AG2003/7734, Transcript of Proceedings [2003] AIRCTrans 4723 (24 October 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LAWSON

AG2003/7734

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under Section 170LK of the Act
by Environmental Chemistry Pty Limited t/as
Hogs Breath Cafe Hamilton for certification
of the Environmental Chemistry Pty Limited
Certified Agreement 2003-2006

SYDNEY

10.35 AM, THURSDAY, 9 OCTOBER 2993

PN1

THE COMMISSIONER: Appearances please.

PN2

MR C.W. AGNEW: I seek leave to appear. I have with me MR J. ANTILL, who is the Restaurant Manager.

PN3

THE COMMISSIONER: For the employees.

PN4

MS K. LEWIS: I am the staff representative of Hogs Breath Cafe, Newcastle.

PN5

THE COMMISSIONER: I presume you don't object to Mr Agnew appearing on behalf of the employer?

PN6

MS LEWIS: No.

PN7

THE COMMISSIONER: The matter before the Commission is an application filed pursuant to section 179LK of the Workplace Relations Act by the employer, Environmental Chemistry Pty Limited, and its employees. The application is for the certification of an agreement. Attached to the application are statutory declarations by the Company Director, Mr Stace, dated 19 September, and by the elected employee representative, Ms Lewis, also dated 19 September. Will you deal with the application please, Mr Agnew.

PN8

MR AGNEW: Commissioner, I would rely on both those statutory declarations of Mr Stace and Ms Lewis in terms of the statutory requirements. I would also indicate, and I do thank the Commission's patience with me over the last 24 hours in terms of the spreadsheets that I have provided. I should just ask a further indulgence. I have provided another spreadsheet of both the same rosters that have been provided, or time-sheets that have been provided to you. The only difference is they include the annual leave loading and they also include an overtime component, and in particular I would just refer you to Richard W. on the kitchen spreadsheet.

PN9

I have done a calculation if overtime was payable under the enterprise agreement. Why I've done that is because it's at the employees' election as to whether they be paid overtime or to be paid on a time for time basis.

PN10

THE COMMISSIONER: These documents that you're now tendering replace the documents that you faxed this morning, or last night?

PN11

MR AGNEW: They are updated versions because I anticipated that you may indicate to me that the annual leave loading wasn't included, nor that an overtime calculation for Richard W. wasn't included, and I just wanted to cure that defect in the material that was faxed yesterday.

PN12

THE COMMISSIONER: The two additional pages, one being a comparison of award against the EBA kitchen direct labour costs, I'll mark as exhibit A1, and the comparison of award against EBA floor direct labour costs, I'll mark as exhibit A2.

EXHIBIT #A1 COMPARISON OF AWARD AGAINST EBA KITCHEN DIRECT LABOUR COSTS

EXHIBIT #A2 COMPARISON OF AWARD AGAINST EBA FLOOR DIRECT LABOUR COSTS

PN13

THE COMMISSIONER: I note that these are in substitution of two pages attached to a fax forwarded to the Commission at 6.58 pm on 8 October by Mr Agnew. These are two replacement pages. Providing them at this time of course causes me some difficulty, Mr Agnew, in that I don't have a chance to examine them in the manner that I'm required to do so, but I will hear your submissions about them and may very well consider those submissions if I decide not to immediately certify the agreement today.

PN14

MR AGNEW: Commissioner, if I can just tell the history of the company and why we're here today. The company is currently under a New South Wales registered enterprise agreement, a copy of which I would like to tender.

PN15

THE COMMISSIONER: The document now tendered by Mr Agnew, the Hogs Breath Cafe Newcastle Enterprise Agreement, update of wage rates, 6 April 1999, I'll mark as exhibit A3.

EXHIBIT #A3 HOGS BREATH CAFE NEWCASTLE ENTERPRISE AGREEMENT, UPDATE OF WAGE RATES, DATED 06/04/1999

PN16

THE COMMISSIONER: Are you telling me that this document hasn't been updated since 1999?

