AG2003/2823, Transcript of Proceedings [2003] AIRCTrans 3131 (22 July 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2003/2823

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Rex Kuchel Electrical and Another for
certification of Rex Kuchel Electrical Pty
Limited Construction Industry Enterprise
Agreement 2003-2005

ADELAIDE

12 NOON, WEDNESDAY, 9 JULY 2003

PN1

MR L. MOORE: I appear for the National Electrical Contractor Association, the South Australian Chapter, and with me today is MR R. KUCHEL.

PN2

MR M. WILLIAMS: I appear for the employees of Rex Kuchel.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Williams. Mr Moore?

PN4

MR MOORE: Thank you, sir. Sir, this company before the Commission today is a member of NECA, the National Electrical Communications Association, which makes them respondent to the National Electrical Electronic Communications Contracting Industry Award and that is the base award for this agreement. Sir, it is our submission that we believe that the provisions required by the Act have been complied with and we've testified to that by stat decs and obviously the one from the employee representative.

PN5

The employee representative, sir, was elected by the employees of the company to represent them in this - well, firstly the making of the agreement and certainly are here today on their behalf. The application itself is made under 170LK, as you would know and the employees, the party to this agreement, were given a letter on 4 June 2003 indicating that the company's intention was to make the agreement, advising the employees that if they were members of an organisation of employees, they could be represented by that organisation in the development of the agreement. I have a copy of that letter, sir, if you wish, for the Commission.

PN6

THE SENIOR DEPUTY PRESIDENT: Certainly, thank you.

PN7

MR MOORE: This is a copy of the letter that was given to all employees.

EXHIBIT #K1 LETTER FROM APPLICANT TO ITS EMPLOYEES DATED 04/06/2003

PN8

MR MOORE: There were no such requests made by either the employees of the company or, indeed, the union.All employees were given ready access to a copy of the agreement, in no uncertain times - quite a lot of discussions about this agreement with employees, again on 4 June 2003 and that agreement is the one that is actually before you today sir. So there certainly has not been any change. There were some changes to the agreement prior to that date during discussions but certainly the one before you today is the one that was given to the employees, which they had for those more than 14 days and they subsequently voted on.

PN9

Sir, in relation to the agreement itself, it certainly does not disadvantage the employees in any shape or form. The terms and conditions have been extensively discussed with all the employees; a lot of discussions, a lot of meetings and a valid majority of employees approved the agreement by a meeting held on 20 June 2003. That agreement was certainly ratified by those employees. I don't believe it was unanimous but almost unanimous, as I understand it. The agreement itself contains in clause 12 a dispute settlement procedure and that contains reference to this Commission's role in dispute resolution and certainly that includes conciliation and arbitration.

PN10

The normal expiry date of the agreement is found in clause 9 and that is 1 May 2006. Sir, if I could, there are some typographical errors in the document but only referencing numbers. If I could take the Commission to those, I think it should be stated now that there are some errors in it and we could amend it or leave them but just have it on record that there are some problems with that.

PN11

THE SENIOR DEPUTY PRESIDENT: Yes, I won't be amending the document but I'm happy to have the typographical errors identified.

PN12

MR MOORE: Firstly, it is subclause 18.4.3, Part III on page 16 of the document. There's actually a reference for the last, or second-to-last line, 19.2.1. That is in fact should be "18.2.1", not "19". In clause 28 of the agreement, which is found on page 23, again a numbering problem in that the clause is numbered 28. All the subclauses should be 28.1, 28.2 etc. They are currently "29". They should be "28". I think this is a Word program problem where they just automatically changed or did not change, I should say. Similarly, clause 30 has the same problem. It should be "31.1.1" - sorry, it should be "30", not "31". It is currently 31 where in fact the actual clause is clause 30.

PN13

Also in the same reference to that same clause 30, in appendix G of the document there is also a reference to 31.1.1 which should read "30.1.1". That is all the errors we've found. It is our submission that the agreement was developed incompliance with the requirements of the Act, its contents satisfy the requirements of the Act and we seek the Commission's certification from today's date. If the Commission pleases.

PN14

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Moore. Mr Williams?

PN15

MR WILLIAMS: Sir?

PN16

THE SENIOR DEPUTY PRESIDENT: Can you inform me, first of all, how it is you came to be the employee representative?

