C2015/1945, Transcript of Proceedings [2015] FWCTrans 451 (4 August 2015)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1052145

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COMMISSIONER WILLIAMS

C2015/1945 C2015/1955 C2015/2187

s.739 - Application to deal with a dispute

Griffin Coal Mining Company Pty Ltd

v

Construction, Forestry, Mining and Energy Union

(C2015/1945) and (C2015/2187)

and

Construction, Forestry, Mining and Energy Union

v

Griffin Coal Mining Company Pty Ltd

(C2015/1955)

Griffin Coal (Production) Collective Agreement 2012

Perth

10.06 AM, MONDAY, 13 JULY 2015

PN1

THE COMMISSIONER: Before we begin, gentlemen, I m conscious we ve got three applications, two of which Griffin is the applicant in and one of which the CFMEU is the applicant. So just by force of numbers, Mr Power, we might start with you.

PN2

MR POWER: Thank you. I ve discussed the matter with my learned friend Mr Nolan and we thought that would be the most sensible course so I m pleased that s also your view, Commissioner. Commissioner, before I open the case for the company - if I may call it that, rather than the applicant respondent - I understand that my learned friend has some submissions to make to you.

PN3

THE COMMISSIONER: Before we do that, perhaps, Mr Nolan, if you want to put in your appearance before I say anything more, yes.

PN4

MR NOLAN: Yes, I seek permission to appear for the CFMEU in this matter, may it please the Commission, and with me at the bar table I have Mr Kentish.

PN5

THE COMMISSIONER: Yes, thank you, Mr Nolan.

PN6

MR POWER: And I seek permission to appear on behalf of the company and I have Ms Bowman with me.

PN7

THE COMMISSIONER: Yes, gentlemen. Given the complexity of this matter, I m satisfied that it s going to be more efficiently dealt with for both parties to be represented by lawyers, so that s done. Yes, Mr Nolan.

PN8

MR NOLAN: Thank you, Commissioner. I merely foreshadow an objection that I anticipate we will have. Nothing is sought to be deployed in the proceeding yet but late on Friday afternoon we received quite a deal of material from the company. We can speculate about the purpose for that but I d rather not speculate but simply indicate that there was no provision in the directions, of course, for the company to file the material otherwise and in accordance with the timetable that s long since passed and an attempt at the 11^th hour - indeed from our point of view worse than the 11^th hour because it came at about 5 o clock Sydney time on Friday - it really is in our view regrettable and potentially prejudicial, of course, to us.

PN9

Indeed, as I ve indicated, it s flagrantly in violation of the directions that you made for filing the material many months ago. I rise to indicate our dissatisfaction with what s occurred. Normally we try to do our best to accommodate each other, I m sure, but this is really beyond the pale, in our view, and if we reach the point where the company endeavours to try to introduce that material into the proceeding we will object very strenuously on that grounds apart from other grounds we might have to object.

PN10

So I really thought it desirable to raise our concern now in view of the extreme lateness of the filing of the material.

PN11

THE COMMISSIONER: Yes, thank you, Mr Nolan. Mr Power, do you want to explain what the situation is with that material?

PN12

MR POWER: Yes, I will, thank you. Can I start by taking you, Commissioner, to the directions about which my learned friend has addressed you? Those directions were the amended directions which were made when my present instructing solicitors took over as the instructing solicitors on the record. In my submission those directions give you a discretion as to whether or not to permit reliance on the documents. I understand the Commission was provided with a copy of those documents at or about the same time as my learned friend or his instructors were provided with a copy.

PN13

So what I m going to address you on, Commissioner, is why they re important and then why they should be permitted to play a role in these proceedings. Could I start by asking you, Mr Commissioner, to have in front of you two documents, one of them is the 2012 production agreement, as it s been called, and you will find that as annexure A to the first of the applications filed in this matter; that s the application of the company which bears the number 1945. The other document that I would invite you to have in front of you, Commissioner, is an annexure to the witness statement of Mr Raj Kumar Roy and that annexure is RKR6. It appears on page 57.

PN14

You will see that that is the 2009 predecessor to the current agreement. What I would like you to do is to go first of all to the 2009 agreement and I want to take you, Commissioner, to clause 9.2 and 9.3 of that agreement. You will see that on page 7 of the agreement, towards the top of the page. Do you have it?

PN15

THE COMMISSIONER: Yes.

PN16

MR POWER: May I ask you, sir, whether you ve had a chance to read these provisions before?

PN17

THE COMMISSIONER: I ve had a chance but I didn t know these were the particular provisions I needed to read, Mr Power.

PN18

MR POWER: Very well. I ll take a little bit of time. If I could just give you a moment, Commissioner, just to read through them to yourself before I make some brief submissions about them.

PN19

THE COMMISSIONER: Yes.

PN20

MR POWER: Commissioner, you ll see that what these two provisions in the predecessor to the current agreement is create an effective right of veto. Now, that is to be contrasted to what appears in the current agreement. If you go to clause 9 of the current agreement you will see some similarities and some differences, relevantly, for the purpose of this argument. In clause 9 of the current agreement, you will not see clause 9.2 and 9.3 of the former agreement reproduced anywhere in that clause or anywhere else in the agreement so the effective right of veto which did exist in 2009 has gone in the current agreement.

PN21

One of the things which has remained, however, is clause 9.1 so that clause 9.1, under the heading, Hours of work, in the 2009 agreement is the same as clause 9.1 for all intents and purposes in the current agreement. There are some differences but they re not significant differences for the purpose of this argument. I ll make some further submissions about how they relate to the substantive argument that will be put by my learned friend later at that time. But the point is that the effective right of veto at clause 9.2 and 9.3 has been removed.

PN22

Now, one of the other differences between these two agreements is that when you look at the current agreement and you go to the back of that you will see there s a clause 21. It appears on page 22 of the agreement and it appears under the heading, Consultation. I imagine, Commissioner, that you ve had a chance to look through this one because it s referred to directly in the submissions.

PN23

THE COMMISSIONER: Yes, I m aware of this, yes.

PN24

MR POWER: But when you look at the 2009 agreement you will see no equivalent. I m going to take you then to the documents which were filed with the Commission on Friday and served on the union, to explain why they are relevant to the issues before you. I start with the email from Chris Godfrey of 25 April 2012. You will see that that is sent to a number of recipients, including the CFMEU Mining and Energy Division of Western Australia. You know from paragraph 1 of Mr Wood s witness statement that he has been the district secretary of that division since 1987. So it would be reasonable to infer that as it was sent to that address it was received by Mr Wood.

PN25

You also know from Mr Wood s statement that he claims to have been intimately involved in the negotiations for the 2012 agreement. Now you see that the email attaches a draft of the current enterprise agreement; that is draft number four. Then when you look at what is attached to this email from the general manager of employee and industrial relations at that time, for the company, you can see that on its front page it has a date - 25 March 2012 - and then a legend on the front page indicating that anything shaded in yellow indicates a clause for further negotiation.

PN26

When you go into that document and you go to page 8 - do you have that, sir?

PN27

THE COMMISSIONER: Yes.

PN28

MR POWER: You can see there that clause 9 begins and runs over the page and to the next page as well, being page 10. Now, clauses 9.1, 9.2, 9.4 and 9.5 of draft four are the same as 9.1, 9.2, 9.3 and 9.4 of the current agreement. The difference in numbering is explained by the fact that in draft four the heading, Start and finish times and locations, on page 8 has been given its own number. That is obviously a drafting error. You will see that draft - this draft number four has at page 22 the bulk of clause 21. This is the consultation clause that I addressed you on a short moment ago.

PN29

This clause - 21, as I submitted a moment ago - was not in the 2009 agreement. So this is a document that precedes a document in the bundle which is of some significant to the exercise in construction which you are going to be asked to undertake. You then go to the next document in the bundle, you ll see that that s a calendar invite inviting the addressees to attend a meeting on 9 May 2012 for an hour and a half at the Muja boardroom. It s addressed to, among others, the CFMEU Mining and energy division WA, so again, the email address at which Mr Wood received email.

PN30

Attached to this calendar invite, is a copy of the draft enterprise agreement and you can see from its turns but also from the calendar invite again that it s draft four. So that s the draft I ve just taken you to; in other words, draft four was to be the subject of the discussion that was to take place on 9 May. The next document in this sequence - and the reason why we re providing you with a series of documents is so that you have the context - the next is perhaps the most significant of these documents but needs to be seen in the context of the others.

PN31

It s an email from Mr Godfrey of the company, again addressed to the same address at which Mr Wood would receive emails. It s dated 15 May 2012, sent at 3.31 pm. It s an email - I beg your pardon - from the CFMEU this time, from the union, to Mr Godfrey and it s headed, Agreement changes. It s sent by Cheryl Sanders, who was the administrative secretary of the union to Mr Godfrey and attached to it is a schedule or table that is dated 1 May 2012. So this is a table which by its date appears to predate draft four - sorry, post-date draft four but predate the calendar invite.

PN32

So it s a document which you can see describes a certain number of changes in a particular way to the agreement which was then going through a series of drafts. It was the subject of negotiation. If you look at the columns going from left to right, you ll see that the first column describes the heading of the clause, the second column going to the right, its number, the third the page at which it appears in the document; the next column, what was added, removed or changed and then skipping the next column if you go to the last two columns to the right-hand side it indicates by the contents in those last two columns what was old - that is, from the previous agreement - and what is new.

PN33

Having understood that, may I take you then to the second page of this table? Now, if you look at the second page, about two-fifths of the way down that page you ll see that there s a reference to clauses 9.2 and 9.3. Do you have that, Commissioner?

PN34

THE COMMISSIONER: Yes.

PN35

MR POWER: You can see that - if you go to the next column but one - it s described as clauses that are removed and the topic is rosters. Now, the next two columns are telling. The first one, under the heading, Old, says:

PN36

9.2 and 9.3 of old agreement dealing with the proposed introduction of a different roster have been removed.

PN37

Now, that s of course a reference to the two clauses which put into the previous agreement an effective right of veto. It then goes on to say:

PN38

However are dealt with in clause 21, consultation on page 22.

PN39

You can see if you go to the extreme right-hand column that it refers to the new 9.2 that has been added. The Commission then goes to the last page of the table, which is not the last page of this document. The last page of the table occupies half the page and it deals with the consultation clause number 21. It says it s added. So what this document would support is an inference that there is a connection between the removal of clause 9.2 and clause 9.3 in the 2009 agreement but it is being dealt with now in clause 21. So whereas there was formally, in our submission, an effective right of veto, that has now been removed and the question of rosters - the subject matter of the old 9.2 and 9.3 - among other things would now be dealt with by clause 21, the consultation provision.

PN40

So this document is in our submission significant because what it does is it gives you an insight, being a document from the union, as to the way in which clause 21 should be read with clause 9. It gives you some indication as to the work which is to be performed by clause 21. Can I then take you to the next document, just to complete the contextual picture? The next document is an email from Mr Godfrey on 30 May at 5.51 am. It s sent to, among others, the union office. It says, relevantly, in the first few lines, Hi, Garry - presumably Garry Wood:

PN41

We have attached our final proposal with amendments in green as discussed.

PN42

Then when you go the document that s attached it s dated 29 May 2012 so now at the end of the month in which the previous document was drafted and sent, and if you go to page 8 of this document you will see there the start of clause 9 of the hours of work and rosters clause. You ll see that that is the current 9.2 is there. The old 9.2 and 9.3 from the 2009 agreement have gone. Then when you go to page 22 of this document you will see the consultation clause as it currently exists in the present agreement. I don t want to labour the point, Commissioner, but in our s8ubmission there are a number of documents because it is necessary to give the critical documents some context.

PN43

The critical document of course is the email from the union of 15 May 2012, sent to Mr Chris Godfrey of the company and attaching the table which explains the relationship between the removal of the old clause 9.2 and 9.3 and the work to be performed by the new clause 21. So in my submission that in itself gives the document that were filed and served on Friday sufficient importance to warrant your consideration in this case.

PN44

Now, I accept of course that the degree of significance is a matter that might diminish or strengthen in the course of the evidence of Mr Wood. That s an imponderable at this stage. But they certainly do have some relevance and would assist the Commission, in my submission, in the construction exercise which it s being asked to undertake. I appreciate, of course, that part of the union s case is that clause 21 has a limited function and it is the union s case that clause 21 cannot do that which the company says it can do. But that is an argument on construction which will have to take place before you at some later point in this case and the Commission will no doubt form a view about which argument it prefers.

PN45

But these documents are relevant to that argument. May I then, having dealt with the importance of the document, come to the question of whether you should permit the company to rely on it. I would say these things in support of the exercise of the discretion in favour of the company: the first thing is that when you take the directions that you made and compare them to the original directions you will appreciate, Commissioner, that in the original directions the timeframe permitted for the company to respond - that is to put its reply case - was originally two weeks.

PN46

You will of course be aware, Commissioner, that there was a concern by the parties to hang on to the original trial dates, commencing today, and for that reason one of the things which the company did was to compact the time for its reply case to one week. Originally it had two. It proceeds on the basis that it would have to live with one so that we wouldn t lose the hearing dates. As it turned out that amount of time was simply insufficient for it to complete the searches it needed to to find all of the relevant documents in reply, including these documents.

PN47

The second thing that I would advance to you, Commissioner, is that these documents which are now being argued before you, of course, are documents that in all likelihood were sent to or sent from persons which would either include Mr Wood or where Mr Wood would have some direct involvement. In other words, they are documents with which Mr Wood should be familiar. So they should not take him by surprise because his evidence is that he was intimately involved in these negotiations. Mr Wood gives evidence about the negotiations, leading up to the current agreement, at paragraphs 23 to 28 of his statement dated 25 June 2015.

PN48

It was the service of that statement on 25 June 2015 which started a train of inquiry where among other things searches were made for records, any records that the company might have, dealing with the matters about which he referred to in his witness statement. Of the people acting for the company in those negotiations - that is for the 2012 agreement - none of them are currently employees of the company. So it wasn t as though the company could go to its employees and ask for assistance to track down these documents. Mr Chris Godfrey has not for some time been an employee of the company. His employment ended in 2012.

