AG2002/638, Transcript of Proceedings [2002] AIRCTrans 1837 (24 May 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT HAMPTON

AG2002/638

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Northern Cement Ltd and Another for
certification of the Northern Cement (Mataranka)
Certified Agreement 2002

ADELAIDE

12.05 PM, FRIDAY, 10 MAY 2002

PN1

THE DEPUTY PRESIDENT: Yes, good afternoon, I will take the appearances.

PN2

MR R. REID: I am seeking leave to appear, sir, on behalf of Northern Cement. Appearing with me for the company is MISS C. HANDLEY.

PN3

THE DEPUTY PRESIDENT: Yes, thank you, Mr Reid.

PN4

MR REID: Thank you, sir. Sir, the application before you of course is a section 170LK agreement under the Workplace Relations Act. In respect to the application I submit that the client is a constitutional corporation, sir, pursuant to section 170LH of the Act. I would indicate that this is the first certified agreement for this particular group of employees in Northern Cement. You may be familiar with a similar agreement for the Darwin sector of Northern Cement.

PN5

THE DEPUTY PRESIDENT: Yes, I recall that.

PN6

MR REID: Yes. This is particular to the Mataranka component of the company as such. Sir, if I could take you to the agreement and I believe you are in receipt of a letter that was provided by fax today from a Mr Alf Reichal.

PN7

THE DEPUTY PRESIDENT: Yes, I have that.

PN8

MR REID: Thank you, sir, I will come to that clause as we proceed through the agreement. At clause 1.4, Deputy President, indicates that the operation of the award, there is some level of retrospectivity there. I can confirm for the record that has its relationship to the rates of pay increase that has been agreed between the parties from 1 January of this year and it goes for the full statutory entitlement pursuant to section 170LU(10) of the Act for 3 years.

PN9

THE DEPUTY PRESIDENT: Of course, in that context, Mr Reid, you will appreciate that an order certifying agreement under this Act can only take effect from the day that it is issued. That does not prevent it operating retrospectively in an administrative sense but formally it can only operate on and from the day of the certificate and in that context the life would be particularly less than 3 years, in which case do I understand the life should conclude on 31 December 2004?

PN10

MR REID: Yes. Yes, thank you, Deputy President. Yes, the submission should have been the operation of the agreement to be for 3 years rather than the life of the agreement, yes, thank you.

PN11

THE DEPUTY PRESIDENT: That is right.

PN12

MR REID: Sir, over the page indicates that the relationship with the award is that it is underpinning this certified agreement. Where there is any inconsistency this agreement, of course, will apply and the award is defined at clause 1.8 as the Building Materials and Quarrying Industries (Northern Territory) Award 1992. I part 2 over the page clause 2.1 indicates the wages. It indicates increases of 4 per cent, 3 per cent and 3 per cent during the life of the agreement respectively. Those percentage increases, I would indicate, sir, are not on the award, they are on the current over-award payment. In terms of what that means in dollar value, the attachment at (a), the final page of the agreement, sets out those actual quantum amounts and we will deal with those shortly.

PN13

In regard to the quantum amounts of salary as this agreement provides, it is based on, as the clause goes on to indicate, a current rotating shift roster. Shift allowances are included in that rate and there are also, as we will see as we get to the hours of work clause, some overtime hours that are included as well. So it is an aggregate salary. It also takes into consideration various allowances payable under the award. Again, as we pursue this agreement through I will indicate to you the specifics of those as we proceed.

PN14

Importantly, sir, I think in the third main paragraph of 2.1 it does indicate in the latter part of that a clause that given it is an annualised salary based on an aggregative basis, should their hours or work change significantly and their rosters change that would affect the shift penalties and the like, then of course it would be up to the parties to revisit whether the annualised salaries are sufficient and adequate for the type of working that takes place. It indicates in that clause new calculations would be structured based on the base salary as it was at the time that that is undertaken. The final paragraph makes clear that if that occurs, which would be, I would suggest to the Commission, anything less than the employees are currently receiving, then of course it would be coming back to this Commission as a variation pursuant to 170MD of the Act.

PN15

THE DEPUTY PRESIDENT: Yes, I understand.

PN16

MR REID: If I could take you to clause 3.1 of the agreement which is the disputes clause. The disputes clause, sir, is in two parts. It has its reference here at 3.1 and indicates the involvement of the Commission as required by the Act, section 170LU, but it refers the parties off to appendix 2 which is the fuller process of dispute resolution under the title of: Fair Treatment Procedure, and gives quite a comprehensive, descriptive process in terms of how that is to apply but it is in two parts.

