AG2001/3061, Transcript of Proceedings [2001] AIRCTrans 1453 (11 July 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
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TRANSCRIPT OF PROCEEDINGS


O/N 7987
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER HOLMES

AG2001/3061

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under section 170LL of the Act by
Australian Guarding Services Pty Ltd for
certification of the Australian Guarding Services
Pty Ltd (Crowd Control - Shopping Centres &
Venues) Enterprise Agreement 2001

MELBOURNE

9.48 AM, TUESDAY, 19 JUNE 2001

PN1

MR S. MOIR: I seek leave to appear on behalf of the employer in this matter.

PN2

MS R. FRENZEL: I appear for the ALHMWU in this matter.

PN3

THE COMMISSIONER: Thank you, Ms Frenzel. Leave is granted. If you would like to address me, Mr Moir. Take what time you need.

PN4

MR MOIR: Thank you, sir.

PN5

THE COMMISSIONER: I gather there are two applications. One is for the designation of an award and the other is the certification of the agreement.

PN6

MR MOIR: That is correct, sir. If it pleases the Commission, we may turn our attention to the 170XF application seeking the designation of the appropriate award for this agreement.

PN7

THE COMMISSIONER: Yes.

PN8

MR MOIR: The agreement that is proposed to be made is an agreement in the security industry so the nature of the agreement is for static and security guarding and the parties to the agreement propose that the Security Employees (Victoria) Award 1998 would be the appropriate award to be designated to underpin this agreement, sir, and on that basis the parties ask that that award be designated in the absence of any other appropriate award for this state and a federal award to comply for this state, if it pleases the Commission.

PN9

THE COMMISSIONER: Thank you. Where are the employees engaged?

PN10

MR MOIR: Sorry?

PN11

THE COMMISSIONER: Shopping centres.

PN12

MR MOIR: Yes, shopping centres, maybe at hotels and special sporting events and the like but all in the state of Victoria.

PN13

THE COMMISSIONER: Thank you. Yes, Ms Frenzel.

PN14

MS FRENZEL: Thank you, Commissioner. Commissioner, I would concur with the submissions of Mr Moir. The work is clearly covered by the terms of the Security Employees Award and the terms of its operation within the state and we would commend the application for the designation of that particular award with respect to no disadvantage test for this agreement, if the Commission pleases.

PN15

THE COMMISSIONER: Thank you. In light of those submissions, in relation to the nature of the work supposed to be performed, I am satisfied that in fact the appropriate award to be designated is in fact the Security Employees (Victoria) Award 1998. I therefore so determine and my associate will provide a copy of that determination to you. We might now move to the application for the certification of the agreement. Yes, Mr Moir.

PN16

MR MOIR: Thank you, sir. Sir, before we move into submissions on that, if I may provide some comment and replacement pages. In reading the agreement again last night, I picked up a couple of items which I think, through renumbering in drafting processes, was overlooked. Sir, if I may just - - -

PN17

THE COMMISSIONER: Do I take it that they don't affect the substance of the agreement?

PN18

MR MOIR: That is correct, sir, and there is only four quick items if I can touch on them - - -

PN19

THE COMMISSIONER: By all means.

PN20

MR MOIR: - - - for the knowledge of the parties. Sir, at page eight, clause 12.3 reference is made at the end of the second paragraph that the overtime rates set out in subclause 12.2 above and in fact that should read 12.1.3 above.

PN21

THE COMMISSIONER: Yes.

PN22

MR MOIR: And sir, if we move down to 12.4.1, it reads "employees, other than casuals". Sir, the agreement does not cover casuals as a basis of employment and we would say that the words "other than casuals" should be deleted.

PN23

THE COMMISSIONER: Do I take it then, that is a fact as of now and that there is no intention during the life of the agreement that the company would employ casuals pursuant to this agreement?

PN24

MR MOIR: That is correct, sir. The only terms of employment under the agreement are full-time and permanent part-time.

PN25

THE COMMISSIONER: Fine.

PN26

MR MOIR: Subject to comments from my friend. Sir, if you turn to page nine at clause 12.4.5, the second clause reference talking about leave being taken and being paid at 12.4.2. Sir, 12.4.2 of your copy talks about annual leave paid out on termination and that reference should read 12.4.4 which refers to leave being taken at the direction of the employer and finally, sir, just at the bottom of that group at 12.4.8, again the reference is made to pay rates set out in 12.2 - that should read 12.1.3 and sir, if it is appropriate, the two pages I have made those adjustments to, if they could be just slotted in for those or replaced with the agreement of my friend.

