AG2001/7946, Transcript of Proceedings [2002] AIRCTrans 3379 (3 September 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114J MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N VT05387
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT ACTON

AG2001/7946
AG2002/936
AG2002/937
AG2002/938

APPLICATIONS FOR REMOVAL OF OBJECTIONABLE
PROVISIONS FROM CERTIFIED AGREEMENTS

Applications under section 298Z of the Act
by Office of the Employment Advocate
concerning employment clause

MELBOURNE

9.47 AM, FRIDAY, 16 AUGUST 2002

Continued from 17.6.02

THESE PROCEEDINGS WERE CONDUCTED BY VIDEO CONFERENCE AND RECORDED IN MELBOURNE

PN210

MR B. LAWRENCE: I seek leave to appear on behalf of the Employment Advocate in these matters.

PN211

MS A. GOOLEY: I seek leave to appear on behalf of the AMWU.

PN212

MR E. GRUE: I appear on behalf of the Australian Workers Union, Greater South Australian Branch.

PN213

THE SENIOR DEPUTY PRESIDENT: Leave is granted to appear. Mr Lawrence.

PN214

MR LAWRENCE: Your Honour, do you intend to hear all of these matters at the same time or the South Australian ones after the Victorian ones?

PN215

THE SENIOR DEPUTY PRESIDENT: I was proposing to deal with them all together but - - -

PN216

MR LAWRENCE: All right.

PN217

THE SENIOR DEPUTY PRESIDENT: Is there any objection to that course? There being none, I will deal with them all together.

PN218

MR LAWRENCE: Yes. Well, what I will do for convenience is go through the submissions in respect of, what I will call the MMS matter, that is 7946 of 2001, and then after dealing with that I will move on to the other three matters and, of course, in doing so avoid repetition. There are, as you know, your Honour, two sets of contentions of fact and law that have been filed on behalf of the Employment Advocate and the particular clause that is now before the Commission is the one that is referred to in paragraph 2 of the contentions in the MMS matter, and the clause is:

PN219

The company commits to wherever possible when employing labour to contact unemployed AMWU or CFMEU members who are suitably qualified first.

PN220

In paragraph 5 of the contentions section 298Z(5) is set out, and I won't read that. And in paragraph 6 there is set out the substance of what subsection (5) says, and the shorthand that is adopted there is:

PN221

...requires or permits, etcetera.

PN222

So instead of repeating the words from time to time I will refer to "requires or permits, etcetera". Section 298Z was inserted into the Act in 1997 and it came about as a result of some limitations that were identified in the case of CEPU v Woodside Heating and Air Conditioning Proprietary Limited. That was a case where there was a preference clause, your Honour, and it was in favour of union members. It was quite clear that the provision was void under section 298Y and the issue which the Commission had to consider there was whether it could refuse certification of the agreement. And as it is noted here:

PN223

The Commission found that it was not able to refuse certification. Even though the agreement contained a void provision, the provision remained in the agreement.

PN224

Now, prompted by that case the legislation was changed and 298Z was introduced. And the point that is made in paragraph 8 of the submissions is that 298Z has to be understood in the light of section 298Y. 298Y provides, and I will read this:

PN225

A provision of an industrial instrument or an agreement or an arrangement, whether written or unwritten, is void to the extent that it requires or permits or has the effect of requiring or permitting any conduct that would contravene this part.

PN226

Now, the important point about this section, your Honour, is that it is not limited to industrial agreements. It is not limited to, in particular, certified agreements of the kind that are made under the Workplace Relations Act or awards that are made under the Workplace Relations Act, but it extends right through commerce and industry to cover agreements or arrangements which require or permit, etcetera, certain conduct that would be in contravention of the Act. And that would mean, for example, that if there was a contract between - a common law contract between a developer and a contractor bearing on the question of part XA matters, then that would be void. When I say bearing on, bearing on in the relevant respect.

PN227

So if, for example, a developer required a contractor to employ only non-union members on the project or, for that matter, union members on the project then it would be void. It would be a common law agreement, a building agreement that would be rendered void. Similarly if there was an arrangement between them, an understanding, something short of a formal agreement, then that would be rendered void. So there are a lot of agreements and arrangements that could exist that fall outside industrial instruments that would be rendered void.

PN228

Now, it may be said that some of those agreements would be void anyway by the ordinary operation of contractual principles: for example, a contract that required somebody to do something that was illegal would be void by reason of public policy considerations. And so if you had a situation where a developer required the contractor to employ only non-unionists or unionists, then the better view, in my submission, would be that that would be void in any event. You wouldn't need to go to legislation.

PN229

But what the Parliament has done is to make it clear that such an arrangement would be void, and an arrangement would be void even if it permitted as opposed to requiring something to be done. So that if you had an arrangement between a developer and a contractor that said something to the effect that the employer may - the contractor may choose to employ only non-unionists or only unionists, then that would be void by reason of 298Y, even if it wasn't void at common law. Now, it is important, in my submission, to look at the explanatory memorandum in respect of 298Y and it says:

PN230

The proposed section 298Y gives effect, subject to available constitutional powers, to the Government's express policy to render void any provision in an award, agreement or arrangement -

PN231

and I interpolate there, it is clear that it is to extend to a whole lot of agreements and arrangements, it is not limited -

PN232

to the extent that it requires or permits, or has the effect of requiring or permitting conduct in contravention of this part ...(reads)... that section 298Y would render void are those which...

PN233

And there are three matters set out. Before I read them or refer to them, two things need to be said. They are not an exhaustive list because they are those that are among the provisions. And, secondly, the explanatory memorandum makes it clear that the provisions may be expressed or implied. And at the top of page 4 of the submissions are the three matters that were set out which I won't read. Now, in paragraph 9 the following appears:

PN234

The clear legislative intent for section 298Z was to remove provisions of the kind identified in 298Y ...(reads)... with the additional reference to purported requirements, etcetera.

PN235

And it may be perhaps commonsense and commonsense drafting to refer to purported requirements because if something is void, then it is not a requirement; it can only be a purported requirement. A provision that is void under section 298Y is objectionable under section 298Z. The nature of section 298Z and the associated section 170LU(2)(a) is apparent in the explanatory memorandum and in the Second Reading Speech. The following appears in the explanatory memorandum. This passage that is set out, your Honour, is a passage that was also referred to in the case which is sometimes called the Gordonstone case, print Q2167, and it contains the following:

PN236

The proposed new section would allow the Commission to vary an award or certified agreement to remove certain objectionable provisions ...(reads)... because of the operation of section 298Y.

PN237

And emphasis is given in this to the words "directly or indirectly requires or permits." And the submission goes on:

PN238

The reference to provisions that directly or indirectly require or permit the relevant conduct is consistent with the reference regarding section 298Y ...(reads)... or effect of the provisions under consideration.

PN239

And in my submission, it means that the Commission should take a practical view of the term that is under consideration. Now, in the Second Reading Speech there was a passage which was also referred to in print Q2167 in which the following appears, and I won't read all of it but at about the fifth line down in the quote:

PN240

The freedom of association provisions of the Act prohibit discrimination based on membership or non-membership of a union ...(reads)... provisions in existing awards or agreements which breach the freedom of association provisions should be removed.

PN241

And I won't read the last sentence there. And it is submitted that it follows from this and from section 298Y, that section 298Z is concerned with the removal of provisions that are void by reason of their express or implied terms and by reference to their direct and indirect effects. This results from the desire of Parliament to remove potentially discriminatory provisions, albeit void, from certified agreements and awards because of the impact that they may have in the employment relationship.

PN242

Paragraph 13 refers to a beneficial construction being given; that is, it is submitted, that the intent of 298Y and 298Z is to be protective and be beneficial, and to protect the rights. And as section 15AA of the Acts Interpretation Act requires, one is to look at a construction that promotes the underlying purposes of the Act, and the underlying purposes of the Act include, of course, freedom of association provisions, their objects. There is in section 3, paragraph (f), the object of ensuring freedom of association, etcetera. And also in section 298A, the objects:

PN243

To ensure that employers, employees and independent contractors are free to join industrial associations of their choice ...(reads)... or are not members or officers of industrial associations.

PN244

So, in my submission, your Honour, a protective approach should be taken to these matters and not a limiting approach which would restrict protection to people who have been identified by the Parliament as being in need of protection. And that would be consistent with the desire of Parliament to look at not only expressed terms but implied terms, and not only direct effects but indirect effects. So it is a broad enabling approach that is taken by the Parliament.

