Port Kembla Coal Terminal Limited

[2018] FWCA 2391

[2018] FWCA 2391

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Port Kembla Coal Terminal Limited
(AG2017/5121)

PORT KEMBLA COAL TERMINAL LIMITED ENTERPRISE AGREEMENT 2012 – 2015

[AE893080]

Coal export terminals
SENIOR DEPUTY PRESIDENT HAMBERGER	SYDNEY, 30 APRIL 2018

Application for the termination of the Port Kembla Coal Terminal Limited Enterprise Agreement 2012-2015.

Introduction and background

[1] Port Kembla Coal Terminal Limited (the applicant) applied on 27 October 2017 under s.225 of the Fair Work Act 2009 (Cth) (the FW Act) to terminate the Port Kembla Coal Terminal Limited Enterprise Agreement 2012 1 (the 2012 Agreement).

[2] The matter was heard in Sydney on 22 and 28 February, and 1, 13, 15 and 29 March 2018. The applicant was represented by R Kenzie QC and B Rauf, counsel. The Construction, Forestry, Mining and Energy Union (Mining and Energy Division) (CFMEU) was represented by A Walkaden.

[3] The following people gave evidence on behalf of the applicant:

•  John Gorman, PKCT’s Operations Manager; and

•  Dominic Tisdell, Head Metals & Mining Consulting, Asia Pacific, Wood Mackenzie Limited.

[4] The following people gave evidence on behalf of the CFMEU:

•  David Brown (PKCT Process Control Transition);

•  Peter Colley (CFMEU’s National Research Director);

•  Robert Timbs (District Vice-President, South Western District Branch, CFMEU); and

•  Murray Dakers (PKCT Outbound Shut Controller and Acting Lodge President, CFMEU).

[5] At the conclusion of the final day of hearing on 29 March 2018, I issued an order 2 terminating the enterprise agreement with effect from 29 March 2019. These are my reasons for deciding to issue that order.

[6] I do not propose to summarise all the extensive evidence tendered during the proceedings. The parties may be assured that I had regard to all of the evidence in making my decision.

The legislation

[7] The immediately relevant provisions are as follows:

‘225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.’

[8] Also of particular relevance to the application are the object of the FW Act, as set out in s.3 and the objects of Part 2-4 of the FW Act, dealing with enterprise agreements, as set out in s.171.

The applicant’s business

[9] The applicant is the operator of the Port Kembla Coal Terminal (PKCT). PKCT is a coal exporting facility which services coal mining operations in the Southern and Western coalfields of New South Wales. The terminal receives coal by road and rail, which is stockpiled and then loaded for shipping. PKCT’s employees operate heavy machinery including shiploaders, reclaimers and mobile plant. PKCT operates 24 hours a day, seven days a week.

[10] PKCT is owned and operated by a consortium of six equal shareholders, all coal producers on the Southern and Western coalfields, who lease the terminal from NSW Ports. The shareholders are Illawarra Services Pty Limited, Centennial Coal Company Limited, Wollongong Coal Limited, Tahmoor Coal Pty Limited, Oakbridge Pty Limited and Metropolitan Collieries Pty Ltd.

[11] Prior to 1990, PKCT was owned by the NSW Government, and employees were employed by the Maritime Services Board (MSB). Following privatisation in 1990, the employment of the MSB employees working at PKCT who elected not to take voluntary redundancies transferred to the applicant. Since privatisation, employees of the applicant have been covered by an award and successive enterprise agreements.

[12] PKCT balances its operating costs with its loading charge and does not retain any profits from its operations. It is a condition of PKCT’s lease with NSW Ports that PKCT be available to any customer wishing to utilise its facilities and that all customers be charged the same loading charge in the financial year.

[13] PKCT’s loading charge is set prior to the commencement of the financial year and advised to customers. It is set by dividing the expected business and maintenance costs for the financial year, minus other income, plus the capital expenditure/cash charge (where required) by the total expected throughput for PKCT during the financial year. Throughout the financial year the actual tonnage rates of each customer vary from the estimated tonnage levels provided by customers at the start of the financial year. If throughput falls, then the loading charge, all other things being equal, is increased (and vice versa).

