Request by Unions New South Wales for the assistance of the Industrial Relations Commission of New South Wales on the PWCS 3EXP Construction Project by Bechtel for Port Waratah Coal Services [2010] NSWIRComm 56

LEGISLATION CITED: Industrial Relations Act 1996

HEARING DATES: 6 June 2008; 12 March 2010; 16 April 2010

Mr P McPherson (Applicant) Unions NSW and affiliated unions LEGAL REPRESENTATIVES:

Mr S Gordon (Respondent) Australian Industry Group

• 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Request by Unions New South Wales for the assistance of the Industrial Relations Commission of New South Wales on the PWCS 3EXP Construction Project by Bechtel for Port Waratah Coal Services for inspection and conference

1 These proceedings concern the 3EXP stage of the expansion of the Kooragang Coal Loader operated by Port Waratah Coal Services (PWCS). 2 The parties, while not in dispute, rely upon the broader definition of that term (which includes a question, difficulty or situation that is likely to give rise to an industrial dispute if preventative action is not taken) to seek the assistance of the Commission in facilitation of the communication process and dispute resolution provider prescribed by their industrial agreement. 3 In furtherance of assisting communication, safety and productivity on the Project a conference and site inspection took place on 6 June 2008. 4 The parties sought further conference proceedings, which took place on 12 March 2010 and 16 April 2010. The Commission was available to deal with industrial disputes throughout the Project, but was not required. 5 On 12 March 2010 Mr P McPherson appeared on behalf of Unions NSW; Newcastle Trades Hall Council; the Australian Workers' Union, New South Wales; Construction, Forestry, Mining and Energy Union (NSW Branch); and the Electrical Trades Union of Australia, NSW Branch. Mr D Wallace appeared on behalf of the Australian Manufacturing Workers' Union. Mr S Gordon of Australian Industry Group appeared for Bechtel Australia Pty Ltd with Ms N Fitzsimon, Mr G Lindner, Mr J Hazelmore, and Ms N Wayne. 6 On 12 March 2010 Mr Gordon tendered a report (MFI 1) prepared by Mr Lindner, Bechtel Construction Manager, which outlines the status of the Project and the outcomes achieved. 7 This report, set out below, describes a successful and innovative project, founded upon a co-operative model of industrial relations, which builds upon the success and achievements of the PWCS 3D Project (see Decision of Stanton J of 23 February 2007 [2007] NSWIRComm 1012). 8 The parties are committed to continue these arrangements in a new agreement for the Kooragang Master Plan Completion Project, identified by the acronym KEP (Kooragang Expansion Projects), which will add a further 20 million tonnes per annum to coal handling capacity over the next four years, involving an investment of approximately $680 million, providing employment for an average workforce of 300, peaking at 400. 9 The development of coal loader capacity has established the Port of Newcastle as the largest coal export port in the world. 10 This capacity has the added advantage of enabling further investment and job creation throughout the coal chain which is of significant benefit to the Regional, State and National economy. 11 It is to the absolute credit of the parties that they have achieved the results detailed below, including a most impressive safety record. 12 All phases of the Project have been completed ahead of schedule and under budget, with no lost time due to industrial issues. There have been some 16 separate industrial instruments negotiated on the Project. 13 Mr McPherson submitted that the only difficulty on the Project had been around continuance of regular monthly committee meetings which the parties had successfully resolved. Mr McPherson tendered a schedule of meeting dates for 2010 (MFI 4) which have been set having regard to Project operations. 14 The industrial relations arrangements have been and are set to continue in a positive and co-operative manner. In the proceedings of 12 March 2010 the agreement for future work was not then concluded. Private conference took place on that occasion and the parties conferred prior to proceedings on 16 April 2010, at which the parties were able to report that an agreement had been concluded. Mr McPherson reported that: "the Bechtel Australia Pty Limited Port Waratah Coal Services Kooragang Expansion Project Agreement 2010 to 2014 was lodged with Fair Work Australia I believe yesterday" 15 Particular credit must go to the union officials, delegates, managers and front line supervisors who have worked hard within the co-operative framework, exhibiting the necessary level of dedication to the principles of co-operation and trust between them. 16 The PORT WARATAH COAL SERVICES PROJECT 3EXP Report (MFI 1) states: 1.0 PURPOSE

The New South Wales Industrial Relations Commission has requested Bechtel to provide it with a summary of activities, from an Employee Relations - Industrial Relations perspective, that were conducted on the expansion of the capacity of Port Waratah Coal Services' Kooragang Coal Terminal known as Port Waratah Coal Services Project 3Exp.

