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Australian Industrial Relations Commission Transcripts |
AUSCRIPT PTY LTD
ABN 76 082 664 220
Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
DX1344 Sydney Tel:(02) 9238-6500 Fax:(02) 9238-6533
TRANSCRIPT OF PROCEEDINGS
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
JUSTICE MUNRO
DEPUTY PRESIDENT O'CALLAGHAN
COMMISSIONER CARGILL
C2002/2290-2292
C2003/534-535
C2003/679
APPEAL UNDER SECTION 45 OF THE ACT
BY THE FINANCE SECTOR UNION OF AUSTRALIA AGAINST DECISION OF SENIOR DEPUTY PRESIDENT DUNCAN IN S2001/2989 ON 4/12/02 AND 12/3/03 RE
REDUNDANCY
SYDNEY
10.20 AM, TUESDAY, 24 JUNE 2003
PN1
MUNRO J: This is the first listing before the Full Bench as constituted of six matters that have been listed thus far concurrently. In relation to two of the matters there is an application for extension of time that needs to be attended to. In relation to four of the six matters there were amendments to the notice of appeal. The matters before the Commission are C2290 of 2002 - that is an application giving notice of appeal lodged on 23 December last year. It's an application by Colonial Mutual Life Assurance Society Limited relating to the Colonial Group Enterprise Award '96 and it's an appeal against a decision of 4 December by SDP Duncan not to make an order. That decision is recorded in print 925304 and as amended it's an appeal against an order of 12 March made in print 928627 and the order number escapes me at the moment.
PN2
The second matter is C2291 of 2002 lodged also on 23 December by a corporation, ACNPL. It is in relation to the Colonial Retail Network Multi-Site Franchise Interim Award 2000. It is an appeal against a decision not to make an order in the same print, PR925304, and against the order made in print 928630 on 12 March pursuant to a decision recorded in PR928627.
PN3
The third matter is C2292 of 2002 lodged 4 December, 2002. It's an appeal by Colonial Services - I think that date for lodgment is an error. It was 23 December. At lodgment it was lodged by Colonial Services Pty Limited. It's in relation to the Colonial Group Enterprise Agreement 1999. It's against the same print involving a decision not to make an order in that award and against an order made on 12 March in print 928631 under a decision recorded in print 928627.
PN4
The fourth matter is C534 of 2003 lodged on 2 April, 2003 by the Commonwealth Bank of Australia in relation to the Commonwealth Bank Australia Employees Award 1999. It is against the order made on 12 March 2003 in print 928629 under the decision in print 928627.
PN5
The fifth matter in relation to which an extension of time to institute the appeal is sought is C679 of 2003 lodged on 14 January 2003 by the FSU in relation to the Colonial Group Enterprise Agreement 1999, that is the same matter as the third matter I have mentioned in C2292 of 2002. It is against a decision that the Commission had jurisdiction to vary the Colonial Group Enterprise Agreement 1999 in print 925304 and the order made in print 928631. As I understand the submissions put by the Colonial Group collectively or the employer appellants collectively it may be that it is conceded that an extension of time in relation to that matter is not necessary.
PN6
The sixth matter is print 535 of 2003. That was lodged on 8 April, 2003. It is an appeal by the FSU again in relation to the Commonwealth Bank of Australia Employees Award, the same award as is dealt with in matters C534. It is an appeal against a decision that the Commission has jurisdiction to vary that award made in print 925304 on 4 December and against the order to vary in print 928629 made on 12 March.
PN7
In relation to the first three matters amended notices of appeal were lodged after the making of the respective orders. Similarly in relation to matter C679 of 2003 the first of the FSU appeals there was an amendment to the notice of appeal lodged.
PN8
I have prior to the hearing of today circulated to the parties yesterday effectively what is a provisional list of documents received. That I hope has been distributed as a draft to the parties at the bar table, or perhaps not to all of them. If that hasn't been done that might be done by my associate now if we've got a copy of that draft as to exhibits. I'll run through that so that when appearances are made in due course it is clear sooner rather than later what the Commission perceives to have before it.
PN9
We have marked as exhibit APP1 essentially for the employer appellants a document lodged by Freehills on behalf of the employer appellants in the matters shown C534, 2290, and the first three lodged appeals. That's the employer's written submissions lodged on 30 April.
EXHIBIT #APP1 DOCUMENT LODGED BY FREEHILLS ON BEHALF OF EMPLOYER APPELLANTS
PN10
PN11
PN12
MUNRO J: APP4 is an amended notice of appeal lodged by the ACM Company - that's called there no name company - on 2 April re Colonial Retail Network Multi-Site Agreement Award. That is C2291, the second of the matters referred to earlier.
EXHIBIT #APP4 AMENDED NOTICE OF APPEAL BY ACM COMPANY LODGED ON 2 APRIL
PN13
PN14
MUNRO J: APP6 is written submissions of Colonial Services Pty Limited in reply to written submissions on behalf of the FSU lodged 20 May, that's in C679 of 2003 and APP7 is amended notice of appeal lodged by Colonial Services on 2 April re Colonial Group Enterprise Agreement, that's in C2292 of 2002. From the unions the Commission has received and marked again, this is a provisional marking, written submissions on behalf of the FSU lodged 20 May, those go to the first four appeals mentioned.
PN15
FSU 2 is written submissions on behalf of FSU lodged 29 April, those are the submissions of the FSU on the appeal in the fifth matter mentioned relating to the Colonial Group Enterprise Agreement taking effectively the ambiguity jurisdictional point. FSU3 written submissions on behalf of the FSU lodged 29 April in relation to the Commonwealth Bank FSU appeal, the ambit jurisdictional point.
PN16
FSU4 Finance Sector Union of Australia supplementary appeal book index lodged 29 April and that goes to appeal in the fifth and sixth matters. FSU5 amended notice of appeal lodged in the fifth matter. FSU6 affidavit of Justin John Henry re applications for extension of time in both matter and finally, PFG1 is a letter from Phillips Fox attaching submissions on behalf of the interveners in matters effectively, 679 that's the FSU appeal in relation to the Colonial Group Enterprise Agreement and C2290 and 2292.
PN17
With that introduction indicating what is before us, could we have appearances please, directed to each of the particular matters if it is not in relation to all of them and in due course, could we have an indication I suppose, firstly, as to whether the applications for extension of time are opposed and secondly, as to whether there is any objection to the matters being heard concurrently on common transcript. Appearances?
PN18
MR I. DOUGLAS: Thank you, your Honour, I seek leave to appear for the appellant employers in all of the appeals, all of the appeals that your Honour has gone through this morning. Do you want me to deal with the other issues?
PN19
MUNRO J: I think it might as well, Mr Douglas, we'll know where we go.
PN20
MR DOUGLAS: I can do that very briefly. Your Honour, I have nothing to say in relation to the extension of time, it would follow from that, your Honour, that we would not be surprised if the Bench did not make a ruling favourable to the FSU on that issue. On the question of leave in relation to the FSU could I add that we have nothing further to say, we simply rely on what we've said in our written submissions. We are happy for all of the matters to be heard together.
PN21
MR B. LAWRENCE: If the Commission pleases, I seek leave to appear on behalf of the interveners, they are the individuals who are interested in three matters, three matters that are referred to in the submissions that are marked PFG1 that is, C2002 number 2292; C2002 number 2290 and C2003 number 679. I don't say anything about the extension of time because of my particular capacity. As far as the matters being heard together is concerned, it would be my submission that that is an appropriate way for the matters to be progress. If the Commission pleases.
PN22
MR P. GINTERS: May it please the Commission, I appear on behalf of the Finance Sector Union in all matters. Dealing in reverse order if I can, we are content for the matters to be dealt with concurrently and jointly, we consider that is an appropriate course. Insofar as the question of extension of time, I simply rely on the written submissions which I have previously forwarded to the Commission in FSU3.
PN23
Insofar as the question of leave to appeal, I seek to rely on paragraphs 17 through 19 of FSU3 which sets out the written reasons as to why my client says leave to appeal ought be granted in the FSU matter. I don't understand that leave to appeal is opposed in the Colonial appeal, to the extent that it may be, I rely on my written submissions in that matter as well.
PN24
MUNRO J: Yes, we are of the view that we should grant an extension of time to allow the appeals to be instituted. In relation to the question of leave to appeal we'll reserve to deal with that question in relation the position that we reach on the merits of the matter in due course. In relation to leave appear, it is granted in each instance. Yes?
PN25
MR DOUGLAS: Could I begin by saying very briefly in relation to leave that notwithstanding what we have said and what FSU have said in the written submissions in relation to leave, it would be very surprising to all I suggest, if the Bench does not grant leave in the case of every appeal that is currently before it. We have put together a 1-page list of the matters that may be of additional assistance to the Bench and it conforms in a sense with the order of things that were dealt with by your Honour at the outset. I provide that, it doesn't need to be marked, it simply identifies the matters that were before his Honour and the six appeals.
PN26
The appeals are listed in the order of 1 through to 4 as your Honour dealt with them but 5 and 6 are in the reverse order on our document, number 5 is the last appeal listed on the page. We have no comment to make in relation to the draft list of exhibits, that seems to be entirely accurate, save that no mention is made of the two appeal books that have been filed and may they don't' need to be marked, in any event.
PN27
MUNRO J: Yes, it was a deliberate omission insofar as we've assumed that they are part of the document, we do have them.
PN28
MR DOUGLAS: Yes, your Honour and we have provided a list, a bundle of cases, the main ones that we rely on, I won't go them during the course of - - -
PN29
PN30
MR DOUGLAS: All of the written submission are identified in the list of exhibits and they do comply with the Commission's direction, they are full indeed, in fact probably over full in one sense, that the delivery of full written submissions does not seem to bring about economy in approach. Also, I might say, standing here having practised in this Tribunal for so many years, that full written submissions make me for one, feel somewhat redundant but having said that I continue.
PN31
No doubt it makes the job of members of the bench considerably easier and that in short form is desirable no doubt. The appeals by my clients and the appeals by the FSU we identify them directly in our written submissions which is the APP1 at paragraphs 34, 35 and 36 on page 12, I don't go to those pages nor do I go to the two decisions of his Honour, the main decision being dated 4 December of last year and the Settlement of Orders decision of 12 March of this year, they have been correctly identified by your Honour, the presiding judge, and we deal with them as do my friends in our written submissions.
PN32
The matters before his Honour involved three section 113(2) variation applications, those applications were directed at three awards, being the Commonwealth Bank of Australia Employees Award 1999 which we said and I think it was accepted by his Honour was in fact the 1990 CBA Award simplified, the second award being the Colonial Group Enterprise Award 1996 and the last one the Colonial Retail Network Multi Site Franchise Interim Award 1999 and that remains an interim award or at least it has the word interim in its title.
PN33
His Honour we say correctly determined that the CBA and Colonial Awards should be varied by the inclusion of the transmission of business and the acceptable alternative principles of the Commission's TCR redundancy standard and that the Multi Site Franchise Award should be varied by the inclusion of the transmission of business principle of that standard.
PN34
It's relevant that those determinations are not under threat by any of these appeals, that is certainly by our appeals or by those of the FSU, save of course that the FSU has an appeal that goes directly to jurisdiction which is in a sense quite fundamental. We say his Honour went wrong when he determined that each variation should contain a substantive modification of the principles that I've referred to being involving the insertion of the date 4 December 2002 so as to prevent the variations having an operative effect before that date.
PN35
Members of the bench if you've been through the written submissions in detail at this point you may well have stumbled upon what we say is an anomaly in what his Honour did and it demonstrates the validity of our submissions being that his Honour went wrong when he placed that date in each of the variations.
PN36
We say the inclusion of that date was clearly contrary to the determination of the TCR bench in TCR number 2, the December 1984 TCR decision and that's referred to in paragraph 124 of APP1, being that the transmission of business principle the bench said:
PN37
Should cover transmission of a business before and after the date of any award.
PN38
PN39
What the TCR bench said in that number 2 decision is quite fundamental to these proceedings. It was not open, and I come to the anomaly, it was not open to his Honour to decide to vary the Multi Site Franchise Award by the inclusion of an acceptable alternative employment provision because that award already contained such a provision. His Honour of course because of that fact did not decide and could not have decided to insert the 4 December date into that provision. Consequently the acceptable alternative employment provision in that award remains fully consistent with TCR, the variations are not so consistent.
PN40
MUNRO J: He didn't vary the existing provision there, it wasn't necessary or he did?
PN41
MR DOUGLAS: No, it wasn't before him for variation. The section 170MD6 application sought the removal of ambiguity or uncertainty from the Colonial Group Enterprise Agreement 1999. There is I think a suggestion in our written reply to the intervener's submissions which is APP2 that his Honour concluded that there was ambiguity or uncertainty in one or more of the awards, that's not so and my learned friend Mr Ginters has asked me to indicate that to the bench. He made a finding of ambiguity or uncertainty in relation to Colonial awards but not as to the CBA award.
PN42
Now on the MB6 application - - -
PN43
MUNRO J: I'm sorry, he did make a finding of ambiguity in the Colonial awards.
PN44
MR DOUGLAS: Yes your Honour. The section 113 matters were argued before him on the basis of the two discretions inherent in that section being what I might call the general discretion, the Commission may vary the award if the circumstances are appropriate or the alternative that the Commission may vary the award to remove ambiguity or uncertainty. Now each of the section 113 applications were argued in that two-fold way. In relation to the CBA award he moved on the general discretion rather than by reference to ambiguity or uncertainty.
PN45
MUNRO J: That's the one where he assumed, did he not, that severance would be payable under, I think he prefaces his reasoning - - -
PN46
MR DOUGLAS: That was one of the things we put to his Honour. We said - - -
PN47
MUNRO J: You put to him and he adopted that assumption for purposes of the variation.
PN48
MR DOUGLAS: Yes, that's right. We said for the purpose of the argument you should presume that the union is correct and we said the same thing in relation to qua awards and the position taken by the interveners you should presume that the interpretation that they put on the instruments is correct.
PN49
MUNRO J: Yes.
PN50
MR DOUGLAS: That was a position similar to the way in which the proceedings in the Employment National case proceeded. His Honour in the MD(6) which related to the Colonial agreement did find the existence of ambiguity or uncertainty. That finding is appealed by the FSU and it's supported by the interveners. In our submission there is no reasonable basis upon which that finding can be overturned and our reasons for saying that are set out fully in our written submissions. The FSU also argues as it did before his Honour, and again I think the interveners support the FSU, that the Commission's MD(6) power is limited to giving effect to the original intention of the parties to the agreement being the intention they had when the agreement was made.
PN51
They rely, I suggest very dangerously, upon what your Honour the presiding judge decided in Linfox. The Linfox decision is number 10 in our book, APP8. We are argue in our written submissions and we say that it is clear that there is no such invitation placed on the Commission's variation ability by reason of the wording in section 170MD(6). It's probably worth returning very briefly to that subsection. It reads:
PN52
The Commission may on application by any person bound by a certified agreement ...(reads)... ambiguity or uncertainty.
PN53
We submit that those words make it clear that the Commission's power is at large. Having found the existence of ambiguity or uncertainty the Commission is given the capacity by the legislation to cure it. You cannot read in my submission into those words any limitation going, for example, to the intention of the parties when they reach the agreement. In fact ambiguity or uncertainty might arise in a certified agreement for a whole host of reasons.
