that there were three components to your position in relation to allied health?---Yes.

PN5470

And we're looking at an analogy with the nursing settlement and the other settlement?---Yes, yes.

PN5471

Because that was the policy, the strategic direction that you were taking it as an association?---That's correct, that's correct.

PN5472

And you were attributing productivity and efficiency improvements to the two per cent uplift component of the three components?---That's right, yes.

PN5473

MR LANGMEAD: Indeed, it would be impossible, wouldn't it, to truly quantify concepts such as increase up to 15 per cent, it might be less?---Well, it's a target that was negotiated and the parties are committed to achieving it and short of making the best endeavours on that, that's about the most - that's about as much precision as you can bring to an exercise such as this.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5474

And the inclusion of personal care workers for the purposes of satisfying nurse/patient ratios in certain circumstances, again that's necessarily a nebulous outcome?---No, not nebulous for those who are involved in that issue. We went forward into the nurses' negotiations with a clear aspiration to have included what we commonly call the third level nurse, for want of a better description, which is the classification that sits below the Division 2 nurse. This, and a personal care worker, it is a classification that's commonly found in the aged care sector, but there is in our view scope and legitimacy in having such a worker also engaged in acute settings in appropriate circumstances. Those workers would be supervised on all occasions by an appropriately qualified nurse. We didn't get to the point we were hoping to get in those negotiations, but we did get an acknowledgement that in limited circumstances that could be brought to bear.

PN5475

There are already personal care workers in acute settings, aren't there?---Yes, that's right, but - well, they're personal services assistants. There is a difference. Personal care workers is much more related to the care of principally aged care, aged care patients and residents. Whereas personal services assistants is not as, how would I put it, as hand on to the patient as personal care workers.

PN5476

So this proposal is not to - - - ?---It's not a substitution.

PN5477

But it's also not personal carers assistants becoming personal care workers, although that might be the case?---It's theoretically absolutely possible, yes.

PN5478

But like the increasing up to 15 per cent it may not be possible to implement that even to the extent that you hope to do it?---Well, as I said, it's a target that the parties agreed to based on their belief that this was achievable over the life of the agreement. There is a mechanism in place to implement the agreement and monitor its development over the life of that agreement. We think, and I think the union, the ANF in this case, thinks that this is achievable based on our best assessments. We can do no better than that at the moment. Time will tell whether we were right or wrong.

PN5479

The HSU is also a part of that agreement, isn't it?---Yes, technically they're party to the agreement, although their presence in the negotiations was a fleeting one.

PN5480

COMMISSIONER LEWIN: So is it the case that all of the productivity and efficiency outcomes are essentially mutually agreed aspirational goals?---Well, they are agreed - either they're things that you can commit to or they're aspirational or they're specific - - -

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5481

They're aspirational from - as far as I have heard so far, they are all aspirational goals?---Yes, it's about achieving something - - -

PN5482

There are - - - ?---Because they're things to be realized over the life of the agreement.

PN5483

Yes. There are no conditional aspects on the wage increase? That is to say, the wage increase will be payable regardless of - - - ?---Upon the achieving of certain - - -

PN5484

Yes, there's none of that?---No. It's not couched in those terms.

PN5485

It's all aspirational goals?---It is aspirational. It's not couched - well, of the two per cent uplift you'll get one per cent when you reach target X. It is not characterized in those terms. It's an upfront commitment.

PN5486

SENIOR DEPUTY PRESIDENT LACY: And there's no periodic measure of the - - - ?---No. There is no specific measuring point established in those agreements, your Honour. As I say, the process for realizing that is in some senses a more collaborative approach based on the mechanisms that we've reached with the ANF and the psychiatric services and the medical scientists group. We all have very similar mechanisms to ensure that the agreement is implemented and that which we've aspired to, to pick up your word, Commissioner, are realized.

PN5487

What if you don't measure it, it makes it handier if you want to put them in again for the next agreement?---I've been heard to say that I won't be here for the next one, your Honour. Why would you keep doing this? This is a difficult process. It's not simple. It's complicated and achieving these kinds of outcomes don't come easily.

PN5488

MR LANGMEAD: Mr Djoneff, there's been productivity increases in hospitals, in health services in recent years?---Certainly hospitals have, in their throughput and other measures, have improved.

PN5489

And health professionals have contributed to that improvement?---They're part and parcel of the delivery of health services.

PN5490

Now the medical scientists, are they - I think you said they got a similar outcome?---Yes. I think as a general statement that's correct.

PN5491

So they got 3.25 per cent, applied with an element of retrospectivity, do you recall that?---Yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5492

They would have had an uplift payment?---Yes, they did.

PN5493

How much was that?---Average two per cent.

PN5494

But it wasn't across the board?---I beg your pardon?

PN5495

It wasn't across the board, or not?---Yes.

PN5496

It was not - - - ?---Across the board in the sense of - - -

PN5497

Did any classification get less than two per cent?---Look, I'm just trying to recall precisely, but I think that union opted for a more uniform distribution of the so-called two per cent than, for example, was the case with nurses. A totally negotiable matter.

PN5498

COMMISSIONER LEWIN: I understand if you're looking at it in the way in which the two per cent uplift was distributed through the nursing grades was that it was used to articulate the classification structure so that where points of seniority and value arose in the perceptions of the profession, there were high increases concentrated at that point and that the classification structure is essentially a career path?---Yes, that would be correct.

PN5499

So that what was being done was that the two per cent was being used to stretch out through the career path and create rewards at particular levels of achievement?---Yes, for certain classifications within that structure, there was agreement that certain - a relatively greater increase should be accorded at one level versus another.

PN5500

And in very broad terms the profession took the view that there were reasonable markers that were achieved and responsibility?---Markers of achievement of responsibility, but they weren't the only considerations. There were classically industrial considerations based on constituency sensitivities themselves. It's ever thus.

PN5501

MR LANGMEAD: The medical scientists also had a lump sum payment of $1,250 for each full time employee and a pro rata amount for each part time employee, is also got to be paid?---That's correct.

PN5502

Is that contingent on any of these considerations, service improvement or productivity cost of offsets?---That was a package settlement in the particular circumstances and that's what we pursued, is a package settlement, also the ingredients of a package could vary from union to union or from occupational group to occupational group. It is a bargaining process.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5503

So if you call it a lump sum payment, you can deliver an outcome greater than the government guidelines?---Well, whether it is or it isn't, I'm not sure much turns on that, but it was a package settlement that had that componentry added to it.

PN5504

And if you say it's a productivity offset, then that also ensures compliance with the policy, the guidelines, sorry?---I'm not sure what you're getting at there, sorry.

PN5505

Well, if you identify something as a productivity offset, then it enables you to say that you've met the government guidelines?---Well, clearly. Clearly we - in order to proffer the particular wage outcome that was, there had to be some material on the other side of the ledger.

PN5506

Now, with the medical scientists which is the Health Services Union Victoria Number 4 Branch?---Yes.

PN5507

Negotiating the union party, and of course the HSU as a legal entity?---That's correct.

PN5508

Quantifiable savings measures in that instance are - sorry - the service delivery improvements productivity measures are the same facilitation in the treatment of the initial 37,000 Ed patients and 16,000 elective surgery patients?---Mm.

PN5509

But they would work with any health service seeking to employ laboratory technicians to perform non-scientific work, and that's referred to in attachment 4 to the agreement. Are you familiar with this agreement, Mr Djoneff?---Yes, I am. I didn't personally negotiate it.

PN5510

That isn't of itself requiring any quantification?---No. It's a set of targets.

PN5511

Yes. Well, there's not even targets set at all, are there?---Other than the capacity to change the labour mix. Yes, there's no specific targets set in that circumstance, but that has to be linked to an ongoing process of the amalgamation of pathology laboratories which is underway.

PN5512

Operate in any laboratory amalgamations and technological change initiatives?
---Mm.

PN5513

Support the introduction of a true casual clause, in addition to current local employment arrangements?---Mm.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5514

What does that mean?---On-call and remote on-call? Is that what you're referring to?

PN5515

The HSU is required to support the introduction of a true casual clause?---Yes.

PN5516

What does that mean?---I think the existing clause precluded a true casual arrangement. There was a wording deficiency.

