AG2003/6089, Transcript of Proceedings [2003] AIRCTrans 3584 (19 August 2003)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2003/6089

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Watters Electrical Adelaide and Another
for certification of the Watters Electrical
Adelaide Construction Industry Enterprise
Agreement 2003-2005

ADELAIDE

3.10 PM, MONDAY, 4 AUGUST 2003

PN1

MR S. PRIEST: I appear for the company in this matter. Appearing with me is MR L. MOORE and MR T. MAKEPEACE.

PN2

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Priest.

PN3

MR W. DEAKIN: I appear on behalf of CEPU Electrical Division. Appearing with me is MR J. WILDER.

PN4

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Deakin. Mr Priest?

PN5

MR PRIEST: Commissioner, the company in this application before you is a member of the National Electrical Communications Association, which by that association make them respondent to the National Electrical, Electronic, Communications Contracting Industry Award (1998) for the electrical workers covered by this agreement. We believe, sir, that provisions as required by Part VIB of the Workplace Relations Act have been provided, as testified by the statutory declarations signed by the company and that is signed by Mr Bob Gerraghty of the CEPU Electrical Division.

PN6

The application before you is made under section 170LJ of the Act. In relation to the requirements of the Act, the agreement certainly does not disadvantage employees covered by this agreement. The terms and conditions of the agreement have been explained and discussed with the employees extensively and as I understand it, the employees have a very clear and precise understanding of this agreement. A valid majority of employees approved the agreement by way of a meeting held on 16 July 2003.

PN7

The agreement contains in clause 13 a dispute settlement procedure that contains reference to the Australian Industrial Relations Commission's role in any dispute resolution by way of conciliation and arbitration and the nominal expiry date of the agreement, as found in clause 10, is 31 December 2005. I will take this opportunity to bring to your attention two typographical errors in the document. Firstly, in subclause 18.4.3, the inclement weather clause of the agreement on page 16.

PN8

THE SENIOR DEPUTY PRESIDENT: Yes. It should reference 18.2.1.

PN9

MR PRIEST: 18.2.1, yes As previously mentioned in appendix G on page 42 - I take that back. In Appendix G the clause reference is correct, but even though it is in point 1 of the agreement:

PN10

Shall mean the Electrical Company Construction Division Enterprise Agreement.

PN11

Clearly, this should read:

PN12

Watters Electrical, Adelaide, Construction Industry Enterprise Agreement.

PN13

THE SENIOR DEPUTY PRESIDENT: I'm sorry, you have lost me there.

PN14

MR PRIEST: Sorry. Appendix G in clause 1.

PN15

THE SENIOR DEPUTY PRESIDENT: Yes.

PN16

MR PRIEST: The agreement currently reads:

PN17

The Electrical Company.

PN18

It should quite clearly read:

PN19

Watters Electrical, Adelaide, Construction Industry Enterprise Agreement.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes.

PN21

MR PRIEST: I think going to clause 3, the clause of the agreement is correctly referenced in this case at 30.1.

PN22

THE SENIOR DEPUTY PRESIDENT: Yes.

PN23

MR PRIEST: I would also like to take this opportunity to clarify on transcript that the travel allowances listed in subclause 30.1 are to be paid to employees who must provide their own transport. To conclude, sir, it is my submission that the agreement before you was developed in compliance with the requirements of the Act. Its content satisfies those requirements and we seek therefore the Commission's certification of the agreement effective from today's date. If the Commission pleases.

PN24

THE SENIOR DEPUTY PRESIDENT: Mr Priest, can I take you to the Employer's statutory declaration at 6.1 and can I understand that the intention was to say in that statutory declaration that the agreement was generally approved by a valid majority of employees and that that approval followed the provision of a minimum of 14 days advice of the agreement, so that employees had the agreement 14 days before they voted.

PN25

MR PRIEST: Yes.

PN26

THE SENIOR DEPUTY PRESIDENT: And that there were no changes made to the agreement within that 14 day period.

PN27

MR PRIEST: Certainly.

PN28

THE SENIOR DEPUTY PRESIDENT: Can I presume, relative to paragraph 6.7 of the statutory declaration, that the employer provided the agreement, again 14 days before the employees voted on it, but there were opportunities given to employees to clarify or to discuss the agreement?

PN29

MR PRIEST: Certainly.

PN30

THE SENIOR DEPUTY PRESIDENT: And that notwithstanding those opportunities, they did not make any changes to the document that was ultimately voted upon?

