AG2003/7251, Transcript of Proceedings [2004] AIRCTrans 1571 (26 April 2004)

AUSCRIPT PTY LTD
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TRANSCRIPT OF PROCEEDINGS

O/N 10720
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT CARTWRIGHT

AG2003/7251

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ the Act
by Petersville Limited trading as Nestle
Ice Cream and Others for certification of
the Nestle Ice Cream - Mulgrave Maintenance
Enterprise Agreement 2002

SYDNEY

10.16 AM, FRIDAY, 26 MARCH 2004

Continued from 16.9.03

THESE PROCEEDINGS WERE CONDUCTED BY VIDEO
CONFERENCE IN SYDNEY

PN105

THE SENIOR DEPUTY PRESIDENT: Good morning, ladies and gentlemen. Can I first of all apologise for the delay in start due to difficulties establishing the video link between Sydney and Melbourne. Having said that let me take the appearances in Sydney?

PN106

MR D. DAVIES: Good morning, your Honour, I am a consultant and I seek leave to appear on behalf of Petersville Limited. My colleague Mr McCarthy appeared by leave of the Commission on the last occasion. Appearing with me in Melbourne are MS I. TREBELS and MR P. HARPER both of whom are from the company's Human Resources Department.

PN107

THE SENIOR DEPUTY PRESIDENT: Thank you, good morning. In Melbourne at the other end of the table?

PN108

MS C. CHEW: I appear for the AMWU.

PN109

MR C. LEANE: I appear on behalf of the Electrical Division of the CEPU, Victoria.

PN110

MR S. McKAY: I appear on behalf of the CEPU Electrical Division.

PN111

THE SENIOR DEPUTY PRESIDENT: Thank you all. Now, ladies and gentleman, the file discloses that the agreement which is the subject of the application was approved on 15 July 2003, the application was lodged on 27 August 2003 and I heard the matter by video link on 16 September 2003. At that hearing I raised a number of questions about the agreement particularly in relation to clause 15. As a result of the proceedings at the hearing you were going away to think about the questions raised. When we didn't hear anything for quite some months after that the Commission followed up in February and I gather, resulting from that following up, the parties have sought the matter to be re-listed so I'm in your hands.

PN112

Having said that let me tell you I think there is still a very serious question to be asked about clause 15 and particularly clause 15.3 so I would be very interested in what you've got to say.

PN113

MR DAVIES: Your Honour, perhaps if I can start the ball rolling, you addressed the issue of clause 15.3 in proceedings on the last occasion as you've indicated and that debate commenced at paragraph 38 and concluded at paragraph number 98 of the transcript at which stage you said, and I quote:

PN114

Yes, and I have said before I have given the explanation you gave before.

PN115

You go on to say that:

PN116

The only difficulty I have in relation to completing the certification proceeding ...(reads)... that it can't be all that difficult.

PN117

Subsequently, the proceedings were adjourned.

PN118

THE SENIOR DEPUTY PRESIDENT: You've got the advantage on me. I don't have the transcript.

PN119

MR DAVIES: I'm sorry, your Honour. Your Honour, earlier in the transcript, you had referred to two decisions of the Commission which are dealt with, issues not dissimilar from those appearing in clause 15.3 of the proposed Petersville agreement and you refer particularly to the Unilever North Rocks decision which, I think, was a decision of your Honour in print 935410. The Zoom Sound decision in print 937011. You indicated that that decision, particularly the North Rocks one may provide a hurdle in relation to these proceedings.

PN120

We note that the decision of the Commission reflected in print 935410, that is the Unilever North Rocks decision was considered by a Full Bench of this Commission in appeal proceedings. Their decision is set out in print 940027.

PN121

THE SENIOR DEPUTY PRESIDENT: I can assure you, I've read it very closely.

PN122

MR DAVIES: Well, I was about to say, I have a copy of it, your Honour, if you want me to hand it up, but I presume you're familiar with its contents. Your Honour, that decision was handed down on 31 October 2003 and of course was subsequent to the last occasion that this particular application was before you. Your Honour, the parties believe that the decision of the Full Bench in that matter provides some comfort to us in relation to clause 15.3 and it will be my submission eventually that clause 15.3 should not prove an impediment to the certification of this agreement.

PN123

Perhaps if I could refer to print 940027, which I'll refer to conveniently if it suits the Commission, as the Unilever Appeal Decision. At paragraph 177 and 178, the Commission, having spent numerous pages, 46 on my copy, dealing with the issues surrounding the provisions of section 170LI of the Act. Paragraphs 177 and 178 of the Unilever Appeal Decision says this, and I quote:

PN124

It follows from our construction the nature of the agreement test and section 170LI ...(reads)... the nature of the agreement test.

