C2003/395, Transcript of Proceedings [2003] AIRCTrans 972 (21 March 2003)

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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER REDMOND

C2003/395
C2003/397

THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION

and

ELECTROLUX HOME PRODUCTS AUTOMATED
EQUIPMENT AND TOOLING

Application under section 170LW of the Act
for settlement of dispute re application of
Clause 30 - casual and contract labour and the
application of clause 15 - disputes procedure

THE AUSTRALIAN WORKERS' UNION

and

ELECTROLUX HOME PRODUCTS AUTOMATED
EQUIPMENT AND TOOLING

Application under section 170LW of the Act
for settlement of dispute re extension of
period of engagement for all non-permanent
employees and engagement of additional
non-permanent labour

SYDNEY

11.35 AM, WEDNESDAY 5 MARCH 2003

THIS MATTER WAS CONDUCTED BY VIDEOCONFERENCE IN SYDNEY

PN1

THE COMMISSIONER: Be seated gentlemen, please. Appearances please?

PN2

MR BRAITHWAITE: If it please the Commission, I appear on behalf of the Australian Workers' Union, Braithwaite J. Appearing with me is Mr Bob Leech.

PN3

THE COMMISSIONER: Thank you, Mr Braithwaite.

PN4

MR PLANT: If it please the Commission, Plant, initial A, appearing for the AMWU and with me is Mr Ian Whitehead, shop delegate.

PN5

THE COMMISSIONER: Thank you, Mr Plant.

PN6

MR BAKEWELL: If the Commission please, Bakewell, initial S, seeking leave to appear as agent on behalf of Electrolux Home Products. Appearing with me today is Mr Quirk, initial G.

PN7

THE COMMISSIONER: Thank you. Any objections, gentlemen, to Mr Bakewell appearing?

PN8

MR BRAITHWAITE: As a matter of principle, Commissioner, I would oppose the agent in this matter. We would make formal submissions in opposition to it and that this matter go to arbitration, if the Commission pleases.

PN9

THE COMMISSIONER: Yes. Mr Plant?

PN10

MR PLANT: Yes, we would also object, Commissioner, on the same grounds.

PN11

THE COMMISSIONER: Well, I am going to grant leave to Mr Bakewell in these circumstances. Yes, Mr Braithwaite?

PN12

MR BRAITHWAITE: Commissoiner, this dispute relates to Clause 30 of the enterprise agreement that relates to the engagement and usage of non-permanent labour. I've tried to break it down a little bit in the notification in that the company seeks to extend current non-permanent labour past the current extension of 31 March this year and engage additional labour. What the unions have indicated to the company is that there are five employees who have had nearly 12 months service. Their respective dates vary but the first one was 18 February 02 and move down through. In around June of 2002 those non-permanent workers had an extension to take them to 31 March 2003.

PN13

The company now has sought a further extension in accordance with 33.4.31 and they also seek to extend other non-permanent labour on site as well as engage additionals. The unions have indicated that as far as the five individuals who are close to or over five years - one years service, it is our view that they should be made permanent. In accordance with clause 30.4.7:

PN14

A non-permanent employee who is required to be engaged beyond the limits prescribed by -

PN15

that should be 38.4.3:

PN16

...will become a permanent employee.

PN17

The company has clearly indicated that they require that labour to go passed March and have projects, et cetera, for that to occur. The company's response in relation to the union's position, that those five employees be made permanent, is that unless we give a blanket extension to all non-permanent labour, the company will turn off the tap, so to speak, they will not take the work on, they will out source the work and they will terminate all non-permanent employees.

PN18

Now, we believe that that position violates clause 30.48 in that:

PN19

The company will not terminate the employment of a non-permanent employee to avoid its obligations.

PN20

So, what we have said to the company, sir, is to break the situation in relation to non-permanents down into three categories. Those non-permanent employees have already had an extension to 31 March, 2003, which involves five employees. The second category are those non-permanent employees who are in their first period of engagement under 30.43, which is in their first six months of engagement and the third category are those non-employees who are to be engaged in accordance with 30.3.1.

PN21

Now, from our perspective, without prejudice, if we can sort out the first category, those five with around 12 months service, the other two categories of engagement of non-permanents isn't an issue but, as far as those people who have been extended and are close to 12 months duration, we say that the agreement stipulates that they had a right to remain permanent and should be made permanent. And if one went back to the award, acknowledging that the award is superseded by the agreement, the current variation that was made in the Metal Industry Award in relation to casuals, does have some principles that do apply.

