C2002/3805, Transcript of Proceedings [2002] AIRCTrans 3309 (29 August 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
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DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N VT05318
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER TOLLEY

C2002/3805

AUSTRALIAN MUNICIPAL, ADMINISTRATIVE,
CLERICAL AND SERVICES UNION

and

TXU AUSTRALIA/EASTERN ENERGY

Notification pursuant to section 99
of the Act of a dispute re clauses 10 and
40 of the TXU Enterprise Agreement 2002

MELBOURNE

2.03 PM, TUESDAY, 13 AUGUST 2002

PN1

MR M. RIZZO: I appear on behalf of the ASU and appearing with me is MS M. DAWSON.

PN2

MR I. DIXON: I seek leave to appear on behalf of TXU Australian Services Proprietary Limited and TXU Electricity Proprietary Limited, with me is MR G. McTAGGART.

PN3

THE COMMISSIONER: Thank you. What do you say about leave, Mr Rizzo.

PN4

MR RIZZO: You know, Commissioner, I could bang on for about half an hour, but I will spare us all the headache - - -

PN5

THE COMMISSIONER: Save me saying I have heard what you have to say and I think he can - - -

PN6

MR RIZZO: That is right and we will let Mr Dixon have his go.

PN7

MR DIXON: I am grateful.

PN8

THE COMMISSIONER: Leave is granted, Mr Dixon.

PN9

MR DIXON: I am grateful, Commissioner.

PN10

THE COMMISSIONER: Yes, Mr Rizzo.

PN11

MR RIZZO: Thanks, Commissioner. Commissioner, this issue concerns about 16 people, who have been made redundant by TXU, as of last Friday, wasn't it, yes - as of last Friday, Commissioner. So when we notified the Commission, I think about a week ago, we knew it was fairly imminent that these people were to be terminated. There are two fundamental issues, here, Commissioner, we are in dispute with. One, is the issue of whether TXU could, actually, terminate these people. And leaving that aside, for a moment, let us assume that they could, then we are also in dispute on the redundancy and other payments, that we believe these people are entitled to, but which TXU, up until this point, has refused to pay.

PN12

Perhaps, Commissioner, if I could take you to the first point, these people were employed, nominally, under a contract and I want to tender that document, Commissioner, for your purposes.

EXHIBIT #A1 EMPLOYMENT CONTRACT AND ATTACHMENT

PN13

MR RIZZO: Thank you. I apologise, Commissioner, I think I put the statement at the wrong end, but the document is intact.

PN14

THE COMMISSIONER: That is okay.

PN15

MR RIZZO: It is those new fandangled machines where you have to key in stapler and you never know where the staple is going to appear. Commissioner, it was A1, wasn't it?

PN16

THE COMMISSIONER: Yes.

PN17

MR RIZZO: Yes, thank you. Commissioner, the front letter is the termination letter:

PN18

With the finalisation of the MOCS contract, we hereby advise the following date will be ...(reads)... contract and we would like to wish good luck to you in your future endeavours.

PN19

And, as I say, there are 16 people who have been subject to this termination letter, Commissioner.

PN20

MR DIXON: Can we just correct that, I think it is eight, Mr Rizzo. It is eight, eight employees.

PN21

THE COMMISSIONER: Gentlemen, gentlemen, you are not in the back room of a bar.

PN22

MR DIXON: Apologies, Commissioner.

PN23

MR RIZZO: Commissioner, I stand to be corrected, my impression was - - -

PN24

THE COMMISSIONER: Well we will sort that out in a minute.

PN25

MR RIZZO: Yes, well it was my impression it was 16, but if the employer representatives tell me it is eight, then, I stand to be corrected. Nevertheless, there is a number between eight and 16 that have been terminated. Commissioner, A1, attached to that letter of termination is the contract, which I mentioned to you, which these people are covered under and I suppose, Commissioner, I would want to highlight two things, one is the first paragraph, which the company relies on. And the first paragraph says:

PN26

Dear Deborah

PN27

In this case:

PN28

Following our recent discussions, I have now pleasure in confirming our offer of employment ...(reads)... GCS contract with MOCS is terminated, your contract with GCS will also be terminated.

PN29

That is the paragraph that the employer relies upon, Commissioner, in order to terminate the employees. In other words, if the contract - sorry, yes, if the contract terminates, between the parties - - -

PN30

THE COMMISSIONER: So, if GCSs client's contract terminates, I read that - - -

PN31

MR RIZZO: Yes that is the contract with the client.

PN32

THE COMMISSIONER: Yes, good, yes.

PN33

MR RIZZO: And if that contract were to be terminated, then the company argues that then the individual employee would then be terminated. Now we dispute that and I will come to that in a moment. But just to stick with A1, then attached to A1, Commissioner, at the end of that contract, is a - no, sorry - - -

PN34

THE COMMISSIONER: Termination of employment, is that what you are going to.

