C2002/1465, Transcript of Proceedings [2002] AIRCTrans 1266 (12 April 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

O/N VT03274
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT WATSON

C2002/1465

TARGET AUSTRALIA PTY LIMITED

and

SHOP, DISTRIBUTIVE AND ALLIED
EMPLOYEES ASSOCIATION

Application under section 170LW of the Act
for settlement of dispute re the application
of alternative employment provisions

MELBOURNE

9.02 AM, THURSDAY, 28 MARCH 2002

PN1

THE SENIOR DEPUTY PRESIDENT: Any change in appearances or in effect new appearances in the application.

PN2

MR A. CURTAIN: I am appearing for the SDA.

PN3

MS S OAKLEY: I appear on behalf of Target Australia. I believe that MR D. CAVEDON was here present at the conciliation and MR L.BIESBROCK.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes, very well, and this in effect has become an application by Target in respect of clause 4.6.17 of the agreement.

PN5

MS OAKLEY: Yes, your Honour.

PN6

THE SENIOR DEPUTY PRESIDENT: Yes, very well. Well, perhaps on that basis you should lead off, Ms Oakley.

PN7

MS OAKLEY: Thank you, your Honour. As I understand it, the background of this issue was presented in submissions at the conciliation on 14 March.

PN8

THE SENIOR DEPUTY PRESIDENT: It was, yes.

PN9

MS OAKLEY: And we also have provided some background to the issue in our application, so it was not my intention to necessarily revisit that background.

PN10

THE SENIOR DEPUTY PRESIDENT: Yes.

PN11

MS OAKLEY: What I believe that came out of the conciliation was that there was a necessity for the parties to agree on some facts in order to move this forward, which we have done following discussions with the SDA, if I could tender that now.

PN12

THE SENIOR DEPUTY PRESIDENT: Yes, very well.

EXHIBIT #T1 AGREED FACTS DOCUMENT

PN13

MS OAKLEY: Thank you, your Honour. Just to work through this briefly the matters that have been agreed between the parties is that Mr Chapman has been employed and is employed on a full-time basis by Target Australia Pty Limited as a truck driver at the Keon Road off site reserve. We have referred to that throughout the document as the old position. Mr Chapman's employment is governed by the Target Retail Agreement 2001. His weekly rates made up of ordinary rates and allowances is $542.85.

PN14

As part of the background it has been agreed as well that employees at the Keon Road off site reserve, were advised on 30 January 2002 of the need to close that off site. On 4 February Mr Chapman was provided details of an alternative position at the Laverton off site reserve and it has been agreed that the new position is materially the same as Mr Chapman's old position, save for the location. The distance from Wallan to Mr Chapman's town of residence and the two off site reserves is, in terms of distance, 38 kilometres from Wallan to Keon Road and 60 kilometres from Wallan to the Laverton off site reserve.

PN15

On the day that those measures were taken it is my understanding that the times involved in those two trips were 29 minutes and 45 minutes respectively. And as your Honour referred to we have also made application under clause 4.6.17 of the Target Retail Agreement to have the severance pay varied. So as we understand it, your Honour, the essential difference then between the parties is whether or not the position offered to Mr Chapman is a suitable alternative position.

PN16

We have maintained in the past and continue to maintain that it is, and we base that application on - and our submission today, on the principles that have been established in a variety of decisions by the Commission. I might just hand up the first of those decisions that we would rely on. This decision was a decision of Senior Deputy President Williams in P and O Cold Logistics v the National Union of Workers. The point which we would wish to take your Honour to is on page 2 at paragraph 7.

PN17

In his decision he determines that the test to be applied to determine whether or not the alternative employment offered is acceptable, is to be an objective one. Later in his Honour's decision at page 4 on paragraph 15, he then refers to tests that you could apply as to whether a location change is to be regarded as a suitable alternative position. They involve three essential elements, does the transfer involve unreasonable additional travelling time; does it involve a significant increase in the cost of that travel; does it involve a substantial increase in the level of difficulty experienced in being able to get to work.

PN18

Dealing then with each of these tests in turn, the additional travel time as outlined in exhibit T1 at paragraph 7, the distance itself, additional distance was 22 kilometres. We submit that that is approximately 16 minutes difference in travel time. We also say that the travel is primarily on the Western Ring Road and on the Princes Highway and is unlikely to be significantly different to that. On the date that Mr Cerritelli and Mr Biesbrock did the travel, as I understand it, it was around about 8.45 in the morning or 8.30 in the morning, there were roadworks on the road and the traffic was fairly moderate.

PN19

Our submission is that this would reasonably affect the average additional travelling time. Then, in determining whether or not this additional travel time is reasonable we then rely on two decisions of the Commission which I would also now like to hand up. The first decision I would like to refer to is the matter before Commissioner Raffaelli in the Shop Distributive and Allied Employees Association v Dick Smith Electronics. In this decision, at page 5, paragraph 13, Commissioner Raffaelli says that:

PN20

Twenty to thirty minutes additional travelling time per day does not amount to extreme and unreasonable arduous hardship.

PN21

In the second case which was before Senior Deputy President Acton in Car Alexander v Australia Cutting Systems Pty Limited, formerly Laser Lab International Pty Limited, this was a slightly different case in that it was a matter regarding an unfair dismissal application, but in determining whether there was a valid reason for the termination her Honour has to determine whether the additional travel Mr Alexander was required to make following the transfer of the site from Cheltenham to Brooklyn, was reasonable.

PN22

At paragraph 11 on page 6, Senior Deputy President Acton summarises Mr Alexander's evidence, including that it took approximately one hour to travel from his place of residence, which was at Dandenong North to Brooklyn by car. In her decision then her Honour concluded at paragraph 16 on page 7, that she was not satisfied the employment for Mr Alexander at Brooklyn with ACS was not acceptable alternative employment.

PN23

The second test referred to by Senior Deputy President Williams in the first case I have tendered, then said that we should consider whether there has been a significant increase to the cost of travel. We believe that this in many ways relates to the first test, that is it is based on the extra distance travelled. On the days that Mr Biesbrock has tested this extra journey it has taken approximately 2 litres extra per day, sorry, per trip. He bases that off his trip computer. Mr Biesbrock has a V6 Commodore and we understand that the engine capacity of Mr Chapman's vehicle is a four cylinder vehicle.