PN5517

COMMIMSSIONER LEWIN: Is that an issue in this, Mr Langmead, on your instructions, was that a matter at issue in these negotiations?

PN5518

MR LANGMEAD: I don't believe that?---Not that I'm aware of, Commissioner.

PN5519

SENIOR DEPUTY PRESIDENT LACY: How much longer have you got to go, Mr Langmead?

PN5520

MR LANGMEAD: I think probably about 40 minutes at least, your Honour.

PN5521

SENIOR DEPUTY PRESIDENT LACY: Would that be a convenient time?

PN5522

MR LANGMEAD: It certainly would.

PN5523

SENIOR DEPUTY PRESIDENT LACY: 2.15.

<LUNCHEON ADJOURNMENT [12.42PM]
<RESUMED [2.14PM]

PN5524

SENIOR DEPUTY PRESIDENT LACY: Thank you, Mr Djoneff.

<ALEC DJONEFF, RECALLED ON FORMER OATH [2.14PM]

PN5525

SENIOR DEPUTY PRESIDENT LACY: Thank you, Mr Langmead.

PN5526

MR LANGMEAD: Thank you, your Honour.

<CROSS-EXAMINATION BY MR LANGMEAD, CONTINUING [2.14PM]

PN5527

MR LANGMEAD: Mr Djoneff, we were discussing the productivity offsets that were obtained in relation to the nurses and the medical scientists; were any productivity offsets suggested to the HSU health professionals?---No, there were no very highly specific ones, and they certainly weren’t the subject of any lengthy discussions, for the reasons I’ve outlined previously.

PN5528

Did any of the agreements with the nurses, the psych nurses or the medical scientists, involve removal of conditions other than those identified as productivity offsets?---No, I don’t recall the removal of specific conditions.

PN5529

In paragraph 45 you identify some, what you described as, common provisions; was the parental leave additional paid parental leave?---Yes, we’ve moved from a regime of eight weeks’ paid parental leave to a regime of nine and ten weeks over the cycle of the agreement.

PN5530

Yes, and was the reimbursement of childcare expenses a new provision?---Yes.

PN5531

As was paid emergency leave?---Yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5532

Emergency services leave, and what does, “Modernisation of industrial instruments for consistency with occupational health and safety awards” mean
?---A number of agreements have had varying kinds of provisions in relation to OH&S safety laws, and our objective was to get a consistent set of words in relation to those matters across all the occupational groupings; and removal of - how to put it - references to legislation had been - are now out of date. So it was updating in terms of those - so there was no substantive change to entitlements. It was merely a cleaning up of the verbage associated with those provisions.

PN5533

Those improvements, where they were improvements, would obviously have a cost?---Yes, clearly.

PN5534

That’s not taken into account in terms of the wage increases that were agreed
?---Well it was a part of the overall package. The - the application of these particular provisions would be very incident based, so it wouldn’t be an ongoing application to all employees. It would be very much incident based.

PN5535

Mr Djoneff, the ballots that the HSU sought are described by you in your paragraph 52, and are in relation to five health services?---Yes.

PN5536

You described the approval of the ballot and the question to be asked, and the AEC was expected to complete the counting of the ballot by some time on the morning of 5 December; do you recall that?---I think that’s right.

PN5537

In the weeks immediately prior to that there were negotiations and meetings, as you describe at paragraph 51, on the 20th, 27th, 29th, and 30 November?---Yes.

PN5538

Yes, and by 29 and 30 November it was becoming that the agreement wasn’t going to be reached, was it?---I think that’s a fair statement.

PN5539

You had issued a bulletin to employees, dated 28 November 2007, and that was what I might call your first bulletin, to be contrasted to the bulletin put out a day later; do you recall those bulletins?---Broadly, yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5540

This is R6 and R7, your Honour. The first one informed your members that:

PN5541

At the time of writing there is no agreement in place to settle the health professionals EBA. HSU has convened an information meeting scheduled for 11 am on Wednesday the 5th. VHIA has been assured by HSU’s brief that the purpose of the meeting is to provide the union members with information about the progress of the EBA and negotiations, and will not result in industrial action or threat of industrial action. Accordingly, this is a paid meeting. Within the rules that apply for attendance of such a meeting, leave applications should be responded to on merit. The employer has the discretion to grant or refuse leave, having regard to the normal operational needs of the health service. Leave applications should not be refused expressly on the grounds of attendance at a union meeting.

PN5542

You pre-empted what happened in the Commonwealth Public Service there. At that stage you were still hopeful that the agreement would be reached?---Yes, it’s always a hope that I harbour.

PN5543

It presumably was the hope of the union?---I - I believe that’s what its state of mind was at that time.

PN5544

Indeed there was another meeting the following day and one the day after?
---Sorry, would you repeat that again?

PN5545

There was another meeting between yourselves and the union on both the following day after, being 29 November, and the 30th?---Yes.

PN5546

At both those meetings you were still trying to reach agreement, as was the union?---Yes, so that was our endeavour.

PN5547

Yes, however on the 29th you did issue another circular to your members, and you refer to an email from the HSU that states:

PN5548

The meeting will not be a paid meeting, only if it endorses an agreement between the parties, otherwise it will be unpaid. This is not the case. The meeting is a paid meeting, provided that it does not result in industrial action or the threat of industrial action.

PN5549

Then you go on in the second-last paragraph:

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5550

Employees should be made aware that their release from duty is conditional on the meeting being about the union updating members on the progress of the negotiations. If the meeting does resolve to undertake industrial action or the threat of industrial action, then those attending will subsequently have their pay docked. Accordingly health services should keep a list of those employees.

PN5551

Can I suggest to you that that memo was widely disseminated through the industry?---Yes, it went to the usual addressees of - from my organisation.

PN5552

Yes, and you’re not surprised to know - in fact you do know - that your circulars usually end up in the union office?---Well if you’d only subscribe and pay for them it’d be much better.

PN5553

I don’t think we’re even eligible for membership, Mr Djoneff?---We have subscription memberships, Mr Langmead, that everyone takes up from what I can see. We can do an agreement and I’ll give them to you for nothing.

PN5554

Indeed, the advice to members is often circulated to staff?---Yes, they find their way round hospitals, but not through any particularly deliberate act. Because they’re widely disseminated, it’s not surprising that they find - find their way into the hands of many people other than those to whom it was directly addressed.

PN5555

It’s not as if it’s a sensitive or confidential document, in that sense?---No, no, no, these are standard information bulletins.

PN5556

Yes?---Or advices about progress and state of affairs.

PN5557

Apart from advising your members of the VHIA’s position in relation to this issue, I suggest it had the intended effect of firstly, dissuading anybody who attended the meeting from either taking industrial action or resolving to take industrial action; do you agree with that?---No, I don’t. It was - the bulletins were absolutely a reflection of the outcome of the conversation I had with Ms Jackson, as to the basis upon which the meeting would occur. That was the agreed position, and a position that was customary and common in the EBA of the health industry.

PN5558

I suggest that another effect was that people wouldn’t go to them meeting?---Not at all. In fact I must say in respect to the meeting at the Trades Hall, which I think from memory was on 5 December?

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5559

Yes?---I had every reason to believe that the - what the union told me was to occur would occur, and that there wouldn’t be industrial action or the threat of it, for the very reasons that you yourself have outlined; and that is the parties at that point were still pretty heavily concentrated on shaking out the bones of a - of a likely agreement. We were quite surprised actually that that industrial action occurred.

PN5560

You have acknowledged that you knew the ballots to approve industrial action were to be - the results were to be announced on the morning of the 5th?---I believe so, yes.

PN5561

I suggest to you that in the light of that situation, that if the ballots were successful, then combined with the fact that the agreement had not been reached, it was likely that those members at those five facilities would notify you of industrial action at some point in the near future?---Yes, it was distinctly possible, perhaps certain, that we would receive the appropriate notices required under the Act in respect of protected action. What happened on the 5th was something other than that though.

PN5562

Yes, well evidence has been given to this Commission as presently constituted and on previous occasions before Commissioner Cribb, and I think you were present for those proceedings, the 496 proceedings before Christmas?---Yes, before Christmas. Yes.