PN49

So there was in a very real sense a logistical difficulty in finding documents of this type which might assist the Commission. I accept that that will cause some inconvenience and those representing it and for that, I apologise. But it should not be taken as the case that the company has been less than diligent in trying to find documents of this type. Having found them, they are of importance to the resolution of the issues, particularly the construction arguments, and they ought be before you.

PN50

In my submission, even though it is of course open to the union to complain about the delay, the fact of the matter is that the prejudice if any caused by that delay must be in my submission minimal and it must be minimal because they are documents, as I said a moment ago, about which Mr Wood should be familiar, that he can give instructions on, and if it requires additional time for that to happen, so bet it. But they ought not be excluded, given the relatively slight nature of the prejudice and given the importance of those documents to the resolution of the issues before you, sir. Thank you, sir.

PN51

THE COMMISSIONER: Mr Nolan, what is your view, having heard that?

PN52

MR NOLAN: Sorry, Commissioner?

PN53

THE COMMISSIONER: What is your view, having heard that, Mr Nolan?

PN54

MR NOLAN: Yes, well, of course the primary position is that the onus is on the party who seeks to adduce material late and out of compliance with the directions that have been made to establish that there s a cogent and overwhelming case for the exercise of the Commission s discretion to relieve it of the burden of the directions that have been made. It s not surprising that our view is that no such cogent case has been made. So as a matter of pure convenience, the burden, we say, still hasn t been overcome.

PN55

But there is a more fundamental point at stake here and that is the real extent to which any of this material can have any probative value in coming to a conclusion about the legal question before you - namely the construction of the agreement - and the authorities all go really one way on this question. I cited in the written submissions that were filed earlier but in a slightly different connection the recent decision of the full bench of the Commission in the Golden Cockerel case, where they look at those rules that apply to the admission of material to consider whether or not surrounding circumstances are relevant to the question of construction of a particular clause.

PN56

We say that that authority applies squarely to the material that s sought to be adduced here and if applied properly would of course treat that material as being inadmissible. So we have that very powerful authority standing in the way of the admission of the material. There is another authority that is perhaps even more on point - I haven t got a hard copy of that but I can provide copies in due course - and that is a decision of his Honour Justice Moore, as he then was, in the Federal Court, in a case called Moshirian v University of New South Wales.

PN57

This very issue of the admissibility of material that was really concerned with the negotiations that the parties had leading up to an agreement was considered and dealt with quite comprehensively by his Honour Justice Moore. That case was [2002] FCA 179 1 March 2002. The relevance of that was that it was a prosecution that dealt with the meaning of a particular provision in the agreement. It was a case where the employer in that case endeavoured to call in material that recorded the deliberations of the parties and negotiations leading up to the agreement and his Honour said that material simply was not admissible and had to be distinguished from the background circumstances and the kind of things that are mentioned in Golden Cockerel and similar authorities.

PN58

I ll just mention a couple of quick observations that his Honour made. He said:

PN59

The university sought to rely on an earlier certified agreement.

PN60

I interpose there that we can see the comparison with the present case:

PN61

On evidence of the negotiation of the relevant clause in the agreement in its present form in support of its preferred construction. Evidence of the historical background to an agreement can be a permissible extrinsic aid to interpretation, at least to the extent that it illuminates the objective background of facts that were known to both parties and/or the subject matter of the agreement or award.

PN62

There are a number of authorities his Honour refers to. He goes on to say, though:

PN63

However, as I understand the present state of the authorities, evidence of the historical background to an agreement, including evidence of antecedent negotiations, is irrelevant insofar as it s relied upon simply to demonstrate the subjective intentions, aspirations or expectations of the negotiating parties. That is because the interpretation of an ambiguous word or phrase turns not on the actual or stated objectives of the negotiating parties but on their presumed intentions as inferred from the words chosen by the parties in the context of the facts and circumstances known to them.

PN64

He goes on to say that in the circumstances that class of material simply doesn t come up to the bar to qualify as relevant extrinsic material that can be called in aid of an interpretative task. I ll provide copies of that in due course. As we would see it, that is squarely in the territory of what s attempted to be done here. But perhaps there is another powerful reason in the present context why the admission of this sort of material really should be rejected and treated with great suspicion and that is that of course under the mechanisms that exist at present under the statutory scheme for the adoption of enterprise agreements, it s not the union officials or the negotiating parties who have the last word on the acceptance or otherwise of the content of the agreement; it s the workers who vote in the ballot.

PN65

It can t be presumed the workers who voted for the document that was presented to them had in their minds any notion at all of the various steps and toing and froing that went on with the antecedent negotiations. What they were voting on unambiguously is the document that was presented to them for approval. Nothing more can be made of that and nothing less. It s only in circumstances where the contentious clause itself raises some ambiguity that one then is permitted to make some further inquiries of the kind that were discussed in Golden Cockerel and other cases, where that extended exercise is undertaken.

PN66

But of course, in this particular case, the clause in contention, it seems, has now become clause 22, the consultation clause. Now, that clause, in our submission, is really quite uncontentious. It s quite an unremarkable clause. It happens to be the clause that was adopted by the parties to replace the - to the extent that it did replace those previous provisions, if one accepts the annotation on that table. But the point to be borne steadily in mind is that when one looks at clause 21, Consultation, and when one looks at the relevant contentious subclause in clause 21(9) one sees a list of matters that are the subject - that may be the subject of consultation, where the major change is likely to have a significant effect.

PN67

As it happens, that list of matters - the termination of employment and so on - are all identical in fact of the requirement of the Act for the standard consultation clause. When one looked at that table that referred to the discussions that you have been referred to a moment ago, so much is confirmed because the table itself indicated that clause 22 simply picked up the standard consultation clause. So nothing more nor less can really be made of the whole exercise, except for the fact that in clause 21 the compulsory clause, which is to be found in the schedule to the Act, was added to the agreement.

PN68

That says nothing; it tells us nothing at all about what was intended or what wasn t intended outside of that. The clause speaks for itself, frankly, and in the absence of any indication that would call into question the clear words of the clause, all the more clear we would say because they really just replicate the provisions in the statutory model clause. It s really quite inappropriate and legally impermissible to start to trawl back and look over the entrails of the negotiations and negotiating provisions and who said what to whom to try to spin up some alternative view of what the clause was intended to mean.

PN69

You can t be assisted by that; it s an approach that s been on numerous occasions rejected by courts and tribunals and it ought to be rejected in this case. It cannot be of assistance to you to. To the extent that you were, with respect, tempted to try to make something of it you would be entering into territory where you would be committing legal error and acting contrary to the authorities, most recently expressed and reiterated again in Golden Cockerel.

PN70

THE COMMISSIONER: Thank you, Mr Nolan. Gentlemen, we seem to be moving beyond the initial question for me, and that is whether or not I ll allow the material to be introduced and considered. The question of - if that material is introduced - what if anything it brings to this case is a separate matter. My view in short is this; the material appears to be relevant. I am concerned it s been introduced at a late stage. In the circumstance this Commission generally takes a flexible approach. So my intention is this; the material will be allowed to be introduced through I assume cross-examination of Mr Wood, Mr Power?

PN71

However, Mr Nolan, should you be of the view that Mr Wood is prejudiced in some way, given the timing of this material being made available for himself and yourself to consider, I will consider an application for an adjournment or whatever, given my sense is that this case is not going to take the full three days we ve set down for it. So there is some latitude there. Also, Mr Nolan, should the union be of the view that there is responsive material that Mr Wood would want to give evidence about, similarly I would allow that to be introduced if it was in response to these documents.

PN72

Can I say this - just sit down, MR Nolan, for a moment - for what it s worth, gentlemen, the material, whilst I understand Griffin s interest in having it before me, I have real doubts as to its capacity to demonstrate objectively the mutual intention of the parties in terms of provisions in the agreement. That seems to also be in issue, Mr Power, given if Mr Wood s the only person who was around when this agreement was negotiated even his view about those things is only one side of the argument s view. The issue, gentlemen, as well is this; regardless of these documents, the prior agreement is different from the current agreement.

PN73

I can take judicial notice of the prior agreement and the changes therein and much of this material just reinforces those changes. What I make of those changes, goodness knows. So thank you for that. We ll move on. Yes, Mr Power.

PN74

MR POWER: Thank you, Commissioner. As I indicated earlier, my learned friend and I had some discussions about the way in which we would proceed and it s certainly been agreed between us, subject to the Commission s view, that I would now open the case for the company. Can I just indicate to you, Commissioner, that I will take longer than I would normally take in opening a case because it is the sort of case that in my submission would be assisted by a more detailed opening so that I can develop some of the written submissions. I do so fully understanding that the written submissions which have been filed by the parties are fairly comprehensive already.

PN75

For the most part, probably they are easily understood. Would it be convenient for me to begin now?

PN76

THE COMMISSIONER: Yes, thank you.

PN77

MR POWER: Thank you. Commissioner, the temptation in a case like this is of course to address you on the issues which are most obviously and hotly disputed between the parties and it would be apparent from your review of the written submissions that one of the hot issues between the parties is the proper construction of the current agreement and what it permits and does not permit. But that is not where I m going to begin. I want to deal with the question of the need for the proposed roster before I move to the question of whether it can be done and if so, how. In respect of those propositions it s the company s case that there is a very real need for the new roster.

PN78

It can be done and it can be done without a great deal of complexity. I ll explain why in a short while. The Commission would be aware that the company mines thermal coal at Collie. It and Yancoal are the two companies which mine coal at that location for the supply of, among other things, power stations located close by. Currently the company mines coal at two areas: Ewington One and Ewington Two. IT currently has three customers: Bluewaters Power, BHP Billiton Worsley Alumia and Cockburn Cement. They are domestic customers and that is its market.

PN79

That of course has a consequence on what it can extract by way of price for its coal. Supplying those three customers, it is required on average to produce 2.85 million tonnes of coal per annum. In the past, the company has been meeting that target with some variable levels of success and failure and one of the reasons for that is because since January 2010 the company has been operating at a business loss. As the Commission would know, the current proprietors of the company, Lanco Infratech Ltd, acquired the business on 28 February 2011. It acquired it from the then administrators. Since then the business has continued to run at a loss, excluding the capital acquisition cost of Lanco, excluding the payments required to service the debt incurred for that acquisition the operational losses to date are $160 million. It s only been able to continue operating the business because of intermittent injections of capital from the parent company.

PN80

In my submission, this is the background against which this application by the company - these applications by the company - need to be seen. Now, the reason why the business is in its current dire financial position can be tracked to a number of factors but two of those factors are of particular significance. The first is, as I indicated a moment ago, the domestic customers of the company acquire coal under long-term contracts. Those long-term contracts have fixed prices for the coal. Those prices are below what it currently costs the company to produce it and that position simply cannot be sustained.

PN81

The second reason of particular significance for the current dire financial position is that in recent times there has been a significant increase in the costs of wages and salaries. So the labour component for producing the coal has gone upwards. It was 30 per cent of its total operating costs in 2010. For the year ending 31 March 2014, it was 43 per cent. On the most recent figures it s hovering slightly in excess of that. Its labour costs are the company s biggest operating costs of the moment so it clearly has to do something to change that position; it just cannot continue to suffer these sorts of losses and be expected to continue as a business.

PN82

A decision has been made that fundamental change is required and one of the steps in implementing that fundamental change at these operations is the introduction of this roster. Now, that brings me quite naturally to a consideration of the production agreement and by that, Commissioner, I am referring of course to the current enterprise agreement of 2012. That s an agreement which bears the date 31 July 2012 but of course as you would know operation on 7 August of that year. For the purpose of this argument by the company it is of most importance to look at clause 5 of the agreement.

PN83

Clause 5 is the clause which contains the principle objectives; it s the objectives clause. You can see that s replicated at the bottom of page 3 of the submissions. Would it be easier for me to work through the submissions or through the agreement, sir? You don t mind?

PN84

THE COMMISSIONER: It doesn t concern me; whichever way you wish to do it, Mr Power.

PN85

MR POWER: All right. Well, if you look at clause 5 of the production agreement you can see there that the draftsmen of the agreement have gone to the trouble of recording the principle objective of it. The principle objective is to secure the future of Griffin and its employees. You only need to understand a little bit about the history of Collie coal mining to understand why that might well be a principle objective of this agreement. You can see it goes to the trouble of not only telling you what the principle objective is but telling you how it s going to be achieved and its going to be achieved - the parties have agreed - by the establishment of efficient and effective operating practices which, it is noted, will minimise the cost of operations.

PN86

So front and centre, that is what is important about this agreement and it s important on how you should construe the agreement. The second paragraph of the principle objective tells you that to achieve it the parties have agreed to a process of continues improvement to make the mine a number of things, one of which is to make it cost-efficient and as productive as possible. It records in the same paragraph, The parties will cooperate to achieve that objective. I emphasise that because that part - the commitment to cooperate to achieve the objective - is something that is then picked up, in my submission, later on in this agreement. I ll take you to those clauses in a moment.

PN87

This paragraph concludes by making the point that the parties recognise that two things are the main factors that will contribute to Griffin Coal being more competitive with other energy resources: one is quality, the other is cost. Now, stepping back from this objectives clause and looking at it, a number of things are apparent. The first is that there is a clear agreement by the parties to work together to produce efficient and effective operating practices. That is their joint commitment. The second thing that is apparent when you look at this clause from a short distance away is that there is a clear recognition in this objectives clause of the need for cost-saving and efficiency and those two things cannot be ignored when you construe the balance of the agreement and work out how it operates.

