C2014/8211, Transcript of Proceedings [2015] FWCTrans 245 (22 April 2015)

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PN1

THE DEPUTY PRESIDENT: Can we have appearances, please?

PN2

MR A GOUNIS: Yes, your Honour. Gounis, initial A, appearing for the applicant, the AWU.

PN3

THE DEPUTY PRESIDENT: Thank you.

PN4

MR GOUNIS: I have with me MR J BOYD.

PN5

THE DEPUTY PRESIDENT: Thank you. Thank you.

PN6

MR SAUNDERS: May it please the Commission, Saunders, with your permission, as counsel for Orica.

PN7

THE DEPUTY PRESIDENT: Thank you. I understand, Mr Gounis, that you don’t oppose Mr Saunders’ appearance, is that right?

PN8

MR GOUNIS: That is correct, your Honour.

PN9

THE DEPUTY PRESIDENT: I will grant permission under section 596 for Mr Saunders to appear. Can I just say to start that we did have a telephone mention on 24 March and at that stage I didn’t actually have the file which was still floating around the registry in Newcastle or somewhere. But I do have it now and I have gone through it probably more carefully than I have gone through the material that has just been filed in the last day or two.

PN10

But I do have a range of material from the applicants and I think yesterday we got a range of material from the respondent. So you can assume that all that material is there. I am really in the hands of the parties as to how we proceed. I gather, Mr Gounis, that you don’t propose to call any witnesses; is that right?

PN11

MR GOUNIS: We just have the one witness, your Honour.

PN12

THE DEPUTY PRESIDENT: Just one. But there is not a witness statement, is there, or am I - there is. All right, there you go. I see, Ms Osland. All right, I missed that. All right, thanks. All right, so we will kick off with the oral evidence, I suppose, on both sides unless either of you want to make an opening submission.

PN13

MR SAUNDERS: Your Honour, I don’t wish to make an opening but there are two preliminary matters I wish to deal with; very minor matters as it turns out. There are some pages missing from a particular annexure to one of our statements I wanted to provide to Your Honour and I wanted to provide one other document which is effectively just an aide-mémoire to explain how the Kooragang Island operations are separated into various departments or areas for ease of explanation. So might I provide those two documents. Mr Gounis has a copy of each of them.

PN14

THE DEPUTY PRESIDENT: Yes, thank you. So the first needs to be inserted somewhere in this folder, I assume.

PN15

MR SAUNDERS: Yes. One has written at the top in my scratchy handwritten, “SE2”. It is an additional part of the annexure - sorry.

PN16

THE DEPUTY PRESIDENT: I have got beautiful coloured tabs here that my associate put together in a very artistic fashion. I will put that in there.

PN17

MR SAUNDERS: The second document your Honour is now looking at is the document depicting the various departments or areas Orica has and, relevantly for this dispute, it centres on the ammonium nitrates area which is comprised of three nitric acid plants and two ammonium nitrates plants, often referred to in the evidence as ‘nitrates’.

PN18

THE DEPUTY PRESIDENT: Yes. I had a bit of a question about that but, anyway, I won’t distract everyone now. We will mark that exhibit S1.

EXHIBIT #S1 DOCUMENT DEPICTING VARIOUS AREAS OF ORICA

PN19

MR GOUNIS: Your Honour, just one minor matter for the applicant. Annexure RO-4 to the statement of Rodney Osland, that is a draft meeting minute and I propose to hand up a copy of what was the final meeting minute and I have provided a copy to my friend and we agree that the documents appear to be identical but just for clarity so that the Commission has the final version.

PN20

THE DEPUTY PRESIDENT: Thank you. Sorry, which document is this replacing in one sense?

PN21

MR GOUNIS: RO-4. It is Annexure RO-4 to the statement of Rodney Osland.

PN22

THE DEPUTY PRESIDENT: I will just find my way through this. RO-4. So it replaces it but you are saying that in substance it doesn’t change. The substance doesn’t change.

PN23

MR GOUNIS: That is right, your Honour.

PN24

THE DEPUTY PRESIDENT: All right, thank you. Do you want to make any opening yourself, Mr Gounis? I should have asked.

PN25

MR GOUNIS: No, your Honour.

PN26

THE DEPUTY PRESIDENT: Call the witness then; thank you.

PN27

MR GOUNIS: Your Honour, I propose to call witness Rodney Osland.

<RODNEY PAUL OSLAND, AFFIRMED [10.10 AM]

PN28

MR GOUNIS: Your Honour, I might just provide a copy of the statement and annexures to it.

PN29

THE DEPUTY PRESIDENT: So that is the four tabs. Yes, I have found Mr Osland’s statement. It had got sort of lost behind one of these tabs. All right, okay.

PN30

THE WITNESS: I was going to say I have got one over there but ‑ ‑ ‑

PN31

THE DEPUTY PRESIDENT: They are going to ask you questions about it.

EXAMINATION-IN-CHIEF BY MR GOUNIS [10.11 AM]

PN32

MR GOUNIS: Mr Osland, you have provided a statement in this matter?‑‑‑I did.

PN33

That is dated 30 March 2014?‑‑‑Yes, it is.

PN34

You agree that that statement is true and correct to the best of your knowledge and belief?‑‑‑I do.

*** RODNEY PAUL OSLAND XN MR GOUNIS

PN35

Your Honour, there is just a couple of matters in evidence which I propose to ‑ ‑ ‑

PN36

THE DEPUTY PRESIDENT: We might just mark that first. We might just mark it exhibit G1.

EXHIBIT #G1 STATEMENT OF MR R. OSLAND DATED 30/03/2014

PN37

MR GOUNIS: Mr Osland, can you please tell his Honour the training requirements to become a nitrates operator at Orica’s Kooragang Island site?‑‑‑Well, it’s a - it’s a combination of both technical learning and like school classroom type training as well as plant knowledge and training and learning the actual plant itself actually.

PN38

Approximately how long would that training take?‑‑‑It’s actually divided into different classifications. So we actually have six classifications as a nitrate operator. We have three - what you call three outside operator roles and we also have then a control room role then two CO roles which are coordinator roles. Basically your first grade one level would take anywhere between, say, three to six months depending on the person who is being trained. Your next outside role which would be a grade two again would be another six months or so. After that, a grade 3 would take probably another 12 months. And then you go into a control room operator which in itself could take anywhere from 12 months to 18 months depending on the person. And then after that it is sort of more of a - you go into sort of a team leadership role and a mentoring role for your lower colleagues and I think to go to a coordinator level, as a coordinator 2 level, you would have to spend another at least two to three years after you - as a control room operator you would have to add another two to three years on that. Then like CO3 would be another two to three years on top of your CO2 level. So to go from go to whoa to the highest level, I mean, if you were very quick you could probably start there and be made up as a CO3 within nine years. Ten years I think is probably - 10 years is probably the quickest I have ever heard of it.

PN39

Are there any employees employed at Orica’s Kooragang Island site outside of the nitrates department that could work in the lowest classification or lowest role that you have just described?‑‑‑At the moment there were two gentlemen that were transferred from our department to the ammonia plant site of things around about 12 months ago, 18 months ago, I think it was. I can’t remember exactly the timeframe. But they were actually made up to a grade one level, whereas they could probably come back. Even though our ammonium nitrate plant no.1, which is actually a grade one operational role, it has changed a little bit since they have left so they would have to go through a retraining process. But theoretically, I mean, they could come back and work in that but they would have to be guided for the first period of time just to update their knowledge and make sure they haven’t forgot anything.

*** RODNEY PAUL OSLAND XN MR GOUNIS

PN40

Apart from those two employees, there is no one else within?‑‑‑No, no one has been trained to actually fulfil those roles, no.

PN41

So they would have to both. Your understanding is that they would have to go through the training that you outlined?‑‑‑Exactly. They would have to go through the whole training process of the technical side of things, the school room learnings and the on-plant learnings.

PN42

Would that be the same for contractors?‑‑‑We don’t have contactors that fulfil those positions at all. They are only fulfilled by Orica employees.

PN43

That concludes the evidence-in-chief, your Honour.

PN44

THE DEPUTY PRESIDENT: Thank you. Mr Saunders.

CROSS-EXAMINATION BY MR SAUNDERS [10.16 AM]

PN45

MR SAUNDERS: Mr Osland, you have just given evidence about two employees who transferred from nitrates to the ammonium plant. When was that? Twelve to 18 months ago, was it?‑‑‑Yes, somewhere there. I can’t remember exactly but it was a fair while ago, yes.

PN46

As part of the current restructure that is taking place, there is at least one employee who it is proposed will also move from the nitrates area to the ammonia plant. That is right, isn’t it?‑‑‑That is what the company is proposing, yes.

PN47

Whoever it is who moves across in that way could also come back across to the nitrates area and work in that area given their past experience and training, couldn’t they?‑‑‑Yes, depending on the timeframe they were away and whether the plants had changed as technology changes and things happen and plants change. So, yes, there would be maybe just the refresher course or something. But, yes, there would be.

PN48

But if that person is currently working in nitrates went across to the ammonia plant in May and they were asked to come back within a month or two of that date to some work in nitrates, they would be able to do that without any difficulty, wouldn’t they?‑‑‑You would have to think so, yes.

PN49

The Orica plant at Kooragang Island produces products which are largely sold to mining companies in the Hunter Valley. That is right, isn’t it?‑‑‑That’s correct.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN50

The 2014 enterprise agreement was negotiated in the period from about August 2012 until about June 2014; is that right?‑‑‑Yes.

PN51

During that period of time, the mining industry in the Hunter Valley was going through a downturn after an earlier boom. That is right, isn’t it?‑‑‑Well, yes, that’s what the papers say.

PN52

You don’t have any reason to dispute that, do you?‑‑‑No, well, no, but the product we were making we were still making basically the same amount of product. So it did not change our daily workload.

PN53

During the negotiation for the 2014 agreement, you understood that the downturn in the mining industry might have an impact on Orica’s Kooragang Island business in the future, didn’t you?‑‑‑I suppose if we are involved in the mining industry, yes, but it didn’t actually dawn on us that we would - we always thought that we would still be making product to be sold to the mines.

PN54

During the negotiations for the 2014 agreement, you understood that Orica might need to make some workplace change in the future as a consequence of a downturn in the mining industry, didn’t you?‑‑‑No, they never told us anything like that, no.

PN55

They never said anything to you about the potential for change in the workplace during negotiations; is that what you say?‑‑‑Well, they brought up how the whole of Orica has to streamline, I suppose, and change the way we do things. But never in change as far as manning levels or anything like that if that is what you are trying to say; no. Like, they said we had to change roster but that was all they ever sort of said to us and that was going to help them save money.

PN56

You have a copy of your own statement in front of you; is that right?‑‑‑Yes, I do.

PN57

You don’t have a copy of Mr Eltham’s statement in front of you, do you?‑‑‑I don’t think so but I’ll have a look here.

PN58

We will just arrange for it to be provided to you. There are a number of things. First, I want to show you, and I will hand to you in a moment, a copy of Annexure SE1 to Mr Eltham’s statement. In fact, I will hand to you a bundle of a whole set of the annexures to Mr Eltham’s statement.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN59

THE DEPUTY PRESIDENT: We won’t bother about marking this at this stage because I guess we will mark it when it is introduced in evidence-in-chief.

PN60

MR SAUNDERS: Yes, yes, your Honour. Thank you. You see the first document there, Mr Osland, is 2012 EBA meeting minutes of 22 January 2013. Do you see that?‑‑‑Yes, I do.

PN61

You are one of the delegates present at that meeting. That is right, isn’t it?‑‑‑Yes.

PN62

If you see in the second-last paragraph on the page in the last sentence or, firstly, that second-last paragraph starts off by saying: “There was a discussion around the future outlook for the company and how that affects the individual employees.” Then in the final sentence it says: “Management explained the changing operating environment and the need for the site to change in order to remain efficient and competitive in the long term.” You accept that words to that effect were said in this meeting, don’t you?‑‑‑Yes, but as I say again, as I was just trying to say before, it was reiterated. It was around about our roster change. That is where they were saving their money so they could align our roster down at nitrates with the ammonia plant and that is where they were going to make their changes and savings. Apparently the figure of $20m savings was thrown out at us and that is how - and they were getting that through our roster change from the roster we were doing to go to the ammonia roster.

PN63

There is nothing in these minutes which limits the sentence I have just read to you about change to roster change only, is there?‑‑‑No, there was nothing. There is nothing there written there in those minutes but the intent was what it was - how it was given to us.

PN64

When you say the intent, you understanding is what you are talking about, isn’t it?‑‑‑Correct.

PN65

In fact, during the negotiation for the 2014 enterprise bargaining agreement there were lots of discussions where Orica representatives talked about the need for workplace change. That is right, isn’t it?‑‑‑Yes, but I think ‑ ‑ ‑

PN66

Is that right?‑‑‑To an extent, yes, yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN67

One thing that Mr Eltham said repeatedly during those negotiation meetings was that the company needed to remove some of the shackles from the old 2010 agreement. Do you recall him using that expression?‑‑‑Not really shackles, no. I remember they said they wanted to remove “mutual agreement” throughout the document. Their superiors had told they had to remove “mutual agreement” from the document.

PN68

He told you that they had to remove “mutual agreement” from the document because the business might in the future need to change. That is right, isn’t it?‑‑‑Yes, yes, to a degree, yes.

PN69

Do you recall during the bargaining meetings that Orica representatives also told you that it was their goal to ensure the Kooragang site’s sustainability and future competitiveness and how that was in the interests of all employees?‑‑‑Yes, yes.

PN70

Orica told you that during negotiations that one of their key objectives was continuous improvement especially with regard to safety, efficiency and productivity?‑‑‑Yes, and also from our side of the bargaining group as well, we were right behind that and we still are, especially the safety side of things.

PN71

The Orica representatives during bargaining also told you that their overarching principle for the agreement being negotiated was productivity improvements or the flexibility for the implementation of the productivity improvements; would you agree with that?‑‑‑Yes, yes.

PN72

From the outset of the negotiations for the 2014 agreement, there was a fundamental disagreement between the employee bargaining representatives and Orica about the issue of manning levels in the nitrates area, wasn’t there?‑‑‑No.

PN73

You deny that, do you?‑‑‑Yes, manning levels were never, ever questioned. They guaranteed us that there was nothing wrong with our manning levels. They never ever wanted to touch our manning levels. All they wanted to do was change our roster to line-out roster with ammonia plant.

PN74

Can you look at the annexures to your statement, please, and in particular can you look at RO-1D?‑‑‑And where would I find that, your Honour? Sorry.

PN75

I don’t know if yours are tabbed. It is referred to as RO-1D.