PN22

So, what we would say, sir, is that the agreement is not ambiguous, is quite factual, that 30.4.7 says that if there is a requirement for non-permanents to be extended passed their period, they should be made permanent and that the company's position in relation to a blanket out sourcing of work to avoid their obligations, is clearly a violation of 30.48.

PN23

An example of the company's out sourcing proposal that has only come to hand in the last few days is that if Electrolux dish washers require a nine stage die with an excess of a thousand hours to be manufactured, that would normally be done in house, but management have decided now to out source that and, coincidentally, the time that would come to the shop floor to start that project is the end of March. So we say that the company has already started to avoid its obligations in respect to the agreement.

PN24

I don't think I need, at this stage, to go into any greater detail than what the agreemetn actually states, if the Commission pleases.

PN25

THE COMMISSIONER: Mr Braithwaite, I don't have before me the Grievance Procedure in your agreement at Electrolux Home Products. I am trying to memorise it. What - have you got that before you?

PN26

MR BRAITHWAITE: Yes, sir.

PN27

THE COMMISSIONER: Can you tell me what role it gives the Commission, please?

PN28

MR BRAITHWAITE: Clause 15 is the clause, Commissioner, and the disputes procedure indicates at 15.1:

PN29

The disputes settlement procedure provided for at subclause 3.1 and 3.2 of the award, being the Metal Industry Award, as it stands on 1 July 2001, shall apply to any matter in dispute between the employer and the employees and the union. While these processes are being followed the parties shall be committed to avoid stoppages of work, block outs -

PN30

et cetera. It then goes on to 15.2 which talks about:

PN31

The company agrees that labour can be withdrawn when employees have a reasonable concern about safety.

PN32

And 15.3 gives the Commission arbitration powers in respect to 170LW in the that it states:

PN33

In addition to paragraph 3.2.1C of the award, if conciliation fails to resolve the dispute, the Commission is empowered, under section 111AA and section 170LW of the Work Place Relations Act 1996 as it stands at 1 July 2001 where the relevant union agrees to arbitrate over the matter provided that the arbitration is limited to the interpretation, application of process of implementation of the terms of this agreement.

PN34

We would say to the Commission that the application of this agreement in applying clause 30.4.31 and clauses 30.47 and 30.48 is a clear application of the agreement and should the Commission need to interpret the agreement, also has the powers but, to my view, sir, there is no ambiguity in respect to those two clauses. If hte Commission pleases.

PN35

THE COMMISSIONER: Thank you, Mr Braithwaite. Mr Plant?

PN36

MR PLANT: If it please the Commission, I think Mr Braithwaite has covered the argument admirably except he has missed one point and that is 30.4.3.1 of the stated clause and that is to the extension of casual contractors:

PN37

Where agreement to extend this period has been reached with the relevant union represenative and the union organiser -

PN38

This did not occur when the first extension was sought last June or July. There was no contact made, to my knowledge, with officials either of the AWU or the AMWU so there seems to be some bypassing of that process, Commissioner.

PN39

THE COMMISSIONER: Thank you, Mr Plant. Mr Bakewell?

PN40

MR BAKEWELL: Yes, thank you, Commissioner. As my friends have been relatively succinct on this matter, I think I can go straight to the salient points. The first issue - and the most important issue - concerns whether or not 30.4.7 of the agreement applies and that is that a non-permanent employee who is required to be engaged beyond the limits prescribed by 28.4.3 will become a permanent employee.

PN41

Commissioner, it is the company's position that the work concerned, which is work that the company is pursuing with external contracts - and I say external in so far as the work does not relate to internal Electrolux work in other plants - it primarily concerns contracts in the company's GMH and Mitsubishi - that the company will no longer be pursuing that work, the work will not be there, the employees will not be required and so it is the company's position that, as the work will not be there, and the employees are not required, that they hence are not required to be permanent emmployees, therefore the company is not seeking an extension for those employees to remain as casual employees. Those employees will not be required because the work is not there.

PN42

The remaining employees of the company, who are the permanent employees, perform work on primarily that is internal Electrolux work doing work performed for other plants in a support role. That work is unaffected and is not relevant here. So it is the company's primary position, Commissioner, that the employees are not required and are therefore not required to be made permanent and, moreover, that it is the company's right to make decisions about what contracts it pursues.

