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Fair Work Act 2009                                                    




C2022/2666  AG2022/3077


s.739 - Application to deal with a dispute


Australian Workers' Union, The


Contract Resources Pty Ltd T/A Contract Resources


Contract Resources Pty Ltd (Lytton Refinery) Queensland Enterprise Agreement 2021


s.217 - Application to vary an agreement to remove an ambiguity or uncertainty


Application by Contract Resources Pty Ltd T/A Contract Resources


Contract Resources Pty Ltd (Lytton Refinery) Queensland Enterprise Agreement 2021


s.739 - Application to deal with a dispute


Australian Workers' Union, The


Contract Resources Pty Ltd T/A Contract Resources



s.217 - Application to vary an agreement to remove an ambiguity or uncertainty


Application by Contract Resources Pty Ltd T/A Contract Resources





10.13 AM, WEDNESDAY, 24 AUGUST 2022


Continued from 23/08/2022



THE DEPUTY PRESIDENT:  Thank you.  So, submissions, closing, and you're first, Mr Taylor, so unless there's anything else.


MR TAYLOR:  No, Commissioner.  I'm ready to go on both matters.  In respect, your Honour, apologies, I'll perhaps start by doing a summary of the respondent's submissions in reply, just addressing a couple of the issues there.


At paragraph 4 they say there's no evidence of a common understanding on the 2019 agreement.  They say Berri at point 19 prevents this and they say it's inadmissible.  We don't agree that there's no evidence of a common understanding in the 2019 agreement.  Whether our evidence is in admissible or to be given zero weight, the latter is obviously a matter of your discretion.  We say that the mischief that the CPI provisions weren't tendered or addressed in the 2019 agreement, go beyond the subjective understanding of the applicant's witnesses.


As for the claim that there's no evidentiary foundation for the assertion as to what the wider Australian public thinks about CPI, our position is that this is a notorious fact and no evidence is actually required to be given to prove it.  Notorious facts are plainly admissible in the interpretation of the enterprise agreement; Berri says as much.  The Golden Cockerel matter says as much.


At paragraph 5 of the respondent's submissions in reply, I say that the applicant's central premise is removed if they're 2019 common intentions are not in evidence.  We don't agree with that characterisation of our submissions, that the ordinary meaning of CPI is the central premise of our hallowed submissions.  There are significant other reasons why the Commission should determine the dispute in our favour, including the respondent's failure to properly explain to the negotiators, and voting employees what they now say they intended the CPI provision to mean.


At paragraph 6, the respondent says Mr Cotton explained the meaning of the phrase to negotiators and employees and refers to Mr Cotton's reply statement which says – and the respondent says the lack of demure from anyone is evidence of a common understanding.  We say that this conclusion is ill-conceived.  It proceeds on the basis that the union negotiating and voting employees were ever actually told what the respondent intended to seek the provisions to mean.  We say that the evidence is that they did not and that this submission from the respondent should be disregarded.


In regards to the usual understanding of CPI, at paragraph 8(a) of the respondent's submissions in reply, they said CPI is not commonly understood as such, has no evidentiary basis and is not consistent with the ABS source figures.  The respondent's attempt to portray the usual meaning of CPI as consistent with the ABS source figures, but it doesn't change – well, we say it is a notorious figure.  Their usual meaning was just that for the 2019 and 2021 agreements and we say the respondent would have taken proper steps to change the words away from those, which they did, if there were genuine about them, intending to mean something other than what they already did.


At 8(b), the respondent says the interpretation requires the Commission to read the annual period by reference to unstated start date for words that only use a quarterly time period (December).  Then it refers to their outline of submissions at paragraph 18.  The respondent's claim that words that only use a quarterly time period (December) doesn't seem to be well founded, we'd say.  It's not clear from these submissions if they're referring to the words in the agreement, well the words of the CPI sheet that they say they distributed and spoken to.


In any event, the word quarterly is not in the agreement.  The respondent's efforts to read this word into the agreement have to fail for that lack of evidence.  Of course, the CPI sheet itself refers to both annual and quarterly CPI figures, we had that discussion yesterday.  If the respondent is somehow claiming that the CPI sheet only uses a quarterly figure, they're wrong.


As to paragraph 8(c) they say 'wage increases whilst for a yearly period best address increased cost of living pressures at the time when the increases are first paid', and they refer to the respondent's submission at 20, which posit, why would the parties seek to fashion a 1 January wage increase on movements on prices from up to 12 months ago, whether they be higher or lower than now.  We say there's no basis for this argument.  It's not up to the respondent to determine how it's employees want to deal with cost of living pressures.  It was the employee negotiations who first introduced the CPI provision in the 2019 and who complained when the respondent unilaterally removed it.  That's our position, although I understand that's contested.


Those negotiators and the other employees voting the agreement, are the ones best placed to determine how to deal with cost of living pressures that they were facing at the time.  And of course, they would use the CPI figures that were available at the time.  The submission, of course, ignores what we say was the purpose of the CPI provision too, to provide a safety net against inflation, so that real wages don't go backwards.  I don't think that would be surprising in most industrial contexts; people don't want to go backwards financially.


