AG2002/5450, Transcript of Proceedings [2002] AIRCTrans 5233 (30 December 2002)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER RAFFAELLI

AG2002/5450

APPLICATION FOR VARIATION OF
CERTIFIED AGREEMENT

Application under section 170MD(6) of the Act
by Pearl Aviation Australia Pty Ltd to vary
the Pearl Aviation (New South Wales Air Ambulance -
Licensed Aircraft Engineers) Enterprise Agreement
1998-2001 re general severance pay prescription

SYDNEY

3.03 PM, WEDNESDAY, 11 DECEMBER 2002

Continued from 25.11.02

Hearing Continuing

PN199

THE COMMISSIONER: Yes, could I have the appearances again, please.

PN200

MR P. HOULIHAN: If the Commission pleases, I appear for Peal Aviation.

PN201

MR C. RYAN: Commissioner, I appear for the Australian Licensed Aircraft Engineers Association.

PN202

THE COMMISSIONER: Yes, thank you.

PN203

MS R. BERNASCONI: Commissioner, I do not formally appear but I act for the Royal Flying Doctor Service of Australia, south eastern section, based on a request from your associate that a representative of the RFDS attend today. I'm here in that capacity depending on the way forward today I may seek leave to appear on behalf of the RFDS and seek leave on behalf of the RFDS to intervene in the proceedings.

PN204

THE COMMISSIONER: Yes, thank you, Ms Bernasconi. Yes, Mr Houlihan, this if for report back.

PN205

MR HOULIHAN: I think, Commissioner, the position is that its a lot happier and a lot clearer than it has been in the other proceedings before you on this matter. We are now in possession of the knowledge that the RFDS are going to offer employment to all of our employees in the Sydney operation, I think with the exception of two pilots, as I'm advised but that's a somewhat matter that's currently before us.

PN206

That being the case the purpose of these proceedings are essentially at an end except that we would seek a date to exercise our right under the terms of the certified agreement to enable us to put argument to you as to why the sum of the severance pay should be reduced because of the continuing employment opportunities that exist. Perhaps if I just read on to the record, and I only have one copy of a draft letter that is going to all our employees, as I understand it today. Its dated, Wednesday, 11th:

PN207

Re cessation of New South Wales Air Ambulance contract - - -

PN208

Its on Pearl Aviation Australia letterhead.

PN209

As we approach the conclusion of the contract it is important that we keep you all aware of this current situation with regard to the company's position relating to redundancy payments. In recent discussions with the RFDS we were pleased to be advised that all of you have been offered employment on their AS/NSW contract. We have striven to influence the RFDS where possible to achieve such an outcome and we are of the belief our efforts have helped to reserve your future livelihoods. On this basis we therefore intend to pursue relief from Pearl Aviation in the matter of severance payment via the IRC, at this stage it looks as if we will be in a position to put our case around the middle of January 2003, obviously, such a timetable will delay the termination date you've already advised and in case any of your uncertainties as to our intent as at 31 December 2002 the following will be our course of action. At the close of December we will pay you a final pay and pay out any accrued annual leave, pay out any long service leave entitlements as per State legislation. Those of you with company superannuation will be able to arrange to roll over your company superannuation by contacting David Bone - - -

PN210

and it gives telephone, fax and email address:

PN211

David will be able to provide with you any advice that you need to ensure that your funds are treated in the manner that you desire. Post-Industrial Relations Commission hearing in January, it is likely that the Commissioner will require some time to make his determination on the appropriateness of the Pearl Aviation case. At the last hearing he alluded to a lag between hearings and determinations and it is unlikely a decision will be made on the day due to the complexities of the matter of the case. Once the Commissioner has made his decision the company will comply with the directions given and take the appropriate actions to finalise the matter. Given you all have the opportunity of ongoing employment with the RFDS this delay should not cause undue hardship.

PN212

and that's signed by Richard Jupp, the General Manager.

PN213

I think, Commissioner, that puts our matter. We've been seeking to bring the matter to some sort of position where Pearl Aviation had some knowledge of what was going on so that we could act in the best manner that we could towards our employees and towards ourselves, we are now in that position. The delay in the hearing of the actual substantive argument is unfortunate but we simply are unable to do it this week because I'm leaving shortly to go to Darwin and I won't be back until Friday lunch time, I was in Dubbo on Monday. I understand the union has got difficulties next week, its that time of year. So, Commissioner, we would seek to have a hearing set and I've got commitments in the week commencing 6 January but the weeks after that if the Commission is available and if it suits the other parties as early after the week commencing or in the week commencing the 11th would be fine with me. May it please the Commission.

