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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
DX1344 Sydney Tel:(02) 9238-6500 Fax:(02) 9238-6533
TRANSCRIPT OF PROCEEDINGS
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
SENIOR DEPUTY PRESIDENT DUNCAN
C2001/1506
C2001/4328
FINANCE SECTOR UNION OF AUSTRALIA
and
AMP SERVICES LIMITED
Notification pursuant to section 99 of the Act
of a dispute re alleged reduction of an employee's
hourly rate of pay
SYDNEY
9.38 AM, WEDNESDAY, 29 AUGUST 2001
Continued from 13.8.01
PN691
THE SENIOR DEPUTY PRESIDENT: Good morning, everybody. I want to first of all mark a couple of documents that have been produced before, or for these proceedings, which haven't been marked. I don't think we will find that Mr Borg's witness statement was marked, so I will mark that witness statement.
PN692
PN693
THE SENIOR DEPUTY PRESIDENT: With that bit of housekeeping, we can move on.
PN694
PN695
THE SENIOR DEPUTY PRESIDENT: Yes.
PN696
MR CLIFFORD: Thanks, your Honour. Your Honour, the proceedings this morning I believe we just have one witness, which is myself for the FSU, to respond to the evidence of Mr Wilde, and then as I understand it, we go straight to final submissions - - -
PN697
THE SENIOR DEPUTY PRESIDENT: Which are simply filling in any cracks, or crevasses that exist in your written submission.
PN698
MR CLIFFORD: Correct.
PN699
THE SENIOR DEPUTY PRESIDENT: Yes.
PN700
MR CLIFFORD: Your Honour, so for that purpose, Ms Hannan, who appears with me today, will be doing the evidence-in-chief for my time in the witness-box.
PN701
THE SENIOR DEPUTY PRESIDENT: Very well.
PN702
MS HANNAN: Your Honour, I understand with your previous practice that you would like to take the evidence mostly as read, except for any supplementary questions that the union may wish to put.
PN703
THE SENIOR DEPUTY PRESIDENT: Quite correct, Ms Hannan.
PN704
PN705
MS HANNAN: Mr Clifford, could you please state your full name and address for the purposes of the record?---My name is Michael Shane Clifford. My address is 21 Prince Street, Paddington, Brisbane.
PN706
Thank you. Have you prepared a witness statement for the purpose of these proceedings?---I have.
PN707
Do you have a copy of that witness statement with you?---I do.
PN708
Is that a true and accurate record of what you prepared for the witness statement?---Yes, it is.
PN709
I tender a copy.
PN710
THE SENIOR DEPUTY PRESIDENT: I think a copy has been filed, has not it?---It was, your Honour.
PN711
MS HANNAN: In that case, your Honour, I would ask that it be marked.
PN712
THE SENIOR DEPUTY PRESIDENT: Let me find it. Any objection, Mr Wilde.
PN713
MR WILDE: Your Honour, I have no objection.
PN714
**** MICHAEL SHANE CLIFFORD XN MS HANNAN
PN715
MS HANNAN: Thank you, your Honour, one supplementary question. Mr Clifford, in negotiations, what if anything do you recall concerning discussions around the hourly rate of pay for contract employees?---The question of whether contract employees had an hourly rate of pay, your Honour, did arise as part of the discussions we had with AMP. Primarily when we were raising concerns about the affect that an increase in the standard working week would have on employees, both contract and award employees. I do recall Mr Wilde in fact saying as part of those discussions that contract employees didn't really have an hourly rate of pay, which is consistent with the position that he has been putting to the Commission to date. The union's response to that was that they did and that hourly rate of pay was shown on the payslips of all GIO employees. Rather than argue that point through to its finality, it was agreed that for the purpose of applying any guarantee to an employee's hourly rate of pay, that employees would basically be deemed to have an hourly rate of pay, as it was able to be tracked and shown on payslips, and that is really evidenced by the structure of the clause in question in this dispute - clause 2.7.3 - where it does guarantee an hourly rate of pay and it does guarantee that hourly rate of pay for contract employees so really that was the outcome of those discussions that an hourly rate of pay was acknowledged at the end of the day.
PN716
Thank you. Nothing further of this witness.
PN717
PN718
MR WILDE: Mr Clifford, what does the phrase: prior to the commencement of the agreement, mean to you as it is used in 2.73?---To me it means and has always meant and was intended by the union in our negotiations that that phrase would be immediately before the commencement date of the agreement. The reason we say that was that in our meetings with members, members were expressing concern about the fact that their hourly rate of pay would be reduced which is a reflection about their broader concern about losing the GIO 35-hour week. To that extent we wanted to be able to say and Mr Derrick has also said this in these proceedings, we wanted to be able to say to employees
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
that if you have a look at what your hourly rate of pay is before this agreement comes in and then you have a look at it again after this agreement comes in you should see no reduction, so you can be assured that you are fully compensated for any change in those hours.
PN719
Yet the agreement does not put it quite in those terms, does it?---I don't understand.
PN720
Well, the wording used in the agreement is "prior to the commencement of the agreement"?---Yes.
PN721
When I asked you just now to explain what it meant to you, you used words to the effect of "immediately prior to the commencement of the agreement"?---Yes.
PN722
Of course that is not what the agreement says, is it?---That it doesn't say immediately prior?
PN723
It does not use the word "immediately"?---It doesn't use the word "immediately".
PN724
It does not qualify it that way?---The natural and ordinary meaning would be that it is immediately prior.
PN725
Well, let me ask you a question about that. Is the 31 March 2000 prior to the commencement of the agreement or after the commencement of the agreement?---It's prior to but so it 1963.
PN726
Well, quite so. So the wording of the agreement is ambiguous in that you are saying the FSU intended it to mean just prior to the commencement of the agreement but it is not expressed in those terms?---Are you asking me if it is ambiguous?
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN727
Yes?---We say it is not ambiguous at all because it is clearly - the clause is clearly linked to an increase in hours. The increase in hours only happened with the commencement of the agreement, therefore the guarantee to your hourly rate of pay is tied to that event. So any natural and ordinary and reasonable reading of that clause would say that the comparison point for your hourly rate of pay has to be directly before and after that event unless there's a qualification to say otherwise. There is a qualification to say what should happen after, which is that - well, it is not directly after for contract employees because you have to wait until your jobs are classified.
PN728
Yes?---For other employees it is directly after.
PN729
I put it to you, Mr Clifford, that what you are doing is overlaying the words of clause 2.73 with your own interpretation of their meaning?---I think that that would be the ordinary and reasonable interpretation of that clause and that is the way that members - - -
PN730
Is it not ordinary and reasonable to - - -
PN731
MS HANNAN: Objection, your Honour, I think that Mr Clifford has answered his question and I believe that the legal effect of this meaning can be dealt with in the submissions.
PN732
THE SENIOR DEPUTY PRESIDENT: It is very much a matter for submissions, you are quite right, Ms Hannan, but Mr Clifford in his affidavit has mentioned opinions and interpretations which I think open it up to Mr Wilde. I must say both contributions are not of great significance as evidence but they could be of significance as far as submissions go. So I'm not stopping you, Mr Wilde, but I'm making an observation as to the worth of going down that path.
PN733
MR WILDE: Well, perhaps I will move along, your Honour.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN734
THE SENIOR DEPUTY PRESIDENT: You will never get agreement.
PN735
MR WILDE: Sometimes disagreement can be just as illustrative, your Honour.
PN736
THE SENIOR DEPUTY PRESIDENT: You are quite correct. I accept that completely.
PN737
MR WILDE: Mr Clifford, do you have a copy of your witness-statement with you in the box?---I do.
PN738
I am looking at paragraph 16 of that statement?---Yes.
PN739
It says:
PN740
At no time in our discussions on 4 July 2000 or in any subsequent discussions did AMP state that the guarantee should operate inclusive of the pay increases that were delivered to contract employees earning $43,000 as part of the April 2000 pay review.
PN741
?---Yes.
PN742
The FSUs view has always been that the guarantee should operate only inclusive of those increases which are provided under the AMP GIO Enterprise Agreement.
PN743
?---Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN744
I am going to ask you now whether you recall when AMP agreed to the hourly rate of the guarantee around that time, that to qualify that agreement by saying that the guarantee would operate inclusive of all other increases, or words to that effect?---I don't recall AMP saying that, or words to that effect.
PN745
To be fair, Mr Clifford, you know that I have given evidence that those words were used?---Yes. I don't recall those words being used. I do recall that the discussions did talk about increases that - the discussions did by their very nature make it quite clear that the guarantee would operate inclusive of increases which were in the agreement because there was a lot of discussion around the 4 per cent and the $780 and annual leave loading being included. There was no discussion about increases which were not contained in the enterprise agreement.
PN746
If I could take you back to the question. Is it possible that words like "inclusive of all other increases" were used around the time in the course of those negotiations and that you might have interpreted them in one way and perhaps AMP might have interpreted them another way. I'm asking you is it possible that those words be used?---Well, it has to be possible. I can't remember every word that was used or every phrase that was used in those discussions.
PN747
Does it seem to you strange or unlikely that those words were used?---If those words were used then it would have been in the context of other increases included in the agreement because that was all that was discussed in those negotiations, was other increases contained in the agreement. If those words were used I would go further to say that AMP at no stage were explicit about the fact that what AMP was saying was that they intended it included increases which were not part of our negotiations and were not part of the increases contained in the enterprise agreement.
PN748
You knew about those increases?---We knew about them but we didn't negotiate them and at no time have we discussed what those increases should be or how they should be delivered.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN749
You knew the inter-relationship between those increases and the 4 per cent pay increase negotiated as part of the agreement?---What we knew was that earlier in the year AMP had unilaterally delivered pay increases to GIO employees earning over $43,000 or thereabouts. It was AMPs position that those people would be excluded from any pay increases delivered by the enterprise agreement. So to that extent there was an inter-relationship but in terms of this particular clause, our concern was to see that the change in the working week was fully recognised. To that extent there was no discussion about increases that were contained in the agreement.
PN750
I will take you to another paragraph in your statement, that is paragraph 12, and it says in part:
PN751
Prior to these proceedings FSU has never seen the Q and A at attachment B of Mark Wilde's witness-statement. The contents of this Q and A were not discussed with FSU at any time.
PN752
I will put to you, Mr Clifford, that the contents of that were discussed with you by Mr Walsh, not in the sense that he produced a copy of the Q and A but the concept contained in that Q and A that the pay increase being offered to contract employees and the eventual pay increase to be negotiated under the enterprise agreement were to be mutually exclusive. I put it to you that that was discussed with you?---Sorry, I don't follow which part of that you want me to answer. That there were two mutually exclusive payments?
PN753
Yes?---I do recall Mr Walsh saying that they were going ahead with the review.
PN754
Yes?---In fact, that was in train from my recollection some considerable time earlier. I recall discussing that issue in 1999 prior to the full takeover of GIO. We always knew that there was to be a pay review and our understanding was that that pay review was basically working its way down through the ranks of GIO employees.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN755
So you recall discussions about the rule of thumb that was adopted whereby contract employees earning more than $43,000 were to be included in the review and those earning less were to be excluded?---I recall Mr Walsh saying that people earning over $43,000 would be included in a review.
PN756
And that contract employees earning less than $43,000 and award employees would be excluded. Do you recall that?---Well, that is the quarry if you have only got people earning over $43,000 included in the review one would assume that the others are not.
