C2001/4733, Transcript of Proceedings [2002] AIRCTrans 642 (1 March 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

TRANSCRIPT OF PROCEEDINGS

O/N VT02587
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LEWIN

C 2001/4733

TRANSPORT WORKERS UNION OF
AUSTRALIA

and

MOBIL/EXXON

Notification pursuant to section 99 of the Act
of an industrial dispute re interpretation of
clause 7 of the Mobile Melbourne Airport -
Enterprise Agreement 2000-2003

MELBOURNE

11.30 AM, THURSDAY, 14 FEBRUARY 2002

Continued from 24.9.02

PN136

THE COMMISSIONER: Are there any changes in the appearances?

PN137

MS LEARMONTH: No, I don't think so, Commissioner.

PN138

THE COMMISSIONER: Very well.

PN139

MR VICKERS: No, Commissioner.

PN140

THE COMMISSIONER: So it is you, Ms Learmonth.

PN141

MS LEARMONTH: Commissioner, just in relation to the process today, I am not too sure how you would prefer to go about it. I had a discussion with Bill last week, and we are quite happy to go on the record and detail what our case is and ask that you make a decision in relation to the matter.

PN142

THE COMMISSIONER: All right.

PN143

MS LEARMONTH: Commissioner, this dispute concerns the interpretation of a clause in the current Mobil Melbourne Airport Agreement 2000-2003. Since we were last before you on 24 September 2001, discussions have been held between the parties to try and resolve the issue. We tried to revisit the intent of the clause, also the interpretation of the clause and also tried to broker a settlement but were unable to do so. Also due to the collapse of Ansett and the September 11 attacks which the Company felt had impacted upon their business, our discussions turned to possibly varying the agreement which would have resolved this issue.

PN144

The Company and the employees were concerned about the viability of the business and we had many discussions to try and resolve those concerns and also how costs could be reduced, and unfortunately the talks didn't lead to a resolution to that particular matter, and the current EB remains without any variation. At Perth and Adelaide, variations were made to the enterprise agreement in line with the collapse of Ansett which did resolve the issue of payment for public holidays for new employees. So this matter remains solely to the Melbourne Airport operations.

PN145

In about mid-December some 12 employees were made redundant, and the gaps left by those redundant employees have been filled either as casual employees through an employment agency or as new employees under this enterprise agreement, that is they are direct employees of Mobil. It is the clause that surrounds the conditions of employment of new employees which has led to this dispute, in particular whether a payment for public holidays should be made to new employees.

PN146

The Company says that the hourly rate of pay for new employees is inclusive of any payments made to existing employees for public holidays. We say that an additional public holiday payment needs to be made to new employees. I actually now turn to the clause in the enterprise agreement. I am not sure whether we had an exhibit of the enterprise agreement at the last hearing or not.

PN147

THE COMMISSIONER: We don't need to. It is print 901030, is it?

PN148

MS LEARMONTH: That is correct, Commissioner.

PN149

THE COMMISSIONER: Well, that is the identification.

PN150

MS LEARMONTH: Also at the last hearing we actually renumbered the individual clauses within paragraph 7(1)(b).

PN151

THE COMMISSIONER: That is right.

PN152

MS LEARMONTH: So what I have actually done is I have continued to use that renumbering just to try and assist in being able to resolve this. Most of this agreement has been rolled over from the previous enterprise agreement, that is the 1997 enterprise agreement and the clause in dispute is clause 7(1)(b). This clause creates an opportunity for the company to put on new employees at a lower rate of pay, and the membership placed a cap on how many new bodies the employer could put on using this subclause, and that is defined in what I have renumbered as subclause 7(1)(b)(vi). What I have done, Commissioner, is I have actually made up a matrix which is based upon the matrix set out in the back of the enterprise agreement that exists for existing employees. If I may, I might tender at least one of those matrix just so that we can explain how we would see the payment of public holidays being relevant.

PN153

THE COMMISSIONER: I can't recall whether or not this is your first exhibit. I think it is.

PN154

MS LEARMONTH: I think it is, yes.

EXHIBIT #A1 MATRIX FOR EXISTING EMPLOYEES

PN155

MS LEARMONTH: I have done a number of things in order to try and explain where we are coming from in relation to exhibit A1. First of all, on the left-hand side I have tried to number of each line so that if I am referring back to something it is easier to refer to a numbered line. The boxes titled total shifts, shift penalty and weeks per cycle, they are a direct copy of what exists for existing employees. At line 18 there is a new line called - it is titled New Package and I have - again that is - the layout and the format is the same as that for existing employees. I have modified it, though, to reflect the hourly rate of pay for new employees.

PN156

If you look at line 19, the current rate of pay would be $640.50, which was $18.30 by 35 hours and what you will see is I have put in a column there that refers to the calculations how I have reached that. On 4 February 2001 there was a 4 per cent increase, which brought that up to 19.03, that hourly rate of pay. So it has increased their base rate of pay to $666.05. The other part of this matrix that I have done is I have put next to the calculations two separate columns, one for a full-time employee who is working the same roster as an existing employee and a full-time employee who is working a different roster as an existing employee and the relevant clause numbers as we would see them.

PN157

So our argument is quite simple. We would say in relation to the payment of the shift loading, which is at line 21, that a new employee on full-time roster working the same roster as an existing employee is entitled to the shift loading of 38.26 per cent and we would say that clause 7(1)(b)(i) provides for that where it says that new full-time employees to be paid at the new base rate of 18.30 per hour as at 21.12.2000, as per the same formula as current employees if they work the same roster as current employees, whereas for an employee working a different roster, that 38.26 per cent of the shift loading is not relevant to them.

PN158

Line 22, which says "a shift will be paid at the relevant shift penalty, see above" - and that is only applicable for a new full-time employee who is working a different roster to existing employees. That is set out at clause 7(1)(b)(ii) where it says:

PN159

If any new employees are on a different roster, they will receive the relevant shift loading...

PN160

which is the shift penalties set out in the box up at line 4 - and if I just go back to the agreement - plus the overtime payment of 1.7 of 18.30 per hour. So, Commissioner, at line 4 in the right-hand box where it says shift penalty, it would be the company's responsibility to look at what roster that new employee is working and calculate their shift loadings depending on whether they are working Monday to Friday, Saturday or Sundays and also whether they are working day, afternoon or night shift.

PN161

THE COMMISSIONER: Let me just test my understanding of your submission. It is based on the distinction between the rostering of new full-time employees.

PN162

MS LEARMONTH: Yes.

PN163

THE COMMISSIONER: And it is based on the provisions of (1)(b) and in particular the words "if they work the same roster".

PN164

MS LEARMONTH: Yes.

PN165

THE COMMISSIONER: If they work a different roster, then different conditions apply.

PN166

MS LEARMONTH: Yes.

PN167

THE COMMISSIONER: And you schedule the conditions which apply respectively to either the same or the different roster.

PN168

MS LEARMONTH: Yes.

PN169

THE COMMISSIONER: Thank you.

PN170

MS LEARMONTH: Now, Commissioner, we come to line 23, which is the payment for public holidays. Line 31 to line 43 sets out the calculation for public holidays. What I have done - again, line 41 to line 43, that table or those sets of lines, that format is exactly the same as what currently exists for existing employees. The only difference is that the hourly rate of pay is what I have changed and that is shown over in the calculations.

PN171

THE COMMISSIONER: So you put the hourly rate of pay for the existing employees.

PN172

MS LEARMONTH: For the new - - -

PN173

THE COMMISSIONER: For the new employees, I am sorry.

PN174

MS LEARMONTH: - - - employees, yes.

PN175

THE COMMISSIONER: So that it is the hourly rate of pay that is different.

PN176

MS LEARMONTH: Yes.

PN177

THE COMMISSIONER: The method of calculation of other considerations should be the same as existing employees.

PN178

MS LEARMONTH: That is correct. So if we go back up to line 23, a payment for public holidays for a new full-time employee is 44.96 per week and we are saying for a new full-time employee working the same roster as an existing employee, that that is set out at clause 7(1)(b)(i), which again comes back to if they are working the same roster as current employees.

PN179

THE COMMISSIONER: Then they get 44.96 per week.

PN180

MS LEARMONTH: That is correct.

PN181

THE COMMISSIONER: As an annual or a weekly, annualised consideration.

PN182

MS LEARMONTH: That is correct.

