AG2004/2927, Transcript of Proceedings [2004] AIRCTrans 2037 (2 June 2004)

AUSCRIPT PTY LTD
ABN 76 082 664 220

ADMINISTRATOR APPOINTED

Level 7, ANZ House 13 Grenfell St ADELAIDE SA 5000
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TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/2927

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LS of
the Act by Wrightville Administration
Pty Ltd and Another for certification
of the Jarvis Certified Enterprise
Agreement 2004

ADELAIDE

11.50 AM, FRIDAY, 21 MAY 2004

PN1

MR M. ESAU: I appear for the employer. I apologise for my lateness, I wasn't aware of the hearing until a short time ago.

PN2

THE SENIOR DEPUTY PRESIDENT: Yes, I understand there was some confusion in that regard. Mr Esau, do you need to seek leave? Are you a legal practitioner?

PN3

MR ESAU: Yes, I am.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes, so I take it you need to seek leave?

PN5

MR ESAU: Yes, I do, I seek leave.

PN6

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN7

MR A. SIBBONS: I'm from the Australian Manufacturing Workers Union.

PN8

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Sibbons, do I take it that you don't oppose Mr Esau's application for leave?

PN9

MR SIBBONS: No, I don't.

PN10

THE SENIOR DEPUTY PRESIDENT: Very well, I grant that application for leave, thank you, Mr Sibbons.

PN11

MR ESAU: Thank you.

PN12

THE SENIOR DEPUTY PRESIDENT: Well, I can advise the parties that I've read the agreement and the statutory declarations. I have a number of questions about the process whereby the agreement was reached. Mr Esau, can I take you to the statutory declaration and, in particular, to paragraph 1.4, it does not appear to have been filled in but am I correct in understanding that the agreement has application to a part of the employer's business, being that part that is regulated by the Vehicle Industry Repair Service and Retail Award of 2002?

PN13

MR ESAU: You are correct - sorry, Commissioner, that is an oversight, yes, it should be filled in. What you said is correct.

PN14

THE SENIOR DEPUTY PRESIDENT: Am I correct in understanding that the agreement was provided to all employees on 2 April 2004?

PN15

MR ESAU: Yes.

PN16

THE SENIOR DEPUTY PRESIDENT: Can you tell me what form the ballot that occurred on 23 April took, was it a secret ballot, or how did the process occur in that regard?

PN17

MR ESAU: I can't tell you, Commissioner, I had no part in that process. Mr Sibbons might be able to advise.

PN18

THE SENIOR DEPUTY PRESIDENT: Mr Sibbons, are you able to help me in that regard?

PN19

MR SIBBONS: I can help you sir, yes. It was in the form of a secret ballot.

PN20

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Now, Mr Sibbons, I'm going to ask Mr Esau a number of questions about the agreement. My questions don't invite him to rewrite the document, they simply go toward clarifying both the intention of the parties relative to a number of provisions and, also, a number of provisions that I will need to consider in the context of the confines of the Act. Please feel free to jump up and tell me if you want to add something to his responses, or indeed if you want to disagree with them.

PN21

MR SIBBONS: Sure.

PN22

THE SENIOR DEPUTY PRESIDENT: Mr Esau, can I take you first of all to clause 8, and I should preface the question that I have here by saying I have particular regard to the importance of that single bargaining unit which, in the terms of clause 8, could be read as simply recounting what has happened, were it not for the provisions of clause 9 which place a prospective role for that single bargaining unit. Now, the single bargaining unit is proposed to consist of - or stated to consist of the relevant shop stewards and a union official and up to three representatives from management. To what extent are employees who may not be members of the union involved in that single bargaining unit?

PN23

MR ESAU: I can't tell you, Commissioner, but I undertake to do so.

PN24

THE SENIOR DEPUTY PRESIDENT: All right. Well, that then takes me to clause 9, which indicates that as I understand it that the parties propose to consider through that single bargaining unit a performance-based wage structure. Am I correct in understanding first of all that that performance-based wage structure would not result in wage rates less than those articulated in the agreement?

PN25

MR ESAU: Yes.

PN26

THE SENIOR DEPUTY PRESIDENT: Secondly, should I understand that whilst the attached appendix 4 is effectively a blank sheet of paper, the parties would intend that if they reach agreement on a performance-based wage structure, they would seek to vary this agreement so as to incorporate that arrangement pursuant to section 170MD(2) of the Act?

