AG2003/140, Transcript of Proceedings [2003] AIRCTrans 1771 (15 May 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 2, 16 St George's Tce, PERTH WA 6000
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N WT0141
AUSTRALIAN INDUSTRIAL A

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT POLITES

AG2003/140

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Olten Pty Ltd trading as MSA Security
and Another for certification of the MSA
Security Officers Certified Agreement

PERTH

10.11 AM, TUESDAY, 8 APRIL 2003

PN1

MR J. UPHILL: I appear on behalf of Olten Pty Ltd, and with me MR J. DENNISON, the Managing Director of the Company.

PN2

MS F. BENNETT: Fiona Bennett from the Australian Liquor and Hospitality Miscellaneous Workers Union. We seek leave to intervene today sir, in accordance with section 43 of the Industrial Relations Act.

PN3

THE SENIOR DEPUTY PRESIDENT: Have you got the appropriate authority from the employees?

PN4

MS BENNETT: Sir, we do. The basis of our application to intervene is accordingly we applied and were granted a section 291A certificate in this matter on 13 March 2003. I wish to raise some concerns the ALHMWU has in relation to section 170LT, the no disadvantage test. And further we propose to, if in the event the Commission is satisfied and the agreement is to be certified bound to the agreement sir.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Mr Uphill?

PN6

MR UPHILL: Your Honour, if I might just touch upon some of the detail of the agreement and then perhaps move on to make some submissions in respects to the intervention. The application is for the certification of an agreement pursuant to section 170LK of the legislation. From a perusal of the papers it should be clear that this matter has had a fairly lengthy history, having been the subject of - or another agreement of almost identical content was the subject of proceedings before Senior Deputy President Lacy - - -

PN7

THE SENIOR DEPUTY PRESIDENT: Yes I have read that decision Mr - - -

PN8

MR UPHILL: Yes, I suspected that you probably had. Since that time your Honour, the matter has been resubmitted to employees. The agreement has been modified to take account of the decision of his Honour and this agreement has been approved by a valid majority of employees. And we believe that the documentation that has been filed does indicate very clearly that the agreement complies with all the legislative requirements. And would seek that the agreement apply according to its terms.

PN9

THE SENIOR DEPUTY PRESIDENT: Yes. Sorry, I was going - - -

PN10

MR UPHILL: I might pause here if there are any questions at that stage?

PN11

THE SENIOR DEPUTY PRESIDENT: No, I - I have read the agreement and I have read the decision and it looks to me as though you have made an attempt to fix up, as it were, the difficulties pointed to by the Senior Deputy President. But, what were you going to say about the intervention?

PN12

MR UPHILL: Your Honour, I understand the intervention is pursuant to section 43(2) of the legislation and we have no ability to, I think, object to the intervention given the basis on which it is made and the certificate which has been issued. We do have some concerns with respect to the issues that Ms Bennett has foreshadowed, that she seeks to canvass in these proceedings. And I understand she wishes to make submissions with respect to the provisions of section 170LT.

PN13

We submit that the union ought not be permitted to make such - such submissions. We do so on the basis that the intervention pursuant of section 43(2) is, in our view, limited to the union satisfying the Commission that the requirements of section 170M have been satisfied and we do not believe that the union has the ability, in this type of intervention, to go any further than addressing that section of the legislation.

PN14

THE SENIOR DEPUTY PRESIDENT: Well, we will hear what Ms Bennett has to say about that.

PN15

MS BENNETT: Sir, we would like to press our application for intervention. We do believe that we have a right to raise some concerns that we have in the agreement not meeting the provisions of 170LT(2). We - it is upon the Commission to be satisfied that the agreement does meet the no disadvantage test. And given that we have concerns with certain aspects of the agreement, this will be an agreement that will cover an industry of employees where we have a large number of members, who we have an interest in their well-being being affected by the terms and conditions of this agreement. We would press our application sir, to be allowed to provide some submissions, at least an outline in relation to our concerns we have.