PN24

THE SENIOR DEPUTY PRESIDENT: Sorry, two litres per - - -

PN25

MS OAKLEY: Journey. So - - -

PN26

THE SENIOR DEPUTY PRESIDENT: Per journey.

PN27

MS OAKLEY: So in summary we would say that is four litres per day, approximately three to four dollars per day. In the matter before Senior Deputy President Williams he was also asked to make a determination regarding a reduction in earnings. While it wasn't related to the travel itself he did determine on the issue regarding a reduction in rates and at paragraph 12 on page 4 he determined that:

PN28

The potential reduction in income brought about by a transfer to Mulgrave does not, in my view, render employment there unacceptable.

PN29

In that particular case he was talking about a reduction in earnings of approximately $18 per week.

PN30

THE SENIOR DEPUTY PRESIDENT: Eighteen dollars.

PN31

MS OAKLEY: Yes.

PN32

THE SENIOR DEPUTY PRESIDENT: There is a reference in paragraph 12 to an allowance of $39.14.

PN33

MS OAKLEY: Yes, my apologies. The evidence itself within the transcript actually goes through the details of the reduction, there was a reduction of the allowance, they have removed an allowance which was $39.14. There was also an increase in the ordinary rate of pay for people at the Mulgrave site, so as a net reduction it was $18 per week. The third issue was around the substantial increase and the difficulty of getting to work. As I understand that, that principally revolves around the employee's method of transport, particularly if there is a reliance on public transport.

PN34

It is my understanding that that is not the case in this circumstance in that Mr Chapman does drive to work, so we would say that in this case there is no substantial increase in the difficulty of him getting to work. I also believe that the union argued during the conciliation that the employee may suffer from fatigue, presumably as a result of the additional travelling time. They therefore would say that this would create an unsafe environment. Our submission is that Mr Chapman is not required to drive trucks consistently during the day, nor are the trips that he does, or is required to perform, long hauls.

PN35

We also submit that other employees travel for the same additional length of time as Mr Chapman would be required to travel, if not longer, including two employees who were redeployed from the Keon Road off site reserve to the Laverton off site reserve as part of this transfer. In conclusion, your Honour, it is our submission that on the objective test established by the Commission the position offered to Mr Chapman by the company is a suitable alternative position. On that basis we respectfully ask that his Honour grant the company's application to vary the severance pay.

PN36

THE SENIOR DEPUTY PRESIDENT: Yes, just one moment. So that is clause 4.6.17. Yes, very well. Thank you. Mr Cerritelli.

PN37

MR CERRITELLI: Thank you, your Honour. As your Honour is aware we are here because of the result of a hearing that we held some two weeks ago. The issue today is whether or not the job offer by the company constitute an acceptable alternative employment. It is not necessarily the issue of Mr Chapman seeking a redundancy package. It is whether this job offer constitutes an acceptable alternative employment. The reason why I wish to highlight that factor is in the application made to the Commission on this matter, and I refer to a document in relation to the application, signed by Sonia Oakley, dated 18 March, which is the actual application and I refer to paragraph 7 which starts:

PN38

The matter was referred to the Commission for hearing before SDP Watson -

PN39

etcetera -

PN40

The SDA sought a redundancy to apply to Mr Chapman.

PN41

Let me just say that I wish to just make it clear at that point, in this case we believe there is no acceptable alternative job offer, yes a redundancy should apply. But equally so, if a job offer was available in the local area at another store, anywhere part of the Coles Myer empire, Mr Chapman will be more than happy to look at that option, and be more than happy probably to take that option up. So this is not purely an issue of the union and one lone member coming into this Commission seeking a sum of money.

PN42

This is an issue of whether or not we believe that this job offer is acceptable or not, and the company's proposition put to us prior to coming to the Commission, was that if Mr Chapman refuses this job he is deemed to have resigned. That is a proposition to come - the union will never support, but we are here today to vote whether or not it is an acceptable job offer. The SDAs contention today that the job offer does not constitute an acceptable alternative employment, and this is when we apply the objective test to this employment offer.

PN43

We believe that in this case there are issues that should be examined in terms of distance travelled, the occupational health and safety issue and the cost of travel to the new location, as part of that objective test. I will restrain from going into the background issues because we have already gone through them in more detail than we probably care to.

PN44

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you for that.

PN45

MR CERRITELLI: No worries. When we discuss these matters, such as an objective test and so forth, we should really look at case law that has, I suspect, established these principles which even affected the P and O case which was presented by my colleague, Ms Oakley. We can refer to places such as the Hot Tuna case, which is print number H310, but more importantly we should look at the Derill Nominees which - - -

PN46

THE SENIOR DEPUTY PRESIDENT: I am sorry, Hot Tuna is 310 something I would suspect - - -

PN47

MR CERRITELLI: Sorry, 3100.

PN48

THE SENIOR DEPUTY PRESIDENT: Zero, zero, thank you.

PN49

MR CERRITELLI: I intend to drop off the last letters of everything. But I think more importantly we should - - -

PN50

THE SENIOR DEPUTY PRESIDENT: It makes it hard to find though.

PN51

MR CERRITELLI: Derill Nominees Pty Limited, print number J4414, this in actual fact was a case also referred to in the P and O Logistics case that Ms Oakley actually submitted as well. I think it is important when we look at these cases, look at what we are talking about when we say an objective test. And what we are looking at when we are discussing the issue of alternative employment. Now, if I can refer you to page 2 of that document, the final paragraph.

PN52

The final paragraph is entitled 51 redundancy, or subheading: Alternative Employment, refers to the issue of a company making an application to the Commission in respect of waivering the general service - the general severance pay. And I will read out the final paragraph:

PN53

This provision does no more than provide an avenue by which an employee may apply to the commission to vary the obligation which otherwise would be imposed by the award. It does not follow from the terms of the clause that employ coming within its scope will achieve necessarily full or partial relief.