PN5563

Evidence was given by HSU members that their expectation that they had hoped to be informed that there was agreement, but if there had not been it was their expectation that industrial action at those five hospitals would be then initiated or notified, and that it would have been likely that the meeting on the 5th would have done that; do you recall that evidence before Christmas?---Only in a very - in a general sense.

PN5564

Yes. Do you recall that was the general thrust of it?---That was the general thrust, yes.

PN5565

In the event, the ballot at St Vincents was not successful because not sufficient members voted in it?---Mm mm.

PN5566

Yes?---Or not sufficient voted in the affirmative.

PN5567

I would suggest to you that the position was that there was not the requisite number who participated. There was an affirmative vote but there weren’t enough of them?---Okay.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5568

COMMISSIONER LEWIN: I think you’re saying the same thing, aren’t you?

PN5569

MR LANGMEAD: No, your Honour, because there was a majority in favour of industrial action but there wasn’t a sufficient number of persons who participated in the ballot. I would have to check the provisions again but I think it’s 50 per cent, or something like that, have to vote, and 50.0001 have to vote in favour.

PN5570

COMMISSIONER LEWIN: I see. I understand.

PN5571

MR LANGMEAD: So there would have only been four health services where in the ordinary course protected industrial action could be taken after notice?---Yes. Yes.

PN5572

Evidence was given at those hearings before Commissioner Cribb by the HSU members in attendance that they became aware, ether before or at the meeting, of your circular of the 29th, being R7?---Mm mm.

PN5573

They took it as provocation; do you recall that evidence in general terms?---You put something similar to me in those proceedings before Commissioner Cribb, that might well have been - was - constituted a provocation.

PN5574

As I recall it, Mr Djoneff, I was not allowed to ask you that?---No, you’re right. You were intending to ask it. You signalled on it your intention.

PN5575

And I’m not asking that now?---No. Good. Good.

PN5576

But I’m asking if you recall that that was their evidence, that they regarded it as provocation?---Yes, they did characterise it in those terms.

PN5577

That was they perceived it as a threat that if they went to this meeting, and if the meeting resolved to take any future industrial action, that all of them would be docked for four hours; do you recall that was the general thrust of their evidence?
---That was their perception, yes.

PN5578

Yes, and that in fact was the position, wasn’t it, that if the meeting resolved to take any industrial action, including by notice in three or four days’ time, they would all be docked?---Well it was no more than the application of the provisions of the Act.

PN5579

You say that because you say that anybody who takes industrial action has to be docked for four hours’ pay?---Well, without going to the fine niceties of that provision, that’s the essence of the provisions of the Act.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5580

You say that they stepped into the realms of taking industrial action by the fact that they attended the meeting?---No, no. No, no, no. The position that - the position we put in the bulletin, which sought to do no more than reflect the agreement that we have reached with the union, was that the attendance at the meeting would be paid, but on the basis that industrial action ensued then it wouldn’t be paid; and that was known up front. The industrial action that ensued happened at the immediate conclusion of that meeting which, in our view, was unprotected industrial action because people immediately took industrial action.

PN5581

Yes?---And that’s been canvassed in - before the President and the subsequent Appeal Bench.

PN5582

The problem from the point of view of the members was that they saw it as a provocative act, because it meant that whether or not they were from those four hospitals where the ballot had got up, and even if the original intention of the union, which was to give notice and take protected action in three or four days’ time, that even if that was the only outcome of the meeting they would still be docked?---Well, that’s - that’s correct.

PN5583

Yes, even though they weren’t taking industrial action, all they were doing was attending the meeting?---Well at - if they were only attending the meeting then returned to work, the issue of docking simply doesn’t arise. I mean, we can’t - we can’t be criticised, in my view, for having fairly and objectively articulated the basis upon which that agreement was reached. If someone regards that as provocative well that’s unfortunate, but neither the wording of the bulleting is couched in industrially provocative terms. It was a recitation of what was agreed.

PN5584

You did, however, say that even if the meeting had been told, “Well we haven’t reached agreement” and the meeting said, “Well we should take industrial action at those four workplaces where the ballot has got up, and we direct the secretary to give notice in accordance with the Act”, and then they all went back to work, nevertheless they would have all been docked for four hours?---That may well have been the circumstance that was applied.

PN5585

Whether those circumstances applied or not, that’s what the memo said would happen, wasn’t it?---If that’s what it said, yes.

PN5586

SENIOR DEPUTY PRESIDENT LACY: Can I just clarify, if somebody attended the meeting and after the meeting they returned to work?---Yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5587

They would still be docked pay if there had been a motion to take industrial action; is that what you’re saying?---No, not in respect of the meeting, your Honour. But obviously subsequently, if industrial action does take place then the provisions of the Act would apply in terms of the docking of pay. It was not our intention to frustrate the meeting or - or discourage an attendance on the basis of a threat that the mere attendance had - would result in the loss of pay. If they’re exercising their proper rights under the Act then that meeting, I think, was probably going to result in people being paid.

PN5588

So any individual who returned to work or didn’t actually take industrial action would have been paid?---I think so. The consequence or the circumstance we were reacting to thereafter was that upon the cessation of the meeting immediate industrial action actually occurred, by those attending or some attending. So there was no notice. There was a - call it spontaneous industrial action, if you will.

PN5589

COMMISSIONER LEWIN: I think what is being put to you is that the way in which the communications from the association were expressed in those documents, exhibits R6 and R7, was such that the persons who attended the meeting would be under the impression that it was the intention of the members of the association to dock their pay, had they made some sort of decision that industrial action should be taken, and then returned to work?---I - I can see how that construction would have - would have arisen.

PN5590

Right, by reference to the documents?---Yes, but I do wish to stress that was not what we were intending to achieve.

PN5591

Yes?---It was quite - actually quite the opposite of what - - -

PN5592

So what you say is that the impression in the documents probably does not accurately reflect the policy intention of the association?---Well I think at the time it was written, I think it was a - it was a fair reflection because it was purporting to be a reflection of the agreement reached with the union.

PN5593

Yes, well I’m really just focussing on the words that are used in the documents. I don’t know whether you’ve got them in front of you?---No, I don’t. Look, I - I don’t challenge the fact that some would have regarded it as potentially provocative. I - I - - -

PN5594

Yes, in the sense that they may have attended the meeting, heard the report?
---Yes.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5595

Said “We reject the proposal. We call upon the union to authorise industrial action”?---Yes.

PN5596

“And we go back to work”?---Yes.

PN5597

They’re thinking, “Well because we’ve asked the union to authorise the industrial action, we’re going to get our pay docked”?---I understand.

PN5598

It seems to me an available construction from the expression in those
documents - - -?---I think that’s - that’s a fair point to make.

PN5599

MR LANGMEAD: Mr Djoneff, would that have still, if the circumstances were what the Commissioner has just described, namely that the people attended the meeting, were informed that agreement had not been reached - - -

PN5600

MR PARRY: Well your Honour, I think these documents should be before him. I mean, he’s getting things - - -

PN5601

DEPUTY PRESIDENT IVES: Yes, fair enough.

PN5602

MR PARRY: I think things are being put from a number of places.

PN5603

SENIOR DEPUTY PRESIDENT LACY: I thought they were before him.

PN5604

MR PARRY: I think the witness should have exhibit R6 and R7 before him.

PN5605

SENIOR DEPUTY PRESIDENT LACY: Yes, well do you have spare copies there, Mr Parry?

PN5606

MR PARRY: Yes, I do.

PN5607

SENIOR DEPUTY PRESIDENT LACY: Yes.

PN5608

MR LANGMEAD: Mr Djoneff, if the meeting had proceeded on a basis in which the meeting was informed that agreement had not been reached, the meeting decided that the four hospitals should go ahead and take industrial action in accordance with the Act, give notices et cetera, then they had all gone back to work; then that would still fall within your concept of an information meeting, would it?---Yes, at the time of that writing that was what the clear intention was.

PN5609

You certainly know from the evidence given to the Commission that the members didn’t see it that way?---Well that’s been - yes, some gave that - - -

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5610

A number of people took immediate industrial action that day?---Yes, we were informed that that occurred.

