AG2002/6102, Transcript of Proceedings [2002] AIRCTrans 5132 (19 December 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
DX1344 Sydney Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LARKIN

AG2002/6102
AG2002/6104
AG2002/6117

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under Section 170LK of the Act
by Chubb Security Australia Pty Ltd t/as
Chubb Protective Services Australia

SYDNEY

2.38 PM, THURSDAY, 5 DECEMBER 2002

PN1

THE COMMISSIONER: Could I take appearances please?

PN2

MR P.J. RYAN: If the Commission pleases, I appear on behalf of the company Chubb Security Pty Limited and with me MS J. De LEON. Ms De Leon is a Chubb Guard Business Manager.

PN3

THE COMMISSIONER: Thank you, Mr Ryan.

PN4

MR RYAN: Commissioner, the three agreements before you are an application under Division 2 of Part 6B of the Workplace Relations Act pursuant to section 170LK. The proposed agreements are titled the Chubb Protective Services Voluntary Additional Hours, the first being Hewlett Packard Regents Park; the second Hawker de Havilland and the third is Sydney International Regatta Centre. My submissions rely on the statutory declarations made by Ms De Leon which were filed in the Commission on 25 November 2002. Commissioner, the underpinning award is the Security Industry New South Wales Award 1999.

PN5

Each site is a distinct geographical part of a single business and at each site a valid majority of employees have signed and approved the agreement. It is the company's submission, Commissioner, that the agreements comply with the requirements of the Workplace Relations Act in the following manner. Firstly, notice of the company's intention to enter into an agreement was sent to each employee at each site on 29 October.

PN6

THE COMMISSIONER: Do you have a copy of that notice, Mr Ryan?

PN7

MR RYAN: Unfortunately I don't have one with me, Commissioner, but I can - - -

PN8

THE COMMISSIONER: I'd like to sight it.

PN9

MR RYAN: Yes, I note that, Commissioner. Unfortunately I don't have it with me, perhaps I could send it this afternoon to your associate via e-mail.

PN10

THE COMMISSIONER: Yes please if you would. The notice is for each of the agreements.

PN11

MR RYAN: Yes.

PN12

THE COMMISSIONER: The notices for each of the agreements was forwarded on 29 October.

PN13

MR RYAN: It was in respect to Hewlett Packard. With regard to Hawker de Havilland it was 17 October.

PN14

THE COMMISSIONER: 17 October?

PN15

MR RYAN: That's correct. Sydney International Regatta Centre was 16 October. Attached to each notice of intention to negotiate the agreement was a copy of the proposed agreement. So each employee received that in the mail on those respective dates. I also note, Commissioner, that every employee who cast a valid vote was given the required minimum 14 days to consider each agreement. The letter of intent from the company advised employees that if any them that would be subject to the agreement or a member of a relevant organisation of employees, ie a trade union, they could request that organisation to confer with us about the agreement.

PN16

For each agreement respectively and prior to the agreement being made no such request was made to the company.

PN17

At each of the sites an information session was held. Once again in respect of the first being Hewlett Packard that information session was held on 1 November. Hawker de Havilland the information session was held on 23 October and finally in respect of the Sydney International Regatta Centre the briefing session was held on 22 October. During those briefing sessions which were conducted by Ms De Leon each term of the proposed agreement was explained to employees. The employees were given the opportunity during this meeting to ask any questions or to raise any issues regarding the agreement. Employees were also advised that they could ask any questions or raise any issues with Ms De Leon at any time prior to the vote taking place.

PN18

Secret ballots were conducted at each of the sites. In respect of Hewlett Packard that occurred on 15 November. Hawker de Havilland occurred on 6 November and the Sydney International Regatta Centre the secret ballot took place on 4 November. At each of those sites during the voting process a valid majority of employees voted in favour of the proposed agreements. Each agreement has a nominal period of operation of three years from the date of certification by the Commission. Each agreement also contains a necessary dispute resolution procedure at clause 8. Commissioner, I'd now like to address the broader macro environment which the company operates in terms of the industry specifics.

PN19

As you would be aware, Commissioner, the security industry in New South Wales as in all other states and territories across Australia is extremely competitive resulting in employers being conscious of the need to contain costs in order to remain viable and able to compete for work. Chubb Protective Services as Australia's largest provider of security services has identified overtime as one of those areas. With respect, Commissioner, it is the company's view that the rates of pay for overtime regulated within the award are onerous in relation to overtime. It is submitted that these rates act as a disincentive to the allocation of overtime to full time employees. As a consequence within the industry it is industry practice to use casuals to supplement the requirements at each site.