PN76

THE DEPUTY PRESIDENT: You need the nice coloured tabs.

PN77

MR SAUNDERS: Yes, sorry.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN78

THE DEPUTY PRESIDENT: Which one is it? D?

PN79

THE WITNESS: Would I have that in my thing, Alex?

PN80

THE DEPUTY PRESIDENT: Under my heading it is under “D”.

PN81

MR SAUNDERS: There is a big heading, “Common claims,” at the top of the document.

PN82

THE DEPUTY PRESIDENT: This is a summary of the claims from the enterprise agreement, as I understand.

PN83

MR SAUNDERS: Yes, your Honour, it is the log of claims. There is a big heading at the top of the page: “Common claims.”

PN84

THE DEPUTY PRESIDENT: Yes. This is the company’s document, I am assuming. Is it part of the negotiation?

PN85

MR SAUNDERS: This is the union’s document.

PN86

THE DEPUTY PRESIDENT: It is the union’s document.

PN87

MR SAUNDERS: Do you see the document there, RO-1D, headed “Common claims”?‑‑‑I have a document in front of me that says “Common claims,” yes.

PN88

They are the claims that were made by the employee bargaining representatives during the early part of negotiations, correct?‑‑‑Yes.

PN89

If you look at item 13, one of the claims made by the employee bargaining representatives was the right to consultation and mutual agreement for manning levels and new equipment. That is right, isn’t it?‑‑‑Yes.

PN90

Then if you look across to - sorry, just before I move on, you understood that in the 2010 agreement that was what applied. That is, there had to be mutual agreement in order to change the manning levels in nitrates?‑‑‑Yes.

PN91

Then if you look at item 77, please, in the same document?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN92

It has: “Minimum manning level increased to seven to align with NH3 plant manning.” So what the employee bargaining representatives were claiming here was that there should be an increase from six to seven as the minimum number of employees to work on any particular crew in the nitrates area; correct?‑‑‑That’s correct.

PN93

Can you next please look at the annexures to Mr Eltham’s statement, the other bundle you have there?‑‑‑Yes.

PN94

I need you to turn to SE3, please?‑‑‑Yes, right. Yes, yes, I have it.

PN95

If you turn to the second page of that, you will see a table in which you have the common claims in the left-hand side and the company response on the right?‑‑‑Yes.

PN96

The common claims are the ones we have just seen, the employee bargaining representative claims and the company responses set out. That is right, isn’t it?‑‑‑Yes.

PN97

If you look at item 13 on page 3 of 11, you will see there that the company’s response to the employee’s request to a right for consultation and mutual agreement for manning levels was to say it is a fundamental business decision and the company requires the flexibility to make these decisions?‑‑‑That’s correct.

PN98

So you understood from very early on in negotiations that Orica’s position was that it did not want mutual agreement for manning levels. It wanted the right to have flexibility to make those decisions about manning levels itself?‑‑‑Yes, I did, but can I bring that into context? Is that okay or not? I would just like to add to it because what happened, it was going through a growth period at the time. It was going through an upgrade of a project called Trident and theoretically our plants were going to become bigger - more. It was going to get a new acid plant. It was going to get a new boiler. It was going to get a lot of new things. So basically what we were asking there for, your Honour, was basically we wanted to be involved, rather than them just saying, “Well, here is another three plants to operate and we are not going to give you any more people to operate them.” Well, we wanted to be involved in the process to say, “Well, look, we need people to be able to do this, to look after this plant safely and to look after that plant safely and that is the context of that and that is back well before the whole downturn and everything went south.

PN99

Can you just look at page 9 of the same document, item 77?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN100

You will see there that item 77 is the employee claim for minimum manning level to increase to seven?‑‑‑Yes.

PN101

The company response is to say they believe that the current manning is sufficient. What you took from that was the company rejecting your proposal to increase minimum manning levels to seven in the nitrates area; correct?‑‑‑Yes, basically, yes, we took that as that. But then again, as I said, basically we were saying we wanted to go to the ammonia plant because at the time the ammonia plant was running the two control room operators and we were going through an up-rate and putting a new DCS in and we were having alarm floods and the alarms were crazy. The amount of alarms everybody had to acknowledge and process and deal with basically were getting out of hand. So we just basically wanted to go to two POC(?) operators so we could deal with the alarm flood and that safely.

PN102

The company rejected that proposal?‑‑‑They did.

PN103

Next can you look at the annexures to your statement, please, and in particular go to RO-2. Hopefully that is tabbed up. RO-2, behind tab 2?‑‑‑Behind tab 2, yes.

PN104

You will see from the first page of RO-2 that the email is dated 22 March 2013. Do you see that?‑‑‑24 March, did you say, sorry?

PN105

Up the top it is 24 March 2015?‑‑‑Yes, yes.

PN106

Ignore that. That is just for the purpose of these proceedings. But if you see then ‑ ‑ ‑?‑‑‑Yes, “Minutes No.14,” is that the document?

PN107

That is the document, but just above that on the first you will see the email from Shaun Eltham to a large number of people, the date 22 March 2013, 8.19 am?‑‑‑Date down the bottom, yes, yes. It is the 22nd of the 3rd, yes, at 8.19.

PN108

Then you will see behind the email a marked up and shaded version of a draft enterprise agreement. Do you see that?‑‑‑Yes.

PN109

What happened here is that the parties used the 2010 enterprise agreement as a starting point for negotiating the 2014 agreement. Is that right?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN110

What we see in this document, in the body of the document you will see on the right-hand side there are various comments and they are comments that were made by the employee bargaining representatives. That is right, isn’t it?‑‑‑Yes.

PN111

Then you will see some dark shading on the document and some light shading. The dark shading indicates parts of the draft enterprise agreement that the employee bargaining representatives were happy with; correct?‑‑‑No, they were basically what the company was happy that we left there.

PN112

The light bits, the light shaded bits, are the bits that the employee bargaining representatives were wanting changed; correct?‑‑‑Well, yes, yes. Yes, the light bits were the ones that we were - we were stating that ‑ ‑ ‑

PN113

If you go to page 23 of the document, please?‑‑‑Yes.

PN114

You will see down the bottom there is a heading: “21.4 Employment Levels.” Do you see that?‑‑‑Yes.

PN115

Then over the page at the top of the next page there are the words: “Unless otherwise mutually agreed between the parties, shift employment levels will remain as follows.” Do you see that?‑‑‑Yes.

PN116

Those words were in the 2010 agreement, weren’t they?‑‑‑Yes.

PN117

The employee bargaining representatives were happy for those words to be kept in the new agreement being negotiation. That is right, isn’t it?‑‑‑We wanted them to stay, yes, yes.

PN118

If you see in the comment on the right-hand edge of that page, comment B46, it says: “Employee representatives requested the term ‘minimum’ be included here.” Do you see that?‑‑‑Yes.

PN119

So what the employee bargaining representatives clause 21.5 to say was: “In the ammonia operating area there are six technicians per team on a five-panel roster to fulfil the following minimum shift operating levels.” Correct?‑‑‑Yes.

PN120

You wanted the same change made to 21.6?‑‑‑Yes.

PN121

Next can you go to RO-3, please? You will see RO-3 is dated ‑ ‑ ‑

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN122

THE DEPUTY PRESIDENT: Just make it clear that the witness has the exact same document. It has got “Alexander Gounis.” It is an email from you, Mr Osland, to a range of people according to my version of it?‑‑‑Yes.

PN123

MR SAUNDERS: You will see about a third of the way down the first page there is the original email from Shaun Eltham to a range of people dated 14 June 2013. Do you see that?‑‑‑Yes.

PN124

So it is some months after the earlier email of March 2013 and there is attached to this email, RO-3, a draft of the enterprise agreement. Do you see that?‑‑‑Yes.

PN125

You understood that this was the company’s response to the earlier draft that had been put forward by the employee bargaining representatives?‑‑‑Yes, well, this was, yes, another draft that was put out by the company, yes.

PN126

If you look at page 38 of that document, please?‑‑‑Yes.

PN127

Or at the foot of page 37 you will see the heading that used to be 21.4, now 32.4: “Employment levels”?‑‑‑Yes.

PN128

Then over to page 38 the words towards the top of the page: “Unless otherwise mutually agreed between the parties, shift employment levels will remain as follows.” Those words have been struck through; correct?‑‑‑Yes.

PN129

So you understood that the company wanted those words deleted from the new agreement being negotiated?‑‑‑Yes, as I - as I said earlier, basically they said “mutually agreed” was not allowed to be anywhere in the document.

PN130

In the old 21.5, the new 32.4.1, you will see two things. The first thing you will see is the new word “currently” being inserted by the company?‑‑‑Yes.

PN131

Secondly, you will see both in that clause and the one that followed it, 32.4.2, there is no reference to the word “minimum” that the employee bargaining representatives wanted in there. That is right, isn’t it?‑‑‑Yes, that’s correct.

PN132

Next can you go to R0-5, please. The top of the document is headed “Alexander Gounis.” It is from you, sent on 24 March 2015, 7.15 am. Do you see that?‑‑‑Yes, yes, yes, draft dated 19/12/2013, yes, yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN133

Again, this is another draft put forward by the company in December of 2013 at this time. Do you agree?‑‑‑Yes.

PN134

If you turn over to page 28, at the top of the page, 33.4, “Employment Levels”?‑‑‑Yes.

PN135

In that version of the agreement being put forward by the company, there is no reference to the “unless otherwise mutually agreed” provision. Do you agree?‑‑‑No, as I stated, there was never going to be any.

PN136

In this draft the company has retained the use of the word or the insertion of the word “currently” in 33.4.1 and point two?‑‑‑Yes.

PN137

There is no reference to the employee bargaining representatives’ proposal to insert the word ‘minimum.’ Do you agree with that?‑‑‑I agree.

PN138

So the company’s position on this clause had not changed from June until December 2013?‑‑‑No, it hadn’t changed, but neither had ours.

PN139

Next can you look at R0-6, please. At the top of the page you will see it is an email from John Boyd to various people; 24 March 2015, 2.30 pm?‑‑‑Yes.

PN140

This is a document in which the employee bargaining representatives put forward their comments on the company’s draft. Do you agree?‑‑‑Yes, yes.

PN141

If you can turn to pages 22 and 23, you will see there are some comments in the right-hand side of the page concerning the insertion proposed by the company of the word “currently.” Do you see that?‑‑‑Yes.

PN142

We will come back to that shortly, just to round out this course of negotiations?‑‑‑But did you see what it said before that too?

PN143

Just answer my questions, please, Mr Osland?‑‑‑Sorry, yes, yes, sorry, sorry, sorry.

PN144

If you look at RO-8, please?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN145

The first email is from you dated 24 March 2014, 8.05 am?‑‑‑Yes.

PN146

The email below is from Shaun Eltham to a range of people, 27 March 2014?‑‑‑Yes.

PN147

He attaches the final draft of the enterprise bargaining agreement?‑‑‑Mm.

PN148

This is the final draft?‑‑‑That went out to vote, I think, this one, yes.

PN149

That is right and if you look at clause 33.4 on page 22, you will notice firstly there is no reference again to the “unless mutually agreed provisions”?‑‑‑Yes, yes.

PN150

There is no reference to the word “currently”?‑‑‑That’s correct.

PN151

There is no reference to the word “minimum”?‑‑‑That’s correct.

PN152

This is the version of the agreement that was ultimately made in terms of how it deals with this clause, “Employment levels”?‑‑‑Yes.

PN153

There were about 50 bargaining meetings that took place before the final agreement was approved. That is right, isn’t it?‑‑‑Yes, there was a hell of a lot, yes.

PN154

You attended them all, did you?‑‑‑I wouldn’t say I attended every one of them, but I wouldn’t have missed many. I might have missed one or two.

PN155

There were lots of discussions at those meetings about a whole range of topics, weren’t there?‑‑‑There was.

PN156

Did you take any notes at any of those meetings?‑‑‑Yes, we did. Yes, we were - were taking ‑ ‑ ‑

PN157

Did you take them or someone else?‑‑‑No, no, somebody else. I took some of my own just - I used to jot down on documents and that where we used to think that we wanted to actually bring up later in time to talk about and discuss with the company further over further issues.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN158

Have you kept those notes?‑‑‑I would have them somewhere at home. I don’t tend to throw them away but, yes, I would have to have a look, yes.

PN159

You know that other people, the other employee bargaining representatives, took notes from time to time as well. Is that right?‑‑‑Yes, yes.

PN160

I am just taking you to one of the draft agreements where there is comments on the right-hand box by the employee bargaining representatives about whether Orica intended to make any changes to the manning level in nitrates?‑‑‑Yes.

PN161

What I want to suggest to you is that during the bargaining meetings, what Orica said about that topic was that it had no intention at that time of changing manning levels in nitrates but it didn’t know what the future would bring in the current economic environment. Do you agree that the Orica bargaining representatives said words to that effect during the negotiation meetings?‑‑‑No.

PN162

You deny it, do you?‑‑‑Yes. No, they basically said to us that they had no intentions of attacking our manning levels at all throughout the whole life of this agreement. Like, there was no - our manning levels - every time our manning levels come up, there was no way that they were thinking of changing our manning levels.

PN163

I want to suggest to you that at no time during the bargaining meetings did anyone from Orica say words to the effect of: “The manning levels would not change in the nitrates department.” What do you say to that?‑‑‑Disagree.

PN164

Do you have a clear recollection of someone saying that?‑‑‑Yes, it has come up several different times and it was brought up by Paul Edwards. It was brought up by Shaun. It was brought up by Scott Reid in different meetings at different times and they guaranteed us. They gave us assurances and that is why we were sort of looking at “currently” and I think that is why eventually they took “currently” out because they did not want to take - affect our manning levels. They gave us assurances to that. The only thing they wanted to change and where they were going to make all their money and make all their adjustments and streamline their processes and whatever, was through us changing roster.

PN165

So you say you have got a good recollection, do you, that Orica bargaining representatives said words to the effect that the manning levels would not change in the nitrates department?‑‑‑Yes, yes, it’s - I never, ever, walked out of a meeting thinking they were going to change our manning levels; not once.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN166

I want to suggest to you, you walked out of the meeting with that understanding because you were told by the Orica bargaining representatives that they had no intention at that time of changing manning levels?‑‑‑No, I tend to disagree. They never said that.

PN167

Could you look at paragraph 20 of your statement, please?‑‑‑Yes.

