AG2003/767, Transcript of Proceedings [2003] AIRCTrans 5622 (15 December 2003)

AUSCRIPT PTY LTD
ABN 76 082 664 220

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TRANSCRIPT OF PROCEEDINGS

O/N 5558
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT ACTON

AG2003/767
AG2003/768
AG2003/1346

AUSTRALIAN HIGHWAY PLANT SERVICES
-TASMANIA CERTIFIED AGREEMENT 2002-2005

AUSTRALIAN HIGHWAY PLANT SERVICES
BAIRNSDALE CERTIFIED AGREEMENT 2003-2005

AUSTRALIAN HIGHWAY PLANT SERVICES
CLAYTON SOUTH CERTIFIED AGREEMENT
2003-2005

Application under section 170LK of the Act
by Australian Highway Plant Services Pty Ltd
for certification of the above agreements

MELBOURNE

11.29 AM, WEDNESDAY, 3 DECEMBER 2003

Continued from 11.3.2003

PN56

MR A. ERMER: I seek leave to appear on behalf of the applicant, Australian Highway Plant Services Pty Ltd. MR GAVEN McCOLL, the financial controller, is also present from the company, your Honour. Your Honour, if I may begin?

PN57

THE SENIOR DEPUTY PRESIDENT: Yes.

PN58

MR ERMER: Earlier this year we appeared before you on behalf of Australian Highway Plant Services Pty Ltd, where we sought certification of three agreements for Bairnsdale, Tasmania and Clayton South. There were two matters which you requested further information on in order to satisfy yourself that the agreements met the required legislative tests. One related to a dollar comparison over a three month period of what the employees would earn in that period under the award compared to under the agreement.

PN59

Dr James Doughney, senior researcher, work and economic policy research unit of Victoria University, has prepared a report which has been provided to your Honour. He found that the agreements passed the no disadvantage test based on the rosters for January through to March 2003. Secondly, in relation to the settlement of disputes clauses, clause 12 of the Tasmanian agreement, and clause 13 of the Bairnsdale and Clayton South agreements, you asked for confirmation from the company and from the employees as to what process it would be if they could not agree on a mediator.

PN60

Employees have agreed unanimously in writing to a process outlined, whereby if they cannot agree to an independent arbitrator within four business days, then the president of the Institute of Arbitrators and Mediators Australia will nominate a mediator. And we note that this does not necessarily prevent the parties from attending the Commission if they wish. Your Honour suggested that when we provide this information we provide you with submissions in relation to satisfying you that the agreements meet the required tests under the legislation. Those written submissions were provided to your Honour on 21 October 2003.

PN61

We also mention that at page 2 of Dr Doughney's report he suggested two undertakings be given in relation to future roster changes. Our client instructs us that it formally gives the two undertakings set out on page 2 of Dr Doughney's report under the heading, conclusion. In this regard we have provided your Honour with a statutory declaration from Mr Michael Constable, who reports to the financial controller of the company, Mr McColl. He provides the undertakings and one consistent with the disputes procedure agreed with the employees.

PN62

Accordingly, your Honour, in our submission the requirements of section 170LT of the Act have been satisfied. That being the case, the Commission must, under section 170LT, certify the agreements. In this regard we understand you have some queries of Dr Doughney, who is present here today to assist the Commission in relation to its queries. Having done so, your Honour, and having been satisfied, it is submitted that in accordance with the objects of the Act and the functions of the Commission, the Commission should, on the basis of these and earlier written submissions, certify each of the Tasmanian, Bairnsdale and Clayton South agreements. If your Honour pleases.

PN63

THE SENIOR DEPUTY PRESIDENT: Mr Ermer, I asked you to bring along Dr Doughney because I wanted to go through the report. So perhaps the easiest way might be if you just swear him in, and he can go through it and I can ask any questions that I have along the way.

PN64

MR ERMER: Certainly. We would be pleased to do so, your Honour.

<JAMES RICHARD DOUGHNEY, AFFIRMED [11.32am]

<EXAMINATION-IN-CHIEF BY MR ERMER

PN65

MR ERMER: Could you please state your name for the Commission?---James Doughney.

PN66

And your position?---I am a senior researcher, work and economic policy, at Victoria University.

PN67

And have you provided a report to the Commission in relation to these matters?---I did. The report was dated 29 May 2003.