PN35

MR RIZZO: No, sorry, Commissioner, if I could take you to page 2, of that contract - - -

PN36

THE COMMISSIONER: Give me a few clues.

PN37

MR RIZZO: Yes, at page 2, termination of employment, Commissioner.

PN38

THE COMMISSIONER: Yes, I have it.

PN39

MR RIZZO: Yes, thank you. It says, the last paragraph says:

PN40

In the event of you being made redundant, you will be entitled to the redundancy benefits, if any, as set out in the company's redundancy benefits policy.

PN41

Now, I have attached to that contract, Commissioner, the company's redundancy policy. And the company policy, which is about another three or four pages into A1, Commissioner, entitled "Redundancy Benefits Policy".

PN42

THE COMMISSIONER: yes.

PN43

MR RIZZO: Says that people get three weeks for every year of service. And this is found under number 3, on the next page, redundancy benefits. And you will find it under Principles, next to the word "payment". Do you see that, Commissioner? Over the page, number 1 in Policy Coverage, I think.

PN44

THE COMMISSIONER: Getting there. These are all numbered back to front, your machine has done merger on the lot of us. Here we are, is this what you are talking about?

PN45

MR RIZZO: Yes, "Redundancy Policy", correct.

PN46

THE COMMISSIONER: All right.

PN47

MR RIZZO: And if you flip over to the next page, number 1 is "Policy Coverage"?

PN48

THE COMMISSIONER: Yes.

PN49

MR RIZZO: Yes, okay. Sorry, Commissioner. Then under number 3, "Redundancy Benefits", there is a column on your left hand, "Payment", next to that column it says:

PN50

As of 14 September '99, this is a three weeks pay for each year of service to a maximum payment of nine months FAR, in addition to the notice period above.

PN51

So, apart from the notice period, the company's policy is three weeks for every year of service. Okay. So that is one of the issues that we are dispute about, Commissioner and, mind you, I think, in most of these cases, if not all of these cases, we are talking about these people having one year's service, when they were terminated. So we are arguing about, simply, the company paying these people and we will have to confirm the number, in a minute, but somewhere between eight and 16 of them, that they simply received three weeks payment for every year of service.

PN52

The company will put to you, as it has been put to us, that they don't have to pay any redundancy because of that, as I say, in paragraph 1 of the contract, in relation to termination of the contract. We put it to you that that is not our position, because we believe that these people are covered under the TXU EBA. And the TXU EBA says two things about redundancy and about contracts and I would like to give the Commission an extract of the TXU EBA.

EXHIBIT #A2 EXTRACT OF THE TXU EBA

PN53

MR RIZZO: Commissioner, this was a recent enterprise agreement, June 2002. The clauses, I notified to the Commission, were clauses 10 and 40, I think, they were. I have those extracts here, in A2. Clause 10, Commissioner, which is, I think, three pages into the document, is entitled, "Manning Levels and Workforce Science". It says:

PN54

The parties acknowledge the current skills, mix and manning levels of the employer and will strive to maintain and expand these levels through the growth of the business.

PN55

And more pertinently, it says:

PN56

The parties will continue to observe current practices of natural attrition and voluntary ...(reads)... utilise any other mechanism will be by negotiation and agreement...

PN57

I emphasise that word:

PN58

...between the parties. The company will view, favourably, sponsored employment programs.

PN59

Etcetera. So, I think it is that middle paragraph that is probably the most relevant one, Commissioner. It is our contention that TXU could make these people redundant, under clause 10 of the EBA. Further, Commissioner, we submit, and I refer to the next page, in the document, at clause 40, "Employment Agreements", and it says:

PN60

By agreement between the employer and the employee, who may be a member of a union, party ...(reads)... the employer will give due consideration to matters raised by the employee or union.

PN61

And I submit, Commissioner, that the next paragraph is more pertinent:

PN62

It is agreed by the parties that no employee shall be disadvantaged by entering into an employment ...(reads)... than would otherwise accrue from this agreement.

PN63

So, we submit the following, Commissioner, that (1) under clause 10 of the EBA, these people should not have been made redundant, because the EBA does not allow for redundancies. The company will argue that these people are not covered by the EBA because they are on contract. Yes, they are on contract or they were on contract but we say that they are covered by the EBA, under the auspices of clause 40, on employment agreements. Which ties them back to the EBA and says that they should suffer no lesser rights than the EBA and the EBA, of course, goes back to clause 10, about no redundancy.

PN64

So, we submit, Commissioner, that they should not have been made redundant. But, as I said, if we put aside the redundancy argument for a minute, it is our secondary contention that if they are to be made redundant, then two things should happen. (1) that the company should pay these people three weeks for every year of service, as per their redundancy policy. And, as I say, the employer, in discussions and meetings that we have had, has failed to honour that what we say is an entitlement or a commitment.

