<MARCUS HENRY, RECALLED ON FORMER AFFIRMATION [10.00 AM]

RE-EXAMINATION BY MS DOLAN [10.00 AM]

PN491

THE COMMISSIONER: Well, good morning, parties. Thank you for your attendance. Now we're turning to Mr Henry's re‑examination.

PN492

Now, Mr Henry, if I can remind you that you remain under the affirmation you gave yesterday?‑‑‑Yes, Commissioner.

PN493

All right. Thank you. Ms Dolan.

PN494

MS DOLAN: Thank you, Commissioner.

PN495

Mr Henry, yesterday the applicant's representative asked you a number of questions in cross‑examination and today I'm going to ask you some follow‑up questions. So the first question relates to page 147 of the hearing book and it's in relation to the paragraph 25. So you were asked if employees voted on the current classification structure as part of the consultation process. My question to you is does your agreement require a vote as part of the consultation process?‑‑‑No.

PN496

Thank you. Now could you please turn to page 154?‑‑‑Sorry, 154?

PN497

154, paragraph 67. Now, is the fact that skilled acquisition and pay rises are not linear an issue of fairness that you would like to overcome by implementing the current classification structure?‑‑‑Yes.

PN498

Thank you. Now, could you please turn back to page 150? This is in relation to paragraph 47. You were asked in relation to paragraph 47 whether the learning curve for new employees is steeper at the start of their career with Aspen. So my question to you is would the ability to gain three B skills which are equivalent to a C skill, assist with that steeper learning curve?‑‑‑Yes, it would.

PN499

Thank you. Another question related to that paragraph is can a new employee progressively learn and acquire new skills in the current classification structure?‑‑‑Yes.

PN500

Thank you. And would you say that this compensates new employees for the steep learning curve when they commence an appointment?‑‑‑Yes.

*** MARCUS HENRY RXN MS DOLAN

PN501

Thank you. And finally in relation to paragraph 47, at grade 1, does an employee have to have two C skills?‑‑‑No, the businesses recognise at this level in addition to offering three B skills being equivalent to a C skill, we also recognise four A skills just at that level.

PN502

Thank you. Now, if I could ask you, please, to turn to page 155 this is in relation to paragraph 74. You were asked about that paragraph and you said:

PN503

At grade 2 plus, I have one employee with one C skill and one employee with six C skills -

PN504

- and you said that was unfair. My question is do you say that example is a reason for the need to change from the historical position and introduce the current classification structure?‑‑‑I think the reason to change from the historical classification structure to the current classification structure is around making it linear all the way through. Historically there were the blockers and we removed the blockers from that - from being an issue by recognising them as C skills and you can use any C skill to replace those things but the impediment was also around the number of skills that people need to acquire at grade 3, 3‑plus (indistinct) and 4, so the business' proposal, the current structure that was in place was around taking the existing number of skills and redistributing them evenly throughout the whole wage table in the classification structure.

PN505

Thank you. And would you say that would include productivity in multiskilling the business?‑‑‑Yes, because it would equally recognised multi skills.

PN506

Thank you. And you'd have to say that would be good for the Aspen business?‑‑‑That would be great for the business.

PN507

Thank you. Yesterday you were also asked to count how many C skills a grade 2‑plus employee would have under the current classification structure and you agreed that would be an increase for the employee?‑‑‑Yes.

PN508

Now, is this required to remedy the unfairness for employees at grades 3 and grade 4?‑‑‑At grade 3 and grade 4 there would be a reduction from four C skills which is the historical requirement and it's now two C skills which is the same at every level throughout the classification structure.

*** MARCUS HENRY RXN MS DOLAN

PN509

Thank you. You also said a grade 2 employee is skilled but not fully multiskilled. Could you please tell us what a fully skilled operator - a fully multiskilled operator in the current classification structure looks like?‑‑‑Yes. So a fully multiskilled operator is what we'd describe as our grade 4 operator and they would have skills in three different key production processes on site nominally.

PN510

Thank you?‑‑‑They could acquire those skills in four or five different areas across the site but nominally it's being skilled in three key production processes, in one work area or in multiple working areas.

PN511

Thank you. If you could please turn to page 157. You were asked about paragraph 92 of your statement regarding the jump in wage rates, could you please tell us what this shows?

PN512

THE COMMISSIONER: Sorry, which paragraph?

PN513

MS DOLAN: Paragraph 92 on page 157.

PN514

THE COMMISSIONER: Thank you.

PN515

THE WITNESS: Yes. So I was asked yesterday around the jump that grade 2 which I acknowledge is the largest paid increase in the wage payment and I had put in a table on - I don't know where it actually is, in paragraph 54 there's a wage table which shows the historical and the current skills compared to the cumulation of dollars. At grade 2 the issue that the business has is that we pay 40 per cent of the wage table and we gain 11 per cent of the skill that is on offer and that's unfair to the business and the follow on from that is the requirement at grade 3 and grade 4 is that people are expected to get 32 per cent of the skills on offer but they're only going to get an 11 per cent or an 18 per cent increase in salary which is a disincentive to multiskilling at those higher grades.

PN516

Thank you.

PN517

THE COMMISSIONER: Sorry, I've got to delve into that a little bit further. What do those numbers mean, 40 per cent of the wage table remuneration, what does that mean?‑‑‑All right. So Commissioner, the difference between the grade 4 pay rate and the new start up pay rate is the wage increase across the skill table.

PN518

Sure. I understand. And the 11 per cent?‑‑‑And the 11 per cent is at grade 2, would be a number of skills that historically you had to acquire so yesterday I was asked by Ms Dolan how many B skill equivalents there are in the wage table and I said there were 37.

*** MARCUS HENRY RXN MS DOLAN

PN519

Yes, but where does 11 per cent come from?‑‑‑11 per cent is that at grade 2, the skill, so in paragraph 54 the first column there:

PN520

Per cent skills -

PN521

- is the number of B skill - or C skill equivalent that is required at that level.

PN522

I'm missing the maths. You say that we have a workforce who's being paid 40 per cent of the wage table remuneration to gain 11 per cent of the skill?‑‑‑Yes.

PN523

Looking at it from my perspective if someone's being paid 40 per cent of the wage table remuneration then they're being underpaid and that's an offence. Now, you're clearly not saying that?‑‑‑No, the ‑ ‑ ‑

PN524

I think what you're really saying is that the differential between grade 4 and grade 2 is a margin of 40 per cent, correct?‑‑‑It's the accumulative ‑ ‑ ‑

PN525

Is that correct?‑‑‑I think so, Commissioner.

PN526

Right. Now if you'd explain?‑‑‑So there's a disconnect between the accumulation of skills and the accumulation of salary increases.

PN527

Yes, but that's not what paragraph 92 says. You've reduced it to numbers and I'm not a person who reduces everything to numbers?‑‑‑Yes.

PN528

I think I've understood what the 40 per cent margin is but to gain 11 per cent of the skill, what on earth does that mean? Are you 20 per cent more skilled than me or is Ms Dolan 37 per cent less skilled than me? I mean, how do you get to that assessment?‑‑‑So on the classification structure the acquisition of B skills and C skills there are 12 C skills in the total grading structure.

PN529

Yes?‑‑‑Which those 12 C skills is 100 per cent of the skills available and at grade 2 they have acquired 11 per cent of the 100 per cent skills available but they have been paid for 40 per cent of the salary available.

*** MARCUS HENRY RXN MS DOLAN

PN530

Well, all right, I'll bite. So what, the - any classification structure I've ever worked with will have that defect, won't it, if you look at the clerks award structure or the metals award structure or the pay structure applying to public servants, you don't have a situation in which grade 3 is 100 per cent more than grade 2 and you don't have a circumstance in which the skills, how on earth you assess someone as twice as skilled as someone else is beyond me but you don't have that feature and so what I'm trying to get to is what's the point you're making?‑‑‑So, Commissioner, if you look at paragraph 48 on page 151.

PN531

Right?‑‑‑(Indistinct) 1.

PN532

Yes?‑‑‑So the blue line there represents the acquisition of dollars. The grey line is the acquisition of skills.

PN533

All right. All right. Thank you.

PN534

Thank you, Ms Dolan.

PN535

MS DOLAN: Thank you, Commissioner.

PN536

I'd like you to turn to paragraph 116 which is on page 161. Yesterday there was quite a significant period of time of questioning in relation to this rather long paragraph. That paragraph 116 has two tables in it, could you please tell me what years are listed in relation to those tables in the extract of those tables?‑‑‑So the first table there which is around the blister line was effective 13/10/1999 and the second table is also effective 13/10/99.

PN537

Thank you. Could you please explain to us what those two tables are and how they're different?‑‑‑So those two tables come from a document which talks about the skills and how the skills were managed on the site in 2005 and it talked about the RX production area and the skill acquisition or the skills available within that area. It was in there because I understand that the applicant's focus would be around the acquisition of two C skills on that production line and that was the case for that line at that point in time.