PN245

Now, I want to go on to the two aspects of these protective provisions: the first in respect of requirements, and the second in respect of the permission that is given. In regard to require, the section is concerned with provisions that disclose a basis, criteria or discrimen for decision-making that would be impermissible under part XA. A particular provision would be void if the action was carried out for a reason that is identifiable from the terms of the instrument and that reason constituted an ingredient of a contravention of a provision of part XA.

PN246

Paragraph 16 should read the "adoption" rather than the "adaption." Perhaps it could also read "adaption" but nothing much turns on it. The adoption of the terms of section 298Y and section 298Z maintains the need to consider the effect of the provision - and that is apparent in paragraph (b) of 298Z(5) - and consistent with that, the action which the provision directly or indirectly requires when considering whether a provision is objectionable. The provision is not to be construed in a narrow way.

PN247

It is significant, your Honour, that the Parliament has not limited its concern about these agreements or arrangements to requirements that appear within them but also to the permission that is available, or purportedly available under them. Section 298Y makes for it a provision that permits or has the effect of permitting a contravention of part XA. A party to an agreement cannot call in aid such a provision as a reason for engaging in action in contravention of part XA or as a defence to a claim that his or her conduct would amount to such a contravention.

PN248

So one looks at the provision and asks the question: does this appear to permit the carrying out of the kind of conduct to which it refers? Whether a clause has the effect or purported effect of permitting or indirectly permitting a contravention of part XA depends on the terms used. A provision is void if it might be called in aid as an excuse for or justification of action that is specified or contemplated in the clause and which, if carried out, could be in contravention of part XA.

PN249

To decide whether a term permits or purports to permit, has the effect of permitting or purports to have the effect of permitting is necessary to consider the terms of the provision in question and to determine whether it could operate in a way that would provide apparent permission for conduct in contravention of part XA. In common with the requirement aspect, it is necessary to consider the effect of the provision and, consistent with that, the actions which a provision directly or indirectly permits. And again in respect of the permission aspect, the provision is not to be construed in a narrow way.

PN250

Now, it is submitted that the terms of section 298Y and 298Z, particularly when enlightened by the extrinsic material to which I have referred, make it clear that the inquiry is not limited by the express terms of the provision of the industrial instrument. The legislative intent is concerned with implied provisions and indirect effects. And the next part is important, your Honour. The objectionable provisions text in section 298Z does not require the Employment Advocate to establish that, for example, the relevant action is more probable than not or is likely. It is not concerned with the probabilities or likelihood of something happening, nor does it depend upon the willingness of the employer to act in accordance with the term or to invoke it in the course of its business. The real concern is whether it could be used as a justification for, or as an excuse for, or as a reason for the action which is contemplated, and the effect and the consequences that are anticipated by that clause.

PN251

So one has to look at the clause and see what it is about: what it says, what the express terms are, what the implied terms are, what its direct impact would be, and what its indirect impact would be. So it is a characterisation question and it is quite clear that, in my submission, that when one looks at the MMS clause it is void and it can be removed, and should be removed, under section 298Z.

PN252

In the Re Accurate case, the Full Bench referred to an ordinary termination of employment provision that might appear in, or would normally in an industrial instrument. And the Full Bench made the point that such a clause doesn't carry with it any implications or questions; it is benign or neutral in its nature. I don't think they use - they didn't use the terms benign or neutral but that is what they meant, that it was a term that was benign or neutral and there was no reason to question that. But, in my submission, when one has a look at the MMS clause, clause 27, it is not benign or neutral. It is concerned about something which - or a course of action which, or conduct which would be in breach of part XA, and it purports to require it and purports to give permission for it.

PN253

Now, in paragraph 23 it is said that the MMS agreement involves several aspects. First of all, the company has agreed to a requirement to do the things that are covered by the clause. Secondly, the employer is required to contact members of the two unions who are unemployed. And, third, there is a requirement to give advice that there is a vacancy and, by necessary implication, to make job offers to the persons contacted. Now, it is submitted that this is a provision which is designed and has the effect to give a preference in employment, to give an advantage to those who are members of the two unions to employ them in preference to members of other unions and non-unionists, and it is designed to exclude those people from employment when there is a member of the AMWU or the CFMEU available to do the work.

PN254

THE SENIOR DEPUTY PRESIDENT: Is the implication necessary to a finding that the clause is objectionable?

PN255

MR LAWRENCE: It wouldn't be necessary but the implication is also there and does make it objectionable. On the face of it, it is an exclusionary provision and, in my submission, you don't have to go to implications or what is indirect or what is implied in it.

PN256

THE SENIOR DEPUTY PRESIDENT: So without the implication, what is the objectionable part?

PN257

MR LAWRENCE: It gives preference because it gives preference to members of those two unions.

PN258

THE SENIOR DEPUTY PRESIDENT: What is the nature of the preference?

PN259

MR LAWRENCE: They are taken first, they are employed first.

PN260

THE SENIOR DEPUTY PRESIDENT: No, but that is the implication, isn't it, the employment? Absent the implication, what is the objectionable part?

PN261

MR LAWRENCE: Sorry, the - when you say the implication, you are referring to the implication that I referred to in paragraph (c).

[10.13am]

PN262

THE SENIOR DEPUTY PRESIDENT: Yes.

PN263

MR LAWRENCE: Yes, I accept that it is the necessary implication that makes this objectionable.

PN264

THE SENIOR DEPUTY PRESIDENT: So if I wasn't able, for whatever reasons, to find that there was such an implication, then I couldn't find it was objectionable.

PN265

MR LAWRENCE: I think that is right, your Honour. There are other implications that go beyond that. I put - the position is put this way. Supposing there was a contract between a developer and a contractor in similar terms; that is, the contractor was, for the purposes of recruiting staff or filling vacancies, to contact non-unionists first, suitably qualified. That would carry with it the necessary implication that they were to be employed, as I say, in paragraph 23(c). You asked the question what is it there for? What is the understanding of the parties? What is the implied term? The implied term is that those people will get preference in employment. If they are offered the job first, then if they choose they will get the job first, and also by implication, a further implication, other people will be refused employment.

PN266

Now, if you see a term like this in a contract and there is some dispute about whether or not it was complied with, you ask the question, well, what was the intention of the parties? What was the intention of the parties to this agreement, whether it be a common law agreement or a certified agreement or an arrangement that is not even reduced to writing. It is not for any purpose other than to employ them first if they choose to be employed, to give them the right to be employed. It carries - - -

PN267

THE SENIOR DEPUTY PRESIDENT: And if it was a contract situation, and I was seeking to ascertain the intention of the parties, wouldn't I rely on evidence?

PN268

MR LAWRENCE: You don't need to - well, you can look at the material here, you can look at the terms. To understand what it means, you can look at the terms. You don't need to, and in some cases you can't look at extrinsic material. But what purpose does it serve if it doesn't give these people, the beneficiaries of this term, the right to be employed? That is the real question. What purpose does it serve if it doesn't serve the purpose to which I have referred, and that is the necessary implication and one can't say that this obligation is merely complied with by passing on the information.

PN269

The use of the word "first", for example, makes it clear that there is a priority there. They are to be contacted in preference to others. There is certainly no doubt about that. There is no implication needed. These people are to be contacted. The implication is - we say necessary implication - that they are to be offered the job, and that follows. You don't need to go to extrinsic material in order to come to that conclusion. It is the intention of the parties, having used those words.

PN270

So the necessary implication that I have just been referring to is the one to make offers to these people, job offers to these people, to the exclusion of non-members of the two unions and the effect of that, the indirect effect of that, the necessary consequence of that, is to deny employment or employment opportunities to people who don't fall within this category. In my submission it is intended to be and has the effect of being a preference clause, and a clause by which members of the two unions will be advantaged, and a clause by which the employer is required to employ them, and furthermore it purports to permit the employer to do this.

PN271

It would mean that an employer would be able to come along and say, in a misguided view of 298Y, say, look, I did what I was required to do under the agreement, or I did what I was permitted to do under the agreement. What that would mean is that the employer would be able, purportedly, but not legally able, to say that in bringing about the preferential employment of union members, he was simply following the terms of the agreement.

