BP2002/4776, Transcript of Proceedings [2002] AIRCTrans 3734 (23 September 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
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TRANSCRIPT OF PROCEEDINGS


O/N VT05650

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT WATSON

BP2002/4776

NOTICE OF INITIATION OF BARGAINING
PERIOD

Application under section 170MI of the Act
by the Australian Municipal, Administrative,
Clerical and Services Union re Jardine Airport
Services Australia Pty Ltd, Suite 31212,
PO Box 3009, Sydney International Airport,
Mascot NSW Australia

MELBOURNE

12.05 AM, MONDAY, 9 SEPTEMBER 2002

PN1

MR M. FOLEY: I appear on behalf of the Australian Services Union in this matter.

PN2

MR P. ROCHFORT: I appear on behalf of the respondent in the matter, Jardine Airport Services Australia Pty Ltd. With me is MR R. CROOK, who is the Acting General Manager of the company and MR de KRETSER, the solicitor with Mallesons Stephen Jaques and he is here on behalf of the parent company, Jardine Matheson in Hong Kong.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Rochfort. Is there anything arising out of that, Mr Foley?

PN4

MR FOLEY: Thank you, sir. I thank the Commission for its indulgence and apologise for any confusion that might have happened in how these issues, this listing, finally got before us. I was going to suggest, sir, if I could perhaps put a few things on the record and then, with the Commission's indulgence seek, as this is essentially a seeking of conciliation process as to the bargaining period, move towards perhaps a conference. So I might table a bundle of documents, sir, and see how we go.

EXHIBIT #ASU1 BUNDLE OF DOCUMENTS - OUTLINE OF RECENT HISTORY, DOCUMENT HEADED ANNOUNCEMENT TO STAFF, DOCUMENT HEADED JARDINE AIRPORT SERVICES TO SELL GROUND HANDLING BUSINESS, ASU UPDATE, ASU AND JARDINESDOCUMENT, LOG OF CLAIMS DATED 22 AUGUST FROMLINDA WHITE TO MR NELSON OF JARDINE AIRPORT SERVICES AND A WITHOUT PREJUDICE DOCUMENT REASU JARDINES DRAFT REDUNDANCY AGREEMENT, COPY OF NOTICE OF INITIATION OF BARGAININGPERIOD, ASU UPDATE 28 AUGUST AND LETTER TO MR CROOK FROM 22 EMPLOYEES

PN5

MR FOLEY: In terms of the background to this, sir, Jardine Airport Services Australia, which Mr Rochfort alluded to, is fully owned by the Jardines Group based in Hong Kong, has announced a decision, which you will see in the second page of that bundle of documents, from Rob Nelson, the former General Manager of the group - - -

PN6

MR ROCHFORT: Sorry, he is the General Manager. Mr Crook's position is Acting General Manager during Mr Nelson's absence on leave. I apologise I didn't make that clear to start.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes. Very well.

PN8

MR FOLEY: I retract. I wish Mr Nelson all the best with annual leave. The Jardine Airport Services Australia has been operating for a number of years now and in the Australian domestic aviation sector but overwhelmingly the international sector where they provide customer service, land and ground handling and freight services in partnership to a number of international airlines moving in and out of Australia. I am sure they do other things but that is as far as I am aware.

PN9

They have had, if I could say, a good relationship with the airline industry unions in that their terms and conditions have been regulated by a number of agreements negotiated with the unions and it is our hope and view that that will continue to be the case but it is a pretty tough market, as shake outs in the industry have shown and the employees who are the subject of this application, sir, know how tough it is. Some of them have come from - over the past 18 months have lost their jobs variously in Impulse, Kendall and Ansett and they are very concerned as to the processes that are currently being announced by the company and what the company have announced is that they intend to sell, through a particular process, the business to Menzies Aviation Group, which operates in Australia, at least, as Menzies World Cargo and that process is due, as I understand, to be completed some time this week. I stand to be corrected but that is my understanding, sir.

PN10

THE SENIOR DEPUTY PRESIDENT: Yes.