PN125

It then goes on to say at 178:

PN126

In our view, as agreed terms, none of the provisions with which Cartwright SDP was concerned ...(reads)... subject to the agreement.

PN127

Now, having established that as a premise, further on in the decision, at paragraphs 183 and 184, the Commission deals particularly with clause 23 and appendix E which relate to contractors in the Unilever decision. I'm sorry, I withdraw that, in the Unilever Agreement. What it says in paragraph 183:

PN128

In relation to clause 23 and appendix E as agreed terms, the latter term ...(reads)... provisions at issue in National Transport -

PN129

I emphasise this:

PN130

These clauses establish reciprocal rights and duties on the parties and persons bound by the ...(reads)... rights or duties integral to any such transactions.

PN131

Paragraph 184 says:

PN132

The linkage between clause 23 appendix E and other provisions of the agreement is not difficult to discern ...(reads)... of the terms of the whole agreement.

PN133

Then I go and quote later the last sentence of paragraph 184:

PN134

The workplace and business realities that those provisions grapple with must be given weight in any balanced assessment where the provisions of the kind in issue are about a matter that pertains to the reference relationship. Clause 23 and appendix E are about such a matter.

PN135

I conclude my quotation there. If the Commission is to look at paragraph 15(3) in the proposed agreement, we say that paragraph 1 provides for a process which involves my client's employees who are union delegates. It's an administrative process in terms of introducing union delegates to contractors and subcontractors working on the site.

PN136

THE SENIOR DEPUTY PRESIDENT: Sorry, you mean the first couple of sentences of 15.3.

PN137

MR DAVIES: Sorry, yes, well, the first paragraph, yes, the first couple of sentences, yes, from "Delegates from" down to the term "before contract work commences". So we say that that provides a process, an administrative process, which involves the employees of my client who are union delegates. We say that the next paragraph, the one commencing, "It should be a requirement of" and going down to "no longer required" sets out a statement of the commercial relationship which will apply between the employer respondent to the proposed agreements and to subcontractors and their employees. So it reflects a commercial relationship outside the scope of the agreement.

PN138

Now, we say that the provisions of 15(3), those to which I have referred are not inconsistent with the conclusions of the Full Bench in paragraph 183 of the Unilever appeal decision. I just repeat those for emphasis?

PN139

These clauses establish reciprocal rights and duties on the parties and persons ...(reads)... to any such transactions.

PN140

We say, sir, that the provisions of the Full Bench decision in paragraph 184 also have relevance to what we propose in 15.3. The Commission in paragraph 184 refers to the term "labour use flexibility" and we say that is particularly relevant to provisions of the proposed Petersville Limited agreement. We say that it is particularly relevant to clause 15.1 of that agreement which indicates the parties recognise the need for the use of contractors for:

PN141

Supplementary work, specialised maintenance work, modification work and project work.

PN142

That's not core activities of my client's operation.

PN143

We also say that it is relevant to clause 7 of the proposed agreement. Clause 7 provides a detailed consultation process aimed at providing productivity improvements and efficiencies at the site and as I indicated extends to detailed consultation processes involving input of employees. Involving input of union representation. So we say, sir, that the question of labour use flexibility is referred to in another part of the document, that is clause 17.

PN144

We say further to the issue of flexibility is referred to in clause 10 where we talk about the introduction of change and the company's duty to notify and the company's duty to discuss change. Those are issues that we say are also relevant to labour use flexibility. In paragraph 184 of the Unilever appeal decision the bench also makes reference and uses the phrase "retention of some assurance of secure employment". We say that is also relevant to the agreement before the Commission today. Clause 15.2 of the proposed agreement deals with consultation between site management and management employees in conjunction with delegates over the use of contractors and subcontractors. Clearly that consultation, in my submission, is designed to ensure that the company can satisfy its employees that the use of contractors and subcontractors is not going to be done in such a way as to impact on security of employment.

PN145

We also say that that phrase that is used in 184 "retention of some assurance of security of employment" is dealt with in clause 10, Introduction of Change, as well because one of the things that the company is required to do under the provisions of clause 10 is to advise employees of what changes may take place, to advise employees of the impact of those changes which could have an impact on security of employment and then to attempt to deal with the impact of those changes in one of a number of ways, most of which are looking at guaranteeing providing security of employment. Clearly if that is not possible and the issue of security of employment is not able to be guaranteed by my client in certain circumstances where change is introduced then clause 11 comes into play and clause 11 deals with, what I might say is the other end of the scale of security of employment, and that is provisions that might apply if an employee is made redundant.

PN146

Now we say, sir, that the concept of labour use flexibility and the retention of some assurance of secure employment, both of which are referred to by the Full Bench, are issues that are inherent in the Nestle agreement in the clauses to which I have referred.