[14] PKCT monitors the loading charge at the end of each month and recalculates the loading charge throughout the year to ensure that it is reflective of the actual tonnes being shipped through PKCT. All adjustments to the loading charge are backdated to the commencement of the financial year to ensure that it is reflective of the actual tonnes being shipped through PKCT, and invoiced to customers accordingly.

[15] Other NSW coal loaders, such as the Newcastle Coal Infrastructure Group (NCIG) and Port Waratah Coal Services (PWCS), operate on a ‘take or pay’ basis, whereby customers must allocate a certain number of tonnes at the start of the financial year to be shipped at a set loading rate.

[16] The 2012 Agreement was negotiated in a strong economic environment and at a time when the forecast for PKCT was for substantial further growth. Throughput for PKCT in the 2011 financial year was a record 14 million tonnes, rising to 14.7 million tonnes in the 2012 financial year. Further growth in throughput was expected over the course of the next decade. Indeed, PKCT had planned to upgrade its infrastructure and facilities to an ultimate capacity of approximately 28.5 million tonnes per annum.

[17] As it turned out, however, market conditions significantly deteriorated in 2012. Coal prices fell significantly and PKCT customers significantly cut their output. Its plans for expansion were scrapped. By 2017, annual throughput had fallen to 8 million tonnes, with an expectation that throughput would be as low as 4.6 million tonnes in the 2018 financial year.

[18] Largely because of the reduction in throughput, the loading charge has increased from $3.84 per tonne in the 2012 financial year to an anticipated $6.90 in the 2018 financial year. While there are a range of factors behind the reduction in throughput, some of which may be temporary (for example, the downturn in production at South32’s Illawarra Mines), it has put pressure on the applicant to reduce costs. Moreover, while the evidence at the hearing about PKCT’s customers diverting exports through NCIG and/or PWCS was mixed, there is certainly a risk that if PKCT is unable to control its costs into the future, at least some of its customers may decide to use those other export facilities. This could conceivably put PKCT’s future viability in jeopardy.

The 2012 Agreement

[19] The Fair Work Commission (the Commission) approved the 2012 Agreement on 4 April 2012. It commenced operation on 11 April 2012 and nominally expired on 30 June 2015.

[20] The 2012 Agreement applies to the applicant and the employees of the applicant who perform work in the three streams of the grading matrix in Appendix 1 – Grading System. Approximately 57 full-time equivalent employees are currently covered by the 2012 Agreement. The CFMEU is also covered by the 2012 Agreement.

[21] The 2012 Agreement contains some unusual features, particularly those that reflect the use of ‘self-directed’ working teams. While this ‘team system’ may be attractive from the point of view of industrial democracy, it significantly constrains the applicant’s ability to manage its employees, including in relation to performance, discipline, rostering, working time, leave, and promotion. I am satisfied that the relevant provisions restrict the applicant from flexibly organising and structuring its working arrangements and utilising its workforce to maximum benefit during working and paid hours.

[22] The superannuation entitlements in the 2012 Agreement are very generous by community standards. They reflect the arrangements that were in place at the time of PKCT’s privatisation. Employees must contribute 8 per cent of superannuable salary and the applicant contributes an additional 17 per cent. If an employee contributes a further 2 per cent for any consecutive six-year period, the applicant is required to contribute a further 3.5 per cent, bringing its maximum contribution to a total of 20.5 per cent.

The course of enterprise bargaining

[23] The parties commenced bargaining for a replacement enterprise agreement in March 2015. In that year, there were 25 bargaining meetings. These typically ran for around three hours or so, and involved Mr Gorman and two or three other PKCT representatives and three or four employee representatives, including Messrs Dakers and Timbs. In November 2015, the applicant presented a draft enterprise agreement which included changes to the team system, a reduction in the scope of the agreement for future employees so that it would only cover Trades and Operator roles, changes to superannuation (reducing the employer contribution to the SGC rate for employees engaged after 1990), as well as changes to hours of work, dispute resolution, consultation and the grading system. The employee representatives rejected this proposed agreement and put forward their own proposals.

