TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 63797-1

SENIOR DEPUTY PRESIDENT ACTON

AM2011/41

s.160 - Application to vary a modern award to remove ambiguity or uncertainty or correct error

Application by Construction, Forestry, Mining and Energy Union
(AM2011/41)
Manufacturing and Associated Industries and Occupations Award 2010

(ODN AM2008/5)
[MA000010 Print PR985120]]




Melbourne

2.02PM, WEDNESDAY, 12 OCTOBER 2011

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA
VIDEO CONFERENCE AND RECORDED IN MELBOURNE

PN1

THE SENIOR DEPUTY PRESIDENT: Can I have the appearances, please.

PN2

MR S. MAXWELL: If the tribunal pleases, my name is Maxwell, initial S. I appear on behalf of the Construction, Forestry, Mining and Energy Union.

PN3

THE SENIOR DEPUTY PRESIDENT: In Sydney?

PN4

MR R. CALVER: Good afternoon, Senior Deputy President. Richard Calver from Master Builders Australia.

PN5

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN6

MS C. ESTOESTA: Your Honour, Estoesta, initial C, appearing on behalf of the Australia Manufacturing Workers Union.

PN7

MR S. SMITH: If it pleases the tribunal, Smith, initial S, with MS G. VACCARO of the Australian Industry Group.

PN8

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Maxwell?

PN9

MR MAXWELL: Thank you, your Honour. Hopefully this matter can have a satisfactory resolution. The union made this application because we were concerned that, with the termination of the refractory state award of New South Wales, there was a possibility of uncertainty in regard to the coverage of all refractory materials. To be honest, there are about three companies in Australia that produce refractory materials. Two are Cookson Plibrico, which are part of Vesuvius Group, and Shinagawa, which is part of a large Japanese multinational. They have large production facilities in New South Wales and both of those companies have used the state refractory award for their enterprise agreements.

PN10

Those agreements are now coming up for re-negotiation. Both those companies and the union are agreed that the manufacturing award is the appropriate award to use for the coverage of that work but because of what we see as a possible uncertainty in terms of the award, we seek to provide that certainty by the insertion of a new reference to "refractory materials" because those two words would then cover not only refractory bricks it would cover refractory materials that are made from - other than clay for those that may have a cement base. But that is what we're seeking to do with this application.

PN11

I know that the MBA, in their submission, in paragraph 4, raised the possibility of the coverage of refractory materials made from other substances remains unclear and in regard to the other two submissions, both the AMWU and the AIG say the work is already covered. Our concern, though, is the way in which they see the award is covered is that you've got to go through various paragraphs to work out the total coverage. Now, given that we're talking about particular materials and then argue two words can identify the coverage, that is far simpler and much easier for employees to understand rather than having to go through different paragraphs of the award to find the coverage. That is all we're seeking to do.

PN12

Rather than a new paragraph, it may be that paragraph 4.9(a)(1)(o) could be amended to refer to refractory materials and that may address some of the concerns of the other parties in regard to significantly amending the coverage of the award. 4.9(a)(1)(o) refers to clay and ceramic articles including but not limited to bricks, refractory bricks, terracotta products, et cetera. It may be that if we just added the words "refractory materials" into that provision that that would suffice in terms of ensuring that the award has coverage of that work. Your Honour, that - - -

PN13

THE SENIOR DEPUTY PRESIDENT: (indistinct) 4.10?

PN14

MR MAXWELL: Sorry, is it 4.10?

PN15

THE SENIOR DEPUTY PRESIDENT: Yes.

PN16

MR MAXWELL: Sorry, your Honour. The only other issue I have with any of the submissions is that of the AIG. In paragraph 5 of their submission, they state that "refractory materials are often installed in products manufactured for metal and therefore are components of the manufactured product and covered by the award on that basis." If the AIG is suggesting that the use of refractory materials installed in blast furnaces, in glass furnaces, et cetera - if they are suggesting that that work is covered by the manufacturing award then we clearly have a problem because that work has traditionally been covered by the National Building and Construction Industry Award. It is now covered by the Building and Construction General On-site Award.

