AG2002/6457, Transcript of Proceedings [2003] AIRCTrans 140 (14 January 2003)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS


O/N VT1197

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LEWIN

AG2002/6457

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Transport Workers Union of Australia and
Another for certification of the BOC Limited
National Bulk Distribution Enterprise Agreement
2002

MELBOURNE

11.49 AM, FRIDAY, 20 DECEMBER 2002

PN1

MS S. LEARMONTH: I appear on behalf of the Transport Workers Union.

PN2

MR G. BARTRAM: Employee Relations Manager for BOC Limited.

PN3

THE COMMISSIONER: I have just got a little bit of a difficulty in that I thought I brought my glasses with me and I opened the case and it was empty, so I am just waiting for them to arrive, but you might start telling me about the agreement in the meantime.

PN4

MS LEARMONTH: Commissioner, application has been made under division 2 of Part VIB of the Workplace Relations Act 1996 with the certification of an agreement made under section 170LJ of that Act. All of the requirements of the Act, regulations and rules of the Commission have been met in the making of this agreement. The requirements of section 170LJ of the Act have been met in that the TWU has at least one member employed in the part of the single business whose employment will be subject to the agreement and the TWU is entitled to represent the industrial interests of that member.

PN5

The agreement was approved by valid majority of persons employed at the time whose employment will be subject to the agreement and access to the agreement was provided to the relevant employees at least 14 days prior to the vote. And the terms of the agreement were explained to those employees before the vote took place. The agreement meets the requirements of section 170LT of the Act in that it passes the no disadvantage test. It was genuinely approved by a valid majority of relevant employees. The terms of the agreement were appropriately explained to those employees.

PN6

It contains a dispute settlement procedure at clause 3 of the agreement and contains a nominal expiry date of 30 September 2005 at clause 1.5 of the agreement. In relation to the no disadvantage test the agreement is underpinned by the Transport Workers Mixed Industries Award 2002. And we submit, therefore, that the agreement meets all of the requirements of the Act and we would seek certification from today's date in the terms sought. Just before I finish, Commissioner, there is one other matter that I would actually like to just talk about, if I can perhaps just hand up a document to the Commission.

PN7

THE COMMISSIONER: What is this document?

PN8

MS LEARMONTH: That document relates to - there is a condition in one of the appendix and that document is referred to in that. If we look at the agreement that is before you that we are proposing to have certified, Commissioner, on page 27, at the top of that page, it talks about - it is titled, "Condition 3." And basically it makes reference to a local agreement which is set out in a document entitled, "Agreement for filling tankers at the Cryocentre." And we also state that that shall be filed with the Industrial Relations Commission as a confidential document to form part of this certified agreement.

PN9

During the life of the previous agreement there was an agreement reached at the Cryocentre in relation to how tankers would be filled. It is - - -

PN10

THE COMMISSIONER: Well, I will make that exhibit A and I will mark it confidential to the parties. It will be placed in an envelope in the file not to be opened without the permission of the Commission member on application.

EXHIBIT #A CONFIDENTIAL DOCUMENT TO FORM PART OF CERTIFIED AGREEMENT

PN11

THE COMMISSIONER: Just out of interest what is the reason for the confidentiality?

PN12

MS LEARMONTH: It - yes, I think that is all in relation to exhibit A unless of course the employer has some further comments they wish - - -

PN13

THE COMMISSIONER: What is the reason for the confidentiality of the agreement?

PN14

MS LEARMONTH: The reason is that part of the negotiations around this agreement have centred around drivers taking more responsibility or a greater responsibility to filling tankers in their yards. And as part of our discussions around the enterprise agreement we acknowledge that there was a local agreement and that that local agreement would continue to operate despite provisions set out in the agreement to the contrary. So the purpose of making it confidential is that we want it to remain localised at the Cryocentre so that we don't have a situation where disputes might arise because other yards look at the agreements that is in the public domain and basically say, well, why does the Cryocentre have special conditions over and above ourselves.