[24] Throughout the course of 2016, the parties attended some 16 bargaining meetings. In May 2016, the employee representatives put forward their own enterprise agreement. The applicant rejected this on the grounds that it did not reflect its objectives of increased productivity and flexibility and reduced costs. Despite this, it is worth noting that the proposed agreement put forward by the employee representatives would have largely removed those provisions of the 2012 Agreement that were based on the team system, and allowed management much greater responsibility for managing performance, non-rostered overtime, promotion and leave.

[25] In November 2016, the employee representatives invited the applicant to accept a rollover agreement with a 4 per cent salary increase each year. This was clearly intended to ‘shock’ the applicant into making further concessions.

[26] Further bargaining meetings took place in January and February 2017. On 20 February 2017, the CFMEU filed an application for a protected action ballot order. On 3 March 2017, the results of the protected action ballot were declared. Virtually all the employees on the roll of voters voted in support of industrial action. The 30-day period in which to initiate industrial action subsequently was extended, and employees took protected action from 12:00 am on 11 April 2017 to 3:00 pm on 13 April 2017.

[27] On 22 February 2017, the applicant applied to the Commission to deal with a bargaining dispute under s.240 of the FW Act. The parties attended a series of eight conferences facilitated by Deputy President Dean between March 2017 and July 2017. Further proposals were exchanged between the parties and significant progress was made. However, the parties remained apart on a number of significant issues.

[28] Further bargaining took place and on 5 September 2017, the applicant provided a copy of a proposed agreement to the employee representatives. This contained a number of modifications to the 2012 Agreement, including the removal of the team work clause and the introduction of Line Managers who would be responsible for various decisions that were previously the responsibility of the team, such as in relation to training, rosters, time in lieu, shift relief, leave and manning. It also proposed changes to the dispute settlement procedure and consultation clauses, and the existing superannuation entitlements were to be ‘grandfathered’, with new employees only receiving the superannuation guarantee amount.

[29] While this proposal would have largely dismantled the team system and significantly increased managerial flexibility, it also incorporated a number of concessions by the applicant, in order to maximise the likelihood of its acceptance. The employee representatives indicated that they agreed to all the provisions of the proposed agreement with the exception of two issues:

(a) Salary increases

The applicant proposed annual salary increases of 1.5 per cent, 1.5 per cent, 2 per cent and 2 per cent, while the employee representatives wanted 2 per cent increases each year; and

(b) Superannuation contributions for new employees

The applicant proposed a maximum employer contribution of 14 per cent for new employees, while the employee representatives wanted new employees to retain access to the same provisions as existing employees.

[30] The applicant put the proposed agreement to a vote. It was rejected by approximately 90 per cent of employees.

[31] The reasons why the employees so comprehensively voted down the September 2017 proposal are not entirely clear. However, based on the evidence, I consider that while the employee representatives had genuinely accepted the need for major change, including the dismantling of the team system, this was not necessarily the case for many of the employees. I am satisfied, moreover that the vote at least partly reflects that many employees had a low level of trust in management.

[32] To some extent, the rejection of its September 2017 proposal led to a hardening of the applicant’s position. One consequence was its decision to apply for the termination of the 2012 agreement.

[33] The CFMEU proposed in mid-November 2017 that the parties jointly seek the Commission’s assistance under its ‘New Approaches’ program. The applicant rejected this.

[34] However, negotiations did continue. In December 2017, the CFMEU wrote to PKCT confirming its position was based on the September 2017 proposed agreement with a number of additional provisions and amendments. The applicant responded in a letter of 14 December 2017 which withdrew a number of concessions it had previously included in its September 2017 proposal.

[35] Further bargaining has occurred in 2018, with the applicant indicating some willingness to move back to the provisions in its September 2017 proposal.

Consideration

[36] Under s.226(a) of the FW Act, a precondition to the Commission’s obligation to exercise its power to terminate an agreement is that it is satisfied that it is not contrary to the public interest to do so.

[37] In Kellogg Brown,the Full Bench of the Australian Industrial Relations Commission stated:

‘The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation and the maintenance of proper industrial standards, …While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.’ 3

[38] PKCT plays an important role in facilitating coal exports from the Southern and Western Districts of New South Wales. Its cost-effectiveness and its viability are important not only for the terminal itself and its employees, but for the wider industry that it serves.