At 8(d), the respondent says that our view on the usual meaning of CPI is inconsistent with the objective surrounding circumstances known to the parties at the time the agreement was made.  They refer to their submissions at paragraph 19.  We say that they're missing the point, because of the purpose that there was a purpose for that provision to be introduced originally, you know, we say that purpose is demonstrated by an objective view of the evidence.  The respondent is attempting an overly-technical interpretation of what we say is just a commonly understood meaning of CPI.


8(d) of their submissions in reply also refer to paragraph 19 of their submissions, where the respondent says 'the Queensland Government Statistician's Office publication on CPI was distributed and discussed during meetings with the AWU and the voting employees'.  You've read the witness statements; you've heard the evidence of Mr Kuun and Mr Cotton.  They don't say in their witness statements that they were distributed to the bargaining employees.  That was the difficulty when they were both on the stand yesterday.


Mr Cotton's oral evidence was that he handed the document around but Mr Kuun's oral evidence was clear; the document was placed on a table and not circulated.  Neither of them say that it was distributed to the voting employees.  This aspect of the respondent's submissions must fail.


The final words about the dispute application, we would say that the CPI provision plainly meant something in the 2019 agreement and the best approach for the Commission would be to work out what was, but at least provide some context for what happened in 2021.  The respondent hasn't put on any evidence about that meaning.  It makes no submissions about it, except for what we say is Mr Cotton's rather convoluted evidence about ABS statistics and his broad statement that he thought CPI – he just generally thought CPI to be a quarterly figure because it was published quarterly.  I don't agree that Australians generally would be walking out CPI on a quarterly basis for that reason.


We refer to and rely upon our submissions, say an objective analysis should read to the conclusion that the evidence of the respondent does not materially change those submissions.  There is a dearth of evidence provided by the respondent about the bargaining steps taken for the 2019 agreement and little evidence in support of what was actually given to, displayed or spoken to at the tool box meetings.  It's just incongruous that they say that the last line that they put up at the tool box meetings and claim to have spoken to, no one has any recollection of seeing this thing, or hearing the discussion, except for Mr Kuun.


I won't speak to the merit – I might leave it to my friend to speak to the section 217 application.  It's his and they properly should go first if the Commission is so minded.


THE DEPUTY PRESIDENT:  Yes, you answer one my questions is what you have to say about the second part or the second application, but you'd prefer to follow – I mean I understand.  Do you want to make any comments now, or - - -


MR TAYLOR:  Look, I mean, I'll speak perhaps about that process.




MR TAYLOR:  The Commission is required to not interpret the provision; that's not the job of the Commission in this case.  You've just got to determine if there's an ambiguity, but there has to be a determination made.  I don't know how controversial that would be for you, given that both parties seem to be so minded.  But still, it has to be done.  A number of the cases, including the Hobsons Bay City Council case, a matter by Commissioner Harper-Greenwell, laid out the steps for determining such a case, or for determining the ambiguity and then what happens after that?


To determine the ambiguity there's no need for the Commission to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements.  So, you don't need to interpret the agreement to determine if there's an ambiguity.  Once an ambiguity has been determined, in determining the discretion whether to vary, the Commission may also have regard to the mutual or common intentions of the parties at the time that the agreement was made.


We would say that's best done by looking at how the 2019 agreement was made, because it follows on from there; how the mutual intention of the parties does follow on from on from there. Other than that, I've got nothing at this time.


THE DEPUTY PRESIDENT:  Thank you very much.  Mr Follett.


MR FOLLETT:  Thank you, Deputy President.  I don't intend to read from our written submissions, the legal principles, insofar as there are any relevant to the interpretation question of well settled, and the principles with respect to the 217 application are also well settled and not particularly controversial.  There's an ambiguity gateway which both parties appear to accept there is an ambiguity.  Whilst my learned friend's right to say that it's a matter for you, I don't think that's the difficult part with that application.


The authorities then say that you have a discretion as to whether to vary an enterprise agreement to resolve an ambiguity or an uncertainty.  That discretion is usually principally influenced by mutual intention and there's that passage in our written submissions from the Full Bench in – yes, Construction, Forestry, Maritime, Mining and Energy Union v Specialist People Pty Ltd Full Bench, footnote 22, paragraph 12.


THE DEPUTY PRESIDENT:  Sorry, is the reference in the - - -


MR FOLLETT:  Paragraph 12 of our written submissions.




MR FOLLETT:  The substantive agreement that was ambiguously or uncertainly reduced to writing.  So, 217 application are effectively like a rectification case in a contractual world.  The search is for whether there was an agreement to achieve a particular outcome and then when the parties came to reduce that to writing, they did it in a way which was ambiguous or uncertain and didn't and didn't clearly record that agreement.  Then you rectify by variation, the agreement to accord with the mutual intentions.


So, evidently, Deputy President, you will have seen in our evidence in our submissions, what we've sought to demonstrate is that there is sufficient evidentiary basis for you to be satisfied that there was a common understanding as to what CPI in clause 2.6 would mean in the 2021 agreement, and that that common understanding was not clearly reflected in the works and that you should vary the agreement to remove that ambiguity.  It doesn't appear to be disputed that one of the discretionary tools, and indeed the most common outcome of the variation in terms of the timing is to make the variation retrospective since the parties' agreement precedes the approval process itself.