PN538

Yes?‑‑‑At that point in time there were 32 C skills available onsite using the same historical classification structure that required a minimum of 11 C skills and a maximum of 12. So there were 32 C skills available. As of today, we have 53 C skills available for the same classification structure. So a lot of what I was asked yesterday was the business has reduced the amount of C skills available but I have increased the number of C skills - C skills not C skill equivalents, just C skills from 32 to 53.

*** MARCUS HENRY RXN MS DOLAN

PN539

Yes?‑‑‑So the availability of C skills has increased on site. I have also increased a recognition of B skills and I have 17 C skill equivalents available today as well which gives you 70 C skills available and the classification structure only requires a maximum of 12.

PN540

Thank you. Now, could you please turn to page 158 and that is in relation to paragraph 97. So page 158, paragraph 97. Could you please explain why the business has chosen a work centre base model for the current classification structure?‑‑‑So there's two models that could have been chosen, there's a machine‑based model and there's a work centre based model. The business has chosen a work centre based model because I can measure the output of intermediate products or finished products depending on where it happens within the business. Our skills have been built around that for a long period of time but our business budgeting process and our business routes where we measure the productivity of the site are all measured on a work centre basis. So training for skills to match with our budgeting process and the - what's the cost model that we actually sell our productivity to our customers.

PN541

Thank you. And what problems would a hybrid model create, so that would be a work centre and machine model blended together?‑‑‑Being able to draw the line between what is an index skill and addressing that consistently across the site.

PN542

And would you have concerns about a hybrid model and double dipping and issues of fairness?‑‑‑Yes.

PN543

Thank you. And why is it fair that employees don't get two C skills for identical lines?‑‑‑If you use the example of driving a car, you get a licence to drive a car, you don't have to get a licence to drive a different model of car or a different colour of car, you do need to get a different licence to drive a truck and you do need to get a different licence to drive a motorbike. If you go to a machine‑based model, then that would be the process that we would look at where a blister line's a car, a bottle of wine is a truck, a sashay line is a motorbike and you would gain the skill 1s.

PN544

All right. Thank you. And could you please provide information about what areas on site where there is one machine that is essentially a work centre or the one machine where a product is an output?‑‑‑(Indistinct).

PN545

So there might be a work centre that is a discrete work centre with a particular output?‑‑‑I'm just trying to think of one where there's only one machine.

PN546

(Indistinct) compression?‑‑‑Yes. So if I look at a compression suite, so there is one main machine but there are subsets within that where you have a metal detector, you have a deduster and you have the (indistinct) ‑ ‑ ‑

*** MARCUS HENRY RXN MS DOLAN

PN547

THE COMMISSIONER: Mr Henry, you just dropped out at that point, could you repeat what you said, please?‑‑‑Yes. Sorry, Commissioner, we just had someone try to ring on the computer that I'm on.

PN548

All right?‑‑‑So within a compression suite there is the main machine which is the press which is a C skill, then you have supporting equipment like a deduster and a metal detector which tests the product as it comes out or it removes the dust from the product as it comes out but the supportive skills which are A or B skills of doing hardness testing, doing the quality checks on that product as you go.

PN549

Thank you. Could you please move to page 166 and this is in relation to paragraphs 130 and 131, I'll just let you refresh your memory of those?‑‑‑All right.

PN550

Could you please tell me the difference between RX packing and RX manufacturing?‑‑‑So the RX manufacturing the batch document will have a number of steps like a recipe. So you know, if you're looking in terms of cooking, you can set up the oven, you assemble your ingredients. There are different steps within the cooking where you need to do the pre‑work and you need to put it all together and then you end up with your finished product. Each step within that process requires adherence to the skill so that we get the right outcome. You need to put stuff in, in the correct (indistinct). On a packing line you have a product and you're not changing that product, you're just packing that product. So a bottle of wine we will take a tablet, we will put it into a bottle, we'll put a cap on it, we put a label on it and then it might go directly into a shipper or it might go through a cartoning process depending on the customer requirements. On a blister line we take a tablet, we put it into a blister, that blister will then be aggregated as one blister, two blisters, eight blisters, depending on the pack that it's going into. That will go into a carton, cartons will get aggregated in shrink wrap and then it will be put into a shipper. We don't add value to the product, we just pack on the line for the consumer's use.

PN551

Thank you. So yesterday you mentioned that one has ongoing steps and changes required and one being continuous?‑‑‑Yes.

PN552

So if you could just reiterate RX packing versus RX manufacturing, which one has the steps and changes and which one is continuous?‑‑‑Yes. So in manufacturing the product evolves from the raw materials to a product that is in a saleable condition. On the packing line it is wrapping that product for stability and for consumer end product use.

*** MARCUS HENRY RXN MS DOLAN

PN553

Thank you. The final question that I have relates to how many C skills were required in the historical structure and how many business proposals in the current structure, you got a fair bit of questioning about that yesterday, if you could just explain to us what the current structure proposes and compare that to the historical structure for us?‑‑‑So the current structure requires a maximum of 12 C skills and historical required a maximum of 12 C skills.

PN554

Thank you. Thank you. That's all the questions I have for you today. Thank you.

PN555

Thank you, Commissioner.

PN556

THE COMMISSIONER: Right. Thank you, Mr Henry for giving evidence. That's appreciated. You're now released as a witness but obviously you may remain there for the rest of the proceedings if you wish.

<THE WITNESS WITHDREW [10.24 AM]

PN557

THE COMMISSIONER: Now, what we need to come to obviously is the submissions from both parties. Before I do that though, I just wish to place on the record that this morning - sorry, yesterday, the Commission received some correspondence from an anonymous person pertaining to these proceedings. That correspondence was received in our chambers this morning. I've requested my associate to provide a copy of that correspondence to both parties. It's not awfully profound but what it is is a letter from a person who says:

PN558

Subject: Suggestion with the grading structure classification. As an employee from Aspen Pharma Proprietary Limited, Dandenong, Victoria, want to remain anonymously requesting that deciding authorities Fair Work Commission to consider my suggestion to solve this long‑time issue. Thank you. Anonymous. Aspen Pharma Proprietary Limited, Dandenong.

PN559

And then there's an attached - an attachment which is a suggested grading structure which is in the - excuse me, is in the chart form that you would have each seen before. I haven't been through it to determine how it relates to either of your submissions and I don't propose to but what I thought appropriate to do was to provide it to you and you can then make submissions to me about it, its meaning and purpose at the appropriate point.

PN560

All right. Now, Ms Ananth, are you in a position to put your oral submissions to the Commission, any further ones you want to put?

*** MARCUS HENRY RXN MS DOLAN

PN561

MS ANANTH: Yes, Commissioner. Thank you.

PN562

THE COMMISSIONER: Before you do that, I should also just mark as an exhibit the draft order that you filed which is 118 of the hearing book and I'll mark that as exhibit A4.

EXHIBIT #A4 DRAFT ORDER AT PAGE 118 OF THE HEARING BOOK

PN563

THE COMMISSIONER: All right. So if you'd proceed, please.

PN564

MS ANANTH: Thank you, Commissioner. I just want to start my submissions by bringing it back to the central principle on which the Union's proposal is based which, put simply, is that a structure which accords more closely with historical practice should be preferred and only amended to such an extent as to redress any unfairness caused or unreasonableness in its application.

PN565

This, Commissioner, we say that this is because a more radical departure from the established structure such as the one being proposed by the respondent will result in unfairness between groups of employees. Because of the operation of clause 5.7.2 you would otherwise have a situation where new employees classified under the respondent's proposed structure would be at a much lower grade than current employees classified under the existing structure despite having the exact same skills.

PN566

That would be a manifestly unfair situation. Commissioner, the Union's proposal largely resembles the current classification structure. The two key issues of unfairness arising under the current classification structure which the Union has sought to have addressed through the review of the classification process are the issue of the so‑called blocker skills and the unilateral reduction of C skill value allocation that was implemented by the company following the unanimous rejection of the points based system in 2015 as attested to in paragraphs 42 to 46 of Mr Vengopala's statement.

PN567

This is on page 101, Commissioner.

PN568

Turning to the blocker skills issue now, the Union agrees that the company has made a business decision that it no longer values the specified functional skills or does not require everyone to be assessed on them. So that - we agree that that results in an unfairness where to the extent that the company is not making - training available - an assessment available to employees on these specified functional skills, it does restrict employees' progression and we agree that this should be resolved by removing the specific functional skill and replacing them with unspecified skills.

PN569

Where we defer, Commissioner, however, is that the Union maintains that the skills - that's the specialised functional skills should be replaced on a like for like basis. For the company to simply decide that it values a skill more and that it should be valued by allocating a C skill value in a break from historical practice, it defies the established definitions of A, B and C skills and it not only undermines the clearance and integrity of the classification structure itself, it also represents the unilateral decision on the part of the employer without the agreement of the Union to implement that in 2019 as attested to in Mr Henry's the evidence.