PN54

That is an important issue to note, full or partial relief. Just because the company here today is saying we are seeking to waiver the application of this clause of severance pay, does not necessarily constitute that they will have full but they may have partial relief, or neither. The level of relief, if any, to apply, is to be a matter determined as an exercise of discretion in the circumstances of the case. Clearly it allows the Commission the ability to use its own discretion in the subject of how much, if at all, the amount of severance pay should be waivered.

PN55

The provision - and then we go on further to the issue of the provision. There are two aspects of particular importance subject to this appeal, meaning the word alternative employments and objective - obtained, sorry. But we are not going to look at the obtained issue because I think the company has sought to obtain Mr Chapman alternative employment, or rather the issue of alternative employment. If I can then refer to page 4 of 7. We refer to the final paragraphs, which are entitled "Acceptable Alternative Employment." And here we have a couple of paragraphs which I suppose I should - if you want to hear my voice i am quite happy to speak it or let you guys read it, let your Honour read it, the final two paragraphs there.

PN56

THE SENIOR DEPUTY PRESIDENT: Well, I am doing that, yes, thank you. And that goes essentially to the objective standard rather than the view of the employee.

PN57

MR CERRITELLI: What it is basically trying to say is, setting up the standards for the objective test.

PN58

THE SENIOR DEPUTY PRESIDENT: Yes.

PN59

MR CERRITELLI: Then it is also trying to say, well look, at the end of the day it is not a carte blanche, this is how I am interpreting it of course, your Honour, it is not a carte blanche for an employer to say this is an acceptable alternative job or for an employee equally to say it isn't. But it is really establishing the parameters in which a test can occur. And it looks at issues such as not being unreasonably distant. It looks at issues such as that:

PN60

The approach demonstrates alternative employment acceptable to -

PN61

here, for example, at page 5 of 7, refers to:

PN62

Eighteen former employees cannot be regarded ...(reads)... took up the employment at the new location.

PN63

And that is what is an important issue when we are applying the objective test today. In Ms Oakley's submission today she referred to, in particular I suspect, two other drivers who were employed at Thomastown who subsequently went to Laverton. Those two other drivers, in their circumstances, in their case, it was acceptable alternative employment. In Mr Chapman's case we are arguing that it is not when we apply the objective test. Furthermore, it should be pointed out that those two other drivers were part-timers, Mr Chapman is full-time, and in respect of one of those other drivers I believe they actually were offered extra hours of work. So there was an inducement there or a bit of a sweetener there.

PN64

THE SENIOR DEPUTY PRESIDENT: But it follows that if it is an objective test that it has to be applied in just that way and the fact that others might have accepted it doesn't necessarily mean it is objectively reasoned.

PN65

MR CERRITELLI: Then on the other hand, your Honour, the flip side is just because others have accepted it, it doesn't necessarily mean that when we apply the objective test to this, it goes both ways.

PN66

THE SENIOR DEPUTY PRESIDENT: I am sorry, I thought that is what I said.

PN67

MR CERRITELLI: Sorry, yes.

PN68

THE SENIOR DEPUTY PRESIDENT: If I didn't, I apologise.

PN69

MR CERRITELLI: It is probably a bit too early in the morning for me.

PN70

THE SENIOR DEPUTY PRESIDENT: You haven't travelled too far, have you - - -

PN71

MR CERRITELLI: Thank you. So, I think that is an important issue we are looking at. It is an objective test and that really establishes the parameters there. If we look at the three major issue that, I suppose from the SDAs prospective, as really what this - the Commission should consider in applying the test, we believe there is issues. The distance travelled, the issue of occupational health and safety. The fatigue issue and the increase costs due to relocation and that increased cost refers to the usage of the motor vehicle to go from Wallan to Laverton instead of Wallan to Thomastown.

PN72

Now, the distance travelled. Yes, it is agreed that Wallan to Thomastown, or Keon Road, is 38 kilometres. Wallan to Laverton is 60 kilometres. The usage though of time is a subjective measure. And I will put to you a subjective measure. When the union and the company went on the road we were going against the flow of the traffic, we weren't going in the flow of the traffic. So in that respect the time travelled was a lot easier. We have to look at the time travelled during peak hour, not necessarily just during when we went.

PN73

Also, I think the route we took was actually quite a - and I must say if I am going down work that way was quite a good route, we went up the ring road and we nicked off on to the Tullamarine Freeway, Mikelham Road, up the Hume to get to Wallan. Not the most direct route but certainly the best way to avoid traffic if you were going that road. So the issue of time - - -

PN74

THE SENIOR DEPUTY PRESIDENT: And presumably the parties undertook the route normally used by Mr Chapman?

PN75

MR CERRITELLI: Well, what we did, we examined the route normally taken by Mr Chapman to Thomastown, and then we looked at what someone would do if they were living in Wallan to get to work to Laverton, would be what sort of route there. But I would just say that it is from 38 kilometres to 60 kilometres, so there is almost a doubling of the distance involved, not quite, but just almost. And - - -

PN76

THE SENIOR DEPUTY PRESIDENT: Is that a relevant criteria, if Mr Chapman lived presently one kilometre away and had to travel an additional one kilometre you would say that is the doubling of the distance and - it is the additional distance that is relevant.

PN77

MR CERRITELLI: I would think what we have to apply - if we have been applying the distance travelled and say what is doubling of one kilometre versus say 38 to 60 kilometre, a test of reasonableness must be applied.

PN78

THE SENIOR DEPUTY PRESIDENT: But it is the absolute change rather than relative change, isn't it?

PN79

MR CERRITELLI: The absolute change of location.

PN80

THE SENIOR DEPUTY PRESIDENT: Yes.

PN81

MR CERRITELLI: Yes. Only when we look at reasonableness I think apply, it would somewhat constitute this as a reasonable position that, you know, one kilometre may not be an unreasonable thing to do, but when you are looking at from 38 to 60, it may be considered unreasonable in what a normal person would consider reasonable. So if we apply the test of reasonableness, I suppose, if we refer to Lord Denning, but I don't, unfortunately have that case in front of me, but that sort of decision, then what a normal person would constitute as a reasonable doubling of distance.