That's an effective precis of the relevant legal principles, not particularly difficult.  Ultimately, it's a facts case and I want to spent some telling you or submitting to you, rather, what we say you should find are the relevant facts, based on the evidence that you've received.  There is no evidence of any discussions, debates or anything about the wording of the clause in the 2019 agreement.  All you have is a number of AWU witnesses saying this is what I thought it mean in 2019, or this was our purpose.


My friend just referred to the purpose.  There was a purpose for it including the CPI clause.  All you heard was from a witness, what their asserted personal purpose may have been.  That's not a means of identifying objectively what the parties meant.  So, you have zero evidence of what contract resources thought or didn't think about the wording in 2019.  Accordingly, you can't make any finding about a mutual intention or common understanding about that language in 2019.  The AWU may have had a few, but as identified, there's no evidence that Contract Resources expressed its view to the AWU or relevantly, that the AWU expressed it's view to Contract Resources, because you don't have any evidence or any interaction at all.


I think what we've marked as exhibit CPI1 and CPI2 yesterday, the Commission will see that this dispute didn't come up under the 2019 agreement, because for the three relevant years of operation, both annual and quarterly CPI figures were below the specified pay rises in the enterprise agreement.  So, the parties never had to turn their mind to the question.  This year is the first year upon which the annual figures has exceeded the stated amount in the enterprise agreement, and the quarterly figure hasn't; hence why we're here.


That, we say in our submissions, Deputy President, that the lack of any mutual intention or common understanding in 2019 punches a hole in the AWU's principal articulation of its case.  The principal articulation of its case you will see at paragraph 16 to 18 of the original submissions and 21, which is essentially repeated in paragraph 9 of the reply, which is essentially there was a common understanding or mutual intention in 2019 and the company didn't do enough or didn't do anything to change that.


Putting aside whether or not that's a valid approach to finding the existence of a common intention for the 2021 enterprise agreement, it just fails on the facts.  That being so, you couldn't construe the 2021 enterprise agreement clause by reference to the 2019 circumstances.  Equally, you shouldn't find a common intention to pay annual CPI, especially in the face of Contract Resources actual evidence regarding 2021.


That essentially puts paid to the union's alternative 217 case which they don't spend a great deal of time on apart from one reference in paragraph 28 of their original submissions where they say well, if the Commission is minded to vary, you should vary too.  We make reference to the difficulty with that approach at least, in paragraphs 12 and 14 of our original submissions.  We refer particularly in paragraph 14 to the Full Bench decision in United Voice where at paragraph 23 of the Full Bench says:


It would normally be desirable to resolve an ambiguity to make it clear that the amount is not payable when there is an insufficient basis to find that the parties agreed to pay the additional amount.


That authority is actually more helpful for us than the way we're principally putting our case.  We urge upon the Commission a finding of mutual intention in 2021 for quarterly CPI.  What that case suggests is not only would you not positively vary an agreement to increase payments in circumstances where the employer's intention was not to increase payments.  But equally, you would vary the agreement to make it clear that those payments are not payable in circumstances where the employer's clear evidence is that it had no intention to make those payments.


So, essentially, where that leaves the scenario on the relevant applications, is the Commission couldn't vary the agreement to reflect annual CPI.  The variation application would only be disposed of therefore, in one or two ways – a variation to reflect quarterly CPI as we urge or a dismissal of that application on the basis that you're not satisfied that the evidential material enables you to find on the balance of probabilities that either (a) Contract Resources didn't intend to pay the increased amount or (b) there was a mutual intention.


Where that leaves the dispute resolution application, which as we've said in our submissions only conceptually arises if the 217 application is dismissed, and we refer to the Toyota Full Bench in our submissions, where exactly the same scenario occurred at first instance.  There was a 739 application and a variation application and the Commission dealt with the 217 application first to vary the agreement and therefore just didn't deal with what was left of the 739 dispute because there was nothing to resolve.  It was contended on appeal that the failure to deal with the 739 application was erroneous in some way and the Full Bench said no, once the ambiguity had been removed, there was no dispute about the meaning of the clause anymore; there was nothing for the Commission to do.


So, if, and only if, in our submission the Commission dismisses the 217 application, then one turns to what these words mean and there are three alternatives.  One, they mean what the union contends; two they mean what we contend; or three, you can't determine what they mean because they're too uncertain.  And in that scenario, the union fails, because it's their application.


In that endeavour, what you may not have regard to is any evidence that merely reflects subjective understandings or intentions.  So, any material whereby individuals on both sides are saying this is what I thought, are not receivable to influence the construction of the document.  But what is receivable is objective evidence known to both parties.  So, that is effectively, what occurred in the discussions between AWU and Contract Resources and what happened in the tool box meeting explanation to employees.


So, any material whereby individuals on both sides are saying this is what I thought, are not receivable to influence the construction of the document.  But what is receivable is object evidence known to both parties.  So, that is effectively, what occurred in the discussions between AWU and Contract Resources and what happened in the tool box meeting explanation to employees.  That evidence becomes objective.  Now that doesn't take one the whole distance, of course, because if it's just one side articulating the other, this is what we think, whilst objective and regard may be had to it, you may form the view that ultimately that doesn't take matters very far because it's only reflecting one party's subjective understanding.