Project 3Exp was a $458 million investment to increase capacity from 77 to 88 million tonnes per annum at Kooragang Coal Terminal.

Upgrade Inloading Streams 2 and 3 Install new reclaim conveyor Install new reclaimer Install 2 replacement stackers and reclaimers Deconstruct 2 stackers and 2 reclaimers

The Project remains on schedule and construction is currently 89% complete and significantly under budget. The following work is yet to be completed:

completion of construction of 2 new reclaimers - April/May 2010 deconstruction of 2 reclaimers - April - November 2010

1.3 million man hours have been worked from project inception to 31st January 2010, with no lost time injuries and no lost time due to industrial action.

Project Management, Procurement and Construction Management were based at Site.

The project used a combination of lump sum contracts for major machine delivery and cost reimbursable contracts for all Brownfield/tie in work.

The Employee Relations plan allowed contractors to negotiate individual site agreements.

From a people perspective the Project Leadership built upon the successful systems, and processes that made the previous PWCS 3D project a success.

To ensure the success of the 3Exp project, the key components of the people management strategy were: · Leadership · Committed and aligned teams and team members · Safe work environment, work methods and work practices · Commitment to shared, achievable Project goals and objectives; · Performance recognition · Excellent communications · Proven existing systems and processes across all aspects of the Project;

4.1 Leadership Given that many of the leaders from the 3D project continued on to the 3Exp project, it was decided that a new, fresh approach to leadership training would be most effective, rather than using the same format that had been used before. Therefore, a consulting company, Sentis, was engaged to deliver 2 x 2 days Leaders Training programs, which focused on a cognitive behavioural approach to safety leadership (Zero Incident Process).

The program was designed as a cultural change process to assist leaders to drive safety performance towards zero. The program acknowledges that a leader's role is a key in influencing a safety culture. The training therefore focussed on the psychology of leadership and offered an advanced understanding of human psychology and the drivers of safety behaviours. It provided participants with detailed skills in safety conversations, psychologically powerful questions and specific tools of psychological influence.

The program was rolled out to leaders down to the supervisory level and received exceptionally positive feedback.

5.0 SAFETY The Project continued the Zero Incidents Performance philosophy adopted on the 3D project. This philosophy is founded on the belief that every occupational injury/illness is preventable and that the commitment to totally preventing and eliminating injuries/illnesses must be constantly pursued on a daily basis and integrated into every aspect of work planning and execution.

The 3Exp project had the benefit of employing experienced safety professionals and a wide range of proven systems, processes, procedures, programs and work methods.

Project 3Exp has maintained zero lost time injuries for the life of the Project. This result was achieved through the following initiatives:

Zero Incident Team The purpose of a Zero Incident Team was to establish a continuous process of improvement, participation, communication and co-operation as a key element to the success of the environment, safety and health process/system.

Commitment and Leadership Management led by example, modelling the expected behaviour for supervisors, workers and subcontractors. The commitment was visible through management actions that included: · Commitment - Personal Safety Plans One of many innovative ideas that contributed to the success and elimination of workplace injuries and illnesses on the Project was the development of Personal Safety Plans by every team member at all levels of the Project. · Authority to Stop the Job All employees are given the authority to stop the job if it's not safe. This message is conveyed directly to employees on induction day by the client, the Bechtel project manager and Construction manager as well as the leaders from each contractor. · Communication and Involvement The Project recognised the importance of everyone's involvement in order to promote ownership and commitment. The Project encouraged employee commitment through their involvement in: · Identification of hazards, assessment of risks and the development and implementation of controls using the work method statement tools; · On the job observations of fellow team mates performing their tasks as part of the "Planned Job Observation" program. In excess of 3000 planned job observations were conducted over the duration of the Project; · Identifying opportunities for improvement in ES&H and in the development and implementation of appropriate solutions · a stretching program that was successfully introduced and implemented at all daily pre-start meetings through Ethos Health. The program was implemented due to research findings suggesting that stretching can reduce the incidence of soft tissue injuries at work.

