C2003/5095, Transcript of Proceedings [2003] AIRCTrans 4901 (6 November 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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

TRANSCRIPT OF PROCEEDINGS

O/N 5087
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT IVES

C2003/5095

SHOP DISTRIBUTIVE AND ALLIED EMPLOYEES
ASSOCIATION

and

COLES SUPERMARKETS PTY LTD

Application under section 170LW of the
Act for settlement of dispute re the
employer's intention to reduce the hours
of work for part-timers in a number of
Victorian stores

MELBOURNE

10.06 AM, TUESDAY, 21 OCTOBER 2003

Continued from 7.8.03

PN105

THE DEPUTY PRESIDENT: Have we got a change in the appearances?

PN106

MR J. BOURKE: Yes, your Honour. I seek leave to appear on behalf of Coles.

PN107

THE DEPUTY PRESIDENT: Yes, thank you. Mr Ryan, any objection to leave?

PN108

MR BOURKE: No.

PN109

THE DEPUTY PRESIDENT: Yes, leave is granted, Mr Bourke.

PN110

MR BOURKE: Thank you, sir.

PN111

THE DEPUTY PRESIDENT: I might just note that I have had, I think, two requests. The first from the respondent that I should issue directions in this matter, which I declined to do. And the second, as I recall, that the time set aside for the hearing of this matter did not appear to be long enough, and there was a suggestion from the respondent that I should set aside further time. Again I declined.

PN112

It seemed to me appropriate in the circumstances, as this was an SDA application, to hear from the union as to what progress, if any, had been made in this matter. Should it be that more time is necessary, then that can be arranged. Again, should it be necessary that there be directions issued, then I can determine that at the appropriate time.

PN113

I note that there have been submissions filed on behalf of the respondent, but after I have heard from the SDA I will be more in a position to determine the way that we take these proceedings further.

PN114

MR BOURKE: Can I just say first, your Honour, that we no longer seek those directions, and we think the matter can finish today in the time allotted.

PN115

THE DEPUTY PRESIDENT: Yes, thank you. Well, I would assume that given you have filed submissions already, Mr Bourke, that that would have been your position, but we will see how we go after Mr Ryan has - - -

PN116

MR RYAN: Your Honour, there have been discussions between the Association and the company. There was an attempt to resolve the matter, and the attempt was unsuccessful, which led us to ask for the matter to be relisted. So I think we are in a position where it is really the respective cases need to be put to you, with a decision being made.

PN117

Now, we are happy to proceed immediately, subject to anything else you want to do with the matter.

PN118

THE DEPUTY PRESIDENT: No, there is nothing. If you are content for it to proceed, then proceed, Mr Ryan.

PN119

MR RYAN: Your Honour, we outlined briefly the matters in dispute on the last day that this matter was before you. At the time that we first went before you there were two separate aspects to the matter. One of those has been resolved, and that is the general implementation process for the reduction of part-time hours.

PN120

The matter that is outstanding and constitutes the specific part of the dispute we seek to have resolved by the Commission under the disputes procedure of the Enterprise Agreement concerns the consequential effect of the reduction of part-time hours as it affects those persons who have an existing entitlement to long service leave.

PN121

We identified on the last occasion that our particular concern is the reduction in part-time hours leads to a situation where a person who is entitled to access long service leave prior to the reduction in part-time hours suddenly finds that the value of their long service leave entitlement is reduced by 20 per cent if their part-time hours are also reduced by 20 per cent. That is the particular issue that we have.

PN122

There are several aspects to the argument that we would raise with you, your Honour. The first is that the consequences of the way the agreement works was simply never an issue that was put to the membership or to the workers prior to them voting on this agreement. I do note that you were the member of the Commission who originally certified the agreement. I am not relying upon your memory of all of the documentation that would have been perused by you at the time.

PN123

THE DEPUTY PRESIDENT: I am glad you are not, Mr Ryan.

PN124

MR RYAN: I would seek to hand to you a copy of the statutory declaration, and a copy of this is on the file of the Commission in terms of the certification of the agreement. It is only one of the statutory declarations: there were two statutory declarations filed in identical terms. One on behalf of Joe de Bruin the National Secretary of the Association, and one on behalf of the company. They were in identical terms, as is always the case with the agreement that we have got with the Coles Myer group of companies: that is, there is always that uniformity of statutory declarations that we produce.

PN125

Quite clearly part of the process of certification is the requirement of the parties to identify any disadvantages that workers would suffer against an award.

PN126

THE DEPUTY PRESIDENT: I am sorry, Mr Ryan, before you continue, are you seeking to tender this document?

PN127

MR RYAN: Yes.

PN128

THE DEPUTY PRESIDENT: Yes, I think probably, whilst it is a documentation of the Commission, I will accept it as a tender and mark it accordingly, even if only for the purposes of reference.

EXHIBIT #SDA1 COPY STATUTORY DECLARATION

PN129

MR RYAN: The exhibit is quite a lengthy exhibit, and the reason for that is there are a number of annexures and attachments to the exhibit. These are the comparison documents which show both the benefits and the detriments that would flow as a result of the operation of the agreement in relation to each of the relevant awards that apply to the various classes of employees who were covered by the agreement. So it has go the relative Shop Assistants Award plus the Bakers and Pastrycook Award that also apply.

PN130

There is a substantial amount of information contained in that. But what I can say is that any examination of the documentation discloses that there has been no reference at all in any of the documentation to the fact that if a person voted to accept this agreement, that if they were a person with an existing long service leave entitlement as a part-timer, that the effect of agreeing to the agreement would put them in a position that the operation of the reduction in part-time provision would lead to a reduction in long service leave entitlement as a consequential effect of the operation of the agreement in conjunction with the operation of the Long Service Leave Act in Victoria.

PN131

There is mention in the statutory declaration material to a benefit which was identified in relation to long service leave, and that is the ability to take long service leave - double the period of long service leave at half the pay, which was a provision which was incorporated into the agreement. But there was no identification anywhere within the documentation that a detriment would flow from the operation of the agreement, and that the detriment would be that where the employer exercised their rights to reduce part-time hours by up to 20 per cent, that there could be a corresponding reduction of 20 per cent of an existing long service leave entitlement.

PN132

THE DEPUTY PRESIDENT: However, there is a specific provision in the agreement itself, is there not, Mr Ryan, at 6.1.6 relating to long service leave?

PN133

MR RYAN: In the - - -

PN134

THE DEPUTY PRESIDENT: In the agreement itself. And I think the particular provision is to the effect that the long service leave will be in accordance with the relevant State legislation. So are you putting to me that that was in the agreement, but what it meant was not something that was discussed with anybody?

PN135

MR RYAN: Yes. That there was no attempt by either the Association or the company to identify the effect of the operation of the agreement in relation to long service leave as it would impact upon a part-time employee whose hours were reduced in accordance with the reduction in part-time hours provision of the agreement.

PN136

That was not put by the Association because I say it was not an issue recognised by the Association as a consequence of the agreement, and it most certainly was not put by the employer to any of the employees: in which case it questions the, or it raises questions about whether or not a valid majority could have genuinely approved the agreement in any event, given that they were not properly informed of the operation of the agreement.

PN137

Now, I note, your Honour, that the - - -

PN138

THE DEPUTY PRESIDENT: That might be drawing a bit of a long bow, might it not, Mr Ryan?

PN139

MR RYAN: No.

