AG2001/1666, Transcript of Proceedings [2001] AIRCTrans 578 (12 April 2001)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 6599

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT POLITES

AG2001/1666
AG2001/1667

APPLICATION UNDER SECTION WR 170XF
OF THE ACT BY EDS (BUSINESS PROCESS
ADMINISTRATION) PTY LIMITED FOR
DETERMINATION OF DESIGNATED
AWARD FOR CERTIFIED AGREEMENT

APPLICATION UNDER SECTION WR 170LK
OF THE ACT BY EDS (BUSINESS PROCESS
ADMINISTRATION) PTY LIMITED FOR
CERTIFICATION OF AGREEMENT
(EMPLOYEES - DIVISION 2)

MELBOURNE

9.05 AM, WEDNESDAY, 28 MARCH 2001

PN1

THE SENIOR DEPUTY PRESIDENT: Good morning. May I have the appearances please?

PN2

MR I. DOUGLAS: Good morning, your Honour. With your Honour's leave, I appear for the applicant, EDS Business Process Administration Pty Limited.

PN3

THE SENIOR DEPUTY PRESIDENT: Yes, leave is granted, Mr Douglas.

PN4

MR DOUGLAS: Your Honour, I think the file should contain all of the necessary technical matters.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, I've read the file, Mr Douglas.

PN6

MR DOUGLAS: Thank you, your Honour. I did cause yesterday, your Honour, to have a bundle a documents forwarded.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes, I did a bit of light reading last night, Mr Douglas.

PN8

MR DOUGLAS: Yes. Well, I didn't do it for that purpose, your Honour.

PN9

THE SENIOR DEPUTY PRESIDENT: But you can take it that I have read it.

PN10

MR DOUGLAS: Thank you. Your Honour, EDS Business Process Administration Proprietary Limited is a wholly owned subsidiary of EBS Australia Proprietary Limited. Its business is new. In fact it is at the very start of its development cycle. It is in that sense an embryonic member of the EDS group in Australia. As your Honour knows, EDS Australia began operating here in about 1985. At that time it was owned by the US General Motors Corporation. It is now owned 65 per cent by the US Electronic Data Systems Corporation and 35 per cent by the Commonwealth Bank.

PN11

The US Corporation, EDS Corporation, is the prime entity of what are many hundreds, I'm told, many hundreds of entities in the EDS group around the World. EDS, your Honour, of course is a global leader in its field. Its mission is to achieve superior value for its clients in the digital economy. It offers, sells and deploys intellectual capital. The knowledge of its employees and technology to help its client enterprises in becoming competitively stronger and more efficient, it provides a wide range of services on contract including an array of information technology and associated services to an industrially diverse range of clients across some 55 countries.

PN12

Globally, EDS employs over 121,000 employees at this time including in excess of 4000 in Australia in four entities, one of which is this new company, EDS Business Process Administration Proprietary Limited. Now, the global EDS presents itself to the market including the market in Australia by offering a portfolio of service through four lines of business. They call them LOBs. They are firstly, management consulting through the worldwide network of A.T. Carney. Secondly E Solutions. Thirdly information solutions or more often referred to as I Solutions within the group and fourthly, Business Process Management BPM.

PN13

Now, to day, globally and in Australia, I Solutions in terms of revenue generation and employee and other resource dedication has been overwhelmingly the most significant of the services deployed by EDS, for example I refer to the I Solutions contract entered into with the Commonwealth Bank in late 1997. Unlike for example the position in the United States, EDS is yet to enter into a significant or stand-alone BPM contract business process management contract in the Australian market and EDS BPA as the applicant has been formed to enhance EDS's opportunities with respect to that line of business.

PN14

If I could just briefly tell you this as to what BPM involves, your Honour. The business process management area involves the provision of services such as strategic - through strategic out-sourcing of one or more of a client's business processes or functions with the aim, of course, to improve the overall business performance of the client enterprise. Business process management offers help in entering new markets and/or in getting products to the market faster. The management of client customer and client supply in relationships, the management acknowledge and information sharing across the client enterprise, knowledge solutions and business intelligence.

PN15

I don't mean covert intelligence, your Honour. It is intelligence in terms of the market place and document and claims processing. Now, currently EDS in some seven EDS employees are dedicated to the business process management line of business and four of those employees are within the scope of the agreement that is before your Honour and that four are of course currently employed and newly employed, I should say, too by EDS Business Process Administration Proprietary Limited.