PN272

Now, the consequence of this, the indirect effect of this, the practical consequence of this can be expected to be the preferential employment of union members. And the clear intention of Parliament is to avoid preference and to protect people who are not in this case unionists or members of those two unions, and a beneficial approach would be a protective approach to those people. In my submission the approach that is set out in this document would take into account not only the express terms, but the implied terms in the agreement and would deal with the direct effects and the indirect effects.

PN273

Again, one only has to illustrate it by reference to the example that I gave before where a developer requires through a contract that non-unionists be approached first and that the contractor should go to non-unionists in - or workers other than members of the AMWU or the CFMEU and if they are qualified, then they should be approached.

PN274

Indeed, just in relation to that word "qualified", again the words "members who are suitably qualified" also gives a flavour as to what the provision is about. It is not simply about contacting members of the union as if by way of a notice board placement, but it is designed to identify an obligation to contact suitably qualified people; that is, people who will do the job and people who are expected in those circumstances to come on board if they choose to, and if they choose to, then of course, that will exclude others who are not in the category.

PN275

THE SENIOR DEPUTY PRESIDENT: Of course, it may be the intention of it is to just make sure that those members know about the vacancies as opposed to the haphazard looking it up in the paper.

PN276

MR LAWRENCE: But it doesn't look like that, it doesn't look like that. And it is - contacting them first reveals what it is about. It is not a job advertising process. One would be suspicious immediately that it is only directed towards advertising amongst union members, but when you see the obligation to do it first, the implication there is that these people are to be given a preferred position.

PN277

Now, it will be interesting to see what the union says it means, there is some reference to that aspect in the submissions filed on behalf of the union, but in my submission it is not a vague directionalist exercise that the employers - that don't have any consequence for the employers in regard to engagement decisions, it is there for a very clear purpose, and one can't close one's eyes to what is implied in the term, what the indirect effects will be and what the practical consequences will be.

PN278

If there was a bulletin board, for example, where jobs were made known to union members, that is if there was a board at the - a union notice board on the plant and there was some requirement on an employer to put impending vacancies, a notice of impending vacancies on the board, then that could be perfectly innocent and not carry the connotations that I have referred to. That would advertise, that would give union members an opportunity or would give the union an opportunity of knowing what was coming up and making that information available to its own members, but that is not what this is concerned about.

PN279

THE SENIOR DEPUTY PRESIDENT: So if they are required to put it on the union notice board first, that would be all right?

PN280

MR LAWRENCE: Well, it would not - perhaps one comment could be made about that as can be made about clause 27. They are both not concerned with the employer/employee relationship, so I wouldn't want to say that such a provision in an agreement would be all right first of all because at that point - and I do seriously make the point that clause 27 is not a clause about the employer/employee relationship, but that is an incidental question - or a question that you don't have to determine in these proceedings, your Honour.

PN281

THE SENIOR DEPUTY PRESIDENT: Quite.

PN282

MR LAWRENCE: But if there was a clause or a practice - perhaps I could leave it at a practice - if there was a practice in a company of circulating impending vacancies and a practice to put those vacancies on the notice board as well as notifying other places, but it was one of a number of ways of advertising vacancies, then on the face of it there would be nothing wrong with it, and subject to the requirements of the employer/employee relationship aspect, if there was an agreement to do that, then it wouldn't carry any implication because it wouldn't be giving a priority to union members.

PN283

One should be very careful in these cases in drafting something that would be acceptable. You would have to look at the term later on. I think all parties would want the right to look at it later on, but it certainly would be a contrast to the kind of provision that is here.

PN284

Now, the next paragraph, paragraph 24, really just states in summary form the matter that I have covered. There are some authorities set out in paragraph 26 that deal with preference clauses and they are straightforward and well known to the Commission. There is also reference to two decisions - or actually three decisions, two of this Commission and a Federal Court judgment, in paragraph 25 that deal with the rights of members of particular unions, and in the Toyota case which is set out in two prints, it was recognised that the protection of Part XA extends to members of unions other than what might be called the favoured union.

PN285

In that case the matter was finalised by the giving of undertakings. Now, undertakings were accepted at that stage in the registration - in the certification process which is, of course, a different process to the one here. In AWU v John Holland Proprietary Limited the capacity of Part XA to operate in respect of inter-union issues and disputes was accepted, but your Honour, it was not subject to detailed analysis, it seemed to be assumed. There were a couple of authorities cited, but Goldberg J didn't go into the matter in detail. But nevertheless, as far as the Commission is concerned, at least one member of the Commission, the protections in Part XA do extend to members of the particular unions.

PN286

Paragraph 26 simply summarises some points that I made before, as does paragraph 27. Paragraph 28 simply says that - identifies the particular parts of Part XA that are relied on, and they are the ones that are set out in the application.

PN287

THE SENIOR DEPUTY PRESIDENT: Would it make any difference, Mr Lawrence, if I actually called the parties to this agreement and said, what is your intent?

PN288

MR LAWRENCE: Sorry, your Honour?

PN289

THE SENIOR DEPUTY PRESIDENT: Would it make any difference if I actually called the parties to the agreement and said, what is your intent?

PN290

MR LAWRENCE: The intent of the agreement would have to be determined by the clause itself, and it would have to be determined in an objective way, not dependent upon the subjective intentions of the parties, and it would have to take into account what might be the indirect or implied meanings in the clause as determined from time to time by decision makers within the organisation.

PN291

One couldn't take such a subjective view because you could potentially have different answers to the matter, depending on whether it was company A or company B. The same clause could appear in a number of certified agreements, and one could not have a different answer to the words according to whether it was company A, company B or company C. The task of the Commission - - -

PN292

THE SENIOR DEPUTY PRESIDENT: Well, in this instance it will be one company, it is an agreement applying to one company. So how does that differ from the undertaking arrangement?

PN293

MR LAWRENCE: From the undertaking?

PN294

THE SENIOR DEPUTY PRESIDENT: Yes.

PN295

MR LAWRENCE: Well, the undertaking that was given in the Toyota case was an undertaking as to how things would occur, and that was acceptable to the Senior Deputy President at that stage, despite the excluded union's protests, but that was justified then - or could only be justified on the basis that it was the exercise of a power in certification. There is no ability for that to be done here. It would be necessary for the union and the employer - we haven't got the employer here - it would be necessary for the union and the employer to say, these words mean and can only mean on their terms such and such and not what the Employment Advocate says they mean or what their indirect or implied effects would be - implied terms or indirect effects.

PN296

Now, in my submission, the Commission shouldn't venture into subjective intentions of the parties, but look at the words as they appear and ask the question, could they be used or might they be thought to be available for the kind of actions which I have indicated? What it amounts to here is that the employer - we say what an employer can do or the conduct which we point to would be the employer, knowing a vacancy was available, would approach - either through a union office or through job delegates or through a list supplied to the company of unemployed union members, would approach them and would tell them what is available. And we say if they are suitably qualified, then those employees would - those unemployed people would be entitled to take up the offer. If those people wanted the job, then they would get it under this arrangement. The employer would not be entitled to say, no, I am telling you about it, but I am not offering you the job, and if the employee wanted it, then the employer would have no say in it.

PN297

In those circumstances, the employer would be able to say, well, this agreement, looking at it, enables that to be done. It says I can do that, that I can neglect these non-unionists, go to the unionists who are unemployed and offer them the job and they get priority. Well, the answer to that is that it purports to do that, but it doesn't - it is not a valid - it is not a legal provision, it is a void provision. That is why I referred to the permission aspect. When you look at what might be permitted or purported permitted, the question is, can it be called into aid, if it was valid, could it be called into aid as a defence against a preference in employment? And - - -

PN298

THE SENIOR DEPUTY PRESIDENT: It is pretty hypothetical because it is void.

PN299

MR LAWRENCE: Well, that is right, and that is why one gets purported - purported permission. But as the Second Reading speech made clear, you don't - the Parliament doesn't want to have clauses in awards - in certified agreements which are void, but which some - I will read the sentence:

PN300

Leaving aside the futility of such an exercise, there is a real risk that some employers and employees may mistakenly take these void clauses at face value, disadvantaging employees and breaching the Act in the process.

PN301

So that is why an employer may call into aid or seek to call into aid - it would be futile, a provision - this provision in order to justify doing what I have referred to, giving a job to those people in preference to non-union members and excluding non-union members. In the Re Accurate decision it is said that one needs to look at the words used. You start with the words that are used, and in my submission, you can't modify those by the subjective intentions of the parties even if you could find out what they were. The question is can this provision - is it capable of being used, mistakenly used to do what is contemplated by the clause.

