C2002/4626, Transcript of Proceedings [2002] AIRCTrans 3852 (27 September 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

TRANSCRIPT OF PROCEEDINGS


AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT IVES

C2002/4626

AUSTRALIAN, LIQUOR, HOSPITALITY
AND MISCELLANEOUS WORKERS UNION

and

ARTISTIC CATERING COMPANY PTY
LIMITED and ANOTHER

Notification pursuant to section 99 of the
Act of a dispute re the contracting out of
catering services at Healesville Sanctuary
resulting in an alleged reduction in wages
and conditions to employees

MELBOURNE

1.03 PM, FRIDAY, 13 SEPTEMBER 2002

PN1

MS R. FRENZEL: I appear with MS C. DE NINO and MS V. ILIAS for the LHMU.

PN2

MR R. CANNELL: I am from Robert Cannell and Associates for the Artistic Catering Company.

PN3

MR C. PULS: I appear for the Zoological Parks and Gardens Board.

PN4

THE DEPUTY PRESIDENT: Yes, Ms Frenzel.

PN5

MS FRENZEL: Thank you, Deputy President, Firstly, can I thank the Commission for availing itself at such short notice with respect to this dispute. It is rare that the LHMU requests the urgent intervention of the Commission and we do appreciate it when it does put itself out in such a way.

PN6

THE DEPUTY PRESIDENT: It is an absolute pleasure, Ms Frenzel.

PN7

MS FRENZEL: Thank you, Deputy President. Deputy President, this is a bit of an unfortunate industrial dispute to the extent that it deals with people's livelihoods and it deals with people's jobs and normally industrial disputes that come here generally deal with wages and conditions and industrial situations but this one actually deals with people's jobs as well. A little bit of background to the dispute. The Zoological Parks and Gardens Board determined to contract out their catering services at Healesville Sanctuary and in addition to that determined to change their contractor at the Werribee Open Range Zoo and at Melbourne Zoo.

PN8

Melbourne and Werribee have previously had contractors in there doing the catering but this is the first time that it has occurred with Healesville. The Melbourne Zoological Parks and Gardens Board determined that a company called Artistic Catering had won their favour and determined that the three sites would be contracted to them to provide catering services. The scheduled changeover for the contracting out of Healesville is this coming Monday and with respect to Melbourne and Werribee that occurred last Monday just gone.

PN9

The union has been concerned for some time about the method of the contracting out, hence the notification against the Zoo, and also the terms and conditions of employment with respect to our members at Werribee and Melbourne, hence the - and indeed Healesville, and that is the basis of the industrial dispute we say against Artistic. I should point out right from the outset, Deputy President, that in our view Artistic are bound by the terms of the Catering - Victoria - Award 1998 by virtue of section 149 of the Act.

PN10

That transmission occurs in two ways. Firstly, with respect to Healesville the transmission occurs by virtue of the terms of a roping-in award made by your Honour on 2 August and I have set out the print number in the dispute notification where the LHMU were successful in roping in the Zoological Parks and Gardens Board to the Catering - Victoria - Award 1998. That is the first transmission. The second transmission can be characterised more, I suppose, as a Gribbles type of transmission to the extent that AVS Catering are named respondents to the award.

PN11

AVS, I might indicate, had a name change to Delaware North but nonetheless the respondency or the section 149 continued to apply and we say that the transmission once again to Artistic, a la Gribbles in Health Services Union v Gribbles Radiology, and it is Federal Court of Australia and the decision is number 856, clearly, at this point in time in any event, establishes that Artistic Catering are bound by the terms of the Catering - Victoria - Award.

PN12

There was considerable discussion between the union and the Zoo and Artistic about, firstly, the engagement of the employees and, secondly, the terms and conditions upon which the employees would be engaged and I might at this point tender some documentation to the Commission. The first thing I might tender is a bulletin from Artistic Food Services and Caterers which, on my instructions, was provided to the affected employees.

EXHIBIT #A1 BULLETIN FROM ARTISTIC FOOD SERVICES AND CATERERS PROVIDED TO AFFECTED EMPLOYEES

PN13

MS FRENZEL: The Commission will note that the contract changeovers are mentioned at the first paragraph. It also says:

PN14

How does this affect current employees?

PN15

And it says:

PN16

All current employees including full-time and casual employees, will end their employment on the last shift prior to the change of contractors.

PN17

I will come back to that point later in my submissions:

PN18

With respect to the payment of employee entitlements all current full-time and regular casual employees -

PN19

I am not sure about that definition but in any event -

PN20

will be paid out their full termination entitlements including applicable annual leave, long service leave, notice and redundancy ...(reads)... Artistic Services Australian Workplace Agreement.

