C3827/700, Transcript of Proceedings [2003] AIRCTrans 1083 (26 March 2003)

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 VT10261
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER TOLLEY

C No 38277 of 2000

TRANSPORT WORKERS UNION
OF AUSTRALIA

and

LINFOX TRANSPORT (AUST)
PTY LIMITED

Notification pursuant to section 99 of the Act
of an industrial dispute re application of
schedule 4 of the certified agreement in relation
to an individual member

MELBOURNE

11.30 AM, WEDNESDAY, 12 MARCH 2003

Continued from 20.2.03

PN136

MR A. OLTHOF: I appear for Linfox Australia Pty Ltd with MR J. DIXON.

PN137

MR W. MADER: I appear for the Transport Workers Union with MR C. O'MALLEY and MR B. DEWAN and, Commissioner, could I indicate behind me there are members from the EBA Consultative Committee.

PN138

THE COMMISSIONER: When this matter was last before the Commission on 20 February of last month the Commission issued a recommendation and a direction to the parties. The Commission's inquiries as to the progress on the work method laid out in that recommendation has met with what the Commission regards as a failure of the parties to progress the matter properly. Accordingly the Commission is espoused to call this matter on. I will hear reports first then I will decide what I am going to do. Mr Mader.

PN139

MR MADER: Yes, thank you, Commissioner, and I take note of what you are saying. We have actually moved from the Commission hearing on the 20th to hold a meeting with the members as soon as possible after that and for that purpose we had discussions with Mr North from the company. And a meeting was scheduled on the Friday of that week, Commissioner. I just don't have that date with me at the moment. The 21st I am told. We had a meeting scheduled for Friday the 21st the purpose of which was to take the recommendation from the Commission, the outcome of our discussions that involved the EBA Consultative Committee to have the matter voted on, Commissioner.

PN140

But that vote did not take place on the Friday as a result of some questioning as to the protection of earnings provision of the proposal contained in your recommendation. Unfortunately, Commissioner, Mr North went ill on that Friday and subsequently we found that he was hospitalised. We didn't find that out until the Monday following the 21st so that would be Monday the 24th. We arranged with Mr North to have further discussions to clarify the question of protection of earnings.

PN141

However, on the 24th on the Monday we found that Mr North was not available because he had been hospitalised so Brendan Dewan and myself then sought to speak to I guess any other manager from Fox who may be able to - who might have been able to assist with what we were looking to deal with and that was this protection of earnings issue. The best that we could do was to speak to Tony Olthof by telephone and an agreement was reached whereby we would itemise the issues of concern for his attention in the absence of Mr North. Commissioner, we did that and I might take the opportunity of handing this up to yourself.

PN142

THE COMMISSIONER: Yes, thank you.

PN143

MR MADER: And I think the company has got a copy of it. Commissioner, it sets out - - -

PN144

THE COMMISSIONER: I will mark this as U1 for Union 1, Mr Mader.

EXHIBIT #U1 ISSUES OF CONCERN

PN145

MR MADER: Thank you, Commissioner.

PN146

THE COMMISSIONER: Yes.

PN147

MR MADER: It is a very simple document that sets out our issues of concern from I think your recommendation regarding the protection of earnings. It has been drafted up - and this perhaps should have had a note on the top to say it is a draft - but it was drafted up to in simple terms identify exactly what protection of earnings is. And you can see at paragraph 2 there, Commissioner, that we say that the current pay structure, being hours overtime and commission payments as detailed in the Linfox Coca Cola Agreement 1996, where the drop in case rate results in earnings lower - and there is a typo there but I think I have pencilled in the word "than" - lower than the current pay structure make up payments will be made on a weekly basis.

PN148

Commissioner, there have been no further formal discussions with the company with the Consultative Committee but it has been conveyed back to us that the company has a problem with that proposal to the extent where they don't believe that a protection of earnings ought to include commission payments. And as I understand it - and I guess I can leave their points on this to Mr Olthof - but as I understand it it is along the lines that if there was such protection of earnings provision that there would be no incentive for the employees who are going to trial this arrangement to work towards an incentive arrangement.

PN149

Commissioner, the union totally rejects that proposal and it is indeed at odds with some of the comments that we have made and that I think comments that the company has made that the productivity level and the incentive that the current group of permanent employees are working towards is not in question, that they are satisfied with that. And there has been no evidence at all to suggest that there would be any change to that. And I think I suppose I will leave it on this point. It is the company that has insisted right throughout this exercise that this drop in case rate will work and, Commissioner, if I might just go to the comments that Mr North made on transcript on Thursday the 20th after we resumed into hearing after the conference and he said in his first paragraph:

PN150

Thank you, Commissioner. First of all I would like to thank yourself for making yourself available for these proceedings. Linfox certainly gives its commitment to give this trial a fair go and are exceptionally confident that it will be acceptable to both parties.

