AG2003/1206, Transcript of Proceedings [2003] AIRCTrans 1548 (28 April 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2003/1206

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Frankipile Australia Pty Limited and Another
for certification of the Frankipile Australia
Pty Limited KCA 5 Upgrade Project Agreement 2002

ADELAIDE

11.12 AM, THURSDAY, 10 APRIL 2003

PN1

THE SENIOR DEPUTY PRESIDENT: Good morning, can I have some appearances, please?

PN2

MR B. KLITSCHER: I appear on behalf of Frankipile this morning.

PN3

MR M. HARRISON: I appear for the CFMEU. We are here to support this application. If it please the Commission.

PN4

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Klitscher?

PN5

MR KLITSCHER: Sir, perhaps if I give you a very brief background as to the - of what this agreement covers. You may be aware - I will say you are aware that Kimberley Clark Australia is undergoing an expansion programme in its Snuggery plant near Millicent in the South-East.

PN6

THE SENIOR DEPUTY PRESIDENT: I am indeed aware of that, Mr Klitscher.

PN7

MR KLITSCHER: As a forebear to these agreements, this one in particular that is in front of you, the main contractor and Business SA and the unions involved reached what they call heads of agreement to provide for enterprise agreements covering the work of various contractors who had contracted to the main managers, Connor Wagner, on that project. So arising out of that heads of agreement as each contractor is successful in tendering for work, the parties get together an enterprise agreement in the terms of the heads of agreement to cover the work.

PN8

Sir, this one before you, Frankipile, as the name suggests, installing piles in the foundations of the project on site. Sir, I wish at this stage to make an application for extension of time to lodge the agreement. The agreement was made on 22 January 2003 and I think it was lodged in the Commission on 26 February 2003. Sir, at the time there were - at any one time there were about three to 10 employees of Frankipile, depending on the programme of piling. At the time the agreement was made it was seven employees of Frankipile at that site.

PN9

THE SENIOR DEPUTY PRESIDENT: It might be best if you address that issue first of all, Mr Klitscher. If I understand what you are telling me, there were seven employees at the time the vote was taken.

PN10

MR KLITSCHER: Yes.

PN11

THE SENIOR DEPUTY PRESIDENT: Are you in a position to tell me how that vote occurred and what the outcome of it was?

PN12

MR KLITSCHER: My instructions are it was a vote undertaken amongst the employees of Frankipile. I think assisting with that was Mr Aaron Carthledge from the CFMEU who, if you like, supervised the vote. It is also my instructions that from that time forth there was no changes to the general make-up of the employees involved on site.

PN13

THE SENIOR DEPUTY PRESIDENT: So did seven go to 10?

PN14

MR KLITSCHER: I don't think it ever got back up to 10. I think the 10 was passed before the - - -

PN15

THE SENIOR DEPUTY PRESIDENT: I see.

PN16

MR KLITSCHER: From day one when Frankipile were on site.

PN17

THE SENIOR DEPUTY PRESIDENT: Yes.

PN18

MR KLITSCHER: I guess thrown into that also, sir, if you talk about the extension of time, there was a situation where some documents became either lost or mislaid in respect to after the employer signed the agreement and I gave assistance to the CFMEU and they eventually located the forms. They were forwarded to them for signing and there was some lapse of time between that.

PN19

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, perhaps before you go on with your submissions just in order to clarify this issue, Mr Harrison, are you able to confirm to me that the union is of the understanding there were no significant changes to that group of seven employees who voted in favour of the agreement on this matter?

PN20

MR HARRISON: Yes. I suppose I ought to seek to amend Alan Harris's statutory declaration at 6.3 or 6.3 by adding the figure 7.

PN21

THE SENIOR DEPUTY PRESIDENT: Yes. The statutory declaration suffered from a number of deficiencies. I make that statement as a collective statement. Yes, I understand that amendment but can I take it from that that you agree that those seven employees remained the same group of employees for the time that we are talking about for the extension of time that has been sought?

PN22

MR HARRISON: I have no direct instructions from Carthledge but from his past practices he is a thorough organiser and he knows of the need for continuity. On that basis I am prepared to accept what my friend says.

PN23

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. On that basis, Mr Klitscher, I will extend the time frame provided for in section 170LM(2)(a), I think, using the discretion provided for in section 111(1)(r) of the Act.

PN24

MR KLITSCHER: Thank you, sir. So you now know the background which gave rise to the agreement that is currently before you, that is the Frankipile Australia Proprietary Limited KCA 5 Upgrade Project Agreement which was based on the - virtually word for word of the heads of agreement between the parties. Sir, when Frankipile was situated on site their employees were given a copy of the proposed agreement to look over and both their site supervisor, Mr Wallace, and Mr Carthledge were available for employees to ask questions and for those questions to be answered. So we say that they were fully appraised of the content of the agreement and that the parties intended to have the agreement certified in the Australian Commission.

