C2015/4117, Transcript of Proceedings [2015] FWCTrans 746 (31 December 2015)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1052877

---

COMMISSIONER CAMBRIDGE

C2015/4117

s.739 - Application to deal with a dispute

Maritime Union of Australia, The

and

Patrick Stevedores Holdings Pty Limited

(C2015/4117)

Patrick Terminals Enterprise Agreement 2012

(ODN AG2012/5576)

[AE894673 Print PR525096]]

Sydney

10.06 AM, WEDNESDAY, 16 DECEMBER 2015

Continued from 15/12/2015

PN797

THE COMMISSIONER: Mr Slevin?

PN798

MR SLEVIN: Thank you, Commissioner. If I can start with a housekeeping matter. Yesterday the annual leave policy was handed to Mr Cheng and there was some cross-examination about it and I neglected to tender it. So I tender that.

PN799

THE COMMISSIONER: I take it there's no objection?

PN800

MR DARAMS: No, Commissioner.

PN801

THE COMMISSIONER: Thank you. This document will become exhibit 17. Exhibit 17 is described as Asciano annual leave policy, dated 30 November 2012, exhibit 17.

EXHIBIT #A17 ASCIANO ANNUAL LEAVE POLICY DATED 30/11/2012

PN802

MR SLEVIN: Thank you. And I think the next matter in the order of business is the is an agreement between the parties that goes to the jurisdictional objection made by the company about the standing of the MUA to refer these grievances to the Commission. As I said yesterday, we don't concede that that's necessary that this be done but we are willing to make an application under section 586, asking the Commission to amend the application to identify as the applicant or the referring party, to use the term in the agreement, as being Darren McCarthy and the other employees listed in schedule B to the application.

PN803

MR JACKA: Schedule B. Appendix.

PN804

MR SLEVIN: Appendix B. Mr Jacka corrects me. If the proceedings are amended, or the referral is amended in that manner I understand that there is no longer an argument about the jurisdiction of the Commission to proceed on the basis of standing, and so I make that application and I understand it's an application that's made by consent.

PN805

MR DARAMS: It's not opposed.

PN806

THE COMMISSIONER: Thank you. Well, I think it's got to be Annexure A. Although I think we've had one drop out, haven't we? Or more than one? But anyway, I suppose that's probably irrelevant. But if you want the proceedings to demonstrate that it's Darren McCarthy and the other named individuals - - -

PN807

MR SLEVIN: That's right.

PN808

THE COMMISSIONER: Contained in Appendix A.

PN809

MR SLEVIN: The next matter, Commissioner, is yesterday at the end of my opening you asked if we could put to writing a deposed determination in the matter and we've done that and I provide it to you. I might take the moment to give you the opportunity to read it, Commissioner, before I speak to it.

PN810

THE COMMISSIONER: Yes.

PN811

MR SLEVIN: You will see that in terms of 1(a) of the determination that goes to the findings of unfairness, and (b) goes to the remedy that's suggested to deal with those matters. You will note, and we had this discussion yesterday about the question of whether it applies to all employees or just applicants, what's sought is that the recalculation occurred in relation to all employees because the selection process is a relative one it's a case of, you can't just make changes for some and not others and so the outcome would be that if the scores are recalculated it would be on the basis that the unfairness is removed and the unfairness is removed for all, and the proper ranking of the employees for the purposes of the training and the dismissal is then established.

PN812

If you were to take a sub-set where they'd be the sub-set of the five applicants that are subject of the arbitration, or the sub-set of the 60 or so who raise grievances, then you would end up with anomalies in terms of the way the process was applied. The interests of the employees is that the process that was used be a fair one overall. The interests of the employees is not to steal a march on other employees but to say overall they can be confident that the process that was applied to them that ended up with them either losing their job or keeping their job, was one that was free of the sorts of unfairnesses that have been identified in the proceedings and so the remedy is sought.

PN813

While the grievances give rise to identifying the unfairness, the remedy for the unfairness from the employees' point of view is to say, well, no, we want that process to have been fair, been applied fairly to all, so that the outcome is an outcome that there can be confidence in. So that's the reason for seeking a remedy in that fashion and of course what's proposed in the remedy by the union on behalf of the applicants, as a result of your consideration, may be the subject of some modification but from the applicant's point of view, that's what they seek in the proceedings.

PN814

The next matter, Commissioner, is then the submissions in support of that remedy that's sought and there's an outline of submission that's been filed. In the course of the proceedings some of the matters in the outline are proven to be wrong. For example, the table setting out the selection criteria in the outline of submissions was the pre-consultation table. So we've re-done the outline of submissions, Commissioner, and also added some references to evidence and some mentions of the evidence overnight. I'll speak to that document. It is substantially the same as the outline but I ask that in your consideration of the matters you disregard the outline and rely on this document. Now what I proposed to do this morning was speak to this document and supplement it by some references to the evidence.

PN815

The first point to be dealt with in these proceedings, as is often the case in dispute resolution proceedings, is locating the precise source of the authority for the arbitration itself but this question is put in issue by the company in its outline of submissions. Here we set out the basis for the jurisdiction by reference to the clauses in the agreement and the provisions of the Act. The starting point you'll see in the submission is clause 10. At 10.1 the agreement says, "Any concern by an individual employee that the company may have unfairly treated him or her may be progressed in accordance with the personal grievance procedure set out in schedule 3". So that's the source of the right of the employee to complain about unfair treatment. So the starting point is clause 10 and the question to be addressed, or the right that is conferred, is a right to fair treatment. It is expressed as a right to complain about unfair treatment but the converse of that, of course, is that it provides the right for employees to be treated fairly.

PN816

The means by which an employee can enforce that right is to have access to the personal grievance procedure set out in schedule 3. I make a comment about clause 10. Clause 10 is clear on its face as being a very broad provision allowing employees access to that grievance procedure to address any concern. That's the word in clause 10, "any" concern that he or she has been unfairly treated.

PN817

Now in these circumstances and you've seen the evidence both in Mr Cheng's statement and in the statement of the applicants, the schedule 3 was indeed accessed by the employees and that personal grievances were made. There was some suggestion of a criticism in the evidence of Mr Cheng that perhaps proformas had been used and that sort of thing, but I think Mr Cheng in his cross-examination made it clear that no issue was really taken by them about the way the grievances were conducted. And the cross-examination of the witnesses in the brief cross-examination, it appears that some point is being made about the dates of meetings and the like and what was said. The concentration in that cross-examination was on the first grievance meeting. You will see through the other evidence that there were two grievances and so any error on the part of the applicant's in their statements as to the recollection of what was said at which grievance meeting wouldn't result in any adverse finding against them and wouldn't have any impact on the fact that the grievance procedure so far as these complaints are concerned, was accessed by them and was followed by them.

PN818

Going to schedule 3, the first term in schedule 3 defines a personal grievance as a personal grievance being, "a grievance that any employee may have against the company because of a claim 1.1, that the employee has been passed over for selection to fill a promotional position or for placement in a training course". Now you have seen the grievances that when identifying the nature of the grievance the employees ticked both (1) and (2) and you've also seen the material that when the employees were notified of their success or otherwise in the selection process in January, you've seen those letters, that the company expressed that outcome as an outcome to undertake training for the new terminal and so the employees were right to call in aide 1.1 as being a source of their grievance.

PN819

And secondly, the far broader formulation in 1.2 applies, as well, that the company has taken some other action that is unjustifiable, and the unjustifiable action is the way that the selection criteria, published selection criteria was applied to them and the manner in which scores were allocated to them and so that takes us through the first part of schedule 3. Schedule 3 up to the referral point is the steps to be taken. I don't think there is any contest that the various steps were taken in terms of notifications in writing and appeals, internal appeals, which leads to the last term in schedule 3, which is clause 8, that in the event that "the concern cannot immediately be alleviated by management, depending on the nature of the alleged grievance, one or more of the following options shall be adopted as a means of resolution". Now that's 8.1, "further discussions between management, the employee and/or union employee representatives". 8.2, "Reference to a mutually agreed conciliator/arbitrator". 8.3, "Reference to FWA in accordance with the avoidance of the disputes procedure set out in schedule 1 of this agreement".

PN820

Both the objective evidence, the evidence - or the unchallenged evidence of the witnesses and indeed of Mr Cheng, was that the nature of the current grievances were such that discussions between management and the union were exhausted and so the first of those options was not available. The evidence was also that despite attempts there was no mutually agreed conciliator/arbitrator, and so option 8.2 was not available and there was cross-examination of Mr Cheng about this. You will see it also reflected in one of the decisions of Sams DP during the course of this long-running context over automation and that's the decision in 1280. Mr Darams says that the company has prepared a folder of authorities and you may be assisted, rather than having too many copies of documents, by receiving them now and I've got no objection to that. It's in tab 5 of the volume that my friend has handed up and you'll see at the end of his Honour's reasons at paragraphs 19 and 20, the circumstances of whether the Deputy President would take on the role of private arbitrator for the purposes of 8.2 is dealt with. That material reflects what Mr Cheng confirmed yesterday that there was no agreed conciliator/arbitrator which, of course leaves, given the nature of the alleged grievances here, adopting the words from the perambulatory provision in clause 8 of schedule 3, that left reference to the Commission in accordance with the avoidance of disputes procedure.

PN821

There was some argument in the respondent's outline about, well, if it's referred to the Commission under schedule 1 of the agreement, just how does that work? The suggestion by the company is that you start at the beginning of schedule 1 and the constraint about whether the dispute is over the application of the agreement or the NES applies. That means of reasoning would be contrary to a decision of the Commission in relation to another provision in the agreement and that decision is the decision of Commissioner Cribb which I see is at tab 7 of the folder.

PN822

In that decision I think we're at one with the company that when the Commissioner refers to clause 15, it should be a reference to clause 14 of the agreement and for the purpose of this argument it may be useful to have Mr Cheng's statement with the agreement attached at 2(c)(1). The dispute being dealt with by Commissioner Cribb was the dispute over a similar dispute to the one here. It was about the introduction of significant change and that the dispute was referred to the Commission following consultation and in accordance with clause 14.4 which is at page 16 of the agreement, itself, which says that "Where, subject to the provisions of this clause, the company exercises it's right to implement significant change in the workplace and the employees disagree with that decision and implementation of the change, subject to there being no stoppage of work or rejection of implementation of the change, the employees or the union where requested by the employees, may refer the matter in dispute to the FWA in accordance with the dispute resolution procedure set out in schedule 1 of this agreement".

PN823

The subject matter of that type of dispute is always going to be not about the application of the agreement or the NES, it's going to be about the disagreement that arises. And so when one goes to schedule 1, one sees it as a provision in schedule 1 well, there's the perambulatory words that "in the event of a dispute arising in the workplace in regard to the application of this agreement or the NES, the procedure to be followed to resolve the matter shall be as follows", and then a full procedure is set out. And so there will be meetings and if it's not resolved it will be escalated, until you get to step 1.1(e), which is, "Where the dispute has not been resolved within seven days of the issue giving rise to the dispute being raised despite the foregoing procedure being followed and subject to there being no industrial action occurring, or having occurred in relation to the issue at hand, and subject to clause 1.3, either party may refer the matter to the FWA for arbitration if necessary, in which case the decision will be accepted by the parties subject to any appeal rights".

PN824

That is the mechanism by which a reference to FWA is made. So if you go to 8.3 in clause 8 of schedule 3, it says that one of the options that may be adopted is referenced to FWA "in accordance with the avoidance of disputes procedure set out in schedule one of this agreement". In other words, go to schedule 1. Where schedule 1 makes provision for reference to FWA you refer to FWA in accordance with that provision. In other words, you don't pick up the perambulatory words, you don't pick up the steps at 1.1(a), (b), (c), or (d). You pick up (e), which is how a reference is made in accordance with schedule 1. So that's the argument and that's the argument that was accepted and it's their argument that the union in these proceedings contends is the correct construction of that clause. And it is an argument that in terms of clause 14.4 which, in a similar way, mentions as the mechanism for the reference of a disagreement over the introduction of change, uses the mechanism of a reference under schedule 1. So in the same way, the applicants were permitted by schedule 3 to make the reference that they have without the need to meet other requirements in schedule 1. And as I said, indeed that's the finding that Commissioner Cribb made at paragraph 76 of the decision at tab 7 where the Commissioner says, "I accept the union's submissions that this clause is another dispute settling clause in the agreement, in addition to schedule 1 which it refers to. I have not been convinced that it narrows the union's ability to dispute significant change and/or its implementation. Rather, it makes it abundantly clear that subject to good behaviour, the union, if it disagrees with the company's decision and/or implementation, may refer it to the Commission. The clause also states that this ability only applies to significant change once the company has exercised its right to implement significant change, and subject to good behaviour by the union. The clause skips the preamble and the first couple of steps of the dispute settlement procedure in schedule 1 by specifically referring the matter to the Commission. In accordance with the powers set out in schedule 1 the Commission has the power to arbitrate a dispute between the parties over the significant change decision and/or its implementation. It is these two disputes are premised on a disagreement by the union about how the company is implementing the significant change. I therefore find that I have jurisdiction to deal with the dispute on the basis of clause 15.5 of the agreement". 14.4 should be the correct reference.

PN825

And so we say that that step, the step from schedule 3 of referring to the Commission, is a reference to a reference to the Commission in accordance with the requirements of clause 1.1(e) of schedule 1. And that the same reasoning applied by Commissioner Cribb there applies in relation to the dispute resolution mechanism provided for in relation to grievances. And so once the matter is referred to the Commission, the Act has work to do because the Commission is a statutory body and can only operate under its statute. In that section it sets out the powers of the Commission to deal with the dispute and as to arbitration, sub-section 593 reads, "The FWC may deal with a dispute by arbitration, including by making any orders it considers appropriate, only if the FWC is expressly authorised to do so in accordance with another provision of this Act".

PN826

So that sub-section sends you looking for another provision in the Act to authorised the arbitration and you'll find that in division 2 of part 6(2) of the Act which is about dealing with disputes between employees and employers, and sub-section 738(b) provides that the division applies if an enterprise agreement includes a term that provides a procedure for dealing with disputes. If the provision applies then sub-section 739(4), which is about the FWC dealing with disputes, authorises the Commission to arbitrate the dispute. And so you have the authorisation coming from the terms in the agreement that I have taken you to. And sub-section 4 of 739 says that, "If in accordance with those terms the parties have agreed that the FWC may arbitrate, however the described the dispute, the FWC may do so". So the dispute described in clause 10 about the unfair treatment, having gone through the grievance procedure, having been referred to the Commission under schedule 1, and schedule 1, in particular, 1(1)(e), allows or authorises the Commission to arbitrate. And so therein are the provisions relating to the power of the Commission to arbitrate.

PN827

What's put against us on this question of jurisdiction is that first of all, schedule 1 should be read so that the perambulatory works apply and that the dispute arising must be one arising in the workplace in regard to the application of this agreement, or the NES. Now first of all there's the argument that I've already taken you to which is, you bypass that as schedule 3 does the work of setting out the process for resolving the grievance. So it's already got the first four steps covered, as it were, in terms of the dispute resolution mechanism, and (e) only applies to supplement the procedure in schedule 3. Now if we're wrong on that and we say because of Commissioner Cribb that it would be difficult for you to find otherwise, and indeed the decision of Commissioner Cribb should be accepted by the parties in accordance with the schedule 1, but if we're wrong on that, well the dispute, the grievances are about the application of the agreement in any event because clause 10.1 guarantees the fair treatment and gives the employees the ability to challenge unfair treatment, and so it's about the application of clause 10 and whether the employees were treated fairly. You don't need to go to that argument, Commissioner, but it follows that indeed the grievances, because they arise from the agreement, are about the application of the agreement and turn on questions of the application of the agreement. So that's the first argument that's put against us.

PN828

The second argument in relation to jurisdiction, as I apprehend it, is this argument that the exclusion which is in 1.1(e) in clause 1.3 applies. And then 1.3 says, "Unless agreed by the parties, FWA shall not have the power to arbitrate in relation to any dispute involving a company policy other than in relation to a dispute over whether or not the party has complied with the company policy as required by this agreement". What flows from Mr Cheng's cross-examination yesterday is that this is not a policy. You can see exhibit 17. That's a policy. It is expressed as a company policy and the company policy is in capital letters in that clause. The policies are also mentioned in clause 8.5 of the agreement. "Nothing contained in a policy, capital or procedure shall have any effect to the extent that its inclusion or implementation is inconsistent with this agreement".

PN829

You saw yesterday in the evidence, Mr Cheng accepted that policies take the form that you have before you. He tries to backtrack and say, "Oh, but it can apply to other things such as the procedures we follow". But there's no basis for a finding that just because the employer at one terminal, and you've got to remember the context of this, this agreement applies to a number of terminals at Patrick Stevedores, they apply company policies and indeed the company polices that they apply are the Asciano policies, so you're talking about high level company polices when you're talking about capital C, capital P, Company Policies. You're not talking about a selection criteria developed to introduce significant change at one particular terminal. It wasn't promulgated as a policy, you heard from Mr Cheng. It wasn't even adopted, it seems, as a policy. It was adopted as a procedure to follow but it wasn't adopted as if it was a company policy. "It is now a company policy that when we automate, this is how we select employees".

PN830

There's nothing along those lines occurred in the evidence. But the company wants to come along and say, well, no, this is a clause 1.3 company policy and so you can't arbitrate about it. And the finding simply must be on the basis of the evidence that that document is not a policy. The other factors telling against a finding that it's a company policy and the fact that it's never described in the contemporaneous documents as a company policy it doesn't get described as a "policy" until the statement of Mr Cheng. You've got contemporaneous correspondence going back as far as June of 2012, annexed to Mr Cheng's statement in July 2012, TC2. As you see that correspondence developed, and it talks about the nature of the changes in July 2012, to communications with the union in October 2013, the reference to the criteria for selection in the letter of 20 November 2013, the 22nd of 2013, all of these documents refer to a selection criteria. None of them refer to it as the development of a policy. They don't say, "This is our company policy".