PN82

But it should also be pointed out that whilst it is, we are looking at an extra probably 22 kilometres in any direction, we must also consider the fact that the distance is actually 44 kilometres because we are going back and forth every day, so there is an extra actual 44 kilometres per day, five days a week, 48 weeks of the year, assuming he doesn't work on his holidays. So there is those issues with distance. Moving on. The issue of - the occupational health and safety issue of fatigue.

PN83

At the previous hearing we did raise the issue of driver fatigue and this is a real issue as far as the union is concerned, it is not just one that we have pulled out of the hat, as it were to say, we have raised it at the previous hearing, and just to show that this is an issue of actual concern within the industry, and I must say it is an issue to be considered here today because if Mr Chapman was purely doing a job that was, say, a warehouse worker and to double the distance he would go to work, stay on site for eight hours and then go home.

PN84

But in Mr Chapman's case what we are doing is he drives to work, gets a truck loaded, hops on the truck and drives around all day, and then goes back to the depot, takes his car and drives home. So the issue of driver fatigue is a real issue, that when we are applying the objective test, should be considered here today. What I have done, just to highlight that driver fatigue is a very real and serious issue within the transport industry, and I will use the transport industry because it is - - -

EXHIBIT #SDA1 EXTRACTS FROM WORK SAFE DOCUMENTS

PN85

MR CERRITELLI: This is a bundle of documents, and the reason why I have put forward a bundle of documents, your Honour, is just to show that this is a real issue. There are a couple of publications, the first one being "The Transport Industry a Guide to Occ Health and Safety Duties" produced by Work Safe in Victoria. This is an authority that looks at health and safety in the work place here in this state, and the issue of driver fatigue which looks at, your know, the number of shifts, hours of sleep and so forth. There is another publication also by them, "No One Should Die at Work". I won't go through all the details of them. Another publication, "Who is the Weakest Link" which looks at the issue of driver fatigue again, because - and one of the quotes it states is:

PN86

The transport and storage industry has the highest work place fatality rate in Victoria.

PN87

So it is an issue of state concern. I have also included the Australian College of Road Safety's Policy Statement of vehicle driving hours and fatigue. I have also included there, your Honour, the RACV check list, it is always good to have the RACV check list. Fatalities program within the work place produced by Work Safe, downloaded from their on-line, which number of fatalities in relation to transport, investigated fatalities. Prevention facilities - - -

PN88

THE SENIOR DEPUTY PRESIDENT: I am sorry, the exhibit is not how I described it, but it is extracts from a series of Work Safe documents dealing with - - -

PN89

MR CERRITELLI: I thought it better, your Honour, to give you a bundle of extracts rather than - - -

PN90

THE SENIOR DEPUTY PRESIDENT: No, I just though it important that it be correctly identified on the record.

PN91

MR CERRITELLI: Yes, thank you, your Honour. And also figures from VicRoads which detail the times of crashes and so forth due to fatigue, which is all on the final three pages. Also, I don't want to - whilst it is a bundle of documents there, I think it is important to note that this is an actual issue that does affect those who are driving as primary for their employment. And to say that enhancing the distance Mr Chapman drives to and from work is also an issue is something that we have to consider in terms of occupational health and safety.

[9.30am]

PN92

The issue of driver fatigue may not necessarily be an issue, your Honour, that will affect Mr Chapman at the beginning of the shift. But by the end of the working day, obviously he would have spent eight hours or so on the road, broken up, as Ms Oakley would have said, but the drama becomes in terms of fatigue, that final part of the day and the drive home, where he is then expected after a day in the truck, to go home and travel 60 kilometres.

PN93

So the issue of fatigue is actually there. And purely because you would have short-haulage does not necessarily mean that only long haul drivers get fatigued. We are talking about an individual who will be driving through the city, probably during peak hour traffic, or through congested roads, through a good part of the day. Let us assume, for example, he has a lunch break, tea breaks and so forth, may be he is driving for six out of eight hours of the day. But still at the end of the day, he is on the road for the bulk of his employment.

PN94

So the issue of fatigue does come into effect here when we apply an objective test. I might point out, your Honour, that under section 97 of the Workplace Relations Act, the Commission is able to look at issues such as health and safety in determining industrial disputes. So it does have relevance in this case. We would also say that I don't believe the Company has actually bothered, in real terms, to consider the issue of driver fatigue. They have done no risk assessment that we are aware of. They have done no investigation that we are aware of. so in respect of health and safety, when the Company says to us, oh, well, he doesn't drive all the day, well, that's not an acceptable answer for the Union in respect to the issue of occupational health and safety.

PN95

Furthermore, I would also point out, that under clause 10(1)(5) of the Enterprise Agreement by the Company, there is a commitment to discuss issues of changes of equipment or work practices. I would say, your Honour, that in this respect the Company has changed the work practice, i.e. the physical location of work. And there was an obligation by the Company to go through and discuss these issues of occupational health and safety.

PN96

Now, obviously the next item we wish to discuss, your Honour, is the issue of the increased costs due to re-location. What we will be looking at when we discuss an increased cost due to re-location is looking at the actual amount, the cost of running a motor vehicle for that extra distance. And also we will be looking at what effect this takes on the take home pay of Mr Chapman. Now, for the purposes of calculating this I will provide a couple more documents. First of, the tax tables, so we can actually see Mr Chapman's - we calculate Mr Chapman's take home.

EXHIBIT #SDA2 TAX TABLES

PN97

MR CERRITELLI: Furthermore, I will also present the RACV's vehicle operating cost criteria as another exhibit. In case you are wondering, your Honour, yes, I have used that as a basis of my calculations for the cost of running the vehicle.

EXHIBIT #SDA3 RACV VEHICLE OPERATING COST CRITERIA

PN98

MR CERRITELLI: In respect of Mr Chapman, it is agreed that he does earn $542.85 per week. The Company pays fortnightly in arrears. So therefore in a fortnight he would earn $1085.70. Now, what I have done is I have actually referred to the taxation table. I am not an accountant, I will grant, but nonetheless I will try my best. And if I refer to - yes, it is page 5 there - found the nearest figure to $1085.70, which is in column - which is in the second main columns.