PN20

This occurs to the detriment of full time employees in terms of accessing additional hours above and beyond their normal full time load. Commissioner, it is against this backdrop that Chubb is regularly approached by employees to enter into voluntary overtime arrangements of the kind set out in this agreement. Chubb currently has a number of these agreements across all states including New South Wales, Victoria, South Australia, Western Australia, Queensland and the ACT. As a brief background in relation to the sites in particular the employees who have approved the agreements have had limited access to overtime as a consequence of the costs associated with the penalty payments under the award.

PN21

The company has predominantly used casual employees to supplement the labour requirements in addition to the normal rostered hours required at each site. This agreement is intended to provide the employees with the ability to increase their earning capabilities but on a purely voluntary basis. This concept presents an opportunity that under the award is not available and that previous to this agreement has not been available either. Commissioner, if I could take you to the agreement itself. Clause 5 of the agreement itself states that the intention of the agreement is to provide permanent employees with access to additional hours and therefore additional income but on a purely voluntary basis. The payment for working voluntary additional hours attracts a 15 per cent loading resulting in the employee receiving normal shift and weekend penalties and in addition to that 15 per cent of the unloaded rate.

PN22

This mean that the rate depending on when the shift is worked is made up of either two or three components. If it's a day shift that's worked it's the normal day shift obviously without a penalty plus 15 per cent. If there's a night shift which is worked which would normally attract a penalty of 21.7 per cent the employees receive an additional 15 per cent of that unloaded rate. Commissioner, it might be useful if I hand up to the bench a copy of some calculations that I've done in order to demonstrate how the proposed agreement will operate.

PN23

THE COMMISSIONER: Yes, thank you. Mark the document CHUBB1, thank you.

MFI #CHUBB1 DOCUMENT

PN24

MR RYAN: Commissioner, that example or those calculations used three examples of the formula in which the agreement operates on. It has got a weekly afternoon shift, a Saturday shift, and a Sunday shift, all with the same hours. An employee working duration of a five hour shift between 1800 and 2300.

PN25

Commissioner, you can see with regard to the Thursday shift the payment in regard to voluntary additional hours would be made up of the following components. Starting at 1800 and working through to 2300 the employee would receive per hour $13.44, which is a grade 2 employee base, hourly rate. This is on the assumption that it is a grade 2 site. Obviously all sites won't be grade 2, there might be some sites which are grade 1, there might also be sites which are grade 5 or anywhere in between for that matter.

PN26

So, with base rate being $13.44, a shift penalty of 21.7 per cent for non-permanent nightshift, plus 15 per cent of that base rate that $13.44 which calculated to $2.02. So, when you add up each of those components you would see that working a Thursday evening as a voluntary additional hours shift the rate would be $18.38 per hour. Multiplied by five hours would $99.88 for working that particular shift at that time.

PN27

THE COMMISSIONER: The casual rate, isn't there - there is a one twelfth in the casual rate?

PN28

MR RYAN: There is under the award, Commissioner, but under - - -

PN29

THE COMMISSIONER: No, that is what I am saying. Your award casual rate is here. I actually don't have it in front of me but the $13.44 that is the permanent rate, per hour?

PN30

MR RYAN: That's correct, yes.

PN31

THE COMMISSIONER: So, therefore, your - and if memory serves me correctly and I don't think there is a difference between the Federal and State Award - one thirty-eighth of the permanent rate, plus your $1.18 I think for your one twelfth, and then your 15 is taken on that.

PN32

MR RYAN: That's correct, Commissioner.

PN33

THE COMMISSIONER: That is your ordinary rate. Your flat rate plus your one twelfth.

PN34

MR RYAN: Yes, that's correct, Commissioner.

PN35

THE COMMISSIONER: Yes. So your figure down here 15.46 wouldn't be right, would it? Mind you - - -

PN36

MR RYAN: Point taken, Commissioner, that has obviously omitted the one twelfth annual leave component.

PN37

THE COMMISSIONER: Yes.

PN38

MR RYAN: Which would need to be added on.

PN39

THE COMMISSIONER: What impact that has on the overall calculations or your overall analysis I am not sure. But I thought I would draw that to your attention.