PN54
One such reason being that there is a conflict between the views of the parties as to what their intention was. There may well be a good reason why ambiguity arises quite independently from the intention of the parties and the Commission is given the power to cure any ambiguity and any uncertainty no matter how it derives. Could I provide the Commission with a copy of the transcript of the Linfox proceedings? I just want to make a couple of brief comments about it. I provide the whole transcript simply to demonstrate that right at the end of the proceedings there was a very short and I hardly call it a discussion but for the purposes of submissions I call it a discussion between your Honour the presiding judge and Mr Barani.
PN55
The Linfox transcript demonstrates that there was a debate that rested on evidence that was presented to the Commission going to what was intended by one party and the other at the time when the agreement was entered into and that the matter originally came before his Honour in arbitration under the guise of a section 99 notification that more accurately via the dispute settlement procedure in the agreement which gave the Commission arbitral power in accordance with the legislation. The involvement of 170MD(6) in a sense was an add-on in the proceedings. It arose as an alternative but the whole direction of the arbitral proceedings was aimed at arbitrating in accordance with the dispute settlement power.
PN56
If you go to page 190 of the transcript right at the end Mr Barani begins his submissions. This is on 19 June '98. The large bulk of the preceding part of the transcript goes to the evidence and cross-examination of witnesses and so on and Mr Barani says:
PN57
Can I just start off by saying that I think the primary issue ...(reads)... now the primary position -
PN58
and so on. Then there's a discussion about all of that. Then at the bottom of 193, about line 34, he says:
PN59
Now if I take your Honour to section 170MD and in particular subclause (6) and I quote -
PN60
and he reads it, so there is a clear power, your Honour, that you have in exercising a function to remove perceived ambiguity from a certified agreement. Those submissions continue very shortly. Then your Honour raises some questions as to the scope of the Commission's power in relation to MD(6). There were no substantive submissions put to the Commission on that issue nor did the Commission really invite such substantive submissions. As I read the transcript your Honour was doing no more than flagging an area that might need to be examined at some stage in the future and I would also suggest that one can read into your Honour's words exactly what I've put to the Commission this morning with respect to the wording of MD(6) itself. That is to say, if there is an ambiguity or if there is an uncertainty then the Commission's power is to cure it. It doesn't matter how it arises.
PN61
Your Honour, it is for those reasons because of what occurred in that proceeding that I suggest that the decision in Linfox in reality can't be relied on as being a decision which has determined a significant limitation in the Commission's power - that there is a significant limitation to the Commission's power inherent in the wording of MD(6) even though you cannot see that limitation in the words that the Parliament has used.
PN62
MUNRO J: There are some other cases on the point though, are there not? Are they referred to in his Honour's decision? I thought Ross DP and Commissioner Whelan had given some weight to a consideration that it wasn't open to import something new, to make a new agreement in effect. Am I misquoting? I notice they're not amongst the references. I thought they were part of the background.
PN63
MR DOUGLAS: Well, your Honour, there's no final determination on that issue. There have been suggestions along those lines and I would submit that the members of the Commission who have been making those suggestions have done so without the support of any real authority in the wording of the legislation. In a sense it's surprising; it runs against the way in which members of this Commission have proceeded over many many years. Here we have a situation where seemingly members of the Commission are determined to write down its ability to act rather than to say its ability to act is unlimited by the wording.
PN64
MUNRO J: I think they're probably frightened of the width of the invitation of North J - or Goldberg J, was it - to have a go at re-writing agreements. Find an ambiguity and away you go.
PN65
MR DOUGLAS: Well ,at the end of the day, your Honour, if there's power to solve an ambiguity or uncertainty - - -
PN66
MUNRO J: Or, if I could put it this way, and I don't want to make you redundant, Mr Douglas, it's not very hard for people to find ambiguities. Life is full of them. If you can then exercise an arbitral function between the parties to say, "This is a discretion at large; this would look good", is there no inhibition at all on what the Commission can do? I would have thought that there are cases under 113 that suggest at least you're limited to the ambit of the original dispute. That much is obvious.
PN67
MR DOUGLAS: I think that much is obvious and I would suggest, in relation to ND(6), you might be limited to the subject-matter. Your Honour, if Parliament has decided that the Commission's power in unlimited, why should we be fearful of that? They are the words. Where does the Federal Court get the authority to say that the Commission is doing something that's not permitted by the legislation? I would suggest - - -
PN68
MUNRO J: I think the Federal Court, in the instance I had in mind - and I'm surprised they haven't quoted it there - I can't remember whether it was North J or a decision following Amcor - basically said the parties should do what you have done in this matter: come to the Commission and get it to remove ambiguity or uncertainty from its agreements. The power was there. They have quoted it in something or it's been quoted in something. I think it was somebody other than North J who might have by some been expected to say that. When one was faced with such apparent plenary power to re-write a parties' agreement, I thought that several members of the Commission had said, "Well, hang on, we're not writing a new agreement; we can't go back and put in the things you didn't think about".
PN69
MR DOUGLAS: Well, your Honour, two things: North J, of course, flagged very strongly that very message in his decision in the Health Services case involving transmission of business section 149. He said that if an employer doesn't like the award that's going to be transmitted to him, using the short form, then he has the capacity to go to the Commission and seek an order to have the transmission killed. Now, that, of course, was taken up in a leading case by EDS and his Honour Polites SDP acted upon that.
PN70
Now, your Honour, I would suggest that what I've put to the Commission as to the wording of ND(6) is correct and that Parliament has given the Commission that power on the basis that the Commission will do what is industrially right. It's a question fo merit. That's the arbitral function that the Commission is given broadly by the legislation, to act industrially according to the merit of the particular case.
PN71
In relation to an ambiguity or uncertainty in the variation of an agreement to remove an ambiguity or uncertainty you do that to carry out the removal. You don't do it to re-write the agreement. You do it to remove the ambiguity or uncertainty. That's the scope of the Commission's power, that you do it to remove it regardless of how the ambiguity or uncertainty arose. In other words, you don't try to hunt around and face the difficulty that your Honour referred to in Linfox and your Dunlop Rubber experience of trying to fathom out what the intention of one party or the other was. If you had conflicting intentions how then can the Commission remove the ambiguity or uncertainty if it bows to the intention it concludes that one of the two parties had? That, in my submission, would be contrary to the legislation.
PN72
Your Honour, it's all set out in our full written submissions but clearly we say that this is quite a fundamental point and it goes to the very essence of the Commission's ongoing capacity, under NB(6) in elation to certified agreements. Certified agreements are going to be around for a long time. They've been here now for a long time and one would presume that the Commission will continue to have this capacity to deal with ambiguity or uncertainty or it might be modified, the wording might be slightly changed in the future; but there will be a window of opportunity for the Commission to deal with certified agreements in a certain way.
PN73
One other matter I should raise, 3, and it supports what I'm putting as to NB(6) is: how can you determine what was the intention fo the respective parties in relation to an LK agreement? Maybe it's all right in relation to LJ agreements. You look at what he employer says was his intention and you look at what the union says was its intention; but you haven't got a single employee party in an LJ sense there in an LK agreement. An ND(6) applies to LK agreements just as it applies to LJ agreements. How do you determine what was the intention of each and individual employee party to the LK agreement? Given an LK agreement, there might be 10 employee party to it or there might be 1000 employees party to it.
PN74
Now, in those circumstances it would be absurd, I would suggest, to come to the conclusion that the Commission's ND(6) power is confined to the intention of the parties; absolutely absurdity. It would be impossible, impossible for the Commission to make a determination as to what the intention fo the employee parties was.
PN75
There could have been 1000 different intentions on that side of the equation.
PN76
Can I just deal very briefly with TCR and what really is a fundamental issue here as to the TCR principles? His Honour, we say, emasculated the TCR principle when he inserted the 4 December date. When he did that in relation to transmission of business, that's one principle; when he did it in relation to acceptable alternative employment, that's another principle. As a single member of the Commission, Clarkson's case tells us that his Honour had no capacity to do that. He could not re-write TCR. Having determined that it was appropriate to put TCR in these awards and agreement then he had to do it by putting TCR in as it is.
PN77
I've looked at over 100 awards of the Commission on Osiris and I have not found one award, simplified or not that contains a transmission of business clause in the TEAT provision in the TCR clause with a date included in it like the 4 December date. In other words with a date which prevents that clause operating before a given time.
PN78
TCR No. 2 in December '84 determined that the transmission of business principle and the exact alternative employment principle should operate in relation to events before and after the award was made. In exactly the same way, or holding exactly the same approach taken by the Commission with respect to long service leave. Now in recent times there have been a number of cases where there has been confusion between transmission of business and acceptable alternative employment. Boford is one of them, that is in our list, it is number 4. There are others.
PN79
Some of that confusion has arisen because of the writings of some academic writers. I refer to Punch and Crichton. Unfortunately, those writers and members of the bench for instance in Boford were not exposed to an accurate account of the history as to how TCR adopted the transmission of business provision and acceptable alternative employment provision from long service leave. Now this material is in the record but can I just go through it briefly. I must say, and my friends know exactly what I'm going to tell you now because I've done it more than once but I must say that age is now an advantage to me because I the only practitioner still appearing before this Commission who has personal knowledge of what occurred from 1959 onwards in relation to long service leave and ultimately TCR.
PN80
Now in 1953 or in the 50s, the States had in place long service leave legislation. That legislation by and large followed the drafting format of the long service leave provisions in the Labour and Industry Act in Victoria of 1953. That legislation contained two provisions, two sections. One, a transmission of business provision which was designed to protect the long service leave entitlement rights of employees when they moved from one employer to another. Almost identical provisions existed in New South Wales, Western Australia, certainly in the Northern Territory and so on.
PN81
Towards the end of the 1950s the National Employers which I think were called the National Employers' Group, the NEPC, National Employer's Policy Committee and headed up by a gentleman by the name of Doug Fowler, proposed to the ACTU that there should be an award standard on long service leave and the ACTU tentatively agreed to that approach and there were negotiations which resulted in the establishment of what was called the national code on long service leave.
PN82
That national code is referred to in the 1959 and 1964 long service leave decisions of the Commission, Full Bench decisions. Shortly before that national code was given effect to n terms of an award formula in the Commission,the New South Wales Government changed the long service leave standard from 13 weeks after 20 years to 13 weeks after 15 years and disrupted the uniform situation.
PN83
That occurred after the 1959 long service leave case. It turned out ultimately that the ACTU would not finally agree to the national code becoming an award because they anticipated certain changes in legislation in the state's area. The Full Bench of the Commission in 1959 determined that it should refrain from making a long service leave award in the metal industry and graphic arts industries under section 41D of the Act on the basis that there was substantial uniformity on long service leave throughout the states.
PN84
It was shortly after that decision that the New South Wales Government changed the standard in that state, as I've indicated. That gave rise to the 1964 case in the Commission. The Commission overturned the 1959 section 41D ruling and decided to make an award on long service leave as being a test case award in the metal industry, metal trades and graphic arts award areas.
PN85
The format for that award was the national code and therefore, the format for those two test case awards was in fact the drafting of the long service leave provisions in the Victorian Labor and Industry Act which by that time was the Labor and Industry Act 1958. Now, I participated in the 1959 case as with Mr Steve Elly instructing for the employers and as junior to Mr Apiard in the 1964 case, so I'm familiar with what was in the national code and where the various provisions came from historically.
PN86
Now, there was a constant between the 1964 long service leave case and the two TCR decisions and that was Moore J. Moore J sat on the 1964 long service leave case and he sat on the two TCRs cases as President. In 1965 he was instrumental, along with the other two members of the Bench in placing into the long service test case long service leave awards the transmission of business provision from the Victorian Long Service Leave Act with machinery changes made to it only, that is to say, a few words were changed so that the provision would apply to an award rather than to legislation.
PN87
There was no limitation as to when that transmission of business provision should operate, in other words, there was no limitation of the kind placed in these variations by his Honour, Senior Deputy President Duncan in March of this year. So long service leave awards then developed throughout the Commission's regime. In 1967 or early 70s or thereabouts, in TCR number 1 they said:
PN88
We intend to provide for transmission of employment -
PN89
having previously in the same paragraph spoken about transmission of business -
PN90
transmission of employment in terms similar to clause 55 of the Metal Industry Long Service Leave Award (1976).
PN91
Now, the terms of clause 55 of the '76 award were exactly the same as the terms of the clause 55 of the 1964 award. There had been a change in the long service leave standard in the intervening period but no change in the transmission of business provision in that award, and even though the TCR Bench said, "We intend to provide for transmission of employment", in terms similar to that clause, when they write the award they followed the heading format of the long service leave award and headed it, Transmission of Business.
PN92
The definitions that were adopted by the TCR Bench were the definitions inserted in the long service leave award back in 1964 as a test case standard. And those definitions, if you look at TCR, went far beyond what can say is the scope inherent in section 149(1)(d). There is no connection, historical connection whatsoever between the transmission of business provision in long service leave awards, the transmission of business provision in the TCR awards, and section 149(1)(d) or its predecessor, 61(d), absolutely no relationship whatsoever.
PN93
That's where the academic writers have come unstuck because they have not been aware of the history that I've just put to the Commission, and because of that fact they have been searching around, trying to find where it was that the transmission of business clause that was lobbed on by TCR came from. If you turn to the 1976 Metal Industry Award you go no further unless you have the knowledge that I've just related to the Bench.
PN94
MUNRO J: Essentially they're looking at different things, aren't they?
PN95
MR DOUGLAS: Exactly.
PN96
MUNRO J: If an award provides, as does the Metal Trades Award, that service is to be continuous despite a transmission of business, and for purposes of an employer bound by the award, the award makes a provision about past service, then you can call it transmission of employment, or continuity of service provision, or recognition of prior employment, and it binds the employer at the time that the award speaks in relation to a contingent entitlement. As with long service leave, past service with a cognate employer will be taken into account for your fifteen years if that's the case with severance benefit. If you are made redundant by an employer bound by the award then the calculation of severance will be based upon the transmission of business provision but whether or not the award binds the employer at the time of the termination is a function not of the transmission of business provision in the award, it must be of section 149.
PN97
MR DOUGLAS: Exactly you Honour, exactly and the transmission of business provision is concerned with what I might call the old employer, it's concerned with his obligations, not the obligations of the new employer and there has been a deficiency - - -
PN98
MUNRO J: No, of the employer for whatever purpose the award speaks in relation to long service leave if you say, and I accept what you've put in that respect that the provisions are more or less identical any duty created by the transmission of business clause effectively applies only to the employer who is faced with an immediate obligation to pay long service leave or to pay a severance benefit. It's not the old employer, they're out of it relatively, they've either been taken over by the transmission or they've gone and departed, the transmission of business clause allows an employee to say the contingent liability to long service leave or termination benefit when at best will be calculated by reference to all this past service and that vests against an employer bound by the award that contains that provision or the agreement at the date effectively when the entitlement falls due.
PN99
MR DOUGLAS: That's correct your Honour, that the benefit goes with the employee to invest in a day in the future when the employee moves to the new employer and the obligation then transfers to the new employer, that's the intention.