PN68

And are the contents of that report true and correct?---Yes, they are.

PN69

THE SENIOR DEPUTY PRESIDENT: Dr Doughney, could you go through it and explain exactly what you did and the results you came up with?---Yes, certainly. The report is based on a piece of software, or software application called the Better or Worse Off Software Application, which was designed specifically for the no disadvantage test. That software has been trialed within the Commission over the past six months, and a number of associates have been trained and a couple of the Commissioners have been trained as well in the use of that software. The underlying principle of the software is that it takes award conditions and proposed agreement conditions, especially where agreement conditions intend buying out certain penalty rates, particularly those pertaining to shift work and overtime, and enables a comparison of global salaries on the basis of hours worked and the distribution of those hours worked across days of the week and particular shifts, so that it actually compares what one would have been paid under the award to what would be paid or proposed to be paid under any proposed certified agreement. So that is the underlying principle. As a result of obtaining the documentation from the company in this case via Price Waterhouse Coopers Legal, I scoured the agreement and the award to compare the relevant conditions. The fourth page of the report, which is headed General Information and Working Scenario, compares the basic conditions applicable to different times of the week and different rates that are applicable, so that total hours worked, you will notice in the agreement column to the right has one, so it is standard time, award rate or allowance, one, so it is standard time, overtime first hours, first two or three

**** JAMES RICHARD DOUGHNEY XN MR ERMER

hours usually, in the agreement there is no specific rate applicable that is of that type, whereas there is a 50 per cent mark up or time and a half for the award. And so it goes, the one for overtime, thereafter hours means double time, Saturday, first hour is time and a half all in the award. These are all proposed to be collapsed into the standard rate of the agreement together with, as you see as we go down the list, an all inclusive agreement, overtime mark up rate of point 75 or time and three quarters for all overtime worked for the agreement, and there is no corresponding category for the award in that sense. And just below that the ticks in the boxes mean particular allowances paid under the award and/or the agreement, and each is specified in the left hand column. So once having identified those, the key task is to look at the particular rosters that employees worked in a three month period from January through to March in 2003. My way of dealing with this is always to look to the worst, and so I selected for each of the sites that the three agreements would apply to, the worst monthly rosters that would be applicable. I didn't average them over the three month period, I just picked out the worst in a particular month for each of those.

PN70

Worst in the sense?---The worst meaning, potentially the worst implies where there is buying out of overtime rates, where there is more overtime and weekend work. So that is what I - - -

PN71

And so for overtime and weekend work you were looking at?---Yes.

PN72

Yes, okay?---That is what I mean by that. And having identified those, and I think the employees were named Essex, Coull and Prior, I used those as the base line above which all other employees would have an improved result. So that anyone above those three least favourable rosters would obtain a better pay result than those three.

PN73

So if I just take - well, can I go to the next page, which is Agreement and Comparison Award Pay Data, which follows the one you earlier took me to. Now, what is this showing?---This is showing - and I have used the Tasmanian agreement as the example here - it is showing in the first panel, the top panel, it is showing the proposed agreement rates at the different grades at the bottom and/or the top of the levels that are proposed. So that at grade zero, at the

**** JAMES RICHARD DOUGHNEY XN MR ERMER

bottom of the band, it is 14.89, and if you go down a bit further, grade zero, top of the band, is 16.65. Now, the second panel - and correspondingly for other grades. The second or lower panel shows the award bottom of the band, since it is only one classification, which is C11 in the award, it is the same, so it is 12.93, 12.93.

PN74

Right?---So that is what that page is showing, and it is those hourly rates that then go into the calculation.

PN75

Yes. And so we go to the pay slip comparison for Essex. This is his pay slip for what you have regarded as the worst arrangement of hours for him?---For any of that group of employees in the Clayton.

PN76

Okay. So you looked at the rosters for all the employees and you picked out the worst?---Yes.

PN77

And Essex had the worst?---Essex had the worst, and I picked the worst month of Essex' roster.

PN78

Okay. And this shows the results you got when you effectively combined the previous two pages through the model?---Yes.

PN79

Right, okay?---And allocated the hours to each of the categories, the roster hours, and multiplied them through.

PN80

Okay. So if we just take Mr Essex - I assume it was Mr Essex - the hours worked were 164 over that roster?---Yes, total.

PN81

Now, his earnings under the agreement would have been 2451?---Yes.

