AG2002/6366, Transcript of Proceedings [2003] AIRCTrans 78 (9 January 2003)

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TRANSCRIPT OF PROCEEDINGS


O/N VT1178
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT IVES

AG2002/6366

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Australian Associated Motor Insurers Limited
for certification of the AAMI Enterprise
Agreement 2002

MELBOURNE

2.30 PM, WEDNESDAY, 18 DECEMBER 2002

PN1

MR D. McLAUGHLIN: I seek leave to appear for AAMI Limited. With me MS G. BOWERS, general manager of people and culture; MR R. NOTO, southern regional representative on AAMI staff committee; and MS V. HULL, employee relations manager.

PN2

THE DEPUTY PRESIDENT: Yes. Thanks, Mr McLaughlin. I don't think there is anybody to oppose leave so we will grant it to you.

PN3

MR McLAUGHLIN: Thank you. I was hoping my colleagues wouldn't oppose. Your Honour, this is an application for certification of the AAMI Enterprise Agreement 2002. It will, if it is certified, supersede the AAMI 1999 agreement. I believe you would have on the file the relevant application for certification, together with the appropriate statutory declaration in support of the application, and obviously a signed copy of the agreement. Do you have those documents?

PN4

THE DEPUTY PRESIDENT: Yes. I do have that, Mr McLaughlin. Yes. I do.

PN5

MR McLAUGHLIN: Your Honour, there is obviously a substantial amount of material filed with the statutory declaration and that is because the development of this agreement has been a fairly length process. We in fact haven't encumbered you with all the documentation that was produced along the way. And I will, if I can, just take the opportunity to perhaps just briefly introduce you to some of the additional material that was developed rather than filed at all.

PN6

THE DEPUTY PRESIDENT: Yes.

PN7

MR McLAUGHLIN: The development of the agreement really commenced back in July 2001. Now at that time the process was taken for nomination of a new staff committee. The previous enterprise agreement was developed with the assistance and heavy involvement of the staff committee. The committee sits for three years. In July 2001, in anticipation of the development of the 2002 agreement, a new staff was - the process for developing a new staff committee was commenced and nominations were called for that committee. And I just table a memorandum to all staff seeking nominations for the staff committee.

PN8

THE DEPUTY PRESIDENT: Did you wish to tender that, Mr McLaughlin, or are you simply - - -

PN9

MR McLAUGHLIN: I will tender that, your Honour.

PN10

THE DEPUTY PRESIDENT: Yes.

EXHIBIT #A1 MEMORANDUM TO ALL STAFF SEEKING NOMINATIONS FOR STAFF COMMITTEE

PN11

MR McLAUGHLIN: The committee - as a result of the nominations and an election process which was conducted by Elections Australia, the committee was elected in October 2001 and then there was, I think, training of the committee representatives in relation to what their role was, and the role of the committee. And then work was commenced on developing the enterprise agreement. Now a recommendations conference of the committee was held on 28 and 29 May. I am not going to table this but that is the document that was produced for that committee meeting.

PN12

I will table an extract from that conference work book. And the extract is just the front cover of the book. It shows the contents page and then should also have attached the two-page program for the - the schedule for the conference.

PN13

THE DEPUTY PRESIDENT: Yes.

PN14

MR McLAUGHLIN: Yes. Just on the program for 29 May 2002, if you have got that page there - - -

PN15

THE DEPUTY PRESIDENT: Yes, I have that. Yes.

PN16

MR McLAUGHLIN: - - - you will see under the timeline 8 o'clock, the fourth line down:

PN17

...FSU presentation, Tony Bett and Brendan Byrne...

PN18

Do you have that, your Honour?

PN19

THE DEPUTY PRESIDENT: Yes, I do have it. Yes.

PN20

MR McLAUGHLIN: Yes. That came about as a result of an invitation to the FSU which was extended to them on 9 April 2002. A letter inviting them to present to the staff committee about issues that the FSU would see as relevant to the development of the enterprise agreement. And indeed they did accept that invitation. A further recommendation's conference was held on 9 and 10 July, another volume. And again if I might just table some extracts from that.

PN21

THE DEPUTY PRESIDENT: I am assuming, Mr McLaughlin, if you wish these to be tendered that you will let me know, otherwise I will simply accept them as documentation. Did you wish to have them marked?