PN17

I think this goes to an issue that was raised in the previous matter today where the AIG seek to claim that the use of products that are manufactured under the manufacturing award is covered by that award and not other awards. I flag that, your Honour, on the basis that because of the way it's been raised in these proceedings - that the union will obviously seek to address that matter in the 2012 review of the modern awards because it is clearly an issue that has potential to reach disputation - uncertainty between the parties. I just flag that at this stage, but in regard to this matter, we're happy to hear what the other parties have to say and hopefully, if there's a possibility of an agreed position, we would welcome it.

PN18

THE SENIOR DEPUTY PRESIDENT: Okay. Who's going next?

PN19

MR SMITH: Thank you, your Honour. At paragraph 5, we were thinking far smaller products there in making that statement than huge blast furnaces, et cetera. But as we've identified there, our central issue here is to make sure that the requirements of 160 are applied with rigour and that those requirements are appropriately met by the application. We're not convinced that there is uncertainty. We're not concerned about the effect of the application because our view is that companies that are making these materials will be covered under the award anyway.

PN20

But as we've said in our submission, we think the application raises an important (indistinct) issue that we'd like to discuss at an appropriate time, whether as part of these proceedings or more generally, and that is that in many areas, things that were being out of one material are now being made out of more modern materials, whether that be refractory materials or whether it be parts of aircraft or all sorts of other products that have traditionally been manufactured under the (indistinct) industry award or the other awards that found their way into the modern manufacturing award, so we've raised there a concept, in paragraph 8, which would involve using a similar approach to what is being used in a number of other parts of the award, and that is to include substitutes in the area that Mr Maxwell has been particularly focussed on which is 4.10(a), as well as - we think there's merit in looking at it in 4.10(a) because of those materials like fibre composites and so on.

PN21

Some of these areas - there are even new trade qualifications being developed and so on and I know that's a broader issue but we'd rather that there be a focus on that issue than what we see as quite a minor issue that's (indistinct) award in our view anyway. But if the tribunal is convinced that the requirements of section 160 are met, then we're not that concerned with what Mr Maxwell is proposing, but we would rather it be dealt with in the way we're proposing in paragraph 8, if the tribunal pleases.

PN22

THE SENIOR DEPUTY PRESIDENT: Mr Calver?

PN23

MR CALVER: Your Honour, the uncertainty to which we point relates to the inconsistency in the manufacturing award between areas where there is recognition of substitution (indistinct) areas where that has to be implied and I draw your attention to, for example, 4.10(s) of the award that says, "All products made from or containing plastic or rubber or substitutes for plastic or rubber", whereas if you go over to GG, Mr Edmonds, from the earlier proceedings today, "Gypsum, plasterboard, fibre cement and similar materials and all products made there from" - "similar materials" is different from substitutes for those materials but would perhaps stand as a better form of implicating the types of material that were under consideration and certainly, that's the uncertainty that we believe exists with the manufacturing award, to shorten its terms.

PN24

However, part of our submission is that whether or not that's amenable to section 160 would require evidence of the lack of clarity and we believe that Mr Maxwell should perhaps address the tribunal further on that point to be satisfied that section 160 can apply. The only other point we might make is that if Mr Maxwell's application is granted, we would suggest that there be a definition of "refractory materials" because in consulting the Macquarie Dictionary at page 1046 of the Macquarie, there are five different meanings to the word "refractory".

PN25

Obviously some aren't apropos. One might be, "Stubborn or unmanageable", like a refractory child, which is not at all an issue ever before the tribunal, as you're aware, your Honour. But there are two meanings which could apply and one is when refractory is used in the plural, it can merely mean bricks, bricks of various shapes used in lining furnaces. So we wouldn't want the change to be circular in its effect. There is a meaning, though, that is ascribed as one of the five in the Macquarie Dictionary. That is, "A material having the ability to retain its physical shape and chemical identity when subjected to high temperatures", and we would therefore suggest that, if Mr Maxwell was amenable to it and the tribunal was moved to grant his application, that there also be inserted a definition along those lines. So we support the AIG in their submissions and we make those additional submissions, if it please the tribunal.