PN757
Do you recall discussions around that time to the effect that if AMP and GIO negotiated pay increases with the FSU for the group that was excluded they would be back dated to the same date, that is 1 April?---I don't recall that as part of any discussions with Mr Walsh. There were discussions that we had around a memorandum of understanding which was earlier in the year. I can't say exactly what date those discussions, or dates, those discussions took place. But as part of those discussions around a memorandum of understanding there was agreement in principle between the parties that any increase to award employees would go to - would be back dated to 1 April. I believe, I can't say with any great certainty and perhaps if I had that document it might clarify it for me but I can't say with any great certainty whether or not there was a commitment to back date anything for contract employees, whether at that stage we had agreed that an increase would apply to any contract employees. It may have been the case we did, I'm not sure.
PN758
Well, I will put it to you for the record that in fact very early on in the discussions with AMP and GIO that the principle was established that any increase that was negotiated for contract employees earning less than $43,000, award employees and customer service reps would be back dated to 1 April being the same date as the contract employees pay review?---That is not my recollection. My recollection of the importance of 1 April was that that was the AMP pay review date. What our GIO members were saying to us at that stage, your Honour, was they are now owned by AMP. AMP is going ahead with a pay review for its own employees, for AMP employees, on 1 April and our GIO members were saying, we want to be paid at the same time as the
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
AMP people. It had nothing to do with contract employees earning over $43,000. Again, that was a completely separate issue. That was something that the company had determined unilaterally and determined the size of the increases and the size of the pool. We had nothing to do with that. What our members were concerned with was what AMP was doing with its own employees and that was the importance of 1 April because we did have an involvement in the pay negotiations around 1 April for AMP employees and we wanted to ensure that GIO employees were not disadvantaged against those AMP employees.
PN759
I will take you now to paragraph 17 of your statement. In paragraph 17 you put your interpretation or view as to a conversation with me where we went through a series of calculations?---Yes.
PN760
As to how the various increases and provisions under the agreement would fit together?---Yes.
PN761
You said in your statement and there is no reference in your notes from that discussion to 1 April 2000 date?---Yes.
PN762
And that there was no discussion about the operative date for the guarantee?---Yes.
PN763
That at no time did we discuss or refer to the increases being received outside the enterprise agreement by contract employees who earned more than $43,000?---Yes.
PN764
Well, Mr Clifford, I will put it to you that in the course of that discussion I did say that we would use 31 March as a convenient comparator date for the hourly rate guarantee for award employees because their increases would be back dated to 1 April?---What I recall from that discussion is that you did make a reference to 1 April as a statement of fact that pay increases would be back dated to that date. As you have already acknowledged this was not a discussion about the operative date for the guarantee.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN765
But I'm putting to you that I in fact said more than as a matter of fact the pay increases are back dated to 1 April, I'm putting to you that I said that 31 March would be used for the hourly rate guarantee because award employees increases are back dated to 1 April?---Well, I don't believe you did say that. Again, I recall you talking about 1 April as being the date that pay increases would be back dated to but there was nothing in that conversation that led me to believe that 31 March would be the date that the company was going to use as the point of comparison. I left that conversation quite comfortable in the fact, well, not that the conversation was about it but there was nothing in that conversation which disturbed my view that the comparison date for any guarantee was immediately prior to the commencement of the agreement.
PN766
Let me put the question in a slightly different way. I take it that your view is that the appropriate date of comparison is 18 August?---Well, I suppose there is - practically it is the last period prior to the commencement.
PN767
THE SENIOR DEPUTY PRESIDENT: Yes, we won't debate whether it is the 17th or 18th.
PN768
MR WILDE: Within 48 hours before the commencement of 19 August. If in the course of that discussion I said to you that as a matter of administrative convenience AMP was going to operate that hourly rate for award - guarantee for award employees using the date on 31 March. That would make sense, would it not, because one of the tasks that AMP has as employer was to operate a 4 per cent pay increase for those employees back dated to 1 April. So it if was to do that prior to implementing the hourly rate guarantee it would need to take a date prior to 1 April to operate that guarantee.
PN769
MS HANNAN: Objection, your Honour, where does this take us? I lodge the objection on the similar grounds that I raised before. It is an argument about a legal effect of the operation of the agreement and the operation of the pay period falling before that and I really do think that is a matter for submissions. I also think Mr Clifford has answered this question previously.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN770
THE SENIOR DEPUTY PRESIDENT: No. I disagree with you, Ms Hannan in this instance. There is - it is crucial that the factual situation. I note that it is a hypothetical question, Mr Wilde, but I will permit it just the same.
PN771
MR WILDE: Would you like me to repeat the question?---Could you please.
PN772
In the course of our discussions would it have been unlikely or a surprise to you if I had said that as a matter of administrative practice AMP would adopt the date of 31 March because in the order of our obligations under the agreement we needed to implement a 4 per cent pay increase back dated to 1 April first and then apply the hourly rate guarantee?---Right. So if you had said that is the question would that concern me?
PN773
Yes?---I would see some logic in what you were saying. My concern would be for any employee who had received a pay increase since 31 March. So for those employees I would question whether or not 31 March even for administrative ease is appropriate because you then overlook those people, because remembering that our concern was that you get the pay packed before the agreement starts and the pay packet after and they should be the same in terms of the hourly rate. If you take it back to that date and I've got an increase in June, well, it's not going to be the same outcome.
PN774
Well, we are in agreement that the discussion was a discussion about the timing of various pay increases and applicational provisions under the agreement?---Yes. It was whether or not annual leave comes first or annual leave loading comes first or the 4 per cent comes first or whatever.
PN775
I put it to you that it was our common view that the 4 per cent increase should be applied first?---Correct.
PN776
Now, if you take that through to its logical conclusion and you increase award employee salaries by 4 per cent backdated to 1 April?---Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN777
Then is there not an argument that their hourly rate immediately prior to the commencement of the agreement is actually 4 per cent higher than AMP has understood it to be?---No, it's not, because that didn't happen until after the commencement of the agreement. The clause specifically says - talks about your hourly rate - the hourly rate that existed prior to the commencement of the agreement. Prior to the commencement of the agreement your hourly rate didn't have 4 per cent piled on top of it. That only happened after the commencement of the agreement.
PN778
Well, for the purposes of AMPs administrative systems, once that increase had been applied it was applied back to 1 April?---Right.
PN779
And there was a backdating effect?---Your Honour, I find it difficult to answer the question based on AMPs administrative systems because I'm not familiar with the software and hardware and what it is capable of. What I would say is that in one sense administratively that makes sense to do that, but my concern in doing that would be that that would override, or neglect any increases that people had received since 31 March. Whether they be the increases that contract employees had received, who earn over $43,000, or whether they be increases that people had got through other means through promotion, or whatever - - -
PN780
We didn't have that conversation at the time?---We did not, no.
PN781
Well, I will put it to you that I did in fact mention a date of 31 March as being the comparative for award employees and that you now don't recall it because it was not central to our discussions?---It certainly wasn't central to our discussions.
PN782
The employee, who is the subject of this dispute, Mr Borg, was a contract employee under the terms of the GIO Award and that meant that he did not have his hours regulated in the normal sense. Do you think that he has been advantaged by the operation of the enterprise agreement on his circumstances?---I think in some respects there are things in the agreement which do benefit Mr Borg, yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN783
Would you acknowledge that in the course of proceedings to certify this agreement you went to some lengths to - I highlight to the Commission that employees such as Mr Borg coming from a position of no regulation of hours to a position of regulation of hours was in fact an advantage for them?---Yes, that's correct. I'd have to say also that we - in saying that there was advantage for contract employees - we did that on the basis of understanding that the guarantee applied to all employees which meant that - or all employees that came under the hours provision - which meant that we believed that people would be fully compensated and that the change in hours would be fully recognised by that guarantee. We did not anticipate at the time that we were certify ing the agreement that there would be a particular class of employees who would see a reduction in their hourly rate of pay.
PN784
Notwithstanding that that notion sits a little uncomfortably with your acknowledgment that Mr Borg didn't have regulation of his hours of work?---No, it does not sit uncomfortably because we had agreed that anybody who fell under the hours provisions of the agreement should have the change of the standard working week fully recognised. We did that because contract employees were saying to us that they are equally affected. We had many contract employees who were saying that: in reality they did work a 35-hour week that's - and they kept saying to us: that's what it says on our pay packets that's what we work - - -
PN785
I might stop you and ask you a question about that because I notice you have made a similar point in your submissions?---Yes.
PN786
You in fact have done no empirical research, or survey, to ascertain what proportion of contract employees worked more than 35 hours a week? And what proportion worked a 35-hour week?---No, we haven't.
PN787
So when you say, "many employees", you are aware that many contract employees in fact worked a 35-hour week, that is just based on your discussion with some such employees at meetings?---That's right, when we held meetings with GIO employees leading up to the finalisation of this agreement, that was the feedback that we were receiving in those meetings.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN788
So - - - ?---That's - and I'll add that that wasn't universal.
PN789
So of the - let me estimate, 2500 contract employees that GIO had - you are not in any position to say what proportion of them actually worked a 35-hour week - - - ?---No.
PN790
- - - and what proportion worked greater than that?---No. I would add though in any move from a 35-hour week to a 37½ hour week, I think in any company I think that the hours worked are often relative to what the standard working week is. If there was an expectation in a company that people work 40 hours a week, then, our view is that people who work unregulated hours would see that as the standard, perhaps work that, or a little bit more than that. If the standard is 35, they will work that, or a little bit more than that. The standard working week, despite the fact that hours might be strictly regulated, do have an impact on the hours that people ultimately work and they certainly have an impact on the times that people start work and the times that people finish work.
PN791
Even for contract employees?---Even for contract employees.
PN792
I will put it to you that had the agreement not been settled, AMP would have been in the position to request more than 35 hours a week work from Mr Borg without additional remuneration?---Mm - - -
PN793
I believe that Mr Borg acknowledged it as much in his evidence?---That you could be required to work more than a 35-hour week. He would have received no overtime work in addition to the 35 hours. I think that had the company tried to work a 37½ - have people work as a standard a 37½ hour week, then, I think that would become a significant industrial issue.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN794
Notwithstanding that those employees received pay increases, specifically to relinquish the right to overtime and regulation of hours - - - ?---Our view from the meetings that we were holding with members, your Honour, was that despite the fact they worked unregulated hours they still had a very strong concept that the working week in GIO was 35. They understood that their hours weren't regulated by the award and they understood that if they did work extra hours they weren't going to get overtime, but they had a very strong sense from the meetings that we held that the standard hours were 35 and they didn't want to see that change. I also find it interesting that the company was saying that for those contract employees - the company's intention for the contract employees was to increase their hours to 37½ regardless of whether the agreement went through. That in itself is interesting in that if people were working the unregulated hours in the way that AMP says, you would wonder why there would be a need to in fact change the standard working week for those contract employees. If you think that you can get as much work out of them as you like, I don't see the need to change the working week to 37½ hours.
PN795
Well, the company could have simply provided them with more work?---It could have but as I understand it your submission was that the company had an intention to change the hours to 37½.
PN796
My submission - - - ?---Sorry, your evidence, yes.
PN797
Well, yes, but there is more than one way to do that. Anyway, I think we are straying?---Straying.