PN22

MR McLAUGHLIN: Yes, that should be tendered, yes, your Honour.

PN23

THE DEPUTY PRESIDENT: Yes. And the previous one?

PN24

MR McLAUGHLIN: Yes, please.

PN25

THE DEPUTY PRESIDENT: Yes.

EXHIBIT #A2 RECOMMENDATIONS OF 28 AND 29 MAY

EXHIBIT #A3 RECOMMENDATIONS OF 9 AND 10 JULY

PN26

MR McLAUGHLIN: Right. Yes, your Honour, well that recommendations conference on 9 and 10 July, again I have included the table of contents and you will see that there are reports to be provided in relation to leave, in relation to remuneration benefits, ways of working. So what these conferences did was discuss various matters that were needed to be dealt with in the enterprise agreement on the basis of feedback from staff and input from management. And that work culminated in a decision-making conference on 29 August 2002. Again, I won't table the whole thing but just if I can hand up again an extract from that and I seek to have that marked as an exhibit.

PN27

THE DEPUTY PRESIDENT: Yes.

EXHIBIT #A4 DECISION-MAKING CONFERENCE OF 29 AUGUST

PN28

MR McLAUGHLIN: So arising out of that conference, decisions were made as to what items should and shouldn't be included in the enterprise agreement and, to an extent, how the clauses should be framed. Following on from that, information sessions for staff were conducted on 23 September to 11 October. A final draft of the agreement was distributed to all staff over the days 5 to 8 November. A voting period commenced on 25 November through to 9 December.

PN29

9 December being the day that the votes were counted and the ballot was declared. Of course, all that material from 23 September on is included in the statutory declaration.

PN30

THE DEPUTY PRESIDENT: Yes.

PN31

MR McLAUGHLIN: The ballot was declared on 9 December. Again the ballot was conducted by Elections Australia and their report of the outcome of the ballot is an exhibit attached to the statutory declaration. 80 percent - 87 percent, sorry, of those who cast a valid vote, voted in favour of making the agreement. In relation to the union involvement you will note in the statutory declaration that there has been no request from the union to be involved in the proceedings, or to represent any employee throughout the process.

PN32

The union asked for a copy of the agreement on 31 October and a copy was e-mailed to them on 11 November and also a hard copy was mailed to them on that day. There has been no further communication with the union since that time. Now, your Honour, the statutory declaration addresses, as it is required to do, the no disadvantage test that you need to satisfy yourself in relation to before certifying the agreement. The declaration makes it clear that there is no reduction in overall terms and conditions of employment. I don't know if you have had an opportunity to look at that aspect of the agreement, your Honour.

PN33

THE DEPUTY PRESIDENT: Yes. I have some comments to make about the no disadvantage test actually, Mr McLaughlin. I will save them, though, until you have finished your presentation.

PN34

MR McLAUGHLIN: Yes. Yes, your Honour. The agreement provides for an increased spread of hours as compared to the award, although the award of course does allow for the spread of hours to be increased by the agreement with the majority of employees. And further, the agreement in relation to personal leave that can be accessed for sick leave or carer's leave is slightly less than the award. However, in relation to bereavement the enterprise agreement for bereavement leave which is not deducted from personal leave.

PN35

There are a number of aspects of the agreement which, we submit, improve on and exceed the benefits provided under the award. There is a pool of remuneration - equivalent to 4 percent of total remuneration available for distribution amongst staff as pay increases each year. I should state, your Honour, that AAMIs actual rates of pay are, on average, at least 15 percent above the award rates. Furthermore the agreement, of course, states that no employee will receive less than the award rate at any time during the agreement. And in doing that, to achieve that of course, safety net increases would be passed on to employees as a minimum

PN36

But of course the other provisions of the agreement, we would say, are more than likely to generate increases greater than safety net increases. It is a 4 percent distribution available for staff. There is also a profit share scheme and there is - and I think it has been attached - the total rewards policy summary document, which is attached to the statutory declaration - which sets out AAMIs approach to remuneration which, again, is expected to provide benefits far greater than remuneration available just under the award.