PN26

THE SENIOR DEPUTY PRESIDENT: Ms Estoesta?

PN27

MS ESTOESTA: Your Honour, in relation to the CFMEU application to vary the award, we continue to submit that those materials identified in paragraph 3 of their written submissions are already covered by clause 4.10(o) of the manufacturing award and we also note that metals-based refractories are already covered by clause 4.10(e) of the manufacturing award so we don't see any merit in varying clause 4.10. In relation to the Australian Industry Group's proposed variation containing paragraph 8 of the submission, we agree that there is some merit in removing the (indistinct) relating to the manufacture of products made from substitutes of materials listed in 4.10(a) and 4.10(o) of the manufacturing award.

PN28

However we're of the view that the proposed variation that the AI Group is seeking should really be dealt with more appropriately by a separate application, given that the materials they are seeking clarification on are different from those that the current CFMEU application is dealing with. So in that regard, your Honour, we're seeking for the CFMEU and the AIG proposed variations not to be granted during these proceedings.

PN29

THE SENIOR DEPUTY PRESIDENT: One of the areas that you suggest there may be some question mark over is high temperature concretes.

PN30

MS ESTOESTA: That's correct, your Honour, and we stated in our submission that perhaps the CFMEU may need to provide more information regarding those types of material, concrete, to perhaps give us an idea as to what their composition is and to see whether they fall within clay ceramics. But we submit that there is not enough information in the current application to support or to provide more information about the materials not to be included in the manufacturing award.

PN31

THE SENIOR DEPUTY PRESIDENT: Right, okay. So I've got Mr Maxwell wanting to make it absolutely clear and Mr Calver suggested we do so with a definition; AIG saying they don't really care but they want to preserve the integrity of the Act and in any instance there's another problem, they would like to fix up on the way through; and the AMWU saying - with a very comprehensive submission I have to say - it's already covered but there's a question about how you make up concrete refractory materials.

PN32

MR CALVER: Your Honour, I think that I did say that we adopted the submissions of the AIG, supported them in that sense and that if the barrier for 160 was gotten over and the uncertainty to recognise, then the definition would come in. I hope that doesn't sound impertinent, but that does clarify our position I believe.

PN33

THE SENIOR DEPUTY PRESIDENT: Yes, that's fine.

PN34

MR SMITH: Your Honour, on that definition, it's the first time we've heard that definition from Mr Calver but it does seem to align with what we were thinking about as a definition of refractory materials. That's why I made that comment about the items, that we had in mind with paragraph 5 were a lot smaller than what Mr Maxwell was talking about because we were thinking of that last premises; we were thinking about all sorts of products that were exposed to heat and are resistant to heat, so it is a very broad definition, but that definition is probably appropriate if there is to be an award variation around the refractory materials.

PN35

THE SENIOR DEPUTY PRESIDENT: Can you just read it again, Mr Calver?

PN36

MR CALVER: Sorry, your Honour, I just - in terms of the research that - granted it's a surprise for my colleagues, but in research for presenting the materials to you today, I made sure that I had it infixed in my mind what refractory materials were and the Macquarie Dictionary, as I see it, the encyclopaedia edition 2011 at page 1046 contains five definitions, one of which, when read in the plural, would make any definition of "refractory material" circular because it only refers to bricks. Therefore, I don't - - -

PN37

THE SENIOR DEPUTY PRESIDENT: I'm just wondering the one you thought was appropriate.

PN38

MR CALVER: I am for the definition which is, "A material having the ability to retain its physical and chemical identity when subjected to high temperatures." We thought that that might be more appropriate than a circular definition which might occur if you were minded to grant the CFMEU's application.

