AG2003/1237, Transcript of Proceedings [2003] AIRCTrans 1554 (28 April 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 7, ANZ House 13 Grenfell St ADELAIDE SA 5000
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TRANSCRIPT OF PROCEEDINGS


AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2003/1237

APPLICATION FOR CERTIFICATION
OF AGREEMENT - GREENFIELDS AGREEMENT
(DIVISION 2)

Application under section 170LL of the Act
by Complete Scaffold Contracting and Another
for certification of the Pelican Point Complete
Scaffold Contracting Pty Ltd Power Station
Enterprise Bargaining Agreement 2003-2004

ADELAIDE

9.12 AM, THURSDAY, 10 APRIL 2003

PN1

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

PN2

MR R. SMITH: Thank you, your Honour. I appear for Complete Scaffolding in this matter.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Smith.

PN4

MR M. HARRISON: I appear for the CFMEU. I indicate that we are here to support this application.

PN5

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

PN6

MR SMITH: Thank you, Commissioner. The company is seeking certification of the agreement before you in accordance with section 170LL of the Act, the Greenfields agreement. It is the intention of the company at the time of signing this agreement to obtain work down at Pelican Point both for Alstrom Power, the head contractor, and International Power who is the client in the matter. The company is seeking certification of this agreement before you in accordance with 170LL of the Act.

PN7

The agreement is in similar terms to other agreements applying on that site reflecting the head contractor, Alstrom's agreement and it is contained purely within the civil maintenance area. The agreement period of operation takes us through to 30 December 2004 and it does contain a dispute settlement provision which is clause 16. The company relies on the statutory declaration submitted before you to achieve certification of this agreement.

PN8

I would be happy to answer any questions you have regarding the agreement or any of the clauses contained in the agreement. I think you might be familiar with a number of those clauses because they are similar terms to ones that have been previously certified before you, your Honour.

PN9

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Smith. Mr Harrison, is there anything you want to say in this matter?

PN10

MR HARRISON: Other than to say that I move on the standard declaration of Allen Harris which is filed in this matter and dated 19 March 2003.

PN11

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Harrison, I am going to address some questions to Mr Smith but please don't feel shy if you wish to jump to your feet to comment. I can assure you I would expect you to do so.

PN12

MR HARRISON: I am indebted to the Commission.

PN13

THE SENIOR DEPUTY PRESIDENT: Mr Smith, the first question I have relates to the basis of the application. It is an application made pursuant to section 170LL so it is a Greenfields agreement.

PN14

MR SMITH: That is correct.

PN15

THE SENIOR DEPUTY PRESIDENT: Can you tell me a little more about the employer such that I can be satisfied as to the Greenfields nature of the arrangement that is proposed?

PN16

MR SMITH: The employer was seeking to obtain work both with Alstrom and with International Power at Pelican Point. This is ongoing work down there. The employer itself has no enterprise agreements for any parts of its businesses and - - -

PN17

THE SENIOR DEPUTY PRESIDENT: But does the employer have employees at the present time?

PN18

MR SMITH: Right at this moment the employer does have employees down there because when this agreement was down, signed and filed the employer at that time was not selected as a potential contractor. They entered into that agreement on the basis that they wished to become a potential contractor down there. At the time of signing that agreement and the time of filing in Court there was no contract and no employees working down there. There are employees working down there at the moment because there is a shut down going on at the moment.

PN19

THE SENIOR DEPUTY PRESIDENT: Now, at the time when the agreement was made did the employer have any employees at all in South Australia?

PN20

MR SMITH: Yes, it did but they were not working on that project or in the power industry. They were in the commercial building.

PN21

THE SENIOR DEPUTY PRESIDENT: This is a - if I understand it correctly, this is a scaffolding contractor?

PN22

MR SMITH: That is correct.

PN23

THE SENIOR DEPUTY PRESIDENT: Is it fair to characterise this employer's business as being a business that involves movement from one project to another so as to erect and dismantle scaffolding?

PN24

MR SMITH: My understanding is that they were hired for the shut down which finishes on 8 May. I understand it is the employer's intention to obtain and seek further work down there as time goes by.