PN88

Now, the reason for the additional roster - the proposed roster - is dealt with in section C of the submissions, starting on page 4. The simple fact of the matter is that there is no longer a need to have all of the production employees working on the current 12-hour, seven-day rosters. What the additional roster seeks to do is to make sure that the majority of those employees will be used in a way that is both efficient and which meets the current production needs for the company. The way in which it does that, as you can see from the documents that have been filed, is to reduce the number of hours from 42 to 35 and in doing so and as part of doing so removing a lot of the loadings that would otherwise apply.

PN89

Instead of working seven days a week the majority will work five days a week. So it is about the efficient use of its labour resources to produce what it needs. Now, why would any company maintain its current labour cost if it wasn t needed? It really is as simple as that. The reason it needs to do it is because if it doesn t do it, as I say - and it s a matter of obvious inference - there might not be any business to employ the production employees. So it s not a matter that the company does with any concern other than to insure its survival and the continuing employment of its employees.

PN90

There is no talk in any of this about terminating employment of employees. There is no talk of making them redundant. This is about continuing to employ all of them but in a way which meets the competing needs of the employees and the company. The one common denominator between those needs is the need for the business to survive, which will insure their continued employment. So in that way, what is proposed by way of an additional or if you prefer new roster, is entirely consistent with the principle objective of this agreement.

PN91

It is the firm position of the company that it can introduce and implement this additional roster and it is the firm position of the company that there is nothing in the agreement or elsewhere that prevents it from doing so and I ll elaborate on that in just a short moment. May I just deal with one issue that is of some significance to understanding how it can be done? That is a matter which is dealt with in the submissions at page 5. So I m now referring to the first set of submissions and you can see there that the submissions deal with the matter of managerial prerogative.

PN92

It s a term that sometimes attracts unwanted attention. But that is irrelevant. The fact of the matter is an employer does have certain entitlements to operate its business in the way it sees fit. Now, of course, those entitlements are not unfettered and they are restricted by a range of matters, which I will deal with in a moment. But it s not some illusory right. It does exist and in a case where it s appropriate for it to be exercised, it should not, with respect, be the subject of interference by any arbitral body, including of course this Commission and I say that with the utmost respect. The Commission will see that we deal with the case of the AMWU v Silcar at paragraph 26. It makes the point, albeit in respect of shift arrangements, not rostered hours:

PN93

That is, in the absence of any term of a binding industrial instrument that prevents an employer from making changes, an employer has a managerial prerogative to

PN94

in that case

PN95

alter both the pattern and structure of shifts and the particular shift worked by an employee.

PN96

In the written submissions, we then deal with a number of other cases and I won't recite the facts of those cases to you because, with the exception of one of them, the factual context which of course always has a bearing on the application of the principle emerging from it is less important than the legal principle which the respective cases provide. You'll see that we deal in paragraph 27 with the case of AMWU v Rheem Australia. The written submissions have not identified the relevant paragraphs. I'm going to do that for you now. The relevant paragraphs are 84 to 86. I'm not going to take you to them, Commissioner. It's not necessary to do so for the purpose of this address.

PN97

In that case, of course, there was an enterprise agreement which incorporated certain terms of the modern award and there was nothing in the enterprise agreement or in those incorporated terms which prohibited the transfer which was the subject of dispute in that case. Again this is another example of a case where an examination was made of the regulating industrial instrument to see whether there was a prohibition and, none being found, the power being exercised by the employer was held to be within its right.

PN98

The next case is the Australian Workers Union v Orica. You'll see there that the written submissions rely on paragraph 35. There are some additional paragraphs to which I want to draw your attention. They are paragraphs 39 and 41. I will not read them to you. That is an interesting extract from paragraph 35 of that decision where Lawrence DP made the point that:

PN99

Generally speaking, employers covered by agreements have a right to implement change in -

PN100

and I miss the next two words -

PN101

hours and rosters, et cetera, to deal with the demands of changed economic circumstances provided that they consult and there are no express provisions in the relevant agreement which prohibits them making the change.

PN102

The Commission will immediately appreciate that this is a very similar line of argument to the one which is adopted by the company in this case. You'll see that we then take the Commission to the decision of the CFMEU v HWE Mining Pty Ltd. The passage that is referred to and which is extracted in the balance of paragraph 29 comes from parts of paragraphs 7 to 10, so there are other parts of those paragraphs which are not reproduced, but the relevant parts are. It is the last part of that to which I wish to draw your attention, where it says:

PN103

However, managerial prerogative in relation to employees is subject to legal constraints.

PN104

I am missing a few words. It then says:

PN105

It may also be constrained by the terms of a contract of employment or a statutory agreement.

PN106

I miss a few words and I quote:

PN107

For example, an enterprise agreement might provide that all work must be carried out in accordance with a roster pattern specified in the agreement.

PN108

I will come back to those words in a moment.

PN109

In that example, unless the agreement also confers a right on the employer to vary the roster pattern, the employer has bound itself not to require employees to work a different roster pattern.

PN110

So this is factually different, in our submission, from the case before you today. I come back to those words -

PN111

an enterprise agreement might provide that all work must be carried out in accordance with a roster pattern specified in the agreement.

PN112

That is not the case here. There is no clause here which says that all work must be carried out in accordance with a roster pattern specified in this agreement. It's not that case. Nor is it the kind of case that is portrayed by the words which follow that. Commissioner, I will develop that argument in the context of the provisions of this agreement in just a moment, if you're happy for me to do so.

PN113

The next passage that is cited from the HWE decision, the Henry Walker Eltin decision at paragraph 11, is recited at paragraph 30. I draw your attention to this paragraph because it links back to a submission I made to you a moment ago. In this passage it was observed that:

PN114

If an employer's exercise of managerial prerogative is not prevented by statute, an award, a statutory agreement or the contract of employment, the basis for a tribunal such as Fair Work Australia acting as an arbitrator of a dispute, interfering with what would otherwise be a lawful exercise of managerial prerogative -

PN115

I skip the words in brackets -

PN116

was laid down in Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales.

PN117

Then there is cited a passage from that case, the XPT case below, where it is said:

PN118

It seems to us that the proper test to be applied and which has been applied for many years by the Commission, is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.

PN119

Now, I have recited that passage to you, Commissioner, because it is the company's submission that the manner in which the company conducts its operations to meet its production targets and to make its operations more efficient, is not in general terms a matter with which this Commission should interfere. In making that submission, I acknowledge of course that the Commission has to give some consideration - and it's appropriate for it to do so - to the competing interests of the employees, by which I mean the hardship that will obviously be visited on them as a result of the introduction of a new roster.

PN120

There is a line to be drawn and, for example, where the company - as it does in this case - puts to you a case that says, "We intend to produce coal in a particular way and here is our plan to do so," it's neither desirable nor necessary for the Commission then to be looking at the plan to say, "Well, look, there might be a better way of doing it," or, "I might do this differently," or, "It might be done better in this way and therefore I'm going to be critical of the way in which it's being done." That would not be a proper exercise of the Commission's role, in our submission. It is always open to any employer - in particular a mining company - to conduct its operations in a particular way.

PN121

There might always be some criticism levelled at the way in which it conducts its operations and there might be some doubt expressed about whether it might achieve its objectives; its stated objectives. It's always the case that an employer has a range of operational and managerial choices open to it and it might always be the case that someone will say, "Well, there's a better way of doing it," but that's not the matter which should concern the Commission because otherwise you are putting yourself in the shoes of the company and second‑guessing it. That's not a role which I would have thought the Commission would ever want.

PN122

I referred to a case which was an exception a short while and that's a case with which you, sir, have a particular familiarity. It's dealt with at paragraph 31 of the outline of submissions. It's the West Australia Newspapers v AMWU case in which you presided. Because of that, I need not make lengthy oral submissions about it, but I do want to make some points about this to the Commission because they bear upon the argument in this case.

PN123

In that decision, the Commission considered the content of the obligation of West Australia Newspapers to exercise its managerial prerogative fairly and reasonably. There is no contest about that fetter on the power. It's trite law. It concerned a dispute, as you well know, about changes to rosters and manning levels. The factual context of course was that West Australia Newspapers had for some time been battling falling revenue from its advertising and other revenue raising sources, and it could not sustain the wages it was paying to its employees in light of that falling revenue.

PN124

As a consequence of that, roster changes were proposed and the essence of it was that the majority of employees would then work ordinary hours rather than hours with loadings attached to them. In that case the Commission concluded that the changes which were proposed were not unreasonable and were not unjust, and were not contrary to the terms of the agreement in that case.

PN125

You found specifically at paragraph 74 - which is recited at paragraph 33 of the submissions - that:

PN126

It is not reasonable for those employees to demand or expect that existing rosters and manning levels will always remain in place.

PN127

We say the same here. Given the current financial predicament of the company and given what is likely to happen if that position continues, it is not reasonable for the employees to continue to expect the same level of remuneration. Can I turn then more particularly to some particular provisions of the production agreement. I start by setting out these provisions at pages 7 and following in the first outline of written submissions.

PN128

I start with clause 9. Clause 9 of the agreement deals with hours of work and rosters. If you look at clause 9.1, you'll see that it goes to the trouble of distinguishing between ordinary hours of work, which it then nominates as 35 hours per week, and an additional seven hours per week which in combination amount to the average weekly hours for a part‑time employee of 42 hours. It refers to the current annualised salary in schedule A and by subsequent provisions makes it clear that the 42 hours worked on average per week are used in the calculation of that current annualised salary.

PN129

If we then go to 9.2 - bearing in mind that 9.1 is under the heading Hours of Work - 9.2 then deals with a different matter under the heading Rosters. It is the only clause under the heading Rosters. There are some notable things about this clause. It no longer - as I indicated earlier in my submissions to you, Commissioner - has an effective right of veto. That is gone. It takes the trouble to refer to a current roster, not "the roster", which would have a very different connotation.

PN130

It takes the trouble to note that the current roster "in schedule C will specify the normal commencing and finishing times of ordinary working hours of each shift", but everything, in my submission, needs to be coloured by not only the words "current roster" at the commencement of this clause, but the other clauses which I will take you to in a moment in this agreement which indicate that there is very much a temporal qualification that must be applied when reading this agreement.

PN131

9.3 deals with Start and Finish Times and Locations. 9.6 deals with Breaks. Then I come to clause 10.1. There are a number of parts to this clause which are of some assistance in answering at least one of the questions which has been posed for you which is whether, in effect, the company can introduce and implement the new roster. The starting point for the oral submissions is in the second sentence where there is a proviso. The proviso applies where a new roster is introduced. When that happens, the effect of the proviso is schedule A is no longer payable.

PN132

As a consequence of that, it triggers something. What it triggers is that "a new annualised salary will be agreed" and then in brackets "or determined by FWA." There is, in my submission, a reason why those words are in brackets which I'll come to later in the context of clause 21. We don't, contrary to the submission that has been made against us, rely on or pull on this loose thread in 10.1. It's a bit more than that.

PN133

Where it's said against us that this is a - I withdraw that. Perhaps I'll come to that construction when it's more appropriate to do so in the context of clause 21. Of course in construing this agreement, Commissioner, it is important to have regard to the principles of interpretation for industrial instruments and there have been many, many descriptions of those principles. The one which we rely on is that in paragraph 39 of the first outline of submissions.

PN134

It's extracted from the Transport Workers Union v Smith Brothers Trade and Transport Terminal Pty Ltd case, from paragraphs 5 to 6 in particular, where Asbury DP relied on the convenient summary of Federal Magistrate Emmett in the New South Wales Nurses Association v SOS Nursing and Home Care Service case. Then he set out, in paragraph 13, summaries principles. The ones which we would ask you to keep in particular mind in this case in construing the arguments of the parties on how the agreement should be interpreted, are numbers 1, 3, 6, 7, 9, 10 and 12. I am not going to read those to you.

PN135

I then come in the written submissions to the proper construction of the agreement itself. The first thing we say about this agreement is that when you look through it closely, there is nothing in it which you can properly hang your hat on saying it prevents the company from implementing the additional roster. We have made the submission to you already, Commissioner, that when you're construing this agreement, the principal objective which is so clearly framed and jointly committed to as a matter of direct expression by the parties should guide the construction of this agreement, particularly so in the current financial predicament of the company.

PN136

We make these two further submissions. When you look through this agreement, there is no question that there are a number of clauses in it which refer to 12‑hour shifts and rosters. If you were to look at that in a superficial way, you might say, well, because there are that many references to 12‑hour shifts and rosters, what this agreement is dealing with is just 12‑hour shifts and rosters. It's something that cannot be changed except by a variation of the kind which the union advocates.

PN137

Then when you look more closely at these different provisions which reference 12‑hour shifts and rosters, and you ask yourself the question why do they mention 12‑hour shifts and rosters, you can quite readily come to the view of two things. First of all, when you look at the references to 12‑hour shifts and rosters against the background of the whole agreement, you can see that what was proposed and what was current at the time the agreement was entered into was shifts and rosters based on 12 hours.

PN138

The question you ask yourself then is, is that immutable? Is that the only way in which it can be addressed? In other words, do you require a variation of the kind contemplated by sections 208 and 209 of the Act to change that. What we say about that is when you look closely at these provisions and the whole agreement, the agreement doesn't describe those references to 12‑hour shifts and rosters in a way which makes it clear that they are the only shifts and rosters which can be worked. I'll explain that in a little while.

PN139

Secondly, we say that when you look at the whole of the agreement, you can quite properly conclude that there are a number of clauses in here which indicate to you that 12‑hour shifts and rosters are not etched in stone. Clause 9.2 of which I've taken you to before, refers to a current roster. It doesn't say that the roster described in that clause will be the only roster that will be worked by employees during the term of this agreement. It does not say that, nor does it say that that roster is a permanent roster.

PN140

Now, it might be argued against it that that is a matter of implication, but it doesn't say either of those two things. If you wanted to make it clear that the only roster that could be worked under this agreement is a 12‑hour roster - a 12‑hour shift running seven days, so that's the roster pattern - if you wanted to make that clear in this agreement, what you could do is you could define those terms. There's no definition in this agreement to that effect.

