AG2002/3065, Transcript of Proceedings [2002] AIRCTrans 2539 (8 July 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 10, MLC Court 15 Adelaide St BRISBANE Qld 4000
(PO Box 38 Roma St Brisbane Qld 4003) Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER SPENCER

AG2002/3065

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under section 170LK
of the Act by Melcann Limited for certification
of the Melcann Limited Agreement 2002

BRISBANE

2.45 PM, FRIDAY, 21 JUNE 2002

PN1

THE COMMISSIONER: Thank you. I will take appearances, please?

PN2

MR S. PAWLOWSKI: May it please the Commission, my name is Pawlowski, appearing - from the QCCI on behalf on Melcann Limited. With me I have MR GEOFF McNEIL who provided the affidavit on behalf of the employer, and JAMIE JOHNSTON who provided the affidavit on behalf of the employees. In addition to the affidavits there were a couple of handwritten letters that were attached; one from Mr Johnston here in addition to the affidavit, and another one from a Mr Anthony Moore who is also on the consultative committee.

PN3

THE COMMISSIONER: Thank you.

PN4

MR PAWLOWSKI: My understanding is that the agreement has been signed by all employees except one. I wonder if - - -

PN5

THE COMMISSIONER: I think I had a letter also from - no, Mr Daly, we had two, sorry, yes, a photocopy, that is right - sorry, Mr Pawlowski.

PN6

MR PAWLOWSKI: I believe that all the procedural matters were correctly followed, Commissioner, and it is just a question of whether the - what questions the Commission may have of the parties, as I understand it.

PN7

THE COMMISSIONER: All right. Well, Mr Pawlowski, the first thing I wanted to ask was this particular agreement has, in the contents page, reference to a schedule B, and it was provided on the file as a confidential document between the parties. Now, in certifying the document obviously it becomes a public document, and I need some guidance as to how you wish that - - -

PN8

MR PAWLOWSKI: What we have done there, may it please the Commission, is the disk that we have provided has schedule A there, then schedule B, it has just got the heading, and confidential to parties, and is blank.

PN9

THE COMMISSIONER: Yes, but - - -

PN10

MR PAWLOWSKI: And then we have provided in a separate envelope for the Commission the formula for schedule B which is of course not confidential to the Commission or to the parties at the workplace, but we would not like that to become part of the published document.

PN11

THE COMMISSIONER: All right. So my difficulty is that in certifying that agreement the part that I understand that you do want to make public does refer to, in the contents page, a schedule B incentive payment program. And that particular page, as you have said, Mr Pawlowski, remains in the document. It is just an unusual - - -

PN12

MR PAWLOWSKI: It is, I wondered how the Commission would treat it, but we have in the past had reference to certain types of things that would apply to agreements, I think, that, even without that part, met the, you know, criteria of the no-disadvantage test.

PN13

THE COMMISSIONER: Well, perhaps to a assist me, you may take me to - I am confident in relation to all the provisions have been met for certification, but the part I would wish you to take me to is just the wages clause in terms of the no-disadvantage test, and any interplay that there may be with the provisions in the agreement, the proposed agreement with this incentive payment program.

PN14

MR PAWLOWSKI: The wages, we believe, meet the no-disadvantage test, Commissioner, on their own. The incentive payment program is - could be completely out of the agreement and the agreement would still meet the test. Now, the incentive payment program would not deduct anything if people don't meet targets. My understanding, Commissioner, is that the incentive payment program has two components; one is an annual component which is based on profitability, and that can provide from 4- to 6 per cent of the base rates - in addition to the base rates annually, that is one component.

PN15

The other component is the monthly assessed component which is based on productivity, quality, and safety factors, and that is capable of giving an increase of seven and a half per cent if the barely minimum acceptable standards are met, in addition to the base rate, 10 per cent if target is reached, and 15 per cent if it is over target. So when I say that - - -

PN16

THE COMMISSIONER: So those increases are over and above those that are planned under this agreement anyway?

PN17

MR PAWLOWSKI: Yes, they are all additional. The agreement - in our view, there is nothing in the incentive payment program that is required to in any way cover the no-disadvantage test. We believe the agreement without that would stand on its own. This is just something additional to try and create incentive in the workplace to even do better.

PN18

THE COMMISSIONER: And can I ask you, is the reason that it is a commercially sensitive document, that is why you wish it to be kept confidential between the parties?

PN19

MR PAWLOWSKI: Perhaps I had better let Mr McNeil answer that, Commissioner.

PN20

THE COMMISSIONER: Thank you, Mr McNeil?

