AG2003/9095, Transcript of Proceedings [2003] AIRCTrans 5192 (25 November 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER LAWSON

AG2003/9095

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Anvera Pty Limited and Another for
certification of the Anvera Pty Limited
Certified Agreement 2003

SYDNEY

11.00 AM, WEDNESDAY, 29 OCTOBER 2003

PN1

MR B. THOMPSON: I appear for Anvera Proprietary Limited, with the employer, MS K. DINEEN and the Returning Officer for the employee secret ballot, MR B. BREEDON.

PN2

THE COMMISSIONER: The matter before the Commission is a matter filed pursuant to section 170LK of the Workplace Relations Act, for the certification of an agreement. Attached to the application is a statutory declaration by a company director, Mr J. Dineen, dated 22.9.03. I note that there is no statutory declaration by an employee representative, however I note there were ten employee signatories on the proposed agreement, which included two company directors, and therefore I regard only eight of those employee signatories as being relevant in terms of their notified acceptance of the agreement. Will you deal with the application, Mr Thompson?

PN3

MR THOMPSON: Commissioner, we seek to proceed with the application. The agreement was certified pursuant to section 170LT of the Act and I submit that it complies with the statutory requirements of the Act. It does not disadvantage employees.

PN4

THE COMMISSIONER: I have no way of working that out, given that you have only just provided a copy of rosters to my Associate immediately before these proceedings. You assert that it passes the no disadvantage test, but you have been asked for these rosters for some days now. They have not been provided. I have not had the opportunity of now testing your agreement against the no disadvantage test, because we haven't had your rosters. In that regard I will hear your application for certification, but don't assume that it will be certified and don't assume that it passes the no disadvantage test. That is something for me to determine.

PN5

MR THOMPSON: I agree with you, Commissioner. I understand the necessity for you to be satisfied of the requirements yourself - for me to convince you. The agreement was arrived at with a full understanding and agreement of a valid majority of employees. It meets the time frames that are required within the Act. It contains a dispute settlement clause and other provisions that must be included within the agreement. I note that you haven't had time to review yet the rosters that were submitted this morning and would offer to take you through the comparison, no disadvantage table.

PN6

THE COMMISSIONER: You will have to do that anyway, as part of this application.

PN7

MR THOMPSON: Yes. And submit that the basis of the no disadvantage test in this case is against the agreement. The agreement has not been implemented, so the rosters that were available to give to you, which are the existing rosters of the business, in many ways may be irrelevant to the no disadvantage test as it applies to this agreement today.

PN8

THE COMMISSIONER: How will the rosters change if the agreement is certified?

PN9

MR THOMPSON: The agreement provides for a number of Saturdays, Sundays and public holidays to be included as ordinary hours under the terms of the agreement. The rates under the terms of the agreement have been adjusted to include all of the otherwise penalty hours under the award within the single hourly rates in the agreement - or the rates in the agreement.

PN10

THE COMMISSIONER: Do those rates incorporate payment for public holidays, payment for Saturdays, payment for Sundays?

PN11

MR THOMPSON: Yes, they do. They incorporate the penalties that would have been incurred had employees worked those hours under the award, so that what we have tried to show is that if the agreement is applied - and we presume always that it will be applied properly - then an employee that works within those parameters will not be disadvantaged against the same hours as worked under the award.

PN12

THE COMMISSIONER: That is fine. That is exactly what the no disadvantage test is all about, but there is no point providing me with rosters that are not going to apply once the agreement is implemented. How will the certification of the agreement impact upon the rosters?

PN13

MR THOMPSON: It will give the employer more flexibility to operate within the terms of the agreement.

PN14

THE COMMISSIONER: So there will be new rosters?

PN15

MR THOMPSON: The rosters will change from time to time.

PN16

THE COMMISSIONER: Of course.

PN17

MR THOMPSON: There won't be any set fixed roster.

PN18

THE COMMISSIONER: You are indicating to me, Mr Thompson, that on certification the rosters will change.

PN19

MR THOMPSON: They may vary. I can't say how they will vary, but they may vary.

