AG2002/5811, Transcript of Proceedings [2002] AIRCTrans 5024 (13 December 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT HAMPTON

AG2002/5811

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Wilkus Pty Limited (Subway) for certification
of the Wilkus Pty Limited Certified Agreement

ADELAIDE

11.07 AM, FRIDAY, 29 NOVEMBER 2002

PN1

THE DEPUTY PRESIDENT: Yes, good morning all. I will take the appearances.

PN2

MR B. THOMPSON: I represent the employer. I have with me MR S. KUSTERMANN representing the employer and MS S. HARVEY representing the employees.

PN3

THE DEPUTY PRESIDENT: Yes. Perhaps, Mr Thompson, I should also indicate notwithstanding the formal environment and without in any way wanting to detract from your role, I just want to make it clear that both Mr Kustermann and Ms Harvey should feel free to make a contribution in these proceedings as they see fit.

PN4

MR THOMPSON: Yes, sir, I have indicated that to them.

PN5

THE DEPUTY PRESIDENT: Good. Yes, Mr Thompson?

PN6

MR THOMPSON: Deputy President, if I just may take a few moments to give you some background on these matters and the employee relationship.

PN7

THE DEPUTY PRESIDENT: Thank you.

PN8

MR THOMPSON: You have before you a section 170LK application representing two workplaces, both of them being Subways Fast Food Sandwich Shops, one in Morphett Vale, Adelaide, the other one in Colonnades Shopping Centre. Both of these establishments, Deputy President, have been operating for approximately 3 years under Australian Workplace Agreement under the same Act. The employment relationship has been extremely positive and the employees have been very satisfied with the existing arrangements.

PN9

The reason that we have made the application to progress to a certified agreement under section 170LK is to again simplify the process by removing the individualised nature of the agreement and moving it to a workplace nature. In doing so, Deputy President, we found that the employees are particularly satisfied with the new agreement because it is simply mirroring the previous AWA and actually increases their benefits in terms of hourly rates under that AWA. Would you like me to move on to the application and the procedural issues?

PN10

THE DEPUTY PRESIDENT: Yes, certainly.

PN11

MR THOMPSON: As is required by the Act, Deputy President, the employer has followed the procedural requirements by first issuing to the employees a notice of intent as is attached to the application. You will note that the notice does comply with the required wording from section 170LK(4) informing employees of their right to representation by either a parent or a guardian or an employee organisation. I will also add that this right was expressed orally on several occasions and the employees were fully aware of that right that they had. However, no application was made by an employee organisation.

PN12

THE DEPUTY PRESIDENT: It may be a typographical error but I think in the third paragraph it says:

PN13

If you are a member of an employer organisation...

PN14

That may not - - -

PN15

MR THOMPSON: I believe under the section 170LK(4) the actual wording is:

PN16

If a member may be represented by...

PN17

I'm paraphrasing, Commissioner, but may be represented by an employee organisation:

PN18

...(if a member) or if appropriate.

PN19

THE DEPUTY PRESIDENT: Yes, it says employer in this statement.

PN20

MR THOMPSON: Sorry, in that case it is a typographical error and this was the pro forma agreement which was then retyped on to letterhead and I imagine that would have been picked up.

PN21

THE DEPUTY PRESIDENT: Well, I don't think it is fatal in any event given the previous paragraph does day:

PN22

If you prefer you may have a representative including -

PN23

paraphrasing -

PN24

an employee organisation if a member.

PN25

MR THOMPSON: Yes, Deputy President.

PN26

THE DEPUTY PRESIDENT: All right.

PN27

MR THOMPSON: So once the required notice of intent had been given all employees were given at least 14 days, in many cases more time than that, to negotiate with the employer and to gain a full and comprehensive understanding of the proposed agreement. You may wish to speak to the employer or the employee representative to confirm this is the case but I'm sure they will submit the same as what I have just indicated. Again because of the nature of the previous relationship the AWA being reflected in this certified agreement I think that we can comfortably say that all of the employees were fully aware of the agreement and its nature and understood it.