PN141

Again, it is of course open to say against us, well, that's not the end of the argument. Of course it's not the end of the argument, but it's an indication of what the parties may or may not have intended. What we say about these references, therefore, to 12‑hour shifts and a roster pattern of seven days a week, is it does no more than just reflect the existing rosters at the time the agreement was made.

PN142

As we say in paragraph 46 of the first set of written submissions, if they were to be the only rosters ever to be worked except for a variation under the Act, then the agreement could quite easily have said that - it does not - and there would have been no need to refer to 12‑hour rosters. The way in which they are referred to is a reference point for the calculation of entitlements. Commissioner, do you intend to take your normal morning break?

PN143

THE COMMISSIONER: Are you getting close to a witness?

PN144

MR POWER: I'm getting close to finishing this section of the submissions, I'm sorry.

PN145

THE COMMISSIONER: We'll keep going.

PN146

MR POWER: Very well. Can I then take you, Commissioner, back to 10.1. 10.1, we say, does indeed contemplate the introduction of a new roster. If it was intended that there be no ability to change the roster, then there is definitely another way in which 10.1 could have been expressed. You don't need it expressed in that way to effect a variation under the Act. You just rely on the provisions of the Act.

PN147

Again it has to be seen, in my submission, in the light of what was there before; 9.2 and 9.3. Of course I understand your point, Commissioner, in your earlier ruling about the newly produced documents, but if you look at 9.2 and 9.3 under the 2009 agreement, you can see that there was at that time an agreed position. The agreed position reflected in the terms of those provisions was that there should be an effective right of veto.

PN148

The agreed position reflected in the new 9.2 is that the effective right of veto has gone. Now you have a new provision, being clause 21. I'll just take you to that very briefly. Do you have that handy, sir?

PN149

THE COMMISSIONER: Sorry, which - - -

PN150

MR POWER: Clause 21 of the new agreement.

PN151

THE COMMISSIONER: Yes.

PN152

MR POWER: There are some provisions of this that I need to take you to and I'll do that sequentially. The first is 21.1. This is a new provision that wasn't there when the effective right of veto was. You can see from 21.1 that it applies where the company -

PN153

has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise.

PN154

Each of those words should be presumed to have a different function. If you ask yourself the question could a change of roster or, if you like, the introduction of a new roster and its implementation come within any of those things, the answer is quite obviously yes. You could describe it as a major change to production, to program, to organisation and to structure.

PN155

It's apparent from the statements that have been filed and the submissions that have been filed, that it would meet the second limb of 21.1. Is it something that is a change "likely to have a significant effect on employees of" the company? The answer to that would be yes. That much is readily apparent from the statement of Mr Wood. It's also part of the submission of the union. I'll then take you down to 21.9. 21.9 is a clause which sets out what is meant by the term "major change". That is -

PN156

a major change likely to have a significant effect on employees.

PN157

It's described in the subparagraphs (a) to (g). In other words, a major change is likely to have a significant effect on employees if it results in one of those things. The first of them is:

PN158

The termination of the employment of employees.

PN159

The second is:

PN160

Major change to the composition, operation or size of the employer's workforce or to the skills required of employees.

PN161

The third is:

PN162

The elimination or diminution of job opportunities.

PN163

The fourth is:

PN164

The alteration of hours of work.

PN165

You ask yourself the question - two questions in fact. Would the implementation and introduction of the additional roster be something that could be described as a major change likely to have a significant effect on employees because it's an alteration of the hours of work? The answer is yes.

PN166

The second question you ask yourself when you come to 21.9(d), is this: why is it expressed in the way it is? Why does it not talk about a reduction or an increase of the hours of work? The reason for that, in my submission, is because it's intended to permit movement both ways; up and down. Why would you have that? Well, for one thing it would be consistent with the principal objective. The next thing that is mentioned here is:

PN167

(e) the need to retrain employees; (f) the need to relocate employees to another workplace; (g) the restructuring of jobs.

PN168

Then you ask yourself this question: how many of these things would require a variation to the agreement of the kind that is contemplated by sections 208 and 209 of the Act? You could make the argument in respect of some of them that they might, but you could not make the argument in respect of all of them that they would. Then I take you to 21.11. 21.11 provides that:

PN169

If the changes through consultation cannot be agreed upon by Griffin management or its employees -

PN170

then it can be referred to, in effect, the Commission -

PN171

for conciliation or arbitration.

PN172

I need to just pause here, Commissioner, and take you to the Act. My learned friend has quite rightly of course made reference to these provisions and they do require an examination against the provisions of this agreement. I start by taking you, Commissioner, to sections 208 and 209 of the Act. I can see you've got it open in front of you, sir.

PN173

208(1) provides the first part of the mechanism by which an employer may request a variation to an enterprise agreement. Section 209(1), in the case of single‑enterprise agreements, makes it clear - as does my learned friend in his written submissions - that a variation can be effected in a single‑enterprise agreement in that way. Now, the argument that is put against the company is that those provisions restrict the way in which, and impose an effective block on, the company from introducing a new roster. That's not how it's put in the written submissions, but that's my assessment of the argument.

PN174

Clause 21 was made, as we know, pursuant to your order on 31 July 2012. Sections 208 and 209 were in the Act at that time. Some submissions have also been made against us concerning clause 25. Can I take you to that in the current agreement, Commissioner.

PN175

THE COMMISSIONER: Yes.

PN176

MR POWER: Clause 25 appears on page 26 of the agreement under the heading Variations to Agreement. Have you got that, sir?

PN177

THE COMMISSIONER: Yes.

PN178

MR POWER: Thank you. You can see that 25.1, and which is the only part of 25, deals with a number of things:

PN179

Any variation, amendment, deletion or addition to this agreement.

PN180

Each of those words, it must be presumed, was included because each was to serve a different purpose. If you take the view that they are all variations of the kind that would be captured by sections 208 and 209 of the Act, then it doesn't matter whether it's a variation, amendment, deletion or addition because they're all variations of that kind if you make that assumption.

PN181

You can see - and some moment has been made of it by my learned friend in his submissions - that in the brackets following those words, this clause has been expressed to include variations, amendments, deletions or additions "that may arise from subclause 10.1." What this clause then goes on to provide is that those things, namely, variations, amendments, deletions or additions to the agreement -

PN182

shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.

PN183

The point made against the company in the submissions of the union is the last part of that - that is that it can be referred for arbitration - cannot operate because it would be contrary to the legislative scheme which requires variations to be consensual. Now, I want to say some things to you, Commissioner, about those arguments, but it's necessary first to bring into play what I submit are some of the other key elements of the arguments against us.

PN184

One of the key planks in the argument against us is a reliance on clause 7.1 of the agreement. 7.1, for want of a better description, is an entire agreements clause. Like any entire agreement clause, it needs to be read carefully what it does and what it does not do. When you look at 7.1, it's clearly intended to operate in conjunction with 7.2. The qualification to 7.1 is that the agreement is the entire agreement between the parties and. to the extent permissible by law, then expressly excludes those matters which then follow those words: any statutory laws, awards, agreements or orders and so on. 7.2 is a further provision whereby

PN185

the parties expressly exclude any protected and/or preserved entitlements and/or conditions as defined by the Act.

PN186

Then a series of them are listed in the inclusions. 7.2 ends with the words, again a qualification

PN187

except as provided for by this agreement.

PN188

Now, what we say about these two clauses is they are not a basis on which to prevent the company from introducing and implementing the new roster. The reason we say that is twofold. First of all, these two clauses are exclusionary clauses, so the starting point is to look at the agreement itself. What does it do? What does it prevent? What does it permit? If it does not deal with something - for example, in our submission, the introduction and implementation of a new roster - then these exclusions cannot work that effect. Because of the terms in which they are expressed, they cannot exclude that which the agreement does not deal with where there is another basis - a legal basis - for the introduction and implementation of a new roster.

PN189

The second thing we say about this clause is that it is a platform for what is then submitted against us by the union in relation to 9.2. 9.2, you'll recall, is the provision that deals with certain matters under the heading Rosters. It's on page 8 of the document. What does 9.2 actually do? It, first of all, makes it clear that it's dealing only with the current roster. It says:

PN190

The current roster employees will work as in schedule C. Shift rosters will specify -

PN191

certain things, being -

PN192

the normal commencing and finishing times of ordinary working hours of each shift.

PN193

It doesn't say, as I've submitted earlier, that this is the only roster; this is the only roster that will be worked under the agreement. It doesn't say a lot of things that it would need to say if it was going to have the effect for which the union contends - but it doesn't say those things. If a new roster can be introduced and implemented relying on some other source of power such as managerial prerogative and it's not prevented by this agreement, then the two parts of clause 7 can't achieve that purpose.

PN194

I come back now, Commissioner, to what exactly do you make - what should you make - of clause 21.11 which appears to permit arbitration by the Commission and clause 25.1 which also appears to permit arbitration by the Commission. To understand those, it's necessary to take a few steps back and ask yourself the question what statutory purpose is sought to be achieved by sections 208 and 209 of the Act which, as I submitted earlier, was in place when this agreement was made.

PN195

The statutory purpose, or at least one of the statutory purposes, sought to be achieved by those two sections of the Act is to fortify the statutory scheme whereby where the parties enter into an enterprise agreement, they are for all intents and purposes intending to regulate the relationship between them for the duration of that agreement on the terms in the agreement. That's the statutory scheme.

PN196

Why then would you have 21.11 and why then would you have 25.1, because at first blush those two provisions would seem to run contrary to the statutory scheme and that is, no doubt, part of the reason why it's said against the company by the union that they cannot be effective. Well, I put this submission to you: what 21.11 does is it creates a mechanism which has been agreed between the parties for dealing with the sorts of things that are identified in 21.1 and expressed more particularly in clause 21.9.

PN197

The assumption that this mechanism and the changes which might be implemented by it requires a variation of the agreement of the kind dealt with in sections 208 and 209 of the Act, whilst prima facie attractive, doesn't naturally hold true, because what underpins that argument against the company is the assumption that these major changes that are dealt with in clause 21 requires a variation of the agreement.

PN198

What have the parties actually agreed here? Well, what they have agreed here is a mechanism to deal with these sorts of major changes and they have agreed in their mechanism that what they will do in the event that they cannot agree these things, is to arbitrate it before the Commission; so that's part of the agreement. It's part of the production agreement.

PN199

In other words, they have agreed between themselves that where these sorts of issues arise and they cannot be resolved by conciliation or by mediation or by conferral between the parties, it will go to arbitration before the Commission. That's part of this agreement. It doesn't require a variation. Commissioner, am I making that point clear enough?

PN200

THE COMMISSIONER: I understood the point, yes.

PN201

MR POWER: Let us then go to 25.1. Does it follow, as it's argued against us, that 25.1 where it invokes the ability of the Commission to arbitrate, is inoperative? Again, it's interesting that this provision goes in by the agreement of the parties at a time when sections 208 and 209 of the Act are there. It should be presumed that it went in with that knowledge. In other words, the parties knew what the effect of sections 208 and 209 were and are, and they nonetheless put in this provision.

PN202

This is what they agreed as part of this agreement. They agreed that in the event of "any variation, amendment, deletion or addition" to the agreement, they would have a mechanism for dealing with it that would put it outside the scope of the effective prohibition in 208 and 209. I appreciate of course, Commissioner, that there is a tension between the legislative scheme in 208 and 209 of the Act and what the parties appear to be agreeing here. I appreciate of course that the construction that 25.1 still permits the Commission to arbitrate when you have 208 and 209, is a much more difficult argument to make than it is in relation to clause 21.11.

PN203

It's odd here that this clause is there and the parties have gone to the trouble of not just talking about a variation which would clearly mark it as something captured by 208 and 209, but they've gone to the trouble of describing all the ways in which this clause might be invoked: amendment, deletion or addition. Can I take you back to the 2009 agreement. Do you have that open in front of you, sir?

PN204

THE COMMISSIONER: Yes.

PN205

MR POWER: Thank you. Would you go to clause 22 of that. You can see, Commissioner, this is a clause which is in some respects similar to 25.1, but in significant respects different. It provides that:

PN206

Any variation, amendment, deletion or addition to this agreement, including those that may arise from subclause 10.1, shall be in accordance with the Act and lodged with the Workplace Authority -

PN207

as opposed to Fair Work Australia. What this does not have is it does not have the words "for conciliation or arbitration". Again, in my submission, a clear indication - given that the parties should be presumed to know of the existence of 208 and 209 - that clause 25.1 was made in full understanding of the effect of 208 and 209 as a mechanism for allowing the parties to come to the Commission for arbitration. In other words, they agreed between them that that is the mechanism they would have in this agreement for dealing with it.

PN208

As I say, I acknowledge it's a harder argument to make and it's a harder argument to make simply because you have to first examine the character of the variation, amendment, deletion or whatever it is, to see whether it's a variation within the meaning of 208 and 209; but the difficulties which beset this argument do not beset 21.11.

PN209

Commissioner, before I move to something else, may I just ask of you this question: in both sets of submissions filed by the company, you'll see that we deal with the calculation of what is described as the new annualised salary which would be implemented for the proposed roster. You'll see, Commissioner, that the way in which that is done is that you effectively deconstruct the number of hours and the loadings on that in the case of the current roster to work out what the ordinary hourly rate is, and then you're using that hourly rate multiplied by the number of ordinary hours and the loadings on that to come to the new. Do I need to go into that - - -

PN210

THE COMMISSIONER: No, I understood the maths.

PN211

MR POWER: Thank you. Can I then come, Commissioner, to an obvious question. If you accept at this point in time that it is open to the company to introduce and implement the new roster, then the obvious question which you need to ask yourself at that stage is, well, will it work? Can it actually be done under and having regard to the terms of the current agreement? Now, you'll know, Commissioner, from what we say at paragraphs 27 and following in the second set of submissions, that we say it can be done.

PN212

I'll proceed on the basis, Commissioner, that you had sufficient time in your busy schedule to go through what we say about how it would work as a matter of practice in paragraphs 27 through to 48 of the submissions. If that's not right, you'll let me know, but there are just a few submissions that I want to make to you about the practical working of the proposed roster.