PN27

MR ESAU: Yes. May I say, I had some discussions with Mr Higgins of Jarvis Ford, or the employer, about that and the structure - they didn't have time to complete the negotiations, I'm instructed, but it is as I understand it, actively under consideration.

PN28

THE SENIOR DEPUTY PRESIDENT: Yes, well, see, there are two potential steps here. You may well reach agreement on a performance-based wage structure as one step, but there is potentially an altogether different step associated with reaching agreement so as to vary this agreement so as to insert, in effect, an appendix 4.

PN29

MR ESAU: Yes. That is how I understand the intention.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Mr Sibbons, did you want to say anything on that issue?

PN31

MR SIBBONS: Sir, just to add some clarification on the single bargaining unit and how that is comprised. Members and employees - I will rephrase that to, employees from either of the workshop sites have elected a representative from each of those work groups to be on the single bargaining unit, so they can be either a member of the union or a non-member of the union.

PN32

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Mr Esau, are you happy for me to work then on the basis of Mr Sibbons' response to my question, or will you need to seek clarification of that from the employer?

PN33

MR ESAU: I would be grateful if you could use the response that has just been given to you.

PN34

THE SENIOR DEPUTY PRESIDENT: Very well, thank you. Now, Mr Esau, can I then take you to clause 10. Am I correct in understanding that notwithstanding the provisions of that clause, the issue of whether or not an employee is or is not a member of the AMWU, or any union, is not a factor taken into account in decisions relative to the employee's employment?

PN35

MR ESAU: Yes.

PN36

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, clause 11 relates to: Income Protection Insurance. As a housekeeping issue, appendix 1 does not appear to be labelled as such but, I take it, it is the first in the appendices?

PN37

MR ESAU: Yes.

PN38

THE SENIOR DEPUTY PRESIDENT: Secondly, who determines in accordance with that second dot point whether the income protection insurance is available at a reasonable cost, that is, whose prerogative is that?

PN39

MR ESAU: I'm sure that will be a matter that is negotiated with the parties because, of course, it then goes on to say:

PN40

Having regard to the usual premiums charged in the industry.

PN41

Which is a matter that, presumably, could be advised on by experts in the industry. I agree the agreement is silent as to at whose choice. I would think it's a matter for both parties.

PN42

THE SENIOR DEPUTY PRESIDENT: I see. So, presumably, the employer would agree with that single bargaining unit as to whether the premiums were - well, constituted a reasonable cost.

PN43

MR ESAU: Yes. I assume, based on expert evidence on that issue.

PN44

THE SENIOR DEPUTY PRESIDENT: Yes.

PN45

MR ESAU: From the insurance industry.

PN46

THE SENIOR DEPUTY PRESIDENT: So you are saying to me now that I should read that clause in that context?

PN47

MR ESAU: Yes.

PN48

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 12 relates to: Medical Benefits Insurance. I'm wondering whether you might assist me by explaining that second paragraph.

PN49

MR ESAU: The employer, as I understand it, receives some sort of financial benefit from the medical benefits insurer and the intention is that it is from out of that benefit that the excesses would be payable. This clause was in the previous agreement between the parties that was looked at some years ago now and so I'm casting my mind back to those times.

PN50

THE SENIOR DEPUTY PRESIDENT: Yes.

PN51

MR ESAU: Because it is an exact copy from the previous agreement, but I think that was the situation.

PN52

THE SENIOR DEPUTY PRESIDENT: So is it the employer's understanding then that the extent to which any excess might be paid is entirely dependent upon the amount of money left in what I would describe as "a pool paid to the employer" as a consequence of the employer arranging the insurance?

PN53

MR ESAU: Yes. But do you mean if there is no such moneys left after whatever claims there are, then, there is no further payments?

PN54

THE SENIOR DEPUTY PRESIDENT: That is what I'm reading into the clause. Is that correct?

PN55

MR ESAU: That is as I understand it, subject to what Mr Sibbons might have to say.

PN56

THE SENIOR DEPUTY PRESIDENT: Mr Sibbons, is that your understanding?

PN57

MR SIBBONS: Yes, it is, sir.

PN58

THE SENIOR DEPUTY PRESIDENT: Yes. See, I'm aware that the clause might well have been in existence for a long period of time. Unfortunately, that does not exempt it from being the subject of a future disagreement.

PN59

MR ESAU: I understand that. I was only saying that because I had to cast my mind back in order to answer that question some years, but that is why I mention that.