PN183

THE COMMISSIONER: That is the weekly rate of an annualised consideration of the number of public holidays provided for by the agreement, is it?

PN184

MS LEARMONTH: That is right.

PN185

THE COMMISSIONER: And that is if they work the same roster.

PN186

MS LEARMONTH: If they work the same roster, that is correct.

PN187

THE COMMISSIONER: But if they work a different roster - and that is the essence of the matter, is it, that you are asking me to decide that if they work a different roster a different method of calculation applies, that the 44.96 does not apply but that the other considerations which you identified in exhibit A1 apply?

PN188

MS LEARMONTH: Yes.

PN189

THE COMMISSIONER: That is the question that I have to decide, whether or not the $44.96 amount applies in all cases or whether or not it applies only in relation to when new full-time employees work the same roster as existing employees.

PN190

MS LEARMONTH: Yes.

PN191

THE COMMISSIONER: And if a new full-time employee does not work the same roster as an existing full-time employee, then you are asking me to find that the calculations you set out in A1 are applicable.

PN192

MS LEARMONTH: Yes, Commissioner. That would apply for part-time employees, new part-time employees and perhaps - I do have a matrix for new part-time employees which is exactly the same - - -

PN193

THE COMMISSIONER: So whether it be full-time or part-time, new employees only receive the $44.96 allowance, either the full allowance or a part of it, if they work rosters which are the same as those of previously existing employees or is there a distinction to be made here?

PN194

MS LEARMONTH: I think there is a distinction with - we are virtually trying to deal with three different classes of new employees, one being a new full-time employee working the same roster as the existing employees, and we would say that the enterprise agreement is pretty clear that they should get that entitlement. We would then say that new full-time employees working a different roster to the existing employees, that the payment for public holidays, we would say that it should apply. I will concede that the agreement is not clear on that.

PN195

THE COMMISSIONER: Sorry, what is the agreement not clear on?

PN196

MS LEARMONTH: The agreement is not clear on whether a new full-time employee working a different roster to existing employees, whether they are entitled to the 44.96 as a weekly payment.

PN197

THE COMMISSIONER: As opposed to the?

PN198

MS LEARMONTH: As opposed to the new full-time employees working the same roster as current employees.

PN199

THE COMMISSIONER: Yes, all right. I think you are probably circling around a bit now and perhaps causing a little bit of confusion. In essence, your case is that the terms of the agreement lead to the conclusion that if a new full-time employee works a different roster to an existing full-time employee, then the $44.96 allowance should not apply but rather another set of conditions should apply to the working of public holidays.

PN200

MS LEARMONTH: The essence of our submission is that new full-time employees should be paid for working on public holidays.

PN201

THE COMMISSIONER: Yes, but not by way of the $44.96.

PN202

MS LEARMONTH: No. For some, that will apply. For others it may apply on a pro rata basis.

PN203

THE COMMISSIONER: If you concentrate very carefully on what I am saying, I am putting it to you in a very considered way in order to formulate the issue for the determination in this matter. For a decision maker, the first step in the decision making process is to pose the right question.

PN204

MS LEARMONTH: Yes.

PN205

THE COMMISSIONER: So what I am trying to do is to have you assist me in your submissions by ensuring that I pose for my decision making function the right question to be answered. So I am being very careful about the way in which I am formulating these questions because they are what I propose to address when I come to determine the matter. So they become rather crucial to the outcome in this matter. If I formulate the question either wholly or only even subtly, in part, in the wrong way from the point of view of your application, then it will prejudice your prospects of success.

PN206

So what I am saying to you is this: is the question properly formulated as follows? Should new full-time employees working on rosters which are different to existing full-time employees be paid $44.96 as a weekly payment of an annualised compensation for public holidays provided by the agreement or they should be paid differently and, if so, should they paid in accordance with your proposals in exhibit A1?

PN207

MS LEARMONTH: That is - - -

PN208

THE COMMISSIONER: That is the right question?

PN209

MS LEARMONTH: That is the right question, yes.

PN210

THE COMMISSIONER: Good. I think it is very important for me to get the right question and there is some complexity to this. Now, what you are saying about that is that you concede that there is some ambiguity in the terms of the agreement. In particular, it would be possible to read clause 7(1)(b) such that the hourly rate of $18.30 applies simply by virtue of the full stop after "first aid". That is one construction you could place upon it and, no doubt, one that the company may well urge upon me.

PN211

MS LEARMONTH: Yes.

PN212

THE COMMISSIONER: That that sentence is conclusive. But you then say - as I understand the way you make out your case is that you can't just read that sentence because, clearly, clause (1)(b), in the first paragraph of it, has to be read as a paragraph, so that if you use the straightforward and orthodox rules of grammar, the paragraph deals with a single subject and, accordingly, the following sentence should be understood to address the same subject as the first sentence. Therefore, it qualifies and further explains and elaborates upon the meaning of the first sentence such that it is the formula which is to be applied in certain conditions and those conditions are that the new full-time employee is working the same roster.

PN213

MS LEARMONTH: That is correct.

PN214

THE COMMISSIONER: And you deduce from that, as I understand your submission, that if those conditional facts are not met, then the appropriate interpretation of the agreement is as you set it out in exhibit A1. The conditional fact for the operation of the hourly rate of $18.30 all inclusive is that the employee be working the same roster.

PN215

MS LEARMONTH: Yes.

PN216

THE COMMISSIONER: I think what you concede in terms of ambiguity is that it leaves open the question, well, if that interpretation were to be adopted, there is no expression in the agreement as to what happens for the new full-time employee who is not working the same roster as an existing full-time employee, that the agreement omits an explanation of what is to be done.

PN217

MS LEARMONTH: That is correct.

PN218

THE COMMISSIONER: What the company, no doubt, will say is, well, that is because the agreement says that all new full-time employees are to be paid $18.30 an hour. That is the issue, is it not?

PN219

MS LEARMONTH: That is correct, yes.

PN220

THE COMMISSIONER: Very well.

PN221

MS LEARMONTH: Commissioner, do you want me to proceed on with my submission - - -

PN222

THE COMMISSIONER: Yes, yes, I do but I just want to be clear - - -

PN223

MS LEARMONTH: Certainly.

PN224

THE COMMISSIONER: - - - I understand the direction from which you are making the submission, the problem that you are addressing.

PN225

MS LEARMONTH: I might - do you feel it is necessary for me to continue trying to explain exhibit A1?

PN226

THE COMMISSIONER: Well, I think you should put to me whatever you want to put to me that will assist your case.

PN227

MS LEARMONTH: Okay.

PN228

THE COMMISSIONER: I think I have got a fairly good grip on on what the issue is but why I should decide it in your favour is a matter for you to persuade me on.

PN229

MS LEARMONTH: In light of the discussion that we have just had, I believe the public holidays and explanations surrounding the public holidays alone, I think that explanation is set out in exhibit A1 when it is read in conjunction with the clause in the award. Given that the overtime is not an issue in this matter, I won't proceed on with that section and, given that the allowances is also not an issue nor the first aid allowance is an issue in this matter. The only point I might make in relation to the first aid allowance is that there is no allowance set out in the enterprise agreement and, going back through the history of the enterprise agreement, it was borne out - or the enterprise agreement was born out of the award but the first aid allowance never made it into the enterprise agreement which is why the current allowance for first aid is 12.92 and that is from the award and that award is up to date. Commissioner, I might now provide you then with a matrix that looks at new part time employees.

PN230

THE COMMISSIONER: Yes.

EXHIBIT #A2 MATRIX RE NEW PART TIME EMPLOYEES

PN231

THE COMMISSIONER: Well, just before we commence the hearing of your submission in relation to new part time employees, I gather that the way in which this submission will develop is by reference to the inclusion of part time in the brackets in 7(1)(b).

PN232

MS LEARMONTH: Commissioner, I would say that 7(1)(b), that first paragraph which we have titled (I), that the reference to the part time - in fact, it makes the reference to the hourly rate of pay for those people.

PN233

THE COMMISSIONER: Yes, that is what I was suggesting that this submission rests on the same foundation as the full time employees.

PN234

MS LEARMONTH: That is correct.

PN235

THE COMMISSIONER: Because part time are mentioned along with full time and temporary and fixed term employees in the brackets. So that the correct construction of (1)(b) of 7 is that the rate of pay prescribed for new Mobil employees includes full time, part time, temporary and fixed term employees.