PN831

What is referred to in the agreement is not some mechanism by which the company can, by describing their actions as being done, "in accordance with a policy", allow them to avoid scrutiny under the disputes procedure. The clause can't be read like that. If my friend's submissions are successful, that would be the effect of it. There is some argument along similar lines in the decision of Commissioner Cribb that I have referred you to but the case here is so much stronger, given the evidence about the nature of the selection criteria that was developed and whether it was in fact a company policy.

PN832

Those are the jurisdictional matters, Commissioner. If we get to the dispute now, you'll see that and that's page 4 of the submissions, the dispute attempts to describe in fairly neutral terms from paragraph 13 onwards and you are familiar with that background as I went through it, pretty much, yesterday and so I won't waste your time by going through it again. You will see the nature of the grievances that were raised and that's summarised at paragraph 18 and it's reflected ultimately in the determination sought in these proceedings, and that's the concerns of the employees about the selection criteria and the scores that they were given. So we've set out those concerns at paragraph 18. Now what we need to do is put the flesh on the bones of that and we do that, starting at paragraph 20 on page 6. And so by looking at the evidence you received yesterday you can see what's actually occurred in relation to the application of this selection process.

PN833

You will see that there was a labour model, and the company's labour model is at TC10 of exhibit 15, Mr Cheng's first statement, and it sets out the various roles that were to be filled by the application of the selection process. There continues to be this disagreement over the PIR crane role. In these proceedings it doesn't loom so large but you can see from TC10 that in terms of the selection criteria there was a PIR crane role and it had a different selection criteria to all the other PIR roles. And you can go back and have a look at TC10, the labour model, and you can see the nature of the roles in the labour model and it includes identification of nine PIR crane roles. It is significant in terms of the selection criteria because it shows that there were PIR crane selection criteria that matched up with the selection criteria, or didn't match up but was unique from the selection criteria for other crane operators and indeed team leader crane. Now the significance of that is that there are productivity scores and simulator scores that apply to that cohort of workers, those who are going to operate cranes, and in the complaints in particular about productivity, the use of the simulator and productivity scores are one of the complaints made, so that context.

PN834

In terms of the selection criteria, as well, and there's suggestions in the company's material that somehow there was the arbitration that occurred in early 2014 that gave the company's selection criteria the imprimatur of the Commission in resolving a dispute. Well, the union says, well, that's not the case and on the face of the lengthy decision of Sams DP it's clear that the sorts of issues that are being agitated in these proceedings were simply not agitated then, nor could they be because of some simple facts. It was before the selection criteria was finalised. The argument there and it's on the face of the decision, was whether there should be a separate selection criteria to the one already existing in the agreement for other purposes. But the company was developing its own selection criteria and it wasn't finalised. There was still consultation occurring about it and that occurred throughout 2014.

PN835

Given those circumstances, and indeed the other fact which is the selection criteria, and the scores weren't given until late 2014, and just as a matter of historical record, it can't be said that Sams DP considered the criteria and gave it any sort of imprimatur, and indeed the express statement of Sams DP at paragraph 263 of that decision was in these terms and that's, "Secondly, any employee who believes that the selection procedure has been inappropriately applied or incorrectly assessed can lodge an individual grievance under schedule 3 of the agreement, thereby providing an individual appeal mechanism for any employee who believes the selection procedure has produced the wrong result". And indeed that's what's happened in these proceedings.

PN836

The criteria ultimately used by the company for selecting into the roles in the new structure is summarised at TC12. I took you to TC12 in terms of describing the roles but it's TC12 which summarises the documents that are attached to TC11. Just by way of example, Commissioner, you will see Mr Bonnar(?), who was a grade 6 employee at the time in November 2014, was sent an information pack. Because he was a grade 6 he could apply for any of the positions that were going to be available in the new terminal. So his pack is a comprehensive pack and that means he got the information about everything and he got the so I'll start with the first grade 6 role preference form.

PN837

THE COMMISSIONER: Sorry, where are you looking at?

PN838

MR SLEVIN: I'm at TC11.

PN839

THE COMMISSIONER: TC11.

PN840

MR SLEVIN: And so you have the role preference form for a grade 6 and then you start getting the position summaries of the positions available that the employees are expressing a preference for. They follow a format and that's the first page which gives the position summary, and then the next page identifies the selection criteria, and so you see that page that describes the selection criteria and the various components. They are summarised by Mr Cheng in his table at TC12. So when you look at TC12 you see the role the different components play. Now you will see, Commissioner, in TC12, if you take the crane operator, that the fitness to perform the inherent requirements of the role was described as the "gate requirement". In other words, you must meet that requirement. Then if you had a final warning within the last twelve months you had a deduction of ten points. If you had a written warning you had a deduction of five points. If you had a counselling letter that was no longer applicable. That was something that came out during the consultation. The shift manager's score is identified there as 20 points and you can see, Commissioner, just by reference to this points allocation system, that those 20 points are important. They amount to 40 per cent of the available points an employee could achieve. And then the employee performance is 18 points, and that's the productivity score so that was the averaging of the lifts of the gang exercise, and then normalised in a fashion I'll get to shortly, the way that was done, to give a score out of 18. And then the capability testing simulator, which became the capability testing simulator, even though as you saw yesterday, it was a simulator always designed for training but for this purposes it was used as a productivity measure. And then for the crane operator there's no skills required. So that covers the crane operators.

PN841

If we go to the other positions and you'll see if you go to the senior clerk and I draw your attention to this, given Mr McCarthy's circumstances, that the fitness to perform the role is a gate requirement. The warnings deductions are the same. The shift manager score though is 35 points and so that highlights the importance of the score given by the supervisors. Now it's described as the "shift manager's score" and I should pause there. You will see in the evidence and you heard this yesterday about the shift managers. The "shift managers" is the generic term for the supervisors, who did the scoring. There are yard supervisors and ship, with a p, supervisors, and you'll see it in the evidence, people describe supervisors being on the other side of the roster. "The other side of the roster" is a reference to, if I work in the yard as the straddle drivers to, then the other side of the roster is the ship side of the roster. So you've got the cranes that do the loading and the unloading of the ships, and that's the tower is associated with that and Mr McCarthy was talking about this yesterday and so there's that side of the roster, and then there's the yard side of the roster which is the straddles, and they're moving the boxes around the yard and they're moving it to the rail load and the truck load. And so you've got two parts of the operation so I say that now because there is a context to the complaints that the applicants make about, "well, how did that supervisor score me? He's on the other side of the roster, he doesn't know my work". You know, a straddle driver's supervisor purporting to score the work of someone who works in the ship's hold as part of the crane team, is just incongruous and that complaint was made and it's just a matter of common sense. And so when you get to the shift manager's score and you saw how it was done with the primary and secondary scores, and we'll get to the table in the submission shortly, that's what's being referred to. It's the shift managers, generally but the actual supervisory structure at the site is broken into the two sides of the roster.

PN842

Going down the column there's no employee performance and no capability testing for the senior clerk role. There is the skills metrics which provides details of points per skill, and I'll come to that, the question of whether the skills were utilised in a twelve month period, as opposed to whether someone was allocated to exercise the skills for a full shift, is the context in that regard. And then so Mr Cheng's table gives you and demonstrates the importance of the complaints being made about the way scores are made. Now just by way of a general observation about this in Mr Cheng's evidence, he responds to complaints by the applicants that they were given two's and not three's. In other words, being told that they didn't meet expectation and needed further training in circumstances where they'd never been told by any of their managers that they didn't meet expectations and needed further training. Mr Cheng says that "this was a performance review exercise and so we didn't tell them that". And this was more important than a performance review exercise. This was an exercise where they were rating people to determine whether they'd still have a job, and so Mr Cheng's explanation as to why he should accept the employees whose livelihoods were on the line, didn't really need to be warned prior to someone making a judgment that they didn't meet expectations. It actually falls against me when he suggests that, well, that's because we weren't reviewing their performance. The actual points the applicants make is that, well, they should have been reviewing our performance before they started making an assessment that we didn't meet their expectations, because had they told us, we could have done something about it. But they didn't, they just decided that they'd sit in a room and allocate scores, and some of them liked to give two's and some of them didn't, and you can see that on the outcome of the table when we get to it and so - - -

PN843

THE COMMISSIONER: It's the corollary of that then that no-one could receive less than three unless they'd been given some sort of talking to beforehand?

PN844

MR SLEVIN: I think that is the case, on the performance scores.

PN845

THE COMMISSIONER: So to fix that problem we have to, somehow or other, know if anyone had been chatted in the twelve months before this and if they hadn't been, there is no way they could get less than three - - -

PN846

MR SLEVIN: Yes, for those performance type issues. If there's something you don't need to have been chatted, for example, for the punctuality and attendance aspects because that's simply a record of whether you were punctual or attended and so it doesn't apply to all the criteria on the punctuality and the attendance. It's just a matter of, there's a record here that shows you didn't turn up on this shift, therefore you don't meet expectations, or you are below the line, as it were. But you get a two for attendance and you say, well, why would I get a two for attendance? I attended every shift that I was rostered for, if I'm a PIR, or I attended every shift I was rostered for, if I'm on the permanent roster. That's what some of these applicants are saying, then that unfairness arises. I'll get to a further response to that question, Commissioner, when I get to TC14 and what the supervisors were told. I have some criticism to make about the fact that the supervisors didn't come and explain these things and don't seem to have really ever been sat down, one to one, to explain these things other than to address certain specific grievances through the grievance procedure. There was no vetting, as suggested that there should have been in TC14, before the scores were utilised to make the decisions about the employee's future.

PN847

So we go to, and I'll do that now, go to the process that was followed. Paragraph 28 of the submission sets out, I think, in an uncontroversial way, the process that was followed and that's that there were 291 employees drawn from both the permanent fixed roster and the permanent irregular roster that was subjected to it was subjected to the supervisor rating process. The workers were evaluated by their supervisors on their values and performance, using a five point scale, from one, "does not meet expectation", to five, "far exceeds expectation", for each of the eleven criteria, for a maximum score of 55. A total of eleven supervisors completed the ratings of the workers. The workers were potentially evaluated by a primary supervisor and up to ten secondary supervisors. The employees didn't have the same total number of reviews, nor were they all reviewed by the same set of supervisors. The supervisors were distinguished as primary or secondary supervisors of the employee and the total score was calculated by giving 50 per cent weighting to the primary supervisor score, the single primary supervisor score, and a 50 per cent weighting to the averaged secondary supervisors' scores. And so that mathematical exercise was carried out.

PN848

The workers on the permanent irregular roster and the clerical workers didn't receive a score from a primary supervisor. This is important in relation to, in particular, Mr McCarthy. And where this occurred, the overall score was simply the average of all of the supervisors. Now the employees' overall score out of 55 was then adjusted so that it became a score out of 20, 23 or 35 and you will recall we went through that at TC12, as to why that occurred, and depending on the positon the employee was considered for and so those weightings were given.

PN849

The first complaint made relates to these supervisors' scores and the applicants each provided statements to the Commission, setting out the position they held prior to the restructure and providing the scores they received in the selection process. The applicants complained that the scores they received were not fair, in a general sense. That's the unfairness from clause 10 of the agreement. Now if you go to the statements themselves and Mr Busuttil is the first, exhibit 6 and 7, you'll see in relation to the first complaint that there was the manager scoring him without knowledge. Mr Busuttil in his evidence doesn't make that complaint. He had no primary shift manager because he was on the irregular roster.

PN850

Now you've seen Mr Cheng's response that he uses table for other grievances in evidence, that he'd looked at the rosters and compared when each shift manager was on, so that was the exercise that Mr Cheng went through and I just say this because it arises in the response of Mr Cheng. You don't get from Mr Cheng, information about and as I say, I'll come to this in more detail but if we could make a criticism of the fact that the supervisors didn't come along. You haven't had the supervisors come along and say, "Look, I was the yard supervisor and I scored Mr Busuttil in this way because I observed his work and this is the way that I scored". And you don't get that from each of the managers who score this particular applicant. And so there's no opportunity for the Commission to understand, well, all right, that's why you scored, and then have another supervisor come along, and look, "I'm a supervisor on the ship site and I scored Mr Busuttil this way because of this". Is it because someone told him about Mr Busuttil? Is it because, "Look, I did a couple of shifts with Mr Busuttil when I filled in with someone, for someone"? Was it because, "I observed him from my side of the terminal because I saw him at meal breaks and talked to him about his work".

PN851

Was it that the basis of the observations being made once you get the fact that the operations work that way you can see that it's very important for the supervisors to be able to come and explain why they scored the way they did. That's what they were told in November for the training for this exercise and it doesn't happen anywhere. It doesn't happen in the witness box. It doesn't happen in documents provided by the company which reflect notes. At the highest, you get comments made to people in the grievance procedure. Those comments are challenged by the applicants in their response where they say, look, we finally got some documents where we get some indication of what the supervisor says. And they address those criticisms. So when the Commission has to deal with evidence of that nature, the Commission can accept the direct evidence of the employees responding to these criticisms over the hearsay evidence of the records that others made of conversations that they had about the scores that were provided.

PN852

The company has taken this risky approach in these proceedings in not giving you any direct evidence about the scores that are under challenge. And they're going to have to be hoisted on their own petard in that regard, Commissioner. They don't bring the decision-makers to the decisions that are being challenged. And so that's the first issue as to, well, how do we know about all of these scores for Mr Busuttil from these managers if we don't know on what basis the scores were made. Mr Busuttil in his material does address the inconsistencies of the scores. He gives you the direct evidence that, look, as far as he was concerned, he'd done everything right on the job. He had minimal sickies so there little there was no damage associated with the way he operated. He always respected safety. He never had an argument or he never showed disrespect to supervisors. He was accommodating to the allocator, he says, the allocator being the person who organises the labour, shift to shift, in circumstances where flexibility is required and Mr Busuttil was one of the flexible workers, being the irregular roster. And so he says he was always accommodating to the allocator. There's no evidence to suggest that that wasn't the case. You'll see that in his statement at paragraph 11, in particular. These matters were all raised in his dispute grievance procedures with the company.

PN853

He points out in his evidence, Commissioner, that in particular, he was scored lower by Mr La Roche. Now I can't do anything because Mr La Roche doesn't come and give evidence to say, well, look, the reason I gave such low scores to so many people is because this is the approach that I took. You know, all we have is the outcome of Mr La Roche's approach to the scoring and I'll go to the overall statistics but here we've got an incidence of Mr Busuttil actually describing for you that, well, he gets a lower score from Mr La Roche than anyone else and indeed, it's highlighted by the fact that he gets a 23 out of the possible 55 from Mr La Roche, and the next lowest score is 30, so there's a difference of seven points there. And then the rest of the scores are between 31 to 35, and so you see arising here a specific example of the matters that I'll take you to in the general sense a little later, a specific example of the impact of this, on its face, inconsistent approach to the scoring.

PN854

Now all we get in response is Mr Cheng come along and say, "Well, I spoke to Mr La Roche and he stood by his scores". There's no explanation as to, well, he might stand by his scores but is there any explanation as two why his scores are so much lower than anyone else's? Well, there's not. There is no opportunity for the Commission to explore that issue because Mr La Roche doesn't come. Now Mr Busuttil also gives the examples of being scored at two for certain criteria. Now he is given all two's by Mr La Roche, so it seems that on all criteria he doesn't meet the company's expectations as far as that supervisor is concerned. But he says he's never been spoken to for any of the categories, any of the criteria, about having poor performance and so he's marked down as being not meeting expectations, where no-one has raised that issue with him.

PN855

You also see that Mr Busuttil points to Mr Lucy giving him scores of not meeting expectations in circumstances where Mr Lucy had never raised with him any concerns about his work. Similarly, Mr Wood had given him those sorts of scores and so Mr Busuttil provides evidence in relation to that aspect of the complaint about the scoring. Mr Busuttil is the employee who understood that he'd been given a score for pinman. It seems that that is the case. So that part of I think I opened yesterday, saying that it appeared that some employees were given scores for pinman and others were not. That part of the case drops away. We don't say that that's the case and we accept what Mr Cheng says, that no-one was given the pinman score. But the complaint about the pinman score on the skills metrics is still pressed on the basis that there are categories of employees who were performing pinman duties, utilising the pinman skill in the twelve months prior who were entitled to that score but were not given it. So all of the employees - and on this question, Mr Cheng's answer is, well, we needed a document that told us how they were allocated and we went to a certain document and it was about being allocated for a whole shift.

PN856

That's not what the selection criteria says. And if you go to the selection criteria and the skills metrics, is how it's described, you see that the points were available to the employees if they had utilised the skill in the last twelve months. And so you end up with this anomaly that it's the case, and Mr Cheng wouldn't accept that all of the straddle drivers exercised the pinman when they were doing work where required but he did acknowledge that the pinman duties were being done and they were being done in the manner in which those relieving from cranes and straddles were performing those duties. So you've got employees who are utilising the skill of pinman because the work was being done, who on the face of the selection criteria are entitled to that score, who simply did get the score and so that's an anomaly that is clearly unfair and disadvantages those people who were performing, or utilising, to use the word in the criteria, that skill. Because of his role there was no complaint about the productivity score for Mr Busuttil and so Mr Busuttil's evidence in relation to the complaints being made are relevant for those reasons.

PN857

The next number five is Mr Dymock. You'll see that Mr Dymock was also a PIR employee. His statements are exhibits 8 and 9. His evidence is that he had no blemish on his work record. He'd never been disciplined. He had no safety issues. His leave record was perfect. He was always on time and never failed to report for a shift. He was assessed by ten supervisors. His lowest scores were two, indicating that he only partially met standards and training, or correctional action was required, and they were from supervisors who didn't know him or his work. The yard supervisors who did know him and gave him two, had never reprimanded him nor told him he needed additional training. So you see the aspects of the difference between the supervisors in their designations in the evidence of Mr Dymock. Now he gives the specifics about the managers without knowledge. They're at paragraphs 12 and 13 of exhibit 8. That's not addressed in Mr Cheng's response and it's clearly not addressed by the shift managers, who didn't give evidence at all. Mr Dymock says that over the last twelve months he predominantly worked in the yard. HE says he didn't know Mr La Roche, who gave him a two for everything except for safety.