PN570

Commissioner, the consequence of the specified functional skills being replaced on a like for basis if I could please refer you to appendix A to the Union's outline of submissions on page 73 of the hearing book, Commissioner, the consequence of that would be that there would now be three C skills and one B skill at the grade 3 level and two C skills at the grade 3 level.

PN571

This of course, Commissioner, would mean that despite all the creative accounting exercises engaged in by the respondent, that the new structure, having replaced the blocker skills on a like for like basis, would have a minimum requirement of 10 C skills for progression from grade 1 to 4. 10 not 12. There is no justification for the respondent's proposed increase in the C skill requirements other than a mathematical neatness. Yes, 12 divided by six is two C skills per level but that's the only basis on which the employer seeks to increase a number of overall C skills required for progression.

PN572

And Commissioner, we submit that progression shouldn't be linear. Firstly, Commissioner, the wage differentials between each of the grades is not linear and it shouldn't be decided - what the basis of progression is shouldn't be decided purely on whether you were to plot the skill requirements at each grade, it would form a nice neat line, this doesn't reflect the basis on which employees actually acquire and develop skills.

PN573

The respondent - Mr Henry for the respondent has acknowledged in his evidence that skill acquisition is progressive. It's a lot easier to read once you've learned the alphabet. So an employee at the lower levels would have a much more difficult time acquiring a large number of C skills than say an employee at the grade 3 or the grade 4 level and the current classification structure, Commissioner, we submit, reflects this.

PN574

The parties acknowledge that the biggest jump in wages is between the grade 1 to grade 2 level. We acknowledge that it represents a 5.29 per cent increase in wage rates but the grade 2 level, Commissioner, we submit, is also the level at which an employee who's assessed on one C skill would be classified, having progressed from the new starter level to the interim level and grade 1 level which only requires an employee to be assessed on foundation A and B skills.

PN575

So, Commissioner, we stand by our submissions that grade 2 marks a point at which an employee becomes a skilled operator in the sense of being able to operate and setup a complex machine, that is, a key packaging reproduction line and we say that this is what justifies, Commissioner, the jump in wage rates. The respondent's concerns is articulated by Mr Henry, while we appreciate are about fairness to employees at the grade 3 and grade 4 level, about them having to acquire more C skills for a less significant jump in wages.

PN576

Respectfully, Commissioner, we note that this concern is not actually shared by our members and the employees on site. Requiring an employee at the higher levels to have more skills to progress is not unfair, especially given the iterative and progressive nature of skills acquisition but we submit that what is unfair is to require an employee at the grade 1 level to have two skills as being a - C skills as being proposed by the respondent or an employee at the grade 2 level to have four C skills or 12 B skill equivalent under the company's proposal which (indistinct).

PN577

THE COMMISSIONER: Why is that unfair?

PN578

MS ANANTH: Well, Commissioner, in the employee's business, that would mean that an employee at grade 1 would need to operate and setup two key production or packaging lines and at the grade 2 level they would be, you know, up to four key production or packing lines. Commissioner, this is unfair both by reference to industry standards as attested to in Mr Soueid's statement and, Commissioner, it would also exacerbate the unfairness between new employees proposed under the - classified under the company's proposed structure and current employees classified under the current structure because current ‑ ‑ ‑

PN579

THE COMMISSIONER: Can I just pause you there? I don't - I mean, I hear that you say it's unfair, it might be unfair for me to practice medicine in this country unless I get a doctorate degree from the United Kingdom because I can't go to the United Kingdom, that might be unfair but stipulating that the practice in medicine requires me in this country to have a Bachelor of Medicine and Bachelor of Surgery from an accredited university, even though that might be different from how I thought about the profession, it may not be unfair.

PN580

So bringing that down from the very poor example that I've given you to the here and now of grade 1 and grade 2, why is it unfair?

PN581

MS ANANTH: Well, Commissioner ‑ ‑ ‑

PN582

THE COMMISSIONER: Difference doesn't equate to unfair, does it?

PN583

MS ANANTH: Well, but it's not purely a matter of difference, Commissioner. To use your analogy, what this actually would be is to say to one person that you need a Bachelor of Science and Medicine from a university and to say to someone else that they need to have a PhD to do the same job, that's what this equates to because presently ‑ ‑ ‑

PN584

THE COMMISSIONER: And how so?

PN585

MS ANANTH: Well, presently, Commissioner, if an employee at the grade 2 level would only need one C skill so an employee would only need to run and be able to operate one machine to be classified at the grade 2 level but what the company is now proposing is that the same employee at the grade 2 level would be able to run four production or packaging lines, that's a massive jump in the skill requirement for grade 2.

PN586

THE COMMISSIONER: Well, let me put it this way. Pick your unfairness because that can be solved very rapidly by saying, 'Well, all those who are presently level 2 but don't necessarily have the certified number of C skills, they've got to go and get them. Now, the Union of course would be saying, 'Absolutely not, we're not doing that. We need a (indistinct) arrangement,' so pick your unfairness surely. If you - I mean, I get that you don't like it but it's not inherently unfair.

PN587

MS ANANTH: Well, Commissioner, it is in the sense that clause 5.7.2 of the agreement is a given that both parties have to abide by that, the effect of which is that an employee is classified under the current structure cannot lose any pay or classification level as a result of this new structure coming into effect.

PN588

THE COMMISSIONER: Sure, and you can remove that in 2023 when you negotiate a new agreement or you can remove it in the next month through a variation so you know, those things are not fixed in stone but what I'm pressing you on is the unfairness. You say it's unfair what the company is putting forward and I'm pushing back on that saying I don't see an inherent unfairness.

PN589

MS ANANTH: Well, Commissioner, inherent unfairness I guess, would rest also on industry practice. It is as Mr Soueid's pointed out in his statement, rather uncommon for a pharmaceutical manufacturer at least in the State of Victoria to require an employee at the level 2 grade, specially an employee who's being paid comparatively similar rates to other facilities to be required to operate for production lines or packaging lines at the grade 2 level.

PN590

THE COMMISSIONER: Right. And that's saying to me that it's not so much a question of unfairness but the - you're saying to me it's - the high jump is inappropriately high.

PN591

MS ANANTH: Correct, Commissioner.

PN592

THE COMMISSIONER: All right.

PN593

MS ANANTH: It would be uncommon and, Commissioner, I think also critically, it is a massive break from historical practice and what happens currently as well.

PN594

THE COMMISSIONER: All right. Thank you.

PN595

MS ANANTH: Well, Commissioner, maybe just turning to the definitions of A, B and C skills, Mr Henry has provided evidence that the total number of C skills have gone up compared to historical levels. Commissioner, I think an important point here is that this could be an incidence of greater capital and investment in the facility, more machines being commissioned in the factory.

PN596

The question here is not whether or not there are more C skills available now compared to previously but it is the case that the number of C skills that are allocated to a machine, particularly complex integrated packing lines have been reduced from two C skills to one C skill. That is the issue in play today in this dispute. Commissioner, I'd like to refer you to page 105 of the hearing book which contains Mr Vengopala's current assessment sheets.

PN597

As you can see, Commissioner, he was assessed on the cartoner of the sachet line on 17 June 2012. He's not assessed on the sachet filler until 25 August 2012. This suggests that you don't acquire both of those skills simultaneously. They are, in effect, different complex machines that just so happen to be connected by a conveyor belt that for ease - and that, Commissioner, is a basis on which two C skills were previously awarded to a complex machine like the packing lines and yet, the respondent has provided no evidence in support of its position that the overall C skill allocation should be reduced to one C skill.

PN598

What the company's proposing is a wholesale reduction in C skill valuation across the factory and that is unfair, Commissioner, especially because there's no sound justification provided in support of why that should happen. If anything, Commissioner, and I've made this point earlier, that actually both the parties are not that far apart on where an employee who's learned multiple lines in the same machine would end up in terms of skill value allocation.

PN599

Where we defer is that we say that the historical practice of allocating two C skills for setting up of a packing line - the complex line at the packing line should be maintained whereas, what the employer's saying is that, 'No, we're going to only provide one C skill allocation to a complex packing line but will allocate additional B skills for different lines of the exact same machine,' and there's been a lot of discussion, Commissioner, about whether what the Unions proposed is a hybrid model or not.

PN600

And, Commissioner, I just want to clarify again that we're not proposing a hybrid model. We've been very clear about this in our submissions, what we're seeking is a machine based model that allocates skill values based purely on the complexity of a machine and the skill - the complexity of the skill performed on that machine and under our proposal an employee would not get additional skills simply because they're operating different lines of the same machine.

PN601

To use Mr Henry's analogy of a car licence which may or may not be advised because I don't have an affinity for cars, to allocate a B skill value for an employee who is rostered on additional lines of the exact same machine, would be like allocating a value to an employee simply because they're driving a red car or a blue car as opposed to a white car of the machine.