PN168

You say in paragraph 20: “During the discussions about employment levels, the respondent representatives stated words to the effect that the manning levels will not change in the nitrates department. I have a vague recollection that Shaun Eltham, Scott Reid, Greg Holmes and Paul Edwards made statements to this effect during bargaining meetings.” How is it, Mr Osland, that you have a vague recollection of those comments when you made your statement and now you tell His Honour that you have a good recollection of those dates?‑‑‑Well, I am not trying to change my statement at all or anything like that. But, as I say, I could not remember the exact dates and, as I just said then, I never walked out of one meeting thinking they were going to attack our manning levels. So if I would have thought they were going to attack our manning levels, I would have remembered that, yes, they did bring it up that they were going to attack our manning levels so ‑ ‑ ‑

PN169

Which is it, Mr Osland? You have a vague recollection of this being said or a good recollection?‑‑‑Well, mate, I have a pretty good recollection. I put down “vague” but, you know ‑ ‑ ‑

PN170

You put down “vague” and you knew it was wrong, did you?‑‑‑No, I didn’t, no, no, no.

PN171

Why did you use the word “vague” in your statement?‑‑‑Because I wasn’t - I couldn’t guarantee when Alex was asking me the dates of the meetings. So it was no good me saying it was in meeting 33 if all of a sudden it come up that it was in meeting 25. And I didn’t want to say it was in meeting 27 if it was meeting 42 because I didn’t want to basically tell youse the wrong thing. So I just said, “Well, it’s roughly in and around there,” sort of thing, you know, I just ‑ ‑ ‑

PN172

You don’t say in your statement in paragraph 20 or anywhere else when these statements were made, do you?‑‑‑No, well, that’s why I said “vague” because I wasn’t exactly sure of the meetings. That was my - sorry, I am not a lawyer and a solicitor and I didn’t pick my words correctly.

PN173

You know what the word “vague” means, don’t you?‑‑‑Yes, yes, I have a rough idea of exactly when it sort of happened but not exactly the date.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN174

See, in paragraph 20 you don’t deal at all with the timing of these statements, do you?‑‑‑No, well, that’s - I don’t.

PN175

So your reference to the word “vague” can’t have been a reference to anything about timing, could it?‑‑‑Well, it was to me when I was giving the statement. I’m sorry. I’m only a nitrates operator.

PN176

So you say that each of Shaun Eltham, Scott Reid, Greg Holmes and Paul Edwards said words to that effect?‑‑‑In different meetings, yes, like, because it was brought up that, you know: “So what? So basically you want to attack our manning levels?” And they would all talk and they would look at each other and they would say - look - one person might have been talking and he will refer to another person and they would say: “No, we have got no intention of doing that.” It wasn’t just coming from one person. It was them talking around the room and then talking back to us.

PN177

So what they have said to you is they had no intention of changing manning levels. That is what you have just told us, haven’t you?‑‑‑Yes, I suppose that is what I just told you if that is what I just said, yes.

PN178

You understand the difference between saying, “We have got no intention of changing manning levels on the one hand,” and saying on the other hand, “Manning levels will never be changed or will not be changed during the term of the agreement”?‑‑‑I understand what you are saying there now, but the intent of how it was delivered to me at the time and delivered to us as a bargaining group was: “We are not attacking your manning levels. All we want youse to do for us is to change rosters.”

PN179

Your understanding of that intent is based on the fact that the Orica bargaining representatives said to you that they had no intention of changing manning levels?‑‑‑Well, yes.

PN180

Did you take a note of any of these statements by any of these Orica representatives about changing manning levels?‑‑‑I don’t know if we ever wrote it down as such. But, I mean, as I say, I never walked out of a meeting thinking I had to go back to the people who I represented and tell them that basically they want us to change our manning levels. So if that would have - if that would have come up, that would have been a major issue and I would have took that back to our guys. So obviously it never ever came up as a concern that this was going to happen, otherwise it would have been something major that I would have had to take back to the shop floor, as they say.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN181

Do you say that Shaun, Scott, Greg and Paul all said words to this effect or just one of them or somewhere between one and four?‑‑‑Well, over the space of different meetings, yes, it had come from a few of them, yes.

PN182

From a few of them or all of them? What is your evidence?‑‑‑Well, I think from all of them at different times. Not maybe on the same day but at different times we were reassured by all of them.

PN183

Can you give us any indication of the timeframe in which the first time this was said? Was it early on in negotiations? Later on? When?‑‑‑I think early on it would have been said and then basically after the failed - after the first failed document that went out with “currently” in it that got voted down and it would have been said after that as well heading towards the final document to come out and then that is when they took currently out of it.

PN184

You say it would have been said because you don’t have an actual recollection of it being said. That is right, isn’t it?‑‑‑I haven’t got an actual date or an actual meeting number, no.

PN185

Who do you say said it first; Shaun, Scott, Greg or Paul?‑‑‑I honestly can’t remember.

PN186

Who said it second?‑‑‑I honestly can’t remember.

PN187

It is fair to say that your memory of this discussion about this topic is not very good?‑‑‑It is fair to say that I was quite happy during the negotiations never to take it back to my people that I was representing that our manning levels were being attacked or they wanted to change our manning levels in the life of this agreement. That is what is fair to say.

PN188

What the Orica representatives did say during the bargaining meetings was that they would need to consult with employees in relation to any proposal to change manning levels in the future. That is right, isn’t it?‑‑‑Again, I can never remember them saying about changing manning levels in the future.

PN189

Do you remember them talking about consultation and about change, don’t you?‑‑‑I bringing up about consultation because we had to put the thing in, yes, yes, the clause in, yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN190

You understood that the range of topics that could be the subject of consultation under the clause in the enterprise agreement was very broad?‑‑‑Yes.

PN191

You understood that one of the topics that could be the subject of consultation for change was changed to manning levels, didn’t you?‑‑‑No, no, I never - never - that never ever entered my mind through the whole time of negotiations. The roster - the roster change was the major issue at hand.

PN192

In relation to the roster change, there was a change agreed between the parties to the rosters; correct?‑‑‑Yes, we ended up changing our roster, yes.

PN193

The company also told you that they had no intention at that time of changing the rosters again?‑‑‑Yes, yes, yes.

PN194

But they also told you that in the future, things might change depending on the circumstances?‑‑‑As far as the roster goes?

PN195

Yes?‑‑‑Not really, no. They basically said: “This is the roster and that’s the roster and that’s the roster.” Like, basically as long as we both work the same roster, as long as everyone on the plant on the shift work worked the same roster they were happy and they were going forward.

PN196

Did you understand from the negotiations that there would be no change by Orica to the rosters during the term of the agreement?‑‑‑Yes.

PN197

You thought that was locked in, did you?‑‑‑Yes.

PN198

Industrial action, protected industrial action, was taken by Orica’s employees during the negotiations. That is right, isn’t it?‑‑‑Yes.

PN199

That was for five days in about October 2013?‑‑‑Yes, somewhere there, yes.

PN200

During that time, the nitrates part of the plant stopped production?‑‑‑Yes.

PN201

When the employees returned to work after their five-day period of protected industrial action the plant had to be restarted?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN202

Do you recall on the first day back after the protected industrial action, a number of employees who were supposed to be back were actually away on sick leave?‑‑‑Yes, okay, maybe. I can’t argue that point. I don’t even know if I was there on the first day back.

PN203

Do you recall that as a consequence of employee’s being absent from work on that first day back after the protected industrial action there was a shortage of employees in the nitrates area of the plant to restart the plant?‑‑‑If you say so.

PN204

Do you recall that or not?‑‑‑No, no, I don’t recall that day. If you point out the day I could probably try to remember but, as I say, I can’t remember.

PN205

Do you recall there being a bargaining meeting on the first day back at work after industrial action?‑‑‑No, I can’t remember that.

PN206

Do you recall on the first couple of days back at work after the industrial action there being a discussion about how to deal with the shortage of employees in the nitrates area of the plant to get it up and running again?‑‑‑Not to get the plants up and running. But, I mean, we have always had discussions on manning levels as far as what plant we will shut down if we haven’t got enough - if we haven’t got enough people there, so which plants we actually take off line.

PN207

Could you please have a look at R0-4 to your statement?‑‑‑Yes, yes.

PN208

See the first page of RO-4 is an email from Gerard Mason sent on 24 March 2015 at 5.44 pm?‑‑‑Yes, yes. Yes, yes, yes, got it, yes. Hang on. No, it’s a different one.

PN209

Your Honour, I think the witness has the previous version.

PN210

THE DEPUTY PRESIDENT: Yes, this is the document that was tendered by Mr Gounis as being an up to date version. But in substance I think they are the same, aren’t they?

PN211

MR SAUNDERS: The document attached to the email is in identical term, whether you look at the document that Mr Osland has or the one your Honour has.

PN212

THE DEPUTY PRESIDENT: Yes. So it should have 24 March as the date on the top of it?‑‑‑Yes, 5.54 pm.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN213

MR SAUNDERS: If you go across to the document attached to this email which is what I want to ask you about you will see it is headed: “Kooragang Island site, 2012 EBA summary of meeting”?‑‑‑Yes.

PN214

You see it is 28 October 2013 and you are recorded as being present at the meeting. Do you recall that?‑‑‑Okay, yes.

PN215

Do you recall this is the first day back after the industrial action?‑‑‑No, I didn’t. I didn’t realise.

PN216

Just take a moment to have a look at the summary, please, and just refresh your memory of that?‑‑‑Yes.

PN217

Having refreshed your memory from the document, do you now remember that on your first day back at work, 28 October 2013, after the industrial action, there was a bargaining meeting?‑‑‑Well, I was there, obviously.

PN218

Having refreshed your memory from the document, do you recall there was discussion at this meeting about an issue concerning people being away from work on sick leave and that causing a shortage of employees in the nitrates area?‑‑‑Well, it doesn’t say that there was - there was shortages in the nitrates area. It just says “If” and basically just says that we were covered with overtime to get the numbers to six and, if not, if it goes below that, well, we will do a risk assessment and see what happens. But it doesn’t sort of say, because I can’t remember the actual day, whether we were short or we weren’t short.

PN219

If you look at the first paragraph in the summary, it says: “The meeting commenced with the parties in discussion about possible opportunities to progress the transition to the ammonia roster”?‑‑‑That is correct, yes.

PN220

That was a topic you were discussing in the negotiations for a new enterprise agreement; correct?‑‑‑Yes.

PN221

The next item or the next paragraph says: “The parties were diverted by a need to further explain the company’s position on sick leave manning and shut downs associated with the current start-up of nitrates operations”?‑‑‑Yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN222

What has been recorded here is the fact that the parties were diverted from bargaining by this issue concerning the current start-up of the nitrates operations. Do you agree with that?‑‑‑Not really, no.

PN223

That is because you have no recollection of it; is that right?‑‑‑Well, the start-ups would have been happening down in the plant. The meeting would have been held up in the office so the start-ups would have just continued, I would imagine. I don’t even know if I was actually rostered on shift that day. I might have just come in on one of my days off to attend the meeting. I would have to go back and have a look at the shift rosters to see if actually I was part of it.

PN224

You attended the meeting, didn’t you?‑‑‑Yes, yes.

PN225

You recall attending the meeting?‑‑‑Well, I was there, yes, yes. It’s one of ‑ ‑ ‑

PN226

You say you were there because your name is there?‑‑‑Yes, I remember several meetings, you know what I mean? I don’t remember that exact meeting, like, to the minute, but, yes.

PN227

Do you have any actual recollection of this meeting apart from the fact that your name is shown in this document?‑‑‑Not a lot of it. No, not a lot of this one but I remember most of them.

PN228

Isn’t it the case that the parties starting talking about bargaining in the sense of transition to the ammonia roster, but then the parties were diverted from bargaining because there was a need to deal with a sick leave issue relating to the manning for the current start-up of nitrates?‑‑‑Yes, but, I mean, that could have been anything from just saying, “Well, okay, look, we have got two people sick, we need to get blokes in,” or, “We need to start no.1 acid plant, we need an extra person for that so we need to get three people in to work.” I mean, that could be anything.

PN229

The point about that discussion or the kind of discussion you just told us about is that that deals with the current issue at the plant at that time rather than bargaining for a new agreement; doesn’t it?‑‑‑Yes, but we were talking about sick leave throughout this whole bargaining issue. Throughout the whole thing, I mean, obviously we have moved on because we are talking about manning levels, but sick leave took up the bargaining for, I reckon, nearly 12 months because we went from having what the employees thought was unlimited sick leave which was actually leave to the discretion of the company basically to basically have a maximum of 10 sick days per year. So sick leave was a very hot topic all the way through the whole EBA discussions.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN230

If you look at the heading “Manning” towards the bottom of the first page of the document, it says: “It is agreed that the current manning provision of six employees as in the agreement will continue to apply”?‑‑‑That’s correct.

PN231

Your recollection of the meeting is that that bullet point related to manning which was taking place at the time this meeting was occurring, that is, 28 October 2013; correct?‑‑‑Yes.

PN232

That that issue was being discussed because there was a shortage of people at work on the first day back after industrial action?‑‑‑Well, we just have to have six people there to start all the plants. So maybe basically what might have happened, we might have only had five employees and couldn’t cover the sixth position so, therefore, we would have had to leave one of the plants down. So therefore it would have had to come into consultation with, well, how do we go about the start-up? Do we start up one, two, three, four, and leave five down until we get six employees? Or do we start up one, two, three, six, and leave five down? So it just depends on how you start the plants up depending on your manning levels.

PN233

What I am suggesting to you is that is the kind of discussion you had about how to deal with the manning of these plants at that time rather than what is recorded under the heading “Manning” being some recording of a discussion about negotiations for a new agreement. Do you see the distinction?‑‑‑I sort of understand what you are saying, yes. But without actually remember exactly what was happening and which plants were being started up at the time on the plant, it is hard to give a total correct answer, I suppose, or a more definite answer to what you are looking for.

PN234

So you just can’t say one way or the other whether what is recorded under the heading “Manning” on the first page of this document relates to an issue being dealt with at the time because of a shortage of staff as compared with negotiations for a new enterprise agreement. Is that right?‑‑‑Well, yes, I mean, I can see what you are saying and it is possible. But, as I say, I can’t remember the actual day and I can’t remember what plants were starting up in what particular order.

PN235

If you go over the page, please, there is a heading towards the top, “General Discussion,” and it says: “Following clarity of the above matters, the parties recommenced discussion on the transition to roster.” Do you see those words?‑‑‑“Following clarity of the above matters, the parties recommenced discussion,” yes, yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN236

I want to suggest to you that what you see under the heading “General Discussion” there recorded, relates to bargaining for the new enterprise agreement. Is that your recollection?‑‑‑Yes, yes, yes, I can see what you are saying, yes.

PN237

If the pleases the Commission, that is the cross-examination.