PN858

Now in paragraph 23, he refers to Mr Gardener, one of the supervisors, who had given him a two for taking a responsibility but says he was never spoken to by Mr Gardener about not meeting expectations in that criteria. He says that he had not much to do with another supervisor, Mr Wood, and so makes the complaint that he doesn't believe Mr Wood was qualified to score him. Again, the only response to that is Mr Cheng saying that he spoke to Mr La Roche and he stands by his scores. Well, Mr La Roche can come and give evidence and stand by his scores but the company chooses not to bring him. Now in relation to those two's, Mr Dymock sets out for each of the criteria where he was given the scores and where he was never spoken to. So you have that evidence, Commissioner, in those exhibits from Mr Dymock and he addresses the details of the question of things like liability and attendance and punctuality. He notes in his statement that and you can see this in Annexure MD6 to his first statement, exhibit 8, that he's getting two's for attendance and reliability from some managers but for others, Mr Jones and Mr Lucy, they give him four's, and for a criteria such as, in particular, attendance and reliability and punctuality, one would expect those scores to be very similar. Maybe you could tolerate the difference between and three and a four, but the difference between a two and a four on the description of the scores and how they should be applied, which I'll go to once I've done with the individual evidence, it's an incongruity that speaks of unfairness and so that's highlighted and demonstrated by the evidence of Mr Dymock.

PN859

Again, the pinman complaint which was made by Mr Dymock, having been a PIR who utilised that skill I note the time, Commissioner.

PN860

THE COMMISSIONER: Do you want to take a break?

PN861

MR SLEVIN: If we could, please.

PN862

THE COMMISSIONER: All right, we'll take a short morning break. We'll adjourn for a bit.

SHORT ADJOURNMENT [11.17 AM]

RESUMED [11.38 AM]

PN863

THE COMMISSIONER: Thank you, Mr Slevin, yes.

PN864

MR SLEVIN: Commissioner, I was reading through the individual applicants in the evidence, demonstrating the unfairness. The third was Mr Hudson. He was on permanent operations roster as a straddle driver. He explains or he sets out his extensive experience and training in his statement but he gets low supervisor scores. He says that his primary supervisor was the wrong supervisor. He was scored, just in his statement, by ten shift managers and he received scores of two from supervisors who'd never said to him that he was not meeting expectations.

PN865

Now what arises in the evidence of Mr Cheng about Mr Hudson is that in relation to one of the supervisors it was accepted that his scores shouldn't be taken into account, and that was Mr Wood, because he'd only heard about Mr Hudson's work demonstrating the problem that was indeed a real problem. It seems from the documents though and you'll see this in the annexure to Mr Hudson's statement, that another supervisor made a similar comment. Mr Jones said that he'd based his assessment based on feedback as opposed to his own observations. And so what you get from Mr Hudson's evidence are these two examples of supervisors who even after the fact, and on the hearsay evidence that you have from the company, admit that they were making assessments of employees based on feedback and based on what they'd heard about them rather than what they observed.

PN866

We move to Mr Lee who's in a different category, being a crane driver and he was a crane driver on the permanent roster. He'd worked in the industry for 25 years and had extensive training. He had never received a warning for poor performance. He had been ranked highly in previous performance reviews and he gives an example of that in his statement. He had training as a team leader, indicating that he was an experienced crane operator. His gang, he says, didn't have a permanent team leader. It was scored by ten supervisors. Now he says a number of those supervisors rarely worked with him and the supervisors who didn't know him overall gave him scores of 33, and the supervisors who did know him gave him scores of 37 to 44, so that's his exhibit 12. The other thing about Mr Lee, Commissioner, is that he deals with the question of this productivity and the use of the simulator, which are part of the complaints made by the employees and so he's representative of that area of complaint about the unfairness of and the use of the productivity in the supervisors' scores, along with the evidence on the productivity, along with the evidence of Mr Freestone.

PN867

Now you'll see in the detail of his statement, exhibit 12, that he didn't know Mr La Roche, Mr Jackson and Mr Graham and Mr Katchia, so he identifies those supervisors, and he uses that expression, "on the other side of the roster", that I referred to earlier and he says that those supervisors didn't have anything to do with him. In response to that, Mr Cheng comes along and identifies these supervisors as having worked with Mr Lee. But under cross-examination it seems that Mr Cheng's method was not to look for people who were working with the particular employees, but rather, looking at simply the statistics as to when their shifts overlapped. And so this Mr Cheng's evidence doesn't address or deal with this complaint that they were on the other side of the roster. In other words, they weren't working in the area of the terminal that Mr Lee worked and so that cast doubt on Mr Cheng's response to those supervisors' scores, with his number-crunching approach to these things. It doesn't go to the substance of the complaint that's made by Mr Lee and you can see in the substance of his complaint, it is a legitimate complaint to say, well, you're getting people to score me who simply didn't know my work. And so he repeats that complaint and gives those examples of it.

PN868

THE COMMISSIONER: What do you say about the evidence that if the exercise that was done by Mr Cheng was to take those scores out of those people, so La Roche, Katchia, Graham, Jackson are taken out, and even then adjusting it, it doesn't materially alter the position?

PN869

MR SLEVIN: Well, the approach that the applicant's taken is well, there are a number of concerns about the scores. It gets him closer. Then we talk about productivity scores and if we're right on productivity scores, then it gets him, I think for Mr Lee, gets him over the line, as it were, and then there's the simulator score, as well. So it's not just as an exercise of addressing the complaints by saying, look we'll deal with that part of the unfairness but when we do, he doesn't get over the line. These are cumulative things. Unfairness is about all of the scores. So it may - - -

PN870

THE COMMISSIONER: Which means you have to succeed on all of these complaints, really, to get the material alteration.

PN871

MR SLEVIN: I don't think we're in a position to say about the material alteration, the nature of the proceedings being test cases, and it's going to have a different impact for different people. And indeed it may well be for some, it will move them up when they're not even one of the applicants and that's accepted on our side that that may be the result. And there are various other variables as to what the outcome will be. We don't ask you to speculate as to what the outcome will be if the unfairness is addressed. We simply ask you to address the unfairness. It is accepted by the parties - - -

PN872

THE COMMISSIONER: Surely I've got to have regard for what the practical consequences of that might be.

PN873

MR SLEVIN: You do if the respondent can stand up and say that as a matter of discretion this is going to cause us some sort of prejudice that we weren't expecting, or that was not anticipated, or that would be grossly unfair to us. That exercise may be justifiable. But in these proceedings the parties have agreed, firstly, in clause 10, that the employees will be treated fairly; secondly, that if they say that they're being treated unfairly they can go through a grievance procedure; thirdly, that while that grievance procedure, and this is clause 7 of schedule 3, while that grievance procedure is being followed, any decisions made that it had been challenged, are regarded as provisional.

PN874

So the agreement has already covered those sorts of issues. It's focussed on making sure that the mechanisms are in place that a grievance can be run through a procedure, and that the outcome will be preserved so that if it's found to have been unfair it can be addressed. So it doesn't need to exercise in these circumstances your mind in terms of where it may, in a circumstance where you are arbitrating from scratch as it were, you're not arbitrating from scratch as the cases make clear in these you're doing what the parties are asking you to do. And the parties have turned their mind to, well, what do we do in the meantime and what about the remedy? And they've said, well, what we do is, you've complained about that, we will not make any permanent position until your dispute about unfairness is dealt with. And so we get to a good example in Mr McCarthy who clearly didn't get the control clerk and was clearly assessed by people who never worked with him and so that those two components for Mr McCarthy operate so that he would selected at grade 6. So the productivity unfairness question, or assumed unfairness question, doesn't come into play. Indeed, the inconsistent scoring doesn't come into play, just the question of who scored him, comes into play. So for him it would only be two of the factors when the scores are recalculated that will give a result. So you do get a result there for Mr McCarthy. But because of the way the proceedings are brought, and from our side of the Bar table it's the intention to resolve it in these test cases, so we don't have to come back and do these in five job lots, as it were. Here are the test cases. They demonstrate the unfairness. The unfairness is found. The remedy in place for the unfairness, let that as a guiding principle, lead to the recalculation of the scores - - -

PN875

THE COMMISSIONER: For everyone.

PN876

MR SLEVIN: Yes.

PN877

THE COMMISSIONER: Not just those that are test cases, not just those that have made a grievance, but for everyone. So - - -

PN878

MR SLEVIN: And there's a - - -

PN879

THE COMMISSIONER: But the practical ramifications of that is something that I was just contemplating during the break.

PN880

MR SLEVIN: Well, the practical - - -

PN881

THE COMMISSIONER: What about people who have gone on and taken their redundancies and gone and got another job?

PN882

MR SLEVIN: Well, that is the sort of speculation that in my submission needn't trouble because it doesn't deal with the unfairness that's been addressed and it's something that the parties can deal with. Clearly if the result of this is that someone who has perhaps even taken a voluntary redundancy, well, no-one's going to say, well go and get that person who too, that voluntary redundancy and say they're now on the list and they can come back. If they've taken the voluntary redundancy, they've taken it. If there's someone who's taken the redundancy and they don't want to come back, in other words they're not going to accept an offer of employment and say, well, look, I see what you've done and I see that I could have stayed but I'm happy where I am, thank you very much. And that's fine, you just move down the ranking. The intention is, and the employees are entitled to do this, say, well, look, you if they misapply their selection criteria they can come the employees are entitled to raise a grievance about that and come and have the unfairness addressed in the way we want.

PN883

THE COMMISSIONER: Not on an individual basis. This is for the transforming the individual into a universal application and saying, if you find an individual circumstance and a fault and we show you five that are similar, that leads then to an outcome which says, universally, revisit the whole process.

PN884

MR SLEVIN: It doesn't revisit the whole process, Commissioner, with respect, it - - -

PN885

THE COMMISSIONER: No?

PN886

MR SLEVIN: They've got the numbers. They've calculated the numbers. Five come along and say, as representative of 60 odd who raised grievances, the way they've calculated those numbers, that's just unfair. They need to recalculate the numbers. What flows from that is, you address the unfairness. Now having addressed the unfairness, you've done your job in resolving the dispute before you.

PN887

As to the consequences of it, and I do say, I I accept that there may well be that there'd be a strong argument to say to you, well, as arbitrator here, that's just going to lead to an enormous mess. But it's not because the company has put in place, provisional arrangements while this process takes place and those provisional arrangements apply to everyone because all of the decisions turn on this grievance, so everyone who's been appointed. So everyone out there at the moment is waiting for the outcome of the grievance. They know. They were notified that that was the case. Those who bring the grievances are aware of that, as well. There are various arrangements in place as to, if there's going to be some sort of reshuffling, what will happen. You've heard the evidence about labour reviews occurring. You've heard the evidence that since these decisions have been made there have been changes to the labour force. You're not here resolving the whole exercise. You're here resolving the question of the unfairness of the grievances. If you start speculating about those other things then you're drawing your attention away from the nature of this exercise.

PN888

The parties have come here accepting that, all right, in the whole exercise, this was going to be part of it, and here we are dealing with that part of it. Now I don't hear the respondent saying they want you to do something different. In other words, I don't hear them saying, only ask us to reassess the five in these proceedings, or only ask us to reassess the 60 who were on the list. I think it's accepted by the parties and you're here to do the bidding of the parties, as it were, by resolving the dispute in accordance with the agreement that they had that you will, to address the unfairness and to focus on the claims being made about whether these people were unfairly treated. So I can understand the desire to have a look at, well, what's going to be the impact of this? What's going to be the impact of this is, you're going to resolve the grievances and what will flow will flow.

PN889

You will note, as well, in the proposed determination that the applicants ask that, (c), the Commission be available to assist with the implementation if need be, and issues that arise in that sense can be dealt with in that way. So the Commissioner to be available to assist in implementing the determination of those other issue arise. It may well be that the labour review will be affected by, if not your decision, the fact of the proceedings, themselves. But this is one step in a very large undertaking by the company in that they have disrupted the entire workforce and its' not going to be determined at every point. This is a point in that overall exercise.

PN890

Now I was talking about Mr Lee, Commissioner, and so I wanted to get to the question of the productivity scores. Mr Lee takes up the cudgel, as it were, on that issue. And you'll see that Mr Lee deals in his first statement at paragraph 20, with the question of the crane simulator scores and productivity scores. Now here - - -

PN891

THE COMMISSIONER: What was the paragraph?

PN892

MR SLEVIN: Paragraph 20.

PN893

THE COMMISSIONER: Who?

PN894

MR SLEVIN: Lee.

PN895

THE COMMISSIONER: Exhibit 13, his second statement. No, my mistake, sorry.

PN896

MR SLEVIN: It's exhibit 13, Commissioner. It's his second statement. He deals with this question of the crane simulator and productivity scores. Now he provides for you there, the outcome of the simulator against productivity scores and gives you the example of, the employee is identified as 23123 by his payroll number. He scores three out of twelve for the crane simulator but he was ranked number one in the productivity score with 130 average lifts. Now we do have our criticisms of the productivity score but here we're criticising the methodology of the company and you can see the point that's being made, that you've got the number one employee on the productivity score being measured in a crane simulator and scoring only three out of twelve. And the second example is the employee who scores one out of twelve, and he's number two on the productivity score with 130 average lifts. I imagine he should be equal first, rather than number two, as he gets the same as the fellow. And then the third highest on the productivity score with 129 average lifts, scores three out of twelve on the crane simulator, indicating that the crane simulator is not a good judge of the productivity of the employees, which is the reason that Mr Cheng describes the inclusion of the crane simulator in the exercise. And so someone can sit in the crane simulator and get one out of twelve, but over a twelve month period on the productivity score, simply on their gang, they're operating the machinery in the field and they're getting the highest productivity score using the metrics that the company wants to use. It just doesn't make sense and it underpins the claim by the crane drivers that it was simply unfair to use the training tool that was only being used since 2012 to score employees' performance in circumstances where so many of the crane drivers, and in particular, Mr Lee, had been driving cranes for 25 years. Mr Lee doesn't score well on the simulator score and that's his gripe as it were. That's his grievance and that's unfair. How can you turn my performance in this machine into a score and that cost me my job? That's an unfair process. So that's the question of the simulator scores.

PN897

The productivity questions arise from the evidence that Mr Lee gives. The manner of the scoring of the productivity, as well, becomes a problem because the way that the performance is turned into a score, is that first there's a score given. Those scores are then ranked. Those rankings are then put in a percentile and then the percentiles are worth a particular score. So there's so many calculations being done that you end up with a skewed importance given to the first score and so you've got that problem as well that's described by Mr Lee. And in addition, you've got the problem Mr Freestone focusses on in his second statement about, well, in any event, the way these productivity scores have been calculated, you end up with a circumstance where those drivers like Mr Lee who are good at getting into the corners of the ship and getting the difficult boxes out and doing that sort of loading, as part of an overall exercise of loading and unloading a ship, are penalised because his specialised gang is never going to be able to meet the gang that's operating the crane on the wharf and moving the boxes from the vessel to the wharf, as almost a direct lift. And so taking no account of that and Mr Lee as an example of this, taking no account of that circumstance, is a problem.

PN898

Mr Cheng's answer to that is, well, I don't like what Mr

PN899

Freestone says because that becomes averages upon averages. Well, he's already working with averages. It's just that he's deciding to confine his averages to the gang, so the gang is doing the lifts from the ship to the wharf as scored on that gang's average, and the gang that's working in the hold is scored on that gang's average. He's already working on averages. What's wrong with working on an average? That is, the average of all of those persons working on the gang, working on that ship? There's nothing wrong with it. It's fairer. It's not ideal, as Mr Freestone says, because if you are measuring individual performance and you don't have the actual and you can't factor in those various things that are described by Mr Freestone as causing problems for individuals or reducing individual lift numbers out of the individual crane driver's control. So it's not a perfect means of doing it but it's a means of alleviating the concern that those who are doing the difficult jobs are being penalised, and that's the effect of what's been done on the productivity score.

PN900

THE COMMISSIONER: Everyone's going to wind up with the same figure.

PN901

MR SLEVIN: No because it works ship by ship, so you do it by one ship - - -

PN902

THE COMMISSIONER: Everyone gets the same figure on that ship.

PN903

MR SLEVIN: Yes.

PN904

THE COMMISSIONER: Everyone gets the same figure on the next ship.

PN905

MR SLEVIN: Well, there'll be different people working different ships. So if there's two ships at the port and those who are working on one ship have moved in the shift and I should use "vessel" instead of "ship" if there are two vessels at the port on one shift and the gangs working on one vessel unload faster, they're going to be the better performance than the gangs working on the other vessel who have worked slower, and so the score will be different and then over a twelve month period you'll have the (indistinct) you're looking for on the productivity score.

PN906

This problem is not a making of the applicant's. If the company is going to use productivity scores as a means of making a decision as to as part of the decision as to whether you stay or go, it's a question of, look, that's and the applicants say this, Mr Freestone says, "Well, that's a difficult thing to do fairly. This is what we say you should do. But certainly, the way you did it is unfair". I understand what you're saying, well what's the outcome? Well, the outcome is, yes, you do get a discrimin in it. It's not as greater discrimin as you do if you do it gang by gang but it's a fairer way of doing it.

PN907

You could go the other way and do it individually, couldn't you?‑‑‑Yes and then you get an exacerbation of the unfairness described by doing it gang by gang. If you go the you know, the smaller the group you choose, the greater problem you have in not taking into account the fact that if you went at individual level, from Mr Lee's evidence, "my supervisors love to put me in the hold, in the little corners up the front because I was good at that". And so he was a good performing crane driver whose performance is measured based on him not being able to lift as many boxes as the - - -

PN908

THE COMMISSIONER: Sorry, but doesn't that really just lead to the prospect that whatever approach you take to try and introduce this there's going to be essentially some positive and negative aspect of it, whether it's done individually by gang and by ship? Whatever the sort of scope is that you use, there can be criticism of it?