PN100
MUNRO J: That's the way you construe it, yes.
PN101
MR DOUGLAS: Yes and your Honour that was your intention with the long service leave legislation, it was the intention of the provision in long service leave awards and it was the intention of TCR that that should occur.
PN102
MUNRO J: But it was only an intention that had any benefit if the successor employer, if we can call him that, was in fact bound by the award. Let me give you an instance of proof of, paid out by proof of on the basis that the incoming proof of owner will meet the redundancy obligations, incoming proof of owner escapes Victorian jurisdiction so there's no Federal Award employee, comes to the Federal Commission and says, oh a bit of a slip up, I'm not quite a Federal Award employee, I hadn't joined the MTIA at the relevant period. Employee has transmission of business provision but employer, new employer is not bound by it. You would say it probably can't go back to old employer.
PN103
MR DOUGLAS: No, it can't go back to old employer.
PN104
MUNRO J: Because old employer is protected from having to pay out.
PN105
MR DOUGLAS: And that was the intention of the TCR bench.
PN106
MUNRO J: But there is no transmission because there's no transmission of the award obligation to an employer not party to the original dispute or not a member of MTIA.
PN107
MR DOUGLAS: But there was a transmission your Honour in terms of transmission as defined by TCR and as defined by long service leave because transmission is defined to include the transfer of employment as the bench said in that paragraph and the bench said when employment is transferred from employer A to employer B there should be no entitlement to severance pay in the employ and no obligation on employer A to pay that severance pay and the TCR provision then also said, the employment with the employer B is deemed to be continuous. Now that's where we run into difficulties in terms of obligation and it's in recent years that they've been concerns about that and that has in fact given rise to the agreement which is now before the test case bench on redundancy and presumably will be given effect to by the Commission.
PN108
Now, the form of that agreement is before this bench. Could I add to that the relevant parts of the written submissions of ACCI and the Commonwealth Government before the Full Bench and I do this to bring the Commission up to date with the developments that are occurring in that area.
PN109
MR GINTERS: Could I indicate to the members of the Full Bench that I would object to this material going before the Full Bench. The reasons are elucidated in my written submission. I say it's simply not relevant that these matters be before the Full Bench, it's not a matter that is on appeal, and what another Full Bench may do in relation to redundancy provisions is just not a matter that is relevant to these proceedings, and it's not relevant particularly on appeal.
PN110
MR DOUGLAS: I ask the Commission to accept the exhibits as a means of explaining further what is CBA8 in the proceedings, being appendix B to the document that has gone forward following the conciliation process to the test case Full Bench.
PN111
MUNRO J: I think the expeditious course is we will allow them and defer ruling on Mr Ginters' objection.
PN112
MR DOUGLAS: I accept that Mr Ginters makes the criticism in his written submissions that he refers to here.
PN113
MR GINTERS: If it please the Commission.
PN114
PN115
MR DOUGLAS: I haven't included any extract from the ACTU submissions because the ACTU does not in its written submissions make any comment about the agreed position. Could I just take the Commission briefly to this, firstly to paragraph 1.3 in the submissions of ACCI where they say:
PN116
The ACTU applications do not seek a major revision of core elements of the existing award redundancy standard ...(reads)... was awarded across the award system in 1984.
PN117
In 1.4 they refer to the fact that the ACTU is seeking to lift the level of actual severance pay entitlements. Then going over to page 3 at paragraph 1.12:
PN118
Appendix B is a tabular comparison of the position of the parties on the variation ...(reads)... conciliation process.
PN119
And that's the agreement process referred to in paragraph 1.11. In that document appendix B was CBA8 in the proceedings before his Honour. You then go over to page 12 of 1, it's on the back headed Alternative Employment. 12.2:
PN120
The following negotiation and conciliation between peak union and employer bodies ...(reads)... this is as follows.
PN121
Then they set out the existing and the agreed variation, and the only change is in the last paragraph on the right hand side of the page being:
PN122
This provision does not apply to circumstances involving transmission of business as set out in 4.4.5.
PN123
I think the paragraph is slightly incorrect, but that in itself makes clear that both the ACTU and the national employers and the Commonwealth when we come to its submission, are one in the view that transmission of business and acceptable alternative employment are two separate matters, separate from one another, and the running together of those two things has been wrong and confused over time. For instance, what the Full Bench did, with respect, in talking about the two in a merged sort of way was an incorrect approach and inconsistent with what had been decided in TCR. Then if you go over to page 13 of 2, Transmission of Business:
PN124
Following negotiation and conciliation during late 2002 ...(reads)... in terms contained in appendix B.
PN125
Then the existing award provision is as set out in TCR. If there is a transmission of business, a transmission of employment according to the definition from employer A to employer B, the employment is deemed to be continuous and the contingent benefits are deemed to be with the new employer. That's in paragraph A and B on t he following page. I will read them, this is the existing award:
PN126
The continuity of the employment of the employee shall be deemed not have been broken ...(reads)... with the transmittee.
PN127
The parties have agreed to some significant wording changes to clarify and to make more workable that provision, and I go through it. "The provisions of clause 4.4", and that's the severance pay entitlement provision:
PN128
... are not applicable where a business is before or after the date of this award transmitted ...
PN129
Etcetera. The wording there is exactly the same, whether before or after the date of this award. No change from what was in TCR. In other words, it applies to situations back to the originating date of the dispute. Then over the page 1:
PN130
Where the employee accepts employment with the transmittee ...(reads)... with the transmittee.
PN131
So rather than the deeming there's now got to be, if this is adopted by the test case bench and one would presume it will be, there's got to be an acceptance by employer B of the protection of the employee's service, or "Where the employee rejects", and this is new, dealing with the TCR provision, was silent on what should happen when the employee says no to the employment offer made by employer B:
PN132
Where the employee rejects an offer of employment with the transmittee ...(reads)... considered on an over all basis ...
PN133
And those words I suggest were probably taken from our section 113 applications. They were the subject of criticism by my learned friend, Mr Ginters, early on, but then they saw the light of day in this proposal by these parties:
PN134
... than the terms and conditions applicable to the employer at the time ...(reads)... with the transmittee.
PN135
So that you don't get severance pay if you reject the offer and those two things apply, and you don't get severance pay if you accept the offer and the new employer has said, We will protect the employee's service. 13.3 they say:
PN136
The circumstances in which there is a transmission of business ...(reads)... law and practice in this area.
PN137
This is where I say the academics have been searching around trying to find historical basis for this transmission of business provision which derived from long service leave and they haven't been able to find it because they weren't aware of what I put to the Commission today. Then I go over the page to 13.12:
PN138
During the 1990s there has been an increasing focus on transmission ...(reads)... government to private sector.
PN139
And then there's reference to the ATOF case being a major initiator. Of course, ATOF was about union rules and eligibility and it's clear that ATOF really has developed such an importance in this area of transmission of business, 13.17:
PN140
Confusion and inequity in regard to transmission of business and associated obligations are of considerable concern to employers ...(reads)... ongoing basis.
PN141
13.20:
PN142
In this instance the agreed clause is intended to substantially address the proper application and non-application of award rate ...(reads)... award provision.
PN143
Then the proposed consent clause 13.22; the proposed clause is in various part. It seeks to set out various transmission of business circumstances and I've dealt with those and attached to that is appendix B, CBA8. Then the Commonwealth's submissions and I go to those; paragraph 43:
PN144
The Commonwealth supports the parties agreed transmission of business provisions.
PN145
44:
PN146
In the '84 test case decision the Commission determined that employees should not receive severance payments merely because ...(reads)... "We would make it clear that we do not envisage severance payments being made in cases of succession, assignment or transmission of a business".
PN147
But that was in terms of transmission of a business as defined by that bench and the academic writers overlook the large scope given to those words by that definition. 45:
PN148
The existing transmission of business appears to be designed to achieve this objective by -
PN149
MUNRO J: That's the fallacy of 2 isn't it that the bench overlooked, the Freehills situation. There's an ambiguity in the clause because if you have a provision that provides for transmission of a business which doesn't work because there is in law no transmission then the employee gets no severance benefit from the incoming employer and none from the outgoing employer and the bench hasn't adverted to the possibility on your construction and perhaps even on the Commonwealth's approach. Let's have something called a transition of business provision and we shift all these employees to a global solutions network; there is no transmission of business, a similar process but, tough, you didn't get your money from your outgoing employer but you're not going to get it of necessary from the incoming employer unless there is some form of agreement.
PN150
MR DOUGLAS: Your Honour is absolutely correct and that has been a difficulty which has caused people problems particularly in the last 10 years when outsourcing and the sort of things that occur in business that we're familiar with and that's the reason why I suggest that the ACTU and the national employer groups have come to this new arrangement because they're saying that if as an employee you go from employer A to employer B and employer B doesn't guarantee or protect your service for future redundancy entitlements then employer A must pay you severance pay. That's what they are on about, to cure that very problem but in most cases - - -
PN151
MUNRO J: Or another situation, and I don't know what the ACTU submission would be, it all works very smoothly but employer A has sold the business free of the liability for severance and long service leave to employer B who buys it stripped of those entitlements and doesn't have any money to pay the liabilities.
PN152
MR DOUGLAS: Your Honour, there are all those sort of things occurred and that's one of the problems that, for instance, exists currently in the textile industry where the Clothing Trade Union is endeavouring to set up funds to protect employees rights in that way but they are not the - - -
PN153
MUNRO J: But it's also the reason why there's some guardedness about the sweep of the transmission of business clauses in awards.
PN154
MR DOUGLAS: In the case of Colonial, for instance, EDS being employer B guaranteed to preserve the employment service of the employees who came across, who accepted EDS employment offers and in fact they went across on what was said to be employment conditions that were equal to or better than. Now, my learned friend Mr Lawrence had some concerns about that in the proceedings before Deputy President Duncan but there was certainly an all out effort made by Colonial and EDS to provide these people with employment at EDS which was ongoing, protective and good.
PN155
The same had occurred back with the CBA in 1997 when 1200 CBA employees went to EDS and that's the subject of the decision of Senior Deputy President Polites which is number 1 in our bundle. That is the world that we were talking about and our section 113 applications when they were filed sought to put in place in a regimented way those protections. What we did was to make applications which said employees would not be entitled to severance pay providing their terms and conditions of employment in the new employment were equal to or better than and their service was preserved. Those two things must occur before the employee was not entitled to severance pay. His Honour rejected those proposals and decided on the implementation of TCR and we argued that our proposals were within the scope or authority of TCR and therefore could be implemented by his Honour; his Honour rejected that.
PN156
DEPUTY PRESIDENT O'CALLAGHAN: Mr Douglas, how do you say that the employment provisions applicable to the former Colonial employees who then became the EDS employees were regulated and hence enforceable?
PN157
MR DOUGLAS: How were they regulated? In the first place each employee was given a letter of offer setting out in detail each and every employment condition, salary, leave entitlements, preservation of service and so on. In many cases they were told that they couldn't be given their precise classification at the time of change but subsequently they would be classified within the EDS structure.
PN158
Employees signed off on that and those became common law contracts of employment but the moment the employee joined EDS they became covered by the EDS LK agreement which was in place and which was subsequently rolled over and in fact voted on by these very people. So that the EDS Certified Agreement was the ultimate protection and that agreement protected their service for future redundancy entitlements and those future redundancy entitlements would be equivalent to the entitlement they had accrued in a contingent way while employed at Colonial and while employed at EDS they would then continue to grow in terms of the EDS scheme. So there was a watertight guarantee and protection of those employment benefits.
PN159
DEPUTY PRESIDENT O'CALLAGHAN: Thank you.
PN160
MR DOUGLAS: Could I just come back briefly to the Commonwealth submission. I've gone on much longer than I intended to this morning. At paragraph 45:
PN161
The existing transmission provision appears to be designed to achieve this objective by deeming employment not to have broken ...(reads)... non-transferable credits.
PN162
I refer to paragraph 48 in the middle and I continue:
PN163
For this reason the Commonwealth supports the parties proposal to explicitly provide that severance pay is not payable ...(reads)... accrued entitlements.
PN164
Alternative employment, the parties seek to all of this provision to make it clear that it does not apply to circumstances involving transmission of business.
PN165
Now, all of that in my submission is totally consistent with what we had argued before his Honour as to what was intended by TCR and the changes that have been agreed to there were the very changes that we were trying to put in place with our section 113 applications and I say to the Commission that it's important for you to look closely at the wording of those original applications.
PN166
Just finally can I hand up to the Commission, I tender - I presume my learned friend, Mr Ginters, will take the same approach here - a couple of documents that relate to section 27 of the Income Tax Assessment Act as to what is and what isn't a bona fide redundancy and I seek to place that material before the Commission. One is the wording of the section; the other is the Taxation ruling on the matter.
PN167
MR GINTERS: It is the same objection, your Honours and Commissioner, but I hear what the Commission says.
PN168
PN169
MR DOUGLAS: If you would just go to the shorter document first to section 27F, bona fide redundancy payments, it reads:
PN170
(1) Where (a) an eligible termination payment is made ...(reads)... redundancy of the taxpayer.
PN171
And if you go over the page down to (d) or the end of (c):
PN172
There was at the termination time no agreement ...(reads)... after the termination time.
PN173
And so on. In other words where there is an arrangement, an agreement as there was in the case of Colonial and EDS for employment offers to be made on specific terms which were enshrined in the contract between the two companies to the employees so that the affected employees could move from Colonial to EDS. That situation would not be regarded for income tax assessment purposes as a bona fide redundancy and therefore any payments that might have been made in accordance, say, with the claim made by the interveners would be regarded as normal income and not a genuine severance entitlement.
PN174
Now in terms of public policy we submit that that is consistent with what we have been putting to the Commission and it's certainly consistent with our argument that the TCR transmission of business provision cannot be emasculated by the insertion of a date which confines its operation to events after that date and prevents it from operating at an earlier time as is permitted by TCR and which was ruled upon by the Bench in TCR2.
PN175
If you go to TCR2 which is 3 in our bundle, if the Commission pleases, page 94 of our bundle, you will see that the TCR bench said this under the heading, Transmission of business. Can I just indicate to the Commission how the second TCR decision came about. After the Commission handed down TCR1 there was an uproar across the country particularly by employers of what they saw to be the impact of the TCR decision, on the fact that t hey were going to have to pay out this severance pay amount for redundancies without any limitation on how the amount would be calculated by reference to past service and there were complaints about other matters.
PN176
The Bench sat again to deal with those complaints and that hearing gave rise to this second decision that under the heading, Transmission of Business, they said this:
PN177
The only difference between the parties in relation to transmission of a business -
PN178
and remember in (1) they called it transmission of employment or transmission of business -
PN179
- was whether the clause should apply to transmission both before and after the date of any award or only after.
PN180
In other words was it only after as determined by Senior Deputy President Duncan or before and after as we said he should have done? They went on:
PN181
For reasons expressed later in relation to the employer's argument that the whole of the order shall only apply to future service by an employee ...(reads)... both before or after the date of any award.
PN182
Now, that was a substantive determination by this Bench. In number 1 they said we will put in the provision from the long service leave award. Here they said we're not going to change that provision and we reject the arguments that it should be changed.