PN151

So, Commissioner, we are at odds as to how the company can be so confident towards that and yet raises a question that there might be some jibbing of the calculations by the current employees. It has been suggested in our own discussions that if they wanted to jib the company along those lines they could do it now and they are not.

PN152

THE COMMISSIONER: And get the flick when they got caught. It would be no good them coming in here whingeing.

PN153

MR MADER: That may be the case, Commissioner, and I think we would stand by that. And further to that I think that if there is a question that the trial would not be given a fair go then even on the company's proposal of there being a protection of earnings based on hours and overtime if the drop in case rate was not given a fair go and people wanted to work counter towards it then they could simply work to hours and overtime. So, Commissioner, we are at a bit of a loss as to why we can't get across this last position.

PN154

There is one other item, Commissioner, that has come up in recent discussions over how we might take this matter forward and that is the standing of the current arrangements during the trial period. And we would seek some sort of guidance either from yourself or from the company that they will not move to have the current enterprise agreement with the current arrangements in it set aside and that this is given a fair go. Commissioner, that is all I have to say at this point.

PN155

THE COMMISSIONER: Yes. And just before you sit down, in effect are you saying to the Commission that if the issues contained in U1 and your later comments about the maintenance of the current agreement are resolved the matter will be trialled properly?

PN156

MR MADER: That is the - - -

PN157

THE COMMISSIONER: And - before you answer - is that the decision of the employees?

PN158

MR MADER: From our meeting this morning, Commissioner, yes. There is always, I guess, some nervousness about the exercise but there was a well attended meeting this morning when we were given advice and the EBA Consultative Committee said.

PN159

THE COMMISSIONER: You see, Mr Mader, I don't want people coming back here in a weeks time and saying to me we have changed our mind because then the Commission might change its mind about current agreements and the award. And the Commission has got the right to do so on its own decision without any agreement from the parties if it so wishes. I would hate to be placed in that position because of the stupidity of both sides. Thank you, Mr Mader. Mr Olthof.

PN160

MR OLTHOF: Thank you, Commissioner. Commissioner, I don't take any great exception to what Mr Mader has put on the record. I do wish to elaborate a little on the position as the company sees it. I should at the outset indicate that at Linfox' instigation there was in fact discussions held with the union as represented by Mr Mader on Thursday 6 March. Linfox requested the meeting for another purpose to deal with some other issues but in the course of that meeting we happened to touch upon the outstanding matters regarding the Coca Cola round operation in Victoria.

PN161

Now - and we specifically discussed what now takes the form of exhibit U1. And as will be readily apparent from an examination of U1 it is obviously the drivers desire that the new scheme as discussed at length before the Commission on 20 February or thereabouts ought to be in their view underpinned each week for the current - and these are my words of course - unenforceable over award pay structure which comprises three elements:

PN162

(a) ordinary hours on the current above award hourly rates of pay which, incidentally, I just advise are 3 per cent or less than the prevailing standard Linfox TWU rates of pay, but there is a history behind that which we needn't go to for the moment, and

PN163

(b) the next element, overtime hours on the present above award hourly rates of pay with award prescribed penalties, of course, and

PN164

(c) the final element, the Commission payments as were detailed in the 1996 certified agreement, that is, prior to that agreement being varied by the Commission by way of deletion of those Commission payments by way of order, I think, in 1999.

PN165

Now, points (a) and (b) as effectively incorporated in U1 are already, we believe, agreed to and reflected in the so-called appendix B document that was discussed before the Commission previously. And I refer in particular to page 23, paragraph 9(b) where it talks about review of drop and case rate payment system and (b) it says:

PN166

For the duration of the initial 3 month period employees were paid no less than the amount they would have received for hours and overtime actually worked during this period.

PN167

And I - so I think by reference to that paragraph 9(b), the first two points effectively incorporated in U1 have been agreed and dealt with to finality, unless there is something in the union's position I fundamentally misunderstand. Point (c) however, we say the desire for the union - or the desire on the part of the drivers to maintain the old Commission structure as part of the underpinned for the purposes of the trial, we say that point (c) has effectively been replaced via the minimum loads and payments set out on page 22 of appendix B, specifically clauses 2, 3 and 4, where there is a minimum case is prescribed for prime loads, minimum payment for second loads and minimum daily payment.

PN168

Now, having regard to those particular paragraphs, 2, 3 and 4 on page 22, we are not able - the company is not able to agree to the drivers underpinned demand with respect to point (c) as I have called it, the old Commission structure. And this is because, as Mr Mader has already alluded to, in our view it would deprive the drivers of any incentive to make the new scheme to be trialled actually work in practice.

