AG2003/6550, Transcript of Proceedings [2003] AIRCTrans 3775 (28 August 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
DX 305 Melbourne Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 4166

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER SIMMONDS

AG2003/6550

APPLICATION FOR CERTIFICATION
OF GREENFIELDS AGREEMENT

Application under section 170LL of the
Act by Toyota Technical Center Asia
Pacific Australia Pty Ltd and Another
for certification of the Toyota Design
Agreement 2003

MELBOURNE

9.21 AM, WEDNESDAY, 13 AUGUST 2003

PN1

MR W. YOUNG: I seek leave to appear for Toyota Technical Center Asia Pacific Australia Proprietary Limited with MS C. WOODFIELD.

PN2

MR M. GEORGIOU: I appear for APESMA.

PN3

THE COMMISSIONER: Any objection to the application for leave?

PN4

MR GEORGIOU: No.

PN5

THE COMMISSIONER: Yes, leave is granted. Could I also indicate that I have, by a mysterious process, received an application for determination of a designated award, which doesn't appear to have been given a file number by the Registry, but as I understand the Act, it is necessary I deal with that before I can deal with the Agreement. I propose to - well, I need to establish whether there is any objection to me operating in that way.

PN6

MR YOUNG: If the Commission pleases, no. An application was lodged on Friday.

PN7

THE COMMISSIONER: Yes, clearly lodged, it is the Registry, for some reason, hasn't given it a file number or anything.

PN8

MR YOUNG: I see. It was lodged, certainly, on the Commission Registrar on Friday.

PN9

THE COMMISSIONER: Yes, and I have a copy. It is before me, so it is a mysterious process.

PN10

MR YOUNG: Right. Well we would have no objection, the - - -

PN11

THE COMMISSIONER: Because notice hasn't been given, that is the point.

PN12

MR YOUNG: Right. We would ask the Commission today if they could assist the parties in determining the award for the no disadvantage test, if that was available.

PN13

THE COMMISSIONER: Mr Georgiou, do you have any objection?

PN14

MR GEORGIOU: I certainly don't, Commissioner.

PN15

THE COMMISSIONER: Very good. Well, I had better deal with that aspect of it first. On the presumption - well, the matter has been filed in the Registry, it is just that the processing doesn't seem to have been done in accordance with the requirements of the rules, and to the extent that there is a capacity to grant relief from the rules to the Registry, I grant relief. And I think, on that basis, I had better hear you both - I presume you both appear in relation to that matter as well.

PN16

MR YOUNG: Yes, Mr Commissioner.

PN17

MR GEORGIOU: Yes, Commissioner.

PN18

THE COMMISSIONER: And leave is granted. Yes, well, dealing with the XF application, Mr Young?

PN19

MR YOUNG: If the Commission pleases, in looking for the no disadvantage test for the Certified Agreement that we have placed before you today, we have sought that the Technical Services Professional Engineers (General Industries) Award was the appropriate award for the Agreement to be referenced against, as it contains many of the provisions and the classifications that are applicable to the hopefully certified Agreement before you.

PN20

THE COMMISSIONER: So the Certified Agreement only covers professional engineers, does it?

PN21

MR YOUNG: Yes, it does, Mr Commissioner. And we feel it is the appropriate award for the no disadvantage test.

PN22

THE COMMISSIONER: Yes. Mr Georgiou.

PN23

MR GEORGIOU: Yes, I think it is an excellent award, Commissioner, and very appropriate for the Toyota Design Centre. If the Commission pleases.

PN24

THE COMMISSIONER: Well, excellence is not one of the considerations in the Act, but - - -

PN25

MR GEORGIOU: No, no - it should be, though.

PN26

THE COMMISSIONER: Well of course if it is a Federal award it will always be excellent.

PN27

MR GEORGIOU: No, no, no. I have met a couple of dodgy ones.

PN28

THE COMMISSIONER: Yes, this - the matter immediately before me is pursuant to section 170XF for a determination of the designated award for the purpose of a Certified Agreement. The application has been lodged by the President of the Toyota Technical Centre Asia Pacific Australia Proprietary Limited, being the employer. There is no relevant award in relation to some or all of the persons, that is the company is not a respondent to an award. I, having heard the parties, determine that the appropriate award for the purpose of the no disadvantage test - for the purpose of deciding whether the Agreement passes the no disadvantage test is the Technical Services Professional Engineers (General Industries) Award 1998.