PN5611

Some did go back to work immediately after; do you know that?---I - I would believe that to be so.

PN5612

Yes, and they were docked too?---I - I’m - I can’t be certain of that but yes, you’re probably right.

PN5613

Yes, and over the next few days there was ensuing industrial action, mainly in the form of various bans at various workplaces?---Yes.

PN5614

They weren’t confined to the four workplaces where the ballots had been carried; they were much more widespread than that?---That’s correct.

PN5615

Which caused the VHIA to make an application under section 496?---Yes.

PN5616

That was heard or I think it was listed late in the afternoon, and it was apparent that proceedings couldn’t go very far that evening, and overnight or that afternoon perhaps, the parties came to a position where they were able to agree to abandon those proceedings, because the parties were going to explore conciliation with the assistance of the Commission?---That’s correct.

PN5617

Can I ask the witness to have a look at this document, please.

PN5618

Mr Djoneff, that’s a copy of exhibit A1 tendered to Commissioner Cribb when the proceedings were brought to an end, and reflect the agreement between the parties as to what would happen?---Yes.

PN5619

I tender that.

PN5620

SENIOR DEPUTY PRESIDENT LACY: This was an agreed position, was it, between the parties? This is a reflection of the agreement between the parties; is that right?

PN5621

The problem from the point of view of the members was that they saw it as a provocative act because it meant that whether or not they were from those four hospitals the development built up and even if the original intention of the union which was to give notice and take protected action in four days time, that they even that – if that was the only outcome of the meeting they would still be docked?---Well that’s correct.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5622

Even though they weren’t taking industrial action all they were doing was attending the meeting?---Well if they were only attending the meeting and then returned to work, the issue of docking, simply doesn’t arise. I mean we can’t be criticised in my view for having fairly and objectively articulated the basis upon which that agreement was reached. If someone regards that as provocative, well that’s unfortunate, but neither the wording of the bulletin is couched in industrially provocative terms it was a recitation of what was agreed.

PN5623

It did however say that even if the meeting had been told, or we hadn’t reached agreement and the meeting said well we should take industrial action of those four workplaces where developers got up and we direct the secretary to give notice in accordance with the Act, nevertheless, and then they all went back to work, nevertheless, they would have all been docked for four hours, wouldn’t
they?---That may well have been the circumstance that was applied

PN5624

Well whether those are the circumstances that applied or not that’s what the memo said that happens, didn’t it?---If that’s what it said yes.

PN5625

SENIOR DEPUTY PRESIDENT LACY: Can I just clarify it, if somebody attended the meeting and after the meeting they returned to work?---Yes.

PN5626

They would still be docked pay if there had been a motion to take industrial action is that what you’re saying?---No, not in respect of the meeting your Honour but obviously subsequently if industrial action does take place then the provisions of the Act apply in terms of the docking of pay. It was not our intention to frustrate the meeting or discourage an attendance on the basis of a threat that the mere attendance had, it would result in the loss of pay. If they are exercising their proper rights under the Act, then that meeting I think was probably going to result in people being paid.

PN5627

So any individual that returned to work or didn’t actually take industrial action got paid?---I think so, the consequence, the circumstance that we were reacting to thereafter was that upon the cessation of the meeting immediate industrial action actually occurred by those attending, or some attending. So there was no notice, call it spontaneous industrial action if you will.

PN5628

COMMISSIONER LEWIN: I think what’s being put to you is the way in which the communications from the association were expressed in those documents exhibits R6 and R7 were such that the persons who attended the meeting were under the impression that it was the intention of the members of the association to dock their pay had they made some sort of decision that industrial action should be taken and then return to work?---I can see how that construction would have arisen.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5629

By reference to the documents?---Yes, but I do wish to stress that was not what we were intending to achieve it was action quite the opposite of our objective.

PN5630

So what you say is that the impression in the documents probably doesn’t accurately reflect the policy intention of the association?---Well I think at the time it was written I think it was a fair reflection because it was purporting to be a reflection of the agreement reached with the union.

PN5631

Yes well I’m really just focusing on the words that are used in the document I don’t know whether you’ve got it in front of you?---No, I don’t. Look I don’t challenge the fact that some would have regarded it as potentially provocative.

PN5632

Yes in the sense that they may have attended the meeting heard the report said we reject the proposal, we call upon the union to authorise industrial action and we go back to work?---Yes.

PN5633

And they’re thinking well because we’ve authorised the union asked the union to authorise the industrial action we are going to get our pay docked?---I understand yes.

PN5634

It seems to me an available construction from the expression in that document?---I think that’s a fair comment to make.

PN5635

MR LANGMEAD: Mr Djoneff we better still get the circumstances were as the Commissioner has just described namely that people attended the meeting, were informed that agreement hadn’t been reached - - -

PN5636

MR PARRY: Well your Honour I think these documents should be before him. I mean he’s getting things - - -

PN5637

MR LANGMEAD: Fair enough.

PN5638

MR PARRY: I think things are being put from a number of places and he should have exhibit R6 and R7 before him.

PN5639

SENIOR DEPUTY PRESIDENT LACY: Yes, well do you have spare copies?

PN5640

MR PARRY: Yes, I do.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5641

MR LANGMEAD: Mr Djoneff if the meeting had proceeded on a basis in which the meeting was informed that agreement hadn’t been reached the meeting decided that the four hospitals should go ahead and take industrial action in accordance with the Act, the notices et cetera, they would have all gone back to work, then that it would still fall within the, your concept of an information meeting would it?---Yes, at the time of writing that was what the clear intention was.

PN5642

You said it be noted in the evidence given to the Commission that members didn’t see it that way?---Yes, some gave that.

PN5643

And a number of people took immediate industrial action that day?---Yes we were informed that that occurred.

PN5644

Some did go back to work immediately after do you know that?---I would believe that to be so.

PN5645

They were docked too?---I can’t be certain of that but you’re probably right.

PN5646

And over the next few days there was ensuing industrial action mainly in the form of various bans at various workplaces?---Yes.

PN5647

They weren’t confined to the four work places where ballots are being carried they were much more widespread than that?---That’s correct.

PN5648

Which caused the VHIA to make an application under section 496?---Yes.

PN5649

That was heard in – or I think it was listed late in the afternoon and it was apparent that proceedings couldn’t go very far that evening and overnight or that afternoon perhaps, the parties came to a position where they were able to agree to abandon those proceedings because the parties were going to explore conciliation with the assistance of the Commission?---That’s correct.

PN5650

Now can I ask the witness to have a look at this document please? That’s a copy of exhibit A1 tendered to Commissioner Cribb when the proceedings were brought to an end and reflect the agreement between the parties as to what had happened?---Yes.

PN5651

I tender that.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5652

SENIOR DEPUTY PRESIDENT LACY: This was an agreed position was it, between the parties this is a reflection of an agreement between the parties is that right?

PN5653

MR LANGMEAD: It is your Honour.

EXHIBIT #A30 AGREEMENT BETWEEN HSU AND VHIA RELATING TO THE PROCEEDINGS IN THE COMMISSION

PN5654

SENIOR DEPUTY PRESIDENT LACY: I’m just wondering where this is all taking us Mr Langmead. I know there’s an issue about whether or not the union or to do with the union’s conduct in relation to the negotiations but this is all just historical isn’t that right?

PN5655

MR LANGMEAD: Well yes it is your Honour but it’s the historical material which the employer rely on to say two things about the union’s conduct. One is that the union deliberately took unprotected action ion those two weeks preceding 22 December. I think it was even suggested that that was their intention all along. Secondly, that the union in taking industrial action which had the effect of threatening the health and safety of part of the population and action which would inevitably cause the termination of bargaining periods is conduct which this Commission should adversely comment upon or adversely take into account in determining the determination of this matter.

PN5656

There are aspects of that where the way in which it has been put, it is a way which the union certainly takes issue with and the cross-examination of Ms Harbridge in particular was predicated it seemed on the hearing that it couldn’t – the action the union was taking must have been deliberately unprotected because when it resumed after the breakdown of the conference before Vice President Lawler that the reason for the resumption of industrial action was the breakdown in conciliation. And it’s our counter thesis that the industrial action was clearly only suspended, not entirely ceased anyway it was eased, some of it wasn’t suspended at all and it was the same – it bore the same character of being response industrial action right throughout that period.