So, in the construction exercise, if you get to it, you are really looking at what the words mean, having regard to the context of the agreement as a whole, plus, whatever you think you can make of the objective background evidence.  That evidence favours us; it certainly doesn't favour the union, but ultimately you need to construe the words in the document itself.


Now, what therefore is the evidence about the 2021 agreement?  There is nothing at all in our respectful submission about the point we heard a lot about in evidence about the wording of the CPI clause being removed at a point in time during 2021 negotiations.  Mr Cotton deals with that in his reply statement, in a completely logical and rational way.  If no evidential foundation at all for paragraph 20 of the AWU submissions, and also paragraph 11 of its reply submissions, where they assert effectively, that there was some surreptitious attempt to take out what we knew to be damaging to us in our financial interests and we got caught red-handed.


It is expressly rejected by Mr Cotton.  It makes no sense at all, because it's highlighted in yellow by Mr Cotton and after some round about cross-examination, the allegation was put to Mr Cotton and his reply was, I completely reject that claim.  He couldn't have been more direct.  So, there's certainly nothing surreptitious and underhanded about it.


In that context, it doesn't really matter whether the removal of that wording was raised with Mr Cotton.  There's some dispute on the evidence as to whether that was raised with him and if so, when; it doesn't really matter.  Mr Cotton says it was raised in February after the agreement was approved.  Mr Thain gave some fairly vague evidence about it being raised in Mr Cotton's presence and then Mr Cotton replying with words to the effect, I don't know what happened there; who cares, with respect.  It's not going to move the dial one way or another, other than potentially an issue associated with credit.


In any case, at that level, the Commission will plainly refer the evidence of Mr Cotton.  His evidence made logical sense in the sequence and on any view of things, he has a better recollection of events than any of the AWU witnesses would do.


That leaves, Deputy President, seven evidentiary matter which I want to address:


1.    What was Contract Resources intention?


2.    The one-on-one pre-bargaining meeting between Mr Cotton and Mr Thain.


3.    The bargaining meeting in late October early November.


4.    The subsequent bargaining meeting regarding competitor's rates, later in bargaining in mid to late November.


5.    The 19 November employee tool boxes.


6.    The late January, early February discussion between Mr Cotton and Mr Thain, and the December quarterly CPI sheet.


7.    The 23 February discussion between Mr Cotton and Mr Thain when the dispute was raised.


Before traversing those seven evidentiary findings or factual issues, I want to make some broad observations about the evidence as a whole.  We say, on any view, Contract Resource's evidence is cogent, specific and direct.  Mr Cotton and Mr Kuun corroborate each other on most of the key issues, noting that Mr Kuun is not in the 19 November tool box meetings.


The AWU evidence, by contrast, is drafted not as a summary or account of what actually happened, but as a responsive or defensive positioning in response to what it thought Contract Resource's evidence would be.  That is made clear by a couple of points.  Firstly, the correlation between the aide memoir and the nature of the evidence presented by the AWU in its original statements.


Mr Thain gave an account of a one-on-one discussion with Mr Cotton, where the CPI sheet was provided to him, which, in our submission derives from the way in which paragraph 9(b) of the aide memoir was drafted, which appeared to suggest that Contract Resources would lead evidence to say that Mr Cotton provided Mr Thain that document.  Equally, Mr Purchase's evidence about the 19 November tool box meeting, because the aide memoir, again, is drafted in a way, paragraph 9(a), that suggests that the agreement and the quarterly CPI sheet was presented to employees - - -


MR TAYLOR:  Objection.  It wasn't put to this witness, that he'd ever even seen the aide memoir.  My recollection is that he hadn't.  It certainly wasn't put to him in the way that it was to Mr Thain, that he'd somehow based his responses upon it.


MR FOLLETT:  I don't know why he's objecting to my submissions.  If he wants to make a responsive submission, he can.


THE DEPUTY PRESIDENT:  I'll give you the opportunity to make a response.


MR FOLLETT:  I did cross-examine him about that, but my point is not a point about Mr Purchase directly, it's a point about the AWU's evidence as a whole and there is a correlation because Mr Purchase's first statement on this then says not much more than there was nothing distributed in the meeting, the tool box meeting.  That's all it says.


Obviously, Mr Thain conceded in cross-examination that he had regards to the aide memoir and drafting his first statement.  It's also made clear by some of the responsive evidence to the 19 November tool box meeting which, in our submission, was not based upon – and this really flies through all of the AWU witness evidence; it's not based upon a recollection of what actually happened and an articulation to the Commission of what actually happened, but rather, a reference to certain things not happened.


For example, two of the reply statements – this is not a major point, but it all formed part of the milieu when assessing the reliability.  Two of the reply statements from the AWU refer to Mr Cotton's PowerPoint on 19 November.  Now, that was because in the original statement of Mr Cotton at paragraph 26, he referred to a PowerPoint, which of course he corrected before the statement was received by the Commission, and said it wasn't a PowerPoint, it was two separate PDF documents.


A minor issue, but you can see that the AWU evidence is presented to deal with defensively what Contract Resources said this is what happened.  Not in a way that's designed to persuade you of an alternative version of events.  Plainly enough, Mr Cotton and Mr Kuun have a far better recall of events in terms of timing, sequencing and that evidence is generally supported by objective signposts.