[10.40am]

PN302

Now, that is all I wanted to say in relation to the submissions in the first matter. We have submissions on behalf of the AMWU which have been adopted by the CFMEU in this first matter. Paragraph 14 of the submission on behalf of the unions takes issue with the implication aspect, and in particular it is said the Employment Advocate seeks to right into the agreement words that are not there. Now, for the reasons which I have given in my submission, that submission can't be made out. Again, for the reasons which I have given in my submission, the point made in paragraph 15 is not a valid point. In paragraph 17 it is said that:

PN303

In the event that the Commission finds that the provision is objectionable, we submit that the Commission is able to vary the clause to remove the objectionable provision.

PN304

In my submission that course is not available in these proceedings, but in any event, it is not simply a case of blue pencilling, even if blue pencilling is available in these proceedings - or on the basis that blue pencilling is available in these proceedings, you couldn't move to make this provision other than - you couldn't move to make it unobjectionable. It falls; it is not capable of blue pencilling. Now, in relation to the other matters, what I might call the South Australian matters, the provisions in the first two, the Brownwood Panels and the Port Adelaide - - -

PN305

THE SENIOR DEPUTY PRESIDENT: Can I just - sorry, just before you go into that, Mr Lawrence, could I just ask you about that.

PN306

MR LAWRENCE: Yes.

PN307

THE SENIOR DEPUTY PRESIDENT: If one removed the word "first", would that overcome the problem?

PN308

MR LAWRENCE: No. No, it doesn't.

PN309

THE SENIOR DEPUTY PRESIDENT: Why do you say that?

PN310

MR LAWRENCE: Well, first, because the point of contacting them is to give those people preferential engagement.

PN311

THE SENIOR DEPUTY PRESIDENT: The reason I raise that was because one of the submissions you previously put in response to a suggestion that perhaps the intent of the clause was to make sure they knew about it as opposed to having to pick it up from the newspaper was that what gave the lie to that, it was put, was the word "first".

PN312

MR LAWRENCE: Yes, but it doesn't follow from that that it would remove the underlying objection. See, to say that - the "first" emphasises the point. I don't say that it is only the word "first" that makes this objectionable, it is the preferential treatment, the contacting of members of the union that puts them in a position to the detriment of others, and - - -

PN313

THE SENIOR DEPUTY PRESIDENT: That is a new submission, isn't it, because I thought you said the objectionable bit was the necessary implication which was the employment.

PN314

MR LAWRENCE: Yes, the necessary implication is the employment of those people.

PN315

THE SENIOR DEPUTY PRESIDENT: Yes.

PN316

MR LAWRENCE: No, I am not putting a new submission, but what - the necessary - if I can go - the necessary implication that we dealt wit earlier is the implication that is referred to in paragraph 23(c).

PN317

THE SENIOR DEPUTY PRESIDENT: Well - yes, yes.

PN318

MR LAWRENCE: There is a requirement to give advice that there is a vacancy and, by necessary implication, to make job offers. And, see, that is the implication there and that doesn't depend on them being contacted first, is it the job offer, and I think that - the point I was making was it wasn't just a general distribution of information, and that is how I got to the sign on the wall, on the notice board. It is not the dissemination of information that positions are available; what this is concerned about is to make job offers to them. And again, immediately underneath para (c):

PN319

By this process, the company gives preference in employment to members of the AMWU and the CFMEU over those who are not union members or who are members of other unions.

PN320

So it doesn't depend on them advertising - sorry - it doesn't depend on the word "first", the construction that we put which we say is the appropriate construction carries with it, even without the word "first", the implication that these people would be made the job offers. There is one other matter, too, that the blue pencilling rule is only available if it would be consistent with the - generally consistent with the intention of the parties and where it doesn't make a substantive - in my submission it also only applies in circumstances where there would not be a substantive variation to a clause.

PN321

And in these circumstances, if it was simply an advertising - if it was thought the blue pencil would be available to turn this into a simple advertising clause, then that is a very different clause to the clause that is in the agreement at the moment. There is a substantive difference. And as the Commission has made clear in - I think it was - yes, it was Tay Brothers, I think, that you can't make a substantive change by way of blue pencilling, it is a matter that needs to go by way of variation under the provisions of the Act. It is not the Commission's task to bring about a substantive amendment.

PN322

The other thing is that, as I said before, this is a provision which - clause 27 is a provision which does not relate to the employer/employee relationship, it is independent of that. The sort of provision that we have been talking about that would merely advertise a position is also not a provision that is to do with employer/employee relationship, and in my submission the Commission should not use the blue pencil rule in order to save a provision that is not appropriate for a certified agreement.

PN323

That is, in exercising a discretion to use - or in exercising a power to use the blue pencil rule, the Commission, generally speaking, has to be cognisant of the requirement that the certified agreement is to cover matters relating to the employer/employee relationship, and the Commission should not exercise the blue pencil rule in order to save a provision which would otherwise fall completely if what is saved is something that is not relevant to the - does not pertain to the employer/employee relationship.

PN324

To simply - even if it were considered to turn this into a mere advertising clause, the Commission shouldn't exercise the power to do that because it would be putting in a term substantively different and one which does not pertain to the employer/employee relationship. And finally, in relation to that, the submission I make is that the Act, section 298Z, requires that the Commission remove the objectionable provision, not amend it or vary it, and so therefore the primary position is the blue pencil rule is not available, but even if it were, the limitations that are there that I have mentioned would prevent the blue pencil, and certainly the blue pencilling of the word "first".

PN325

Now, in relation to the South Australian matters, your Honour, the first two agreements that are referred to in the submissions relate to the CFMEU which is not represented today. There was a communication received by my instructors from the CFMEU, which I understand was also sent to the Commission, and the covering note there was this - or in part:

PN326

The union contends that the OEA should accept the AIRC-approved changed in this case also due to precedent.

PN327

Now, it was only by chance, your Honour, that I came across a decision of the Commission in regard to this agreement, which is - or part of which is attached. It is the Auspine Tarpeena Agreement. It was put forward to the Commission for certification earlier this year. I am sorry, your Honour, I just haven't got the - there is being passed to you at the moment a folder of the decisions and included in that, which I think is evident from what you see in front of you, a decision Senior Deputy President O'Callaghan on 21 May this year. It is print PR917840 and it concerns an attempt to certify an agreement which had a couple of provisions in it that objection was taken to, or concerns were expressed about. Could I ask you to go to the second page of the document, paragraph 11:

PN328

This decision primarily relates to a union notification provision contained in the proposed agreement. Clause 1.7.2 states -

PN329

and then at the top of the next page -

PN330

The company shall supply to the relevant union officers every three months a list of all employees covered by this agreement.

PN331

Could I now ask you to go to paragraph 16 of the decision and it set out there what the debate was about clause 1.7.2. I won't go into - it is not necessary in these proceedings to go into the argument, but the end result of it was that his Honour found that 1.7.2 was objectionable and he thought that it should be removed. At paragraph 38, after expressing that conclusion, he said:

PN332

In the course of the hearing on this matter I sought clarification on a number of agreement provisions -

PN333

which he sets out. And then in paragraph 38 at the fifth point he says:

PN334

I have already noted that the parties have categorically confirmed that notwithstanding the provision of clause 10 of the agreement, that the agreement does not intend or indeed does establish the requirement for union ...(reads)... potential difficulties with the certification of any replacement agreement, this provision should be clarified.

PN335

The document that has been sent to the Commission doesn't have - there is a document sent by the CFMEU to this Commission - or the Commission in these proceedings, I should say, doesn't have 1.7.2, nor does it have clause 10.2.11. Now, I just refer to that decision, your Honour, in order to make sens of what was communicated to my instructor and to the Commission in relation to what the Commission had already certified.

PN336

So my reading of it is that this decision of Senior Deputy President O'Callaghan was used to support a view that certain provisions were acceptable and not objectionable, and again from the communication from the union, it would appear that the union are saying that clause 1.7.1 has found to be acceptable or no objection was taken to it, and it will be approved. Now, 1.7.1 is:

PN337

For the purpose of this agreement a single bargaining unit has been established at Auspine Limited, Tarpeena. It comprises representatives from the company and the unions who are parties to this agreement.