PN15

THE COMMISSIONER: What provisions are they that are different/

PN16

MS LEARMONTH: I can get as technical as I understand it, Commissioner. My understanding is - - -

PN17

THE COMMISSIONER: Is it about the filling function?

PN18

MS LEARMONTH: It is about the filling function, yes.

PN19

THE COMMISSIONER: So that, elsewhere, that is not a work practice that applies?

PN20

MS LEARMONTH: It is becoming a work practice. It has been introduced already into some yards. For example, Queensland and South Australia pretty much fill - the drivers fill their own tankers or another driver might return with his tanker and fill it up just as part of his normal duties.

PN21

THE COMMISSIONER: Well, is it the potential productivity payment scheme.

PN22

MS LEARMONTH: Sorry, Commissioner?

PN23

THE COMMISSIONER: Is the issue the potential productivity payment scheme to the Cryocentre agreement?

PN24

MS LEARMONTH: I don't think, specifically, the Cryocentre. My understanding is that the filling of tankers is working fine at the Cryocentre. They have some drivers who come in and specifically fill tankers who will start an earlier shift to fill a tanker. And so that when a driver starts on his shift he has already got a tanker there to be filled because a tanker takes anywhere between, say 45 minutes and an hour and a half to fill. Whereas there are other drivers at the Cryocentre who will arrive, pick up their filled tanker, go and do a delivery, return, fill up their tanker and do another delivery and then come back and pretty much leave an empty tanker.

PN25

And so another driver would then come in and fill that tanker before going to do his drop-off. The situation at other yards though is that each driver is responsible for filling his tanker.

PN26

THE COMMISSIONER: Oh, I see, so it is that particular work practice that - - -

PN27

MS LEARMONTH: It is, yes.

PN28

THE COMMISSIONER: The view is that that should be a local work practice?

PN29

MS LEARMONTH: That is right.

PN30

THE COMMISSIONER: And not expanded by virtue of the certification of the agreement?

PN31

MS LEARMONTH: No, that is right.

PN32

THE COMMISSIONER: I see.

PN33

MR BARTRAM: If I might just clarify that point on behalf of the company, Commissioner. What Ms Learmonth has said is correct and in fact there is another process for the implementation of automation of tanker filling at our Port Kembla operations in New South Wales and that is seen as separate and distinct from the implementation of those arrangements at the Cryocentre in Victoria. So as a matter of - a local matter of the drivers at the Cryocentre yard want to see the arrangements set apart from any arrangements that may be put in place at Port Kembla and vice versa.

PN34

THE COMMISSIONER: Very well. There is only one aspect of that matter which I think is incomplete and that is the documents which have been tendered are not signed documents and I think if those - that is to be perceived as an agreement then the parties to the agreement, or their representatives, I think, need to sign the document and the Commission needs to have a signed copy of the terms of the agreement on the file. Could that be arranged?

PN35

MS LEARMONTH: That can be arranged and I would personally feel far more comfortable if that was the situation as well.

PN36

THE COMMISSIONER: Mr Bartram, do you have anything else to say?

PN37

MR BARTRAM: I just wanted to make some general points, Commissioner, and there is some specific points in relation to the agreement itself. This agreement has been the product of a very extensive discussion between BOC, the TWU and our employees. And one of the unique aspects of the process of reaching agreement was the incorporation of the commercial, literacy program for delegates and transport managers as part of the process of better understanding some of the commercial issues that are confronting our business. And that commercial literacy program was quite successful in the lead-in to the actual negotiation of the agreement.

PN38

Pulling the agreement together has required a high level of co-ordination in the four states, New South Wales, Victoria, Queensland and South Australia and has been very successful in terms of both communication, and ultimately, a successful vote on the ground at each of our yards in those four states. In terms of the agreement itself there is a number of points that I want to make. The first is that the document itself is in a new form and contains significantly new content. In terms of form we have probably reduced it by over half in terms of the number of pages and appendices. Something like 76 down to 35 pages.