PN28

Moving along, the agreement then after the 14 days, signatures were collected between the 16th and - well, after 14 days. What happened then, Deputy President, I will explain, is that the signatures were collected. There was some delay in progressing the application, mainly administrative because our office, the employees' bargaining agent, is in Sydney and there were some administrative delays, so the agreement or the application lapsed out of 21 days and we believe that it is probably best to have it re-executed rather than seek the discretion of the Commission under section 111(1)(r) of the Act.

PN29

The agreement was then re-executed so you will notice that the employees actually had even more opportunity to understand and have again given their genuine concern a second time and we have achieved approximately 100 per cent or just under 100 per cent acceptance, genuine acceptance of the agreement. Once the signatures were collected the second time the application was updated and lodged within the required time period and now lies before you for consideration.

PN30

THE DEPUTY PRESIDENT: Mr Thompson, there are, or at least there appear to be, two documents.

PN31

MR THOMPSON: Yes, there are.

PN32

THE DEPUTY PRESIDENT: I say that because of course there are initials on two different documents and they are different initials.

PN33

MR THOMPSON: That is correct, Deputy President. What happened was that the content of the two documents is identical but one copy of each document was provided at each workplace and signatures were collected on each document and then because of that the two separate, although identical, certified agreements were lodged for completeness. Didn't want to remove the signatures and attach them to the one.

PN34

THE DEPUTY PRESIDENT: Just in that context I note that clause 10.1(iii) has been removed from both.

PN35

MR THOMPSON: Yes.

PN36

THE DEPUTY PRESIDENT: At what stage in the process was that deletion made?

PN37

MR THOMPSON: It is my understanding that that was - - -

PN38

MR KUSTERMANN: Right at the start.

PN39

MR THOMPSON: - - - prior to the application - sorry, prior to the notice of intent.

PN40

THE DEPUTY PRESIDENT: Thank you.

PN41

MR THOMPSON: I was just considering whether the Commission - you, Deputy President, had any specific questions in relation to the nature of the agreement or the no disadvantage test.

PN42

THE DEPUTY PRESIDENT: Yes, I do. Firstly, if I can take you - there are a couple of points of clarification on one particular issue I need to hear from you on. The duration of agreement clause, and I appreciate that because this is effectively modelled if not taken completely from an AWA there may be a clear understanding about these matters in the workplace, I must say that with respect the wording of some of these provisions means it is not entirely clear to me but the duration of agreement clause?

PN43

MR THOMPSON: Yes, Deputy President. The duration of the agreement is 3 years, a minimum, period of 3 years.

PN44

THE DEPUTY PRESIDENT: Yes. I understand the back end of the clause but what does the first part of the sentence mean and in particular "and does not continue those of prior engagements". What does that mean?

PN45

MR THOMPSON: The agreement is intended and is drafted, albeit I may concur with you that it could be improved, the agreement is drafted to reflect that it applies only to the type of employees that are specified under the section 5 and again under the section 9 of the agreement, so that it applies to the specific terms and conditions of those employees identified in section 9 and in section 5. It does not continue those of prior engagements, meaning that it does not continue - that these employees are new - that this is a new agreement to replace the AWA rather than a continuation of the AWA, and then simply goes on to the duration of the agreement.

PN46

THE DEPUTY PRESIDENT: Mr Thompson, you will appreciate that if someone had to interpret that at any stage they might have some great difficulty because you appreciate this is in a duration of agreement clause.

PN47

MR THOMPSON: Yes.

PN48

THE DEPUTY PRESIDENT: I accept it talks about - relates only to employment specific to its terms and conditions. Now, that is rather circular but it says:

PN49

That is weekly employment facilitating training rosters and hours within specific parameters.

PN50

Now, I think with a fair approach that means that the agreement relates to weekly hired employment.

PN51

MR THOMPSON: That is correct, yes.

PN52

THE DEPUTY PRESIDENT: That is what it is designed to mean?

PN53

MR THOMPSON: And add that, for instance, this is intended to only operate in relation to part-time and full-time employees, not casual employees.

PN54

THE DEPUTY PRESIDENT: Yes.

PN55

MR THOMPSON: The employer does not as a matter of policy employ casuals for reasons - if you would like me to explain if necessary later - that he finds a benefit in confirming the actual employment relationship, that being part-time because of the tenure of most of his employees we believe it is better to confirm the exact nature being part-time rather than have the existence of an unknown employment relationship.