PN238

THE DEPUTY PRESIDENT: Thank you. I had a couple of questions for the witness, Mr Gounis, which might be appropriate if I ask them before you examine in reply. You indicated that there was - I think it came from cross-examination that there was protected industrial action in October 2013. That is right?‑‑‑Yes.

PN239

I think you also gave evidence that at one stage a draft of the agreement was voted down by employees?‑‑‑Yes.

PN240

When did that happen?‑‑‑It was around about the Christmas time, I think. I think it was December.

PN241

2013?‑‑‑2013.

PN242

So that is after the protected action took place?‑‑‑Yes.

PN243

I am just asking you this as a delegate. In your view what were the major issues that your members were particularly focused on in taking the industrial action and voting the draft of the agreement down? What were the crucial issues in dispute?‑‑‑Well, sick leave was still an issue, a big issue, at the time because it was transitioning from one. The main issue was probably roster changes because basically at the time down our way the guys didn’t want to change roster. The actual word “currently” was in there so that was basically no good as far as the guys were - they were unsure what “currently” meant even though we had been reassured that they had no intention to change our manning levels. They were unsure what that was there for. After we agreed to sort of get rid of “mutual agreement” they gave us the reassurance that it wasn’t put there to attack our manning levels. Pay issues were still a thing at the time and basically a lot of - a lot of the documents still hadn’t been tidied up. Around about our credit leave, we have, instead of getting paid extra on a public holiday, your Honour, we get paid - we get given time in lieu and we just had something around flexibility around that that we already had from the 2010 agreement which they wanted to change and take out which eventually it went back the other way and the company was good enough to put it back to the way it was, sort of thing and we - yes, so there was just a hell of a lot of things in the document that we thought the company were just trying to push it through and it hadn’t been sorted out and discussed and worked out to the nth degree.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN244

So I just want to ask you a couple of questions about the operation of the agreement and I am not asking you this as a lawyer but the agreement has got some clauses towards the back one of which we are talking about, starting with clause 33 - and 33, 34, 35, 36 - which appear to me to be specific conditions of employment in various forms relating to particular parts of the plant; is that right?‑‑‑Exactly, your Honour, yes.

PN245

The agreement I don’t think really describes the way in which they relate to other parts of the agreement. Do you agree with that? I mean, in one sense they just sit there?‑‑‑Sometimes, yes, and this was - yes, well, this was part of - and the company will probably tell you as well - one of the big things throughout the whole document was to try to tidy it up and to make it less grey and to make it more compatible. But the company wanted an overall common section that dealt with a hundred per cent of, sort of, the workforce that this covers and then they wanted the individual side of things, i.e., to each - things that were special to each department as such that theoretically doesn’t impose on other departments, your Honour. So, yes, there probably are grey areas still.

PN246

That is why we are here maybe. What is your view about those clauses - and the one we are particularly talking about is clause 33.4.2 - how does that relate to some of the other clauses in the agreement, do you think, in practice?‑‑‑Basically, well, again, see, it is a standoff alone clause and it basically just talks about the ammonia and the ammonia and the nitrates department. So it is sort of not read in conjunction with the common side of things. As I said, the common side of things, they agreed - they sort of come across everybody but then the individual sections are for those particular departments that - that it - things. So for me to read that, I read that as a wholly and solely issue about the ammonia operations and the AN operations, if that is what you are asking.

PN247

Yes, well, put another way, you see that those provisions override some other provisions in the agreement, for example?‑‑‑Yes.

PN248

Just one final question just about the negotiations. It seems to be uncontested that the company proposed removing the veto really that employees had to change the manning levels; is that right?‑‑‑To have any common say in it, is that what - is that what you are asking, sorry?

PN249

The previous agreement seemed to say that these things couldn’t be changed without the agreement of employees?‑‑‑Through mutual agreement, yes.

*** RODNEY PAUL OSLAND XXN MR SAUNDERS

PN250

So that was proposed to be removed, is that right?‑‑‑Yes, and that had to - right from very early in the piece, your Honour, it was stated that the company said that it had to be removed from the whole document, everywhere that “mutual agreement” was removed and it was removed from common areas and that first and then slowly, as the negotiations went along, it eventually got removed from everywhere.

PN251

So what was your understanding of the significance of that and what did that mean?‑‑‑I didn’t - the significance probably didn’t hit me as much as what it is hitting me today, to be totally honest, because I was always under the impression that it wasn’t removed from the fact that they wanted to change the manning levels. It was just removed because the new people in charge of the company now basically said that they didn’t want “mutually agreed” in the document and that is the way it was sort of put to us in the start.

PN252

Thank you. Mr Gounis.

RE-EXAMINATION BY MR GOUNIS [11.12 AM]

PN253

MR GOUNIS: Just a couple of questions, your Honour, and just following on from that point, Mr Osland, with the mutual agreement clause as it existed in the 2010 agreement, employees were able to seek a change; is that right?‑‑‑Yes, yes, and basically around the roster and that, that’s why the mutual agreement was there. So basically if we wanted to change our roster, we could get a vote of 60 per cent of there. Take it to the company if the company was happy and the company could see that it wasn’t going to affect production or anything like that, that they were quite happy then to allow us to change our rosters. That is how basically you had two different departments doing two different rosters.

PN254

If you could just turn to RO-1D which is the employee claims. That is towards the end of tab 1?‑‑‑Sorry, yes. Is that after the draft?

PN255

Yes, it would be in the last few pages of tab 1?‑‑‑Yes.

PN256

So it is titled, “The following log of claims,” and if you just continue?‑‑‑Yes, got it.

PN257

That was the claims that existed at that point in time for the employees. If you turn to the front of tab 1, the email is dated 24 September 2012. So that is about a third of the way down the first page behind tab 1?‑‑‑Yes.

PN258

So that document is divided between common claims and then specific claims for certain departments, isn’t it?‑‑‑Yes.

*** RODNEY PAUL OSLAND RXN MR GOUNIS

PN259

If you turn to your statement in paragraph 13 and 14, that refers to RO-2 and RO-3 respectively?‑‑‑Yes, yes.

PN260

You can’t be sure, can you, that the drafts provided were the consecutive drafts? There is a chance that there may have been drafts in the meantime, isn’t there?‑‑‑There might have been one in between but hopefully we got them all but there might be.

PN261

You were asked about minutes and taking notes for bargaining meetings. Do you recall that question?‑‑‑Yes.

PN262

Were any formal minutes taken during bargain agreement meetings?‑‑‑To start with, yes, we used to take proper minutes which were both agreed to by both parties before they were sent out to the EBA group. But after, I think, when Paul Edwards come on board which would have been early 2014 or late 2013. Actually I think it was early 2014 they stopped taking minutes altogether. The company said they didn’t want to take minutes. They didn’t want minutes recorded.

PN263

Did you or any other bargaining representatives say in response to that?‑‑‑Yes, we said we wanted minutes taken at all times but the company said that they wouldn’t be done, that what they would do is they would formalise an overall letter of not exactly what was said in the meeting but the overall outcomes and the overall intentions, I suppose, of the meeting maybe, if that is the best way I can describe what they said to us. But it wasn’t actually in minute for minute to document what people were saying across the table.

PN264

That is all, your Honour.

PN265

THE DEPUTY PRESIDENT: Thank you. Thank you, you are excused. Thank you.

<THE WITNESS WITHDREW [11.18 AM]

PN266

THE DEPUTY PRESIDENT: Mr Saunders, you have got two witnesses. Am I right in that?

PN267

MR SAUNDERS: Yes, your Honour, two witnesses.

PN268

THE DEPUTY PRESIDENT: I have got that right. Do you want to proceed with them now or would you like a short break? I am easy.

PN269

MR SAUNDERS: I am certainly content to proceed with the first one.

PN270

THE DEPUTY PRESIDENT: Yes.

PN271

MR SAUNDERS: The second one is on his way down. It just depends on how long we will be with the first.

PN272

THE DEPUTY PRESIDENT: I see. The first witness will be the longer, you would expect.

PN273

MR SAUNDERS: Indeed.

PN274

THE DEPUTY PRESIDENT: Yes. We might just take a five-minute break before you start off and come back at 25 past. Thank you.

SHORT ADJOURNMENT [11.19 AM]

RESUMED [11.29 AM]

<SHAUN JUSTIN ELTHAM, SWORN [11.29 AM]

EXAMINATION-IN-CHIEF BY MR SAUNDERS [11.29 AM]

PN275

MR SAUNDERS: You say: “I deny that I ever stated words to the effect that the manning will not change in the nitrates department.” Did you ever hear any other Orica representative say words to that effect?‑‑‑No.

PN276

Did you attend all the bargaining meetings?‑‑‑Yes, I did.

PN277

Next, if you look at paragraph 51, you refer there to RO-04 to the Osland statement and you say it is a record that the bargaining unit had discussed a specific issue around operational start-ups which was separate to the negotiation process. Do you see that?‑‑‑Yes.

PN278

Can I ask you to have a look at RO-04? I will get it provided to you. You see RO-04. Firstly, it is an email and then attached to it there is a summary of meeting. Do you see that?‑‑‑Yes, I do.

PN279

Did you prepare this summary?‑‑‑Yes, I did.

*** SHAUN JUSTIN ELTHAM XN MR SAUNDERS

PN280

See the date of it is 28 October 2013. Can you tell His Honour whether that was the first day back after the employees had taken protected industrial action?‑‑‑That is correct. I understood the employees returned from five-day protected action on that day at approximately 10 am for the nitrates employees.

PN281

Does the whole of this document, the whole of the content of the summary of meeting that you prepared, related to discussions about bargaining or does part of it relate to something else?‑‑‑Part of it relates to something else; an operational issue that we had at the time.

PN282

Looking at the first paragraph, “The meeting commenced with the parties in discussion about possible opportunities to progress their transition to the ammonia roster,” did that relate to bargaining or something else?‑‑‑That related to bargaining.

PN283

What about the next paragraph that talks about the parties being diverted?‑‑‑Yes, that, from that section onwards, did not relate to the bargaining.

PN284

So from that section, from the words “the parties weren’t adverted,” is it, what, down to the bottom of the page to not relate to bargaining, you say?‑‑‑All the way through onto the next page, through to “DCS manning.”

PN285

The bullet point under “DCS manning,” did that relate to bargaining?‑‑‑No.

PN286

Then you have a heading “General Discussion.” Did the information under the heading “General Discussion” relate to bargaining or something else?‑‑‑It related to bargaining.

PN287

So the parts you have identified in this document that don’t relate to bargaining starting on the first page, what do they relate to?‑‑‑So they related to an operational issue where we, from my understanding, did not have sufficient labour to recommence the nitrates operations directly following the protected industrial action on the 28th.

PN288

THE DEPUTY PRESIDENT: We should mark this statement, exhibit S2, and just so I am certain he has got 11 annexures from what I can see. Is that right?

PN289

MR SAUNDERS: Yes, your Honour.

*** SHAUN JUSTIN ELTHAM XN MR SAUNDERS

PN290

THE DEPUTY PRESIDENT: Yes.

PN291

MR SAUNDERS: I should say, Mr Eltham, you say the content of your statement is true and correct?‑‑‑Yes, that is correct.

PN292

So on the first page of this summary I have been asking you about under the heading “Manning,” the first bullet point says: “It is agreed that the current manning provision of six employees as in the agreement will continue to apply.” Was that something you wrote as an indication of what was going to apply in the future under a new enterprise bargaining agreement or did it relate to just what was happening at that time in starting up the plant?‑‑‑It related specifically to the operational issue we were having at the time.

PN293

And not to bargaining?‑‑‑And not to bargaining.

PN294

That also applies, does it, to every bullet point we see under the heading “Manning”?‑‑‑That is correct.

PN295

You will see that this document is entitled: “Summary of meeting.” Did at some point the company changed from preparing detailed minutes of bargaining meetings to start preparing a summary of the meeting?‑‑‑That is correct, yes.

PN296

Can you recall roughly when that took place?‑‑‑No, I can’t recall exactly when that took place.

PN297

Can you tell his Honour why there was a change in approach by the company?‑‑‑I think our viewpoint was the minutes of the original maybe six months of the meetings were quite in depth. They had a range of personal issues or personal attacks involved. They were very detailed backwards and forwards about specific elements of the meeting. They were not very clear about what we were discussing at the time. So we changed to a summary of the meeting to, I guess, enable the broader community of VA employees to understand the context of the meetings that we were discussing rather than be specific.

PN298

THE DEPUTY PRESIDENT: It seems a good idea anyway, I must say. I mean, the idea of taking detailed meeting notes of minutes of each of the meetings would be pretty difficult, I think, in my experience.

PN299

MR SAUNDERS: I think it is a common experience, your Honour. That is examination-in-chief.

*** SHAUN JUSTIN ELTHAM XN MR SAUNDERS

PN300

THE DEPUTY PRESIDENT: You have just got to work out what you have agreed to. That is the only problem. Yes, thank you. Okay, Mr Gounis.

CROSS-EXAMINATION BY MR GOUNIS [11.35 AM]

PN301

MR GOUNIS: Mr Eltham, at paragraph 15 you state that Orica informed the employees that they needed to be able to change in order to remain efficient and competitive in the long term. That is correct, isn’t it?‑‑‑Yes.

PN302

You also state that flexibility was a key matter for the employer, Orica?‑‑‑Correct.

PN303

Have you been involved in previous agreement negotiations?‑‑‑I have.

PN304

Approximately how many?‑‑‑I sat at a significant EA negotiation for Patrick Stevedores in 2004. I was a member of the negotiating committee. I was support for their ongoing negotiations following that agreement. I also was involved in the Nyrstar Port Pirie initial set-up of the negotiations. So I did a lot of the pre-work. I departed before they commenced negotiations.

PN305

Based on your experience, it is unremarkable that the employer wants to retain as much flexibility as possible. That is right, isn’t it?‑‑‑Sorry, can you, please, restate that?

PN306

So you refer to the need for flexibility being a key part of this agreement, don’t you, from the employer’s perspective?‑‑‑Yes.

PN307

You agree that based on your previous enterprise agreement negotiations that flexibility was always a key matter for employers. That is right, isn’t it?‑‑‑Yes.

PN308

You agree, don’t you, based on your past experience, that employees seek to lock in or establish the terms and conditions of their employment, don’t they?‑‑‑I don’t agree in all aspects. Some aspects, yes, in my experience.

PN309

You understood during the enterprise agreement negotiations that the employee bargaining representatives sought to establish the conditions of their employment in the agreement?‑‑‑That is expected, yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN310

The employees during negotiations sought to avoid or prevent Orica from being able to change conditions of employment at their discretion. You agree with that, don’t you?‑‑‑No, I don’t.