PN25

Sir, we say that the agreement which is underpinned by the National Building Construction Industry Award is the relevant award. We say also that there are no provisions in the agreement which disadvantage the employees overall in respect to wage rates, allowances or other matters. The agreement is from certification in place until the project is completed, so it is a project specific agreement which the Commission may have already observed. We say that the agreement complies with the minimum requirements to be placed in the enterprise agreement such as the dispute settling procedure, a life of the agreement and the relationship and underpinned by the relevant award.

PN26

In clause 3.6, the wage rates, the Commission will notice that during a period of time from September 2002 through to 2004 pay rates will move as per those increases. We say those rates are significantly above the National Building Construction Industry Award. The CFMEU was an employee representative association involved in the process and we say that they were the appropriate association. We believe that they have members they can represent with Frankipile. There is a dispute settling procedure as I have already alluded to in the agreement and that is found at clause 2.2. Sir, unless there are any specific questions you have of me regarding the agreement, that really forms the substantive part of my submissions to you this morning and we seek - in fact we commend the certification of the agreement to the Commission.

PN27

THE SENIOR DEPUTY PRESIDENT: Mr Klitscher, I have a few questions that go to the agreement itself. It might be best if I hear from Mr Harrison before I ask those but I have a couple of questions that go to the uncertainties created by the statutory declaration. Can I refer you to paragraph 6.3 of the statutory declaration? You have already clarified 6.2. 6.3 asks for the total number of employees. I take it that that should be seven?

PN28

MR KLITSCHER: Should be seven, sir, I'm sorry about that.

PN29

THE SENIOR DEPUTY PRESIDENT: I can presume on that basis that none of those seven fall into the categories articulated in the 6.5?

PN30

MR KLITSCHER: I think that has answered - well, my copy of the statutory declaration at 6.3 it says "no".

PN31

THE SENIOR DEPUTY PRESIDENT: Yes, the only reason I'm asking the question again is because of the absence of an answer in 6.3.

PN32

MR KLITSCHER: Yes, I think that is an omission in 6.3, sir.

PN33

THE SENIOR DEPUTY PRESIDENT: Can you confirm to me that the agreement was either provided in writing or that employees had reasonable opportunity to access it in writing at least 14 days before they voted on it?

PN34

MR KLITSCHER: Yes, that is correct.

PN35

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Klitscher. Mr Harrison?

PN36

MR HARRISON: If it please the Commission, as indicated we support this application and I move on the statutory declaration of Alan Harris of 19 February 2003 which is filed in these proceedings.

PN37

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Harrison. Mr Harrison, I will direct the questions I have that go to the intention of the parties relative to various agreement provisions to Mr Klitscher but please feel free to jump up if you wish to do so. Mr Klitscher, I should indicate that my questions aren't designed to trip up the process of certification, nor indeed are they designed to change, with perhaps one possible exception, the words in the agreement. They simply reflect my desire to clarify questions that I have now rather than regretting that I didn't do so at a future stage.

PN38

I have become aware of the KCA 5 Project through a dispute and I have no desire to keep expanding my awareness of the project through further disputes. Can I take you to clause 1.6 which is perhaps the most significant issue. The agreement proposes to operate until project completion or 2 years from certification, whichever is the latter. Depending on the construction that can be put on section 170LT(10) which states:

PN39

The agreement must specify a date as the nominal expiry date of the agreement and that date cannot be more than 3 years after the date on which the agreement will come into operation.

PN40

I must say I'm having some difficulty acknowledging that project completion can be regarded as a specified date for the purposes of section 170LT(10). It gives rise to a question as to whether the parties collectively are able to give me an undertaking that the agreement will operate from the date of the certification until 2 years from that date of certification.

PN41

MR KLITSCHER: That is certainly the intention of the parties.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes.

PN43

MR HARRISON: It is the word "later", isn't it, that - - -

PN44

THE SENIOR DEPUTY PRESIDENT: That is the word that causes me perhaps most difficulty in - - -

PN45

MR HARRISON: I think that has got to come out because obviously it means that if the project finishes before 2 years that is the end of the agreement.

PN46

THE SENIOR DEPUTY PRESIDENT: Well, that is correct and indeed if we were to take a worst case scenario, notwithstanding that it might be extremely doubtful, let us say for instance the project were to be expanded in some way such that piling was required in 3 years' time, this clause could be taken as implying that the parties intended this agreement to continue on after the 3-year period prescribed in the Act.

PN47

MR HARRISON: That is certainly what it says now.

PN48

MR KLITSCHER: Although the project won't be known as KCA 5 then, it will have a different designation.