PN338

Now, that single bargaining unit is in a different form - or that clause dealing with a single bargaining unit is in a different form to the ones that are being attacked in these proceedings. I think that is the only point of relevance that appears to come out of the communication from the CFMEU and Senior Deputy President O'Callaghan's decision.

PN339

THE SENIOR DEPUTY PRESIDENT: In the Auspine decision, clause 1.7.1 was found to be all right, was it?

PN340

MR LAWRENCE: It appears - the decision indicates it wasn't even challenged, it wasn't questioned. Now, I did - just as a matter of interest, your Honour, I did find - and I haven't got copies of this, but I don't think it is necessary to give copies - I did find a decision or an award variation in regard to Auspine. In 1996 an agreement was certified by Commissioner Lewin in relation to Auspine, and the agreement contained clause 6 which was concerned with - or headed Single Bargaining Unit, and it read:

PN341

For the purpose of negotiating an enterprise agreement in accordance with the decision of the October 1991 National Wage Case, a single bargaining unit comprising representatives from employees, the union and the company has been established for the Auspine Limited Tree Farms Division situated at Penola Road, Tarpeena, South Australia.

PN342

And then it goes on to set out the composition of the single bargaining unit. Now, what appears to have been the case was that that single bargaining unit was set up back in 1996 and the reference to it has continued through to the present time. It doesn't purport to do anything, it is simply the establishment of a single bargaining unit. It doesn't purport to represent people who are not members of the union. It probably is an anachronism in some senses because things have moved on since 1991. But that might explain why it is there and it does look benign and one can understand why there was no issue raised about 1.7.1 and the single bargaining unit.

PN343

What we say is that that is a very different provision to the ones which are in the two CFMEU clauses, if I could call them that, in the Brownwood Panels Agreement and the Port Adelaide Timber Agreement. Now, could I go to the submissions in relation to those three South Australian matters, skip over the matters that I have already covered in reference to the MMS matter, and go to paragraph 23:

PN344

Clause 10.1 of the Brownwood Agreement contains a representative unit clause which has two parts ...(reads)... The Commission has held that clauses of a similar kind are objectionable provisions.

[11.06am]

PN345

And there are two cases there; I think both of them are referred to in the previous submissions, but these are exclusive representation clauses. What we say is that, first of all, exclusive representation clauses or purported exclusive representation is not permissible. It is a - they are objectionable provisions. And secondly, properly characterised, properly characterised, in accordance with implied terms and indirect effects, and the practical approach, those provisions, the various parts of clause 10.1, do amount to an exclusive representation clause. And could be used, and can - would be expected to be used, to support that sort of practice or conduct within the firm.

PN346

It is also said in paragraph 25 that the first part of the representative unit clause is also concerned with giving the CFMEU an advantage over other unions and establishing it as the representative of union members on site. A provision that deprives or purports to deprive members of other unions from representational benefits may constitute an objectionable provision. Well, in my submission, while it might be appropriate, in general, to say it may constitute an objectionable provision, in this particular case it does constitute an objectionable provision. And then there is a reference to the cases that I referred to earlier today.

PN347

So it is submitted that that representational part of the clause is concerned with conduct of the kind set out in section 298K(1)(b), (c) and (e) for the reason set out in section 298L(1)(b). Now, the second part of the representative unit clause is concerned with and purports to give CFMEU members an advantage over employees, in that it provides that the CFMEU membership is a positive factor. And it is referenced there to CPSU and Telstra, where it was found that a message sent had the - message sent within the organisation had the effect of - or could be expected to have the effect of giving certain employees more favourable treatment.

PN348

And it is submitted that this is the very kind of provision which part XA strikes at. And part XA strikes at the conduct which is directed at giving some people, union members, or non-union members, in the appropriate case, favourable treatment. And then there is a reference to the preference - examples of where preference clauses have been deleted. Now, what is said in relation to the Brownwood agreement is adopted in relation to the Port Adelaide agreement, and that is apparent in paragraph 30. The two agreements are almost word for word, except that one of them, the Port Adelaide one, has sub-paragraphing, or the paragraphs are numbered.

PN349

In my submission, all parts of those should be removed as objectionable provisions. They are part of a scheme - each aspect is part of a scheme, and in my submission there is no justification for blue pencilling when you have got a scheme, a composite scheme. And I say that, having in mind, your Honour, that there is in each of them the following:

PN350

The employer will encourage all employees to be members of the CFMEU.

PN351

Now that, as your Honour knows, has been the subject of some discussion in decisions, particularly in Clough Engineering, Munro J referred to it. It was also in one of the very early - it was a clause that appeared in one of the very early - in applications by the Employment Advocate in the PR Dawson matter, which actually pre-dated - but I think it pre-dated the Clough decision. But in that one there was a clause headed, Preference of Employment:

PN352

Preference of employment will be given to financial members of the Union.

PN353

And then it went on to say:

PN354

Each employee of the company will be encouraged to become and remain a financial member of the Union.

PN355

And the Employment Advocate sought the removal of the first sentence, but not the second sentence.

PN356

THE SENIOR DEPUTY PRESIDENT: Yes.

PN357

MR LAWRENCE: So in PR Dawson, the Employment Advocate didn't seek the removal of what might be called, an encouragement clause. And as you know, there have been a number of cases since then that have accepted encouragement clauses. It might be said that the encouragement clauses are becoming more encouraging, and perhaps at some stage there might be some reason to have a look at them. But this is a bare - what appears in this sentence, in each of these two agreements, is what could be called a bare encouragement clause.

PN358

And I would not put to your Honour that in itself it is objectionable, because of the authority. But what I do say is this. That is part of a scheme and ordinarily one - and one shouldn't blue pencil it. It would fall with the rest. But there is another reason for not saving it, and that is the reason I mentioned before. That to save it would keep something that doesn't relate to the employer/employee relationship. And I don't need to repeat what I said before about that aspect. So in my submission, the Commission could and should remove both of those clauses in their entirety in the CFMEU agreements. Now, in relation to - - -

PN359

THE SENIOR DEPUTY PRESIDENT: Could I just ask you on the - - -

PN360

MR LAWRENCE: Yes.

PN361

THE SENIOR DEPUTY PRESIDENT: Why do you think it says, single union employee representative unit, as opposed to single union representative unit?

PN362

MR LAWRENCE: Well, because it purports to cover the employees - represent the employees.

PN363

THE SENIOR DEPUTY PRESIDENT: But the Union represents employees, doesn't it?

PN364

MR LAWRENCE: Yes, but the Union - what we say that this clause is intended to do, is to give the Union the right to represent, or the status of representing all employees, not just members of other unions, but people who are not union members. It purports to cover all employees. We say it is - when you read it is an exclusive representation clause.

PN365

THE SENIOR DEPUTY PRESIDENT: You don't think it is a single unit in which they discuss workplace improvements, efficiency and productivity, which comprises the Union and employees?

PN366

MR LAWRENCE: Well, it is the - it might be the means by which the CFMEU does it, but the CFMEU is, as the term is made clear, in my submission, the CFMEU does it as a representative of all employees. See, obviously you would have discussions taking place, a forum established, for some exchange of views between the employer and the Union on behalf of the employees. Now, it could be in a defined organisation or generally, that is outside a defined organisation. But what this clause attempts to do, and its purpose, is to represent in - all of the employees.

PN367

THE SENIOR DEPUTY PRESIDENT: So is the unit just the CFMEU?

PN368

MR LAWRENCE: Yes.

PN369

THE SENIOR DEPUTY PRESIDENT: Well, why then - this is a clause under the Wood's one say, all members will be part of it? It doesn't seem to just - it says, all members will be part of it. It doesn't seem to envisage that it is only going to comprise management and a representative from the CFMEU?

PN370

MR LAWRENCE: The CFMEU is the single employee - single union employee representative unit, it represents. It constitutes the unit, and it represents all the employees.

PN371

THE SENIOR DEPUTY PRESIDENT: But the third paragraph says that all members of the CFMEU will be part of that unit.

PN372

MR LAWRENCE: Yes.

PN373

THE SENIOR DEPUTY PRESIDENT: So it seems to envisage that each individual member is part of a unit.

PN374

MR LAWRENCE: Yes, yes.

PN375

THE SENIOR DEPUTY PRESIDENT: Rather than just one person representing the CFMEU.

PN376

MR LAWRENCE: Yes, but that - the single union employee representative unit is a unit - - -

PN377

THE SENIOR DEPUTY PRESIDENT: It is a single unit.

