C2002/3365, Transcript of Proceedings [2002] AIRCTrans 3548 (17 September 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT HARRISON

C2002/3365
C2002/3371

TRANSPORT WORKERS' (BULK MILK CARTERS) AWARD 1985
TRANSPORT WORKERS' (MILK CARTERS) AWARD 1985

Applications under section 113 of the Act
by the Transport Workers' Union to vary the
above award re award coverage

SYDNEY

10.30 AM, WEDNESDAY, 17 JULY 2002

Hearing continuing

PN1

THE SENIOR DEPUTY PRESIDENT: I'll take appearances first in Melbourne.

PN2

MS S. LEARMONTH: Your Honour, I appear on behalf of the Transport Workers Union.

PN3

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN4

MS F. FIELD: Your Honour, I am from the Australian Industry Group appearing on behalf of respondent members.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN6

MS J. WHITECROSS: If the Commission pleases, I am from VECCI appearing in matter C 2002/3365. Your Honour, I am unaware of the other matter to which you referred so I am not sure whether we would have an interest in that.

PN7

THE SENIOR DEPUTY PRESIDENT: All right, well it is the Milk Carters Award. Yes, I don't know myself independently whether in the past you've expressed an interest, but we won't preclude you in the future from revisiting that matter. But it is likely your principal interests is just in 3365.

PN8

MS WHITECROSS: I believe that to be the case, thank you your Honour.

PN9

MR D. NORTH: If the Commission pleases I appear for Linfox Australia in both matters.

PN10

THE SENIOR DEPUTY PRESIDENT: Thank you. I'll take appearances now in Brisbane.

PN11

MR L. MOLONEY: Your Honour, I'm from Livingstones Australia. I seek leave to appear as agent in both matters, your Honour, on behalf of Queensgate Unity Dairy Foods Co-operative Limited, trading as Dairy Farmers. And Milandra Dairy Foods Limited, trading as Dairy Farmers, insofar as the operations of those two companies in Queensland are concerned. I also seek to enter an appearance on behalf of Pauls Limited in both matters.

PN12

THE SENIOR DEPUTY PRESIDENT: Any difficulty with leave being granted, Ms Learmonth?

PN13

MS LEARMONTH: No, your Honour.

PN14

THE SENIOR DEPUTY PRESIDENT: Leave is granted, Mr Moloney. Back to you, Ms Learmonth.

PN15

MS LEARMONTH: Your Honour, this is an application to vary the Transport Workers' Milk Carters Award 1985 and the Transport Workers' Bulk Milk Carters Award 1985. The variation we are seeking is to extend the area of operation of both of these Awards to cover the Northern Territory and all States except New South Wales.

PN16

The application notice of hearing order for substituted service and draft order was served upon the respondents to these Awards via substituted service. In relation to the statement of service I have faxed to your chambers this morning a statement of service attesting to the service for the Milk Carters Award and in relation to the service for the Bulk Milk Carters Award we've had to seek the assistance of Australia Post to show proof of receipt for the service that we have provided upon the respondents to that. I've also sent to your chambers via email a draft order. And that was the draft order that was provided to the respondents to these Awards.

PN17

THE SENIOR DEPUTY PRESIDENT: Yes. Just pause for a moment would you. Yes, I might just mark the two draft orders. In each matter the order will become TWUU1.

MFI #TWUU1 DRAFT ORDERS

PN18

THE SENIOR DEPUTY PRESIDENT: Ms Learmonth?

PN19

MS LEARMONTH: Thank you, your Honour. There are a number of grounds upon which we seek to make this application. The Bulk Milk Award is designed to cover drivers who are hauling milk in large quantities either from the farm to the processing or manufacturing plant. The Milk Carters Award is designed to cover drivers who are carrying packaged milk products from the processing or manufacturing plant to either distribution centres or dissemination to retail sites such as a supermarket chain or to a smaller retail site. Some of the companies actually have their own drivers who provide that service and some of them outsource that requirement.

PN20

Currently, the Bulk Milk Award is applicable to the States of Victoria and Tasmania only. And the Milk Carters Award is applicable to the States of South Australia, Victoria and Tasmania. The industrial instruments currently used in all other States in relation to the carting of milk or milk products, in bulk or in packages, is a State Award is used or the Transport Workers Award 1998. If our application to vary the Award is granted it would create the opportunity for a far more level playing field within the transport sector of the milk industry.

PN21

If I may, your Honour, I'd just like to provide a brief history of the milk industry and also a review of today's climate for milk production and dairy manufacturing. The industry has changed since these Awards were made in 1985. Since 1986 regulation of the manufacturing sector provided a measure of support for manufacturing milk prices while still allowing them to move in line with export returns.