PN236

MS LEARMONTH: Yes.

PN237

THE COMMISSIONER: And, as such, it is really just if - it turns on not so much particular considerations of part time employees, but more general ones as to how I should construe the words "if they work the same roster". Is that right?

PN238

MS LEARMONTH: Yes, it is.

PN239

THE COMMISSIONER: And there is no other distinction between part time and full time employees so the question remains the same.

PN240

MS LEARMONTH: It does remain the same. I guess perhaps - I can go through exhibit A2 in some detail.

PN241

THE COMMISSIONER: But it will just replicate A1, according to the part time scenario, will it not?

PN242

MS LEARMONTH: That is correct, that is correct..

PN243

THE COMMISSIONER: Yes. The question and the answer has to be the same, on your submission.

PN244

MS LEARMONTH: Yes. I might just say just a couple of matters just in concluding my submission. There has been a number of new employees that the company has employed and, although I don't have exact dates, I am led to believe that new employees - there has been two groups of them. One commenced about mid June last year and would have finished up about mid November. And the company is quite entitled to correct me on this, but I believe that that group of employees may be entitled to a public holidays allowance for the Melbourne cup day which occurred on 6 November. That group then finished up but then were re-employed in about mid December - - -

PN245

THE COMMISSIONER: Sorry, can I just clarify what you mean by what you just said. The allowance that you referred to is the $44.96. On the company's interpretation that applies to the Melbourne cup day, does it?

PN246

MS LEARMONTH: No, no. I am saying that I am not sure of the dates of when the new employees commenced employment with the employer and finished with the employer.

PN247

THE COMMISSIONER: What is the relevance of that to this matter? Surely the meaning of the agreement is the same regardless of if and when people are employed.

PN248

MS LEARMONTH: Yes. If the Commission should find that it may only depend on whether the employee works or does not work on a particular public holiday, I am simply trying to show that those - - -

PN249

THE COMMISSIONER: Well, the meaning of the agreement will be constant regardless of whether or not an employee works or does not work on a public holiday, insofar as public holidays are concerned. The consequences of the agreement will be dependent upon whether or not an employee does or does not work on a public holiday. You are talking about what happens when an employee does work on a public holiday, are you not?

PN250

MS LEARMONTH: No. When we were here last, Commissioner, you raised the question - and I don't know whether that was on the record or not - about whether there was a practical application of this clause at that time. And by way of an explanation, yes, there is.

PN251

MS LEARMONTH: Yes, all right. Well, I recall that. I was saying, well, is there a situation where people are not working on the same roster? The answer was affirmative and, therefore, if such employees work on public holidays, they will be paid according to the public holiday provisions; is that right?

PN252

MS LEARMONTH: I think that was the question that you posed.

PN253

THE COMMISSIONER: And is that the issue before me? Is the consequence of the finding that you seek confined to circumstances where employees work public holidays?

PN254

MS LEARMONTH: No.

PN255

THE COMMISSIONER: It is not?

PN256

MS LEARMONTH: No.

PN257

THE COMMISSIONER: It extends to the pay that employees are to receive, new employees are to receive all the time if they are not on the same roster.

PN258

MS LEARMONTH: That is correct.

[11.59am]

PN259

THE COMMISSIONER: Yes, all right. Well, that is a dimension of the matter that I don't fully understand.

PN260

MS LEARMONTH: It is probably not worth me proceeding on with that.

PN261

THE COMMISSIONER: It is not?

PN262

MS LEARMONTH: No, because - - -

PN263

THE COMMISSIONER: Why not?

PN264

MS LEARMONTH: Because the question that you have posed is that it is in relation to their weekly rate of pay which is regardless of whether they actually work a public holiday or not.

PN265

THE COMMISSIONER: Right.

PN266

MS LEARMONTH: Which is the situation, for example, of the existing employees. They may or may not work a public holiday - - -

PN267

THE COMMISSIONER: Well, what would be the consequence of - what would be the full consequence of me finding in favour of your interpretation for the new full-time employees who are not working on the same roster as an existing employee?

PN268

MS LEARMONTH: A new full-time employee who is working on the same roster as an existing employee would be paid in accordance with the matrix set out in exhibit A1.

PN269

THE COMMISSIONER: Yes. A new full-time employee working on the same roster as an existing employee - - -

PN270

MS LEARMONTH: Yes.

PN271

THE COMMISSIONER: - - - would be paid $18.30 an hour.

PN272

MS LEARMONTH: They would be paid - currently they are paid the 19.03 because of the - - -

PN273

THE COMMISSIONER: Well, I beg your pardon, 19.03.

PN274

MS LEARMONTH: Yes. If we go back to exhibit A1, at line 29 it sets out what the total would be for a new full-time employee who is working on the same roster as an existing employee.

PN275

THE COMMISSIONER: So that would be different to 19.05 an hour, is that - what is the practical consequence of this for such an employee?

PN276

MS LEARMONTH: It would effectively give them approximately a $45 a week pay increase for a new employee - - -

PN277

THE COMMISSIONER: And that would be derived by the incidence - these are the employees working on the same roster?

PN278

MS LEARMONTH: That is correct.

PN279

THE COMMISSIONER: Let us go back to the agreement. I am sorry, I think maybe what you are saying to me is not as I apprehended it. You rely on not so much if they work the same roster but as per the formula?

PN280

MS LEARMONTH: That is correct. If a new full-time employee is working exactly the same roster as an existing employee they should receive exactly the same amount of pay except that the hourly rate of pay on which that is made for a new employee would be lower. So an existing employee is - it is around about $21 at the moment.

PN281

THE COMMISSIONER: So the question that you pose in this respect is, should a new full-time employee be paid as per the same formula as current employees except that the base rate to which the formula should be applied will be the rate prescribed by the agreement as adjusted from time to time.

PN282

MS LEARMONTH: We would say that that is what the agreement says.

PN283

THE COMMISSIONER: Yes. So that is the primary question you want answered.

PN284

MS LEARMONTH: Yes.

PN285

THE COMMISSIONER: Not the one that I posed earlier about what happens in relation to the employees if they are on a different roster.

PN286

MS LEARMONTH: There is a relationship between the two questions.

PN287

THE COMMISSIONER: Yes, but the first one is, what is the meaning of - as per the formula? Isn't that right?

PN288

MS LEARMONTH: Yes.

PN289

THE COMMISSIONER: What meaning does that clause denote by the use of those words? Isn't that right? That is the starting point.

PN290

MS LEARMONTH: That is correct.

PN291

THE COMMISSIONER: The question that I posed earlier actually is the secondary question, not the primary question. Is that right? What is the meaning of the words "as per the formula" is the first question. And the second question is, what does that give rise to if the employees do not work the same roster as current?

PN292

MS LEARMONTH: That is correct. Which may occur for a full-time employee or a part-time employee.

PN293

THE COMMISSIONER: Yes, yes. But as I say, you really have to address the meaning of the words "as per the formula" first before you can actually derive any conclusions in relation to the words if they work the same roster. Is that correct?

PN294

MS LEARMONTH: That is correct.

PN295

THE COMMISSIONER: Well, what is happening at the moment that attracts the disagreement? The employees are not being paid as per the formula, is that right?

PN296

MS LEARMONTH: That is - - -

PN297

THE COMMISSIONER: They are being paid instead $44.96. Is that - - -

PN298

MS LEARMONTH: No. They are not receiving any payment when they do or do not work on a public holiday. So if a new employee works on an afternoon shift on Christmas day they would receive the hourly rate of pay of 19.03 for those hours worked.

PN299

THE COMMISSIONER: Whereas the formula would require what if they were working alongside an existing employee on the same roster?

PN300

MS LEARMONTH: The formula would require that that person be paid - that new employee be paid 44.96 as a weekly payment in lieu of additional payments for work on public holidays.

PN301

THE COMMISSIONER: Per week?

PN302

MS LEARMONTH: Per week, that is correct.

PN303

THE COMMISSIONER: On all weeks of the year?

PN304

MS LEARMONTH: That is correct.

PN305

THE COMMISSIONER: So that is what you are seeking. That is part of the formula that applies to existing employees and it is not being applied to new employees working on the same roster.

PN306

MS LEARMONTH: That is correct.

PN307

THE COMMISSIONER: So there appears to be something of a contradiction between the first and the second sentences. It is quite significant on the respective interpretations that have been adopted by the parties.