PN5657

So whilst the trigger for the resumption was indeed the breakdown of conciliation before Vice President Lawler, it didn’t destroy the character of the response industrial action and - - -

PN5658

SENIOR DEPUTY PRESIDENT LACY: But you’re not going to get Mr Djoneff to concede that are you?

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5659

MR LANGMEAD: No but I do say this about the documents and I think I’m obliged to at least remind him that the documents do use the words suspension and put that thesis to him in the same way that my learned friend put the thesis to Ms Harbridge, his thesis to him.

PN5660

SENIOR DEPUTY PRESIDENT LACY: Yes well I mean I don’t wish to constrain you in any way, it just seems to me that we’re going a very long circuit route to get there that’s all.

PN5661

MR LANGMEAD: Well I’m certainly not doing that deliberately your Honour. If only there a shorter way home for the entire proceedings I think all of us on both sides of the bar table would be delighted and we will continue to endeavour to do that wherever we can.

PN5662

Mr Djoneff you don’t disagree with my description that I’ve just given to the Commission do you?

PN5663

SENIOR DEPUTY PRESIDENT LACY: Which part of it?---You beat me to it your Honour.

PN5664

MR LANGMEAD: I’m sorry, the description of exhibit A1 and what it says about?---It stands on its own words, there was an attempt to resurrect discussions in an atmosphere that was highly charged, very difficult, strong positions had been taken by the parties at that time. but I think it’s also reflective of the fact that whatever the tactical moves each of the parties were, there was a desire to try and get an agreement if at all possible.

PN5665

That was the underlying desire by all sides throughout the dispute?---Well this document spells it out in it’s own words in my estimation. There was a pulling back from both sides on the respective actions that they were involved with in order to give Vice President Lawler an opportunity to attempt to narrow the gap between the parties or find a basis upon which further negotiations had the potential to lead to an agreement. It’s no more than that, it’s an honest attempt by the Commission to press the parties, but history shows that as earnest as that effort was it didn’t yield in an agreement.

PN5666

You don’t doubt that the resumption of industrial action was by the union was to try and put pressure on the employers to get that agreement?---Well if it wasn’t for that I’m – I can’t imagine what else it was for.

PN5667

COMMISSIONER LEWIN: Sorry just before you go ahead, my understanding of your evidence Mr Djoneff is that you had some conversations about this meeting that turned out to become a stoppage of work?---Yes, Commissioner.

PN5668

With Ms Jackson?---Correct.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5669

My understanding of your evidence is that she didn’t anticipate that there would be any industrial action but that it would be a report back meeting?---Yes, that was I think in fairness to her I think she genuinely believed that at the time that conversation and that agreement was entered into that that’s all that would result. The fact of the matter is and that’s not in dispute that some people spontaneously after that meeting immediately commenced industrial action.

PN5670

Right.

PN5671

MR LANGMEAD: In fact the evidence of the members before Commissioner Cribb was that the meeting itself resolved to take industrial action?---Yes, I’m not suggesting otherwise. To that extent it went beyond or it took a shape that I believe Ms Jackson had not anticipated was expected.

PN5672

During those bans imposed in the period prior to Christmas the Health Services were diligent if not rigorous in ensuring that employees who took industrial action were recorded as doing so and were docked?---That is correct.

PN5673

Yes and in those circumstances where you’re at work but you’ve got some minor bans on but you’re being docked it’s unsurprising that people come to the conclusion you’re better off not being at work, do you agree with that?---Look I can’t account for the thought process of a variety of members but it’s not beyond the bounds of possibility that it was the strain of thinking.

PN5674

It really makes employees I suggest more inclined to take stop work action because they’re going to be docked anyway?---Well the application of the provisions of the Act is such that you’ll get various behaviours. One of those is the one you describe.

PN5675

COMMISSIONER LEWIN: What’s the value of this evidence Mr Djoneff is just speculating about what the attitude of his position or the people at the meeting might have had?

PN5676

MR LANGMEAD: Well he is a very - - -

PN5677

COMMISSIONER LEWIN: Well so are we.

PN5678

MR LANGMEAD: Yes Commissioner. Yes it will be our submission that it’s unsurprising that - - -

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5679

SENIOR DEPUTY PRESIDENT LACY: This is your submission now Mr Langmead now is it? I mean whatever concessions that you need from Mr Djoneff surely you have them by now and it’s a matter for submission?

PN5680

MR LANGMEAD: Yes.

PN5681

COMMISSIONER LEWIN: It just doesn’t help us for opinion evidence to be given, with all due respect to Mr Djoneff extensive experience and industrial relations expertise, because ultimately you’re really addressing a question of judgment that will be made by an expert tribunal.

PN5682

MR LANGMEAD: Yes, thank you Commissioner.

PN5683

Again in paragraph 83 Mr Djoneff you recall that the union had given notice of further industrial action take place in the four hospitals were ballots had been approved, the action was to take place some time in the new year?---I think that’s correct.

PN5684

It was those bargaining periods where the application was made for initially determination by the union and then suspension by the VHIA?---I think that’s correct, I must say all of those events are a bit of a blur at the moment.

PN5685

Again that is consistent with the intention of the union to take protected industrial action?---Well the union exercised its rights under the Act and so did we.

PN5686

In paragraph 91 where you said it is threatened and industrial action will continue indefinitely, in fact the notices were for three periods of 24 hour stoppages, is that correct?---Look I could stand to be corrected on the precision of that but my recollection is that our impression was that we were to be facing an ongoing campaign.

PN5687

Mr Djoneff can you explain why you say in paragraph 96 why it would effectively bring about automatic progression?---Well that’s how we’ve interpreted the claim that would in effect result in people moving through grades 1 and 2 other than the manner that is presently provided.

PN5688

Has the union ever said that?---I believe so yes.

PN5689

Said that to you in meetings?---My recollection is that that was the essence of the purpose of the claim.

PN5690

I’m instructed that it isn’t the union’s intention and I must say I can’t see myself where that flows from the proposed determination do you have that proposed determination with you?---No, I don’t have it with me, but I think at the time the discussions were being held then which was prior to Workplace determination or draft Workplace determinations having been drafted that was the essence of the union’s aspiration.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5691

It’s not in the particulars accompanying the initiation of the bargaining period is it?---It may not do, but I’m making reference to what we understood to be the intention. If that’s not the intention, then so be it.

PN5692

That would certainly if it’s not the intention it would remove one of your concerns?---It certainly of itself it would.

PN5693

In your paragraph 97 you say that employers need to be able to respond to changes in demands in the services and be able to utilise their workplace flexibility within the constraints of the relative industrial instrument. But what you’re really saying is that you don’t want to be constrained by the industrial instrument aren’t you?---No.

PN5694

Well?---What we were attempting to do is negotiate a new industrial instrument and those negotiations have been unsuccessful. I know there’s been an issue that was canvassed in cross-examination yesterday about the award provision but our position on it has been made clear.

PN5695

You certainly want the freedom to adopt whatever structure you want to, each of your members want to adopt whatever structure it believes suitable without the industrial instrument constraining that election?---But that’s not what I’ve said. I’ve said I’m readily acknowledging that the behaviours of the employer cannot be at odds or inconsistent with or in breach of the relevant industrial instrument providing they behave in that fashion then I would have thought theoretically at least they ought to be, have the capacity to organise their hospitals in an appropriate manner. I put that caveat in myself. I mean the standing of my organisation has always been that we do not support the breach of industrial instruments and we’re often the first to ensure that any breach that has occurred is remedied. But of course there are often sometimes debates genuinely differences of view as to whether a breach exists or doesn’t exist.

PN5696

Both your paragraphs 97 and 98 are premised on the presumption that the union is seeking automatic progression is that right?---Yes, that’s what it is underpinning.

PN5697

Yes now you have the – do you know Mr Djoneff if the amalgamated chief structure is still maintained in radiography departments for example?---Look I’m not sure.