PN39

MR MAXWELL: Your Honour, I'm loathe to jump up at this stage but I feel I have to because the definition proposed by Mr Calver doesn't really identify the type of material we're talking about and to me, it's clear that neither of the employer advocates really understand what it is we're talking about. The refractory - - -

PN40

THE SENIOR DEPUTY PRESIDENT: You need to explain to me too, I think.

PN41

MR MAXWELL: I'll explain this here, your Honour. The refractory companies in Australia and the main ones that install the product are Andreco Hurll, Beroa, AGC and Phoenix Refractories and then there's another half-dozen smaller companies and all of them employ CFMEU members and the majority of them have agreements with us. What they do is - you will have, for example, a blast furnace down in the steelworks in Wollongong. The lining of that blast furnace is either made up of refracted bricks, which are the clay bricks, or they are covered by refractory materials that are actually sprayed onto the inside of the furnace. Similar furnaces are found in the glass manufacturing companies and they are found in aluminium refineries, so we're talking about large-scale manufacturing establishments.

PN42

So to the extent that we're talking about a substance that retains its shape, we don't think that really gives clarity to the substances we're talking about. It may be that - and again, this would then come down to the proprietary requirements of the companies that manufacture them, to the extent that they would wish to expose the composition of the materials, given that a number of them are quite guarded as to releasing the details of the actual composition because that may give an advantage to their competitors. I would have thought that just the term "refractory materials" has a fairly simple understanding by most of the parties and if we are going to have to go to the Macquarie Dictionary or any other dictionary to define every term in every coverage provision of every award, then I think we have a severe problem in coming to terms with a general industry understanding of what these terms mean.

PN43

I should also point out that I have a major concern about the proposal by the AIG and I suppose, to put it into some context, they are suggesting that the award be varied to include the words "and substitutes". Well, if we just take 4.10(a) which talks about "all products made from or containing steel, iron, metal, sheet metal, et cetera". Obviously metal furniture is covered by the manufacturing award. A substitute for metal in furniture is wood. Are they then saying that the manufacturing award would then cover the manufacture of wood articles. I think that we have opened up the Pandora's Box if we are seeking to refer to all parts made from specific substances and then any substitute substance, and we believe that if the AIG wants to pursue that issue then the 2012 is the appropriate vehicle to discuss that because it will involve discussions with a wide range of parties.

PN44

THE SENIOR DEPUTY PRESIDENT: Is there any issue about whether the concrete awards, there's a couple of them, would cover high temperature concretes?

PN45

MR MAXWELL: Your Honour, it is not - the high temperature concrete is the main substance in the refractory material, so it isn't the concrete, as such, as envisaged by either the Cement and Lime Award or the Concrete Products Award. Given that it is the same companies involved in the manufacture of these products that manufacture the ceramic-based bricks and the clay-based bricks, that (indistinct) that opens up another range of issues. The only alternative that perhaps we could suggest is that if the tribunal is of a mind that the variation was not necessary - if the tribunal reflected that in the decision to say that the tribunal believes that refractory materials are covered by the award already - and that may be sufficient to address the issue.

PN46

THE SENIOR DEPUTY PRESIDENT: Well, from what I've heard, the only area of concern I have about what might be covered is high temperature concrete, because I think the AMWU has done a sterling job in tracing down every other bit of chemical or whatever through the award. But that's the only area that I'm uncertain about.

PN47

MR MAXWELL: Your Honour, the only slight area of difference we'd have there is the reference to, I suppose, carbon and graphite.

PN48

THE SENIOR DEPUTY PRESIDENT: Right, and the basis for your concern is?

PN49

MR MAXWELL: Given that carbon is a major component of coal, I wouldn't want to be seen to be opening up another area of dispute.

PN50

THE SENIOR DEPUTY PRESIDENT: You've missed me there. They call carbon and graphite the same thing, as I understand it.