Formal safety communications were provided through (as a minimum): · Daily Pre-Start Safety Talks; · Contractor Safety Committees · Take 5/STARRT program · Monthly status reports · Work Method Statements; · Weekly safety toolbox meetings; · The Zero Incident Team; · Safety Bulletins and notices.

6.0 Employee Relations Systems The full suite of traditional and proven Bechtel Employee Relations and Industrial Relations Systems, Processes and Procedures was established and implemented on this Project.

6.1 Recruitment, Mobilisation & Demobilisation Process The prime goal of this process is to ensure the timely and orderly professional recruitment of a top class, locally based, very competent workforce aligned to the goals of the Project in a manner that met the Project's recruitment and mobilisation requirements.

All prospective Project employees were required to complete a Registration of Interest Form prior to proceeding to the Project Medical Evaluation for Safety. They were also required to complete a survey that measured attitudes towards safety. Any issues arising from an individual's survey were followed up through additional training and re-assessment before approval for mobilisation was given. 6.2 Local Employment The Project strategy to maximise the use of local labour was successful, as 98% of the manual workforce was from the local region. Virtually all contractors on the Project brought their existing employees to the Project thus ensuring our local content objective was achieved and rendered the need for a local recruitment program redundant.

At its peak, the Project workforce was 450 in May 2008 with over 1000 persons being employed over the life of the Project. 6.3 Performance Management & Communication An integral component of the Employee Relations Strategy was the successful implementation of the Project Performance Management & Communication Program. This program has been successfully used on all Bechtel Projects over the past 17 years and has been effective in ensuring desired behavioural outcomes are achieved.

The Performance Management & Communication Program is designed specifically to: · motivate employees: · ensure the prime Project Employee Relations goals are achieved; · promote teamwork; · encourage and challenge teams and individuals to achieve a performance level that could even surpass their own expectations; · give recognition for achievement where it is due immediately after the event.

The Program has two elements; a Reward and Recognition Program and a Communication Program.

6.3.1 The Reward and Recognition Program The Reward and Recognition Program consisted of Team and Work Group Excellence Awards. The awards were positive tools for recognising people's contribution to the Project and for maintaining the team's focus on achieving the Project's key milestones.

The effective use of this program has been one of the key factors contributing to the success of the Project.

6.3.2 The Communications Program The Communication Program consisted of activities designed to provide the all Project participants and stakeholders with consistent, effective, timely and appropriate channels of communication by a variety of proven mechanisms, including: · Orientation / Induction Program · Site Magazine - Refer Attachment 2- Project Newsletter November 2008 and August 2009 · Dashboard Matrix Posters · Milestone Celebrations · Social / Sporting Activities - Social events - 2 project wide race day events - 2 project wide golf days - Contractors' Sports Challenge · Participation in Local Community Events - Sparke Helmore Triathlon over 2 years - Leukaemia Foundation "World's Greatest Shave to Care and Cure" over 2 years. Last year the project raised $27,308 which was within the top 10 highest fund raising amounts for this cause in NSW. - Participation in "Movember" which raised money for men's health. - The project supported Daracon's fund raising activities for "Headstart", a charity for people suffering from head injuries.

The project also introduced monthly communication meetings with management, employees and union officials as a means of promoting open communication and resolving any issues before they escalated. These meetings were conducted in the spirit of communication, consultation and co-operation which helped to ensure no work time was lost due to industrial action. [emphasis added]

6.4 Employee Training/Upskilling Programs Apart from the leadership training referred to in other sections of this report, minimal "on-the-job" training was required. Employees engaged in civil works, mobile equipment operators, riggers, scaffolders and tradespersons all came to the Project fully ticketed.

However approximately 30 employees gained WorkCover Accreditation and ticketing in the skills of operating Elevated Work Platforms, Forklift, Franna Cranes and earth moving equipment. All electrical personnel also took part in PWCS provided electrical awareness training (one day per year per employee, also run by TAFE).

A number of EH&S training activities were also conducted.

17 Work on the 3EXP Project is substantially complete and further work is covered by the KEP 2010-2014 Agreement which will have an umbrella effect for the conclusion of the balance of the 3EXP Project. 18 In these circumstances the parties were in agreement that this matter be concluded. 19 The parties are at liberty to make such application as they are advised in respect to assistance in the future in regard to the KEP 2010-2014 Agreement. 20 These proceedings are so 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.