PN140

THE DEPUTY PRESIDENT: No?

PN141

MR RYAN: I note that the normal emphasis on the application of the no disadvantage test is in terms of the comparison between the agreement and either a relevant or designated award, which is essentially the way the no disadvantage test is looked at in practice. And that is as a matter of practicality that the relevant or designated award is quite clearly the major underpinning safety net document, and that gives rise to the greatest degree of scrutiny in terms of an assessment of whether or not the no disadvantage test is satisfied.

PN142

The provisions of section 100XA(2) of the Workplace Relations Act identifies the no disadvantage test not only in terms of the relevant award or the designated award, but also of any law of the Commonwealth or of a State or Territory that the Employment Advocate or the Commission as the case may be considers relevant.

PN143

In the case of the certification of this agreement you could not have considered that the Long Service Leave Act of Victoria was a relevant Act, because the consequences of the operation of the agreement in terms of its impact upon long service leave entitlements of part-time employees was hidden from the Commission by virtue of the non-disclosure of that matter in the proceedings before you, and in any of the information that was put to employees who were subject to the agreement and who were required to vote upon the agreement.

PN144

THE DEPUTY PRESIDENT: And are you suggesting that if that had not been the case, in other words, if it had been raised in proceedings before me, that I would have found it to represent some disadvantage to the employees?

PN145

MR RYAN: Yes. I am saying that if - - -

PN146

THE DEPUTY PRESIDENT: Could it not have equally represented an advantage to employees?

PN147

MR RYAN: That they lose - - -

PN148

THE DEPUTY PRESIDENT: If you wanted to take that line of argument, could not - - -

PN149

MR RYAN: That they lose an existing entitlement?

PN150

THE DEPUTY PRESIDENT: No, that anybody whose hours were increased in fact received a greater entitlement.

PN151

MR RYAN: Yes.

PN152

THE DEPUTY PRESIDENT: So if you wanted to use that line of argument, and I am not suggesting that it is a line of argument that attracts me: I am simply saying that if you wanted to use it, it works in both directions, does it not? Both advantageously and disadvantageously.

PN153

MR RYAN: Yes. In which case material would have to have been put to you as to what is the effect on employees. And it could not be a test satisfied by saying more employees would get an increase in hours than employees who would get a decrease in hours. It would be that if some employees only suffered a decrease in hours, then the no disadvantage test would have been failed.

PN154

That is consistent with an approach adopted by the Commission in relation to the Coles Myer Clerks Agreement case. The Commission made it very clear, and there has been no dissent from this view, that it is what the agreement actually allows, not what may be the practice, but what the agreement allows to happen. The global test of a no disadvantage is not global of all employees, but it is looking at the global test against an individual employee, and if it fails on one, it fails.

PN155

Now, in this case we would have had to have been in a position of putting to you information that this could operate so that during the life of this agreement an employee could suffer a reduction in part-time hours: that reduction could, and certainly as is the case with the current round of reduction in part-time hours, there are employees who have an existing entitlement to long service leave, in other words, they have been a part-time employee for more than 15 years, and they have an actual entitlement to long service leave, that entitlement is simply reduced by 20 per cent as a result of the application of the agreement.

PN156

Now, that is materia that should have, and would have required to have been put to you at the time. And quite clearly if you formed the view that it was an issue where the no disadvantage test would not have been satisfied, then the proper course of action as is required by the Act is not to refuse to certify the agreement, but to give the parties to the agreement an opportunity of either giving undertakings or amending the agreement. And an undertaking that a worker would not suffer disadvantage would have been able to have overcome the issue.

PN157

So it is not an issue that could not have been properly dealt with by the Commission at the time of certification, but in the way the matter was proceeded with, it was not a matter that could have been dealt with by the Commission because it was not drawn to the attention of the Commission. But equally, and probably more importantly, it was not a matter that was even put to the employees who were required to vote on the agreement. And the failure to explain a key issue in the operation of the agreement calls into doubt the genuine approval by the employees of the agreement.

PN158

Given that the statutory declaration, your Honour, and if I can take you to page 8 of exhibit SDA1, there are, or there were at the time some 20,000 part-time employees who were covered by the agreement out of a total workforce of 54,000, it is not an insignificant cohort out of the electorate that may have been not given sufficient information to allow them to genuinely approve the making of this agreement.

PN159

What it leads to is, there is either two ways of approaching this. Either we can accept, as the Association accepted, it was never the intention of the agreement to operate in a way that would have led to a disadvantage being suffered by a part-time employee.

PN160

What we find ourselves then is that as this matter has developed over the last couple of months, it is very clear that the views of the company have been diametrically opposed to hours, and they say it was always a clear intention that the disadvantage would flow if that was simply the way the agreement and Long Service Leave Act operated in conjunction with each other. So on the view that have been put by the company that they have got a right to reduce the hours, and if in consequence of that there is a disadvantage suffered by a part-time employee, then so be it. That is simply a consequence of the application of the Act.

PN161

Now, if that is the view they held at the time they made this agreement, then quite clearly there appears to have been a lack of clarity in the positions of the negotiating parties in understanding the consequences of the agreement. And if that was the position of the company, then it would have required the company to have disclosed that in any event to employees and to the Commission at the time the agreement was being made.

PN162

If that is a view that they have only adopted as a result of the most recent round of part-time cuts, then it would lead to the conclusion that it was the intention of both the employer and the union that a part-time employee would not suffer this disadvantage, and not suffer a disadvantage that was not clearly identified at the time the agreement was made. In which case we say that then this is properly a matter that can be resolved by the Commission in terms of the dispute resolution process.

PN163

If we have a dispute over the application of the agreement as to how it will be implemented and operate, and if we would then be able to say quite properly to you that this is a matter that falls fairly and squarely within the application of the disputes procedure, then you should be able to make a decision in relation to this particular matter. And the decision that we would seek is that we would seek a decision that the agreement operate in the way it was intended to, and that is not to have an unintended consequence of causing a significant loss to an employee who has an entitlement under the Long Service Leave Act when part-time hours are reduced. Now, Commissioner - - -

PN164

THE DEPUTY PRESIDENT: Sorry, Mr Ryan, the entitlement under the Long Service Leave Act arises at the time the leave is taken, as I understand it, based upon the number of hours that the employee is working, is that right?

PN165

MR RYAN: Well, probably not based - technically it is based upon the rate of pay, or the amount of pay - - -

PN166

THE DEPUTY PRESIDENT: Yes, that is right, but the ordinary - - -

PN167

MR RYAN: - - - which reflects the amount of hours, yes.

PN168

THE DEPUTY PRESIDENT: Yes, the ordinary rate of pay is based upon - - -

PN169

MR RYAN: The actual hours worked at the time the leave is taken.

PN170

THE DEPUTY PRESIDENT: Yes. So in that instance, if that is the basis upon which the entitlement arises, how do you say that there is a reduction in entitlement?

PN171

MR RYAN: The reduction in entitlement is that prior to the exercise of the reduction in part time hours, an employee has an entitlement to apply for and take long service leave at a certain rate of pay. That entitlement is unilaterally varied by the employer exercising a right under the agreement. The operation of the agreement is such that it does not require any consultation with nor does it require the agreement of an employee, and the company has made it very clear, including in their submissions and the statutory declaration: it is a unilateral right to vary the hours worked.