PN308

MS LEARMONTH: Yes, yes.

PN309

THE COMMISSIONER: Your interpretation says that the words:

PN310

...as per the same formula as current employees has work to do.

PN311

that they are not superfluous words and the company, as I understand it from the last occasion, says, well, the first sentence is conclusive.

PN312

MS LEARMONTH: That is correct.

PN313

THE COMMISSIONER: It is $18.30 an hour plus first aid.

PN314

MS LEARMONTH: Yes.

PN315

THE COMMISSIONER: I think I have got it in the right order now.

PN316

MS LEARMONTH: Terrific. Perhaps just in conclusion there is also one final matter that I would like to put on the record, and I am seeking a commitment from the company in relation to this. We have heard that should the Commission decide that new employees are entitled to a payment for public holiday, that they will move those new employees over to the employment agency and have them employed by the employment agency and as casual employees. And we express our concern about that.

PN317

THE COMMISSIONER: Well, I suppose the company will just have to calculate the risks associated with the legislative provisions in relation to that matter. All right. Mr Vickers, are you going to present the alternative point of view?

PN318

MR VICKERS: Thank you, if the Commission pleases. I will try to keep this as simple as I can in view of the conversations we have been referred to. The union is correct in summarising some of the background to this issue. I might add that the agreement itself resulted from something close to twelve months of negotiations before it achieved an outcome. That outcome was documented in some haste on a Friday night immediately prior to Christmas during a period of industrial action so it is quite conceivable that the drafting is perhaps not as precise as it could have been.

PN319

But what I would put to the Commission is that the company argument all along has been that the intention of this clause was to create a facility whereby the company could employ a limited number of new employees in the various categories listed on a different rate of pay and a different set of conditions to those applying to the existing employees. The reason for that was largely competitive pressures around our aviation industry; the fact that other companies at other locations had significantly lower operating costs than we had. But over a long period of time we had sought to get agreement with the union on the way of addressing those competitive pressures.

PN320

Inevitably the outcome was a compromise. The number of employees that could be recruited at this lower rate was restricted by an artificial quota, as you will see in clause 7(1)(b), of no more than 20 per cent of the core work group.

PN321

THE COMMISSIONER: What is artificial about the quota?

PN322

MR VICKERS: Sorry?

PN323

THE COMMISSIONER: What is artificial about the quota? It looks fairly substantial to me.

PN324

MR VICKERS: Well, at the moment it means that there is four people as the maximum that you can - - -

PN325

THE COMMISSIONER: No, but you said it was an artificial quota.

PN326

MR VICKERS: Well, I think any restriction on the employment of new employees on these conditions is somewhat artificial. It is - - -

PN327

THE COMMISSIONER: Yes, I know you think that. What I am trying to understand is what the nature of the artifice is.

PN328

MR VICKERS: As I say, it was a compromise outcome designed to reassure the union that we were not going to effectively convert the entire workforce on to a cheaper rate - - -

PN329

THE COMMISSIONER: I think for my purposes, you know, when you say something like artificial, I mean there is a bargain made by the parties in consideration of their interests.

PN330

MR VICKERS: Yes, there is a - - -

PN331

THE COMMISSIONER: It is like any commercial contract.

PN332

MR VICKERS: There is a compromise outcome - - -

PN333

THE COMMISSIONER: That is what I look at, you know, the - where there is an ambiguity, the intention may be relevant but when you use the word artificial, I am looking at it from an interpretative point of view, whereas I suspect that what you are looking at is at from, you know, your perspective as to what the company would prefer in terms of limits or no limits on the employment conditions of the persons whom it employs and that any limit is an artificial thing. That is why I asked you the question because I don't know whether it has any significance of an interpretative nature, given the function that I am required to perform.

PN334

MR VICKERS: I probably should have used the word arbitrary as the - - -

PN335

THE COMMISSIONER: Sorry?

PN336

MR VICKERS: I probably should have described it as a somewhat arbitrary figure, rather than artificial.

PN337

THE COMMISSIONER: Well, it was an agreed figure, wasn't it?

PN338

MR VICKERS: It was an agreed figure. There was no particular science attached to its calculation. In terms of - - -

PN339

THE COMMISSIONER: Well, I would have thought the science of it was any commercial negotiation, the same science as any commercial negotiation.

PN340

MR VICKERS: The practical effect of it, as I say, at the moment is that it restricts the number of people affected by this argument to be four people. In terms of the - or the meaning of the clause, as we would put it, I think the Commissioner has foreshadowed already some of the arguments that we would put. If I take you to the first sentence of 7(1)(b), the rate of pay - I won't read all of it:

PN341

...will be $18.30 per hour inclusive of all allowances except first aid.

PN342

The full stop. We would argue that when that statement is read in conjunction with the words in 7(1)(3) - sorry, 7(3) which is the final section of clause 7, that clause or that sub-clause goes on to list the allowances that are still available following the new Transport Workers (Oil Companies) Award revision in 1998 and included in that list is public holidays allowance. So our submission would be that the statement "$18.30 inclusive of all allowances except first aid" is intended to cover the field, so to speak, and specifically incorporates within the $18.30 all of those other allowances which are identified in sub-clause (3). The next two sentences - - -

PN343

THE COMMISSIONER: Well, look, can I just ask you about that because I am not quite sure I understand what 7(3) means and it wasn't addressed in Ms Learmonth's submission. How should I interpret the part of sub-clause (3) of clause 7 that says:

PN344

The only allowances which will continue - - -

PN345

MR VICKERS: This clause I think, Commissioner, arose from the re-writing of the Transport Workers (Oil Companies) Award which, from memory, eliminated a number of other allowances and absorbed them into base rates. I think going back over some years, for example, the transport and location allowance that used to be paid to oil company employees - - -

PN346

THE COMMISSIONER: Well, can I just sharpen my question up a little bit more and we might get straight to it. Should I understand it on your submission to be that existing employees should receive an annualised public holiday allowance?

PN347

MR VICKERS: Sorry, I - - -

PN348

THE COMMISSIONER: Should I understand your submission to mean that the appropriate meaning is that existing employees should continue to receive an annualised public holidays allowance as well as those other allowances said to continue in the formula?

PN349

MR VICKERS: Yes, that is correct, that the - - -

PN350

THE COMMISSIONER: That is the way you approach it.

PN351

MR VICKERS: That the award - - -

PN352

THE COMMISSIONER: No, that is congruent with your interpretation that - - -

PN353

MR VICKERS: Yes, and if you look to - - -

PN354

THE COMMISSIONER: - - - that this applies consistently with the first sentence of 7(1)(b); is that right?

PN355

MR VICKERS: Yes, and the form of expression of that allowance for the existing employees prior to this negotiation was set out in the appendix to the agreement, or the matrix as the union have described it, which prescribes the amount per week for public holidays along with the rest of the construction of the annualised salary which was the specific feature of the agreement. I might come back to that because I would like to try to deal with the confusion perhaps around the first two paragraphs of (1)(b), particularly the second sentence of the first paragraph and then the next paragraph.

PN356

Our submission is that the description it refers to as per the same formula as current employees if they work the same roster, and the words that follow that, which say:

PN357

If any new employees are under a different roster they will receive the relevant shift loading plus overtime payment of 1.7.

PN358

But that was designed to deal with the situation that because we have an annualised salary that incorporates effectively prepaid overtime, and of course had to contemplate the fact that roster systems could vary from those which applied to the existing employees on seven day shift work, we wanted to achieve an outcome whereby if overtime, for example, needed to be worked that there was a fairness or a consistency of treatment in terms of how the annualised overtime component was paid.

PN359

The shift roster itself was designed obviously to reflect the actual hours worked, so hence the words in the next paragraph that talk about if they are on a different roster they will receive the relevant shift loading. So, what was trying to be achieved was to protect the overtime situation to incorporate the annualised overtime element so there would be no problems in terms of which people would be working back or covering gaps should somebody phone in sick, for example.

PN360

But our major submission is that the first sentence of 1(b) combined with the words in subparagraph 3, also clause 3, reflect the intent of the parties, which is to create a new all-inclusive rate different to that which applied to the existing employees, but that rate would only apply to a limited number of people as a result of the 20 per cent quota, reflecting the compromise outcome trying to deal with the situation of the business pressures that we faced.