PN40

MR RYAN: Thank you, Commissioner. With respect, I don't think it will make a difference in regard to the certification process but I do take note that the figure that has been supplied in relation to ordinary time for casuals is incorrect.

PN41

THE COMMISSIONER: Make sure you fix your records when you do another analysis.

PN42

MR RYAN: Yes, most definitely, Commissioner. Commissioner, moving onto the Saturday shift we can see the base rate is $13.44 for a grade 2 employee. In addition to that Saturday hours attract a 50 per cent loading, or time and a half, which is $6.72. And in addition, under the proposed agreement, employees would receive an additional 15 per cent of that base rate, that $13.44, which once again would be $2.02. So, on a Saturday if an employee was engaged at a grade 2 site they would receive $22.18 per hour.

PN43

Commissioner, on a Sunday the employee would receive $13.44 plus 100 per cent shift penalty, or double time, which is the penalty applicable for working Sundays. There is a clause in the award which states that the maximum additional hours payment is double the unloaded ordinary rate of pay. So, logic would normally say that you would add 15 per cent on to that in the absence of that clause. Because that clause is there that means that the rate under the proposed award would top out at $26.88 which is double time.

PN44

Commissioner, putting the exhibit to one side and moving along, clauses 10.3 and - - -

PN45

THE COMMISSIONER: So, what is your submission regard to CHUBB1 then?

PN46

MR RYAN: The submission is, Commissioner, to merely extrapolate how the payment would work under the proposed agreement for ease of comparison for the Commission.

PN47

THE COMMISSIONER: But there is a disadvantage to employees in being paid the 15 per cent for additional hours as opposed to working overtime under the award?

PN48

MR RYAN: Yes, that is correct, Commissioner.

PN49

THE COMMISSIONER: You don't dispute that?

PN50

MR RYAN: No that is correct, Commissioner, and I will come to that in a moment.

PN51

THE COMMISSIONER: And you are going to explain to me why I should think it is not contrary to public interest?

PN52

MR RYAN: Most definitely and there is a line of authorities that - - -

PN53

THE COMMISSIONER: Yes, I have read them all.

PN54

MR RYAN: Yes, your learned colleagues have handed down.

PN55

THE COMMISSIONER: It is slightly different. Her Honour, Harrison SDP, one of the issues she took into account was the short life of the agreement. This agreement is for three years, but then I do note that Commissioner Lang's agreement was for three years and I think also one or two of Commissioner Holmes'. One was two years, I am not sure about the other one. Anyhow, enough of that, I have interrupted your submissions.

PN56

MR RYAN: That's fine, Commissioner. I might just add whilst we are on that note that Lacy SDP has also certified a similar agreement for three years as had Commissioner Lewin in Melbourne. But I will come to those.

PN57

THE COMMISSIONER: Based on submissions that were put to them.

PN58

MR RYAN: Most definitely. They were identical agreements Commissioner so the submissions would be very similar indeed. Commissioner, clauses 10.3 and 10.4 provide that employees who wish to avail themselves of the voluntary additional hours do so by making application in writing in accordance with appendix A of the agreement. Employees can also at any time withdraw their consent to work voluntary additional hours, which would be done by completing the appendix B form.

PN59

The reason why I raise that, Commissioner, is that there is built-in flexibilities within this agreement. In that, if today you are of a mind to certify it, although it would be binding upon that site, employees do have the discretion to either opt in or opt out of the operation of the agreement at any stage throughout the life of the agreement. Whereas, obviously, with most certified agreements once it is certified it is binding upon those employees for the length or the duration of its period.

PN60

THE COMMISSIONER: But the terms of this agreement is that for it to operate an employee must execute a form.

PN61

MR RYAN: That's correct. But it is also, I suppose, emphasising that employees can use their discretion to withdraw that consent at any stage.

PN62

THE COMMISSIONER: Yes and they can also enter back in to the circumstances that the agreements provide for.

PN63

MR RYAN: Yes, most definitely. Commissioner, clause 9.1 of the proposed agreement states that there will be a review of the operation of the agreement after six months of operation. This review is to assess the effectiveness of arrangements made under the agreement. And really to assess whether there is an equitable sharing of shifts available under the proposed agreement amongst the employees at that site. So, there is a built-in mechanism to review the operation of the agreement. And we will be seeking the feedback of the employees, who are being affected by the agreement, at each site.