PN909

MR SLEVIN: Yes, and Mr Freestone's point is exactly that and he's out there and he knows how this works. And he says, look, this is not a good way to do it. If you're going to do it, the fairest way is to do it ship by ship. That will give you some discrimin(?) between employees who move around the different parts on the roster, move around to different ships and will be allocated to different sorts of tasks. But he says, well, the fairest way that he can come up with is to do it that way. It may well be, Commissioner, that your view is, well, it's probably best not to have productivity scores at all because it looks like you can't do it fairly. But the approach that the applicants have taken is that if you're going to do productivity scores you've got to find a way that you're not penalising you good performers who have to do the difficult work.

PN910

That leaves Mr McCarthy, on the individuals, Commissioner, before I go more generally. I think you're well familiar with Mr McCarthy's circumstances. I've referred to it a number of times. He's a clerical worker who worked as a VBS clerk, and R&D clerk, a control clerk. He describes what he did for you and the training he received, in his statement. He'd been with the company for 33 years. He sought employment as a senior clerk. He complains that his manager's scores are inconsistent and he was scored by managers who did not know his work and were not part of his operation. He worked in a tower and the supervisors worked in the yard. He also did not receive a score for his control clerk skill and so I think you're familiar with that and I'll get to, in a moment, the question of what employees were told about skill recognition. The detail of those complaints are made good in his statement. I don't think I need to take you to the specifics of that.

PN911

You saw, and this, I suppose, gets to the point you were making about the consequences of these various complaints. You saw in Mr Cheng's evidence that indeed it would be the case that if you removed the yard supervisor's score and you recognised the control clerk skill, that he'd have been retained as a senior clerk and so the consequences for that applicant was that. But you see, and I cross-examination - - -

PN912

THE COMMISSIONER: So you don't want me to approach it on that basis?

PN913

MR SLEVIN: No, I don't but in terms of I suppose I put it in this sense, that there's utility in what we're doing. So if there's any submission that says, well, look, you don't need to worry about any of this, and this seems to be what comes from Mr Cheng's response statement, that look, I've fiddled with this calculation and I removed this, that, and it didn't make any difference for that individual. This submission is made in response to that. Well, we can see that it does make a difference for individuals so a submission can't be made that there's no utility in doing this and that none of it will make any difference. It will make a difference. As to the precise nature of the difference it will make, we give you examples of where it will make a difference and we say to you, well, no-one can say there's no utility in this arbitration.

PN914

THE COMMISSIONER: But in terms of the remedy, you don't take the approach that, well, Commissioner, you could remedy Mr McCarthy's circumstances because you should find that in his case the individuals that were supervisors in the yard, I think it was, wouldn't have had any valid familiarity with him so their score should be removed, and his circumstance he wasn't recognised for the control clerk skill although he had that but it wasn't being shown in terms of the way in which it was being extracted. Here are the manifest errors, so therefore McCarthy's case leads to a successful individual grievance. His score should be adjusted to rectify those two deficiencies and whatever flows from that flows to Mr McCarthy and the people that are on either side of him in the scheme of things. But you don't want me to do that.

PN915

MR SLEVIN: No.

PN916

THE COMMISSIONER: You want me to universally apply these various unfairnesses and start from scratch again.

PN917

MR SLEVIN: No, I don't.

PN918

THE COMMISSIONER: No?

PN919

MR SLEVIN: No, I don't. I don't want the Commission to be doing anything universally. I want the Commission to be dealing with the group grievances, determining the cause of the grievance and setting a remedy so that that grievance can be addressed. I don't take it on the approach, or it's not take by the applicants on the approach of, you should take each individual and effectively make an order for their reinstatement. We're not doing that, which I think it was the first report or I think we're half way between the two things you describe, which is to say, you look at this, find the unfairness which is manifest on the wrong supervisors and on them not giving the control clerk. You examine that. You determine that what's happened here is the company has failed to properly apply its selection criteria. It should go back and apply it properly. So it's not start from scratch. They've already got the numbers. It's the way that they treat those numbers. So get rid of those, get rid of those, keep those numbers. That's fair. On those numbers for the skill, you forgot to put that in. Put that in for him. Anyone else that comes along and says to you, look, you're rule was if I utilised a skill for twelve months and this is about the implementation of what you say if anyone comes to you and says, I utilised the pinman skill over that twelve month period, you've got to give them those points. Or if you know that they utilised that pinman's skill because your supervisors can tell you or otherwise, make sure you give them that skill. I know that you didn't do it for the pinman and I know that you didn't do it for Mr McCarthy. That's the nature of the unfairness, I find. I remedy that by saying to you, well you go back and recalculate that. And you rejig it, and when it's rejigged - - -

PN920

THE COMMISSIONER: It might just be we'll keep doing the same thing because then when we've done that again, there'll be people that will come back, surely, and say, well, the way that that was now down contains a problem.

PN921

MR SLEVIN: Mr Jacka makes the point that, no, well, we've come here to ask you to address the unfairness in these grievances. And we've done it on the basis where our preference here is not to come back for the other 54.

PN922

THE COMMISSIONER: Yes.

PN923

MR SLEVIN: It's not to come back for anyone who's got a complaint about your decision or the implementation as a result of your decision. We're here accepting the decision of the Commission as we are required to under the disputes procedure.

PN924

THE COMMISSIONER: Just take the skills example. What if we revisited that as you say, and then after having done that someone says, but hang on a minute, I utilised this skill in that twelve months and you never recognised it.

PN925

MR SLEVIN: And you didn't even do it on the second occasion.

PN926

THE COMMISSIONER: Yes, so we're just it could keep going on and on, couldn't it?

PN927

MR SLEVIN: It could go that way but that's then the point of the implementation. So if the decision is, yes, that's unfair, the remedy is recalculated, the implementation what we say is, you can find out about the skills by asking the supervisors. You can find out about the skills by asking the employees. That can be done before the exercise if finished, so you say, well go back and revisit that. And the union will work with the company and say, well, how are we going to do that? Well, you're saying to us that there are people who claim that they didn't get a skill. Write to them. Ask them. Part of the problem with this, is Mr Cheng sat there, he was making these assessments and he was looking for HR documents that said, oh, were they allocated to it?

PN928

THE COMMISSIONER: And time-keeping documents and all that sort of thing - - -

PN929

MR SLEVIN: That's right.

PN930

THE COMMISSIONER: That showed who was on with what shift.

PN931

MR SLEVIN: That's right.

PN932

THE COMMISSIONER: And what they were doing, and that.

PN933

MR SLEVIN: Instead of getting up out of his office, walking out in the yard and saying, "Can you tell me about these blokes and whether they've exercised the pinman's skill"? Or saying to the employees in their information packs, "And by the way, will you just fill in this form and tell us what skills you say you've utilised in the last twelve months". Go and ask them. And then a second phase where people come in and say, "Oh, hang on, we told them about that", then they wouldn't take any notice. There shouldn't be this presumption that the employees are not going to tell you what they've been doing, which seems to be the presumption that's being made. I might be being unfair to Mr Cheng in saying that, but these things are practical things. You either utilise the skill - - -

PN934

THE COMMISSIONER: What if we find out someone fibbed?

PN935

MR SLEVIN: Well, they find out someone fibbed and there will be consequences.

PN936

THE COMMISSIONER: Then we have to do it all again, you see?

PN937

MR SLEVIN: No, we don't have to do it all again. And - - -

PN938

THE COMMISSIONER: We've got all this false evidence from people who all said they were doing pinman and we weren't doing pinman but they misled us.

PN939

MR SLEVIN: Well, they have a way of checking it.

PN940

THE COMMISSIONER: I just wonder where this would end.

PN941

MR SLEVIN: Well - - -

PN942

THE COMMISSIONER: I've got to retire in about eight years' time.

PN943

MR SLEVIN: And you're relatively late to this, Commissioner. Some of this have been here since June of 2012. You shouldn't be assuming though that that's going to happen. If it does happen it can be addressed. The process could be this, if you want to do it. Ask the employees, "What did you do?" Then get the supervisors who actually supervised them to have a look and say, "No, he didn't do that". It's a simple process. It's a limited number of employees. They were capable in December last year of sitting in a room, all together, huddled together and churning out these results in a short period of time. If they were able to do that, why aren't they able to sit down and say to the employees, all right, well, the Commission has decided it was unfair, the way we did that. We're bound by his determination that we should relook at it. We're relooking at it and here's what we'll do. It's not a big exercise, Commissioner, and checks and balances can be put in place but I don't think you should be operating on any assumption that there'll be people who will try and gain in the system in that way, especially given the way these whole proceedings have unfolded and the way that the parties have worked through the various processes to get where we are. I have finished with Mr McCarthy then.

PN944

THE COMMISSIONER: Yes.

PN945

MR SLEVIN: And so we move to paragraph 31 at page 10 of the submission. So we've taken you to the individual examples. There's other material that establishes the unfairness claim by the individuals and that material is of a more general nature and so the complaint of the inconsistency in the scoring was also made out in that analysis of those overall scores and that's where the table comes in. And so here we make the observations that some of the supervisors were clearly more harsh in rating employees than others, which resulted in some supervisor's scores being systemically higher or lower than other supervisor's scores, which indicates bias. It doesn't have to have pejorative overtones. It just shows that there is a bias or a predilection or a proclivity to score low, for example.

PN946

Some employees were disadvantaged to have a rating from one of the supervisors who was so biased, who had a proclivity to give the lowest scores and so consequently there's a need to adjust the scores to take account of that. Now there may be various ways of doing it but the suggested way by the applicants is to remove scores from supervisors who shouldn't have scored. If we then go to the next observation which is that other supervisors gave the higher ratings to their primary employees to their secondary employees. So employees getting the higher rates from the primary supervisor were advantaged over all of the other employees that didn't receive a score from a primary supervisor at all. So that's the PIR and the clerical people who didn't have a primary supervisor. And so consequently the applicants submit that there's a need to reconsider the weighting of the primary and secondary scores. So some supervisors were also more likely to give a middle of the road score, the 33, middle three for everything, 11 criteria meets expectations for everything, which reduced the distribution of employee's scores and made it harder to distinguish between highly ranked and lowly ranked employees. And so that arises from an analysis of the overall scores. So you see the actual scores themselves in SL5 to Mr Lee's first statement and I think it appears in a number of places in the evidence but I drew your attention to Mr Lee's evidence yesterday.

PN947

And so you'll see on the next page is the table identifying the supervisors and so it just gives you the numbers there and you can see from just looking at the table that those observations are made out on the figures. There's some interesting things, looking at the table, if you have a look at, for example, Mr Clayson, who gave no primary scores. He appears to be the only one who's scored all 291, so he took the view that he knew them all well enough to give them a score, albeit a secondary score. And then you compare him to Mr Gardener at the bottom who has only given secondary scores to 107. So you see that the way the scores are done, there's not a consistency in it. Then across the table you see the median, which is the middle point of their scores, the mean, and we can see that there's some variances and we comment on that between the means and the medians, and sometimes more than one would expect, you get the minimum scores and the maximum scores, so scoring within a band, sort of exercise. So you'll see some are going to stay within a particular narrow band, where others are much broader and so the standard of the deviation is identified in the last column to give some indicator of the range between the minimum and maximum scores.

PN948

So just by way of example, paragraph 34 sets out, four examples that if you look at the median or middle score and the average scores you'll see that supervisor 3's median score, also Mr Jones' median score, and mean score are 40 and 39, much higher than a lot of the other supervisors and so it appears that Mr Jones then must be a more lenient evaluator than some others so his bias is towards a higher score. If you go to the second example, you get the minimum and maximum scores and you see the supervisors 1, Mr La Roche, and number five, Mr Clayson, have given scores as low as 12, whereas supervisor 3, Mr Jones, the lowest is 27, and four out of the eleven supervisors have given perfect scores of 55, the highest score given by supervisor 11, Mr Gardener. And his 107 assessments is 38. And so you're getting these variances between the scores and the third observation is that the spread of scores there's a tight range of only five points for supervisor 9, Mr Katchia, for example, for his primary scores and then for a similar number of primary scores, supervisor 7, Mr Graham, used a 33 point range. So you have the different supervisors having a different approach to the way they've applied the scores. And so we've got again in (d), a further example, the differences between the primary and secondary scores, for example, the average for the primary scores of Mr Wood is more than five points higher than the average for his secondary scores and so you've got all these variances but no account is taken for these inconsistencies.

PN949

You had evidence from Mr Cheng about the way the scoring was to be done. Mr Cheng didn't allocate scores to anyone. He gave some evidence of speaking to the eleven supervisors about the process to be followed in that presentation which is TC14 to exhibit 15, which occurred in November of 2014. Now if you go to TC14, Commissioner, and keeping in mind what you've just seen in that table as to the outcome of this exercise, you see that at slide 2, you see the intention at the fourth dot point that the training would assist the supervisors to understand the rating definitions, and the fifth dot point to "confidently explain the reasoning behind the scores you give". So from the very start the supervisors have been told, well, you've got to understand these ratings and you've got to be confident to be able to explain what you've done. That, of course, never occurs.

PN950

No explanation occurs other than that small exercise of dealing with the grievances. Now if you go to slide 4, you'll see that there was the first instruction about all supervisors were going to score all of the employees. You get the description of the primary and secondary yard and shift managers in slide 5, but once you get to slide 6, you see the description of the process that should be followed by the supervisors when they're doing their scoring but given the evidence that we've seen, appears not to have been followed. "Think of how you will support your ratings. What does the employee need to improve? How can they do this? Are they meeting your expectations? If not, why not? What are their strengths?" Now that exercise, that's been the instruction to the supervisors, so they were told and they were told that providing reasons was strongly encouraged and that they should be able to cite specific examples, state why behaviour does or does not meet expectations and consider what the employee could have done to improve scores. So you see that at slide 12, as well. This is slide 6. And the supervisors were told that they may have to make notes as appropriate, justifying those scores. See that at slide 13. They were told that they may be required to explain and justify the score as part of a grievance process or as a witness in court. Slide 13 provides that information to them. At slide 14 the supervisors were told that there would be one on one meetings to discuss scores and they may be asked to discuss and explain scores to ensure consistency or check accuracy.

PN951

And Mr Cheng confirmed in his cross-examination, well, none of that happened before the scores were relied upon for the decisions made. Mr Cheng says that there was an opportunity to make notes on the form and that they could have scribbled their notes on the form but no-one did. So all of these encouragements to make notes and to justify things and to record their thought processes appear to have been ignored by the supervisors. All we end up with is the scores. When it comes to the grievance process, even though they're told that they should be able to explain themselves, we come to the arbitration and none of them get in the witness box and say, "Well, look, I can explain to you, Commissioner, exactly how I did this", not even one, to give an example.

PN952

Mr Cheng comes along and says, "Well, I was satisfied with what they did". But no-one comes to show you and allow the applicants to ask, "Well just explain to me how it is that you thought, being a yard supervisor, that I was only worth a two, working in the hull of the ship on the other side of the terminal?" There's no opportunity for those sorts of questions to be asked, no opportunity to say, "Well, how come you gave everyone two's when you'd never said to anyone, even on your crew, Mr La Roche, that they needed to improve themselves? You've said they didn't meet your expectations". It seems that there weren't very many people who met the expectations that Mr La Roche had but there's no opportunity for us to address those questions despite the fact that the supervisors were primed to be in a position to be able to do that. We just say, look, as a matter of procedure the failure to follow the instructions given to the supervisors and indeed, as a matter of this arbitration and addressing the grievances of the employees, the company has just failed woefully.

PN953

Now Mr Cheng also described and I referred to this a little while ago, that there was a further meeting of the supervisors where the scoring occurred, and so the eleven supervisors are sitting around, it seems, in a meeting, giving their individual scores for the 290, and who knows what happened at that meeting as to what was discussed and what was taken into account? You know, we've got this opportunity for them to collaborate on the way that they were scoring. It seems that there's suggestions in the evidence, in particular, Mr Hudson, that people were you know, that the supervisors were giving scores based on feedback and things that they were told. We don't get a chance to address this but it seems that the opportunity to seek that feedback was presented to the supervisors in the manner in which the scoring exercise was carried out. And again, I did raise this in the individual facts, circumstances, that Mr Cheng says that he gave a different instruction to that of slide 4, that each supervisor could assess all the employees and allowed supervisors to decide themselves whether they could score particular employees. Well, that led to problems as we saw with Mr Hudson and we don't know one of the supervisors decided he could score all of them and another one scored only 107 of them, so we get this wide variance occurring in the way that the process was followed. And we submit that the Commission can find on that basis that the process followed was unfair to the employees and that the instructions given to the supervisors were not followed. The employees haven't had the opportunity to be able to test what the supervisors had to say or what the supervisors considered in giving the scores that they did, in circumstances where those scores had such an important part in the decision-making process about their futures.

PN954

I summarised the submissions of the applicants from page 14 onwards in the outline and you'll see that the complaints are there identified. I think I'd just be repeating myself to go through the detail of that, Commissioner, but I'll just identify that that is the place in writing that that's been put, and you'll see the various complaints and the reasons for them in those pages. And so, Commissioner, the submissions of the applicants are that the unfairness is established. The proposed determination is as I've handed you. I think I've addressed all of the points in it. We've discussed the remedy and the remedy addresses the various complaints that are made and it's that relief that the applicants seek.

