C2003/1959, Transcript of Proceedings [2003] AIRCTrans 1970 (26 May 2003)

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TRANSCRIPT OF PROCEEDINGS

O/N 2580
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER FOGGO

C2003/1959

FORD MOTOR COMPANY (VEHICLE INDUSTRY) -
CONSOLIDATED AWARD 1998

Application under section 113 by Automotive,
Food, Metals, Engineering, Printing and
Kindred Industries Union and Others
to vary above award re Safety Net Review -
Wages May 2002

MELBOURNE

11.05 AM, FRIDAY, 9 MAY 2003

PN1

MR A. SACHINIDIS: I appear on behalf of the Australian Manufacturing Workers' Union.

PN2

MS C. NEENAN: I appear on behalf of Ford Motor Company.

PN3

THE COMMISSIONER: Thank you. I have letters from the Association of Professional Engineers, Scientists and Managers Australia, from the CEPU and from the ASU to indicate that they are unable to attend this morning, that they have seen the union's draft order and that they support the application. Mr Sachinidis.

PN4

MR SACHINIDIS: Yes, thank you, Commissioner. Commissioner, the matter before you this morning relates to an application pursuant to 113 of the Act and it concerns the 2002 safety net review wages decision. I understand that correspondence from the union has been forwarded to the Commission on 16 April. That documentation conveniently includes a copy of the union's application, a covering letter which was sent to the company, specifically to Ms Cindy Neenan, a draft order marked attachment A and also an AMWU document which sets out the formula and methodology that has been relied upon to vary the wages and the applicable allowances contained in the award. I trust that you have that with you.

PN5

THE COMMISSIONER: Yes, I do, thank you. That was received on 16 April.

PN6

MR SACHINIDIS: Yes, and I also can confirm in accordance with the specific rules of the Commission in relation to section 113 applications that on 22 April, a copy of the listing for the matter to be heard today was forwarded to Ms Cindy Neenan representing Ford which detailed the details for today's hearing. Commissioner, I would like to at this point provide you with a further draft order and this draft order has corrected one allowance, one allowance which was inadvertently omitted in terms of an adjustment and that is set out at point 9 of the draft order which related to clause 4.16(b)(i) and the allowance now correctly prescribes an increase of $23.20 payable for relief tasks performed by employees. The order that I have provided you now and it is also marked attachment A has incorporated the relevant matter number and also today's date and I understand, Commissioner, that that is a draft order which is by consent of the parties. There is one issue - - -

PN7

THE COMMISSIONER: Can I just ask you, attachment A, that was the draft order, the amended draft order was sent to the unions and that is the draft order that they have seen?

PN8

MR SACHINIDIS: That is correct, yes. There is an issue which I will take you to, Commissioner, as part of my submissions which would go to the specific requirements necessary to satisfy the Commission in terms of varying the award. The union relies in terms of the statement of principles, Commissioner - on 6 May, you would appreciate that the Bench handed down the 2003 safety net review decision.

PN9

This application before you relates to the 2002, although the principles which apply in relation to varying the award for safety nets have not fundamentally changed at all, so what I will be doing is relying on the 2002 safety net review decision in terms of the offsetting provision, the offsetting provision which we have inserted into the actual draft order and you will see that that is set out in point 3 of the draft order, so accordingly, Commissioner, we submit that the application before you meets the specific requirements set out in the statement of principles at attachment A and those are indeed principle 2A which provides for inclusion of previous national wage case decisions in accordance with principle 3, principle 2C which refers to adjustment of allowances in accordance with principle 5 and in particular principle 2F which relates to adjustments of wages in terms of safety net adjustments in accordance with principle 8.

PN10

Accordingly, principle 3 is satisfied. Principle 5 we have detailed in the methodology and formula document that, indeed, the allowances which have varied are consistent with the Furnishing Trade and Glass formula set out in principle 5C and D. In relation to principle 8 we rely upon principles 8B, C and D upon which the Commission should vary the award and in particular here I am referring, Commissioner, to the operative date which is specified in point B of the draft order on the last page. You will note there that the terms of the order sets out as follows:

PN11

This order shall come into effect from the first pay period on or after 31 October 2002 and shall remain in force for a period of 12 months.

PN12

The reason why the order prescribes a date which is retrospective is because the previous order was varied on 5 May 2002 and that order specified the force coming into being on 31 October 2001. That meets the 12 month rule in relation to safety net adjustments have to be at least 12 months, or at least 12 months having elapsed before a further variation could apply, so that is the principal submission that I make in relation to why the union relies upon that particular operative date.

PN13

We do so for a number of reasons. The first, of course, is that the draft order before you is by consent and principle 8C indicates that in awards where the variation for a safety net arising from the April 1999, May 2000, May 2001 or May 2002 decisions is by consent and does not result in an increase in the wage rates actually paid to employees or increase the wage costs for any employer, any applicable 12 month delay between the variations may be wavered.

