C2003/5643, Transcript of Proceedings [2003] AIRCTrans 4760 (29 October 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

TRANSCRIPT OF PROCEEDINGS


AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER BLAIR

C2003/5643

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

and

ALFA FURNITURE PTY LTD

Notification pursuant to Section 99 of the Act
of a dispute re classifications

MELBOURNE

8.35 AM, MONDAY, 13 OCTOBER 2003

PN1

MR R. LOWE: If it pleases the Commission, I appear for the CFMEU. Appearing with me are organiser, MR ANDREW VENDRAMINI and we have also with us a member, MS ALEXANDRA AUGERINAKIS. If the Commission pleases.

PN2

MR N. CRAVEN: If the Commission pleases, Neil Craven of the Furnishing Industry Association. I am appearing on behalf of the - the name of the company is English Amber Pty Limited trading as Alfa Furniture. Appearing with me is ANN GRACE and MR JOHN KYRIACOPOULOS. If the Commission pleases.

PN3

THE COMMISSIONER: Yes, Mr Lowe?

PN4

MR LOWE: Thank you, Commissioner. This dispute is over the classification of our member who was employed by Alfa Furniture initially in 1987 and continue employment when the transmission of business took place with the present company around about November in 1988. She was employed as a sewing machinist on lounges produced by the company. From 1988 when the present owners took over, I am advised, Commissioner, that her duties included sewing up and operating of number types of material, using two types of sewing machines one being a standard sewing machine and the other being an overlocker, and in 1988 when the company bought the overlocker, there were two employees in the factory operating both machines. While she was employed there, she was paid simply as an employee level 2. We believe that to be contrary to the provisions of the award.

PN5

I have brought, Commissioner, some extracts from the Furnishing Trades Award which may be of some assistance to the parties, which just deal with classifications. The Commission will see that this is the current award which was made by the Commission in April of 2001, printed in June 2003, but the classifications have remained pretty standard for some period of time. I'd like to take the Commission in the first instance to page numbered 31 at the bottom.

PN6

THE COMMISSIONER: Right. Got that.

PN7

MR LOWE: That area there, in clause 21.2.2 deals with a production employee level two and, in clause 21.2.2(a) provides the duties and the indicative tasks which an employee at this level may perform. The Commission would see at dot point four:

PN8

Repetition work on any automatic, semi-automatic or single-purpose machine.

PN9

Then I would take the Commission to pages 32 and 33 which deals with the classification for a production employee level three and, on page 33, Commissioner, again in clause 21.2.3(a) under the duties and the indicative tasks which an employee at this level may perform are the following, and at dot point two:

PN10

Sets up and operates two or more sewing machines other than computerised numerically controlled machines.

PN11

We would say that that is the classification that our member should have been employed under, our people doing that work at this plant as they use more than one sewing machine.

PN12

The discussions that have taken place, Commissioner, between our union organiser, Mr Vendramini, and the employer's representative - Ann, I understand it to be - and then now discussions with the Furnishing Industry Association, have failed to resolve the issue. In the last discussions that I've had with Mr Craven, he has indicated to us that the company isn't disputing the fact that the overlocker was used by our member but they are arguing that it was only used on, I guess, occasions which didn't number very greatly, so it wasn't used often. In discussing this with Alex, he has indicated to us, Commissioner, that she used both machines on a regular basis. They weren't used in the period of time she was employed between 1987 and 1988 as the only lounges that were made were made with vinyl but when the company started using fabric for covering the lounges, then she used them on a regular basis and indicated to me that that would have been in excess of two hours a day, and there is a mixed functions clause in the award, and I haven't included that unfortunately with the document I have handed up, but that is clause 24 of the award, Commissioner, and that provides for:

PN13

An employee engaged on more than two hours during any day or shift of duties carrying a higher rate than their ordinary classification rate should be paid the higher rate for such day or shift. If it is for two hours or less during one day or shift, they should be paid the higher rate for the time so worked.

PN14

In discussions that I had with Mr Craven, he indicated that there could be a case for higher duties or a mixes function payment to apply; however, our member has indicated that using the both machines was a regular part of her duties and that is what we believe she should be classified as.

PN15

So we would hope, Commissioner, that we can use this process and your assistance to resolve this dispute we have with the company. We are quite happy to go into conciliation to try and resolve this matter and we suggest that that happens. That has been discussed with Mr Craven as a process.

PN16

The only thing that I want to say now, I understand that when Alexandra finished working with the company, she was paid out at the rate of a level three employee. So that, we are of the view, vindicates the claim that we have here before the Commission this morning. If the Commission pleases.

PN17

THE COMMISSIONER: Just a couple of questions. When did your member cease working for the company?