PN602

And Commissioner, we say that this will cause unfairness, the very same unfairness that we're hoping to address through this - through our proposal because what could happen is that similar to the blocker skills, the employer might decide that they don't have a business need to have an employee be rostered across all four lines of the same machine.

PN603

So in effect, you would have a situation where one employee who's allocated only one C skill because they've only been assigned - only been assessed on one line of a machine, such an employee would get one C skill and then you could have another employee where the employer decided - that needs to be rostered across all four lines of the same machine, such an employee would get an additional three B skills.

PN604

So the second employee who, purely because they've had the opportunity to be rostered across four lines of the same machine would get two C skills whereas the first employee would only get one C skill despite having the exact same skillset. To allocate skills on this basis would be contrary to a skills based model.

PN605

What the company's proposing is, in effect, a task based or a job based model that undermines appearance and rationality of a skills based pay structure to employees to the extent that they have the same skillset who should be allocated the exact same skill value.

PN606

Commissioner, turning now to the obsolete skills, quite simply the Union's proposal is that an employee should be allocated 12 months - or should have 12 months from the date on which the company decides to decommission a line to be reassessed on a new skill to replace that skill, and, Commissioner, we say that our proposal should be preferred to that of the respondent because quite clearly the limiting factor as to whether or not an employee can replace an obsolete skill is whether indeed the employer offers them the opportunity to be assessed on another line or another machine.

PN607

As Mr Henry himself accepted in his evidence, access to training is always subject to business needs and production needs, so where you have an employee who was previously assessed on a line which is now become - now been decommissioned and that employee's running another line which is of critical importance to the business, that employee may never get an opportunity to replace their obsolete skills within the 12‑month period being proposed by the employer because the employer requires that employee to keep running the line that they're running.

PN608

In fact, that is the experience of Mr Vengopala on nightshift and he's attested to this in his witness statement. He spent several years, as he's attested, since he's been provided an opportunity to replace the skills that were made obsolete in 2019. He's yet to be assessed on a new machine to replace those skills.

PN609

So, Commissioner, given that the employer holds all the cards here, so to speak, and when they elect to offer an employee the opportunity to be reassessed on a new skill to replace a skill that's been made obsolete, the fair thing to do here would be to start the clock from the date on which retraining opportunities and reassessment opportunities are actually offered to an employee.

PN610

This is especially the case because the respondent has submitted that the basis on which they will allocate opportunities for retraining would be by prioritising employees at the higher levels with the largest skill gaps.

PN611

This is despite the fact that, Commissioner, an employee at the grade 4 level has nowhere to progress up to so the opportunity cost of that employee not being given an opportunity to reskill and be reassessed on a new line would be much lower than for an employee at the grade 2 level would be massively disadvantaged in terms of it being able to progress up through the classification structure if they were not to get an opportunity to replace their skills within those 12 months.

PN612

So, Commissioner, we submit again that the fair thing - the fair solution to this would be for the 12‑month period to operate from the date on which an opportunity for reassessment is actually provided by the employer. Commissioner, that concludes my submissions.

PN613

THE COMMISSIONER: You referred to Mr Vengopala and his obsolete skill, does his evidence address the question of when retraining was offered to him?

PN614

MS ANANTH: Yes, Commissioner. This is on paragraph 64 and 65 of his statement which is on page 104 where he says that two of his obsolete skills relate to a line that was decommissioned in late 2019 and he is yet to receive an opportunity to replace them.

PN615

THE COMMISSIONER: All right. Thank you. I notice in Mr Henry's statement at - let me just find it, paragraph 177, there's a reference to an exhibit MH8 which then appears at 191 of the hearing book and this is the Dandenong production grading skills list 2022 and Mr Henry says about that that it's the proposed skills list. Now, irrespective of what the outcome in the substantial proceedings might be, you both seem agreed that the whole classification structure surrounds aggregation of A skills, B skills, C skills.

PN616

Now, the question I'm getting to is whether or not there's first of all agreement - well, I should back up on that. The question I'm getting to is whether your evidence has addressed the question of MH8 and then secondly, whether there's any agreement about what it contains and then thirdly, whether there's any agreement between the parties as to how that list is reviewed.

PN617

MS ANANTH: Commissioner, there is no agreement between the parties about what the new skills list should look like. I think that would depend on the Commission's determination as to how skills should be classified and what the basis of progression would be. I think more so how skills should be classified than about the requirements to progression, however, we have exchanged, Commissioner ‑ ‑ ‑

PN618

THE COMMISSIONER: Sorry, what does that mean, that it should be determined after these proceedings?

PN619

MS ANANTH: That's right, Commissioner. It would be a matter of implementing the decision of the Commission in this matter.

PN620

THE COMMISSIONER: And then I'll have another dispute.

PN621

MS ANANTH: No, I think to the extent, Commissioner, that the definitions of the skills are pretty clear, I think the matter of classifying individual skills in that list in accordance with those definitions should be relatively easy and not subject to dispute, I would say.

PN622

THE COMMISSIONER: If I were to determine the dispute in whatever way I choose on the evidence and in the course of that I accept that it's based on skills list version 8 and that that is fixed, maybe that's the wrong word, would that be a mistake on my part?

PN623

MS ANANTH: Sorry, Commissioner, if you could just repeat that question again.

PN624

THE COMMISSIONER: Well, I either go left or right or straight ahead in terms of the substantive matter before me which is the classification structure. You'll find out in a month or so but in the course of that if I say this is based absolutely on MH8, would that be an error?

PN625

MS ANANTH: Yes, it would, Commissioner, because MH8 does not accord with our skills definition being proposed by the Union.

PN626

THE COMMISSIONER: How do I know that?

PN627

MS ANANTH: Well, Commissioner, for one, it retains the issue that we see as being quite central to the dispute about ‑ ‑ ‑

PN628

THE COMMISSIONER: Can I pause you there? Neither one of you have presented evidence as to how this is framed. Now, that in itself might be an error on my part if I adopt it but you haven't brought evidence forward about how MH8 relates to your version of how skills are acquired. Would that be right?

PN629

MS ANANTH: I think it is - that is correct in the sense that MH8 doesn't reflect our preferred skills definitions (indistinct).

PN630

THE COMMISSIONER: And (indistinct) is not necessarily about having a preferred option, is it? You're here in arbitration, a definition - one of you is not getting your preferred outcome. At least one of you.

PN631

MS ANANTH: That's - but I guess the point I'm making is that if MH8 were to be accepted by yourself in this matter it would mean that you'd have to accept the respondent's preferred skills definitions because the skills list would not look like this if the Commission were to adopt the Union's preferred skills definitions.

PN632

THE COMMISSIONER: There's been no evidence drawn out on that subject in either direction.

PN633

MS ANANTH: Commissioner, I believe we have supplied a skills list that reflects our preferred definitions which should be - which should have been provided as an attachment to our submissions, just bear with me, Commissioner. Otherwise, Commissioner, such a skills list has definitely been provided to the respondent over the course of conciliations and if it would be of assistance to the Commission, it would - we wouldn't require more than close of business today to prepare such a skills list.

PN634

THE COMMISSIONER: But you say that there's already a skills list in your material, is there?

PN635

MS ANANTH: It should be. There should be, Commissioner.

PN636

THE COMMISSIONER: All right. Well, can we come back to that when it comes to the reply?

PN637

MS ANANTH: Yes. Yes.

PN638

THE COMMISSIONER: All right. And look, I'm loathe to give either party an opportunity to provide any more material but that doesn't mean I'm unpersuadable. All right. And look, where I wish to go is to provide absolute certainty. I don't wish to half‑determine this dispute and then find that there's residual disputes that then have to be dealt with by myself or others.

PN639

Now, that might be an uncomfortable position, anyone who wishes to rush forward and say, 'Well, look, we'd prefer to conciliate instead,' well, now is your chance. Anyway, so do you wish to say anything more, Ms Ananth?

PN640

MS ANANTH: Not at this stage, Commissioner. I'd like to reserve my right to reply, however.

PN641

THE COMMISSIONER: All right. Of course. Of course.

PN642

All right. Ms Dolan?

PN643

MS DOLAN: Thank you, Commissioner. Before I head off into our submissions, I'd ask that our submissions that start at page 122 of the hearing book and our orders at page 192 be marked as exhibits.

PN644

THE COMMISSIONER: Of course. The respondent's outline of submissions will be marked as exhibit R2.

EXHIBIT #R2 RESPONDENT'S OUTLINE OF SUBMISSIONS

PN645

THE COMMISSIONER: And the respondent's draft order will be marked as exhibit R3.

EXHIBIT #R3 RESPONDENT'S DRAFT ORDER

PN646

MS DOLAN: Thank you. In direct response to the conversation that just occurred between yourself and Ms Ananth in relation to the filing of more material, we would strongly oppose that. We're happy to reply to the anonymous proposal that you sent through. But this dispute has gone on for a significant period of time and the failure by the union to propose a skills list is a failure of it to provide evidence.