[39] The FW Act is designed to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians.

[40] I am concerned that the 2012 Agreement is not consistent with the promotion of economic prosperity, especially as its retention in the longer term may jeopardise PKCT’s viability.

[41] In these circumstances, I am satisfied that the termination of the 2012 Agreement would not be contrary to the public interest.

[42] The Commission is required to consider whether it is appropriate to terminate the 2012 Agreement, taking into account all the circumstances, including the views and circumstances of the employees, the employer and the CFMEU, including the likely effect that termination would have on each of them.

[43] All other things being equal, terminating the 2012 Agreement would certainly give the applicant greater scope to increase productivity and reduce costs. On the other hand, it could lead to a significant reduction in the terms and conditions of employment enjoyed by the employees. This is despite the applicant’s undertaking (annexure A to this decision) to maintain certain conditions of employment in the event of termination.

[44] As I have previously mentioned, I have not sought to summarise all the evidence presented during the proceedings. However, I have concluded, based on that evidence, the following:

•  Both parties have genuinely tried to reach agreement.

•  While neither party has breached the good faith bargaining requirements, both have at times taken positions that made it more difficult to reach agreement.

•  The employee representatives – quite appropriately – accepted that the team system needed to go as far back as 2016.

•  At least some of the employees are not yet similarly persuaded.

•  The 2012 Agreement needs to be replaced, mainly because it prevents PKCT from flexibly organising and structuring its working arrangements and utilising its workforce to maximum benefit during working and paid hours.

•  The September 2017 proposed agreement (perhaps with some minor modifications) provides a sound basis for reaching agreement on a replacement.

•  There is a real risk that simply terminating the 2012 Agreement immediately will further polarise the parties, reducing the likelihood of reaching a new agreement and undermining the potential for productive workplace relations at the terminal.

Conclusion

[45] The 2012 Agreement – and the team system embedded within it – needs to go. I am not satisfied that this will occur unless the application to terminate the agreement is granted, as I am not confident that the bulk of the workforce (as opposed to their representatives) have fully accepted this fact. However, it is better that this sort of wide-ranging change be introduced by agreement. By delaying the implementation of the termination of the 2012 Agreement for 12 months, I have sought to maximise the likelihood that the parties – and the employees – can negotiate a new enterprise agreement which removes the team system well before termination takes effect.

SENIOR DEPUTY PRESIDENT

Appearances:

R Kenzie QC with B Rauf, counsel, for Port Kembla Coal Terminal Limited.

A Walkaden for the Construction, Forestry, Mining and Energy Union.

Hearing details:

Sydney.

2018.

February 22, 28.

March 1, 13, 15, 29.

Annexure A: Applicant’s undertaking

1. Port Kembla Coal Terminal Limited (PKCT) has applied to the Fair Work Commission under section 225 of the Fair Work Act 2009 (Cth) for the termination of the Port Kembla Coal Terminal Limited Enterprise Agreement 2012 (the Agreement).

2. PKCT hereby undertakes to each employee who on the termination date was covered by the Agreement (Employee) that, from the termination date of the Agreement, PKCT will, in addition to its obligations under the National Employment Standards (NES) and the Coal Export Terminals Award 2010 or the Clerks – Private Sector Award 2010, apply the terms and conditions in this Undertaking to the Employee.

3. Unless otherwise agreed with the Employee, in respect of any Employee who is not covered by the Coal Export Terminals Award 2010 or Clerks – Private Sector Award 2010 as at the date of termination of the Agreement, PKCT will, in addition to its obligations under the NES, apply the terms and conditions of the Coal Export Terminals Award 2010 to the Employee (at the maximum classification level for the Employee's role) until whichever of the following first occurs:

(a) a new enterprise agreement which applies to the Employee commences to operate; or

(b) the Employee and PKCT agree in writing that the terms and conditions of the Coal Export Terminals Award 2010 are no longer to apply to the Employee.

4. The Undertaking is inclusive of, and paid in satisfaction of, all payments and benefits that PKCT is legally obliged to provide to Employees including all entitlements Employees have to payments (including wages, overtime payments, penalty rates and allowances) under the Coal Export Terminals Award 2010 or the Clerks – Private Sector Award 2010 (the Awards), based on the maximum classification level for the roles in which Employees are engaged. Any entitlement Employees may have to any payments (including wages, overtime payments, penalty rates or allowances) under the relevant Awards are off set against payments made in accordance with this Undertaking.