PN18

MR LOWE: I understand the member finished working for the company in 1999 but she was on WorkCover from '95 to '99, Commissioner.,

PN19

THE COMMISSIONER: Right. And, at any time during the employment relating to the mixed functions, or the higher duties, sorry, did your member ever receive any payment for the higher duties?

PN20

MR LOWE: No. The payments that have been received have been at the level two rate, Commissioner.

PN21

THE COMMISSIONER: Okay. Thank you. Yes, Mr Craven?

PN22

MR CRAVEN: Thank you, Commissioner. As Mr Lower has outlined the claim, she commenced employment - well, the current owners of the company took over the running of the company in 1988 and our records are from there. She resigned earlier this year on 26 February. She had been injured at work in August of 1995 and went off on WorkCover in March of '99 and was never to return. I understand that the workers compensation matter has been settled and that is now finalised and that she is now on benefit of some other payment not to do with WorkCover.

PN23

THE COMMISSIONER: Sorry, when did the current owners take over the company?

PN24

MR CRAVEN: 1988.

PN25

THE COMMISSIONER: 1988.

PN26

MR CRAVEN: Yes.

PN27

THE COMMISSIONER: Sorry, I thought Mr Lowe said there was a takeover in '97. Did I misunderstand?

PN28

MR LOWE: No, no, 1988 was with the current - she started working in 1987. Sorry, Commissioner, if I wasn't clear on that - - -

PN29

THE COMMISSIONER: No, I just misunderstood you.

PN30

MR LOWE: - - - or if I inadvertently gave you the wrong year.

PN31

THE COMMISSIONER: So when did the lady officially finish with the company?

PN32

MR CRAVEN: February of this year.

PN33

THE COMMISSIONER: Okay. So - - -

PN34

MR VENDRAMINI: She started in '87, the company was taken over in '88, she went on WorkCover in - - -

PN35

THE COMMISSIONER: '95.

PN36

MR VENDRAMINI: - - - in '99.

PN37

THE COMMISSIONER: Well, where did '95 come from?

PN38

MR CRAVEN: That's when she first lodged a claim for WorkCover, Commissioner.

PN39

THE COMMISSIONER: Okay.

PN40

MR CRAVEN: And then she was fully incapacitated from March of '99 - fully incapacitated from '99 and she submitted a resignation early this year.

PN41

THE COMMISSIONER: Right. Okay. Thanks.

PN42

MR CRAVEN: Commissioner, our position in respect of this matter - and we do not oppose going into conference - is that the vast majority of her duties, and the principal duty, was operating a sewing machine and that it was on a very irregular basis that she operated an overlocker, and I will come to that in a moment. So we reject quite outrightly the claim that she be entitled to be paid at a level three during her employment.

PN43

From 1988 to approximately 1995, the company's main product - and they are a furniture manufacturer, an upholsterer, was making sofas or lounge suites. Those products were made out of vinyl and velvet, and that represented probably at least 90 per cent of their production. Commissioner, when you manufacture furniture out of vinyl or velvet it does not require overlocking and we can provide technical evidence to that effect and how it was manufactured, etcetera.

PN44

THE COMMISSIONER: I think Mr Lowe sort of concedes that, doesn't he?

PN45

MR LOWE: Yes.

PN46

MR CRAVEN: Over 90 per cent of their product through to the mid-90s, that was their line of product. They were known for their velvet and vinyl, particularly vinyl, and there is still some vinyl products being made although they are being phased out now. I might add that since '95 when the material started to change - in fact, since '96, nearly all of the overlocking has been outsourced. Now that they are making them with different forms of material that does require overlocking, that was outsourced.

PN47

Now, at present, we have one lady working on the sewing machine who does do some overlocking and that was approximately on two days a week and no more than 10 hours a week. Now, this is with the change of material and so it is an irregular and does not occur every week. The vast majority of the overlocking is still being outsourced. We would lead evidence at a formal hearing that the union's member actually wasn't keen on overlocking and that when it was required of her to do it it was actually performed by another lady. The company's overlocking machine was only recently moved into the sewing machine. It was relocated in another area during the period of employment of the union's member, and really was used by the designers, and again, we would produce evidence to that effect.

PN48

We would also provide evidence from Mr John Kyriacopoulos, if required, who was the cutter and then supervisor of the ladies in question as to how much work was given out and when - and how much overlocking was done and, to that effect, we would say that between 1988 to 1995, there was probably only 20 examples - that is two to three times a year - that overlocking was performed, and it takes approximately two hours per job because they were using vinyl and velvet products, and this is consistent with what we are saying.

PN49

Between '95 and '99, as I said before, the overlocking was outsourced. There was some more internal overlocking. The overlocking that was done internally was shared and approximately once every two weeks, we estimate, and that would involve two hours, and, again, those two hours were shared between employees. And so if you look at that on the basis of two hours per - every two weeks, you are only looking at about 50 hours per year.