PN99

THE SENIOR DEPUTY PRESIDENT: Sorry, one thousand and what?

PN100

MR CERRITELLI: And 85 dollars and 70 cents.

PN101

THE SENIOR DEPUTY PRESIDENT: Yes.

PN102

MR CERRITELLI: Yes, I found the nearest figure to that, which is $1086 per fortnight, which says - if you refer to column 2, therefore the tax to be taken out is $208 per fortnight.

PN103

THE SENIOR DEPUTY PRESIDENT: Which is a rate of around 20 per cent.

PN104

MR CERRITELLI: Yes. That leaves - - -

PN105

THE SENIOR DEPUTY PRESIDENT: An average rate.

PN106

MR CERRITELLI: Yes. That leaves Mr Chapman approximately in his pocket, $878 per fortnight. Okay.

PN107

THE SENIOR DEPUTY PRESIDENT: Just one second. There are some complications such as spouse rebates etcetera.

PN108

MR CERRITELLI: Mr Chapman only got married on the weekend, your Honour, so I am assuming - - -

PN109

THE SENIOR DEPUTY PRESIDENT: Congratulations, Mr Chapman.

PN110

MR CERRITELLI: I have done it as a single man.

PN111

THE SENIOR DEPUTY PRESIDENT: Yes, okay.

PN112

MR CERRITELLI: Now, Mr Chapman - so what I am intending to look at is - - -

PN113

THE SENIOR DEPUTY PRESIDENT: This is a rather odd concept of a honeymoon, but nevertheless - - -

PN114

MR CERRITELLI: In actual fact his wife also worked for Target so - corporate marriage, but anyway. What I have done is, I've looked at - what I will be doing is comparing the cost of running a motor vehicle from Wallan to Thomastown, or to Keon Parade, and the cost of running that same motor vehicle from Wallan to Laverton, and comparing it as a percentage loss versus his take-home pay.

PN115

THE SENIOR DEPUTY PRESIDENT: Is it appropriate to use the RACV type material? That is an average cost of operating a vehicle per kilometre, but there are within that sum, fixed costs - - -

PN116

MR CERRITELLI: That is right, your Honour.

PN117

THE SENIOR DEPUTY PRESIDENT: And some marginal costs.

PN118

MR CERRITELLI: That is right. If we refer to the - I am glad you pointed it out, because we need to go through those issues. If we refer to the vehicle operating costs criteria, which is part of the RACV document, we have the vehicle purchase cost, which is the same in both instances, the depreciation, which is affected by the wear and tear on the motor vehicle so that is - whereas the vehicle purchase cost is a fixed part, depreciation is changing. The interest, that is a factor that is calculated in. It will be the same in both cases, so it is a fixed case. The vehicle registration, TAC, is another fixed case.

PN119

THE SENIOR DEPUTY PRESIDENT: Well, the interest - sorry, the interest is fixed, isn't it, there?

PN120

MR CERRITELLI: The interest will be fixed if we - what i am assuming is that irrespective of where he was driving to, he will be paying that interest. so it is - - -

PN121

THE SENIOR DEPUTY PRESIDENT: If he didn't drive a car at all, he would still be paying interest?

PN122

MR CERRITELLI: That is right.

PN123

THE SENIOR DEPUTY PRESIDENT: Yes.

PN124

MR CERRITELLI: Comprehensive insurance, once again is a fixed cost. The fuel is a variable, and vehicle maintenance, because of the extra distance travelled, is also a variable. So the main variables here are the depreciation, the fuel, vehicle maintenance. Now the reason why I have done this - and I will presenting my calculations in a moment - the reason why I have done the ratio of versus - of percentage ratio of take-home pay is because by using a ratio system, what we are doing is accepting there are fixed costs, and just comparing with only the variables moving.

PN125

THE SENIOR DEPUTY PRESIDENT: Yes.

PN126

MR CERRITELLI: So it is like - I am just trying to recall my mathematics training. It will be like a quadratic equation where we know the value of C but X squared and X - yes, X cubed, X squared and X are actually the same.

PN127

THE SENIOR DEPUTY PRESIDENT: That relies upon me recalling my mathematics training, Mr Cerritelli.

PN128

MR CERRITELLI: But in other words, your Honour, the fact is, what I have attempted to do, I looked at - I was trying to find something that could calculate the cost on a per kilometre basis. I have got to say that the figures given by the RACV are actually less than what the figures would be in the Target agreement, if you are using the car for business purposes. So I thought, well that sounds reasonable, to begin with. And I was trying to look for something that would be used as more of an industry standard, if someone was calculating the cost of a motor vehicle, where would they refer to? The RACV. Now, let us go through the calculations.

PN129

THE SENIOR DEPUTY PRESIDENT: An objective standard.

PN130

MR CERRITELLI: And objective standard, that is right, your Honour. Now, Mr Chapman's car, I believe is between five to 10 years old. Just on 10. It is assume as a light vehicle, because the engine capacity is below 1.6 litres. Now, what I will do is I will hand up my calculations, so that way I can walk people through this. It is a double sided sheet, by the way.

PN131

THE SENIOR DEPUTY PRESIDENT: Thank you.

EXHIBIT #SDA4 SDA CALCULATION OF COSTS

PN132

MR CERRITELLI: I have actually - you will note there is an assumption 1 and assumption 2, a small vehicle versus a light vehicle. When I actually did the calculations I wasn't quite sure whether Mr Chapman's vehicle was above or below 1.6 litres. But in conferring with him this morning it is actually below 1.6 lites.

PN133

THE SENIOR DEPUTY PRESIDENT: So your assumption is correct.

PN134

MR CERRITELLI: So it is assumption 1 on the calculations.

PN135

THE SENIOR DEPUTY PRESIDENT: Yes.

PN136

MR CERRITELLI: I put two assumptions there, yes.

PN137

THE SENIOR DEPUTY PRESIDENT: And that was the correct assumption?

PN138

MR CERRITELLI: Yes, your Honour.

PN139

THE SENIOR DEPUTY PRESIDENT: Yes.

PN140

MR CERRITELLI: Well, I calculated for both cases in case I didn't have time this morning, your Honour, to correct it.