The AWU witnesses, almost universally offer a view based upon recollection of what didn't happen, and I'll return to that.  It never articulated a positive account and the evidence that says well, this didn't happen and I don't recall that happening, is not really evidence of someone who recalls and wants to articulate to the Commission what occurred, but rather, someone who's resisting a case which is put against their interests.  On the whole, the AWU witness evidence is unreliable and insofar as there is any conflict which, ultimately is very very narrow, that conflict would be resolved in favour of Contract Resources.


Can I now deal with the first of the seven evidentiary matters, Contract Resource's intention.  It's pretty clear what our intention was.  We always viewed the CPI clause as quarterly.  The September quarterly sheet supports that.  The discussion about 1.3 per cent versus 1.5 per cent; the Ampol negotiations reinforcing that range; the subsequent discussion aver the Ampol discussions of competitor rates; the 19 November tool box where the sheet is presented again, and the late January discussion between Mr Cotton and Mr Thain, where Mr Cotton presents to Mr Thain the December CPI sheet and points out the quarterly CPI is at 1.6 per cent and says therefore we're paying 2 per cent which is the stated amount in the agreement.


Crucially, and I'll return to this, Mr Thain says nothing.  That evidence, inexorably – one can add to that, the 23 February discussion between Mr Cotton and Mr Thain.  That evidence, all of it points inexorably to the conclusion that Contract Resource's intention was not to pay annual CPI.


The second evidentiary matter, the initial one-on-one discussion between Mr Cotton and Mr Thain, it's not overly material, but it reflects accurately by reference to the log of claims that was presented afterwards and it affirms the credibility and reliability of Mr Cotton's evidence as a whole.  Mr Thain doesn't recall that meeting; he didn't deny it, he just didn't recall it.  In terms of the entire arc of the story from the beginning, even on this somewhat peripheral point, Mr Cotton's reliability as a historian of events is established.


The third evidentiary matter, the central bargaining meeting in late October, early November.  The evidence puts this before the Ampol meeting on 4 November.  It's probably the most important piece of evidence.  Mr Cotton and Mr Kuun give a corroborative account, not only of the meeting itself, but of the subsequent discussion they had with each other after Mr Thain had raised, for the very first time, from anyone on the AWU side, the alternative construction.  That's Mr Cotton's first statement at paragraph 37 and Mr Kuun's first statement at paragraph 16, where after Thain has raised the issue with Mr Cotton and suggested it might be annual, Mr Cotton has gone to Mr Kuun and they've had a discussion and they've both obviously said to each other, well that's not what happened; he agreed it was quarterly.


There's no challenge to that evidence.  You would have to accept it, and once you've accepted it, there's no reason for it to have occurred, unless that's exactly what happened in the bargaining meeting.  There is also corroboration in the arc of the story itself about CPI and the associated wage increase.  The parties are negotiating between 3 per cent and 1.5 per cent, initially, and they reached agreement on 2 per cent, all the while, the whole time, the elephant in the room is an annual inflation rate at that point in time of 3.9 per cent.  The rhetorical question, why on earth would the parties be negotiating between 3 and 1.5, and agree on 2, when annual inflation is sitting there at 3.9 per cent?  It's a complete nonsense from an industrial perspective and the only explanation for that from pure industrial experience, is that everyone knew it was quarterly.  And when it's quarterly, the 1.5 which went up to 2, is actually a pretty good deal.


The other witnesses have no explanation for that, other than what was, with respect, evidence that couldn't possibly be accepted by the Commission, that experienced AWU representatives, negotiating with a company, all the while knowing annual inflation is at 3.9 and essentially saying, well it's not for me to tell the company what the employees want.  I have to go back to talk with the employees.  It's as if they presented it as if they're not articulating any position for an on behalf of their members at all.  The company is saying 1.5 to 2, and all they're saying is – not arguing the point, not articulating a vision, just saying oh well, we'll go back and speak to the members.  Is that really what AWU negotiators are going to be doing?  Not actually negotiating, just saying, we'll speak to the troops.


That was the mechanism sought to be deployed to try to explain why the elephant in the room, no one looked at.  Also, the 1.5 per cent from Contract Resources are bench marks against the quarterly 1.3 at that point in time and the Ampol client expectations, which in turn itself, was benchmarked against other competitors which was then discussed and displayed to the AWU.  Why does one do all of that, and at the same time, be happy to pay annual CPI, which at that point in time was running at 3.9 per cent and plainly on the rise?


More directly, Mr Cotton and Mr Kuun specifically recall giving the account and they gave a positive account including extending to Mr Cotton, identifying where the meeting was, when it was, what the room looks like, who was there, who was sitting where and before yesterday, there was not a single AWU witness, who accepted that the CPI September quarterly sheet was distributed, or presented on a table, or discussed, or even seen by anyone in that bargaining meeting.


The only evidence from the AWU on it was Mr Thain saying there was a separate one-on-one discussion where he gave me that document.  He says in paragraph 11 of his first statement, it never happened in a bargaining meeting; it happened in the one-on-one.  Then for the first time yesterday in cross-examination, he said well of course that happened.  You get this frankly, fairly relevant debate about whether there was a copy placed on a table, or there was a copy given to this person and then he passed it to this person and passed it to this person.  It doesn't matter.