PN20

THE COMMISSIONER: You immediately give me a different lead. You have given me rosters, that is to say: Here is the agreement, if I apply the agreement rates to the rosters, make a comparison with the award, and then you turn around and completely change the rosters, then the no disadvantage test is a fraud.

PN21

MR THOMPSON: I strenuously disagree with that, Commissioner.

PN22

THE COMMISSIONER: You are the one telling me the rosters may change.

PN23

MR THOMPSON: The statement that the no disadvantage test is a fraud I strenuously disagree with. The fact that the rosters may or may not change does not render the no disadvantage test a fraud. The way in which the agreement is put together and has been formulated is that the ordinary hours under the agreement include a number of Saturday, Sundays and public holidays as ordinary hours, which gives the employer and the employees additional flexibility to work days of the week as ordinary hours, which would otherwise have incurred penalties under the award. They can do so within the terms of the agreement without being disadvantaged, as compared to the award.

PN24

The employer and the employees understand the parameters of the agreement and the hours that can be worked under that agreement. Taking into account those flexibilities, the employer may choose to open on some days of the year, when she may not have opened under the award. For example, I am instructed that the business currently operates only on some days where the demand from people checking into the business, that is a Caravan Park in Narrabeen, would warrant that there are enough rooms to be cleaned and that the margin to be made in cleaning those rooms would be sufficient to bother opening.

PN25

If that is a Sunday, for example, most of the time it is not worth opening the rooms up and cleaning the rooms, because the margin just isn't there. They will often remain closed until the Monday or Tuesday when the penalties don't apply. If we can standardise a rate that covers all days of the week and does not disadvantage people, then the employer and the employees have additional flexibility to go in and clean those rooms on days which wouldn't have otherwise been available. There is a strong commercial reason for doing this. It is my intention to show you that the additional flexibility created by this agreement doesn't disadvantage people.

PN26

THE COMMISSIONER: Go ahead and do so.

PN27

MR THOMPSON: If I may draw your attention to attachment 2 to the statutory declaration, which is a comparison table. This shows the wages that have been incorporated in the agreement and compares them and their calculation to the wages that would be paid if the employees continued to operate under the existing award. The agreement provides that employees may be required, but cannot be directed, to work more than 30 Saturdays and Sundays during any year. So the basis of the rates in the agreement are that people have been required to work all of those penalty hours, all of those 30 Saturdays and 30 Sundays.

PN28

It could be quite likely that people don't actually work all of those hours, so we are using a worst case scenario. On that basis, the rates in the agreement over a working week which includes Saturdays and Sundays, as you can see in the first box, gives a total gross net income of $17,385. If an employee were to work under the award, they would earn $15,936 for 30 weeks, including Saturdays and Sundays. So the agreement is providing significantly more in that respect. But then what we have done is show that all of the other penalties and loadings etcetera that would be payable under the award and compared that to what would actually be earned under the agreement.

PN29

For example, in the final box on that first page at the bottom left hand side, we have shown that under the award people would also earn a public holiday loading of $558. They would also earn annual leave of $1860. They would also earn annual leave loading, sick leave and bereavement leave in addition to the salary that they have. The rates that are paid to these people are inclusive of all of those amounts. At the end of the year, on a worst case scenario, each employee would end up at least $228 better off under the terms of this agreement.

PN30

That means that if the employer abides to the agreement - which I think we presume that they will and rosters people within the parameters provided in the agreement, then there is no likelihood that they will be disadvantaged. The following pages of the agreement provide the same comparison for the other levels of salary under the agreement.

PN31

THE COMMISSIONER: Well I take it - one of the questions I was going to raise with you later but now that you are focusing on level 1, I take it that level 1 only applies for an employee on probation, is that correct?

PN32

MR THOMPSON: Level 1 applies in the same way, it applies to the same people as level 1 under the award would.

PN33

THE COMMISSIONER: The agreement says something different, or the way I read it says something different. Clause 8 of the agreement, - - -

PN34

MR THOMPSON: Yes, you are correct about the level - - -

PN35

THE COMMISSIONER: - - - the third underlined point, level 1 starting rate, and I quote:

PN36

Newly commencing employees on probation undergoing initial training and requiring supervision mainly involving general assistance that complements staff and principally, but not limited to hospitality, front office and leisure services.