PN29

I will reduce that determination to writing and provide a copy of it to the employer in due course. That brings me to the matter that was originally listed, which is AG2003/6550. Yes, Mr Young.

PN30

MR YOUNG: Thank you, Mr Commissioner. I have great pleasure today in presenting for certification the Toyota Design Agreement 2003. This Agreement has been the culmination of about 12 months of planning and a further number of months of discussions with the Association of Professional Engineers, Scientists and Managers of Australia. The company would submit this is an Agreement of integrity, and provide the basis for the company to begin the employment of something in the order of 30 highly skilled staff to begin operations by around 2004.

PN31

Mr Commissioner, it is my submission that the Agreement before you today satisfies the requirements and the tests outlined in the Workplace Relations Act. In parties have submitted appropriate statutory declarations, which we believe satisfy the Act and the Commission. The Agreement is consistent with the obligations of the Division 2, Part VI(B). We submit that all requirements of section 170LL and 170LT have been met, in particular this is a true greenfield agreement, and no employee has been employed by Toyota at this point.

PN32

With respect to section 170XF we have received the determination today, which we thank the Commission for their assistance. We would submit the Agreement provides the same or significantly better employment conditions than the award in all areas, in particular leave entitlements, especially provision of a period of paid maternity leave and wages significantly above the award. We would submit, therefore, that there is no reason to not allow the Agreement to pass through the no disadvantage test under section 170XA.

PN33

The Agreement contains a dispute settlement clause in clause 11. The period of the Agreement is outlined in clause 3, which is a duration of three years, effective from the signing of the document, which was 29 July, and we would therefore submit that the provisions under section 170LU - we submit they are satisfied, and there would be no ground which would suggest the Agreement would not be certified. Mr Commissioner, just a couple of final points, if I may. This Agreement provides the investment and commencement and creation of a new business, and the company is now in the process of acquiring land, and this Agreement is the cornerstone of allowing those processes to continue.

PN34

And finally, Mr Commissioner, I would like to thank the Association for their support and assistance, in particular Mr Georgiou. Whilst we have had interesting and vigorous debate, and some differences, we have always been able to manage those, and we believe that forms a good relationship for our future. If the Commission pleases, I commend this Agreement to the Commission.

PN35

THE COMMISSIONER: Mr Young, people have said that there is no reduction in the entitlements, but if I look at clause 12, that seems to be that if it is intended that that has application in the context of the unfair dismissal procedures, then it would seem to be a reduction.

PN36

MR YOUNG: Mr Commissioner, we would argue that the probationary period really is just looking at some unique circumstances of people who will be required to travel overseas, and that would not be seen to substitute any of the unfair dismissal provisions, but allow the company to provide a process of assessment of the performance and the training of individuals as they join the organisation.

PN37

THE COMMISSIONER: So are you giving an undertaking that the existence of the probationary period in this Agreement would not be used by the company as an argument to extend the three month qualifying period should there be - in the unfortunate event that there be an application under 170CF?

PN38

MR YOUNG: We would argue, Mr Commissioner, that the provision would have relevance to any application should an individual wish to apply.

PN39

THE COMMISSIONER: Well then it is a reduction in entitlements, isn't it?

PN40

MR YOUNG: Well, we would argue that this is a minor part of the Agreement, and that overall the Agreement itself is - - -

PN41

THE COMMISSIONER: Well, I am sorry - you can argue it, but it has to meet the no disadvantage test. And if you are saying that people are going to be disadvantaged, then what is the counter balancing elements?

PN42

MR YOUNG: Well we would argue that the overall provisions of the Agreement are in excess - - -

PN43

THE COMMISSIONER: Well, tell me about them. Tell me, I mean - if you are going to argue it, argue it. Just don't say it.

PN44

MR YOUNG: Right. The - as mentioned in my submissions, Mr Commissioner, the provisions for the sick leave entitlements, for the period of paid maternity leave, for the salary levels, which are intended to be significantly higher than the award.

PN45

THE COMMISSIONER: All right, well let us go to them, one at a time.

PN46

MR YOUNG: And we would - - -

PN47

THE COMMISSIONER: Don't rush off. All right. Sick leave. Where do I find that?

PN48

MR YOUNG: That is - clause 19 is personal leave, on page 9 of the Agreement.

PN49

THE COMMISSIONER: Yes.

PN50

MR YOUNG: A total of ten days, and in addition there are bereavement leave entitlements beyond that.