PN172

This means that a worker could even give an indicative intention of taking long service leave, and the employer, prior to the time they take long service leave, has an absolute, unfettered unilateral rate to reduce part time hours by 20 per cent. Now, I know the company will say "That is outrageous, we wouldn't do that, we wouldn't want to do it." That is not what the agreement says. The agreement says they have an absolute unilateral right to alter the hours, reduce the hours by 20 per cent, and they can do that at any time. That immediately would trigger a reduction in an existing entitlement.

PN173

THE DEPUTY PRESIDENT: Yes, I am just - maybe it is semantics, Mr Ryan, but it seems to me that the use of the word "entitlement" is perhaps misleading. Certainly if an employee accessed their long service leave whilst on a higher number of hours then the calculation of their ordinary rate of pay for that period of long service leave would be higher than if they were on a lower rate of pay.

PN174

MR RYAN: Yes.

PN175

THE DEPUTY PRESIDENT: But as I think I said before, the entitlement arises at the time of taking the leave, does it not - - -

PN176

MR RYAN: No.

PN177

THE DEPUTY PRESIDENT: - - - based upon the - - -

PN178

MR RYAN: No, under the Long Service Leave Act, the entitlement arises in two scenarios. Immediately upon the completion of the 15 years of service, an entitlement exists - - -

PN179

THE DEPUTY PRESIDENT: Yes.

PN180

MR RYAN: - - - so it is, at that point of time, the entitlement exists. The second type the entitlement exists is a person with more than ten years of service who terminates has an automatic entitlement to a pro rata payment. So the entitlement is created, accessing that entitlement is then a matter of timing, because there is no requirement that you actually have to access or utilise the entitlement when it becomes an entitlement. It is actually structured in such a way for practical reasons, that the taking of long service leave, or accessing the entitlement, is generally something that is done by agreement between the employer and the employee, to suit both sides.

PN181

THE DEPUTY PRESIDENT: Yes, I think - I won't - - -

PN182

MR RYAN: But it doesn't have to be.

PN183

THE DEPUTY PRESIDENT: I won't pursue the point any further, Mr Ryan. Carry on.

PN184

MR RYAN: Yes. But in our submission, then, because the entitlement can be unilaterally affected by the reduction in part time hours, then that is an issue that we say was never an intended consequence of the operation of the agreement, and it is a matter that can be rectified by, in our submission, the Commission acting pursuant to the dispute resolution procedure.

PN185

We have a dispute, the dispute is over whether or not that should or shouldn't occur, and so that because it is simply not, and was never envisaged to be, an outcome of the operation of this agreement, it is something that the Commission should actively involve itself in in trying to resolve the dispute. And we - - -

PN186

THE DEPUTY PRESIDENT: How do you say this matter has been processed for practical purposes in the past, Mr Ryan, by the company? And I mean in terms of people becoming eligible for long service leave, accessing long service leave, presumably there have been reductions in hours in the past - how do you say the company has processed those applications?

PN187

MR RYAN: Well, to my knowledge, even though I have been with the union nearly ten years, I have been spending most of my time in the national office and not therefore been involved in day to day operations of this agreement and its predecessor agreements at the workplace level, but to my knowledge - - -

PN188

THE DEPUTY PRESIDENT: But presumably you have been instructed by people that have been involved with Coles Myer and have - yes - - -

PN189

MR RYAN: Yes, and I have - and it has not come up in the past, in the national office, to me as a particular issue that I have got to go off and pick a fight with Coles Myer.

PN190

THE DEPUTY PRESIDENT: So if Coles Myer were to say that they have had people's - people in the past who have had their hours reduced who have then accessed long service leave, that that long service leave has been paid according to the requirements of the Act - - -

PN191

MR RYAN: No. No, they won't say that, because one example where this did occur was in 2002, but I happened to be out of the country for all of 2002, and when that did occur, it occurred at the Benalla store. This is referred to in the material filed by the company. There was an arrangement made so that the person who suffered a reduction in part time hours actually took their long service leave at the higher rate of pay.

PN192

THE DEPUTY PRESIDENT: But if they were - if I could just finish what I was going to say, Mr Ryan - if Coles Myer were to say that there have been instances where there have been reductions of hours, and subsequent applications for long service leave, and that those applications have been processed in accordance with the requirements of the Act, are you in a position to deny that that is the case in all circumstances?

PN193

MR RYAN: No.

PN194

THE DEPUTY PRESIDENT: No.

PN195

MR RYAN: And I wouldn't attempt to, no.

PN196

THE DEPUTY PRESIDENT: Thank you.

PN197

MR RYAN: The most I can say is that one incident I am aware of was in 2002 where a reduction in part time hours occurred, and the person who had the long service leave entitlement was allowed to take their long service leave at their higher rate of pay, in other words the rate of pay prior to the reduction in the part time hours.

PN198

THE DEPUTY PRESIDENT: Yes.

PN199

MR RYAN: And then it has come up as a major issue because the number of stores that there was sought to be a reduction in part time hours this year sort of significantly expanded the problem.

PN200

THE DEPUTY PRESIDENT: Yes. So you could point me to a circumstance, at least one circumstance where you say the company has departed from what is required of it under the Act.

PN201

MR RYAN: Yes.

PN202

THE DEPUTY PRESIDENT: But you are not in a position to deny that they may well have simply complied with their obligations under the Act in other circumstances?

PN203

MR RYAN: No, not at all.

PN204

THE DEPUTY PRESIDENT: Yes, thank you.

PN205

MR RYAN: The Long Service Leave Act, quite clearly, allows, or provides that the minimum legal obligation on an employer is to pay long service leave at the hourly rate of pay of the person when they take their long service leave. That requires - or that creates the situation where some employees may be significantly advantaged by that operation of the Act, and also it allows for some employees to be significantly disadvantaged by that operation of the Act.

PN206

And the circumstances where an advantage of disadvantage would occur is where there has been a substantial change in the operation of the status of the employee with that employer over a period of time. Critically, the changes that would occur in those sorts of circumstances, because they would be changes to the contract of employment, would be consensual changes. It is the promotion that moves a person up in salary scale, or an offer of increased hours to a part timer and they accept them, or a change from casual employment or part time employment to full time employment. An offer to vary a contract of employment which is accepted by the employee.

PN207

Equally, disadvantage could be suffered because a person chooses to apply for or elect to accept a reduction in hours for a part timer, or accepts an alteration from being a full time employee to a part time employee, and then at the time they take their leave, there could be an alteration. They could even accept a demotion in a job by saying "I no longer want the responsibility of this position, I would prefer to accept a lower paid position." They would also be consensual changes to the contract of employment.

PN208

This is not consensual, and never has intended to be. In fact, it is absolutely the opposite. This constitutes a unilateral variation to the contract of employment, but a unilateral variation of the contract which is specifically approved by the operation of Federal law, Commonwealth law, to over-ride common law, because the agreement says the employer has an absolute unfettered right to unilaterally alter the contract of employment in a particular circumstance. Now, that is significantly and quantitatively different from the scenarios that would normally apply in the operation of the Long Service Leave Act, and where it is done by consent and by agreement then there will be swings and roundabouts. Some employees might get better benefits under the Long Service Leave Act provisions at the time they take their leave. Others will have received a lesser benefit than what they had accrued for part or most of their period of service.

