AG2002/2706, Transcript of Proceedings [2002] AIRCTrans 2202 (14 June 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

JUSTICE MUNRO

AG2002/2706

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Gough and Gilmour Holdings Pty Limited
for certification of the Gough and Gilmour
Holdings Pty Limited (Cadia Mines) Certified
Agreement 2002

SYDNEY

9.29 AM, MONDAY, 3 JUNE 2002

PN1

HIS HONOUR: Yes, this is matter AG2706 of 2002. It is an application under section 170LK of the Act for certification of an agreement to be known as the Gough and Gilmour Holdings Pty Limited (Cadia Mines) Certified Agreement 2002. Could I have appearances please, this is the first listing of a matter that was lodged on 16 May in relation to an agreement declared by a secret ballot on 26 April 2002.

PN2

MR J. ROBINSON: If it please your Honour, I am a solicitor, and I seek leave to appear on behalf of Gough and Gilmour Holdings Pty Limited, the employer, in relation to the agreement which you have before you for certification today.

PN3

HIS HONOUR: Yes, thank you, Mr Robinson. What do you have to say about it?

PN4

MR ROBINSON: Your Honour, I will note also that I have with me today MR A. LANCASTER, the statutory deponent in the matter. I also have present with me as well, two employees from the site, MR R. MUDFORD and also MR R. KNOBBS who are down here today. Your Honour, it gives me pleasure to obviously seek the certification of this agreement today. It is a second generation section 170LK agreement, the first generation having been certified before Commissioner Lawson on 29 June 1998.

PN5

It relates to part of my client's business being its Cadia Mines operation which at the time of first certification of the agreement before Commissioner Lawson in 1998 was a new operation for my client and it is one which has continued to be successful. It is a 24 hour a day, seven day a week operation for my client as is the mine itself. The second generation of the agreement, your Honour, I suppose is only a minor tweaking of the original agreement which was put in place by Commissioner Lawson, this agreement will see if certified today by your Honour will see an increase in base pay back paid to 31 May last year being the date that the previous agreement expired and will see a further increase in pay base effective from 1 June 2003.

PN6

There have also been some slight adjustments to the skill and ability table which appears in the agreement. Some adjustments to the rates that will be payable on public holidays with three public holidays now being paid at triple time. The agreement will continue the features which applied in the previous agreement, it will continue until 31 May 2004. It averages rates of pay which I'm instructed by my client average between 60 and $80 an employee - - -

PN7

HIS HONOUR: How is that calculation made, Mr Robinson? I have found the agreement very difficult to follow. The base pay calculation appears to be relatively complex. You say that it is $60 above award rate.

PN8

MR ROBINSON: That is correct, your Honour.

PN9

HIS HONOUR: How do you reach that conclusion?

PN10

MR ROBINSON: Your Honour, the calculation of the base pay in relation to employees is built around, if I can find the relevant part of the agreement, your Honour.

PN11

HIS HONOUR: There is a wage calculation sheet and it shows a starting rate of $423.30 and for a trade certificate it appears there is an addition, according to clause 12.1.4.

PN12

MR ROBINSON: $81.41.

PN13

HIS HONOUR: 81, what else is added in of necessity.

PN14

MR ROBINSON: Your Honour, upon the trades certificate being granted that is the base rate, and I must say the rates which appear in that table, as I understand it, don't actually include the 3 per cent adjustment as of last year so that will go on to the top of those rates and then by virtue of the employees gaining extra skills in accordance with - - -

PN15

HIS HONOUR: I'm sorry, you're on to the top of those rates. Let's concentrate on one thing at a time. The rates calculation sheet, you say is the $60 above award rate figure?

PN16

MR ROBINSON: The way my client has arrived at that, your Honour, is they have actually done calculations, and I must admit I don't have the material with me today, but what they have done is they have actually compared the employees which they have currently working at the site, have done a comparison of those employees and the skills which they would be required to reach the classifications under the Metal Engineering and Associated Industries Award, classified them pursuant to that award and then done the comparison directly between those employees and what they would earn pursuant to the agreement with the starting rate, plus the trade certificate, plus the skills that they would have added in addition under the skill and ability table that my client has put in place and compared those rates against what those employees would be earning for their appropriate classification under the Metal Industry Award.