PN49

THE SENIOR DEPUTY PRESIDENT: I'm simply indicating that in terms of - - -

PN50

MR KLITSCHER: Yes, I understand what you are saying.

PN51

THE SENIOR DEPUTY PRESIDENT: - - - strict compliance with section 170LT(10) I doubt that the clause 1.6 can be taken in that regard and hence I'm asking the parties for an undertaking that I should be able to read that clause as indicating that the agreement will operate from the date of certification until - or for a period of 2 years from that date.

PN52

MR KLITSCHER: I can give that undertaking on behalf of the employer, that the agreement will not go beyond 2 years from the date of certification.

PN53

MR HARRISON: That would be our understanding. I think it is just an oversight in drafting.

PN54

THE SENIOR DEPUTY PRESIDENT: Yes, I have no doubt of that but I thought it best that I clarify it at this stage. That clarification, you might say, assists me in terms of my understanding of the provisions of clause 1.8. Can I take you to clause 3.3? Clause 3.3 references the construction worker group 1B as per the National Metal and Engineering On-site Construction Industry Award of 1989. That award is not referenced in clause 1.7 of the agreement. Clause 1.7 proposes that the agreement be read and applied in conjunction with the following award if relevant to employees engaged by the employer. It then references the national - - -

PN55

MR KLITSCHER: I'm struggling to find - which classification? I'm not reading with you.

PN56

THE SENIOR DEPUTY PRESIDENT: I'm looking at clause 3.3 on page 6. I'm looking at groups 1A, 1B and 1C.

PN57

MR KLITSCHER: Yes.

PN58

THE SENIOR DEPUTY PRESIDENT: The words alongside those groups read:

PN59

After fulfilling substantial requirements of Construction Worker 1 Group 1B as per the national Metal and Engineering On-site Construction Industry Award of 1989.

PN60

That award is not referred to in clause 1.7.

PN61

MR KLITSCHER: The award referred to in 1.7 is the overall underpinning award.

PN62

THE SENIOR DEPUTY PRESIDENT: Well, it may be the case but that is not what 1.7 appears to say, Mr Klitscher. 1.7 has a significant qualification. It says:

PN63

If relevant to employees engaged by the employer.

PN64

That is what gives rise to my question. That is if groups 1A, B and C are not covered by the National Building and Construction Industry Award then is the intention of the parties such that I should read this agreement in conjunction with that national Metal and Engineering On-Site Construction Industry Award or if not then how should I look at the specific provisions that might be contained in any award relevant to groups 1A, B and C?

PN65

MR KLITSCHER: I can't answer that, sir. I need to have that clarified. I wasn't the drafter of this - - -

PN66

THE SENIOR DEPUTY PRESIDENT: Well, look, I understand the dilemma you have got and I need to make it absolutely clear, I'm not setting out to deliberately disrupt the certification of the agreement but a very similar question arises in relation to a number of other classifications in this award and I think it would be preferable that the parties clarify that question now rather than wait for the problem to arise. I'm not suggesting the agreement needs to be fundamentally rewritten as I consider there are probably ways whereby this issue can be addressed in terms of an agreed statement of intention.

PN67

So that in considering my question relevant to 1A, B and C I would also ask the parties to look at the other classifications contained on page 7. Can I refer you to clause 3.7.1 on page 10 and suggest that I should read the sentence there as concluding with the words "will receive the following adjustments to working hours paid".

PN68

MR KLITSCHER: Yes, that is a typographical error, that is correct, I can confirm that.

PN69

THE SENIOR DEPUTY PRESIDENT: Clause 3.8, I'm taking it that the intention of the parties is that the fares and travel allowance of $20 per day per return journey referenced in 3.8.1 will apply in addition to the wage rates set out in the award.

PN70

MR KLITSCHER: Well, it says that, in addition to the project wage rates.

PN71

THE SENIOR DEPUTY PRESIDENT: Yes, I'm asking that question because of the way that the wage rates are described earlier in the award as a total rate. I just wanted to be absolutely sure in that regard but you have answered that question. Clause 3.11, I'm taking it that because of the somewhat curious phraseology in that provision and the reference to a number of other unions or to employees that might be eligible to be members of those unions, that I could read that provision as being synonymous with the statement that that $13.95 income protection payment would be paid with respect to all employees.

PN72

MR KLITSCHER: Correct. Indeed, sir, there have been occasions already on this project where whilst employees might be carrying out a function which is one union's coverage, indeed they are a member of another union from a previous project and they have been paying into an income - or having their benefits paid into a particular income protection scheme which might be different from here. So we endeavour to try and capture all the unions under the one IUS.

PN73

THE SENIOR DEPUTY PRESIDENT: I'm sure the unions are cooperating so there wouldn't be an inkling of a dispute over demarcation issues.