PN16

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Uphill, why do you say that the intervention is confined by the Act to 170M?

PN17

MR UPHILL: I do so in regard to - or referring, I should say, to a decision that you made your Honour, in the matter involving Access Security Solutions. Where in that matter, you might recall, the union in that matter, which was dealt with in October 1998, and is print Q7309. There was an attempt by the union in that matter, as a result of the intervention pursuant to section 43(2), that they put submissions with respect to the provisions of 170LK, and whether or not they were satisfied. And in that matter you found that the union was confined, given the nature of its intervention, to simply satisfying the provisions of 170M. And did not have the ability to voice their concerns with respect to 170LK.

PN18

And it is on the basis of that decision your Honour, that we put the view that the union is precluded from expressing views about 170LT. We do not see that there is any distinction with respect to the putting of arguments pursuant to 170LK, as opposed to 170LT. We believe that the intervention under 43(2) is confined to 170M requirements, and no other provisions of the Act, in our view, are able to be addressed in that type of intervention.

PN19

THE SENIOR DEPUTY PRESIDENT: Thank you Mr Uphill. Well, I recall the previous decision, but my understanding about that was that the notice given in that case, sought just to be bound by the agreement and then when the respondent turned up, they then sought to attack and agreement and I was not prepared to permit that to happen. Now, Ms Bennett on the other hand, has given notice as I understood it, that she did want to address the LK grounds, but in the event that she is unsuccessful in that, you want to be bound by the agreement, is that right Ms Bennett?

PN20

MS BENNETT: Correct sir, we do propose to be bound to the agreement.

PN21

THE SENIOR DEPUTY PRESIDENT: Well, I think I will hear an outline any way and just - just to - in the final analysis the obligation is on me to satisfy myself that the agreement passes the no disadvantage test, so you go ahead Ms Bennett.

PN22

MS BENNETT: Okay, thank you.

PN23

THE SENIOR DEPUTY PRESIDENT: I will grant leave.

PN24

MS BENNETT: Thank you sir. I had done an outline of submissions in relation to the history of the file, but perhaps to move the matter a bit more swiftly, in the fact that you have indicated sir, that you are familiar with the decision of Senior Deputy President Lacy, I will move on with our submissions. As you are aware, Olten Pty Ltd embarked on issuing a further agreement to their employees on or around 21 February. This was highlighted as being an agreement which reflected the changes needed for the agreement to be registered.

PN25

The company claimed that the agreement did pass the no disadvantage tests and the changes were purely based cosmetic ones as such. We state that that information is incorrect and misleading. However, it was clearly identified by SDP Lacy, that certain provisions did not meet the no disadvantage test and the proposed amendments to the agreement, advanced by MSA, would have been a significant departure. We will just touch on the certain provisions sir, that we believe, have not been rectified in relation to SDP Lacy's initial findings.

PN26

The first one I will refer you to is the shift allowance, contained in the award under clause 13.4 and the agreement 21.43. The agreement does not allow for any shift loading for week day afternoons. The award clearly allows for a 15 per cent loading for afternoon shifts. Now, in this industry that would be a common shift that workers would do on a regular basis and therefore we believe would be penalised. Further sir, in regards to the shift allowances, within the agreement 21.43(2) and the award 13.4 again sir, their - sorry the loading for night shift in the agreement has been applied at 15 per cent, where the award clearly allows for a 25 per cent loading.

PN27

Now again, this would be a regular shift that would be undertaken by employees within this industry and we believe would, you know, penalise them. The hours of work by - extra hours by agreement. The agreement at clause 12(i)(d), allows for extra hours by agreement at ordinary rates of pay. The award clearly provides for overtime done outside of ordinary hours, prescribed by clause 15 of the award, to be paid at the rate of time and a half for the first two hours and double time thereafter. Now, these are still sir, just on the issues identified by SDP Lacy, that have not been rectified in the new agreement.