PN214

THE COMMISSIONER: Yes, thank you, Mr Houlihan. Yes, Mr Ryan?

PN215

MR RYAN: Commissioner, just a few issues of fact. As we are here at the moment, no engineers at the New South Wales Air Ambulance operation at Mascot have received an offer of employment from the Royal Flying Doctor Service. The ALAEA has been engaged in a process over the last seven to 10 days of trying to establish appropriate employment arrangements that would apply but these discussions have not been finalised which may have a bearing on the ability of the RFDS to make a firm offer.

PN216

I'm actively pursuing documentation from the RFDS today and I anticipate to receive that either today or tomorrow and discussions, if necessary, will continue with a view to a speedy resolution of any outstanding items. I'm a little unclear as to what is being intended by Pearl at this stage other than they've had the opportunity as we know since October or prior to October as soon as they were aware of the likelihood and indeed, in October the reality of the loss of the contract to the RFDS became knowledge, became a fact and Pearl Aviation were obviously aware of this and pretty soon after that development, lodged their initial application.

PN217

Now, this is the third occasion we've appeared in relation to this matter and we would reiterate that we don't believe it's appropriate or reasonable for the employer to continue to hold this application over the heads of the employees. They are distressed and disturbed enough by the changeover arrangements and to continue now off into sometime in the near year, we would see as being an unreasonable action on the part of the employer and we would be seeking from them some sort of undertaking that they're not going to proceed with this matter.

PN218

I reiterate and this is not the time to argue the case but I reiterate that in accordance with the Full Bench decision in the TCR case 1984 which I've referred to in previous proceedings, it was very clear in that decision that severance pay was largely in recognition of the loss of service related entitlements. I've done a calculation on the back of a coaster before we started this afternoon, Commissioner, and these employees have lost about 25 weeks in accrued long service leave for those people who would not be paid long service leave in accordance with the New South Wales legislation.

PN219

They would no doubt have amounts of accrued sick leave which won't carry over to the new employer and there would be some other service related entitlements which won't carry over as well. In addition, the total amount of redundancy under the terms of the agreement which would be payable by my calculation - again this is a back of the coaster calculation, if you will, Commissioner, is in the order of 50 to 55 weeks pay for all the engineers concerned.

PN220

These are not huge amounts and we would be arguing at the appropriate time that severance payments in recognition of the loss of those service related entitlements which will not carry over as we have seen on previous occasions, Commissioner, the RFDS have stated in writing that they are not going to pick up the service related entitlements and indeed, they have not received any offer or proposal from Pearl to hand over those service related entitlements or to hand over money in recognition of those entitlements so that they could be credited against the names of these current Pearl employees.

PN221

They've reiterated to us in recent negotiations that they're not interested at this point in themselves picking up the severance rate entitlements, and certainly in the absence of any formal proposal from Pearl Aviation.

PN222

So, having made those few comments, Commissioner, I would submit those comments for your thoughts. Thank you.

PN223

THE COMMISSIONER: Ms Bernasconi, have you anything to say? I'm not requiring you to say anything.

PN224

MS BERNASCONI: Commissioner, as we are here we do have a couple of points that the RFDS do wish to be made today. Firstly, I can confirm that the list of names of employees to whom offers will be made was provided to Pearl, I believe, on 3 December. As Mr Ryan points out, offers have not yet been made to employees and that is subject to finalisation of the greenfields industrial instruments which are to apply at the RFDSs new operations. I understand that that is quite close but there are still some final touches to be put to that and then offers will be made as soon as possible. I also understand from my client that it undertakes to advise Pearl who of those employees has actually accepted employment with the RFDS.

PN225

Finally, Commissioner, having read the transcripts of the last few occasions that this matter has been before you, the RFDS just wishes to place on the record that they reject any comments that have been made on the last few occasions that it has been giving anyone the run around or unnecessarily delaying making offers of employment. It certainly has legitimate business reasons for not having been in a position until now, or very soon, to be able to make those offers; and we wish to place on the record that the RFDS does reject that it has been difficult or unnecessarily delaying the provision of that information to Pearl.

PN226

Other than that, Commissioner, unless you have any questions for me on behalf of the RFDS, that is all I wish to say.