PN21

It then goes on to explain what an Australian Workplace Agreement is and then the question is asked:

PN22

Why an agreement?

PN23

And this is one issue that we take issue with and that is - the answer to that is:

PN24

Artistic is currently not a respondent to the Federal Catering - Victoria - Award.

PN25

We say they are bound under section 149 for the reasons put to you previously:

PN26

In this manner the agreement is used as a base in establishing the payment based upon award rates -

PN27

and I will come back to that point later in my submissions as well. It goes on to say:

PN28

How will employees be paid?

PN29

And the answer is:

PN30

Employees will be paid an hourly rate in accordance with the Federal award classification definitions as follows. Part-time employees will ...(reads)... Monday to Friday, Saturday and Sunday.

PN31

A question is then asked:

PN32

What is the difference between a part-time employee and a casual employee?

PN33

And the answer is given:

PN34

A part-time employee will be offered regular weekly hours of work and is entitled to annual leave, personal leave and long service leave. A casual employee is engaged by the hour with no guarantee of regular work and is paid an additional 25 per cent premium to compensate for the hours worked.

PN35

And it goes on to say this:

PN36

What about the longer term? Artistic, in good faith, agree to immediately commence discussions in negotiating an enterprise bargaining ...(reads)... three months and will replace the AWA.

PN37

And there is a few observations to be made about exhibit A1. The first one is the issue about award respondency; the second one is the issue of the part-time versus casuals. It is clear that every employee from Artistic's point of view was to be engaged as part-time. There is therefore a million dollar question about why the issue of casual employment arises in any event.

PN38

The third thing is that arising out of the terms of the Australian Workplace Agreement that some, but not all, of the employees have signed the rates of pay contained within that AWA at the moment have a premium of 25 per cent on top of the award rate which is our casual rate under the award but that rate is designed to cater for and cover shift penalties, week-end penalties, public holiday penalties and, as I understand the situation, there is also the possibility of a buy-out of sick leave and annual leave to employees.

PN39

So we say that exhibit A1 demonstrates that Artistic, either intentionally or otherwise, have misled the employees with respect to their terms and conditions of employment with them and into the future. The unfortunate thing then happened. Some of the employees went to inductions last week - I refer particularly in relation to the Melbourne and Werribee people. They - on my instructions some people had three interviews through their induction. They were asked to sign these Australian Workplace Agreements, and we understand the difficulty with the jurisdiction of the Commission with respect to AWAs.

PN40

But then, at the eleventh hour when they were meant to start work on Monday at Melbourne and Werribee this week, they were told we don't have a job for you. We are not going to employ you, and some of those people have chosen to come to the Commission today. The rationale that was provided to the LHMU for the failure to engage was tha there was some doubt about whether - in Artistic's mind there was some doubt about whether or not these employees would be entitled to redundancy payments from their previous employer, that being Delaware North, and whether or not as a consequence of transmission they would become liable for such redundancy payments.

PN41

Now the interesting concept there, your Honour, is this, is that at one point they are saying, we are not respondent and we are not bound, but on the other hand they turn around and they reject these people, after they have signed AWAs, on the, we say, spurious grounds that there might be some entitlement into the future for redundancy. We say that they are spurious grounds at best and you can't have it both ways. There is either transmission or there is not and I might also indicate that at no point to date has the LHMU sought to claim redundancy payments respectively for any of the employees and we wouldn't intend to do that with respect to Artistic because the employees are casual employees.

PN42

In any event there was a whole string of events which then occurred and I might just briefly tender now a copy of a letter addressed to Ms De Nino, who is with me today in the Commission, from the Zoo.

EXHIBIT #A2 LETTER FROM MELBOURNE ZOO DATED 21/08/02

PN43

MS FRENZEL: This letter is dated 21 August 2002 and this clearly demonstrates that the LHMU was very concerned, firstly, about the ongoing prospects for employment of our members and, secondly, about the terms and conditions of the people who were being engaged by Artistic Catering. Now, can I say this, the Zoo Board is not pure as the driven snow in this process either. They are the client of a contractor. They have the ability to direct the contractor about terms and conditions of employment. It is a well-known fact in contracting with cleaning, security and catering.