PN25

THE SENIOR DEPUTY PRESIDENT: Perhaps you didn't hear my question. Is it fair to characterise this employer's business as a business that involvement moving from site to site or project to project so as to erect and dismantle scaffolding?

PN26

MR SMITH: I can't answer that question because I don't know whether they hired people specifically to work down there or they used existing people. I don't know. At the time the agreement was signed as a Greenfields agreement they had nobody working down there.

PN27

THE SENIOR DEPUTY PRESIDENT: Perhaps I will try again. I am simply asking you to clarify the nature of this employer's business and if I am understanding this employer's business correctly this employer moves from site to site and project to project so as to erect and dismantle scaffolding.

PN28

MR SMITH: He is in the scaffolding business, yes.

PN29

THE SENIOR DEPUTY PRESIDENT: Yes. So that the employees that the employer uses normally move from different sites or between different sites so as to do that?

PN30

MR SMITH: I would say that would be possibly right and they would probably engage people from time to time to do that work.

PN31

THE SENIOR DEPUTY PRESIDENT: Yes. See what I am wrestling with is the extent to which I can characterise the operations of the employer on the work envisaged by - envisaged to be covered by this agreement as consisting with a new business.

PN32

MR SMITH: Well, let us put it this way. I can see where you are coming from, your Honour. If the employer said to me: we are going down to Pelican Point. These six people are going to work down there for the duration of the shut and we have a contract and off they go. It would automatically be an LJ agreement and they would have to vote for it and have to have the 14 days time-frame. At the time that I did this agreement they were not engaged or had people engaged in work down there.

PN33

So what has happened is I have done the agreement being LL, time has overtaken this and they do have employees now working on that site. If it is an impediment to certification I would be quite happy to resubmit in 14 days time a further statutory declaration putting that agreement to the employees for a vote. The only thing that would happen is the shut - by the time it got certified the shut would be over but I would be quite happy to do that if that is an impediment, your Honour.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes, and if I understand it correctly there are effectively two foreseeable categories of work. One is the shut down work that had already commenced.

PN35

MR SMITH: Correct.

PN36

THE SENIOR DEPUTY PRESIDENT: One is ongoing work that the employer is looking for.

PN37

MR SMITH: Correct.

PN38

THE SENIOR DEPUTY PRESIDENT: Tell me about the proposed arrangements with respect to the ongoing work with particular reference to which - how the employer will go about recruiting personnel for that ongoing work.

PN39

MR SMITH: I could not give you an answer. They might use the existing work-force or the might recruit specifically for that depending on what work they have got available at the time.

PN40

THE SENIOR DEPUTY PRESIDENT: All right, well - - -

PN41

MR SMITH: This work in this sort of industry is quite - I wouldn't say seasonable but it does go up and down. I don't think any employer maintains a permanent work-force on the pre-text they are going to obtain a contract.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Smith, can I indicate to you that I have some other questions about the agreement.

PN43

MR SMITH: Sure.

PN44

THE SENIOR DEPUTY PRESIDENT: This question has the potential to be a fundamental question. What I propose to do is subject to anything Mr Harrison may say to me to consider my position on the operation of section 170LL in this regard. It seems to me that the Act operates from the premises that a preferred and a clearly preferred position is that employees be entitled to be informed of and able to make a decision on an agreement and that LL exists for a circumstance where that is not possible. I propose to consider whether LL can be used in this situation based on the information you have provided to me. As to whether or not you chose whilst waiting for my conclusion on that regard to resubmit an LJ application that is entirely a matter of your choosing.

PN45

MR SMITH: I will have to speak to my colleague whether he wishes to pursue that.

PN46

THE SENIOR DEPUTY PRESIDENT: Now, can I take you at that point to the agreement. Can I refer you, first of all, to clause of the agreement.

PN47

MR SMITH: The scope clause.

PN48

THE SENIOR DEPUTY PRESIDENT: The scope clause and clarify first of all that the intention of the parties is that the reference to classifications mentioned means classifications contained in this agreement.

PN49

MR SMITH: That is correct.