PN56

THE DEPUTY PRESIDENT: I have got no difficulty with that sentiment at all. My only concern is whether there is uncertainty being created because of the inclusion of some of those words that presently appear in clause 3, duration of agreement, "does not continue those of prior engagements" appears to relate to the sort of employees that are covered whereas that is not the explanation you have given and I'm sure it is not the intention.

PN57

MR THOMPSON: I guess for want of clarification that the clause is reasonably clear to me and I didn't draft it, Deputy President, but again if you would like to refer back to within the agreement if we are trying to understand this clause, "does not continue those with prior engagements" may also be assisted by the fact that the AWA has been terminated when making this agreement. So I think it is again simply confirming that the AWA has been terminated in order to progress to this certified agreement and that this is a new agreement relating to these employees, these part-time employees employed in the manner mentioned for a period of 3 years.

PN58

THE DEPUTY PRESIDENT: I mean, obviously it would have been easier to draft a traditional duration clause, have a scope clause that said exactly what you have just said to me and in particular that it applies only to weekly hired employees, not to casuals and replaces the AWA.

PN59

MR THOMPSON: I can see that. However, I don't think that the current wording necessarily disadvantages the employees or is so ambiguous so as to not be understood with some reading of the entire agreement.

PN60

THE DEPUTY PRESIDENT: I think I would make some of the same comments though in relation to the contract of employment clause and in particular the definitions of weekly employees and part-time employees.

PN61

MR THOMPSON: I take your point there, Deputy President, and without jumping ahead I would imagine that your concern lies in the fact that we are defining the type of employment and then including a statement regarding probation, yes.

PN62

THE DEPUTY PRESIDENT: All of the terms, yes. In fact I do have a concern about the clarify and legal enforceability of that should the agreement be certified and in particular what appears on face value to be a contradiction between full-time employees who are employed on 3 months' probation and have a continuing employment relationship. Now, there's some tension in that. I believe I understand the intent. The intent is presumably that full-time employees are initially employed on a 3 months probation period and subject to confirmation have a continuing employment relationship. I think that is presumably what it means.

PN63

MR THOMPSON: Well, yes, Mr Kustermann, you would agree that the - correct me if I am wrong - that the policy of your employment is to take people on on a 3-month probation and then confirm - - -

PN64

MR KUSTERMANN: Yes, yes.

PN65

MR THOMPSON: - - - beyond that 3 months that it is an ongoing relationship?

PN66

THE DEPUTY PRESIDENT: Because, you see, the part-time employment definition of course, as you have correctly perceived, Mr Thompson, it defines and then loads all the conditions effectively into one clause. I take it that the elements of this are 3 months probation subject to that continuing employment relationship goes and paid by the week, to work less than 38 hours on regular days and hours with a minimum of 3 per day and by agreement less than 12 but not less than 6 on average per week. Now, there are - I pause, which won't show up in transcript, of course, but I pause between those various elements. I wonder whether that is - have I correctly perceived the appropriate point of to pause and to point out the separate concepts that are there?

PN67

MR THOMPSON: Yes, you have, Deputy President, and you have read and understood the clause in its intended manner. Again, I concur that it takes a little more effort to fully understand it and it could be drafted slightly more clearly but your initial reading of it is correct.

PN68

THE DEPUTY PRESIDENT: So in relation to the part-time employee, that means for instance if there isn't agreement to less than 12 then the minimum is 12?

PN69

MR THOMPSON: Yes, unless by agreement. Would you like to confirm it? So with a part-time employee obviously you will - you would give them a roster and if on that roster there were less than 12 hours they would consent to working those less than 12 hours if they didn't consent by working those hours it could then be argued that their minimum term of employment for that week would be 12 hours?

PN70

MR KUSTERMANN: Yes, or the people working less than 12 are basically all school children and yes are only wanting to work three hours a week and that sort of thing.

PN71

THE DEPUTY PRESIDENT: Mr Thompson, I might just take you to the attachment to the statutory declaration that has been filed. These you rely on for the purposes of the No Disadvantage Test. Just to make sure I have understood what you have done here by way of the calculations. In relation to the second - this is attachment 3.

PN72

MR THOMPSON: Yes.

PN73

THE DEPUTY PRESIDENT: The bottom part of the first page has two tables which - one is part-time the other is full-time I take it.