PN28

Further, it was identified that the agreement failed to provide for a First Aid allowance. The MSA have - sorry Olten Pty Ltd have inserted a First Aid allowance, but it is still deficient to the award. The award is $8.39, they have provided for $8.07. There has been no alarm resetting allowance inserted into the agreement, which is $5.26 per week. And there has been no undertaking to provide - in relation, sorry sir, to the licences, where 50 per cent of the outline - outlay for a licence for second and subsequent years is to be supplied.

PN29

Now, that is a clear identification of issues that have not been rectified in this agreement. We still have other issues with certain clauses of the agreement, not limited to, but in relation to the overtime provisions, no meal allowance being provided in overtime. There is no accrual for an RDO. Employees required to work on public holidays must be paid at double time and one half with a minimal payment of three hours. There is the - in relation to clause 19 of the award, the annual leave, there is a clear deficiency in no annual leave loading being provided. And also the loss of an extra week's annual leave in relation to a full-time officer who works a seven day shift. Again sir, that would be a very regular occurrence within this industry.

PN30

They are probably matters pertaining more to a monetary value sir, we still state that there is no provision in relation to an RDO, which we would say is a loss of 12 recreation days a year. There is also no clear, distinct and broad description within the types of employment categories and descriptions to allow a more broader provision for regular part-time employees. The award contains, in clause 9, quite an extensive regulated description for a part-time worker, where the agreement provides nothing of the sort.

PN31

We would say, given that the hourly rate for this agreement sir - they are as I said, an outline and a highlight of the areas that we have concerns with. We would say, given the hourly rate provided for in this agreement, which is equivalent, not above or slightly above, it is equivalent to the award rate, we would say that this agreement still would fail - well we believe fails the no disadvantage test and overall would disadvantage employees in relation to a number of the issues that I have raised.

PN32

THE SENIOR DEPUTY PRESIDENT: Thank you Ms Bennett. Mr Uphill?

PN33

MR UPHILL: Your Honour, there is a range of issues that Ms Bennett has raised and I was unaware of those issues until just a moment ago, when she outlined them to you. In the circumstances I would appreciate an opportunity to seek some instructions from Mr Dennison about each of those matters.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes, by all means. Would 11 o'clock suit you Mr Uphill?

PN35

MR UPHILL: That would be satisfactory yes.

PN36

THE SENIOR DEPUTY PRESIDENT: We will adjourn this matter until 11 am.

SHORT ADJOURNMENT [10.27am]
RESUMED [11.02am]

PN37

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Uphill.

PN38

MR UPHILL: Thank you, Your Honour. For me to respond to those issues that Ms Bennett drew to your attention and how they impact on the no disadvantage test, but before I do so I would observe, of course, that the no disadvantage test does not need to be applied on a line by line basis. It is really the totality of the agreement that we need to look at.

PN39

THE SENIOR DEPUTY PRESIDENT: Yes.

PN40

MR UPHILL: Having said that, it is true that a lot of the issues that Ms Bennett drew to your attention in the agreement do not exactly mirror the award provisions. But looking at the first matter dealing with the shift allowance provisions, it is true that there is no night shift penalty contained within the agreement. But I would also outline the operational practicalities that are possible under the award provisions and that is that the award clause talks about a night shift allowance of 25 per cent applying where a shift commences after 6 pm. It is, of course, possible to restructure operational requirements so that a shift might commence at 5 minutes to 6 and you would be in a situation of paying an afternoon shift penalty of 15 per cent.

PN41

It has been drawn to my attention that the company does not want to get into that type of arrangement and it believes that, in the circumstances, a 15 per cent shift premium ought to apply and that is the basis on which mention of that has been inserted into the agreement. There is also, I am reminded, the ability to work 12 hour shifts and clearly, in that situation, it also leads to the view that the shift penalty structure in the agreement is not inconsistent with that type of arrangement. The other aspect that I need to respond to, Your Honour, is the union's comment about extra hours being paid at the ordinary hourly rate rather than the overtime rate under the award.

