Industrial Relations Commission New South Wales Medium Neutral Citation: Notification under section 146B by Unions NSW and others of a dispute with Energy Australia re Wallerawang Power Station Announcement 16 January 2014 [2015] NSWIRComm 34 Hearing dates: 6 February 2014, 19 May 2014, 18 November 2014, 2 March 2015, 20 July 2015, 21 August 2015, 1October 2015 Decision date: 29 October 2015 Jurisdiction: Industrial Relations Commission Before: Harrison DP Decision: The notification in this matter is exhausted with the making of the 2015 Enterprise Agreement. A notice of discontinuance is received from Unions NSW acting on behalf of all NSW power generation unions and their members. Proceedings in the matter are concluded. Catchwords: Closure of Wallerawang Power Station - Market conditions – Business re-organisation – Redundancies – Post sale employment guarantee – Consultation in accord with engagement plan – Open and frank exchange of information. Enterprise Agreement negotiated to meet business need and employees' interests. Legislation Cited: Industrial Relations Act 1996 Category: Principal judgment Parties: Unions NSW Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (PSA) Australian Institute of Marine and Power Engineers, NSW District (AIMPE) The Electrical Trades Union of Australia, NSW Branch (ETU) New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (United Services Union (USU)) Construction, Forestry, Mining and Energy Union (NSW Branch) The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) Professionals Australia (PA) (formerly known as The Association of Professional Engineers, Scientists and Managers Australia) EnergyAustralia Representation: Mr P McPherson Unions New South Wales Mr M McGrath CFMEU Mr M Sinclair PSA Mr P Sansom USU Mr N Di Falco PA Mr L Welfare Mr P Gray Energy Australia File Number(s): IRC 55 of 2014 STATEMENT 1. This matter was initiated by Unions NSW, a Peak Union Body, with and on behalf of the Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales (PSA); Australian Institute of Marine and Power Engineers, NSW District (AIMPE); The Electrical Trades Union of Australia, NSW Branch (ETU); New South Wales Local Government, Clerical, Administrative, Energy, Airlines & Utilities Union (United Services Union (USU)); Construction, Forestry, Mining and Energy Union (NSW Branch) (CFMEU); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (AMWU); and Professionals Australia (PA) (formerly known as The Association of Professional Engineers, Scientists and Managers Australia; all being registered industrial organisations with members employed by EnergyAustralia at the Wallerawang Power Station. 2. On 16 January 2014, by way of a Media Release, Energy Australia advised that it had opened consultations with its employees and their representatives on a reduction in power generation from the Wallerawang Power Station following commercial coal supply shortages and a declining trend in energy demand across New South Wales. The public announcement by EnergyAustralia was consistent with advice to Union officials, including site delegates, and was followed by a joint communication meeting involving all employees the day following the Media Release; and tool box discussions with employees. 3. Wallerawang Power Station consists of two 500 megawatt generating units identified as Unit 7 and Unit 8. The "old station" units 1 to 6 have been closed for some time and that part of the power station demolished and the site cleared. 4. The announcement advised that Unit 7 would be permanently withdrawn from service in January 2014 and Unit 8 would be placed in a three month recall from the end of March 2014, should market conditions change. 5. Unit 8 was subsequently permanently withdrawn and closed later in 2014 during the course of the consultative process. 6. The General Manager, Mr Luke Welfare, described the action as a prudent response to the market and operating costs, emphasising that this was the start of a consultative process to determine how best to adapt the Wallerawang and Mount Piper work sites to the present circumstances. 7. Mr Welfare said: "It's very important to us that we consult with our employees and provide them with an early opportunity to determine the best means of managing these changes." 1. In the concurrent discussions on site with unions, EnergyAustralia provided a detailed engagement plan, setting out the drivers for change, stakeholder identity, and timetable for the consultations to occur. 2. The notification in this matter was filed by Unions NSW on 3 February 2014 and the first proceedings took place in Newcastle on 6 February 2014 in the course of a Tier 1 consultative meeting. 3. Union Officials in attendance were Mr Peter McPherson, Unions NSW; Mr Mark McGrath, CFMEU; Mr Greg Shaw, PSA; Mr Paul Sansom, USU; Mr Benn Billingsley, AMWU; and Mr Nick Gotsis, PA. Site Delegates present were Mr Peter Compton, Mr Rob Waters, and Mr Dan Smith, CFMEU; Mr Shane Kearney and Mr Larry Anderson, PSA, Mr Ken Lindsay, AMWU; and Mr Nino Di Falco, PA. Those in attendance for EnergyAustralia were Mr Luke Welfare, Mr John Delicato, Ms Linda Robertson, Mr Guy Feeney. 4. Energy Australia provided comprehensive information in respect to the circumstances and issues facing the parties. Areas of further inquiry and information requirements were identified, 5. Further meeting dates of 24 February, 18 March and 1 April 2014, and a possible mass meeting of Wallerawang and Mount Piper employees for 2 April 2014 were scheduled. 6. It was agreed that arrangements would be made for Union Officials or delegates to attend the consultative workshops planned for February and March 2014 in accordance with the aforementioned engagement plan. 7. Further Commission proceedings took place on 19 May 2014 at Mount Piper Power Station. 8. On that occasion Union Officials in attendance were Mr Peter McPherson, Unions NSW; Mr Mark McGrath, CFMEU; and Mr Russell Wilson, ETU. Site Delegates present were Mr Peter Compton, Mr Rob Waters, and Mr Dan Smith, CFMEU; Mr Shane Kearney and Mr Larry Anderson, PSA, Mr Ken Lindsay, AMWU; and Mr Nino Di Falco, PA. Those in attendance for EnergyAustralia were Mr Michael Hutchinson, Mr Luke Welfare, Mr John Delicato, Ms Linda Robertson, and Mr Guy Feeney. 