PN361

The union has referred to other negotiations that have taken place since we were last here. It is correct that we have reached agreements in both Perth and Adelaide which are different to this particular agreement. There was a similar document produced for Melbourne which was ultimately rejected by the work group, so we are still left with this particular clause and the need for an interpretation of it. I don't really think there is a lot more I can add in terms of our position as to how we believe the terms of the document should be read.

PN362

THE COMMISSIONER: All right. Just looking at clause 7(1)(b), it seems to me there is a bit of a contradiction on the face of it at least between the terminology in the first sentence and the terminology in the second sentence. Do you accept that?

PN363

MR SZCZEPANIAK: I will explain that, I will explain that.

PN364

MR VICKERS: Mr Szczepaniak has indicated that he would like to try to explain that as he had the prime - - -

PN365

MR SZCZEPANIAK: Yes. Commissioner, as you pointed out before, one of the keys to understand the sort of - the contradiction between the first and second sentence is to fully understand what the wording "as per the same formula as current employees", and as Bill Vickers tried to explain, this is to do with the overtime payments, equity if you like, or making sure that the work group shares the overtime equitably. And the way it works at Melbourne Airport, let us say we have six operators on the roster, and then if the forthcoming roster, the following roster, if there is a casual absence then one of the six operators on the previous roster has to stay back.

PN366

When we agreed on the 18.30 rate, wholly inclusive rate, which obviously we believe includes the public holiday allowance as well as every other allowance, the question then arose about the overtime, and our understanding was that these people will only be paid overtime when they actually work it, so that created a practical problem that if out of six people only three are regular old employees and three are people who would work on this new arrangement, then only we would be actually asking only three people out of six in that particular group to actually stay back because they are paid overtime.

PN367

So, the words "as per the same formula" meant that we would actually pay them overtime in exactly the same way as to the existing people to make sure that we have a pool of six people available to stay back rather than only three, and there would be other group, for example, where all six would be old guys, so - old operators, therefore we would be using six operators in that group while only three in others, so virtually the three could potentially work double the amount of overtime as everybody else, so that was the idea.

PN368

Then the second paragraph, when we talk about the new employees who work on a different roster, that really explains that what they were going to receive apart from the base payment of 18.30 inclusive of all allowances is the shift penalty as well as the overtime payment of 1.7 times 18.30 at the time only if worked, because we recognise the fact that once they are on a different roster their ability to cover for people who are on different roster to themselves is virtually non-existent.

PN369

Obviously it is clear that the public holiday allowance was not intended to be paid to these guys, and I would put to you, Commissioner, that why would we comprehend to pay public holiday allowance to one group of people but not to other, knowing fully well that they all be required to work public holiday allowance, and that is the reason why I say that we didn't plan to pay public holiday allowance because it was inclusive in the rate to any of these people.

PN370

THE COMMISSIONER: So, it is probably a question for both of you, but for the time being for you, Mr Szczepaniak. In essence there seems to be because of the contradictory nature of the language some potential issues that arise depending upon your approach to the interpretation perhaps, there is a question as to whether the allowance of 44.96 ought to be paid at all times. If the answer to that is no on your submission, it could be simply the case that it is not payable under any circumstances, because the $18.30 is the rate.

PN371

MR SZCZEPANIAK: Correct.

PN372

THE COMMISSIONER: That is your submission.

PN373

MR SZCZEPANIAK: Yes. That is correct.

PN374

THE COMMISSIONER: But then you seek to explain the "as per the formula" in a way that sort of doesn't actually gel terribly well with the words, because it is related to specific factual circumstances; the working of overtime, for instance.

PN375

MR SZCZEPANIAK: Correct.

PN376

THE COMMISSIONER: So that it is not $18.30 an hour, is it, at all times? I mean, clause 7(1)(b) on your explanation involves that there are some circumstances when a rate higher than $18.30 an hour will be paid to new full-time employees.

PN377

MR SZCZEPANIAK: It was always higher. The 18.30 rate is what we refer as a base rate of pay, and then obviously it was comprehended that on top of that they will be paid shift allowance whatever the shift they work, and they will be also receiving overtime either in the form of annualised overtime as per the same formula as the existing employees or as paid for actual hours paid.

PN378

THE COMMISSIONER: And what about when they work on public holidays?

PN379

MR SZCZEPANIAK: When they work on public holidays then the rate comprehends the public holiday allowance for both groups.

PN380

THE COMMISSIONER: Well, why doesn't it comprehend on the terminology of the agreement, overtime?

PN381

MR SZCZEPANIAK: Well, it does comprehend the overtime.

PN382

THE COMMISSIONER: Why isn't it the overtime rate on the interpretation you favour?

PN383

MR SZCZEPANIAK: Well, with regard to work on any public holidays - - -

PN384

THE COMMISSIONER: No, no. Could we just focus on the overtime for one moment, please?

PN385

MR SZCZEPANIAK: Right.

PN386

THE COMMISSIONER: And then come to the public holidays.

PN387

MR SZCZEPANIAK: Yes.

PN388

THE COMMISSIONER: Given that you say that the first sentence is conclusive, and the base rate if $18.30 an hour, but you then say that the words "as per the same formula" do have work to do, but you say that the work that they do doesn't apply to public holidays, but it does apply to overtime. Is that right?

PN389

MR SZCZEPANIAK: Yes, that is correct. As I say, the proper - you know, as Bill explained before, the sort of writing was happening just one day prior to Easter after 12 hours of discussions, and even the first sentence should really be saying "the base rate of pay", and then obviously we accept the fact and we have been paying the way that obviously on top of that rate we pay shift allowance, as opposed to common hourly rate which is currently being used which encompasses all allowances including shift and everything else.

PN390

THE COMMISSIONER: You see, if I follow your submission, the first point seems to me to be the - well, you can't derive the meaning in given circumstances of clause 7(1)(b) clearly concisely and easily from the words of the clause itself. You actually have to sort of think about different situations. You have to think about shift situations, you have to think about overtime situations, and logically you also have to think about public holiday situations. So, the answer is, well, it is the base rate plus the component in the formula for overtime at 1.7 or whatever it is.

PN391

MR SZCZEPANIAK: That is correct, Commissioner, but looking at paragraphs first and second of (1)(b) - - -

PN392

THE COMMISSIONER: Well, you mean the sentences?

PN393

MR SZCZEPANIAK: No, no, the clauses, the clauses. I think - - -

PN394

THE COMMISSIONER: All right. Well, I have renumbered those just for convenience for a reference. I have given each of the paragraphs of clause (1)(b) a Roman number, a small Roman number, so (1)(b), the first paragraph, which commences: The rate of pay, is (i) as follows (ii), (iii), (iv), (v), (vi).

[12.29pm]

PN395

So, if you are looking now at what I am calling (ii), what are you saying to me about that?

PN396

MR SZCZEPANIAK: What I am saying is that I agree with you, Commissioner, that the first and second sentence of paragraph 1, is difficult to understand because they appear to be contradicting each other. And then the wording, as per the same formula becomes critical, and I have explained what was this period at the meeting to address the issue of overtime. But reading the paragraph 1 and 2 in conjunction, in paragraph 1 we explain what other components of the pay are being paid to the new employees.

PN397

THE COMMISSIONER: If they are on a different roster.

PN398

MR SZCZEPANIAK: If they are on a different roster. However, I guess someone could work a roster which is only half an hour away from the current roster. And then why wouldn't they - - -

PN399

THE COMMISSIONER: Well it depends on what meaning you attach to the word "roster". Now, if someone is rostered on the same roster, a new employee full time, as an existing employee, but when it comes to one of the days of the roster they work overtime, they are still on the same roster.

PN400

MR SZCZEPANIAK: Correct, but if their starting time is a different time, then they are technically on a different roster.

PN401

THE COMMISSIONER: Maybe. It depends. I think there is a question of what meaning you actually attribute to the word roster there: whether that is actually working on the same days at exactly the same hours, or whether or not there is a sort of small variation in the starting time. And whether or not that is substantial enough to say that that is a different roster.

PN402

MR SZCZEPANIAK: Correct.

PN403

THE COMMISSIONER: That is a question you would have to decide. If someone started 10 minutes earlier than another person for, say, on a four day roster, and finished at the same time, well, would you say that they are on a different roster? I think it is questionable that they are on a different roster. I think there is an argument that could be put quite cogently that, "we are on the same roster, with a slightly different starting time."