PN27

THE COMMISSIONER: I will hear Ms Frenzel when she makes her submission.

PN28

MR MOIR: Sir, in terms of the agreement, the agreement is sought to be made between Australian Guarding Services Pty Ltd and the Australian Liquor, Hospitality and Miscellaneous Workers Union as a Greenfields agreement. Sir, as previously mentioned, the scope of the agreement is to cover guarding and static security at shopping centres, hotels, venues and special events within the state of Victoria.

PN29

Sir, using the Security Employees (Victoria) Award 1998 as the base, the rates and conditions contained within the agreement have been put against that award for the purposes of the no disadvantage test. Further, sir, given that there is no involvement for employee participation on the basis that at the time of making the agreement, the employer had no employees for such work, there was no need to follow the processes required under LJ or LK. We say that the requirements set out in the Act pursuant to 170LL in terms of making the agreement being complied with and the negotiations that have taken place with the union as previously named.

PN30

Sir, overall the agreement is - sorry, does not disadvantage any employee who would receive payment under the award, however there is provision for payment rates of pay which is less than that described in the award. Now, sir, that is at 12.1.3 of the agreement and in the table at that clause the rates for weekends and public holidays are less than the rates for the same type of work prescribed in the award. However, we say that the balance of those lower rates are offset in the positive by the rates for Mondays to Fridays, those rates being higher than the rates for such work under the award.

PN31

Now, sir, in terms of illustrating that statement, if I may hand up a copy of some rosters.

PN32

THE COMMISSIONER: Thank you. I will mark those as exhibit A1 and A2, the one for Knox is A1 and the one for Cranbourne is A2.

EXHIBIT #A1 SAMPLE OF ROSTER FOR KNOX

EXHIBIT #A2 SAMPLE OF ROSTER FOR CRANBOURNE

PN33

MR MOIR: Thank you, sir. Sir, if we turn to exhibit A1 in the first instance, the front sheet is basically a financial analysis of the roster on a weekly basis so the back sheet is an indicative work pattern that was proposed by the employer for working at shopping centres. Sir, I think you are very familiar with the rostering systems and profiles. The page illustrates the days that work is undertaken in a night shift, day shift and afternoon shift pattern. The narrower columns to the right indicate the number of hours under each of those penalty bearing shifts or payment patterns with the totals being carried to the bottom. Sir, it is those totals that are then transferred over to the front page of the table and costed out at the rates that would be applicable to such time under the Security Employees (Victoria) Award and also under the agreement.

PN34

Now, sir, I just note the second column of the analysis is addressed as J or Campbell Security agreement which was a draft name, sir, and I ask that that just be ignored and referred as the Australian Guarding Services agreement. If we look at the ordinary hours component, the hourly rate of the award is $11.9105 and the corresponding ordinary hours payment under the proposed agreement is $15.30 so we say that there is $1.39 per hour increase to the ordinary hours. Shift duty, at the second line, the award

PN35

provides for the appropriate 20 per cent penalty on it at 14.2926 and the agreement is providing the 15.30, again in the order of a dollar an hour higher.

PN36

THE COMMISSIONER: The first one is of the order of $3.30 an hour, isn't it?

PN37

MR MOIR: $3.30, thank you, sir. That improves the position greatly. The third item for Saturday work is the first one that after two hours would be lower to the employee if they were receiving award payments. As you are aware, sir, the award provides for the 17.8658 hourly rate for the first two hours of overtime - sorry, I am getting ahead of myself, sir. The award provides for ordinary hours on a Saturday at time and a half rate which is described there. In terms of the agreement, again the rate for ordinary hours is higher than the award. Where it is lower is the Sunday duty on the fourth line, sir, and you will see the $23.82 of the award against the $18.25 of the agreement but if we look to the total hours column, we will see that the Sunday work is the minimum number of hours that would be worked by an employee over the course of rotating the roster and the previous three hourly rates are the higher hours and the agreement provides for the higher hourly rate.