PN183
It will apply to transmission before and after the award is made.
PN184
Now that is the principle and his Honour went wrong in my submission when he inserted the date. In the proceedings before his Honour I referred to a number of awards in the finance sector that contain the transmission of business provision as set out in TCR without any date like the date put in by his Honour being included.
PN185
Can I just read to the Commission the awards that I dealt with. Credit Union, Deutschbank, Primary Industry Bank, Bankwest, Queensland Credit Union, Bank Nationale de Paris, Macquarie Bank, Bank of Tokyo Mitsubishi, Trustee Industry, Bank of America, Banking Agents, Bendigo Bank, HSBC Bank, Chase Manhattan, OCBC, BT Financial Group, Standard Chartered Bank of China, Bank Trust Tasmania, Bank of Queensland, Bank Adelaide Employees, Citibank, AGS Finance, Perpetual Trustee, Cardlink,
PN186
AMP Employees, Lords Bank, St George Bank, National Australia Bank, Westpac, and they are the main awards operating in the finance sector, the FSU being the respondent in I think all of those cases, they contain the transmission of business provision, no date, no limiting date.
PN187
In our submission our appeal should be allowed.
PN188
MUNRO J: Thank you, Mr Douglas. Mr Lawrence?
PN189
MR LAWRENCE: If the Commission pleases, members of the bench will no doubt be aware of the way in which the interveners come to the Commission. Following the outsourcing arrangements being entered into by Colonial following its acquisition by the CBA a number of the Colonial employees finished up in the employment of EDS. The circumstances which led them to that employment have been canvassed in the proceedings and in part the interveners say that there was an exercise taken by Colonial and the CBA which involved the application of duress and coercion.
PN190
Those issues, as I've indicated in the written submissions, don't need to be determined. They're matters which may be litigated and potentially they will be litigated in another place. But some of the employees of Colonial who did not comply with what we characterise as pressure on employees to resign employment with Colonial and take up employment with EDS remained in the employment of Colonial and despite what was said to them that they would not get redundancy pay when terminated because they hadn't accepted the EDS offer were in fact paid out their full redundancy entitlements when they were subsequently made redundant. That is, they were seconded across to EDS by Colonial and after a number of months, about six months generally, were terminated and terminated with redundancy pay.
PN191
It was said, amongst other things, that that indicated that Colonial knew that the rejection of an offer from EDS was not the rejection of a comparable position under the terms of the agreement or the award. As I say, that's by way of background and proceedings were commenced in the Federal Court to determine the entitlements of the group for whom I appear. A letter of demand was written on their behalf by Phillips Fox setting out the reasons why the industrial instruments provided for redundancy pay to be made to them notwithstanding their further employment with EDS.
PN192
Before the Federal Court proceedings were instituted the applications were made by Colonial and the applications to this Commission made by Colonial were designed to undercut the ground that had been clearly marked out by Phillips Fox in the letter of demand. There's no doubt about that. The application has attached to it the application by Colonial in both the award and the agreement matters which has all of that set out. The interest that the interveners have sought to protect and preserve all through the proceedings has been to protect their rights to pursue the Federal Court litigation and to argue before the Federal Court what they contend to be the position as it applied in September of the year 2000. As far as the future is concerned how the award and the agreement might be formulated and how they might be amended in accordance with the Act that's really of no consequence to the interveners insofar as their entitlements as at September 2000 were concerned.
PN193
The interveners put to Senior Deputy President Duncan that they should be able to run the argument in the Federal Court. If it was a good argument they'd get up and if it was a bad argument they wouldn't get up. The decision of 4 December of his Honour indicated that he was not prepared to undercut the ground that had been marked out by the interveners and when there was debate about what form the orders should take it was again put to him by the interveners that he'd decided that it shouldn't be undercut and that he should ensure that the order was drafted in a way that made it clear that he didn't intend to undercut that ground.
PN194
That's why there was some debate leading up to his decision of 12 March of this year and as the interveners said in their submissions, the written submissions leading up to the 12th that what Colonial was seeking to do was to have a form of orders which would give them some basis for arguing that what was intended to be an award variation prospectively would operate in some respects in a retrospective manner. In the course of the submissions on that day I put it to his Honour that he should make it very clear in his decision that it was not intended that the award variation would apply in respect of terminations prior to 4 December prior to his decision and therefore of course there couldn't be any argument.
PN195
It would be put beyond doubt. Now, in the end that's what his Honour did. He made it clear that he wasn't going to interfere. Basically what my learned friend has said today is that despite that intention he was forced to do something because of the TCR case which he didn't want to do. We draw to the Commission's attention section 146(2) which of course deals with retrospective operation of award variations and the need for exceptional circumstances to make a variation retrospective. We say that there weren't any exceptional circumstances that would require there to be retrospective operation. In fact all of the factors worked for a prospective operation.
PN196
In regard to the merit issues of course what Colonial did point to in the course of the case was that these people did resign their employment and they went over to EDS and they went over on a package of benefits and it was put forward as being something that would weigh in the balance. But we put it as we're quite entitled to put it that there was a lot more to it than just the package that was being offered. There were other considerations. We say there was coercion, duress. There were people who had had a career in banking who finished up being shunted off into an IT company and there were a number of reasons why it was unfair and why the merit certainly didn't run in favour of retrospective operation.
PN197
So although there was a lot of evidence and all members of the bench would have seen a lot of cross-examination of the witnesses called by the company it was directed at the process and to show that it wasn't the kind of process that would give rise to some merit considerations that would favour retrospective operation.
PN198
But his Honour made it quite clear at the end of the day that he thought that these people, the interveners, should have their day in court. We say that's an entirely proper conclusion to come to and at the end of the case apparently the issue that is central, at least as far as the interveners are concerned, really central to the matter, was there any error of principle, any relevant error on the part of his Honour in deciding that these people should have their day in court and argue in court that they were entitled in September 2000 to certain retrenchment payments.
PN199
There is another issue and that is in relation to the variation to the certified agreement. The interveners had an interest in that matter - - -
PN200
MUNRO J: The employees on whose behalf you intervene had their employment with Colonial finalised in September 2000, were they though by resignation or these aren't the ones who were seconded? They are a different - - -
PN201
MR LAWRENCE: No, none of - - -
PN202
MUNRO J: These are still employees engaged by ADS for the most part of - - -
PN203
MR LAWRENCE: Yes, for the most part my people resigned on or about 1 September and took up EDS employment, I think the latest one was December but there were just dribs and drabs after.
PN204
MUNRO J: So, September to December 2000 there was a class of what, some 34 employees?
PN205
MR LAWRENCE: They are the ones that I act for but there was a larger group, I just forget the figures at the moment but it was - - -
PN206
MUNRO J: Who moved across from Colonial to EDS at that time.
PN207
MR LAWRENCE: I think there were 330 moved across, some didn't resign and they were seconded across and they were I think about 30 but I could be corrected but it's in the material and it was those people who didn't resign and were seconded across, who were eventually terminated and received their full benefits. Contrary to what we said was the advice that was given to us because we were told, if you don't accept this offer, then you will be regarded as having rejected an offer of comparable position.
PN208
So, that's how it came before his Honour and as I said, we had an interest in the agreement, the application to vary the agreement for this reason; some of the 34 are covered by the agreement and some are covered by the award.
PN209
MUNRO J: The difference is the employer, I take it?
PN210
MR LAWRENCE: No, one employer but there's a cut off point with the agreement, so that some people who were covered by the award are not covered by the agreement. Yes, 334 Colonial employees resigned their Colonial employment and accepted EDS employment out of a total of 375 and my people were within the 334 and in the other, the balance, the 41 there were, well, I'm not sure just how many at the moment.
PN211
MUNRO J: A number were seconded and subsequently terminated.
PN212
MR LAWRENCE: Yes and the secondments have long finished.
PN213
MUNRO J: The franchise agreement is irrelevant to your - - -
PN214
MR LAWRENCE: Correct, your Honour and the application to amend the Certified Agreement to include these undercutting provisions was made by Colonial on the basis that there was an ambiguity and/or uncertainty and that that should be corrected on a retrospective basis. You see, the only way you can cut the ground from underneath the people relying on the agreement is to change the agreement, amend the agreement retrospectively and I'll come to this a little bit later.
PN215
But the argument for retrospectivity that was put by Colonial was, it should be retrospective because that was the intention, the intention to prevent these people from having redundancy payments. So that was how we got interest in the agreement and the retrospectivity and the ambiguity and/or uncertainty in the agreement. But as it turned out, his Honour found there was an ambiguity or uncertainty and he decided that the change should be prospective, so in that sense his decision is of no consequence to us, no practical consequence because it doesn't undercut the ground from us.
PN216
But nevertheless, we do support the view that's been expressed by the FSU and it's a central part of the FSU appeal that there is no ambiguity or uncertainty in the agreement. Having said that by way of introduction, could I now - - -
PN217
MUNRO J: Colonial I take it, is an extant employer?
PN218
MR LAWRENCE: Sorry, your Honour?
PN219
MUNRO J: Colonial is still an operating distinctive employer or is it extinct?
PN220
MR LAWRENCE: I can't answer that, your Honour, I proceeded on the basis that there were still some employees of Colonial's.
PN221
MUNRO J: I'm sorry, that's a question better directed to the FSU I think, too.
PN222
MR LAWRENCE: Yes. The submissions that we rely on have been filed and they've been given an exhibit number PFG1 and I don't intend to go over them. What we want to say is in there, it's consistent with what we put to his Honour and we've gone into that matter in what we regard as sufficient detail and sufficient for the purposes of the Bench. What I tried to do nt he submissions was to paint the broad picture and to give the Bench a road map, if I can use that currently popular term, to the issue but hopefully a more successful road map than the other one appears to be.
PN223
I've tried to identify the issues as they emerged, giving references to the transcript so that the Bench might understand how we put the case. The employer Colonial has taken issue with a number of those matters, the picture that has been painted and - - -
PN224
MUNRO J: But perhaps just before you go to that, your submissions on behalf of the interveners go to three of the appeals, the first appeal is lodged by Colonial Mutual Life Assurance Society Limited, that relates to the Colonial Group Enterprise Award; the third appeal on which you are also interested, the Colonial Group Enterprise Agreement, the appellant party is Colonial Services Pty Limited, does any difference turn upon that identity of the employers?
PN225
MR LAWRENCE: No, your Honour.
PN226
MUNRO J: So, all of your interveners are employed by effectively one and the same person or there is no weight of distinction of any importance?
PN227
MR LAWRENCE: No, they were employed by Colonial Services Pty Limited, it's in the material stated there but the award had a respondent which included the insurance company, Colonial Mutual but in the end the employer was Colonial Services. Now, the first thing I want to say in relation to the response of Colonial to our submissions is
PN228
They've made a number of allegations that we've given false signs on the road map, that we've misstated what the position was, and I want to deal with those matters. The first one I one to take is a matter that is particularly relevant because it doesn't look good when you read it. We've put in our material that there was no evidence about mutual intention, common intention. There's no evidence about the intention of the parties. It was something that was put in the FSUs submissions as well.
PN229
At exhibit APP2, the Colonial response to ours, at paragraphs 10 to 17 this is set out and there's some detail on the matter and it takes a fairly simple role in this attack on us. It's under the heading Intention of the Parties. They point out that we said that:
PN230
The intention of the parties to the agreement is not a matter upon any evidence was called by Colonial ...(reads)... no such evidence exists.
PN231
Then:
PN232
Colonial submits that this intention fundamental misstates the way in which the proceedings were conducted ...(reads)... statement of Peter McGregor Marshall,
PN233
Exhibit CBA7 transcript 20 August 2002 and there's a page reference there. I just ask the Commission to run a circle around "Colonial relied on the evidence". Then it goes on and says that the intervenors have put this Jones V Dunkel argument and so it goes on. At paragraph 17 if the Commission would turn to that, this is a more general comment:
PN234
In any event, Colonial submits that the reference to there being no evidence ...(reads)... is not correct.
PN235
Then they start dealing with the three parts:
PN236
In relation to the Colonial agreement the Colonial Group Award ...(reads)... Colonial Franchise Award relied on ...
PN237
And I won't read the rest of that. The next sentence:
PN238
In relation to the CBA Award the applicants relied on the evidence of ...
PN239
And it goes through. Then you will see that there is a reference to the transcript of 19 August, then 2 September and so on. Then finally the Colonial comes back to this in paragraph 30 and they have another go at us saying that we have in effect misstated and misled the Commission on this matter, and again refer to Mr Marshall's statement exhibit CBA7 at the proceedings on 20 August.
PN240
We are particularly concerned about what was put there for this reason, that Mr Marshall was not part of the case that was put against us, and I need to explain how that came about. Will the Commission go to volume 1 of the court book and if the Commission turns to page 113 of the appeal book it will see there that the transcript starts at 30 April 2002. This was the start of the substantive hearing of the matter. There were a couple of days prior to this dealing with various aspects and then at page 117 to 118, after referring to the witnesses who would be called by Colonial, at the bottom of the page at 117 the following appears:
PN241
MR DOUGLAS: Your Honour, there is the possibility of another witness ...(reads)... to be very difficult.
PN242
Then he refers to the Colonial Group being purchased by CBA. Paragraph 730 State Bank of New South Wales is referred to and the certified agreement operating there. Then importantly paragraph 731:
PN243
Now, that is the best we have been able to ascertain but it really does not give us any guidance ...(reads)... relevantly short rather than lengthy in the sense that ...
PN244
And I won't read the rest. So we've got that on 30 April. On 2 May at appeal book 330 at the bottom of the page my learned friend says in paragraph 2818:
PN245
Well, I think, your Honour, the cross-examination of my learned friend's witnesses ...(reads)... award history.
PN246
His Honour said:
PN247
Yes, you've foreshadowed that.
PN248
Mr Douglas says:
PN249
Yes, but it will be short and done by as much documentation as possible.
PN250
And his Honour said:
PN251
Yes, we will approach further hearing dates in Melbourne.
PN252
Then there was some reference to programming and then subsequently we were given, that is we the interveners as well as the FSU, were given a statement from Mr Marshall. Then on 24 July, I ask the bench to turn to page 443 of the appeal book, the Commission will see that we've got the transcript of 24 July and over at page 444 at the start of the proceedings, second entry, first by Mr Douglas:
PN253
Your Honour, there has been a slight change in the program for this morning ...(reads)... cluttered up with that document.
PN254
That's what happened on the 24th and we were told on that morning that Mr Marshall was not going to be called. The Commission will see that it was indeed a very short day, the transcript doesn't run for many pages for that particular day.
PN255
Mr Marshall of course was a very significant player in the game because Mr Marshall was one of those, he was in the Human Resources Area in Colonial who was involved in what we said was the coercive conduct, the application of duress and the misleading and deceptive conduct. And he would no doubt have had a lot to say and his evidence would have filled up a lot of that day, but he wasn't called. We weren't given an opportunity to cross-examine him, and there was nothing, what he had to say about the award history in his statement was withdrawn. The transcript on that day actually finishes at 4.57 so it's rather short.
PN256
Now, that was the end of Colonial's case. Colonial ran the case, its evidence at that point. That as their last day. At the end of that day they'd finished their evidence and the next stage was the evidence of the intervener's witnesses and that appeared, that was given on 7 and 8 August and the transcript of those two days finishes the rest of that appeal book, volume 1 of the appeal book.