PN31

MR PRIEST: That's right.

PN32

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Mr Priest. Mr Deakin?

PN33

MR DEAKIN: Yes, your Honour, we concur with the employers, sir, and seek to have the matter - sorry, the agreement certified.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. I presume that you would make the same qualifications or changes to your statutory declarations?

PN35

MR DEAKIN: Yes, sir. From our stewards in that company, our representatives in that company was - went through okay.

PN36

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN37

MR DEAKIN: Thank you, sir.

PN38

THE SENIOR DEPUTY PRESIDENT: Now, Mr Priest, I'm going to seek to clarify a number of provisions in this agreement. The provisions by and large reflect those that I raised with the parties in the last matter relating to PCV Electrical Pty Limited. Again, I'm not inviting you to change the agreement, but I'm endeavouring to try to clarify issues. Should I understand that clause 3.2 is such that it is intended that this agreement will apply in all situations covered by 3.1 save and except those where an agreement to which Watters Electrical are a party, applies relative to a client, a builder, or a specific project, so that it provides for benefits or conditions and rates of pay which, as a whole, are better than those in this particular agreement, in which case that site specific agreement, which would need to be certified by the Commission, will apply in lieu of this one.

PN39

MR PRIEST: Yes.

PN40

THE SENIOR DEPUTY PRESIDENT: I would understand then that the reference to union in clause 4 should be taken as a reference to the CEPU as it is defined in clause 8.

PN41

MR PRIEST: Yes.

PN42

THE SENIOR DEPUTY PRESIDENT: Notwithstanding that it may be referred to as the ETU. There is another question relative to an observation I would make relative to clause 4.3 and that is to simply observe that the Act provides for circumstances under which an agreement which has passed its normal expiry date might be terminated. I understand that clause 12.3 contains in its first paragraph a statement of intent which the parties agree is not enforceable and that the second paragraph in clause 12.3 simply establishes that Watters Electrical do not intend or will not further sub-let work which has been contracted to them.

PN43

MR PRIEST: Sir. Of course 12.3.1 does go on to explain the situation where it will be possible for the company to sub-let.

PN44

THE SENIOR DEPUTY PRESIDENT: Yes. I further understand that clause 12.3 does not purport to make this agreement binding on any party other than those that are nominated in the agreement.

PN45

MR PRIEST: That is correct.

PN46

THE SENIOR DEPUTY PRESIDENT: Clause 12.4 I understand should be read so that an employee may seek to be represented by a union or person of their choice.

PN47

MR PRIEST: Yes.

PN48

THE SENIOR DEPUTY PRESIDENT: Clause 13.2.4 again I'm taking is on the basis that the parties agree that the employee may be represented by a union or a person of their choice.

PN49

MR PRIEST: Yes.

PN50

THE SENIOR DEPUTY PRESIDENT: I would also understand that 13.2.6 is such that whilst the preference of the parties is for matters to be resolved through a conciliation process where either party seeks arbitration, this is provided for under the dispute resolution provision.

PN51

MR PRIEST: Yes.

PN52

THE SENIOR DEPUTY PRESIDENT: Clause 16.2 gives rise to a question in that - are the parties able to advise me of a time frame within which the skills database will be developed?

PN53

MR PRIEST: The company has - it is my understanding that the company hopes to have that skills database copyrighted within 12 months but certainly over the life of the agreement a database will be created.

PN54

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, clause 21. I understand that construction sites are synonymous with construction work as defined in appendix B.

PN55

MR PRIEST: Yes. Now, in the first of the dot points in clause 21 there is a reference made to "such enterprise agreements" or to "current enterprise agreements". How should I understand that reference?

PN56

MR MOORE: If I may sir, this particular clause, as you would have noticed, is a common clause in most agreements. It actually referenced previous agreements of the company. If this company had an arrangement where they used a - although they had a company picnic day in place in previous years, then that could prevail.

PN57

THE SENIOR DEPUTY PRESIDENT: I see, so that is how I should understand the first of those dot points.

PN58

MR MOORE: Yes, sir.

PN59

THE SENIOR DEPUTY PRESIDENT: Then the second dot point I should understand on the basis that provided an employee attends and as a consequence of that attendance, has a validated ticket endorsing their attendance, that payment will be made irrespective of union membership.

PN60

MR PRIEST: Yes.