PN141

THE SENIOR DEPUTY PRESIDENT: I see. Yes.

PN142

MR CERRITELLI: Sorry?

PN143

THE SENIOR DEPUTY PRESIDENT: So we ignore assumption 2 - - -

PN144

MR CERRITELLI: Yes, ignore assumption 2, that is hardly an issue.

PN145

THE SENIOR DEPUTY PRESIDENT: Very well.

PN146

MR CERRITELLI: Now, item 1 refers to the wages and taxes. so we went through that, and as you see in italics, there is $878 per fortnight, approximately. Item refers to the cost of working in Keon Parade, travelling from Wallan. Now the assumption that he is driving a light vehicle, as defined by the RACV, up to 1.6 litres, with motor vehicle aged between 5 to 10 years, and the cost per kilometre as set by the RACV is 30c.

PN147

Now, what I have done is, I have said the distance to Keon Parade from Wallan is 38 kilometres, therefore the total travel per day is 38 by 2, 76 kilometres. Cost per fortnight is equal to 10 days per fortnight times the distance per day times the cost per kilometre. So that would be 10 working days times 76 kilometres times 0.3, which will meet the actual cost of running a motor vehicle on a fortnightly basis, according to the RACV tables is $288 per fortnight.

PN148

Then - we forget assumption 2. We go to point 3, which is the cost of working in Laverton from Wallan. The assumption 1, the car again is a light vehicle, same vintage and so forth. This distance from Wallan - form Laverton to Wallan is 60 kilometres. Therefore the total distance travelled per day is 60 times 2, 120 kilometres. And we did the calculations again, that is 10 times 120 times 0.3, that means $360 per fortnight.

PN149

And if we turn the page, we go to the difference of costs. Under assumption 1 therefore there is a negative difference in terms of the costs of $132 per fortnight, which would mean that if we take it as a ratio of the take home pay, that means that there has been an effective loss of 15.03 per cent.

PN150

THE SENIOR DEPUTY PRESIDENT: But doesn't that build in the fixed costs that you earlier distinguished?

PN151

MR CERRITELLI: That is true, your Honour, but the thing is because the fixed costs are the same in both cases, they negate themselves. They balanced out.

PN152

THE SENIOR DEPUTY PRESIDENT: No, they don't because the fixed costs of - there are - I wouldn't think mathematically it would.

PN153

MR CERRITELLI: Well, if you're doing the sum, and you've got the two situations, and you're doing a ratio of those two situations, then the ratio - because you are dividing them both, would actually negate themselves. So if your fixed costs are the same in two sets of equations, it's only the variable that moves, and thus using the ratio we actually see the difference in the variable.

PN154

THE SENIOR DEPUTY PRESIDENT: No, but that wouldn't apply in that sort of comparison, because each of the two locations builds in the fixed costs within the 30c per kilometre. The fixed - the additional kilometres would not be subject to any addition in respect to the fixed cost component.

PN155

MR CERRITELLI: There is another - the other way of calculating this, your Honour, if you wish to do it as a separate way - - -

PN156

THE SENIOR DEPUTY PRESIDENT: Yes.

PN157

MR CERRITELLI: - - - is to take the 228, divided by the take home pay, and have that as a ratio. Then take the 360, divided by the take-home pay, and have that as a ratio, and then you do a comparison with the ratios.

PN158

THE SENIOR DEPUTY PRESIDENT: But it still has a difficulty in that there is assumed to be for the additional kilometres, the fixed cost component of the 37c per kilometre.

PN159

MR CERRITELLI: Well, in actual fact, your Honour, if you think about it then, the difference between the two costs is actually the only thing. And that is the only change that has occurred. And that would only be looking t the extra distances. If we want to do other sums, your Honour, and if - we can do it today, we can actually subtract 38 from 60, do the cost of running the car for 22 kilometres. And we could have a look at that, your Honour.

PN160

THE SENIOR DEPUTY PRESIDENT: Yes, but you would have to apply something less than the 37.7 to remove the fixed cost element - sorry - the 30c - to remove the fixed cost element.

PN161

MR CERRITELLI: The fixed cost element though, your Honour, let us be crude, is a ratio that has been put into the criteria at 30c so therefore by using the same value in both, the same cost per kilometre in both, you have actually negated the both. I sat down and did my sums last night, that is why.

PN162

THE SENIOR DEPUTY PRESIDENT: No, that - well, I will think about that, but I don't understand that because just taking a - well, that's so the fixed costs comprise 50 per cent of the 30c per kilometre.

PN163

MR CERRITELLI: Yes.

PN164

THE SENIOR DEPUTY PRESIDENT: Just as an example, then if that was so, the difference over the kilometres would only be 15c per kilometre.

PN165

MR CERRITELLI: Well, your Honour, if we were to just - let us just have a play now. I suspect if we were just to look at say, assumption 1, cost of travelling, and we say, right, let us only look at the variables and we will assume a 50 per cent knock off for the fixed cost.

PN166

THE SENIOR DEPUTY PRESIDENT: Yes.

PN167

MR CERRITELLI: And that is 10 times 76, which is 760, by 0.15. That will mean that the variable cost per fortnight will be $114 per fortnight. If we then do the same again for Laverton to Wallan, it is 10 times 120 times 0.15, that is $180 per fortnight. If I can just do that again, just to make sure I'm right. Oh, sorry - yes, that's right, that's correct, $180. So then if we do the difference again, there will be 114 minus 180 - - -

PN168

THE SENIOR DEPUTY PRESIDENT: It will be half of 132, won't it?

PN169

MR CERRITELLI: It will be half of 130 - well, that is right. But then in that case the ratio will be half of 15.03, so we are still looking at reduction of actual take-home capacity of about 15.5 - of about 7.5 - 15 per cent.

PN170

THE SENIOR DEPUTY PRESIDENT: Yes.

PN171

MR CERRITELLI: Which, in the real terms, is still a significant amount of money.

PN172

THE SENIOR DEPUTY PRESIDENT: I am not disputing that, I am disputing the methodology of including the fixed costs within the calculation.