PN213

Again, if you look at the way in which it can be done, at a superficial level you might say to yourself, "Well, here you have on the one hand an enterprise agreement, being the current agreement, which whilst not dealing with everything, does deal with a large number of subjects matter in a fairly detailed way.

PN214

If you accept that there is an ability in the company to introduce and implement a new roster, for example as an exercise of managerial prerogative, then the question which comes up for consideration is, "Well, how would you then deal with all the different parts of a production employee's terms and conditions that would otherwise have been governed by the production agreement?" And that's what we seek to explain in those paragraphs 27 to 48.

PN215

We start with the proposition that even if you implement a new roster; that is, the proposed roster as an exercise of managerial prerogative, it doesn't mean that all of those things that might have otherwise have been governed by some terms of the current agreement are up for grabs. That proposition is a nonsense and, as we say, in paragraph 29 of the written submissions, the second set of written submissions, even the exercise of managerial prerogative carries with it some legal protections; fairness and reasonable as being one of them.

PN216

There are some protections which come from the contract of employment. There are some that come from statute. There are many sources for the necessary protections that an employee ought to have. And as we say at 30, in the same set of submissions, they are enforceable in the usual ways at law; that is, in the Courts or Tribunals and, indeed, can be dealt with under clause 20 as an employee grievance.

PN217

Now, what we say in paragraph 33 is not really that startling. When you look at each of the benefits and entitlements that are dealt with in the agreement, that would be affected if the proposed roster was introduced, you will see that those relevant provisions will be affected in one of three ways.

PN218

The first way, and we deal with this in paragraph 36 where we list them - at least most of them, there may be others but we think we've captured them all - where they simply won't apply. So these provisions of the agreement will no longer apply.

PN219

THE COMMISSIONER: By force of what do they not apply?

PN220

MR POWER: I'm delighted you have asked that question, Commissioner. They don't apply because if you have the ability to introduce a new roster as an exercise of managerial prerogative, it is not prevented by the agreement, then the agreement has nothing to say about that.

PN221

THE COMMISSIONER: Well, if that's correct, that's fine, but that's just affects the schedule in the agreement that identifies the roster and - - -

PN222

MR POWER: Sorry, sir, I've got this noise going next to me.

PN223

THE COMMISSIONER: I apologise for our horrific air conditions. The issue about managerial prerogative and implementing the roster, if you are right on all of that, that deals with the schedule in the agreement that sets out the detail of the roster.

PN224

MR POWER: Yes.

PN225

THE COMMISSIONER: And the schedule in the agreement that specifies the attached annualised salary.

PN226

MR POWER: Yes.

PN227

THE COMMISSIONER: That doesn't deal though with these other clauses which you identify in paragraph 36.

PN228

MR POWER: Yes.

PN229

THE COMMISSIONER: So what I'm struggling with is they are in the agreement, they still apply on their terms, why do you say that something else happens?

PN230

MR POWER: First reason, you have to go back to the terms, because an agreement only applies by its terms. So the examination of whether they apply starts with an examination of the term. You look at the term and you ask yourself, "Can that term apply to this different situation?" And if the answer is no, then that term of the agreement does not apply, because otherwise what you're doing is you're giving that term a meaning in effect it doesn't have. Does that follow?

PN231

THE COMMISSIONER: Yes. I understand the concept, yes. I'm intrigued to see how work in practice.

PN232

MR POWER: You will see, Commissioner, that we have sought to deal with that in the paragraphs that follow. Now, it's not that, as I say - I'll say two things about that, Commissioner, because it clearly is a matter that's troubling you. The first is that it is, we accept, not something that you would hear every day in this Commission.

PN233

THE COMMISSIONER: Yes, that's correct. I agree.

PN234

MR POWER: But that doesn't mean that that's a basis for its rejection. And the answer to whether or not the submission of the company should be accepted or not should depend on a strict legal analysis tempered with the requirement, of course, to make it practicable and workable, because it should be that. It must be that.

PN235

So let's start with the first part of that examination. If you look at any agreement and you look at whether or not a particular term has an effect on a particular employee in a particular way, you have to start with the words of the term, and you might immediately say to yourself, "Well, that clause doesn't apply to this employee. It might apply to another employee, but it doesn't apply to this one."

PN236

That's what we say about those provisions which are listed in paragraph 36. If you try to apply any of those provisions to employees who are working on the new roster, you would say, "Well, they wouldn't apply by their terms to those employees." That doesn't mean that those employees are left to the mercy; that's an appropriate expression of the employer. It doesn't mean that at all. The practical part of the question is, "Well, what do you do then for those employees," and I'll answer that. Before I do though, Commissioner, can I come to the examples in 37?

PN237

Now, you can see in 37 that all we are saying is in relation to those clauses, what will happen is that they will continue to apply, but they are going to be using the new annualised salary. So it's easy to see how they will apply. And in clauses 9.11 and 9.16, which are dealt with in paragraph 38 of the submissions, will apply by their terms. What we do in paragraphs 40 through to 48 is give you some examples of how that would work.

PN238

Now, here is how the practical problem might arise. An employee might come to the employer and say, "Look, I understand that clause number" whatever it happens to be, "no longer applies, because I'm working the new roster. So in that situation what breaks am I entitled to?" Because the agreement provided - told me what breaks I'm entitled to; it doesn't apply anymore, so what's the situation with breaks?" Well, you can see we deal with that in the submissions at paragraph 43.

PN239

THE COMMISSIONER: So why is there any reference to the award?

PN240

MR POWER: Well, it's not because the award is binding, it's because the award provides a standard.

PN241

THE COMMISSIONER: Well, it's an irrelevant standard. Why that award?

PN242

MR POWER: You need to see that in two ways, Commissioner. The way in which you're addressing me on it, you're saying the award has no application as a matter of law, so therefore it's an irrelevant standard. I understand that, but when you look at the award, you can see the award as a genesis for something else; in other words, it's the logic that underpins the entitlement. That's the assistance we say you ought to derive from the award.

PN243

THE COMMISSIONER: So really what you are saying is the employer will unilaterally determine these matters that are currently dealt with by clauses in the agreement which you say will no longer have any application?

PN244

MR POWER: Subject to this. Of course, an employee has an ability to challenge that. How is that dealt with? Well, that's dealt with under the grievance procedure. So let's say the employer says, "Okay, well, the agreement no longer applies to you. This is the break that we think is appropriate for you during your shift." The employee says, "Well, I don't agree with that." How is that resolved? It's resolved by the grievance procedure under clause 20 and a ruling is then given on that.

PN245

That's not a variation, it's a ruling, but it's a ruling that will have the required effect. So when I talk earlier about the exercise of managerial prerogative being subject to constraints, including clause 20, that's what I'm talking about. I appreciate, Commissioner, that this unusual, but it doesn't mean it's workable.

PN246

And, indeed, we say it is very workable, because you will see in the submissions that we've set out how each of these matters are going to be dealt with where the award doesn't apply - sorry, where the agreement ceases to apply or has a limited application and there is a very straightforward answer for each of those situations and it's not unilateral in the sense of it being left to the employer only, because there is a grievance procedure.

PN247

And the grievance procedure provides a mechanism to the extent that one is needed and I'll come to that in a moment, for resolving any disputes between the parties. I say to the extent that one is needed, because I imagine in most cases there will not be a dispute.

PN248

THE COMMISSIONER: Do you accept that this difficulty, because it seems it will be a difficulty for all involved - and I accept your submissions, it doesn't mean it's impossible - arises simply because the chosen roster is not a 12-hour shift and the hours aren't 42 hours per week?

PN249

MR POWER: It arises in this context in that way but if, for example, the company decided at some other point in time that it wanted to introduce a different roster, then it would not rising in the context of a 12-hour shift, it would be arising as a matter of construction of the agreement.

PN250

THE COMMISSIONER: Yes, but the factual issue here is - and I don't think anybody can shy away from it - the terms in the agreement that deal with a whole range of entitlements seem to be drafted with an assumption that the shift roster will be 12 hours.

PN251

MR POWER: And what we say, Commissioner, is there are two assumptions made here. That's one assumption, that the roster which will be worked will be 12-hours shifts and of a certain pattern. I accept that; that's one assumption that appears from a reading of this agreement. The other assumption that appears, and we articulate it in detail in our written submissions and hopefully in our oral submissions as well, is that that is not immutable. In other words, there is an ability - - -

PN252

THE COMMISSIONER: I haven't made that leap. I just was asking that question, just on that narrow basis.

PN253

MR POWER: I don't shy away from that, sir. We acknowledge that that is a difficulty which needs to be overcome in the argument and what we say is it is capable of being overcome because of what this agreement does not say, because of what it does not prohibit, because of what it does not define.

PN254

THE COMMISSIONER: Do you accept that, for want of a better word, the scheme you are suggesting will have two apply. If this application is granted as Griffins seeks it. What I call difficulties that may flow from that, which is uncertainty about how some entitlements will be applied and potential disputes as you've indicated could occur around that.

PN255

Is that a matter I should take into account if, given the layers of questions I have to work my way through in these applications, if I get to a point where I believe we're at that point where the question is, "Should the Commission, in effect, endorse or approve the new roster," is that an issue I should take into account in considering whether , in effect, this is a good idea or not?

PN256

MR POWER: One of the reasons why we address workability in our reply submissions, Commissioner, is because we accept that those sorts of factors are matter that you must take into account, but we would also ask you to take into account these sorts of considerations: it is often the case that when the parties on either side of an argument first identify the issue, there is a process of conferral between them which takes place.

PN257

It is often the case that when there is a proper basis for framing an entitlement or a benefit in a particular way, for example, by reference to the Long Service Leave Act or to a standard found elsewhere, very often there can be agreement between the parties. So it's not right just to look at the ledger and say, "Well, when considering workability, I should only consider those things which might go wrong with this," and I know you are not advocating that, sir. It's also right to look at the other side and say, "Well, and here are all the things that might be agreed quite reasonably between the parties, because they are reasonable parties on both sides."

PN258

THE COMMISSIONER: Thank you.

PN259

MR POWER: Would you bear with me for a moment, sir. If I may just turn my back on you and get some instructions for a moment. Commissioner, you will see that in both sets of written submissions we deal with the question of jurisdiction was the end of each set. That is a matter on which I had proposed to address you, but in light of what's occurred in the exchanges between us, it seem unnecessary for me to develop those written submissions any further.

PN260

THE COMMISSIONER: I think both sets of written submissions deal with the matter adequately, but that's a judgment for yourself, Mr Power.

PN261

MR POWER: Thank you, sir. Well, in that case, I'm not going to address you on those matters. Is there anything else with which I can assist you at this point?

PN262

THE COMMISSIONER: No.

PN263

MR POWER: Thank you, sir.

PN264

THE COMMISSIONER: All right. What I propose is we have a brief adjournment for 10 minutes and then we will resume Thank you.

LUNCHEON ADJOURNMENT [12.29 PM]

RESUMED [2.32 PM]

PN265

THE COMMISSIONER: Mr Power, I understand there have been some developments in terms of procedure.

PN266

MR POWER: Yes, Commissioner, there have. Thank you for the extended luncheon adjournment. Those discussions have been very fruitful, and what I am able to tell you your Honour is this: we have agreed between us that each of the parties will tender their evidence. In the case of the company, there will be three witness statements and then we will also tender formally the documents which were filed and served on 10 July and I will make some submissions about what use you should make of those in due course.

PN267

And then I understand that the union also intends to tender its witness statement from Mr Wood. It's been agreed between the parties that cross-examination of those witnesses would be of no assistance to the Commission, so there will be no cross-examination. Some objections will be made by the company to Mr Wood's statement and the union will make some objections on a global basis, as I understand it, to the company's evidence, and that would then form the evidence in front of you.

PN268

What would then occur - again it's been agreed - is that Mr Nolan will then address you and make his oral submissions, and I would then reply to those submissions, if that's a satisfactory course. I hope I haven't misstated that.

PN269

THE COMMISSIONER: Yes, that sounds sensible, thank you. Let's carry on.

PN270

MR POWER: Commissioner, you will have before you three witness statements. If I can just identify those for you they are first of all a witness statement of Raj Kumar Roy; that is, a witness statement that is dated 22 May 2015. It runs to 15 pages and it has attachments marked RKR1 to 12. If I may move to the second statement.

PN271

THE COMMISSIONER: Yes.

PN272

MR POWER: The second statement is a witness statement of Vanga Vinod Kumar and that is a witness statement also dated 22 May 2015. It comprises 10 pages and has attached to it nine attachments, being VVK1 to 9. The same witness has prepared a second statement, which is the third statement to be tendered. That's witness statement of Vanga Vinod Kumar in reply. It's dated 2 July 2015 and it runs to six pages, and it has attachments to it which run from VVK10 to 13.

PN273

Commissioner, may I also tender the other documents at this point?

PN274

THE COMMISSIONER: Perhaps we should just mark these as exhibits before we get more documents.

PN275

MR POWER: Very well.

PN276

THE COMMISSIONER: All right. Taking those in order, we will mark the witness statement of Raj Kumar Roy at exhibit G1.

EXHIBIT #G1 STATEMENT OF RAJ KUMAR ROY DATED 22/05/2015

PN277

THE COMMISSIONER: And we will mark the first statement of Vanga Vinod Kumar as exhibit G2.

EXHIBIT #G2 STATEMENT OF VANGA VINOD KUMAR DATED 22/05/2015

PN278

THE COMMISSIONER: And the witness statement of Vanga Vinod Kumar in reply as exhibit G3.

EXHIBIT #G3 STATEMENT OF VANGA VINOD KUMAR IN REPLY

PN279

MR NOLAN: I foreshadowed that I would object to those statements. Our objection really, as indicated, is a global one. We say that the material is not relevant, because as we see the issue before the Commission, it's strictly one that is concerned with the construction of the agreement and the matters canvassed in the three statements don't go to that issue, so we might, if we may, record a formal objection to those. The Commission will need to deal with them as it sees fit, but let our objection be recorded.