PN44

So what the Zoo say here about them having no control over the terms and conditions of employment and who is engaged and who is not engaged it is simply not the case and in fact there is a - and I put it no higher than this - but there is a rumour circulating around Melbourne Zoo amongst the catering staff that in actual fact Melbourne Zoo instructed Artistic Caterers not to engage any of the employees who were former Delaware North employees. Now whether that is true or not is beside the point. The fact is, is that clients can and do, as a matter of course, exercise that level of control over their contractors day in, day out, week in, week out.

PN45

So we raised the issues of concern with the Zoo about the ongoing employment and the terms and conditions and the - point 1 is most probably the most salient point in this correspondence and I quote:

PN46

The union has sought an undertaking from the Zoo that Artistic Catering would offer the current zoo employees offers of employment with the ...(reads)... have the power to interfere with the business operations of Artistic Catering.

PN47

We dispute that. We then sought a commitment from the Zoo that current Zoo Board staff, this is at Healesville, who gained employment with Artistic Catering would be employed under the same terms and conditions and once again the Zoo plays Pontius Pilate and says that is a matter for Artistic Catering and not for us and they even go on to say they are unable to direct or demand that Artistic Catering employ staff under certain terms and conditions. That is simply not the case.

PN48

We also sought an assurance from the Zoo that the Zoo Board employees entitlements would be protected in the transfer process and the Zoo Board gave that commitment because what they were going to do was pay all the outstanding entitlements to the employees including, I might add, for those fortunate at Healesville the State Government redundancy package. So the concern of Artistic about the transmission with respect to those people and redundancy entitlements was clearly settled and we say the issue that arose in Amcor in Finkelstein Js judgment does not come anywhere near the type of liability that Artistic may or may not believe they are open to with respect to the Melbourne and the Werribee people.

PN49

Now in addition to that we also correspond with Artistic as well and I will tender a copy of a letter dated 26 August and this is after a series of meetings between the LHMU and Artistic about their intentions.

EXHIBIT #A3 LETTER DATED 26/08/02

PN50

MS FRENZEL: Now we say this, and can I say this this letter is mainly directed to Healesville but the principles can be applied equally uniformly to those employees at Werribee and at Melbourne and Artistic indicated they were keen to retain as many staff as possible and in fact the instructions that I have from some of our members were the Artistic management were very glad to have them at Melbourne and Werribee as well because these are the people who knew how to run the functions and knew what to do and therefore the - having previous employees at the site is extremely important to make sure that there is continuity in terms of delivery of service.

PN51

We also indicate in our letter of 26 August that we understand that the Artistic tender document based its calculations for wages and related expenses on the state minimum wage orders rather than the catering award and we also go on to raise the issue of transmission with them as early as 26 August 2002 and we also foreshadow our intention on page 2 to rope Artistic into the Catering - Victoria - Award 1998 and I am able to advise the Commission that, and I put this in my notification of dispute as well, that a letter of demand and a log of claims have been served on this employer with a view to having a dispute found and a roping-in award made in part settlement of that dispute.

PN52

On 3 September, bearing in mind that the organisation is divided between Healesville and Melbourne and Werribee and one official does Healesville and one does Melbourne and Werribee, another letter is sent to Artistic and this deals with the Melbourne Zoo catering contract and I will also tender a copy of that.

EXHIBIT #A4 LETTER DATED 03/09/02 TO ARTISTIC CATERING

PN53

MS FRENZEL: Now this was written on the 3rd because people at Melbourne in particular are starting to get a bid worried about what is going to happen. Are they going to get jobs, are they not going to get jobs. If they are to get jobs what sort of job is it going to be and all those sorts of fundamental issues which arise with changes of contract and we raised those issues with Artistic and we asked that they advise the employees and ourselves accordingly about their intentions.

PN54

It was around that time, I think, that the issue of the Australian Workplace Agreements arose and we accept that employees have a right under the Act to have Australian Workplace Agreements. What we don't accept is having a, if you like, an issue where employees are brought in for three inductions, told to sign the AWAs and then said, sorry, but I am not going to employ you, when these employees have been working at that site with no performance issues whatsoever for extended periods of time and then they rely upon this spurious argument about transmission with respect to redundancy.

PN55

So in any event most of the employees did attend the inductions and did sign the Australian Workplace Agreements and we understand that the terms of the Workplace Agreements are a matter for the union to take up separately and we intend to do that. But having said that the employees attended the inductions, signed the AWAs, made themselves available and in fact, Deputy President, were rostered by the company to work. They were told by this company, yes, you are on the roster, can you please make sure you come down to the office, sign the relevant employment documentation and get ready to start work.