PN65

And the second issue of payment, Commissioner, revolves around bonuses. And I would like to submit two documents that relate to this, what we call, also, a payment that should be made to these employees.

[2.17pm]

PN66

MR RIZZO: Commissioner, they are related documents but they are distinct, and perhaps we should distinguish them for the record.

PN67

THE COMMISSIONER: Well, A3 will be 2001 short term incentive requirements, and A4 will be correspondence addressed to Ms Robinson.

EXHIBIT #A3 2001 SHORT TERM INCENTIVE REQUIREMENTS

EXHIBIT #A4 CORRESPONDENCE ADDRESSED TO MS ROBINSON

PN68

MR RIZZO: Thank you, Commissioner. Perhaps if I can refer to A4 first. TXU, like a lot of companies, has a performance bonus system and Ms Robinson, who is one of our members and one of the affected people, got this letter for the 2001 performance incentive payment and it reads:

PN69

I wish to acknowledge your valuable contribution to the achievements of both our business unit and TXU overall ...(reads)... to achieve an even better result in 2002.

PN70

So it is obvious that this member of ours, Commissioner, and a number of other employees did receive the performance payment in 2001. What is in dispute at this point, Commissioner, is whether they should receive the payment for 2002. Now, it is true that as a result of TXU terminating these employees that they have only worked eight twelfths of the year; well, probably seven twelfths of the year, in fact, till the end of July. So it is true that they haven't worked the full year and I need to explain to you, Commissioner, that TXU works on the American calendar system between January - - -

PN71

THE COMMISSIONER: Well, doesn't the last paragraph on the second page of A3 cover that?

PN72

MR RIZZO: Yes, it - yes, you are right, Commissioner. I was going to come to that. Under pro rata payments, you mean?

PN73

THE COMMISSIONER: Yes.

PN74

MR RIZZO: Yes, it does. The point that is being made here is that you have to be employed at the time that the bonus is being paid. Is that what you are referring to?

PN75

THE COMMISSIONER: Yes.

PN76

MR RIZZO: Yes. That is correct, Commissioner. We concede that. It does say you have to be employed at the time of the performance - the time that the bonus is paid. But it also says that the business unit general manager at their sole discretion may choose to provide a payment. And further on in the next paragraph it says something similar, that the business unit manager at their sole discretion may choose to provide a payment if someone resigns, retires, is made redundant, etcetera. And we have argued with the company that at least these people who have performed extremely well in 2001, and all accounts seem to suggest that they have done so in 2002, at least should get a pro rata payment. And the company again argues that this should not be the case because they have not been employed for the full calendar year.

PN77

So, Commissioner, to try and summarise the ASUs submission is as follows. These people were made redundant. We say that they should not have been made redundant under the terms of the EBA; that is our first position. But as I said, if we set that aside for a moment, if they were to be made redundant, then what entitlements do they have? And we believe that they should be entitled to the redundancy policy which is three weeks for every year of service. And I emphasise to you that in my understanding I think all these people roughly have a year's service so we are talking about three weeks for every year of service for somewhere between, well, 8 and 16 people. And we believe that these people, given that they have made a contribution to the company and given that they have been terminated through no fault of their own, should at least get a pro rata payment of seven twelfths or eight twelfths of the year which we think is a fair outcome for these people.

PN78

It is not a hell of a lot of money, Commissioner. These people don't have a hell of a lot of service. And all we are really claiming is three weeks for every year of service, which is one year as I understand it, and a pro rata payment, which is probably just a few hundred dollars if it is based on anything on the figures detailed in A4. If the Commission pleases.

PN79

THE COMMISSIONER: Yes, thank you, Mr Rizzo. When you are ready, Mr Dixon.

PN80

MR DIXON: Thank you, Commissioner. Commissioner, can we clarify that there are eight agency staff, people supplied by an agency, and eight TXU/GCS staff. GCS, Global Customer Solutions is the call centre and a division of TXU. The eight agency staff being released and the eight TXU members, employees members of - or maybe members of Mr Rizzo's union are the subject to our debate.

PN81

Commissioner, can we say at the outset that when these people were employed they were put through an interview and recruitment process which quite explicitly and definitely pointed out to them that they were being engaged to work upon the Melbourne One Call Service, MOCS, and that was the contract that they were being engaged for at the time. This is not just something that was inserted in the paragraph or in the contract. This is the basis upon which they were engaged and it was expressly made clear to them at the time in those interviews that if that contract terminated, as it does happen in call centres, then their employment would be terminated.