PN60

THE SENIOR DEPUTY PRESIDENT: I see. Can I take you to the third paragraph and in that context I note that appendix 4 is the understanding, or memorandum of understanding relative to what is described as "Jarvis Ford." I take it first of all that that reference to "Jarvis Ford" is a reference in effect to the employer?

PN61

MR ESAU: Yes.

PN62

THE SENIOR DEPUTY PRESIDENT: Secondly, I note that that memorandum of understanding has the potential to expire on 1 June 2004 in that it came into operation on 1 June 2003 and is for a minimum period of 12 months. Now, in that context should I understand that the concept of a "reasonable cost" identified in the third paragraph in clause 12 will be discussed by the employer and that single bargaining unit in the context of the usual arrangements applicable to such schemes?

PN63

MR ESAU: I think in reality the more likely arrangement is it will simply be renewed.

PN64

THE SENIOR DEPUTY PRESIDENT: How then should I understand the words:

PN65

Provided medical benefits insurance continues to be available at reasonable cost.

PN66

Is that "reasonable cost" to employees? Or is it a reasonable cost to the employer?

PN67

MR ESAU: It is the employee's cost, so it would be reasonable to the employees, but I can't think of circumstances where that clause will be invoked. It might be invoked where the nominated insurer at that time, you know, issues a premium 10 times the previous year, in amount, and it might be that the parties then say: well, that is not a reasonable cost having regard to the usual industry charges, we will go to some other insurer.

PN68

THE SENIOR DEPUTY PRESIDENT: I see. Mr Sibbons, does that reflect your understanding?

PN69

MR SIBBONS: Yes, sir, it is.

PN70

THE SENIOR DEPUTY PRESIDENT: I'm not saying I'm resting with what the parties once upon a time intended in terms of this provision.

PN71

MR SIBBONS: Yes, I agree with what Mr Esau is saying in relation to history and also the application.

PN72

THE SENIOR DEPUTY PRESIDENT: I see.

PN73

MR ESAU: I'm thinking that it is unlikely to have any application because as I understand it the industry - all the insurers charge about the same anyway. It would be unusual for suddenly one of the players in the industry to charge 10 times everyone else.

PN74

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 18 talks of: A Service Upgrade Program. Is such a program proposed to be introduced during the life of this agreement?

PN75

MR ESAU: I believe so. Mr Sibbons might have some input on that.

PN76

MR SIBBONS: Yes, sir, if I may. The service upgrade is a forward factory initiative that all dealerships will be going through in the very near future and it should not have any major impact on our members, or employees at the Jarvis sites.

PN77

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Esau, if I can then take you to clause 19, which requires that I look at appendix 3, but to what extent should I understand that there is actually an agreement in relation to the 4-day week?

PN78

MR ESAU: Again, I'm sorry, I can't assist you. I thought that had been implemented. Mr Sibbons would know more than I on that.

PN79

THE SENIOR DEPUTY PRESIDENT: Mr Sibbons, are you able to help me in that regard?

PN80

MR SIBBONS: Yes, sir. My understanding in the previous agreement this clause was as it is written in this clause. There was an opportunity for employees to discuss and, hopefully, if they did agree that they could go down the path of a 4-day week working arrangement, so the company has agreed this time that if employees do agree and they meet the certain criteria set, then the employees could entertain a 4-day week working arrangement. People were not going to be forced into working that arrangement, it would have to be agreed by a clear majority of employees at the site, taking into consideration various other issues that may confront them.

PN81

THE SENIOR DEPUTY PRESIDENT: So the process would be that employees at the relevant site - and I understand there might be more than one site - - -

PN82

MR SIBBONS: There is more than one site, yes.

PN83

THE SENIOR DEPUTY PRESIDENT: Would meet and discuss whether or not they sought a 4-day week. The employer would then agree with that, subject to it suiting the work flow and productivity requirements.

PN84

MR SIBBONS: That is right.

PN85

THE SENIOR DEPUTY PRESIDENT: Whereupon a 4-day week would then be implemented on the basis of the roster set out in appendix 3 and, presumably, that would then change arrangements relative to ordinary working hours for each of those 4 days.

PN86

MR SIBBONS: That is correct.

PN87

THE SENIOR DEPUTY PRESIDENT: And overtime arrangements?

PN88

MR SIBBONS: Correct.

PN89

THE SENIOR DEPUTY PRESIDENT: Are they set out elsewhere in the agreement then?

PN90

MR SIBBONS: No, I don't believe so.