PN56

Then on the Sunday before the Monday they are told, sorry, we haven't got a job for you. Now the Zoo also, as I have already said, we say are in it up to their ears as well and I will tender a copy of an e-mail from Chris Reynolds who is the human resources manager at the Zoo and is present in the Commission today to Ms De Nino, once again raising the issues of terms and conditions of engagement and employment.

EXHIBIT #A5 E-MAIL FROM CHRIS REYNOLDS TO MS DE NINO

PN57

MS FRENZEL: The e-mail is from Chris Reynolds addressed to Connie De Nino and it says:

PN58

Hi, Connie, Attached is our response to the questions raised by catering staff. For some of the questions it isn't appropriate for us ...(reads)... contact us if further questions arise.

PN59

And then we have - and the questions were raised specifically by the Healesville staff on the basis that they remain directly employed by the Zoo at this point in time. Firstly:

PN60

Did the contract document and following contracts specify the remuneration for each staff and what awards were current?

PN61

And the answer to that is:

PN62

The tender document does not specify the remuneration of staff nor what awards were current. The Zoo tendered the catering services out with the understanding that the contractor will be responsible for the employment of suitable staff for their business.

PN63

It goes on to say:

PN64

If not, did the Zoo Board neglect to advise Artistic of the current status regarding the staff payment levels and awards?

PN65

And the response:

PN66

The Zoo requested interested contractors seek any information they required regarding catering services for the three Zoos. This included ...(reads)... contractual arrangements with their staff.

PN67

Next question:

PN68

If so, why is it now necessary to negotiate an EBA between Artistic and the Zoo Board without the inclusion of negotiators on behalf of the staff?

PN69

And the Zoo response is this:

PN70

The EBA is between Artistic and its staff and not with the Zoo Board. It is appropriate for Artistic to respond to this question and not the Zoo Board.

PN71

It goes on to ask:

PN72

Does the contract document specify that Artistic shall take over the staff at their current rates of pay under the current awards?

PN73

The answer is:

PN74

The tender document does not specify that the contractor takes over Zoo Board staff at their current rates of pay under current awards. A matter ...(reads)... by the Zoo Board for their own operation.

PN75

The question is then asked:

PN76

Is the redundancy package available to be taken voluntarily?

PN77

The answer is:

PN78

Yes, if catering staff do not wish to transfer from the Zoo to Artistic the redundancy will apply.

PN79

The next question is this;

PN80

Does Artistic expect to employ all existing staff at a level of pay less than current and under different conditions and if so, why?

PN81

And the Zoo say then:

PN82

It is not appropriate for the Zoo to respond, Artistic to reply.

PN83

The question is then asked:

PN84

Is it possible to turn down the offer of jobs and take redundancy?

PN85

And the answer is yes to that. They also ask questions:

PN86

Is it possible for redeployment in other parts of the Zoo?

PN87

And the Zoo sort of hedge their bets here but they do say:

PN88

Opportunities for redeployment are considered to be very limited now and in the short term future however.

PN89

The employees also asked their employer, the Zoo:

PN90

What legal avenues do the staff have to negate EBA negotiations (and contract content) and is the union in a position to act accordingly?

PN91

And the Zoo Board say:

PN92

The union should reply to that.

PN93

And it asks:

PN94

Does the Zoo have a copy of the contractual document?

PN95

And they say:

PN96

A copy of the tender can be provided to the union. The contract outlining the investment cannot be provided as this is deemed commercial confidentiality.

PN97

And then we have got a few things that both Artistic and the union are required to respond to from the Zoo's perspective and those questions are:

PN98

As existing staff are not privy to contract content or how it currently affects their current employment what is the impact of immediate withdrawal of labour and the closure of the catering centre at Healesville Sanctuary?

PN99

What support can catering staff expect from other areas of the operation and if an EBA is negotiated what is the length of time for completion?

PN100

And they say that the Zoo - sorry, that Artistic or the union should reply to those questions and I think that is appropriate in the circumstances. The next question, however, is this:

PN101

What happens to Zoo during this process in terms of remuneration?

PN102

And they say:

PN103

Artistic and the union to reply.

PN104

And it comes back to that washing of hands, if you like, by the client of the contractor about the terms and conditions of these people. Then it goes on to say:

PN105

If the contractual document specified current remuneration conditions can all existing staff now refuse to negotiate an EBA, etcetera?

PN106

And they say once again that it is a matter for Artistic and the union and:

PN107

Current Zoo Board staff who do not wish to transfer to Artistic will be eligible for redundancy.