PN955

Mr Jacka reminds me that the applicants, as of the exchange on productivity that we had earlier, Commissioner, about well, how do you do it? You see in Mr Lee's statement there's a complaint about, well, all right, they've taken the productivity scores, they've given us the average, so they've given us a 100, and they've decided that a 100 falls within a particular band and that they have this is described in paragraph 21 of exhibit 13, Mr Lee's second statement which is that, "The productivities show how unfairly we were scored. According to the company employees were ranked and given a raw score of one to five, depending on their rank. The problem is, the company then went and made the raw score out of 18. This is unjust. My average lifts were 111 which gave me a ranking of 34". So he's 34th best on the list but he only got a raw score of two. Now the cut off to getting a raw score of three, was 112, one more on the average lifts. And the ranking of 32 meant that he just missed out on getting a raw score of three. By making the score out of 18, it meant the difference in his productivity score was 3.6 instead of one.

PN956

So his average was lower than on the ranking score and you'll see the document that supports that is SL3, and Mr Lee identifies himself as employee 20897. So what happens, and think the next exhibit assists in understanding what's been put and what's being put is an alternative remedy for the productivity crane score, Commissioner and I'll get to it. I'm being a little long-winded but I need to take you to the detail. You'll see that what happened was first, they got the average lifts so they did that exercise that we say was unfair. They then ranked them. You'll see one down to 53.

PN957

THE COMMISSIONER: So where were we?

PN958

MR SLEVIN: This is SL3 on exhibit 13.

PN959

THE COMMISSIONER: I have it now.

PN960

MR SLEVIN: Yes. And so you'll see the exercise, so if you go across the top you get the average lifts and if you have a look down, you'll see there are two fellows on 130, and then 129. The ones who did poorly in the simulator ranked one, two, three, and down the listing. Because you have a particular ranking you will see, if you ranked in the first eleven you got a raw score of five. Your raw score then needs to be out of 18, so they multiply it by three and a bit, and so it goes. And so the difference between being ranked at 34, Mr Lee, and being ranked and the unfairness is even worse for Mr Myer, it appears, above him because he has the same average lifts.

PN961

THE COMMISSIONER: So he has the same as Mr Wingate but - - -

PN962

MR SLEVIN: He does.

PN963

THE COMMISSIONER: But Wingate gets 7.8 and he gets 7.2.

PN964

MR SLEVIN: He gets yes, that's right, there's three points but that ends up being 3.6 points on the final score.

PN965

THE COMMISSIONER: Yes.

PN966

MR SLEVIN: So he's - - -

PN967

THE COMMISSIONER: How do people on the same score appear above or beneath one another?

PN968

MR SLEVIN: I understand that the average lifts were rounded and that they were decimalised so it may well be I don't know the detail of it but that's what I'm instructed.

PN969

THE COMMISSIONER: There's some decimals behind that, probably, yes.

PN970

MR SLEVIN: So you could be .1 behind.

PN971

THE COMMISSIONER: Yes.

PN972

MR SLEVIN: But that results in him getting 3.6 fewer points on the overall score, which is a very big penalty and that's just associated with the maths of this. So what's suggested as an alternative on dealing with the productivity score, to suggest a deal with the say, as a result of our exchange and I hope this isn't the case, but you decide that there's nothing in the applicant's argument on whether you're in the hold or on the wharf, but there is something in this argument and so the average lifts exercise remains. The average lifts should be converted into a score out of 18, rather than going through first, a ranking and then a raw score and then a final score exercise. And so we put that as an alternative to the remedies sought at B4. So that's an alternative to B4.

PN973

Mr Lee makes the same complaint in relation to the simulator and I put this equally as an alternative to the remedy in the same fashion as an alternative to the remedy at B(v) that if the simulator scores are not to be disregarded, they should instead reflect the total points awarded rather than the normalised, to 12, column in the document which is SL2 to Mr Lee's first statement. So with those suggested alternatives to the remedy sought, Commissioner, unless there's anything else, they are the submissions of the applicant.

PN974

THE COMMISSIONER: All right. Thank you.

PN975

MR DARAMS: Could I just, by reply, just deal with this last issue because I think while it's fresh in my mind and I can take you to the documents and explain why there's a variance between individuals. Ultimately it's the application of the process which was decided upon and argued but I'll come back to that in a moment but can you go to tab 9 of Mr Cheng's statement. So this is the selection criteria, the selection policy and I'll deal with that in some more detail, but if one is looking at those figures from SL3, the answer is set out under, effectively, page 3 of that document, Commissioner, and you will see that the company has grouped employees as to whether or not they were in the top 20 per cent, top 21 to 40, et cetera, and gave them points. Now you're always going to have someone on one side of the line or the other and if one views here as to the points, the answer is correct for some decimalisation. You are always going to have someone, one side of the line. So here it looks like there's been a significant change in the numbers but that's because they were the points that were allocated and that's the system which was opted.

PN976

The same thing applies in relation to SL2 and the crane capability testing which is on the next page of the document. So that's the explanation. So there is a difference between the employees. One falls on this side, one falls on that side of the line. And that's because the company has determined, we want the top 20 per cent here, the next per cent here, the next per cent here, and they all get points in respect of that. But I'll make some more submissions about the selection criteria ultimately. So there's nothing unfair about those results. They are the results that come about as a consequence of applying the process.

PN977

THE COMMISSIONER: To the extent that it might be unfair on a person who just misses out, it's fairer on a person who just gets into the higher category, perhaps.

PN978

MR DARAMS: That's another way of looking at it.

PN979

THE COMMISSIONER: Fairness can be observed from different perspectives.

PN980

MR DARAMS: Absolutely. You're going to have it both sides of the coin.

PN981

THE COMMISSIONER: But I suppose there's potential here to find criticism with any process and the means by which you try and allocate some score for something that has a connection to a tangible measurement. So you've got these tangible and you're trying to allocate a score in the process. There might be well, there's probably an endless number of actual sort of methods by which you could do that and each one of them would be able to be criticised, I would think.

PN982

MR DARAMS: That's probably right. Now I will take you in some detail to the approach of the Commission to these types of cases where scores are allocated by employers and where they are, in effect, trying to assess from a large number of employees as to who might ultimately be made redundant, and the role of the Commission has said from time to time that it ought properly play in that process.

PN983

THE COMMISSIONER: All right.

PN984

MR DARAMS: Now I'll come to that in due course but there are a number of steps before I get to that. Could I start with - - -

PN985

THE COMMISSIONER: Do you want to start after lunch? Is that going to be more convenient for you or do you - - -

PN986

MR DARAMS: We could take lunch now and come back at 1.45. I'm quite content for that.

PN987

THE COMMISSIONER: It might be easier if it's - - -

PN988

MR DARAMS: That doesn't bother me.

PN989

THE COMMISSIONER: Rather than sort of stop you after ten minutes.

PN990

MR DARAMS: That's fine.

PN991

THE COMMISSIONER: Yes. Yes.

PN992

MR DARAMS: We can do that.

PN993

THE COMMISSIONER: So why don't we take lunch now and resume in approximately an hour's time?

PN994

MR DARAMS: Okay.

LUNCHEON ADJOURNMENT [12.46 PM]

RESUMED [1.51 PM]

PN995

THE COMMISSIONER: Mr Darams.

PN996

MR DARAMS: Yes, Commissioner. The Commission will have received two sets of written submissions on behalf of the respondent in the proceedings. We obviously rely upon those written submissions. I don't propose to read out those written submissions but I am going to supplement some matters orally. But just to note we do rely upon them in their entirety. Could I deal with what we call the jurisdictional objections? There are effectively three which the company has proposed in its written submissions which deal with that, the first one being the standing point.

PN997

Can we confirm this. Our position is that we don't oppose any application to amend the proceedings to name the individual applicants as the parties to the grievance proceeding. There are a couple of points we make about that. In doing so, Commissioner, we don't concede any other argument that might be run against a particular individual, and what I mean by that is that I'm instructed that some of the individuals who might be identified in the annexure A or appendix A on my instructions may not have followed the procedure that is required before one ends up before the Commission.

PN998

Now that doesn't, on my instructions, relate to any of the individual applicants that have given evidence before you in this proceeding. But to the extent that there is any point to be made the company reserves its position in that respect. The second point we want to make is probably more directed to - or sorry, is more directed to some of the questions that you put to my learned friend about what orders might ultimately be made. Now our primary submission is that the Commission should not make any orders in these proceedings for various reasons. But to the extent that the Commission is of the view that it is required to make any orders, the company's position is they need to be made on an individual basis.

PN999

That is, the grievance process by which these matters come before the Commission are individual grievances. They are not group grievances and so if the Commission is to resolve any grievance it has to resolve them on an individual basis. That directly obviously relates to what we say about the proposed orders which we object to, but we can say more about that if necessary. But they are individual grievances and the fact that individuals might be represented by the applicant - well, by the union, doesn't change the nature of the individuality of the grievances.

PN1000

Can I move on, Commissioner, and just note the second objection to jurisdiction. The nub of the company's contention is that schedule 1 of the agreement limits the kinds of disputes that can be progressed through the procedures set out there, and these particular grievances are not about the application of the agreement or the National Employment Standards. Now the company is content in relation to this second objection just to rely upon its written submissions, which are at paragraphs 48 to 70, and doesn't wish to say anything further orally in that respect.

PN1001

We do however wish to make some oral submissions in relation to the third objection, and the third objection arises if the Commission is satisfied that in effect clause - well, in effect the second objection is not made out. The essence of this objection is this; whilst the individual grievances have been referred to the Commission, the respondent does not agree or consent to an arbitration of the dispute. If the Commission has Mr Cheng's statement at tab 1, in effect the company's argument is this. What is being relied upon is clause 8.3 of schedule 3.

PN1002

We don't take any issue that if the Commission is satisfied that the second objection is not made out, we don't take any issue that these matters have been properly referred in accordance with clause 8.3. But that's only half of the argument and the nub of the objection arises this way, Commissioner. If you then go to schedule 1 what results with a referral pursuant to clause 8.3 of schedule 3 is that the matter then in effect starts at paragraph 1.1(c) of the procedure. We accept that that process has occurred. Clearly there was conciliation before the Commission.

PN1003

One then goes to clause 1.1(e). Our submission is directly this, that absent the agreement of the company the Commission isn't empowered to arbitrate this dispute because this dispute is a dispute involving - and if one goes to clause 1.3 now, Commissioner. Clearly 1.1(e) is subject to clause 1.3 and clause 1.3 is:

PN1004

Unless agreed by the parties the Commission shall not have the power to arbitrate in relation to -

PN1005

And just note the words "in relation to" are very broad and there are numerous authorities over time identifying how broad those words are:

PN1006

- any dispute involving -

PN1007

Again words with quite a broad application:

PN1008

- a company policy.

PN1009

Now we say that the last part of that, i.e. the exception to the exception isn't engaged in these circumstances because the company policy argument, there's no requirement in the agreement that this policy, which I'll come to in a moment, shall be followed. So the exception to the exception doesn't apply. The fundamental point here is whether or not what we call the - what has been titled the selection criteria, the selection process, whether that amounts to a company policy, and our submission is that it does amount to a company policy.

PN1010

It amounts to a company policy as that term would be understood in clause 1.3. We note this, company policy isn't defined in the agreement so our submission is that the Commission would give it the ordinary meaning and the ordinary meaning of - put aside "company". "The company" would be referring to the respondent - the ordinary meaning we rely upon, Commissioner, is set out in the written submissions, if you wish to go to the written submissions, Commissioner. But in effect it's a course or a definite course of action adopted by the respondent as in one definition expedient, or from any other consideration.

PN1011

So the company's position is the criteria, the process - and I'll come to the title of it in a moment, but one needs to focus on whether or not the criteria has set down a definite course of action which the company is going to adopt, and we say it does in the circumstances of this case. It's a definite course of action which the company has decided to adopt in order to determine - and you can frame this a number of different ways. You can frame it as to which individuals would be made redundant as a consequence of the automation or which persons would be selected for training as a consequence of the project and the identification of new roles.

PN1012

Now if we can go to the authorities. The first one is Riverwood v McCormick. It's behind tab 8, Commissioner. The Commission is probably well aware of Riverwood v McCormack but one of the issues in that case was whether a document which I think was entitled a "Redundancy agreement" satisfied the expression in a contract which said "company policies and practices". Lindgren J at paragraph 39 which is at page 9 of the decision said, and we accept here he was looking or considering the issue in a particular contract, but he identifies in paragraph 39 or says in paragraph 39:

PN1013

On its face, the expression "Company Policies and Practices" refers to things that from time to time answer the description of a "policy" or "practice" of Packaging -

PN1014

Being the relevant company:

PN1015

- whether contained in a document or not.

PN1016

We say here that there is a document which sets out what we will call the policy, and we just pause to note that he has obviously put the words "policy" in inverted commas. Now I suggest the reason he has done that is to denote that policy itself is probably a slippery word to some degree. He then in paragraph 41 picks up the Macquarie Dictionary definition and that's in effect the definition which I suggested would apply or which we really upon here as giving context to the term "company policy" in clause 1.3.

PN1017

Now we obviously accept that his observations in paragraph 42 that although not conclusive, those definitions lend some support to his understanding of what the meaning is. In my submission there is nothing in the evidence nor in the agreement which demonstrates that the word "company policy" or the definition of "company policy" in clause 1.3 is to be given anything other than its ordinary meaning. Perhaps I could - there are a number of points that have been made about this and a few points I need to make about the arguments against the company's position.

PN1018

I might start with to the extent that any argument is made that the selection criteria is just a criteria for selection and therefore not a policy, a couple of observations can be made against that or about that proposition. The first is that it's not unusual in a redundancy agreement - and I'll use the example here in Riverwood. If the Commission goes to paragraph 55 or 56 one can see there that within the document, which was ultimately found to be a policy for the purposes of that agreement once these criteria for selection of redundant employees.

PN1019

So my submission is it's not unusual to see within a policy or a redundancy policy a selection process or criteria, particularly where the persons - well, particularly in relation to where there's going to be in effect involuntary redundancies. That's the first point. So whether the document is called a selection criteria isn't the determining factor. It's whether or not the - whether the circumstances satisfy a definite course of action. Secondly, related to that submission, it's not unusual or one would sort of put the rhetorical, hypothetical proposition that a company might have a policy in respect of how it might make persons redundant involuntarily in accordance with a principle of last on first off.

PN1020

Now that clearly would give rise to the company's policy, but it's also relating to the criteria by which people are selected in respect of the redundancy. So the point of those submissions, Commissioner, is that the fact that this refers to a selection criteria doesn't mean that it doesn't also operate as a policy. It's the policy to be adopted in order to determine who would be selected or not selected, and so in our submission if the Commission is satisfied that whatever it's called it amounts to a company policy, these disputes are clearly within the broad meaning or the broad words "any dispute involving", they're clearly disputes involving the policy.

PN1021

If the Commission is of that view, we say that's the end of the matter. The matters cannot be arbitrated. Now there are a couple of other - - -

PN1022

THE COMMISSIONER: Sorry, if that's right.

PN1023

MR DARAMS: Yes.

PN1024

THE COMMISSIONER: Couldn't then the company promulgate a policy about some component of the agreement and then avoid the prospect of - - -

PN1025

MR DARAMS: No.

PN1026

THE COMMISSIONER: No?

PN1027

MR DARAMS: No, because that's - if you go to clause 8.5.

PN1028

THE COMMISSIONER: So 8.5 stops that?

PN1029

MR DARAMS: Correct.

PN1030

THE COMMISSIONER: Well, 8.5 deals with these sorts of selection processes.

PN1031

MR DARAMS: Sorry?

PN1032

THE COMMISSIONER: 8.5 - sorry, clause 9 deals with some of these selection processes.

PN1033

MR DARAMS: Well, this has already been the subject of the arbitration before Sams DP and he says clause 9 does not apply to this process. So the selection procedure falls outside clause 9. Clause 9 wasn't intended - and this is at the heart of Sams DP's argument. So the decision - so if we go to - - -

PN1034

THE COMMISSIONER: So that has already been - - -

PN1035

MR DARAMS: It has been decided.

PN1036

THE COMMISSIONER: - - - decided?

PN1037

MR DARAMS: And that this procedure falls outside clause 9.

PN1038

THE COMMISSIONER: So what you say then is 8.5 has effect of ensuring that if the company promulgates some sort of policy about a matter that's contained in the agreement it's not going to work to deprive - - -

PN1039

MR DARAMS: Correct. Yes.

PN1040

THE COMMISSIONER: - - - the - - -

PN1041

MR DARAMS: So the broad question put to me was that that would mean the company could promulgate any policy and it would do away with - as I interpreted the question.

PN1042

THE COMMISSIONER: Yes.

PN1043

MR DARAMS: Clause 8.5 prevents that.

PN1044

THE COMMISSIONER: But it didn't in this case.

PN1045

MR DARAMS: Because it's not dealt with in the agreement.

PN1046

THE COMMISSIONER: Right, so that's what Sams DP finds.

PN1047

MR DARAMS: Correct. He finds - - -

PN1048

THE COMMISSIONER: Saying a different set of circumstances, different - - -

PN1049

MR DARAMS: Sorry?

PN1050

THE COMMISSIONER: Different circumstances or something in respect of the - - -

PN1051

MR DARAMS: No.

PN1052

THE COMMISSIONER: No?

PN1053

MR DARAMS: No, the argument was about this selection criteria. The argument on behalf of the union was that no, clause 9 applies to this process, selecting these individuals. Sams DP found "No, clause point 9 is directed to something different and not this process".

PN1054

MR SLEVIN: It wasn't this one. It was an earlier iteration of this one.

PN1055

MR DARAMS: Well, I'll come to that in a moment.

PN1056

Now there was some cross‑examination of Mr Cheng yesterday about his understanding of the various policies and the like, and there are a couple of points I want to make about that. The first point is that the questioning of Mr Cheng and his answers is ultimately irrelevant. They only amount to his subjective views about certain matters i.e. the questions he was asked, and they don't impact or aren't relevant to the point of construction as to whether or not the selection criteria, the selection processes, the selection procedure, is a company policy for the purposes of clause 1.3 of schedule 1.