PN50

THE SENIOR DEPUTY PRESIDENT: Secondly, the agreement is proposed to be limited only to - or limited to work which is actually undertaken at the Pelican Point site.

PN51

MR SMITH: That is correct.

PN52

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 7, the National Building and Construction Industry Award has been through an award certification process, to what extent then should I read the second paragraph in clause 7 as referring to existing facilitation clauses or indeed, any new or additional clause to be inserted in that award?

PN53

MR SMITH: What they are basically saying there and it has been a - that paragraph, the second paragraph, has been insisted by a number of the unions in this state in South Australia to apply to basically say - well, my view is that we go back to the award and the award turns prior to simplification. That is my view.

PN54

THE SENIOR DEPUTY PRESIDENT: Mr Smith, that clause does not say anything like that.

PN55

MR SMITH: Well, it says:

PN56

Any new facility agreement listed in the relevant clauses of the above award.

PN57

THE SENIOR DEPUTY PRESIDENT: Yes.

PN58

MR SMITH:

PN59

Introduced as a result of the awards certification shall not be used during the life of this agreement.

PN60

THE SENIOR DEPUTY PRESIDENT: I see.

PN61

MR SMITH: That is the interpretation I get.

PN62

THE SENIOR DEPUTY PRESIDENT: I see. So what you are saying there is that the employer understands that facilitation provisions identified or included in the award as part of the award simplification process would not be utilised without agreement between the company and the union.

PN63

MR SMITH: That is right. I say here that that clause has been around certification came in. It has never been an impediment to me. I believe that the unions have put it in there as a motherhood clause saying we don't agree with award simplification. The conditions of employment that apply out of this agreement on the Pelican Point job that has never been a problem or an issue been raised.

PN64

THE SENIOR DEPUTY PRESIDENT: Clause 8, I should read that as saying it is a term of this agreement the parties shall not pursue prior to the end of the period of operation of this agreement any extra claims.

PN65

MR SMITH: The way I interpret that, your Honour, is that the company would not entertain any extra claims issued by the employees or the union over and above this agreement unless consent was achieved and the variation to the agreement was made in accordance with the Act.

PN66

THE SENIOR DEPUTY PRESIDENT: Right. It gives rise to a question in clause 9 such that I take it that what the parties are referring to there is certification of a variation to the agreement by the Commission.

PN67

MR SMITH: Correct. So in other words if there was an extra claim there was merit to consent was achieved - - -

PN68

THE SENIOR DEPUTY PRESIDENT: Yes, it is just that the Act can't certify a variation to the agreement. The Act can only certify the basis upon which such a variation could be made.

PN69

MR SMITH: That is right. It sets out a process that would enable you to vary the agreement under - whether it is an ambiguity or it is an additional claim.

PN70

THE SENIOR DEPUTY PRESIDENT: Mr Smith, if I looked at clause 12, wage group 3A. From whence is wage group 3A derived and which award provision should I be looking at so as to understand what is being referred to by 3A.

PN71

MR SMITH: The award that has been nominated is the National Building and Construction Award. Where the rates from 3A come from is a percentage movement above the tradeperson's rate either up or below depending on the tonnage of the crane. That is what was negotiated by Mr Carslake from the union.

PN72

THE SENIOR DEPUTY PRESIDENT: So which classification in the award should I be looking at for the purpose of determining what is referred to by wage group 3A?

PN73

MR SMITH: The wage group 3A comes from the National Building and Construction Award. It comes from the tradesmen's rate and it is a percentage above the tradesmen's rate. There is no linkage between that and the Mobile Crane Operator's Award, your Honour. The tradesmen's rate is constant through the mechanical and electrical trades as well applying to that project.

PN74

THE SENIOR DEPUTY PRESIDENT: Are there any provisions in the National Building and Construction Industry Award which you say have relevance to the mobile crane driver exceeding 100 tonnes in a fashion which is, at all, different to any of the other identified classifications?

PN75

MR SMITH: There is no provision at all.

PN76

THE SENIOR DEPUTY PRESIDENT: Sorry, perhaps you might clarify that for me. There is no provision in the National Building Trades Award for a mobile crane driver.