PN173

MR CERRITELLI: Well, that is why I tried to go to a ratio, your Honour, purely on the basis that - - -

PN174

THE SENIOR DEPUTY PRESIDENT: But at the end of the day, the issue is going to be an additional sum of money Mr Chapman is required to pay in order to travel. And you are then comparing that to his take-home pay.

PN175

MR CERRITELLI: That is right.

PN176

THE SENIOR DEPUTY PRESIDENT: Yes.

PN177

MR CERRITELLI: And I think that is - if we are applying the objective test, the issue was always - one of the tests that was talked about was a reduction in pay. Well, what we're talking about today is a reduction in the real spending power of the individual by moving to the site in Laverton.

PN178

THE SENIOR DEPUTY PRESIDENT: Yes.

PN179

MR CERRITELLI: I will leave those calculations for people to peruse. I suppose in relation to some of the statements made by Ms Oakley, if I could refer to some of those cases. The P & O logistic case. It is important to note that the outcome of the P & O case though did not give a carte blanche to all, I believe, eight persons who were actually involved in this situation, that there was a variety of outcomes, for a variety of people. And so the objective test was obviously applied but resulting in different outcomes for different people. So I think that is important - - -

PN180

THE SENIOR DEPUTY PRESIDENT: Because of different circumstances relating to each employee, yes.

PN181

MR CERRITELLI: Exactly. So in other words, what we have to do is look at each individual circumstance, and make an objective test based on that individual circumstance. So purely to cite the P & O case, your Honour, as an issue of saying, look, here we've had a distance move, and therefore this is what should apply, is a misnomer. Once again it emphasises the fact in its decision that each individual must be looked at separately. And objective test applied.

PN182

THE SENIOR DEPUTY PRESIDENT: And in doing that, the focus today has been on - well, let us go back to T1, the agreed facts suggest that the new position is materially the same, and the focus therefore has been on what is different, and that is the travel.

PN183

MR CERRITELLI: That is right, your Honour.

PN184

THE SENIOR DEPUTY PRESIDENT: That doesn't provide licence to look at the travel in isolation, but to consider it as one of a range of considerations, the others not having changed materially. Is that the correct approach?

PN185

MR CERRITELLI: We are looking at travel as the major item, yes, but associated with the travel there is a peripheral of issues which we have gone through today, that being the fatigue issue, that being the extra - - -

PN186

THE SENIOR DEPUTY PRESIDENT: But then there are number of others such as the position not changing, the salary not changing etcetera.

PN187

MR CERRITELLI: That is correct, your Honour.

PN188

THE SENIOR DEPUTY PRESIDENT: And they have to be brought into the equation.

PN189

MR CERRITELLI: They are brought into the equation, and I would say between the Company and the Union, we're not actually arguing about some of those other issues, what we are really coming down to an argument is whether or not this distance travelled is reasonable, and whether or not asking somebody to go to Laverton constitutes an acceptable alternative employment.

PN190

THE SENIOR DEPUTY PRESIDENT: Yes, the point I am making is in looking t the alternative employment you have to look at the total employment of which the factors you are relying on are one element amongst a range of others and objectively make an assessment of the alternative employment as a whole.

PN191

MR CERRITELLI: Your Honour, that is correct, it is an element, but within elements there are sub-elements and we should extrapolate and examine those sub-elements - - -

PN192

THE SENIOR DEPUTY PRESIDENT: Yes. I understand you say there are a number of dimensions to the travel?

PN193

MR CERRITELLI: That is right.

PN194

THE SENIOR DEPUTY PRESIDENT: The fatigue etcetera.

PN195

MR CERRITELLI: And particularly in this case where Mr Chapman is also a driver as well. That is why we have brought in the issue of fatigue and so forth.

PN196

THE SENIOR DEPUTY PRESIDENT: Yes.

PN197

MR CERRITELLI: So in conclusion, your Honour, let us just - form the Union's perspective - we are saying because of these sub-elements of the main element in dispute here today, the job does not constitute an acceptable job offer when we look at it objectively, because of the cost, because of the distance travelled, because of the fatigue. We would also say that in the application made by the Company it does not necessarily constitute a full waiver of the severance pay, or for that fact, at all. It is partial, full, or whatever the Commission today decides.

PN198

THE SENIOR DEPUTY PRESIDENT: Yes.

PN199

MR CERRITELLI: And the objective test from the Union's perspective is not a simple black and white test, a yes and no test. It is a test of what is right, what is wrong, what is fair, what is unfair. It looks at the shades of grey, rather than just the straight black and white. And your Honour, that concludes our submission, thank you.

PN200

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Cerritelli. Yes, Ms Oakley, anything in reply?

PN201

MS OAKLEY: Thank you, your Honour. Just if I can very quickly recap some of the issues raised by Mr Cerritelli. With respect to the additional distance, I have not seen a decision that has actually considered the distance as being the determining factor, it has been more of the travel time. I would presume that that would be on the basis that if I took the Dick Smith case that was before Commissioner Raffaelli, I think the kilometres were something like 5.3 kilometres, but the actual distance travelled in - presumably between suburbs in Sydney, was up to 15 minutes.

PN202

So again in this case we say that the travel time itself is what is important, and the fact is that - - -

PN203

THE SENIOR DEPUTY PRESIDENT: The decision suggests it is a range of factors, including modes of transport so - - -

PN204

MS OAKLEY: Sure.

PN205

THE SENIOR DEPUTY PRESIDENT: In one instance, I think the issue was the public transport - - -

PN206

MS OAKLEY: That is correct.

PN207

THE SENIOR DEPUTY PRESIDENT: - - - routes were so indirect that it was an incredibly onerous task to travel.

PN208

MS OAKLEY: Yes, from memory, it was about three hours or something, of public transport travel, which wouldn't figure for anybody's sanity, I would think. Again, what we say though is that this travel that is involved for Mr Chapman is on freeways, highways - I'm not sure what the correct technical term for these roads are, but they are roads that are - - -

PN209

THE SENIOR DEPUTY PRESIDENT: Increasingly, tollways.