PN378

MR LAWRENCE: Yes, yes, yes. And all CFMEU members are part of it. And it represents the employees, not just union members.

PN379

THE SENIOR DEPUTY PRESIDENT: Why are not other - which part of it says, other employees are not part of it?

PN380

MR LAWRENCE: The first part - I am looking at the Port Adelaide one.

PN381

THE SENIOR DEPUTY PRESIDENT: I was looking at Brown's, I must say, but - - -

PN382

MR LAWRENCE: Yes, well stick to that one, your Honour:

PN383

The parties agree that both management and employees employed at the site where this agreement has application shall develop a single union employee representative unit.

PN384

Right, and management will encourage - the next part:

PN385

The company will not challenge the right or ability of the CFMEU to constitutionally cover any employee covered by this agreement.

PN386

And what this is designed to do, and with having a single union employee representative unit, is to have the single union, the CFMEU, as the employee representative unit, and it is comprised of its own members. So the unit that represents the members - no, sorry. The unit that represents the employees that is recognised under this clause is the unit that is comprised of CFMEU members, and that is the vice of it. Because the CFMEU, the union, and its members, are there operating as a representative unit. And it would mean that the employer would be required, or permitted, to recognise that as the representative of the employees. So that is the vice that we point to, and it's in substance, an exclusive representation clause.

PN387

THE SENIOR DEPUTY PRESIDENT: Why wouldn't I read the clause as - because this comes under the heading, Workplace Improvements, Efficiency and Productivity, right? Why wouldn't I read it, as they've got one unit they want to negotiate with on workplace improvement, when they want to have their negotiations, they want to meet them all at once. They will have one unit, and it will be an union employee unit.

PN388

MR LAWRENCE: And employer might want to have one unit to deal with.

PN389

THE SENIOR DEPUTY PRESIDENT: Yes.

PN390

MR LAWRENCE: But to have it only comprising CFMEU members, and to have the CFMEU dominate there, is to give the CFMEU the control of the - one side of the negotiating process.

PN391

THE SENIOR DEPUTY PRESIDENT: So in these first three parts, is the offending bit the compromise - comprise, sorry?

PN392

MR LAWRENCE: Well, no, no, you have to read the lot together. But that is part of it. They comprise it, the CFMEU comprises it. And - - -

PN393

THE SENIOR DEPUTY PRESIDENT: The members comprise it?

PN394

MR LAWRENCE: Yes. Yes. There would be nothing wrong with an employer dealing with CFMEU members, as such.

PN395

THE SENIOR DEPUTY PRESIDENT: Yes.

PN396

MR LAWRENCE: There would be nothing wrong with that. And you would expect that to happen. But when you have got that, in conjunction with a role given to it, and recognised in the introductory words, that it represents the employees - - -

PN397

THE SENIOR DEPUTY PRESIDENT: Where is that?

PN398

MR LAWRENCE: It is in the first sentence:

PN399

It shall develop a single union employee representative unit. Management will encourage the development of a single union employee representation unit, by offering to each new and existing employee detailed information on membership of the predominant union on site.

PN400

THE SENIOR DEPUTY PRESIDENT: So you read it as a one union representative unit? Why can't it be read as, we're only going to have one unit we're going to negotiate with, and everyone is going to be in it?

PN401

MR LAWRENCE: Yes, well, it doesn't say that, and in fact suggests the opposite. It says the opposite because it says:

PN402

... all members of the CFMEU shall comprise it ...

PN403

"Shall comprise" that is exclusionary. That is an exclusionary term. They are the only ones. If it is said, there shall be a representative unit of employees comprising members of the CFMEU, members of other unions, and non-unionists.

PN404

THE SENIOR DEPUTY PRESIDENT: Yes.

PN405

MR LAWRENCE: Then it would be clear that it would be simply a representative unit in which no representative rights were given to a union in respect of people who are not unionists.

PN406

THE SENIOR DEPUTY PRESIDENT: But we have to get the third paragraph before we come to that, don't we?

PN407

MR LAWRENCE: You have to read it together. The point about this is that to understand it, you have to read all the sentences together. You say, well what does this mean? And it means that the CFMEU becomes the representative. It purports to have the CFMEU and its members, be the representative, and the single and only representative of the employees of this company. That is the vice.

PN408

THE SENIOR DEPUTY PRESIDENT: Mm.

PN409

MR LAWRENCE: And if it didn't do that, if it were simply - on one hand, simply establishing a group of CFMEU members who would not be the single representative unit, or on the other hand, if it established a group, a unit that comprised of all employees without regard to union membership, that is in which the CFMEU membership was irrelevant, then both would be acceptable. They would not be objectionable. But it is running - it is the form in which it appears here that causes it to be objectionable. Now, the - so that deals with the first part of the two clauses.

PN410

The second part deals with preference and in my submission, on any view of it, the second part of those two clauses just has to fall because it is a preference clause. And that is the words the employer will consider membership through to the end of the clause. Now, could I come to the Welland agreement. It again is headed, Single Union Employee Representation Unit. The others are slightly different. They are a single union employee representative unit. Now, again with this one, as with the others, the heading is an indicator of what it is about. This has similar provisions. They are to develop a single union employee representative unit. And in paragraph B:

PN411

Any employee not a member of a union, or whatever reason, shall for the purpose of identifying the predominant union, be deemed to be a member of the AWU.

PN412

Now unlike the other two agreements, it doesn't have that provision of - that members of the AWU will comprise the single union employee representative unit. And in my submission it is clear that what is intended by this, and what the effect will be, is that the AWU will be the representative of employees. There is a single unit being established, a single representative unit being established, and it will mean that the AWU will be the representative of the employees - purport to be the representative of the employees, without regard to their union membership or non-membership. Now, any debate, in my submission, is again clearly, and without any debate, in my submission, a preference clause, which has to fall.

PN413

THE SENIOR DEPUTY PRESIDENT: What do you think the purpose of clause B is?

PN414

MR LAWRENCE: Sorry?

PN415

THE SENIOR DEPUTY PRESIDENT: Clause B?

PN416

MR LAWRENCE: Clause B is a similar provision to 9.4.2 in the Port Adelaide one. The introductory part of 9.4.2 in Port Adelaide is something that the Brownwood agreement doesn't have.

PN417

THE SENIOR DEPUTY PRESIDENT: Yes.

PN418

MR LAWRENCE: But it is part of the scheme.

PN419

THE SENIOR DEPUTY PRESIDENT: What role does it serve?

PN420

MR LAWRENCE: Well, the - what role - the role it serves and the purpose of it is to establish or confirm the predominant position of, in one case, the CFMEU, and in the other case, the AWU.

PN421

THE SENIOR DEPUTY PRESIDENT: The clause says though, that:

PN422

... for the purpose of any union membership identification -

PN423

whatever that means -

PN424

any employee who is not a member of the union, for the purpose of identifying the predominant union, shall be deemed to be a member of the AWU.

PN425

MR LAWRENCE: Yes.

PN426

THE SENIOR DEPUTY PRESIDENT: I can't see where that fits in.

PN427

MR LAWRENCE: Well, it is obviously designed to give the AWU or the CFMEU, depending on the agreement, a standing and a status to support their role as the single union employee representative unit. What these clauses are concerned about is establishing a single union employee representative unit, which will represent or - which they want to represent - all employees. And they will deem non-union members, members of that dominant or predominant union. And that is an indicator that they are purporting to - the unions are purporting to speak on behalf of, and to represent non-union members, who are only their deemed members for these purposes, and an employer faced with this provision, would be required to - purportedly required to recognise the unions, the predominant unions, the CFMEU or the AWU, as the representative through their single union employee representative unit, of all employees.

PN428

THE SENIOR DEPUTY PRESIDENT: Do you say that in paragraph (c), the reference to, single union employee unit, is a reference to the single union employee representative unit?

PN429

MR LAWRENCE: In (c)?

PN430

THE SENIOR DEPUTY PRESIDENT: Yes, for the AWU one ..... for Welland.

[11.33am]

PN431

MR LAWRENCE: What (c) does emphasise is that the single union employee representative unit is comprised of AWU members and it purports to give them priority over others.

PN432

THE SENIOR DEPUTY PRESIDENT: But everyone is deemed to be a member of the AMWU, doesn't they?