PN108

Now there is a million dollar question here, Deputy President, which arises specifically with Healesville and not with the other two sites and that is that the contract change is meant to occur as of Monday and the million dollar question is given that the employees at Healesville, current employees at Healesville, refused to sign the Australian Workplace Agreements, the intentions of Artistic in engaging those people and the terms upon which those people will be engaged given that we say that there is a clear transmission of business under section 149.

PN109

As I say, Deputy President, it is an unfortunate industrial dispute because it goes right to the very heart of why contracting out can either be managed properly or managed badly and we say in this case that the whole thing has just been managed very badly and the ultimate result of that is that there are employees, whether they are members of the union or not, in our view, at this point in time and given the gravity of the situation is irrelevant, who are employees, long-serving employees, who are now out of work for reasons which are at best doubtful and most probably it could be more properly described as just being reprehensible actions on the part of the Zoo and Artistic.

PN110

We would be seeking the assistance of the Commission to enter into conciliation with a view to trying to, first, sort out the mess and, secondly, see if we can get some sense into the re-employment and the employment conditions for these people. If the Commission pleases.

PN111

THE DEPUTY PRESIDENT: Yes, Ms Frenzel. Just before you sit down, those employees other than at Werribee are all currently employed under the terms of the Australian Workplace Agreement, is that correct?

PN112

MS FRENZEL: The status, as I understand it, is this. The employees at Healesville are still employed by the Zoo and therefore they are still under the terms of the Catering - Victoria - Award 1998 by virtue of the roping-in. The employees at Werribee and Melbourne are now former employees, because they weren't engaged, and I am not certain about this but my expectation would be that those persons have been engaged under the terms of the Australian Workplace Agreement. My understanding of it also is that at this point in time I don't believe those Australian Workplace Agreements have been approved by the Employment Advocate.

PN113

We say that until those AWAs are approved by the Employment Advocate then obviously, under section 149, the employees should be covered by the terms of the Catering - Victoria - Award for the reasons I outlined earlier with respect to the two types of transmissions.

PN114

THE DEPUTY PRESIDENT: Yes. I mean, my recollection is that the terms would apply from the issuing of a filing receipt. Is that not correct?

PN115

MS FRENZEL: That is right.

PN116

THE DEPUTY PRESIDENT: Yes.

PN117

MS FRENZEL: I don't have any information about whether or not there is a filing receipt or not but my assessment of the situation right now, given the shortness of the length of time, would be that it is possible that it is not.

PN118

THE DEPUTY PRESIDENT: Yes. Okay, thanks, Ms Frenzel.

PN119

MS FRENZEL: If the Commission pleases.

PN120

THE DEPUTY PRESIDENT: Yes, Mr Cannell.

PN121

MR CANNELL: Your Honour, from Artistic Catering's perspective the effective - first of all, there is a couple of corrections. The effective dates of commencement of new employees for the takeover of the sites were 10 September for Melbourne and Werribee, not Monday the 9th, it is the Tuesday, and 17 September for the Healesville site which is next Tuesday, not next Monday. In terms of award respondency Artistic currently operate under the Victorian Minimum Rates Sector G and we are aware of the union's intent to rope Artistic into the Federal award in that matter, but currently they continue to operate under the minimum rates system.

PN122

Until two days ago I was not personally aware of the Zoo being a named respondent to the Federal award, however I acknowledge that now, as of the SDPs decision of 2 August. Artistic understood at the time, in putting this whole strategy together, that the Melbourne site would be paid in accordance with the - sorry, at the moment Artistic understood that the Melbourne site is paid in accordance with the Federal award, the Werribee site is paid in accordance with the Spotless EBA - it is not operated by Delaware North, it is operated by Spotless - and the Healesville site operated under the Federal Catering Award with employees employed by the Zoo.

PN123

Our strategy in putting together this whole process was Artistic, in good faith, it commenced an interviewing process with employees with the view to offering those employees or the majority of those employees employment. However we had some concerns in regard to casuals - most of them were casuals, and most of them were regular casuals. We had concerns in terms of Artistic taking on responsibility of their - at law they were really regarded as part-time employees and therefore redundancy was a major issue.

[1.33pm]

PN124

So in offering AWAs to employees it was done on the basis of previous discussions with the employers in terms of previous employers honouring redundancy payments on those regular casuals and full-time employees. In view of the fact that at the time that I understood that the Zoo had not been roped in to the Federal award, the strategy was to put together an AWA initially to cover the employees immediately and then immediately commence the negotiation of an enterprise bargaining agreement directly with the union and our approach to the union was on that basis.

PN125

To that extent we met with the union last Thursday and sat down with them and put our strategy together. I would like to submit please documentation.