PN61

THE SENIOR DEPUTY PRESIDENT: Clause 23 gives rise to two questions. The first is over what or for what duration does the income protection insurance scheme provide for income protection? Income protection schemes generally provide for income protection for a nominated period. Well, it is generally either an income protection cover for a one year period or a two year period or in some cases a three year period.

PN62

MR MOORE: If I may sir, I'm relying on my memory now but the policy of the document I believe is that payments are made on a monthly basis. I think the coverage has a limited life after the last payment of I believe 6 months but I'm not sure entirely. I think - - -

PN63

THE SENIOR DEPUTY PRESIDENT: Yes, but if an employee is injured then for what period of time is the income protection insurance paid?

PN64

MR DEAKIN: Two years.

PN65

THE SENIOR DEPUTY PRESIDENT: Well, I'm not saying there is a right answer, I'm just anxious that the parties have a common answer.

PN66

MR MOORE: Just to clarify that, sir. There are two issues here, one is after - are you suggesting that what period does the policy cover that employee after they have left employment?

PN67

THE SENIOR DEPUTY PRESIDENT: After they are not able to work such that they need to call on that policy.

PN68

MR MOORE: Two years. My apologies, sir, I misunderstood the question.

PN69

THE SENIOR DEPUTY PRESIDENT: Now, how should I understand the second paragraph in clause 23, Mr Priest?

PN70

MR MOORE: If I may sir, as a result of a certain Commission, not the Industrial Commission, another Commission, there was a requirement by one of the industrial parties being the CEPU that that clause enables any commissions, if you like, that come about by a particular fund to be able to be awarded to a signatory to that - to the Board or the Trustee of that fund to receive commissions from the payment of income protection payments from the employers.

PN71

THE SENIOR DEPUTY PRESIDENT: Yes, well it gives rise to two questions, Mr Moore. The first is the extent to which that second paragraph represents any form of enforceable provision. And the second question relates to whether or not the paragraph in fact appertains to the employment relationship.

PN72

MR MOORE: I can only but agree.

PN73

THE SENIOR DEPUTY PRESIDENT: Well, simply put, if I follow the authority in Atlas Steels, if the provision does not appertain to the employment relationship I'm going to have a problem certifying the agreement.

PN74

MR MOORE: Well, sir, from the employers' perspective we would have no qualms about you removing that clause from the document or having it removed - - -

PN75

THE SENIOR DEPUTY PRESIDENT: I need to keep repeating, I'm not in the business of removing clauses from agreements that employees have voted on. I don't see that the Act gives me that licence, Mr Moore. Is it a provision which is in any way enforceable?

PN76

MR DEAKIN: Sir, I think that it is a provision that has been imposed upon us now that is coming out in the Royal Commission that we identify to all our members that there would be some monetary fund coming back as - I will have to change my glasses again. The commissions, because of the deals that the - we explained ourselves to our employees, our members, that it is a requirement now to be seen to be above - all funds have got to be seen to be above board and it has got to be spelt out of where these moneys have gone.

PN77

Sir, this is a requirement so that we don't fall foul of the Act that we explain to all the employees how the fund works and there may be some commissions that come back to the union to be spent for them on their behalf within the industry. In other words the fund does not receive any - sorry, interest on its money that is invested, that money comes back into the industries, myself as a commission and allow us to be spent in many ways but it has all got to be seen above board.

PN78

I think this has come out of the Cole Royal Commission and we have chosen to explain it all to our members so that they understand the ins and outs of that scheme and that is in there sir, just to ensure that we are seen and it is open - the funds. We have tried in many ways to explain to the employees and our members of how these funds work and to ensure that we do not fall foul of the requirements now that is laid on all the trust funds out there. So we put that right in the document so it can be seen and it has been explained to the people too.

PN79

THE SENIOR DEPUTY PRESIDENT: Yes, but Mr Deakin, going back to the first question that I have and that goes to the extent to which the proposed provision represents any form of binding commitment. If it does represent a binding commitment then the only way that I can simply read that commitment is that that represents a matter between the ETU, its trust fund and employees in the industry. In which case, I'm having difficulty seeing how that relates to the employment relationship.

PN80

MR DEAKIN: Well, it does sir, because if it is not in there that may affect their benefits. Because if it is not in there, sir, it is not spelt out in that way then they have to pay some form of I think fringe benefit tax on the moneys and it would affect their benefits.

PN81

THE SENIOR DEPUTY PRESIDENT: So you are saying to me that that provision is a binding obligation?