PN5698

All right. There's been multi-disciplinary teams in the allied health sector for many years, hasn't there?---Yes, there has, but it has steadily grown as a mode of operation and of service delivery.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5699

Allied health professionals who work in those teams and I think you acknowledged this earlier continue to be allocated to a department and responsible to the chief of that department?---It can be.

PN5700

DHR didn't make any offers, did it, that excluded any teams or programs from the claimed chief restructure?---Sorry, I'm not with you.

PN5701

You say the claim in relation to the chief structure is contrary to the existence of the multi-disciplinary teams. Did you put any proposal that they be excluded where they weren't allocated to departments?---No, no, no, we were not seeking to exclude any particular classifications.

PN5702

You didn't look at narrowing down the application of the union's claim in regards to the chief - - -?---Look, all sorts of considerations and debates were had about options relating to a future structure. I think I've spoken about that on several occasions now. Rightly or wrongly, agreements have not been reached despite the endeavours of the parties themselves and the endeavours in conciliation with Vice President Lawler.

PN5703

In relation to the model flexibility clause, the Commission's decision in the award modernisation deliberations make it clear that it's something which is not going to apply until 2010?---That's correct.

PN5704

And place a considerable caveat on it being subject to the final form of any particular award?---Yes, I acknowledge that.

PN5705

I suggest to you the proposal for a model flexibility clause in the workplace determination is premature?---Well, that's a suggestion you can make, of course, but in the context of pursuing an outcome in either these proceedings or in any negotiation, that is an aspiration that we have.

PN5706

COMMISSIONER LEWIN: Did you have it during the discussions?---Yes, we did.

PN5707

Did you reduce it to writing?---No, we didn't.

PN5708

How was it expressed? How was the claim that there should be some model flexibility something or other as part of the agreement?---It was expressed in very general terms, Commissioner, as a general aspiration having regard to the nature of the workforce.

PN5709

So it didn't actually bear any relationship to the award system?---No, it didn't. Of course, since then the Commission in the award modernisation process has handed down - we thought that was a reasonable model to put into the workplace determination which is the subject of these proceedings.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5710

Since the model flexibility provision was determined by the Commission for the award system?---Yes. All we're simply saying is we've had that aspiration of a local flexibility capacity and notwithstanding that that wasn't canvassed in great detail, it was canvassed as an objective which of itself wasn't repudiated.

PN5711

I might leave it to Mr Langmead to examine how it did manifest itself during the bargaining period and how it might be said or denied that it was a matter at issue?
---Yes.

PN5712

MR LANGMEAD: The model flexibility clause decision of the Commission was after the determination of the bargaining period, wasn't it?---Yes.

PN5713

In fact, I think the ministerial request was after the determination of the bargaining period?---Yes, I happily accept that that is the sequence of events.

PN5714

It was the Mr Chance letter of 16 March, A26, doesn't list a flexibility clause at all, do you agree with that?---I don't have it in front of me, but I am happy to accept your word that it doesn't make that mention.

PN5715

That is a letter which purported to record the matters which are at issue?
---Yes.

PN5716

SENIOR DEPUTY PRESIDENT LACY: How did you discuss the idea of having a flexibility clause?---Your Honour, I think as I said earlier on, the span of time in which discussions occurred was relatively brief, particularly in that first stage leading to Christmas and in subsequent discussions, particularly under the chairmanship of Vice President Lawler and I think there were several conferences with that - - -

PN5717

This is subsequent to the termination of the bargaining period?---Yes, that's correct.

PN5718

Yes, but during the bargaining period, was there any discussion then about having incorporated in an agreement a flexibility clause?---Yes, but I should hasten to add it wasn't the subject of rigorous discussion over a lengthy period of time. It was in the context of the general nature of the discussion in which as part of our aspirations that was expressed. I wouldn't elevate it to the point of saying this was a do or die provision that we must have and wasn't expressed in those terms.

PN5719

COMMISSIONER LEWIN: Who was leading the negotiations for the Association?---Variously either myself or Mr Clay.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5720

So was it you who said to someone we want a flexibility clause?---Yes.

PN5721

DEPUTY PRESIDENT IVES: And did they say what do you mean by that?
---There was not a lot of discussion about it, your Honour.

PN5722

So you didn't give an explanation as to what you wanted to include?---Yes, clearly, basically said that there ought to be capacity for local level arrangements between employees and management having regard to labour supply issues, having regard to a whole range of things and we wanted the union's reaction to that as a concept. I have to honestly say we didn't get much further than talking about it at the conceptual level, but then equally we didn't get far beyond talking about productivity conceptually. We didn't get much beyond that either. That's the reality of where we got to.

PN5723

MR LANGMEAD: Mr Djoneff, the letter from Mr Chance dated 16 March was a fairly careful letter. Do you recall it or do you want to have a look at it?
---I was overseas at that time. Mr Chance was acting in my position.

PN5724

As you would expect, it was a careful letter?---Yes, I would expect so.

PN5725

It was sent at the time of the termination of the bargaining period clearly to fix in time those matters or to record at that time those matters which the VHIA thought were at issue?---Yes.

PN5726

That was the purpose of that?---It was.

PN5727

And it doesn't include anything to do with the flexibility clause, does it?---No, no, no. I've acknowledged that.

PN5728

Is it possible that the discussions you had arose after the determination? It was certainly much more topical after the determination in this industry generally, wasn't it?---Yes.

PN5729

I think I jumped in, Mr Djoneff, before you could answer whether you thought it was possible that it was discussed afterwards?---Clearly it was possible.

PN5730

In relation to paragraph 113, you refer to a dispute at Melbourne Health. Were you involved in that at all?---No, not at all.

PN5731

Somebody told you about that?---As it happened, it was Mr Clay who at the time of this dispute was working for VHIA, but at the time of that Melbourne matter was the executive director of human resources for Melbourne Health, so he was directly involved in those discussions, I believe.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5732

Other than knowing that the matter was resolved in writing, you can't tell us anything more about it?---No, no, no, my organisation was not involved.

PN5733

You say paragraph 114, referring to the statement of Ms Harbridge, that the issues she identified at paragraphs 20 and 21 were determined by paragraph 63 of the MX decision. Ms Harbridge's statement in paragraphs 20 and 21 relate to the claims for senior clinicians and clinical tutors and clinical educators whereas paragraph 63 deals with the claim or the MX decision deals with the claim for professional structures and the claim was:

PN5734

The parties shall establish principles regarding professional structures.

PN5735

So paragraph 63 of the decision doesn't seem responsive to - - -?---Well, I have neither of those documents in front of me, but if I haven't got it quite right, well, no doubt someone will let me know.

PN5736

SENIOR DEPUTY PRESIDENT LACY: Do you wish to see the document?
---If it will assist the Commission, certainly.

PN5737

Mr Langmead, do you have copies of the documents to show Mr Djoneff?

PN5738

MR LANGMEAD: I do. I have something scribbled on it?---I think the only point I was I think attempting to make at 114 is that the nature of the observations made by the bench in 63 back in 2000 are in my opinion applicable to the kinds of claims that have been made in 21 and 22 which seeks to prescribe particular arrangements. I put it no higher than that.

PN5739

Mr Djoneff, paragraph 115 about the annual leave, you seem to be saying in the second sentence the standard Monday to Friday nurse gets five weeks?---Yes. I think I am right there.

PN5740

Yes, and the standard Monday to Friday health professional and this is your second last sentence in the paragraph gets four weeks. You don't say it in those terms, but that seems to be what you're talking about?---Yes.

PN5741

That means that health professionals get one week's annual leave less than a comparable nurse, is that right?---If I've got it right, I think that might be so.

PN5742

In paragraph 116 you say in relation to back-dating, you say about halfway through the paragraph:

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5743

In respect to medical scientists, the agreement also expired on 30 September 2007. However, the new agreement was not to operate until 1 January 2008 and the agreed wage increases back-dated one month from 1 January 2008.

PN5744

So I take it it was 1 December?---No, I think that's a mis-expression on my part. The back-dating was to 1 January.

PN5745

To 1 January?---Yes, so I think that has been clumsily expressed.

PN5746

That agreement was signed on 26 June, wasn't it?---Yes, in its final form.

PN5747

So it had something like six months' back pay?---Yes, that's correct.