PN433

MR LAWRENCE: No, it is for - no, for the purpose of identifying the predominant union, they are deemed to be a member. So they get their status by picking up these people, but those people are not protected because they are not the members of the single union employee unit. So the predominant union is partly there by reason of the deeming provision in (b), then once it is there or once its members are there comprising a single union employee unit, then they get priority in terms of employment, redundancy, etcetera. There is support for that in the second sentence of paragraph (a):

PN434

Management will encourage the development of a single union employee representative unit by offering to each new and existing employee detail information on membership of the predominant union on site.

PN435

And that indicates that in order to get into that unit or to develop the unit, people will be given the opportunity of joining the predominant union on site. So non-members of the union are not members of a single union employee representative unit. I think they are the only matters I need to put at this stage in relation to that second matter. Could I just say before I sit down, your Honour, we have provided a folder of documents and in - they are decisions and judgments, and some of them are referred to in the submissions, in the outline that has been filed, some of them are not, so I don't specifically rely on the ones that haven't referred to, but they are cases which may arise in the course of submissions on behalf of the respondents to these applications.

PN436

THE SENIOR DEPUTY PRESIDENT: Yes.

PN437

MR LAWRENCE: If your Honour pleases.

PN438

THE SENIOR DEPUTY PRESIDENT: Ms Gooley.

PN439

MR GRUE: Your Honour, if I could just for a second interrupt?

PN440

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Grue.

PN441

MR GRUE: The Australian Workers Union at this stage hasn't provided submissions and doesn't intend to, and I wouldn't see my presence here actually add anything to these proceedings at the moment, so with your leave I would seek to withdraw from this matter, Senior Deputy President.

PN442

THE SENIOR DEPUTY PRESIDENT: So you have nothing to put on what the Employment Advocate has put in regard to the Weller Nobolt Enterprise Bargaining Agreement 1999?

PN443

MR GRUE: We would say that it is not objectionable, but I don't have any submissions to make on that. No argument to put.

PN444

THE SENIOR DEPUTY PRESIDENT: Yes. And you don't wish to make any submissions, because now is your time to do so if you wish to.

PN445

MR GRUE: I don't feel that I am in a position to do so, Senior Deputy President.

PN446

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you. Ms Gooley.

PN447

MS GOOLEY: Thank you, your Honour. The AMWU has provided an outline of its contentions of fact and law in this matter. Is it appropriate that that be marked, your Honour?

PN448

THE SENIOR DEPUTY PRESIDENT: Yes, I will mark them all actually, but just before I do, the submissions you are making, are they only in respect of the MMS Agreement?

PN449

MS GOOLEY: Yes, your Honour. I understood that the Apex Enurca Collective Bargaining Agreement had been sorted out. There was a variation to the agreement and I think that was - that matter is no longer pressed.

PN450

THE SENIOR DEPUTY PRESIDENT: Yes.

PN451

MS GOOLEY: So it is only in relation to what is referred to as the MMS Agreement.

PN452

THE SENIOR DEPUTY PRESIDENT: Yes. Yes, thank you. I will mark the submissions that I have got.

EXHIBIT #L1 CONTENTIONS OF THE EMPLOYMENT ADVOCATE IN RESPECT OF MMS AGREEMENT

EXHIBIT #L2 CONTENTIONS OF THE EMPLOYMENT ADVOCATE IN RESPECT OF BROWNWOOD PANELS, PORT ADELAIDE AND WELLER NOBOLT AGREEMENTS

EXHIBIT #L3 FACSIMILE DATED 06/06/2002 FROM CFMEU ATTACHING PARTS OF THE AUSPINE AGREEMENT

PN453

THE SENIOR DEPUTY PRESIDENT: Apart from the contentions of the AMWU in the MMS Agreement, which I will come to, is that your understanding, Mr Lawrence, of all the documents that I should have?

PN454

MR LAWRENCE: Yes.

PN455

THE SENIOR DEPUTY PRESIDENT: I note that - and you might be able to help me in this regard, Ms Gooley, Mr Lawrence suggested the CFMEU were supporting the AMWU in respect of the MMS Agreement.

PN456

MS GOOLEY: Yes, your Honour. I understood that they sent a fax to you in May in which they adopted our submissions. That was a fax dated 28 May to yourself, the Employment Advocate and myself, and it says:

PN457

Contentions of Fact and Law on Behalf of the CFMEU. The CFMEU supports and adopts the submissions of the AMWU filed on 28 May 2002.

PN458

MR LAWRENCE: I have got a spare copy of that, your Honour.

PN459

THE SENIOR DEPUTY PRESIDENT: Yes. Yes, thank you, Mr Lawrence, because I don't appear to have it. Thank you. I will mark that document.

EXHIBIT #L4 FAX FROM CFMEU DATED 28/05/2002 ADOPTING AMWU SUBMISSIONS

PN460

THE SENIOR DEPUTY PRESIDENT: Yes, Ms Gooley.

PN461

MS GOOLEY: I don't think you have marked our submissions.

PN462

THE SENIOR DEPUTY PRESIDENT: No, I haven't marked yours, sorry.

EXHIBIT #G1 SUBMISSIONS OF AMWU

PN463

MS GOOLEY: Thank you, your Honour. Your Honour, I don't propose to go through that submission. I think it is very clear on its face what the submissions of the AMWU is putting to you which is that, to use the words from the Accurate Factory case, the clause - the first is that adverse activity is not apparent from the face of the agreement. What the Employment Advocate has come along to you and submitted is that what you have to do with this clause is read into it not one, but two implications. The first implication is that this clause in some way obliges the employer to offer employment to AMWU and CEPU members, and importantly, if he wants to bring it within Part XA of the Workplace Relations Act, you must imply into this clause a requirement, a permission on the employer to refuse to employ another person because they are not either a member of the AMWU or the CEPU.

PN464

So you have got to imply two things into this clause; that they will offer employment to and give preference in employment to the AMWU members, and will refuse to employ people who are not members of those unions. What my friend doesn't in any way give you any arguments as to why it is necessary to imply that into the clause, why there is any necessity to imply anything into the clause. It is not suggested, it is not submitted to you that the clause is ambiguous. The clause on its face - and let me read it to you:

PN465

The company commits to wherever possible when employing labour to contact unemployed AMWU and CFMEU members who are suitably qualified first.

PN466

That is the obligation on the employer. Once the employer has fulfilled that obligation in terms of this agreement, the obligations are over. It is not as though without the implication there is nothing required under the clause. The Employment Advocate says you need - the Employment Advocate accepts that you need the first implication to make this clause objectionable. We submit, in fact, what you need is the second implication to make this clause objectionable. You have to imply into this clause, because the provision of 298 that they rely on is the employer refusing to employ another person. So that is the implication you have got to rely on, that you have got to read into this clause a line at the end which says "and shall refuse to employ a person who is not a member of the AMWU or the CFMEU".

PN467

He says that you only have to ask yourself can this clause be used mistakenly, because, of course, it is void if it is objectionable, to do what is contemplated by the clause. Well, I agree. You only have to ask yourself could an employer come along and say, I refused to offer you - sorry - I refused to employ you, not I refused to offer you employment, I refused to employ you because you are not a member of the AMWU or CFMEU. And what is my excuse? This is what that clause requires me to do.

PN468

The Employment Advocate is requiring words to be written into this agreement that are not there. What they require you to write into this agreement are objectionable provisions, and they are simply not there. I suppose one might ask oneself the question that if an employer advertised for employees in a union journal, would they breach 298K of the Workplace Relations Act? I don't think so, because there is nothing in advertising in the union journal that says I am going to refuse - the mere advertising, the mere advising people that employment is available is saying I refuse to employ because of their union membership.

PN469

As put in our submissions, we do rely on the decision of Munro J in the Clough case. It is inappropriate, we say, for you to make assumptions about - no, I take that back, sorry. We don't think you need to make any assumptions about the intentions of the parties, nobody is submitting the clause is ambiguous, and in the Clough case Munro J was, when looking at what the - what was argued again was a preference clause, stated, and we quote it in our submissions at paragraph 13, which is:

PN470

Nor should the plain words were treated as a mere contrivance simply because of a suspicion that springs to the mind of the reader.