PN227

MR HOULIHAN: Commissioner, could I just make a couple of comments about some of the points that Mr Ryan made? It needs to be borne in mind that right from the outset my client, Pearl, has offered to transfer all of the entitlements. We've done that right along. Any problem with the entitlements is not something of our making. We have offered to do that. That's the first and paramount issue.

PN228

Commissioner, I simply say this about the TCR decision - and obviously this may become a more important issue later. Mr Ryan needs to give careful consideration to whether or not the instance that is currently before this Commission actually qualifies as a redundancy situation. What has happened here has happened in the normal course of business. There is, I submit, nothing more normal in business than one company winning a contract and another company losing it. I simply say this. I have no instructions to go down that path but that needs to be borne in mind. May it please the Commission.

PN229

THE COMMISSIONER: Yes. I mentioned this on the last occasion and I'm responding to Mr Ryan's comment that somehow the employer's application should be litigated quickly rather than be delayed and their proposition was that they should have done something about it last time and if they are not prepared to something about it now then they should withdraw it.

PN230

As I said last time, the difficulty with that is that what the company is doing, to my mind, is square with clause 37.5 of the certified agreement which is an agreement entered into between the union and Pearl Aviation. So, whatever complaints people might have, the fact is that the company is doing nothing more than exercising its right under the agreement.

PN231

The ability of the company to seek an exclusion from the severance pay prescription will only ever be made if there is a redundancy situation. So the exercise will always be in periods of stress to the employees. That is exactly what the agreement says. The employer will hardly exercise 37.5 if there is not to be any redundancy. So, unfortunately, it is one of those events that happen when redundancies are due and it perhaps adds to the stress of employees but that is no reason to deny the company its ability to prosecute the case.

PN232

It seems to me the position will soon be clear to the employees but it seems to be clear to Pearl that, at least from its point of view, all employees, it says, have alternative employment and it therefore seeks an exclusion or reduction; and, given that, it now seeks to deal with the matter as soon as practicable. I see no reason to be aghast at the company's proposal which is a preparedness to litigate the matter early in the New Year.

PN233

I must make a couple of observations. First of all, it may be that the company has some work to do to convince the Commission, firstly, that the TCR decision is somehow distinguishable or can be relied upon, because I go back to the argument Mr Ryan made on the first occasion when he said that TCR was very much for loss of entitlements rather than the requirement to look for alternative work and perhaps be unemployed for some time - that was one point that he sought to make out of the TCR decision - and, secondly, I note that 37.5 makes the clear point that the company may make application if it obtains acceptable alternative employment.

PN234

The question is, did it obtain alternative employment or was that just something that the RFDS did, listening to what Pearl might have had to say, listening to what the ALAEA might have had to say, and just considering whether it wanted experienced engineers or perhaps to go out and get new ones. So it came to certain conclusions and decisions.

PN235

Now, whether in fact, as I said, it's the company that secured that is very much to the point when you look at 37.5. In that regard I might make the observation that, while I don't see why the RFDS would necessarily be a party to further proceedings,, it may very well be that someone from the RFDS may be a witness, either for the company or for the union, very much on the point that I've raised.

PN236

Finally, Mr Houlihan might say that if there's a view that this is not really a redundancy - and as you say, there might be an argument about that - then why are we here? In other words, we're only here because of 170MD(6) which triggers 37.5. If the company says, "This is not really a redundancy", well then, I don't know whether 170MD(6) is an appropriate application. Perhaps it should just be that it won't pay it; let the union prosecute it and it will defend itself. Anyway, they are all points for ongoing consideration.

PN237

I think that a hearing in the New Year seems to be the only way that we can proceed. I think the week you were talking about was commencing Monday, 13 January. Mr Ryan, how are you placed then?

PN238

MR RYAN: That week is fine for me, Commissioner.

PN239

THE COMMISSIONER: Mr Houlihan? I was thinking of Wednesday, 15 January. Do you think one day will be sufficient?

PN240

MR HOULIHAN: Commissioner, I think it would be plenty. I couldn't imagine going much more than an hour in the matter.

PN241

MR RYAN: Commissioner, in my view it will take considerably more than an hour but it certainly wouldn't take up a whole day.

PN242

THE COMMISSIONER: Yes, all right. Well, subject to finding I have something else on that day - I don't think I have - I propose to adjourn the company's application and relist it for Wednesday, 15 January, at 10am. On that basis these proceedings are now adjourned. Thank you.

ADJOURNED UNTIL WEDNESDAY, 15 JANUARY 2003 [3.25pm]