PN311

If I may take you to SE-1 of your statement. So that is the meeting minutes from the meeting on the 9th. So from the 9th meeting which occurred on 22 January 2013. If you turn to page 3 of that document, there is a highlighted section and it states, doesn’t it, that: “Employee delegates always raised that morale is low, not due to the EBA negotiations but due to management changing structures.” You agree with that, don’t you?‑‑‑That is what it says, yes.

PN312

It continues that employees were also concerned about stripping long-term conditions from the workers?‑‑‑Yes, that’s what it says.

PN313

You agree that during negotiations, that remained a primary objective of employees, don’t you?‑‑‑I don’t know the primary objection of the employees.

PN314

Do you agree that it was an objective of employees that they wish to lock in the long-term conditions that they had secured previously?

PN315

MR SAUNDERS: I object. This witness can’t get into the mind of employees and give evidence about what they wanted. I mean, he can be asked questions about what they said.

PN316

THE DEPUTY PRESIDENT: He is being asked questions about the document, I think.

PN317

MR SAUNDERS: The last question, your Honour.

PN318

THE DEPUTY PRESIDENT: Yes.

PN319

MR SAUNDERS: The earlier questions were but this last question is about what the employees wanted or their objective.

PN320

THE DEPUTY PRESIDENT: Yes. You can ask him questions as to the company’s objectives and what was in the mind of the company representatives, particularly himself, yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN321

MR GOUNIS: You agree, Mr Eltham, don’t you, that during negotiations employees stated that they wanted to secure their conditions of employment?‑‑‑Correct.

PN322

And that that occurred, and statements to the effect occurred, throughout the negotiations for the agreement. That is right, isn’t it?‑‑‑That is correct.

PN323

If you may turn to paragraph 17 of your statement, subparagraph (b) of that paragraph refers to a copy of the minutes from 16 November 2012 meeting and that is at SE-4 to your statement. So if you could please turn to Annexure SE-4. You can see the heading “Employment Levels” is highlighted and that is on page 4 of SE-4?‑‑‑Yes.

PN324

It states, doesn’t it, that further discussions are to occur?‑‑‑It says: “Further discussions to occur.”

PN325

You agree, don’t you, that this meeting minute, which is dated 16 November 2012, is after the minute dated 16 October 2012 which you refer to at paragraph 19 of your statement?‑‑‑That looks correct, yes.

PN326

The reference to “Further discussions to occur,” would apply to the employment levels in the nitrates department. That is right, isn’t it?‑‑‑It doesn’t specifically say it is the nitrates department.

PN327

Do you have a recollection of this meeting on 16 November 2012?‑‑‑Some recollection of the meeting. I can only refer to what is here in the document.

PN328

So your recollection doesn’t go any further than ‑ ‑ ‑?‑‑‑I can sort of talk about elements of what is within the document and they’re a record of the discussion at the time.

PN329

But specifically in relation to employment levels you cannot recall the nature of those discussions at that meeting, can you?‑‑‑I can recall elements of it, yes.

PN330

You cannot recall, can you, that the discussions included the employment levels in nitrates?‑‑‑As one element of this, yes.

PN331

So you agree, do you, that one element of these discussions was employment levels in nitrates?‑‑‑Correct.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN332

In paragraph 17(a) of your statement and paragraph 19, you refer to the employee bargaining representatives common claim in relation to mutual agreement for employee numbers, don’t you?‑‑‑Sorry, can you point me in the right direction?

PN333

So at paragraph 19 you can see there is a box titled “Common claims” and shaded in black?‑‑‑Yes, yes.

PN334

As a common claim, this refers to a claim that would apply for all departments in Orica. That is right, isn’t it?‑‑‑That was my understanding, yes.

PN335

You agree, don’t you, that under the 2010 agreement, which is the preceding agreement to what was being negotiated, there were not scope to change manning levels by mutual agreement in all departments at Orica Kooragang Island, don’t you?‑‑‑No, I mean, I didn’t operate under the 2010. Sorry, I mean, I wasn’t a party to the negotiation of the 2010 agreement. I can’t give anything specific.

PN336

THE DEPUTY PRESIDENT: You did work under the 2010 agreement, though?‑‑‑I worked under the 2010 agreement, yes.

PN337

Yes, to be clear, yes?‑‑‑No, sorry. Sorry, I am trying to get my dates right. No, I operated under the 2012 agreement when I came in in October.

PN338

2014, in your current role?‑‑‑The 2014, 2012 and 2010. There was no 2012.

PN339

Sorry, I wasn’t trying to confuse things?‑‑‑No, no, no.

PN340

I was trying to clarify.

PN341

MR GOUNIS: But there was no 2012 agreement, was there, because negotiations for what eventually was the 2014 agreement proceeded for such a long period of time?‑‑‑It expired in 2012, yes, correct. Sorry, yes, that’s right.

PN342

That is right, isn’t it?‑‑‑And we talked about (indistinct) changes.

PN343

THE DEPUTY PRESIDENT: Can I just be clear? You commenced in your current role in October 2014?‑‑‑2012. 2012. I commenced in my current role in 2014.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN344

That is right?‑‑‑And my previous role in 2012, October 2012.

PN345

That is right. That is right, yes. You commenced in your current role in October 2014 and you commenced with Orica in 2012?‑‑‑In 2012, October 2012. Maybe if you could replace that question it would clear the confusion.

PN346

MR GOUNIS: You agree, don’t you, that under the 2010 agreement and under the current agreement there are specific divisions that deal with the conditions of employment that relate specifically to those departments, don’t you?‑‑‑Yes.

PN347

If I may take you to division 2 which relates to Triella technicians in the 2010 agreement and I will hand a copy.

PN348

THE DEPUTY PRESIDENT: Just identify where that is in the pile of materials, can you?

PN349

MR GOUNIS: That is at tab 2 of the applicant’s bundle of documents. So it should be the second, number 2, in the applicant’s folder.

PN350

THE DEPUTY PRESIDENT: Yes.

PN351

MR GOUNIS: I will give you a moment to have a look through that?‑‑‑Sorry, we are talking page 29, division 2?

PN352

Relating to Triella?‑‑‑Triella.

PN353

You agree, don’t you, that in the 2010 agreement there were no employment levels in this department, don’t you?‑‑‑Well, there are elements of it if you look at team make-up, the competencies are defined, what skills are required.

PN354

But you agree, don’t you, that there is no binding employment levels for each shift? I refer you to the subheading “Team make-up” which states that teams will at all times have a minimum of two mechanical trade fitters and two electrical trade mechanical fitters. But you agree, don’t you, that there is no reference to changing any employment levels by mutual agreement?‑‑‑Correct. There is no reference to “mutual agreement” in this section.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN355

You agree, don’t you, that in the 2010 agreement “mutual agreement” was the manner in which the employment levels could be changed in the nitrates department, don’t you?‑‑‑Could you give me a clause, please?

PN356

THE DEPUTY PRESIDENT: It is on page 22, I think.

PN357

MR GOUNIS: Clause 21.4.

PN358

THE DEPUTY PRESIDENT: At the bottom of page 22?

PN359

MR GOUNIS: Page 22?‑‑‑Yes, so the “mutual agreement” refers to, under this, 21.5 and 21.6.

PN360

Correct. If you turn to page 35 of the 2010 agreement which is that division which relates to manning in engineering, under this clause Orica could change the manning levels in maintenance, couldn’t they?‑‑‑My interpretation of that clause is, yes, they could via a consultation process.

PN361

It didn’t have to be changed by mutual agreement, did it?‑‑‑Not that I understand, no.

PN362

I refer back to SE-3, Annexure SE-3 to your statement, and at page 3 it states the right that the employees’ common claim was the right to consultation and mutual agreement for manning levels and new equipment. That would have applied to all departments including the maintenance department, wouldn’t it?‑‑‑At this point in the negotiation, yes, that would be the case.

PN363

If you turn to page 9 of Annexure SE-3, about a third of the way down that page there is a subheading “Nitrates operators”, isn’t there?‑‑‑Correct.

PN364

At item 77, because it falls under this heading it represents the specific claim in relation to manning in the nitrates department, doesn’t it?‑‑‑Yes, it does.

PN365

You agree that the employer’s response is that, in the next column across: “Believe current manning in sufficient.” That was the employer’s response to the specific claim for manning levels in nitrates, isn’t it?‑‑‑Yes, that is directly in relation to the, I guess, negotiated position of the employee bargaining reps that they wanted an additional person to sit on the POC and our claim was we didn’t see it as necessary.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN366

You will also see in item 77 that the employee bargaining representatives give brief reasons for their claim and they state: “Aid in prevention of another possible environmental incident.” Can you explain what that environmental incident refers to?‑‑‑Only in very broad scale because I wasn’t there in 2011, but I understand there was an incident in the ammonia plant and there may have been some previous incidents in the nitrates plants but I am not - I wasn’t there at the time. I am not overly - you know, I don’t understand all the elements of what those environmental bits and pieces might be.

PN367

You accept, don’t you, though, that the Kooragang Island site of Orica is a major hazardous facility?‑‑‑That is correct.

PN368

And that incidents can lead to catastrophic consequences including to the health and safety of employees in the community?‑‑‑Are you asking me from a broad scope or are you asking me from a specific scope? I mean, it is a big plant. It is not - you know, these plants are designed to protect themselves. We have highly skilled operators who function in those plants, who have knowledge and experience in those plants. My personal belief - I am a Stockton resident - that the catastrophic consequences is so far out of the realms of reality unless you are talking about something very, very specific.

PN369

Assuming there was a major incident where there was severe plant failure, there is a risk to employees in the community, isn’t there?‑‑‑There is a risk to everything that we do. Is it specifically around these plants? These plants are designed to go to fail safe. So you are talking something that I can’t respond to. I am not a risk manager. I am not a risk measurer from that. From a plants perspective, I am not an engineer that does those types of things.

PN370

In relation to negotiating an enterprise agreement, you accept that these negotiations went on for a very long period of time, don’t you?‑‑‑Correct, 22 months, as I recollect.

PN371

You agree, don’t you, that during negotiations generally, parties may change their position in order to reach agreement, don’t you?‑‑‑Correct.

PN372

You agree, don’t you, that this is particularly the case for positions that are expressed at an early stage during negotiations, don’t you?‑‑‑That can happen, yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN373

You agree, don’t you, that Orica’s position changed with respect to certain claims during negotiations, don’t you?‑‑‑That is possible. You will need to be more specific on the claims if you want me to respond to where we have changed, where we changed positions.

PN374

But you agree, don’t you, at a general level that Orica changed its position in respect of certain claims during the negotiations, don’t you?‑‑‑We did during this negotiation, yes.

PN375

Indeed, in your statement you refer to one of these examples at paragraph 28B regarding negotiations, regarding arbitration, don’t you?‑‑‑Sorry, you said 28B? Was that 28B, Alex?

PN376

That is correct, your Honour?‑‑‑That was a position change on the organisaton, yes.

PN377

That position change occurred at the end of negotiations towards the end of bargaining, didn’t it?‑‑‑It was towards the end of major bargaining, yes.

PN378

THE DEPUTY PRESIDENT: No doubt based on advice from AMA, I am sure. Sorry, I couldn’t resist that.

PN379

MR GOUNIS: In your statement at paragraph 23, you refer to the May draft which is described as Orica’s final offer?‑‑‑Yes.

PN380

You agree, don’t you, that although it is expressed as Orica’s final offer, it indeed wasn’t its final offer and its positions did change during negotiations? That is right, isn’t it?‑‑‑That is correct.

PN381

Towards the end of this paragraph you state that subclause 32.4.2 of the May draft reflects Orica’s desired drafting of the issue which was eventually agreed in the terms at clause 33.4 of the current agreement, don’t you?‑‑‑That is our desire. That was our desired position, our desired drafting of the clauses.

PN382

You accept, don’t you, that Orica’s desired drafting changed in the agreement that was approved by employees, didn’t it?‑‑‑That’s correct.

PN383

That change, if I may take you to the May draft and subclause 32.4.2, so that is SE-7 to your statement?‑‑‑What clause, sorry?

PN384

It is on page 22 of SE-7?‑‑‑Yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN385

The word “currently” appears at both 32.4.1 and 32.4.2, doesn’t it?‑‑‑It does.

PN386

Both instances of the word “currently” were deleted by the employer in the agreement that was put out to vote and approved by employees, wasn’t it?‑‑‑Sorry, can you state that one again?

PN387

The word “currently” where it appears in the May draft at 32.4.1 and at clause 32.4.2 was deleted by Greg Holmes for the agreement that was put out to vote and approved by employees?‑‑‑Yes.

PN388

Those words didn’t appear, did they?‑‑‑No, that is correct. The word “currently” didn’t appear, correct.

PN389

At paragraph 25 of your statement you state that the employees did not agree with the May draft?‑‑‑Correct.

PN390

The employees told you, didn’t they, that the reason they didn’t agree was because the word “currently” might mean that the employer could change the employment levels during the agreement. That is right, isn’t it?‑‑‑Amongst other things, yes.

PN391

You agree that employees stated this position between the May draft and up until 26 March 2014, didn’t they?‑‑‑I would need to specifically look at documents to answer that in the affirmative.

PN392

So you agree that at the meeting referred to at paragraph 25 being on 14 June 2013, you have just stated that you recall the employees explaining why they didn’t agree with the changes to the manning levels, the employment levels clause, and that recollection is independent of documents, isn’t it?‑‑‑That is correct. We talked about a range of issues at that time, everything from rosters. There probably was many, many issues on the agenda at the discussion point when the rejection was given by the employee group. I remember those meetings going for a number of hours, were very emotional and robust in nature. So, yes, a number of issues were raised at that time.

PN393

You have agreed that you have a specific recollection at the 14 June 2013 meeting but you can’t recall employees ever raising this issue again; is that right?‑‑‑That is not correct.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN394

I put it to you that you previously answered that you would have to refer to documents to identify whether or not the employees explained why they didn’t agree to this clause. That is right, isn’t it?‑‑‑I understand in the feedback they provided, which was a three or four page document summary of that meeting, there was a number of issues that were raised at that time. My recollection is that one of those issues were about the manning, mutual agreement, the rosters, and the reasons for their rejections.

PN395

You refer to that document. Is that document annexed to your statement?‑‑‑I understand it should be.

PN396

Is it the document which is ‑ ‑ ‑

PN397

THE DEPUTY PRESIDENT: Does something turn here on which document it is or is it just a question of trying to find it amongst the ‑ ‑ ‑

PN398

MR GOUNIS: I put it to you, Mr Eltham, that there is no document annexed to your statement after the 14 June 2013 meeting explaining why employees didn’t agree with Orica’s proposed changes and you agree, don’t you, that during ‑ ‑ ‑

PN399

MR SAUNDERS: I object. He needs to be given a chance to answer the first question before we move onto the next one.