PN257
Right at the very end of the appeal book if the Commission turns to 584 there's reference on that page to what was happening next. By way of explanation the Commission will be aware that by reading the material that there was a distinction made between the Colonial instruments and the CBA instruments and the evidence was split into two. We finished the Colonial evidence on 8 August and the evidence in relation to the CBA was to start later in August.
PN258
What is said at page 584 is this, this is at paragraph 5226, his Honour said:
PN259
All right then ...(reads)... about three weeks time I think.
PN260
Then his Honour said:
PN261
I will adjourn the further proceedings in the matter until 10 am on 2 September in Sydney.
PN262
Then the Commission turns to the other appeal book and the Bench will see at page 587 that his Honour next sat on 19 August and the transcript is: Commonwealth Bank of Australia Employees Award 1999 and on the next page at paragraph 1 at page 588 his Honour says:
PN263
I will commence a new transcript with these proceedings this morning so I'll take appearances first of all.
PN264
So that we've got the proceedings commencing and in the course of these proceedings it turns out that Mr Marshall's statement, exhibit CBA3, was tendered. And that appears in CBA7 at paragraph 341. 341 is at appeal book 622. Now the interveners didn't know about this statement, CBA7 until - that is I didn't know, my instructor didn't know about CBA7 - until it was pointed out in the submissions from Colonial that were filed just recently when they took us to task on this aspect.
PN265
Mr Marshall is not even called. His statement is tendered and we saw after raising the matter with the FSU we asked them yesterday if they could obtain CBA7 for us and after making inquiries CBA7 was shown to me this morning.
PN266
Now, could the bench turn to page 703 of the appeal book, and this is in the course of my submissions and just to put it in context; I have been putting to his Honour my construction argument, that is I've gone through each part of the instrument looking at how one might construct it and what was meant by redeployment and whether redeployment had to come before termination. And I finished that at about, at the top of 703 and I said on the second line of that page, that is:
PN267
The position that was being offered ...(reads)... or in the relevant clause of the agreement.
PN268
That is in my submission clear on the reading of the section as a matter of construction:
PN269
That is the only sensible conclusion one can come to ...(reads)... between the parties.
PN270
Now that has not happened here. There's not even a suggestion in that it was the intention of the parties, not even the intention of Colonial let alone the common intention of the parties, to provide for a system in clause 21 that would enable a comparable position proviso to be extended to an external company such as EDS.
PN271
Mr Marshall we have heard through a statement that was presented and withdrawn was involved in these award negotiations over the years. He wasn't called to come along and say the common intention of the parties was such-and-such contrary to what was contended by the FSU now and the interveners. He has not come along; no one has come along. No one has said on behalf of the applicant that this was the common intention.
PN272
Your Honours should draw the conclusion that it wasn't the common intention to extend it to positions offered by companies and EDS in particular, by other companies and EDS in particular. Your Honours should also conclude consistent with Jones v Dunkel that the absence of a witness on behalf of the applicant to give such evidence can only lead to the conclusion that they don't believe it anyway.
PN273
Now, fairly and squarely it was raised. What I put in the written submissions which are now being attacked because it's said they mis-state the true position, was there in black and white as part of our submissions and it wasn't responded to, it wasn't responded to. I said before and asked the Commission to run a line around the words "relied on". Nowhere in the submissions was this CBA7 relied on, it wasn't mentioned, and it was so unimportant at that stage, or it was so irrelevant at that stage that they didn't even come back and say, by the way CBA7 deals with this.
PN274
Now, as I read CBA7 as I read it this morning it doesn't deal with, it doesn't say what they say it says anyway and I'm quite happy for the Commission to see CBA7. It was omitted from the appeal book we say for good reason because it says nothing. That's why they omitted it from the appeal book, it says nothing. And then when they see us stick our head up over the paragraph on this issue and run this they try and knock it off.
PN275
So it is plain to me and it's not based on how the case was run. There was no evidence of what the intention was and they had an opportunity to show what the intention was and they walked away from it. That was very relevant. The question was very relevant if one was going to make an argument out for rectifying this agreement in the light of some ambiguity that might be identified and making it retrospective. That's the first way in which they attack us. The next is in relation to this ambiguity issue. In our submissions we put that in effect they hadn't run an argument on ambiguity in the award. They ran it in relation to the agreement.
PN276
At paragraph 15 of the submissions that are put by Colonial - sorry, it's not paragraph 15, it's paragraph 7. They take up paragraph 15 of our submissions. If the Commission could turn to APP2 at page 7, paragraph 7, they say:
PN277
Colonial did not conduct the hearing of the application in respect of the Colonial award ...(reads)... general jurisdiction under section 113(2).
PN278
They attack in relation to that. But what's relevant in that regard is this. It's a passage that appears in volume 1 of the court book at page 137. By way of background there was some debate early on before his Honour about whether or not the matter should proceed while there were Federal Court proceedings and of course Colonial and CBA were keen to move on as much as they could and they did put a position on 7 March 2002 to his Honour, which I'll come back to in a moment, but it was put again at page 137 of the appeal book at paragraph 9.11. Mr Douglas said:
PN279
Now we say on the other hand that no such entitlements arose at law because the employees in question were either not redundant in the circumstances.
PN280
He goes on to say that they disagree with the position that had been put by the interveners and the paragraph concludes:
PN281
Now that is our position at law.
PN282
He goes on:
PN283
However, your Honour, having said that, to facilitate a meaningful debate ...(reads)... to make a presumption subject to what I will say further about the multi site award in a moment -
PN284
I won't read the rest of that sentence because it deals specifically with a multi site. Going on:
PN285
Having said that, your Honour, we make it clear that we don't ask the Commission to make ...(reads)... but the form of the variation rather.
PN286
So what was being put there was first of all there should be a presumption in favour of our position but saying that nevertheless Colonial was saying on merit there should be a retrospective operation and those rights should be taken away. Now that's it. It's an interesting question or an interesting point in relation to the exercise of his Honour's discretion. He was being asked to presume that the Phillips Fox argument was correct. Quite apart from what I said before in relation to his desire to avoid undercutting it was put as a basis upon which this power in section 113 should be exercised that he should make the presumption that the Phillips Fox contention was correct.
PN287
But the point that I wanted to make about this attack on our description of what happened is that that is how it was set up. Now in the end of course his Honour found that there was an ambiguity or uncertainty in relation to the award. The fact that he wasn't asked specifically at that point didn't prevent him from going on and doing it and no doubt Colonial wasn't obliged to stop him if that was the way he was moving in relation to the terms. The description, as I said, this narrative that's in paragraph 15 of our submissions is there because it indicates the way in which the case developed and quite clearly Colonial were no doubt happy that his Honour moved to a position of ambiguity in relation to the award.
PN288
Indeed one might say if you came to the conclusion that there was an ambiguity or uncertainty in relation to the agreement then it might follow as night follows day that you'd come to the same view in relation to the award because they're drafted in the same way. Our point was that there was no disconformity between the two in relation to the comparable position; that the comparable position could not have been the EDS employment either under the agreement or under the award. Now I did say that I would go back to the transcript of 7 March 2002 in relation to this aspect but I don't think I will given the time. Could I just give a reference to that? I know the Commission hasn't got this transcript in the appeal book but it's at paragraph 616 of the transcript of 7 March, the point being there that Colonial was saying well if you make this presumption then there's no reason why the matters can't proceed because there can be nothing better than a presumption running in favour of these employees.
PN289
MUNRO J: Yes, I note the time, Mr Lawrence, is it a convenient time to adjourn?
PN290
MR LAWRENCE: Yes, it would be, your Honour. Just before we do I have got extracts from the transcript and I would tender those but I won't go to them.
PN291
PN292
MR DOUGLAS: I indicate, your Honour, that I accept the factual criticisms that my learned friend makes of our reply to his submissions with respect to Mr Marshall and I therefore ask the Commission to disregard what was said in that respect.
PN293
MUNRO J: Mr Douglas, we mark as PFG to the transcript of same proceedings as 7 March, this is in relation to the speaking of the award, is it? No, it's earlier in the year, yes, thank you.
PN294
MR DOUGLAS: No, your Honour, it's a bit confusing because 7 March 2002 was in relation to procedural matters and then 7 March 2003 was speaking to the orders.
PN295
MUNRO J: Yes, I see. We'll resume at 2.15.
LUNCHEON ADJOURNMENT [12.52pm]
RESUMES [2.19pm]
PN296
MUNRO J: Mr Lawrence?
PN297
MR LAWRENCE: If the Commission pleases, I would now like to move on to another matter that we're taken to task over in the course of exhibit APP2 and it's found at paragraph 6 of the submissions and there's a quote from paragraph 14 of our submissions, we said:
PN298
Colonial did not contest the construction of the clauses advanced by the interveners ...(reads)... out sourcing process that took place.
PN299
Then it goes on:
PN300
Colonial submits ...(reads)... clauses advanced by the interveners.
PN301
Then what was said by my learned friend is set out on page 5 and page 6 and then over to page 7 of the document. Now, one thing that should be said about this is that it is taken from the transcript of 6 September 2002, that was in rely, what was put in reply. Now, we were told in the opening by Mr Douglas that he would come to his argument on ambiguity or uncertainty but it wasn't until that we got to reply that we actually saw what he had to say on the subject.
PN302
The analysis that I put forward on behalf of the interveners is at appeal book 699 through to 703. I ask the Commission to turn to that. These are the pages that lead up to the passages that I read before dealing with the lack of evidence on intention and where I refer to Jones v Dunkel, so our position on the construction issue is set out there. Of course, it wasn't set out for the first time at that point because as the Commission may recall, when the application for variation was lodged by Colonial or the two applications for the agreement and the award, Colonial attached to the applications the letter of demand from Phillips Fox.
PN303
That letter of demand actually set out the reasoning, that is, the construction issue was addressed in that letter, so right from the word go before these proceedings were commenced, Colonial knew how we were putting it, how the construction issue was being met and addressed. Now, our view on the construction issue is this, that if you are to understand what a clause or a series of clauses or a series of subclauses mean you actually have to go into the words that are used to the meaning that is given to words, to the way i which the words interplay with each other, to the construction of the whole of the provisions, all of the relevant provisions.
PN304
That's the construction exercise and it's an exercise which we often do when we are confronted with a document that at first sight might not appear to be as clear or might raise some questions. So, we set out the construction, our approach to the construction issue in the letter of demand. We were promised that we would be told what the ambiguity or uncertainty was in the course of the hearing. We had some reference to the ambiguity or the uncertainty that was identified by Colonial in the application but it really didn't say anything because it simply said, there's an ambiguity or uncertainty in the operational effect, I think that was the term, operational effect of the clauses.
PN305
But we were promised that we would get at the start of the case some elucidation on that aspect but it wasn't until in reply that we got an argument put. So, we set out our approach to construction, we did the analysis and we contend that when you have a look at those provisions, both in the agreement and in the award, that there's only one conclusion that can be drawn and that is, re-deployment to a comparable position is something that occurs before termination, before the employer terminates and it's re-deployment to another position so as to avoid termination and therefore, it can't be a re-deployment to a position with EDS.
PN306
We say it's simple, it's straightforward and there really isn't any doubt about it. What my learned friend did in his reply which is set out here is, in my submission, not an analysis of the provisions, it's not a proper exercise in construction and we also say and t his is in the written submissions, that his Honour didn't approach the matter in the way in which he should have because all his Honour did was to say in respect of one particular provision, it could mean one thing or the other.
PN307
But our answer to that is, if you look at the other clauses, if you look at that subclause in the context of all of the provisions, then the answer is clear, it can only mean one thing and it doesn't mean the other. Now, no doubt Mr Douglas would say, well, that's our approach to construction, we've set it out in full and there it is at pages 5, 6 and 7 of our written submissions here in the Commission and we set it out in transcript in reply and it doesn't matter if it was in reply or not, it was still there.
PN308
Our answer to that is, that that is not the proper construction exercise and that's why we say they didn't come to grips with the construction issue. Now, the Commission may disagree with us on that but what I do say to the Commission is if members of the Bench read the provisions in both instruments. Then what I had to put about how you construct a proper meaning of these provisions, and then read what my learned friend has put about this issue, then it will be clear that the construction issue has not been addressed, or not sufficiently addressed at least. In my submission the Commission will come to the conclusion that the comparable position is a position to be within the organisation and it's a position to which a person may be redeployed to avoid termination. Therefore it can't be outside a EDS.
PN309
As I said, the Commission may come to a different view on that but in my submission, on a proper analysis, would not be come to that position. The debate there in relation to paragraph 6 is that we say they didn't really come to grips with the construction. My learned friends they did. The Commission will answer that after reading the material.
PN310
I should say one thing before I move on and that is there was something I did press even after Mr Douglas' reply. If the Commission turns to appeal book volume 2, this is at page 1030. This is a document which starts at 1025 which is intervener's submissions in response to matters raised in reply. By way of background, the interveners and the FSU for that matter made the point that some things were raised in reply that hadn't been raised earlier. At page 1030 we have part of the submissions that were put in on behalf of the intervener in relation to Mr Douglas' submissions on the award and the agreement.
PN311
A bit of the background is set out there, some of which I alluded to before, about the submissions. The submission that was put to his Honour at that stage was, and it's about two-thirds of the way down:
PN312
The determination of the construction questions is a matter requiring careful analysis ...(reads)... termination of employment with Colonial.
PN313
We address that point there in response to what Mr Douglas had said, and of course the substance of what we were saying was that it hadn't been addressed, I hadn't addressed that in the way that's appropriate for the determination of a construction issue. We say that when you look at what was put on behalf of Colonial, Colonial had avoided that comparable position aspect which was really central, or the issue, and it was also the issue that was avoided by his Honour in deciding the matter.
PN314
In paragraph 69 of the Colonial responses to the FSUs submissions - sorry, I should say that I have finished with that page of the appeal book now. This is exhibit APP6. What the FSU said on this subject was at paragraph 26. The second sentence of this, and this is the Colonial responding to the FSU, that he, his Honour:
PN315
That he did not expressly state the nature of the ambiguity or uncertainty ...(reads)... contended for by Colonial.
PN316
In my submission that really highlights the point. They say, well, he didn't identify the ambiguity, it must have been what Colonial was saying. My response to that is that he was required to address the question of the comparable position aspect and to come to a conclusion in relation to that, and he didn't and for that reason we think in that respect he fell into error. In addressing that he would have to determine whether a contrary position to the one put forward by the interveners was objectively reasonable arguable, and we say it doesn't get to that, it doesn't meet that threshold test, so we say that we do support what the FSU has said in that there wasn't a proper identification of the ambiguity or uncertainty.
PN317
Could I leave that particular aspect and go to paragraph 20 of the submissions that I've been dealing with, that is the exhibit APP2 and the attack that's been made on our position. This is to do with the power to vary an agreement pursuant to section 180MD(6). We say that there has been a significant departure from the submissions put to Senior Deputy President Duncan. They say that we fundamentally misstated Colonial's position, and then they set out what was said in reply or rather the applicant's outline of submissions in reply. These were submissions that were put in just prior to 7 March 2003. Members of the Commission will see that Colonial has quoted what is said:
PN318
These references may have given rise to some confusion. Applicants do not contend ...