PN82

Plus some overtime, is it?---Yes, that is right.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN83

Giving him 2714?---Yes.

PN84

Under the agreement he would have received - sorry, under the award he would have received 2129.88?---Yes.

PN85

And then various other loadings for Saturday and Sunday and overtime worked, is that right?---Yes, and various allowances down the bottom, yes.

PN86

Right. Suggesting he was $270 better off under the agreement?---And which is 11.8, 11.08 per cent, yes.

PN87

Okay, fine. And then you have done the same thing for Coull in Tasmania?---Yes.

PN88

Prior in Bairnsdale, you have got a couple for Prior, I see, here?---Yes. I was a bit unclear on Prior, because the Bairnsdale ones didn't come through with full rosters. So what I did in Prior's case is do two examples, one where all of the 41 hours, I have got it all being worked on the weekend, so I have just gone to an extreme case.

PN89

Right, okay?---So it is 41, so that is a weekly allocation, it has all been worked on the weekend. And the second one for Prior seems to be - let me see what I have done here. You will just have to bear with me, I will just have a quick look through this again. No, it was two, sorry. I have got Prior working the weekend, and the first example is on Prior based at grade zero, and grade zero is the grade at which the pay rates have the worst relativity to the award of all pay rates. So it gets better the higher you go up the ladder.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN90

Right?---So this gives a worse off result in this extreme case of $7.69 for this period, this week. And if we go to grade one, it becomes $101.49 better off. Now, the next two pay slip comparisons, I have used again grade zero, but manufactured an imaginary distribution of overtime and weekend work evenly distributed throughout the period, so that in this case we end up with, of the 200 hours, 108.8 are overtime hours, some of which are worked on weekends. And in the second generalised scenario I have just made it 200 hours, of which 132.8 are all worked within weekend hours, and I imagine these to be rather extreme cases, certainly in comparison with the rosters that I was given, and in each instance they come out better off marginally in the second generalised case.

PN91

The second generalised case you have redistributed the 200 hours so there is more weekend work rather than overtime, is it?---That is right, yes. So it is 132.8 of the 200 hours worked at weekends within that 200 hours.

PN92

Right. The 200 versus the 41 versus the 164, was it, 67, what is the basis of that differential?---So we go back to the 164.67, so that is Coull, Prior and, yes, Coull, Prior and the generalised.

PN93

Coull and Essex?---Yes. Really it comes down entirely to an increase, the difference between the Coull result and the other two results are that greater weekend work is allocated in the imagined or hypothetical scenarios that I developed.

PN94

Yes. No, you misunderstood me. The 164 hours, that is a roster over several weeks, is it?---Yes, that is a monthly roster.

PN95

Right. Whereas the 41 hours for Prior - - -?---For Prior is just a weekly amount that must - it must have been just given to me as a global total.

PN96

Right. And the 200 is based on a monthly roster, is it?---No. That is a generalised figure that I have just put in there to say that if it were like this for this amount of total hours.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN97

Right. And on the last page of your report before the attachments, table 1 I think it is entitled, you give the percentage differences that are reflected in the last column of each of those areas we have just gone to?---Yes.

PN98

Right. You suggest undertakings, that there be no significant future roster changes involving substantial shift and weekend work. One of the difficulties I have is that I don't know what the rosters were, and so to see whether there is a significant change I need to know what they are now. Is it change as against the pay slip comparisons?---Yes, I think that is the best way to go, so that Essex at Clayton, Coull in Tasmania, and even this extreme instance of Prior in Bairnsdale, these are the worst types of roster, potentially - these give potentially the worst off results for employees based on the rosters that I observed.

PN99

So in a monthly roster, if we just take Essex, he worked 164 hours, of which, what, five hours was Saturday hours, or are these overtime hours?---Five hours was Saturday hours, yes.

PN100

So ordinary time on Saturday, was it?---This employee would get under the agreement ordinary time on Saturday, but would get time and a half and double time on the award, and also Essex would have worked 13.25 overtime first hours and 5.3 overtime thereafter hours in addition to that through the week.

PN101

So of his 164 hours he has worked 18.55 as overtime?---Yes.

PN102

So 164 minus the 18.55 gives his ordinary time hours, is that right, of which five were on weekends, was on Saturday?---Yes.