[10.37am]

PN209

That is significantly different from a position where the changes are made unilaterally. A unilateral change such as this could not be done in relation to a normal contract of employment. An employer does not have the right under a normal contract of employment to simply say "Your hours are reduced", and in fact, when one looks at the standard award clause for part-time employment, the whole of the structure of the clause in the - that came out of the Award Simplification Test Case was guarantee certainty of the hours of work, the number of hours, the days upon - of the week, and the hours on each day that they are worked, with very clear instruction within the standard clause that any variation had to be in writing and by agreement.

PN210

It was the structure of part-time employment to provide the certainty and to absolutely remove unilateral variations that may occur. In this scenario where the agreement provides for unilateral variation we say that because this is such a peculiar circumstance and gives to the employer such a significant power to alter the status of an employee, it has to and should be read as not being used in the way which would create a significant unfairness or disadvantage to the employee. That is if the employer maintains its position that it has got the right to do both, both to unilaterally vary the hours and also to simply allow the Long Service Leave Act to operate so as to create a consequential reduction in a long service leave entitlement.

PN211

The changes are so significant that if they weren't identified during the process of having the agreement approved by a valid majority of employees, then we say you should have much more regard to our submission that it was never the intended operation of this agreement that it would actually have this effect. It was not an issue ever discussed during the negotiating, the period of the negotiations. It was not a matter that was drawn to the attention of the workers who were required to express their genuine approval or disapproval of the agreement. In fact, they could not have expressed genuine approval or disapproval when this information was withheld from them, as it was. Now - - -

PN212

THE DEPUTY PRESIDENT: Given clause 6.16 long service leave was obviously discussed, Mr Ryan?

PN213

MR RYAN: Long service leave was discussed in the context of the extension of long service leave to create the double time and a half pay. That is because that was a specific claim of the Association on the employer during those negotiations, to try and extend a benefit. But there was no discussion about what - the fact that the operation of the part-time reduction provision would create a disadvantage. I mean, if nothing else, the Association, if we understood that that was what was the clear operation of the agreement, it would have been included in the documentation that we put to the workforce.

PN214

THE DEPUTY PRESIDENT: Yes, but you are suggesting to me, as I understand it, that you have got an agreement which allows the change of hours by, as you put it, unilateral decision of the company, and in the same agreement you have a clause which pertains to long service leave which effectively states that long service leave will be in accordance with the provisions of the relevant State legislation. Now presumably you knew what was meant by the hours provision. But you are suggesting to me you didn't know what was meant by the long service leave provision.

PN215

MR RYAN: No. As a person who actually negotiated some of these agreements, I mean, long service leave - I have always looked at long service leave as whether or not we get the entitlement after 15 years, or as in say the case of South Australia, you get the entitlement after 10 years. It is really - that is the entitlement. We know what the entitlement is in the broad. I must admit I think that it has been many, many years since I have actually sat down and looked at any of the Long Service Leave Acts in any detail from any of the States. It is not an issue which comes up on a day to day basis, either in the national office or in the branch.

PN216

But the reflection in the agreement was to simply recognise that whatever was the different standards in the different States would apply. There has been claims made by the union on the employers for many, many years to try and get virtually the South Australian standard across the board, so that it is a national agreement. Why not have national long service leave? Why not have it after 10 years? It is one of those claims where they are always strenuously resisted by employers. Not just Coles-Myer and not just the various parts of Coles-Myer, but every employer simply says, "No, long service leave is where we will just stick with the Act," and we end up with this clause, and this clause is probably in every single national agreement that we have, that it just simply says long service leave is covered by the various State legislation.

PN217

THE DEPUTY PRESIDENT: Yes. But every single national agreement that you have would, I suspect, not likely contain a clause to the effect that changes of hours can be - - -

PN218

MR RYAN: No.

PN219

THE DEPUTY PRESIDENT: - - - as you put it, unilaterally decided by the employer.

PN220

MR RYAN: No. Not all - not every agreement has that.

PN221

THE DEPUTY PRESIDENT: No, and so you are suggesting to me that that is a fairly unique circumstance, and it seems to me to be a fairly significant concession as far as the union is concerned to the employer in the context of the bargaining. Something that I wouldn't have thought the union would have conceded without extracting an appropriate value for the concession, and without a fairly in-depth consideration of what that concession meant in the light of the rest of the agreement.

PN222

MR RYAN: Yes.

PN223

THE DEPUTY PRESIDENT: But the agreement is not silent on the question of long service leave, Mr Ryan, is it?

PN224

MR RYAN: No. No, it is not silent. Specifically incorporates effectively the operations of the State legislation with the proviso of the new edition in this agreement, which was the extension of long service leave to double time and a half pay. I mean, I can say that in the time of the life of the previous agreement, and the life of this agreement, this is not an issue that was raised or discussed at any stage during the negotiation of the agreement. When you look at the statutory declaration, and it identifies that there are some 20,000 part-timers, I have no idea what percentage of those have got 15 years of service. I suspect that it is a very small percentage, because even in the current round of discussions over the reduction in part-time hours this is not an issue that affects every single employee who is a part-timer.

PN225

THE DEPUTY PRESIDENT: No.

PN226

MR RYAN: There are some part-timers who are on minimum hours, and because they are on minimum hours their hours can't be reduced below the minimum. There are some who can have a reduction in part-time hours but they have got very little service. It is simply not an issue for them. Some of these employees may never want to be there with this company for 10 years or 15 years. Others may want to be there for 20 odd years, but it is not an issue that came up because it is nothing - we have never identified what is the percentage of the part-timers who actually have existing entitlements to long service leave and who would have been affected by it.

PN227

Now, it may be that the Commission will say, you know, that it is a bit sloppy on the part of the union that we don't look at everything in this area, and in hindsight I would agree. But leading up to negotiations this was simply not an issue. The part-time employment provision, where there is the reduction of part-time hours, has been the feature of this agreement, an earlier agreement and the consent award which pre-dated the earlier certified agreement. So it has been a matter that was conceded as part of the making of the consent award, which was the original enterprise agreement. That is at the time when consent awards - when an enterprise agreement could either be a consent award or a certified agreement under the Industrial Relations Act, the vehicle that was chosen was the vehicle of the consent award.

PN228

So it has been in every enterprise agreement that Coles Supermarkets have had with the SDA. I suppose familiarity breeds contempt and we don't look at these issues. Equally if we don't - if the issues don't raise their head in the way they have in this occasion, sometimes we just don't focus on what are the real impact of these - of the words that have been used; and when there was clearly no - never an intention on the part of the Association that what we were agreeing was a system that would allow an effective 20 per cent reduction in an existing long service leave entitlement then it is not surprising that it wasn't an issue that was on the agenda in any negotiating, and I - - -

PN229

THE DEPUTY PRESIDENT: Given that section 170LW empowers the Commission to determine industrial disputes that arise out of the application of the agreement, and given that both of the clauses here are specific clauses of the agreement, how do you say then that the dispute should be settled if it is a dispute over the application of the agreement?

PN230

MR RYAN: In my submission the way it should be settled is that the Commission should form the view that the application, or the agreement is meant to be applied so that a worker who has an existing entitlement to long service leave cannot have that entitlement reduced when the part-time hours are reduced. That the two stand separate in terms of the way the agreement should be applied.

PN231

THE DEPUTY PRESIDENT: But wouldn't that seem to be directly contrary to 6.16?