PN74

MR THOMPSON: That is - yes, it is.

PN75

THE DEPUTY PRESIDENT: Yes, now just in terms of my understanding what has been done here, this has been done assuming all the provisions of the agreement are applied but in the case of the full-time - in case of both a 38-hour week?

PN76

MR THOMPSON: That is correct.

PN77

THE DEPUTY PRESIDENT: So that is effectively it has been done on Monday to Friday, five days a week and that's in relation to the top part of the table.

PN78

MR THOMPSON: Yes.

PN79

THE DEPUTY PRESIDENT: Then what has happened in the bottom part of the table is that the additional provisions which at least in the case of the part-time employees arises because of the award and are not reflected in the agreement you have then included those provisions. So the public holiday loading at double time, for instance, do I understand that the 361.52 is the additional payment that would have been payable under the award?

PN80

MR THOMPSON: That is correct.

PN81

THE DEPUTY PRESIDENT: That is, the extra time payment that would have been paid for the amount of public holidays.

PN82

MR THOMPSON: That is correct, sir, Senior Deputy President.

PN83

THE DEPUTY PRESIDENT: All right. Now, in relation to the afternoon shift, the 520 that is there, can you just - on what basis that calculation has been made? I mean, what assumptions have been made about the extent of afternoon shiftwork?

PN84

MR THOMPSON: Wel, the - using the standard hours of both establishments which are 7.30 am until 5.30 pm on most days, we have - and the hours agreed as a typical roster in clause 16 of the agreement, we have calculated the afternoon entitlements for the 52-week period and that is reflected by the $520 in the first column of the calculations under the award.

PN85

THE DEPUTY PRESIDENT: All right. Most Subways, in my experience, are tending to trade later now than they were. Obviously the one - is it in Colonnades?

PN86

MR THOMPSON: Yes.

PN87

THE DEPUTY PRESIDENT: They would presumably be subject to the trading hours of the general store.

PN88

MR KUSTERMANN: Yes, exactly, we are inside so we have got no option to open late or anything like that.

PN89

THE DEPUTY PRESIDENT: All right. In relation to the other store what is the circumstances there?

PN90

MR THOMPSON: Well, the other store is open until, on some occasions 10 pm.

PN91

MR KUSTERMANN: Yes, in summertime.

PN92

MR THOMPSON: In summertime, and we have again worked this on a worst case scenario, Deputy President, to arrive at these figures. These calculations under the award are based on an employee working the maximum - - -

PN93

THE DEPUTY PRESIDENT: Yes, I understand that and I agree and I accept that that doesn't necessarily mean we will but what you have done is calculate on the basis that if all of the potential flexibility that is allowed under the public holidays, Saturday, Sunday and hours of work arrangements, were utilised this is the picture that would emerge. That is the assumptions that you have made.

PN94

MR THOMPSON: That is correct, Deputy President.

PN95

THE DEPUTY PRESIDENT: Look, I think that is a very reasonable assumption. I will bear in mind that that then does mean the worst case scenario.

PN96

MR THOMPSON: Yes and just again on record, Deputy President, that the - against the Award and this attachment refers to AWA and that should obviously be corrected or understood as certified agreement.

PN97

THE DEPUTY PRESIDENT: Yes, I did understand that.

PN98

MR THOMPSON: It actually gives a net aggregate positive payment or additional payment in the tune of just over $100 per annum. So even on a worst case scenario it is still coming out a little ahead of the award.

PN99

THE DEPUTY PRESIDENT: All right. Mr Thompson, the issue that I referred to earlier which is a matter perhaps more of just substance than form is that, as I understand it in relation to part-time employees, in respect of annual leave and sick-leave, there is no annual leave and sick-leave and you have adopted a loaded rate approach.

PN100

MR THOMPSON: We have cashed out and, in your terms, yes, loaded the rate to reflect that.

PN101

THE DEPUTY PRESIDENT: I think what I need to hear you on is whether or not, given the nature of annual leave and sick-leave, whether or not the fact that there isn't a designated leave in that context raises issues in terms of the No Disadvantage Test and I would invite you to make whatever submissions you wish to about whether or not the agreement then as a package meets that test.