PN103

So in Mr Essex' case, or in the Clayton scenario, the worst possible scenario was five hours work on a Saturday and 18 hours overtime?---Based on the rosters that I observed for that three month period, yes.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN104

And in Coull's case there was 34.5 overtime hours out of the 164, and four hours on a Saturday. And then in Prior's case there was no overtime, but there was 10.6 - well, he worked a lot of hours on the Sunday?---Well, this is an imagined one. I was only given global hours for Prior.

PN105

When you say global hours, what do you mean by that?---Just the number of hours per week worked.

PN106

Right?---And so I stacked them into a situation which would give the worst possible comparison with the agreement.

PN107

Right, okay?---And so I put them all in the weekend, all in weekend.

PN108

Okay. So if you put them predominantly in the weekend, in fact, you have put them all in the weekend, haven't you?---Yes. I just put them all in the weekend to imagine the worst possible scenario.

PN109

Yes. Then if he is on the base rate he is worse off?---Mm.

PN110

Yes, okay?---And any higher grade becomes better off.

PN111

Under your model then, your modelling suggests that unless you are on the base grade you could work all of your hours at the weekend and still be better off under the agreement than under the award?---That is right.

PN112

In that scenario is there any purpose to be served by getting an undertaking?---Give me just a second to do some mental arithmetic. I might come up with a clearer answer to that. No.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN113

Right. Subject to the proviso that anyone employed on the base grade not work all of their hours on the weekend, and so an undertaking they will not employ anyone, they will not employ a base grade employee for all their hours on the weekend would be adequate, would it not?---No. There is a possible - I have come to where it possibly means something. On all of the rosters that I had there was no shift work, and so this would be thrown out were there to be significant amounts of overtime worked that might be in shift hours. No, not even that, because it would be the weekend rate that would apply presumably. So no, I think you're right, that the undertaking is unnecessary.

PN114

Yes. Excepting to this extent. The company will not employ any base grade employee for all their hours at weekends?---Yes.

PN115

Right, okay. Do you have any questions, Mr Ermer?

PN116

MR ERMER: No, your Honour, except to say that perhaps I could confirm instructions in relation to that undertaking, if you so require.

PN117

THE SENIOR DEPUTY PRESIDENT: Yes. Let me just get the wording right, I think, before you get instructions.

PN118

MR ERMER: Certainly. But otherwise no, your Honour.

PN119

THE SENIOR DEPUTY PRESIDENT: The company undertakes that base - is it base grade? Is that how it is referred to in the agreement?---Grade zero.

PN120

Grade zero, is it?---It is grade zero.

**** JAMES RICHARD DOUGHNEY XN MR ERMER

PN121

Yes. That grade zero employees will not be rostered to work all their hours on weekends. Does that seem to cover it, Dr Doughney? Take your time by all means?---Why have I got an itch that needs to be scratched? Bear with me while I have another squiz. Yes, that's right. I was just looking at the generalised two, and wondering why that was at 0.84 compared to Prior's, and I realised why it is not possible over a period of 200 hours to work round the clock at weekends, so it actually, that is the maximum in generalised two that can be worked weekends, unless we work people around the clock 24 hours a day. So yes.

PN122

So an undertaking that the company won't employ, or grade zero employees will not be rostered to work all their hours on weekends would seem to cover it, would cover the one scenario that you have got?---Yes.

PN123

As I understand the agreement, ordinary hours are worked Monday to Friday. Ordinary hours are worked Monday - I'm just looking at the Tasmanian agreement. Ordinary hours are worked Monday to Friday between six and six. So to the extent that I work at weekends, I'm working overtime, aren't I?---Yes.

PN124

And this model takes that into account. And then also to the extent that I work outside six to six, I'm working overtime as well, yes. Thank you, Dr Doughney?---Thank you.

<THE WITNESS WITHDREW [12.01pm]

PN125

THE SENIOR DEPUTY PRESIDENT: Mr Ermer, the other undertaking that you have referred to is in respect of disagreement about the arbitrator, and this is associated with clause 12.3 of at least the Tasmanian agreement, is it?

PN126

MR ERMER: Yes.

PN127

THE SENIOR DEPUTY PRESIDENT: I thought you said in submissions that that didn't preclude the right to refer the matter to the Commission?

PN128

MR ERMER: Yes, if the parties were to agree and essentially - if the parties actually couldn't agree on - or the parties might agree on a mediator to be the Commission, but if they can't agree then it goes to the Institute to appoint.