PN77

MR SMITH: That rate is a made up rate just like the rigger scaffold that I think you will find is 95 per cent of the tradesmen rate. I am not sure of the percentage but I think that might be at say 110 per cent of the tradesmen's rate. That is how that rate came about. They negotiated a rate from the tradesmen's rate. That percentage increases - there is no linkage back to the National Building Trades Award for that.

PN78

THE SENIOR DEPUTY PRESIDENT: So can I presume from there that the parties are still saying to me that the underpinning award is the National Building and Construction Industry Award.

PN79

MR SMITH: That is what the parties have agreed to, yes.

PN80

THE SENIOR DEPUTY PRESIDENT: The National Building and Construction Industry Award is not - does not cover, if I understand your submissions, the classification 3A which gives rise to a further question that I will put to you now. Is there another award which does cover the mobile crane driver exceeding 100 tonnes to which this employer has responded?

PN81

MR SMITH: That classification and its rate and its exceeding 100 tonnes was a rate and a tonnage that was negotiated between the parties.

PN82

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that. I am just after an answer to the question that I am asking as to whether or not there is an underpinning award other than a National Building and Construction Industry Award which does contain a classification for the mobile crane driver.

PN83

MR SMITH: There are classifications for Mobile Crane Operator's Award, yes, there are.

PN84

THE SENIOR DEPUTY PRESIDENT: Is the employer a respondent to that award?

PN85

MR SMITH: I would say that the Complete Scaffold would not be a respondent but my colleague here tells me that is the case. Their business is not in cranage it is in scaffolding.

PN86

THE SENIOR DEPUTY PRESIDENT: Clause 14, powerhouse industry allowance. Can I take it from the scope of this particular agreement that that power industry allowance of $34.90 per week would be paid at all times? That is if the agreement only applies to the Pelican Point site does the $34.90 payment apply at all times?

PN87

MR SMITH: Yes, just a little bit of background there. The reason why it is expressed in per week is that the powerhouse - or the power industry allowance originally came from ETSA and all contractors were told to include it at that term and it is determined by the power generators and it is included - to be included in a contract and we keep it in our agreements so that as that rate changes by the client we have got an immediate variation. It applies for all purposes which means it virtually per hour worked.

PN88

THE SENIOR DEPUTY PRESIDENT: Yes, but there would be no circumstances under which an employee would be covered by this agreement and not receive that payment?

PN89

MR SMITH: There would be no circumstances.

PN90

THE SENIOR DEPUTY PRESIDENT: Can I just clarify the intention of the parties is that the role of the Commission in the resolution of disputes pursuant to clause 16 is intended to stop at the conciliation process?

PN91

MR SMITH: That is what the dispute resolution procedures say and I have said this on numerous occasions before. It is the intention of the applicant in this matter were need arises we would obviously seek resolution from the Commission in accordance with the Act.

PN92

THE SENIOR DEPUTY PRESIDENT: Well, let me be clear - - -

PN93

MR SMITH: Where need arises.

PN94

THE SENIOR DEPUTY PRESIDENT: The scope for the Commission to act in the resolution of disputes is fundamentally derived from section 170LW. If the agreement does not empower the Commission to move beyond the conciliation process then I would doubt very much that section 170LW or indeed any other section of the Act could be invoked so as to bestow that jurisdiction on the Commission.

PN95

MR SMITH: That is right. It is basically up to the parties whether they want to seek the Commission to determine an outcome if there is a matter on dispute.

PN96

THE SENIOR DEPUTY PRESIDENT: Without any agreement the Commission role stops at conciliation.

PN97

MR SMITH: That is correct.

PN98

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Clause 22 and the last sentence in that clause. I presume that -I read that sentence as: the loading constitutes part of the casual employees all-purpose rate?

PN99

MR SMITH: That's correct. The "why" should not be there.

PN100

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Smith.

PN101

MR SMITH: Good, thank you.

PN102

THE SENIOR DEPUTY PRESIDENT: Mr Harrison, do any of Mr Smith's responses to my various questions occasion you the need to comment?