PN37

So I take it that the level 1 starting rate only applies to probationers?

PN38

MR THOMPSON: You are correct.

PN39

THE COMMISSIONER: Well, given that people after 3 months advance to the competency rate, how do the wage rates then impact upon most persons?

PN40

MR THOMPSON: Looking at level 2, the same analysis has been applied and I guess the net advantage to an employee would be $137.38 under the terms of the agreement.

PN41

THE COMMISSIONER: That is a very fine margin, something less than $2 a week for a full time employee or a level 2 part-time employee?

PN42

MR THOMPSON: Well, that is for a - and for a full time employee, it is $324.10 a week. The intention is not that these are paid rates, as the agreement shows us. These are the legal minimum rates and the intention is to - - -

PN43

THE COMMISSIONER: Well, are the paid rates?

PN44

MR THOMPSON: Well, the paid rates are common law agreements between the employer and the employees.

PN45

THE COMMISSIONER: Are they subject to any sort of public scrutiny?

PN46

MR THOMPSON: Well, provided that they are - sorry, they are in the - - -

PN47

THE COMMISSIONER: Well, how do I know what people are paid, Mr Thompson?

PN48

MR THOMPSON: There's - you know that they won't be paid less than the rates in the agreement and that - those legal minimum rates are subject to close public scrutiny and the scrutiny of the Commission, as we have seen.

PN49

THE COMMISSIONER: Yes, go on.

PN50

MR THOMPSON: The level 3 rates, again would produce a net advantage of $146 for part-time employees and $385 for full time employees.

PN51

THE COMMISSIONER: Well, whilst you are on level 3 rates, if you are going to move away from that now, explain to me the rationale in clause 11.1 of the agreement? There you have level 3 supervisory rates for persons 17 years of age and under and 18 and at 19, you say. How can you possibly conceptually have an under 17-year-old supervisor? Why even have rates of pay for a junior employee who is alleged to be a level 3 supervisor? It does not make any rational sense at all. One would have thought that if a person is good enough to be a supervisor, then age is irrelevant and they ought to be paid a supervisor's rate?

PN52

MR THOMPSON: That is probably a - that is a very rational assumption, but it is not the way the - most awards work. Junior rates are applicable in many ways across many awards for supervisors. It is just - it is the way that the system operates. I completely agree with you - - -

PN53

THE COMMISSIONER: What is the award link under the Motels Award for junior rates for supervisors? I raise this with you in the context that I've dealt with a number of agreements in recent times, in the services industry generally, where this ridiculous proposition has been put forward and when raised with the applicants at the time, it has been removed, because it makes no sense.

PN54

MR THOMPSON: Yes.

PN55

THE COMMISSIONER: I can't imagine an under 17-year-old person acting in a supervisory capacity and being paid a rate of $9.97 per hour on a part-time basis. If a person is that good to be supervising others, then they ought to be being paid as an adult.

PN56

MR THOMPSON: Frankly, I agree with you, Commissioner. I think that is correct.

PN57

THE COMMISSIONER: Well, why is in this agreement?

PN58

MR THOMPSON: Well, I will take instructions from my client and if satisfactory to my client, then we might provide an undertaking that those rates are not utilised. Well, my client instructs me that that is okay.

PN59

THE COMMISSIONER: That is fine.

PN60

MR THOMPSON: Commissioner, are there any other - - -

PN61

THE COMMISSIONER: Yes, there are, but I would like to hear what you have got to say first. I have other matters of concern to make about the agreement. You may deal with them along the way. It saves me asking the questions. I'm not here to conduct an inquisition, I'm hear to listen to your argument in support of the certification of the agreement.

PN62

MR THOMPSON: Well, with your permission, Commissioner, I would be happy to address the specific questions that you have.

PN63

THE COMMISSIONER: Well, let me take you to clause 7.5 of the award - of the agreement, which says that this agreement says, and I quote:

PN64

... will be read in conjunction with a welcome letter and an employee handbook, which fix individual rates for performance, company policy and other benefits.