PN798
If the FSUs proposition in relation to Mr Borg's pay is accepted, what in percentage terms would be the pay increases that Mr Borg received in the course of the year 2000?---My recollection is that Mr Borg said he received about 3½ per cent as part of the April pay review. He would then as a - if the guarantee applies in the way that FSU says it should, would receive roughly a 7 per cent increase, so roughly he would receive 10½ per cent. I would have to say that that is probably not a lot more than some other employees of AMP GIO would receive in a year.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN799
10½ per cent?---Yes. I don't say - - -
PN800
I put it to you that it is substantially more?---Than some. Than some employees would receive in AMP. It wouldn't be unheard of that an employee would receive 10½ per cent. The other thing I would say to that is that AMPs pay system, your Honour, is such that if there's anomaly created because somebody receives a pay increase, a significant pay increase, in a particular year which takes them outside the market range, Mr Wilde explained to us in this matter that AMP pays according to market rates. If an employee having more than what the markets say they should earn, then there is basically a catch-up scenario. Over time that employee won't get further increases until the market catches back up with them. So he might get 10 per cent this year, but AMP would certainly drag that back in the coming years.
PN801
Had Mr Borg been an award employee in exactly the same situation, what would he have received?---An award employee would have received a minimum of 7 per cent. I think some employees, depending on the rate of pay that they had earned in excess of 8 per cent. The - - -
PN802
But given Mr Borg's rate of pay?---Well, we are talking about an award employee and the percentage increase.
PN803
Yes?---Some employees received in excess of 8 per cent. The other thing I would have to say to that though is that, that does not take in to account any other increases that award employees might have got which we don't know about which were delivered unilaterally to those employees outside the enterprise agreement. GIO had an extremely ad hoc arrangement to delivering pay increases and our members could never understand why certain people got some increases and other people didn't and they said that some times it operated on favouritism. There may well have been other employees who received pay increases outside this enterprise agreement earlier in the year.
PN804
Well, I put it to you, that if that was the case it would be a very small number of employees - - -?---It - - -
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN805
- - - and then, in fact, the company was taking the position of no pay increases for award employees until the agreement had been settled?---Well, that might be the case, I don't know whether it was small or not. I would imagine it probably was, but the point is that those increases that those people may have received outside the enterprise agreement would not have been included as far as any guarantee was concerned.
PN806
Well, let me approach this from a different point of view? Accepting that Mr Borg was an award employee who did not receive any other pay increases, can you outline for the Commission's benefit how the increases under the agreement would have applied to him?---He would have received 4 per cent. He then would have received $780 and as an award employee he would have been getting annual leave loading and that would have also been rolled in to his base salary. They would have been the increases he would have received.
PN807
How would the hourly rate guarantee over-lay on top of those?---Depended who was applying it, whether it was AMP or FSU.
PN808
Well, he - - -?---We - we would say - - -
PN809
- - - as an award employee, I put it to you, that there is no material difference?---Assuming there has been no increases between 31 March and 18 August, the guarantee would have worked to - to - those increases would have been applied. You would have seen what the hourly rate of pay was after those increases were applied. You would have a look at the hourly rate of pay prior to the commencement of the enterprise agreement and if an adjustment was necessary the adjustment was made.
PN810
Well, in your submissions, Mr Clifford, you - the FSU submits that Mr Borg should be entitled to a 7 per cent pay increase between say 17 August and the date in which he became covered by the hours provisions of the agreement and that the hourly rate guarantee was essentially to catch-up for any increases that were less than 7 per cent?---Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN811
Over that period?---Yes.
PN812
So as an award employee, Mr Borg would have been entitled to a 7 per cent pay increase?---Yes.
PN813
In total? However, as a contract employee - - -?---Yes.
PN814
- - - you are asserting that he should be entitled to what amounts to 10.5 per cent - - -?---No - - -
PN815
- - - in pay increases?--- - - - we say that as a contract employee he is entitled to the same as the award employee, he is entitled to 7 per cent to recognise the change of hours from 35 to 37½.
PN816
Was he entitled to 4 per cent pay increase?---No, he did not get that.
PN817
And that was because - - -?---That is because he wasn't an award employee and he earned over $43,000.
PN818
And he had already received a pay increase?---Well, those pay increases as I've said, were delivered completely separately.
PN819
But if it is a simple proposition - - -?---Yes.
PN820
- - - if the FSU's interpretation is accepted, Mr Borg will have been entitled to 10.5 per cent worth of pay increases?---Out of this agreement?
PN821
Over the course of the year 2000?---But we are not concerned about what happened earlier in the year, those increases were not negotiated with the FSU. They were not part of our negotiations, they were never part of this agreement.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN822
Mr Borg would have been entitled to 10.5 per cent worth of pay increases?---Mr Borg was guaranteed that he wouldn't suffer a reduction in his hourly rate of pay because the working week was changing. That entitled him to the same increases under the agreement as other people got, in fact, slightly less because of his rate of pay. As I said, some award employees earned in excess of 8 per cent. He would have got 7 per cent in total. He would have got exactly the same as award employees got under this agreement.
PN823
But he had already received 3.5 per cent?---Award employees may have received other - - -
PN824
But you are saying we should disregard the contract employees pay review?---Yes.
PN825
A review that applied to well over 1000 employees, I think, around 2000 employees because it was not negotiated with the FSU?---And it was not part of this agreement and it certainly, at the time those pay increases were delivered there was no discussion around the change of hours from 35 to 37½.
PN826
In the agreement there is a reference to the contract employees pay review, is that not correct?---Yes, yes, there is. Well - yes, there is.
PN827
So let me come back to where we started? Regardless of whether you think that it should be taken in to account or not for the purposes of compliance with the agreement - - -?---Yes.
PN828
- - - Mr Borg did receive a 3.5 per cent pay increase as part of a pay review back dated to 1 April?---Yes.
PN829
And if you add that to the pay increases that you say he is entitled to under the agreement that would add up to 10.5 per cent?---Correct.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN830
If he was an award employee and had not received a pay increase and the vast majority of them did not?---Yes.
PN831
Then he would only be entitled to 7 per cent?---Correct.
PN832
Does it not strike you that that is a little strange, Mr Clifford, given that Mr Borg is going from a situation where he has his hours of work unregulated and is not entitled to overtime. Going from that situation to a situation where his hours of work are regulated by way of overtime and he becomes entitled to 10.5 per cent worth of pay increases, where if he was an award employee he would have been entitled to overtime all along and he would only have received 7 per cent?---Your Honour - - -
PN833
Does that not seem a bit arbitrary or strange?---Your Honour, there's two reasons that it does not. The clause in the agreement had a clear intent. It was to compensate people generally for the change in the standard hours. That - the change in hours was 7 per cent. We said therefore that the compensation for that change also had to be 7 per cent. That compensation should go to anybody who is covered by the hours provisions of the agreement. AMP agreed to that. So it is not strange that he should receive an amount different to an award employee by virtue of some increases that were delivered outside the enterprise bargaining process and outside the enterprise agreement itself, in particular. The other reason I say it is not strange is that, AMP's pay system delivers different outcomes to people all the time. I find it strange that Mr Wilde is arguing an equity argument here with me when the union's position on AMP's pay system for years has been that that pay system does not deliver equity. People in AMP receive increases anywhere from zero right through a scale. Every year there are people in AMP who not just have a 3 per cent - 3½ per cent difference in pay, but they can receive 4 and 5 and 6 per cent difference in pay. So it is not unusual, in this company, for people to get different pay outcomes. But those different pay outcomes are linked to a pay system which reflect the market and an employees capability. Here we are talking about an employee who, take two employees, Mr Borg an award employee on the same salary - - -?---Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN834
In all other respects they are the same?---Yes.
PN835
One employee gets 10.5 per cent the other employee gets 7 per cent. The employee who gets 10.5 per cent is going from a position of no overtime to an entitlement to overtime. The employee who gets 7 per cent is going from a position of entitlement to overtime, to entitlement of overtime?---Both get 7 per cent under the agreement. One got 3½ per cent outside the agreement. I don't know what the award employee got outside the agreement, whether they got something or nothing.
PN836
Can I ask you what other benefits Mr Borg would have got under the enterprise agreement?
PN837
MS HANNAN: Could Mr Wilde be a bit specific in what he is referring to? It is a rather lengthy agreement.
PN838
THE SENIOR DEPUTY PRESIDENT: It is a big agreement.
PN839
MR WILDE: Well, let me put it to you. I will put it to you that in addition to what you say should amount to 10.5 per cent worth of increases, Mr Borg would have also received an increase of 3½ per cent by additional superannuation contributions?---That is correct.
PN840
Up to an additional 10 per cent by way of bonus, which is targeted at 5 per cent of his annual pay?---That wasn't guaranteed for him but there is access to a bonus pool, yes.
PN841
But the existence of the bonus scheme is guaranteed?---Yes, yes.
PN842
In fact you would be aware that the bonus scheme has in fact been implemented?---Yes, and the superannuation and the bonus was also there for award employees and it has always been, well, not always, but it has been there for many years for AMP employees.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN843
I put it to you that the superannuation increase for award employees is 2.5 per cent and for contract employees it was 3.5 per cent?---Sorry, can you repeat that.
PN844
Yes, I will put it to you that as a contract employee Mr Borg was entitled to a 3.5 per cent increase in superannuation whereas an award employee he would have been entitled to 2.5 per cent?---Can you explain why.
PN845
Yes, because contract employees funded their own superannuation out of their package?---Yes.
PN846
And would have had to fund the 1 per cent increase in the SGC levy had it not been for the agreement, whereas award employees did not have that arrangement?---It gets fairly lengthy if we go into this but the SGC applied equally to award employees and to contract employees. The difference was that the contract employees had a total remuneration package and part of that total remuneration package was in fact their superannuation. Both award and contract employees went from an SGC arrangement to AMP's practice which applies to all AMP employees as well of providing 10½ per cent superannuation.
PN847
The award employees superannuation of 8 per cent was provided on top of their salary, therefore an increase to 10.5 was a 2.5 per cent increase whereas for contract employees they had just had to fund an increase of an additional 1 per cent which we then provided to them in addition?---This might be a whole - - -
PN848
- - - it was a 3.5 per cent increase?--- - - - debate, Mr Wilde, it is enough for me to say that there was a benefit.
PN849
I think we can leave it at that, yes. The point I'm getting to Mr Clifford is that as a contract employee Mr Borg was substantially advantaged by this agreement. Is that correct?---There was certainly benefits in the agreement for Mr Borg, there is no question about that.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN850
They were quite generous?---But equally the award employees got the benefit of those same benefits.
PN851
That is right?---Yes.
PN852
But the proposition you are advancing would see contract employees advantaged over award employees by quite a substantial degree. In Mr Borg's case it was 3. 5 per cent but it could be anywhere up to an additional 5 per cent?---Well, we would argue that there are disadvantaged. We would say that if you apply the guarantee in the way that FSU says they receive under the agreement, under this document, they receive the same treatment as any other employee. If we apply AMPs position this group of employees becomes the only group of employees covered by the hours provisions of the agreement that actually sees a reduction in their hourly rate of pay. As we heard Mr Derrick say that reduction was a test, that hourly rate was a test for people to see whether they have been fully compensated for the change in the standard working week. Quite separate to arguments about whether this individual or that individual in fact works a 35 hour week or in fact works a 40 hour week or whatever. The parties took the view that this was to be a generalised thing. Rather than going out and asking people or surveying people about how many hours they actually worked, we said there was a class of employees affected by this change and it ultimately will impact on people who come under the hours provisions of the agreement. So a standard was applied to all those people. AMP's position sees this group of employees, this 2-300 employees as being the only group of people who don't satisfy the test, who pick up their pay after the agreement and see a reduction in their hourly rate which says to them, unlike the award employees and the contract employees earning under $43,000 I haven't been fully compensated for this change in hours which was guaranteed to me under this agreement.