PN103

MR HARRISON: The fundamental one raised by the Commission I would seek to address that one. Your Honour takes the point that the object of the Act is to provide that existing employees have the right of sale as to an agreement which applies in their future employment. One, with respect, wouldn't say anything contrary to that, but the terms of this provision in the Act as to the new business is meant, in our respectful submission, by clauses 5 and 6 of the agreement itself because that agreement writes into it, or rather imports into it by 5.1 the actual contracts upon which this enterprise will move.

PN104

This is no different than any other joint enterprise undertaken by bodies corporate. Here you have a multiplicity of corporations who say: look, we are contracting for this one enterprise and this one enterprise alone and this union has come along and said: yes, we accept that and we are limiting the operation of this agreement to those contracts, and it is our submission that, in itself when read together as a compact between the commercial corporations and the union which is also a body corporate, provides a compact for a joint enterprise which, in our respectful submission, constitutes a new business within the meaning of the Act.

PN105

As to the other aspects that my friend has answered I don't seek to make any further submissions and, in particular, in relation to clause 16(c) the conciliation point, we accept what it has fallen then and from his response that this results in conciliation only.

PN106

THE SENIOR DEPUTY PRESIDENT: Mr Harrison, you may well be right on the issue of section 170LL and, in particular, the argument you put to me relative to clauses 5.1, 5.2 and 5.3. It is that issue that I'm going to take away and consider, but I would invite you to comment on the extent to which I should draw a distinction between a company whose fundamental business involves moving employees from site to site and a company that might, in order to try to obtain a work on a particular project might need to enter into an agreement.

PN107

The issue that I'm wrestling with is that if I'm understanding the business of this employer correctly, one of the reasons for existence is to move from site to site and to move existing employees from site to site. The question I'm wrestling with is the extent to which in that situation the Act is intended to require that those employees be given a say in the form of industrial regulation that is to apply to them. Now, I don't have any definitive view on that in this particular situation and I'm inviting you to comment on that question.

PN108

MR HARRISON: Yes, I have a feeling this is going to come back to bite me on another occasion but - - -

PN109

THE SENIOR DEPUTY PRESIDENT: I wondered whether you might think that, Mr Harrison.

PN110

MR HARRISON: Yes, I can conceive of a situation where we would be most unhappy.

PN111

THE SENIOR DEPUTY PRESIDENT: I can conceive of a very similar set of situations too.

PN112

MR HARRISON: Could I put it this way that on the face of it and limited to this case alone, it is our respectful submission that this scaffolding company stands in no different position than a firm of brick layers, or an engineering company like Alstrom, who enters into a joint agreement with other corporations to provide a particular facility. Well, I don't need to address this bench on this but it is to try to point out that in the commercial world it is replate, these examples, where companies get together in a joint venture which is clearly not only a new business but a new business limited to a particular objective.

PN113

It is our submission that this scaffolding company joins a, as it were, a limited joint venture for this purpose and in order to obtain that contract it wishes to meet with the head contractors policy by entering into this sort of agreement.

PN114

THE SENIOR DEPUTY PRESIDENT: Yes, I understand what you are saying to me. I also understand the care with which you are choosing your words, but can I take you to section 170LL(1)(b) which reads, if I put it in its proper context that one of the two prerequisites for the operation of this section is that:

PN115

The agreement is to be made before the employment of any of the persons who will be necessary for the normal operation of the business, or part, and whose employment will be subject to the agreement.

PN116

PN117

I would invite you to comment on the extent to which that prerequisite is being met?

PN118

MR HARRISON: On this occasion, I have no submissions to make on that point, if it please the Commission.

PN119

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN120

MR SMITH: Could I be of assistance? This is the dilemma I have in all of this, your Honour, and that is that where a company hasn't engaged - a company has existing employees doing various jobs around the area of Adelaide and they are seeking to get a new contract to do something different in power stations. At the time of talking to the company they have got nobody earmarked from the existing work-force to go on that job because, one, they don't have a contract and secondly, if they do need additional people to take up that contract they will go and hire them for that job, whether they are casual, or - depending on length or duration.