PN14

I rely upon that principle, Commissioner, to enable us to have that operative date and also to enable us to have, if you like, in the award at least a 12 month period before the safety nets apply and we submit that, indeed, there is no cost impost on the company in relation to the application before you and in particular if it was granted today, there would clearly not be an actual increase in the wage rates paid to employees employed by the company.

PN15

I also rely on principle 8D and I can give a commitment, Commissioner, in relation to absorption that the union gives that commitment consistent with principle 8D and accordingly we rely on principle 8E which has inserted the appropriate offsetting provision as set out in the statement of principles. Relying on the submissions that I have made, Commissioner, if there are no issues you have in relation to what has been submitted, I intend to leave my submissions here and ask that the Commission look favourably on the application and grant that effective from today's date, consistent with the relevant period as set out in point B of the order which would be 31 October 2002. If it please the Commission.

PN16

THE COMMISSIONER: Thank you, Mr Sachinidis.

EXHIBIT #S1 DRAFT ORDER

PN17

THE COMMISSIONER: That will be the operative order for the purposes of these proceedings. Ms Neenan.

PN18

MS NEENAN: Thank you, Commissioner. On behalf of Ford Motor Company, we are certainly happy to vary the award consistent with the principles. We have reviewed the union's submission and are comfortable that the submission is consistent with the safety net adjustment principles. However, I would like, please, Commissioner, for some discussion on the operative date.

PN19

Principle 8A talks about the operative date will be no earlier than the date of variation to the award and I see from our perspective that the date on the submission is effective from 31 October 2002 and I would like some clarity as to whether that actually meets principle 8A. In terms of the movement in the award rate, we do have some allowances, one or two allowances that under the safety net review increase for May 2002 will move and they are not subject to the agreement, so that our existing agreement is silent on those particular allowances, so I would seek clarity from the Commission as to the effective date of those allowances and if, in fact, we will be required to retrospectively increase those from the date of 31 October 2002. If the Commission pleases.

PN20

THE COMMISSIONER: Yes, thank you. That seems to be at odds with your submission, Mr Sachinidis.

PN21

MR SACHINIDIS: Yes, Commissioner, my submission in relation to the operative date is as follows, that principle 8A in the circumstances currently before you and in the circumstances prevailing in this award does not apply because we are relying on principle 8B and C. The principle A relates to where awards predominantly have incorporated previous safety net adjustments and would apply where an award has already been varied for the 2002 safety net adjustment and in those circumstances, parties would be required to rely upon both principle 8A and principle B, that is at least 12 months haven't been elapsed and then the operative date would be no earlier than that date of variation to the award, so in our submission there should be no consequential increases that would pick up the point that has been submitted by the company. As I understand that submission, it relates to a number of allowances which are set out in the award which are not referred to in the enterprise agreement.

PN22

In my submission, I find that difficult because most of it, or all of the allowances in the award pursuant to the enterprise agreements that have been reached between the company and the union have been varied consistent with the percentage increases that have applied to wage rates. That is what we understand how the allowances at the enterprise level have been varied, so I don't accept the submission from the company that suggests that they may well be required to retrospectively pay employees any adjustment to wages.

PN23

THE COMMISSIONER: Can you be sure of that?

PN24

MR SACHINIDIS: Well, I can be in a sense because I am relying on the previous adjustments made to the award. You have fortunately been present and have dealt with all the applications from the consolidation of the award for the simplification and there from 1998, 1999 - - -

PN25

THE COMMISSIONER: No, Commissioner Lewin dealt with the simplification.

PN26

MR SACHINIDIS: The simplification, yes, but you actually dealt with the consolidation.

PN27

THE COMMISSIONER: The consolidation, yes.

PN28

MR SACHINIDIS: That is correct, and in that consolidation, we dealt with simplification issues, bringing the various parts together, so in that context, all the adjustments in terms of safety nets have not required any retrospective adjustment to be made by the company, so I rely on that history to argue or submit to you that in this case, there is clearly no intent at least from the union that the company would be required to, as a result of this application, retrospectively adjust allowances and pay employees.

PN29

If that is an issue, I would submit to you, Commissioner, it is an issue at the enterprise agreement level as opposed to the award because the agreement talks about how allowances are to be varied. What we are trying to do is establish in the award contemporary rates of pay and allowances commensurate with safety net decisions as being the minimum, so therefore I don't understand that submission which has been made by the company because if that is the case, then the Commission would be required to vary the award from today's date. That would then mean we would have to wait for 8 May 2003 to incorporate the 2003 adjustment to this award.

PN30

THE COMMISSIONER: No, 2004. You would have to wait until May 2004.