PN404

MR SZCZEPANIAK: Okay. But the paragraph number (ii) explains that apart from the 18.30 rate, which is inclusive of all allowances including public holiday allowance, they will receive the relevant shift loading, plus overtime payment when it is worked. So, taking the same interpretation to the first paragraph, we just provide a bit more clarification that we do intend to pay relevant shift loading, as well as overtime in a different formula, which is that it be annualised, but we continue to say - well, we don't say anything about the public holiday allowance: meaning that it is not intended to be paid to these people.

PN405

THE COMMISSIONER: I can see that at that point, but that is why I asked you the question earlier, you remember: what meaning should I attribute to the words, "the only allowance which will continue shall be the annualised public holidays allowance and some others." I mean, what is the effect of those words? You said that is confined to existing employees, but there does not seem to be any distinction in clause (iii) between existing and new employees.

PN406

MR SZCZEPANIAK: As it was explained, the wording of this clause, clause 7(iii), is virtually a direct repeat of the clause which appeared in the agreement in '97, as well as in '94 and '95. And at the time of rationalisation of the award, there was some other allowances which have been comprehended in the base rate of pay. However, these allowances were excluded, and they were to continue under the Transport Workers (Oil Companies) Award 1998.

PN407

THE COMMISSIONER: Could I just ask,if that is the history of the matter, what is the consequence of it for the interpretation clause (iii)?

PN408

MR SZCZEPANIAK: Well, my understanding of this is that there is no consequence as such, with regards to any payments, because we deal with this particular clause on the basis of either paying old allowances as we do to current employees, and these are the only allowances we do pay to existing employees: or otherwise paying it in a form of inclusion in the hourly rate of 18.30, as the first sentence of clause 7(1)(b) provides for.

PN409

THE COMMISSIONER: Yes. The difficulty I have with that, by application of the normal principles of statutory interpretation, is that - well, once again there is ambiguity there because of the word "continue". And the distinction between current and existing employees appears in a different part of clause 7.

PN410

I understand you are saying that this was drafted by people under pressure, and I will have to take that into account, obviously. These documents are drafted by the parties. There are some cases on this. They are not drafted by lawyers, and they are often, as you have already pointed out, drafted in particular circumstances of urgency, and the like.

PN411

Nevertheless, what we have here is several subsections of clause 7, if you like, and you have to give that compartmentalisation some meaning. And in clause 3 the distinction which you argue for between the application of the public holiday allowance and its continuation as between existing and new employees, does not appear in clause 3.

PN412

MR SZCZEPANIAK: And that is because we have never said that we actually won't be paying public holiday allowance, or any other allowance. What we are saying through the first sentence of clause 7(i)(b), that these allowances are comprehended in the base rate of pay.

PN413

THE COMMISSIONER: Yes, well, does that say that there? You see, the words that you have just used, they do not actually appear in the clause, do they?

PN414

MR SZCZEPANIAK: Well, I say that the rate of pay for new Mobil employees will be 18.30 inclusive of all allowances.

PN415

THE COMMISSIONER: Yes, all right. I understand. I do not want to get too arcane about it, but there is a principal of statutory interpretation that says that a special provision always overrides a general provision. So what you are really saying is that clause (iii) is a general provision, and clause (1)(b) is a special provision for new employees.

PN416

MR SZCZEPANIAK: And as you see, we have obviously excluded first aid, which is also listed in clause 7(iii), and there was no need to talk about the electronic ..... allowance for shift team leaders and team leaders, because these are the people who are Grade 3 people, and this of course refers to Grade 2 employees.

PN417

THE COMMISSIONER: Do you think it is possible, Mr Szczepaniak, that you in fact didn't reach agreement, and that the parties are in the circumstances that you have described, after these rather lengthy and possibly exhausting negotiations, believe that they have reached agreement, and each recorded in clause 7(1)(b) their respective view of what it was that they had agreed upon. In your view, that you would be paying in accordance with the first sentence simpliciter, and that insofar as that was concerned, you wouldn't be paying the public holiday allowance because it was excluded, and that the TWU thought that what would happen is that the $18.30 would merely be the base rate for the application of the formula.

PN418

Is that a possible scenario?

PN419

MR SZCZEPANIAK: I cannot speak for the other party, but as far as the company was concerned, our understanding was that the $18.30 is inclusive of all allowances, and to us that was inclusive of public holiday allowance.

PN420

THE COMMISSIONER: I understand that is your view of it. I allowed for that. I have allowed for that.

PN421

MR SZCZEPANIAK: Now, as we drafted this, virtually we were - I think we went from 7(1)(b)(i) to 7(1)(b)(iii). And then the question arose about, well, hang on a sec, how about if these people - we were sort of - our intention was to pay them overtime only when worked, and then there was a question of, what if they actually have to cover for some other people; what are you going to be doing.

PN422

Our response to that was, well, we would be looking at people who are already on annualised overtime, who have pre-paid overtime to cover their time. And then the question of the overtime load to be shared equally by all the people.

PN423

So the sentence 2 and 3 in paragraph 7(1)(b) have been added on a bit later to cater for the annualised overtime, as well as any other overtime circumstances. But it wasn't intended, in our opinion, to deal with public holiday allowance.

PN424

THE COMMISSIONER: When does the agreement expire again?

PN425

MR SZCZEPANIAK: 1st of February, 2003.

PN426

THE COMMISSIONER: Can you just - I mean, this is a little bit off the track, really, and don't worry, I won't get confused about interpreting the terms of the agreement with speculation about the merits of the negotiation, nor the negotiating positions of the parties: but it seems to me what you are saying is that the agreement was drafted on the run, and as the parties considered issues that might arise in the event of the employment of new employees on different conditions to the existing employees, terms of the agreement were formulated in order to address those considerations, such as overtime scenarios, and the like.

PN427

Is what you are putting to me that it was clearly put to the TWU, and it was discussed between the parties without any doubt that it was a live issue in the negotiations, as to whether or not the public holiday allowance would apply? Are you saying that to me? Are you saying that when the parties were actually sitting at the negotiating table, that the role of the public holiday allowance was actively, expressly and conscientiously dealt with in verbal interaction between the parties?

PN428

MR SZCZEPANIAK: From what I can recall, I don't think that the public holiday allowance was expressly - - -

PN429

THE COMMISSIONER: Addressed in the way that I described it.

PN430

MR SZCZEPANIAK: - - - addressed in a sort of specific way, about talking about it. However, at the same time the award provides for four different allowances, and we specifically excluded one of them.

PN431

THE COMMISSIONER: Yes, I understand what you are saying.

PN432

MR SZCZEPANIAK: There were the other three, and our understanding was that by saying inclusive of all allowances, it is very clear that it is the other three, and the work group is perfectly aware of what the other allowances are.

PN433

THE COMMISSIONER: So that what you say to me is this. Look, we are dealing with professional negotiators here. We offered them 18.30 all up, except first aid. They should understand that that means it excludes every other allowance. It is straightforward on the face of it that that is what we were putting forward.

PN434

MR SZCZEPANIAK: I guess the other consideration in this discussion should be that the origin of the rate of 18.30: we were trying to establish a rate which would be comparable to what we believed at the time was the competitive environment, and that was a company called BAFS in Brisbane. Their hourly rate, which is a common hourly rate, was set at $25.30, and it expressly actually indicated that inclusive of all allowances, and all the allowances were listed.

PN435

Our 18.30 was roughly the equivalent - of base rate, was roughly the equivalent of the 25.30 of BAFS common hourly rate. And this particular issue was discussed at length, in terms of we looked at the rate of BAFS.

PN436

THE COMMISSIONER: So that was the focus of discussions, whether or not the union could see its way clear to allow you to employ a number, to be determined by negotiation, of new employees on a rate competitive with that particular service provider?

PN437

MR SZCZEPANIAK: Correct.

PN438

THE COMMISSIONER: And it was not so much that you focused on the individual components of the rate, but rather you focused on the aggregate picture. And that insofar as you are concerned, it should have been clear that the rate, by virtue of the ways it was expressed as being exclusive of allowances except first aid, excluded public holiday allowances?

PN439

MR SZCZEPANIAK: Correct.

PN440

THE COMMISSIONER: Good, thank you. Mr Vickers, had you finished? I am not quite sure whether you had.