PN647

Our draft orders which refer to MH8, reflect our classification structure that would, if implemented as a whole, create absolute certainty in the business and enable us to go forward with the classification structure that works, and people being able to progress fairly and equitably. Thank you.

PN648

THE COMMISSIONER: That's all very well but I didn't put this proposition to Ms Ananth because of the way she replied. But it's one certainly I have to put to you, which is that's all very well, your client might not like that because that list would then be a fixed list and you haven't drawn evidence about how that list gets compiled or changed.

PN649

MS DOLAN: Commissioner, we have done that. It's a company controlled document set out in Mr Soueid's affidavit, his witness statement.

PN650

THE COMMISSIONER: All right, can you take me to the paragraph, please?

PN651

MS DOLAN: Yes, just bear with me. I have marked it up. Just bear with me, Commissioner. I'll just do a word search, that'll be quicker.

PN652

THE COMMISSIONER: Thank you. Paragraph 36.

PN653

MS DOLAN: Yes. Paragraph 35 and 36 of Mr Henry's statement, and I'll take you to the page, page 149 - okay, so that is referring to how the skills list was created and how it is updated, and we've made submissions to say that the skills list needs to remain outside of the agreement because the skills that are on that list relate directly to the equipment that is commissioned, indeed commissioned to the factory, and that could be related to, you know, upgrades of technology or different products no longer being required to be made so that the equipment is taken out. So, we would need to ensure, and that's in our submissions and in our draft orders, that the skills list isn't a term of the agreement because it needs to reflect those exigencies.

PN654

It is a quality control document and is subject to the employee consultant committee meetings.

PN655

THE COMMISSIONER: What's a quality control document?

PN656

MS DOLAN: So it is contained in the company's document control system and it's something that - - -

PN657

THE COMMISSIONER: Yes, and? I mean, what does that mean? Every document ultimately is in a company's document system.

PN658

MS DOLAN: I think - - -

PN659

THE COMMISSIONER: I doubt anyone has ever said to me that their documents are to quality controlled.

PN660

MS DOLAN: To ensure that people know exactly where it is and it's not changed arbitrarily and people can rely on the document, as at the current version.

PN661

THE COMMISSIONER: And the point you just made is the point I wanted to get to, which is it's not changed arbitrarily.

PN662

MS DOLAN: It's not.

PN663

THE COMMISSIONER: Yes, and that's the - well, the union accuses you of that. We're in the submissions so you deal with that subject.

PN664

MS DOLAN: Commissioner, if I could take you to paragraph 135 please, and I'll just get you the page number. Page 167. There's a lot of information and evidence that Mr Henry has put on about how the skills list is dealt with. So that's at paragraph - - -

PN665

THE COMMISSIONER: Page 167, is it?

PN666

MS DOLAN: Yes, page 167. There is a heading in the middle of the page called, 'Skills list.'

PN667

THE COMMISSIONER: All right.

PN668

MS DOLAN: And that hasn't been contested by the applicant, that evidence.

PN669

THE COMMISSIONER: Just bear with me a moment, please. It's my turn for a word search. Just one moment. Thank you for drawing my attention to that part of Mr Henry's witness statement. I understand what he has to say there. Is there an acceptance on the part of Aspen Pharma that consultation about the document, the skills list document, would in the event of the dispute, be subject to a dispute resolution term?

PN670

MS DOLAN: Commissioner, it would in certain circumstances if a change to the skills list was like substantiating a major change that triggered the consultation obligations, and an example of that might be the obsolescence of major machinery. We're very cognisant of that and that our managerial property is curtailed by those obligations in the agreement.

PN671

THE COMMISSIONER: You may care to get some instructions on that point. I'm concerned in terms of my thinking and determination of this dispute that it might get to a circumstance that changes to the skills list then disputed may not be capable of being agitated through the dispute resolution procedure. Ultimately that's a matter for the company to put its position to the Commission but I'm cautioning the company that may not assist its case.

PN672

MS DOLAN: Thank you, Commissioner. Would you mind if we went on mute for a moment and I'll just talk to my instructor.

PN673

THE COMMISSIONER: Maybe if we come back to that after - if you put all of your submissions.

PN674

MS DOLAN: Yes.

PN675

THE COMMISSIONER: No, I think it's probably more appropriate if you do it now.

PN676

MS DOLAN: Thank you.

PN677

THE COMMISSIONER: The concern I've got is, I'm going to determine this dispute. I don't wish to leave it in the circumstance where the dispute has recourse of

PN678

sub-disputes which go on for some time. I take what Ms Ananth has to say, and I'll hear what she has to say at the end but I'm very concerned that we'll get to a circumstance in which one or both of you will look at the Commission's decision and then go, well, we don't like that aspect of it, and you cherry-pick. That, I don't think would be healthy for anyone and if that were to be a possibility I think I would have to say to the parties that they would be better off bargaining for a new agreement.

PN679

MS DOLAN: Thank you, Commissioner. If we could take a moment I'll get some instructions.

PN680

THE COMMISSIONER: All right. It's presently about 10 past 11.00 and so if we resume at about 11.20.

PN681

MS DOLAN: Thank you.

PN682

THE COMMISSIONER: All right, thank you.

SHORT ADJOURNMENT [11.03 AM]

RESUMED [11.15 AM]

PN683

THE COMMISSIONER: Thank you, parties. How did you go, Ms Dolan?

PN684

MS DOLAN: Thank you, Commissioner. We appreciate that break so that I could seek instructions. I'd like to take you if possible to page 195 of the hearing book, which includes paragraph 5 of our draft orders, and I take you there because that illustrates how the skills list works in the respondent's business and how stability and certainty is created with the supporting documents. So, as set out there, and this is also included in Mr Henry's witness statement, this is the shortest summary of it.

PN685

Employees will progress through the classification structure with the reference to the skills list, the competency checklist document and an assessment tool. Our position unfortunately is that we can't have the skills list at the term of the agreement because it does need to remain fluid. It does need to change regarding market trends and the decommissioning or the commissioning of technology.

PN686

But what we say is that the skills definitions that we have proposed are substantial and they link to that skills list, and we would submit that they create stability and they're likely to reduce the likelihood of a dispute arising. We propose that the skills definitions be included in the agreement for certainty. We commit that of course if there's a major change we would be subject to consultation obligations.

PN687

So, for example, if new equipment is brought in and machines are exchanged on a like for like basis, there would be no change to the skills list. That would not be a major change. But should a piece of equipment be decommissioned and skills become obsolete that would trigger our consultation obligations. We also commit to not downgrading the existing C skills. What is in that skills list in MH8 today goes forward. So, if it's a C skill from today it will be C skill tomorrow. But we cannot commit to having the skills list as a term of the agreement because we won't be able to change it as needs arise. I understand - - -

PN688

THE COMMISSIONER: Back to the question I asked you, how to you answer that?

PN689

MS DOLAN: That the other provisions of the agreement that I have talked you through which includes the - - -

PN690

THE COMMISSIONER: Yes, you're avoiding the subject, Ms Dolan. How do you answer the question? The question was quite a succinct one, which was whether or not your client undertakes that a dispute arising out of the ECC in respect of the classification and competencies - sorry, not classification, the skills list, is a dispute for the purposes of the agreement?

PN691

MS DOLAN: Only if it triggers consultation obligations of a major change, that is the answer to that.

PN692

THE COMMISSIONER: So the answer is no?

PN693

MS DOLAN: Correct.

PN694

THE COMMISSIONER: Right, okay. Let's proceed.

PN695

MS DOLAN: Thank you. Commissioner, I would also like to note that despite having the opportunity in the directions to reply to our evidence, the applicant didn't take that up. So, as I've already take you to page 167, Mr Henry's evidence about the skills list was put and it wasn't replied to. Thank you.

PN696

THE COMMISSIONER: What - - -

PN697

MS DOLAN: We have provided very substantive submissions in this matter and I don't propose to labour over the points that we've already made. What we want to do here is rectify the inherent unfairness in the classification structure and I refer you to pages 150 to 152 of the hearing book, which are paragraphs 45 to 54 of Mr Henry's witness statement. So that's pages 150 to 152, paragraphs 45 to 54.

PN698

We want to make skill acquisition fair for employees in each grade. This means a rebalancing of the current back-ended loading burden on employees in grades 3 and grade 4. The applicant said this is unfair and there should be no changes to acquisition requirements in grades 1, 2 and 2 plus. We wish to remove the unfairness in skilled acquisition not being commensurate with pay increases. It is not unjust or unreasonable and our proposed resolution to the dispute is not unjust or unreasonable.