PN11

MR FOLEY: There is, to the best of my knowledge, no immediate threat of loss of jobs but we would have to, given the state of the industry and the history of particularly the customer service staff, who now work for Jardine and their background in the industry, they all know that the likelihood of rationalisation of employment and changes of ownership cover some pretty significant issues.

PN12

So just in terms of the recent history, at the front page of ASU1, sir, after the staff were advised by Mr Nelson that the business was to be sold, a number of meetings were held around the country and a number of discussions, formally and informally, were held with Menzies - pardon me, Jardines and essentially the position of the ASU in all of this was that we want to see the sale of the business as a transmission of business and in that regard, given that we had expired our existing certified agreement with the company, we gave authorisation to the union to initiate a bargaining period. A similar position was adopted in Sydney and they are two areas that are covered by our certified agreement in place at the moment and I stand to be corrected but I don't think Jardines Airport Services operate in Brisbane, so it is just Melbourne and Sydney.

PN13

A number of discussions were held with the company and further report back meetings were dealt with but to cut to the chase, sir, it is my understanding that the sale will proceed and will be done on the basis of a share sale process so that, if you like, Jardines lock, stock and barrel, including the employees and its current contractual arrangements, including certified agreements, expired or otherwise, will transmit in a particular sense, over to Menzies Aviation Group. I am sure my friends will correct me if I am wrong but in those discussions, because we are out of, if you like, we are out of our certified agreement at the moment, it is our view that we are facing some uncertainty in that Menzies Aviation Group, prior to their having established business in Australia - or having bought a business that was established in Australia, that company was previously called BOC, as in British Oxygen Corporation, BOC Cargo had, before it had set up, had concluded a Greenfields site certified agreement with the Transport Workers Union of Australia, which gave that organisation exclusive coverage of BOC employees.

PN14

Menzies then purchased BOC Cargo - that was a couple of years ago, and we now have a situation where the Menzies Group are purchasing Jardine Airport Services, so whilst it is our understanding that the nature of the sale is such that the shares - and as a result of that the process of sale will see all these existing arrangements and obligations transmit to Menzies Aviation Group, our concern is we will be going into a group in which, if you like, the parent company, perhaps we are wrong, but the parent company has a Greenfields site arrangement with another registered union and we are, of course, concerned that a lot of the comparable employment conditions are not the same.

PN15

Overwhelmingly, given the background of a lot of these employees have been through the wringer in the industry in recent times, our main concern, sir, is to lock in both the transmission of business arrangements and the potential for redundancies is very real, in our view, and we are also seeking to deal with that as part of this process. Because we have initiated the bargaining period, sir, it is our hope that we will be able to finalise a certified agreement with Jardine Airport Services and/or Menzies Aviation Group as a matter of urgency. Because our view is that those two key issues of redundancy and transmission of business are critical, we intend today, and I will do so in a minute, to table a draft certified agreement that deals with those issues alone and maintains all other terms and conditions of employment as is until March of next year.

PN16

So in terms of background, sir, it is our hope that we can, from conciliation conferences today, arrive at a process that gives our members some certainty that they will transmit on existing terms and conditions, that there is a safety net of an industry standard redundancy package there should the process end up at a goal that nobody wants it to end up with. But you have to be realistic about the prospects of that in the sector at the moment and based on that, sir, it is our hope that we would be able to use a conference before you today to make some substantial ground in narrowing the differences between the parties, if there are any.

PN17

Our members at both Melbourne and Sydney have made it clear that they wish to cooperate with the company in this process. They know the importance of secure and viable employment in this sector. It is not too long a bow to suggest that Jardines have been subject to some pretty vicious undercutting of pricing by certain larger, dominant players in the market and our members know that. The company has been quite up front and honest with them over the last few years about this process and given that, we think our reasonable proposition of effectively not seeking to pursue a wage claim for what will amount to a period of 12 months from the expiration of the current certified agreement to this process in return for some security on transmission of business and the safety net of a redundancy arrangement is eminently reasonable.