PN65

How can I certify an agreement that leaves a whole range of issues ill-defined and subject to some other form of document? This agreement is to be read "in conjunction with", they are the words. How do you explain 7.5?

PN66

MR THOMPSON: I explain it in that this agreement is a legally - if certified, would form the basis of the legal employment arrangements at the workplace and would set the minimum terms and conditions, apart from other statutory terms and conditions, which might be employed, or other conditions which would fall into it from the award. Really, it is a reference to an employment letter, a confirmation of employment, confirmation of classification or level and also, I mean, most -

PN67

THE COMMISSIONER: Does anything in the company's policy book or the employee handbook, purport to vary the terms and conditions of this agreement?

PN68

MR THOMPSON: No, absolutely not. Certainly, the agreement may - if it was read: this agreement may be read in conjunction with but may not be altered by or varied by those things, would be the correct interpretation and I guess looking at the legal technical aspect of it, those common law contracts - if that is what they are - they have the ability to vary a certified agreement, so you should take some satisfaction in that.

PN69

THE COMMISSIONER: Well, you see, I don't know what is in the common law agreement but I accept your word for it. You are on the public record as having described them as not impacting upon the terms and conditions contained in this agreement.

PN70

MR THOMPSON: Just like any.

PN71

THE COMMISSIONER: Can I take you to clause 11.3 of the agreement? This is the review of wages. It says, and I quote:

PN72

The employer and an employee representative ...

PN73

even though there is no employee representative in these proceedings. The agreement was made with all of the employees as individual, but somehow an employee representative apparently will emerge out of the ether:

PN74

... that the employer and that employee representative will review the minimum rates of page in clause 11.1 annually, such review shall, without limitation, have regard for CPI increases over the previous 12 months. Increases shall be made where appropriate.

PN75

Who determines what is appropriate?

PN76

MR THOMPSON: The employer and the employees.

PN77

THE COMMISSIONER: Is there any resolution if they don't agree?

PN78

MR THOMPSON: There is a dispute resolution procedure but the - that clause to me sits perfectly within the objects of the Act. I mean, that is the - saying that the terms and conditions of employment are to be considered within the enterprise at the workplace level.

PN79

THE COMMISSIONER: So there are no in-built wage increases in this agreement, is that correct?

PN80

MR THOMPSON: There is a review mechanism - - -

PN81

THE COMMISSIONER: That is correct, there is a review mechanism. There is a promise that there will be a review but no more than that?

PN82

MR THOMPSON: If I might say, Commissioner, there are no in-built wage increases in the award which is to be used for the no disadvantage test.

PN83

THE COMMISSIONER: But this does not relate any wage increases in the agreement to any wage increases in the award. This is a review of CPI increases that may or may not, if considered inappropriate, be applied.

PN84

MR THOMPSON: Commissioner, with respect, my argument for that would be the no disadvantage test requires the agreement as it stands today - and the Act is very specific in saying the agreement as it applies today, on the day of certification, if it would be certified, against the agreement on the other hand and whatever is in the award has to be balanced against what is in the agreement.

PN85

THE COMMISSIONER: At the point of certification. I'm asking you about the review. This is an agreement which you propose has a 3 year life.

PN86

MR THOMPSON: Yes and a 3 year - and an annual review.

PN87

THE COMMISSIONER: All I'm asking are questions for you to come clean and tell me how or whether wages will be reviewed over the 3 year period.

PN88

MR THOMPSON: Every year the wages will be reviewed according to the agreement, at the enterprise level.

PN89

THE COMMISSIONER: Okay. Clause 13.1 overtime. Why should employees agree to work overtime at ordinary rates?

PN90

MR THOMPSON: They shouldn't. They have the option to, but they don't have to.

PN91

THE COMMISSIONER: Are you telling me they won't be prevailed upon to work at ordinary rates?

PN92

MR THOMPSON: They shouldn't be. The terms of the agreement are flexible enough to incorporate - the ordinary hours under the agreement allow employees to work within whatever is prescribed by the employer - rostered hours - quite broad. So according to the agreement there shouldn't be an overtime unless there was an exceptional circumstance.