PN441

MR VICKERS: Yes, Commissioner, I think that last point was the point that I wished to make.

PN442

THE COMMISSIONER: That was where you were heading, was it?

PN443

MR VICKERS: Yes, just in terms of what was underpinning this whole debate and discussion. The actual drafting of the document, I think was done by Mr Szczepaniak with a former official of the union. And, as I think has been said a couple of times, was done in some haste, given the circumstances. We could have been more precise; we would certainly accept that.

PN444

THE COMMISSIONER: Well, as I said before, it is the characteristic of industrial negotiations that they are often conducted under pressure, and people do not have the luxury that perhaps commercial negotiators do of referring each and every document to their lawyers for proofing.

PN445

Do you want to reply, Ms Learmonth?

PN446

MS LEARMONTH: Commissioner, I think I will, just briefly, and perhaps just provide you with an understanding of how we were perceiving the discussions. Certainly in relation to the word allowances, set out in paragraph (i) of 7(1)(b), our intention at that time was to exclude the $20 all up allowance that existing employees receive.

PN447

So the company bundled up allowances such as the meal allowance, and those sorts of things, and found an annualised rate, and said, there is $20 a week towards allowances that you will not be paid except in this $20 payment. So we had said to the company that as part of the $18.30, or the new employees, it was our understanding that they would not receive that $20 per week allowance.

PN448

I cannot provide any further information in relation to why the first aid allowance remained, and so I won't attempt to try and do that.

PN449

THE COMMISSIONER: Can I just ask you to pause there. Therefore, what is the difference between your perspective of the negotiation and the agreement, to the one which has been expressed by the company?

PN450

MS LEARMONTH: I think you summed it up quite well, Commissioner, when you said that we were both interpreting the clause as we perceived it, and I believe that that was clearly what was going on.

PN451

THE COMMISSIONER: Right, I understand that. So your perception was that it was the $20 allowance that was excluded?

PN452

MS LEARMONTH: That is right, and not a public holiday allowance.

PN453

THE COMMISSIONER: Well, in fact, it was not an allowance as such: it was a nominal value, which was calculated by reference to the hourly rate of the existing employees: is that right?

PN454

MS LEARMONTH: Yes.

PN455

THE COMMISSIONER: What does that mean? I am not sure how that fits into the different perspective. Can you just elaborate on that a little bit for me. The consequence of the difference in the points of view is therefore what?

PN456

MS LEARMONTH: In relation to that first sentence?

PN457

THE COMMISSIONER: No, I think what we are talking about is Mr Szczepaniak is saying, look, we were looking at this competitor in Brisbane. We were offering $18.30 all up excluding first aid. You are saying, we have a different perspective. When we were negotiating, we were excluding certain payments that existing employees were receiving, but that was all that we were excluding.

PN458

MS LEARMONTH: Yes. My understanding, and I was not present at any of the negotiations, but my understanding, certainly from going back through the file and to notes surrounding the negotiations, is that the company some 12 months before the negotiations were concluded came to the union and said, we want an all up hourly rate of pay for new employees that is lower than what existing employees are currently receiving.

PN459

THE COMMISSIONER: And so what was it that you excluded, and what was it that you did not exclude?

PN460

MS LEARMONTH: Perhaps if I can take you to clause 7(1)(b)(iv), where that clause talks about an employee, which would be a new part-time employee, is entitled to payments in respect of annual leave, public holidays and sick leave on the basis of proportionate hours. So what we were trying to do with that paragraph was to make it clear that part-time employees would also be in receipt of annual leave, public holidays and sick leave.

PN461

THE COMMISSIONER: The more I read this, the more difficult it becomes to take an overview of consistent meaning through the clause. There are in almost every clause, inconsistencies. I suppose it comes back to the drafting-on-run scenario.

PN462

MS LEARMONTH: And the members and the union representatives were trying to consider all possible scenarios that would arise, because it was a situation that was not currently in place. And so they were trying to sort of dot the i's and cross the t's, and just trying to ensure that in bringing in this opportunity for the company to employ new employees on a lower rate of pay, that they weren't going to disadvantage those employees to a large degree.

PN463

That there was an acceptance that the new employees would be working alongside existing employees on a lower rate of pay.

PN464

THE COMMISSIONER: Yes. I am still not entirely clear on this $20 amount. Can you just tell me how that was derived.

PN465

MS LEARMONTH: In the matrix at the back of the enterprise agreement, Commissioner, there is - if you turn to the one that it titled, annualised salary summary, refueller operators grade 2s. And underneath the heading, new package, down the bottom there is an allowances per week, which is $20. That again, that was something that was rolled over from the previous enterprise agreement, which I think as Mr Szczepaniak has also said, was then borne out of the oil company's award and the allowances that were paid in the oil company's award.

PN466

My understanding is it was in lieu of meal money and telephone calls and obviously for existing employees, a first aid allowance. So that was our understanding that the company, new employees did not need to pay that $20 per week allowance.

PN467

THE COMMISSIONER: Is that all you wanted to address on reply?

PN468

MS LEARMONTH: Perhaps if I can just say one more thing, Commissioner. It is just in relation to Mr Szczepaniak's interpretation of the overtime when and when that would not be paid. We would say that clause 7(1)(b)(ii), that sub-clause would address the issue of overtime for new employees. We do not believe that that was appropriately addressed by the second paragraph in 7(1)(b)(ii). That is all, Commissioner.

PN469

THE COMMISSIONER: Thank you. Mr Vickers, how long does your contract run for with - are you sort of like a moment by moment service provider out there are you?

PN470

MR VICKERS: Sorry, was that a contractor - - -

PN471

THE COMMISSIONER: You are like a service station that people just ring you up and say come and fuel this plane or do you have a contract with the - - -

PN472

MR VICKERS: Most of the business is on contracts with the airlines which are put to tender on a regular basis. Usually they divide their fuel sales up into parcels rather than doing all their Melbourne volume in one contract, for example, they will split it up so they can have the various companies competing against each other to win those tenders.

PN473

THE COMMISSIONER: What are the rise and fall consequences for you of this decision if it goes in favour of the union?

PN474

MR VICKERS: Well, as I indicated earlier, Commissioner, the application on the decision only applies - - -

PN475

THE COMMISSIONER: Well, it is a fixed price contract isn't it or - - -

PN476

MR VICKERS: In terms of the price we charge airlines?

PN477

THE COMMISSIONER: Your - yes.

PN478

MR VICKERS: No comment on it, no. I mean the consequences are - relate to four people. I wouldn't pretend to submit that this - - -

PN479

THE COMMISSIONER: There are contractual consequences, there are no contractual consequences?

PN480

MR VICKERS: No major consequence. I mean the impact in dollar terms is relatively small. The issue that the company was concerned about was the one we laboured at some length about the competitive position of our Melbourne operation versus others. But given that only four people are directly affected it was not a major consideration.

PN481

THE COMMISSIONER: So it really is relevant, it is just a question of the meaning of the agreement.

PN482

MR VICKERS: And I suppose from our point of view, Commissioner, it was the degree of difficulty we had in trying to get to any agreed outcome that we would recognise the company's concern about its operation and its competitiveness and the need for some greater flexibility in the workforce generally.

PN483

THE COMMISSIONER: Well, that's really not a matter that is before me at the moment.

PN484

MR VICKERS: No, it is not.

PN485

THE COMMISSIONER: Given the nature of these proceedings I am rather confined to settling the dispute about a matter arising under the existing terms of the agreement. The terms of the agreement are matters for the parties unless they seek conciliation or some other mechanism for the determination of disagreements with them. And those would be separate proceedings which would address the merits of what the terms of the agreement should be rather than what the meaning of the existing terms are.

PN486

So I just sort of say that really my job here is to try and, as far as I can, give effect to the plain meaning of the words in the agreement. And if there is any ambiguity or uncertainty to apply a reasonable set of interpretive principles having regard to the context in which the agreement was made.

PN487

MR VICKERS: That is understood. Whilst Ms Learmonth was addressing you, Commissioner, Mr Szczepaniak has been going through some of his old notes of whiteboard exercises that were part of these negotiations, and I unfortunately do not have copies of these to tender as exhibits. But these are - I might just show that to you.