PN853
I put it to you, Mr Clifford, that there is another class of employees which you haven't dealt with and that is contract employees who did not end up earning more than $43,000, who did not end up coming under the hours provisions of the agreement?---No, I specifically said, we are talking about people under the hours provisions of the agreement. They are the only class of employees under the hours provisions of the agreement who could identify a reduction in their hourly rate of pay.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN854
Mr Clifford, I won't keep you much longer. If this matter of the hourly rate guarantee for contract employees earning more than $43,000 had been raised directly in negotiations on or around 4 July 2000, and AMP had said: well, we are not going to pay the hourly rate guarantee of the full 7 per cent level for those employees because we have already given them a pay increase. So what you are asking us to do amounts to those employees double dipping. Had that argument been directly put we wouldn't be sitting here today, would we, because we would have clarified the position back then?---Are you putting the hypothetical to me?
PN855
Yes.
PN856
MS HANNAN: How would the witness know, your Honour.
PN857
THE SENIOR DEPUTY PRESIDENT: Well, that is the problem with a hypothetical question of course.
PN858
MS HANNAN: How does it inform the Commission.
PN859
THE SENIOR DEPUTY PRESIDENT: I am going to permit the question because I can see the point of it.
PN860
THE WITNESS: If you were to put that to us in negotiations it would be hard for me to say what the outcome would be because we had on one hand a vocal group of people - - -
PN861
MR WILDE: I am not asking you to speculate as to the outcome?---Well, you are putting a hypothetical to me, I think I have to speculate.
PN862
I'm asking you to acknowledge that had the matter been squarely raised at that time that it would have been addressed?---Your Honour, I think I need to speculate to be able to answer the question in full.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN863
THE SENIOR DEPUTY PRESIDENT: Well, in a hypothetical question I think speculation is inherent in the answer.
PN864
MR WILDE: But I'm not asking you, Mr Clifford, to speculate as to what the result of those negotiations would have been on this issue, but I'm saying that had it been squarely raised in these terms, the terms that we are viewing it through today that there would have been some resolution of that specific issue?---Well, I am sure there would have been some resolution but whether it would have been resolved in the way that you are currently saying I can't tell you that.
PN865
That is fine. If I look at the same hypothetical from a different point of view, had AMP said to you, we are not going to apply the hourly rate increase into - we will apply the hourly rate increase inclusive of the April pay review for these employees the FSU might have had an objection to it?---Well, on the basis of the arguments that we have put before the Commission I am sure we would have had an objection, given that they were increases which weren't part of this agreement.
PN866
But it would have been dealt with? It would have been - - -?---Well, if you raised it we had to deal with it.
PN867
That is right. So I put to you, Mr Clifford, that the very issue we are talking about today did not get a great deal of attention during the negotiations because it applied to a small group of employees, it was not the main game?---That is fair to say.
PN868
So when the FSU went ahead with agreement on the basis that they had secured an hourly rate guarantee, they had in mind a particular notion of what that meant?---Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN869
When AMP asserted that that hourly rate guarantee would be inclusive of all other increases, perhaps they had a particular thing in their mind as to what that meant but because the issue did not get a great deal of air play the intersection of those two notions was not fully explored. Is that a reasonable proposition, Mr Clifford?---I can only assume from the fact that we are here today that either AMP had a different view at the time which wasn't verbalised to ourselves or to our members, or that belatedly AMP has come to this view. It's one of those two. I can't say what AMP was thinking at the time. I can only say what AMP said to us and what AMP has said to employees and at no time has AMP made it clear that your intentions were in fact to use the 31 March as a comparison date for the guarantee. It's not in writing, it has not been verbally communicated. So if you did have that intention you kept it pretty well to yourselves.
PN870
Is it possible that we had that intention?
PN871
MS HANNAN: Objection. I don't believe that is a fair question to put to the witness.
PN872
MR WILDE: Let me withdraw that question and ask another. Is it your evidence that AMP has changed its view on this after the fact, that it had one thing in mind when we reached agreement and we have changed our mind between reaching agreement and applied this guarantee in a different way?---Is it - - -
PN873
MS HANNAN: Well, objection again, your Honour, because Mr Clifford has already given his answer on that question in his previous evidence.
PN874
THE SENIOR DEPUTY PRESIDENT: He did say there were two possibilities.
PN875
MS HANNAN: Yes.
**** MICHAEL SHANE CLIFFORD XXN MR WILDE
PN876
THE SENIOR DEPUTY PRESIDENT: I don't know that you can really expect him to know which is the possibility that AMP would have followed. I mean, it is too much of a speculated question.
PN877
MR WILDE: I withdraw the question, your Honour.
PN878
THE SENIOR DEPUTY PRESIDENT: We have already established that Mr Clifford recognises that there were two possibilities. He agrees with that. Well, he offered that.
PN879
MR WILDE: Your Honour, I have no further questions for Mr Clifford.
PN880
THE SENIOR DEPUTY PRESIDENT: Very well, Mr Wilde, thank you. Ms Hannan?
PN881
PN882
MS HANNAN: Mr Clifford, you have been asked a number of questions in terms of what may have been intended by the parties in terms of what was to take effect into the agreement. At the end of the day was the position reached that the hourly rate for an employee not be reduced?---Yes, it was.
PN883
Mr Clifford, earlier on in your evidence Mr Wilde referred you to clause 16 of your witness-statement that any subsequent discussions that AMP state that the guarantee should operate inclusive - sorry, I withdraw that. At no time in our discussions of 4 July 2000 or any subsequent discussions did AMP state the guarantee should operate inclusive of pay increases that were delivered to contract employees earning over 43,000 as part of the April 2000 pay review. Did any contrary agreement end up in the agreement?---No, it didn't.
**** MICHAEL SHANE CLIFFORD RXN MS HANNAN
PN884
Has there been any subsequent memorandum of understanding reached between the parties to indicate that that proposition as stated by AMP should be so?---No.
PN885
No further questions.
PN886
PN887
THE SENIOR DEPUTY PRESIDENT: Now, who is going first?
PN888
MS HANNAN: Just before Mr Wilde rises to his feet I was wondering if I may seek leave of the Commission to withdraw.
PN889
THE SENIOR DEPUTY PRESIDENT: Yes, Ms Hannan, certainly, thank you. What is the position? As far as final submissions are concerned there's a written submission then from the FSU. There's nothing from the AMP, is there, by way of final - - -
PN890
MR WILDE: I do have a final written submissions document that I was going to file in the hearing. It has been prepared in response to Mr Clifford's final submissions. We received them only fairly late so we haven't had an opportunity to file it through the registry. I was just going to speak very briefly to those submissions, your Honour.
PN891
THE SENIOR DEPUTY PRESIDENT: I see. Well, thank you for that because that gives me a way to go. I will hear the FSU so that you are responding to the whole of their case but obviously from what you have both said you will appreciate that I'm going to be relying on those written submissions and I don't wish them to be subject of a ballooning out and particularly of repetition. So Mr Clifford?
PN892
MR CLIFFORD: Your Honour, if I can just take you to the written document.
PN893
THE SENIOR DEPUTY PRESIDENT: That is FSU19 now.
PN894
MR CLIFFORD: Your Honour, the first couple of pages, first two-and-a-half pages, are really just by way of background to the issues from paragraph 9. We try to summarise there what we say this dispute is about. Essentially it is the view of the FSU that this dispute turns on a number of things but largely turns on what is meant by the words "prior to the commencement of the agreement". As we say in the written submission, we think for the guarantee in clause 2.7.3 to operate there clearly has to be a point or a time or an event or a date around which an hourly can be compared. There has to be a point at which you look at something after and before that event.
PN895
We submit that the event to be used for the point of comparison is the commencement of the agreement itself. The date the agreement commenced was 18 August, therefore there's - the point of comparison is 17 August. That is the event or the date or the time around which this guarantee has to operate if there's to be a point of comparison. Practically I suppose you could say that rather than 17 August, if you are looking at an hourly rate of pay, practically you might want to use the pay period before 17 August because that would be the latest evidence of a person's hourly rate of pay.
PN896
AMP on the other hand says that the date and the event around which the comparison should operate is - well, the date being 31 March, the event being the April pay review for contract employees or the back-dating of the pay increase to April. Your Honour, we say that the words of 2.7.3 simply don't support that proposition. Nowhere in that clause is there a reference to the date of 31 March, nor is there a reference to the pay increase, nor is there a reference to the contract employees' pay review. The only reference is to the commencement of the agreement and we say that is the event that you have to make the comparison around.
PN897
Well, in the witness statement, we indicated that we believed that the clause was unambiguous. We still maintain that and at paragraphs 12 through to paragraph 18 we provide there a range of cases that - that go to this issue. That where no ambiguity arises the Commission need not extend its inquiry to what may have been the intended meaning of one of the parties to the agreement. In those paragraphs, your Honour, we provide a range of extracts from various decisions which go to that point. If I could take you to paragraph 18.
PN898
THE SENIOR DEPUTY PRESIDENT: Does your argument led you in to a situation where it can be said that as a matter of fact for the pay period commencing immediately prior to 18 August, Mr Borg's hourly rate of pay was less than it became when the retrospective element of the 4 per cent came in or whatever was the decision?
PN899
MR CLIFFORD: Well, he didn't get the 4 per cent, your Honour. So it didn't - it wouldn't have boosted his pay anyway.
PN900
THE SENIOR DEPUTY PRESIDENT: Right.
PN901
MR CLIFFORD: I mean, that - an argument of AMP's is that you have to use 31 March as the comparison date because the 4 per cent applied retrospectively would have artificially, if you like, boosted the hourly rate of pay for employees just prior to the agreement. If I can just address that argument? Our view is that, again, the clause is clear. It talks about an hourly rate of pay prior to the commencement of the agreement. So it is talking about an hourly rate of pay which does not yet have the 4 per cent applied to it.
PN902
THE SENIOR DEPUTY PRESIDENT: That is right, yes.
PN903
MR CLIFFORD: So that only happened after the commencement of the agreement.
PN904
THE SENIOR DEPUTY PRESIDENT: Well, it is right, in your submission, anyway.
PN905
MR CLIFFORD: Yes, and it is applied retrospectively.
PN906
THE SENIOR DEPUTY PRESIDENT: Yes.
PN907
MR CLIFFORD: It does not alter what the hourly rate of pay was prior to the commencement of the agreement. Your Honour if I could take you to the folder of documents that FSU handed up and at - - -
PN908
THE SENIOR DEPUTY PRESIDENT: At an early stage?
PN909
MR CLIFFORD: At an early stage, yes, and at tab F there is a table with the various rates of pay of Mr Borg. We can see that in March 2000 he was earning $23.25 per hour. In April, which was the date - so at 1 April his increase is back-dated to that date and that is when he started earning $24.05. Then in August, July-August, we see that there is a ballot for the enterprise agreement and his pay is still $24.05. On 18 August when the agreement commences, his pay drops to $22.55, so there is a reduction.