PN699

Our proposal further bolsters the objects in the agreement set out in clause 2.1 and neither of the applicant's witnesses disputed that these clauses had work to do. The operation of the current classification structure is essential to ensuring the objectives in clause 2.1 of the agreement are met, and I wish to briefly reiterate some of the points that made your decision of [2021]FWC4231 to TWU v Aspen Pharma, but I won't go into too much detail. Undoubtedly you are aware of what you said in your own decision.

PN700

We submit that you can't impose the outcome sought by the applicant on us. With regards to paragraph 54 of your decision we are now at the stage of this dispute where the Commission needs to tread with care as noted in the XPT case. The subject matter for the dispute is not provided for in the terms of the agreement apart from the reference to attempting to reach agreement under the dispute settlement clause.

PN701

A short extract from that XPT case is:

PN702

The proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all of the facts and not to interfere with the right of an employer to manage its own business unless it is seeking from the employees something which is unjust or unreasonable.

PN703

We ask that you take a cautious approach when making the determination to settle this dispute, and any settlement of the dispute must not amount to a substantial disappearance of the autonomy of us, the respondent, to efficiently conduct our business. Our witnesses - - -

PN704

THE COMMISSIONER: But the submissions are not so much that I can't do it, rather that I must not do it because it infringes those boundaries?

PN705

MS DOLAN: Correct. Thank you, Commissioner.

PN706

THE COMMISSIONER: All right, thank you.

PN707

MS DOLAN: Our written submissions detail the relevant authorities with respect to this long established position, and as you've made us very comfortable we're very certain that you are cognisant of it, thank you.

PN708

We have indicated to the Commission in Mr Henry's statement and in our written submissions that we are well aware of our limits on the managerial prerogative. The terms of the agreement itself temper our prerogative, for example, clause 5.7.2, and related to this is the evidence provided by Mr Vengopala during examination that he didn't lose a grade on two of his C skills (indistinct) historically obsoleted. We also refer to obligations arising which we've just discussed, under clause 3.3 regarding consultation about major change, and that's referenced in paragraph 71 of your decision. As we have already explained, an example of major change would be the obsoleting of a machine and the obsoleting of skills.

PN709

With reference to paragraph 59 of your decision the applicant's claims go beyond the commitments made in the agreement and we say they infringe on our capacity to arrange and manage our business. We are well aware of the scope of the commitment in clause 5.7.1 to endeavour to negotiate in the classification structure and our endeavours have proved somewhat fruitless, and this is where we're adding arbitration. We propose a resolution to the dispute, which is the ability for us to recommence using the current classification structure and we have set out the nature of our proposal in the witness statement of Mr Henry, our (indistinct) site manager.

PN710

With reference to paragraph 50 of your decision the operation of the current classification structure would be a departure from customer (indistinct) but it is not a wholesale departure as it retains the WorkSafe space model, and the essence of the changes in relation to the way the skills are required. The essence of the effect of the change is to remedy the current unfairness in the non linear classification structure and this is what justifies the needs of a change. I refer here to page 157 of the hearing book, which is paragraph 92 of Mr Henry's statement.

PN711

Mr Henry has provided very detailed and compelling evidence about how unfair the non linear structure is to the employees and the respondent. The applicant has attempted to establish that the current classification structure is unfair but it hasn't provided any compelling evidence of this. We say it hasn't met the test referred to above, that the Commission can't step into the realm of managerial prerogative unless what we are seeking is unjust or unfair. Employees at grade 1, grade 2 and grade 2 plus will be required to obtain more C skills than current. However the requirement to obtain 12 C skills or their equivalent has not changed and this is seen in the evidence of Mr Henry, and as per Mr Vengopala's current (indistinct) during his cross-examination despite him disagreeing with clear evidence that there were 12 C skills which has always been a key feature of the classification structure.

PN712

In terms of fairness, employees at grade 3 will only need to obtain two C skills. So, previously they had to obtain four. But there is no change to grade 3 plus, apart from removing the blockers, and grade 4 employees will also only need to gain two C skills, not four. This encourages multi skilling which Mr Vengopala said was good for the business during cross-examination. There will be no change to the rates of pay for each classification and no employees will be disadvantaged by having their pay or classification reduced. Importantly, and we've already hit on this, we propose to include classification criteria and other material as set out in Mr Henry's statement to ensure employees can easily navigate through the structure and this satisfies those concerns you identified at paragraphs 64 and 656 of the decision about navigation to the sector.

PN713

The current classification structure ensures that the various provisions of clause 2.1 of the agreement have a role to play. As set out in Mr Henry's statement at paragraph 107 on page 159 of the book, these objectives include the need to ensure the respondent remains internationally competitive and can provide secure employment and worthwhile careers for employees. The objectives also include that labour practices align with the future needs of the enterprise and this directly relates to the replacement of obsolete skills.

PN714

Another objective is to support multi skilling to create a flexible work environment. The success of these objectives which have not been objected to by Mr Vengopala or Mr Soueid directly relate to the issues in dispute. The respondent needs to be able to recommence the operation of the current classification structure to remain competitive and to provide meaningful jobs. It needs to keep up with market changes and changes to technology. As noted the applicant didn't take the opportunity to respond to our proposal as per your direction. It failed to establish that the current classification structure is unfair yet proposed that they give it an appropriate structure of its own. An examples of this is the applicant's failure to provide its skills list which is an essential element to navigating through the classification structure, whatever the form. We have provided you with what we can in relation to that skills list, noting that it is essential that it does not become a fixed term of the agreement. But we have also noted that we are well aware of our (indistinct) of our managerial prerogative.

PN715

The applicant's argument about fairness with reference to the conscious decision must be seen in the context of that decision. That referred to the long established principle that the Commission will not interfere in the managerial prerogative even in the context of the part of the Fair Work Act where the Commission is entitled to make a settlement of the dispute, and I refer to paragraphs 36 and 82 of the conscious decision.

PN716

I am almost at the conclusion of my submissions, Commissioner, but I would like to take you to - I think this will be of assistance - if I can take you to our submissions, and if I could take you to page 139 of the hearing book where we have included a table of where the parties are at.

PN717

THE COMMISSIONER: To which page?

PN718

MS DOLAN: Page 139.

PN719

THE COMMISSIONER: Thank you.

PN720

MS DOLAN: I'm not going to respond to every single part of that table. I'm only going to respond to parts where the evidence has created the need for an update. So, if I could take you to row A, which is, 'any new classification structure should align with the correct pay structure.' So, we said that this is a wage claim disguised as a classification structure, and the inclusion of that wage table in Mr Soueid's affidavit indicates this, and despite this he admitted in cross-examination that enterprise agreements are negotiated at an enterprise level to reflect the nuances of the enterprise.

PN721

If I could take you now to line C, which is about the skills value. The applicant has unsuccessfully attempted to establish that our definitions are too vague during the cross-examination of Mr Henry and this didn't get anywhere. The lack of success on the applicant's part relates to its confusion around, or lack of understanding of the importance of having either a work centre or machine based model. The confusion that appeared to arise in the cross-examination of Mr Henry demonstrates what would happen if the applicant's hybrid model was to upgrade, and I know the applicant said that he's not seeking a hybrid model but in reality that is what it is seeking. A work centre model is the fairest and most consistent way to assess and allocate skills. A hybrid model is riddled with inconsistency, creates some confusion and this has clearly been demonstrated during the cross-examination of Mr Henry.

PN722

THE COMMISSIONER: What do you say about the proposition that was being put by the applicant to the effect that you've reduced the number of C skills, and maybe it wasn't put in that way but certainly what I understood her to be saying was that the numbers reduced and thereby the opportunity is reduced - - -

PN723

MS DOLAN: Essentially - - -

PN724

THE COMMISSIONER: Isn't there some possibility that that's actually the case, by defining things by the work centre area?

PN725

MS DOLAN: What we've done though is we've increased the number of skills available across the business by moving to this work centre model, and we've allowed employees to equivalate three B skills to one C skill, so the opportunities are actually greater for employees. It is not fixed as it was. In terms of the requirement to gather into your bag, one C skill, two C skills, three C skills, as you went through the grades, now you can use different C skill equivalencies and there are more opportunities in the structure to get the both set skills.

PN726

THE COMMISSIONER: So, if I understand the essence of the argument and to keep mixing my metaphors, if I understand it correctly, by defining several lines as the one work area, you then have a circumstance in which the person moves from one model of Hyundai, to another model of Hyundai, to another model of Hyundai, then to a Kia. In the meantime, they don't - they're doing different work but they're not actually getting any more listed skills, as a result, whereas at the moment they might.

PN727

MS DOLAN: What they get is a C skill for the first, or for the most complex one in the work sector.

PN728

THE COMMISSIONER: Right.

PN729

MS DOLAN: Then they would gather B skills, and those B skills that they gather up can equivalate to C skills.

PN730

THE COMMISSIONER: And you say that overcomes the unfairness that Ms Ananth points to?