PN17

MR AGNEW: That is correct, and that's the reason for my client coming here today.

PN18

THE COMMISSIONER: What is the rationale of that? Why four years later does your client come to the Federal Commission?

PN19

MR AGNEW: The client has just taken over the operation of the restaurant last year, September 4, I think, and after subsequently talking to myself we find ourselves here today, in terms of trying to upgrade the employees' rates of pay, obviously to accord with the relevant safety net award. In terms of the agreement itself, I will take you through some benefits and reductions for your own assessment in terms of the no disadvantage test.

PN20

The agreement is written in what I consider to be plain English in accordance with directions of Vice President Ross I believe, after the award simplification process, or the award review process, in or about 1995/1996. It is in a question and answer format which provides, at least the feedback I get from both my client and the employees, it's an easier document to understand than the current New South Wales registered agreement and the award. It is intended to last until 1 May 2006 and is also intended to replace the terms and conditions of the New South Wales Restaurant Employees' Award, State.

PN21

In terms of the benefits of the agreement, I'll turn you to the rates of pay at clause 3.2.1. The rates and the classification structure are different to the award where the award provides seven grades. This agreement provides simply four levels for a career path. I should point out that this is a steakhouse operation. It doesn't employ, except for its manager, any of its staff as chefs. It doesn't employ apprentices. If it does they're employed through group training schemes or group training companies. The majority of its employees perform the functions as set out in appendix 3 to the agreement which sets out the indicative duties.

PN22

They are basically, just to summarise the types of positions, you have kitchen hands who are grade 1 under the award, the relevant award, whereas under this agreement they could eventually get themselves to the proficient level which is equivalent to the grade 2 level. The other types of employees are what we call floor staff which are waiters and waitresses that undertake guest service and cash handling, and they would traditionally be under grade 2 and in this agreement they would be classified at the proficient level. Then at the supervisory level, that includes not only supervisors but also includes chefs or cooks, which is equivalent to the grade 4 level and the rate has been based off the grade 4 level under the award.

PN23

If you look at the rates of pay at 3.2.1 there are two columns - one for the full time part time employees another for casual employees. Those rates are at least ten per cent higher than the relevant grades that I've just mentioned to you in terms of each of the levels in the agreement and I'll just re-state them. Introductory level is equivalent to the grade 1 level in the award. The proficient level is equivalent to the grade 2 level although grade 1 employees can and will be classified under it. The supervisory level is equivalent to the grade 4 level under the award although under the award supervisors can be classified under grade 3 in the award and then we have the managerial level which is not, or they aren't employees covered by the New South Wales Restaurants Award.

PN24

In terms of the casual rate. It is a rate that is also, it is 3.2.3, it is 18 per cent above the casual Monday to Friday rate. Why is it 18 and not 10? It is 18 because it includes, and New South Wales is unique about this Commissioner, is that they have an annual leave payment which equates to approximately 8 per cent in additional amount and that's why we've got the 18 per cent for the casual rate in 3.2.1.

PN25

Those additional loadings are meant to buy out any relevant weekend penalties, public holiday penalties, allowances and annual leave loading and therein lies why I've provided you with those calculations in comparing the current employees with the agreement rates against what they would be paid under the award rate.

PN26

I also indicate I've provided you with a payroll general report, Commissioner, yesterday which indicates what the current hourly rates are of various employees and you should see in that document that a number of the employees are in fact being paid amounts above what's specified in this agreement as it currently stands and there's no intention by implementation of this document to reduce those employees hourly rate. They will continue to be paid at that rate until which time the agreement rate matches their current rate. There are also pay increases set out within the document clause 3.2.5 and those pay increases are two and a half percent, 18 August 2004 and 18 August 2005.

PN27

THE COMMISSIONER: Are those elements minimum elements and will they be compared to any award movements over comparable periods, or it's just a flat two and a half percent and a flat two and a half percent irrespective of what occurs in the award?