PN22

Historically, state governments were responsible for ensuring year round supplies of fresh and wholesome milk to consumers. Individual state governments achieved this using either pooling or quota systems to source milk from farms and by controlling prices and distribution from the farm and to the consumer. During the 1990s the various state governments phased out post farm gate controls, until only farm price and source and regulations remained.

PN23

In the late 1990s all Australian State and Federal Governments signed on to a national competition policy with its guiding principle being that there should be no restrictions on competition unless it can be clearly demonstrated to be in the public interest. In early 1999 the milk industry approached the Federal Government with a plan for an orderly national approach to the de-regulation of the market milk sector. By October 2000 all states had conducted reviews of their milk arrangements under the national competition policy and while a number of states were able to justify their regulations Victoria - which is the largest dairy state - could not justify retaining regulations of the drinking milk sector.

PN24

As part of the de-regulation process, all states have repealed legislation governing pricing or sourcing of drinking milk and most state milk authorities which administer these controls have been wound up. If the de-regulation of the drinking milk sector can ultimately flow down to other sectors involved in the industry with transport being one of them by varying the award to cover the Northern Territory and all states except New South Wales it gives us the ability to maintain a level playing field within the transport sector of the industry and reduces the ability for transport companies to undercut each other. The companies involved in this industry knew that the other companies would be applied the same terms and conditions for the transport of milk in either a bulk or a packaged form then that is one additional certainty for them.

PN25

In relation to milk production farm numbers have decreased over the last 20 years, yet milk output has still increased due to improved cow yields, and more recent years increased cow numbers. In 1985, milk production reached 6.03 million litres, but it has increased to 10.54 million litres in 2000 and 2001. Within this context of greater productivity per farm, Australian milk production remarks seasonal, reflecting the pasture based nature of the industry. Milk production peaks in October and tapering off in the colder months of May and June. The development of long shelf life manufacture of products, particularly in the south-east regions, has enabled maximum growth of production within the seasonal cycle.

PN26

However, milk output in some states, such as, New South Wales and Queensland is less seasonal due to a greater focus on drinking milk and fresh products in the product mix.

PN27

The production industry can be divided into two distinct sections, one for drinking milking, and one for manufacturing milk. The drinking milk sector accounts for around 18 per cent of milk production, and with expanding milk output the drinking milk share of production is declining - - -

PN28

THE SENIOR DEPUTY PRESIDENT: We've lost you, just a minute. Can you hear us? Ms Learmonth, can you hear me?

PN29

MS LEARMONTH: Yes.

PN30

THE SENIOR DEPUTY PRESIDENT: I can hear you again.

PN31

MS LEARMONTH: Can you hear us? Okay. In relation to dairy manufacturing, the milk processing sector is undergoing continual rationalisation. This has resulted in increasing milk intake per factory. Larger operations have allowed improved efficiency and economies of scales. Australian dairy companies continue to increase processing capacity to keep pace with growing milk output.

PN32

Milk is processed by both farmer owned co-operatives and public companies in Australia. Co-operatives dominate the industry according for approximately 75 per cent of all milk output. The three largest co-operatives, which are Murray/Goulburn Co-operative, Bonlac Foods Limited, and the Dairy Farmers Group account for over 60 per cent of all milk intake, and over 50 per cent of all milk use and manufacturing.

PN33

As well as the co-operatives, there are a number of multi-national companies operating within the Australian dairy industry including Fentera, Nestle, Kraft and Farmalash. Other Australian dairy companies cover a diverse range of markets and products from publicly listed milk processors, such as, National Foods, to highly specialised Farm House cheese manufacturers.

PN34

The TWU represent drivers in the industry, who are either employees of the major dairy companies within the industry, such as, Pauls, Kraft and Tetura, or the major co-operatives, such as, Bonlac, National Foods and Dairy Farmers. The TWU also covers employees of contractors, such as Linfox and McCalls.

PN35

The TWU has, at least, one enterprise agreement with each of those companies that I've just mentioned. Overall we have abut 16 to 20 current enterprise agreements in the industry, the majority of which are underpinned by the Bulk Milk Carters Award or the Milk Carters Award, or both, in some instances. However, due to the limited areas of operation of both of these award, we can only use the Bulk Milk or the Milk Carters Award to underpin enterprise agreements in either Victoria, Tasmania or South Australia.

PN36

So, therefore, we're also in the difficult situation where we have enterprise agreements, such as, those in Queensland and South Australia, which are underpinned by a state award or the Federal 1998 Award.