PN17

For the purposes of the no disadvantage test, Deputy President, clause 3.4 notice of termination of employment, provides for a significantly higher level of notice on termination than the award and the standard TCR provisions, up to 7 weeks' notice or the equivalent of what would otherwise be 4 weeks in the award and similarly under the subclause (c) of redundancy it provides a maximum severance pay of up to 70 weeks based on 4 weeks for the first year of service and 3 weeks thereafter. So that is clearly superior to the award and the standard provisions of redundancy severance pay. All I should point out is indicated at B4, all are payable at the annual salary rate, so there was a double benefit in terms of those provisions.

PN18

Which takes me, sir, to page 10, in particular the current clause or paragraph 8 as I sought your understanding that you had been in receipt of a letter. I simply indicate for the record that the application or the agreement under application had clause 8 included. It was clearly in error. I can indicate, sir, that that provision was a cut and paste clause, shall I call it, from another segment of the company and even the terms in that agreement, just to give you some understanding of the intent, indicate that it is to be phased out and clearly it was not the intention of the company to re-introduce or introduce, I should say, a clause that is being phased out in other places or other parts of the company. That indicates, I believe, the understanding that it was a mistake.

PN19

I would also indicate for the record that it didn't form any part of the negotiations between the employees involve, nor was the agreement that went to the employees for consideration and voting, didn't have that clause in there. It was simply an administrative error in getting the final document to the Commission, even though it was signed on that basis. The understanding of that, Deputy President, is indicative, I believe, in the letter from Mr Alf Reichal who was the employer representative that gives the understanding as I have submitted. Sir, are you comfortable with that explanation before I proceed?

PN20

THE DEPUTY PRESIDENT: Yes. In that context I take it you are seeking leave to amend the document before the Commission?

PN21

MR REID: Yes, sir. In fact I have replacement pages which I can hand up to the Bench.

PN22

THE DEPUTY PRESIDENT: Thank you.

PN23

MR REID: However, given the lateness of the day it has just become apparent to us that the following page needs an adjustment in terms of the numbering and we will undertake to provide that first thing Monday morning. So all that has occurred, sir, as is indicated by the replacement pages, former clause 8 has been removed, everything else in that provision remains the same.

PN24

THE DEPUTY PRESIDENT: Yes. In that respect, Mr Reid, I indicate that leave is granted to amend the document before the Commission. In that context, and you will appreciate that there are very significant restrictions on the Commission's capacity to deal with the documents amended after a vote, particularly in this particular part of the Commission's jurisdiction. However, based on the evidence before the Commission and in particular the letter from the employee representative of today's date, I find that the variation is not a variation of the agreement as voted on by the employees, it indeed re-establishes the agreement that was voted on, in which case it is appropriate that leave is granted and it is my view that in that context the Commission has the power to allow that course of action.

PN25

MR REID: Thank you, sir. If I can take the Commission to the following page 11 under the sub-heading: Long Service Leave, just to indicate again the beneficial nature of this agreement where the provision of long service leave after a person has had 5 years service has also been granted in this document which is quite a reasonable distance outside the provisions in the Northern Territory let alone South Australia, as you will be aware.

PN26

THE DEPUTY PRESIDENT: Yes, indeed.

PN27

MR REID: At part 4 on page 13, in particular paragraph 4.2, the hours that I indicated in my earlier submissions regarding the aggregate nature of the salary, it does indicate that employees at A, second paragraph:

PN28

May be required to work a further 130 additional hours per annum.

PN29

Average of 2.5, I think slightly above that, and as indicated by the following paragraph that is included in the employee's annual salary package. Just for qualification the final paragraph under that sub-clause indicates anything outside of that would attract the overtime penalty of double time. I think that is consistent with the award.

PN30

If I could take you, sir, to 5.1 on page 15. Another benefit that has been agreed to between the parties is found at paragraph C: Cashing out of Annual Leave Entitlements, where at the request of an employee in writing and with the acceptance of the employer, employees may cash out their annual leave, although it does provide or require that a base of 2 weeks be maintained for the purposes of an employee having some rest and recreation presumably.

PN31

At 5.2B there is a rather significant provision of unlimited sick leave subject to the provisions of that clause in terms of abuse or otherwise, clearly outside or in addition to the benefits that are in the award and/or the Act, of course. In respect to the aggregate or annualised salary, if I can take you to not quite the last page, it is actually page 22 of the document which is actually the second page of appendix 3: Conditions of Employment. For the benefit of the parties, it clearly delineates what actually the annual salary comprises and as is indicated there by those five dot points, annual base salary, annual leave loading is included; the average shift penalties as I previously indicated; the 130 additional hours of overtime and regular allowances that would apply. It also indicates that the annual salary would be funded at that - for superannuation purposes at that annual salary rate, again another benefit to the employees.