PN910
THE SENIOR DEPUTY PRESIDENT: Because of the change in ..... that you have adopted.
PN911
MR CLIFFORD: Correct. So the hours increase from 35 to 37½, there is a reduction there. That is a reduction which is anticipated by the agreement because your Honour will recall that the clause itself says:
PN912
Well, the guarantee applies for the contract employees only when your job has been classified.
PN913
So we say, "That is right, it should be $22.55". In November, Mr Borg's job is reclassified and the hourly rate of pay increases to $22.95 because his job was reclassified as coming under the enterprise agreement and coming under the hours provisions of the enterprise agreement. So therefore he gets $780 pay increase, that is dictated by the agreement itself. Then we see that the next figure is when the adjustment is actually made. So AMP goes back and says:
PN914
Well, your pay is actually - we are going to apply the guarantee now. Your pay is lower than what it was prior to the enterprise agreement, but it is adjusted to $23.24.
PN915
So the comparison that AMP make is back with the one at the top of the page.
PN916
THE SENIOR DEPUTY PRESIDENT: Yes.
PN917
MR CLIFFORD: Whereas FSU's contention is that the comparison is with $24.25 as it was in August of 2000 prior to the commencement of the agreement. The last entry in that document, your Honour, is what Mr Borg's pay went to after the year 2001 pay review. So that was something which was anticipated by the agreement and it is the normal pay review that AMP employees go through.
PN918
THE SENIOR DEPUTY PRESIDENT: Just let me make sure I have got it clear. The second entry, April 2000, post GIO annual pay review is the one that was, in fact, retrospective?
PN919
MR CLIFFORD: Now, for Mr Borg, this was the pay review that only applied to contract employees over $43,000.
PN920
THE SENIOR DEPUTY PRESIDENT: Yes. It wasn't retrospective?
PN921
MR CLIFFORD: Well, he received it in June, I believe.
PN922
MR WILDE: If I can assist, your Honour, it was retrospective to contract employees, but rather than being retrospective from August when the agreement came in to April, it was retrospective from June.
PN923
THE SENIOR DEPUTY PRESIDENT: June.
PN924
MR CLIFFORD: So that makes this, for the Commission, just ..... through those changes and - - -
PN925
THE SENIOR DEPUTY PRESIDENT: Yes.
PN926
MR CLIFFORD: - - - and each of those pay rates are contained in the pay slips which were tendered to the Commission. So having said that, your Honour, going back to your original point about ambiguity, does that assist?
PN927
THE SENIOR DEPUTY PRESIDENT: Yes, it does.
PN928
MR CLIFFORD: Paragraph 18, which is an extract from PKIU v Davies Bros, states that, the Court said there that:
PN929
Care must be taken, of course, not to create an ambiguity by bringing in to consideration external factors which may be used legitimately to resolve an ambiguity if one exists.
PN930
In this case, your Honour, we submit that what is happening is that AMP is doing just that, trying to create an ambiguity where none exists. It is our submission that the words are clear on their face. They say that people shouldn't suffer a reduction in their hourly rate and here we have a group of employees that have suffered that reduction in their hourly rate. We also say that where there is no question of ambiguity it is proper for the Commission to apply the ordinary and natural meaning of the words in question. Again, we say, that the ordinary and natural meaning of those words support FSU's position.
PN931
Your Honour, if the Commission finds against FSU, and finds that, in fact, the clause is ambiguous, we submit that it should be applied in the way submitted by FSU based on the intention of the parties at the time that the clause itself was negotiated. In our submission, we have relied on the witness statement of myself and the witness statement and evidence of Mr Derrick to state what the union's intentions were at the time on negotiating the agreement. Clearly, in summary on that point, the union's intention was to ensure that by virtue of the standard working week changing from 35 to 37½, the union wanted that change, that significant change, to be recognised in a very tangible way and as Mr Derrick has said in is evidence:
PN932
A guarantee around the hourly rate of pay was a very simple test for people to apply to see whether, in fact, they have been disadvantaged by that increase to the standard working week.
PN933
That test was to be applied not just to award employees but also to contract employees who came under the hours provisions of this agreement. Mr Borg and the class of employees to which he belongs are such employees that came under the hours provisions of this agreement. The guarantee therefore applies to them. They also should be able to apply that simple test to see whether or not their hourly rate of pay has reduced. The simple fact is when they applied that test, looked at their pay slips, they have seen a reduction in their hourly rate. That was not what was intended by the parties, that people would see a reduction in the hourly rate of pay.
PN934
If it was the intention of AMP that a class of employees should see a reduction in their hourly rate of pay I am sure that would have been reflected somewhere in the clause. It either would have said that the appropriate event was the pay review of April 2000 or the appropriate date was 31 March or there would have been some reference to the fact that some employees in fact would see a reduction in their hourly rate. None of those things exist in that clause.
PN935
Moving through the submission, your Honour, we have broken the clause up to basically ask four questions. Is the employee or class of employees a GIO employee or former GIO employee? We say that that particular point is not in dispute. For the purpose of the operation of the clause did the employee or class of employees have an hourly rate of pay? Mr Wilde in his witness-statement went to some length on this issue. We say that without doubt people did have an hourly rate of pay. We say that because it exists on their pay slips. In the first instance my own evidence said that there was a discussion around that and FSU in fact put that position in negotiations that an hourly rate of pay did exist on the pay slip and for the purposes of this exercise in applying a guarantee to the hourly rate of pay, those pay slips can be used to see exactly what the hourly rate of pay was.
PN936
We go on to say on that particular issue that the clause itself clearly recognises that people have an hourly rate of pay. The clause applies to contract employees. If AMPs argument about contract employees having no hourly rate of pay was correct, it makes nonsense of the fact that clause 2.7.3 clearly applies to contract employees and talks about guaranteeing their hourly rate of pay. In communications with Mr Borg there has never been a reference to the fact that he did not have an hourly rate of pay.
PN937
The e-mails that form part of Mr Borg's witness-statement constantly refer to Mr Borg's hourly rate of pay and the final E-mail from the company talks about the fact that we are guaranteeing your hourly rate of pay but we are guaranteeing it at 31 March, not that you don't have an hourly rate of pay therefore the guarantee does not apply to you, but the hourly rate of pay we are going to guarantee is 31 March 2000. Clearly again AMP recognises that there is an hourly rate of pay to which this guarantee can be applied. Also Mr Walsh wrote to Mr Borg again guaranteeing him that he would not see a reduction in his hourly rate of pay.
PN938
THE SENIOR DEPUTY PRESIDENT: This is getting close to reading, Mr Clifford.
PN939
MR CLIFFORD: Sorry, your Honour, I will move a bit more quickly through it. The other issues around that particular point are that Mr Wilde does in fact concede that there is such a thing as a notional rate of pay and what we say in our submissions is that if the Commission finds that there's not an hourly rate of pay but in fact there is a notional hourly rate of pay, we say that for practical purposes they are the same thing and the guarantee can be applied the same.
PN940
The next issue is around and prior to the commencement date of the agreement. This is the issue which most of the argument has gone to. I think I have already made my point quite clear on that, your Honour, so I won't take you through all of that. There has been an argument around the increase to the standard working week and I'm not at paragraph 44, your Honour. I just make this point on this issue - well, two points on this issue. One is on the evidence of Mr Borg he has seen an increase in his standard working week and that is demonstrated also by the time sheets that we were able to hand up say he is now working a 37½-hour week. His own witness-statement says that when he was a contract employee he would most often still work the 35-hour week.
PN941
Mr Wilde has introduced the issue of overtime. We have made it clear throughout these proceedings that overtime was not the only consideration in making sure that this guarantee applied. There were broader issues to consider. The broader issues were one, that the standard working week was changing. That also meant that people spent longer hours at work; it meant that the start and finish times changed for people which meant that that might impact on their personal arrangements. Because many of our members were so wedded to the concept of a GIO 35-hour week, what the union wanted was to see that that was fully compensated.
PN942
So we say that there's no question that there has been an increase to the standard working week. The second argument around that is that the clause is written in a general form. It is not about whether or not Mr Borg's hours increased individually or whether X, Y or Z, whether they in fact were working more hours than they were before. The clause recognises that in a general sense the working week is going to change and then goes on to say: if you fall under the hours provisions of this agreement, because in a general sense the working week has increased, we will guarantee you that your hourly rate of pay will not change, because when you increase that working week the divisor changes.
PN943
If I could just take you to paragraph 51, your Honour, and at the risk of reading I do want to focus on these two paragraphs which is about the construct of clause 2.7.3 as a whole. The clause talks about the guarantee applying and your hourly rate not reducing as a result of the increase in the standard working week. That is what this was all about, your hourly rate of pay as a result of the standard working week change, your hourly rate of pay changing because the divisor changes. It is no longer 35, it is 37½.
PN944
There's a clear and explicit link between the changing of the hours and the guarantee about your hourly rate. That goes to the issue of the operation of the guarantee itself. It is clearly around an event. What is the event? The event is the changing of the hours. That gives us a very strong indication of what the operative date for the guarantee is. We go further to say that there's also an uncontested connection between the change of the standard hours and the commencement of the agreement. Those things happened at the same time. As soon as the agreement came into play the hours went to 37½. So again there's a clear and explicit link and connection between the changing of the hours, the commencement of the agreement and the guarantee applying and therefore your hourly rate of pay not being reduced.
PN945
We think that that inter-connection and inter-relationship of those things lends substantial support to our argument that the date that the guarantee has to apply to is 17 August or the pay period just before the commencement of the agreement. On the issue of - I notice in the company's submissions or outline of submissions they say that if you find in favour of Mr Borg that there shouldn't be any general application of your finding, of the Commission's decision. We say that if the Commission finds in favour of Mr Borg that a decision should be applied to all other contract employees who earn over $43,000, that they should be treated in the same way as Mr Borg. Again the reasons for that is that the clause does not seek to single out individuals. The clause is one of general application, that is general application based on the fact that there is an increase in the standard working week from 35 to 37½. That is uncontested and undeniable.
PN946
In terms of the equity arguments this as has already been stated, if the Commission finds against FSU on this, this group of employees will be the only group of employees who see a reduction in their hourly rate of pay. They can get their pay packet after the agreement comes in and before the agreement comes in and they will see a difference. Any other employee covered by the hours provisions of this agreement, be they AMP employees or GIO employees wouldn't be able to identify that reduction in hours. If I can just be clear on that one point, your Honour.
PN947
Mr Wilde argues that they would be able to identify a reduction because the award employee when you apply their 4 per cent increase retrospectively that boosts the hourly rate of pay before the agreement. Again, on that point, in practical terms, well, two things. If you look at the clause it talks about the hourly rate of pay that existed prior to the commencement of the agreement. That was one which didn't have a 4 per cent increase about it. That is the relevant hourly rate of pay that you need to be comparing.
PN948
The second thing is for practical purposes what our members wanted to know was exactly what Mr Derrick said in the witness-box. They wanted to be able to take their pay slip out at the time they were voting on this agreement, just before the agreement, and say, this is my hourly rate of pay. I don't want to see that change because if that changes that means I haven't been fully recognised, or it has not been fully recognised that the divisor has changed, that the increase in hours has occurred, that I am here for longer in the day.