PN37

We have two Federal Awards, which are the Milk Carters and the Bulk Milk Carters Award, which are specific to this industry yet have limited areas of operation. This is an opportunity for the TWU to amend that anomaly and to bring these awards up-to-date and to match the growing industry. Further, should this application be granted, it gives the TWU the opportunity to ensure that all players are paying under the appropriate awards, either the Bulk Milk or the Milk Carters Award.

PN38

In summary, we have two milk awards that were made in 1985. We have an industry that has changed significantly over the last 20 years. We have an industry that is largely de-regulated in terms of consumer pricing, and an industry that is de-regulated in terms of states specific legislation or regulatory authorities. Yet it is an industry that is growing in output of milk for drinking and manufacturing.

PN39

We have some very large players who dominate the manufacturing sector of the industry and that aren't national or multi-national companies. We have TWU drivers who haul bulk milk and package products in all states. We have TWU drivers who have different award conditions applied to them due to the state they are based in.

PN40

TWU drivers are doing the same task in each state but receiving different terms and conditions because of the appropriate awards, are not yet able to operate in each state and the Northern Territory.

PN41

A range of awards are currently applied to TWU drivers within the transport sector of the industry. There is the ability to undercut in relation to the transport of bulk and packaged milk, and milk products, due to the application of different awards. Undercutting can lead to uncertainty and a reduction of existing terms and conditions enjoyed by some drivers in the industry.

PN42

We have a number of enterprise agreements but different awards which underpin them based upon the state the EBA is applicable to. We have a Ford Foundation of minimum standards for drivers in this industry which uses an array of federal awards and state awards to base its terms and conditions and we have the inability to maintain an effective award safety net, a fair and enforceable minimum wages and conditions of employment for drivers in the milk industry.

PN43

It is on this basis that we seek to have the awards varied so that the Transport Workers (Bulk Milk Carters) Award and the Transport Workers (Milk Carters) Award can operate in the Northern Territory and all states except New South Wales. We are seeking an operative date of today's date. If the Commission pleases.

PN44

THE SENIOR DEPUTY PRESIDENT: I suspect I'll need to come back to you in relation to how these matters are going to proceed but I say that without knowing the extent of any opposition to the variations but one matter I will need to come back to you on is concerning whether you should be directed to serve a little more widely the application for variation than I have already directed. When these matters both came in I limited service to the entities on the order for subservice but on reflection it seems to me that given what you're attempting to achieve here I would need service to be attended to a little more broadly.

PN45

Mr Moloney might be able to tell me about whether we need to alert anyone in Queensland other than obviously his clients who are aware of this but I do not yet know if there's any representation here today in respect to South Australia, Western Australia and Northern Territory but maybe the employers when they address me might also make any comment they wish to about those matters. We'll start with you, Ms Field.

PN46

MS FIELD: Thank you, your Honour. In terms of our receipt of the applications again we received those on 8 July and we are in the process of consulting with our members. We haven't had any opposition to the application yet, however, our discussions with our members are not yet completed so again we would be looking for some further time to complete those discussions.

PN47

In terms of the question that you just posed I h ave contacted our Queensland office and asked them to get back to me with a position on how the application may affect people who are currently operating under the Queensland State Award system and carting milk but at this stage they haven't been able to get a position for me and I haven't heard back from them with any conclusive material so we have attempted through our organisation to at least find out what's going on in Queensland because obviously that's where we have an office and some operations but that's as far as we have gone in terms of trying to ascertain the effect of the applications outside Victoria and New South Wales.

PN48

THE SENIOR DEPUTY PRESIDENT: Is it too early for you to say, at least on behalf of your Victorian interests, it's unlikely that they would oppose the extension of the coverage of the award?

PN49

MS FIELD: Your Honour, certainly those are the indications I have at this stage that it is probably unlikely but we haven't heard back from everybody yet.

PN50

THE SENIOR DEPUTY PRESIDENT: All right. Ms Whitecross?

PN51

MS WHITECROSS: Your Honour, as in the previous matter Vecci is yet to get complete instructions with respect to the coverage issue and again would be seeking further time. I would flag at this stage, more for your information, that Vecci does have concerns in terms of the jurisdictional issues with respect to whether the initial ambit of the log of claims extends to those other states.

PN52

We would you know, given that as I have indicated that I have not received the paperwork until Wednesday of last week. I need to further consider that and look back on our files. The other issue that I have in light of Ms Learmonth's submissions to you this morning is that if the TWU is seeking to have a consistent coverage nationally, why isn't New South Wales being brought into this matter? At this stage we would be seeking further time to get complete instructions on this matter and put further submissions. If the commission pleases.