PN280

THE COMMISSIONER: Thank you, Mr Nolan.

PN281

MR POWER: Commissioner, I then turn to the bundle of documents, which number four, that were filed and served on 10 July; that is, last Friday. Would you like me to identify them for you now?

PN282

THE COMMISSIONER: Are we going to deal with them one by one or tender them as a bundle.

PN283

MR POWER: I was going to tender them as a bundle, but I would ask that you identify them separately within the bundle so that they are easy to hear submissions on.

PN284

THE COMMISSIONER: Yes. Well, I have these here, so why don't I just identify them and we will mark them as a bundle.

PN285

MR POWER: Thank you.

PN286

THE COMMISSIONER: There is a bundle of documents which comprises an email from Chris Godfrey, dated 25 April 2012 to the CFMEU Mining and Energy Division and with an attached draft, Griffin Coal Production Agreement, dated 25 March 2012. The second document is an invitation from - well, the organiser of the invitation is Chris Godfrey. The subject is "Production EA and negotiations."

PN287

The proposed date of the invitation to the meeting was Wednesday, 9 May 2012. Attached to that again is a draft of the Griffin Coal Production Collective Agreement 2012, dated 25 March 2012. The next document in that bundle is an email from the CFMEU Mining and Energy Division, dated Tuesday 15 May 2012 to Chris Godfrey. The subject is "Agreement change" and that is from the Admin Secretary Cheryl Sanders. Attached to that document is a copy of a spreadsheet with various columns dealing with differences between the old and new Griffin agreement.

PN288

The next document is an email from Chris Godfrey, Wednesday 30 May 2012 to the CFMEU Mining and Energy Division, subject, "Production Draft, EA Draft 7, 29/5/2012." And it starts, "Hi Gary." Again, there is a draft of the Griffin Coal Production Collective Agreement 2012 with a notation saying, "Green indicates clauses changed," dated 29 May 2012. Now collectively those documents I will call as a bundle exhibit G4.

EXHIBIT #G4 BUNDLE OF DOCUMENTS

PN289

MR NOLAN: Now, I indicated earlier that we had a strenuous objection to that material. I understand that you'd received it, subject to the comments you made this morning, Commissioner, but we would simply note that our objection is on foot; that we would, for the reasons we said this morning counsel you against taking that material into account in any decision you make construing the agreement and we referred to a couple of legal authorities we say that are apposite this morning in the discussion, and since then we, I think, emailed to your associate - - -

PN290

THE COMMISSIONER: Yes, I've received that, thank you.

PN291

MR NOLAN: - - - the copy of his Honour Moore J. So that's really all we need to say about that. I think we've made our position quite clear earlier today.

PN292

THE COMMISSIONER: You did. Thank you, Mr Nolan.

PN293

MR POWER: Commissioner, I will deal with that document and what reliance you should place on it in my submissions, even though strictly it's not in reply. That will be a convenient time to deal with it if my learned friend is happy for me to do it at that point.

PN294

MR NOLAN: Yes, we can deal with it then.

PN295

MR POWER: Thank you, I'm grateful for that. The only other document I have, but it's not right that I should deal with it now, is a schedule of the company's objections to the witness statement of Gary Norman Wood of 25 June 2015. If it's convenient, I'll deal with that at the point of tendering.

PN296

MR NOLAN: Yes. Well, I think it then falls to me to formally tender Mr Wood's statement. I understand we've been given a copy of the schedule of objections. I don't know whether you've received that yet?

PN297

THE COMMISSIONER: No.

PN298

MR NOLAN: Perhaps we can let that be handed up to you and I can make some comments on the schedule and then we can deal with the statement in the light of those comments and your conclusions about the way you will deal with the statement.

PN299

THE COMMISSIONER: Sorry, I am not being distracted by our air conditioning, Mr Nolan. I'll apologise to myself, does that work?

PN300

MR NOLAN: I was handing up the schedule

PN301

THE COMMISSIONER: Yes, the - I think we're at the stage where I can mark Mr Woods statement as an exhibit, and then I will hear from Mr Power about his objections. The witness statement of Gary Norman Wood and attachments we will mark as exhibit CFMEU1.

EXHIBIT #CFMEU1 STATEMENT OF GARY NORMAN WOOD

PN302

THE COMMISSIONER: Yes, Mr Power.

PN303

MR POWER: Just very briefly, Commissioner, we've taken the liberty of going through this statement quite carefully and we have identified a number of parts of it which are objectionable and we have captured those objections in the schedule of objections which you should now have. You can see that we have attempted to be quite precise about where the objections are taken and what the nature of the objection is.

PN304

We provide this to you on the understanding that in relation to some of those objections you may be inclined to rule the evidence inadmissible and in relation to other parts of those objections you may see the objections as a matter going to weight. So we don't propose to be heard orally on them. In our submission the objections really do speak for themselves and are not difficult to understand.

PN305

But if there is anything arising out of the schedule on which the Commission does require some specific assistance, we are of course more than happy to provide it.

PN306

THE COMMISSIONER: Thank you, Mr Power. Yes, Mr Nolan.

PN307

MR NOLAN: Commissioner, I didn't propose to go through each of these line by line. I think the way that Mr Power suggested you deal with the objections is appropriate for this Tribunal and, of course, the Tribunal will very often have regard to evidence which might not otherwise be strictly admissible in court proceedings, becomes a matter of judgment and weight, and we're content for the Commission to apply the ordinary approach.

PN308

So that having been tendered. Now, and those objections having been dealt with there was one other matter that I wanted to deal with and that is, for completeness, we wanted to hand up to you what is often referred to as the form F17; this is the employer's declaration in support of the application to approve the enterprise agreement for this particular enterprise agreement.

PN309

I have a copy of that and I propose to provide a copy to Mr Power and for completeness I propose to hand that up and have it marked as well, if I may.

PN310

THE COMMISSIONER: What's the relevance of that in the context of these proceedings, do you say?

PN311

MR NOLAN: Well, the relevance is it simply, just in our view, adds the icing on the cake, if you like, because there are questions directed to the parties and particularly the employer party lodging the agreement and in particular the question back at- questions 3.5 and 3.6 that deal with improvements and reductions entailed in the agreement.

PN312

And then 3.5, there are terms and conditions that are identified that are more beneficial than the reference instrument being the production award and there are a number of clauses specified there, and then there the question whether there are any that are less beneficial than the equivalent terms and conditions of the instruments and the answer there is no.

PN313

So none of it is particularly surprising, but the significance of it is that when one looks at the exercise that's been undertaken by Griffin in, to use Mr Power's apposite term "deconstructing the award", one comes up against various provisions that would need, on their view, to be dealt with in a different way, to the extent that those matters fell below the award provisions.

PN314

It would come up squarely against the answers that are given in 3.5 and it simply just adds to the argument that we put that it was never in anyone's contemplation that there'd be this radical dissection and deconstruction of the agreement requiring people to go back and forage through the various details in the agreement to come up with, in the sense, an alternative agreement that would leave some things in and leave some things out, but that just arises from our general objection to what they've said, but it's solidified by the declarations that were made when the agreement was approved.

PN315

THE COMMISSIONER: Yes, thank you.

PN316

MR NOLAN: So that point having been reached, I think it's now up - - -

PN317

THE COMMISSIONER: Perhaps for completeness I will mark that as an exhibit while we're at it. We will mark the Form F17 from the application to approve the 2012 agreement as exhibit CFMEU2.

EXHIBIT #CFMEU2 FORM F17 FROM APPLICATION TO APPROVE 2012 AGREEMENT

PN318

MR NOLAN: There was one other thing I omitted to ask you to do and that is annexed to Mr Wood's statement is a spreadsheet that contains the names of CFMEU members at the mine and various rates of pay and so on. That is really personal information that should not be broadcast and we would ask that a confidentiality order be placed on that particular annexure to the statement.

PN319

Of course, the other side have looked at it and there's no objection to them.

PN320

MR POWER: There is no opposition to that.

PN321

THE COMMISSIONER: All right. An order to that effect will be issued.

PN322

MR NOLAN: Yes, thank you. So, if I may, I'll go to the submissions and you have the benefit, or at least I'd hope the benefit of the written submissions from the CFMEU dated 25 June 2015. I won't read them all out, but I will endeavour to summarise the main points of the submissions, because obviously you have already had the opportunity to read the submissions and digest them, but can I say that we haven't really changed our mind after hearing Mr Power's quite persuasive presentation this morning. We are certainly not persuaded, however attractive the presentation may have been.

PN323

We think that the real focus of the exercise has to be on the terms of the agreement and we have said for the reasons we have set out in the submissions that they are really relatively straightforward and what's been attempted here has been an exercise with respect an over-complication and of escalation of what the provisions of the agreement really mean, and to the point where, in a sense, as we've already said, there's various phrases or one particular phrase in the agreement, that's been picked at in an attempt to unravel the whole structure and framework of the agreement and turn it into something that it isn't.

PN324

In theory, that may have sounded plausibly at least arguable but, of course, the devil is in the detail and what really brings the employer's position completely undone is when it came to really look at what was entailed by what it was endeavouring to do, and that's very well‑illustrated in the submissions in reply, because when, I may say, the acid was really put on the employer to say, "Well, look, how would this elaborate scheme operate if you are going to away from the agreement in the way that you suggest and spit out these other terms and conditions that somehow or other arise by implication from the jettisoning of a whole range of terms and conditions, what are you left with?"

PN325

And when we look at the submissions in reply, that really highlight and throw up the dilemma that the company has created for itself by trying to take this course, then we would place particular emphasis on those endeavours, which have not succeeded in the submissions in reply to suggest that these provisions could somehow or other be read and twisted and turned in a way that would effectively, as we've said, turn the original agreement on its head and turn provisions into unknowns that would somehow or other have to be grappled with.

PN326

And so impossible is that task that we really got to the position in the exchanges earlier this morning when Mr Power was invited to say how a particular thing might operate, he said, "Oh well, if there was any difficulty, well, of course we have got the grievance clause in the agreement," one of the few provisions that was left standing that would somehow or other be able to resolve uncertainties that arise from their scheme.

PN327

And that answer alone is enough to really absolutely undermine what's been suggested by the company, one can only imagine an infinite number of disputes over the same issue, how they'd work their way through the system and be resolved, presumably by the Commission under the grievance clause and simply to articulate that as possibility is to highlight its absurdity, with respect.

PN328

What it does, is it just shows absolutely and utterly how unreal the proposal of the company is. And what it also highlights is just the unreality of accepting this as a general proposition when it's considered from the perspective of the worker's who voted on this agreement and the terms of the agreement. As I said earlier today, they weren't the beneficiaries of some elaborate background story about who said what to whom in the course of negotiations.

PN329

The whole rationale and the mechanics wear by these agreements are struck means that negotiating parties - it may not always be the union - get together and they come up with a document. That's the crystallisation of the agreement, not something that happened down the track and it's that crystallised agreement that goes to the employees for their approval, and it's not an agreement until it's approved by the workers concerned.

PN330

That means one and only one thing and that is that it can only be read and properly understood and from the perspective of somebody who was voting for it, without the background information about what might or what might not have been said. The workers are presumed to understand what the agreement entails and they will be familiar, very often, with the industry terms of art and other expressions that might be somewhat esoteric, but in a particular identify will be probably well-known.

PN331

They make the decision, the agreement is struck, the agreement is approved and is approved following a process that involves and includes the F17 declaration, and there it sits. Now, to suggest that these workers would have had in mind or could reasonably be expected to accept the propositions that really now emerge in the submissions in reply as to the way the agreement would have to be implemented and approved, and dealt with if these proposals were implemented, is frankly quite fanciful.

PN332

You could imagine how these employees would have reacted if it was said to them, "Well, look this is the agreement, but what you are really also agreeing to it is this," and they got another schedule of all these things that would be changed by virtue of this endeavour to unpack the agreement by reference to those few provisions in the agreement that are said to support this.

PN333

The ordinary response, one would imagine, would be, "What are you talking about? What are we agreeing to? We thought we were agreeing to this and now you are telling us we are agreeing to something completely different."

PN334

Now, if that was all dished up at the time the vote was taken, you could imagine the reaction and it is certainly quite inappropriate and quite perverse to think that one thing that was voted on would undergo some sort of transmogrification, some metamorphosis and end up with something entirely different.

PN335

And I thought in that connection, Mr Power's use of the word "deconstruct" was probably especially apposite, because it puts one in mind of the sort of post-modernist approach to language which says anything can mean anything, because that's really been the approach that's been taken by the company to this agreement.

PN336

But an agreement for all practical purposes ordinary working people could pick up and read and make sense of is now magically, via this process of - I don't know what you'd describe it as - industrial post-modernism, would turn into something completely different. That would be no real resemblance to what was agreed to by the workers in the first place. It just can't be right.

PN337

And it is fanciful to suggest that it could seriously be entertained as an appropriate way to read the agreement. And of course, the problems that have been confronted have really been, as I've said, well-highlighted by those latter sections of the submissions in reply.

PN338

And what we are left with is the kinds of suggestions that are made in the course of those submissions, including one that says at paragraph 35, when one is having difficulty coming to terms with what terms and conditions pertaining to the employment of production employees should or would be governed by the production agreement as somehow or other altered.

PN339

It said, for example:

PN340

The concept of reasonableness may import a consideration of what entitlements an employee in a similar position would receive.

PN341

Well, frankly, that's just beyond the bounds of anything that's rational or sensible, or has anything to do with the way the system is designed to work. Are we to expect then that reminiscent of the old award days, that we are really in the territorial of something akin to a application to vary in the old award days, requiring the Tribunals to consider what's reasonable in all the circumstances, without regard to all the immediate industrial circumstances and restrictions that would bear on it.