PN17

HIS HONOUR: Perhaps I should explain the difficulties I have, might be the quicker way to get to the process. As I understand it currently, the C10 rate as of 1 June is $525.20 per week or an hourly of $13.82. Even allowing for whatever miscalculation may be based upon whether you include, it's the 3 per cent isn't it from June last year, I think this agreement produces 5.4 per cent or something like that over a three year term dating back to last year.

PN18

While the base hourly rate is a matter of computation and I've looked at the definition, there is a definition of base pay and it means that part of the employees remuneration that is calculated in accordance with clause 11, the skill and ability table, and then base hourly rate means the hourly rate calculated by dividing base pay by 38. Then one goes to, I think it is clause 12.1.4, base pay will be the starting rate set out in the wage calculation sheet, that's 423.30, where applicable the rates set out for the trade certificate, that is 81.45, that comes to $504.75. Then there is the value of any relevant skills which the employee consistently and confidentially demonstrate at the time of commencement.

PN19

Now, that may be meaningful, but it certainly involves a calculation and I suppose you might be throwing in the $42.87 as the general first skill and if that's the case, one gets up to about 547 on those rates and then after that it is presumably individual classifications. I have some difficulty knowing what, and I think employees would have some difficulty knowing what the 3 per cent attaches to. The wage calculation sheet is based upon self-assessment, review and grading, that at any time the branch project manager can intervene upon as well as the employee.

PN20

Now, all of that is by way of preface to, I suppose, the primary subject of my concern triggered by these sorts of agreements. It is an agreement that on the last page was executed by Mr Gough and Ms Schumann under the common seal, that's not dated, but presumably it was dated either after or before the valid majority voted on it. The Commission is left with these matters and there is another one following shortly where it is asked to certify an agreement in writing as to which only one party has signed.

PN21

It is then put because of the Commission rules and because of the Act and because that's the way the matter has been approached, it must be an agreement in writing because taking the Statute of Frauds approach, an offer has been made by the company and has been accepted. Whether that would be held as a valid basis under Statute of Frauds enforceable against the employees, I would have thought as the moot point, certainly it might be enforceable against the employer, but that seems to be the way in which this approach has been developed.

PN22

Now, when one looks at the provisions of 170LK, LE, to take those two, the structure of the Act does appear to be that if there has been a reasonable opportunity and a valid majority has voted to approve, then the valid majority must have made the agreement. Who the valid majority is, no one need ever know. In this instance, no one could know. 28 employees were polled by the chartered accountant selected, as I understand, by the company and 10 of them didn't respond at all, 17 voted for, 3 voted against. If one counts the absentee, then it's 17-13. What they voted on is not again entirely clear. It hasn't been completely proved.

PN23

In the case of this agreement though, at least two things happened. Firstly, there was a summary of the agreement submitted, as I understand it, with the comprehensive notice under 170LK, plus the invitation to secret ballot, plus a suggestion that if you went to the company office, you could get a copy of the agreement, plus a summary of the agreement. I don't think there was anything that explained the pluses and minuses to the employees. For instance, you're paying 15 per cent for night shift under a 12-hour continuous roster, as I understand it year round, but nothing for day shift that goes past 6pm, 6.15, and no employee, even if they are on continuous night shift, would get the 30 per cent that the Metal Industry Award applies.

PN24

Now, that may be all right. I have to say that I have read with care the comparative table that you have provided showing the advantages or disadvantages and that seems to, if your figure as to the $60 over-award payment is accurate, it would probably come close to muster although I can't say that I am confident about that when I see that there is no night shift penalty of 30 per cent payable at all and couldn't be paid, nor am I confident when I see the shifts around the public holidays or weekend work dependent upon definitional change for when those loadings apply, I simply don't understand them. If I don't understand them, I have to say, I wonder acutely how employees polled in a secret ballot with limited opportunity to consult together as a collective would understand it, particularly if they have to go to the company office and get a copy of the agreement prior to its being voted upon in order to tip the hand that they're a bit concerned about it.

PN25

That brings me to the last point, you were rolled up in one approach to secret balloting. The attachment AL1 shows that Mr Knobbs, who is here today, was at the calling of the, or the declaration of the ballot and had an opportunity to scrutinise. There was a vote: Do you want the proposed agreement to apply to your employment? I'm just running through these as they occur to me. I guess that comes close enough to: Do you with your fellow employees want to make this agreement? The question isn't quite what 170LE does or what a party to an agreement would do. Do you accept the employers offer or do you, along with all your fellow employees make this agreement, really must be the question, but I think you have got it near enough if the whole process comes out as one that satisfies me that it was reasonable.