PN28

MR AGNEW: Well again the audit at appendix 2, in my view, protects the employees in respect of that and I don't think there'll be any trouble in my client saying that they would match if the award increased by three percent, that they would match any - - -

PN29

THE COMMISSIONER: Well that's your view but what does your client actually state about that? Do you have a view about it?

PN30

MR ANTILL: Personally - - -

PN31

THE COMMISSIONER: Are you a director of the company?

PN32

MR ANTILL: No.

PN33

THE COMMISSIONER: Well how can you make a commitment on behalf of the company? I've got a statutory declaration here from a director of the company. I don't know that you can provide me with information that overrides anything contained in the statutory declaration by a director.

PN34

MR ANTILL: I run his company for him. He has no involvement in the business apart from the financial outlay, I suppose. As far as everything else goes I run it and I'm the one that has organised this.

PN35

THE COMMISSIONER: In answer to my question should the State award move by a margin of more than two and a half percent what is the company's position with regard to the two wage increases that are built into the proposed certified agreement?

PN36

MR ANTILL: We would follow the award to make sure that none of the employees were disadvantaged in any way.

PN37

THE COMMISSIONER: In terms of the quantum of an increase or you would just make sure your rates are above the award?

PN38

MR ANTILL: Well maintain ours with the percentages above the award that are already preset.

PN39

THE COMMISSIONER: That's fine. Thank you.

PN40

MR AGNEW: I'd also point out that at clause 3.4 that trainees will be paid in accordance with the rates in this agreement, not in accordance with any state training wage award or national training wage award.

PN41

THE COMMISSIONER: In what circumstances are the trainees employed? Is there structural training?

PN42

MR ANTILL: Yes we have basically, when we bring somebody in they get onto a traineeship as such.

PN43

THE COMMISSIONER: A traineeship that is underwritten partly in cost by Centrelink?

PN44

MR ANTILL: No.

PN45

THE COMMISSIONER: No?

PN46

MR ANTILL: No.

PN47

THE COMMISSIONER: Are they performing structural training according to a training program certified by the relevant state education training department?

PN48

MR ANTILL: It's a training organisation we have like AWise Employment, people like that. They come in and they spend up to three or four, I think it's about three months learning our systems through our training program.

PN49

THE COMMISSIONER: This is all new employees, or is it only specifically to a few who are identified as trainees?

PN50

MR ANTILL: Just those that haven't come from other Hog's Breaths or anything that just - those that don't have any knowledge of hospitality.

PN51

THE COMMISSIONER: They will be paid in accordance with the agreement?

PN52

MR ANTILL: Yes.

PN53

THE COMMISSIONER: Thanks Mr Antill.

PN54

MR AGNEW: I just point out that because of the loaded rate paid that overtime under clause 4.2 the employee decides to be paid overtime rates will be paid at a higher rate because of the loading attached.

PN55

THE COMMISSIONER: I'm sorry, if overtime is paid it's paid at the loaded rate?

PN56

MR AGNEW: Correct. So it's first two hours is time and a half and the remaining is double time.

PN57

THE COMMISSIONER: You infer that an employee has to elect to be paid, is that correct?

PN58

MR AGNEW: They have the decision if they don't elect, when I say elect, they can elect to have either what we call make up time or time in lieu which is time for time.

PN59

THE COMMISSIONER: They seek to be paid for overtime.

PN60

MR AGNEW: If they don't elect for that they get paid the overtime normally. There is an ability under this agreement to cash in up to five days annual leave which a lot of employees, due to fact that they are students at tertiary institutions find an advantage. Or at least that's the feedback I get from the staff at this restaurant, that they can cash in those annual leave days and not be disadvantaged by when they wish to take time off either to study.

PN61

There's an ability under clause 5.5 to be paid long service leave or in other words cash it in after five years, whereas that entitlement under the relevant long service leave act here in New South Wales only applies at a five year mark if the employee is made redundant or has to leave the business because of personal illness or necessity. In this case they're simply entitled to it subject to the fact they're not terminated for serious misconduct at five years as opposed to the normal case where it's limited at five years but that is unlimited subject to serious misconduct issues after ten under the Long Service Leave Act.