PN400

MR GOUNIS: Apologies. I think he nodded.

PN401

THE DEPUTY PRESIDENT: I think you were silent actually, what was the answer?‑‑‑Sorry, can you repeat the question?

PN402

MR GOUNIS: There is no document annexed to your statement which explains why the employees didn’t agree to the May draft changes. That is right, isn’t it?‑‑‑That could be correct.

PN403

You agree, don’t you, that between 14 June 2013 and up until the end of negotiations the employees’ bargaining representatives raised their concerns about Orica being able to change employment levels in nitrates, didn’t they?‑‑‑As far as I am aware, yes, they did.

PN404

In response to the employees raising those concerns, the employer bargaining representatives stated that the manning levels wouldn’t change, didn’t they?‑‑‑No.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN405

If I may refer you to a draft of the agreement that was emailed on 24 March 2014 from employee bargaining representative, Gerard Mason, to yourself and other bargaining representatives outlining remaining issues in the agreement. I will provide you with a copy of that.

PN406

THE DEPUTY PRESIDENT: What was the date of that? 23 March, was it?

PN407

MR GOUNIS: I believe it is 24 March 2014.

PN408

THE DEPUTY PRESIDENT: Of 2014, right.

PN409

MR SAUNDERS: Is this in the evidence somewhere?

PN410

MR GOUNIS: It is. This is Annexure RO-6 to the statement of Rodney Osland.

PN411

THE DEPUTY PRESIDENT: Isn’t it 24 March 2015? No.

PN412

MR GOUNIS: Apologies, your Honour. That is the date at the top of the actual agreement.

PN413

THE DEPUTY PRESIDENT: It is, yes, sorry. I see, underneath it. Yes, I see. That is one I was looking for, yes.

PN414

MR GOUNIS: If you refer to the comments at clause 33.4 of this agreement which is at page 33?‑‑‑Sorry, I am at page 22.

PN415

Apologies, that is correct. It is at page 22. You can see that there is a comment in a green box that states the company has denied that they wish to change these levels. That is right, isn’t it?‑‑‑That is what it states, yes.

PN416

That reflects what transpired during the negotiations, doesn’t it?‑‑‑I don’t believe that’s correct. I think there is - there was a range of discussions at that time about the intent of the company to change it at the time, and our intention at that point in time, otherwise it would have been in these negotiation discussions that are not included in the draft. If we intended to change the numbers at the time, we would have addressed it in the drafting and we did not.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN417

You agree, don’t you, that this record states that the company has denied that they wished to change these levels and I put it to you that during the negotiations the employer didn’t indicate that the employment levels might change, did they?‑‑‑It was not our intent to change the employment levels.

PN418

You didn’t indicate to the employees, did you, that the employment levels may change, did you?‑‑‑That is correct. At the time of negotiation we made it very clear we did not intend to change the current manning levels.

PN419

I put it to you that your statement doesn’t refer to the employer bargaining representatives making such statements, does it?‑‑‑Probably not.

PN420

THE DEPUTY PRESIDENT: I am not sure that that will go onto transcript. Can you repeat the answer?‑‑‑Sorry. Probably not.

PN421

MR GOUNIS: You agree, don’t you, that the employer bargaining representative statements that it did not intend to change manning levels was in response to employee concerns that the employer could change the manning levels based on the draft with the word “currently” in it. That is right, isn’t it?‑‑‑My recollection is that the employees were concerned about the removal of “mutual agreement” and that was what their concern was about. From my perspective, the word “currently” was put into the document to ensure clarity around what is expected.

PN422

Can I just stop you there? In terms of your perspective, we don’t ‑ ‑ ‑

PN423

THE DEPUTY PRESIDENT: Let him finish the answer.

PN424

MR GOUNIS: Apologies.

PN425

THE DEPUTY PRESIDENT: Sorry, continue.

PN426

MR GOUNIS: Continue?‑‑‑So from our perspective that word “currently” at this particular point of the negotiation towards the very end didn’t reference or didn’t play a role in the significance of the removal of “mutual agreement.” The removal of “mutual agreement” was the key element to enable us to do these things at some point in time, albeit the intent at the time of the negotiation was to not change the numbers.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN427

But the change to include the word “currently” happened in exactly the same draft, didn’t it, that “mutual agreement” was removed?‑‑‑That is correct and that was to ensure the clarity around what that particular element of that clause meant. I think I used the words “abundantly clear.” We needed to make everyone aware of what it meant.

PN428

But you didn’t state, did you, that another employer bargaining representative states that Orica could change the manning levels in nitrates during the agreement that was being negotiated, did you?‑‑‑I did not.

PN429

You don’t recall other employer bargaining representatives making statements to this effect, do you?‑‑‑I do not recall.

PN430

Your evidence is that you attended every bargaining meeting for the agreement. That is right, isn’t it?‑‑‑That is correct.

PN431

In relation to “mutual agreement” under the 2010 agreement, it was your understanding that either the employees or Orica could seek changes to the employment levels. That is right, isn’t it?‑‑‑Under the 2010 agreement.

PN432

That is right; the prior agreement?‑‑‑So using “mutual agreement” you could change numbers.

PN433

That is correct, and the employees could make a claim to change employment levels which Orica couldn’t unreasonably refuse. That is right, isn’t it?‑‑‑That is correct.

PN434

During negotiations for the agreement, Orica knew that employees wanted an additional employee on each shift in nitrates. That is right, isn’t it?‑‑‑The claim was for seven employees and an additional POC operator, from my recollection.

PN435

If “mutual agreement” had remained in the 2014 agreement, the employees could have made a claim for an additional POC employee or indeed other employee and Orica couldn’t unreasonably refuse that request. That is right, isn’t it?‑‑‑That sounds about right.

PN436

I referred earlier to the draft agreement with comments dated 24 March 2014. Do you agree that the bargaining for the agreement was close to being agreed principle at this stage, wasn’t it?‑‑‑Correct. We were down to drafting meetings or predominantly drafting meetings at this stage.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN437

You and other bargaining representatives knew from employee statements during the negotiations about the concerns of the employer being able to change employment levels in nitrates, didn’t you?‑‑‑It wasn’t - for me it wasn’t a specific - specific concern.

PN438

But you understood that it was a concern for the employees, didn’t you?‑‑‑I can interpret from this particular document, which is the draft I understand we are referring to, that that was a concern.

PN439

It wasn’t just from that draft, was it? The employees repeatedly during bargaining meetings raised the issue that they were concerned that the word “currently” meant that the employer could change the manning levels during the agreement. That is right, isn’t it?‑‑‑I recall on a number of occasions discussions about it were not going anywhere and the item was parked.

PN440

During those discussions, the employees identified their concerns about the word “currently” and the draft clause, didn’t they?‑‑‑Well, they have in this particular document that we are referring to.

PN441

I am referring to negotiations prior to this document. So between 14 June 2013 and 24 March 2014. Employees raised their concerns that the word “currently” might mean that the company could change the manning levels in the agreement and they sought to have that issue resolved, didn’t they?‑‑‑I do not recall it being a significant discussion point, discussion topic at the time. A lot of our focus around that time was on the nitrates rostering arrangements. Yes, I don’t recall it being a significant issue that warranted a significant discussion at the time.

PN442

Is it your recollection that in response to employees raising these concerns employer bargaining representatives stated that the manning levels wouldn’t change. That is right, isn’t it?‑‑‑No, that is not right.

PN443

Is the position that the employer bargaining representatives didn’t make any statements in response, is that correct?‑‑‑They may have made statements but not a statement that said it would not change. That is absolutely incorrect.

PN444

Your evidence earlier was that you could not recall the bargaining meetings and employees raising their concerns about the changes to employment levels. That is right, isn’t it?‑‑‑Like I said, it wasn’t ‑ ‑ ‑

PN445

MR SAUNDERS: I object. I object to that. That is not the effect of the evidence. It is an unfair question.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN446

THE DEPUTY PRESIDENT: Can you rephrase the question as to what your understanding was?

PN447

MR GOUNIS: You agree, don’t you, that employer bargaining representatives didn’t state that they were going to change the employment levels in nitrates? That is correct, isn’t it?‑‑‑Sorry, can you please repeat that, Alex? Sorry.

PN448

THE DEPUTY PRESIDENT: I don’t quite understand that. Are you saying that the employees withdrew their claim to increase the number in nitrates? Was that the question?

PN449

MR GOUNIS: Not quite, your Honour. I might rephrase.

PN450

THE DEPUTY PRESIDENT: All right. Well, maybe just rephrase it.

PN451

MR GOUNIS: You agree, don’t you, that employer bargaining representatives did not make any statements during negotiations that the employment levels in nitrates might change? That is right, isn’t it?‑‑‑I don’t recall us talking about “might change.” We talked about our intention not to change. But I do not recall the specific words: “might change.”

PN452

THE DEPUTY PRESIDENT: Can I just clarify, Mr Gounis? Did you mean to say “employee representatives” in that question or “employer representatives”?

PN453

MR GOUNIS: Employer representatives.

PN454

THE DEPUTY PRESIDENT: I think you said “employee” but maybe I am wrong about that. But I understand the question if you are talking about employer representatives. That was your understanding?‑‑‑Sorry, I took it - I took it as employer representatives, yes.

PN455

Thanks. I am glad you know what is going on. That is good.

PN456

MR GOUNIS: You refer in your statement to the discussions in relation to roster changes in nitrates, don’t you?‑‑‑Can you point in the ‑ ‑ ‑

PN457

If you refer to paragraph 29 of your statement?‑‑‑Sorry, 29. Correct.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN458

You agree, don’t you, that the nitrates employees did not wish for their roster to change? That is right, isn’t it?‑‑‑Yes, I made it abundantly clearly.

PN459

At paragraph 30 of your statement you refer to the fact that the parties ultimately reached agreement in respect of the change to rosters, don’t you?‑‑‑Correct.

PN460

And that after, to use your words, an extended and vigorous debate, the employees agreed to that change to their condition and the statement which is reflected at clause 26 of the agreement being that: “Work pattern and/or shift rosters including start and finishing times may be varied to suit the requirements of the plant or sections of the plant. These can be altered following consultation and being guided by occupational health and safety considerations.” You see that, don’t you?‑‑‑That’s what is says, yes.

PN461

You agree, don’t you, that there is no comparable clause relating to employment levels in nitrates at clause 33.4.2 of the agreement, is there?‑‑‑Of the current agreement?

PN462

That is correct, of the current agreement?‑‑‑I don’t have a copy of the current agreement. It may have been in one of mine. No, I don’t. Sorry, you are referring to, Alex, 33?

PN463

You refer to page 22 of that agreement?‑‑‑Sorry, can you repeat the question? There was a couple of questions there that you asked.

PN464

Do you agree that the clause extracted at paragraph 30 of your statement doesn’t appear even though a similar clause appears at clause 33.4, “Employment levels for nitrates,” does it?‑‑‑That’s correct.

PN465

It is your understanding, isn’t it, that the agreement is divided in a common section and then specific sections dealing with the specific employment conditions for employees in different departments? That is right, isn’t it?‑‑‑Actually that is not correct. There are elements within the front section before we get to the - what do they call them - the schedules or divisions, sorry, that are specific to individual departments. I think there are elements around overtime and things like that that are specific to individual groups.

PN466

But you agree, don’t you, that the provisions within each of the divisions relate solely to the conditions for the relevant departments? That is right, isn’t it?‑‑‑That’s correct, yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN467

Your Honour, that concludes ‑ ‑ ‑

PN468

THE DEPUTY PRESIDENT: All right. I have got a couple of questions for Mr Eltham which might, given that you have got some re-examination, take us close to 1 o’clock, perhaps. But it would be convenient, I think, to finish the witness before lunchtime, I am assuming.

PN469

MR SAUNDERS: Yes, my re-examination will be short.

PN470

THE DEPUTY PRESIDENT: I have got a couple of questions if I can, mainly just to help my understanding of the sort of operation. You remember exhibit S1 which was this little chart of the operation. I don’t know if you have got it in front of you there, but I am sure you know it off by heart?‑‑‑I don’t, but I know it well.

PN471

Can you just give me a description of the number of employees in each part of the operation, for example, and their inter-relationship to start off with?‑‑‑I think ‑ ‑ ‑

PN472

Roughly?‑‑‑Roughly?

PN473

I am not going to hold you to the exact figures?‑‑‑So I think there is about 35, 36 employees in nitrates. There is about - I think it is about 26 or 27, somewhere to that effect in ammonia. Despatch, who have just recently reduced, are probably down to about nine employees.

PN474

So that is the store, I assume, isn’t it?‑‑‑Yes, that is the warehouse and they bag the product for shipping. Triella is three.

PN475

Three?‑‑‑Three employees.

PN476

What is Triella?‑‑‑It is an ammonia bottling product. You know, it is part of the chemicals division. And who I have missed? Maintenance.

PN477

Maintenance?‑‑‑Probably about 18, 19.

PN478

So that is your AMWU and CEPU members?‑‑‑Yes.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN479

So the rest, apart from the 18, are AWU?‑‑‑Yes.

PN480

So the clause that we are talking about, clause 33.4, contains a reference to ammonia and ammonia nitrate together in one sense, although there is different provisions. Is that for any particular reason?‑‑‑They’re the two continuous 24-hour, seven-day a week operations. So they’re the two major elements. So to give you a brief example and unfortunately I am not very technically competent in this stuff ‑ ‑ ‑

PN481

More so than me?‑‑‑We take natural gas. We make ammonia. We sent that ammonia over to the nitrates area. So they’re the two - the biggest plants, probably the most complex plants, and then from there it is into those other areas.

PN482

So clause 33.4.2 has got - I just want to make sure I am understanding this correctly from a practical sense - the staff provisions says there are seven technicians per team on a five-panel roster which gives you your 36 employees. But then it has six people that are there. So my understanding would be, or assumption would be, that the seven number is really to cover annual leave. Would that be right?‑‑‑That is correct. Yes, that is correct.

PN483

So at any one time there has to be six employees in the area according to this clause?‑‑‑It is expected, yes.

PN484

So what happens if it is not? You know, for example, there is some unexpected illness or series of illnesses, what happens if that is not the case?‑‑‑Overtime. So people are called in for overtime. I understand people will provide cover, you know, four hours at the back end of a shift and four hours at the start of a shift to cover that period and there is sometimes a gap in the middle. There is a range of things. Plants are brought down as far as from what I am aware. Plants are brought down during that period depending on a range of issues. I understand also plants are left up and running if it is - you know, if it is generally in a good situation and there is, you know, enough experienced bodies around to monitor it because once they are running I think the monitoring is the important part.