PN319
Etcetera. The last sentence is interesting:
PN320
The parties addressed the Commission at length in relation to this issue in submissions. See for example ...
PN321
The first one is actually extracted from my submissions, that is paragraphs 1040 to 1063. The second one is extracted from Mr Ginters' submissions, 1946 to 1948, and the third one is a reference to my learned friend, Mr Douglas' submissions, at 2387 to 2392, that is, 5 paragraphs.
PN322
Now I know they say in that submission see for example, but in my submission it doesn't get any better than that and again that last reference where Mr Douglas is dealing with the issue is a reference, is in reply. But be that as it may what we put was that they had diverged. They said there they hadn't diverged and in order to demonstrate this could I tender two documents which were before his Honour. The first one is submissions put by Freehills or Colonial dated 26/2 on form of orders.
PN323
MUNRO J: This is TFG3?
PN324
MR LAWRENCE: And the second one, would it be convenient if I tender it now. Our response to that which became exhibit C3 in the proceedings but which hasn't been included in the appeal book. I tender that if the Commission pleases.
PN325
PN326
MUNRO J: Which exhibit was this?
PN327
MR LAWRENCE: These are our outline of submissions on the form of orders.
PN328
MUNRO J: And it was exhibit C3.
PN329
MR LAWRENCE: The relevant parts of this document start at page 7 of paragraph 18. And it reads:
PN330
It follows from the above ...(reads)... in limited circumstances -
PN331
and I interpolate there they were dealing with a question of whether or not there was an ambiguity or uncertainty. Going on:
PN332
There were three broad categories ...(reads)... approved by the Commission -
PN333
and I won't read the rest of that.
PN334
(b): Where on application by any person ...(reads)... made under section 170MD6.
PN335
Now in the next one they say they're not aware of any authority on the matter but they do refer to his Honour, Senior Deputy President Kaufman in Camberwell Coal and this was one where he said that in the interests of certainty given his conclusion then it's meant at all relevant times a certain thing and so the variation would go back from the date of the agreement.
PN336
Now, what Colonial was doing at that stage was putting a view different from what I was putting today, was putting a view that you look at mutual intention and you give effect to it. They were running a second point, that is once you do that you have to vary it from the date the agreement was made because that's the only way you give effect to the intention of the parties and so in a desire to get retrospective variation to the certified agreement so as to undercut the interveners in their proceedings in the Federal Court, they put forward a view which was their view that the purpose of a variation was to give effect to the mutual intention of the parties.
PN337
Now, we think that that really is their considered position and the passage that is referred to as being a passage to the contrary, that short 5 paragraph passage, really doesn't gainsay what's in here; indeed what is in here follows on from that 5 paragraph contribution in reply because it was in that 5 paragraph contribution that my learned friend said the decision or comment in Linfox was wrong and it's broader than that. But when one reads it, reads the transcript it's pretty clear in the course of argument, and maybe it wasn't - perhaps I shouldn't speculate on how it came about - but in any event after the event, after that, after that comment on Linfox we get the submissions that are put forward in that document of 26 February when we get to the form of orders.
PN338
The Bench will appreciate that Colonial was keen at that stage to say to his Honour that he really had no room to move on the operative date because it was, he had to vary the agreement from the date of the certification. We said in our submissions, and these are the second set of submissions that have been put in, we took that up and had something to say about it. If the Commission turns to page 5 of those submissions one will see the start of the references to the certified agreement, and over the page at 6 at 17 we say this:
PN339
The applicants' submissions identify the limited basis upon which a certified agreement might be amended ...(reads)... section 170MD(6).
PN340
Then we go through, set out there what they said about intended being actual intention. At paragraph 19:
PN341
It is apparent that the applicants did not conduct the case before the Commission ...(reads)... which it could be said ...
PN342
And I won't read the rest of that. Then there is some reference over the page to the Camberwell decision. Then again to reiterate the point, at the bottom of page 7 in paragraphs 20, 24 and 25 we put the point that there is no established common intention. If one thinks about it, in effect what Colonial is saying is that it would have been the intention of the parties when the agreement was made, or indeed they might say when the agreement to make a consent award was made, that in the event of outsourcing of the kind that happened with EDS that the parties would have agreed.
PN343
One thing the Commission can be quite sure of is that the FSU and the people who are involved in these proceedings would not have said that in the case of an outsourcing of the kind that was subsequently engaged in in respect of EDS, that the union and the parties would have agreed, the employing parties would have agreed. It was fundamentally different. There is no basis for thinking that that kind of change could have been contemplated as being something which would prevent the payment of redundancy payments.
PN344
As I said before, that's really not the issue. The real issue on ambiguity and uncertainty is in relation to comparable position. That's why we say that we are entitled to make the comment that we did in paragraph 68 of our submissions that there was a significant departure. If it's Colonial's view now that you can look at other things, that is you don't have to look at common intention, then that really does undermine their argument for retrospectivity.
PN345
Assuming they come to the Commission now, and I understand this is the inevitable position given the acceptance of the Marshall material, given that they come here and say, well, we haven't got any material on common intention, then the only basis upon which they could seek a variation to the agreement, assuming they've established some ambiguity or some uncertainty, is on the basis of some industrial merit. If it is industrial merit, whatever that means or whatever might be included in it, then there is no reason why it needs to be retrospective.
PN346
If the Commission was at large, as was suggested earlier today, in bringing about a variation to the agreement, and if his Honour was correct in introducing the TCR provisions into the agreement, then there is no reason why it had to be made retrospective. He obviously concluded that he shouldn't make the variation retrospective because it would undercut the entitlements of these people, or the ability to claim in the court certain entitlements. That's a perfectly acceptable consideration and there is no error of principle in that.
PN347
The next matter I move onto is to do with the TCR case. The four areas I've covered so far are areas where it's alleged that we have misstated what the material was. The TCR case clearly looms large in this area, but there are a lot of issues in the TCR case that don't need to be resolved in this case, given what I've said about the discretion, but nevertheless there are some aspects of the TCR case that my learned friend relies on.
PN348
First of all can I say this. We put in our written submissions to this appeal bench and also we said this to the Senior Deputy President, that if there was a TCR model clause that had to do with transmission of business, and if there was a transmission of business and people moved across, then in accordance with the TCR provision they wouldn't be entitled to redundancy payments. They would still be redundant but they wouldn't be entitled to redundancy payments.
PN349
I don't think there's anything exceptional about that. It's suggested in the response from Colonial that we've admitted something that's fatal to our case. It's not. It's not at all. What we say is this, that the parties didn't bargain for that provision to go in. Quite clearly they didn't bargain and there is no reason to believe that that provision was there by implication, or it was intended to go in. That transmission of business clause was well known to everyone, it's been well known for a long time, and it just wasn't put in. The parties did not intend that that exemption, that provision that would operate under a model clause would operate in this particular case, so there is no admission on our part that's fatal to our case.
PN350
The real issues in relation to the TCR case involve first of all this question of whether the transmission of business provision operates in a different way to section 149(1)(d) and secondly, whether it operates in a way so as to give retrospective effect to an order made by the Commission in accordance with the model clause in the test case. I have identified in the written submissions a number of issues and I have dealt with them there and I don't want to add much to them because they are there set out in a considered way, but can I just say this in relation to the first point.
PN351
Mr Douglas spent some time today talking about history and his involvement in matters going back a long time. In order to demonstrate that the transmission of business clause was intended to operate on a different basis to section 149(1)(d) or the predecessor under the old Act to 149(1)(d) and he in effect says well it's been in my breast for all these years and people have been confused and now I'm able to tell people just how we approached this matter. What he's said is that the transmission of business provision in the TCR clause operates in a broader way than section 149(1)(d) because it's got the words "an occupation" in it and it was intended to operate on a transmission of employment, not a transmission of business. In my submission there's no basis for that conclusion and I've set out the reasons why in the written submissions.
PN352
We say there's no disconformity between 149(1)(d) and the transmission of business clause. So we join issue on that. I was interested to see in the document that he produced today APP9, this is the extract from the ACCI submissions, that there is a change or a proposed change, an agreed position. Can I just ask the Commission to briefly look at one matter? It's at page 11 and there may be an answer that's not apparent in this document but when one looks at this document there's an interesting thing. At page 11 we have the existing award and the agreed variation and under the agreed variation the Commission will see this:
PN353
The provisions of clause 4.4 are not applicable where a business is before or after the date of this award a transmitted business.
PN354
Then over the page business is not defined in the agreed variation whereas on the left hand side of the page it says:
PN355
In above, business includes trade, process, business or occupation.
PN356
Those words "or occupation" were the ones that my learned friend said gave extended operation to this TCR transmission of business clause. Now as I understand it on this material that definition of business has been dropped - well, he tells me it is not so.
PN357
MR DOUGLAS: It's in a different place.
PN358
MR LAWRENCE: He points out at page 26 that there's a definition of business but that recites, as I understand it, the positions that were adopted by the parties when they were - that is, the positions prior to agreement. My understanding of this, and I may be wrong, is that what they've done is to refer to business without definition and it would appear that that's been done having regard to what's said in here about the High Court decision in PP Consultants. In any event it would come as a surprise to say the least if it was pointed out to people who have been associated with these sorts of provisions over the years that the words "or occupation" in the definition of business gave it an extended meaning. Now Mr Douglas put this position. In fact he first foreshadowed it on
PN359
10 December of the year before last.
PN360
In our understanding you will not find that view put anywhere else. He says it's a proper view because if you follow the history through and knowing what I know it is intended to have a different operation to 149(1)(d). My response to that is the words don't make any difference and if you have a look at the decision in the TCR case, both TCR1 and TCR2, there's no indication that what was being adopted was something that would have a different operation to the transmission of business provisions. But that's a debate which is canvassed in the material and I don't want to say any more about it.
PN361
The second point is this. That what my learned friend says is that because of that provision, because of its reference to past transmissions of business that you must take into account those earlier transmissions and there will be an element of retrospectivity. Now we say that that confuses on one hand the obligation to pay somebody any amount of redundancy pay and secondly the amount of money that's to be paid. We've set that out in the submissions. My learned friend has contested it and we've got a debate and what I would say to the Commission is that the answer is in the decision, the words that were used in TCR1 and TCR2.
PN362
The answer is not in the breast of my learned friend Mr Douglas. The answer is in what the Commission said and what it prescribed. Now if we talk about history I was in TCR1 and TCR2 for the State of Victoria and I sat between Mr Boulton as he was for the ACTU and Mr Moore as he was for New South Wales and I represented Victoria but what I might say now about my recollection of what happened and how things emerged is irrelevant. It doesn't matter what I say from the bar table about it, the answer is in the words that were used. As I've said in the written submissions and we've said it to his Honour, over 17 years there's no decision that would indicate what my learned friend says is right.
PN363
He turns it back on us and he says oh well they haven't quoted a decision which would support it but in my submission it's not neutral. It is a situation where they're the ones who were seeking to make out the case and they're the ones who are advancing a position that's novel and there's no proper basis upon which the Commission could come to the conclusion that Mr Douglas seeks the Commission to come to. In relation to the date of operation we say that the view he's putting forward on the transmission of business was a back door way of getting retrospectivity when his Honour decided there shouldn't be retrospectivity.
PN364
We put to his Honour that he should put this beyond doubt and make it clear that it would not apply to redundancies prior to 4 December 2002 and his Honour accepted that. We say he's quite entitled to say that it wouldn't apply, that is, redundancies occurring prior to that date should not attract these new provisions or they should not be affected by these new provisions just like in the TCR case the date of operation there was 1 February of 1985 and so it applied in that Metal Industry Award in respect of redundancies which occurred on and after that date. The transmission of business provision made two things clear or involved two things.
PN365
One is that if there was a transmission of business in future then there would be an exemption but also it made it clear that any termination, any redundancy that occurred after that date would involve the calculation of prior service which could include service with a transmitter at some previous stage. So the Metal Industry Award came in 1 February - the variation came in 1 February 1995. In respect of redundancies that occurred on and after that date in calculating the amount of money that had to be paid you would be entitled to go back and that was one of the issues in debate, and the Commission will see when it reads through those passages that I've given references to, that one of the things that agitated the employers and one of the reasons why the matter came back on, was that a lot of employers said, "Why should we now have this provision which lumbers us with service prior to the date that the award was made. And the Commission said, "Well, that's right", the CAI was putting the position then, "CAI has put this point and we understand that people are upset about it, but we are going to take into account past service which will include past transmissions, because if somebody had been engaged by three employers where they had been transmissions of business three times, then all of that period should be taken into account."
PN366
So all that his Honour was doing was to do the same sort of thing. He was saying, "As from this date there will be a new regime applying and this will not affect redundancies prior to 4 December 2002", just like the decision in the TCR case did not affect any actual redundancies that occurred prior to 1 February 1985. They weren't affected at all. There was no retrospective operation there, and so if somebody was made redundant on 28 January 1985 that wouldn't have been affected. The payment there would not have been affected.
PN367
We say that there's no breach of the TCR provisions and we have nothing more to add to what is in the written submissions in relation to this aspect. Perhaps I should say one thing in relation to that. We did put in some extensive submissions on the Victorian antecedents of the Federal Long Service Leave Award and they were put in following my learned friend's reply and they have been included in the Appeal Book. They follow on from that document that I referred to earlier, the intervener's submissions in response to matters raised in reply.
PN368
The Commission will see that from about page 1034 we've extracted Alli's Industrial Law Victoria. Some of the pages are not very easy to read. We say that there isn't a Victorian approach to this issue that has got into the Federal provisions, that there's consistency between what we say is the proper operation of the Federal provisions and the Victorian provisions.
PN369
Paragraph 18 of Colonial's submissions, we've taken to pass over our adoption of what the FSU has said, and we've said we've adopted more than the FSU said. In my submission we were quite entitled to adopt the reasoning set out in the case law and to adopt that for both the agreement and the award, and it's not right to say, as they say, that our statement fundamentally misstates the nature of the FSUs submissions. What we were saying there was, and these are our words:
PN370
The intervener's adopt those submissions -
PN371
I interpolate the FSUs submissions -
PN372
both in respect of that agreement and in respect of the Colonial award.
PN373
Indeed, the principles that are set out by the FSU in relation to their attack on the finding in relation to the agreement are principles that apply equally in relation to award ambiguities or uncertainties, and it's clear when you look at the authorities that there is a consistency within the Commission in regard to the way in which ambiguity and/or uncertainty in an award, or ambiguity and/or uncertainty in an agreement are approached, and the principles are equally applicable. So we're quite entitled to pick up on those submissions to apply it to what we say about the finding in relation to the award.
PN374
One point that is made by my learned friend's client by Colonial is that we haven't appealed against that finding that his Honour made in relation to the ambiguity and/or uncertainty in the award, and it's suggested it's not a matter that could be debated. Well, we didn't appeal against it because we didn't need to because we got the decision that we were after, that is no retrospectivity. But, given that Colonial has appealed it, we are quite entitled to say, "No, it's not simply a question of the exercise of discretion and the retrospectivity, we're entitled to look at the question of whether his Honour got it right in the first place in relation to the finding that he made on ambiguity and/or uncertainty."