PN51

MR MAXWELL: No. Normally the coal industry talks about - in terms of the terminology that's used in the coal industry, they refer to it being produced in carbon and I'm not sure that the - I notice in the AMWU's submission, they refer to - alumina is oxide of aluminium; magnesia is oxide of magnesium; and chromia is oxide of chromium; and zirconia is the oxide of zirconium. I don't think they address the issue of - just trying to find it - in paragraph 2 of the AMWU's submission, they refer to paragraph 3 of our submission where we deal - "materials include oxides of aluminium, silicon, magnesium and calcium and zirconia, silicon carbide and carbon (graphite)."

PN52

THE SENIOR DEPUTY PRESIDENT: Yes. So you're the one that quotes them, do you?

PN53

MR MAXWELL: We're just raising that the manufacture of carbon products is covered by the manufacturing award.

PN54

THE SENIOR DEPUTY PRESIDENT: But that's - - -

PN55

MR SMITH: Your Honour, some of the biggest - - -

PN56

THE SENIOR DEPUTY PRESIDENT: Yes, go on, Mr Smith.

PN57

MR SMITH: - - - manufacturers would be making products out of carbon fibre and graphite, et cetera. This was the very issue that we've raised and to have a view that the award doesn't cover that sort of material would mean that a large number of mainstream manufacturers are caught up with this issue and we just don't accept that. This is a newer material that's being used instead of metal in lots of obvious applications, whether it be bicycles, components of planes, et cetera. So we need to be very careful about this particular issue.

PN58

THE SENIOR DEPUTY PRESIDENT: But we don't need to go there, do we, because this is about refractory materials of which there only seems to be a concern about high temperature concrete.

PN59

MR MAXWELL: Yes, your Honour.

PN60

THE SENIOR DEPUTY PRESIDENT: So I could leave it and we'd still have high temperature concrete up in the air, would we?

PN61

MR MAXWELL: That's correct, your Honour.

PN62

THE SENIOR DEPUTY PRESIDENT: Presumably, high temperature concrete has concrete in it, or somewhere in it?

PN63

MR MAXWELL: It does, yes.

PN64

THE SENIOR DEPUTY PRESIDENT: Well, why is it not then a concrete product?

PN65

MR MAXWELL: Your Honour, in terms that - the refractory materials that contain the concrete are not just made out of concrete; they are made out of a range of components. As I say - I can refer to the Vesuvius web site where they do have a breakdown of the range of materials that they produce and go through all the chemical compounds that they use, but we're seeking a much simpler solution and we would have a concern that requiring the employers to apply the manufacturing award on three out of four assembly lines and the Concrete Products Award on another assembly line where the employees are performing the same work and doing the same functions, we believe is not the simplicity in award coverage that the award modernisation request envisaged.

PN66

THE SENIOR DEPUTY PRESIDENT: I assume the AMWU wouldn't have any objection to the metals award covering high temperature concretes.

PN67

MS ESTOESTA: Your Honour, as Mr Maxwell indicates, those high temperature concretes are within the claims in both (indistinct) the manufacturing award then we'd ideally have an objection to that. As we said in our submission, we just were not sure about composition of those - high temperature concrete because we couldn't find much information about them in the CFMEU's submissions.

PN68

THE SENIOR DEPUTY PRESIDENT: But you're not saying, are you, Mr Maxwell, that high temperature concretes are plain ceramics?

PN69

MR MAXWELL: We're saying that we have a concern that refractory materials that are cement-based are covered by clay ceramics. That is the concern we have and that is the concern we're seeking to address.

PN70

THE SENIOR DEPUTY PRESIDENT: (indistinct)

PN71

MR MAXWELL: Yes.

PN72

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Should I just add in high temperature concretes?

PN73

MR MAXWELL: Sorry, your Honour, could you repeat the question?

PN74

THE SENIOR DEPUTY PRESIDENT: Should I just add in high temperature concretes?

PN75

MR SMITH: Would that be in the context of refractory materials or more generally? Because if it was more generally, it might cut across the concrete products area.

PN76

THE SENIOR DEPUTY PRESIDENT: That was my concern, but if it might cut across the concrete products - and unfortunately I don't have it here for the moment - then it doesn't really matter whether it's in as refractory materials such as high - concrete products, does it?