PN26

The difficulty, and I only put it as a difficulty, I'm not suggesting, Mr Robinson that there is anything untoward about this, I'm concerned about it because I think it has got the seeds of being very difficult for employees to get either collective recognition for their collective or to get a union in because of the process that you've adopted, but I'm only saying it is making it difficult and I have an open mind because I think probably the agreement is an acceptable one.

PN27

But I go to AL2 now. This is the note on 3 April which is:

PN28

As you're aware the company intends to determine by democratic secret ballot whether a majority of our ...(reads)... and a summary of the proposed agreement.

PN29

Then it invites them to cast their ballot and to mail the ballot no later than 5pm on 19 April 2002. So effectively I think the 14 days notice is given by that notice and it will be counted on 26 April. It then invites them to - copies are available in your branch of the proposed agreement and you can request it from Mark Sweeney. I'm not sure who Mark Sweeney is. Then:

PN30

It is also important for you to note that if you are a member of a union and its entitled to represent you ...(reads)... about the proposed agreement.

PN31

Then it covers:

PN32

If you don't get your envelope by 8 April or lose your ballot paper you must contact Mr Finney.

PN33

and then invites discussion. So far as the conformity of that process with 170LK, I would have to say that I think it is doubtful and I'll take you briefly to 170LK for that purpose:

PN34

The employer must take reasonable steps to ensure that every person -

PN35

and this is LK(2) -

PN36

at the time whose employment will be subject to the agreement has at least 14 days ...(reads)... before those 14 days have passed.

PN37

and linked in with that is access to the proposed agreement and LK(4), content of notice of intention:

PN38

That if any person whose employment as a member of an organisation the person may request ...(reads)... about the agreement.

PN39

Then there must be an opportunity under LK(5), if there is such a request, to give the organisation a reasonable opportunity to meet and confirm about the agreement before it is made. If, for instance, there were three union members or even 10 in this matter, the realistic opportunity for them to have asked their union to represent them and meet and confer with the employer before the agreement is made would be relatively low, and I won't use the pejorative term, the ballot is already out and running and if you don't get your ballot by 8 April then complain, lodge your vote by 19th and while you're about it, we'll take into account that you can consult with your union if they want to bring them in.

PN40

The process is extremely cavalier in relation to the rights under 170LK because essentially it is the chartered accountant who is running the ballot. The agreement is to be made by the declaration of a poll. There is no union or no collective representative of the employees. If you look at 170MI(3), if the company had notified a bargaining period with its employees, the employees generally are a negotiating party.

PN41

If one goes to the Statute of Frauds provisions, normally an agreement has to identify the parties with a memorandum in writing, identifies precisely who the parties are and somebody signs, but here, because it's an offer by an employer accepted by the employees, nobody on behalf of the employees needs to sign and the employees, not only those present and voting, but even those who come on to the site, in this instance up to two years down the line, are bound by the valid majority of the secret ballot.

PN42

Now, the Commission's entry into this process and in my case it has been mainly figured by the fact that I think this is the second agreement that I've had in a short space of time where there is no employee signatory. I had grown used to a practice where the LKs, at least there was an attempt to get everybody who was bound who were the employees to sign it, I must say that I never insisted that everybody sign it because that's difficult but at least those who were there at the time put their signatures on it. They knew they were bound and they were the ones who attested that they had signed the document that they understood they accepted.

PN43

Now, the reason I'm concerned about that possibility of variation is that the content of agreements, even where they're vouched for by parties, tends to be a bit of a moveable feast. They keep on varying them as they go along and eventually they have got the final document which is the one that comes to the Commission and near enough is good enough often from the union's side too where these come forward. For employees, particularly with a complex agreement, the content of it is not really vouched and I would dare say, although this one is undated, but even Mr Gough didn't know what was in the agreement until somebody asked him to put the company seal on it. There is nothing in our statutory declarations that requires an averment that the document so signed and sealed by the company is precisely without variation the agreement upon which the valid majority voted.

PN44

Now, in this instance, I doubt whether even that could be done because in order to get the precise agreement upon which they voted to accept one had to go and find Mr Sweeney and get a copy of it. I am sympathetic to the problem from the company, it's a long document and it's a complex one. I have to say my fears evaporate when I find that I've got three or four people who say they were the negotiating committee on behalf of all employees. They're known identifiable people and they put their name on the agreement and they are the single bargaining unit in effect at the site.