PN39

And we also adapted a new scheme of arrangement to make the document much more useful for employees and managers in referring to the document on a day to day basis. In terms of the key productivity measures there is a range of items that I would want to just highlight in the body of the agreement. The first is the recognition of the role of the permanent part time driver in clause 4.4 which is a new innovation within the business. In clause 4.14 the drivers have committed to fleet rationalisation with the reduction of prime mover numbers of four from our existing number. There has also been a renewed commitment to training and development in clause 4.7 and the alignment of training to a national competency standard.

PN40

In clause 4.9 the drivers in the company recognise the need to introduce in-cab technology in the term of this agreement and the parties will be working towards that over the term of the document. We have also made significant changes in other areas including how we manage changes to driver's duties which is reflected in clause 5.10 of the agreement and how changes to daily work arrangements are made in clause 6.2 There was one point of clarification that I wanted to raise on transcript. During the round of votes at the yards there was a concern in Queensland and at the Cryocentre in Victoria as to what clause 4.1 on page 7 was actually saying with respect to probation.

PN41

Ms Learmonth and I have exchanged e-mails on that matter and I am also happy to exchange letters. Some drivers read the clause as saying that all employees would be subject to probation including existing employees. It is clearly not the intention of the parties for the probation clause to apply to existing employees. The intention of the probation clause is to apply to new employees who were recruited during the term of the agreement.

PN42

THE COMMISSIONER: Well, I will treat that for the purposes of the application for certification as a statutory undertaking.

PN43

MR BARTRAM: Just a few final remarks, Commissioner. In terms of wage and benefit outcomes, the mix of wages and benefits is rather novel for BOC. The arrangement is that in some areas of benefit there has been changes to the method of payment and greater accrual. And I would point to the treatment of annual leave prospectively in clause 5.3 and the treatment of long service leave in 5.4 prospectively as a way of providing an additional benefit to employees without a direct cost being - incurring to the company through a wage outcome. And we have also changed the method of payment in clause 5.5 for the public holidays. The - - -

PN44

THE COMMISSIONER: Can I just ask you - - -

PN45

MR BARTRAM: Yes.

PN46

THE COMMISSIONER: - - - about the long service leave clause. What does CHR mean for the purposes of this agreement?

PN47

MR BARTRAM: It is a common hourly right - rate. So when this agreement was first put in place in 1998 as a national agreement there was a consolidation of wages and allowances and overtime payments into a common hourly rate for each of the states. So the shorthand methodology we use is CHR. And the practice has been in place now for three or four years.

PN48

THE COMMISSIONER: The question I was going to ask, because that is what I anticipated the answer would be, is - two questions, really. The first one is the effect of the first sentence in clause 5.4. Is that consistent with the relevant long service leave legislation?

PN49

MR BARTRAM: That is the first - the first sentence in 5.4? I haven't cross-checked that against the long service leave legislation because that provision was in place in the old EBA and it has been translated across without modification, I think, from recollection. Ms Learmonth may be able to clarify that with me.

PN50

THE COMMISSIONER: Well, would your view, and would it be the company's policy, that if the Long Service Leave Act was in conflict with those provisions - you would appreciate that there is nothing that this agreement can do to create a legal effect contrary to the provisions of the Long Service Leave Act?

PN51

MR BARTRAM: Absolutely, no, we understand that.

PN52

THE COMMISSIONER: You accept that, do you?

PN53

MR BARTRAM: Yes, we do.

PN54

THE COMMISSIONER: So for the purposes of clause 5.4 can I treat that answer as a statutory undertaking that employees will receive no less than their entitlements under the long service leave - the relevant long service leave provisions?

PN55

MR BARTRAM: I can certainly make that undertaking on behalf of BOC Limited.

PN56

THE COMMISSIONER: Yes, I think, there is a little bit of ambiguity in that that may or may not give rise to a question of that kind but it is answered comprehensively by your undertaking.

PN57

MR BARTRAM: Certainly.