PN232

MR RYAN: Yes. It would appear to be but in light of the way the agreement was actually structured and negotiated we say it is not, it is not inconsistent with it. I must also say that given the strength of the argument being put by the employer, both at the earlier hearing and at every step along the way including the final submissions, it certainly appears that the line that the company is taking is that they have got a right and it is a right that they have got and they are going to exercise it no matter what and that effectively this is not a matter that the Commission can deal with under section 170LW. Now - - -

PN233

THE DEPUTY PRESIDENT: Well, they would have to convince me of that, Mr Ryan.

PN234

MR RYAN: Yes. The great difficulty I have with all of this, too, is that the whole of the relationship between the union and the company is based upon - that where we have the disputes that arise out of the operation of the agreement we try to resolve it. We either do that by numerous discussions amongst ourselves or resort to the Commission as the last stage of the disputes procedure to try and resolve the actual issue in dispute. We haven't yet adopted approach at all with Coles-Myer where we get to the stage of the company digs its heels in and says "No, we have got the right and that is it". And then we are forced to go off to another jurisdiction to try and resolve the dispute mainly because no other jurisdiction can resolve the dispute.

PN235

And other jurisdictions will tell us what our legal rights are and they might make a determination as to whether or not the Commission acted within jurisdiction or outside its jurisdiction in certifying an agreement. None of those issues actually resolves a dispute. The dispute ultimately gets resolved by the parties with the aid of an independent third person trying to resolve the critical issue. And, ultimately, that is really what we are looking for from the Commission. We need a practical resolution to this issue.

PN236

I have already sort of gone through my own mind all of the other possible options. We can, you know, might enjoy going off to the Federal Court on an application but it is not going to resolve the dispute and I don't want to go down a path that leads to the dispute simply being unresolved. So as much as possible we are urging the Commission to seize the matter and resolve the practical dispute that we have got. It is not over a large number of employees. It is not a major issue in terms of the long-term operation of the company but it is certainly a major issue for those persons who see that their long service leave can be cut by the operation of the reduction in part-time hours provision.

PN237

And, ultimately, I suspect that the union wouldn't want to go down the path of trying to remove this clause from the agreement because it has always been one of those safety provisions of encouraging the company to put on more and more part-timers and less and less casuals but on the basis that the operation of the clause allows a degree of flexibility to the company in times when there may be genuine problems with their pattern of trading hours for whatever reason. You know, changing demographics, different competitors or different structures of the business.

PN238

There is a flexibility that allows the company to maintain a large number of part-timers and, hopefully, increase part-time employment and we don't want to see that disappear and be replaced by increasing casualisation of the workforce. So we still end up with the problem and that is the practical issue of how do we resolve the dispute we have over the application of the agreement in relation to a small group of part-timers who have - or who are likely to face a reduction in their existing entitlement to long service leave and that is what we need the help from. If the Commission pleases.

PN239

THE DEPUTY PRESIDENT: Yes, thanks, Mr Ryan. Mr Bourke.

PN240

MR BOURKE: Thank you, sir. Could I start off my tendering submissions that were forwarded.

PN241

THE DEPUTY PRESIDENT: Yes. I don't usually take submissions as a tender, Mr Bourke - - -

PN242

MR BOURKE: Yes, thank you. And if I could tender the statutory declaration of Mr Murraylee. I have an extra copy here, sir. And could I hand up three cases that were cited in the submissions? One for Mr Ryan. I don't propose to call Mr Murraylee unless Mr Ryan wishes to cross-examine him and it might be appropriate that we get that indication now.

PN243

THE COMMISSIONER: Yes, I was just going to do that. Mr Ryan, are you - - -

PN244

MR RYAN: No, no. There would be no point cross-examining Mr Murraylee. I mean - there is nothing in his statutory declaration I would challenge and to the extent that I wanted to cross-examine him, the fact that he sat through and listened to everything I have said wouldn't make the cross-examination worthwhile so I will leave it go.

PN245

THE DEPUTY PRESIDENT: Well, it was open to you to seek an order that he should be excluded, Mr Ryan, if - - -

PN246

MR RYAN: I wasn't going to worry about it because I am not going to cross-examine him.

PN247

THE DEPUTY PRESIDENT: Yes. I will mark the declaration of Mr Murraylee as CM1.

EXHIBIT #CM1 DECLARATION OF MR MURRAYLEE

PN248

THE DEPUTY PRESIDENT: Yes, go ahead, Mr Bourke.

PN249

MR BOURKE: Thank you, your Honour. Your Honour, having listened to Mr Ryan's submission this morning, really, what it can be translated to is the union, at very best, at being sloppy. They have effectively, on their own case, been asleep at the wheel. They are telling the Commission a cornerstone piece of legislation that applies to their members, being the Long Service Leave Act, they didn't know how it worked at the time they entered into the certified agreement. And they are effectively saying, please fix that up we have mucked up. And this has been put as some guise of, you construe the agreement to fix up our mistake but in truth it is saying, you vary the agreement to how we would have wanted it if we had have read the Long Service Leave Act.

PN250

And that is not the role of a section 170LW. Section 170LW is not to change agreements so that one side, after the event, feels happy because they didn't know what they were doing. And Mr Ryan's first point, as proof of intention, was that no-one discussed the fact that this was the way it would work. Intention, your Honour, of course, if one is to go to background material to construe a document, look at intention, one does not look at what the actual state of mind is of the SDA, one looks at the parties objectively, the objective bystander looks at the parties and their conduct. And what do you get? You get the fact that both parties agreed that the Long Service Leave Act would apply and that is the end of the matter.

PN251

And the SDA agreed to that and now they are turning around saying, we don't want the Long Service Leave Act to apply if it applies in a way that we feel disadvantages any of our members. And to make the submission what was really effectively an apology by the SDA that they have been asleep at the wheel, these provisions have gone through a number of different forms, legislative forms in various Acts before they have arrived in the Long Service Leave Act, but the procedure, the formula for calculating long service leave has effectively been in place since 1978 so this experienced union, for some 25 years of its collective knowledge, has been happy to have their members' conditions determined by this procedure and only now has the penny dropped after they have signed the last certified agreement.

PN252

Now, one thing which was completely wrong is this suggestion of non-disclosure. There has been no non-disclosure. If there has been any non-disclosure it is by the union not spelling out in detail to their members, oh, look, we want you to approve this. You are going to be covered by Victorian legislation that covers every other worker in the state but we haven't read it. That is the non-disclosure, we haven't read it. There has been no trick up Coles' sleeve that they have tricked anyone or tricked the SDA into signing this certified agreement and there was virtually a submission, somehow, that it never should have been certified, somehow there has been a trick put over the Commission. It is totally unsatisfactory.

PN253

On the no disadvantage test the submission just does not add up. You cannot say that any member of the SDA is disadvantaged by reason of this certified agreement. The certified agreement says you will get exactly what you would get under the Victorian state legislation, not less, exactly the same. And every mechanism provided for under that Act must be complied with by the employer and in fact Coles agreed to, over and above the Act, an additional entitlement where you could take double the leave at half the pay. So if there was going to be any assessment you are better off with this provision in the certified agreement than if you just fell back on state legislation. So that is completely wrong.

PN254

The second point put was there being some unilateral variation of the contract and that is not right. Each contract provides that your terms and conditions are as per the EBA. So if the EBA changes in any way the terms and conditions change. There has been no unilateral change in anybody's contract.

PN255

THE DEPUTY PRESIDENT: I think the suggestion, more, Mr Bourke, was that there is, by virtue of the agreement, a unilateral right, and that was the term Mr Ryan used, to vary the hours. I am not sure that it went beyond that.