PN126

THE DEPUTY PRESIDENT: Can I just be clear, Mr Cannell? You say that the offers of employment that were intended to be made or were made and withdrawn from employees were withdrawn on the basis that the company you represent was of the view that it may inherit liabilities in that those casual employees may have been deemed as permanent employees under the award, is that - - -

PN127

MR CANNELL: Correct.

PN128

THE DEPUTY PRESIDENT: And that would have been by virtue of which particular provision of the award?

PN129

MR CANNELL: I don't have that readily available just quickly at the moment, your Honour.

PN130

THE DEPUTY PRESIDENT: All right.

EXHIBIT #R1 DOCUMENT

PN131

MR CANNELL: On that basis we met with the union with a view to first of all discussing all the issues with them and following that meeting this letter was then sent to myself confirming that subject to in principle I guess that they were in agreement with the process as outlined and at that stage of the negotiation process we understood we had the support of all the employers in terms of their payment of redundancy entitlements to employees and that was on the Friday when this was received. On the Monday it was - we met with the Zoo and reached agreement on the payment of redundancy entitlements to all those regular casual employees. However, Delaware North declined the offer and on that basis the offer was declined. I might also add, your Honour, in terms of - - -

PN132

THE DEPUTY PRESIDENT: Sorry, could you just go back a bit. Delaware North declined what particular offer?

PN133

MR CANNELL: To pay the redundancy entitlements.

PN134

THE DEPUTY PRESIDENT: In respect of those - - -

PN135

MR CANNELL: In respect of their employees, because the company was interested in taking on a number of those employees.

PN136

THE DEPUTY PRESIDENT: Yes.

PN137

MR CANNELL: The majority of those employees.

PN138

THE DEPUTY PRESIDENT: Yes.

PN139

MR CANNELL: And had in good faith commenced to negotiate with those employees. At no time was any employee requested to sign a document because under the requirements of the Act in terms of Australian Workplace Agreements there must be at least a five day provision and a 14 day provision for those employees currently employed.

PN140

THE DEPUTY PRESIDENT: So was the position of Delaware North that their employees had no entitlement to redundancy by virtue of the fact that they were casuals? Was that their position or was there an acknowledgment that the - - -

PN141

MR CANNELL: That was the position put to us by Delaware North.

PN142

THE DEPUTY PRESIDENT: Yes, but you had a different view?

PN143

MR CANNELL: And we had a different view of that and the offer was made to the employees on the basis that we would have, subject I guess to the employees being entitled to that payment.

PN144

THE DEPUTY PRESIDENT: Yes. So just to take up the point of Ms Frenzel before is that an acknowledgment by the company you represent that they are bound by the terms of the award?

PN145

MR CANNELL: We admit that - it is our understanding they are now bound by the terms of the award in view of the - - -

PN146

THE DEPUTY PRESIDENT: By virtue of section 149?

PN147

MR CANNELL: Yes, that is right.

PN148

THE DEPUTY PRESIDENT: Yes.

PN149

MR CANNELL: And having been roped-in to the catering award, but at the time when we initially put our strategy together we were not aware of that and purely I sought to form - look at some sort of legal way of ensuring that employees were legally covered and an Australian Workplace Agreement is the way of doing that.

PN150

THE DEPUTY PRESIDENT: Yes. No, I understand that. I am just trying to sort of work out what we agree to and what we don't agree to at this point in time.

PN151

MR CANNELL: Sure.

PN152

THE DEPUTY PRESIDENT: Yes, sorry, continue, Mr Cannell.

PN153

MR CANNELL: The critical issues for us are that Artistic has, in good faith, submitted the tender documentation based on flexibilities under - originally Artistic submitted their tender documentation, I should say, on the understanding of them entering - paying employees under the minimum rates entitlement. Rightly or wrongly that was the basis of their submission.

PN154

Upon being awarded that tender it has since turned out that they have had to absorb a 25 per cent increase in labour costs to cover penalty rates and adhere to less or more restrictive hours of work arrangements under the Federal award and they are quite prepared to work with that but at this stage the purpose of introducing that AWA was to look at greater flexibility so that they could at least maintain some sort of operational environment which would be profitable for them. They are quite prepared to continue with the ongoing negotiation of an EBA.

PN155

There is no problem in that matter whatsoever and we actually see our involvement here today as a very positive step in terms of ensuring that there is some sort of ongoing discussion and finalisation of an EBA. We are quite prepared, if we have some sort of security in terms of the redundancy entitlements of Delaware North employees, to employ or make offers of employment to those employees as originally intended.