What matters is that it occurred and the document is produced in response to a question which both Mr Kuun and Mr Cotton record Mr Thain as asking – this is paragraph 20 of Mr Cotton's first statement and paragraph 10 of Mr Kuun's, where Mr Thain asks, what does CPI in the enterprise agreement mean?  I don't understand what CPI in the 2021 clause at 2.6 means, and it's in response to that, that they pull out the sheet and say, let me show you.


So, Mr Thain, for the first time ever has come out with it yesterday and this was after Mr Wilson.  Of course, Mr Thain's evidence completely eviscerates the credibility of Mr Wilson who didn't quite swear black and blue, but reasonably close to it, that he'd never seen the document in his life before some time in 2022.  Five minutes later, Mr Thain's in here saying it was put down in a meeting where Mr Wilson was and, on Mr Cotton's account, passed around.  Putting that aside, the evidence insofar as it's recorded in written form from the AWU doesn't explicitly deny the occurrence of the event anyway.


Mr Thain's first statement says nothing about this bargaining meeting other than by implication, there was no bargaining meeting where the CPI sheet was handed out; that's paragraph 11, which of course he retreated from yesterday.  His second statement at paragraphs 5 and 6 says 'I do not recall having a discussion of this nature and I do not believe that Mr Cotton ever described CPI revisions'.  Do not recall and do not believe, that's not a denial, and in any case, he admitted it yesterday.  Mr Wilson was a little bit more direct.  His evidence, in his first statement at paragraph 10 is probably characterised fairly as being in conflict because it says 'At no point during bargaining, did any of the company representatives explain that they intended to mean a quarterly figure.  As far as I can recall, I attended all bargaining meetings with the company'.  On one view of things, that might be inconsistent with Contract Resource's evidence.


In reply evidence, however, he also says at paragraph 3 'At no point at any bargaining meeting that I attended, was CPI discussed'.  Then at paragraph 8, he says 'At no point was CPI discussed'.  Now, that's on one view of things directly inconsistent with Mr Cotton or Mr Kuun, but as I noted, his reliability, not only from his recall, but more generally, was completely eviscerated by Mr Thain.


Mr Purchase, in his first statement said nothing about the subject matter.  In his second statement he said at paragraph 3, 'I do not recall any bargaining meetings I attended where Mr Cotton discussing the offer of a 1.5 pay rise by way of comparison to anything else, but it may have happened that way'.  So, I do not recall, but it may have.  Then at paragraph 4, he has 'I do not recall any bargaining meeting'.  Similarly, 'I do not recall attending any bargaining meeting'.  Paragraph 6 'I have no recollection'.  Paragraph 7, 'I have no recollection'.


As the Commission well knows, no not denials, and all of the witnesses, including the employee witnesses which I'll come to in a moment, accepted, logically, and fairly, that there was a whole range of things discussed at various meetings that they can't, sitting here today, or yesterday recall.  And there was a whole range of things discussed and said that they can't now recall.  So, saying therefore that they don't recall this particular discussion, doesn't really take their case very far.  Mr Cole says nothing at all about that bargaining meeting, even though he was there.


By reference to all of that, including the subsequent tool box meeting, the late January discussion and the 23 February discussion, on the balance of probabilities, plainly that meeting happened and it happened the way we say it did, in the very early stage of bargaining and that CPI from that time was understood in the agreement to refer to the quarterly CPI figures as released in December, although released in January for the December quarter.  The remainder of the negotiations to alter an agreement at 2, 2 and 2, are proceeded on that basis.


Fact four, the later November meeting regarding competitors' rates.  Before getting to this, there's obviously the unchallenged evidence of the 4 November Ampol meeting.  Then subsequently, we have the meeting about competitor rates.  Now, that meeting in and of itself is not particularly important either except for its timing and its context.  It completes the line, as it were, from Contract Resources side that 3 per cent was too high, 1.5 per cent was referrable to September quarterly CPI at 1.3.  The Ampol meeting, which was effectively, you can't be competitive at 3 per cent or annual CPI, but 1.5 to 2 per cent is more in the ball park.  We then go back to discuss with the bargaining representatives why our 1.5, which ultimately became 2 per cent offer, was consistent with and competitive with the market.  We ask again, why would any of that have happened and negotiations about those levels of pay increases proceed, when annual CPI was 3.9 per cent.  If all the while CPI in the agreement meant annual CPI.


Fact five, in 19 November tool boxes, two tool boxes because of COVID restrictions, about 30 to 35 people in each, in a room that probably seats about a hundred, big 75 cm or inch TV screen up on one of the walls, computer system off to the side enabling projection.  Once again, we have Contract Resource's witnesses telling the Commission what actually happened and we have AWU witnesses simply saying that they don't recall things happening.  Quite correctly, as the cross-examination showed, none of those witnesses called by the union who were at the meeting, or one of them, purported to recall everything that happened and say with any degree of confidence what did or did not happen.


So, you have Mr Cotton's account on one hand and on the other side of the ledger, you have Mr Thain who was not there, Mr Wilson who was not there, Mr Cole who was not there and the only witnesses for the AWU who were there, and Mr Purchase, Mr Willman and Mr Olexienko.  The evidence of those three individuals is not particularly reliable.  We don't advance that as a criticism, as a credit issue, but simply as a reliability issue as to their capacity to be regarded as accurate historians of what happened in one tool box meeting out of monthly tool box meetings in a contest of daily prestart meetings there are 30 to 35 people.