9. The Commission was provided with a comprehensive report on the consultation process, decisions taken, and plans for further examination of the issues detailed in a document provided by EnergyAustralia, identified as MFI 5 and MFI 6 in proceedings. 10. The parties continued to consult in accordance with the arrangements identified. 11. The next formal report back took place on 19 November 2014 in Newcastle. 12. Union Officials in attendance were Mr Peter McPherson, Unions NSW and Mr Mark McGrath, CFMEU. Site Delegates present were Mr Peter Compton, Mr Rob Waters, and Mr Dan Smith, CFMEU; Mr Shane Kearney and Mr David Turnbull, PSA; and Mr Ken Lindsay, AMWU. Those in attendance for EnergyAustralia were Mr Luke Welfare, Ms Lisa Kinnear, Mr Guy Feeney, Mr Peter Gray and Mr Chan Sinnadurai. 13. The parties reported that they had made substantial progress, reporting that: Since 19 May 2014, further consultation on operational and organisational changes has taken place with Unions NSW, Union Representatives, site Delegates, and staff. In summary, consultation between the parties has covered a range of topics: ● Integration of EnergyAustralia and Delta Electricity policy frameworks ● Organisation structures and job designs ● A voluntary redundancy program ● Introduction of the Maintenance Employee Model which is based on a national competency framework and salary progression system, as a replacement for an older "hard skills" model (2009) ● Business Planning Guidance presentations provided by EnergyAustralia Executives ● Joint Staff Survey tool used to gather the interests and priorities of staff as input to Enterprise Agreement discussions ● Enterprise Agreement discussions linked to the business planning. No disputation has occurred during this period." 1. Following discussion of the progress achieved and options for the future, the matter was adjourned to further report back in Newcastle when it was anticipated that enterprise agreement negotiations would be further advanced. 2. The appearances on 2 March 2015 were Mr P McPherson for Union NSW and the ETU with Mr P Compton, Mr D Smith, Mr D McKee, Mr S Kearney and Mr D Turnbull. Mr M McGrath for the CFMEU. Mr M Sinclair for the PSA. Mr P Sansom for USU. Mr L Welfare for EnergyAustralia with Mr P Gray and Mr C Sinnadurai. 3. The parties reported that they had met on nine separate occasions, satisfactorily resolving a number of issues identified by Mr Welfare as apprentice tools, proposals for inclusion of the maintenance employee model in the Western Region Operators Model (WROM), and how to resolve Operators coming off shift. 4. Mr McPherson, supported by Messrs McGrath, Sinclair and Sansom, submitted that the parties had come to an impasse on the enterprise agreement negotiations. 5. Mr McPherson identified the issues as firstly a move from voluntary redundancy to forced redundancy; and the duration of the agreement, in particular the Unions' reluctance to accept a four year term as proposed by EnergyAustralia. 6. The parties were of a common understanding that, consequent upon acquisition of Wallerawang and Mount Piper Power Stations by EnergyAustralia from the NSW Government, employees have a guarantee of employment to September 2017. The difficult operating circumstances discussed above leave the operation overstaffed and the uncertainty of coal supplies suggests operations up to September 2017 could be adversely affected by lack of fuel. 7. The parties sought the assistance of the Commission as presently constituted to engage in an examination of solutions to conclude an enterprise agreement. 8. The matter continued in further private conference. 9. The processes then undertaken by the parties resulted in conclusion of an enterprise agreement, approved by the Fair Work Commission on 3 June 2015, known as the EnergyAustralia NSW (Mount Piper and Wallerawang Operations) 2015 Employees' Enterprise Agreement AE414147 PR567892 (the Enterprise Agreement), to operate from 10 June 2015 to 11 March 2019. 10. The issue then turned to implementation of the Enterprise Agreement which is taken up in a separate notification by Unions NSW pursuant to section 146B of the Industrial Relations Act 1996 ("the Act"). (Matter No IRC 539 of 2015, before the Commission as presently constituted). 11. It is appropriate to note that there has been no lost time by way of strike, ban or other industrial action throughout the 18 months of consultation, engagement, and negotiations dealing with difficult and sensitive issues of fundamental import to the interests of the parties. 12. The Union Officials, led by Mr McPherson, and delegates have applied themselves diligently and consistently to the issues in the interests of their members; whilst management have been open, honest, patient and accommodating of time and resources in addressing the issues. 13. The parties have participated in 71 meetings in total, including 15 joint consultative meetings, 17 meetings in concluding the enterprise agreement; and seven separate proceedings in the Commission. In addition there has been ongoing communication to maintain currency of information. 14. The resources required were exacerbated by the tyranny of distance, involving multiple round trips of 600 kilometres from the Lithgow and Newcastle regions to bring the parties together and into the Commission. 15. That said, there can be little doubt that the resources applied by EnergyAustralia are significantly less than the cost of disruptive industrial action and collateral damage to relationships and productivity; and for the Unions and their members, they have avoided expensive litigation and loss of wages. 16. In summation, all participants worked hard for a productive outcome when it may have been easier to resort to traditional disputation, abdicating responsibility and outcome. 17. I congratulate all parties for their responsible and enlightened approach to a difficult situation. 18. The notification in this matter is exhausted with the making of the 2015 Enterprise Agreement. 19. A notice of discontinuance is received from Unions NSW acting on behalf of all NSW power generation unions and their members. 20. Proceedings in the matter are concluded. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 October 2015