PN53

THE SENIOR DEPUTY PRESIDENT: Yes, thanks. Mr North?

PN54

MR NORTH: Thank you your Honour, Linfox is actually opposed to this application at this point in time your Honour and would greatly appreciate the opportunity to hold further discussions with the TWU given that we are a national transport company it certainly has the potential to affect us on a grand scale. We became respondent to the Bulk Milk Carters Award via an enterprise agreement we made in respect of the United Milk Tasmania operations.

PN55

So we are more of less a reluctant respondent in that regard and we would wish to have further discussion with the TWU to see if we can resolve a number of issues that we have and similarly support VECCI in their concerns as to the potential jurisdictional issues.

PN56

THE SENIOR DEPUTY PRESIDENT: Where at the moment Mr North does Linfox cart milk be it bulk otherwise, like as in States?

PN57

MR NORTH: We have Tasmanian operations your Honour and also in Victoria. Victoria under a Victorian agreement however is underpinned by the Transport Workers' Award 1998, the package milk operation and we would say certainly that that is more than adequately covered by the '98 award given that it is just the same as carting out Coca-Cola which is certainly underpinned by the Transport Workers' Award 1998 which we also do.

PN58

THE SENIOR DEPUTY PRESIDENT: What sort of time do you think you will need to see if you can reach some accommodation with the TWU or alternatively confirm that you will be opposing this variation.

PN59

MR NORTH: I certainly would not want to prejudice how much time the Chambers may need to consult with their members but certainly it would be at least a couple of weeks for us depending on the ability for us to work through the issues but certainly a report back in two weeks would not seem to be an unreasonable in my view. If the commission pleases.

PN60

THE SENIOR DEPUTY PRESIDENT: All right. I will go now to Brisbane. Mr Moloney?

PN61

MR MOLONEY: Thank you your Honour. Could I say at the outside the three entities that we represent are opposed to the applications to extend the coverage. The two Dairy Farmer's operations as I say are limited in these matters to their Queensland operations although I do understand the Malanda Processing Plant does ship packaged product to Western Australia and no real operations over there. Pauls has operations in Queensland and the Northern Territory.

PN62

In fact Pauls is actually covered by two awards of the federal jurisdiction for the Northern Territory, the Transport Workers' Pauls Limited Northern Territory Award 1999 which is AW800317 and there is also a Transport Workers' Pauls Limited Northern Award which applies to the Northern Territory which is an older award T1087. So we find the application a bit curious but as I say, initially my instructions are to oppose the applications. They do seek to extend the coverage.

PN63

I support the submissions of Ms Whitecross that we have not had an opportunity to look at the ambit of the dispute in this particular case in these particular awards to see whether or not there is even jurisdiction to do what it is that is sought to be done in terms of covering the operations. Pauls have no operations your Honour in WA and I believe that they do have some in South Australia. I guess it is probably fair to say that we are probably a bit perplexed at the fairly spectacularly simple submission by the TWU which I think needs a lot more fleshing out in terms of issues such as having a level playing field.

PN64

The history of these two awards, my personal knowledge of these two awards it is they go back a long way before 1985 and they have their origins and their genesis in the Victorian dairy industry obviously and the conditions were derived from there. It is probably we would say something that we would need to address in a lot more detail about the differences in conditions. Whether or not it does create a level playing field. We would probably take issue with a comment that having differential jurisdictional coverage of the industry gives people the ability to undercut.

PN65

There is no evidence before the commission about those sorts of matters and unless we can reach some agreement or accommodation with the TWU I foreshadow that if the TWU does not present evidence about it we probably will. There has certainly been no identification in the initial submission this morning about those differential conditions or what gives rise to that ability to allegedly undercut. I think having said all that, that is probably simply alerting the TWU to the areas of concern that we have.

PN66

There is we would suggest more than adequate coverage under Queensland common rule awards, there is in fact a specific milk industry transport award in operation in the Queensland jurisdiction which covers all of these types of employees. That award was made at about 1980. So that is why we find the application a bit curious and probably to satisfy that curiosity we would suggest that it would be appropriate at this stage if rather than go into any more detailed submissions we would simply advise the commission that we would prefer to have some discussions with the TWU first and see whether or not we can reach some level of agreement or understanding with them and advise the commission from there.

PN67

THE SENIOR DEPUTY PRESIDENT: All right, now Ms Learmonth back to you. I think it is still early days for you to take any issue with what might be the evidence should either or these proceed to a hearing so you can probably just hold your fire on responding to anything Mr Moloney said. I do wish to hear you now in relation to whether we should list both these matters now for a report back. If so when and also in relation to any direction I should issue in the interim.