PN129

THE SENIOR DEPUTY PRESIDENT: I see.

PN130

MR ERMER: So that is what I mean. It is more of a note to - - -

PN131

THE SENIOR DEPUTY PRESIDENT: Yes, I see. So that in other words, to clarify 12.3, it is where the parties can't reach agreement within four days the matter will be referred to the person nominated by the president?

PN132

MR ERMER: Yes. As reflected by the memoranda in each site signed by all the employees, yes. That was at tab 3.

PN133

THE SENIOR DEPUTY PRESIDENT: Which attachment is the memorandum again?

PN134

MR ERMER: Tab 3 of the submissions, your Honour.

PN135

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Have you got instructions about the form of the undertaking on the rosters?

PN136

MR ERMER: Certainly I think the form that you formulated ultimately with Dr Doughney, our client instructs me that they have no problem with that.

PN137

THE SENIOR DEPUTY PRESIDENT: So the company gives an undertaking that grade zero employees will not be rostered to work all their hours on weekends?

PN138

MR ERMER: That is my instructions, your Honour, yes.

PN139

THE SENIOR DEPUTY PRESIDENT: And also an undertaking that if the parties cannot reach agreement within four days of a dispute arising on who the person should be to act as the arbitrator, that they will proceed with a person nominated by the president in the Institute of Arbitrators and Mediators Australia?

PN140

MR ERMER: That is correct.

PN141

THE SENIOR DEPUTY PRESIDENT: And that undertaking is in respect of clause 12.3 of Tasmania, is it?

PN142

MR ERMER: Of Tasmania.

PN143

THE SENIOR DEPUTY PRESIDENT: The same one in each?

PN144

MR ERMER: 13.3 of the other two, your Honour.

PN145

THE SENIOR DEPUTY PRESIDENT: Thank you. Very well. Is there anything else, Mr Ermer?

PN146

MR ERMER: No, your Honour.

PN147

THE SENIOR DEPUTY PRESIDENT: Very well. Well, having regard to material contained on the file in this matter, and also the submissions put to me, I am satisfied I should certify the Australian Highway Plant Services Tasmania Certified Agreement 2002-2005, the Australian Highway Plant Services Bairnsdale Certified Agreement 2003-2005, and the Australian Highway Plant Services Clayton South Certified Agreement 2003-2005. The certifications of the agreement will come into force from today's date.

PN148

They are subject to the undertakings that have been given in transcript, and will be reflected in the certificates issues, and they will remain in force until, in the case of Tasmania, 30 September 2005, in the case of Bairnsdale, 3 January 2005, and in the case of Clayton South, 31 October 2005. Mr Ermer, I am not sure whether you have covered this. In the case of the Clayton South agreement, clause 5 says:

PN149

The agreement is to be read in conjunction with the Australian Highway Plant Service Clayton South Certified Agreement 2000-2003 until that agreement expires.

PN150

Has that agreement expired?

PN151

MR ERMER: It has. In fact, both in respect of the Bairnsdale and Clayton South agreements the nominal expiry date of those previous agreements was 28 June 2003, so those have actually expired now, your Honour. Thank you for pointing that out. At Tasmania there was no previous agreement.

PN152

THE SENIOR DEPUTY PRESIDENT: Okay. And in the Clayton South agreement on the signatory page, under the signature of whoever signed for Australian Highway Plant Services Pty Ltd - Maurice Clark it looks like, is it? There is a "see appendix B."

PN153

MR ERMER: There is an attachment to the statutory declaration which shows a result of the vote. Mr Clark at the time called it appendix B, but the result of that vote was 16 votes for, and four against, and that is, in fact, attachment B to the statutory declaration, but he referred to it as appendix B.

PN154

THE SENIOR DEPUTY PRESIDENT: So I should attach that to the agreement so that it is understood what appendix B is?

PN155

MR ERMER: Yes, your Honour, that would be appropriate.

PN156

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Is there anything else, Mr Ermer?

PN157

MR ERMER: No, your Honour. As the Commission pleases.

PN158

THE SENIOR DEPUTY PRESIDENT: I will now adjourn.

ADJOURNED INDEFINITELY [12.08pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

JAMES RICHARD DOUGHNEY, AFFIRMED PN65
EXAMINATION-IN-CHIEF BY MR ERMER PN65
WITNESS WITHDREW PN125