PN51

THE COMMISSIONER: And what does the award provide?

PN52

MR YOUNG: The award provides - I would have to check the award to remember, Mr Commissioner, but from memory that is in excess of the award provisions. But I would need to actually just have a - refresh my memory on that award. There is a sliding scale, I think, of initially five up to eight days per year, that is my recollection.

PN53

THE COMMISSIONER: And there is no provision for bereavement leave?

PN54

MR YOUNG: Yes, there is provision for bereavement leave in the award, there is also in the Agreement, Commissioner.

PN55

THE COMMISSIONER: Yes, I know, but I am - - -

PN56

MR YOUNG: Two days or 15.2 hours for bereavement leave in the Agreement, in addition to the personal leave.

PN57

THE COMMISSIONER: So it is two days sick leave, righto, what else have you got?

PN58

MR YOUNG: Two days bereavement leave, Mr Commissioner, sorry.

PN59

THE COMMISSIONER: No, there is bereavement leave already in the - 15.2 hours in the Agreement, 15.2 in the award.

PN60

MR YOUNG: Yes. And there is - sick leave is five days in the award, as opposed to the ten days in the Agreement.

PN61

THE COMMISSIONER: I thought you just told me it was eight days.

PN62

MR YOUNG: A sliding scale, initially five, moving to eight days, I think, upon 12 months, or two years of service.

PN63

THE COMMISSIONER: I see. Now, it would only arise in the first six months of service. When does the person attract the ten days under the Agreement?

PN64

MR YOUNG: From commencement.

PN65

THE COMMISSIONER: From commencement?

PN66

MR YOUNG: Yes.

PN67

THE COMMISSIONER: And it is the same in the award? Except it is five days?

PN68

MR YOUNG: Five days on commencement, yes, Mr Commissioner.

PN69

THE COMMISSIONER: Yes, okay. I understand.

PN70

MR YOUNG: Long service leave, Mr Commissioner, clause - - -

PN71

THE COMMISSIONER: Well, it is hardly going to be a balancing factor for someone who is in their first six months of employment, is it? You see, what we are looking at is the person who has got three months of employment and is terminated somewhere between three and six months of employment. They are the ones that are suffering the disadvantage.

PN72

MR YOUNG: Yes.

PN73

THE COMMISSIONER: So that is what I need to counterbalance, isn't it?

PN74

MR YOUNG: Well, we would argue that the - - -

PN75

THE COMMISSIONER: So you have told me that they have got an additional five days sick leave, right, I hear that. What else have we got?

PN76

MR YOUNG: Clause 20, long service leave.

PN77

THE COMMISSIONER: Well that is not going to apply to someone who has just started in three months. And it is not going to apply for whatever the minimum period is, is it?

PN78

MR YOUNG: The other element, whilst they are not a part of this Agreement, the actual wage rates - - -

PN79

THE COMMISSIONER: No - the - - -

PN80

MR YOUNG: - - - would be in excess of the award requirements.

PN81

THE COMMISSIONER: Well, show me, in the Agreement, where the Agreement meets the no disadvantage test.

PN82

MR YOUNG: We would argue that if - - -

PN83

THE COMMISSIONER: Because the only entitlement they have got to wages, from what you are telling me, is what is in the award.

PN84

MR YOUNG: Yes, that is - - -

PN85

THE COMMISSIONER: So it doesn't exceed the award, so there is no advantage there.

PN86

MR YOUNG: But the discussions and commitments we have made with the Association would support that.

PN87

THE COMMISSIONER: But that is not before me.

PN88

MR YOUNG: Yes.

PN89

THE COMMISSIONER: I mean, it is a question of whether the Agreement meets the no disadvantage test. If there are no wage rates in the Agreement, that doesn't form part of what I have to understand meets the no disadvantage test.

PN90

MR YOUNG: Mr Commissioner, there may well be that we are able to overcome the issue of the six month probation with respect to unfair dismissal if there is a concern that we would be circumventing those Agreements.

PN91

THE COMMISSIONER: Well - - -

PN92

MR YOUNG: The intention of the parties is that that probationary period is more for the assessment of the performance and the recognition of the person and the training required rather than as a means to get around the unfair dismissal process.

PN93

THE COMMISSIONER: Yes, I understand that. And I sought an undertaking that it wouldn't be used and you wouldn't give it to me.