PN62

THE COMMISSIONER: Is that an election to take it or an election to pay it out?

PN63

MR AGNEW: Either, they can take it or be paid it. It's the employee's choice. It's at 5.5.2 Commissioner. There are employee discounts contained within the document 6.1.1. that entitles the employee to 50 percent off the menu price whilst they're rostered. If they just come in on a non working day, they're entitled to 25 percent off at that time.

PN64

Now I've only just been given by my clients the figures on those discounts Commissioner but the last month which is the September month the employees accessing that 50 percent discount, it came to a total of $35.80.

PN65

THE COMMISSIONER: But that's not a universal benefit to all employees, that's a personal benefit to any individual employee who elects to exercise. That's not something you can aggregate as a benefit to all employees.

PN66

MR AGNEW: It's a benefit written into this document Commissioner as opposed to something that's part of company policy.

PN67

THE COMMISSIONER: But how does it have a value for the employee? How do you rate it as a value to all employees?

PN68

MR AGNEW: I'm just giving you a value of what has happened in the past and I'm just relying on that. Obviously based on this figure in the September month only $35.80 has been accessed. It doesn't seem to be accessed on a large scale by the employees whilst they're rostered and I believe it was only $6.40 whilst they weren't rostered. So I'm just pointing out to you.

PN69

THE COMMISSIONER: Well it's hardly a benefit is it?

PN70

MR AGNEW: There is also, I forgot, a provision also at 6.1.1(a) that if they work over six hours they get a free meal and the value last month for that was $639.97, so obviously most employees are going for the free meal rather than the discounted meals, which would only make sense. I have a document which I can tender for the Commissioner.

PN71

THE COMMISSIONER: I don't need to see that. A fairly common feature of any agreement in a restaurant that employees are entitled to a meal after a certain minimum number of hours at work provided by the employer.

PN72

MR AGNEW: Free meals in my experience, Commissioner, are rare. Discounted meals are very common. I agree with you. There is also an ability at appendix 2 for employees at the end of each anniversary date of this agreement or at the end of their employment to request a comparison of what they would have been paid under the award had they been paid under that compared to this agreement and the employer does undertake to advise all staff on the anniversary date or on their termination that they have that entitlement and I would indicate to you that the employer has agreed that I will contact the employer with the official notice to give to those employees and if requested, I will myself conduct the audit and if there is a shortfall my client undertakes that that will be paid.

PN73

THE COMMISSIONER: Is that on the presumption that you have a continuing commercial arrangement with the client?

PN74

MR AGNEW: Well if I can speak bluntly to you I am retained by this organisation and - - -

PN75

THE COMMISSIONER: I can't take your commercial arrangements into account in how the agreement will be administered.

PN76

MR AGNEW: Well, in terms of this company I am retained for the next three years as part of my arrangements with this company and part of the arrangements are not only to help them with the audit comparison but also to advise them of the increases. For instance, if there is an award increase that is over and above the two and a half per cent I will formally advise my client of that.

PN77

THE COMMISSIONER: Okay.

PN78

MR AGNEW: In terms of the reductions, Commissioner, the first one is in terms of if an employee wishes to resign under the award, they only have to give a week's notice whereas under this agreement, they have to give notice in accordance with that standard table and I'll just make a reference to section 170CM. So, what we're asking is employees to give the same notice as the employer. I should point out though that my client informs me the average employee is no more than two years and that's at 2.2.4 Commissioner.

PN79

Terms of redundancy - there is a slight reduction in the redundancy provisions being that the redundancy or severance entitlement only goes up to four years and is capped off at 12 weeks whereas the award, if you're less than 45 and less than two years' service, is 16. If you're over 45 and more than two years' service it is 20, the capping. At 2.4.4 there is a provision for the employer to have a trial shift with a potential employee. If the employee's employed, they will be paid for that trial shift. If they're not employed the intention is not to pay that person.

PN80

THE COMMISSIONER: What's the rationale for that?