PN121

To circumvent the arguments of section 1LL it would be wrong for myself to say to the company: listen, just pick six people out of your work-force, whether they are going to work there or not is immaterial, get them to vote, give them the agreement for 14 days and we will go through the hurdles that way. You could have people being involved in that process that never will ever work under that agreement, or nor go down there on site. I say here that this is an additional job to Complete Scaffolds because their core work, their core business is in the commercial building industry. It is not in the power generation or maintenance of power stations. That is the dilemma that I have.

PN122

Now, which way do you go? I said to you earlier because I know from past appearances before you, your Honour, that you would raise this and I did say to you that if it assists the Commission in getting this agreement certified I would be quite happy to take it down to site, put it through the motions for 14 days and side step all these arguments, I wouldn't say arguments, these views that we are expressing back and forth over the bar table.

PN123

THE SENIOR DEPUTY PRESIDENT: But Mr Smith, I have answered that proposition. I have indicated to you and I will repeat, I will reserve my decision on the question of whether I can use section 170LL in this situation. I appreciate the practical difficulties that the parties are pointing out that may well confront this company and I am reserving my decision because I have not reached any conclusion on whether or not section 170LL can be used in this environment. In the meantime, if the parties chose of their own motion to pursue a different vehicle for the certification of an agreement that is something entirely of your choosing. My only request to you there would be that if you did choose to do so you might let my office know.

PN124

MR SMITH: I certainly will.

PN125

THE SENIOR DEPUTY PRESIDENT: I won't devote the scarce grey matter to writing a decision if I don't need to.

PN126

MR SMITH: Maybe the writing of the decision might clear the air for parties for future matters because this is not the first and last time this situation is going to arise.

PN127

THE SENIOR DEPUTY PRESIDENT: No, it is not, Mr Smith.

PN128

MR SMITH: So maybe you should write your decision and - - -

PN129

THE SENIOR DEPUTY PRESIDENT: In terms of the time frame within which the parties might expect a decision I think it unlikely that you would receive a decision prior to the last week in April. I think it only fair that I let you know that.

PN130

MR SMITH: That is fair enough.

PN131

THE SENIOR DEPUTY PRESIDENT: Unfortunately, there are a great number of demands on my time at the moment.

PN132

MR SMITH: I can understand that, your Honour.

PN133

THE SENIOR DEPUTY PRESIDENT: Thank you. Very well - - -

PN134

MR HARRISON: I was wondering if I could just raise one point to the Commission. It seems to me that this issue arises on all the matters before you this morning.

PN135

THE SENIOR DEPUTY PRESIDENT: Not necessarily at all. Mr Harrison, the other matters before this morning fundamentally rely upon other sections of the Act.

PN136

MR HARRISON: Sorry, the LJ, I beg your pardon.

PN137

THE SENIOR DEPUTY PRESIDENT: Does that put paid to the concern that you were about to raise.

PN138

MR HARRISON: Yes, it does indeed. I thought they were all Greenfields.

PN139

THE SENIOR DEPUTY PRESIDENT: I'm relieved that I've remedied at least one potential problem.

PN140

MR HARRISON: On 17th though this matter comes again in - - -

PN141

THE SENIOR DEPUTY PRESIDENT: Mr Harrison you are going a long way in advance of my thinking at this stage and I'm not even able to tell you what I have listed for 17th, nor indeed what day of the week it might be.

PN142

MR SMITH: I'm glad you raised this, I haven't received this notification, it is probably in my office. I would like to see an adjournment of that one on 17th.

PN143

THE SENIOR DEPUTY PRESIDENT: Mr Smith and indeed, Mr Harrison, if the parties want to seek an adjournment of another matter which I'm not even aware of at this stage then can I suggest that you might contact my office in that regard.

PN144

MR SMITH: We will.

PN145

MR HARRISON: Quite, yes.

PN146

THE SENIOR DEPUTY PRESIDENT: I'm afraid that I have no idea what matters are listed for well over a week away. I will adjourn the matter on this basis.

ADJOURNED INDEFINITELY [9.47am]