PN42

I do note in the agreement though, at clause 15.3 that - no, it is not 15.3, but certainly within the agreement that where additional hours are compelled to be worked by employees there is a penalty structure that is similar to the award system. In fact it has been drawn to my attention that the clause is clause 21 and it is subclause 21.1(b):

PN43

Subject to the provisions of this subclause all work done beyond the rostered working hours any day at the employer's request shall be paid for at the following rates.

PN44

Then there is various penalty rates set out which are akin to the award penalty rates. I draw the distinction between hours which are worked in line with the employee's preference to work additional hours and to earn extra income, versus hours which are worked at the request or instruction of the employer. And it is on that basis that we believe that the ability to work to earn extra income is something that is one of the beneficial parts of the agreement.

PN45

Moving on to the first aid allowance the union is correct that the certified agreement has a lower first aid allowance than what is in the award. I am not sure why that occurred. Mr Dennison has told me that he is happy to reflect the existing award provision which is $8.39, rather than $8.07 which is in the agreement.

PN46

MR DENNISON: That is the old rate, that is just a typo.

PN47

MR UPHILL: It may be that the rate of $8.07 was the old rate prior to the most recent national wage adjustment. In fact, that is correct. I am just referring to an old wage schedule, 1 May 2002. Indicates the previous allowance was $8.07 so that would appear to be the explanation. With respect to the alarm reset allowance my instructions are that that has been omitted from the agreement as, in the employer's view, that involves a double dipping in the sense that as a part of the restructuring of the award the employer is of the view that the classification rate now encompasses the duties of resetting alarms and there ought not be a separate allowance payable for the resetting of alarms.

PN48

The next matter involves the payment of licences. The award talks about the reimbursement in the second and third years of 50 per cent of the licence cost. I understand that the licence is actually a three year licence which is paid for up front at the time of obtaining a licence. Employees, so I am instructed, usually claim a tax deduction for the full amount of the licence and it would seem that, given the way the licence is issued, there is not a cost to employees in the second and third years. That is the explanation that - - -

PN49

MR DENNISON: The award refers to an annual licence and there is a three year licence to be paid up front.

PN50

MR UPHILL: Perhaps I need to make that absolutely clear. The award refers to, I think - the award gives the impression that it is an annual licence. I am told that that is not the case. It is, in fact, a three year licence. The other aspect that Ms Bennett drew to your attention was the lack of a meal allowance when overtime is worked under the terms of the proposed certified agreement.

PN51

Certainly, in the award, there is such an allowance but it applies when people work overtime and they are not notified in advance of the requirement to work overtime. In my submission the precondition for the payment of that allowance under the award would not occur in how the employer's operations are arranged in the sense that people know in advance of what hours they are working. And hence, in that situation, we would not see that the meal allowance under the award ought to apply. The next aspect was the fact that the agreement does not contain the ability to accrue rostered days off as per the award. That is true. I am not sure - - -

PN52

THE SENIOR DEPUTY PRESIDENT: I don't need to hear you on that, Mr Uphill.

PN53

MR UPHILL: I am not sure there is much in that. The next aspect was public holidays. I think the complaint from Ms Bennett was that there was no three hour minimum payment for public holidays. There is certainly nothing mentioned in the public holiday clause to that effect but there is in the actual hours clause, clause 19(a)(ii), where any work period has to be a minimum of three hours.

PN54

THE SENIOR DEPUTY PRESIDENT: Three hours.

PN55

MR UPHILL: So I think that disposes of that issue. Next aspect is the lack of the annual leave loading. It is true that there is no mention of a 17-and-a-half per cent loading in the agreement but I would draw to your attention the actual annual leave clause which talks about employees getting paid their ordinary wage. And that is at 23(a) of the agreement and I am instructed that the payment of ordinary wage is higher than the payment of wages earned during ordinary time.