PN74

MR KLITSCHER: Touch wood not at this stage.

PN75

THE SENIOR DEPUTY PRESIDENT: Thank you. Last question, Mr Klitscher, relates to clause 4.5.

PN76

MR KLITSCHER: Yes.

PN77

THE SENIOR DEPUTY PRESIDENT: Where again because of the way in which this clause is worded it appears to me to create an obligation that employees sign a confidentiality agreement that bestows certain rights on the project owner or client. I want to be clear as to the intention of the parties in that if the client requires, as seems to be envisaged in appendix 2, that an employee not working on the project, is it then taken as a given that that employee's employment with the employer will be terminated?

PN78

MR KLITSCHER: No.

PN79

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN80

MR KLITSCHER: It is a question sought by the employer prior to an employee going to site. If an employee does not wish to make that undertaking he does not go to the site. Now, that could - if it is an existing employee of the employer then he does not got to the site. He works on other sites the employer is undertaking or if it is a new employee it is a condition of employment. If people don't wish to sign that then my instructions are they don't get a start. As a direct result of that clause no employee will be terminated because of their refusal.

PN81

THE SENIOR DEPUTY PRESIDENT: Yes, perhaps I could take you to appendix 2 to the second page of that document which occurs at page 17 of the agreement and the last effective paragraph where the employee appears to be required to accept that a breach of any of the obligations pursuant to this deed may lead to the immediate termination of the recipients employment and/or contract. The recipient would be barred by the owner from returning to any job at the construction site. It is that circumstance that I am wanting to explore. I am just endeavouring to ascertain that the intention of the parties is that if an employee breached their obligations established by appendix 2 then I should not read the agreement as necessarily dictating that the employee's employment with Frankipile will be determined.

PN82

MR KLITSCHER: Correct.

PN83

THE SENIOR DEPUTY PRESIDENT: It could be terminated in the event that Frankipile did not have any alternative work available.

PN84

MR KLITSCHER: It could be.

PN85

THE SENIOR DEPUTY PRESIDENT: Yes.

PN86

MR KLITSCHER: It is clearly the intention of the parties was that their employment on that site would cease.

PN87

THE SENIOR DEPUTY PRESIDENT: Now, how long do you think it might take you to clarify the question that I have asked as to the extent to which the agreement should reference other awards?

PN88

MR HARRISON: I would, myself, need at least tomorrow.

PN89

THE SENIOR DEPUTY PRESIDENT: Certainly, Mr Harrison, I don't have any problem with that at all.

PN90

MR KLITSCHER: Yes, I am the same.

PN91

THE SENIOR DEPUTY PRESIDENT: Can I suggest that this issue might be addressed with the - in the following way. If the parties provide to me in a written form an indication of an agreed position on the question that I have asked then I will consider the certification of the agreement from that date. If the parties either individually or collectively consider that it is important that there be a further hearing on the matter then I will put the onus on both of you to advise my office accordingly and we will list the matter again. If I haven't heard from the parties by the end of the month then you can rest assured the matter will be re-listed no matter what to ascertain what the problem is. Does that strike you as a reasonable sort of approach, Mr Klitscher?

PN92

MR KLITSCHER: I wondered what you were going to say. Strikes me at all. I does not strike me as much but, sir, I don't - just for my part if I can get back to the Commission or both Mark and I might by tomorrow then I don't see the necessity for another hearing if you are satisfied of the agreed position.

PN93

MR HARRISON: That is what he is saying.

PN94

THE SENIOR DEPUTY PRESIDENT: Mr Harrison, are you happy with that approach?

PN95

MR HARRISON: Yes, Commissioner.

PN96

THE SENIOR DEPUTY PRESIDENT: Then I should perhaps clarify with you, Mr Harrison, do any of the questions that I have raised with Mr Klitscher occasion you the need to comment?

PN97

MR HARRISON: No, just that one that was causing me some embarrassment, the 1.7 as against 3.3.

PN98

THE SENIOR DEPUTY PRESIDENT: Yes. Look, I understand your position in that regard. Very well, I can indicate to you know that I am satisfied that the agreement was reached for a process consistent with the Act. I can indicate that I am satisfied that the agreement does not contain provisions which are contrary to the Act and that the dispute resolution provisions and on the basis of the undertaking provided by the parties the date, the nominal date of expiry of the date, are consistent with the Act.

PN99

So that if the parties are able to clarify the possibly relatively fundamental question as to which agreement - which awards are referenced within the agreement I would hope to be able to certify with the agreement - certify the agreement with effect from the date upon which I received that common advice. In that event the certificate would be forwarded out to the parties. I will adjourn the matter on that basis.

ADJOURNED INDEFINITELY [11.44am]