PN169

In our view there would be the perfectly natural temptation on the part of each individual driver to do, on a daily basis, in their heads, a cost benefit analysis for the purpose of maximising earnings as distinct from maximising productivity and minimising working time on the day. And in our view that will cause the trial to be - basically its effectiveness will be invalidated. Now, having said that, Commissioner, our view is, and I in no way make this point as a threat, it is simply to be very upfront with the drivers, that if we can't reach a settlement on this latest version of the underpinned claim today, with the Commission's assistance, then Linfox will feel it has no choice other than to do a number of things, one of which is to immediately take steps to redeploy the drivers to suitable alternative positions elsewhere, and we have already identified the 8 or 9 such positions.

PN170

Secondly, we would have no alternative, in our view, but to file an application for the current enterprise agreement to be set aside so that we can, the parties can, start afresh, as it were, as particularly for the purpose of putting appropriate industrial arrangements in place for any new work - the new parcels of work that we may be awarded by the customer in the new financial year, and of course there is no guarantee that we will be awarded such work, but we certainly won't be awarded such work under the current industrial arrangements. They are clearly uncompetitive and unworkable in practice.

PN171

So far as redeployment is concerned can I also say, more positively, that if we can reach an agreement today on the basis upon which the trial will proceed forthwith, we are still more than happy to immediately, or as soon as practicable, redeploy any of the drivers that may wish to be redeployed, to suitable alternative positions. They don't need to work through the trial if any particular individual is aggrieved by the outcome.

PN172

THE COMMISSIONER: In other words, they are going to volunteers.

PN173

MR OLTHOF: In that context they would be volunteers, yes, precisely so. The other point I should just state for the record, because I think there has been some misunderstanding between the parties on this and it was touched upon in the meeting with Mr Mader last week, and that is, it is our desire, assuming the trial gets up and running, as it were, it is our desire to have - and our intention indeed, to have discussions with the agency drivers, and indeed their employer, for the purpose of having a parallel trial amongst that workforce as well.

PN174

We think that is an important part of going forward, hopefully to some sort of success or finality of all of the issues before you, but we do see that as a separate matter, we are not asking the union or our own directly employed drivers to consent to that, or agree to it, we do see it as a separate matter and that is a matter for discussion with those agency drivers and their employer. That is all I have to say for the moment. There is perhaps one other point I should make, Commissioner, and that is, if one does - - -

PN175

THE COMMISSIONER: Excuse me, Mr Olthof. Would you tell Mr Addison if he can't be quiet to go downstairs. Yes, Mr Olthof.

PN176

MR OLTHOF: If one actually does the calculations in respect of paragraphs 2, 3 and 4 on page 22 of appendix B and the appendix B document, you will see that the drivers are effectively guaranteed 9 hours paid work per day, in fact 9.13 paid hours worked per day, and if you factor in - and that would include winter months as well, which on past experience is pretty generous for the volumes typically experienced in winter, but the actual time extends from a clock on to a clock off point, to 9.96 hours, if one factors in the half hour meal break and the 20 minute crib time prior to overtime.

PN177

So if you add the .83 you will get 9.96. So it is a not insubstantial minimum working day in terms of equivalent pay on the current hourly rates of pay enjoyed by the route drivers. And so we think that by reference to that consideration and also paragraph 9(b) on page 23 we think there is more than sufficient underpin for the drivers to get on with the trial. Thank you, Commissioner.

PN178

THE COMMISSIONER: Yes, thank you. Anything further to add, Mr Mader.

PN179

MR MADER: Just a couple of points, I think, Commissioner, as I guess we may very well flesh out some of these things in conference, but I think I just simply need to say this, that what Mr Olthof is saying is correct in relation to appendix B, clause 2, 3 and 4. That is the very crux of the trial and the issues that we went through on the 20th, both in conference and with your assistance, was to establish a trial without there being any overbearing pressures or conditions on it, which was the reason why the earlier attempts to a trial were not agreed upon. So far a Mr Olthof's statements regarding if agreement is not made today - - -

PN180

THE COMMISSIONER: Just before you proceed on that line you can blame me for that, because I told Mr Olthof when I contacted him the other day and asked him a question, I still - I would expect if he is going to represent the company in this hearing - in Mr North's absence, I understand Mr North is ill and that is sad, but I indicated that if there was anything else to be brought forward it was to come out today. It was no good raising it in two weeks time, hence my earlier remarks about the drivers and their commitments.

PN181

MR MADER: Yes, Commissioner. Well, let me say that we perhaps appreciate the frankness that Mr Olthof is demonstrating, but I am not sure that it is productive, but I think I do need to say that I think there will be some very real questions of the legitimacy of compulsorily redeploying people who are employed under the terms and conditions of an enterprise agreement and replacing them with new employees, simply on the basis that the company doesn't like and wants to withdraw from current arrangements and can't reach agreement.