PN5748

Mr Djoneff, you say in relation to a wages outcome that's inconsistent with the state government wages policy would amongst other things encourage the HSU not to bargain in the future and you seem to explain that by saying this is a group of health professionals that have had bargaining periods terminated three times in approximately the last 10 years. Whatever it is about encouragement of bargaining or not, the position seems to be that the group of health professionals is more likely than not to have a bargaining period terminated?---Well, that's a consequence of the action and the reality of the enterprise bargaining system in our sector. I wish I could alter it, but I can't.

PN5749

The suggestion that the Commission should effectively do what the state government wages policy wants I suggest to you is just as likely to discourage the HSU not to bargain as well?---Well, we will be making extensive submissions on what we believe the Commission should do and what it should have regard to. That's the purpose of these proceedings. Like all these matters, there is no one neat, simple fit of positions in a very complex environment.

PN5750

You say it would have a major destabilising effect on those sectors that reach agreement. You say that, I suppose, because if the outcome is different or superior, then it might cause dissatisfaction amongst those people that agreed to something different?---Clearly. I mean, enterprise bargaining is seemingly an endless cycle in our sector and assuming you let me go very shortly, I am heading straight off to the AMA where we are negotiating an enterprise agreement. You don't have to be a Rhodes Scholar to work out that in doing that, the AMA for example will be looking closely at what the agreement outcomes have been and what are the likely outcomes of proceedings such as this, so we are as a central thrust of our position is to seek consistency of outcomes across the industry for what we say are respectable reasons. Whether that's always achievable of course remains to be seen.

**** ALEXANDER DJONEFF XXN MR LANGMEAD
PN5751

That's the major effect you're saying in an area where agreements haven't been reached, it's the AMA, is it?---No, no, it just happens that at the present, the AMA agreement has expired and we are now heavily embroiled in EBA negotiations with them. They're not the only EBA negotiations in this industry. The ambulance employees are heavily embroiled in negotiations with their employers and the government. You would have to be a little bit silly to not acknowledge that in proceeding in such negotiations, the respective parties have got a firm eye on things that have evolved, not only here in Victoria, but bring to the table the reality of outcomes in other places and we have to weigh those up.

PN5752

You will be relieved to know I have no further questions.

PN5753

SENIOR DEPUTY PRESIDENT LACY: Thank you, Mr Langmead. Any re-examination, Mr Parry?

<RE-EXAMINATION BY MR PARRY [3.27PM]

PN5754

MR PARRY: If the Commission pleases. Mr Djoneff, you mentioned in your answer then about other groups. You mentioned ambulance employees. What about HSUA1?---HSUA1 and 5 is next year, but if I recall correctly, the terms of the current agreement requires to commence negotiations six months prior to expiry, so we will be starting to turn our mind to those negotiations coming forward in the coming year.

PN5755

You were asked this morning about whether you were aware of health services who had sought separate negotiations prior to the draft determination being filed. Do you recall that?---Yes.

PN5756

And you said you could tell the Commission why that was the case that they hadn't sought separate discussions and if they were represented through the VHIA in the negotiation process, why hadn't they to your knowledge sought separate discussions?---Principally because the general shape and thrust of the union's claim was such that they at that point were advantaged by central negotiations. They also knew that at an appropriate time in the cycle of those negotiations, we would be holding the opportunity for differential outcomes at an appropriate stage, particularly as it related to matters going to structure and related classification. We never got to that point.

PN5757

You also in the same context were asked about the different outcomes and you said it was the character of public sector bargaining that there be centrally co-ordinated discussions and then I think you said it would be individualised and that was the consensus of the parties that it be done centrally. Which parties are you referring to there?---The immediate negotiating parties. The public hospitals have to operate within state government policy parameters and one of those is central collective negotiations, but within that there is scope for differential outcomes. We certainly pursued that with nurses in relation to certain matters and, indeed, there were separate discussions held with different employers with that union within the umbrella of centralised negotiations and had these negotiations in respect of this group been more fruitful at an earlier stage, then in all likelihood we would have followed a similar course in respect to them.

**** ALEXANDER DJONEFF RXXN MR PARRY
PN5758

You referred to that negotiating process and were asked a number of questions about it and the statement in paragraph 49 and 51 refers to the negotiations I think commencing on 13 November 2007 and then you set out various dates through to the 29th?---Yes.

PN5759

You were asked questions about the breakdown of the negotiations and I think you identified a date around 29 or 30 November when, to get the words you used, something - that the parties were so far apart?---I think I made some reference to the solar system, where we each were in that sense.

PN5760

Why in brief were you so far apart, just in brief?---In brief, if you had to identify one matter that separated us in a very substantial way, that was the issues of structure and the associated classifications.

PN5761

The reason that they put you so far apart was what?---The aspirations in the union's claim were simply - were such that even if we had an unlimited bucket of money, our view was and the view of the health services was that there was an intrinsic lack of merit in the kind of structural proposals that were being put, so even if we had an unlimited funding from the government which would be a miraculous event in its own right, we would not have acceded to the claims based on their intrinsic lack of merit in our view.

PN5762

You were asked a number of questions about the nurses' deal as I will call it and you mentioned I think at one stage a two-page dot point document?---Yes.

PN5763

Perhaps if I could hand you a copy of this document?---Yes, that looks remarkably familiar.

PN5764

When you say remarkably familiar, perhaps I will hand up a copy to the Commission. Why is it familiar?---Because I was party to the preparation of it in those negotiations at a rather late hour.

PN5765

I tender that document.

EXHIBIT #R52 NOTED AREAS OF AGREEMENT DOCUMENT DATED 25/10/2007

PN5766

MR PARRY: Perhaps if I could also hand you another document headed summary of in principle agreement between ANF, VHIA and DHS.

PN5767

THE SENIOR DEPUTY PRESIDENT: I should note that document is dated 25 October 2007.

**** ALEXANDER DJONEFF RXXN MR PARRY
PN5768

MR PARRY: Have you seen that document?---Yes, I have.

PN5769

Perhaps I will hand up a copy of that to the Commission as well. What is this document, Mr Djoneff?---It is as the title suggests, Mr Parry, a slightly more fulsome summation of the other document which is one and a half pages which records in a little more detail and with a little more precision the elements of the agreement that are reflected in the first document.

PN5770

Yes, and the service improvements in productivity offsets are in paragraph 7?
---Yes, they are.

PN5771

I tender that document. I am sorry, around when would it have been produced?
---Very, very shortly after 25 October.

PN5772

I tender that document.

EXHIBIT #R53 SUMMARY OF IN PRINCIPLE AGREEMENT BETWEEN ANF, VHIA AND DHS UNDATED, PRODUCED SHORTLY AFTER 25/10/2007

PN5773

MR PARRY: You also gave evidence about the drafting of the actual agreement that is to be lodged, the workplace agreement with the nurses. That is an exercise that is not complete as yet?---That's correct.

PN5774

And there hasn't yet been a vote on - - -?---No, there has been no votes on any of the agreements that we consummated with the three unions that reference has been made to.

PN5775

COMMISSIONER LEWIN: Could I just interrupt there to ask you where is that all up to, that making of the agreement procedure?---We are still in a drafting process, Commissioner, in respect of all three of those matters.

PN5776

So a vote for the purposes of approval of the terms of the agreement is not imminent?---No. I think that is a fair statement.

PN5777

MR PARRY: I think you were taken to the - you were taken through a list of I think productivity offsets and so forth that were agreed with the medical scientists?---Yes.

PN5778

I am not sure whether you had exhibit FH7 which was an attachment to Ms Harbridge's statement in front of you at that time, did you?---No, Mr Parry. I've had FH6.

**** ALEXANDER DJONEFF RXXN MR PARRY
PN5779

Perhaps if I could hand you a copy of exhibit or attachment FH7 to Ms Harbridge's statement and in particular ask you about paragraph 10 which I will have open. That is a heads of agreement for the medical scientists. Have you see that before?---Yes, yes, yes.

PN5780

You gave evidence I think right at the end of today about when agreement was reached, agreement was finally reached in June. Was there an earlier time when an in principle agreement was reached?---Yes, it was. My recollection is it's some time in March, but I wouldn't want to be held precisely to that.