PN81

MR AGNEW: The employer has a lot of people coming in off the street requesting work and it is an ability for both parties to at least see whether or not they've got some potential or talent to work within the restaurant.

PN82

THE COMMISSIONER: One wonders what the legal obligation is of the employer towards that person if they're not a paid employee and the protection for both parties under workers' compensation legislation. You say they're not going to be paid. I'd hate it to be argued that they are not an employee for the purposes of workers' compensation.

PN83

MR AGNEW: I don't think that argument, I mean the definition I think under that New South Wales Act is actually "worker". I think it is a lot broader definition than employee, Commissioner.

PN84

THE COMMISSIONER: So there's no doubt in your mind that such a person engaged on a trial basis albeit for up to five unpaid hours.

PN85

MR AGNEW: If they were injuring themselves, the injury would be compensatible under the Act.

PN86

THE COMMISSIONER: Okay.

PN87

MR AGNEW: Commissioner, there are a lot of situations where a lot of school age children just want experience and do come to the employer - - -

PN88

THE COMMISSIONER: I'm well aware of all of those issues Mr Agnew - - -

PN89

MR AGNEW: - - - and have in the past requested to work without any money. All I'm just simply trying to do is tidy up a situation, at least my client is, tidy that situation up a little. As I mentioned to you Commissioner the job category - - -

PN90

THE COMMISSIONER: Can I just - it is only in the context that workers are given a trial shift for the purposes of assessing them for employment. It is not to exploit free labour I trust.

PN91

MR AGNEW: No.

PN92

THE COMMISSIONER: Because you could have a line up of young people. You give everyone a five hour trial shift over every day of the school holidays.

PN93

MR AGNEW: I think from a practical point of view the cost of getting somebody, a trainer, in there and doing that all the time would be ridiculous.

PN94

THE COMMISSIONER: But you're not training them, they're just going to be observed for five hours - - -

PN95

MR AGNEW: That's correct.

PN96

THE COMMISSIONER: - - - to see their aptitude towards working in a cafe or restaurant.

PN97

MR AGNEW: That's correct but you'd need somebody to supervise them bearing in mind that most of them would be young people. The job category is at 3.1.2 as I pointed out to you there are seven grades in the award and my client only has four and I will just point out to you that it is due to the nature of its organisation. It doesn't employ the higher level kitchen employees such as your commis chefs, your demis, your head chefs or chef de parties. Nor does it have - - -

PN98

THE COMMISSIONER: Does it employ any chefs at all?

PN99

MR AGNEW: It does. They call them a Kitchen Manager.

PN100

THE COMMISSIONER: Right.

PN101

MR AGNEW: Understanding as you probably do, Commissioner, the nature of the industry, I mean chefs per se are hard to come by and they're in demand and salary levels are quite high and I can actually tell you how much you're paying a chef.

PN102

MR ANTILL: At the moment we're paying him the Manager's rate. He's on $32,000.

PN103

MR AGNEW: $32,000.

PN104

MR ANTILL: In terms of clause 3.2.1 the wages, Commissioner, as I say, the intention is to pay the additional loading, to simplify the payroll administration but to take away what normally employees get on a Saturday and Sunday which is weekend penalties and on a public holiday which is public holiday penalties and the various other allowances such as your uniform allowance in particular and annual leave loading - - -

PN105

THE COMMISSIONER: Mr Agnew, I think for the record I should note that over the last 24 hours you and I have had a couple of discussions over the rates of pay proposed under this agreement as well as rates of pay of a similar structure in relation to another agreement and one of the things that I've expressed to you and I'll formalise it here is the components that make up that 10 per cent loading. I'm as yet not aware of how much each of the sacrificed award entitlements equates within that 10 per cent. Are you in a position to clarify that for me?

PN106

MR AGNEW: I do have a document here Commissioner which I can tender to you. It is basically 203 Monday to Friday days.

PN107

THE COMMISSIONER: Just a second, the single tape document I'm not provided with by Mr Agnew I'll mark as exhibit A4 and it is titled, "Basis of calculation of hourly rates for Hogs Breath Richmond". Does it apply also at Hamilton?