PN58

THE COMMISSIONER: Could you explain to me then in relation to long service leave too, please, what is the meaning of the last sentence in that clause?

PN59

MR BARTRAM: There was a discussion during the course of negotiation about how accruals would be treated for the purposes of transition because some people had significant accruals, obviously historically, at a lower rate which we reflect in hours. The new arrangements provide for a higher hourly accrual in effect. The difficulty that was discussed during the course of the negotiation is that where people will be taking long service leave in the future the difficulty was that they potentially would be taking that long service leave at a lower rate of pay compared to their normal payment.

PN60

And the parties were of the view that employees should be able to elect the number of hours they take per day in order to have access to that long service leave. So for the purposes of transition between one system and the other the difficulty was going to be that people - - -

PN61

THE COMMISSIONER: So do you accrue long service leave in hours?

PN62

MR BARTRAM: As a practice we do, yes.

PN63

THE COMMISSIONER: Rather than days?

PN64

MR BARTRAM: Yes. So people carry an hourly balance which is converted for payroll purposes rather than in days and therefore if people wanted to elect - - -

PN65

THE COMMISSIONER: How do you work out the number of days of long service leave that an employee is entitled to?

PN66

MR BARTRAM: In practice what we do is we look at the blocks of entitlement. We determine the number of days that somebody is entitled to and that is converted to hours.

PN67

THE COMMISSIONER: So you accumulate the right to be absent from the employment in days and you calculate the amount of payment in hours?

PN68

MR BARTRAM: In hours, yes.

PN69

THE COMMISSIONER: So the period of absence is a period of a number of days?

PN70

MR BARTRAM: Yes.

PN71

THE COMMISSIONER: Accrued in accordance with the relevant long service leave legislation?

PN72

MR BARTRAM: That is my understanding.

PN73

THE COMMISSIONER: And then the issue becomes what should the employee be paid and this provision in the agreement gives the employee the opportunity to elect to be paid either 7.6 hours for each day or 11 hours.

PN74

MR BARTRAM: Based on their accrued hours that they hold in the bank for long service leave purposes.

PN75

THE COMMISSIONER: So that is actually more accurately described as the amount of payment they have accrued?

PN76

MR BARTRAM: Yes, it is the amount of payment that they have accrued and they can - - -

PN77

THE COMMISSIONER: Not the amount of - there might - not the amount of leave?

PN78

MR BARTRAM: No, not the amount of leave but they can elect to take it at 7.6 or 11 because the difficulty was that, potentially, they would drop income during the period of long service leave.

PN79

THE COMMISSIONER: I understand now, thank you. In paragraph 7.4 of the statutory declaration there is reference to a number of clauses. I have been looking at those. I haven't finished looking at them. The long service leave clause is in fact one of the clauses referred to. Another is public holiday provision. Can you explain to me that aspect please? How does that work?

PN80

MR BARTRAM: The public holidays, again, this was a hangover from a wages and overtime regime that we ran historically and one element that was not changed in the previous agreement was that when payment for public holidays occurred people reverted, effectively, to base hours which was 7.6 hours. So in order to better embrace the concept of common hourly rate for rostered hours we have moved the public holiday arrangement from what was 7.6 hours to this common 11 hour factor.

PN81

THE COMMISSIONER: So that is actually an increase in the number of hours paid - - -

PN82

MR BARTRAM: Yes, it is, it moves from - - -

PN83

THE COMMISSIONER: - - - for - in relation to public holidays - - -

PN84

MR BARTRAM: Yes, because - - -

PN85

THE COMMISSIONER: - - - that employees do not work.

PN86

MR BARTRAM: That is right, but in effect, the payment for the public holidays move from a standard day to the rostered hours for the day which on - - -

PN87

THE COMMISSIONER: I understand.

PN88

MR BARTRAM: Yes.

PN89

THE COMMISSIONER: But the way in which it should be viewed is that it is an additional benefit - - -

PN90

MR BARTRAM: Yes.

PN91

THE COMMISSIONER: - - - accruing under the terms of this agreement for the purposes of the no disadvantage test.