PN1057

Secondly, there's also some suggestion that because the selection criteria wasn't named or identified as a policy it means it's not a policy. Well, the list of policies which were put to Mr Cheng when he was being cross‑examined yesterday also included the code of conduct. That's clearly not called a policy and on the argument of the applicants it doesn't matter that it wasn't called a policy it would still be included. Ultimately, as I think we've submitted already, it doesn't matter what you call the document. It's really whether or not it satisfies the ordinary meaning of the policy. The next matter - and I don't know whether this has been strictly put but - - -

PN1058

THE COMMISSIONER: Sorry, before we move off of that.

PN1059

MR DARAMS: Yes.

PN1060

THE COMMISSIONER: But if you're right about that, isn't there a component of the complaint here which to some extent would satisfy that it's about whether or not the company has complied with the policy? For instance that aspect of the skills metrics - - -

PN1061

MR DARAMS: Sorry? Sorry, where are we going?

PN1062

THE COMMISSIONER: 1.3, because that's the exception to the exception that you were talking about before.

PN1063

MR DARAMS: No, the way that that is to be read is - the way we say that this ought be read is not whether there's an argument about the company policy and application of it. It's whether the policy has to be complied with by reason of the agreement. That is, the agreement requires the policy to be followed. That's the exception. There's nothing in this agreement which requires this policy to be followed. So it envisages that there might be company policies, for instance there's a reference to a - - -

PN1064

THE COMMISSIONER: So you say it's the requirement that is - - -

PN1065

MR DARAMS: No, no, the exception is that if the agreement requires a company policy to be - yes, it's only where the agreement requires the policy to be followed. So if we use an example there are policies which the agreement provides need to be followed and would be caught by that. So for instance clause 12 which talks about occupational health and safety, 26. So let's take 26, that's probably a more direct obligation. So the agreement here provides that a commitment of the company to implement policies and procedures would provide for EEO et cetera.

PN1066

THE COMMISSIONER: Small p not large P.

PN1067

MR DARAMS: My submission is that there's no evidence that the parties intended anything by reference to whether something was capitalised or not. Now ordinarily or usually one would have capitalisation as denoting some defined term, but the terms aren't defined so nothing turns upon whether there's a capital C company, capital P policy, or little c company, little p policy, in my submission. But back to clause 1.3 this is our submission as to the proper construction of the clause, is that the only disputes which can be arbitrated absent agreement is whether or not the policy has been complied with in circumstances where the agreement requires compliance with a policy.

PN1068

THE COMMISSIONER: Why was Sams DP talking about him being the agreed determinator then?

PN1069

MR DARAMS: Yes, because you go back to schedule 3. If you see - are we on schedule 3?

PN1070

THE COMMISSIONER: Yes.

PN1071

MR DARAMS: Clause 8.2.

PN1072

THE COMMISSIONER: Yes.

PN1073

MR DARAMS: So I think he was proposing to be a mutually agreed conciliator/arbitrator.

PN1074

THE COMMISSIONER: Well then wouldn't he get - - -

PN1075

MR DARAMS: No, see?

PN1076

THE COMMISSIONER: I see, so you don't go to schedule 1. You do that in accordance with whatever procedure you think.

PN1077

MR DARAMS: You go through 8.2. You set it up differently.

PN1078

THE COMMISSIONER: So - - -

PN1079

MR DARAMS: And I should say 8.2 is consistent to some degree to 8.3 because 8.2 clearly evinces the attention of the parties that arbitration will be an agreed process. 8.2, "mutually agreed conciliator/arbitrator". You're agreeing to arbitration. 8.3 says "We accept reference to the Commission" but that just picks up this conciliation process but then arbitration in relation to company policies, only where it's agreed. So when Sams DP was talking about his agreement or being the arbitrator, that's 8.2. I think that's an accepted position.

PN1080

THE COMMISSIONER: What then if the grievances of the individuals are captured by 10.1?

PN1081

MR DARAMS: I'll deal with that now, but we do not agree with that. Well, there are two answers to it. The first answer is that 10.1 says:

PN1082

Any concern by an employee that an employer may have unfairly...may be progressed in accordance with the personal grievance procedure.

PN1083

So one then gets to the personal grievance procedure. You can't pick and choose once you're there. You're in that procedure. Firstly - this goes a little bit towards the answer that has been put, that this process has been challenged on the basis of unfairness or unfairness(sic). We don't accept that and I'll come to that when we deal with the merits. But once one gets within schedule 3, and you get there by 10.1, we say it still has to satisfy that it is a personal grievance. So it's not every concern that you can possibly have as an employee. It's only those which also become or satisfy what a personal grievance is.

PN1084

But then a personal grievance, you go through the process. You still then are bound by clause 8.3 because that's the reference to the Commission through schedule 1, and once one is then in schedule 1, schedule 1 in relation to arbitration has a limitation on it, and the limitation is as we've been submitting, that unless we the respondent agree to it there can be no arbitration in respect of disputes involving company policies. Now there might be - - -

PN1085

THE COMMISSIONER: But that seems to me to be a strange concept because if the unfairness arises from a policy, how do you distinguish then between what 10.1 is trying to do and the sort of exception that's created by 8.3?

PN1086

MR DARAMS: Well, 10.1 is a broad reference to a procedure to resolve a whole host of disputes, not just disputes about a company policy. There could be disputes about a whole host of things in respect of the agreement. The fact that there's an exception to the jurisdiction of the Commission, that isn't unexceptional. The parties, particularly when we're talking about private arbitration we're talking about the parties' agreement. Now the parties have here agreed that there will be a certain number of disputes or certain types of disputes i.e. those involving company policy which whilst the Commission has a role in respect of conciliation, and that's accepted because of 1.1(c), the Commission's role in respect of arbitration is limited and it's limited to the circumstances where agreement is given to that arbitration.

PN1087

Now the fact that the Commission's jurisdiction is limited or there's some exceptions to it was recognised by Commissioner Cribb in one of the earlier or one of the decisions that my learned friend referred to and that's behind tab 7. In paragraph 83 you can see here that the Commissioner is identifying that actually clause 1.3 of schedule 1 does cut down the jurisdiction of the Commission, and all that 1.3 is dealing with is a dispute involving company policy. So the fact that there is a limitation or a restriction on the jurisdiction of the Commission wouldn't be unusual as a general proposition and certainly not unusual in respect of this agreement and it has been recognised, in my submission.

PN1088

THE COMMISSIONER: You might think that in the current negotiations company policy might slip into a definitions clause.

PN1089

MR DARAMS: Potentially.

PN1090

THE COMMISSIONER: That is capital C capital P, Company Policy.

PN1091

MR DARAMS: We might make the observation there are a number of other clauses under this agreement which we ought deal with. Now the fact is we're dealing with it in this context and we say it provides a complete answer in the circumstances. Now it might be said "Well, this doesn't provide any resolution". We say well it does provide a resolution. The resolution is that once the parties have gone through the process - - -

PN1092

THE COMMISSIONER: Without the company the agreement it couldn't come here, they couldn't come here. That's right.

PN1093

MR DARAMS: So you might go back to try and negotiate again. You might go back to say "Okay, well let's try and get some other mediator/arbitrator. Let's determine what particular issues it forces" - well, it doesn't force them but there are other avenues open. But you can't come here - - -

PN1094

THE COMMISSIONER: How does the concept of the moratorium fit with that though?

PN1095

MR DARAMS: Sorry?

PN1096

THE COMMISSIONER: How does the concept of the moratorium fit with that?

PN1097

MR DARAMS: Sorry, can I just take some instructions? I'm not sure of the - yes, I don't think it impacts that at all. The list is there. If for instance there are further roles available or let's say someone retires, let's say someone has their employment terminated, we need to rehire someone or we need to hire someone to fill a role, one goes to the moratorium list. There's no issue with that. It's in effect I guess an undertaking that has been given as a part of the consultation process. So it doesn't have any impact, in my submission.

PN1098

To the extent that there are a couple of other points about this, there was no evidence of any parties or any persons at the time of the making of the agreement that the definition of company policy was to be limited to policies existing at the particular time. One might even observe that the policy which was put forward and suggested - sorry, put forward and tendered as the annual leave policy, I think the date of that policy post-dates the making of the agreement in any event.

PN1099

That is, it wasn't in existence when the agreement was made so, clearly the fact that this policy was promulgated after the agreement was made doesn't prevent it from being a policy which falls within clause 1.3. Likewise it's not unusual that companies will formulate policies from time to time after an agreement is made, a contract is made. That itself is not unusual, and the last point about that is if it was ever intended to be limited only to those policies which were existing at the relevant time then it would have been a relatively straightforward process to include those particular words.

PN1100

So as we say in this case, however one characterises the questions or the issues they clearly, in our submission, relate to disputes involving the selection policy, redundancy selection criteria, and therefore unless agreed by the company the Commission has no jurisdiction to arbitrate, and that's the position here. That is, the company hasn't agreed to arbitration. Could I now deal with what might be termed the merits of the application? The first point we make and this is - the company's first submission is that the challenges made in this proceeding, in our submission, are nothing more than another attempt to challenge the selection criteria, the selection procedure, the selection policy that the company has formulated, and we'll make that good by going to these matters.

PN1101

But perhaps one of the most direct ways to demonstrate that is by reference to the evidence that Mr Freestone gave in relation to the productivity. Now in effect he said, "Look, there's another way of measuring the productivity" and we had his evidence and then we had Mr Cheng's evidence about that. But the short answer to that is that there might be another way. There might be three other different ways. The company has chosen a particular way. There is now an attempt to challenge that method once more, and we say that that's - and again I'll come to the case more directly in a minute - that's just an attempt to re-agitate arguments that Sams DP observed earlier this year has been run and lost, and the Commission ought not permit that to happen.

PN1102

Likewise the observation about the crane productivity, again similar observations can be made about the challenge to - and this is a challenge Mr McCarthy makes directly, that he should have been given skills or sorry, given points for the control clerk role. Mr Cheng's evidence is that the company's procedure, the policy adopted by the company to determine whether someone had utilised the particular skills in the selection period, the previous 12 months, was by reference to its allocation data.

PN1103

Mr Cheng gives that evidence, Commissioner, in his second statement at paragraph 7 and following. Now there was some - so the point made about that is the company has decided on a basis upon which it will determine or has determined whether someone would be allocated particular skills and they've determined and decided that that will be based upon its data, whatever view or whatever reason that they've determined. Mr Cheng says it's a reliable data. Whatever that reason they've chosen to do that. It's not now open to challenge that. That challenge has come and gone, and that's effectively what a number of these challenges amount to in these individual grievances.

PN1104

THE COMMISSIONER: But you see, just on that point isn't there this argument, that is when you look at the document it has actually identified some scoring for pin men, for instance. So the natural inference from that is pin men skills are going to get scored. But then when you go to actually do it later on, "Oh hang on a minute, our data doesn't give us the opportunity to identify when pin men skills are being used". So despite the document saying that, it never emerges.

PN1105

MR DARAMS: Mr Cheng explained and has explained that that was an erroneous inclusion, first point. Second point, no one was allocated pin men points.

PN1106

THE COMMISSIONER: But what I'm saying here is your argument here is "Well, this was all done and dusted before Sams DP". Surely there's that sort of process where you can't say "Oh yes, well we always knew that" - "we always assumed pin men was going to be part of this. That's why we didn't take issue with that at the time". But subsequently when it's actually put into practical - some practical implementation occurred "Oh hang on a minute, that's not going to" - "we can't do that". So it seems to me you get caught by what is sitting there at the time that the company says "Here's our policy" but then when we go to implement it we find a practical impediment to implementing it as it would have been intended.

PN1107

MR DARAMS: Well, I'll come to deal with that more directly when I deal with the procedure or, sorry, the selection procedure and the observations of Sams DP because it's not just the decisions - well, there are two answers to that. The first answer is obviously no one has been affected by it. No one has been adversely affected because no one got scored. Secondly, it was explained to the extent that that was an issue. There is obviously the grievance process, the appeal process where it would have been explained to people.

PN1108

So we don't accept that that there renders the observations or the findings of Sams DP that the process which was the subject of all of the conciliation, all of the consultation, the arbitrated hearing, the further consultation, renders the process unfair, if one was using that descriptor. Now if we go to Mr Cheng's - I mean the other context which I think it's important for the - one obviously descends down into the micro and when you do that you can lose sight of the macro in the circumstances of how the longevity or how long this process has taken.

PN1109

The involvement of the Commission in the process throughout the formulation or the consultation and the formulation of the selection procedure, and the consultation that happened and the changes that happened after the arbitrator decision, and I'll come to the evidence about what happened after that. To end up with "Here is the criteria, the policy, the procedure" and then the company's submission is that they've simply applied that criteria and you end up with a result. Now in relation to this issue about whether or not the application - well, it's a further challenge to the selection criteria. If we go to Sams DP's decision which is behind tab 6.

PN1110

THE COMMISSIONER: Which one?

PN1111

MR DARAMS: It's behind tab 6. It's the one of April 2014.

PN1112

THE COMMISSIONER: The 22 April decision? The big one?

PN1113

MR DARAMS: 22 April, yes.

PN1114

THE COMMISSIONER: Yes.

PN1115

MR DARAMS: So, obviously Sams DP had significant involvement in the varied disputes that arose in relation to this. You know, he identified that immediately in paragraph 1 and then in paragraph 253 this is picking up this argument about clause 9. The argument was run and lost, and then in paragraph 258 is his finding, Commissioner, part of it, and then in paragraph 261. So he says it's unassailable that clause 9 was never intended to apply, and then he says:

PN1116

In addition, given that Patrick's proposed selection criteria have been modified to take account of some of the Union's concerns, such as to removing the final warning as being a disqualification for selection and altering the weighting of the Shift Managers' scores for the purpose of PIR selection, I am satisfied that the process of consultation has produced a selection procedure which is fair and reasonable.

PN1117

That's the process at that time. Mr Cheng's evidence - there was some suggestion that the minutiae of the process wasn't before Sams DP. That's not correct. Mr Cheng's evidence at paragraph 21 of his statement; now at paragraph 21 Mr Cheng gives evidence that the company tendered the document before the selection criteria. So that's TC8. So it's similar looking to TC9 but that was before Sams DP, so his observations in his judgment about the process being fair and reasonable are only a fortiori, one would have thought, in circumstances in paragraph 23 of Mr Cheng's statement. If one now goes to that:

PN1118

That further consultation occurred and further changes were made to the selection criteria which ultimately resulted in TC9.

PN1119

So not only was the almost entire - well, not almost the entirety but the significant majority or significant proportion of the selection criteria was part of the arbitration. The observations were made in that context. Further changes were made as a part of 14 additional conferences before Sams DP, and I say this is important because then earlier this year there's a dispute over documents and we get the judgment of 26 February this year. Again he notes in the background - so this is behind tab 5. So we have one, we note the background. This decision arises from the long-running superintendence by the Commission of the process. Then in paragraph 11 he makes some observations. He says:

PN1120

I would make the following general observations. At the outset, it must be stressed that the right of Patrick to manage and arrange its business as it sees fit, is a right untrammelled by answering the questions of the Union...

PN1121

So an acknowledgement there that one would have thought that - of the management prerogative of the respondent, and then he says:

PN1122

Despite opposing the redundancies of its members and opposing the process by which they were selected for training -

PN1123

And the reference to training, really I think there are some observations either in this case or the earlier decision that those who weren't selected for training would ultimately be made redundant:

PN1124

- the Union does not seek to challenge either the general or specific decisions taken by management in this exercise. That argument has been run and lost. This is not a case, like the earlier two arbitrations, of the Union seeking to have the Commission impose a different selection procedure on Patricks, than the amended one it has used more recently.

PN1125

So he's observing again in this context of his involvement of the process about the fact that those arguments, a challenge to the procedure, in effect in his words it has been run and lost. Now that's why we say that the challenges here are really seeking to do what he has observed; it really is to put another or ask the Commission to impose another selection procedure on the company and one sees that simply because of the nature of the relief that was handed up this morning. So there can't be any cavilling from that proposition that that's what the individual applicants in this case are seeking the Commission to do.

PN1126

If I can go now turning more directly to the specific merits, the company's proposition is this; that the question before the Commission is whether or not the decisions that the company has made in selecting the individuals are justifiable, and we say the reason that that is the actual question as opposed to some proposition that the process has been fair, we say that arises because schedule 3 requires any concern that an employee has to also satisfy, Commissioner, that it's a personal grievance, and something is a personal grievance if and only it satisfies either 1.1 or 1.2 of schedule 3 - sorry, yes, schedule 3.

PN1127

We say 1.1 does not apply because 1.1 is directed to different matters. But we accept that the decisions of the company would satisfy some other action. The question then becomes whether or not that action is unjustifiable, and we've set out in the written submissions what that means. But the short point of the argument is that it's justifiable, the company's decision is justifiable because they are the decisions that have resulted from an application of its selection policy.

PN1128

The alternative submissions we make, Commissioner, is that even if the Commission were of the view that the relevant test is whether the decisions were fair, we would say that the selection criteria has already been judged by the Commission to be fair and reasonable. That's the effect of Sams DP's decision. It's the effect of his 2014 arbitration decision. It's the effect of the changes which have subsequently been made which one might, as I indicated before, mean that the process was "fairer". It's the result or the consequence of Sams DP's observations earlier this year in paragraph 11.

PN1129

Now even if the Commission was then to look at the minutiae of this process, our submission is that the Commission should not do that and should exercise the restraint which has been identified in previous cases applied in this Commission. To make that good could I ask you, Commissioner, to go to the decision of Smith which is in tab 9 of the authorities? Is the Commission looking for something specific? I might be able to assist. Tab 9. So in relation to the decision of Watson SDP and Commissioner Smith - now I'm not sure whether, Commissioner, you are familiar with the facts of the case.

PN1130

But just broadly there were a number of persons selected for redundancy, those being the individuals identified in paragraph 2, and this was ultimately a case in relation to whether or not the dismissals were unfair. Now the salient factors - and while we say whilst it's not directly on point we would say that the propositions are so similar that the propositions from that case, how the Commission approaches challenges to the selection criteria, they're so similar that the Commission would apply them by way of comity in this case. Now those observations are particularly set out in paragraph 53 of Watson SDP and Commissioner Smith's decision and then one sees here:

PN1131

The selection process metrics ultimately involved a criteria for previous performance and for future requirements...