PN64

Commissioner, moving along to the no disadvantage test. As you would be aware the Act requires the Commission to certify agreements if despite the agreement not passing the no disadvantage test the Commission is satisfied that certifying the agreement is non contrary to the public interest.

PN65

I now turn to authorities that support the company's contention that the proposed agreement satisfies the requirements of the Act. Commissioner, I don't have copies of these agreements with me but I do have print numbers which I will be supplying to the Commission.

PN66

Commissioner, the first decision on which the company seeks to rely is a decision of Harrison SDP from 16 July 1998 in the certification of the Chubb Security Darling Harbour Ranges Enterprise Agreement 1998. The print number with respect to that one is print Q3596. At page 2 of this decision.

PN67

THE COMMISSIONER: Print number 3596? I have got Q4138.

PN68

MR RYAN: That is probably the decision that was appealed or the decision handed down. That decision I have referred to as appealed by the HMU. Without success I might add.

PN69

THE COMMISSIONER: Yes, but that does not necessarily mean that the Full Bench necessarily agreed with the agreement, so to speak. They found that her Honour didn't err, that it was open to her.

PN70

MR RYAN: That is correct, Commissioner.

PN71

THE COMMISSIONER: So, that doesn't mean the Full Bench supported it, so to speak. But, yes, I acknowledge the fact that her Honour was not found to have erred.

PN72

MR RYAN: Yes, Commissioner. Commissioner, if I can just read an excerpt of that particular decision of Harrison SDP. At page 2 her Honour stated:

PN73

The third area of agreement was described at the hearing as voluntary overtime. As this particular part ...(reads)... ordinary hours per week and/or in excess of eight hours on any day.

PN74

It is submitted, Commissioner, that this summation by her Honour regarding the operation of the voluntary overtime clause is similar to the current agreement before the Commission.

PN75

After ruling that the agreement did not pass the no disadvantage test, her Honour turned her attention to section 170LT(3) of the Act starting at page 6 of the decision:

PN76

I note that the relevant test of the ...(reads)... provides such an example.

PN77

Commissioner, it is the company's position and submission that the wording of section 170LT(3) of the Act directs the Commission to certify agreements as having passed the no disadvantage test if satisfied the agreement is not contrary to the public interest. It is submitted that the current agreement before the Commission provides such an example of an agreement that may not be in public interest but nonetheless is not contrary to the public interest.

PN78

As referred to earlier in my submissions, the Australian Liquor, Hospitality and Miscellaneous Workers Union subsequently appealed her Honour's decision. The print reference being R0015. The full bench quoted extensively on that part of her Honour's decision dealing with the tests that need to be met under section 170LT(3) and concluded as follows:

PN79

The jurisdiction in the present case was one ...(reads)... this is precisely what the Senior Deputy President did.

PN80

Commissioner, for these reasons it is submitted that it would not be contrary to the public interest to certify the agreement. If it is of assistance I might refer to a number of other agreements that have been certified which are similar if not identical to the current agreements before the Commission at the moment.

PN81

The first is PR907825 which is a decision of Commissioner Holmes, the second is PR911974 which was a decision of Senior Deputy President Lacey, PR911822 and 911824 decisions of Commissioner Jones and 912987 and 912985 which I believe from memory were decisions by Commissioner Holmes.

PN82

With respect it is submitted by the company that each of those agreements provide authority as to why the current agreement should be certified by the Commission. Commissioner, it is submitted that these decisions from learned members of the Commission are directly relevant to the circumstance of this case in the following manner.

PN83

Firstly clause 5 of the agreement states that the intention of the agreement is to provide permanent employees including part timers with access to additional hours on a voluntary basis which they ordinarily would not have access to. Clause 9.1 provides for review of the operation of the agreement to be conducted after 6 months of operation.

PN84

Clause 10.3 and 10.4 which I have referred to earlier state that employees may wish to avail themselves of a voluntary additional hours, but they can also with respect, elect to withdraw the authorised notice at any time. Clause 11 provides limits on the number of consecutive shifts an employee may work in any one fortnight and that at least 10 consecutive hours rest between shifts occurs.

PN85

In summary then the voluntary overtime, the voluntary additional hours provisions of the agreement provide an opportunity for employees to earn monies which they would ordinarily not have access to. It was endorsed at each site by a valid majority of employees to whom it will apply. It was discussed fully with employees when the briefings occurred and those employees understood and voted to adopt the concept.