PN50

Mr Lowe made mention of the fact that the lady in question was paid out at level three. This was done as a result of the following: in early 2002, the company decided to give a pay rise to the ladies who were still with the company in the sewing room - there are two other ladies, once of which has been with the company for about 13 years, and this was done on the basis of - not on the basis of reclassifying employees, it was a case of the company decided to recognise their loyalty and their effort in saying, yes, they have been putting in for a long time, yes, we're going to give them a pay increase, and this is not an inconsistent practice within the industry at large, a way of helping out the employees.

PN51

They did not reclassify the employees per se and as Mr Lowe - and when Alexandra resigned early this year, the company took the view if she had been working at the company, what would we have paid her, and they decided that they would pay her at a level three because it was a case of a fair policy. It was a case of - the award was interpreted by the company without resource to anyone on the basis, well, if she was working with us, in calculating her notice pay, etcetera, all the entitlements, long service leave, everything, everything was paid out on the level three rate because they took the view that she would be still in the sewing room and that she would have go the increase back in early 2002, and therefore they paid her on those entitlements which we would argue was generous and they didn't have to do it because our submission is all the way through that she was no entitled to be at level three.

PN52

Mr Lowe referred to discussions we had briefly last week when I mentioned in fact that there may well be an argument for the application of the mixed functions clause and, given the constraints that I believe in which it should apply, given the minimum amount of overlocking activity that has occurred during her employment, yes, that may be applied, but we do not see it as substantive as two hours a day every day of the week as Mr Lowe has submitted. We say it was on a very irregular basis.

PN53

We would say, Commissioner, in going into conference, that if the matter was to proceed to arbitration, if the matter cannot be resolved, then we would provide evidence from the owners of the company, from the supervisor and cutter, from other sewing machinists, to show that the extent of overlocking to which the union state occurred, did not occur; in fact, it was on a very irregular basis.

PN54

I might add that this matter - we are a bit surprised that this matter has been raised now inasmuch as she went off on full incapacity in '99. Here we are in year 2003. But the company informs me that the union paid regular visits to the company over many years and an organiser who Mr Lowe will be able to assist me with who has now retired, a gentleman called Ray - I do not have his surname and I will endeavour to find that out - had a very good working relationship with the company and, in fact, each year would sit down with Mrs Grace and go through the pays and the classifications and check them out.

PN55

So the company is of the view that, for many years, with the union's knowledge, we've been paying the people correctly and following the award and all the rest of it, and here we are in a situation now where we are now having a claim, some four years after she has finished effectively working at the company for this. The union's claim, if one takes it to its fullest extent, the difference in award rates is $20 per week between a level two and a level three, or $19.90. Now, if you break that down, Commissioner, we are essentially looking at $4 a day, and I say that because of the argument regarding the mixed functions clause. However, if the union's claim was to be granted in full from 1988 to 1999, some 11 years, we are looking in the terms of $12,000 and that, we would say, is totally over the top.

PN56

THE COMMISSIONER: But that goes beyond the statute of limitations in any event .

PN57

MR CRAVEN: That was my final point, the statute of limitations, and I will leave that with you for the moment, Commissioner. Having said that, we do not object to going into conference and seek your assistance in processing this matter. If it please the Commission.

PN58

THE COMMISSIONER: Just a clarification for the transcript. Mr Lowe, has your member successfully completed a training program consistent with national competency standards?

PN59

MR LOWE: Commissioner, that is information that I don't have.

PN60

THE COMMISSIONER: It is pretty vital because, looking at the production employee level three, it is in fact mandatory. It is not an option, it is mandatory that she must have completed training in consistency with national training standards. Then, you then look at the indicative tasks to see whether or not the indicative tasks have been performed. So it is just not looking at the indicative tasks on its own and say we'll forget the national standards in terms of training. If you don't do the training - reading the document, if you don't do the training, then it doesn't make any difference what tasks you do, you are not entitled to be at level three.

PN61

MR LOWE: Well, Commissioner, I've got to then go back to the time when I was involved some time ago in, I guess, the restructuring of this award when these indicative tasks came into being and, I guess, there were certain words that was put around certain things and it was up to the employer to provide the training for employees so that they could carry out their tasks. Then, if they didn't carry out their tasks - because, basically, someone can't move off level one under this award if the training is not provided. Unfortunately, in this industry, the training that gets provided to people who have been employed in the industry for some time and not part of the apprenticeship system, is extremely limited.