EXHIBIT #A4 BASIS OF CALCULATION OF HOURLY RATES FOR HOGS BREATH RICHMOND AND HAMILTON

PN108

MR AGNEW: It is the same rates. I apologise. It should be - - -

PN109

THE COMMISSIONER: Would you explain it for me please?

PN110

MR AGNEW: Basically this is an analysis done by myself Commissioner, looking at the rostering arrangements and we've divided it into the various categories. I haven't included the uniform allowance bearing in mind there are other benefits under this agreement and also bearing in mind the uniform isn't one which fits within the definition of a special clothing, or at least that's my opinion.

PN111

THE COMMISSIONER: What about annual leave loading? I note this specifically fails to mention annual leave loading. I think you mentioned it was intended to offset weekend and public holiday penalty rates and annual leave loadings?

PN112

MR AGNEW: That's correct Commissioner.

PN113

THE COMMISSIONER: There doesn't appear to be a component here for annual leave loading.

PN114

MR AGNEW: My difficulty in that is that some of the employees will be casual and some will be part-time and I've only done an analysis here of the part time rates. All I can suggest to you is that that's the intention of the 10 percent. The other benefits under the agreement such as the pay increases will, it is my intention, make up for the leave loading. The leave loading is approximately 15 cents per hour in additional amount which equates to I think less than one and a half percent on the hourly rate.

PN115

THE COMMISSIONER: I'm just going on your document. You have provided me with a document that says that makes up the components or makes up the components or provides the components of the ten percent loading but it doesn't include annual leave loading.

PN116

MR AGNEW: Well the intention was to make up the components of the traditional penalties when people work on particular days. I'm simply saying to you Commissioner that I believe that there are other benefits in the agreement that can compensate the employees for the loss of their annual leave loading and I should point out annual leave loading under the award is not payable strictly in every situation. If an employee is dismissed for serious misconduct I understand in the provision for the award at clause 17 of the award.

PN117

THE COMMISSIONER: I'm aware of the exclusions and the specific application of annual leave loading but again I go back to your submission says it includes annual leave loading. This document in support of your ten percent loading and the components that make up the ten percent loading doesn't include annual leave loading. Your submissions are contradictory, that's all.

PN118

MR AGNEW: I can only concede that strictly reading clause 3.2.2 that is the case but I would simply ask you to take into account that there are additional benefits under this agreement that would compensate the employees for the loss of it and I'm just simply showing you by producing this document the parameters in which we propose to roster employees within which wouldn't include the payment of annual leave loading because we're dealing with rostering arrangements of employees.

PN119

THE COMMISSIONER: I'm sorry I didn't follow that line of argument at all. It doesn't seem to make any sense at all. Could it be that the basis of the rates contained in Exhibit A4 are slightly below what they should be to take into account annual leave loading? I think you've estimated something like less than 15 cents per hour.

PN120

MR AGNEW: If that's the case I can certainly put on the record and my client is prepared to make an undertaking, that if annual leave is taken, that annual leave loading will be paid.

PN121

THE COMMISSIONER: Well then the agreement is wrong. You can't have it both ways. You can't have the agreement saying it includes annual leave loading and then give me an undertaking that if someone takes leave they'll be paid annual leave loading.

PN122

MR AGNEW: The undertaking will be attached to the agreement Commissioner and the client will make it clear to the employees. You have their representative here today.

PN123

THE COMMISSIONER: Well I note that that is a variation to the agreement and if that can be provided to me by way of a 170 or the undertaking I'll accept that.

PN124

MR AGNEW: In terms of hours of work the minimum hours for a part timer is 20 hours over a four week cycle, which is a reduction from the award if a restaurant has less than 15 employees it's nine hours. If they have more than 15 employees it's 15 hours.

PN125

THE COMMISSIONER: It's a part-time minimum of 20 hours over what cycle?