PN91

THE SENIOR DEPUTY PRESIDENT: So that if the 4-day week were to be implemented, then is it correct for me to understand that the 38 ordinary hours would be worked in 4 equal days?

PN92

MR SIBBONS: Correct.

PN93

THE SENIOR DEPUTY PRESIDENT: With overtime becoming applicable when work beyond the application of that daily ordinary hours arrangement takes effect?

PN94

MR SIBBONS: It could work that way, sir.

PN95

THE SENIOR DEPUTY PRESIDENT: In effect, 38 would be divided by 4.

PN96

MR SIBBONS: Yes.

PN97

THE SENIOR DEPUTY PRESIDENT: When work is required outside of that time that overtime arrangements might apply?

PN98

MR SIBBONS: Or it may work another way.

PN99

THE SENIOR DEPUTY PRESIDENT: Yes.

PN100

MR SIBBONS: As an employee may be required to work a certain number of hours per day, once worked beyond those certain hours per day, then overtime would be applicable.

PN101

THE SENIOR DEPUTY PRESIDENT: I see. And that presumably would be an arrangement that was documented? You see, what I'm wrestling with here is the extent to which such an arrangement might be put in place, but with the very best of intentions the parties might then be in breach of the agreement.

PN102

MR SIBBONS: Sure.

PN103

THE SENIOR DEPUTY PRESIDENT: I'm just trying to avoid a situation where that arrangement becomes unglued at some future stage.

PN104

MR SIBBONS: Just for clarification, sir, the agreement - the current agreement - there has been no move to the 4-day week in that area and it is probably unlikely that a 4-day week will be worked in this agreement, however, it was a reserved matter that could be looked at if the circumstances did change. I understand your point, it is a valid point and I believe that the single bargaining unit would have to specify the hours of work and those arrangements very clearly and precise.

PN105

THE SENIOR DEPUTY PRESIDENT: Yes. Well, the other way of doing it of course would be if the 4-day week was to be implemented, arrangements relative to that could be agreed on the basis of being proposed as a variation to this agreement.

PN106

MR SIBBONS: That is true.

PN107

THE SENIOR DEPUTY PRESIDENT: Yes. So in effect the parties are on notice that the potential exists for a 4-day week to give rise to payments which don't conform with the agreement?

PN108

MR SIBBONS: Sure.

PN109

THE SENIOR DEPUTY PRESIDENT: Yes. The provisions of clause 20 relate to: Wage Increases. How should I read those increases in the context of appendix 2? That is, are they incorporated in the amounts set out in appendix 2?

PN110

MR ESAU: They are an addition as I understand it. Is that what you are asking me, Commissioner?

PN111

THE SENIOR DEPUTY PRESIDENT: Yes.

PN112

MR ESAU: As I understand they are an addition.

PN113

THE SENIOR DEPUTY PRESIDENT: I see, so that if I looked at, say, the advanced technician, the advanced technician receives an amount of $30 per week in addition to the base salary, being presumably award-base or entry level salary, and in addition to that would receive on or after 31 March 2004, another $20 figure?

PN114

MR ESAU: As I understand it, it is separate, that is right.

PN115

THE SENIOR DEPUTY PRESIDENT: Clauses 23 relates to the: Dispute Settlement Procedure. Mr Esau, is it the employer's expectation that dispute settlement procedure will be applied irrespective of whether or not someone is a member of this union or indeed any union?

PN116

MR ESAU: Yes.

PN117

THE SENIOR DEPUTY PRESIDENT: So that the capacity exists for a person who is not a member of the AMWU to be represented by a person or an organisation of their choice?

PN118

MR ESAU: Yes.

PN119

THE SENIOR DEPUTY PRESIDENT: If I can take you to the fifth step in clause 23, which envisages that an unresolved matter might be referred to the Australian Industrial Relations Commission, the norm but by no means the prescriptive requirement is that the Commission will first of all endeavour to resolve a matter by conciliation with arbitration as a last resort. Does that reflect the parties collective understanding in this regard?

PN120

MR ESAU: Yes.

PN121

THE SENIOR DEPUTY PRESIDENT: Mr Sibbons, is that your understanding?

PN122

MR SIBBONS: Yes, sir.

PN123

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 28, in particular the second heading: Alcohol and Drugs. Am I correct in understanding that employees may be under the influence of prescribed drugs, or is that a prohibition on any drug?

PN124

MR ESAU: No, it would not refer to prescribed drugs.

