AG2004/1394, Transcript of Proceedings [2004] AIRCTrans 1061 (24 March 2004)

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 10841
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER EAMES

AG2004/1394
AG2004/1624

APPLICATION FOR DETERMINATION
OF DESIGNATED AWARD FOR
CERTIFIED AGREEMENT

Application under section 170XF of the Act
by Manson International trading as Hungry
Jacks for determination of designated award
for certified agreement

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Manson International trading as Hungry
Jacks for certification of the Manson
International Pty Limited Certified
Agreement 2003

MELBOURNE

10.04 AM, TUESDAY, 9 MARCH 2004

Continued from 22.01.04

PN220

THE COMMISSIONER: There is no change of appearances, I take it. I should hear from you, Mr Thompson.

PN221

MR THOMPSON: Thank you, Commissioner. I take it that this matter is no longer contested in any way by the union.

PN222

THE COMMISSIONER: It would appear so.

PN223

MR THOMPSON: So I will move to maybe one point regarding the last appearance - - -

PN224

THE COMMISSIONER: Yes.

PN225

MR THOMPSON: - - - the subsequent issues that were raised with the Commission. You will recall that there was some correspondence between our offices and the Commission, and that on 27 January this year the Commission confirmed that the alleged member of the union whom they were representing pursuant to section 42(7) was actually not an employee, and on those grounds I would have moved to - to had that struck out - their appearance last time struck out.

PN226

THE COMMISSIONER: Perhaps that says something about why they are not here.

PN227

MR THOMPSON: Maybe it does. In that case, Commissioner, I will move to deal with the section 170XF application.

PN228

THE COMMISSIONER: Yes.

PN229

MR THOMPSON: Firstly. A number of matters were raised at the last hearing in relation to the designation of an appropriate award. It was found that the Hungry Jack's Victoria Award was not a relevant award for the purposes of the no disadvantage test and that accordingly an award would have to be designated. There were some allegations raised that the Hungry Jack's Award would in any event not be appropriate because it did not regulate the terms or conditions of employees doing similar types of work and that it did not maintain an effective safety net of minimum terms and conditions.

PN230

I would like to make some points in relation to why firstly the Hungry Jack's Award is appropriate, and there is a number of reasons for that, and then cover a couple of reasons why the National Fast Food Award 2000 is not appropriate in these circumstances so that the Commission can make a designation. The reasons that the Hungry Jack's Award is appropriate, well, firstly, let us - if I could just turn to consider the actual wording of section 170 and the meaning of award for the purposes of designation. Under that section an award of the type that we are attempting to have designated would not be excluded.

PN231

There are only two exclusions, and they are an award that is made, an exceptional matters order, or an award that is made under section 170MX. In this case that award is neither of those things.

PN232

THE COMMISSIONER: Yes.

PN233

MR THOMPSON: We then turn to the issues to be determined by the Commission pursuant to section XF, and specifically we look at section 170XF(3) which states:

PN234

The Commission must determine (a) an award or awards under this Act regulating terms or conditions of employment of employees engaged ...(reads)... regulating terms or conditions of employment -

PN235

etcetera. In this case section 170XF(3)(a) is the relevant section for consideration. The Hungry Jack's Victoria Award 2002 meets the requirement of section 170XF(3)(a), subsection (a) in two ways. Firstly, it applies to all of the employees of Hungry Jack's Pty Limited, the franchisor, not parent company, but franchisor in the Victorian Hungry Jack's Franchise Network.

PN236

There is also I admit a certified agreement in place with that company, but recent full bench decisions would say that the existence of a certified agreement does not exclude the operation of the award, and if I can hand up to the Commission the finding of the full bench in the Construction, Forestry, Mining and Energy Union and Encham Resources Pty Limited, which did clarify this issue, and did confirm that the award would continue despite the fact that a certified agreement exists. Secondly, the operation of that award has, being a single party award, has not stopped the award from being applied to all other Hungry Jack's in Victoria, barring my client, who has since gone on to use AWAs.

PN237

I have for the Commission, and I will hand up also, a number of statutory declarations by 11 employers, all owning Hungry Jack's franchises in Victoria.

PN238

THE COMMISSIONER: I might mark that as an exhibit, HJ1.