PN93

THE COMMISSIONER: Of course, which leads me to the next paragraph 13.2 which says:

PN94

Unless agreed otherwise in writing, employees must apply for overtime penalties in advance and in writing.

PN95

MR THOMPSON: Yes.

PN96

THE COMMISSIONER: Isn't the more likely scenario that an employee will be asked to work on for an hour or two extra, or come in an hour or two earlier and what you are saying is that employee won't be entitled to be paid overtime unless the employee seeks payment for overtime in writing for the overtime actually being worked.

PN97

MR THOMPSON: The chances are that they are not going to be rostered on to do overtime. That is the terms of the agreement, yes. If an employee wants overtime penalties, they must apply for them in writing in advance.

PN98

THE COMMISSIONER: What is the rationale for that?

PN99

MR THOMPSON: That ordinarily people won't be doing overtime.

PN100

THE COMMISSIONER: All right. What is the rationale for having to apply for overtime penalty payments in writing?

PN101

MR THOMPSON: Whether it is in writing or verbally, does it - - -

PN102

THE COMMISSIONER: Well, this says in writing, Mr Thompson.

PN103

MR THOMPSON: Yes.

PN104

THE COMMISSIONER: What I'm saying is an ordinary scenario will be, someone will be asked to come in an hour or two earlier or asked to stay on for another hour or two after their normal shift. Prior to them actually working that overtime, they have to apply in writing to the employer to actually be paid the overtime penalty rates. It is most unusual.

PN105

MR THOMPSON: It is most unusual if it was in an award, because the award - - -

PN106

THE COMMISSIONER: This is not in an award, this is an agreement. That is why I'm asking you to explain the rationale for it.

PN107

MR THOMPSON: That is what I'm attempting to do, Commissioner. The overtime provisions in the award are such that if somebody is required to do an additional hour here or an additional hour there, or a shift that is on their rostered day off etcetera, there are very clear and distinct overtime provisions. The intention of the agreement is to add flexibility and to decrease the likelihood of overtime by increasing the operation of ordinary hours, to allow employees to work on different days of the week and under different circumstances than the award.

PN108

THE COMMISSIONER: Well, how will the employee then know whether to apply in writing for overtime on any particular occasion or not to?

PN109

MR THOMPSON: Because they will know if they are not working in accordance with the agreement.

PN110

THE COMMISSIONER: Will they?

PN111

MR THOMPSON: I can't speak for an employee, but I can look at the agreement and say that it has wide parameters for its operation.

PN112

THE COMMISSIONER: So you are saying on each occasion an employee may be asked to work overtime, they will know what their entitlement is?

PN113

MR THOMPSON: I can't speak for the employees.

PN114

THE COMMISSIONER: Well, you are speaking for the employer and it seems to me that it is a bit of a guess. I raise the point that that requirement for an employee to seek overtime penalty payments in writing prior to the overtime being worked is an impractical provision in the overtime clause. Your client will have to make it work because that is the agreement.

PN115

MR THOMPSON: Yes.

PN116

THE COMMISSIONER: Clause 17.3 and 17.4 talks about a part-timers employment non entitlement for paid sick leave. Why do part-time employees not qualify for paid sick leave on a pro rata basis?

PN117

MR THOMPSON: They have been paid for it within their ordinary hourly rate in advance. They are entitled to sick leave, to take time off obviously, but their ordinary hourly rate actually includes the maximum number of paid sick leave hours that they would be entitled to under the award. They are paid for that whether they take it off or not, actually. So they are entitled to take sick leave, but they are actually paid for 10 days sick leave - I think it is 10 days sick leave, anyway. So they get their maximum sick leave entitlements.

PN118

THE COMMISSIONER: Well, isn't it the same as a full time employee? Isn't the rate applicable to a full time employee?

PN119

MR THOMPSON: A full time employee will get paid. When they take time off on sick leave they will then be paid.

PN120

THE COMMISSIONER: They will be paid a different rate.

PN121

MR THOMPSON: They will be paid - - -

PN122

THE COMMISSIONER: They are paid a different rate to the part-time employee?