PN1132

And then it identifies there that:

PN1133

Ratings were given for these criteria with a score out of a possible one to five. One, consistently exceeds expectations...

PN1134

et cetera, and then at paragraph 54 there's an observation that, "The reliance on PERs" - now Commissioner, PERs are something which was defined in paragraph 12 of the judgment whereby they were effectively reviews of the employee's performance, performance effectiveness reviews, the PERs, and then if one goes back to 54 the members of the Full Bench there are observing that there was problems in many respects relying upon the PERs and they set out there a number of issues that they observed in the particular instances of that case, and then they say at 55:

PN1135

however in the context of this case we reach no particular conclusion in relation to the PER process per se, preferring instead to adopt what was relied upon by Commissioner Smith in CEPU v Telstra when he referred to the decision of the Court of Appeal -

PN1136

being the Court of Appeal in England:

PN1137

- some of Waite LJ's observations are particularly apposite to this case.

PN1138

Now we would ask the Commission when considering the decision to read the extract in full, but there are a number of points we wish to highlight about this extract. Paragraph 1 isn't directly relevant because it's making observations about the unfair dismissal process and the test of fairness, which isn't dissimilar obviously to the tests that this Commission applies. Then one sees in the extract from the Williams case which is indented there:

PN1139

There are only two relevant principles of law arising from that subsection.

PN1140

Being the relevant unfair dismissal section:

PN1141

First, that it's not the function of the Industrial Tribunal to decide whether they would have thought it fairer to act in some other way. The question is whether the dismissal lay within a range of conduct.

PN1142

And then it goes on to observe the second point of law, again being directly related to the concept of unfair dismissal and that legislation. Under that extract it says that:

PN1143

The Industrial Tribunal must in short be satisfied that the redundancy selection has been achieved by adopting a fair and reasonable system and applying it fairly and reasonably as between one employee and another. It must judge that question objectively by asking whether the system and its application fall within the range of fairness and reason regardless of whether they would have chosen to adopt such a system or apply it in the way themselves.

PN1144

Then perhaps more importantly to your task, Commissioner, we would say:

PN1145

The degree of scrutiny required of the Industrial Tribunal. Employment law recognises pragmatically that an over‑minute investigation of the selection process by the Tribunal members may run the risk of defeating the purpose which the Tribunals were called in to being to discharge, namely a swift informal disposal of disputes arising from redundancy in the workplace. So in general the employer sets up a system of selection which can reasonably be describe as fair -

PN1146

And we say that has occurred:

PN1147

- and applies it without any overt sign of conduct which mars its fairness.

PN1148

Well, they have all that the law requires of him, and then there's the extract from the Court of Session in Buchanan v Tilcom:

PN1149

PN1150

In the event the appellant, apart from throwing out the suggestion that he might have been victimised because of dislike merely expressed his concern that others with even less seniority than he and employed in the same work labouring had been kept on in the situation where no other complaints were made by the appellant, all that the respondents had to do was prove that their method of selection was fair in general terms and it had been applied reasonably in the case of the appellant by the senior official responsible for taking decisions.

PN1151

PN1152

And then as was pointed out by Phillips J in Cox v (indistinct):

PN1153

It is quite sufficient for an employer in a case such as this to call witnesses of reasonable seniority to explain the circumstances in which the dismissal of an employee came about and it was not necessary to dot every I and cross every T or anticipate every possible complaint which might be made.

PN1154

Then scrutiny and marking cases, then there's an extract from two decisions at the bottom of that page which goes over to the top of the page at the first paragraph, and then probably four lines from the bottom:

PN1155

The decision was overturned. It was held in dismissing the appeal that a practice of allowing employees selected for redundancy to see the assessments of those employees who had not been so selected would involve, especially in cases where the numbers were large, an impossibly protracted exercise offensive to common sense and practicality and threatening to stultify the intended fairness of the whole selection process.

PN1156

And then there's a reference to the McKinn decision:

PN1157

There the applicants were four of 20 employees selected for redundancy by a similar process. One of the complaints was that although given details of their own marks they were refused to sight the marks of others. Another was that supervisors responsible for marking were insufficiently informed to make fair assessments.

PN1158

Similar observations being made here:

PN1159

These complaints were upheld by the Industrial Tribunal which was also critical of the fact that the member of senior management called to justify the assessment results was unable to speak to the detailed merits of the assessments made by the applicants by the supervisor who marked their forms. The Employment Tribunal held, allowing the appeal, that there was nothing to suggest that the assessment process was carried out otherwise honestly and reasonably. Their judgment stated...in fact it appears to us that what the employers did in this case was set up a good system of selection, reasonably (indistinct). It may well have been possible to argue about the individual markings of an individual employee but that is a comment which applies as much to those markings of those who were not selected for redundancy as to those who were. If the view taken by the Industrial Tribunal were carried out to its logical conclusion there could be no alternative but to require the employer in every such case to produce all the evidence bearing upon all the assessments out of which a redundancy decision arose. That seems to us to go further than is proper.

PN1160

Then there is the conclusion and then:

PN1161

The use of a marking system of the kind that was adopted in this case has become a well-recognised aid to any fair process of redundancy selection. By itself of course it does not render any selection automatically fair. Each system has to be examined for its own inherent fairness, judging the criteria employed and the methods of marking in conjunction with any other factors to its fair application including the degree of consultation which accompanied it. One thing however is clear. If such a system is to function effectively its workings are not to be scrutinised officiously. The whole tenor of the authorities to which I have already referred is to show in both England and Scotland -

PN1162

And we would say now here in Australia:

PN1163

- the Courts and Tribunals with substantial contribution from the lay membership of the latter are moving towards a clear recognition that if a graded assessment is to achieve its purpose it must not be subjected to an over-minute analysis. That applies both at the stage that the system is actually being applied and also to any later stage when its operation has been called into question before an Industrial Tribunal. To allow otherwise would involve a serious risk that the system would itself lose the respect with which it is at present regarded on both sides of industry, and that Tribunal hearings would become hopelessly protracted. There were therefore strong reasons of policy against allowing disclosure -

PN1164

et cetera, "in that case". So we would submit, Commissioner, that if one was to judge this through the prism of fairness one would apply these observations, and they were equally, in my submission, apposite in this case. That is, the degree of restraint in the circumstances in relation to considering or assessing the scores that had been provided through the process - and it's not been suggested there that any of the scores for instance in the subject - or any of the scores in relation to the shift managers were motivated by malice or mala fide in respect of any of the shift managers.

PN1165

The best that can be said is that the shift managers, we say, had formed a particular view of a particular employee at a particular time. I'm told that the decision was set aside by the Full Court but could I say that Hamberger SDP applied the White decision in a matter of EDI v Martin in 2006 these particular points, and I'm not aware whether the Full Court set the decision aside because of the reliance upon this extract. I'd be surprised if they did, but in any event - the principles set out there from the English decision - then we would say that that would apply to your task, Commissioner.

PN1166

Now just dealing more specifically with the individual complaints which have been made, we say that obviously Mr McCarthy was offered and accepted a position as a PIR. As for the complaints about his subjective scores, the company's primary position is that those scores have been properly given by the shift managers. However we just note the following about some of the complaints Mr McCarthy made. In paragraph 30 - these next submissions, Commissioner, are probably more by way of observation about criticisms of the marks given.

PN1167

But in paragraph 30 Mr McCarthy says that those four individuals wouldn't know what work he did and they all gave him a score of 33 except Mr Clayson who gave him a 35, "I should not have been scored by those shift managers". He then in paragraph 32 identifies Mr Gardener and Mr Bishop as being persons who know - and this question was put to him. He doesn't make the same complaint against Mr Gardener and Mr Bishop and I asked him the question in cross‑examination and he accepted that. Then if one looks at the number of - so the point is Mr McCarthy doesn't make the complaint that Mr Gardener and Mr Bishop don't know him.

PN1168

In Mr Cheng's second statement in paragraph 5 he sets out Mr McCarthy's roster and those who were managing him for particular shifts over the period of time. Now one just observes Mr Bishop and Mr Gardener, Mr Gardener was the most number of shifts. Mr Bishop was the second most number of shifts and they both gave him 33. Now there seems to be - which one just observes, and lots of observations have been made about numbers and the like but one might observe that they were consistent with the numbers that he was given by those whom he complains about.

PN1169

The other observation that might be made from these figures, and as I said lots of observations can be made and we could be here for day after day making all these observations. Mr Grann out of all - he gave effectively the second-highest mark but managed him for the least number of shifts. Now the only reason I raise these is that clearly what's happening and what was intended to happen was that managers would give their subjective view as to a particular employee. Mr Cheng's evidence is that as part of the process managers were told that if they didn't feel that they could properly provide an assessment to an employee then they weren't to do it.

PN1170

There's no evidence to suggest that the managers didn't understand that. In fact the fact that some managers didn't give an assessment suggests that there were some who made that assessment and the company obviously relied upon their knowledge to make that assessment. We ultimately say in relation to the grievance of Mr McCarthy it does become a bit of a moot point because if one takes out the assessments or the scores of those whom he complains about, as Mr Cheng's evidence demonstrates it doesn't make any difference to his position.

PN1171

We accept obviously - and this is Mr Cheng's evidence - that if Mr McCarthy succeeded on both challenges, that is he would get the score for control clerk and you would exclude these four individuals, then it would change his particular position. We accept that. But if he was to get the control clerk points but also the shift managers, the other four shift managers' assessment was taken into account, again that wouldn't change his ultimate position. In relation to the non-allocation of control clerk points our submission is that there can be no valid challenge to that and there can be no valid challenge because what has happened is that Mr McCarthy was given the points that he was entitled to, in accordance with the policy, the procedure, adopted by the company.

PN1172

The company determined how it would assess whether someone had utilised a particular skill and they did that by reference to their records. Now there was some discussion between yourself and my learned friend about another method that might have been chosen. I mean perhaps I think what's being suggested is that one would take - or part of the employees "Okay, well what skills did you do?" One can imagine a view being promulgated on what they say they exercised or what skills they utilised in the 12 months. One might then have a dispute between managers and say "Well, no, we don't agree with that".

PN1173

You'd end up in the same position ultimately if one was to go and - if there was to be any dispute about that. It's not going to resolve it. The way that the company had determined to make that assessment was on its records. Everyone in that respect has been treated fairly. So we would say that the Commission wouldn't find that there has been anything unfair in circumstances where Mr McCarthy has been allocated all of the points for all of the skills that he utilised in the preceding 12 months.

PN1174

Now in relation to Mr Lee he makes a similar complaint about the shift managers or various shift managers. I just want to - at paragraph 22 of Mr Lee's first statement there's a bit of - his complaint in this statement was that there were a number of shift managers who he rarely worked with. So he doesn't deny that he worked with a number of them and he identifies those four, and then he says some reference to them being on the other side of the (indistinct) and then he said, "I never had anything much to do with them" and he identifies the other two he says he had more to do with, and then there's some evidence given by Mr Cheng as to the numbers of shifts upon which they worked.

PN1175

So his complaint in his statement isn't that these people never worked with him. He says that they very rarely worked with him although one then goes to see - you make that assessment against paragraph 12 in Mr Cheng's second statement, and I think the figures were done. If you take out those - it's about 40-odd of the - 40 per cent of the shifts of these individuals were his manager. But in any event there is obviously some degree of difference between the number of shifts which he worked upon or which those managers worked upon. But likewise in relation to Mr McCarthy, whilst we don't accept that there is anything wrong with these managers providing scores because the manager was told "If you didn't feel like you're in a position to be able to do it then you shouldn't do it".

PN1176

But in any event it's a moot point in respect of the dispute of Mr Lee because even taking out those scores it doesn't change Mr Lee's position. Now having said that, at the time we've obviously had a grievance process whereby the employees were provided with the scores of their individual managers and then there was a further process by which they were able to dispute those scores or dispute anything in respect of them. Now Mr Lee did do that, and we say at the time the complaints that were made were investigated by the company in the process, and in doing that the company consulted with the managers who assessed Mr Lee, and one sees in TC24, page 13, of Mr Cheng's statement the claim:

PN1177

Steven has been unfairly assessed i.e. rated as a three and not a four.

PN1178

Can I just pause on that. He's not saying "They should never have rated me", but "I disagree with the rating they gave me". So he makes a different point in these proceedings "Oh hang on, they should never have given me anything". At the time he was saying "Oh well, look, I should have been given a four. I disagree with what they say. They've given me a three". The company investigates it and the evidence is there as to the circumstances and confirms "Well, this is the reason why we gave him these scores".

PN1179

Now in relation to his challenge of the objective elements, being the crane performance and crane simulator we make the same point we made before. These are just challenges to the criteria which the company has chosen. There are a number of suggestions to put for the different methods or different methodology but again as we said before, that argument has gone. The company has consulted. The company has advised the employees. It's now decided "This is how we are going to assess points for these skills".

PN1180

Mr Busuttil complains about individual scores given by his managers. Again the complaints he made at the relevant time were investigated by the company. Now you'll recall Mr Busuttil's evidence. The effect of Mr Busuttil's evidence is that "I was scored these points by various managers but they never told me at the time that I was performing poorly". That's the nub of his complaint. In his second statement Mr Busuttil in paragraph 6 - and you'll his cross‑examination. He again identified various notes of meetings or the notes of the meetings that happened on 22 April and makes the observation "Well, Mr Lucy hasn't explained why he gave me a particular two", and then I put it to Mr Busuttil "Well, that's because you never complained about it" and he accepted that proposition because his evidence was back in paragraph 18 of his first statement where he says Mr Keating on his behalf said:

PN1181

Daniel La Roche and Robert would score me lower compared to other shift managers.

PN1182

Well, that was his complaint. That was investigated and one sees the notes of what the company did and an explanation by those managers why they gave the particular score. So the other nature of his complaint is, as I identified before, that he wasn't told at the time that he was performing poorly. Now that may or may not be right and it seems to be on the case that no one was pulled up on it. But in our submission that's asking an irrelevant question. This process wasn't embarked upon to determine performance management.

PN1183

Managers were asked to identify their view at a particular time of the employees for which they were responsible for managing or were in the position to provide a score. Identifying someone as being for instance a two, needing performance management, the inference is "We've made an assessment of their ability. In order to meet the expectations they're a person who would need to be performance managed". It doesn't mean that they should have been performance managed at that point of time. But even if that does mean that, the fact is - and I don't concede this but it might simply be the company should have been performance managing them and they weren't.

PN1184

But it doesn't mean that the assessment is not an accurate reflection of the manager's individual subjective assessment of that person. There's also a bit of - as I said you can make lots of points about all these assessments. Now you can end up going around in circles, because clearly employees seem to be saying here, "If I've been given a higher score that's a better reflection of my performance" et cetera. That seems to be the take on it. The flip side of that is "Well, perhaps you were being marked more generously than you should have been. Perhaps the lower scores were a more accurate reflection".

PN1185

But I think, Commissioner, before the break when we were talking about the productivity, you can come at fairness from different angles. That's correct, and that applies also to the assessments given by the shift managers. You can look at those figures from different perspectives as well. The other point to make about those assessments is they really are just relative assessments. So the points themselves - and this might go to - if it was suggested that you would move some employees up a point, let's just take this as an example.

PN1186

Manager A or just a manager has assessed employee A and employee B and they will give employee A a four and employee B a three. Let's just use that as an example. They've clearly made a relative assessment between employee A and employee B. So if one was to say "Well, employee B should have been a four", on that argument employee A who was a four should be a five. It's the relativity which is important and it's the relativity being the subjectivity of the shift managers. Now that was always the intended aim to give distinction between employees.

PN1187

That's the first point to make about it. The second point - and I make this observation about paragraph 34 of the submissions, the written submissions. The assumption behind this analysis of the figures, in my view, the assumption is that all of the employees are exactly the same and perform to the exact same ability all the time. That's the assumption that's implicit in all of that. To say that someone should have got this or someone should have got that is to assume that there is no differences between how the managers form that relative assessment between those who they scored, and that can't possibly be the case.

PN1188

Again there are other ways to look at all of those figures. Particular managers - a particular employee might have had a particular relationship with a manager and the manager might have marked them high in that respect. But you're going to get that in any particular system and there's no - any method you choose in that respect is going to be open to criticism, but the fact is this method was selected. This method, we say, was applied and it was applied in accordance with the way it was intended to be applied, and there has been no suggestion that the marks that were given by any of their managers, as I said before, were motivated by mala fide or anything of the like.

PN1189

All that this spread actually indicates is that they are subjective views. Now the company's evidence, and there was some suggestion in the submissions that the company hasn't done anything about taking into account these particular differences of views, but that's not right. I mean, the averaging of the shift managers scores gives that smoothing, so to speak. That is all the managers have scored, you average that, you average it out and you get a particular figure.

PN1190

Now back to Mr Dymock. Again he made - his general complaint is that he was never spoken to again about his performance. So the submissions we make about that, ultimately it's not the relevant consideration because we're assessing one's performance at that time and the managers are identifying by reference to those criteria whether or not this person would be a two, because they formed the view that they would need perhaps performance management to meet expectations. Now the other thing to note about Mr Dymock is that he didn't make any direct allegation during the grievance process about his scores.

PN1191

Now we make that good because Mr Dymock was the employee who didn't actually attend his grievance appeal hearing on 24 April. Mr Garrett attended on his behalf. Then we go to the notes of that meeting which are attached to Mr Dymock's second statement, and they're at page 9 of the second statement. So the person, presumably Mr Garrett - if one goes to the meetings, one looks at the grounds and I think ground D is the relevant one:

PN1192

Shift manager scores were subjective assessment -

PN1193

We accept that:

PN1194

- and open to prejudice, bias and inconsistencies across the table.