PN147

Your Honour I want to conclude my submissions by saying that in the light of the Unilever appeal decision and its relevance to the agreement which is before you today we say that there is no impediment to approving the agreement for you in the terms sought and we say that the decision which I have quoted, particularly the references which I have gone to at length, remove the hurdle that you referred to on the last occasion. To that extent, sir, we ask you to certify the agreement in terms of the documentation that was filed with the registry. If it please the Commission.

PN148

THE SENIOR DEPUTY PRESIDENT: You'd be aware that the Unilever decision was made in the context where two previous Full Benches, commonly known as the Atlas Steels decision and the NUW decision had taken a different point of view and said essentially that each clause of the agreement needs to pertain to the relevant relationship set out in section 170LI. So we are in the rather awkward situation where we've got Full Bench authority on both propositions. We've got two Full Benches saying that each clause needs to pertain and the Unilever bench taking a different view. Interestingly the Commissioner on the Unilever bench also happened to be on the Atlas Steels bench and so - well nothing more need be said about that.

PN149

So the situation is far from clear it would seem to me in that situation. What do you have to say on that?

PN150

MR DAVIES: Your Honour what I say about that is that if one is looking at Full Bench decisions in terms of providing guidelines to other members of the Commission, clearly we have chosen the Unilever appeal decision because it suits our case. Let's be quite frank about that.

PN151

THE SENIOR DEPUTY PRESIDENT: Well said.

PN152

MR DAVIES: The other issue that I believe is appropriate is the fact that the Unilever decision in terms of my understanding of that decision and the other decisions to which you have referred is very much on point. The Unilever decision has dealt with at length with an issue of contractors coming on site. I have referred the Commission in detail to that - - -

PN153

THE SENIOR DEPUTY PRESIDENT: Also in fact the length of the decision deals with the first point that I mentioned, namely the construction of section 170LI.

PN154

MR DAVIES: Yes indeed, but my point is in relation to what we say are the parts of the Unilever appeal decision that are relevant to my submissions in this matter. Paragraph 177 talks about the nature of the agreement test in section 170LI and then talks about clauses 22, 23 and appendix E. It specifically refers to those issues in the Unilever agreement which were issues affecting contractors being used on site. Indeed that is developed later on in the decision in the other paragraphs 183 and 184 to which I have referred.

PN155

Your Honour all I can say to you is that in relation to the Unilever decision in my submission it was a decision that specifically went, at least in part, to the issue of contractors and it was a decision which discussed the commercial realities of business. We face those commercial realities just as Unilever faces the commercial realities. If the Unilever Full Bench recognised those commercial realities and was prepared to approve and enterprise agreement then it is my submission that the Commission, as presently constituted, follow that precedent.

PN156

THE SENIOR DEPUTY PRESIDENT: I've got another question to raise with you but perhaps I should give the parties in Melbourne the chance to make any comments they want to on that particular point that you have dealt with.

PN157

MR DAVIES: Thank you your Honour.

PN158

MS TREBELS: We are instructed to endorse Mr Davies' submissions your Honour and we seek certification of the agreement. If it please the Commission, thank you.

PN159

MR LEANE: Yes Commissioner, our union also supports the application and also the Unilever decision as well. Basically the clause that we are looking at does align itself with job security for our members out there. We support the application of the certification.

PN160

THE SENIOR DEPUTY PRESIDENT: Thank you. Nothing else from Melbourne? Well, now, the agreement - - -

PN161

MR HARPER: Your Honour, sorry, if I may, in just going through the documentation and just to throw another little spanner in the works here, I have just noticed that the statutory declaration is in fact incorrect, the reason being that when the application was originally made in July, we were Petersville Limited and the ABN was as stated but since then the company has changed its name and the ABN has changed. It changed in November 2003, so when we receive the certification we would like to record the correct company name and the correct company ABN. I am not sure whether that would influence these proceedings but I felt we had to raise it now.

PN162

THE SENIOR DEPUTY PRESIDENT: Thank you. Can I direct your attention to clause 4 of the agreement. It states that this agreement will operate from 1 July 2002 and remain in force until 31 March 2005. Now, I don't have the transcript with me but I am sure we would have discussed that last time. Is 2002 a typo, was that meant to be 2003 or was it meant to be 2002?

PN163

MR DAVIES: Your Honour, Mr Harper might wish to correct me but my understanding is it was intended that the agreement would apply from 2002, it was a three-year agreement.

PN164

THE SENIOR DEPUTY PRESIDENT: Yes, but you are aware that the Act provides - - -

PN165

MR DAVIES: That the certification can only apply from the date that the Commission certifies, yes, we are aware of that. Your Honour, you have indicated earlier that I had the advantage of you by having the transcript and your not having the transcript. The issue of the term of the agreement was discussed at paragraphs 28 to 32 of the transcript of proceedings before you on the last occasion.