PN82

MR DEAKIN: It certainly is, sir. It is binding on all parties.

PN83

THE SENIOR DEPUTY PRESIDENT: Well, perhaps you can detail to me who do you think it is binding upon?

PN84

MR DEAKIN: Well, it is binding upon the commitment of the fund to the employee. It is binding them on the funds going in and out and how that money is to be spent.

PN85

THE SENIOR DEPUTY PRESIDENT: Binding upon the fund to the employee?

PN86

MR DEAKIN: Pardon?

PN87

THE SENIOR DEPUTY PRESIDENT: You say it is binding upon the fund to the employee?

PN88

MR DEAKIN: Yes, sir.

PN89

THE SENIOR DEPUTY PRESIDENT: But the fund is not a party to the agreement, Mr Deakin.

PN90

MR DEAKIN: It is a benefit that they receive from the fund, sir, and I am struggling to define it in a better way. It is a benefit that the employees will receive. If that clause didn't go in there it may cause the fund and the employee some problem because then the fund is - - -

PN91

THE SENIOR DEPUTY PRESIDENT: But surely Mr Deakin, that is a matter between the fund and its members?

PN92

MR DEAKIN: Yes, sir, but if we don't put it in there then the fund itself runs into some difficulty within the Act and that would then affect the employees' entitlements and we see this as the best way to be above board, that no questions are ever raised about where money goes or how it is going on their entitlements. If we don't put it in there we see that we could then be in breach of the Act and then we have not been open and above board. I know where you are going with this one.

PN93

THE SENIOR DEPUTY PRESIDENT: In breach of which Act, Mr Deakin?

PN94

MR DEAKIN: Well, the taxation laws I think it is now coming up through the Royal Commission, the Cole Commission, is that they are wanting this to be spelt out quite clearly and the unions have been criticised by not identifying to their members where these amounts have gone. So this is there to ensure it and a lot of discussions have gone on with the employees to make sure we are quite clear with that one. But I know that is a position between the unions, the Act and - sorry, the fund. But in the long term it will affect their entitlements if we don't do it right, sir.

PN95

So by putting this in the document to spell to them to let them know and let everybody know where that - how that works then the fund can't be criticised and they can't be - see I'm trying to think of a - without the paperwork in front of me, that if we don't spell it out quite clearly to them, there is the potential that they will then have to be paying out of that fund, fringe benefit tax and the employees could be taxed. It would affect this outcome here, but by putting it into our documents sir, we are saying it is on - it is to the - it is for the employees.

PN96

MR PRIEST: Excuse me sir, if I may assist Mr Deakin. I think it is definitely our understanding and the employers that the inclusion of this sentence in the agreement does not seek to bind the fund to pay commissions to the union, nor does it seek to bind the union to accept those funds. I believe as you said it is a non-binding clause in that respect. It is put in here merely as an observation and in order to - for the union to perhaps comply elsewhere, this is merely a formative statement to the employees and to the employer so as to avoid any future problems down the track. It is by no means a binding clause which seeks to bind the employer to the union or the fund.

PN97

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Deakin, I understood from you that the provision was in some way binding. Mr Priest is putting it to me that it is not binding. Do you want to consider your position in that regard?

PN98

MR DEAKIN: Yes, sir. It is not binding in a way that there is a commitment to do something in one way or another or certain amounts would be paid or whatever. There is no binding in that form. It is not binding upon the employees to do anything. It is - when I said - I referred before about the parties have to be seen to be above board, it is not just the union, it is the employers as well and of where these moneys are going if that is the nub. So it is not so much as binding upon any party other than trying to comply with a certain part of the Act which if we don't do it, may affect the outcome of the employees' entitlements. We are trying to cover that part by doing so.

PN99

THE SENIOR DEPUTY PRESIDENT: So if I am understanding you correctly, the provisions of clause 23 and in particular the second paragraph in clause 23 do not impose an obligation on either the union nor indeed the employer to do any one specific thing?

PN100

MR DEAKIN: That is right, sir.

PN101

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 28.2 refers to clause 29.1. Can I presume that means clause 28.1?

PN102

MR PRIEST: Certainly.

PN103

THE SENIOR DEPUTY PRESIDENT: Clause 34.8 refers to clause 21.2. Is that the intended reference?

PN104

MR PRIEST: No. I would just confirm with the employer with the protective clothing should be further to 20.2 of the agreement.