PN68

Firstly and in particular in relating to the service upon peak employer organisations having in the States or Territories into which you are seeking these awards to extend. I have formed no view about the need for service on peak State registered employee organisations. I would not be inclined to make that direction unless it was specifically sought and I would probably also, myself, but obviously you will now satisfy ourselves that there is a jurisdictional basis upon which these matters can proceed in any event. Do you want to say anything about those matters before I consider fixing any times?

PN69

MS LEARMONTH: Your Honour just in relation to I think there is really three things that I might just respond to from what you have said. One is in relation to whether to list it for report back. I think it would be helpful, certainly if parties who are here today have expressed some interest to try and have some discussions with the TWU and I am more than happy to accommodate that and a period of probably of between two to three weeks in which we might be able to report back to the commission on where those discussions are going. By that stage some of the representatives here today might have had some response from other states.

PN70

So depending on the outcome of those discussions that the employer representatives have had with the other jurisdictions they might give some indication of whether the service should be provided beyond that that is currently being served and in relation to the jurisdictional matter that has been raised by a number of the parties I would need to get further instructions in relation to that.

PN71

THE SENIOR DEPUTY PRESIDENT: Yes, all right. I must say that my current thoughts, Ms Learmonth, whatever the employers view might be, I am likely still to hold the opinion that service should be effected on the peak employer organisations in the states or territories that you are seeking to move into. So I probably will require that anyway. I suppose the only issue is should I require it between now and report back or should I require it after the report back. Thinking ahead, if the report back tells me we have an arbitration to proceed that date will need to be set. We will then maybe get to a situation that some parties hear for the first time about it and then they in turn might then have issues that would be relevant to how we proceed on an arbitration.

PN72

In any event, I am thinking out aloud, I am thinking that service on potentially interested bodies sooner rather than later might be a good idea so we know just how wide any potential arbitration might be but that's something I can consider and make a direction, Ms Learmonth. Now, what about a report back in three weeks time. We'll go off transcript for a short time.

OFF THE RECORD

RESUMES [10.58am]

PN73

THE SENIOR DEPUTY PRESIDENT: Both of these matters now are adjourned for report back to Thursday, 15 August, at 10.00 am. The parties will have discussions in the interim to see if they can narrow down any issues. I wish to know on that day whether any of the parties oppose either of these applications to vary and also to know the basis upon which the opposition will be proceeding, for example, if it's a section 111AAA or section 111(1)(g) matter or, indeed, any other section under the Act that might be invoked.

PN74

The TWU will satisfy itself about the jurisdictional basis upon which both of these matters can proceed but I want the employers, if they're to raise that issue or any other preliminary or jurisdictional issue, to also alert us all about that at the report back. It is likely, Ms Learmonth, that within the next day or so I will probably issue a direction concerning additional service to that which has already been undertaken by you. Now, is there any other matter that any of you think I should either record or make the subject of a direction? Anyone in Melbourne? No. Mr Moloney?

PN75

MR MOLONEY: Your Honour, there is, I hesitate to raise it but given what the application seeks which is throughout the whole of Queensland I have a suspicion, although I cannot confirm it just yet, that the Australian Workers' Union in North Queensland may well have an interest in this.

PN76

THE SENIOR DEPUTY PRESIDENT: Yes.

PN77

MR MOLONEY: I don't a candle for the AWU but I think it may just save some further proceedings at a later date.

PN78

THE SENIOR DEPUTY PRESIDENT: Yes. I wonder though, what's happened in the past often is either hand in hand with the QCCI taking an interest or at least being alerted the AWU have sent us a letter notifying us of their interest. I'm not too sure that in the past we've actually notified them directly but I do agree with you, it is possible given their coverage in your state, they would have an interest. I'll have a think about that but certainly I had in mind that QCCI would be one of the entities that the TWU will be directed to serve but I can imagine that it is not acceptable for me to assume that service on the employer organisation is good service for the purposes of bringing it to the attention of a state registered union that has coverage of the area.

PN79

You might find a direction is coming your way as well, Ms Learmonth, to serve the state registered union AWUQ. My experience in relation to all of these types of matters in the past is that at some stage along the way they have shown an interest. Shall be adjourn now on the basis that we all get together again on 15 August? The Commission now adjourns.

ADJOURNED UNTIL THURSDAY, 15 AUGUST 2002 [11.02am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

MFI #TWUU1 DRAFT ORDERS PN18