PN471

What we have here is the employment advocate to try and fit this within 298Y having to read quite extensive additional requirements on the employer to make this clause objectionable, and we say simply it is not. My friend says that you are not able to blue pencil this provision in the event that you find it is objectionable, and we say that the decision of Munro J, Senior Deputy President Polites and Commissioner Hodder is authoritative for the principle that you are able to blue pencil, you are not under the Act required to remove the whole clause.

PN472

It does appear that my friend suggests that there might be two elements of this clause that take it over the line, the first one being the word "first". The other provision that I didn't quite understand how far his submissions went, was the requirement to not notify people who are suitably qualified and if you were just notifying generally it might cease to be objectionable. Well, we say there is no need to remove any of the words from this clause, your Honour, but in the event that you found that it was in part objectionable, we say you are permitted to blue pencil.

PN473

We don't think our friend can say, well, you can't blue pencil because you will take away from the intention of the parties. I mean, if it was the intention of the parties, as it was in the coal mining case, it was clearly the intention of the parties there to have a provision that gave preference in terms of seniority to union members and clearly blue pencilling that removed an express intention of the parties. The whole purpose of removing objectionable provisions from agreements is to remove provisions that the parties have, in fact, agreed to.

PN474

So we don't think that the fact that it might not end up precisely as the parties intended it to start off with is an argument for not blue pencilling it. You would never blue pencil any agreement if that was what the result. We also don't concede that such a clause does not pertain to the relationship of employer and employee. We also do not concede that all matters in certified agreements are required to pertain to the relationship of employer and employee and therefore we do not concede the submissions of the Employment Advocate that you should delete this clause in its entirety, not because it is objectionable in its entirety, but because they submit in its entirety it doesn't pertain to the relationship of employer and employee. That is not what your obligations are in this matter before you.

PN475

Your obligations are if, having determined that there is an objectionable provision, your obligation is to remove the objectionable provision, we say no more than the provision in the clause that is objectionable, though our submission is, your Honour, that this clause requires no implications to give meaning to it, is clear on its face, is not objectionable and therefore should remain in the agreement as it is.

PN476

THE SENIOR DEPUTY PRESIDENT: Mr Lawrence, anything in reply?

PN477

MR LAWRENCE: I suppose the first thing to say is that my learned friend hasn't said what the clause means if it doesn't mean what I say it means. She hasn't given any indication as to what it might mean in practical terms, and in my submission she has failed to indicate that on any reasonable reading it would mean other than what I have put forward on behalf of the Employment Advocate. She said there were two implications - she said I, on behalf of the Employment Advocate, want to read in two implications. First, that there is an obligation to offer employment. Now, she didn't deal with that, as I understand her submissions, and in that regard, your Honour, it must be borne in mind that the clause says in part:

PN478

The company commits to wherever possible when employing labour -

PN479

when employing labour, and it is clear in my submission that that is to do with the making of an offer of employment. It doesn't say "The company commits to wherever possible when a vacancy occurs or when a vacancy might occur", it is concerned with the employment of labour. Now, the second - and I say that it is even before you get to the word "first" right at the end. It is concerned about the purpose and it gives meaning to the clause.

PN480

The second implication, she said that we put forward and - which is an invalid implication, is the implication that there is a requirement to refuse to employ or that there is a refusal to employ, and she said basically, well, you just have to wait and see if there is a refusal. Now, that is a misconception, in my submission, of how this provision operates, how section 298Z operates and how 298Y operates.

PN481

What is clear is that - and this was elaborated in my submissions in relation to the permit part of require and permit - is that what is void and what is to be removed is a provision which would give some cover to an employer if it were otherwise valid to do something which would be in breach of Part XA. You ask the question what is the kind of action, conduct about which this clause is concerned? You answer the question by looking at what the character of the clause is. You characterise it, look at its terms. It is not neutral or benign like "Employees with five years service may be terminated on four weeks notice", but it says something about a particular kind of conduct or activity.

PN482

And then you say could this be used as a defence, purported defence, of an action to employ union members - members of the AMWU or the CFMEU in preference to members of other unions or not? And it is unnecessary - and this is a very important point, your Honour - it is unnecessary at this stage to point to a victim, to point to an individual who will be denied or even to say that it is probable or highly likely that something will happen.

PN483

See, this is illustrated by another provision. Supposing the clause said "The company will only employ members of the AMWU when recruiting labour." Well, that would be clear on any of it, it would be clearly an objectionable provision, because you would see that it would be used, the employer would be required to use it, or required to observe it in employment decisions, or it could be used mistakenly by the employer as a defence to employing only AMWU members, and it is struck out before there is a victim, before there is an identifiable victim. You don't wait and see what has happened, you don't want to find a victim, you strike it out.

PN484

All of these preference clauses that have been struck out don't have victims. No one has said there in those cases, let's wait and see if there is a victim, or let's wait and see if something goes wrong. They are all struck out because what they say and what they contemplate, what their direct and indirect effects are, what their express and implied terms are, what the practical consequences will be are such that they will be in breach of the legislation; they will be void and they will be objectionable provisions.

PN485

My learned friend has misunderstood what Munro J was concerned about in Clough. He focused on a union encouragement clause, and he said, in substance: well, that is benign, that is neutral, that does not say anything; anyway, people are allowed to encourage - there is no rule against encouraging union membership, or encouraging people not to be members of unions. And he said some employers may want to discourage, and they are entitled, perfectly entitled to discourage employees from being members of the union.

PN486

So he said there is nothing wrong with that. That does not suggest that it could be used in an incorrect way. It is not capable of being used in any incorrect way. But what you need to do is look at what people do, or what you can do is look at what people do in practice: then you might find there is a breach, a direct breach of Part XA, but the term itself does not lead you to have any concern. But this is a term which leads you to have concern, and it has got very clear implications for Part XA matters. It is the very provision which can be called in aid for an employer that adopts the policy of notifying the union of vacancies as they occur, and of offering employment to union members.

[12noon]

PN487

And the point is, if that happened, if you did have an employer who adopted that policy and practice of only offering employment to union members, then they would be in breach of part XA. That is clear. But, more importantly, they would have a clause which purportedly gives that right, or purportedly imposes on them an obligation to do that, that thing which causes a breach of part XA. And the intention of the Parliament is to get rid of the provisions that would purportedly give some protection against part XA or purportedly require them to do something which would be in breach of part XA.

PN488

And the point my learned friend doesn't accept is that the adoption of what is contemplated, and what we say is clearly contemplated by this provision is in breach of part XA. And it would be just as wrong for an employer to offer the jobs first up to union members, as it would be for an employer to adopt a policy, or enter into an agreement with somebody else to only employ non-unionists to the exclusion of unionists. They are both equally wrong and, if I might say so, if this union, the AMWU, found out that some developers were requiring the other side of the coin in their contracts with their contractors they would be complaining and would be entitled to complain.

PN489

We say one has to be even handed in this and whether it is protection of unionists or non-unionists, the same principles apply and whether you are talking about an industrial agreement or a common law agreement concerned with the development of buildings or other construction projects, the same applies. That is all - sorry, there was one thing, it was to do with blue pencilling. My learned friend said something about the position I have taken on blue pencilling.

PN490

The particular point I want to say, and it is not the sum total of what I have said in relation to blue pencilling, is that in any event you should not use the blue pencil which would lead to the result of the substitution of a clause which is substantially different to that to which the parties agreed because the parties have not agreed to the clause that is substantially different and, in my submission, it is clear that where you have got a substantive variation, that it is a matter that should go back to the parties to the agreement to deal with themselves, and there is nothing to stop the parties to the agreement doing that. They are all the submissions I wish to put, if the Commission pleases.

PN491

THE SENIOR DEPUTY PRESIDENT: I will reserve my decision.

ADJOURNED INDEFINITELY [12.04pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #L1 CONTENTIONS OF THE EMPLOYMENT ADVOCATE IN RESPECT OF MMS AGREEMENT PN453
EXHIBIT #L2 CONTENTIONS OF THE EMPLOYMENT ADVOCATE IN RESPECT OF BROWNWOOD PANELS, PORT ADELAIDE AND WELLER NOBOLT AGREEMENTS PN453
EXHIBIT #L3 FACSIMILE DATED 06/06/2002 FROM CFMEU ATTACHING PARTS OF THE AUSPINE AGREEMENT PN453
EXHIBIT #L4 FAX FROM CFMEU DATED 28/05/2002 ADOPTING AMWU SUBMISSIONS PN460
EXHIBIT #G1 SUBMISSIONS OF AMWU PN463