PN105

THE SENIOR DEPUTY PRESIDENT: Well, I'm sorry, I have missed one sentence. If I understand clause 33 it is that the wage rates set out in Appendix A apply from the first full pay period on or after 19 May. If I understand - no, let me re-phrase that. I simply don't understand what clause 34.2 intends.

PN106

MR PRIEST: Sir, the 34.2 entitlement which I understand commenced prior to the last percentage increase is stating the company's intent along with the employees that all employees will have completed either the in-house wiring rules course or the current TAFE course for AS3000 or its equivalent, in other words, a refresher course for the standards. It is the company's intention along with the employees that all employees covered by this agreement will have completed that course prior to the last percentage increase which is at the end of the agreement.

PN107

THE SENIOR DEPUTY PRESIDENT: What happens if someone does not complete that course, Mr Priest?

PN108

MR PRIEST: As an in-house training I don't think it is a reward or penalty. It is really a commitment by all parties to the agreement that the employees will be educated and kept informed of the standards so therefore to maintain their ability to do their job.

PN109

THE SENIOR DEPUTY PRESIDENT: In relation to clause 34.3, can I read that clause as meaning that the on-site allowances - perhaps I will be silent there and invite you to tell me what the clause means.

PN110

MR PRIEST: Certainly. Clause 34.3 lists two sites which are exempt projects. You will find in the agreement that the employees are paid an on-site allowance of $1.50 an hour all purpose, which is provided for in Appendix A. Appendix C further lists a site allowance scale that is paid at the flat rate on top of that $1.50 once the site value reaches 30 million and beyond. Clause 34.3 lists those two sites which will be exempt from the provision of the new site allowance scale from 30 million onwards.

PN111

As such they will be paid $1.50 all purpose and the flat rate as listed as per the old construction industry scale. Indeed they will not be paid extra. The clause in the second paragraph reads that:

PN112

Where the construction industry site allowance is greater than the all purpose on site allowance -

PN113

which is in the first ..... certification $1.50:

PN114

- then the difference shall be paid as a flat rate.

PN115

For instance if we have a look at the scale of 27 million to 67 million with an allowance currently at $1.55, the employees would then be paid an extra 5 cents an hour flat on top of the all purpose hourly rate.

PN116

THE SENIOR DEPUTY PRESIDENT: So where did you get the 5 cents an hour from, Mr Priest?

PN117

MR PRIEST: Under the construction industry site allowance scale on page 27, the site value has a range of 27 million to 67 million. This is an allowance of $1.55 and as provided by 34.3 as $1.55 is 5 cents greater than the all purpose allowance then that difference between $1.50 and $1.55 shall be paid as a flat rate, hence the 5 cents.

PN118

THE SENIOR DEPUTY PRESIDENT: I see. So presumably if one of those two projects was in the value range of 67 million to 114.5, the employees would receive 40 cents an hour extra?

PN119

MR PRIEST: Then they would receive 40 cents, sir.

PN120

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Priest. Now, Mr Deakin, do the responses on the part of Mr Priest reflect your understanding of how this agreement is intended to operate?

PN121

MR DEAKIN: Sir, we concur with Mr Priest on the application and what has been said here today, sir.

PN122

THE SENIOR DEPUTY PRESIDENT: Very well. I will certify the agreement with effect from today. That certificate reflects an assessment that the agreement meets the requirements of the Act necessary for certification insofar as it was reached through a valid majority of employees endorsing the proposal. The agreement itself meets the requirements of the no disadvantage test. It contains a dispute resolution provision, the operation of which the parties have clarified it is of a duration envisaged by the Act.

PN123

The certificate that will be forwarded out to the parties will outline the various issues that the parties have brought to my attention and it will also list the various clauses upon which I have sought clarification from the parties. If it is necessary that the parties consider those responses then they will need to have regard to the transcript of these proceedings. Again because of the extent to which this agreement very closely resembles the PCV Agreement I would observe that the agreement itself falls a long way short of the standards the parties ought to be setting if they are to avoid the frequency of visits which have become somewhat of a practice in this Commission.

PN124

So I would urge the parties to firstly look at revising the agreement when the next opportunity arises so as to improve the clarity with which it can be understood and to remove the potential for disputation. I would also urge the parties to apply a common sense approach to the interpretation of this agreement so that hopefully you can carry forward for the life of the agreement the co-operative spirit that has led to the reaching of the agreement in this particular instance. I will adjourn the matter on that basis.

ADJOURNED INDEFINITELY [3.45pm]