PN256

MR BOURKE: Well, there was some suggestion of a unilateral variation contract and that is wrong. And talk about unilateral right, a certified agreement - this is a fundamental problem with the submission - a certified agreement is a thrashing out of various rights, obligations and commitments and it gives - sometimes Coles get a right, sometimes they get given an obligation, the same with the union.

PN257

THE DEPUTY PRESIDENT: Yes, I am not getting carried away by the use of the term "unilateral", Mr Bourke, I don't think you should in the circumstances.

PN258

MR BOURKE: Right, okay. Thank you. Now, some criticism was made about the way this was explained. You just have to look at exhibit SDA. The statutory declaration of the National Secretary of the SDA at page 6 sets out the information sessions at the second last dot point:

PN259

At these information sessions the proposed agreement were explained to the employees. The employees were advised that copies of the proposed agreement were available for them to read. Copies were easily identified. Employees were invited to ask questions about the content of the proposed agreement, encouraged to direct future questions to the store manager, representatives of the union or union delegates. Written information prepared by the unions outlining the proposed terms and conditions was distributed to the employees.

PN260

Now, they have been - if their submission is correct they have been asleep at the wheel. If they consider this was a big ticket item that their employees should know that there is a risk that they could lose out because of an adjustment in hours prior to them taking long service leave, then they should have brought that to their attention.

[11.02am]

PN261

And it is just no excuse to say: well, we didn't bother to read the Act, we were lazy, and can you now please fix this up under LW, when it has got nothing to do with the construction of the document. It was conceded by Mr Ryan that basically the term dealing with long service leave is plain, it is plain. And we only get to worrying about what happened because they didn't read it. That is not a basis for re-interpreting the document.

PN262

And I just want to say one other thing, and that is that it is a one-sided submission. They are effectively saying, because there is the risk of the way long service leave has been applied in this State for 25 years, there is the risk that if someone's hours are reduced prior to taking long service leave, there is a detriment suffered. And they say it goes without saying that has to be fixed up and that is the way the certified agreement should be construed. They don't say - I mean, any construction of a document must be done in an even handed, equitable way, fair to both parties; not just fair to the SDA who have been asleep at the wheel but fair to Coles.

PN263

There are circumstances where, because of the application of State legislation for the last 25 years, if people's employment hours are increased just prior to taking leave, they will get a windfall. Now, are they saying that as a matter of construction in those circumstances those people should not get that? They are not. Now, the idea that you would construe the document in a one-sided way is completely untenable and on their construction, if it was done in an even handed way, in an even handed way it would require a term to be introduced into the certified agreement providing that people's entitlements, in circumstances where there hours are increased prior to taking long service leave, are less than under State legislation. They are not saying that. They are, in an extraordinary way by way of effectively introducing a term - this is not construction, this is introducing a term saying: you will get over and above State legislation, although we have got a term saying you will get whatever is provided in State legislation.

PN264

Another thing that was just completely incorrect. There was a suggestion that the entitlements have been unilaterally reduced. Now, that is incorrect. Mr Ryan suggested that at the time someone does 15 years service they got this entitlement and it has been reduced. The entitlement is as per the Act, not reading half the Act or the Act half upside down or inside out. If you read the whole Act, after 15 years you are entitlement is that when you take long service leave, it will be paid as in accordance with your ordinary pay and that ordinary pay will be calculated as at the time you take the leave. That entitlement is never reduced, is never disturbed. And for the whole 15 years you accrue that, you know that is the situation. People know that. SDA have never read it; they have now.

PN265

Now that is not a basis for varying the certified agreement. And this LW application is not a vehicle for overturning some half baked application to overturn the certified agreement. They can't have it both ways, actually. Their first submission was somehow probably not been properly certified. If that is the case, in the long run and we have to face such an application and if they do, we will face it. But they can't turn around and want to enforce the grievance procedure, if they say the agreement is invalid. The fact of the matter is, and you can't move from this, the EBA is unequivocally clear, they agreed to abide by whatever State legislation was and the fact that they have been lazy and they may not have understood what they were signing onto is no answer to this.

PN266

In fact, they effectively admitted this. Mr Ryan, on the last occasion, if you have our folder, we have provided you with the transcript and at paragraph number 39 he makes that point about the universal approach. So what the - the intention of the certified agreement was, no matter what State you were in you would have the benefit of State legislation, not plus if you somehow lose out we are going to bump it up. That was the intent and he said - you know, they tried to get the South Australian stand but they couldn't. It was just - the last line, the last sentence, it is just one of those issues where it has always been easier to simply state Act applies. But no suggestion, but it was always understood the intent would be, our members would get over and above the Act, if somehow there was a change in hours.

PN267

Now, another very unfair suggestion was that somehow Coles, you know, they can do this any time they want and it is a very unfair procedure because we had agreed that they can reduce hours, an entitlement that has been in a number of certified agreements, I understand for ten years. Now just let us examine that. (1), it is very unfair, as a matter of fact, because you will see from the affidavit - sorry, the statutory declaration of Mr Murraylee, there was an elaborate procedure adopted and this was done as a decision of last resort to reduce these hours and it was not done capriciously, but (2) Mr Ryan says, you have to make the construction that I contend because otherwise Coles could come in and just before someone applies for leave reduce their hours, save some money.

PN268

They can't do that. That would be in breach of the certified agreement, because under the certified agreement when hours are available, they must be given to any part time person who has had their hours reduced; they get preference. So if the hours are already there, the minute they are reduced they get the preference to get them back. There are safeguards built in to the certified agreement to ensure this is not done in a capricious way. And what may surprise the SDA is, although they were asleep at the wheel, when it came to this provision they actually did apply their mind. And if you go to our submissions, we have provided, set out from paragraph 2, the complexity of the entitlement to reduce part time hours.

PN269

It is not so a carte blanche thing. SDA applied their mind and there were limitations and qualifications and protections for their members. At 3(a) there was a limitation of a maximum of 20 per cent. 3(b) they couldn't be reduced below 40 hours in any four week cycle. (c) there were notice provisions of two weeks and if an objection, four weeks. And 4, there was this preference entitlement. The minute hours came available they got them. So there is no room for just, capriciously, we are going to try and save some money, we have got someone coming up, we are going to reduce the hours. They can't do it.

PN270

So they have probably forgotten what they agreed to but they did build in those hours. And then they applied their mind, the parties applied their mind to long service leave entitlements. And it must be remembered, they are coming along now - as I said, the intention is to be assessed objectively. They are coming along saying well we didn't know what we were doing. And as I have already pointed out, that is not an answer. But they weren't just the only party, it wasn't just them and Coles. Are they saying the Australian Liquor, Hospitality and Miscellaneous Workers Union didn't know what they were doing.

PN271

You could assume one of two major unions in this country has somehow, at some point in time, read legislation which is, in effect, in one form of another been in place for 25 years. And you can't criticise Coles because they did not treat the SDA as being like some type of industrial kindergarten and explain to them how the Act - sit them down and explain to them how the Act works. They have got an extensive arm of people that kind of do that type of work. And what did they do, they applied their mind and everyone agreed State legislation would apply but there was an additional entitlement given.