PN182

THE COMMISSIONER: Well, that is a matter for argument when there is an argument put and the agreement is set aside.

PN183

MR MADER: Yes.

PN184

THE COMMISSIONER: If it happens.

PN185

MR MADER: And I think the - - -

PN186

THE COMMISSIONER: And I might add, it is my assessment, that with a bit of common sense there would be no need for the issues or the arrangements Mr Olthof spoke about to be put in place.

PN187

MR MADER: Well, Commissioner, I won't press forward with that except to say that - I mean, we are here today with your assistance in good faith to reach agreement. But I think people do have some rights and if the company's position is that these arrangements will work and that they are exceptionally confident as they were last time, then their fears about people jibbing the system are just simply unfounded. The other, I think, Commissioner, is there was mention made that the company is now saying that they intend to go forward with the labour hire casual employees to likewise trial a drop in case rate.

PN188

Now, I am completely mystified how they intend to do that but I should just say, both for yourself and the company, that the Transport Workers Union represents the members who work for those labour hire companies and if there is going to be some change to the current award and by virtue of the TWU Linfox Coca Cola EBA, then we will be involved in that and I don't see it being dealt with any differently than the proposal as being put forward for the permanent drivers.

PN189

THE COMMISSIONER: Well, I would be surprised if the union wasn't involved if they are your members. But I think the point Mr Olthof was making was he yet had to have discussions with the agency that employs those people and he didn't want to confuse that with this issue.

PN190

MR MADER: Yes.

PN191

THE COMMISSIONER: Anything else, Mr Olthof?

PN192

MR OLTHOF: Not at this point, Commissioner.

PN193

THE COMMISSIONER: We will adjourn into conference.

OFF THE RECORD

PN194

THE COMMISSIONER: The Commission has resumed. During the conference, both with the parties together and individually, the Commission has reached the view that further conciliation will be of no use in this matter. The company has reiterated strongly to the Commission that its position as to what I will call underpinning, which in effect is a form of income protection, shall remain at their offer which is the equivalent of 9.6 paid hours per week with the proper penalty rates for those hours above standard hours. And that is a guarantee for the whole of the year, which means it will be - and the 19 drops, the 400 case rate in place as well as contained in annexure B to the proposed document.

PN195

To make the Commission more fully understand what the 9.6 hours underpinning means, the company has told the Commission - and if I am wrong in what I say, Mr Olthof, please correct me - has told the Commission that what it means in effect is this. If a driver finishes his work and returns to the yard after 7 hours they still get paid the equivalent of 9.6 hours, the appropriate penalty rate. Is that right?

PN196

MR OLTHOF: One minor correction, Commissioner. It is 9.13 paid hours.

PN197

THE COMMISSIONER: 13 hours. I can't read my own writing.

PN198

MR OLTHOF: The equivalent thereof. That is what - - -

PN199

THE COMMISSIONER: 9.138 hours?

PN200

MR OLTHOF: 9.13.

PN201

THE COMMISSIONER: 9.13 hours. Okay.

PN202

MR OLTHOF: Yes.

PN203

THE COMMISSIONER: The company has also indicated that it believes strongly the trial should proceed without the commission payments being included. It has indicated to the Commission that if there are any problems about the trial they will participate properly if the matter is brought back to the Commission to sort any issues out between the parties. I don't think I need to say any more than that. Does that summarise your position, Mr Olthof?

PN204

MR OLTHOF: Yes, Commissioner. Everything that I said in my opening remarks stands.

PN205

THE COMMISSIONER: Thank you. Do you have any comment, Mr Mader?

PN206

MR MADER: Only this, Commissioner. I think our brief was to come in here today and pursue the protection of earnings on the basis of the current arrangement and I guess the company's position and your comments will be relayed back to the membership for their further consideration.

PN207

THE COMMISSIONER: Yes, I have got no doubt Mr Mader will tell them the whole of the story, the good, the bad, the ugly, because it has always been your want when reporting from this place - - -

PN208

MR MADER: If it is not already apparent, Commissioner, that will be the case.

PN209

THE COMMISSIONER: Well, it has always been apparent to the Commission as constituted in your case anyhow. All I can say is this, I think you should trial the matter. It is in your own - if you don't trial it, you can't come in here and mount an argument to say it doesn't work. I used the analogy in the conference. You say your motor car won't do 100 kilometres an hour, how do you know if you don't get in it and put your foot on the accelerator? The Commission is adjourned.

ADJOURNED INDEFINITELY [1.12pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #U1 ISSUES OF CONCERN PN145