PN56

And to reinforce that point, in 23(a), the third line, it talks about ordinary wage as prescribed prior to proceeding on annual leave. I am told that what will be paid on annual leave is what an employee would earn, under the roster that they would have worked, had they not been on annual leave. So in that sense I don't think the absence of any mention of an annual leave loading is fatal to the no disadvantage test with respect to the agreement. The other aspect that was complained about was the fact that there was not five weeks annual leave for seven day shift rostered people.

PN57

That is correct but I do respond by pointing out, in clause 23, annual leave, that employees are entitled to a maximum of 168 hours annual leave and that, of course, is higher than the usual 152 hours annual leave. What that would mean is that some people would be advantaged whereas those people who would normally work say 14 shifts of 12 hours, they would get 168 hours annual leave. But certainly where people worked five weeks - where people worked a seven day shift roster they would not get the five weeks annual leave, which is something higher than 168 hours pay.

PN58

What we say there, Your Honour, is that administratively it makes more sense to pay annual leave at 168 hours. There are some people that we say will be advantaged but there are others who, in the union's view, would be disadvantaged. We say there are swings and roundabouts and it should not be an issue that is fatal to this agreement proceeding. The other aspect is the part time description. Certainly, the description of a part time employee in the agreement is different from that in the award. The real complaint I think, Your Honour, is that under the award provision if the hours are changed an employee has access to overtime.

PN59

The rationale behind the certified agreement is different in the sense that where people work additional hours they do so because it suits their requirements. In that situation we believe that the employer should not be compelled to pay overtime but, certainly, we acknowledge that where there is a compulsion to work the extra hours then there will be a premium paid. I think that is the explanation for all of the matters we would wish to put before you.

PN60

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Ms Bennett, have you got anything you want to say by way of response?

PN61

MS BENNETT: Sir, I won't address all the points. Obviously we take the undertaking to rectify the first aid allowance. We would say that in relation to the alarm reset allowance it has been cited on previous occasions that this was incorporated into the classification rate. We disagree with that. There has been no evidence furnished to prove that that has been arbitrated and has been the case. We say it is still a stand alone allowance contained in the award and has never been party to any arbitration to incorporate.

PN62

The payment of the licence, I think the award clearly states the effect of that. Just because it is a tax deduction does not mean it cannot be a, you know, provision and the award clearly states that it is not saying it is a three year licence, it is saying that it will have reimbursement for the second and subsequent years of employment of the worker. We are not disputing it may be a particular three year term licence. The meal allowance I say, again, irregardless of a employee being aware in advance, whether it be a day or a, you know, hour that he is to work overtime, we believe that a meal allowance is still appropriate in the cases of overtime.

PN63

We would still claim, sir, that the annual leave loading and the one week's annual leave which we equate to total nearly $16.96 per week, $880 a year, is still deficient. I am not quite sure to the argument advanced by Mr Uphill. The administration process, I did not quite understand the basis of his argument there. In relation to the part time, I did not raise a issue with that to do with the rationale of additional hours. The issue I raised was to do with the certainty and the operation of employment of a part time employee. The award clearly provides a distinct and broad description of employment for a part time employee.

PN64

Now this is essential to this industry which employees predominantly casual and part time workers. It gives job security to part time employees. That was the reason I raised the deficiency with that clause opposed to the award - sorry, opposed to the agreement, you know, which clearly does not identify that they need to be provided with regular part time hours and a roster, etcetera. That would be a clear disadvantage, we would say, as to the workers not being aware of their regular hours and their regular income. It could be basically changeable at any one given time by the employer.