PN62

So I don't know what training was ever provided for our member by the company or by previous companies. I certainly know that it was the intention of both the employer parties and - it was the Chamber of Manufacturers, a Mr Maurie Mason, who was the employer representative putting that together, myself and other union officials was that if people were doing those tasks, then they were the wage rates that they would achieve, and there is also attached to the document that I have given you, a comparative schedule which was used by employers to also assist with the transposing of people from the old system to the new system which is still in place.

PN63

THE COMMISSIONER: The only difficulty that I've got with your submission is that levels one and two don't require it to be mandatory to undergo training to national competency standards. But if you read clause 21.2.2(e), it says:

PN64

Progression to level three will be on the basis of an employee at level two obtaining the requisite skills and competency standards and on being selected on merit for a level three position when it becomes available.

PN65

It then says at 21.2.3, production employee level three:

PN66

A production employee level three is an employee who has successfully completed the structured training consistent with national competency standards so as to enable the employee to perform work within the scope of this level. An employee at this level performs work of an advanced nature above and beyond the skills of an employee at level two and to the level of their training.

PN67

Then it says the duties. Now, unless there is a transition clause in the award that I am not aware of that says that employees at a given point in time who may be performing work, say, considered to be at level three, may not be required to undergo the competency standards, unless there is a clause in the award something similar to that or words to that effect, one has to rely upon the existing wording, as I see it.

PN68

MR LOWE: Well, 21.3, Commissioner, provides a comparative schedule of old classifications of new broadbanded wage levels.

PN69

THE COMMISSIONER: Right.

PN70

MR LOWE: And that shows in the various areas, for instance the people who carry out various functions, as to what rate they should be. So a machinist be grade, for instance, at page 39 at E4, there is a production employee level 2, whereas a utility worker is production employee level 3.

PN71

We would put it to you, Commissioner, that for a person to be able to utilise the overlocker, they would had to have had some training, whether it was with this employer or with some other employer, to be able to utilise the skills of operating more than one machine as required. So those skills just didn't drop out of the air, so people had to be trained how to use a range of machines, in this case sewing-machines, to be able to do the work that is required.

PN72

THE COMMISSIONER: So at page 39, looking under grade B, is that the grouping?

PN73

MR LOWE: Grade B.

PN74

THE COMMISSIONER: Yes.

PN75

MR LOWE: Furniture-maker grade 1.

PN76

THE COMMISSIONER: Yes.

PN77

MR LOWE: Machinist - - -

PN78

THE COMMISSIONER: Where would have your member fitted under the old structure?

PN79

MR LOWE: Well, they would have fitted in under the machinist grade B, I would have thought.

PN80

THE COMMISSIONER: As defined.

PN81

MR LOWE: Yes.

PN82

THE COMMISSIONER: Is there a definition?

PN83

MR LOWE: And you have got a grade C. There is a - and if you look on page 40, at F2, machinist grade C, ie a cutter operating electric cutting machine and/or sewing-machine is production employee level 2, and that links to the single machine, not to a multiplicity of machines, Commissioner.

PN84

THE COMMISSIONER: So F2, machinist C grade, ie cutter operating an electric cutting machine and/or sewing-machine.

PN85

MR LOWE: Yes.

PN86

THE COMMISSIONER: Is a production employee level 2.

PN87

MR LOWE: That is for a single machine, and then that has been transposed into the current wording in the award at level 2 for a person that operates a single purpose machine, and a person that is doing work of a repetitive nature, Commissioner.

PN88

THE COMMISSIONER: But the transition has been right. The transition has been over to a production employee level 2, which is what your member was classified as.

PN89

MR LOWE: She was classified as that, but she wasn't just using one machine. She was using more than one machine, which is required under level 3, Commissioner.

PN90

THE COMMISSIONER: That is a machinist B grade.

PN91

MR LOWE: That would be a machinist B grade.

PN92

THE COMMISSIONER: Okay. So how is a machinist B grade defined? Where is the definition of a machinist B grade?

PN93

MR LOWE: That is on page 29. Engaged in the setting up and operating or working of freehand machines. And then it mainly deals with machines which are used in the woodworking section.

PN94

THE COMMISSIONER: No, machinist B grade is on 28.

PN95

MR LOWE: 28, yes. It means a person engaged in the setting up or operating or working freehand machines such as - and then it lists the whole range of machines. And then machinist C grade, which is underneath that, means a non-tradesperson engaged as a cutter operating electric cutting machine and/or sewing-machine.

PN96

THE COMMISSIONER: That is a machinist C grade, though.

PN97

MR LOWE: Yes, and that is for a person that uses just a single purpose machine, and just the one machine; doesn't have the skills to operate more than one machine.

PN98

THE COMMISSIONER: All right, the Commission will go into conference.

NO FURTHER PROCEEDINGS RECORDED [9.45am]