PN949
So in conclusion your Honour we submit that our application under section 170LW should be granted on the basis that the clause is clear and unambiguous. We also say that at no time in the lead up to the ballot for the agreement did AMP GIO disclose that their intention was to use the 31 March 2000 as the comparison date for the operation of the guarantee. We think that is an important point. When people voted on this agreement, they voted on it understanding that their hourly rate was going to be the same. Nobody said to this class of employees: but hang on a minute it is actually your hourly rate back on 31 March. They voted on it in good faith understanding that their hourly rate of pay would not change.
PN950
AMP at not time in its written communication or verbal communication with these employees has tried to assert anything else. They have never tried to assert to those employees that your April pay review increases were going to be included. They have never tried to assert that the date would be 31 March until these proceedings, or sorry, until such time as those employees questioned it. Your Honour, if - just one last point, if you find against our application. Now, your Honour, our application is that AMP should pay Mr Borg at the hourly rate of $24.05 effective from 27 October. If I could just explain that. The $24.05 again going back to the table is the hourly rate of pay which existed just prior to the commencement of the agreement. So on 17 August, that is what he was being paid. We say that that is the one he should be getting.
PN951
The reason we say 27 October and again, using that table, is that that was the effective date that when the jobs were reclassified, despite the fact they weren't reclassified until November 2000 the effective date for any increases there was 27 October, so we say that that is the date that that hourly rate of pay of $24.05 should be applied from. Our application then says that the pay increase that Mr Borg received on 1 April 2001 should be applied on top of that hourly rate of $24.05. Now, your Honour, I need a calculator to work out what it is but if we assume that he got about a 3 per cent pay increase in April 2001, we say that that 3 per cent should be applied on top of the $24.05, that he shouldn't be disadvantaged just because the Commission finds in favour of Mr Borg, so he shouldn't be disadvantaged against what he would have got out of the April 2001 pay review.
PN952
But as an alternative, if your Honour finds that the hourly rate of pay of $24.05 should apply from 27 October and that the pay increase in April 2001 shouldn't apply on top of that our alternative position is that we should still, that the April 2001 pay increase should be absorbed. So to explain that further, your Honour, if again we look at that table, effectively what that would mean is that Mr Borg would have an hourly rate of pay of $24.05 between 27 October and 1 April 2001, and then on April 2001 he would simply go to the rate of pay which AMP has said is the appropriate rate of pay which is $24.02.
PN953
So our first position is April 2001 increase should be applied on top of the $24.05. If the Commission finds against that our second position is that Mr Borg's pay does not increase, sorry, that Mr Borg's pay should be $24.05 between October and April and then simply moved to his new rate of $24.22. So I suppose it is a back pay arrangement just for a specific period of time. It is limited. It does not have an ongoing effect from Mr Borg's pay. We argue that that should be applied to all employees affected by this clause, if the Commission pleases.
PN954
THE SENIOR DEPUTY PRESIDENT: Thanks, Mr Clifford. Mr Wilde?
PN955
MR WILDE: Thank you, your Honour. As I indicated earlier your Honour, AMP has prepared written final submissions which I would like to now tender and file.
PN956
PN957
MR WILDE: Your Honour, these final submissions are not dramatically different from the outline of submissions which were filed at the commencement of the proceedings. They are perhaps a little more refined and deal with some of the matters that have come out during the course of the hearing. So I won't go through them in detail. I will however traverse a couple of the matters that have come up in the latter part of the hearing that are perhaps not reflected in the submissions.
PN958
THE SENIOR DEPUTY PRESIDENT: Certainly.
PN959
MR WILDE: You will forgive me your Honour if I jump about all over the place in terms of the order that these come out. They reflect in part my own earlier thinkings and also what have been added to my thinkings by Mr Clifford's submissions today. Firstly, I would like to address Mr Clifford's submissions as to how the Commission should approach this task of interpretation. Mr Clifford said that it is largely a matter of interpreting the meaning of the words prior to the commencement of the agreement and that in fact those words are perfectly clear on their face, there is no ambiguity and so on. I won't go into those submissions in detail but we understand the thrust of them.
PN960
Your Honour, it is AMP's submissions that if your Honour accepts that the Commission is bound by the words that are used in the agreement then that supports AMP's position. In fact if we could have reached agreement on that it might have saved us all a great deal of trouble because it would have confined the issues in dispute as to whether the date which AMP picked was relevantly prior to the commencement of the agreement. Now, AMP's submissions are your Honour that 31 March 2000 was prior to the commencement of the agreement, within the clear ordinary plain meaning of those words. If the FSU succeeds in that submission that your Honour is bound by those words, then we submit that those words point in AMP's favour.
PN961
However, your Honour, this could end up in some rather silly and slightly artificial submissions. AMP submission is that the Commission is charged with the task of interpreting those words within the context of the agreement as a whole and within the context of what was intended by the parties. The reason the Commission is permitted to go into matters of intention and surrounding circumstances is because the words are in fact ambiguous. A date prior to the commencement of the agreement could be 17 August, it could be 31 March, it could, as Mr Clifford pointed out in his evidence, be a date in 1963, it could be my birth date. There are a range of dates which apply to the commencement of the agreement. The agreement does not specify which date prior to the commencement of the agreement should be adopted for the point of comparison.
PN962
The submissions advanced by Mr Clifford seek to imply in that phrase additional meaning and that is an additional qualifier being immediately prior to the commencement of the agreement or just prior to the commencement of the agreement. Your Honour, those words are not there. The FSU is urging you to imply those words into the clause. The AMP submits that that is not appropriate. On the issue of how the Commission should approach interpretation, AMPs submission is that section 170LW of the Act when combined with the dispute resolution procedure in the agreement and also taking into account clause 2.14 of the agreement which acknowledges the potential for unintended consequences and ambiguous operation in the provisions of the agreement that relate to the GIO employees, all confer upon the Commission a very wide discretion as to how this matter should be resolved.
PN963
AMPs submission is that the Commission should use that discretion to identify the most appropriate resolution of the dispute, one that is fair and just and makes sense. If we delve into the intentions of the parties in negotiating that clause and in fact all the clauses that related to GIO employees in the agreement, it becomes apparent that the circumstances the parties were dealing with were extraordinarily complex. It is not beyond the realms that possibilities that the parties had quite different intentions with a number of those provisions.
PN964
The parties acknowledged as much in the terms of the agreement. This potential situation is acknowledged in clause 2.14 of the agreement. If I focus for a moment, your Honour, on AMPs intentions, it simply is impossible that AMP intended to apply the hourly rate guarantee in the way that was advanced by the FSU. Had the matter been squarely raised in the negotiations AMPs submission is that it would have said no, that the fact that these employees have already received substantial pay increases needs to be taken into account. It is simply a matter of basic elementary logic that we would have taken that position.
PN965
From that point of view, your Honour, the interpretation advanced by the FSU must be, from AMPs perspective at least, an unintended consequence of the operation of that clause. In the course of cross-examining Mr Clifford I dwelt for some time on the possibility that there are two ways of interpreting the way AMP has approached this issue. The first is that we had one intention which was consistent with the argument advanced by the FSU and we have changed our mind when it came to implementing it. The second alternative is that we had the intention we now say we have and we had that all along and that the discussions between the parties did not adequately flesh out that issue.
PN966
Your Honour, AMP advances the second interpretation, perhaps not surprisingly. No one is perfect in this world, your Honour. Mr Clifford is not perfect and I'm far from it and if we were we would have tackled this issue in clear and unambiguous terms and recorded it in the agreement in a way that didn't leave us in the position of being here today. Your Honour, we can't re-write history. That time has been and passed and the fact of the matter is, your Honour, that the wording is ambiguous. AMP has one intention, the FSU is now saying it had another intention.
PN967
We submit that the interpretation being advanced by the FSU would clearly be an unintended consequence of that agreement and one that is not equitable, is not fair and does not make sense. Your Honour, Mr Clifford in his submissions took you to table F in -I think it is FSU1, the folder of material that was - - -
PN968
THE SENIOR DEPUTY PRESIDENT: Yes, I know it is the folder of material. I don't know whether it has ever been formally - because it contains witness-statements which have been separately identified. I think we know what you mean.
PN969
MR CLIFFORD: Yes and your Honour, the table also has not been marked but the pay slips which simply reflect what is on the table have.
PN970
THE SENIOR DEPUTY PRESIDENT: Thank you. Well, we will use the table as an aide-memoire.
PN971
MR WILDE: Your Honour, I would like to make a few points about the way that that table is constructed. Firstly, what it is reporting there is the rate of cash paid - received by the employee. During part of the period covered by that table the employee was on what we call packaged arrangements where some non-cash benefits as well as superannuation entitlements were loaded into the employee's pay. Part-way through the operation - the period covered by that table the employee went on to a straight salary with superannuation on top arrangement. I won't go into detailed submissions about this, your Honour, but there are a number of ways of actually interpreting what Mr Borg's actual rate of pay was at any relevant point of time.
PN972
My submission, your Honour, would be that - and I haven't had the opportunity to discuss this with Mr Clifford so perhaps he might want to make some submissions on this, but it may be most convenient for the parties if you were to find on the merits of the case or make a preliminary finding on the merits of the case and then the parties could confer over the exact numbers. If the parties could reach agreement on the exact numbers and how they fit together we would present that to you. If not we would come back to you with submissions on those figures.
PN973
THE SENIOR DEPUTY PRESIDENT: Well, let Mr Clifford absorb that and come back later, Mr Clifford. Just so that we are all clear on what your suggestion is, it is that I might find, for instance, that the view of the application of the clause is as Mr Clifford seeks but stop there and say to the parties: now, armed with that - - -
PN974
MR WILDE: What is the effect of that?
PN975
THE SENIOR DEPUTY PRESIDENT: - - - what is the effect of that?
PN976
MR WILDE: Yes.
PN977
THE SENIOR DEPUTY PRESIDENT: All right, I am at least clear.
PN978
MR WILDE: Mr Clifford, dwelt in his submissions on AMP's view and indeed submission that contract employees didn't for practical purposes have an hourly rate of pay. He impressed upon the Commission that that submission was contradicted by the company's own behaviour in seeking to guarantee an hourly rate of pay in a particular kind of way. Your Honour, the purpose of those submissions goes to AMP's intentions and AMP's point of view throughout the negotiations that this concept of an hourly rate of pay for contract employees was essentially a nonsense and that we would only recognise it in terms of a notional hourly rate of page.
PN979
I don't dispute that AMP has taken some steps, we say, the complete steps towards complying with clause 2.7.3 in respect of Mr Borg. We have written to him and said that we are guaranteeing hourly rate of pay in a particular way. I just wanted to clarify that in my submissions, your Honour. The FSU has submitted that if your Honour finds in favour of its application in respect of Mr Borg then that finding is readily applicable to the class of employees represented by Mr Borg. AMP submits that that would be entirely inappropriate. The FSU has produced no evidence as to the working arrangements for the other 299 employees that are in broadly similar circumstances to Mr Borg and there may be some quite pertinent individual factors that affect how clause 2.73 applies to those employees.
PN980
For instance, there are some employees who have set out in their actual contract a working week which is 40 hours per week and AMP would seek to make certain submissions in relation to that. We haven't done so because this application does not involve those employees, but we simply submit that this is not a class or representative action. Mr Clifford gave evidence that there were "many employees that were on contract to actually worked a 35 hour week." For this to be a class or representative action AMP would seek to produce evidence as to how many employees were, in fact, substantially on a 35 hour week and how many contract employees worked far beyond that on a quite regular basis.