PN92

MR BARTRAM: Yes, that is right.

PN93

THE COMMISSIONER: And clause 5.7 is salary sacrifice arrangements. Are these provisions that go to the subject of tax planning?

PN94

MR BARTRAM: Tax - - -

PN95

THE COMMISSIONER: Planning.

PN96

MR BARTRAM: Yes.

PN97

THE COMMISSIONER: I think that is what the accountancy profession refers to it as.

PN98

MR BARTRAM: That is right. Under company policy employees are entitled to salary sacrifice for a range of purposes up to 25 per cent.

PN99

THE COMMISSIONER: So is this an extension to this workforce is it - of this opportunity?

PN100

MR BARTRAM: Yes, there was actually an exchange of letters during the term of the agreement and as part of the renewal of the enterprise agreement we chose, collectively, to incorporate the essence of that exchange of letters in clause 5.7. So it is an extension of benefit for salary sacrifice which this group of employees have not enjoyed at the 25 per cent level. Effectively, it is an offer that is made generally to employees within the BOC group of companies.

PN101

THE COMMISSIONER: Can I just ask you about the common hourly rate which is $18 - the base rate is $18 something, is it not. I am just trying to find it again. $18.25, is that right? Is that the amount?

PN102

MR BARTRAM: I think it is, in the appendices.

[12.10pm]

PN103

THE COMMISSIONER: That is my recollection anyway. 18.51 I should say.

PN104

MR BARTRAM: Yes, on page 25.

PN105

THE COMMISSIONER: Yes, I am looking at it now. Is - are all of the factors that are compensated for in the common hourly rate referred to there?

PN106

MR BARTRAM: I would - - -

PN107

THE COMMISSIONER: Is that the sum total of the terms - - -

PN108

MR BARTRAM: There would - - -

PN109

THE COMMISSIONER: - - - and conditions of employment that are aggregated into the common hourly rate or the base rate?

PN110

MR BARTRAM: No. My understanding was that again the common hourly rate was devised in the late '90s as part of the earlier agreement and in effect to actually refer to the components of that common hourly rate you would have to refer back to the previous document, when that consolidation occurred so I couldn't give a guarantee to the Commission that that was all of the elements making up that common hourly rate.

PN111

THE COMMISSIONER: Well, can you help me with that because I have to satisfy myself that the agreement passes the no disadvantage test. Is there some other reference to this?

PN112

MR BARTRAM: Yes, there is.

PN113

THE COMMISSIONER: - - - common hourly rate which is effective in the terms of the question that I have asked you?

PN114

MR BARTRAM: What we did when we put the agreement together, Commissioner, is to explain in broad terms what the components were of the common hourly rate in 5.1.1 on page 16 which includes all States except New South Wales and 5.2 specifically for New South Wales on page - 5.1.2 on page 17 specifically for New South Wales so whilst the amounts were not recorded, the historical antecedence as to how the rate was actually built up were recorded in the body of the document. Previously the build up of the common hourly rate was reflected in each of the State appendices.

PN115

THE COMMISSIONER: So your answer is that if - the $18.51 represents the components identified in clause 5.1.1 - - -

PN116

MR BARTRAM: Yes, and - - -

PN117

THE COMMISSIONER: - - - and 5.1.2 as at 20 September 2002?

PN118

MR BARTRAM: Yes.

PN119

THE COMMISSIONER: That is the answer?

PN120

MR BARTRAM: Yes.

PN121

THE COMMISSIONER: - - - to that question, right, good, thank you. I wasn't quite whether that was the case because you see if you read what it says in the appendix, that it doesn't say what you just said. Do you follow what I mean?

PN122

MR BARTRAM: Yes.

PN123

THE COMMISSIONER: What it says in fact is that there is a base rate of 18.51 plus meal allowance of 907.20 and a crib allowance of 193.56. Well, what is the base rate? Is the base rate the aggregate of all of those factors in clause 5 or - - -

PN124

MR BARTRAM: Yes.