5. To the extent that this Undertaking provides entitlements in excess of the NES and the Awards, PKCT will apply the terms of this Undertaking.

6. Unless otherwise indicated in this Undertaking, this Undertaking will cease to apply to an Employee from the day after whichever of the following first occurs:

(a) a new enterprise agreement which applies to the Employee commences to operate; or

(b) the Employee and PKCT agree in writing that this Undertakings will no longer apply to the Employee; or

(c) a period of six months passes from the date that this Undertaking first commences application.

ABOVE AWARD UNDERTAKING

Following the termination of the Agreement, PKCT undertakes to maintain the following conditions for the period set out in paragraph 6 above:

7. Remuneration

Employees will continue to be paid at the pay rates relevant for their grade as at the date of termination of the Agreement, as set out in the table at clause 15.2.8 “PKCT Pay Rates from 1st July 2014” of the Agreement.

8. Superannuation

Employees will continue to be entitled to superannuation in accordance with clause 16 of the

Agreement

9. Hours of work

This section of the Undertaking will continue to apply until a new enterprise agreement which applies to the Employee commences to operate.

PKCT will maintain the current ordinary hours for Dayworkers of 35.3 hours per week, and 35 hours per week plus four hours of rostered overtime for Shiftworkers.

The current roster pattern in clause 14.3.2(a) of the Agreement will continue to apply for Shiftworkers.

The hours of work, including shift lengths, outlined above will apply subject to the provisions of the applicable Award.

10. Additional Hours

This section of the Undertaking will continue to apply until a new enterprise agreement which applies to the Employee commences to operate.

Unless the balance of an Employee’s Additional Hours is addressed in a new enterprise agreement which applies to the Employee, any such remaining balance at the time of the cessation of the Undertaking in respect of the Employee will be paid out at the Employee's annualised rate (as set out in the table at clause 15.2.8 “PKCT Pay Rates from 1st July 2014” of the Agreement).

Each Employee's VERA balance as at the date of termination of the Agreement will be converted to Additional Hours.

‘Additional Hours’ means hours worked in excess of 35.3 hours per week for Dayworkers and an average of 39 hours per week for Shiftworkers.

No payment will be made for Additional Hours worked.

Employees will be entitled to time off in lieu of all Additional Hours worked at the rate of one hour off for each one Additional Hour worked. Employees may take time off in lieu at a time or times agreed by their Line Manager.

11. Public Holidays

Any public holiday bank balance that exists (as referred to in clause 18.5 of the Agreement) as at the date the Agreement is terminated will be paid out to Employees in the first full week pay period following the termination of the Agreement (in accordance with clause 18.7 of the Agreement).

Public holidays are as prescribed by the Public Holidays Act 2010 (NSW).

Payment for public holidays which occur following the date of the termination of the Agreement will be in accordance with the applicable Award.

12. Compulsory Days Off

This section of the Undertaking will continue to apply until a new enterprise agreement which applies to the Employee commences to operate.

Unless the balance of an Employee’s Compulsory Days is addressed in a new enterprise agreement which applies to the Employee, any such remaining balance at the time of the cessation of the Undertaking in respect of the Employee will be paid out at the Employee's annualised rate (as set out in the table at clause 15.2.8 “PKCT Pay Rates from 1st July 2014” of the Agreement).

Shiftworkers that have not taken their annual allocation of Compulsory Days Off (CDOs) as at the date of termination of the Agreement will retain any remaining CDOs and be eligible to take the CDO/s upon agreement with their Line Manager.

Shiftworkers will continue to be entitled to one CDO per four week period worked in accordance with clause 14.3.2(b) and (c) of the Agreement.

13. Leave entitlements

(a) Annual leave

Employees will retain their accrued annual leave entitlements (calculated in weeks) as at the date of termination of the Agreement (Preserved Annual Leave Accrual). The Preserved Annual Leave Accrual, at the time that that any such leave is taken by an Employee, will be paid at the rates set out in clauses 21.1 and 21.2 of the Agreement at the Employee's annualised rate (as set out in the table at clause 15.2.8 “PKCT Pay Rates from 1st July 2014” of the Agreement).