PN731

MS DOLAN: Yes. Plus the opportunity that there are more C skills and C skill equivalents available to employees to gather up across the entire structure.

PN732

THE COMMISSIONER: All right.

PN733

MS DOLAN: If I can take you to line D, originally it appeared that the parties were in agreement on this dispute. The applicant appeared to propose 11 C skills while also proposing no change from 10 to 12 C skills and failing to see that there's already been 12 C skills in the structure.

PN734

We say this is evidence that the applicant doesn't know what's going to satisfy it when it calls for no increase from 10 to 12, yet as I said, it's asking for 11, essentially. And Mr Vengopala counted these 12 C skills for it and then denied that there were always 12

PN735

C skills always been required. Our position is there's no change to historical practice in relation to how many C skills are required in the classification structure. The only change is where they are obtained and when they are obtained.

PN736

Moving on to (e), which is the blocker skills, again on the papers it appears that we were in agreement on this. However, when Mr Vengopala was asked in cross-examination whether the union members would welcome the removal of those blocker skills despite them having been a major issue, he said he didn't think that they would welcome that. This is further evidence that the applicant potentially doesn't understand its own claim, or that its claim hasn't been endorsed by members and this is very concerning.

PN737

Alternatively it demonstrates that whatever the outcome, the applicant is not going to be satisfied and imagine this might be part of the questions that you ask us in relation to the skills list in order to potentially determine this dispute, once and for all. Just to reiterate our position, the blockers have not been replaced by an unspecified number of C skill but there are now no longer mandatory all blocker C skills in our proposal, and we consider that this is something that was a major obstacle to the employees and we thought that this was something that would please them.

PN738

We continue to consider that this would be welcomed by employees despite what Mr Vengopala said in cross-examination.

PN739

Moving on to (f), the replacement of the blocker skills with C skills and the requirement that they be on a like for like basis, Mr Vengopala didn't concede this point but he also didn't say that he lodged a dispute about it when it occurred in 2019. Our position is that the blocker skills have been replaced with like for like and the applicant has failed to make out any case as to why reconciliation should be downgraded from a C skill to a B skill.

PN740

Point (g), the applicant has made no claim, and this is something that we are saying is very beneficial for employees but doesn't form part of the applicant's claim. Mr Henry's evidence is that early on in the grade employees can gain four A skills at grade 1, and throughout the structure, three B skills can equal one C skill. Mr Vengopala welcomed this during cross-examination and this means that employees at the start of their career at Aspen don't have to launch into collecting C skills during their (indistinct) in Perth.

PN741

At grade 2 they could collect six B skills to progress, and the terror of having to collect the C skills that has been articulated by the applicant is not fair in the current classification structure. As employees get more advanced they can collect more C skills. This is the example of the fairness and reasonable approach taken by us. And Mr Vengopala welcomed that. I reiterate that.

PN742

Point (h), we've said that employees will not lose a pay grade or their grade if the classification structure can recommence, and despite this being a term of the agreement it's still a demonstration of the reasons when I said this is an issue and it demonstrates our cognisance of the restraints on our managerial prerogative. Point (i), the applicant did not propose a skills list despite having the opportunity to respond to our evidence in (h)8.

PN743

So, I've moved through that table. We can move through a number of pages. If we could move to row N, and I'll take you to the page of the court book. That is on page 152. The applicant's claim about a C skill for each blister line, this is not agreed. Mr Henry in re-examination noted that the list referred to in paragraph 116 of his witness statement on page 162 of the hearing book, for this date of 1999 and an update from 2005. We say that the applicant is harking back to a distant past and labouring over something that is so distant that it's only adding confusion in arbitration and angst among the members. It has never been our position that each blister line was allocated a separate C skill.

PN744

Then if I could move to line (p), and this is in relation to obsolete skills. The applicant has failed to establish our position on this to be unfair. The 12 month period is agreed but not from when it commences, and Mr Vengopala did not provide any compelling evidence of the respondent withholding training opportunities to him. In fact at paragraph 66 of his statement which is at page 104 of the book, he says he has had some training despite being on nightshift where limited training for opportunities are available for purely operational reasons.

PN745

Then finally at point (q), the applicant disputes that highly skilled employees are being selected for training first which his - the applicant disputes that highly trained employees should be selected for training first. We also note that employees that are close to grading up would be selected for training based on managerial prerogative. We need to ensure that fully multiskilled employees remain so, so they can keep production up to ensure the business can keep producing products and keep employees in jobs.

PN746

Finally in conclusion, we say that our evidence demonstrates that our proposed resolution of the dispute is not unjust or unreasonable. We have Mr Henry, the site manager with some 32 years of relevant experience, providing evidence of what will work for the respondent. He has stated that he wants to make change to remedy established unfairness and he has included provisions that go well beyond what the applicant seeks regarding fairness and, you know, for example, three B skills can equivalate to a C skill.

PN747

For the applicant we have Mr Vengopala who has demonstrated he hasn't clearly understood how the business works. For example, the business doesn't operate 24/7. He also fails to understand what will resolve the dispute for his members. I'll reiterate that he says that the members aren't likely to welcome the removal of what he said was a key issue which is the blocker skills. And for the applicant we have Mr Soueid who has limited experience dealing with the pharmaceutical industry yet makes comments about industry standards and asserts that they should apply to the respondent.

PN748

Despite Mr Soueid's self confessed knowledge of the industry he has asserted something that is just not going to happen, which is that the respondent will be making the Ventolin nebules. He also failed to set out that a major pharmaceutical player is closing, which means job losses despite including that company in his industry comparisons. We also have grave concerns that his comments about pharmaceutical industry job losses is evidence that he doesn't see the relevance of further job losses in the industries in relation to fairness of employees is concerned. He said that if one place closes, 'hopefully we'll be able to move employees to similar work.'

PN749

We consider that this demonstrates that he doesn't appreciate the importance of ensuring that the respondent remains productive and viable into the future. He either doesn't understand the industry or isn't concerned about the accuracy of the evidence he provides. Despite Mr Soueid asserting that there are industry standards that we need to meet, in cross-examination he admitted that agreements reflect enterprise level needs, and he said that there's standard things across sites, like sterile environments yet accepted that Aspen isn't in this class.

PN750

In conclusion a reasonable person in the position of the respondent could have made the proposal that the respondent would like to see, which is the recommencement of the current classification structure in order to resolve this dispute. That you, Commissioner. That concludes our submissions.

PN751

THE COMMISSIONER: Thank you, Mr Dolan. Just returning to the matter of the obsolete skills, you referred to Mr Vengopala's evidence, and paragraph 65 of his statement which is at page one hundred and - - -

PN752

MS DOLAN: Sixty-six.

PN753

THE COMMISSIONER: Sixty-five at page 104, he says he has not yet been provided with an opportunity to replace the obsolete skills. The question I've got is whether or not that subject is dealt with in Mr Henry's evidence, at all.

PN754

MS DOLAN: No, Commissioner. We consider it doesn't need to be. Mr Henry does address that but Mr Vengopala addresses that, himself at paragraph 66. He has had some limited opportunity to learn that line which indicates that he has something - - -

PN755

THE COMMISSIONER: Yes, I'm building to a question, all right? I'm not after more submissions. You can make them when I ask the question. So, my question is about paragraph 65. It's not about paragraph 66, okay? Do you have paragraph 65 in front of you?

PN756

MS DOLAN: I do, Commissioner.

PN757

THE COMMISSIONER: Is that subject dealt with in Mr Henry's evidence?

PN758

MS DOLAN: I shall find that for you, Commissioner.

PN759

THE COMMISSIONER: All right, thank you.

PN760

MS DOLAN: I refer to paragraph 172 of Mr Henry's witness statement. I'll just find - - -

PN761

THE COMMISSIONER: Just one moment. It's page 173. So, is the contention about Mr Vengopala essentially that he - well, do I draw from what Mr Henry has to say at 172 that Mr Vengopala could have moved shifts and thereby be trained?

PN762

MS DOLAN: No, what we're saying is that nightshift, as Mr Henry has put on as evidence, only about 50 per cent of the lines run, so there are limited training opportunities available on nightshift. We're not saying that there's an obligation on Mr Vengopala to change shifts to receive training.

PN763

THE COMMISSIONER: All right.

PN764

MS DOLAN: We are saying that some of this inconvenience is compensated by receiving the loading, and the reason that is - - -

PN765

THE COMMISSIONER: Good luck with that submission. I'm not quite sure that follows. The last time I looked at the reasoning for shift penalty rates I'm not quite sure that leapt out at me, but anyway, that's a subject for another day. The question I want to get to is ultimately about the comparison between the draft orders that you've both provided on obsolete skills. The union puts forward that the obsolete skills should need to be recognised for a period of 12 months from the day on which a retraining opportunity is provided. You resist that possibility. You constructed instead as 12 months from the date of decommissioning while training to get a new skill is undertaken.