PN210

MS OAKLEY: Well, thankfully for Mr Chapman, this doesn't actually involve a tollway. I think that the same issue then also goes to the RACV - I'm not sure exactly what it is called, but the actual vehicle operating costs that were submitted as exhibit SDA3, without having sort of looked at this in any detail, but for seeing it today, I would assume that the other things that would impact on these sorts of things are the types of roads that you are dealing with.

PN211

That obviously impacts on fuel consumption and it impacts on wear and tear. If I am driving along on a gravel road that has lots of pot holes, that would obviously have more wear and tear on mine, than a well-maintained freeway. I think I will leave it with your Honour about determining it on the fixed cost, but we agree, I think, with what you were trying to determine, that those fixed costs are not necessarily proportional to additional kilometres travelled.

PN212

With the issue around the fatigue, my understanding, and again I haven't worked in the transport industry but I do have a husband who has, and the transport industry and a lot of the issues that came out of that were revolving around people who were driving, long haul drives, particularly driving semi-trailers, and obviously a lot of that was because people were driving the 10 to 14 hours sort of trips. There weren't the rest breaks because there was a belief that a lot of those times they were driving with very short deadlines, that weren't allowing those sorts of rest breaks.

PN213

Mr Chapman is entitled to rest breaks under the agreement. He has those rest breaks. We also say that the majority of his time is not necessarily spent driving trucks where you approximate that it is about 50 per cent of his time. As an example, on a day that Mr Biesbrock spoke to the person who manages the off-site reserve, he said that each of the drivers only did one load on that particular day. The other duties then that are performed are around unpacking and unloading trucks, performing store-person duties, or on packing stocks. So there is some break-up, if you like, of the types of duties that Mr Chapman performs day to day.

PN214

I think again, if I can just conclude in saying, and your Honour pointed this out recently, that we would ask that the Commission do look at this as a total position and offer in that the duties of the role have not changed, the pay rate of this have not changed. The only factor that has changed is the location, and that has been agreed between the parties, but as a total role, or offer in front of Mr Chapman, we do still say that this is a suitable alternative. Thank you, your Honour.

PN215

THE SENIOR DEPUTY PRESIDENT: Thank you. Can I ask you, before we conclude, Mr Cerritelli, what do you say in response to the nature of Mr Chapman's duties? The Company's ball park estimate of 50 per cent of the day driving. What is your view in relation to that?

PN216

MR CERRITELLI: Well, your Honour, in respect to that, I would say that his principal job is a truck driver, so I would be wondering why the Company employs a truck driver and pays a driving allowance for someone who is technically not doing more than 50 per cent of that as part of their daily job.

PN217

THE SENIOR DEPUTY PRESIDENT: That might be a dangerous line to pursue, Mr Cerritelli.

PN218

MR CERRITELLI: It could be, your Honour, yes, I concur.

PN219

THE SENIOR DEPUTY PRESIDENT: I mean I am really going to the factual situation. Do you dispute the ball park estimate that 50 per cent of the day would be spent driving?

PN220

MR CERRITELLI: I would say it probably fluctuates on a daily basis, your Honour, from the amount of loads, the amount of stock they have to move to - out of the reserves at the off-site to the stores themselves.

PN221

THE SENIOR DEPUTY PRESIDENT: Yes.

PN222

MR CERRITELLI: So it could - okay. Mr Chapman has just wrote out, for example, that whereas the Thomastown off-site had a certain number of stores that it serviced, in terms of to maintain stock for, to give that to the stores, the Laverton off-site actually has more stores that it services. Therefore, I presume from that, Mr Chapman is indicating that you are probably on the road more, delivering to more stores more stock.

PN223

THE SENIOR DEPUTY PRESIDENT: Well, perhaps you can ask Mr Chapman the question. I will allow you to do it, and get - Ms Oakley has put that a supervisor is estimated in order of 50 per cent of the day was spent driving, 50 per cent on other duties, on average. Perhaps you could see if Mr Chapman has a view in relation to that.

PN224

MR CERRITELLI: Thank you, your Honour. Just talking to Mr Chapman there. It actually is fluctuating depending upon how much stock they actually have to move on a daily basis. So some days I've actually put to him, some days do you drive at all. He goes, no, some days he's on the road all the time. So it actually would fluctuate.

PN225

THE SENIOR DEPUTY PRESIDENT: And would he be able to make, as a ball park estimate, on an average basis?

PN226

MR CERRITELLI: If you spread it all out.

PN227

THE SENIOR DEPUTY PRESIDENT: Ball park, I mean, I'm not looking for any precision.

PN228

MR CERRITELLI: At least 60 per cent.

PN229

THE SENIOR DEPUTY PRESIDENT: Driving?

PN230

MR CERRITELLI: Yes.

PN231

THE SENIOR DEPUTY PRESIDENT: Very well.

PN232

MR CERRITELLI: And we take in that consideration, I suspect, that there are breaks and so forth - - -

PN233

THE SENIOR DEPUTY PRESIDENT: All right, very well.

PN234

MR CERRITELLI: Thank you.

PN235

THE SENIOR DEPUTY PRESIDENT: Anything arising out of that?

PN236

MS OAKLEY: I think just, your Honour, in terms of the numbers of drivers and the amount of stores being managed by that off-site reserve, the essential reason for this rationalisation of state reserves was the consolidation of stock. The numbers of drivers that exist are exactly the same in terms of servicing the same number of stores, so there were already existing drivers at Laverton. The redeployments that have occurred from the Keon Road off-site were actually the drivers as well. So the idea wasn't necessarily for an increase in the number of stores being serviced by each driver.

PN237

THE SENIOR DEPUTY PRESIDENT: Thank you. Very well, I will reserve my decision, but I should be in a position to publish my decision fairly swiftly.

ADJOURNED INDEFINITELY [10.au]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #T1 AGREED FACTS DOCUMENT PN13
EXHIBIT #SDA1 EXTRACTS FROM WORK SAFE DOCUMENTS PN85
EXHIBIT #SDA2 TAX TABLES PN97
EXHIBIT #SDA3 RACV VEHICLE OPERATING COST CRITERIA PN98
EXHIBIT #SDA4 SDA CALCULATION OF COSTS PN132