Most importantly though, even putting aside that cross-examination or really emphasising the accuracy of the evidence given, is the witness statements of these individuals don't actually conflict with Mr Cotton at all.  He explains what happened, what he said and what he did and he does that with some specificity.  In response, the height of the evidence in Mr Purchase's first statement at TPO1 at paragraph 8, where he says 'At this meeting there was no discussion about the CPI clause or about Contract Resources having removed the clause from the draft agreement'.  While there was certainly no discussion about the latter, he then says 'To the best of my knowledge no documents were circulated', and that's true so far as it goes, there were no documents circulated.


In his reply statements after he's seen Mr Cotton's account for the first time, he's a bit more circumspect.  He says at paragraph 6, I have no recollection that the quarterly CPI document was displayed on the screen.  At paragraph 7 he says I have no recollection of Mr Cotton talking about CPI.  Mr Willman and Mr Olexienko are the same.  So, Mr Willman at paragraph 5 says 'I did not see any document on the screen, except for possibly the clause itself', so that's clause 2.6, but he's not even specific about that, just only possibly, and 'I have no recollection of Mr Cotton discussing the meaning of the CPI clause'.


Mr Olexienko at paragraph 5 says 'I do not believe that the quarterly figure was displayed', and at paragraph 6 'I do not recall Mr Cotton speaking about the meaning of the CPI clause'.  There was no conflict there.  You have one account of Mr Cotton and three accounts of individuals who say I don't remember that.  In the context of then accepting in their evidence that evidently things occurred that they don't remember.  From all of that, Mr Cotton's account of that tool box meeting or tool box meetings is left untouched and the Commission should accept it.


Fact six, or evidentiary issue six, the late January, early February meeting between Mr Cotton and Mr Thain.  Supporting Mr Cotton's credit more generally, Mr Cotton says, not challenged in the 19 November tool box meetings, that he would provide the bargaining representatives with the updated December quarterly sheet.  Now think about this for a minute.  That's unchallenged by any witness, and unchallenged in cross-examination.  Why on earth in the tool box meeting would Mr Cotton say I'm going to give you bargaining representatives the December sheet when it comes out, if there was no discussion about the September sheet?  Implausible.


But he said I'll now give you the December sheet to your bargaining representatives when it comes out; it comes out on 25 January.  Mr Cotton said from his recollection around Australia there, the document says it was released on the 25th and sometime shortly thereafter, he hands it to Mr Thain and then tells him, because the quarterly rate, 1.6 per cent is lower than 2, we'll get 2 per cent.  The best Mr Thain could do about this meeting, a bit like the very first meeting, is to not recall it.


Now, that sheet handed to Mr Thain, and we forgot all about particularly from Mr Thain in his evidence, right next to the annual figure is the quarterly figure – sorry, the quarterly figure is the annual figure - 4.3 per cent.  So, and Mr Cotton is saying 1.6 is lower than 2, so you're getting 2.  Right next to it is 4.3 and we have all this evidence about we always thought it was annual and of course it's going to be annual; it was always in our intention that it was going to be annual.  And Mr Thain does not speak a word.  Why?  Because, obviously, at that point in time, he didn't think anything of what Mr Cotton had told him because it was exactly in accordance with what was discussed and agreed.


The first account Mr Thain attempts to give to this meeting is in paragraph 8 of his reply statement but the problem with that is, he's responding to two separate meetings, so it's impossible to work out what meeting he's referring to.  I think when you read his statement, it looks like he's referring to the 23 February meeting, which I'll come to in just a moment.  He doesn't otherwise say anything about the January meeting.  We say that's a very significant admission and it accords entirely with our sequencing of our account.


Evidential issue number 7, the final 23 February meeting between Mr Thain and Mr Cotton.  Once again, Mr Cotton says this is what happened and Mr Thain says, to the best of my recollection certain things didn't happen.  Mr Thain, in his first statement provides no specific account of this and in paragraph 8 of his reply, he effectively agrees with Mr Cotton's account by saying well, yes he said quarterly, I said annual, and we agreed to disagree.


You will recall in cross-examination yesterday, Deputy President, I went through paragraph 35 of Mr Cotton's first statement with Mr Thain and he effectively accepted or virtually did accept that account given of the meeting, and in particular, the quotations in that paragraph.  In particular, he admitted, he said words to the effect 'it's not about morals, it's about what is in writing'.  Now, you will recall the cross-examination about that.  In our submission, Mr Thain has told Mr Cotton - he's told by Mr Cotton in late January that the pay increase is going to be 2 per cent.


He's gone away, he's looked at it, he's maybe had some discussions with other AWU representatives.  They've worked out in an opportunistic way – you recall Mr Cotton yesterday said he thought one of the reasons for this might have been that they saw an opportunity, for in an opportunistic way, a way to get a higher rate by, on Mr Thain's own admission, for the very first time, since even before the 2019 agreement, for the very first time in five years, four years.  We have the AWU turn up on the 23rd and articulate an annual CPI figure.