PN342

Of course, it doesn't and it couldn't and what that does is it just highlights the absolutely absurd nature of the proposal that's been put forward, and it goes on in paragraph 36 and says:

PN343

Production employees working the additional roster will no longer be working 12-hour shifts or 42 hours a week. As a result the following clauses of the production agreement are examples of clauses that will not apply to them while they are working the additional roster and it includes the definition of the salary rate types of employment

PN344

and it goes on. Now, harking back to what I said a moment ago, imagine if you had that schedule and you said to the employees who were voting on this agreement when it was put to them to be voted on, "Well, what this agreement really means is what you have in the agreement, but also it means that if the employer wants to bring the situation about, it can just invent an additional roster that doesn't really refer to the structure that's involved and embedded in this agreement, but it can take away from you the following clauses in the award: the definition of salary rate; the types of employment; casual employment and so on."

PN345

Now, of course, any sensible person would say, "Well, you've got to be joking. How can you possible sustain that as a realistic proposition." And the dilemma is really magnified as one goes through the submissions and, in particular, if you look at paragraph 29, it talks about:

PN346

Where the entitlements listed above are no longer determined by the production agreement, those entitlements can and will be ascertained by reverting to the basis of the particular entitlement and the method for its calculation. This can be done by modifying the description of each relevant entitlement, not the entitlements itself in the production agreement, so that it produces an entitlement consistent with the different circumstances in and arising out of the proposed roster.

PN347

Well, if you were an average worker employed at the mine, God help you trying to make sense of that. I mean, it is just ridiculous with respect.

PN348

It goes on in paragraph 40 and it talks about a production employee working under the current roster is entitled to certain leave and so on. It says:

PN349

This is based on the entitlement under the award, which provides five weeks of leave, plus an additional week of leave for a seven day roster employee at clause 25.

PN350

A seven-day roster employee is defined and it goes on with the definition in the award, and then further down the paragraph, it says:

PN351

In this case, they would be entitled to five weeks of annual leave per annum at 35 hours per week being a total of 175 hours.

PN352

And, of course, there's no authority or support or anything else, any other rationale apart from wishful thinking that supports that contention and so it goes.

PN353

Paragraph 43 talks about taking into account considerations of health and safety of a production employee as well as the position under the award, whereas we know the award has got nothing to do with anything, and we address the issue of the difference between the award and the agreement in our submissions and really there's been nothing at all that's been said to contradict what we put in our written submissions about that.

PN354

There is no question that the Act makes a clear distinction between entitlements that arise under the agreement and entitlements what would arise otherwise under the award and one can't then go back and cherry-pick and what's been done here, of course, has been even more egregious, because there's been an attempt to cherry-pick from the award, cherry-pick from perhaps what might be in a contract of employment, cherry-pick from what might or might not be regarded as reasonable.

PN355

Now, that's all really in the realm of unreality and, of course, absolutely and utterly contrary to legal authority and a whole range of legal authorities that go back as far as memory in terms of making clear distinctions between the operation of a contract of employment, the operation of an award and the extent to which issue of reasonableness and so on can intrude in particular circumstances.

PN356

And none of those arguments have really been teased out in any satisfactorily way by the employer and indeed to the extent that they made concessions about the dilemmas they face in that latter part of the submissions, all they do is highlight the conundrum they face.

PN357

And for you to, with respect accede to that would really amount to an exercise where the whole agreement has been re-engineered from the floor up and it would be being rewritten in a way that was entirely inconsistent with the clear terms of the agreement and would lead to all of these conundrums that we've referred to and just fly in the face of the whole notion of the way agreements are reached and have to be settled.

PN358

One blanches at the suggestion that that particular clause in the agreement that we've criticised that talks about possible variations could possibly be a valid exercise of the power, because as we've already heard, there are strict provisions in the regime these days that prevent an agreement being varied during its term, except in the most clear and confined circumstances. And to think that that could be circumvented by a clause that allowed an hour of variation to be referred to the Commission, is really just extraordinary.

PN359

And it's somewhat amusing, I suppose, to hear it being seriously propounded by an employer, because I can guarantee you that if a union turned up with a clause like that in an agreement and managed to convince an employer to agree to it, I don't think it would pass muster if there was any attention drawn to it in this Tribunal. I think it would be a very contentious provision, because what it would do effectively would be to undermine the entire system of enterprise agreements. That particular clause - - -

PN360

THE COMMISSIONER: Mr Nolan, I guess, the agreement clearly envisages some changes to rosters and potentially consequential changes to annualised salaries.

PN361

MR NOLAN: Yes.

PN362

THE COMMISSIONER: And without going through all of the detail, which I obviously will have to, that seems to rely on no more than on the principle that if the parties agree that the Commission potentially has the power to privately arbitrate a dispute then it can. And if that's what the parties have agreed and that's what they've said in their agreement, that's not at all inconsistent with the Act is?

PN363

MR NOLAN: Well, that's within, with respect, a very narrow compass. It's within a very narrow compass and it's a far cry, in fact, it's a world away from that other clause that suggests that any variation to the agreement can be dealt with by the Commission, and that's a provision that is simply impermissible in our submissions.

PN364

One can't have a, in a sense, a self-executing provision that allows the agreement to be made from the ground up by a mechanism like that. It just can't sit with the structure of the act and those provisions that deal with the variation of the agreement.

PN365

So to the extent that the dispute settlement clause and the variation to the roster provision, which it mentioned, have any work to do it all, it must be within the very limited confines permitted by the four walls of the agreement. And, of course, when you go to the proposed consultation clause and the provisions that were said about clause 21, 21(9) for example, well, for a start, as I've said, clause 21 is simply a replication of the standard consultation clause.

PN366

So there was nothing remarkable about that. The parties simply put in the agreement the standard clause that people were expected to put in that dealt with consultation and it doesn't depart in any respect at all from the substance of that, however there is one difference in the sense that it allows parties who have disputes about those things to send them off to the Commission. But again, there's nothing too startling about that, because there is nothing in 21(9) that says or provides some kind of mandate or power for the Commission to make substantive changes to the agreement, otherwise than those allowed under the Act.

PN367

So in other words, it's possible to envisage any one of those topics under 21(9) to arise in the context of the employment setting and be dealt with under 21(9) with any change being made to the agreement. The two can sit together. That's the way the agreement, with respect, has to be read to make sense and to be reconciled with the Act.

PN368

THE COMMISSIONER: Is it fair to say that that submission really is saying that, as you said, the confines of the Commission's power to do this, you are submitting is a function of the balance of the terms of the agreement, which in effect say rosters have to be 12-hour shift rosters and perhaps arguably as well 42 hours per week.

PN369

MR NOLAN: Yes.

PN370

THE COMMISSIONER: So if the proposal was from the company some change to the rosters, but maintained 12-hour shifts and perhaps maintained 42 hours per week, I'm not quite sure what those changes would be, but perhaps make it not four-panel anymore, who knows.

PN371

MR NOLAN: That's the - - -

PN372

THE COMMISSIONER: You're saying then that sort of dispute about that could be here, could be decided.

PN373

MR NOLAN: Yes.

PN374

THE COMMISSIONER: It's the fact that the particular roster change has all of these consequential impacts on the agreement which it can't have been envisaged that such a roster change falls within that category.

PN375

MR NOLAN: Well, that's absolutely the case and all one has to do is look at all those provisions and see how they all reconcile to reach that conclusion, with respect, and it all works, and 21.9 works without any variation to the agreement because we can still deal with disputes about those matters as they arise, and a dispute about those matters would not necessarily mean that there was any need to vary the agreement. Of course the Commission can't otherwise make an order that would have the effect of varying the agreement contrary to the Act, so it's confined in that respect.

PN376

So it's really a matter of saying to Griffin look, there can be changes and some are obviously in contemplation but they're certainly not the changes proposed here because this a radical re-writing of the entire agreement. It's a root and branch alteration of very important and central provisions in the agreement. And that cannot, on any view, have been in the contemplation of anyone when they ticked the box yes, that they wanted to accept that agreement. As I said, the simple common sense test to apply to absolutely reinforce that is to say well look, if the workers who are voting for this agreement were given this other schedule with all these other things and told oh well, what this means if you vote for this, all that can go, common sense suggests that ordinary experience of industrial affairs would suggest that any workers - well, people would simply go what are you talking about, this is crazy. What do you mean? How can we possible reach that conclusion from here?

PN377

It's a bit like that old joke about if I was going there, I wouldn't start from here and this is - the agreement is very detailed, it sets out in very prescriptive terms the framework in which the agreement operates. There's no doubt about the fact that all the parties when they subscribed to it thought it was a good thing and thought it provided benefits for all otherwise they wouldn't have agreed to it presumably, and to - just to absolutely secure the position if any further reinforcement was necessary of course we've referred to clause 7, the application clause in the agreement which makes it crystal clear that it applies to the exclusion of the award and so on. At the conclusion of clause 7.2 it says the parties expressly exclude any protective or preserved entitlements, and it goes on. There's a whole litany of things. It says:

PN378

Except as provided for by this agreement.

PN379

So there can't be any doubt at all that that clause is intended to have that comprehensive import, in our submission. None at all. So we've got a framework, we've got a framework that adopts a particular roster structure, everything is dependent upon that and simply it's not good enough to say oh well, it was intended that it would never ever be altered.

PN380

It could easily have been provided in expressed terms. Well of course it could. There are lots of provisions where if one sat down to re-write them one would phrase things differently, but looking at this and applying the ordinary principles of construction that apply to agreements, and in that connection we can too rely on that decision of Asbury DP in that Transport Workers Union case. Those are exactly the kind of considerations that would apply here, and if one sat down and said look at those considerations, apply them to the way you interpret this agreement, is it possible therefore to interpret in this quite bizarre way the company's now suggested.

PN381

In our submission, any objective observer would say absolutely not, you can't be serious. It's just a complete disconnect between what you are suggesting could occur and what's clearly contained in the agreement on its face. As I say, it's just breathtaking to think that you could take the red pencil through so many of these important central provisions in the agreement to give effect to this theory that's been advanced about the manner in which it's said the provisions could be altered.

PN382

From whichever perspective you approach it, and we've endeavoured to confront each of these systematically in the written submissions, you come to the inevitable conclusion that what the employer has proposed makes no sense at all in ordinary industrial parlance and understanding, and having regard to the provisions in the agreement, and the way they're expected and they would be expected to operate in practice. Any other view really involves the most extraordinary convolutions in the approach one takes to the agreement and the way it's supposed to operate and they are of such artificiality and they fly in the face of various central provisions of the agreement so profoundly that they can't really be entertained seriously, in our respectful submission.

PN383

At the end of our submissions we point to those provisions and they've been the subject of the response and so on, that we say it would be necessary to read down to try to come to grips with this change and somehow or other read the agreement in a way that would make sense of the proposed alterations. Of course, the more one looks at those the more impossible the task becomes and that dilemma has really not been answered at all by what the employees have put forward by way of a reply. It really is an impossible task and flies in the face not just of the terms of the agreement as they may be read, as a matter of ordinary English, but it flies in the face of all authority that goes to the question of construction of these agreements.

PN384

We quoted to you in that connection that recent decision in Golden Cockerel and we've given you the copy of that and quoted the relevant passages, and we've quoted other authorities that deal with the construction of documents. It seems to us, with respect, that the authority is all one way and again it flies in the face of what's been put to you by the employers. They may be dissatisfied with the agreement and the way it operates and everyone's entitled to have buyer's remorse I suppose but buyer's remorse actually doesn't really find any place in this system that we've got at the moment. It's not like the good old days when you could come back to the Commission and say we made a mistake or we did this or we did that, and we want to have another look at this, rather that parties are expected to live with their bargains under this scheme and to the extent that they're able to change what they've agreed to, there are very confined and prescriptive rules that apply to them and that's it frankly. That's the start and the finish of it.

PN385

Now with this particular agreement, as we know it comes up for review in the middle of next year. As a practical matter one wonders why efforts haven't been really concentrated on making sure that the negotiations for the next agreement aren't started as soon as practicable and well advanced, so that a new agreement could be made hot on the heels of the expiration of this agreement. That's really the answer that the system offers an employer who has some difficulties or finds themselves in trouble in circumstances that have been the sort of circumstances that have outlined here. There is simply no scope in the system for employers or for unions for that matter to have second thoughts and come back and ask for a re-write of the bargain that they made. It just doesn't happen. I mean that's now been the position since 1993, wasn't it, when the first enterprise bargaining agreement scheme came in.

PN386

THE COMMISSIONER: I'll pretend I'm not that old or have any idea what you're talking about.

PN387

MR NOLAN: Yes, well I certainly am and for my sins I can remember the headier days even before that. I can remember Andrew Herbert in Queensland saying to I think it was Asbury C, that he was sure that she was in kindergarten when a particular provision we were referring to was put in.

PN388

THE COMMISSIONER: Bold submission, yes.

PN389

MR NOLAN: Anyway flattery got him nowhere in that case, I'm happy to say that it's been around for suffice to say this whole approach has been around for a long time, it's been refine over the years and it's very well entrenched now. What it says to industrial parties is that you make your agreement, so long as it conforms with the Act and it's approved by the Commission, you're then expected to live with it and if the boot was on the other foot and the union was bellyaching and trying to get out of the agreement, well we could expect that the employer would be saying exactly what I'm saying now. That's the way the ground rules operate, and the real opportunity for a review of the circumstances of the mine and what might or might not be appropriate for the way the mine operates really arises next year when the agreement comes up for renegotiation, and that's the only time with respect that anything like this could be entertained.

PN390

For completeness I suppose I should reiterate my point, and that is that we've said all along in our contentions here that really this is no task for resolution under the dispute resolution clause in this agreement, and that in the event that the Commission didn't endeavour to have recourse to the clause to deal with this, it would really be acting outside its jurisdiction, because the clause is not at all designed to bring about this kind of profound alteration to the agreement. As a matter of law it can't occur, in any event, and the application should be dismissed. May it please the Commission.