PN102

MR THOMPSON: Certainly, sir. Okay, I would like to make two points on that, Deputy President, first of all looking specifically at the annual leave and the fact that it has been cashed out within this agreement, obviously in determining part 6 of the Act, the No Disadvantage Test against this award - against the certified agreement against the award, you would consider the public interest.

PN103

THE DEPUTY PRESIDENT: Yes.

PN104

MR THOMPSON: In determining the public interest as specified by the Act, it is the interests of the employer and the employees to be given the most weight in determining that public interest.

PN105

THE DEPUTY PRESIDENT: Just in reference to the public interest, you are not though arguing that the agreement does not meet the No Disadvantage Test but should be approved in the public interest. You are not arguing that?

PN106

MR THOMPSON: No, no, I am just saying that if we were to go down that track then in the public interest, that being the employer and the employee's interest, it has been agreed to and they are very happy with the fact that the annual leave has been cashed out. On balance also, leaving that argument behind, on balance also the agreement, I believe, brings a lot of intangible benefits which, if you allow me, Deputy President, to explain. The first one I have already touched on which is the fact that the actual employment arrangements are legitimately recognised within this agreement.

PN107

That has two - that is two-fold its benefits. Firstly, in that that ambiguity for part-time and casual employment is removed. That gives the employees the benefit of acknowledging their actual form of employment and particularly for those more mature employees to be able to, for instance, apply for a car loan or a home loan and have a contract specifying that they do have continuing employment is an advantage which although cannot be given a numeric weight certainly for an employed person would offer a great advantage.

PN108

The second is that by becoming a part-time employee and being recognised as a part-time employee under this agreement, the employees receive the advantages of recognised national - recognised traineeships under section - under the Act, Commissioner, and in many cases they have - the employees have opted to commence a traineeship which otherwise would not be available to them as a casual employee and therefore qualified with a nationally recognised traineeship which again is without putting a financial benefit on it is significant.

PN109

On balance, the employees obviously have consented to at least those two benefits outweighing the fact that they have received their annual entitlements to annual leave up front, in advance and in lieu of actually having that annual leave. I think, on balance, Deputy President, that provides a net advantage against the Award, those two issues.

PN110

THE DEPUTY PRESIDENT: Mr Thompson, and obviously you should feel free to take instructions or ask your client to respond to this but I was just wondering what arrangements are made in practice then for an annual break for part-time employees and what happens in the event of a part-time employee not being able to attend work due to illness or injury of some description.

PN111

MR THOMPSON: I accept your invitation, Deputy President, and confer with my client but I am sure that there are - - -

PN112

MR KUSTERMANN: Yes, basically what our policy is.

PN113

MR THOMPSON: Yes.

PN114

MR KUSTERMANN: I explain to everyone how it works, they are getting paid more to not get paid sick-leave or holidays and everyone who wants to take some time off just arranges it and just as long as they give us a week's notice on the roster then they can take whatever time they need. We have got a fair amount of people studying so, for instance, this time of the year, you know, we wouldn't see those people too often because they are ready for their year 12 exams or something like that and then at other times of the year, Sheree, a case in particular, you know she might take a week of and then she might say: Well, I am going to take another week, you know, in 4 months or long weekends or that sort of thing. I think people like that flexibility to just take a handful of days off and more often I have seen that more anyway rather than just take 3 or 4 weeks.

PN115

THE DEPUTY PRESIDENT: Yes.

PN116

MR KUSTERMANN: At the same time, if someone wants to take a good lot of holidays off, going overseas or whatever, you know, I am quite happy to do that and we are running a reasonable amount of people on a roster so, you know, other people realise that they just check in and work a few extra shifts that they need to and you know they get their turn when it comes around.

PN117

THE DEPUTY PRESIDENT: So employees still have access to leave but it is unpaid leave.

PN118

MR KUSTERMANN: Well, that is it, they can take what time that they need and I am obviously - if they - I have never had a case of it anyway, where they wanted to take 12 weeks a year off a year or something like that it would make it a bit awkward. Generally, they - my agreement with them is that, you know: If you need time off or if you want - I actually encourage them to take some decent amounts of days off in a row off or a week here and there just for that exact reason that everyone likes to have a holiday so.