PN86

It only applies to employees at that particular site who choose to volunteer for those additional hours by completing an appendix A form. It allows employees with respect to withdraw their authorisation at any times. And finally it imposes no compulsion upon employees to work the additional hours whether they have volunteered for the work or not, it's purely voluntary in nature.

PN87

With respect it is the company's submission that the agreements although not passing the no disadvantage test and therefore not being seen in the public interest, can nevertheless be certified on the basis that to do so would not be contrary to the public interest. If the Commission pleases.

PN88

THE COMMISSIONER: Mr Ryan, you will forward by this afternoon a copy of each of the notices for me?

PN89

MR RYAN: Yes, most definitely, Commissioner, and with respect, you are looking at the one type of notice that was sent to each site, so you are looking at the three notices being sent.

PN90

THE COMMISSIONER: I presume each employee got the same at their site.

PN91

MR RYAN: Yes, most definitely, but I just didn't want to send 30 documents when I only need to sent three.

PN92

THE COMMISSIONER: Well you wouldn't need to send 30, you would only be sending about nine wouldn't you, because one agreement covers five, another agreement covers three. I just want a copy of the notice that was sent in relation to each agreement and of course there would be a different date I think on each of them. Three to represent each of the agreements is fine.

PN93

Now another thing Mr Ryan, there are three gentlemen in the hearing room at the moment, I gather they are employees of Chubb?

PN94

MR RYAN: That's correct, there is a representative from each site that the company has asked to attend todays certification proceedings to allow the Commission to address any questions that the Commissioner may have.

PN95

THE COMMISSIONER: If I needed to. Yes, thank you, Mr Ryan. Ms De Leon anything at all you wish to add?

PN96

MS DE LEON: No, Commissioner, I just wanted to confirm what Mr Ryan submitted to you this afternoon, his intention was to provide additional income which is - - -

PN97

THE COMMISSIONER: Do any of the three gentlemen wish to address me at all in the relation to application I have before me?

PN98

SPEAKER: I am quite happy with it.

PN99

THE COMMISSIONER: You are quite happy with it. And the other gentlemen you are of the same view? We will give it 3 months.

PN100

SPEAKER: Wel will give it another 3 months.

PN101

THE COMMISSIONER: All right. Thank you gentlemen for that. This is an application by Chubb Security Australia trading as Chubb Protective Services Australia for certification of three agreements which have been made under section 170LK of the Act. The agreements are the Chubb Protective Services Voluntary Additional Hours, Hewlett Packard, Regents Park Enterprise Agreement 2002. The Chubb Protective Services Voluntary Additional Hours Sydney International Regatta Centre Enterprise Agreement 2002 and the Chubb Protective Services Voluntary Additional Hours Hawker de Havilland Enterprise Agreement 2002.

PN102

On the basis of the statutory declarations filed and the submissions of Mr Ryan in the hearing this morning I am satisfied that the requirements for certification have been met, save in respect to the disadvantage test, the no disadvantage test in the Act. I have heard Mr Ryan's submission to me. I have had regard to that, I have also had regard and considered decisions on like agreement for other members of the Commission, albeit I am not bound by single member decisions and each agreement must stand on its own two legs, so to speak.

PN103

But nonetheless I have had regard. A vast majority of them were Chubb agreements and I have given consideration to decisions of other members. In regard to the issue of the agreements as acknowledged by Mr Ryan as not specifically passing the no disadvantage test, having considered the provisions, whereas that subsection says that if the only reason why the Commission must not certify an agreement is that the agreement does not pass the no disadvantage test and the Commission is satisfied that certifying the agreement is not contrary to the public interest, the agreement is taken to pass the no disadvantage test.

PN104

Having regard to that particular section and considering the material before me, I am satisfied that the certification of the three agreements before me is not contrary to the public interest. In that regard the applications are granted with effect from today's date. The agreements will be certified as of today's date but pending receipt and acceptance of the three notices of intent which Mr Ryan has assured me will be forwarded to me this afternoon.

PN105

Once I have viewed that material, Mr Ryan, and if I am satisfied and it doesn't concern me any concern at all, then formal certification will issue. If there is nothing further the Commission is adjourned.

ADJOURNED ACCORDINGLY [3.12pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

MFI #CHUBB1 DOCUMENT PN24