PN21

MR McNEIL: Can I answer your question? If that part of the document were to become public our competitors - well, it would be quite easy for them to work backwards, shall we say, from the calculation basis to establish some of our costs very easily, so that is why we are sensitive about it, to be honest.

PN22

THE COMMISSIONER: All right. Well, I might just hear from the employee representative. I mean, the only reason that I am hesitating is just in terms of procedure as to the certification of the document, and to ensure obviously that that is kept confidential on the Commission's file, because this then becomes a public file, so to speak, as well. So I just need to look at how we would manage that particular situation.

PN23

MR PAWLOWSKI: If it is on the Commission's file, whilst it is a public document, it is not as easily accessible to people as if it is on the internet, that is our sort of concern.

PN24

THE COMMISSIONER: I agree, yes. Right, now, Mr Johnston, thank you for attending. It is just normal procedure when this is an agreement between the employer and the employees that normally I would ask simply some questions in relation to the negotiation and your involvement in that, and as you are representing employees, what was your understanding of the process that occurred in your confidence with the outcome?

PN25

MR JOHNSTON: Yes, we were very confident in the negotiation period, it lasted about six months all up. We had several meetings, we discussed a lot - we didn't get a lot of our - we got most of what we wanted to get - sort of had to think of the company point of view as well, so the majority of us were very happy with what the deal was we got, because it could have been a lot worse from our point of view, so we were quite happy with the processes that went through and the final agreement that we came to.

PN26

THE COMMISSIONER: All right. And those particular wage rates in there, you are confident that they meet acceptable increases above what would be achieved under the award?

PN27

MR JOHNSTON: Yes.

PN28

THE COMMISSIONER: And this arrangement, the employees would be aware that this incentive program would not form part of the certified agreement, but would simply - there would simply be a reference to this separate document, and you have on site access to that - this schedule B?

PN29

MR JOHNSTON: Yes.

PN30

THE COMMISSIONER: All right, thank you.

PN31

MR JOHNSTON: There are several copies in the supervisor's office, and in the company's - - -

PN32

THE COMMISSIONER: All right, and you can have access to those?

PN33

MR JOHNSTON: Yes. Plus we have also got copies of our own.

PN34

THE COMMISSIONER: All right. And is your understanding that this particular program is above the wage rates that appear in the agreement?

PN35

MR JOHNSTON: Yes.

PN36

THE COMMISSIONER: All right. Well, it appears like that is a good example of bargaining at its best. Right, well, Mr Pawlowski, was there anything else that you wished to add to the record?

PN37

MR PAWLOWSKI: No, Commissioner, I just would like to point out that, you know, the company has gone through a major change from the previous operations, because that was continuous operations, seven days a week, with people working 12 hours on for seven days, and having seven days off. So there was a fair bit of overtime built in in those days, so what the company has done on this occasion is built in seven hours of overtime even though most of that will not be overtime, it is scheduled to cover training and all those other sorts of things to make sure that people didn't lose money in shifting from one to the other.

PN38

So what is really happening is people are getting seven extra hours above 35 paid each week - at the moment I believe they are working that overtime, but once the new increases come in they might only be working 42 hours a week, including some training. So what this agreement really does is it covers training which is not work, which is normally paid at single-time, and it pays for it at double-time, and whether the 45 hours are worked or not, might only be 43 hours worked, they are still going to get the 52 hours pay; in other words, seven hours at double-time in addition to 38. And whilst the base rates, you know, meet the disadvantage test, the remaining part of the package was necessary so that people didn't suffer any major losses from the change.

PN39

THE COMMISSIONER: Because of the amount of overtime they worked previously?

PN40

MR PAWLOWSKI: Time that was previously worked in the 12-hour system, and also to make sure that productivity and safety are greater because, Commissioner, for older people working - with commitments, working seven days straight, 12 hours a day, many of them would then try to find other work during the seven days, and the younger people of course would work hard and then play hard for seven days, and that created some productivity problems in terms of people being fit when they came back from their seven-day break. And what we've done this time is try to overcome those problems but at the same time build in an extra, if one likes, 14 hours' ordinary pay for seven hours "overtime", whether those seven hours are fully worked or not, and if there's additional overtime then that would be then paid or banked to cover additional leave that could be taken or paid if there's no agreement as to banking.

PN41

It is, we believe, a wonderful agreement and rather unique, in that it tries to average payment - gives people a minimum realistic wage with a fair bit of overtime each month. People may earn more than that but not less than that so it has become - we call it an aggregate wage but the payments are monthly and virtually for the month it gives 38 hours pay a week plus perhaps 13 or 12 extra hours at ordinary time for overtime and it gives stability whereas you might have a situation where people earn a lot of overtime in one month or one week and less in another. This has brought back the same sort of stability to some extent that they had under the previous system where they worked seven days on and seven days off.