PN272

And Mr Ryan may think he should have introduced this idea, this formula, but you only have to think about it. We provided, at tab 9, the various - you have had various acts in which long service leave entitlements have been provided - section 150, the Labour Industry Act, that was in a slightly different form. But then if one went to an amendment of the Labour Industry Act, section 59 and then it went through to the '79 Industrial Relations Act and now you have got the Long Service Leave Act.

PN273

So Parliament has turned their mind to it on a number of occasions and for the last 25 years clearly they have recognised - they didn't choose some type of pro-rata scheme where you kind of go back 15 years and try and work out and average it all out, which would be a nightmare, and that would probably be ultimately the fairest, they weighed up the fact that okay there is going to be some swings and roundabouts but there is going to be some administrative convenience and some certainty. And every employee, one thing they know, is how much they are being paid at the time they go on holidays and there will be no argument about whether they are getting paid their correct amount.

PN274

But once you start playing with that, and let us say you go to the pro-rata system, which would be fair, some people will win, some people will lose, you are going to have an employee maybe turning around who has recently gone on full time hours, previously worked for many years on say, 30 hours, say well hang on a minute, what has happened. And there will be an argument about whether the calculation has been done correctly. And there will be a dispute; no that wasn't correct, I didn't work 30 hours, I have already worked 40, the record hasn't been kept correctly.

PN275

And you go to Mr Ryan's scheme, what happens if there has been a number of changes in hours? They were once upon a time, for the last 10 years, the last 13 years, at 10 hours a week. The 14th years got increased to 30 hours a week and on the 15th year reduced to 25 hours a week. On his view you would just take the last one. Why don't you take the very first one which was for the longest period. I mean, there are just so many combinations and permutations. And the one we don't hear any complaint about is the one where someone wins out. And in the declaration of Mr Murraylee, he does say that over the years Coles Myer have been applying State legislation, some people have been winning in the swings and roundabouts, some people have been losing out in the swings and roundabouts.

PN276

Mr Ryan is correct, not probably in relation to forced reductions in hours, but people's hours have changed either up or down and that has resulted in Coles probably paying more than what they should for less than what they should, if it was pro-rata'd. But there has never been a complaint from the union until you have heard about an incident in Benalla about mid last year. And we applied, we made a special case for two employees whose long service leave had already been approved, was in the system, had the dates of leave and there was adjustment to the hours, as a special case. That is it. There has been no complaint for 25 years that this is the way we have been applying the Long Service Leave Act and they have not said boo.

PN277

So it is just extraordinary that they would say the intention at the time we entered into the certified agreement is we would do something different than what we had done the last 25 years. And Mr Murraylee gives his own example. He has not taken long service leave yet but he worked for a number of years, I think it may be four, on fairly low casual hours, but under the State legislation they will be recognised now as full time because he now works full time. He will get the benefit of the legislation in terms of the swings and roundabouts.

PN278

Now, can I go back to our document, the outline of submissions. So we have provided that there was a detailed approach to part time hours. Long service leave was dealt by the parties, and we point out the very administrative and other policy reasons why parties have adopted the same approach as the legislature. And further to that the parties agreed there would be no extra claims, and we say that is really what this is. They effectively have admitted they have been asleep at the wheel, have now read the Act and they want to change the agreement that was struck. And we say they can't do that.

PN279

We have provided, at paragraphs 13 - and this really goes to the merits, because in terms of imposing, it is really an outcome, if there is jurisdiction to do this, which costs us more money and saves the face of the SDA, we have - one needs to look at the way we have dealt with this issue of reducing hours and we have provided that - that we didn't need to consult but we have and that is set out in paragraphs 13, 15 and we eventually - there was a concession made by the union in a letter to the Commission, that we have consulted. And the only thing left they have complained about, they complained about, was we did not agree to what they want in relation to long service leave.

PN280

And then, really, if one reads the transcript for the last time round, as to why they issued the application, we have really got a different story. Last time round we had this submission that we had not complied with clause 2.1 which was consultation for the introduction of major change. That was the real driver of the application, and if there was proper consultation they should agree that long service leave worked the way they want it to work. And you, your Honour, pointed out during argument, to Mr Ryan, and it was a killer point - excuse me, but clause 2.1 only applies if the major change has a significant affect and clause 2.1.1(b) says that something does not have significant affect if the change has already been provided for in the certified agreement.

PN281

That was the end of their basis of why they brought the application and how they saw their basis for the application was. So effectively we have heard now, reincarnation of the - were 2.1 is not even mentioned and they now come along and say, there is no obligation to consult and as a result you must do something to construe the document to avoid hardship, because there is no obligation to consult. 100 per cent turnaround from what they submitted on 7 August, a couple of months ago. But this is, this application can only be described of, we have completely mucked up, we didn't know what we were doing, can you please help us, without really identifying proper jurisdictional basis.

PN282

There has been no identification of what clause in the certified agreement is to be construed so that it works, the certified agreement works in the way that they want it to work. They are not saying, look, read that clause, that that actually means that if someone's hours just change just before, they get what they were on beforehand, but if they go up they get the benefit. They haven't pointed to a clause. Now we have provided, at paragraph 19, authorities regarding the role of the Commission, on section LW - and this type of application doesn't come within cooee - LW has to be a dispute over the application of the agreement.

PN283

That is being said to mean how the agreement will apply in practice, as a matter of construction, or interpretation of a clause. What they are really wanting is to give it a new operation over and above what the words say. That is not the purpose of the LW. And we have provided you three cases referred to, there. And if I could just draw your attention to paragraphs 16 to 20 of the decision of Commissioner Raffaelli in the Qantas Airways. If I could just read that. Do you have that, sir? It is in an additional folder that was handed up, at tab 1.

PN284

THE DEPUTY PRESIDENT: Yes, I do. Yes, thank you.

PN285

MR BOURKE: At page 5. Paragraph 16:

PN286

The question is whether the Commission's role ...(reads)... unless such role is specifically provided for in the agreement.

PN287

And we say that completely falls foul of paragraph 17, there. Take, for example, and there is an example given of dirt money $1 per week cannot be changed to $1.10 and then at paragraph 20 there is a reference to Vice President Ross's statement in Ansett Pilots, upheld on appeal:

PN288

Even in the absence of clause 24, I do not think that the dispute can properly be said to be a dispute arising from the agreement. No term of the agreement is in dispute between the parties.

PN289

And essentially that is correct. Their complaint is that if we apply the Act this is the consequence. It is not in truth a dispute saying we are not interpreting the certified agreement correctly. That is what they need to really say. They are really saying, we are applying the agreement, we are bound to under Victorian legislation under the certified agreement, and they are saying, look, that is not very fair, that is not an interpretation. And then Vice President Ross goes on:

PN290

The dispute is not about the application of a particular term, rather it seeks to establish a new term. In my view the APAs claims are different in character to that contemplated by clause 10 of the agreement.

PN291

And just quickly go to, your Honour, your statement in National Union of Workers - - -

PN292

THE DEPUTY PRESIDENT: Look, Mr Bourke, I think I can probably save you the trouble with that. I don't think, in the circumstances, I need to be taken to the way the Commission should discharge its duties under section 170LW.

PN293

MR BOURKE: Thank you, sir. Sir, if you find - can I go to the merits section of the submissions. If you find there is jurisdiction to grant the relief sought, we say the merits weigh heavily our way, that (1) the relief sought is effectively undoing the bargain recently struck last year. We say that is contrary to the objects of the Act and scheme of the Act, including section 3(b), that the matters be primarily determined by the parties themselves, in 3(e), that people and parties abide by the agreements.