PN981
None of that evidence has been necessary because it hasn't been pleaded as a representative or class action and there's no evidence been brought on that. In a similar vein, your Honour, Mr Clifford has made submissions regarding what relevant employees understood when they voted. To my knowledge, the only evidence before the Commission of people's understanding when they voted is the understanding of Mr Borg. There has been no evidence brought of a general or survey nature as to what these employees understood when they voted. So the FSU's submissions on this point are extremely weak, your Honour.
PN982
If the Commission was minded to find that employees could reasonably interpret the agreement in the way that Mr Clifford is asserting. AMP's submission is that because it only applies to a very small minority of the employees that were covered by the agreement and that the agreement was voted in favour of in order of 91 per cent. What is in the mind of the employees when they voted on the agreement is, in one sense, irrelevant to the outcome of that ballot.
PN983
In any event, your Honour, AMP's submissions is that even on the interpretation advanced by AMP, these contract employees have received substantial benefits from this agreement and it cannot simply be concluded that had they known that we were using 31 March as the comparator date for the hourly rate guarantee that they necessary would have voted against the agreement. I think, that that is requiring quite a leap of faith and logic that is not supported by any material before the Commission.
PN984
THE SENIOR DEPUTY PRESIDENT: Well, the jump either way is not supported by material before the Commission, that they would or they would not have.
PN985
MR WILDE: No, quite true. Finally, your Honour - perhaps not finally, I will just refer to my notes. I would just like to make a couple of points specifically about the evidence of some of the witnesses, your Honour. Mr Borg, acknowledged in his evidence, that the 4 per cent pay increase for award employees did not apply to him. The mutual exclusive nature of the 4 per cent pay increase and the contract employees' pay increase is also set out in the enterprise agreement at clause 2.8.2.
PN986
THE SENIOR DEPUTY PRESIDENT: 2.82.
PN987
MR WILDE: 2.8.2.
PN988
THE SENIOR DEPUTY PRESIDENT: 2.8.2.
PN989
MR WILDE: Which reads relevantly, your Honour, it is talking about the 4 per cent pay increase.
PN990
THE SENIOR DEPUTY PRESIDENT: Yes.
PN991
MR WILDE:
PN992
Applying to other contract employees other than GIO field sales employees earning below $43,000 per annum on the commencement date unless such an employee has already participated in the 2000 pay review for contract employees.
PN993
Your Honour, I draw that to the Commission's attention because I believe that Mr Clifford's submissions on behalf of the FSU, were that the wording of the agreement does not acknowledge or reflect the contract employees pay review in any way and that it was simply outside of the realms of what was being discussed. AMP's submission is that the contract employees pay review form an integral and an - I will withdraw that, your Honour. It formed an integral part of the circumstances that applied during those negotiations.
PN994
It has been discussed with the FSU. It was acknowledged in the agreement. Mr Borg knew about the review and knew that it meant that he was not entitled to a 4 per cent pay increase under the agreement. The link between that pay review and the 4 per cent increase under the agreement is quite apparent, your Honour, in AMP's submissions, and it only goes to support AMP's interpretation of clause 2.7.3. Mr Derrick provided evidence regarding the negotiations. I believe, under cross-examination Mr Derrick acknowledged that he had only been brought in to the negotiations fairly late in the piece and that he did not have a full understanding of the complexities of the issues that we were grappling with.
PN995
Your Honour, AMP's submission is that that goes very materially to the credit of Mr Derrick's evidence. AMP's submission is that he recalled in his evidence some of the issues that came out of the negotiations that he recalled, but there were issues covered in the negotiations that he did not recall. Your Honour, Mr Clifford mentioned right at the end of his verbal submissions that if the Commission finds in favour of the FSU in respect of this application that an increase to Mr Borg's rate of pay should be applied on top or in addition to the increases that he received as part of the pay review for April 2001. I find myself barely able to contain my outrage, your Honour, at that suggestion. Mr Clifford said in his own evidence that the way that AMP administers its pay reviews was that any increases that put a person ahead of the appropriate market rate would be essentially, automatically adjusted in later pay reviews because they are done on a matching of a person to a market salary basis.
PN996
The pay review that was administered in April 2001 had its objective to match Mr Borg's remuneration to what we thought was the appropriate market rate for him for the upcoming year. It is simply irrelevant the rate of pay that he received before that. There was no negotiation of a set pay percentage pay increase for Mr Borg as an individual. It is quite a nonsensical submission and is in fact contradicted by Mr Clifford's own evidence. I do note, however that Mr Clifford offered an alternative course of action if your Honour was minded to go that way which was that the increase which the FSU asserts should apply from 27 October should simply be absorbed when we get to April 2001.
PN997
It should be apparent now, your Honour, that the AMP does not put a great deal on the FSU's submissions but if the Commission is minded to find against the AMP in this application an absorption approach is the only course of action which really AMP submits is open to the Commission. Your Honour, I have no further submissions, if the Commission pleases.
PN998
THE SENIOR DEPUTY PRESIDENT: Thank you Mr Wilde. Mr Clifford?
PN999
MR CLIFFORD: Your Honour, I wonder if we might have a very brief adjournment?
PN1000
THE SENIOR DEPUTY PRESIDENT: Yes. 5 minutes?
PN1001
MR CLIFFORD: Yes, thank you.
SHORT ADJOURNMENT [11.38am]
RESUMED [11.48am]
PN1002
THE SENIOR DEPUTY PRESIDENT: Yes, Mr Clifford.
PN1003
MR CLIFFORD: Thank you, your Honour. There were just some points in reply, your Honour. Mr Wilde, in his submission stated that the words: prior to the commencement of the agreement, could be any date. Taken at their ordinary natural reading I think those words lend weight to our position. However, further than that if Mr Wilde's submission might have some standing if there was nothing else in that clause. As I have already put to your Honour there is a clear event that is linked to those words about prior to the commencement of the agreement. That event is the changing of the hours.
PN1004
So in the context of that event and a guaranteeing of an hourly rate around that event it is quite clear that the guarantee has to apply before and after that particular event, not before and after the event that Mr Wilde talks about which is the pay increase. It does not operate around a pay increase it operates around an increase in hours. Mr Wilde also talks about clause 2.1.4 of the enterprise agreement which raises the prospect of some unintended consequences. That clause also says that the paries will meet to try and resolve the issue. My view is that that clause operates not solely when there is an unintended consequence on behalf of one party. We have stated consistently that the intended consequence of the operation of this clause is as the clause itself states.
PN1005
Mr Wilde is saying: well, it might say those things but that is not how we intend it to operate. That clause does not therefore mean or open up the prospect of simply being able to overturn the words of that particular clause. An unintended consequence might be where both parties didn't intend something to happen but then we would still run into difficulties if the words of the clause said something different to what we intended. We simply can't, as the negotiators go back in and say that something does not mean what it says because we didn't intend it to mean that. It is a legal document which has to be read and applied and interpreted based on the words in the document itself.
PN1006
That clause can't undo those words. Having said that we have sat down to try and resolve the issue. We have been through conciliation. We have taken on board some of the suggestions of the Commission and have still not been able to resolve the issue and that is why we are here before your Honour today. Mr Wilde has also said that we have produced no evidence as to the working arrangements of the other employees. We have only produced evidence about the working arrangements of Mr Borg. Again, your Honour, we would say that the working arrangements of the other employees are irrelevant because this clause is a clause of general application.
PN1007
When we negotiated this clause with the company at that stage we didn't sit down and determine what the hours were of each and every individual to see how this clause should apply to them. We didn't survey at that stage, the company didn't survey nor did we to see how many hours people were actually working. Despite that what was agreed between the parties was that we would have a clause of general application which would cover every contract employee who came within the hours provisions of this agreement and that the guarantee should apply to all of those people regardless of their individual circumstances because this was a change which ultimately in one way or another affects most people.
PN1008
Now, Mr Wilde could jump on that and say well, it affect most people not all people, but there are often in enterprise agreements and in the industrial world there are solutions to problems which don't seek to cover off every individual arrangement. There are often generalised solutions applied to a particular set of circumstances. That is what has occurred here. There is a general solution applied to a particular set of circumstances. The particular set of circumstances is the changing of the standard working week. The solution is let us guarantee people's hourly rate so that everybody can see that they have been properly compensated for that change.
PN1009
Mr Wilde has also said that we have produced no evidence of what employees understood at the time of voting, except for the evidence of Mr Borg. Can I say to that that on Mr Wilde's own evidence under cross-examination he has acknowledged that at no time has the company in either written or verbal form, said to employees that the comparative date for the operation of this guarantee would be 31 March. At no time have they come out and explicitly stated to this class of employees that your April pay increases will be included for the purposes of the application of this guarantee.
PN1010
So in the absence of that information they have produced no written documentation to assert otherwise. In the absence of that information we can only assume that when employees voted on this agreement they did so based on what the clause itself told them or what the communications themselves told them and what those communications said was again linking certain things, changing hours, commencement of agreement guaranteeing your hourly rate of pay. Those things work together and understandably any reasonable person - - -
PN1011
THE SENIOR DEPUTY PRESIDENT: Yes, Mr Wilde?
PN1012
MR WILDE: Your Honour, I really don't think Mr Clifford can provide evidence from the bar table as to what was in the employees' minds by concluding what was reasonably in their minds based on what material was in front of them as I think he is seeking to do.
PN1013
THE SENIOR DEPUTY PRESIDENT: Yes, it is a bit late in the piece to be advancing that proposition.
PN1014
MR CLIFFORD: Your Honour, perhaps it is enough to say that it is true to say that there is no communication that went out to employees that would assert anything other than the clause itself said. Mr Wilde has gone to the issue that 91 per cent of employees voted in favour of this agreement. I might have some issue with that particular figure for GIO employees, but it was certainly up in the high 80s. Two points about that, your Honour, we say that is irrelevant. The operation of a particular clause does not in itself turn on whether the majority of employees voted for an agreement.
PN1015
We would also argue that if other people read the agreement in the way that Mr Borg did, they didn't think there was a reason not to vote for it. Also the FSU supported this agreement based on the fact that we had achieved the guarantee. The document which was handed to Mr Derrick which was an E-mail - was exhibit FSU2, which was a copy of an E-mail from myself to union officials which stated what the key issues where of concern to employees at that time and went further to give a break-up of the number of employees who were likely to vote in favour of the agreement, likely to vote against the agreement, and at that stage before this guarantee was in place it was running pretty close to 50-50 as to who would support and who would oppose. We got this guarantee around the hourly rate of pay along with some other improvements, put that out to employees and then got that particular voting outcome. Your Honour, Mr Wilde makes reference to clause 2.8 and 2.8 of the agreement makes some reference to the sorts of pay increases that will be - that will be applied as part of this agreement. If I can take you back to clause 2.7.5, which says:
PN1016
The compensation for the increase in the hours of work for GIO employees will be in addition to other benefits set out in the agreement. The remuneration is set out in clause 2.8.
PN1017
Under cross-examination Mr Wilde acknowledges that the pay increases that contract employees earning over $43,000 received as part of the April pay review, do not in fact, form part of the enterprise agreement. Yes, there is a reference by way of definition about who gets the 4 per cent, but it does not provide an increase to the employees who are in question in this matter. So 2.7.5 is saying: compensation for the increase of hours of work are these specific things. And they are the 4 per cent pay increase, the $780 pay increase and the inclusion of leave loading.