PN126

MR AGNEW: A four week cycle. The reason for doing that Commissioner is that that gives now the employer the opportunity to offer people who normally would have been casual an opportunity to take up part-time employment, which means guaranteed hours to the employees and which in a lot of cases means they can go now to a bank and get a loan whereas previously they wouldn't have been able to do that. It is a reduction and I point that out.

PN127

At 4.1.3 the minimum hours for casuals is two hours per shift, the particular award has a three hour minimum. Again I would and I'll take my friend's instructions on this but most of the employees I believe live fairly close to the restaurant.

PN128

THE COMMISSIONER: Do they work split shifts?

PN129

MR ANTILL: I have probably two or three split shifts per week that are done, one in the kitchen and two on the floor.

PN130

THE COMMISSIONER: Are they for permanent part time employees or are they casuals?

PN131

MR ANTILL: They're generally done by the permanent part timers.

PN132

THE COMMISSIONER: Okay thanks.

PN133

MR AGNEW: The overtime clause, there is an ability at clause 4.2.4 to work up to ten hours per week, there is a capping, on an hour to hour basis. Now I should point out to you the award does have two provisions within it and there is a slight difference between the agreement and the award, but the award does have two provisions within it at clause 11.3 to take time off in lieu on an hour for hour basis and if it's not done within 12 months it'll be paid at normal overtime rates.

PN134

Also there's a clause 6, there's a make up time provision of the award. Now at 4.2.4 it's not intended to be used on a regular occurrence it's obviously with the agreement of the employee, so if they don't wish to work it on an hour for hour basis they will be paid overtime rates and there is a capping on it and generally I'm informed by my client it's only going to be used for cases where employees call in sick and employees have to work either an additional few hours, or they are absent and they haven't notified the employer for whatever reason.

PN135

THE COMMISSIONER: So those who were at work may extend their work and they may be paid overtime or they may choose to have equivalent hours off.

PN136

MR AGNEW: No, it will be paid. That's the difference between the award and the agreement. They'll be paid.

PN137

THE COMMISSIONER: So up to ten hours per pay cycle they can work additional hours over and above their rostered hours but at ordinary rates?

PN138

MR AGNEW: If they elect to be paid at their ordinary rates. They have the choice. Again I mentioned this one before, at 5.1.5, his ability to cash in annual, I just point out and you are aware Commissioner of the Annual Holidays Act in New South Wales doesn't permit cashing in of annual leave. I would point out it's only five days and it's got to be by consent with the company and the employee. I know that there have been previous decisions under the old Act such as the Tweed Valley decision, that it's said it's not within the public interest. I just point out to you it is a reduction compared to a State statute.

PN139

Also for the sick leave there is a requirement to provide a medical certificate for any absence as opposed to two days under the award. So if you were absent for less than two days under the award you wouldn't have to provide a medical certificate whereas under this agreement you do.

PN140

Now the reason for that Commissioner is again the intent of this entire agreement is to take people from casual employment to either part time or full time employment and with that obviously comes issues such as sick leave and the management thereof. It is a management issue and that is all.

PN141

I should also point out at clause 5.2.5 there is a requirement to notify at least three hours before the commencement of a shift, I failed to mention this from the outset, I should point out to you the trading hours of the restaurant normally are from 11.30 am to 9.30 pm Monday to Sunday. Occasionally on Fridays and Saturdays when it is busy I informed they go to 10.00, 10.30, so there are no hours I informed over 10.30 in terms of the restaurant's operations so it's not a twenty four hour operation nor an operation where they have young kids working till late or early in the morning.

PN142

I believe the first shift starts at - - -

PN143

MR ANTILL: The kitchen come in at 10 o'clock and the floor start at 11.

PN144

MR AGNEW: My client has just said the kitchen staff come in at 10 o'clock in the morning and the first floor shift comes in at 11. That's just a summary of the key benefits and a summary of the key reductions. Most of the reductions or benefits are contained in a document that's attached to each of the statutory declarations. It is annexure D. That goes into it in more particular format. In terms of the requirements under the Act, Commissioner, I'd just mae a brief submission on that. I'd just indicate to you and I do have a decision of Bunnings Building Supply which I think you'll be familiar with, which indicates a decision by Commissioner Whelan which I think's been relied upon by this Commission subsequently, on occasions when looking at the "no disadvantage test".