EXHIBIT #HJ1 STATUTORY DECLARATIONS FROM 11 STORES, HUNGRY JACK'S FRANCHISES IN VICTORIA

PN239

MR THOMPSON: You will find that that statutory declaration confirms that each of those employers has for some significant period of time paid - sorry, 11, that is for 11 stores, not 11 employers. I correct myself there. The Hungry Jack's Award has been used by all of the Hungry Jack's employers in Victoria as the relevant award for paying their employees, and that is confirmed by those statutory declarations. In that case we have many thousands of employees employed in Victoria doing exactly the same type of work as that covered by the award whose terms and conditions are regulated by that award.

PN240

There was also some contention in the previous hearing of this issue that the award may not have been properly made or upkept. I have since done quite a lot of research into the making of this award and its upkeep and have discovered that contrary to those allegations the award was made in the first instance having taken into account all of the available awards at the time it was determined that it did meet with the Commission's requirements for the making of the relevant safety net awards. You have already been handed the transcript from the proceedings when the award was made, and you will find at conclusion of that transcript that that is confirmed by the Commission.

PN241

Since the award was made it has been kept up to date by the SDA, and you can see from the decision by Commissioner Hingley on 10 October 2002, which I will hand up to you - - -

PN242

THE COMMISSIONER: Thank you.

PN243

MR THOMPSON: - - - that the award was amended for the purposes of item 51, simplification, and that the Commissioner found in those proceedings that the SDA had made a written submission - at paragraph 3, Commissioner, you will notice that the Commissioner has noted that:

PN244

Additionally a written submission, exhibit SDA3, was provided asserting that the rates at which the key classification in the award is ...(reads)... applying between the classifications in this award.

PN245

These rates - the agreement having been made using the Western Australian and an old Victorian award was since updated as you can see, and that has been accepted by the Commission, and the award is therefore completely - has been completely updated.

PN246

THE COMMISSIONER: I should add that I have had some discussions with Commissioner Hingley myself which confirms the submission that you are putting to me now.

PN247

MR THOMPSON: Thank you, Commissioner. Finally, there was also the working hours test case update that was update for this award made on 30 April 2003. If I hand up that decision by Deputy President Ives, that confirms that the award has also been updated with the relevant test cases. Finally, sorry, not finally, but going back to some of the allegations by the union, Mr Ryan also in alleging that the agreement was outdated and did not set a relevant bench mark, he did also state that the award has been used by the union for the purposes of relevance, a relevant award for the no disadvantage test, and that having been used in that way if you look at paragraph 1 - I have a copy of it here, if you - - -

PN248

THE COMMISSIONER: Good. Thank you.

PN249

MR THOMPSON: At paragraph 138 of the union's submissions - - -

PN250

THE COMMISSIONER: Yes.

PN251

MR THOMPSON: - - - the union has stated that although they wouldn't like the award - I am paraphrasing here, but they wouldn't like the award used for the actual employment of employees, which is not going to be the case here, anyway, but that as a result of their using this award for the no disadvantage test, I quote:

PN252

No-one is currently losing any money as a result of this.

PN253

They have stated the fact that the award hasn't - doesn't result in people losing money, it is up to date, and there has been no problem in its use. I contest that if it has been good enough for the union to have used for these same purposes in the past, then it is good enough for an employer in these circumstances to use on his own. Finally, as the Commission will also be aware, section 151 of the Act allows the Registrar to upkeep and review awards on a periodic basis and no application has been made at this time by the Registrar to displace that award or replace it.

PN254

There is also an opportunity for the union should they really think that this award was so out of line with minimum standards, then they could have made an application under section 187, but no application has been made, and that is confirmed to date by the Registry. Finally, the Hungry Jack's Award was made between Hungry Jack's Pty Limited and the union themselves. In order to add operational flexibility and performance, additional performance to the business that has very specific needs and unique needs, the operations of a Hungry Jack's restaurant require that employees are able to be freely rostered and can be offered in those circumstances the best possible employment opportunities.

PN255

That again was confirmed in the initial hearing, and it is on transcript from the initial hearing when the original award was made, that the intention of this award is to add value to the jobs that are created by Hungry Jack's in Victoria. That has not changed, and the award continues to provide that benefit to the employees of Hungry Jack's. I will quickly get to the two reasons that the Fast Food Award is not an appropriate award for designation which I think is important. Firstly, and I believe the Fast Food Award was handed up at the last hearing, sir.

PN256

THE COMMISSIONER: Yes, I have that.