PN37

The agreement provides for additional annual leave to be in effect purchased by employees through - what you might call a salary sacrifice arrangement. So that if they want to buy extra weeks of annual leave then their salary can be averaged out over the 12 month period so that it doesn't become a week's leave without pay, it is averaged out. There is also the capacity to cash in some annual leave. But it is under very strict circumstances. In clause 5.1.4, for example, an employee must have a balance of at least 30 days of annual leave before the cashing clause can even come into play. The must always have a balance of 20 days annual leave.

PN38

And - and this is probably the most important aspect in our view - they can only cash in an amount equivalent to the amount of actual leave they have taken in the preceding 12 months. So really this is - it is not put up as a means of simply cashing out annual leave, it is put up as perhaps an incentive for employees who may have accumulated large amounts of leave over the years, it is an incentive for them to take leave and have that rest and recreation which is what leave is of course designed for.

PN39

A similar sort of benefit - although it doesn't involve cashing out but it is in relation to long service leave, in that long service leave can be accessed after seven years instead of, well strictly speaking, 15 years. So that is again designed to give employees access to leave periods.

PN40

THE DEPUTY PRESIDENT: Yes.

PN41

MR McLAUGHLIN: One of the important elements as far as AAMI is concerned in the agreement, and part of the reason why we sought an early listing, is in relation to parental leave. And what the agreement provides for is that the primary care giver is entitled to nine weeks paid leave, paid parental leave. In addition, the secondary care giver is entitled to five days paid leave. And that is quite an improvement on the 1999 agreement. And we do have employees who are getting close to taking parental leave and that is why we wanted to get the agreement, if we could, get it certified today to enable those employees to access that benefit.

PN42

There are a number of other clauses which we say improve on the award and when looked at in an overall sense, the agreement does not disadvantage employees. If you wanted to address the disadvantage aspect now, or should I just - because I have only got a few more comments - - -

PN43

THE DEPUTY PRESIDENT: No, there wasn't anything - it was just some comments that I will make about it, Mr McLaughlin.

PN44

MR McLAUGHLIN: Yes. All right. Finally, your Honour, of course the agreement contains a dispute settling provision and that appears in clause 7.1.4.

PN45

THE DEPUTY PRESIDENT: Yes.

PN46

MR McLAUGHLIN: The agreement also is to operate from the date of certification and is expressed to operate for a life of three years. And I am not sure that I can add much more at this stage, your Honour. We would simply seek the certification of the agreement with effect from today.

PN47

THE DEPUTY PRESIDENT: Yes. Thanks, Mr McLaughlin. I just wanted first of all to commend the company on its process. I don't think I have ever seen, since I have been within the Commission, a process as thorough. And it may well serve, on the oversight that I have had of it both here today and in the documentation, as something of a model for consultations. So, I commend the company for what it has done. I would also like to thank the company in terms of the provision of the documentation to the Commission because you have made this process somewhat simpler than it can be in certain circumstances.

PN48

Determining whether or not an agreement as a whole disadvantages employees is not necessarily always an easy task. And the way that you have actually laid that out in, I believe, one of the tables - and I can't recall off the top of my head which one it was, appendix 6(a) I believe it was, anyway, it was the one with the comparison between the various awards - streamlines the process from the Commission's perspective and makes that determination as to whether or not the agreement when considered as a whole does represent any disadvantage, a much easier process to go through.

PN49

Overall, I am satisfied that all of the requirements of the Act have been met in respect of the documentation that has been provided. And on the basis of that documentation and on the basis of the submissions of Mr McLaughlin here today, I can indicate that the AAMI Enterprise Agreement 2002 will be certified with effect from today's date and the agreement will remain in force for a period of three years. On that basis the matter is adjourned. Thank you.

PN50

MR McLAUGHLIN: Thank you.

ADJOURNED INDEFINITELY [2.50pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 MEMORANDUM TO ALL STAFF SEEKING NOMINATIONS FOR STAFF COMMITTEE PN11
EXHIBIT #A2 RECOMMENDATIONS OF 28 AND 29 MAY PN26
EXHIBIT #A3 RECOMMENDATIONS OF 9 AND 10 JULY PN26
EXHIBIT #A4 DECISION-MAKING CONFERENCE OF 29 AUGUST PN28