PN1018
Nowhere in there does it specify that that pay increase which applied to these people earlier in the year forms part of the agreement, or in fact forms part of the compensation. It simply does not state that. I think that Mr Wilde is drawing a fairly long bow by looking at the third dot point under 2.8.2, where it says that: the 4 per cent will go to other contract employees and then makes reference to the fact to exclude those people who got the money earlier in the year, but it certainly does not provide a pay increase to them.
PN1019
THE SENIOR DEPUTY PRESIDENT: Which is where Mr Bog fits in.
PN1020
MR CLIFFORD: That is correct, your Honour, that is where Mr Borg fits in. It certainly does not provide an increase to those people so the connection of those two clauses, 2.7.5 and 2.8, would say that: these increases are not included as part of the compensation. You will see in our submission, your Honour, at paragraphs 56 through to 60 that we also address that issue and make references to the transcript, where Mr Wilde has in fact conceded that those pay increases don't form part of the agreement and were determined unilaterally by the company.
PN1021
Going to the issue of Mr Derrick's evidence, Mr Wilde brought into question the credit of Mr Derrick's evidence because he wasn't involved in all the negotiations. Mr Derrick was involved in a critical meeting which was the meeting - which ultimately determined that the guarantee would be applied to people's hourly rate of pay, and to that extent Mr Derrick's evidence does carry a substantial amount of weight on this issue. As well as that, Mr Derrick was kept informed of the negotiations probably throughout the period, but in particular around the period that this guarantee was being negotiated.
PN1022
Mr Wilde also says that with regards to our application which is that Mr Borg should have the April 2001 increase - so the increase he got this year applied on top of his hourly rate of $24.05. Mr Wilde said: he is outraged by that application, and he is outraged because of the market rates pay system but again, in cross-examination, Mr Wilde admitted that he didn't even know if Mr Borg was in fact within the market range for his job so I would assume that he should at least withhold his outrage until he knows the facts on that particular point. It is not unusual in AMP for people to be paid below what the market says they should be paid and what their capability rating says they should be paid. Those two things combined, it is not unusual for people to be paid below that.
PN1023
So if the Commission were to apply the April increase on top of Mr Borg's hourly rate of $24.05, it may or may not take him outside the market range but, again, on Mr Wilde's own evidence under cross-examination he acknowledges that pay anomalies exist in AMP and he says that:
PN1024
The practice of the company is to divert a greater proportion of the manager's budget towards the employees ...(reads)... they may miss out on a pay increase entirely.
PN1025
That is at paragraph number 371. And further questions on that around paragraph number 370 of the transcript. So if the Commission were to apply the 2001 pay increase on top of the hourly rate of $24.05, it is not such an outrage because next year, if in fact that does take Mr Borg outside the market - we don't know that it does, there has been no evidence to that - if it does, then, AMP will fix that next year. Mr Borg will likely get a small increase, or no increase as Mr Wilde says there.
PN1026
Just two final points and one goes to the issue that Mr Wilde raised about the actual hourly rate, but before I go to that Mr Wilde says that we are looking for is an outcome that provides a fair and just outcome and makes sense to people. We say that if the clauses apply to the way that FSU says, that is fair and it does make sense, because then you wouldn't have a situation where you have got a group of employees who are the only group of employees who can identify a reduction in their hourly rate of pay. It is not fair that those employees, despite the fact there is a clause there that says: your hourly rate will not reduce as a result of the increase in hours. While they are standing there quite rightfully saying: but it has, my hourly rate has reduced as a result of the increase in hours.
PN1027
So a fair outcome would be that those people are treated the same as other people in that they get that guarantee applied to them. They get it applied to them so that their hourly rate does not reduce, but also it would be unfair to include for them the increases that they got entirely outside of this enterprise agreement. Those increases had nothing to do with the change of hours - and as 2.7.5 says and 2.8: they don't go to compensate for that change in hours.
PN1028
In cross-examination I put it to Mr Wilde, a situation where you might have a person who received a promotion in June and that in March their rate of pay was $10. In June they got a promotion - this could be an award employee your Honour, so not in Mr Borg's class - you earn $10 an hour in March. In June you get a promotion and you earn $12 an hour and then when you apply the guarantee what gets guaranteed, the $10 that you had back in March, or the $12 that you had in June? We submit that it is the $12 that you had in June, that was the hourly rate of pay prior to the commencement of the agreement.
PN1029
We put to Mr Wilde, we said:
PN1030
But I put it to you that if that happened - that is, the person got the promotion - what would be guaranteed would be the $12. I would not have seen a reduction below $12 as an award employee.
PN1031
And Mr Wilde's response is:
PN1032
That seems reasonable to me but I'm unaware of any case exactly like that in implementation.
PN1033
Well, for practical purposes there is no difference between that scenario and the scenario of Mr Borg. Both have received an increase outside the agreement for whatever purpose. Mr Borg's case, it was a performance-based increase, it was about merit. In this person's case it was also about merit, it was about promotion. They both get an increase. We say that not the $10 back in March, but the $12 in June is the figure that should be guaranteed and that that should apply, and Mr Wilde says: well, that seems reasonable to me, that it is the $12 that should be guaranteed because that was the rate of pay before the hours changed.
PN1034
If it is reasonable for that person, why is it not reasonable for Mr Borg and that exchange, your Honour, is at paragraph 509 of the transcript and the hypothetical originally put at paragraph 506. So in terms of what Mr Wilde has raised with regard to your Honour making a decision which goes to the merits of the clause it self and then leaving it to the parties to work out what is the figure that applies, we would oppose that, your Honour, because your Honour has, I believe it is exhibit FSU5, the payslips of Mr Borg.
PN1035
Those payslips clearly identify what Mr Borg's hourly rate was at the time that he was voting on this agreement and at the time that this agreement commenced. We would say that is the hourly rate that we should rely upon in applying a guarantee. So we would be opposed to just a finding on the merits without going to the rate of pay. In relation to extending our claim to other employees, I think we deal with that in our submissions so I will not go into that point right now.
PN1036
Your Honour, one final thing, I have talked about the date of 27 October as being - in our application we say it should be 27 October the time at which the hourly rate of $24.05 should be reapplied. That is when the guarantee should kick in. The reason for that, your Honour, is that the agreement itself, clause 2.7.3 says that for contract employees the guarantee becomes effective from the time each employee's job is classified under the agreement and the employee becomes covered by the hours provision of the agreement.
PN1037
THE SENIOR DEPUTY PRESIDENT: What was that reference again?
PN1038
MR CLIFFORD: That is in clause 2.7.3(a)(ii). So it says that is the time the guarantee becomes effective for the contract employees. It is when their job is reclassified and just to confirm to the Commission, when that - that date is 27 October. Your Honour, in my witness statement there is a number of attachments - I basically put those attachments there because we have tendered them previously in the proceedings but we wanted to put them as evidence and just confirm where those documents came from because there was some uncertainty where they came from earlier.
PN1039
Attachment C in my witness statement is a document from AMP GIO about the job equalisation process. On the second page of that document it talks about people who have been classified in job levels 1 to 3, it is the third paragraph on the second page. In that paragraph you will find, your Honour, the effective date for the notification of the job level was 27 October and that is why we say that is the appropriate date. If the Commission pleases.
PN1040
THE SENIOR DEPUTY PRESIDENT: Yes, Mr Wilde.
PN1041
MR WILDE: Your Honour, I must apologise, I feel compelled just to raise a few very, very brief points in relation to some new material that Mr Clifford - - -
PN1042
THE SENIOR DEPUTY PRESIDENT: There could have been some new material put there so I will give you that opportunity but it is on sufferance.
PN1043
MR WILDE: Mr Clifford made a submission about the effect of clause 2.1.4 of the agreement - 2.14 along the lines of it does not empower the Commission to essentially rewrite the agreement. I would simply like to make the submission on behalf of AMP that 2.14 is directed to the consequences and operation of the provisions, unintended consequences and ambiguous operations of the provisions and not the words themselves and that fits very neatly with section 170LW of the Act under which this application is made which empowers the Commission to settle disputes over the application of the agreement.
PN1044
What we are really talking about, your Honour, is the way the agreement gets applied to real life. We are not asserting that we go back and rewrite the words of the agreement. Secondly, Mr Clifford submitted that, very strenuously, that the contract employees pay review increases did not form part of the enterprise agreement. AMP has conceded that those increases were now - - -
PN1045
MR CLIFFORD: Sorry, I object. I don't see this as new material. It is simply going over old ground.
PN1046
THE SENIOR DEPUTY PRESIDENT: I am not sure on what basis you say that you are responding to new material, Mr Wilde. In any event, I think the point has been made, has it not?
PN1047
MR WILDE: I am just trying to recall, your Honour, what point I was going to make. It seemed like a good idea at the time, your Honour. I withdraw that. There was a submission, your Honour, regarding to the effect that an award employee who receives a pay increase between 1 April 2001 and the commencement of the agreement due to a promotion is in no different position to Mr Borg and Mr Clifford quoted from my evidence in support of that submission.
PN1048
AMP's submission on that point is there is a world of difference between those two situations in that the pay increases that were received by Mr Borg were received as part of a pay review that affected approximately 2500 employees were not one off or isolated events. The 4 per cent pay increase negotiated as part of the enterprise agreement, likewise, affected a very large number of employees. If you add those two groups of employees together, you have the whole GIO population. So if you were a GIO employee you either participated in the contract employees pay review or you were entitled to the 4 per cent pay increase. Like Yin and Yang, the opposite sides of an equation. It is quite a different situation when one talks about an employee who may receive an ad hoc pay increase due to a promotion.
PN1049
THE SENIOR DEPUTY PRESIDENT: Although it is correct, is it not, to that - a person who got what you call an ad hoc pay increase by way of promotion, for example, would have had that rate taken into account as the relevant to the guarantee.
PN1050
MR WILDE: Yes. They would have also had the 4 per cent pay increase applied to that rate and had it back dated to 1 April, regardless of when they actually received the pay increase.
PN1051
THE SENIOR DEPUTY PRESIDENT: I see, yes.
PN1052
MR WILDE: So unlike all the other ad hoc pay increases, there is the contract employees pay review and the 4 per cent pay increase which were both backdated to 1 April and which were mutually exclusive so I think that puts a different complexion on that type of pay increase. Your Honour, I don't have any further submissions to make, if the Commission pleases.
PN1053
THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Wilde. I thank both of the applicants for their submissions and their conduct of the case. I reserve my decision. I adjourn the Commission.
ADJOURNED INDEFINITELY [12.40pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
EXHIBIT #FSU17 STATEMENT OF MR BORG PN692
EXHIBIT #FSU18 OUTLINE OF SUBMISSION PN692
EXHIBIT #AMP2 OUTLINE OF SUBMISSIONS FOR THE RESPONDENT PN693
EXHIBIT #FSU19 FINAL SUBMISSION AND FILED ON 29/08/2001 PN695
MICHAEL SHANE CLIFFORD, AFFIRMED PN705
EXAMINATION-IN-CHIEF BY MS HANNAN PN705
EXHIBIT #FSU20 WITNESS STATEMENT OF MICHAEL SHANE CLIFFORD PN715
CROSS-EXAMINATION BY MR WILDE PN718
RE-EXAMINATION BY MS HANNAN PN882
WITNESS WITHDREW PN887
EXHIBIT #AMP3 FINAL SUBMISSIONS FOR THE RESPONDENT PN957
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