PN488

That was an attempt to try to summarise, during the negotiations, the proposal which highlights the $18.30 per hour, and it says, inclusive of all non superannuable allowances. Not in itself conclusive, I would agree, but I think it is again evidence as we would put it of the intention of the company that the $18.30 was meant to be as close as possible to an all up rate excluding the shift and the overtime which are highlighted on there as being additional to that.

PN489

THE COMMISSIONER: Just out of interest, what is your view - [12.55pm]

PN490

And once again I just sort of should indicate I am highly conscious of the fact that this is really a matter of merit. I can assure you that my attention to the matter will be interpretive, but the thing that does strike me about the structure of what you agreed to is that you do provide for the payment of shift allowances and you do provide for the payment of overtime, so in a general sense it is not an all-inclusive rate. You say that it is a rate inclusive of certain allowances, and in particular you say that it is a rate inclusive of the public holidays allowance.

PN491

MR VICKERS: And the meal moneys and the telephone calls.

PN492

THE COMMISSIONER: That is an amount of? The public holidays allowance is an amount of?

PN493

MR VICKERS: The regular employees - - -

PN494

THE COMMISSIONER: For a new employee.

PN495

MR VICKERS: We say that for the new employees hired under this specific provision, it was absorbed in the $18.30 at that time.

PN496

THE COMMISSIONER: What does that constitute as an hourly rate, about a dollar-and-a-bit per hour, is it?

PN497

MR VICKERS: About $1.40 per hour based on what was then the weekly expression as paid to the pre-existing employees.

PN498

THE COMMISSIONER: So if that is the case, where did that leave you? Did that leave you on a - if you did a retrospective calculation of the rate, you are saying that if you take the $1.40 out of the $18.30, it takes it down to about $17 an hour; and what was your competitor paying again?

PN499

MR VICKERS: I will stand to be corrected by my colleague here, but based on the numbers that we had here, we had $16.90 I think is a base rate on the BAFS, Brisbane Formula. But the Brisbane one was derived, in a sense, working from the opposite end. They started by saying they wanted to have an all-up annual salary; from memory, it was $50,000 a year. They then worked backwards to create the hourly rate allowing for shift and so on, so that came at it from a different angle, but when we were in discussions and we were looking to see how close could we get to that all-up outcome, we finished up with the $18.30 figure, which again from memory by the time you added on the shift premium and the overtime annualised hours component, we were still paying more than the Brisbane competitor even on our construction of the clause as distinct from the union's interpretation.

PN500

We have tried to address this issue in the subsequent agreements that were referred to at Adelaide and Perth by rewriting the agreements which we have done with consent of the union. One of those has been certified; I think the other one is before the Commission and awaiting certification at the moment. We still had this confusion over the Melbourne one to resolve, given that the attempt to re-do the whole agreement got voted down.

PN501

THE COMMISSIONER: Well, of course, you will have the opportunity to negotiate an agreement probably commencing this year, I would imagine, you will start the negotiations given your experience with the difficulty of the last negotiation and you will need to provide some time in order to reach agreement if you would roll the agreement over and in particular if you were to address any concerns you have about your costs.

PN502

MR VICKERS: Well, I think there are some very fundamental issues we need to address around our whole airport operations base, since these discussions and this agreement we have lost at one stage 40 per cent of ..... with the Ansett collapse, and at this stage we are owed something like $25 million by Ansett, so we have got some bigger issues to deal with.

PN503

THE COMMISSIONER: Yes. Well, we are all creditors of Ansett here of one sort or another. I didn't attend the meeting.

PN504

MR VICKERS: No, neither did I, but I am sure some of my colleagues did.

PN505

THE COMMISSIONER: I didn't think anybody would see me down there voting.

PN506

MR VICKERS: No, my frequent flyer points aren't worth $25 million. If the Commission pleases.

PN507

THE COMMISSIONER: Yes, all right. Did you want to say anything else, given that Mr Vickers has had another go?

PN508

MS LEARMONTH: No, I don't think so, Commissioner.

PN509

THE COMMISSIONER: No, all right. Very well. I will reserve my decision in relation to the matter. Sorry, did you want to say something else?

PN510

MR VICKERS: If the Commissioner wouldn't mind.

PN511

THE COMMISSIONER: I think you have just about run out of time, Mr Szczepaniak. You have to more or less applies to re-open your case.

PN512

MR SZCZEPANIAK: Yes, just, Commissioner, in terms of your earlier question about whether it was understood by all parties where public holiday allowance sits in all this, I actually do have a printout of the whiteboard which I am happy to submit as an exhibit which the union will have a copy of as well and that - - -

PN513

THE COMMISSIONER: Was a copy provided to them at the time?

PN514

MR SZCZEPANIAK: Sorry?

PN515

THE COMMISSIONER: Was a copy provided to them at the time?

PN516

MR SZCZEPANIAK: Correct, yes, correct. And it does refer to a rate, a weekly rate of $961 which is an equivalent of $50,000 per year as per the BAFS agreement.

PN517

THE COMMISSIONER: Just before we got to it though, because I am a bit reluctant to sort of get into this, I mean, there are some procedural rules that apply to the way I am supposed to conduct these matters. That document obviously is a snapshot of a moment in time that was recorded during a negotiation.

PN518

MR SZCZEPANIAK: Yes, it is one of the - one of several whereby we were trying to agree on the rate.

PN519

THE COMMISSIONER: Yes. No, I understand that. Maybe if you just bear with me for a moment. You appreciate that a negotiation, you know, waxes and wanes so for me to take one piece of paper which represents a moment in a lengthy negotiation and draw conclusions about the meaning of the outcome of the negotiations is fraught with difficulty and I am reluctant to receive it as an exhibit. The only way that I think you could make it stick would be if you were to put to me that this was - this is only indicative of the fact that the allowance structure was under discussion as opposed to what the conclusions the party reached was. Now, is it disputed that the allowance structure was under discussion?

PN520

MR CONROY: No. Just the only thing that is under contention is the fact that our intent was never to have public allowances - - -

PN521

THE COMMISSIONER: Yes, all right. But I think Mr Szczepaniak is not suggesting that it was your intent; he is speaking for himself.

PN522

MR CONROY: I think what he is referring to there on the whiteboard was proposal, counter-proposal, proposal, counter-proposal - - -

PN523

THE COMMISSIONER: Yes, I appreciate that. That is what I have just been referring to. However, and I have ruled out admitting it for the purpose of considering whether a conclusion was reached as argued for by the company. What I think Mr Szczepaniak is trying to say to me is that: look, earlier on this morning I asked a question which was directed to the level of discussion and expression of discussion about the allowance structure. And what Mr Szczepaniak is saying is that the whiteboard records that the allowances were actively under discussion. Now, is that disputed?

PN524

MR CONROY: No, I don't think so. I think - - -

PN525

THE COMMISSIONER: All right, okay. Well, that is all.

PN526

MR CONROY: But just on the discussion, I just want to clarify on the discussion bit. I think it was - there was a number of things up for discussion but it was proposed - - -

PN527

THE COMMISSIONER: Yes.

PN528

MR CONROY: And I am not saying it was agreed to because - - -

PN529

THE COMMISSIONER: Yes. No, I accept that. That is not really the point of what Mr Szczepaniak is trying to demonstrate.

PN530

MR CONROY: No, it was discussed.

PN531

THE COMMISSIONER: Yes, all right. Well, you don't need to have it admitted. It was expressly referred to. Yes.

PN532

MR SZCZEPANIAK: Thank you.

PN533

MR CONROY: I just ..... make a point - - -

PN534

THE COMMISSIONER: About that subject?

PN535

MR CONROY: No.

PN536

THE COMMISSIONER: Well, if we keep on going round and round - - -

PN537

MR CONROY: I want to just go on to the fact that in the negotiations it was never ever our intention to have somebody working public holidays inclusive in the - - -

PN538

THE COMMISSIONER: Yes. Well, I think you have made that clear, that is your perspective, yes.

PN539

MR CONROY: Yes.

PN540

THE COMMISSIONER: All right. I will reserve my decision in relation to the matter. Look, I should caution the parties that there are two things that I need to draw your attention to. One is that I do have the usual backlog of decisions to be made, but I expect to be on leave for family reasons in the near future for some time so there may be a bit of a delay as a result. Thank you.

ADJOURNED INDEFINITELY [1.06pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 MATRIX FOR EXISTING EMPLOYEES PN155
EXHIBIT #A2 MATRIX RE NEW PART TIME EMPLOYEES PN231