PN125

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN126

MR ESAU: Yes.

PN127

THE SENIOR DEPUTY PRESIDENT: Now, because the pages aren't numbered and we will need to be careful in terms of the next question, if I can ask you to turn to the next page and the very last dot point refers to the: Quality Assurance Program. Is that program documented, is it readily available to employees, and am I correct in understanding that it might be changed during the life of this agreement?

PN128

MR ESAU: It is certainly available to employees. It is part of the quality assurance process that the employer goes through. I doubt that it would change.

PN129

THE SENIOR DEPUTY PRESIDENT: I see, thank you. If I can ask you to refer to the next page and the first dot point which refers to the company's: Career Development Program. Once again, am I to understand that it is a documented program, that it is readily available to employees, but it gives rise to the question also as to whether it might change during the life of this agreement?

PN130

MR ESAU: It is available and I doubt that it will change.

PN131

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Esau, keep turning pages, come to the next page. The next page, the next page, the next one. Now, I'm not going to keep doing this - I will ask you to keep turning forward until we find a page with a heading: Use Of The Company's Cars, about a third of the way down the page.

PN132

MR ESAU: Yes.

PN133

THE SENIOR DEPUTY PRESIDENT: The last of the dot points on that page and the first dot point on the next page give rise to a question as to the extent to which - first of all I should understand that that is, the access to an employer car is a matter of discretion for the employee, so the employee may decline to have a car.

PN134

MR ESAU: Certainly, yes.

PN135

THE SENIOR DEPUTY PRESIDENT: Secondly, am I to understand that the amount to be deducted to cover the employer costs, including insurance, would be documented?

PN136

MR ESAU: Yes, certainly.

count 3482

THE SENIOR DEPUTY PRESIDENT: I am sorry, I am going to need to take you back two pages from that last question. This is to a page with - near the top of the page at: Spotter's Incentives?

PN137

MR ESAU: Yes, sir.

PN138

THE SENIOR DEPUTY PRESIDENT: Does the spotters's incentive apply in the case of a referral or in the case of a sale?

PN139

MR ESAU: I can't tell you for sure about that - I would think a sale. As I understand the industry, that is what would normally apply.

PN140

THE SENIOR DEPUTY PRESIDENT: Mr Sibbons, is that your understanding?

PN141

MR SIBBONS: Yes, sir. It is to a sale.

PN142

THE SENIOR DEPUTY PRESIDENT: Thank you. Just turn back one page earlier on into the agreement, to a subclause headed: Restraint on future employment. In that regard, I don't have a question but I do need to make an observation to the parties that whilst I don't consider that clause represents an impediment to certification, the certification of the agreement does not necessarily make such a provision enforceable. Can I take you then to appendix 2? Now, reference is made in this appendix to the official service training scheme. Is that scheme a documented scheme? Is it readily available to employees and might it change during the life of the agreement?

PN143

MR ESAU: My understanding is that it is official, an official scheme. I doubt that it will change.

PN144

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Sibbons, I am working from the basis that where you have been silent, you are in agreement with Mr Esau's responses?

PN145

MR SIBBONS: Yes, sir.

PN146

THE SENIOR DEPUTY PRESIDENT: Very well. On the basis of those responses and the information provided to me, I am satisfied the agreement was reached through a process consistent with that detailed in section 170LJ of the Act. I am similarly satisfied the agreement itself meets the requirements necessary for certification. It is of a duration envisaged by the Act. It contains the necessary dispute resolution provision, the operation of which the parties have clarified today. The agreement does not contain on the basis of advice provided to me by the parties, any provisions which are contrary to the Act, so as to preclude certification.

PN147

It meets the requirements of the no disadvantage test. I will certify the agreement with effect from today. That certificate will be forwarded out to the parties within the next few days. The certificate will detail the various clauses about which I have sought clarification. It will not identify the responses provided to me because those are recorded on the transcript of these proceedings. I congratulate the parties on reaching this agreement and hope that it operates to benefit both the employer and the employees.

PN148

In certifying the agreement, I think it probably incumbent upon me to suggest that - I think there is the potential for a number of clauses to be read in ways where there could be disagreement, and it might be appropriate, given that this appears to be a second or third generation agreement, for the parties to do a stock-take next time around, so as to remove that potential. It is a whole lot easier to do so by way of a planned process than waiting for something unforseen to happen. I will adjourn the matter on that basis.

ADJOURNED INDEFINITELY [12.23pm]

PN149