PN18

Finally, before I hand over to my friends, initial closing, because the company has only been operating for a few years now, our initial round of certified agreements were really about a start up process. Whilst the company was in the market of what we say the industry rates were, it was by no means the market leader. Because the employees were all brand new, we arrived at a view with the company that we wouldn't be pursuing redundancy clauses as part of the initial agreements. Sadly now, with the uncertainty surrounding the company and the sector more generally, we think it is time that those issues were dealt with and before I sit down, I might just table a draft without prejudice agreement that we would put before the parties today.

PN19

THE SENIOR DEPUTY PRESIDENT: Thank you.

EXHIBIT #ASU2 DRAFT AGREEMENT

PN20

THE SENIOR DEPUTY PRESIDENT: Mr Rochfort.

PN21

MR ROCHFORT: Thank you, your Honour. The position of the company is this, that we draw some comfort from the fact that Mr Foley recognises that there is an anticipation that this sale will go through this week. Frankly, I can't say whether that is accurate or not. We don't know, but certainly the sale is pending and Mr Foley's comment that his members and indeed his union hopes that the sale will proceed, well that is the company's expectation also and hope also.

PN22

But what would be a problem for the company, if all of a sudden the ground rules changed and one of the reasons for the company's conservative approach to negotiation has been that heads of agreement have been entered into and the Commission has that document, being what looks like a press release, Jardine Airport Services; it is the third piece of paper in ASU1 which looks like a press release announcing that it is going to happen - heads of terms for the sale of the business have been agreed and of course, part of that is that the company, Menzies, knows what it is buying.

PN23

Now to change that at this stage could be quite prejudicial to the sale, if all of a sudden the product which is being bought changes. However, it whatever characteristic, that could possibly constitute a problem. Now at this stage, as Mr Foley has also pointed out, the sale or the intention is that there will be a sale of shares so there will be a lock, stock and barrel change of ownership and there is no expected redundancies, for Mr Foley's members anyway, arising from that.

PN24

These people are what are known as PSOs, passenger service officers, and they are the people that Mr Foley represents. Now it is likely that they will retain their jobs. More likely than not, put it that way. That is not intended to be a guarantee. I don't want to mislead the Commission. It is not intended to be a guarantee but the expectation is that no-one will lose a job because Menzies don't have these people available, so they will certainly transfer in the first instance, at the point of sale, and have ongoing service with the new entity and so that there should be no apprehension at this point for Mr Foley's members that there will be any change in their employment conditions and of course that is what it is all about.

PN25

If the Commission goes to the fourth sheet in the ASU1, the exhortation is to save our jobs and conditions. Well we don't need this Commission hearing for that because those jobs and conditions will be apropos the sale secure. Anything that happens in the future will, of course, be a matter for Menzies. They may make their own decisions in relation to that but it won't be as an outcome of the sale. It will be only as an outcome of the way they want to run their business and that is something which we believe the union should deal with Menzies in due course about that.

PN26

We don't believe it is appropriate for us to be concluding agreements with the union at this stage because that could, as I say, be prejudicial to the sale and secondly, it is not going to affect anybody. These people will have their job. If the sale takes place on Wednesday, Mr Foley says on Thursday, everybody will still be employed. There will be no change. There will be no conditional changeover. Now as to whether or not there is a transmission of business, well of course that is a matter for law and a matter of facts. The facts will speak for themselves, as the saying goes. The business, that part of the business, will simply be under one proprietorship one day and by virtue of the transfer of shares, under the different proprietorship the next day; from Jardines to Menzies. So whether or not there has been a transmission of business would, in our view, be fairly clear that that has transmitted.

PN27

THE SENIOR DEPUTY PRESIDENT: It would be the same company with different shareholders.

PN28

MR ROCHFORT: Same company with different shareholders, yes, and so there need be no apprehension there. Now that is not to say, your Honour, that the company is not prepared to discuss the matter with Mr Foley and Ms White and the other union representatives and there is afoot an enterprise agreement, currently known as Customer Service Employees Jardine Airport Services Australia Enterprise Agreement which has clear consultative provisions in it and those consultative provisions require the parties to get together and discuss matters and there is no equivocation about that. We are happy to discuss it.