PN77

MR SMITH: Your Honour, I think we'd prefer, rather than necessarily just adding that or Mr Maxwell's proposal of just putting the "refractory materials" list in (o) - even though they have missed this definitional problem because we were thinking of refractory materials in a broader sense, as materials that are resistant to heat rather than in the narrower sense that Mr Maxwell is talking about, but at least then high temperature concrete would be just a subset of that and then be necessarily mentioned (indistinct) identified any specific problems, but if there was just "high temperature concrete" put in there, then presumably anything made out of high temperature concrete, as a product, might disturb the operation of the Concrete Products Award and (indistinct) that issue.

PN78

THE SENIOR DEPUTY PRESIDENT: All right. Is it covered by, in (o), "Clay and ceramic articles including, but not limited to, bricks, refractory bricks and other refractory materials"?

PN79

MR CALVER: Your Honour, that, with respect, goes back to the definitional issue that I mentioned because if it's going in (o), that is a clay derivative, yet one of the ordinary or common-day meanings of - despite Mr Maxwell's protestation - one of the ordinary meanings - that it would be refractory bricks, so it wouldn't have been advanced. That is the reason I raised the definitional issue, not to be difficult but so that the (indistinct) becomes circular. So with respect, I don't think that will cure it because it's still the limiter to plain ceramic articles, inclusive of refractory materials, which would take you back to the definition of bricks. So that is why I raised the issue of the definition that is broader than "clay and bricks": because the way that (o) is expressed, refractory bricks are a subset of ceramics and clay.

PN80

THE SENIOR DEPUTY PRESIDENT: So, you look at JJ and KK and LL, they have got four end products made from other than wood and we need refractory materials as a new item, other than plain ceramic articles?

PN81

MR SMITH: Yes. Your Honour, as long as that doesn't then lead to uncertainty because in the case of JJ, KK and LL, that was of course intended to make sure that those things that are made from wood are excluded, whereas if that was - we'd rather Mr Maxwell's first proposition which would be just to put it in as a separate dot point if they then would be overlapped with other - - -

PN82

THE SENIOR DEPUTY PRESIDENT: Okay.

PN83

MR SMITH: At least there would no - there's overlap all over the place with the award because of the material components as well as the product components.

PN84

THE SENIOR DEPUTY PRESIDENT: Okay.

PN85

MR SMITH: So this will not create any uncertainty.

PN86

THE SENIOR DEPUTY PRESIDENT: Okay, all right. One other aspect that I wanted to raise generally, and it's also associated with this morning's matter and I should have raised it there. This arises from the setting aside of instruments. Those instruments still are there. If one makes, for example, this change, what's expected by the parties? It will then proceed and set aside the instrument, or we will have another hearing in respect of it?

PN87

MR MAXWELL: Your Honour, perhaps as the party that made most of the submissions in those proceedings - should the awards be varied or a coverage be confirmed by whatever modern award, we would then suggest or request that those modernisable instruments then be terminated.

PN88

THE SENIOR DEPUTY PRESIDENT: Without further - - -

PN89

MR MAXWELL: Without further hearing.

PN90

THE SENIOR DEPUTY PRESIDENT: Does anybody else have a difficulty with that course?

PN91

MR SMITH: No. In fact, our position is that they should all be terminated as soon as possible, regardless of the outcome of these proceedings because, as we've submitted, all of those matters have been dealt with.

PN92

MR CALVER: We would support that, your Honour. We don't believe that these proceedings should impinge upon the termination of those instruments.

PN93

MR MAXWELL: Sorry, your Honour, I should perhaps clarify that in that we are only addressing the termination proceedings that have been before the tribunal already, because we note that there are a number of awards or modernisable instruments that are yet to come before the tribunal which particularly deal with some training issues in Queensland and New South Wales which may have to be addressed.

PN94

THE SENIOR DEPUTY PRESIDENT: I was only talking about those as well. Well, I'll have a look at this matter and make a decision. I'll now adjourn.

<ADJOURNED INDEFINITELY [2.40PM]