PN123

MR THOMPSON: Well, the part-time employee - yes, they have a different rate. That is right. The part-time employee's rate is higher.

PN124

THE COMMISSIONER: All right. Anything further?

PN125

MR THOMPSON: Only if I can address any more of your concerns, Commissioner?

PN126

THE COMMISSIONER: No.

PN127

MR THOMPSON: Thank you, Commissioner.

PN128

THE COMMISSIONER: When I'm asked to certify an agreement of this nature, I provide an opportunity for those representatives of the employer and the employees to ask questions of the Commission in respect of the certification process and its meaning. So an open question is to you now, Ms Dineen and to you Mr Breedon, do you have any questions of the Commission in relation to this certification process?

PN129

MR BREEDON: No, Commissioner.

PN130

THE COMMISSIONER: Ms Dineen?

PN131

MS DINEEN: No, Commissioner, I don't. No.

PN132

THE COMMISSIONER: Whilst you are here, Ms Dineen, I raise at the outset my introductory comments that this agreement was accompanied by a signatory page which included two signatures in the name of - well, one is in your name and one is in that of Mr J Dineen who is the signatory of the statutory declaration. I do not regard those two signatures in the employee section of the signatory page as being valid, because after all, you signed it on behalf of the employer. How can you sign it on behalf of the employees as well?

PN133

MS DINEEN: I regard myself as an employee as well. We worked side by side.

PN134

THE COMMISSIONER: Are you paid according to this agreement?

PN135

MS DINEEN: No, I'm not.

PN136

THE COMMISSIONER: Well, with very great respect, you can't be a company director and be an employee representative at one and the same time, when it comes to your signature on this agreement.

PN137

MS DINEEN: It is my fault.

PN138

THE COMMISSIONER: Your signature is there as the employer representative.

PN139

MS DINEEN: Sorry, that was an oversight. I didn't realise.

PN140

THE COMMISSIONER: Mr Breedon, what was the outcome of the ballot that was taken?

PN141

MR BREEDON: From memory, Mr Commissioner, there was 11 votes and 10 were in favour of it and 1 against.

PN142

THE COMMISSIONER: Well, without disclosing, I presume it was a secret ballot, was it?

PN143

MR BREEDON: It was, yes.

PN144

THE COMMISSIONER: That only covers 11 employees, so that accounts for the 11 employees. Are the two directors of the Company included in that 10 in favour of the agreement?

PN145

MR BREEDON: I really don't know, sir.

PN146

THE COMMISSIONER: You don't know. Okay.

PN147

MS DINEEN: No, we didn't vote. Mr Commissioner, we didn't vote.

PN148

THE COMMISSIONER: You didn't vote.

PN149

MS DINEEN: No. We were outside of the room. We weren't involved in that process, it was only that I signed on there. Yes, O'Brien controlled it.

PN150

THE COMMISSIONER: Okay. Thank you. All right. This matter is an application by the employer, Anvera Proprietary Limited and its employees for the certification of an agreement under section 170LK of the Workplace Relations Act 1996. The agreement applies to the operations of the employer at North Larrabie in New South Wales. The employer is a constitutional corporation for the purpose of subsection 170LI(a) and thus the agreement is applicable to a single business, part of a single business or a single place of work for the purpose of subsection 170LI(b) of the Act.

PN151

On the basis of the submissions of Mr Thompson and the statutory declaration filed in accordance with 49(2), I'm satisfied the agreement meets the relevant requirements of section 170LK. I'm also satisfied on what is before me there are no grounds for refusing the agreement under section 170LT or section 170LU of the Act. I'm satisfied that no organisation of employees notified the employer in writing that it wished to be bound by the agreement.

PN152

I have identified to me those relevant employees referred to in subsection 170LT(7) and am satisfied those employees were consulted and were informed of the matters described in subsection 170LK(7) in an appropriate manner and that the effects of the terms of the agreement were properly explained to them. Consequently, I will certify the agreement under section 170LT of the Act, with effect from today's date, 29 October 2003 and the agreement shall remain in force until 28 October 2006. That concludes the matter and the Commission will adjourn.

ADJOURNED INDEFINITELY [11.40am]