PN16

Now, the extent to which the applicant company will grow in terms of the number of persons it will employ is totally dependant upon the success of it and EDS Australia in combination, the success that they have in combination in marketing the business process management line of business in this country. I should say, your Honour, that the market is very competitive of course and it involves others that operate on a global basis. The applicant, EDS BPA is a constitutional corporation and of course it is an employer and as such section 170LK(1) permits it to make an agreement with a valid majority of the persons employed at the time whose employment will be the subject of the agreement.

PN17

The agreement before your Honour is such an agreement. The file as I understand it, your Honour, contains an application under section 170XF(2) for the designation of an award. I say this, that the company currently employs one person to perform - who performs clerical work and even though it can be argued that her role as a personal assistant is more than just a clerk, it is probable that the - as a matter of law that the New South Wales State Clerks Award is a relevant award as to that employee and we would ask your Honour to proceed on that basis.

PN18

THE SENIOR DEPUTY PRESIDENT: The others would be picked up by the consent award, is that right?

PN19

MR DOUGLAS: The others, your Honour, well, we seek to have the EDS Award, Information Technology Award, which was made with appeasement and the new organisation MAFIA as designated in relation to the other employees.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes, I see.

PN21

MR DOUGLAS: That would seem to be appropriate, your Honour. That award of course, your Honour, was something that was in the wing so to speak and it was referred to as a real possibility by me during the course of the section 149 proceedings last year.

PN22

THE SENIOR DEPUTY PRESIDENT: Yes.

PN23

MR DOUGLAS: Now, your Honour, I submit that in the making of the agreement, the company complied with the requirements of subsections 2, 3, 4 and 7 of section 170LK, subsections 5, 6 and 8 of course not in these circumstances being relevant.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes, I've read the material, Mr Douglas. I have no doubt about those minutes.

PN25

MR DOUGLAS: Thank you, your Honour. Well, in a technical sense I should - is your Honour then satisfied that the technical requirements of section 170LK have been complied with?

PN26

THE SENIOR DEPUTY PRESIDENT: Yes, I am.

PN27

MR DOUGLAS: Yes. Does your Honour have any questions of this that your Honour wishes to deal with in relation of the no disadvantage test>?

PN28

THE SENIOR DEPUTY PRESIDENT: Yes, I did.

PN29

MR DOUGLAS: Well, maybe that is the most convenient way of proceeding. Your Honour was provided with two documents yesterday. One which is headed, "Improvements in terms and conditions by reference to the two awards"?

PN30

THE SENIOR DEPUTY PRESIDENT: Yes.

PN31

MR DOUGLAS: The second one, "Reduction in terms and conditions by reference to the two awards"?

PN32

THE SENIOR DEPUTY PRESIDENT: Yes.

PN33

MR DOUGLAS: I think you also have a copy of the what is a print-out from the job coding system that operates in Australia at this time as far as all EDS companies are concerned.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes.

PN35

MR DOUGLAS: That is that document.

PN36

THE SENIOR DEPUTY PRESIDENT: I've looked at that too, Mr Douglas.

PN37

MR DOUGLAS: Yes. That sets out the total remuneration ranges and of course the employees who voted on this agreement fall within the scope of that coding system.

PN38

THE SENIOR DEPUTY PRESIDENT: Can I say what my difficulty is? I've got no doubt about it as to the employees who fall within the agreement but of course assuming, as I hope I assume you will all be hoping that business grows, the agreement didn't seem to contain a provision which indicated that future employees would be employed on - now, you might be able to correct me on this. I couldn't find it - would be employed on the same scales or similar scales and I was going to seek an undertaking that that be the case.

PN39

MR DOUGLAS: Your Honour, could I - - -

PN40

THE SENIOR DEPUTY PRESIDENT: If there wasn't a provision that I - - -

PN41

MR DOUGLAS: Well, I intended to that in any event. Simply, your Honour, even though - even if it is not technically required, I think it is appropriate in the circumstances and inform your Honour as to where we see this company going.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes.

PN43

MR DOUGLAS: Could I deal with that question in two ways, your Honour? Firstly, I've been instructed to inform your Honour that the four employees are currently being paid salaries as follows, and I don't name the people but I can provided the name with respect to each salary if your Honour wishes. Employee 1 is - his total remuneration is $99,403 per annum currently and these remunerations are preserved by clause 5.2 of the agreement.