PN38

Sir, again, in terms of rates of pay, the agreement provides for voluntary overtime and those rates are established - sorry, those rates are described at clause 12.1.3 of the agreement and at the rates that have been set for ordinary Saturday and shift duty being higher, we contend that the lower rates of voluntary overtime against normal overtime rates of the award would result in no disadvantage to the employees should they be required to or volunteer to undertake that work so in terms of being directed to work additional hours, the provisions of the award will apply in the time and a half for the first two hours and double time thereafter etcetera on the Saturday and weekdays, Saturday being double time for the day and Sunday being double time and a half, etcetera. There is no intent to disadvantage the employee under direction for work. Again, it becomes a voluntary exercise where an agreed hour is being developed to work those periods.

PN39

Sir, in terms of the remainder of the agreement, it provides for the flexibility to support the employer in its business endeavours in these areas under the scope and the field of the agreement. It is clearly indicated in the agreement that it is not intended to disadvantage in any way the employees and a review of the agreement has been nominated in it to ensure at a later date that once the operation is up and running the parties can go back and ensure that the agreement is operating not to the disadvantage of the employees. Sir, all other matters that are not contained in the agreement fall back on the award and those appropriate payments will be applied.

PN40

Sir, on the basis of those submissions, I would seek that the Commission certify the agreement for the purposes of Australian Guarding Services Pty Ltd if it pleases the Commission.

PN41

THE COMMISSIONER: Just a couple of questions that I have. Exhibits A1 and A2, do I take it that in fact what that anticipates is employees volunteering to do additional overtime on the Saturdays and Sundays as opposed to being required to do it?

PN42

MR MOIR: No, sir. The rates described in A1 and A2 are the rates of pay for ordinary hours during the course of those days. Voluntary overtime rate, sorry, is not included on that sheet but is reflected back at clause 12.1.3 under the titles of voluntary overtime.

PN43

THE COMMISSIONER: So if you are rostered, that is what you get. As part of your roster, if you have got to work on those days, that is what you would be paid.

PN44

MR MOIR: As per exhibit A1 and A2, correct, sir.

PN45

THE COMMISSIONER: Right.

PN46

MR MOIR: And apart from the Sunday hourly rate, the other three styles, if I could use that term, which are the higher hours, provide a higher hourly rate of pay.

PN47

THE COMMISSIONER: So in fact I had understood you to say that where someone was required to work, they would be paid the award rates but in fact it is only in relation to when they are required to work overtime on Saturday or Sunday - well, any time.

PN48

MR MOIR: That is correct.

PN49

THE COMMISSIONER: If they are required, they would be paid the award rate. If they volunteer to work overtime, they would be paid the rates in the agreement and if their normal hours as per roster involve work on a Sunday, they would be paid less than the award rate on the Sunday.

PN50

MR MOIR: For the Sunday component of ordinary hours, that is correct, sir.

PN51

THE COMMISSIONER: Right. And what you are putting is that the nature of the amount of work which is going to be available on the assumption that individual employees volunteer to do overtime, that when you aggregate it up, they will ultimately end up with a gross income which would be in excess of what they would have obtained if the award provisions had been applied because of the fact that for ordinary hours and shift work, they receive hourly rates of pay significantly in excess of the award.

PN52

MR MOIR: That is correct, sir and Saturday payment is also higher.

PN53

THE COMMISSIONER: And Saturday.

PN54

MR MOIR: So the only one that is on the outer is that Sunday rate for ordinary work.

PN55

THE COMMISSIONER: Right and for voluntary overtime, the rate of pay is less than the award as well.

PN56

MR MOIR: That is correct, sir, but we say looking at the remuneration and benefits as a whole or globally, that the agreement provides for greater return than the award does.

[10.10am]

PN57

THE COMMISSIONER: Right. Would the company be prepared to give an undertaking that it would, in fact, how would I put it, run side by side effectively - pay calculations such that there is a reconciliation and I am open to submission in relation to its frequency, but, say, twice a year which would mean that for each employee you would, so to speak, press a button and outward - it would provide the rate that - well you would know what the applicant or the individual employee rather has been paid, what they would have been paid if the award conditions had applied and make up the difference if there were any?