PN17

MR WILLIAMS: We had a meeting of all the employees at the workshop and I was nominated to be the representative for the employees.

PN18

THE SENIOR DEPUTY PRESIDENT: So the employees voted to elect you?

PN19

MR WILLIAMS: By a show of hands, yes.

PN20

THE SENIOR DEPUTY PRESIDENT: I see. Thank you and can you confirm to me that the employees were provided with that copy of the agreement in its current form a minimum of two weeks prior to the vote being taken?

PN21

MR WILLIAMS: Yes, I can, yes.

PN22

THE SENIOR DEPUTY PRESIDENT: And I think you received a letter in terms of the document I've called K1?

PN23

MR WILLIAMS: Yes.

PN24

THE SENIOR DEPUTY PRESIDENT: Are you aware of any employee who sought that they be represented by a union in the negotiation process?

PN25

MR WILLIAMS: No, none at all. In fact I spoke to every individual employee.

PN26

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Mr Williams. I've got a couple of questions that I'm going to ask of Mr Moore and you should be aware that my questions don't invite him to rewrite the agreement.

PN27

MR WILLIAMS: Sorry? I didn't quite understand.

PN28

THE SENIOR DEPUTY PRESIDENT: Yes. I've got a couple of questions that I'm going to ask Mr Moore. My questions don't invite him to rewrite the agreement but they go toward clarifying the intention underpinning a couple of agreement provisions. I would rather clarify those issues now than regret that I did not do so at some stage in the future.

PN29

MR WILLIAMS: Certainly.

PN30

THE SENIOR DEPUTY PRESIDENT: Please feel free to jump up if you disagree with any of his responses. If you don't do so, I will take your silence as agreement with his position. Now, Mr Moore, can I take you first of all to clause 11.3 on page 5 of the document?

PN31

MR MOORE: Yes sir.

PN32

THE SENIOR DEPUTY PRESIDENT: This clause contains what I read as a statement of principle relevant to the parties' position with respect to pyramid sub-contracting. Perhaps before I ask the question, Mr Williams, have you got a copy of the agreement?

PN33

MR WILLIAMS: I have, yes.

PN34

THE SENIOR DEPUTY PRESIDENT: Thank you. I was just trying to clarify that you did, in fact, have one, otherwise I was going to offer to loan you one. Now, Mr Moore, can I take you particularly to the second paragraph which appears to prohibit the sub-letting of a contract. Can I ask you then to confirm to me your understanding of the extent to which this provision imposes an obligation on a party or a person or an organisation that is not a party to this agreement?

PN35

MR MOORE: Well, the obligation, sir, is only in respect of the company that is a party to this agreement in that they will not engage nor seek to engage another contractor to do part of a work on any particular project unless, of course, that is a specialised field that they do not normally operate in, yet I think the objective of the whole thing is to - for the company, in this case Rex Kuchel Electrical, to complete the job using their own employees for all intents and purposes for all the electrical work and if, if there is a requirement, for example, to do communication or data cabling, that section of the business, of the industry where they don't normally work in, let us say, they would be able to sub-let that part of the contract out to a third contractor or subcontractor.

PN36

THE SENIOR DEPUTY PRESIDENT: I see. Thank you. Can I take you to the dispute settlement procedure detailed in clause 10 and in particular to clause 12.2.4. Can I take it, from the employer's perspective, if an employee was not a member of a union, then the employee would be able to be represented by a person or organisation of their choice?

PN37

MR MOORE: Absolutely.

PN38

THE SENIOR DEPUTY PRESIDENT: Clause 17.1 on page 13, first of all, references in the second paragraph, 36 hour week, am I correct in my understanding of that provision that it is intended to say that the employees will be paid for a 38 hour week and that if a 36 hour week is to be implemented in the form of additional rostered days off, the employees will have to work additional hours so as to fund such an arrangement.

PN39

MR MOORE: First of all, sir, the 36 hour week implementation on 1 May 2005, this particular clause references the fact there is a weekly rate of pay in the appendix with the wage rates and that weekly rate of pay, the devisor becomes 36 to create the hourly rate. If the company is working a rostered day off system to accumulate extra days off for a rostered days off system, those employees would work excess hours in excess of 36 to create the nominal hours for the rostered day off. For example, currently the employees work 40 hours a week to roster for their 38 hour week. In this circumstance they still work 40 and accumulate 4 hours per week towards an RDO system. That is the intent of it. That would then possibly - could create a 9 day fortnight with an RDO system.