PN766

The question I wanted to get to is the second part of the union's proposal. It's not on all fours with yours but it may be on two fours. The employee should not act unreasonably in delaying assessment beyond the 12 month training period. The question to you is whether there's a possibility of adopting that formulation but within the context of 12 months from the date of decommissioning, and an undertaking to the effect that you would not delay retraining or assessment.

PN767

MS DOLAN: Commissioner, could I put myself on mute for two seconds to take instructions? I'll be about a minute.

PN768

THE COMMISSIONER: Of course.

PN769

MS DOLAN: Thank you. Thank you, Commissioner. That would be acceptable to us, what you've just put to us, thank you.

PN770

THE COMMISSIONER: All right, thank you. Just let me double check if there are any other questions I have. No, look, I don't have any other questions. So, Ms Ananth, is there any reply on behalf of the union?

PN771

MS ANANTH: Yes, thank you, Commissioner, just a couple of things. Just firstly on the matter of jurisdiction, particularly with reference to the XPT case, Commissioner, what I would like to say on that is that here is already a clear fetter on the employer's managerial prerogative. They are not entitled to just implement whatever classification structure that they prefer, because the agreement exclusively requires the agreement of the union before a new classification structure is implemented.

PN772

Commissioner, we say that that sufficiently warrants the Commission taking into consideration the views of the union as a representative of the employee into its decision about what the classification structure ought to look like, and Commissioner, additionally we say that we have established several points of unfairness and unreasonableness arising out of the respondent's proposed classification structure which is precisely what the union seeks to remedy in its proposal.

PN773

So for the Commission to adopt the union's proposal would be consistent with the principles expounded in the XPT case in the sense that the union's proposal largely adheres to the status quo in that that is the classification structure that was in place immediately prior to the respondent implementing its preferred version on 1 January, 2021, and to the extent that there were any changes made or any deviations from the current classification structure, it is only to remedy unfairness or unreasonableness arising out of its operation. So for the Commission to adopt the union's proposal would be entirely consistent with the principles in the XPT case, Commissioner.

PN774

I also just want to make a few comments about the work centre model being proposed by the respondent here. Again, the respondent has laboured over the fact that a work centre model is preferable to a hybrid model, without any evidence to how the union's proposal constitutes a hybrid model. There have just been vague aspersions about the union's model being open to double dipping, again, which has not been substantiated by any evidence as to how that might occur.

PN775

Commissioner, we say that the respondent's work centre based model is beset with contradictions and will lead to unfairness and unreasonableness in this application. The work centre based model is just a hasty attempt on the part of the respondent to justify the reduction in C skills that have been historically and as a matter of custom, been awarded to machines from two C skills, to one C skill.

PN776

Commissioner, Mr Henry's statement in paragraph 108 clarifies that a work centre is defined by reference to its output, and yet Mr Henry accepted in his oral evidence that that is actually the case with complex machines such as those machines in the packing line, but there are two different outputs arising out of the packing lines, one from the head of the machine and one from the partner of the machine.

PN777

So it would be perfectly consistent with the respondent's own definitions to allocate two C skills to a complex line such as the packing line, and yet the respondent resists this. That, Commissioner, I think very clearly demonstrates the difficulties with a work sensor model that seeks to describe skill value, not by reference to how complex the skill is or how complex the machine that needs to be operated or set up is, but purely by reference to whether or not the respondent believes that the output is different from the output of another machine. A machine based model is what has customarily been used on site, and a machine based model is only coherent in a rational way to allocate skill values, Commissioner and the union's proposal reflects that.

PN778

The further issue with the work centre model, as we've outlined in our submissions, Commissioner, and as I've also alluded to in my submissions in reply, is that the proposed B skill valuation of the respondent is also again inconsistent with its own proposed definitions. What the respondent is proposing to do is to reduce the overall

PN779

C skill valuation but then to allocate B skills on a rather arbitrary basis to additional lines of the exact same machine. Commissioner, the respondent has acknowledged to the extent that skills can function as blocker skills, it's because the respondent elects not to make assessment available on this skills, that is precisely what will happen under the respondent's proposal.

PN780

Because you would have a situation where there are four lines of the exact same machine that perform the exact same function, and the set up and operation of which would be the exact same, and yet the employer elects to restrict an employee's opportunity to work across all four of those lines. That employee would have fewer assessed skills to their name than another employee who is allowed to rotate through those lines. It would be manifestly unfair, Commissioner, to have two employees with the exact same underlying skillsets, to have two different skill valuations based entirely on whether the employer elects to give an employee the opportunity to rotate across those lines or not. That is another issue that goes to the unfairness and unreasonableness and the irrationality of the respondent's proposal.

PN781

Commissioner, just turning now to another point that the respondent has laboured as being evidence of, I guess, something beneficial about their proposals, which is about the three B skills equalling one C skill. Commissioner, we say that this is just the respondent responding to an issue of their own creation. Because they have devalued skills by reducing the overall C skill values allocated to them and are allocating B skill values to additional lines on the same machine.

PN782

So the total cumulative skill value proposed by the respondent is actually not higher than what's being proposed by the union, and Commissioner, we say that overall there is not the purported increase to B skill or C skill values that the respondent is suggesting there are. It's just a different way of allocating skill values that isn't coherent and will not lead to a consistent outcome amongst employees on site, which again is the very issue that has given rise to this dispute.

PN783

Commissioner, I also note that it would have been open to the respondent to put its proposal out to a vote of the employees as has been done in the past. That would have signified agreement by the employees to the respondent's proposal, and yet no such vote has been undertaken of the employees. Commissioner, I would also just like to touch on the issue of the skills list. The problem with the skills list as we see it, is not that we have issues with the actual skills on the list, but rather with the value that has been allocated to the skills on the list, and that is something that is going to remain the subject of disputation unless there is a coherent and agreed set of definitions as to what constitutes an A skill, versus a B skill, versus a C skill, and how they should be allocated.

PN784

If the Commission were to determine those principles we believe that the matter of implementation and the skills list - there would be very few disputes arising out of the skills list. The dispute that the unions have with the respondent is not that the skills have been removed in accordance with machinery that has been decommissioned, or that new skills have been added in line with new machines introduced on site, it's simply that those machines have not been valued in accordance with the correct system, or a coherent definition or in accordance with historical practice.

PN785

Commissioner, we submit that we can resolve this in one of two ways, either that the Commission could make a determination as to what the skill definition should be and the basis on which they should be valued, in which case it would be a matter of implementation for both parties to submit a skills list on the basis of the Commission's accepted definition for discussion before the Commission. We submit that that would resolve any differences between the parties or any disputes that arise between the parties as to implementation, and our draft order reflects that as our preferred approach, Commissioner.

PN786

Alternatively, should the Commissioner wish to make a determination as to what the skills list should actually entail and what should be in the skills list at the time of the determination that Commissioner, we request that we be afforded an opportunity to provide you with that skills list. To do so would not prejudice the employer in any way and like I said, we wouldn't require any longer than close of business to provide you with that skills list. Commissioner, that concludes my submissions in reply, thank you.

PN787

THE COMMISSIONER: Thank you, Ms Ananth. I think it is appropriate to give you the opportunity to provide more material. Obviously there have been directions issued which have then been complied with. You had the opportunity to provide reply material but the union didn't. The extent to which that causes a problem in resolution of the dispute before me, I'll have to sort that through. All right, is there anything further from either party?

PN788

MS DOLAN: Commissioner, when do you propose that we reply to that anonymous proposal?

PN789

THE COMMISSIONER: You have had the opportunity to reply to it, so far as I'm concerned. I'm not giving a further opportunity unless you particularly say that you require it. I'm not proposing to rely upon it, myself.

PN790

MS DOLAN: Thank you. That's acceptable to us. We appreciate that, thank you.

PN791

THE COMMISSIONER: Just to be clear, it will be part of the file but I don't propose to go to it in informing my decision. All right, thank you, very much, parties. What I will now do is to reserve my decision and say to the parties what I normally say, which is that the Commission doesn't give indications as to when the decision will be issued. Our usual practice is to make sure that 90 per cent of our decisions are determined within eight weeks of them being reserved, but beyond that I don't provide a commentary as to when it will be, largely because when I have done that in the past it has not been accurate. So, thank you for the submissions and your evidence, and your patience in the matter. The matter will now be adjourned, thank you.

ADJOURNED INDEFINITELY [11.57 AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

MARCUS HENRY, RECALLED ON FORMER AFFIRMATION..................

RE-EXAMINATION BY MS DOLAN..................................................................

THE WITNESS WITHDREW.................................................................... PN556

EXHIBIT #A4 DRAFT ORDER AT PAGE 118 OF THE HEARING BOOK............................................................................................................ PN562

EXHIBIT #R2 RESPONDENT'S OUTLINE OF SUBMISSIONS......... PN644

EXHIBIT #R3 RESPONDENT'S DRAFT ORDER................................. PN645