PN156

THE DEPUTY PRESIDENT: And that would seem to me to be the only matter at issue a the moment? That is that the former Delaware employees, if they are in fact deemed to be permanent employees and have an entitlement, that that would be a liability that the company you represent, in your view, would pick up if they were to employ those employees?

PN157

MR CANNELL: Yes.

PN158

THE DEPUTY PRESIDENT: Yes, okay, thank you. Thank you.

PN159

MR CANNELL: If the Commission pleases.

PN160

THE DEPUTY PRESIDENT: Yes. Yes, Mr Puls.

PN161

MR PULS: If your Honour pleases. The Zoological Parks and Gardens Board, the Zoo, is slightly - in some slight misunderstanding in regards to what it is expected to deliver in terms of its appearance here today. The Zoo has attempted to ensure that there has been a smooth transmission, as much as it is within their power to do so, has consulted extensively with the employees and has met obligations - certainly met its prescriptive obligations and I believe has gone beyond the prescriptive obligations in ensuring that its employees do have that smooth transmission.

PN162

Listening to the LHMU advocate earlier this morning, sir, one would be tempted to see a description of the Zoo as being uncaring and being indifferent to the fate of the employees of he Zoo and that hasn't been the case. There has been an extensive concern put in place regarding the Zoo's employees and their transition to other employers but I should respectfully point out to the Commission, to your Honour, that the Zoo's interest in an industrial sense is restricted to Healesville.

PN163

It is only at Healesville where the Zoo employs, directly employs staff and is bound by an award in that regard and it is our view that it is not proper or appropriate for the Zoo to impose conditions in a contract sense or a tendering sense on an employer and the employees who would be in that employer/employee relationship following the transmission of business. We are aware that there is a transmission of business activity occurring. However, having said that we would not either wish to be painted as being indifferent to that process.

PN164

The Zoo has a very keen interest to make sure that the catering aspect of its operations are conducted cohesively and quite smoothly and we have been keen to co-operate with both Artistic and the union in these processes in an attempt to ensure that that operates as smoothly as possible. We would welcome the opportunity of going into conference but listening to the LHMU advocate earlier this afternoon we would be at a loss to understand what relief initially the LHMU would be seeking in terms of the Zoo's involvement in this.

PN165

We would be happy to participate in a conference if it were believed that it was possible for us to make a contribution to that smooth transmission. If the Commission pleases.

PN166

THE DEPUTY PRESIDENT: Yes. Well, I think, Mr Puls, that the position that Ms Frenzel was putting was that it is open to the Zoo to have a view and assert that view in respect of contractual arrangements that it might enter into with a third party. That was the way I understood the submissions at least. So to that extent I think it is relevant that the Zoo remain part of the proceeding at least until we see how far we can go.

PN167

MR PULS: If the Commission pleases.

PN168

THE DEPUTY PRESIDENT: Thank you. Yes, Ms Frenzel.

PN169

MS FRENZEL: Thank you, Deputy President. Just a brief reply. There was a discussion between Mr Cannell and myself a couple of days ago and the question was asked of me, what does the LHMU want, and I said to Mr - - -

PN170

THE DEPUTY PRESIDENT: That is a dangerous question, isn't it, Ms Frenzel?

PN171

MS FRENZEL: Sorry?

PN172

THE DEPUTY PRESIDENT: That is a dangerous question, isn't it?

PN173

MS FRENZEL: Well, it is because I can give all sort of answers.

PN174

THE DEPUTY PRESIDENT: Yes.

PN175

MS FRENZEL: But can I say this, this is what I indicated, that we wanted the employees to be engaged and we wanted, arising out of my advising Mr Cannell that his client was bound by the terms of the award, we wanted those employees to be engaged on the terms of the Catering - Victoria - Award 1998 and it was as simple as that and his response to that was that his client didn't want to do that and I said, well, that was perfectly obvious to me otherwise we wouldn't have been having the discussion in the first place.

PN176

So that is what we want and so if the Zoo is under any misapprehension about their role I think that you clarified that more than adequately, Deputy President. Can I say this though that when an employer or a prospective employer tenders for work on industry sector rates one of two things, if they are moving into an LHMU industry, one of two things will happen. Either (a) there will be a transmission there somewhere, particularly given the recent decisions with respect to transmission, or (b) we will rope them in.

PN177

So if they are not bound by the award in one way ultimately they will become bound in another and Artistic should have, to avoid the three-ring circus we currently have, perhaps should have tendered on the award rates in the first instance because that would have overcome a range of difficulties for them. Having said that they didn't do that, they didn't feel they were obliged to do that even though they actually were and we now find ourselves in a situation where they now see the LHMU having to notify an industrial dispute to this Commission and take the Commission's time as being a positive step.