PN44

THE SENIOR DEPUTY PRESIDENT: Yes.

PN45

MR DOUGLAS: The second employee, $83,569 per annum. The third employee, $67,500 per annum and the last employee $130,000 per annum. Now, your Honour, in addition to that, could I give these undertakings and I give them in conjunction with the information that is contained in this print-out.

PN46

THE SENIOR DEPUTY PRESIDENT: Yes.

PN47

MR DOUGLAS: We commit that all persons employed by this company in the future in clerical and administrative type job roles will be paid no less than the minimum rate provided for under the New South Wales Clerical and Administrative State Consolidate Award existing from time to time, currently that minimum rate, your Honour, is $439.60 per week or annually, $22,859.20. Secondly, a like commitment that all persons employed in the future by this company in professional type roles will be paid no less than the minimum rate provided for under the EDS Information Technology Award 2000 as that minimum rate exists from time to time.

PN48

Currently, your Honour - and you will see this from the page 23 of the Award - the current minimum rate is $16.14 per hour or annually $31,897. Now, your Honour, those two undertakings in conjunction with the information as to the actual salary of employees that have participated in this making of this agreement together with that information, your Honour, I would submit that it satisfies.

PN49

THE SENIOR DEPUTY PRESIDENT: Yes, as I say, I didn't have much doubt about the four employees. I was concerned as to future operation and those undertakings solved that problem.

PN50

MR DOUGLAS: Yes, your Honour, and I think - well, in those circumstances, your Honour, I would simply submit that it is appropriate that the agreement be certified. It contains a settlement of disputes clause as required by the legislation. It contains in clause 22 severance payment entitlements significantly ahead of the Commission standard.

PN51

THE SENIOR DEPUTY PRESIDENT: That was one thing I was going to ask you about but clearly that is true but the notice periods seem to be less than the award and I didn't notice that picked up in the consent award. Maybe I missed something but I - - -

PN52

MR DOUGLAS: The notice periods are dealt with in clause 21, your Honour, ranging from 1 week to 4 weeks notice.

PN53

THE SENIOR DEPUTY PRESIDENT: Yes. Now, they are consistent with the award, with the New South Wales Award I think.

PN54

MR DOUGLAS: Yes.

PN55

THE SENIOR DEPUTY PRESIDENT: I thought that there was a months notice provided in the EDS.

PN56

MR DOUGLAS: A months notice in relation to - - -

PN57

THE SENIOR DEPUTY PRESIDENT: To termination with the additional week's notice for - it is 13 point - - -

PN58

MR DOUGLAS: 13.1, your Honour is correct.

PN59

THE SENIOR DEPUTY PRESIDENT: Yes.

PN60

MR DOUGLAS: Yes, well that is a technical - - -

PN61

THE SENIOR DEPUTY PRESIDENT: I just noticed it wasn't - - -

PN62

MR DOUGLAS: Technical disadvantage in that sense.

PN63

THE SENIOR DEPUTY PRESIDENT: Yes.

PN64

MR DOUGLAS: But there is, your Honour, a significant benefit in terms of the severance payment entitlement.

PN65

THE SENIOR DEPUTY PRESIDENT: Yes.

PN66

MR DOUGLAS: Your Honour has probably noted that the agreement adopts from the manual the provisions in relation to sick leave, bereavement leave, jury service and so on.

PN67

THE SENIOR DEPUTY PRESIDENT: Just one other issue I was going to raise, Mr Douglas, was I note the changes in the - or the modification to shift penalties. Is it the intention of the company to work permanent night-shifts or would this be on an as needs basis?

PN68

MR DOUGLAS: At this time, your Honour, I would say no, but it is rather hard to anticipate what might occur in the future. It depends on what contracts are obtained and what industry, for instance if a contract is obtained with an airline company, it may well occur but if it is a contract contained with a medical benefit company, the opposite might apply, your Honour.

PN69

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN70

MR DOUGLAS: Of course there is always the capacity under the legislation to come back and seek a variation of the agreement to cover for that sort of thing.

PN71

THE SENIOR DEPUTY PRESIDENT: Yes, but in any - indeed, yes.

PN72

MR DOUGLAS: I would ask that the Commission certify - yes, your Honour, could the job coding information be marked confidential?