PN166

THE SENIOR DEPUTY PRESIDENT: Well, that was back in September, it is now six months on and as I said at the outset, the application states that it was approved on 15 July 2003, the lodgment of the application was 27 August 2003, and there has been a six-month gap since the hearing. Had my chambers not followed up in saying, well, we've still got the file, what do you want to do with it, we have heard nothing at all from you since I raised the questions and left the options with you - it now being six months on and the agreement has an expressed life to run for another year, that is until 31 March 2005, what do you want to say in relation to all of those timing issues?

PN167

MR DAVIES: The issue of the application being out of time was dealt with on the last occasion. I appreciate what you are saying, that was in September. Your Honour, two things about that. First of all, it is an agreement that covers seven people and to my knowledge, and perhaps Ms Trebels can correct or confirm what I am about to say, the composition of those seven people who would approve the agreement in July of last year has not changed or certainly has not changed materially.

PN168

The second point I want to make is that the provisions of this agreement, notwithstanding the time it has taken to get it before the Commission in the first instance and then the time which has elapsed since the matter was last before the Commission, this agreement is being applied by administrative action by the company in any case. The parties are dealing with issues pursuant to the terms of the agreement and we say that the Commission should take that into account in any queries it may have regarding timing.

PN169

THE SENIOR DEPUTY PRESIDENT: Yes, so it is your position that you want to pursue certification of the agreement, including clause 15.3 rather that deleting clause 15.3.

PN170

MR DAVIES: Yes, your Honour, that is our position.

PN171

THE SENIOR DEPUTY PRESIDENT: Is there any further submission you would like to make then?

PN172

MR DAVIES: Only in relation to the question you asked me earlier about the Unilever decision, the NUW decision, the Atlas Steel decision.

PN173

THE SENIOR DEPUTY PRESIDENT: Just before you go on, can I mention one other relevant factor, and that is that it may well be the High Court will have something to say about this issue in what is known as the Electrolux appeal which was heard in December last year, if I recall. That may turn out to be relevant to this matter.

PN174

MR DAVIES: Well, indeed it may, your Honour. However, my understanding is, and I keep harping back to Unilever, that that agreement has been certified by the Commission as a result of the Full Bench decision. If there are further proceedings to be brought in relation to that matter before the High Court then those proceedings will proceed in relation to that matter.

PN175

THE SENIOR DEPUTY PRESIDENT: No, sorry, perhaps I said the wrong thing. It's not in relation to Unilever, but Electrolux.

PN176

MR DAVIES: I'm sorry, you have said in relation to Electrolux. Well, that may cause presumably, if there is a decision which is contrary to the conclusions reached by the Full Bench in Unilever, then that may or may not cause the Unilever agreement to be revisited. My submission there would be that if you were to certify the agreement as is sought today, this agreement, based on the Unilever appeal decision, the point I was going to make is that my understanding is that the Full Bench in that matter had the advantage of knowing what the Atlas Steel and NUW Full Bench has said previously.

PN177

If indeed it requires a revisitation of this agreement in the light of the High Court decision in the Electrolux case then that will occur, but we don't suggest that this matter should then be deferred pending the outcome. Indeed, it will only further delay the proceedings. If the outcome of the Electrolux challenge is such that it doesn't affect this agreement then we have lost a lot of time for, I won't say no good reason, but for a reason.

PN178

THE SENIOR DEPUTY PRESIDENT: I think the reason was very clear.

PN179

MR DAVIES: If the Commission is minded to certify this agreement and there is some issue with that as a result of any High Court decision in the Electrolux matter then no doubt someone will ask that this agreement be revisited.

PN180

THE SENIOR DEPUTY PRESIDENT: Yes. I can't help but respond, Mr Davies, that the six-month delay since the hearing has been fundamentally at the discretion of the parties but be that as it may, unless you have anything further to say I propose to reserve a decision in this matter and having said that, let you know that I will be away on leave for some weeks and therefore the deciding of this matter will probably be delayed for at least a month.

PN181

MR DAVIES: I understand, your Honour, and thank you, I have no further submissions to make.

PN182

THE SENIOR DEPUTY PRESIDENT: Thank you very much. Is there anything further in Melbourne.

PN183

MR HARPER: No, your Honour.

PN184

MS CHEW: We accept the assurances by the company that the change in ABN and the change in name is only that and I am also led to believe there haven't been any changes in the composition of the workforce. Thank you.

PN185

THE SENIOR DEPUTY PRESIDENT: You are quite comfortable with the situation that the company has been applying the substance of the agreement in its operations anyway.

PN186

MR HARPER: Yes.

PN187

THE SENIOR DEPUTY PRESIDENT: Thank you very much. Ladies and gentlemen, we will adjourn and I thank you for your help this morning.

ADJOURNED INDEFINITELY [10.46am]