PN29

It is just that in terms of reaching an agreement, we are concerned to do that at this stage, at this very sensitive stage, of the negotiations with Menzies but we are happy to speak to the union - we have always indicated that and what has been indicated by the company is pretty much as I have made these representations to the Commission, that it is a matter which, in everybody's best interests - as I say, if there is going to be redundancy, well it is going to be redundancy which arises out of a new set of circumstances, not the circumstance of the sale. It is best, from the union members' point of view, that they discuss that issue with Menzies at the appropriate time; not jeopardise the sale or do anything which might have the effect of jeopardising or delaying the sale but entering into the negotiations with Menzies when that time arises.

PN30

We have been handed ASU2, a draft agreement. We have actually seen that. The people that make the decision in the company can't - at best they haven't given us our instructions today in any event and in any event, by the time that happens, the sale may well have gone through and we can say to your Honour, well we did go through the processes conscientiously but being conscientious doesn't mean that we can quite meet what Mr Foley hopes we will meet today.

PN31

It is just premature and it is just too quick to try and do it in this way; to notify a negotiating period which is in effect - the negotiating period has started, pursuant to the provisions of the Act. So we are in a negotiating period anyway and we recognise our obligations there and we are happy to meet those obligations but there is not much more that we can do and we certainly are not in a position to proceed with the matter at this stage, nor it would appear, in any other context other than the way these matters usually proceed. And there has been a negotiating period nominated which ends, my recollection is, in December and that is the period which has been nominated for the bargaining period.

PN32

Well, certainly well before that time there is going to be a conclusion one way or the other but the expectations of these bargaining periods are not solved, so to speak, on day one and we would ask that the direction by the Commission be that the parties confer on the issues and if the sale doesn't go through, well clearly we are going to bargain in good faith in due course. There will have to be some sort of agreement. But as we said, we hope that the sale will go through and that will be the end of it and that would be the appropriate outcome.

PN33

THE SENIOR DEPUTY PRESIDENT: Well for Jardine. The new owners - - -

PN34

MR ROCHFORT: For Jardines, anyway. But having said that, your Honour, there is not much that can be achieved through what is being asked by Mr Foley. For one thing, as I say, the matter, whether or not there is a transmission of business, is a matter for - as a matter of fact; it is what has happened and how that fact is ..... Just writing in an agreement is neither here nor there if that is not the way it is seen and secondly, so far as conditions are concerned, yes, it is possible to recognise the spectre of redundancy in the mind of any employee but a, it is not likely to happen, certainly not as a result of this exercise and b, in the event that it does happen, and there is applications made, if there are any redundancies, if in the unlikely case there were any redundancies in result of it, well there would still be an industry standard which would be, in the normal course of events, applied anyway so writing it into the agreement, with the urgency that is sought here, it doesn't really achieve much.

PN35

THE SENIOR DEPUTY PRESIDENT: Very well.

PN36

MR ROCHFORT: Thank you, your Honour.

PN37

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Rochfort. Anything further before I - - -

PN38

MR FOLEY: No, sir.

NO FURTHER PROCEEDINGS RECORDED

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #ASU1 BUNDLE OF DOCUMENTS - OUTLINE OF RECENT HISTORY, DOCUMENT HEADED ANNOUNCEMENT TO STAFF, DOCUMENT HEADED JARDINE AIRPORT SERVICES TO SELL GROUND HANDLING BUSINESS, ASU UPDATE, ASU AND JARDINESDOCUMENT, LOG OF CLAIMS DATED 22 AUGUST FROMLINDA WHITE TO MR NELSON OF JARDINE AIRPORT SERVICES AND A WITHOUT PREJUDICE DOCUMENT REASU JARDINES DRAFT REDUNDANCY AGREEMENT, COPY OF NOTICE OF INITIATION OF BARGAININGPERIOD, ASU UPDATE 28 AUGUST AND LETTER TO MR CROOK FROM 22 EMPLOYEES PN5
EXHIBIT #ASU2 DRAFT AGREEMENT PN20