PN42

THE COMMISSIONER: In terms of averaging those rates out against the award though, my understanding is that it would meet the base levels as payable for those scenarios under the award.

PN43

MR PAWLOWSKI: It more than meets the award rates, just the 38 hours, but in addition it provides certain payments in terms of overtime, whether that overtime is worked or not or whether it's genuine overtime or just training. So you've got 38 ordinary hours and then you've got another 14 hours per week for 48 weeks which is then averaged over 52, to make sure that there is stability of income week-in, week-out, so people then can budget much more easily.

PN44

THE COMMISSIONER: All right. Certainly it's a progressive arrangement but in terms of your submissions - normally what we do, Mr Pawlowski, in these, and I know it was omitted off the directions, is provide a chart in terms of LK agreements that have differing scenarios like this one, is to provide a no disadvantage table so it clearly sets out that it does meet that. I understand that the statutory declarations provided by the employer and employee representative have both given those undertakings, that it does meet that, and that you also have explained that it meets the no disadvantage test. It may be helpful to provide that for the file, Mr Pawlowski.

PN45

MR PAWLOWSKI: Commissioner, I'm quite happy to do that. My understanding of course is that table only concerns itself with ordinary time earnings.

PN46

THE COMMISSIONER: Well, it can in fact go to the overtime scenarios but I suppose it's how far you want to extrapolate those particular scenarios. I mean, this particular arrangement, as I understand, is setting up a provision where the overtime would be paid as part of the base rate, to take into consideration what you're saying and what the previous arrangement was so employees would not in fact be disadvantaged in moving to this arrangement.

PN47

MR PAWLOWSKI: Actually the overtime would be superior because we've even got double time there for the day workers. There's a possibility that some of the work methods may change and maintenance people will become day workers. We're looking at time and a half in three hours, but so that people don't lose anything we've decided to even pay day workers at double time, Commissioner, so there's absolutely no possibility of anyone being disadvantaged in the overtime area. In fact, that whole area is really the bonus area in the document. Certainly if the Commissioner wishes, we can certainly provide a table showing how much better people are off in terms of ordinary time rather than overtime.

PN48

THE COMMISSIONER: Yes, I would be appreciative if you would put that so I could put that onto the file. That's not something that I ask of just this arrangement. Normally that is a standard direction and it was omitted on this occasion. I don't want this scrutiny for the employee or the company representative to think that this is anything unique to this company. I mean, it's good if these bargaining arrangements do result in a progressive arrangement and that's something that we normally do on an LK agreement put onto the file but I certainly would certify the agreement from today's date in line with your submissions, Mr Pawlowski, and it meets the no disadvantage test as I understand, in terms of the submissions and the statutory declarations and I would be grateful if you would provide that document. I would certify the agreement under section 170LT of the Workplace Relations Act 1996 and certify it from today's date, with a nominal expiry date as requested, to 31 May 2004, and I - - -

PN49

MR PAWLOWSKI: Commissioner, I just wanted to check. I thought we wanted the agreement to start from 1 July, isn't it - 1 July, Commissioner.

PN50

THE COMMISSIONER: My apologies. Well, Mr Pawlowski - - -

PN51

MR PAWLOWSKI: But certified from today.

PN52

THE COMMISSIONER: Yes, it will be certified from today. That doesn't preclude you from commencing the agreement from that date but it will be certified from today and I will in fact prepare the certification document on the basis of the document before me, without in fact publishing schedule B. I will keep that in a sealed envelope on the file and I'm just wondering whether there is any necessity to make reference to that schedule B in this particular - you'd like to treat it in that way, to have a reference with just the blank page that the document is confidential between the parties and can be accessed on site perhaps.

PN53

MR PAWLOWSKI: I think it will be sufficient just to have that on transcript. Does that mean that the Commission would like reference to it deleted in the appendix too? Sorry, not in the appendix, in the index?

PN54

THE COMMISSIONER: The reason - we might just go off the record for a minute.

OFF THE RECORD [3.05pm]

RESUMED [3.06pm]

PN55

THE COMMISSIONER: Arrangements have been made for replacement pages and the incentive payment program will be treated as an ancillary document that will remain confidential between the parties as it is not a primary source of the agreement between the parties. It can be accessed by all parties on site. The employer will make it available, but as it is commercially sensitive in nature, it will remain confidential between the parties. Thank you for your attendance.

PN56

MR PAWLOWSKI: Thank you, Commissioner.

ADJOURNED INDEFINITELY [3.07pm]