PN485

Have there been instances where the plants had to be closed down because of a lack of staff?‑‑‑I understand, yes, yes, that has occurred and it is normally an order of priority. So what plants, you know, where the product is going to go.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN486

Am I right - and I might not be - but am I right that if you look at the agreement it is really those two areas where there are minimum staffing levels actually set out in the agreement and not others, although with perhaps one exception that I saw? But is that right or not?‑‑‑I guess, your Honour, I referred to them as, from my perspective, not minimums. They are expected standards if the plants are on all the time.

PN487

Leaving aside how they are - that is part of the debate, I understand that, but in other areas the agreement doesn’t provide for staffing numbers, apart from in despatch where it says shift teams are made up of - this is clause 36.1 - are made up of certain numbers. Is that ‑ ‑ ‑?‑‑‑That is correct.

PN488

What is your view as to why that was done?‑‑‑Look, from my understanding, it was probably a historical item. Again, I didn’t delve too far back into when that first - you know, when that first came into effect. I don’t know the exact reasons why that was locked in in that manner.

PN489

It is relatively unusual, you would have to say, wouldn’t you?‑‑‑From my perspective in previous experience, yes.

PN490

That is a “Yes”. So I know your statement deals with the current proposal to restructure and so on in clause 32 onwards, but can you just give me a sort of summary of what happened and what the current proposal is to restructure?‑‑‑So at the present moment and, again, bear with me in terms of the product side of things, there is a product called Opal which is a product we make out of the AN-2 dry section. That plant does not run very much. It is capable of producing about 60,000 tonnes. It currently produces somewhere in the order of about 800 tonne. So there is a significant gap. The person that is involved in that area runs AN-2 dry as well as AN-2 wet. That is the area of their plant and I may not be a hundred per cent spot on but that’s how I understand it. As that AN-2 dry plant does not run very frequently, that person who is looking after the AN-2 wet section is utilised about 30 per cent of the time or thereabouts. So the idea is we would restructure that role and place elements of that monitoring of that AN-2 wet section into other functions within the business, you know, within that - within the operating team.

PN491

To that purpose, I want to make sure I have got this right as well, there have been four redundancy notices issued at this stage?‑‑‑Three redundancy notices issues. We had a vacancy across in the ammonia plant and we asked for people to express an interest in applying for that role and a number of people put their hands up for that. And out of that we had one employee who expressed an interest to accept redundancy, a voluntary redundancy and we have two employees involuntary redundancy. We have notified them of that involuntary redundancy. So it is three, three redundancies in total on transfer.

PN492

All this happened quite close to the renegotiation of the agreement. Do you agree with that?‑‑‑From my perspective, no, no, sir.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN493

The proposal to restructure was advised to the union on 17 November 2014, is that right? When was the vote to approve the agreement?‑‑‑The agreement was approved on 4 July and I think it was some six weeks prior, five or six weeks prior to that that we actually voted on it.

PN494

Let me try and summarise what I think is the company’s position here which might be a bit brave to do this, but I just want to see if you agree with this. What seems to have happened is that the - I don’t think this bit is contested - the previous agreement essentially had a veto on change by agreement. The company wanted to change that. The union objected to that. Obviously there is all sorts of issues involved in negotiations. The proposition appeared to be that the word “currently” was put in a draft. There was objection taken to that because it gave the impression that it was a temporary thing. So almost towards the end of the negotiation process, in one sense, to get the agreement up and so on, “currently” is taken out and the draft is put and endorsed as it is now. Is that right? So would it be fair to characterise the company’s position as being a little bit analogous to a sort of a line that a politician might have. This is really quite common. It says: “It is not that we undertake that we won’t increase the raise of the GST during this parliament, but the position is we have no plans to introduce the rate of the GST during this parliament.” Was that in the end the company’s position by analogy?‑‑‑By analogy, I think, that was probably closer or that was probably close to the position that we were at the time.

PN495

You see the crucial change really in all of this was to remove the requirement that there be agreement to change the provisions. I think you have said that?‑‑‑Yes, I put it - put it in my sort of terms is when I reviewed the document I wanted to be unshackled by the restriction of “mutual agreement.” It was difficult to achieve change and Orica needed to do that change. We foresaw what was coming at some point in time in the future but we needed to - it wasn’t something that was necessarily done at the time, but we needed to have the opportunity to do a range of those things at some point in time in the future if we need and we would do that by a strong consultation clause and if there was dispute and an inclusion of arbitration in the disputes handling arrangement.

PN496

I mean, it would have been possible to make it clear in the drafting by, for example, including a reference to, in clause 33, for example, which, as I said before, just seems to - again, maybe I am wrong about this - it just seems to sit in the agreement without any reference or any sort of inter-relationship to other clauses in the agreement in terms of the drafting. It would have been possible to say that these provisions, you know, operate subject to clause 8 which is the consultation clause, or clause 32 which is the redundancy clause, wouldn’t it?‑‑‑That is the unfortunate position of dealing with a Brownfields agreement as opposed to a Greenfields agreement, an agreement where you can structure those things well.

*** SHAUN JUSTIN ELTHAM XXN MR GOUNIS

PN497

All right, thanks. Mr Saunders, sorry to take so long.

PN498

MR SAUNDERS: Pardon me a moment, please, your Honour.

PN499

THE DEPUTY PRESIDENT: Yes, sure.

RE-EXAMINATION BY MR SAUNDERS [12.55 PM]

PN500

MR SAUNDERS: In answer to one of his Honour’s questions to you now you referred to the strong consultation clause in the proposed agreement. What did you mean by the “strong consultation clause”?‑‑‑I think it is fairly, you know, explicit in the agreement what the clauses were about, you know, in terms of major change.

PN501

What in particular were you referring to?

PN502

HIS HONOUR: It was clause 8 that I was referring to, yes, yes.

PN503

THE WITNESS: Clause 8, page 5. Now, we talk - for the purposes of this clause, major change includes changes in production which is what we are talking about in this instance, organisation, work allocation including the regular roster or ordinary hours of work for employment, shift arrangements or technology to have a significant effect. So from my perspective, once you stipulate those - any of those significant effects and we foresee them as significant effects gives rise to, you know, a full and thorough consultation process which enables people to view what the other side is considering or doing or a decision that has been made that we need to then talk to our employees about and engage with them the reasons for doing that.

PN504

MR SAUNDERS: During cross-examination, you were asked this question: employees told you that they would not agree to the proposed enterprise agreement because in part the word “currently” in the clause have been talking about meant that the company might change employment levels. Do you recall that question? And your answer to it was, yes, in part that is what they told you. That is right, isn’t it?‑‑‑That is correct, yes.

*** SHAUN JUSTIN ELTHAM RXN MR SAUNDERS

PN505

What was your response to the employees when they told you that about the company’s intention to change manning levels?‑‑‑It is my recollection that when we talked about those types of issues, it is we know there is something coming, we don’t know what it means, but there is no intent today or in the, you know, very short future to change or there is a requirement to change those numbers. We did not foresee the need at that point in time to consider it.

PN506

Can you just tell me whether this is a fair indication of what you said to the employees about this issue? The company said they had no intention at that time to change employment levels, but the company did not give any promise or guarantee that the employment levels would not change and, similarly, the company did not say that employment levels would or might change. Is that a fair assessment of what was said?‑‑‑That is correct.

PN507

That is the re-examination if it please your Honour.

<THE WITNESS WITHDREW [12.58 PM]

PN508

THE DEPUTY PRESIDENT: Thank you. So I was just wondering just in terms of planning what the prognosis is for the rest of the day.

PN509

MR SAUNDERS: We have our second witness to be here at 1 o’clock and I assume he is either here or very close it. I would imagine, subject to what Mr Gounis says, he will be a pretty short witness. He just gives evidence about context and background rather than negotiations. So I would imagine that is going to be short and then we are into submissions.

PN510

THE DEPUTY PRESIDENT: All right. Is it proposed to try and do that all today? I mean, I am flexible but I am just wondering.

PN511

MR SAUNDERS: On the assumption that our next witness will be short, I can’t see any reason why we couldn’t finish submissions this afternoon.

PN512

THE DEPUTY PRESIDENT: All right. We will adjourn ‑ ‑ ‑

PN513

MR GOUNIS: Sorry, one point in respect to the respondent’s written submissions. Obviously we are on a tight timeframe.

PN514

THE DEPUTY PRESIDENT: Yes.

PN515

MR GOUNIS: The applicant didn’t receive those until around midday yesterday.

PN516

THE DEPUTY PRESIDENT: They were late.

PN517

MR GOUNIS: It is no criticism of that but in terms of having an option to respond to those, it may be of assistance to have a greater period of time for the applicant to respond.

PN518

THE DEPUTY PRESIDENT: I don’t want to cut anybody off and I understand, I mean, everyone is on a tight timeframe. I am just really asking for sort of guidance really. We have set aside the two days and, anyway, let’s see how we go.

PN519

MR SAUNDERS: We would certainly be content to come back tomorrow morning if that assisted anybody to give them time to think about those things and to address your Honour.

PN520

THE DEPUTY PRESIDENT: Yes, all right. Well, we will see. All right. If we come back two, does that give people a bit of time?

PN521

MR SAUNDERS: That is convenient.

PN522

THE DEPUTY PRESIDENT: We will adjourn until then, thank you.

SHORT ADJOURNMENT [1.00 PM]

RESUMED [2.07 PM]

PN523

THE DEPUTY PRESIDENT: Yes, Mr Saunders.

PN524

MR SAUNDERS: Your Honour, the respondent’s second witness is Paul Andrew Hastie. I call Paul Andrew Hastie.

<PAUL ANDREW HASTIE, SWORN [2.08 PM]

EXAMINATION-IN-CHIEF BY MR SAUNDERS [2.08 PM]

PN525

MR SAUNDERS: Sir, your full name is Paul Andrew Hastie?‑‑‑Yes.

PN526

Your business address is 15 Greenleaf Road, Kooragang Island?‑‑‑That’s right.

PN527

Your occupation is operations manager continuous manufacturing for Orica, is that right?‑‑‑That’s right.

*** PAUL ANDREW HASTIE XN MR SAUNDERS

PN528

You have made a statement in these proceedings dated 8 April 2015; is that right?‑‑‑That’s correct.

PN529

Is the content of that statement true and correct?‑‑‑It’s true and correct.

PN530

I tender the statement.

PN531

THE DEPUTY PRESIDENT: We will mark that exhibit S3.

EXHIBIT #S3 STATEMENT OF MR P. HASTIE DATED 08/04/2015

PN532

MR SAUNDERS: Thank you. That is the examination-in-chief.

PN533

THE DEPUTY PRESIDENT: Thank you. Mr Gounis.

CROSS-EXAMINATION BY MR GOUNIS [2.09 PM]

PN534

MR GOUNIS: Mr Hastie, at paragraph 20 of your statement you refer to an operations review which analysed the operating structure of the nitrates area in circumstances where the AN-2 dry section would be non-operational from time to time?‑‑‑Yes.

PN535

You agree, don’t you, over the past two years there have been times when the dry plant hasn’t been run?‑‑‑The AN-2 dry plant runs when there is the demand for a production in their plant and so we do it based on our production plan and our customer forecasts.

PN536

As part of that plan there are times when the dry plant wasn’t run?‑‑‑The dry plant runs, yes, when we have production. When there is no requirement for a production it doesn’t run.

PN537

So over the last two years there have been times when there has been no requirement for AN-2 dry product and so the plant hasn’t been run. That is right, isn’t it?‑‑‑If you look at it - can I give a bit of a background on it? If you look at our production capacity in AN-2 dry, we can make up to 60,000 tonnes, I think it is. If you look at the presentation we gave to the operators. I don’t know if you have seen this page here. Sorry, so I can ‑ ‑ ‑

*** PAUL ANDREW HASTIE XXN MR GOUNIS

PN538

THE DEPUTY PRESIDENT: What are you referring to?‑‑‑Sorry. So in terms of, I think, the appendix 1 of the - it says “PH1” and that is the nitrates operational review brief.

PN539

The appendix to your statement, yes, yes?‑‑‑So on page 3 of that presentation that we made, you can see that the capacity of that plant is up to 60,000 tonnes per annum. So the plant doesn’t have to run at that rate all the time. So, therefore, when we don’t have that demand we don’t actually run the plant.

PN540

So that graph demonstrates, doesn’t it, that over the last two to three years the demand has been lower for the Opal product, the dry plant product, and that the dry plant wasn’t run at full capacity. That is right, isn’t it?‑‑‑That’s right. You can see that the actual demand on that - for that product has been dropping over, you know, from 2005 where it was full capacity down to 2014 where we got down to about 12,000 tonne.

PN541

You agree, don’t you, that when the dry plant is not run the capacity that is freed up in terms of one employee’s workload is used to assist with training employees in nitrates. That is right, isn’t it?‑‑‑In terms of when that plant isn’t run, we determine what we are actually going to use that employee for up until now.

PN542

The employee is used for training purposes to assist with training of the nitrates operators. That is right, isn’t it?‑‑‑That is one of the options we have at the moment in terms of the utilisation of that employee.

PN543

I put it to you that over the last two to three years that is predominantly how the additional capacity has been used within the ‑ ‑ ‑?‑‑‑I am sorry. I couldn’t comment on that. I have only been the operations manager since December last year.

PN544

Since that time you agree, don’t you, that the additional capacity is used predominantly to train nitrates operators?‑‑‑I couldn’t guarantee that. I think we used them for actually a number of duties because we have a number of different tasks that we can use people for. One of the things we can use them for is training and they have been doing some of the training or people have been doing training as well as part of that role. But that is not the sole thing that they do within that time. We can use people across a number of tasks. Can I comment?

*** PAUL ANDREW HASTIE XXN MR GOUNIS

PN545

So you mentioned that the employees are not - the additional capacity is not solely for training and that it is utilised for a number of other work practices and requirements and those requirements or the roles that the additional capacity is used for is to assist Orica with certain things that need to be done?‑‑‑Well, for example, over the Christmas period we didn’t run that plant this Christmas that has just gone. So therefore we actually had to work out what we would do with that for those duties and we came up with a list of housekeeping duties for that - for people to do because we didn’t have enough capacity for production. So we came up with a list of jobs for the operators to do.

PN546

The Annexure PH-1 to your statement refers to the forecasts for dry plant product and you agree, don’t you, that these forecasts may change in the future?‑‑‑Sorry, which page are you looking at, sorry?