PN45

I take you finally to 170LE. For the purposes of this part, a valid majority of persons employed at a particular time whose employment is or will be subject to an agreement (a) make or genuinely make the agreement if (c) the employer gives all of the persons so employed a reasonable opportunity to decide whether they want to make the agreement and either a majority of persons decide or genuinely decide that they want to make the agreement or give approval. So effectively the whole process seems to me to hang upon that objective test of the employer gives all the persons so employed a reasonable opportunity to decide whether they want to make the agreement.

PN46

Now, you have, I think, two employees here today in the interests or hope of shortening the matter, so perhaps they might just explain to me the processes they understand that led to the making of the agreement. Is that acceptable to you, Mr Robinson?

PN47

MR ROBINSON: That would be, your Honour.

PN48

HIS HONOUR: I think one of them is Mr Knobbs.

PN49

MR ROBINSON: Yes, Mr Knobbs, your Honour.

PN50

HIS HONOUR: Yes. Could you just tell us how you understand this went forward, Mr Knobbs?

PN51

MR KNOBBS: Your Honour, can you re-explain what you want me to explain?

PN52

HIS HONOUR: Well, what I want to know is what was the background to this agreement? I understand from the company's statutory declarations that there was a meeting, it's effectively the maintenance employees, it is, at which the possibility of the agreement being changed was canvassed. I am just looking at it. The company organised meetings on 22 and 23 March with all employees who would be covered by the agreement. How was that meeting conducted and who attended it? Who went to the meeting on 22 or 23 March? Do you remember that meeting?

PN53

MR KNOBBS: I'm not really sure on the dates, there were crews at two separate meetings. I'm not really sure at which one my crew and myself and another crew, I'm not really sure which dates we attended those meetings.

PN54

HIS HONOUR: Following those meetings, was there any sort of representative group to talk to the company about the agreement or what sort of input did you have? Just individually or was there a group of you who represented anybody?

PN55

MR KNOBBS: Basically, your Honour, after the sessions with the employer, there was just group discussions in the workshop outside of those initial meetings.

PN56

HIS HONOUR: Between the employees?

PN57

MR KNOBBS: Just between the employees, sorry, yes.

PN58

HIS HONOUR: Yes. And was there any feedback to the company organised between you or was it left to individuals to raise points?

PN59

MR KNOBBS: Yes, left to individuals to raise points after those group discussions.

PN60

HIS HONOUR: I see. And how did the secret ballot come about? What part did you play in that?

PN61

MR KNOBBS: Basically as it was set out. Yes, we received our ballot in the mail, gave our opinion and posted it back to Mr Finney.

PN62

HIS HONOUR: How did you come to be here today? Why is it you rather than someone else?

PN63

MR KNOBBS: Basically I think it had something to do with our crew was actually rostered on for these days. If you were on your days off, yes, just the luck of the draw, I suppose it would have been.

PN64

HIS HONOUR: And were you present when the ballot was counted?

PN65

MR KNOBBS: I was, yes.

PN66

HIS HONOUR: Did you look at the ballot papers?

PN67

MR KNOBBS: Yes, went in and saw it.

PN68

HIS HONOUR: And you were satisfied that the numbers are as represented, the 17 voted for the agreement?

PN69

MR KNOBBS: Yes, your Honour.

PN70

HIS HONOUR: Can you suggest any reason why 10 would not have voted at all?

PN71

MR KNOBBS: For various reasons. Probably maybe a majority of those people weren't happy with the agreement and maybe a majority of those people had just plainly forgot to post their ballot.

PN72

HIS HONOUR: Is the agreement approved as you understand it at the workplace? Are people content now with the fact that they have voted for the agreement.

PN73

MR KNOBBS: Yes, from what I hear in the workshop from everyone who voted, everyone has a pretty positive attitude towards the agreement.

PN74

HIS HONOUR: Yes. So if you had been asked to sign the agreement on behalf of all employees would you have done so?

PN75

MR KNOBBS: I think so, yes, from the feedback and from our group discussions in the workshop, I would.

PN76

HIS HONOUR: Is there any reason why the Commission should be hesitant about accepting that this is a fair vote by the employees generally? Is there anybody who thinks that the process was not fair?

PN77

MR KNOBBS: There are some people at the workshop, yes, there were, your Honour.