PN119

THE DEPUTY PRESIDENT: Certainly, so it is a question of giving notice and reasonable arrangements.

PN120

MR KUSTERMANN: Yes, exactly and I don't think I have ever had a case where it hasn't been possible to do. No-one has ever been told: No, you can't go away because we just can't cope. We just cover it and just get through.

PN121

THE DEPUTY PRESIDENT: In relation to sick-leave?

PN122

MR KUSTERMANN: Same type of thing, if someone can't work because they are ill then we encourage them to say: I don't want you to drag yourself in here when you have got a flu or something like that because that can be disastrous in the food industry anyway.

PN123

THE DEPUTY PRESIDENT: Certainly.

PN124

MR KUSTERMANN: Yes, we usually get the call that morning saying: I am not coming in or from the parents saying they are not coming in and life goes on.

PN125

MR THOMPSON: I would just add to that Commissioner, obviously there are policies within the workplace to allow and promote the reasonable taking of holidays and sick-leave, again within reason. Because of the nature of this agreement and the fully loaded rate that is paid to all employees, the fact that the employees are being paid in advance and in lieu all of their penalties under the agreed terms so that obviously the employer is very happy to consider that despite that fully loaded rate he is still happy to approve reasonable unpaid holidays.

PN126

THE DEPUTY PRESIDENT: Are there written policies - are there formal policies about those things?

PN127

MR KUSTERMANN: No, we haven't - yes, I suppose I have never had the need for it because we have always been quite agreeable to that, so.

PN128

THE DEPUTY PRESIDENT: All right, thank you. Ms Harvey, is there anything that - perhaps we might just comment on that general area they we have been talking about from the employees perspective and anything else you wish to add on behalf of employees.

PN129

MS HARVEY: No, everything is quite happy from our point of view.

PN130

THE DEPUTY PRESIDENT: So the explanation which was given to me about the way in which an unofficial leave, if I can use that expression, works. Are you happy with that - - -

PN131

MS HARVEY: Yes.

PN132

THE DEPUTY PRESIDENT: - - - that way that it works. That is your understanding of how it works at both stores.

PN133

MS HARVEY: Yes.

PN134

THE DEPUTY PRESIDENT: In relation to the explanations Mr Thompson gave me earlier about the process, are you - do you think that was fair?

PN135

MS HARVEY: Yes, very.

PN136

THE DEPUTY PRESIDENT: All right, thank you. Mr Thompson, is there anything further you wish to put?

PN137

MR THOMPSON: I have nothing further to add, Deputy President. I commend the agreement to you for certification in the Commission's opinion, in your opinion you think it meets the requirements.

PN138

THE DEPUTY PRESIDENT: Thanks, Mr Thompson. What I propose to do is to formally reserve a decision. In doing so I would indicate that I believe I will be able to deal with the matter expeditiously rathe than hold the parties for an unknown period of time I will consider the matter. In particular, there are two matters that I want to consider. both of those have been raised with the parties. The first one is whether or not there is sufficient uncertainty about some of the wording of the agreement which may cause difficulties in terms of the Commission's certification of it.

PN139

Secondly, the issue about the - what I have called the "loaded rate" for the part-time employees. Whether or not there are issues for the Commission in terms of whether the agreement can be approved in that context but of course I confirm that the Commission's obligation is to consider all of the terms of the agreement and to make that judgment on balance in accordance with the express requirements of the legislation. So in that context - yes, Mr Thompson?

PN140

MR THOMPSON: I would just add that if the Commission, after further reading and consideration of the two provisions that we have discussed would require undertaking for amendment pursuant to section 170LV then with the employer's consent we would be willing to do that if necessary.

PN141

THE DEPUTY PRESIDENT: All right. Right, I appreciate that indication. So look, I will reserve the decision, I will let - Mr Thompson, I will let you know in written form at the earliest opportunity. I will attend to this with some priority. If there are issues I will, of course, raise them in an appropriate way and deal with them accordingly. I know what you indicated there in respect to the preparedness to look at dealing with any reservations the Commission may have by way of undertakings.

PN142

MR THOMPSON: Thank you.

PN143

THE DEPUTY PRESIDENT: So I will reserve a decision and let us have it at the earliest opportunity.

ADJOURNED INDEFINITELY [11.40am]