PN73

THE SENIOR DEPUTY PRESIDENT: Look, I think perhaps - - -

PN74

MR DOUGLAS: Well, maybe it could even - - -

PN75

THE SENIOR DEPUTY PRESIDENT: I think it can perhaps be returned to you, Mr Douglas.

PN76

MR DOUGLAS: Returned, that would be the safest.

PN77

THE SENIOR DEPUTY PRESIDENT: We will just make a note. What I will do, is order the transcript for this and the transcript will show that at the conclusion of the proceedings, the job coding material will be returned to you.

PN78

MR DOUGLAS: Thank you, your Honour.

PN79

THE SENIOR DEPUTY PRESIDENT: On the basis of course, that if it is needed for future action on the file, it will be produced.

PN80

MR DOUGLAS: Thank you.

PN81

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. This is an application pursuant to section 170LK of the Workplace Relations Act to certify an agreement to be known as the EDS Business Process Administration Agreement. Having heard Mr Douglas, counsel, and having read the statutory declaration filed by Robert Gordon Goller on behalf of EDS Proprietary Limited and on the basis of the following undertakings, or the undertakings I will adumbrate shortly, I am satisfied that the agreement relates to a constitutional corporation, namely EDS Business Process Administration Proprietary Limited, ACN number 095806125.

PN82

I am, on the basis of these undertakings, satisfied that the agreement passes the no disadvantage test, the undertaking is that the company will commit that all persons employed in clerical - can be employed in the future in clerical and administrative capacities will be paid a rate no less than that provided for in the New South Wales Clerks Award and that all employees in other areas, the subject of the agreement shall be paid a rate not less than the rate described in the EDS Information Technology Award.

PN83

MR DOUGLAS: Could I just interrupt your Honour?

PN84

THE SENIOR DEPUTY PRESIDENT: Yes.

PN85

MR DOUGLAS: The undertaking I've given of course, if juniors are employed, then that undertaking would apply in relation to the junior calculation of junior rates.

PN86

THE SENIOR DEPUTY PRESIDENT: Right, yes. Those undertakings include undertakings in relation to junior rates in that.

PN87

MR DOUGLAS: Sorry, your Honour.

PN88

THE SENIOR DEPUTY PRESIDENT: I just want to make sure that that is correct.

PN89

MR DOUGLAS: Yes, your Honour. The second undertaking - the first undertaking is in relation to clerical and administrative type roles, the second undertaking is in relation to professional type roles.

PN90

THE SENIOR DEPUTY PRESIDENT: Right. Yes, well, all right. I will make that clear in the written decision. I put clerical administrative and the rest of the people within the scope of the agreement but they are more or less the same thing, aren't they?

PN91

MR DOUGLAS: Well, it may not be, your Honour. There may be some, from time to time, a few technical people and they don't precisely fit the - within the framework of coding system and we haven't turned out mind to that, your Honour.

PN92

THE SENIOR DEPUTY PRESIDENT: Very well, but that is a future prospect only, is it?

PN93

MR DOUGLAS: A future prospect but in those circumstances, your Honour, one would be looking at say the Metal Industry Award for example.

PN94

THE SENIOR DEPUTY PRESIDENT: Yes. Well, I will make those qualifications plain in the decision. I'm also satisfied as to the following matters. The agreement was made in accordance with section 170LK of the Act and a valid majority of persons employed at the time, whose employment was subject to the agreement genuinely approved the agreement. I'm satisfied the explanation of the terms of the agreement was appropriate. I'm satisfied that the agreement includes procedures for preventing it settling disputes between the employer and the employees as employment will be subject to the agreement.

PN95

I'm satisfied that the agreement specifies a date as a nominal expiry date which is not more than 3 years after the date on which it came - will come into operation. Now, I'm also satisfied there are no reasons set out in section 170LU of the Act why I should refuse to certify the agreement. For purposes of the no disadvantage test, I determine pursuant to section 170XF of the Award, as I've already indicated, that the relevant awards for purposes of that test are the New South Wales Clerks State Award and the EDS Information Technology Federal Award.

PN96

On that basis, the agreement will be certified with effect from today's date to operate in accordance with its terms. The formal certificate will be issued in due course following receipt of the transcript. We will adjourn on that basis.

ADJOURNED INDEFINITELY [9.29am]