PN82

That understanding, eyes wide open, is the basis of the first paragraph in exhibit A1 referred to by Mr Rizzo. That is the basis of the engagement of these personnel and the manner in which they worked. That is what has happened, Commissioner. The contract has been terminated and their employment, therefore, came to an end by activation of the contract itself. It is an effluxion of time. It is a pre-determined event. They were aware of it and they were engaged upon that basis, and they willingly joined Global Customer Solutions on that basis.

PN83

Inside that contract, Commissioner, without necessarily conceding anything that Mr Rizzo has said about the application of the certified agreement or any others, inside that contract though are the terms as you have pointed out to you: termination of employment in the event that they were otherwise made redundant in the commonly understood use of that phrase. If they were brought to an end while the MOCS contract was still to an end, they would have the redundancy policy put out to them. They would have the company's redundancy policy that Mr Rizzo refers to applied to them.

PN84

In addition, Commissioner, something Mr Rizzo - just for the sake of completeness - overlooked. In the schedule to the contract, going through two more pages, there is a period of notice. Schedule set out period of notice which conforms with the Workplace Relations Act; it is the scale at the bottom. And if they had been terminated, that would have applied. But it didn't. They were not terminated early. They were not made redundant, apart from the natural effluxion of this contract.

PN85

So we say, Commissioner, whether or not this actually applies or not, whether or not Mr Rizzo can make that, putting that to one side, even if he does, they are given the benefit, as he claims they are supposed to have, under clause 40 of the employment agreement. They do not have any disadvantage. They do not have something less, even if it was to apply. Now, we say on this though - and we don't wish to spend some time, Commissioner, because we may - we can go into it in conference, it might be easier. But we can debate whether or not the employer and the employee may be members of the union, and we can debate the words of clause 40 in exhibit A2 about whether or not the employee and the employer have reached the ultimate outcome which is suitable to both of them. And that is what we say has happened. But clearly, we say, it applies to them while their contract exists and that is what we have done.

PN86

Sir, we say that they have - we have reached an end of the contract in much the same way, Commissioner, as the exemptions are allowed in the redundant case, the test case in 1984 which specifically excluded people on fixed contracts for periods of time, or for tasks. It is the same which applies from the employment protection regulation in New South Wales recently which exempts employees on fixed contracts, and it is the same for unfair dismissal legislation in the Workplace Relations Act:

PN87

The regulation excludes employees on contracts for fixed periods or fixed tasks.

PN88

That is what these employees went into. This may seem as though it is abrupt, but it is not. It is the natural effluxion of their contract. And, Commissioner, so far as the bonus commission - the bonus system works, you have quite rightly pointed to the unfortunate weakness in Mr Rizzo's argument in exhibit A3. The pro rata payments are made if someone is employed at the time the performance bonus is payable which is the end of the financial year which is the end of the calendar year for this company, December 2002. And it is that way, Commissioner, because it takes into account the company's overall performance.

PN89

If I take you to the top of exhibit A3, the company's overall financial performance, the business unit performance, and the individual small team performance are all taken into account and assessed before any bonus can even be thought of. Let me take you to the example of Deborah Robinson that Mr Rizzo referred to. She was engaged in June 2001. Commissioner, December 2001 is the end of the financial year, is within the incentive payment the time the performance bonus is payable. Her position was able to be assessed, as was the business unit, as was the company's.

PN90

The discretion was exercised in her favour at that time. I am unable to tell you but could make inquiries whether it was exercised in favour of everyone else, but it was at that time and she was given a bonus. Those factors, those qualifying criteria are not here in this case. These personnel are not going to be here, are not here in December of this year. And, again, that is a criteria which is often used in the incentive schemes. No one is denying that they have worked well and been paid. No one is denying that they have worked with the company for the MOCS contract. What happened though, Commissioner, is that that contract has come to an end and of its own effect this contract, these contracts have come to an end in the fixed task way which we say is exempt from the requirement to pay redundancy. That is the difference between the parties, Commissioner.

PN91

THE COMMISSIONER: Yes. Anything else, Mr Rizzo?

PN92

MR RIZZO: No, I don't think so, Commissioner, but I would be happy, if Mr Dixon is happy, to adjourn into conference to have a further discussion of this issue, Commissioner.

PN93

THE COMMISSIONER: Mr Dixon.

PN94

MR DIXON: Yes, Commissioner, if that is satisfactory to yourself.

PN95

THE COMMISSIONER: We will adjourn into conference.

NO FURTHER PROCEEDINGS RECORDED

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 EMPLOYMENT CONTRACT AND ATTACHMENT PN13
EXHIBIT #A2 EXTRACT OF THE TXU EBA PN53
EXHIBIT #A3 2001 SHORT TERM INCENTIVE REQUIREMENTS PN68
EXHIBIT #A4 CORRESPONDENCE ADDRESSED TO MS ROBINSON PN68