From the termination date of the Agreement, Employees will accrue annual leave in accordance with NES and the applicable Awards.

Applications for annual leave must be approved by the Employee's Line Manager.

(b) Long service leave

Employees will retain their accrued long service leave entitlements (calculated in days) as at the date of termination of the Agreement (Preserved Long Service Leave Accrual). The Preserved Long Service Leave Accrual, at the time that any such leave is taken by an Employee, will be paid at the Employee's annualised rate (as set out in the table at clause 15.2.8 “PKCT Pay Rates from 1st July 2014” of the Agreement).

From the termination date of the Agreement, long service leave will accrue in accordance with the Long Service Leave Act 1955 (NSW).

Applications for long service leave must be approved by the Employee's Line Manager.

(c) Personal/Carer's Leave

At the termination date of the Agreement, Employees will be credited with 20 days’ personal/carer’s leave.

From the termination date of the Agreement, for each year of service Employees will progressively accrue ten personal/carer’s leave days according to their ordinary hours of work, accumulating from year to year.

Notification of personal/carer’s leave must be provided to the Employee's Line Manager. Additional personal/carer’s leave may be granted at the discretion of the Operations Manager.

(d) Discretionary Leave

Employees currently on an approved period of Discretionary Leave will be entitled to continue their leave for the currently approved period.

All other leave will be given and taken in accordance with the NES.

14. Redundancy process

PKCT undertakes that it will not terminate the employment of an Employee on the ground of redundancy in order to replace the Employee with a contractor, or have the job of the Employee performed by a contractor.

If a decision has been made by PKCT that it no longer requires the job done by the Employee to be done by anyone, and following consultation in accordance with PKCT's consultation obligations under the applicable Award, PKCT will:

(a) initiate an Expressions of Interest process for voluntary redundancy from all Employees, with offers made based on business needs; and

(b) review opportunities for redeployment to a suitable vacant role within PKCT, with offers made based on business needs; and

(c) investigate all avenues to avoid forced redundancies, including the reduction of contractors, where the work performed by contractors can be performed by Employees, having regarding to the skills and competencies of Employees and the nature of the work in question,

then, if further reductions are still required, PKCT will implement forced redundancies by applying a reasonable and objective selection criteria, developed by PKCT and based on business needs.

15. Redundancy pay

Unless otherwise agreed with the Employee, this section of the Undertaking will continue to apply until a new enterprise agreement which applies to the Employee commences to operate.

Redundancy pay (excluding notice or payment in lieu of notice) will be in accordance with clause 13.5.5 of the Agreement and such rates will apply in respect of any redundancy pay entitlements for the whole of the service of the Employee, including employment service following the date of the termination of the Agreement.

Notice or payment in lieu of notice will be four weeks, or if the Employee has more than two years’ continuous service and is aged 45 or older, five weeks.

16. Employee Entitlements Fund (EEF)

Unless otherwise agreed with the Employee, this section of the Undertaking will continue to apply until a new enterprise agreement which applies to the Employee commences to operate.

PKCT will operate an Employee Entitlements Fund (EEF), the purpose of which is to fund accrued Employee entitlements which includes annual leave, long service leave and the redundancy package provided for in this Undertaking.

Whilst ever the EEF is not 100% funded, PKCT will:

(a) reinvest the net interest earned from the fund as part of the contributions; and

(b) make a contribution amount to the EEF of $0.02 / tonne; and

(c) only draw down from the fund for the purpose of paying out redundancy entitlements.

In the event that the fund grows beyond 100% funded, then the amount by which the fund total exceeds 100% funded will be returned to PKCT.

The terms of the relevant Awards (and the Coal Export Terminals Award 2010 for Employees who may not be covered by the Awards) will otherwise regulate the terms and conditions of employment of the Employees.

 1   AE893080.

 2   PR601632.

 3   Kellogg Brown & Root Pty Ltd & Ors v Esso Australia Pty Ltd PR955357 [23].

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<AE893080  PR606657>