PN65

The shift allowances, we would say, operate in a practical way that the company has furnished, I believe, rosters that have reflected the traditional industry rosters of six to six and six to six. We would say that by averaging it out and applying a one rate of 15 per cent instead of 15 and 25 per cent, we would say, is not accommodating of the allowances that are clearly provided. Not only is the agreement omitted of the afternoon allowance it is not paying the full allowance for night shift, which is clearly reflected in the - - -

PN66

THE SENIOR DEPUTY PRESIDENT: What do you say about Mr Uphill's submission that by simply fiddling the roster you can avoid the night shift penalty? And I mean I have got to say I have seen it done.

PN67

MS BENNETT: Correct.

PN68

THE SENIOR DEPUTY PRESIDENT: Yes.

PN69

MS BENNETT: Yes. But we would say, you know, rosters have been furnished and they are, rule in the industry, six to six and six to six. So we would say, just as an industry standard or an industry regular roster - but I do take Mr Uphill's point of fiddling of the roster would, you know, so - and the extra hours issue that I raised being paid at overtime rate was purely on the basis of additional hours. We were not claiming that the company was not paying overtime rates according to the award.

PN70

We had concerns about the additional hours which, we would claim, any additional hours above and beyond ordinary rates should be paid at overtime. Within the agreement it does not stipulate in the agreement, under clause 16 - sorry, 21(1), it does not stipulate that double time will be paid on a Sunday. We do have concerns about that. Though it may just be a interpretation matter, it clearly states that, "Double time-and-a-half" - sorry:

PN71

Time-and-a-half and double time will be paid Monday to Saturday.

PN72

But it does not claim that it will be paid first two hours, each day, Monday to Saturday inclusive, time and one half. And then paragraph 2 says, "All other hours". It doesn't distinctly say that Sunday will be paid at double time. So that was the issue that we raised and I think on that, sir, we would leave it. I would say that the concerns would be in relation to the allowance and also the annual leave, sir. Thank you.

PN73

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Ms Bennett. Mr Uphill, there were a couple of additional matters raised there you might want to respond to.

PN74

MR UPHILL: There were, Your Honour, and I think the overtime clause and the Sunday issue, I am not sure there is much in that given that 21.1(ii) is very clear that all other hours are paid at double time. I would have thought that fairly easily disposes of the Sunday argument. The only other aspect that I perhaps should refer to, Your Honour, is this notion of additional hours and whether they be paid at overtime rates or some other rate, which seems to be fairly central to this and quite a few other matters that come before the Commission. In this particular matter the award has a rather unusual provision in it which allows, by agreement with the union, the working of hours up to 12 and any other consequential provisions.

PN75

In my view, the wording is very broad to allow a range of options that might flow on from agreement to work a 12 hour shift. I would certainly concede that it is - no, in fact, I am reminded that it is not involving the union in the clause, it is with the majority of employees. It is 15.3.2, so the argument is that the award effectively allows an employer to work additional hours up to 12 and, as a consequence, arguably decide what the premium should be paid for those hours.

PN76

And in the absence of reaching a certified agreement, in my view, the employer could effectively run with the agreement that it has, arguably, and claim that it is an agreement under the provisions of 15.3.2. Now, I am not putting that argument as being an argument we rely upon to say we are operating under the terms of the award. I simply draw it to your attention in saying that it is an aspect that needs to be taken account of when you look at the no disadvantage test and what the award provides as the fall back. And it is on that basis that - - -

PN77

THE SENIOR DEPUTY PRESIDENT: I have got to say that other people have put that argument to me, Mr Uphill.

PN78

MR UPHILL: Well, I do not advance it further than what I think I need to do in these proceedings, Your Honour.

PN79

THE SENIOR DEPUTY PRESIDENT: Yes. Look, in the circumstances, I think I would like to consider what has been put by Ms Bennett and Mr Uphill. I won't take very long about it but it might be useful if I were to read the transcript and deal with the points raised in considering the application, in particular of the no disadvantage test. I will reserve the decision but I do promise that I won't keep the parties waiting very long.

ADJOURNED INDEFINITELY [11.25am]