By MARK PHILLIPS, industrial reporter
17 May 2001-Herald Sun

YALLOURN Energy faced significant losses if unions refused to accept job cuts and change work practices, the company's chief warned yesterday.

Chief executive Mike Smith said a bitter dispute of nearly two years was stopping the company modernising its power plant and coal mines to stay competitive.
Mr Smith told a packed Australian Industrial Relations Commission hearing that plans to redevelop the Yallourn open-cut coalmine had been "frustrated" by the dispute.

He said the company needed to begin developing a new coalfield before supplies ran out by 2007.

At the same time, Yallourn Energy planned to modernise the power plant with new technology that would mean the loss of about 30 jobs.

But the dispute over a new enterprise agreement meant the company was unable to make the changes, Mr Smith said.

It was the first day of arbitration to settle the stalemate over talks for an enterprise agreement to replace one that expired in September 1999.

The dispute peaked in October when parts of Victoria were blacked out by a wildcat strike.

In his opening address, Nicholas Green, QC, for Yallourn Energy, said the workers were resisting changes necessary for the company's growth.

Mr Green said they were stuck in the past, when Yallourn was owned by the public as part of the State Electricity Commission.

"The old world has gone and there's no going back," he said.

While Yallourn Energy was seeking a revamped agreement, the unions wanted to retain most of the conditions from the old one, Mr Green said.

The most restrictive parts of the agreement were fixed minimum manning levels, and inability to change shift arrangements or use contract labour without union consultation. It also stopped forced redundancies.

The arbitration hearing, before the Full Bench of the AIRC, is expected to take eight days, with a site visit to the Latrobe Valley today.