PN294

We further say that this would involve a profound departure from past practice and that there is no precedent we are aware of of other agreements in the retail sector varying the type of manner in which ordinary pay is calculated, pursuant to the Act, and that it is completely one-sided in its proposed operation, that it is not a fair go between Coles and SDA, that they come along and want something changed favourable to them. They are not proposing to give anything in return in what is a certified agreement which is a package deal, particularly in circumstances where they are asking for a change that is had, that involves a change in practice over a very long period of time.

PN295

They are asking for - they are not asking for the removal of the swings and roundabouts that applies under the Long Service Leave Act, they are asking that any swings and roundabouts only apply if it is favourable to a member.

[11.29am]

PN296

THE DEPUTY PRESIDENT: So they want the swing but not the roundabout, is that what you suggest?

PN297

MR BOURKE: That is right and we say that is completely turning the Act upside down and they can't do that. If the Commission pleases.

PN298

THE DEPUTY PRESIDENT: Thanks, Mr Bourke. Mr Ryan?

PN299

MR RYAN: Yes, your Honour. Your Honour, I have no difficulty if the management of Coles Supermarkets Australia Pty Ltd wants to accuse the union and union officials of being lazy and being asleep at the wheel and even telling us that we have mucked up. I am big enough, my shoulders are broad enough to carry that and I suspect that even our membership probably wouldn't be too put out if they hear that the management of Coles Supermarkets Australia Pty Ltd has those views about the union, that we are lazy, asleep at the wheel and that we have mucked up.

PN300

THE DEPUTY PRESIDENT: I suspect, Mr Ryan, that your day will come and you will be able to return the compliment at some point in time.

PN301

MR RYAN: I don't think it is necessary for me to return the compliment. I think it is probably relevant that our membership at least know what management's views are of the union. But even if we were lazy, even if we were asleep at the wheel and even if we did muck up, one thing that was not explicitly addressed by Coles in their submissions - but I am imputing it or implying it from the way they put it - they clearly understood the operation of the Long Service Leave Act for the last 25 years. They have known exactly how the Act operated and they have applied the Act exactly how it operates.

PN302

And I suppose they are going to have a much more - a high degree of familiarity with the Act because they are the ones who actually have the applications for long service leave given to them and they have to apply. So they knew, and they have known for 25 years, exactly how the legislation operates which meant they knew at the time the agreement was negotiated exactly how the agreement and the Long Service Leave Act would operate. Now, it doesn't matter whether we were asleep at the wheel and it doesn't matter whether we mucked up, what Coles have not addressed is that the Act itself does not put an obligation on us to be awake in terms of informing the employees about the operation of the agreement.

PN303

Section 170LJ(3)(b) places that obligation directly on Coles. And this is an obligation where they have tried to flick past the obligation by saying that we were lazy and we were asleep at the wheel and we mucked up, but unfortunately, the Act required them, in any event, before any approval is given, that the terms of the agreement are explained to all persons and that is an obligation on the employer. The statutory declaration that we have handed up is the statutory declaration of the employer.

PN304

Any examination of the files of the Commission would show that the statutory declaration filed for and on behalf of the company is in identical terms which means that the company never bothered, knowing the way the agreement would operate in conjunction with the Long Service Leave Act, to tell any person who was to vote on the agreement that that is the effect of the agreement. They did not comply with 170LJ(3)(b) because they knew that this was the operation of the agreement in relation to the Long Service Leave Act and they didn't bother to tell anyone.

PN305

It is also quite clear that they have taken advantage of us being asleep at the wheel. I am presuming that they were driving whatever it was - if we were asleep at the wheel I am hoping that they were - they were probably sitting in the passenger seat, and probably like these cars they use to teach you to drive, there is two steering wheels and two sets of controls and they were firmly in control. They were driving the negotiations, they knew exactly what was going on and if we didn't raise something they were just going to let it go through.

PN306

They knew that they would get an advantage out of it and they simply at the end of the exercise decided not to tell anyone but that was the way the agreement would operate. And because that was an essential exercise in terms of seeking valid approval, or genuine approval of a valid majority, then there is a real question as to whether or not this agreement was ever properly certified within the jurisdiction of the Commission. I have got no doubt that the company's attitude at this stage is that they simply don't want, what they believe, is the proper status quo upset.

PN307

That is a shame in some respects because if the Commission eventually finds that it does not have jurisdiction to deal with the matter as Coles Supermarkets Australia Pty Ltd is suggesting, or urging the Commission, then we are not going to resolve the dispute. We will still have a dispute. We will have another fight and I am just hoping that when we traipse off to the Federal Court that I don't have the management of Coles Myer then ringing up and saying, why are you taking us to the Federal Court, why are you trying to set aside the entire agreement covering some 54,000 employees.

PN308

I say, well, we have to resolve the matter one way or the other. What did go through my mind is, would it be possible to lodge an appeal out of time against the certification of the agreement but even I didn't think I could get up an argument that two years out of time would be something where the Commission should exercise its discretion to revisit the certification process. And if we can't resolve the dispute here before you, your Honour, then that is an unfortunate operation - maybe an unfortunate outcome and maybe unfortunate in terms of the way the Act is operating.

PN309

However, eventually this dispute will have to be resolved. It will be resolved one way or the other but it has to be resolved. All disputes end up being resolved, it is just how they are resolved and how long it takes and how much heartache everyone has to go through. I would urge you to not to accept the submissions of Coles in relation to this matter and I would still urge you to seize jurisdiction of the matter and actually resolve the dispute between the parties. If the Commission pleases.

PN310

THE DEPUTY PRESIDENT: Thanks, Mr Ryan.

PN311

MR BOURKE: Can I just briefly respond to those two matters. Firstly - - -

PN312

THE DEPUTY PRESIDENT: I don't think it is necessary, Mr Bourke.

PN313

MR BOURKE: Okay, thank you.

PN314

THE DEPUTY PRESIDENT: I intend to adjourn for a period of 15 minutes and I will give a decision when I return.

SHORT ADJOURNMENT [11.37am]

RESUMED [11.50am]

PN315

THE DEPUTY PRESIDENT: Yes, I intend to give a decision in this matter. The reasons for the decision will necessarily be brief but I will give expanded reasons if requested to by either of the parties. To the extent that this is a dispute over the application of the Coles Supermarket Australia Pty Ltd Retail Agreement 2002 it is a dispute about how clause 6.16, long service leave, should apply to part time employees. On that basis I find the jurisdiction for the Commission to determine this matter in accordance with section 170LW of the Act.

PN316

I find that the agreement is clear on its face and that is that the long service leave shall apply in accordance with the relevant state long service leave provisions. I am not attracted to the argument that the clear provisions of 6.16 should somehow be creatively construed because of some alleged oversight as to how these provisions - or this provision will interact with clause 3.2.2 of the agreement. It seems to be fundamental that if parties are to refer, and in fact defer, to provisions of other regulatory instruments in their certified agreements that it is reasonable to assume that the parties had and have an understanding of the effect of such instruments.

PN317

If there was an oversight then it is an oversight that the parties have to accept full responsibility for by complying with the clear requirements of the agreement as it is written. I determine accordingly. The matter is adjourned.

ADJOURNED INDEFINITELY [11.52am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #SDA1 COPY STATUTORY DECLARATION PN129
EXHIBIT #CM1 DECLARATION OF MR MURRAYLEE PN248