PN257

MR THOMPSON: The Fast Food Award, Commissioner, has been the subject of a lot of disputes, and has taken many years to formulate. But essentially, when you look at the - there are typical respondents to the Fast Food Award. They seem to appear - or they appear to be smaller, more independent businesses, with far fewer staff and very different operational requirements to a Hungry Jack's. The award also contains penalties and loadings, the likes of which were removed when the original Hungry Jack's award was made, in order to be more efficient.

PN258

To categorise and to place a Hungry Jack's store into the respondency list of the Fast Food Award would be to ignore the actual benefits that were created by the union and the employer, under the original award. Not only would that, I guess - this is incredibly magnified by the fact that Hungry Jack's in Australia is part of a network comprising 11,285 restaurants world-wide. All of those restaurants share the same operational requirements, very similar operational requirements. They have the same manuals. They have the same training procedures.

PN259

They are part of a network that can't classified in the same way as a fish and chip shop. And that it is much smaller, and certainly doesn't seem to fit. A Hungry Jack's doesn't seem to fit into the respondency list of that award. The other point is that being part of a franchised network, what is requirement is that there is consistency of service, price and quality within that network. Now, we are dealing here with an employer who owns five Hungry Jack's restaurants. If the Fast Food Award were applied to that employer, and he was taken off the same footing as everybody else in that network, his competitiveness and his ability to operate as part of that network, which is integral to his business, would be destroyed.

PN260

It would also essentially destroy his ability to provide the same prices as his fellow franchisees. And could effectively destroy his business. And although I am not going to hand anything up today, we have done some calculations ourselves. And it is not so much that the Fast Food Award contains wages, and would operate in a way that would disadvantage the employer financially. But it doesn't give us the ability, when we are dealing with such fine margins in a restaurant like this, it doesn't give us the ability to retain the same prices and things that the network has. And that is essential for a Hungry Jack's, in a network like that, to be able to have that consistency. And a new award, the Fast Food Award, doesn't provide for that. If there is any other issues in relation to the designation that I can cover, I would be pleased - - -

PN261

THE COMMISSIONER: No, I think you have covered all of the bases, Mr Thompson.

PN262

MR THOMPSON: I hope so. thank you, Commissioner.

PN263

THE COMMISSIONER: All right. As I indicated earlier, I have had some discussions with Commissioner Hingley, who was involved in the item 51 review of the award. And based on those discussions, the submissions that you have put this morning, which I am prepared to accept, I am prepared to designate the SDA Hungry Jack's Victoria Award 2002 as the appropriate award to underpin the proposed agreement. And a formal designation will be issued in due course, in relation to that matter.

PN264

I note for the record the non-appearance of the SDA in these proceedings this morning, and I intend to proceed in relation to the substantive application as well, without their assistance. I will take the next matter, the agreement.

PN265

MR THOMPSON: Commissioner, a number of submissions were made at the commencement of the last set of proceedings in relation to the award. You will recall that a verbal undertaking was offered and that would be confirmed in writing obviously. That would ensure that the agreement was updated to reflect the CPI increases each year.

PN266

THE COMMISSIONER: Yes.

PN267

MR THOMPSON: I am happy to run through the agreement clause by clause or to deal specifically with any issues that you have. Essentially - - -

PN268

THE COMMISSIONER: I will save you that trouble. Obviously I have had a look at the proposed agreement and run the comparisons in relation to the Victorian award, and my perusal of the terms and conditions as such would indicate that the no disadvantage test has been met in relation to the award.

PN269

MR THOMPSON: Thank you, Commissioner.

PN270

THE COMMISSIONER: All right. I make that observation based on the submissions that were put in the earlier hearing by Mr Thompson, and the objections that were initially raised by the SDA in relation to this matter. I am satisfied, based on my perusal of the documentation that is attached to the Commission's file, and noting the criteria set out in the Act for the certification of a Division 2 Agreement, that this being an application made pursuant to section 170LK, that criteria has been met in my view.

PN271

The agreement will be certified in the terms sought by Mr Thompson on behalf of his client. The agreement will be known as the Manson International Pty Limited Certified Agreement 2003, it will come into force from today's date, 9 March 2004, and will remain in force until 22 January 2007. Certified copies of the agreement, plus the designation of the appropriate underpinning award will be issued by the Commission in due course.

ADJOURNED INDEFINITELY [10.25am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #HJ1 STATUTORY DECLARATIONS FROM 11 STORES, HUNGRY JACK'S FRANCHISES IN VICTORIA PN239