PN178

We are happy to go into conference. The only thing we say about the Zoo is this. We accept that with respect to Werribee and Melbourne there is no industrial, if you like, obligation on the Zoo but we say there is a strong ethical and moral obligation on this organisation, very very strong, and in my respectful submission they should not be allowed just to hide behind industrial law but rather they should come out of the woodwork and they should exercise those ethics and morals in a more appropriate fashion. If the Commission pleases.

PN179

THE DEPUTY PRESIDENT: Yes, thanks, Ms Frenzel. Mr Puls, can I just ask you a question. At the time that the Zoo went to tender in this matter you would have had two sites, if I am understanding you correctly, who would have been covered by the Federal award, is that correct?

PN180

MR PULS: Can I just take some advice on that, sir?

PN181

THE DEPUTY PRESIDENT: Yes.

PN182

MR PULS: I will only be one second. Yes, sir, I must admit I am a new edition to the Zoo so I need to take advice on these issues.

PN183

THE DEPUTY PRESIDENT: Yes.

PN184

MR PULS: But my understanding is that - my advice is that the only area in which we had direct employees was Healesville. That in fact at Werribee and at Melbourne Zoo there were contractors with their own arrangements with their employees at each of those organisations. I think that probably follows from what Ms Frenzel just said a minute ago.

PN185

THE DEPUTY PRESIDENT: Yes, but is your understanding of those arrangements at the time with respect to Melbourne at least would have been that they were Federal award covered?

PN186

MR PULS: I am advised that the Zoo wasn't aware of that at the time. There was some misunderstanding I think at the time about who was covered by what.

PN187

THE DEPUTY PRESIDENT: Okay.

PN188

MR PULS: But certainly there was no misunderstanding about Healesville where there had been a Federal award - - -

PN189

THE DEPUTY PRESIDENT: No, okay, thank you. In respect of Healesville then was that information conveyed to all the prospective tenderers? That the current employees were in fact covered by a Federal award?

PN190

MR PULS: I will just take some advice, your Honour. I will only be a second.

PN191

THE DEPUTY PRESIDENT: Yes.

PN192

MR PULS: My advice, sir, is that none of the tenderers were required to advise the Zoo in the tenders about what their - what the relationship or arrangement would be for their - - -

PN193

THE DEPUTY PRESIDENT: No, I am sorry, that wasn't the question. The question was, did the Zoo advise the prospective tenderers of the circumstances of current employees - - -

PN194

MR PULS: As I understand - - -

PN195

THE DEPUTY PRESIDENT: - - - with respect to their regulatory mechanisms of their employment?

PN196

MR PULS: Yes, as I understand it that didn't occur, sir.

PN197

THE DEPUTY PRESIDENT: It didn't at all?

PN198

MR PULS: No.

PN199

THE DEPUTY PRESIDENT: Not even in respect of Healesville?

PN200

MR PULS: As I understand it, sir, and there was a reason for that, if I can interpolate. Initially the tender was put out only to cover Werribee and Melbourne. At the last minute, and I am not sure of exactly what the last minute were in terms of days and hours, but very late in the process a decision was made to include Healesville into that process.

PN201

THE DEPUTY PRESIDENT: But it still seems to me to be somewhat odd that - I mean, even if that information wasn't provided as part of tender documents that that wouldn't be one of the first, if not the first, question asked by an prospective tenderer to the extent that there was going to be some encouragement to employ people. That those tenderers wouldn't immediately say can you give us some advice as to the regulatory mechanisms in place.

PN202

MR PULS: It could be regarded as unusual, sir, yes.

PN203

THE DEPUTY PRESIDENT: Yes. Thank you. I might adjourn into conference at this stage. Thank you.

NO FURTHER PROCEEDINGS RECORDED

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 BULLETIN FROM ARTISTIC FOOD SERVICES AND CATERERS PROVIDED TO AFFECTED EMPLOYEES PN13
EXHIBIT #A2 LETTER FROM MELBOURNE ZOO DATED 21/08/02 PN43
EXHIBIT #A3 LETTER DATED 26/08/02 PN50
EXHIBIT #A4 LETTER DATED 03/09/02 TO ARTISTIC CATERING PN53
EXHIBIT #A5 E-MAIL FROM CHRIS REYNOLDS TO MS DE NINO PN57
EXHIBIT #R1 DOCUMENT PN131