PN78

HIS HONOUR: Sorry?

PN79

MR KNOBBS: In regards to fellow workers?

PN80

HIS HONOUR: Wel, in relation to your understanding of how people think about it. Do they think it was a fair enough approach to resolving the agreement across the work force that you are a member of?

PN81

MR KNOBBS: There was a few people that didn't read it as the ballot explains, but overall I think most people in the workshop are pretty happy with the outcome.

PN82

HIS HONOUR: Yes, who is the other employee representative?

PN83

MR MUDFORD: Rodney Mudford, is my name, your Honour.

PN84

HIS HONOUR: Mr Mudford, you've heard what Mr Knobbs has had to say. Is there any point you would feel that should be made or would increase my understanding of how the process worked?

PN85

MR MUDFORD: The only thing that came to my attention was the reason why people didn't vote, a lot of them were sent to previous addresses which is the employees own fault, that was the only thing I noticed.

PN86

HIS HONOUR: Yes, and are you also able to say that you think the process was fair enough.

PN87

MR MUDFORD: Absolutely.

PN88

HIS HONOUR: That the agreement does reflect the view of the majority of employees in the group.

PN89

MR MUDFORD: Yes, it certainly does, the majority of employees.

PN90

HIS HONOUR: Yes, thank you. Mr Robinson, in relation to the no disadvantage test, I've raised the point that is of most concern to me. I don't understand how the 30 percent night shift loading virtually disappears altogether even as an entitlement for some employees, it may be that the pattern of rostering means that there is nobody consistently enough on night shift or what passes for night shift because I think even it goes into the following day doesn't it and starts at 6.15 and goes through to the next morning.

PN91

MR ROBINSON: That's correct, yes.

PN92

HIS HONOUR: But at least, as I read the Metals Award, some employees and those sorts of arrangements would if the configuration is correct be entitled to a 30 percent loading for being regularly on night shift. The second concern I have is to the extent that the justification of the disadvantage turns upon a 60 percent over-award and that's not readily discernible to me looking at the wages calculation sheet, I would require something further to be put covering that.

PN93

I would prefer also that perhaps you have a look at the transcript and note the points that I have raised that go to my concerns about the procedure. The point that strikes me I suppose is that the summary seems fair and accurate enough. The employees should ordinarily probably be provided also with the advantage, no disadvantage criteria and I would at least intend to rectify that by attaching it to the certificate in this case so that they can know.

PN94

In other words, if the company has in fact duded employees, to use a colloquial, then what you are likely to find is that the representations you have made as to the process will be spelt out in the Commission's document and sooner or later somebody is going to read that and if I have acted on the assurances that you've given me, and whoever has been responsible for giving assurances that are incorrect, is likely to be held to account somewhere and these are quite important matters these days and effectively a process that places so much reliance on statutory declarations which are sometimes prepared without adequate care and attention is one that is quite fallible and that does concern me.

PN95

But to be as brief as I can now be about it if you give me some supplementation in relation to the calculation of the rate and an assurance that there has been no material alteration of the agreement that was offered on 3 April, since 3 April, then I will probably be persuaded that there is no disadvantage and that employees have genuinely enough approved the agreement and I'll waive the defects that I've pointed to.

PN96

To the extent though that Gough and Gilmour are proceeding on the advice that you can have a rolled up invitation to treat, conduct the ballot, consult the union, all in one document and get away with it again then you're on notice at least you'll have to avoid me, and life will be greatly simplified if there is a representative body on the site who can on behalf of all employees raise matters because effectively I think collective bargaining is defeated if the real process is one of a secret ballot and the boss will have a chat with you one by one if you don't like the deal with company offers.

PN97

A valid majority is a concept that is very much stretched if all of us had to have an interview with John Howard as to whether or not we were going to vote for him or for instance Mr Mugabi's followers. A democratic vote is one where there is a representative collective view and people know broadly who the valid majority is and you do know it if everybody has had to sign it and if you get up to 17 signatures then you've won, then those 17 are responsible for their own document and they vouch that the one before the Commission is the one they signed but here nobody knows who the 17 are.

PN98

Very well, I'll stand the matter over and I think if you can get that material back to me within the week I will hand down a decision so there is a minimum of delay in finalising the matter.

PN99

MR ROBINSON: Thank you, your Honour.

ADJOURNED INDEFINITELY [10.08am]