PN58

MR MOIR: Sir, I would need to seek instructions on whether the employer would give those undertakings, or alternatively if the thrust of what you are looking at is that there is a spot check along the way for an agreed period between the parties, for instance the union and the employer to ensure this, if that is also an option, and if that is the case - - -

PN59

THE COMMISSIONER: I am prepared to look at any option which means that by one means or another the intent which is set out in these documents which shows that there is a belief that no employee would be disadvantaged vis-a-vis if they had been paid award rates - if there is some mechanism which - I am happy in fact to leave that matter for you to have further discussions about as to how that might be formulated and I will hear from Ms Frenzel in that regard and to advise me in writing, but subject to there being put in place a mechanism which would check effectively that no employee is going to be disadvantaged.

PN60

Then - and that if over the course of six months or a year it becomes clear that an individual is an exception to the general outcome, that the company would make up the difference so that the award rate minimum would be paid to that employee by way of a lump sum payment, then I would be satisfied. So whether that is in the review process, I am not sure, but certainly if you were prepared to give an undertaking to that in principle today, that would take me a long way to addressing a concern that I have. But I might hear from Ms Frenzel whilst you get instructions in relation to that.

PN61

MR MOIR: Thank you, sir. Well I will just make one comment on that if I may.

PN62

THE COMMISSIONER: Yes, certainly.

PN63

MR MOIR: That the agreement at clause 8 has a minimum standards provision and in part it says:

PN64

It shall not operate so as to cause any employee to suffer an overall reduction in the rates and conditions that would otherwise apply under the award.

PN65

Now, sir, subject to my instructions it may be that the parties, if it is acceptable to the Commission, may be able to use that clause to further discuss and agree the processes and the timing and the outcomes that it may follow under the scope of that provision. But I will leave it there, if I may, sir, and seek those instructions, if the Commission pleases.

PN66

THE COMMISSIONER: Thank you. Yes, Ms Frenzel.

PN67

MS FRENZEL: Thank you, Commissioner. Commissioner, the union supports the application made by the company and can I say that the exhibits A1 and A2 go a long way towards demonstrating that, in fact, the no disadvantage test has been met and we say, by virtue of the way these people are rostered - they are rostered on a rotating basis, so over the roster period it is our respectful submission that there would be no disadvantage to the employees. Having said that, there is the issue, obviously, about the voluntary overtime clause and the Sunday clause, or the Sunday and public holidays provision.

PN68

Now, if I can deal with the voluntary overtime provision firstly. The award in actual fact, provides for overtime at casual rates already and it provides for that at clause 24.3, and I quote:

PN69

Despite -

PN70

this is the overtime clause -

PN71

Despite anything else contained in this sub-clause, where a permanent employee is offered work of an ad hoc nature, for example work that is unforeseen, unplanned, irregular or caused by an emergency, the employee should be paid for each hour the casual hourly rate prescribed in clause 12.3.2.

PN72

Now the overtime here is different to the extent that it is voluntary overtime and therefore it occurs at a different rate, but the principle remains the same. Permanent employees can work so long as they agree - the agreement test is in the award as well. So long as they agree, for a rate lesser than the overtime - normal overtime clause. Now my friend made a little bit of a mistake with the overtime itself. Overtime is paid on this basis. Time and a half first two hours, double time thereafter Monday to Friday and Saturdays. Double time on Sundays, which is the normal rate in any event and double time and a half on public holidays, which is also the normal rate.

PN73

I think my friend said that they were paid double time on a Saturday and double time and a half on Sunday which would have blown the no disadvantage test right out of the water. The union absolutely has no objection to the concept of some sort of audit clause. We think it is a good thing to have it in there. I hear what my friend says about the minimum standards clause, and it could probably cater for the sort of circumstance that you are putting to us, but we have - we would be supportive of an audit clause if the Commission was of the view that there is a question mark over the no disadvantage test, even though in my submission, there probably isn't.

PN74

And we would support an exchange of letters and it being placed on the file with the Commission to ensure that an audit does occur and to ensure that the no disadvantage test is complied with, particularly since the greenfields agreement. Apart from that, Commissioner, we would commend the application to you on the basis that it does meet the requirements of the Act and the statutory obligations of the parties have been met, if the Commission pleases.

PN75

THE COMMISSIONER: Thank you, Ms Frenzel. Yes, Mr Moir?