PN125

THE COMMISSIONER: And is the common hourly rate $18.51 plus 907.20 and 193.56 - - -

PN126

MR BARTRAM: Yes, it is.

PN127

THE COMMISSIONER: - - - divided by 52?

PN128

MR BARTRAM: Yes, the common hourly rate is derived for - using I guess the formula that is outlined in 5.1.1 and 5.1.2 and then there are additional components over and above that.

PN129

THE COMMISSIONER: Well, what is the common hourly rate as at 20 September 2002? It is not 2002 - it is not 18.51? But does it - it is not shown in the agreement as far as I can tell, at least not in the terms of the agreement. Maybe I haven't been able to detect it, that is what I am inquiring about. You can help me with this since you negotiated this agreement. See the agreement says how you should go about calculating a common hourly rate.

PN130

MR BARTRAM: Yes, I think the answer is that the new common hourly rate effective 1 October 2002 is not contained in the enterprise agreement before you.

PN131

THE COMMISSIONER: Right, well, isn't there a little bit of a difficulty about the fact that there is an agreement that purports to prescribe the wage rates which should apply, according to a formula contained in the agreement, but the wage rate which results from the formula doesn't actually appear as one of its terms? The agreement doesn't actually prescribe the common hourly rate from an appropriate date such as - - -

PN132

MR BARTRAM: 1 October.

PN133

THE COMMISSIONER: Yes.

PN134

MR BARTRAM: Yes, I understand your question.

PN135

THE COMMISSIONER: Yes. Would it be suitable to amend the agreement or the terms of the agreement or to submit an undertaking in documentary form which specified what the hourly rate was from the relevant date?

PN136

MR BARTRAM: Look, we can certainly do that. We have those figures.

PN137

THE COMMISSIONER: I think it would be desirable in fact that that be done.

PN138

MR BARTRAM: We have those numbers for payroll purposes which I can submit very quickly.

PN139

THE COMMISSIONER: Yes. And they should be a sum - that should be the sum of the factors in clause 5.1 and the matters that are identified in the appendix at page 25.

PN140

MR BARTRAM: Yes.

PN141

THE COMMISSIONER: And what I am understanding is being put to me as far as the no disadvantage test is concerned that that common hourly rate adequately compensates for all of those terms and conditions of employment which would otherwise be prescribed by the award in relation to the incidence referred to in clause 5.

PN142

MR BARTRAM: Yes, that is correct.

PN143

THE COMMISSIONER: Yes.

PN144

MR BARTRAM: We simply - - -

PN145

THE COMMISSIONER: But that is how I have got to get to the point where I am satisfied - - -

PN146

MR BARTRAM: Yes.

PN147

THE COMMISSIONER: - - - the agreement passes the no disadvantage test, is it not, that the calculus?

PN148

MR BARTRAM: Yes.

PN149

THE COMMISSIONER: Yes.

PN150

MR BARTRAM: I agree.

PN151

THE COMMISSIONER: All right, well, that is fine.

PN152

MR BARTRAM: So we certainly give that undertaking to supply those relevant rates.

PN153

THE COMMISSIONER: I think that will take us a long way. I think we need two things before I can issue an order of certification. We need the common hourly rate in a written form, both the system of calculation and the amount derived at an appropriate rate having regard to the terms of the agreement and in particular the dates of operation of wage increases provided under it and we need signed copies of exhibit A1, the confidential agreement for filling tankers at the Corio centre.

PN154

Subject to my satisfaction that the common hourly rate which is the subject of the undertaking, once specified, is sufficient to compensate the employees for any terms and conditions of employment subsumed in that rate which would otherwise be prescribed by the award and the finalisation of the documentation of the Corio Centre agreement, I will issue an order of certification of the agreement. Thank you.

PN155

MR BARTRAM: Thank you.

ADJOURNED INDEFINITELY [12.18pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A CONFIDENTIAL DOCUMENT TO FORM PART OF CERTIFIED AGREEMENT PN11