PN145

He talks about the difference between the old test under the old Industrial Relations Act 1988 and the current Act and he basically says the major difference between the tests, and this is at page 6 of the decision I have, and I will hand up a copy.

PN146

THE COMMISSIONER: What's the print number?

PN147

MR AGNEW: It is print number P6024 Commissioner.

PN148

THE COMMISSIONER: Of which year?

PN149

MR AGNEW: The decision, Commissioner Whelan, was 21 October 1997. I do have a copy for you if you wish.

PN150

THE COMMISSIONER: Thank you.

PN151

MR AGNEW: At page 6, Commissioner, about two thirds down the page, the sentence commencing - and I'll just quote this for you:

PN152

The major difference between the tests is that the contents of the agreement must be considered as a whole to determine if on balance it would result in a reduction in the overall terms and conditions of the employees concerned and only if such an overall reduction is found, does consideration of public interest apply.

PN153

In my submission based on the material before you today I would submit that you either must certify or must not certify or, obviously subject to undertakings under one section, section 170LV, subject to those, certify the agreement in accordance with the requirements of section 170LT and 170LK and in my submission, on the material before you, those requirements have been met. I would rely upon that decision in terms of what is meant under the Act, under I think it is 170XA, the definition of "no disadvantage test" and that the agreement does meet that test.

PN154

If it doesn't, then my client as indicated, is prepared to make an undertaking under 170LV, one of which they've already given you Commissioner in order to make the agreement certifiable. They're my submissions Commissioner.

PN155

THE COMMISSIONER: Thanks, Mr Agnew. You've covered all the matters that I had of concern. As I said when you handed up exhibits A1 and A2, I'll compare the content of those documents to the documents that you provided by fax late yesterday because exhibits A1 and A2 now need to be incorporated within that package of documents that you supplied last night and I'll assess the content of those accordingly. When I'm asked to certify non union agreements of this nature, I give those representatives of the employer and the employees an opportunity to ask questions of the Commission in relation to this certification process.

PN156

From what you've heard today, Mr Antill and Ms Lewis, do you have any questions in relation to what the certification of this agreement means.

PN157

MR ANTILL: I don't particularly have any questions at all.

PN158

THE COMMISSIONER: All right. Ms Lewis.

PN159

MS LEWIS: I don't have any questions either sir.

PN160

THE COMMISSIONER: All right, you clearly understand the nature of the agreement that you entered into.

PN161

MS LEWIS: Yes sir.

PN162

THE COMMISSIONER: And do you think your colleagues all understand that by certifying the agreement gives it legal force? Right. Okay. Thank you. Now was there anything that arose out of today's discussions that I've had with Mr Agnew on the record that concern you at all Ms Lewis?

PN163

MS LEWIS: No. No sir.

PN164

THE COMMISSIONER: All right. That's fine. Okay. Well, consistent with my earlier comments I'll reserve my decision in regard to the certification of this agreement and we'll notify the parties as soon as possible when I am satisfied sufficiently enough to certify the agreement of otherwise. That concludes the proceedings and the Commission will adjourn.

ADJOURNED INDEFINITELY [11.17am]

PN165

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 COMPARISON OF AWARD AGAINST EBA KITCHEN DIRECT LABOUR COSTS PN13
EXHIBIT #A2 COMPARISON OF AWARD AGAINST EBA FLOOR DIRECT LABOUR COSTS PN13
EXHIBIT #A3 HOGS BREATH CAFE NEWCASTLE ENTERPRISE AGREEMENT, UPDATE OF WAGE RATES, DATED 06/04/1999 PN16
EXHIBIT #A4 BASIS OF CALCULATION OF HOURLY RATES FOR HOGS BREATH RICHMOND AND HAMILTON PN108