PN375
This happens all the time. The general practice is, the requirement is in a Court if you're defending something but you think that you're coming to a successful finding for you, a Judge has got it wrong on some point, you put in a notice of contention and you say, "We'll contend that he got it wrong on that point even though overall he got it right." We've done that here. We've done the equivalent of that and we've put Colonial on notice that we contest that.
PN376
Now, there are some other matters in the response from Colonial, but we join issue on it and I won't go into those. The Commission will see what they say and we've said what we say, and I don't add to it.
PN377
Could I now deal fairly quickly with a few housekeeping matters. First of all in our submissions, and this is exhibit PFG1, could I just quickly indicate some changes. Paragraph 28, it starts at the bottom of page 7 and goes to page 8. We've got a typographical error there which I think I should correct. The name of the case which is at the first paragraph of page 8 is Deroll Nominees Pty Limited, and I simply draw the Commission's attention to those submissions which are in the Appeal Book because it indicates that what we would have had if there had have been a standard TCR provision, would have been a whole process to consider what was proposed by Colonial, and a process which denied, and would be denied if an order in the terms, retrospective order was granted.
PN378
The second matter is at paragraph 43 which refers to the decision of 12 March. It's not in the Appeal Book. I understand it's been attached to the amended appeals, but again I do refer the Commission to what was a very clear and considered conclusion of his Honour in relation to the claim for retrospective operation. So the reference to the Appeal Book, page 3, is incorrect.
PN379
At paragraph 54, the second line, there are some words left out and I won't ask the Commission to write in the words but can I just indicate that we've omitted inadvertently some words there. And finally at paragraph 71 could I just indicate that the end of the paragraph there, the reference shouldn't be appeal book 709, it should be 1032. And if the Commission goes four lines back after the words, agreement apparently does, that's taken from appeal book 709.
PN380
There is one other document which I would like to tender; it was part of the evidence before his Honour. It's exhibit PF2 before his Honour and I would ask that it be marked separately.
PN381
PN382
MR LAWRENCE: Just briefly, this is the document that we referred to twice in the course of our submissions and it's the agreement between Colonial, the Commonwealth and therefore Colonial and EDS and it's the one that provides for the secondment of people who don't accept the offer of employment and we put some emphasis on that. But I wanted the appeal bench to have access to that in order to properly understand what we've put in our written submissions.
PN383
Finally could I just say this, arising out of what my learned friend put earlier today in relation to the function under section 170MD6 it's my submission that the task of the Commission under 170MD6 is to look at the question of whether or not there was an ambiguity or uncertainty in the way in which the parties have expressed their agreement, that is, is there an ambiguity or uncertainty as to how they intended to express their agreement. The question is you focus on what's in the agreement and if it is the case, if one does come to the conclusion looking at those terms that there is an ambiguity or uncertainty then the task of the Commission is to resolve that matter if it can consistent with the agreement.
PN384
That's why we say that it's appropriate to talk about what is inherent in the agreement or what is covered by the agreement. It's not a licence to go out and put something in that the Commission might think would be desirable. It has to be embedded in the agreement and it may be difficult at times to work out just what the agreement was and some of the cases that have been referred to indicate just how difficult it is.
PN385
But there will be a case one would expect where one simply can't resolve it and it just has to be determined by a court, or the parties if they really want to resolve it themselves can do it by way of the variation. But certainly you have to read 170MD6 in the context of the policy of the Act. The policy of the Act is to encourage agreement making and for parties to resolve their differences and to come to a conclusion about a whole range of matters. And it doesn't allow scope for the Commission to step in and rewrite a document in the way that the Commission thinks appropriate. It only permits in my submission the Commission to step in and deal with an ambiguity or uncertainty if it can within the ambit or the scope of the agreement that the parties were working towards, the agreement that they sought, and that's why you can look at common intention. That's why you should look at common intention.
PN386
Everything must be restricted to what was the intention of the parties in entering into the agreement. Unless there are any other matters that the Commission would like to raise they are the submissions on behalf of the interveners and for the reasons given it's submitted that the appeals by Colonial should be dismissed.
PN387
MUNRO J: Mr Ginters?
PN388
MR GINTERS: I am very conscious of the time, your Honours and Commissioner, so I'll be as quick as I can.
PN389
MUNRO J: What does that mean, Mr Ginters?
PN390
MR GINTERS: I would expect no longer than 15 or 20 minutes, your Honour. Can I begin, your Honour, by firstly handing up two decisions which I will make some passing reference to. I've provided these to my learned friend. The first is the Victorian Public Transport Enterprise Agreement decision on 170 MD6A and the second one is a decision of the Full Federal Court in re MTIA and I'll take you to that in a minute.
PN391
Just while these decisions are being handed up to the members of the Full Bench can I indicate that the references in FSU1 to the Victorian PTC decision are taken from the Osiris print so it's a 10 page print. What I've done is I've just taken the liberty of making with a yellow highlighted or a yellow posted note the relevant parts of the PTC decision because they won't marry up with the footnotes in FSU1 but they're well known passages and I doubt that the Commission will not have seen them before.
PN392
Three brief points, your Honours and Commissioner, arising out of submissions in FSU1. The first is procedural in nature. If I can invite your Honours to turn to FSU1 which is my client's submissions in response to the Colonial and CBA appeals. If your Honours could turn to paragraphs 4 and 5 which are on page 2 of those submissions, your Honours and the Commissioner will note there that there is an issue between the parties as to whether the draft orders proposed by Colonial and the CBA could be pressed at least insofar as the parenthesis words and those parenthesis words are at paragraph 4A of the submissions.
PN393
I've discussed this with my learned friend. To the extent that draft orders are pressed they're not pressed including the parenthesis words because they were not pressed before his Honour, Senior Deputy President Duncan. I just thought I'd make that clear. I thank my friend for that.
PN394
The second point, your Honours and Commissioner, that I wish to make in relation to FSU1 is the submission that my learned friend, Mr Douglas makes, that his Honour, Senior Deputy President Duncan, could not depart from the test case provisions in TCR and that his Honour fell into error in so doing. I have dealt with that point at paragraphs 51(b) and 58 of FSU1 and I don't read those for present purposes but I invite the Commission to have regard to that in due course.
PN395
Importantly, my respectful submission is that it was clearly open to his Honour Senior Deputy President Duncan to do that which he did, ie insert the variations with effect from 4 December 2002. I have explained that in paragraph 51B and in paragraph 58 of FSU1. In any event, it's my respectful submission that it is simply wrong to say that Senior Deputy President Duncan was bound to apply the TCR provisions unamended or unvaried.
PN396
I say that notwithstanding the references to Clarkson's case that my learned friend Mr Douglas has taken your Honours and the Commissioner to and are contained in Mr Douglas' submissions. For that purpose could I invite your Honours and the Commissioner to turn to the MTIA decision which is reported in 130 ALR 63, it's the decision which I just handed up, and to turn to page 79 of that decision. Your Honours will see there that immediately after a discussion of the Clarkson decision Wilcox CJ and Beazley J had this to say, I'm reading from about 25 on page 79:
PN397
The approach adopted in Moore of the Clarkson decision is known by at least two names ...(reads)... why that intention should not be fulfilled.
PN398
Regardless of the fact that in my respectful submission what his Honour Senior Deputy President Duncan did was within the scope of the TCR and was within the flexibility that the TCR decisions provided for, what we have here is a majority decision of the Full Court saying that if there are special reasons in that particular case why the intention of a Full Bench test case provision should not be fulfilled, it's open to a single member to depart from it.
PN399
As my learned friend Mr Lawrence has quite clearly pointed out, there were demonstrable and readily apparent special reasons why departure would have been permissible, and that's because what Colonial and CBA is seeking to do is undercut or cut the ground from underneath Federal Court proceedings brought by the FSU and separately by the interveners in the Federal Court. It is clearly therefore the special reason as to why a departure from TCR provisions was permissible and open.
PN400
The third point which I wish to make in relation to FSU1 goes to the question of the operative date of the CBA award. Submissions in this matter are extensively dealt with from about paragraphs 75 onwards in FSU1 and I don't wish to read them to your Honours but I think you'll find it's from about paragraph 75 right through to paragraphs 81A to D. What his Honour Senior Deputy President Duncan had before him was a prospective application in 2989, the proceedings that were brought the Commonwealth Bank.
PN401
What his Honour did not have before him was a retrospective application which had been adjourned before his Honour for some period of time, and I might interpolate is now unadjourned, which sought a retrospective variation to the CBA award to cut the ground from under what's been generically referred to in these proceedings as the Adams proceedings in the Federal court, which are representative proceedings brought by my client of the same nature as the proceedings brought by Mr Lawrence's client.
PN402
His Honour Senior Deputy President Duncan was well and truly aware of the fact that there was before the Federal Court a proceedings similar to that brought by the Phillips Fox interveners in the Federal Court brought by FSU members and the FSU, and in circumstances where 2989, which was before the learned Senior Deputy President, was a prospective application and his Honour made reference to the fact that it was prospective. Clearly it was in his Honour's mind that he would not grant TCR in terms of the model provision because that would have exactly the same effect to the FSU Federal Court proceedings as that which it would have had to Phillips Fox group Federal Court proceedings, ie potentially undercut their proceedings.
PN403
That explains the readily identifiable reason or one of the reasons why his Honour Senior Deputy President Duncan ordered the variation of the CBA award as being a variation on and from 4 December 2000, because the proceedings were pressed on the basis of them being prospective. It was only in reply or in final submissions that Mr Douglas sought the TCR provisions in toto as an alternative to the variation application as pressed.
PN404
As I've indicated, those matters are dealt with in some detail from paragraph 75 onwards of FSU1 and particularly at paragraph 78 of FSU1 your Honours and the Commissioner will see the references where it's made quite clear that 2989 was a prospective application and His Honour Senior Deputy President Duncan treated it as such.
PN405
There is simply one further reference that I could add to those that are contained at paragraph 78 of FSU1 and I will just provide that to the Commission now. It's at volume 2 of the appeal book page 590 paragraphs 25 and 26. They are two paragraphs in which Mr Douglas opens the case in relation to 2989 which is the CBA proceedings. They're demonstrative again of the understanding on which the case went before Senior Deputy President Duncan that 2989 was a prospective application, ought not be confused with 1820 which was the retrospective application which stood adjourned before the Commission but as a result of a decision of Senior Deputy President Duncan on 11 June is now unadjourned.
PN406
I don't know if your Honours have got a reference to that unadjourning decision but I can provide it to your Honours and the Commissioner. It's PR932858. Other than those three points, the FSU refers to and relies upon FSU1, its written submissions dealing with the Colonial and CBA appeals.
PN407
Can I then turn briefly to reply to the Colonial and CBA submissions in relation to the FSU appeals. In relation to FSU2 which is the FSUs submissions in relation to its appeal, the 170MD(6)(a) appeal, I'm content to rely upon the written submissions which are constituted by FSU2. There are some references in there to both the Ten X decision and a number of other Full Bench decisions on the proper approach to take in construing 170MD(6)(a). In my respectful submission Senior Deputy President Duncan fell into error in adopting the approach that he did and I have sought to demonstrate the reasons why he fell into error in FSU2 and I'm content to rely upon those submissions.
PN408
Dealing very briefly with a response to the Colonial submissions which are APP6, Colonial attempts to suggest that the variation that Senior Deputy President Duncan made is one that is aligned with the intention of the respective parties at the relevant time, ie the time of certification. That submission is made by Colonial at paragraph B4 of its submissions, the first bullet point. Such a submission, ie that the variation proposed by Colonial is aligned with the intention of the respective parties, would, in my respectful submission, without more be rejected by the Commission.
PN409
If it was the intention of the parties to include in the Colonial agreement exemption provisions modelled on the TCR acceptable alternative employment and/or transmission of business provision. At the time the Colonial agreement was certified it would have been open to the parties to do so. The provisions are well known to industrial parties.
PN410
The fact of the matter is that exemption provisions modelled on the TCR clause were not included in the Colonial agreement. In these circumstances it is with respect simply wrong for Colonial to assert that the insertion of the TCR provisions is aligned with the intention of respective parties at the relevant time.
PN411
Your Honours, that is Colonial's submissions, however B4 the first bullet point.
PN412
Moreover it's simply ...(reads)... without expressly articulating it.
PN413
That's Colonial's submission, paragraph B4, second bullet point. Your Honours, Commissioner, reference can also be made to Colonial's submissions paragraph C17 and H119, that's APP6. The second point in relation to Colonial is this:
PN414
Colonial sees to minimise the importance of the need to call evidence ...(reads)... relevant to the issue in dispute.
PN415
That's Colonial's submissions, paragraph H115 of APP6. Implicit in this submission in my respectful submission is the submission that Colonial can somehow sidestep the material relevance of the question of the intention of the parties but failing to place any such evidence before the Commission.
PN416
The logic behind this approach is with respect inherently flawed, in particular Colonial squarely put the question of the parties intentions in issue when it pressed its MD6 application on the basis of there being an ambiguity or uncertainty arising from the operational intent of clause 3.6 of the Colonial agreement. Colonial bore the onus of establishing that there was such an ambiguity or uncertainty. In these circumstances failure to call evidence addressing the question of the intention of the parties does not thereby make the issue of the parties' intentions irrelevant. To the contrary, it focus intention on the fact that Colonial has not met the onus that it had in seeking to make out a case of ambiguity or uncertainty based on operational intent of clause 3.6.
PN417
In these circumstances the Colonial claim ought not to have succeeded before Senior Deputy President Duncan and Senior Deputy President Duncan fell into error in finding that there was ambiguity or uncertainty. The third point - - -
PN418
MUNRO J: Why if at all is there any departure from the general principle of the intention of the parties to be gleaned primarily from construction of the instrument? And only rarely would it be supplied by extrinsic evidence.
PN419
MR GINTERS: Sorry, I missed the last part of your Honour's question.
PN420
MUNRO J: Why is not the general principle of the intention of the parties in the sense that it's being used in this decision is to be derived by examination of the instrument as distinct from looking to supply extrinsic evidence to supplement the written agreement? Is there an issue between the parties about that?
PN421
MR GINTERS: Well, in my respectful submission if the Commission was minded simply to look at the agreement one would not find an intention the exemption provisions would be inserted.
PN422
MUNRO J: I appreciate how that submission would run but I'm simply raising I would assume the answer is that yes, you look to the intention of the parties in the agreement and mainly in confined circumstances, I think usually where there is an ambiguity or uncertainty to extrinsic evidence.
PN423
MR GINTERS: I think that position is undoubtedly right, your Honour, that's the position adopted by the courts and as a matter of construction if one looks to the terms of the agreement before one looks to extrinsic material or external matters.
PN424
MUNRO J: Well, if the Commission departed too far from it in applying 170MD6 it could be expected to be corrected, could it not?
PN425
MR GINTERS: Yes, and I think the High Court has had something to say on questions of construction and one needs to look at the document first before one starts looking at aids to constructions. I think your Honour's analysis is entirely correct.