PN547

That is page 3 of PH-1?‑‑‑Okay. So I can give you a background on that. So the original budget forecast that we had for the 2015 financial year and that goes from 1 October 2014 to the end of September 2015, the original forecast we had was 8,700 tonnes. So that is what our sales and operational planning team comes up with in terms of what they forecast out and that is what we load into our budget. In January they came back with a revised forecast and that was for 800 tonnes for the - for the 2015 because we hadn’t actually - I don’t think we had made any Opal, you know, previous to that in the financial year. So in - sorry, in January they came back with 800 tonnes and I think on 6 January after Christmas we ran for a period of days and made about 750 tonnes and that is what is noted on this page. However, this product is not a customer demand driven one. This product is a contingency product primarily and so what we do is we have a stock of this product that we store and its use is that when we don’t have a supply of ammonia nitrate solution, which is this material before it is turned into solid, because that is what we are primarily selling, when we don’t have a - where we have a plant upset or a breakdown we can actually - our - one of our sites can - or two of our sites can actually convert this product back into the solution and then sell it as solution into the - into our market. So the whole aim at the moment is to actually have a certain level of contingency stocks that if we do have like an upset they can draw on that product and actually convert it back into solution. So what they are looking at is because that product is so expensive to make because the less you make the more the cost per tonne goes up, they are actively pursuing alternative products from some of our other sites which don’t cost that much to actually manufacture. So what we are doing at the moment is just doing enough production to buy them time to actually investigate these alternative products. So we run - run a campaign. So we did a campaign in January of 800 tonnes. We have actually now - we are currently doing a campaign of about 4,000 tonnes that will go through - I think we started just before Easter. So we are running for a period of time. But the aim is to give the business sufficient time to actually look for and investigate these alternative products and whether they are saleable or useful or not. So at the moment our forecast is nothing else. That is all we have got.

*** PAUL ANDREW HASTIE XXN MR GOUNIS

PN548

Back to my original question, you agree that these forecasts can change?‑‑‑Absolutely, yes, the forecast changed because it is a SOP related product. And what they do is they do forecasting for what is going ahead but the forecasts that they have at the moment is aiming to have enough stock on hand for our contingency while they actively look for a replacement for this product. But we ‑ ‑ ‑

PN549

Sorry, we might just move on. You mentioned that the dry plant is operational at the moment. That is right, isn’t it?‑‑‑That’s right, yes.

PN550

It is being operated as per usual practice in relation to the number of operators within nitrates being six operators operating each shift. That is right, isn’t it?‑‑‑We are operating, yes, yes, as normal at the moment, yes.

PN551

If Orica was able to, assuming Orica could change the manning levels at some point in the future, what would happen with the number of employees operating when the dry plant is run?‑‑‑Could you repeat that, please?

PN552

Sure. If Orica was able to proceed with its proposal ‑ ‑ ‑?‑‑‑Sorry, you mean in terms of demanning ‑ ‑ ‑

PN553

In terms of reducing the employment numbers?‑‑‑Okay.

PN554

What would happen when the dry plant was run in employment levels?‑‑‑Okay. So - so what we have always said as - as part of our consultations is that when the actual plant - an Opal plant is running, we would run it with the numbers that we have at the moment. So ‑ ‑ ‑

PN555

And in that respect, you agree, don’t you, that the company could change how the plant was run; that is, it could decide to reduce the number of operators when the dry plant was running in the future. It would have that option, wouldn’t it?

PN556

MR SAUNDERS: I object. That question is confusing.

PN557

THE WITNESS: I don’t understand that question anyway. Sorry, that doesn’t make sense. I don’t understand it.

PN558

THE DEPUTY PRESIDENT: I think it does make sense but can you just rephrase it so that it is clear?

*** PAUL ANDREW HASTIE XXN MR GOUNIS

PN559

MR GOUNIS: Sure. You just stated that if Orica could proceed with its proposal to deman, when the dry plan is run it would be run with six operators per shift, that is right, isn’t it?‑‑‑That’s what we have been working through, that’s right.

PN560

In theory, the company could change the number of operators. That is, it could reduce the operators to five when the dry plant is run. That is right, isn’t it? To put it another way, the company is not required to have six operators per shift when it is operating the dry plant at some point in the future assuming that it can proceed with its proposal. It is the company’s position that there will be six operators. There is nothing forcing the company, if it could proceed with its proposal, to have six operators when the dry plant is run. That is right, isn’t it?‑‑‑Sorry, I am not ‑ ‑ ‑

PN561

THE DEPUTY PRESIDENT: If I can help, it is a hypothetical question, I guess. But it is asking you what your view would be as to what the company would do if it is successful in resisting this application by the union, really. Is that clear?‑‑‑Yes. In terms of - because we - we have a utilisation analysis, we would - we would - we would need that number of operators to run that plant. You know, if we had all our plants running and that’s - that’s our three nitric acid plants and our AN-1 plus our AN-2, wet and dry, that is what we are saying we would run with those six operators because we would need that number to actually run all those plants if they were all running at the same time. I mean, if you had, like, a number of your plants not running. So, for example, like our AN-1 didn’t run or another - another - other ones didn’t run, that is a different combination. But it depends on how many plants you have running at any one time. So we can run - some of our plants are not running but we shut down our nitric acid plants from time to time. We shut down our ammonia nitrate 1 and our ammonia nitrate 2. It depends how many plants you have running at any one time how many people you need to actually run them.

PN562

MR GOUNIS: With respect to safety, you agree that safety is a crucial matter at the site for both management and employees?‑‑‑We view safety very seriously and consider it very important.

PN563

You accept that safety relates to the acceptable level of risk in deciding whether or not to proceed by a certain approach?‑‑‑What we do is for every action or whatever we are planning to do, we do consider and do an assessment in terms of whether, based on our assessment, we think it is acceptable to actually carry out that undertaking.

PN564

You agree that employees and management may at times have different views as to the safe operation of a plant. Do you agree with that?‑‑‑You mean from their perspective?

*** PAUL ANDREW HASTIE XXN MR GOUNIS

PN565

Yes, from their perspective?‑‑‑Everyone is entitled to their perspective on how they view safety, of course.

PN566

You agree that the employees’ perspective doesn’t always match up with management’s view. That is right, isn’t it?‑‑‑That would be right.

PN567

You agree that employees have a particularly unique insight into safe operation of plants because they are operating them as part of their roles. You agree with that, don’t you?‑‑‑They have a perspective based on what they are doing in terms of the operation as does the company in terms of their perspective as well.

PN568

You agree, don’t you, that an important way of ensuring plant is operated safely is by having adequate employment levels, don’t you?‑‑‑Could you repeat the question, sorry?

PN569

You agree, don’t you, that an important way of ensuring that a plant is operated safely is to have adequate manning levels?‑‑‑It is one of the considerations we do as part of when we assess, yes, whatever undertaking we are doing and it forms part of how we carry out an assessment - a risk assessment.

PN570

Nothing further, your Honour.

PN571

THE DEPUTY PRESIDENT: Thank you. I don’t have anything. Mr Saunders, do you have anything?

PN572

MR SAUNDERS: Just a couple of questions, your Honour.

RE-EXAMINATION BY MR SAUNDERS [2.29 PM]

PN573

MR SAUNDERS: If in the future - if in this case the union does not succeed and so the company has the right to change manning levels in nitrates, I want to ask you about that hypothetical situation. You have given some evidence about that in terms of the number of employees required in the ammonia nitrate plants will depend on how many other plants are running at the one time, is that fair to say?‑‑‑That’s right.

PN574

If you don’t have all of the plants running at the one time you might need fewer than six operators in a particular ammonia nitrate plant; is that right?‑‑‑Mm.

*** PAUL ANDREW HASTIE RXN MR SAUNDERS

PN575

You need to say ‘yes’ or ‘no’?‑‑‑Sorry, yes.

PN576

Thank you. It is being recorded. Would the number of operators you would need in a particular ammonia nitrate plant depend on the number of other plants you are running at the one time?‑‑‑Yes. What we have is - is different work that has to happen across the different plants. So obviously certain plants are more labour intensive than others but, yes it is based on the total number that you are running, of course.

PN577

Earlier in your evidence today you said to Mr Gounis, “Can I make a comment?” It was in the context of being asked questions about using employees during a downturn period to do training in other things. What was the comment you wanted to make or have you already dealt with?‑‑‑It was just that when we don’t have enough work in terms of running the operations or plants, we are actively trying to look around for other things to keep people occupied. So that is why during Christmas one of our major customer, Glencore, were planning - I think they had three or four weeks downtime over the Christmas period and so therefore our production did drop dramatically. In fact, that was quite a considerable amount of downtime because of customers really dropping their demand. In fact, that has been quite a serious situation recently in terms of what is happening across the industry. So, yes, we are actively looking at different tasks that we can do down to cleaning, et cetera. And that is why during that time we were really actively keen on - as the operators did come up with a leave plan too to actually help us address that issue.

PN578

Finally, you were asked some questions about safety and the importance of safety. Has Orica undertaken a risk assessment associated with the risks that might arise from reducing the number of operators on shift in the nitrates area from six down to some lower number?‑‑‑Yes, and that is the assessment that is part of, I think, it is attachment 2. I think it is part of the - I think it is called PH-2.

*** PAUL ANDREW HASTIE RXN MR SAUNDERS

PN579

What was the conclusion you reached in that risk assessment?‑‑‑So what we did was we looked at - I suppose the key thing is when - what we have is our - sorry, ammonia nitrate plant 2 makes an ammonia nitrate solution and some of that solution can then get transferred into making Opal which is a solid product - solid component or - all you do is you take the solution and turn it into a solid. That plant, if we are not making a solid, just stays a solution and gets despatched from the site. The analysis that we went through worked out that when AN-2 dry, the dry component is not running, the operator in that area is only 30 per cent utilised. So what we did was we considered what are the 30 per cent of tasks that are residual when that plant is not running and we worked out how we could reallocate those duties across all the other roles. So it was actually like looking at the resource utilisation across the roles and how we could reallocate them and that is part of the first part of that analysis. The other - the other thing we did was looked at what are the possible foreseeable situations and I think we came up with 17 situations that could be an issue in terms of emergency situations. And we went - we went through and worked out, based on those numbers, how we would respond and how - and our - our assessment whether that is an acceptable level of safety in terms of the response to those situations.

PN580

What conclusion did you reach?‑‑‑So we reached the conclusion that really having one less operator as part of those response s there was no difference in terms of the level of safety and, in fact, that was part of the consultation that we put out to the operators to actually get their comment not only how we reallocated the duties but also in terms of the 17 scenarios and we really had no - I think even in the written response, we had no response in terms of issues with those 17 situations.

PN581

When you say one less operator, are you talking about reducing the number of operators in the ammonia nitrate plants from six operators down to five?‑‑‑We have seven at the moment. So we have seven operators but one of the operators is doing leave coverage. So one is, you know, away all the time on leave.

PN582

So you would expect six to be there at any one time?‑‑‑That’s right, yes, and so we were looking at going from seven operators down to six operators. So you would have one on leave and you would have five, yes, at any one time.

PN583

So when you were asked questions earlier today about Mr Gounis about your plans in terms of how many operators you would have on per shift if you are able to succeed in these proceedings, the answer you gave was six operators?‑‑‑That’s right.

PN584

Did you mean by that six operators with five being there at the one time and one being annual leave?‑‑‑It just means that we can either manage through people - when all those parts are running, including AN-2 dry, we would have six operators there actually working. So it could either be through working through how leave is taken during that time so that the extra operator isn’t on leave or we can cover it through overtime just during those short periods. So we would have six operators actually there running all those plants.

PN585

At the moment you have six operators?‑‑‑That’s right.

PN586

Running the plant at the one time?‑‑‑Yes.

*** PAUL ANDREW HASTIE RXN MR SAUNDERS

PN587

Are you saying that in the future if you succeed in these proceedings that will be the same?‑‑‑Only when we have to run the AN-2 dry’s component and that is why we were looking at running it in campaigns. So when you ran it in campaigns you would have those number of people and that is only for a short period of the year and the rest of the time you don’t need that.

PN588

The rest of the time you would only have five there at one time and one off?‑‑‑You would have five, that’s right, that’s right, yes.

PN589

That is the re-examination, your Honour.

PN590

THE DEPUTY PRESIDENT: Thank you. You are excused?‑‑‑Okay.

<THE WITNESS WITHDREW [2.36 PM]

PN591

THE DEPUTY PRESIDENT: Excuse me. So as I understand it, that is it for the day. Is that right?

PN592

MR SAUNDERS: That is the evidence, your Honour.

PN593

THE DEPUTY PRESIDENT: Yes. So Mr Gounis will go first in the morning. I think we have listed it for 10, haven’t we? We can leave it then or we can start a bit earlier if you want to. It is up to you. Do you want to talk about that?

PN594

MR GOUNIS: I am in your Honour’s hands. I don’t mind either way.

PN595

THE DEPUTY PRESIDENT: I think we have already got it at 10, haven’t we, unless we want to change it. No, we will leave it. Yes, we will leave it at 10. It is just easier. So we would anticipate we would be finished by lunchtime, wouldn’t we, I assume. All right, thank you. We are adjourned until tomorrow morning. Thank you.

ADJOURNED TO A DATE TO BE FIXED [2.37 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #S1 DOCUMENT DEPICTING VARIOUS AREAS OF ORICA.. PN18

RODNEY PAUL OSLAND, AFFIRMED........................................................... PN27

EXAMINATION-IN-CHIEF BY MR GOUNIS.................................................. PN31

EXHIBIT #G1 STATEMENT OF MR R. OSLAND DATED 30/03/2014....... PN36

CROSS-EXAMINATION BY MR SAUNDERS................................................. PN44

RE-EXAMINATION BY MR GOUNIS............................................................. PN252

THE WITNESS WITHDREW............................................................................ PN265

SHAUN JUSTIN ELTHAM, SWORN............................................................... PN274

EXAMINATION-IN-CHIEF BY MR SAUNDERS.......................................... PN274

CROSS-EXAMINATION BY MR GOUNIS..................................................... PN300

RE-EXAMINATION BY MR SAUNDERS...................................................... PN499

THE WITNESS WITHDREW............................................................................ PN507

PAUL ANDREW HASTIE, SWORN................................................................. PN524

EXAMINATION-IN-CHIEF BY MR SAUNDERS.......................................... PN524

EXHIBIT #S3 STATEMENT OF MR P. HASTIE DATED 08/04/2015......... PN531

CROSS-EXAMINATION BY MR GOUNIS..................................................... PN533

RE-EXAMINATION BY MR SAUNDERS...................................................... PN572

THE WITNESS WITHDREW............................................................................ PN590

Fair Work Commission Transcripts

C2014/8211, Transcript of Proceedings [2015] FWCTrans 245 (22 April 2015)