PN5781

That part that I've opened up in FH7, I think it's part 11, that is the various productivity offsets, is it?---Clause 10.

PN5782

Clause 10, I am sorry?---Yes.

PN5783

If you look over the page on some of those, there's attachments or meant to be other attachments?---That's correct.

PN5784

Were there other attachments to that document?---Ultimately there was, but not immediately.

PN5785

Other clauses?---Yes, that's right. For example, attachment 4 relating to laboratory technicians, that was still the subject of negotiation.

PN5786

My learned friend tells me he has an attachment. I don't.

PN5787

THE SENIOR DEPUTY PRESIDENT: There's not an attachment to the file document.

PN5788

MR PARRY: I don't have the attachments?---No, it's not there. I am aware of those attachments.

PN5789

You were asked some questions both by the Bench and by my learned friend about the discussion you had with Ms Jackson in November last year and you said it was an agreed position as was customary and common in our industry. When you say customary and common in our industry, firstly I assume that meant the health industry?---Yes, of course.

PN5790

And had there been such agreements reached with Ms Jackson's union before, for example?---On previous occasions I think there would have been. It's not an uncommon arrangement for an agreed meeting on certain terms.

**** ALEXANDER DJONEFF RXXN MR PARRY
PN5791

And what had been the practice in the past when these agreements had been reached?---If you're talking about the allied health professionals, for example - - -

PN5792

More generally?---More generally, as a general statement, the spirit and intent of those agreements have been honoured by and large. We always took the view that this was a facilitative arrangement to promote the notion of moving forward on the enterprise bargaining process.

PN5793

I have nothing further, if the Commission pleases.

PN5794

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Parry. Thank you, Mr Djoneff. You're excused.

<THE WITNESS WITHDREW [3.43PM]

PN5795

THE SENIOR DEPUTY PRESIDENT: Mr Parry, we had intended rising at four pm today because of other commitments, so is there any point in you bringing your next witness at this stage?

PN5796

MR PARRY: Well, Ms Schultz has driven up here from Geelong. She has been sitting outside most of the day. I know that's not a matter that the Commission has control over and I note the Commission is going to adjourn, but we would at least seek to get her started.

PN5797

THE SENIOR DEPUTY PRESIDENT: Perhaps we can swear her in or affirm her and I don't know how much time you will take. I don't know if it's going to be that long.

PN5798

MR PARRY: Not extensive, no.

PN5799

THE SENIOR DEPUTY PRESIDENT: All right.

<DEBRA LEANNE SCHULTZ, SWORN [3.44PM]
<EXAMINATION-IN-CHIEF BY MR PARRY

PN5800

MR PARRY: If the Commission pleases. Ms Schultz, what is your full name and address?---Debra Leanne Schultz, (address supplied).

PN5801

And you are the director of Allied Health at Barwon Health?---That's correct.

PN5802

You have a statement that you've prepared for these proceedings?---Yes.

PN5803

Do you have a copy of that before you?---Yes, I do.

PN5804

There are some additions and amendments you would like to make to that?
---Yes, there's three amendments.

PN5805

I think the first is at paragraph 28?---That's correct.

PN5806

And how would you like to amend that, Ms Schultz?---Line 2, replace non-replacement of staff with -

PN5807

reduced capacity to replace staff shortages.

PN5808

THE SENIOR DEPUTY PRESIDENT: Sorry, would you just do that again, please?---The second line, replace the non-replacement of staff section with reduced capacity to replace staff shortages and the next one was 61, so following on from:

PN5809

They are then free to apply via email -

PN5810

To include or add:

PN5811

An equitable process is then implemented for coverage of the shifts.

PN5812

Is then implemented for?---Coverage of the shifts.

PN5813

Where does that go again, please?---Just after the second last line after apply via email and then add an equitable process is then implemented for coverage of the shifts and then replace the last sentence with:

PN5814

There is no requirement to work additional shifts.

PN5815

That's the last sentence, was it?---That's correct, yes.

PN5816

MR PARRY: Paragraph 65, is it?---Yes, and the last sentence, to change that to:

PN5817

Allied Health professionals may discuss alternative meal breaks in consultation with their line manager.

PN5818

Now, Ms Schultz, subject to those amendments, is that statement true and correct?
---Yes.

PN5819

I tender that statement.

EXHIBIT #R54 WITNESS STATEMENT OF DEBRA LEANNE SCHULTZ INCORPORATING AMENDMENTS TO PARAGRAPHS 28, 61 AND 65

PN5820

MR PARRY: Now, there's a couple of matters that arise out of evidence that's been given that I would seek to ask Ms Schultz with the leave of the Commission.

PN5821

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Parry.

PN5822

MR PARRY: Ms Schultz, there's been some evidence given to this Commission by one or two employees that they work longer hours than those prescribed in the industrial instrument and their employer encourages them to do that or covertly expects them to do it. What is the position at Barwon Health with employees working longer than the hours in the industrial instruments?---For the departments which I have line management responsibility, it's not expected or encouraged and if the chiefs or the supervisors are noticing that staff are working past the end of their day, then they are required to manage that so there is no expectation that people would work past the end of their usual working hours.

PN5823

In paragraph 71 of your statement you refer to program funding for HARP and primary contact physiotherapist for the emergency department at Geelong Hospital. Firstly, across Barwon Health, how many physiotherapists would you have approximately?---There's over 60.

PN5824

How many are primary care physiotherapists?---This is a new program and with temporary government funding and there is one person employed full-time until the end of June next year and there is one part-time person and six casuals to cover the shifts.

PN5825

I have nothing further of Ms Schultz.

PN5826

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Parry. Mr Langmead, are you able to resist the temptation to cross-examination today?

PN5827

MR LANGMEAD: Certainly, your Honour.

PN5828

THE SENIOR DEPUTY PRESIDENT: Yes, we need to rise at four. In that case, Ms Schultz, unfortunately the Commission has to adjourn now and we cannot conclude the process of your cross-examination and so you will be required to come back and see us again tomorrow?---Right, okay.

PN5829

Thank you?---Thank you.

PN5830

MR PARRY: I haven't had the opportunity to speak to Ms Schultz about tomorrow. Perhaps when she leaves the witness box, if I could have a chat to Ms Schultz about her availability?

PN5831

THE SENIOR DEPUTY PRESIDENT: Yes. Cross-examination hasn't commenced yet in any event.

PN5832

MR PARRY: If the Commission pleases.

PN5833

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Parry. The matter is adjourned until 10 am tomorrow.

<ADJOURNED UNTIL WEDNESDAY 24 SEPTEMBER 2008 [3.53PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #R50 TRANSCRIPT OF THE PROCEEDINGS IN 2000 PN5012
EXHIBIT #R51 WITNES STATEMENT OF DR SMITH PN5014
ALEXANDER DJONEFF, RECALLED ON FORMER OATH PN5017
CROSS-EXAMINATION BY MR LANGMEAD, CONTINUING PN5017
EXHIBIT #A29 COPY LETTER DATED 11/02/2008 FROM HSU TO THE RESPONDENT HEALTH SERVICES PN5074
ALEC DJONEFF, RECALLED ON FORMER OATH PN5524
CROSS-EXAMINATION BY MR LANGMEAD, CONTINUING PN5526
EXHIBIT #A30 AGREEMENT BETWEEN HSU AND VHIA RELATING TO THE PROCEEDINGS IN THE COMMISSION PN5653
RE-EXAMINATION BY MR PARRY PN5753
EXHIBIT #R52 NOTED AREAS OF AGREEMENT DOCUMENT DATED 25/10/2007 PN5765
EXHIBIT #R53 SUMMARY OF IN PRINCIPLE AGREEMENT BETWEEN ANF, VHIA AND DHS UNDATED, PRODUCED SHORTLY AFTER 25/10/2007 PN5772
THE WITNESS WITHDREW PN5794
DEBRA LEANNE SCHULTZ, SWORN PN5799
EXAMINATION-IN-CHIEF BY MR PARRY PN5799
EXHIBIT #R54 WITNESS STATEMENT OF DEBRA LEANNE SCHULTZ INCORPORATING AMENDMENTS TO PARAGRAPHS 28, 61 AND 65 PN5819