PN76

MR MOIR: Sir, if I may. In terms of your question on the last matter my friend was dealing with, my instructions are that the employer is willing to give an undertaking in terms of a review. Sir, that undertaking should be given within the first six months or so of the agreement, to ensure that it is meeting on the rostered basis, the requirements of the award. However, for the longer duration of the award and the wage increases contained therein, to do it for the full life of the agreement would take away any competitive or business benefit - financial benefit to the long - to the end period of the agreement, if I am putting that clear.

PN77

Sir, I mean, an agreement and the rates therein, are in force for the life of the agreement, as we all know. If the award through other variations increases past the agreement, the agreement rates still apply until the end of the agreement. That is where, we say, the second period of the agreement after the second increase if, and we can't foresee what may be handed down in safety nets, etcetera, against the award, but if that had a leap - a great quantum jump in values that are put to safety net, what the suggestion that we are just briefly mooting at the moment, would do to the employer would put it at a disadvantage against its competitors who may have agreements and rates locked in.

PN78

So it is on that basis where we say the undertaking given would be contained to the first period of the agreement, to ensure that it is not under the rates for - in the agreement - in the award that have just recently been moved, that we ensure that for that first period up to six or nine months - preferably in the six months, to ensure that we are on track and any payments that need to be made or whatever else, don't turn into a lot of zeroes at the end of it. We get on track as quick as possible to do these costings, and if required, the undertaking will be to adjust the hourly rate by the required number of cents to ensure it meets those working patterns of the award, if that meets the Commission's request, thank you.

PN79

THE COMMISSIONER: Ms Frenzel?

PN80

MS FRENZEL: Commissioner, it is a bit of a moot point, but can I draw the Commission's attention to 12.1.2 of the agreement which indicates that there will be wage increases of some 40 cents per hour from 1 July each year for the term of the agreement. As I said in a previous matter before the Commission, the effect of the safety net this year was 34 cents. The effect of the safety net last year was 38 cents. On the hourly rate for level one - this is level one work. I think my friend has gone around the mulberry bush for really no reason, because the whole point of this agreement is that it will continue to comply with the no disadvantage, particularly given the Australian economy, the effect of the GST and all those sorts of things.

PN81

If in that climate, the Commission awards $13 an hour for persons employed under the terms of this agreement and under the terms of the award then in my respectful submission, the possibility of safety net adjustments exploding I think, is a very remote one. But I would draw the Commission's attention to clause 12.1.2 which does clearly set out that, in fact, these employees will get an increase which we will respectfully submit will most probably be in excess of the safety net in any event, if the Commission pleases.

PN82

THE COMMISSIONER: We will just go off the record for the moment.

OFF THE RECORD

PN83

THE COMMISSIONER: Thank you for that discussion. I just wanted to clarify what the nature of the undertaking that I am seeking is, that there is an audit undertaken, if one might use that expression thanks to Ms Frenzel, annually which compares what an employee subject to this agreement has received over that period vis-a-vis what they would have received if they had been paid in accordance with the provisions of the award as it is of today, the date that the matter is before the Commission. And that those audits are done for the life of this agreement and that the company would undertake that should the aggregate amount received by the employee under the agreement be less than that which would have been payable under the award over that period, that the company will make a lump sum payment of the difference to the employee, subject to normal tax requirements.

PN84

MR MOIR: Sir, I am instructed that the employer agrees to give the undertaking in the terms that you have just described it, if it please the Commission.

PN85

THE COMMISSIONER: Ms Frenzel, is there anything you wish to say?

PN86

MS FRENZEL: No, Commissioner.

PN87

THE COMMISSIONER: Thank you. In light of that submission, I am satisfied that the no disadvantage test is met. I will certify the agreement. I will indicate that that undertaking when the transcript becomes available, will be prepared as an attachment to the agreement and I consider it part of the agreement which will be sent to the Registrar for publication. And certainly that amended document will be sent to both parties and it will include, of course, the two pages that have been provided by the employers this morning, as I certainly consider that the corrections there are simply typographical and in no way change the intent of the agreement. This matter is adjourned.

ADJOURNED INDEFINITELY [10.26am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 SAMPLE OF ROSTER FOR KNOX PN33
EXHIBIT #A2 SAMPLE OF ROSTER FOR CRANBOURNE PN33