Opportunistically, because there's an arguable construction on the language of the words in writing, that would support that contention and when he's called on it, by Mr Cotton saying hang on, we discussed this and agreed that it's quarterly, he says it's not about morals.  It doesn't really matter whether you accept the addendum added to that contextually, from Mr Thain that Mr Cotton was saying to me, what about morals – what about your morals.  Because of course, none of that was put to Mr Cotton in cross-examination.  But it doesn't really matter, because you've got Mr Thain admitting – him saying it's about what's in writing, not morals.  That is, we think we've got an argument on the text, we're going to take our chances, and it doesn't matter what we actually discussed and agreed.  That's the immorality, that's why it's not about morals.


Now, on the whole of that evidence, Deputy President, you would accept in whole the evidence given by Mr Cotton and Mr Kuun and that evidence establishes beyond per adventure, that Contract Resources justified it's 1.5 per cent increase, initially, by reference to quarterly CPI.  We told the AWU representatives as much.  Mr Thain then asked what CPI in the agreement meant, and the CPI quarterly sheet is pulled out and shown to him and pointed out that it's 1.3 and our offer of 1.5, all CPI.  On any view of it, there is clear agreement, consensus ad idem, meeting of the minds, common intention as at that meeting that the CPI reference in clause 2.6 was the quarterly December figure.  The entire bargaining process proceeded on that basis thereafter.


Mr Cotton then explained that very thing to employees in tool box meetings, especially the people who had to vote on the thing.  For the first time, after the event, when annual CPI is at 4.3 per cent roaring ahead, the AWU pops up and says, well that's what we think it means.  Ambiguity, common intention, varied to reflect common intention, retrospectively.  Doing so deals with the 739 application and deals with the 217 application.


Unless you have any further questions, they are the submissions.


THE DEPUTY PRESIDENT:  Thank you very much Mr Follett.  Mr Taylor, do you wish to say anything in reply?


MR TAYLOR:  Just a couple of points about that.  We, I mean, my learned friend seems to be hanging his hat on a lot of stuff that looks to be post-agreement conduct.  We really question the relevance of that to working out what the common intention of the voting workers was.  We've spoken about the AB Meyer; it's got nothing to do with Tom Purchase.  The phrase the issue of how annual CPI was 3.9 per cent, and so that the idea that the union negotiators would even consider putting a 2 per cent fixed pay rise to the members is a nonsense.  I couldn't agree – I mean they would do so in circumstances where they knew there was also a safety net, which included an annual CPI figure.  That was why I would say that it's not a nonsense at all for them to do so.  If it was 2 per cent or 3.9 per cent, the higher of which, then it would be – that would at least give them a real – maintain their wages in real terms.


My learned friend also talks about the evidence of Mr Thain and Mr Wilson and their negotiating – how they were approaching the negotiations and how they could have possibly taken the decisions that they did.  They'd done so, knowing the industrial scenario they were working in, and particularly in Mr Wilson's case, he spoke about what he knew of the mindset of the members.  I don't believe that there was any wilful protected industrial action or anything like that.  It's hardly surprising in all of those circumstances that that had happened that way.


Mr Thain has made very clear that the discussion about the 1.5 per cent was about the meaning of the fixed pay rise; it's not some opportunistic thing, as my learned friend would like to portray.  He's not sort of revisiting the issue; they had a genuine belief about what they believe the CPI provision to mean, and if at that time the agreement was made, annual CPI was higher than the fixed pay rise, that the parties to the agreement settled on, well, you know, that's how it goes.  There's nothing actually surprising or nefarious about that.


My learned friend would like to talk about the unchallenged evidence of the Ampol meeting.  Of course, a meeting between Contract Resources managers and presumably management from Ampol, we don't say has any particular relevance to the common intentions of the parties.


My learned friend says in regards to the tool box meetings, that John Cole wasn't there.  My recollection of his evidence was that he couldn't recall if he was there or not.  It doesn't mean he wasn't there, and of course, the respondent hasn't provided any attendance list.  There were other witnesses who would remember discussions about pay rises and presentations, we would say, if they had actually happened.  My learned friend made quite a point of saying none of them recall the evidence and then appeared to conflate the words 'I don't believe' with 'I don't recall'.  I wouldn't say that they're the same at all.  I would say 'I don't believe' to mean it didn't happen.  It doesn't mean I don't remember it happening.  That's not my understanding of what those words would mean.


In regards to that conversation of it being not about morals, Mr Cotton's evidence was quite clear.  We would say cogent and credible.  That Mr Cotton had first raised the issues of morals and Jamie had said no, it's not about that, it's just about the agreement as it's made.  There's nothing opportunistic about wanting to enforce the agreement that he understood it to be.  That's it for me.


THE DEPUTY PRESIDENT:  Thank you very much.  Anything else Mr Follett?


MR FOLLETT:  No, Deputy President.


THE DEPUTY PRESIDENT:  Good, thank you.  Parties, thank you very much for your work and the evidence that you've put in.  As I've said, I have to consider both matters and there are a number of ways that it may play out, depending on the way I decide.  If I require anything further, I'll of course request that from the parties.  Other than that, we'll now adjourn.  Thank you very much.

ADJOURNED INDEFINITELY                                                          [11.36 AM]