PN1195

We don't accept that. But we do accept they were obviously subjective assessments. Then:

PN1196

Additional information provided.

PN1197

Point D:

PN1198

No direct allegations of scores though has asked to look at Brad Morgan, Brian Close and Tanya Orlose, Mannie Cachia, Robert Wood and Robert Jackson.

PN1199

So there's nothing being made at the time on his behalf but we said "Well you can go and have a look at them" and then when one sees the findings in D:

PN1200

There's no direct allegation made towards Milton's score.

PN1201

So again, that's just picking up the fact that there's no real challenge to them at the time:

PN1202

Though as part of the investigation all of the scores were reviewed and believe that (indistinct). Did highlight different scores by Mr La Roche. Danny clarified their scores. Milton doesn't do anything above and beyond and you have to keep an eye on him.

PN1203

So whilst he doesn't make any direct point they were investigated and that's what the company has done. Now Mr Hudson. Again he makes similar complaints. He says that he was never told about his performance or his allegedly poor performance, so that's not relevant to the assessment that's being undertaken. Then one has the notes and he does make the complaint during the process that most of the shift managers don't know him and he has been unfairly assessed for performance by a number of individuals.

PN1204

He made that complaint and then the notes which are page 5, commencing on page 5 of his second statement, so TH1, and what one sees there is that he has made that complaint and then they were investigated. Yes, in the grievance process, as the process should or would result in, there was a point picked up about Mr Wood and they took out Mr Wood's scores and reassessed to see whether it would make any difference. Well, it didn't. Now it has been suggested that there's some issue with Mr Jones' scoring because of these notes. Mr Jones is the second bullet point from the bottom on page 5:

PN1205

Nathan advised that he has assessed Troy based on feedback he has received, the figures he has done and his opinion on what he has seen.

PN1206

So Mr Jones' assessment is also based on his own opinion so there can be no real criticism about that. But all this demonstrates, and the reason we point this out Commissioner, is to demonstrate the company applied the selection criteria to a vast number of employees. Mr Cheng's evidence is that there were I think about 95 who challenged the decision, the decision that they wouldn't be offered a role after automation. Sixty five I think of those progressed through to the grievance process.

PN1207

But before that went through the grievance process, those individuals who had come before the Commission particularly - well, those other than Mr McCarthy. Mr McCarthy is a little bit different in the sense that he retained his employment and still retains his employment. They raised relevant grievances at the time. Those grievances were investigated during the process and the results were that the decisions were ultimately affirmed.

PN1208

Now one might observe that - and our submission in that respect is that the process laid down has been applied, has been followed, and including the grievance appeal process to deal with these issues. In this proceeding there were certainly some further issues raised but we say that one needs to look at the decisions of the company as to whether they were justified based upon the application or the decisions made as a consequence of applying its process, and then also in the context of the grievance appeal process which has been undertaken.

PN1209

So our submission is that there isn't anything unjustifiable about the decisions in respect to any one of these individual applicants, the first point. If the Commission approaches it through the realm of whether the decisions and the application of its process was fair, we would say that the Commission ought exercise the restraint that has been identified in the cases in relation to the scrutiny of these scores.

PN1210

In any event we say that there isn't anything that has been demonstrated that the scores were unfairly applied or the process was unfairly applied. So we would say in those circumstances there's no reason for the Commission to make any orders in respect of any of the grievances if it determined that it had jurisdiction to arbitrate the matters. Unless there's anything specifically you needed me to deal with, that would be our submissions.

PN1211

THE COMMISSIONER: All right. Thank you.

PN1212

MR DARAMS: I should also say we obviously have the merit submissions as well that we rely upon. I think I said that. So there are two sets of written submissions.

PN1213

THE COMMISSIONER: Yes, you've got two. Two sets of written submissions, yes.

PN1214

MR DARAMS: Yes.

PN1215

MR DARAMS: Sorry, I should have just checked with those instructing. Sorry, I do apologise. There were a couple of points that I had to make by reply. I think I filled them in, but I'm not sure whether this point is being progressed any further but to the extent that it is there was some further questioning of Mr Cheng yesterday about this proposition of PIR crane driver roles. Our submission is that Mr Cheng explained that reference in the documents to PIR crane driver and his evidence is that no, there wasn't a particular role but what the company needed at cutover date - and this was his evidence, that at cutover date you needed nine persons who had crane driving skills in order to meet the requirements of the company at that date.

PN1216

So to the extent there's any suggestion that there is a particular role to that effect, his evidence at paragraph 38 should be accepted. There was also a submission put about Mr Cheng's evidence that apparently the managers - I think I put - it's in quotes here "sat around the table and collaborated on the scores". In my submission Mr Cheng's evidence went nowhere near that and it's not a fair characterisation of the process that was undertaken, and ultimately to the extent that it's necessary the transcript will show what Mr Cheng's evidence was in that respect.

PN1217

THE COMMISSIONER: If they collaborated they didn't do a very good job at getting their scores similar.

PN1218

MR DARAMS: That demonstrates that they didn't collaborate.

PN1219

THE COMMISSIONER: Well, I don't know. Maybe they didn't collaborate well.

PN1220

MR DARAMS: The point is the evidence doesn't allow the finding to the extent that any of it was relevant, and Mr Cheng didn't give the evidence that they sat around and collaborated. That's what my learned friend has submitted. You didn't?

PN1221

MR SLEVIN: Actually the evidence was they may have.

PN1222

MR DARAMS: Well now - - -

PN1223

MR SLEVIN: He said "We don't know".

PN1224

MR DARAMS: All right, I'm now being told that the submission is that they may have.

PN1225

MR SLEVIN: And we don't know whether they did because they don't give evidence. Cheng said he didn't oversee it, he was there in and out.

PN1226

MR DARAMS: I think the point to make is there isn't anything to justify that they sat around, all the managers sat around and collaborated. Now one might, on the observation you make - well, I don't know what to do with the observation you make that they didn't do it very well. I don't know what that means. I mean why would - - -

PN1227

THE COMMISSIONER: No, just look at the table in the submissions in showing that - there's a criticism here of the wide variance in some of the scoring. If there had been some conscious attempt to try and collaborate I wouldn't have thought we would have seen that.

PN1228

MR DARAMS: That's what I'm saying. I accept that.

PN1229

THE COMMISSIONER: But I think the point that's probably been made is more the case of "Well, there isn't any evidence from any of the managers so we don't quite know what underpins some of this".

PN1230

MR DARAMS: In light of - - -

PN1231

THE COMMISSIONER: We're left to guess.

PN1232

MR DARAMS: No, that's not true to say there isn't any evidence from the managers. Now there are the notes taken, and it has been said that's hearsay. You know, if we wanted - they are company records. You're entitled to rely upon what they said. It happened at the time of the grievance process, the first point. The second point is the cases that we took - particularly the English case applied by the Commission but also, as I said, Hamberger SDP counsels against a process whereby - well, a number of observations are made about that as to what the Commission would do in those circumstances.

PN1233

We could end up in this proposition that one would have 10 managers or 11 managers all giving evidence in relation - that's ultimately where one would get to, 10 or 11 managers all giving evidence in relation to each and every individual person as to why they did this at that particular time. One can imagine the process that would have to be involved in that respect. That's effectively what's being put forward. Because one can't just say "Well, you get the four people here who gave the lowest scores and say 'Well, why did you give the lower scores?'"

PN1234

Because the other criticisms that are made, potentially the higher scores weren't appropriately applied as well. So you'd have to get the higher scoring managers and they'd all have to give it and they'd have to give it for most of the 55 or every single employee that they scored, "Okay, well what about this individual score?" One can only say it or explain it that way to realise how cumbersome the approach would be and that's why, in my submission, those cases counsel against that. Yes, there's a process put in place for the dealing with the grievances and that has been put in place and at that time the managers were consulted as to the scores that they provided.

PN1235

Now the point that I was making though is that there's no evidence of any collaboration. I accept that the managers individually weren't here but in our submission it wasn't necessary and it's not necessary given, you know, the restraint that ought be exercised by the Commission in relation to this process particularly in the context of the Commission's role to date in overseeing the consultation and development, for want of a better description, of the procedure.

PN1236

THE COMMISSIONER: You say it's not appropriate or necessary for that evidence to come forward from each of those managers or a number of them as witnesses. Maybe that's right, but it might be put against you as a sort Jones v Dunkel argument that you could have brought them along and you didn't. So I suppose balanced against that is the proposition that the applicants could have subpoenaed them.

PN1237

MR DARAMS: They could have subpoenaed them. Some of them are no longer there. I mean but the point is - I accept that but the point is we would highlight the restraint that one would do - otherwise you're right, Commissioner, you'll have to hear these until you retire. That's effectively where we'll end up. Now just in relation to - I mean I also make this point. I mean the company's position is "This is our labour model." These are the employees that the company has identified, the number of employees that it wants to operate in its terminal. I'll use Mr McCarthy as an example. Mr McCarthy succeeds if the Commission accepts the challenges and he gets into a particular role.

PN1238

Someone drops out. Now what then happens is there's a domino effect. One looks at the person who he replaces. What were their second positions or their second - well, where do they go? They drop in, someone else drops out. We'll end up domino-ing till someone falls out incompletely and they'll drop on the back of the appendix A and they'll have a complaint. That's where we're going to end up and there will be a continual evolution of different complaints for different reasons, whatever happens. I mean it's probably a trite observation but there were a number of redundancies, a large number of redundancies.

PN1239

You can infer because of the challenges to it that there are a whole lot of people who are not happy about being made redundant, and because they're - so there were a number of voluntary redundancies but clearly a number of people who were offered the opportunity for voluntary redundancy and didn't accept it. So one can assume that those who accepted the roles - and when I say accepted, they were offered and accepted them. If one of them were now to lose their position, and I accept the point has been made provisionally-like, we'll end up with a new set of disputes in relation to those people who might lose their provisional position. One can't actually say when will it end.

PN1240

THE COMMISSIONER: Well, it's going to end at the decision made on the papers by Sams DP on the independent arbitrator process.

PN1241

MR DARAMS: Sorry?

PN1242

THE COMMISSIONER: The proposition that was going to provide for some finite solution to this I think was the concept that had been developed and which I think it's attached as an appendix to the decision of Sams DP back in January or February this year, and for some reason or another that never succeeded. That seems to have a quite clear, finite life to it and it's going to end once he - it actually says there's no appeal. He would decide it overwhelmingly on the papers and that would be the end of it. Unfortunately that got lost in translation somewhere.

PN1243

MR DARAMS: Well, yes, and one of the parties didn't agree to it.

PN1244

MR SLEVIN: Your client.

PN1245

MR DARAMS: Well, both. At the end of the - - -

PN1246

THE COMMISSIONER: Or both. I don't know.

PN1247

MR DARAMS: At the end of the day there was no agreement.

PN1248

THE COMMISSIONER: Yes. Maybe in hindsight it might have been a better process, but anyway.

PN1249

MR DARAMS: Anyway, Commissioner, they were the points that I make.

PN1250

THE COMMISSIONER: Thank you very much.

PN1251

Mr Slevin do you want to exercise a right of reply?

PN1252

MR SLEVIN: Only briefly, Commissioner.

PN1253

THE COMMISSIONER: Thank you.

PN1254

MR SLEVIN: My friend ends with "It's all too hard. Whether unfair or not, it's all too hard. Just let it go." That's not the - - -

PN1255

MR DARAMS: I didn't actually end with that.

PN1256

MR SLEVIN: No, you ended up with about the agreement or otherwise.

PN1257

MR DARAMS: I didn't say it's all too hard. I literally didn't make that submission.

PN1258

MR SLEVIN: Well, that's the effect of what was said. That we'll have people dropping out and we'll have other people coming and making complaints and it will go on forever. The union has been, and the applicants have been, fairly precise in the unfairness they've identified and you see it in 1A of the proposed determination. There hasn't been an exercise of taking up every single grievance and every single point that Sams DP warned against in his decision when he made the point that the employees would be entitled to raise grievances.

PN1259

The union and the applicants have picked the specific complaints that they have, and they're set out in summary form in the determination that's sought. Now in relation to complaints first of all in relation to whether there was a challenge to the selection criteria, and we don't accept that Sams DP in his decision in April of 2014 gave imprimatur to the criteria. I've already taken you to the position the union takes on that, which is that the contest between the parties that is described in paragraphs 200 and 209 of that decision sets out both the union's claim and the company's response, was the contest or the disagreement that was determined; and that was a disagreement as to whether "Look, that selection criteria that you're developing shouldn't be adopted. What should be adopted is the selection criteria already in the agreement".

PN1260

That was the dispute. Now the Deputy President makes an observation about the selection criteria as it was at that time. Mr Cheng in his evidence at paragraphs 22 and following describes how the selection criteria then changed and became something different. Ultimately the skills metrics changed in November 2014, so that's months after the decision of the Deputy President. But even if you accept the argument that what the union's doing in relation to some of these complaints is saying "Well, you should have a different selection criteria", that only applies to five and six in relation to the productivity scores and the simulator.

PN1261

The rest of the matters are all about the application of the selection criteria. They go to the scores and the way people were scored and whether they were scored fairly or not, and the question is not justifiable, it's fairness. It arises from clause 10. My friend tries to take the definitional section in part of schedule 3 which is clause 1 and turn it into the test to be applied. The right that's conferred by the agreement is conferred in clause 10 and it uses the word "fairness" and so the test is a fairness test, and it is a test that is no longer available in redundancy schemes under the Act.

PN1262

My friend has taken you to old cases where that test, fairness, did apply to redundancy circumstances. He took you to Pacific Coal, the Pacific Coal Full Bench that was set aside by the Full Court in Re AIRC; Ex parte Smith [2004] FCAFC 271. Now in deciding that litigation, and that was rather complicated litigation. It involved exceptional matters, orders and the like from the previous Act and indeed there were applications and cross‑applications in the Federal Court arising from the decision of the Full Bench.

PN1263

The Court there at paragraphs 97 and 98 state fairly clearly the established learning on the provisions of that time. The argument was one of these "Was there a valid reason. If there was a valid reason then it can't be an unfair dismissal" and the Court said "Well look, in the circumstances of a redundancy there may be a valid reason being the redundancy, but if you have a selection process for your redundancies then that can be challenged as a matter of fairness under the provisions of the Act" at the time. You'll see that at paragraphs 97 and 98 of that Full Court decision.

PN1264

THE COMMISSIONER: That then led to the legislative change for the genuine redundancy question, yes.

PN1265

MR SLEVIN: That's right. Well, it seems that - yes, perhaps there was too much success in those cases that led to that. But that's a policy question and probably not something that needs to trouble you, Commissioner. We want to confine you to - - -

PN1266

THE COMMISSIONER: It went in under Work Choices and it stayed there.

PN1267

MR SLEVIN: That's right, it did. So that's what we say about that. Turning to the first of the cases referred to by my friend which is Riverwood, and this goes back to the jurisdictional argument. You'll see in the Riverwood decision, in the decision - there are three decisions of the Court, the three Judges of the Court. It's distinguishable. This was about is redundancy pay payable under the employee manual, because the contract of employment said that the parties will abide by policies and practices of the company. So that's the subject matter of that case.

PN1268

There was extensive argument and there is reasoning in the three judgments about how to properly construe that provision in that contract. So did that contract import into the contract of employment the, or incorporate into the contract of employment the manual which had the redundancy pay provision? Now in dealing with that the rules of construction were applied at various stages. Interestingly, and I'm getting to this capital letters point, at paragraph 146, page 12 of the decision, Mansfield J says this in relation to the contract:

PN1269

His Honour correctly identified the relevant principles and reached a conclusion to that effect after considering the respective contentions of the parties. With respect, if it were incumbent upon me to reconsider that conclusion afresh...I would reach the same conclusion as that reached by his Honour. The policy clause in the letter referred to "all Company Policies and Practices", by which the respondent agreed to abide. The appellant must have had certain policies and practices in mind, but it is not clear what those policies and practices were. The words "Policies and Practices" commence in the upper case. That is a technique used to distinguish a specific from a general meaning...

PN1270

And so we rely on that and the submissions I made earlier in the day about those being capitalised, and those being capitalised because the parties when they sat down to negotiate that agreement knew there was such a thing as a company policy, and they weren't creating a circumstance where the company could carte blanche introduce procedures, promulgate them as policies and thereby avoid or create rights or obligations that the parties didn't intend to be observed at the time that the agreement was reached, which is effectively the submission being made.

PN1271

My friend made a submission when he was dealing with this, that this criteria was promulgated as a policy. The evidence is contrary to that. Mr Cheng said the no, it was never promulgated as a policy. I put that to him directly and he said "No, no, it was accepted by the" and I think he described it as the - what was the body that looked after the introduction of the change? Yes, the management team that was responsible for the implementation of the change. But that was a far cry from the company promulgating it as a policy in any event. So even if it could promulgate as a policy, it didn't as a matter of fact in these circumstances.

PN1272

They're the submissions in reply, Commissioner, and so I finish by just emphasising the point that I've made now a couple of times but I'd like to finish on it. The exercise here is the exercise under schedule 3 to deal with unfairness, not to deal with the grievances. It's not to fix the entire problem. It's not to try and foreshadow what will happen at the terminal. It's a case of saying were the employees treated fairly when they were scored or when they were selected in the manner that they were? That's what the grievances are about and we've identified the heads of the unfairness and we ask you to consider those.

PN1273

We've suggested the remedy to address that unfairness and once that unfairness is addressed then your task is complete, and the way that that will then apply is a matter for the parties. We've come here to resolve the dispute or to resolve the grievances about unfairness and what will flow from your decision will flow. We haven't come here to ask you to fix all of the problems at the port. Indeed that would take a long time. They're the submissions of the applicant.

PN1274

THE COMMISSIONER: Yes, thank you. The Commission reserves a decision in the matter and proceeds to adjourn accordingly.

ADJOURNED INDEFINITELY [3.51 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A17 ASCIANO ANNUAL LEAVE POLICY DATED 30/11/2012 PN801