PN391

THE COMMISSIONER: Thank you, Mr Nolan. Mr Power.

PN392

MR POWER: Thank you, Commissioner. Commissioner, I will be completing my submissions in reply before it's time to rise. I'll be nowhere near as long as in opening. There are a few points that I need to respond to, arising out of my learned friend's submissions. Before I do that, there are some submissions that I should make to you in relation to the evidence which you now have before you.

PN393

You have before you in evidence now, the evidence of Mr Wood. Mr Wood in paragraphs 29 to 52 of his witness statement deals with a number of matters. Many of those matters as you would or will soon know are the subject of objections. Many of those matters in those paragraphs also deal with what I describe as operational matters, so Mr Wood has in that part of his statement gone into the area of being critical of some of the operational projections made by the company; in the evidence of Mr Vanga, in particular.

PN394

My submissions about that evidence can be very brief. There is nothing in Mr Wood's statement to indicate that he has the kind of expertise that Mr Vanga has in making those sorts of projections. When you look at Mr Wood's statement, paragraph 29, his expertise appears to come from a number of sources, such as that expertise is. One is in representing members in relation to industrial and safety issues, which by its nature must be very specific. The second source of his purported expertise is talking with friends and family who work at the mine, but there's no specificity given to any of that. He says he has discussed the proposed changes to the roster often and in some detail with members at the mine and employees at work there, including ex-employees, some in management positions. Again, no detail.

PN395

If it were the case that the union was to put forward some evidence about the operational objectives and how they should be met and whether they can be met, as Mr Vanga has done, then the appropriate person to give that evidence is not Mr Wood but someone, like for example Mr Busam from the mine. The union has chosen not to follow that course and the consequence of not following that course is that where the evidence of Mr Vanga differs from the evidence of Mr Wood on operational matters, in the sense of what can be achieved and how it can be achieved and whether it would be achieved, to the extent that the Commission wants to entertain entry into that area of evidence, the evidence of Mr Vanga and the company should be preferred to the evidence of the union.

PN396

That's particularly so when you look at the actual expertise which Mr Wood has, and if memory serves me rightly, in his statement he says that he last worked as a production worker in 1987, some 28 years ago. So that's all I want to say about that aspect of the evidence where there is a conflict.

PN397

I want to respond immediately to a submission that was made towards the end of my learned friend's submissions about the impending expiry of this enterprise agreement. It's put to you presumably for the basis that it should persuade you that the proper course is not to go down the one which the company advocates but instead to take into account the impending expiry of the enterprise agreement as a factor that should strictly or indirectly influence your decision. It's quite right to ask the question; why is it that the company is bringing this application now, given that the enterprise agreement expires next year? Quite right to ask that question. The answer is as I thought I had indicated in my submissions earlier today, it's because - and I don't want to put it too finely - if it leaves it until the expiry of the production agreement next year, there might not be very much to negotiate over.

PN398

Can I then turn to the submissions that have been made in response by my learned friend about clauses 21.11 and 25.1, and I do that in the context of course of the whole of those provisions of the agreement. Commissioner, I'm not going to repeat what I said earlier. You've heard me say that the argument in respect of 25.1 is quite a difficult one to make and I accept that. I do want to make some additional submissions in reply to you in relation to 21.11. You will recall that one of the points that I made earlier in my submissions to you about 21.11 is that 21.11 does not on its terms require a variation of the agreement. So it's an agreed mechanism for dealing with things, including the alteration of hours of work.

PN399

That is one of the things that will be affected by the proposed roster being put forward by the company. So on that basis or on a number of other bases in clause 21.9, you can properly say that what's being put before you in the company's application, the first application, is a matter that comes within the scope of clause 21 of the enterprise agreement.

PN400

I understand your point which arose in your exchange with my learned friend, Commissioner, when you made the point that clause 21 needs to be construed within the framework of the enterprise agreement. Obviously it does, but you need to examine the framework to see what the enterprise agreement does and does not do. This enterprise agreement does not on its terms prevent the introduction of a new roster. If you accept that proposition then 21.11 can be used in the way in which I submitted it could be used earlier today. The framework of the agreement which was a matter discussed in the exchange with my learned friend does not impact on that.

PN401

I'll deal with the elephant in the room, workability. There are some obvious points to make arising out of my learned friend's submissions in relation to this aspect of the case. Before I get into that, may I just say that I do understand why there is a focus on the consequences of introducing the new roster, almost as it were reversing the proposition and looking at the outcome and thereby commenting on the proposed roster. That's attractive and it comes as no surprise that my learned friend should spend much time on that as it's indeed appropriate to do so. That's precisely why the submissions, the written submissions in reply dealt with it in the detail that it did, because it has to be addressed.

PN402

You raised some questions with me earlier this morning, Commissioner, about that. My learned friend has made some further submissions that take the points you made a little further and I need to say something in reply to those, and I will. My learned friend put the submissions about workability which have been expressed in writing by the company as being in the realm of unreality. Now I'm not going to descend into hyperbole but I'm going to make this point. That just because something is new does not mean it should not be accepted where there is a proper sound basis for doing so. It's in that direction that I'm now heading with my submissions.

PN403

It is not the case that if you permit the introduction of the new roster that the agreement would simply cease to apply. What do I mean by that? Well for a start not all of the employees, the production employees of the company would work the new roster. There would still be some who would work the current roster. Well what about those who are working the new roster, what happens with them? Well when you go to paragraph 36 of the company's submissions you will see there a list of clauses in the agreement which it is said will not apply.

PN404

Let me just illustrate the point I'm about to make by taking you to one of them on page 6. Do you have it, Commissioner? Let's pull up one of those. Clause 8.27, casual employees. Yes, that won't apply but will it be of much importance in this case? Because none of the employees working the new roster on the evidence will be casual employees. So yes, strictly speaking it will not apply. But it will not have the sort of en masse effect that my learned friend is postulating.

PN405

My point is this; that when you at your leisure look at these clauses and you apply them to the evidence about what the new roster will require and who will be working it, you will in my submission quite comfortably conclude that many of the clauses that have been identified in paragraphs 36 and 37 will not be a matter of controversy. Admittedly some will but not all will. You'd be quite right, Commissioner, to ask the question well how is it going to play out? There's a simple answer to that.

PN406

Before I get to the simple answer, let me deal with the point that's been raised by my learned friend about whether when voting on this agreement the employees would have contemplated what is now being put to you by the company. With respect, that misses a very important point and it's this; when those employees were voting on this agreement what they were voting on to the extent it's not obvious is what was written in that agreement. So that if the draughtsman of the agreement - I should say draught persons of the agreement - left out something, of course they couldn't be voting on it. What this agreement does not do is it does not contain a prohibition against the introduction and implementation of a new roster, so of course they weren't voting on it because it wasn't there. What they were voting on was what's spelled out in clause 9.2. But we do know that 9.2 and 9.3 from the predecessor was removed, so they knew that.

PN407

MR NOLAN: Negotiated.

PN408

MR POWER: So when you're looking at the question put in the way it is that you should be putting yourself effectively in the shoes of those voting on the agreement, and what they were contemplating - - -

PN409

THE COMMISSIONER: It's also one party's subjective intention as well, isn't it?

PN410

MR POWER: That's right, that's right and I wasn't going to make that obvious submission to you, sir. That's right. Can I just say this, as you know it is our submission that there is a gap in this agreement, if I can put it in that colloquial way, and the gap is that there's no prohibition against the introduction of a new roster. Another way of looking at the argument being put by the union is that it is asking you to look at the whole of the agreement, to accept that where it is predicated and mentions 12 hour shifts and uses them as a basis for calculation, you should infer from that where and when it's mentioned, that this is an agreement that was only ever one that contemplated 12 hour shifts, seven days a week.

PN411

If you come to the view, as we invite you to, that that's not right and that there is a gap and there is no prohibition against the introduction of a five day, seven hour roster, then if you were to take up what's advocated by the union, you would in fact be writing into this agreement that which is not there. That's our submission.

PN412

I appreciate the competing arguments and I appreciate of course that you will need to - I don't want to use the word trawl through the agreement but you need to examine this agreement very carefully to see what it has and what it doesn't have, and therefore what it does and doesn't do. I accept that and I accept there are arguments both ways. But at the end of the day, the construction that we advance, which is that there is no prohibition is easily made out on the express terms. The argument the union advances, which is that it can't be done has to be argued by inference relying on terms that do not spell it out.

PN413

THE COMMISSIONER: Mr Power, if we take a, for want of a better word, a simpler argument - - -

PN414

MR POWER: Yes.

PN415

THE COMMISSIONER: That is that 10.1 says yes, there can be a new roster, doesn't say what sort of roster, doesn't confine it to anything.

PN416

MR POWER: No.

PN417

THE COMMISSIONER: The company's tried to put in place a new roster, employees have said no, if that's something that's occurred through the consultation clause then the company is I think introducing a major change that's likely to have significant effects. 21.11 says:

PN418

If the changes through the consultation cannot be agreed the disputed matter can be referred for conciliation or arbitration.

PN419

We've done that, we're arbitrating it. At that point, what are the principles the Commission is to apply to what are frankly just competing merit arguments?

PN420

MR POWER: Yes.

PN421

THE COMMISSIONER: The company says we've got a pressing economic necessity, there's no prohibition in the agreement, yes it will have these impacts on other terms of the agreement. The union says, accepting they've lost the first argument, says the agreement never envisaged this was going to be a drastic change on a whole range of provisions and obviously a very significant on our members. You shouldn't do this. So what are the principles to be applied when really you're just dealing with a merit argument about a proposed changed that's disputed?

PN422

MR POWER: I understand and if I can answer that question in this way. It's obviously a matter where the Commission would need to examine the arguments put on either side. It would need to come to a view about which of those arguments it should prefer, how does it do that? That's the relevant question. The answer to that is, and it's apparent from the evidence of the company, that the company simply cannot continue to pay these wages. That's the problem. It can't do it.

PN423

Can I answer the question another way. If you're minded to come to the view that the disadvantage suffered by the employees is sufficiently great to warrant a decision in their favour, then what in my submission you are in all probabilities doing is giving them a pyrrhic victory. Because there is no point in winning the case on the basis you're entitled to keep that wage level if at the end of the day the business folds. What's the point of that? I haven't given you the principles because these are discretionary matters but this is how, in our submission, the discretion should be exercised. It really is as simple as that. That's why the company's here now. Why it's not negotiating for next year. That's a long time away in its current predicament.

PN424

Commissioner, I appreciate that was a matter that concerned you and I've dealt with that. Can I come back very briefly - - -

PN425

THE COMMISSIONER: Yes.

PN426

MR POWER: - - - to the workability issue because I haven't made all of my submissions in reply to that and I won't be much longer. I suppose one concern that was apparent from the exchange between us this morning, Commissioner, is that one concern you have about what the company puts up as a workability proposal is that it might be seen to encourage disputation, I understand that.

PN427

THE COMMISSIONER: Well not encourage but that may be a side effect because there are a range of current entitlements which are prescribed in an agreement that it would, on the company's argument as I understand it, no longer be prescribed by the agreement, so what that - well there's no longer an entitlement, then there may be some safety net around some of those things but one doesn't have to be a fortune teller to suggest that that's a circumstance that generally could upset some people.

PN428

MR POWER: That's precisely why I raise the point with you now because it needs to be addressed properly. What we say about that is simply this; first of all you need to see that problem in a practical context. So we're not dealing with all of the employees who work in production, that's the first thing. Secondly, as I submitted earlier, not all of the benefits and entitlements which those employees would normally expect and get will be the subject of any disputation. I accept there will be some about which there will be differences of opinion between the employees, the union and the company. That must be so. How do you deal with that is the question?

PN429

The answer to that question is that it ought and very probably will be the subject of conferral between the company and the union. It's not hard to identify those topics; annual leave, long service leave and so on. One way in which they might be dealt with but not the only way in which they might be dealt with, would be for example for the company to provide a statement of its position in writing to the union and to its employees. These matters are not dealt with under the enterprise agreement because of this drafting omission and here's how we propose to deal with them, let's talk about it.

PN430

The company can, I'm instructed, give an undertaking to set those matters out to the union and they can then be the subject of conferral. The notion that there needs to be some sort of on or will be some sort of ongoing series of disputes between the company and the union is a wrong notion. Because if, for example, we take that approach and they are all set out and are all then the subject of negotiation at the one time, there can be one resolution of them.

PN431

THE COMMISSIONER: Might. There can, there might, there might not be.

PN432

MR POWER: There can, there can. If there is not then there can be an arbitrated outcome. That would not require a variation because it's not captured under the agreement. It's easy to say well, this is new, it's different, therefore it must be problematic. In my submission, that doesn't follow as a matter of reason or logic and it should not be seen in that way. These are difficult times and may be difficult times require unusual measures and that's what I'm advocating, Commissioner. I'm not advocating something that is silly or nonsensical. I am advocating something that is workable and doable and is consistent with the situation that is currently confronting, not just the company but the employees too. It needs to be fixed. That's why we're here. Would you bear with me for a moment? Thank you, Commissioner.

PN433

THE COMMISSIONER: Very well, gentlemen, thank you for your submissions. You have left me with plenty to consider. I will adjourn and in due course advise you of my decision. Thank you.

ADJOURNED INDEFINITELY [3.49 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #G1 STATEMENT OF RAJ KUMAR ROY DATED 22/05/2015 PN276

EXHIBIT #G2 STATEMENT OF VANGA VINOD KUMAR DATED 22/05/2015 PN277

EXHIBIT #G3 STATEMENT OF VANGA VINOD KUMAR IN REPLY.. PN278

EXHIBIT #G4 BUNDLE OF DOCUMENTS.................................................... PN288

EXHIBIT #CFMEU1 STATEMENT OF GARY NORMAN WOOD............ PN301

EXHIBIT #CFMEU2 FORM F17 FROM APPLICATION TO APPROVE 2012 AGREEMENT................................................................................................................................. PN317