PN43

I must say that the company will not and is not out sourcing the Mitsubishi or the GMH work to any other third party. If it does not do the work it will not do the work in the sense of contracting it out or doing it in house. So that proposition is rejected. And number three, Mr Plant raised the point that in respect to clause 30.4.3.1, that the company had not gained agreement to extend the particular casuals concerned for the period up until March.

PN44

The company's position on that is, Commissioner, that the company approached the employees at the AET site concerning the extension, the employees concerned decided they wished to vote as a group concerning whether or not these employees ought to be extended. That vote was conducted by the employees and with the delegates. The delegates returned to the company and informed it at the time that an overwhelming vote had endorsed the extension of the employees. The company agreed with that. The company then wished to know whether or not a form B was required to be signed, and the resonse to that was, no, it was not required to be signed as the employees had voted on it.

PN45

So, it is the company's view, Commissioner, that in those circumstances, agreement had been reached. There was no dispute about that at the time and an appropriate extension had been granted. It is inappropriate to say now that retrospectively there had been no agreement when clearly there had been, in the company's view. They are our submissions, Commissioner.

PN46

THE COMMISSIONER: Yes. Mr Braithwaite, anything to add?

PN47

MR BRAITHWAITE: Well, all I say, Commissioner, is that we met with the company on 19 February. The company indicated they met with delegates the previous week seeking an extension. They make very clear that they needed the current non-permanent employees, plus they sought an additional three. At that time the company indicated that they had already out sourced to the extent of $2.5 million of work per year to the local tool rooms. To make the comment that they are not out sourcing GMH and Mitsubishi, I can't comment on but clearly the company had out sourced $2.5 million.

PN48

The company made it very clear to us at the meeting on 28 February 2003 that the unions grant an extension or AET will turn off the work and I just highlight again that Mr Bakewell hasn't responded to 30.4.8 that:

PN49

The company will not terminate the employment of non-permanent employees to avoid its obligations.

PN50

And clearly, by not sourcing those contracts, by out sourcing work, they are clearly in breach or violation of 30.48 to avoid their obligations. If the Commission pleases.

PN51

THE COMMISSIONER: Yes, what do you say to that Mr Bakewell?

PN52

MR BAKEWELL: Yes, Commissioner, the company is not avoiding its obligations. Decisions that the company makes, whether to pursue contracts or, is clearly for the company to make. I can draw a distinction perhaps on this line: if, for example, the company were to say to these particular employees, your casual tenure is at an end, we no longer require your services, you are terminated, but at the same time continue to pursue and gain work, for example, from Mitsubishi and GMH, and in the next breath employee new casuals to replace those who have been terminated, I would say that is clearly an example of the company avoiding its obligations.

PN53

Here the company is saying it chooses not to pursue the work. The company cannot be avoiding its obligations pursuant to this clause if it is not doing the work and the work is not there to be done. The company is not pursuing the work. It is not pursuing the work, period.

PN54

THE COMMISSIONER: What about Mr Braithwaite's statement that the company has already told them they are out sourcing $2.5 million worth of work, which is their work?

PN55

MR BAKEWELL: Well, we dispute that, Commissioner; that they say that that is their work.

PN56

THE COMMISSIONER: So you say the company never made that statement.

PN57

MR BAKEWELL: No, I'm not saying the company never made that statement. I think Mr Braithwaite is referring to work that is already out sourced or has been out sourced in the past. These particular employees concerned, Commissioner, concern five or seven or so casual employees who are doing work and that work will only be there if the company pursues the Mitsubishi work. It is a different argument again to what Mr Braithwaite is saying when he says that there is some breach of this agreement and that is based on the company having to undo existing arrangements, to the extent that they exist, to provide these employees with work - and we will dispute that.

PN58

THE COMMISSIONER: Well, then maybe it's something that I'm going to have to ultimately determine.

PN59

MR BAKEWELL: It may well be, Commissoiner.

PN60

THE COMMISSIONER: Whether the company is breaching the EBA.

PN61

MR BAKEWELL: It may well be, Commissioner.

PN62

THE COMMISSIONER: All right, well, to that end, if that be the case, that I propose to make a direction this morning in respect of this matter and that is that the parties meet and confer at a date to suit the parties; that if the parties fail to resolve this matter, they shall report back to me on Tuesday 25 March in Adelaide at 9.30 where I will hear and determine the arguments of the parties around this matter. I require written submissions from the parties if they have failed to settle this matter by Friday, 21 March. Is that understood, gentlemen? The Commission stands adjourned.

ADJOURNED ACCORDINGLY [11.54am]