PN40

THE SENIOR DEPUTY PRESIDENT: I see, thank you. The last paragraph in 17.1 references the ACTU 12-hour shift code of conduct. Is it intended that the reference to that code of conduct would be in terms of the code of conduct as it exists at the present time or as it might exist from time to time?

PN41

MR MOORE: I would suggest from time to time.

PN42

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 25, page 22, contains, in relation to severance payments, the statement:

PN43

The parties agree that the amounts contained in the above table shall be inclusive of all taxes payable pursuant to legislation and/or ATO rulings.

PN44

How should I understand that provision?

PN45

MR MOORE: What that actually mean, sir, is that the recent rulings by the ATO are that post May 2003 all payments into a industry severance scheme will be subject to FBT provisions. Now, I would say, sir, this clause becomes somewhat superfluous at the current time because the Federal Government has agreed, it has gone through Parliament, it has gone through the Upper House, that payments made into a complying fund will not be subject to FBT so this provision probably will not even be an issue but what it actually means then is FBT is applicable, just in case, then the total amount of, let us say $50 a week, will be inclusive of FBT provisions that the company has to pay.

PN46

THE SENIOR DEPUTY PRESIDENT: On the current rulings, and provisions the clause has no real effect?

PN47

MR MOORE: No, none at all.

PN48

THE SENIOR DEPUTY PRESIDENT: Clause 27, can I take it the intention there is long service leave will be provided for in accordance with the Construction Industry Long Service Act?

PN49

MR MOORE: That is correct.

PN50

THE SENIOR DEPUTY PRESIDENT: Now, clause 33 on page 26, indicates that the on site allowance, as contained in appendix A, operates to the exclusion of those nominated allowances. Now, it gives rise to two questions. Firstly, is it the intention of the parties then that the rates set out in appendix A preclude the addition of a site allowance on any of the types of work that might be undertaken by employees covered by this agreement.

PN51

MR MOORE: Say that again, sir.

PN52

THE SENIOR DEPUTY PRESIDENT: The reference in clause 33 to the on site allowance gives rise to a desire that I clarify the intention of the parties with respect to site allowances. Another way of expressing my question would be are there any circumstances under which an additional payment, commonly referred to as a site allowance, might apply in addition to the wage rates set out in appendix A?

PN53

MR MOORE: Only in respect of what may be contained in appendix C where the value of the project may go beyond the 30 million level but is included in appendix A.

PN54

THE SENIOR DEPUTY PRESIDENT: If I took you to appendix C, to the third paragraph, that is the paragraph immediately under the heading or sub-heading: Projects/Site Agreements, I take it that in order to be recognised a site agreement would need to be certified by the Commission?

PN55

MR MOORE: That is correct, sir.

PN56

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Moore. Mr Williams, do my questions give rise to any need to clarify your position on behalf of the employees or can I take it that you are in agreement with all of Mr Moore's responses?

PN57

MR WILLIAMS: We are in agreement.

PN58

THE SENIOR DEPUTY PRESIDENT: Thank you. On the basis of the information provided to me today, together with the statutory declarations, I am satisfied the agreement was reached through a process consistent with that detailed in section 170LK of the Act. I am also satisfied the agreement itself meets the requirements of the no disadvantage test and is of a duration envisaged by the Act. The agreement contains the necessary dispute resolution provision. I will certify the agreement with effect from today.

PN59

The certificate reflecting the certification will be forwarded out to the parties within the next few days. It will identify the various clauses upon which I sought clarification but it will not detail the answers to my questions. If it were ever necessary to consider those responses, the parties will need to look at the transcript of the proceedings. I congratulate the parties on reaching this agreement. Indeed, given today, were it not the case, that more parties could reach agreements and in that case I apologise for the delay. I trust this agreement will operate to benefit both the employer and the employees. I adjourn the matter accordingly.

ADJOURNED INDEFINITELY [12.17pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #K1 LETTER FROM APPLICANT TO ITS EMPLOYEES DATED 04/06/2003 PN8