PN31

MR SACHINIDIS: Sorry, 2004, absolutely, yes. Sorry, 2004, to incorporate the 2003 safety net adjustment. Where there is no consequential increase, it sort of skews somewhat the 12 month sort of approach we are trying to sort of maintain in the award.

PN32

THE COMMISSIONER: I am not overly concerned, except that the issue has been raised by the company. I do have the agreement in front of me. I want to be sure that the allowances that are in the enterprise agreement cover all the allowances that are in the award.

PN33

MR SACHINIDIS: That is what I understand, Commissioner.

PN34

THE COMMISSIONER: Well, that is my understanding, too, but it has been raised.

PN35

MR SACHINIDIS: Yes, it has been and that is why I have raised that in discussions with Cindy and I find that quite a strange situation because the Commission would also understand in the sense of all enterprise agreements covering the major companies, major vehicle manufacturers, vary the allowances commensurate with the percentage adjustments through the agreement.

PN36

THE COMMISSIONER: Through the agreement, yes.

PN37

MR SACHINIDIS: Yes, so I just can't see a situation which would necessitate any retrospectivity in these circumstances, but I don't know, I mean, I am all ears, but I don't see - there is no evidence, for example, on the previous occasion, the previous order from you, Commissioner, was issued on 15 May 2002 and the operative date in that order specified 31 October 2001. Now, if there was any issue of retrospectivity in relation to what has been submitted by the company today, that would surely have applied on the previous occasion, so I am confident in my submissions to you, Commissioner, about that, that I indicated to the company it may indeed be an appropriate exercise to look at all the award - sorry, all the allowances specified in the award and what has happened to those allowances pursuant to the enterprise agreements that have been in force. There has been acceptance by the company that that is indeed a good exercise to undertake so there is absolutely clear understanding amongst the parties about what happens at the award level which is what we are seeking to do today and what is indeed happening at the enterprise level in terms of in this case specifically allowances.

PN38

THE COMMISSIONER: Yes, thank you. There is a way to deal with this matter. Let me go first to the application itself. I am satisfied on the basis of the submissions which have been made that the application should be granted. The application is granted, however, based on my understanding that the allowances which are in the award have been dealt with through the enterprise bargaining process and have been subject to increases of the same amount which has been agreed through each of the enterprise agreements which have been certified before the Commission.

PN39

That is the basis upon which I am going to grant the application. If there are some allowances which are to be varied as a result of this application and are not subject to the operations of the enterprise agreement, the company should not pay any increases, but to deal with that matter, there should be an immediate application to the Commission so that we can deal with that issue.

PN40

Now, it is quite clear from the submissions from the AMWU which are supported by the other three unions that the understanding Mr Sachinidis has put forward is their understanding as well. It is an understanding I share, but the granting of the application is on that understanding and if it arises, there is an allowance somewhere that has not been covered through increases, the company is not to pay it. That is not the intention of the union parties to the agreement, but it is something that we will have to deal with.

PN41

Similarly, there are a couple of issues that arise in the award that will have to be dealt with by the parties at some time. One is the supported wage which does not appear, unless I have been unable to find it and I have gone through it and I cannot find a supported wage clause. I want there to be an application to insert that so that the current level is in the award.

PN42

The other matter is in relation to the Federal minimum wage and that should be in there as well and we could quite easily deal with both those applications at the same time and what I intend to do as this raft of applications comes through for increasing the arbitrated safety net consistent with the 2003 Full Bench decision is to look at those other two issues of supported wage and the Federal minimum wage and to make sure they are all absolutely up to date.

PN43

Now, it doesn't have immediate application. I understand that, but none of us are seers into the future and it is a requirement that now exists subsequent to the award simplification process which was completed on 30 June 1998 through the order of Commissioner Lewin. In relation to the extant application, I am satisfied on the basis of the draft order which is marked as exhibit S1 that the relevant issues that have been raised through the principles associated with the arbitrated safety net adjustment have been met.

PN44

The required provision relating to absorption has been provided in the draft order. The adjustment which is sought is consistent with the decision of the Full Bench in the 2002 arbitrated safety net decision. The application is one by consent and the principles which operate in relation to the date of effect are accommodated by part B of principle 8 of the 2002 decision, in that my understanding is there will be no increases and it is in keeping with previous decisions of the Commission, the precise print number which I at this moment cannot recall, to ensure that there can be retrospectivity so long as it does not diminish the 12 months between the increases and my understanding is that that is not the case in this application.

PN45

For that reason, the Ford Motor Company (Vehicle Industry) Consolidated Award 1998 is varied. The variation to the award will be in the terms set out in the draft order which is marked as exhibit S1. The order shall come into effect from the first pay period on or after 31 October 2002 and shall remain in force for a period of 12 months. That part B of the draft order is contingent upon the understandings I have already expressed. There being nothing further, these proceedings are adjourned.

ADJOURNED INDEFINITELY [11.32am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #S1 DRAFT ORDER PN17