PN426
Your Honours, thirdly and lastly in relation to the Colonial submissions in APP6, Colonial submits that it does not matter what form the variation takes, rather the target is the removal of the ambiguity or uncertainty. It is of no occasion if the intent or impact of the agreement is changed and your Honours will find that submission at the APP6 paragraph H119 and H120 of APP6.
PN427
With respect the FSU submits that the approach to construction proffered by Colonial is erroneous and that discussed by your Honour, Justice Munro in Linfox represents the correct approach to 170MD6, that is the power in section 170MD6 must be exercised to remove any ambiguity or uncertainty. It may not appropriately be used to rewrite an agreement to install something that was not inherent to the agreement when it was made.
PN428
The approach to construction adopted by Colonial pays scant if any regard to the fact that the variations allowed by MD6 are variations to a certified agreement being an agreement that it has arisen consensually and as a result of negotiations between the parties. If the Colonial approach were adopted, i.e. that it's of no occasion if the intent or impact of the agreement is changed, it would be to invest the Commission with a jurisdiction to rewrite and potentially fundamentally undercut the bargain struck by the parties, thereby in my respectful submission denuding the basis upon which certified agreements are reached.
PN429
The expansive construction to MD6 proffered by Colonial would it is respectfully submitted be inconsistent with the tenor and the objects of the Act. Can I simply provide you with a reference to section 3B, C, and E of the objects of the Act which undoubtedly place a primary importance upon agreement making.
PN430
In my respectful submission the Colonial approach to construction is one which would denude that capacity and effectively render it nugatory because it would invest the Commission with a power to rewrite agreements which are otherwise consensually made.
PN431
Your Honours and Commissioner, that's all I wish to say in reply to APP6. Can I deal then very briefly with my reply to APP5, that's the CBAs submissions in relation to jurisdiction in the CBA award. The CBA in its written submissions filed on 30 April 2003 which that's APP1 in my respectful submission all but concedes that the variation that it sought to have inserted into the CBA award and the variation that Senior Deputy President Duncan ordered were not variations that fell within the ambit of the dispute in 1990 and I'll simply provide your Honours and the Commissioner with a reference. It's CBA submissions filed 30 April 2003. It's paragraph 23 thereto and in paragraph 23 this much is said.
PN432
There are some references to the evidence of certain witnesses an the concluding sentence is this:
PN433
This explains why the negotiations with respect to redundancy did not result in a clause mirroring the TCR clause.
PN434
That's paragraph 23 of APP1. When one reads paragraphs 22 and 23 particularly the last sentence of paragraph 23, it's quite clear that the negotiations with respect to redundancy did not result in a clause mirroring the TCR clause because in my respectful submission it was not a matter that was in the ambit. The parties defined the ambit of the dispute and my written submissions in relation to that point are before the Commission, FSU2.
PN435
In the abovementioned circumstances, those circumstances being that the TCR provisions were not within ambit of the 1990 dispute, it is submitted that contrary to the CBA submissions the variation sought by CBA and that awarded by Senior Deputy President Duncan cannot and ought not be described as being a variation that is reasonably incidental to the settlement of the differences constituting the dispute between the parties. Nor, for that matter, can it be said that the variation has a rational or natural tendency to dispose of the question at issue.
PN436
The variation sought by the CBA and that granted by Senior Deputy President Duncan represents, in my respectful submission, a substantive alteration of the rights of the parties that travels well beyond that which was the subject of disputation as defined by the parties in 1990. Clear and precise parameters were placed on the ambit of the dispute in C number 22171 of 1990, that's the foundational dispute relied upon by Mr Douglas. They were parameters that did not include exemption provisions of the type inserted by Senior Deputy President Duncan.
PN437
The exemption provisions inserted by Senior Deputy President Duncan affects substantive rights in a manner far removed from that which was in dispute in C number 22171 of 1990. The variation is therefore not one which can be characterised as being reasonably incidental or appropriate to the settlement of that dispute. Furthermore it is submitted that because the ambit of the dispute in C22171 was so defined by the parties, the CBA's reference to section 89A(6) the incidental power in the Workplace Relations Act, is not to the point.
PN438
Section 89A(6) would only have relevance, in my respectful submission, if the matters that were said to be incidental to 89A(2) matters fell within the ambit of the underlying industrial dispute, that is they were matters incidental to matters within the ambit of disputation and those matters were necessary for the effective operation of the award. In my respectful submission, that is not the case with the provisions inserted by Senior Deputy President Duncan.
PN439
The exemption provisions awarded by the learned Senior Deputy President are not incidental to the ambit of the dispute, as they traverse considerations and effect rights in a manner which exceeds the limitations placed on the areas of disputation by the parties in 1990. For that matter nor are they necessary for the effective operation of the CBA award. Your Honours, Commissioner, I have endeavoured to get through that as quickly as I possibly can.
PN440
I don't wish to detract or undercut the force of the written submissions, I rely upon them in their entirety, but those are the submissions of the FSU absent any questions from the Full Bench.
PN441
MUNRO J: Thank you, Mr Ginters. You may be assured that your efforts to condense what you have put won't cause us not to examine closely what you've written in the submissions.
PN442
MR GINTERS: If it please the Commission.
PN443
MR DOUGLAS: Thank you, your Honour, I will be brief in reply. Could I deal with Mr Lawrence first? He began by inviting members of the bench to accept as a background picture that his clients, a small group of Colonial employees, amongst a larger group of people, were subjected to duress, coercion, misinformation and that caused them to accept employment offers made by EDS. Now, that picture was rejected by Senior Deputy President Duncan and it's not an issue that's of relevance to this appeal.
PN444
However, if my friend asks you to do that, then the other side of the coin is also worth looking at. For example, I suggest that members of the bench should look at some of the cross-examination, some of the evidence given in cross-examination by my friend's witnesses. Mr Beresford, for example, told his Honour that he went across to EDS and his starting salary at EDS was $136,659 per annum, being no less than what he had been receiving at Colonial and this is at transcript paragraph number 4815 and following.
PN445
That he received a sign-on payment in two parts, the first being $19,050 and a second sign-on payment of $15,000. So all up he received in addition to his annual salary $34,050 as a sign-on payment to join EDS. In addition to that, at the time he gave evidence which was about 8 August 2002, he had received from EDS two bonus payments, one in April 2001 of $6833 and one in February of 2002 of $5500 plus a four percent salary increase which amounted to an increase per annum of $6150 which occurred in February 2002.
PN446
And yet, in his evidence, he said that it was his preference at the time to have taken approximately $174,000 in severance pay and find his own job by looking at the market. Now, the circumstances are such that he joined EDS, continues to be employed by EDS, as I understand it, and yet he claims at the same time a further $174,000 from Colonial as a severance payment. Now, that's the sort of issue that the reality of this case is concerned with. Now, my friend provided you with PFG5, the EDS letter, at the end of his submissions to support the painting of that picture.
PN447
Can I simply say to the Commission that the criticism that my learned friend put as to what we did on the so-called construction of the instruments, that the propositions he put are absurd. I simply invite the Commission to look at what we've got in our written submissions in relation to that. In any event, his Honour, we submit, was correct in the conclusion he reached being that the instrument should be varied by the inclusion of TCR.
PN448
I ask the bench again to note that his Honour's finding as to the existence of an ambiguity or uncertainty with respect to the Colonial Award is not under attack in these appeals. Could I very briefly read from those passages that my learned friend referred to in the transcript as to construction, for example passages that were attributed to me beginning at 2387 to 2389. I invite the members of the bench to look at the transcript earlier on the previous page and the page before that.
PN449
At 2387 I said I'd been discussing with his Honour the question of within or without Colonial by reference to the agreement and I said "or without" and that must be give rise to an ambiguity or uncertainty in my submission and your Honour, just on that point, if your Honour is concerned about what Munro J said in Linfox:
PN450
That is to say somehow or other notwithstanding the fact that the Act ...(reads)... substantive change to the agreement.
PN451
I point to the fact that the legislation doesn't say that the Commission is confined. The legislation simply says "If there is an ambiguity or uncertainty the Commission may remove it by variation. It doesn't matter what kind of variation, the target is the ambiguity or uncertainty" and so on. I invite the members of the bench to look at the other two paragraphs.
PN452
My learned friend said to members of the Bench, "You can be assured that the FSU", and his clients wouldn't have agreed if they had been asked at the time the Colonial agreement was made, to the insertion of a provision which said that if you move from Colonial to another employer such as EDS in the circumstances that occurred, that you shouldn't be entitled to severance pay.
PN453
I simply pose this question: why not? How is it that one can say that as to the FSU when at the same time the FSU, being an affiliate of the ACTU, is standing before another Bench of this Commission saying to the Commission the very opposite. That is to say that when move from employer A to employer B on comparable employment conditions, with contingent entitlements guaranteed, that that shouldn't be entitled to severance pay.
PN454
My learned friend thought he had a point in relation to this question of definitions in the agreements being reached. I invite members of the Bench later to look at CBA8. CBA8 is the appendix which sets out the position that was agreed to by the parties in the conciliation process before Senior Deputy President Marsh. On the question of definitions the three parties were in accord, being that the definitions that are presently in TCR, in the transmission of business provision of TCR, are to remain and apply to the new transmission of business provision.
PN455
We simply did not rely before his Honour on the word, "occupation"; we relied on the words, "in business includes trade, process, or occupation". Now, each of those phrases being inclusive could apply to what happened between Colonial and EDS. Colonial out-sourced its IT process to EDS. There was a transmission in terms of the definition of Colonial's IT process to EDS and employees went across with that transmission of process. So the definitions remain.
PN456
Can I go very quickly to the 1953 Victorian Long Service Leave Act, which I say, in terms of these provisions was in the same form in other states and territories, and I just very quickly read but hope that it's recorded in transcript, subsection (3) of section 151 and this subsection was repeated in the 1958 legislation, became of the national code, found its way into the long service leave cases, 55 of the '76 Metal Industry Award, then to TCR. The provision in the 1953 Act read as follows:
PN457
Where a business is whether before or after the commencement of this Act transmitted from an employer in this paragraph called the transmitter to another employer in this paragraph called the transmittee, and a worker who at the time of such transmission was an employee of the transmitter in that business becomes an employee of the transmittee, (1) the continuity of the employment of the worker shall be deemed not to have been broken by reason of such transmission; (2) the period of employment which the worker has had with the transmitter or any other prior transmitter shall be deemed to be employment of the worker with the transmittee.
PN458
Now, of course that legislation had no difficulties of the kind referred to by your Honour, the presiding Judge, when you questioned me earlier today because it was legislation applying uniformly across the Victorian jurisdiction.
PN459
Subparagraph (b) of subsection 3:
PN460
In this section business includes: trade, process, business or occupation -
PN461
exactly the definition that continues to be agreed to -
PN462
and includes part of any such business.
PN463
Those words are there now in TCR, and they will continue to be there:
PN464
Transmission includes transfer, conveyance, assignment, succession, whether by agreement or by the operation of law and transmitted has a corresponding interpretation.
PN465
It's also relevant to point out that section 153 of the legislation, the next section, said, and I read:
PN466
The Industrial Appeals Court -
PN467
which was the senior Victorian Industrial Relations Tribunal at the time -
PN468
may, subject to such conditions as it thinks fit to impose from time to time, exempt any employer in respect of all or any class of his workers from the operation of the provisions of this division with respect to long service leave.
PN469
In other words, the initiator of the acceptable alternative employment facility. Now, that's how transmission of business and acceptable alternative employment found its way into TCR. It's not in my bosom, it's in my head; I know that those things did exist.
PN470
My learned friend, Mr Ginters - and that's all I have to say in relation to the interveners. The FSU dealt with Clarkson's case by reference to MTIA. Senior Deputy President Duncan decided in rejecting the applications that we had put forward, that he would instead insert TCR. Having made that decision his obligation was to insert TCR, he had no authority emasculate it. What MTIA is saying is that there is some discretion in a member of the Commission to decide whether a principle should apply or not. That's very different to saying, where a decision has been taken that a principle will taken, that the Commissioner or individual member of the Commission then has the capacity to emasculate that principle, and Clarkson's case says the individual member does not.
PN471
My learned friend also made reference to the adjourned CBA matter in relation to matter 2989. At page 2 of his Honour's 4 December decision, the main decision, he sets out in paragraph 3 what we sought in matter 2989, that is the CBA application in relation to the award. You will see that the wording that we were putting forward at that time was prospective, and we did that because our other matter had been adjourned. We knew that his Honour would not entertain a proceeding while it was adjourned with respect to events that occurred back in 1997 as between CBA and EDS.
PN472
So the wording, and I invite members of the Bench to look at the nature of the application we put forward and compare it with, for example, 2972, which is set out in paragraph 2, which was framed in terms of the past and the future. Now, in relation to both of those applications, and the others, his Honour decided, as we know, to put in TCR; reject that, put TCR. Having decided to put in TCR in the CBA award, then he had to do precisely that. He could not put in something different to TCR.
PN473
Finally, the question of ambit. My learned friend really misleads in a sense, and I don't say he's done it for the wrong sort of motive, but what he's suggested is that what we've put in our written submissions really is a concession as to some problem with ambit. Not so. What we say is this, that where you have a claim for a payment of money, severance pay, an allowance, be what it may, clothing allowance, a site allowance, the Commission inherent within the dispute that comes into existence as a result of that money claim has the capacity, whether you call it an incidental capacity or a capacity within the original ambit of the dispute, it nevertheless has a jurisdictional capacity to determine when the payment is to be made and when it is not to be made.
PN474
That's what his Honour was on about, determining when employees are entitled to the payment. That's why there is no difficulty in terms of a jurisdiction, in my submission. I have nothing further to add.
PN475
MUNRO J: Thank you, Mr Douglas. We're agreed we should reserve decision. The parties will be advised in due course. Thank you.
ADJOURNED INDEFINITELY [4.10pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
EXHIBIT #APP1 DOCUMENT LODGED BY FREEHILLS ON BEHALF OF EMPLOYER APPELLANTS PN10
EXHIBIT #APP2 WRITTEN SUBMISSIONS ON BEHALF OF COLONIAL LODGED ON 18 JUNE PN11
EXHIBIT #APP3 AMENDED NOTICE OF APPEAL BY COLONIAL MUTUAL LIFE SOCIETY LIMITED ON 2 APRIL PN12
EXHIBIT #APP4 AMENDED NOTICE OF APPEAL BY ACM COMPANY LODGED ON 2 APRIL PN13
EXHIBIT #APP5 WRITTEN SUBMISSIONS OF COMMONWEALTH BANK OF AUSTRALIA FOR FCU LODGED 20/5/03 PN14
EXHIBIT #APP8 LIST OF CASES HANDED UP BY MR DOUGLAS PN30
EXHIBIT #APP9 PORTION OF SUBMISSIONS OF ACCI AND THE COMMONWEALTH BEFORE FULL BENCH PN115
EXHIBIT #APP10 PROVISION OF THE ACT PN169
EXHIBIT #APP11 RULING OF THE AUSTRALIAN TAXATION OFFICE PN169
EXHIBIT #PFG2 TRANSCRIPT OF 7 MARCH PN292
EXHIBIT #TFG4 RESPONSE TO TFG3 PN326
EXHIBIT #PFG5 PREVIOUSLY EXHIBIT PF2 PN382
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