PN32

The superannuation which is calculated at 10 per cent, so that is clearly in advance of the current statutory requirements under the Superannuation Guarantee Act. That brings me finally, sir, to the final page which is the salaries themselves. As indicated down on the left-hand side, that is the base rate plus allowances that is to be actioned and the increases are running down the page as we discussed, 4 per cent, 3 per cent plus 3 per cent. The additional hours are in the second column. The superannuation has been included for the purposes of the employees knowing their full entitlement which takes us to the annual salary that the employees would realise or achieve.

PN33

What I have done, Deputy President, is simply take a copy of the relevant page of the award in terms of rates of pay and have just hand-noted in what the salary would be on the base rate for the award just by way of comparison, having gone to the trouble, sir, of putting in 130 hours or allowances as such and I don't think you will - I think you will agree that it was probably an unnecessary calculation when you see the difference between the two.

PN34

THE DEPUTY PRESIDENT: Yes, I should say I have had perhaps more than a sideways glance at that issue prior to the proceedings, as you would expect.

PN35

MR REID: I am sure you have. I apologise for the handwritten notes but I think it tells the story and I'm not quite sure, to be honest, which one of those classifications fit precisely. I understand the employers are fairly multi-skilled. It could be one or all of those four but there is a one-up rate included in this agreement. As indicated there, the salary on the base rate and I stress for the record that that does not include any overtime or allowances, is a minimum of 24,976 per annum rising to the top rate, 25,984. Now, by comparison with the agreement, even at the base rates for just the allowances, sir, it is clearly superior and on the basis of that I would indicate that it well and truly passes the no disadvantage test, by rates or rate comparison.

PN36

In closing, sir, I would submit that all the statutory requirements for the application and certification have been met as indicate by the two statutory declarations and seeing I am on my own here today I will confirm for the benefit of the Commission that a valid majority have approved the agreement. It has occurred with genuine and informed consent. It contains no discrimination that we are aware of and on the basis of meeting all those division 4 requirements and in particular the added benefits of the agreement itself we would commend it for certification effective from today's date is the Commission pleases.

PN37

THE DEPUTY PRESIDENT: Mr Reid. Yes, look I will deal with the application now. Firstly I have of course noted the statutory declarations that have been filed with the application. I confirm for the record that leave has been granted to amend what will effectively be pages 10 and 11 and obviously the amendment to page 11 should be supplied as soon as possible and my reasons for granting leave I have already indicated. I am satisfied that the Commission can and should certify this agreement having regard to the material before the Commission and the requirements of the Act.

PN38

In particular I have assessed compliance or otherwise with the no disadvantage test having regard to the nature of this agreement, its approach to what is effectively an annualised salary arrangement with more flexible hours of work commitments and of course with particular leave arrangements. I indicate that I'm satisfied that the agreement passes the no disadvantage test, in particular the salary rates that are to be applied and in particular the way they've been calculated and in comparison with the relevant award I'm satisfied that the salary on its own would be sufficient but I've also had regard to the undertaking which effectively appears in clause 2.1 in the event there is a change to some of those assumptions.

PN39

I've also noted the beneficial leave provisions. With respect to the partial pay-out of annual leave that is an issue which needs to be considered in the no disadvantage test. However the Act compels the Commission to consider the package and having regard to the protections that operate around that pay-out provision and having regard to the balance of the agreement including the very beneficial leave and severance arrangements it is my view that the agreement clearly passes the no disadvantage test and should be certified.

PN40

So accordingly, Mr Reid, as soon as I've received the amended page 11 I will consolidate the agreement back into the form it that it was approved of by the employees. I will then from that date, presumably Monday, issue a certificate. The certificate will indicate that the instrument is certified on and from that date and will have a life, a normal life until 31 December 2004. So, Mr Reid, that is the basis upon which I will deal with the application. You will receive as will your client a copy of the certified instrument as soon as that course of action has been followed through. Mr Reid, would I understand that Northern Cement is picking up some work as a result of the Alice to Springs to Darwin Railway?

PN41

MR REID: Do you want to - - -

PN42

MS HANDLEY: Yes, sir, Northern Cement is generally. Mataranka is a lime plant though so there's not a lot of lime involved in the railway but for Darwin it has been fantastic.

PN43

THE DEPUTY PRESIDENT: Yes. I just raise that as a matter of interest because I spent 2 days in Alice Springs with great interest both at that level and of course in Darwin. Well, look I wish the company and the employees all the best and we will see you again in this jurisdiction in due course.

ADJOURNED INDEFINITELY [12.24pm]