PN94

MR YOUNG: I would - well, I would need to seek advice as to whether the employer is prepared to make that commitment. I have no instructions on that specific matter to commit them.

PN95

THE COMMISSIONER: You see, it is three months or such - I mean, effectively, it is three months or such longer period as is reasonable. Now, you have reached a greenfield agreement with APESMA. I will hear what Mr Georgiou has got to say about it in a minute, but no one gets a vote on it, because it is an Agreement that has been reached in that fashion. I don't know whether the APESMA has taken into account the possible flow on affect to people's rights under the Act. I presume they haven't, because the statutory declaration says there is no reduction, and it clearly is a reduction.

PN96

It is a reduction in the entitlement of every individual, if it is going to be used as an argument should someone be terminated between three and six months employment.

PN97

MR YOUNG: If I may seek some instructions - - -

PN98

THE COMMISSIONER: Because I would certainly use it. I would be up there and saying, "Well, the Commission has certified an Agreement, therefore it is reasonable."

PN99

MR YOUNG: Mr Commissioner, if I may seek instructions - - -

PN100

THE COMMISSIONER: Yes, certainly.

PN101

MR YOUNG: - - - that would be of assistance. If the Commission pleases. My instructions are that we are prepared to confirm that we would not use that clause with reference to circumventing unfair dismissal proceedings, but that the timing is more about, as previously stated, the - - -

PN102

THE COMMISSIONER: I understand that - - -

PN103

MR YOUNG: - - - training and requirements - - -

PN104

THE COMMISSIONER: - - - but it is not an issue of circumventing.

PN105

MR YOUNG: Or we would not use it as an argument in support, or to oppose an application under the unfair dismissal process.

PN106

THE COMMISSIONER: Yes, thank you. I understand that. And that is consistent, I think, with what you said earlier.

PN107

MR YOUNG: Yes.

PN108

THE COMMISSIONER: That the purpose is to enable people to be improved and developed in their employment. Mr Georgiou.

PN109

MR GEORGIOU: Yes, Commissioner. There are a couple of issues that were raised. There was some considerable debate about the probationary period, and the fact that it exceeded the three months that is the norm in enterprise agreements and in awards, and the Association was convinced that because the people to be employed would be spending considerable time in Japan being trained, that there was some investment by the company in the professional development of the professional engineers that we acceded to the extra time for probation.

PN110

I am pleased that the company has given a commitment that they won't use that clause if there is the unlikely event of any unfair dismissal provisions. There is, by the way, in the Agreement, a very very good termination of employment clause which talks about the termination not being harsh and unjust and unreasonable, and it is in excess of what is required under the award. So there are bits and pieces of the Agreement that will advantage, the professional development clause for example, which will allow for graduates and new employees to be trained both in Japan and here for the production and design of vehicles for the Toyota company around the world.

PN111

So the Agreement overall, whilst it is a minimum because the types - the nature of the work and the types of people who will be employed are to some extent an unknown, we have allowed for maximum flexibility in the Agreement to allow the company to establish itself and for employees to be employed, and as I put the company on notice the next Agreement will be nothing like this one, once we know exactly who is employed and what is required.

PN112

The introduction of change clause, for example, Commissioner, which is clause 10, is far in excess of the TCR provisions that are contained in the award, the redundancy provisions in it are far in excess of the award. Having said all of that, Commissioner, I rely on the statutory declaration of Mr Nadenbousch from my organisation. I believe that the Agreement, save for that provision which has been pointed out by the Commission today, meets the requirements of the Act.

PN113

I was a bit upset at Mr Young praising me like that, I have got a reputation to uphold, and I don't want people thinking that I am a soft touch. But other than that, Commissioner, it is a greenfield site agreement, we are all taking it a bit on notice as to whether it is adequate and the next EBA will certainly be a lot different to this. If the Commission pleases.

PN114

THE COMMISSIONER: Yes, thank you, Mr Georgiou. This matter is an application for the certification of an agreement to be known as the Toyota Design Agreement. On the basis of the statutory declarations by each of the parties, the submissions this morning and the undertaking that has been given regarding the operation of the Agreement, I am satisfied it meets the test prescribed in the legislation. Accordingly I certify the Agreement with effect from today's date, and it will remain in force until 25 July 2006, at which time Mr Georgiou will have an opportunity to prove what he says he is.

PN115

The proceedings in this matter are adjourned. We will give you a copy of the Agreement, don't go.

ADJOURNED INDEFINITELY [9.42am]