AG2004/1414, Transcript of Proceedings [2004] AIRCTrans 2137 (9 June 2004)

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TRANSCRIPT OF PROCEEDINGS

O/N 10884
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT ACTON
SENIOR DEPUTY PRESIDENT LACY
COMMISSIONER HINGLEY

AG2004/1414
AG2004/1603

APPLICATION FOR CERTIFICATION OF
A MULTIPLE BUSINESS AGREEMENT

Application under section 170LC and section 170XF
of the Act by Subway Systems (Australia) Pty Limited
and Others for certification of a multiple business
agreement re SDA-Subway Agreement 2004 and for
determination of designated award for certified
agreement

APPLICATION FOR CERTIFICATION OF
A MULTIPLE BUSINESS AGREEMENT

Application under section 170LC of the Act
by Subway Systems (Australia) Pty Limited
And others for certification of a multiple
business agreement re SDA-Subway Agreement
2004 Number 2

MELBOURNE

9.06 AM, MONDAY, 5 APRIL 2004

PN1

MS S. WILLEKES: I appear for the employers in the SDA-Subway Agreement 2004 and the SDA-Subway Agreement 2004 Number 2, and I seek leave to appear.

PN2

MR M. GALBRAITH: I appear for the SDA, and appearing with me is MS J. HEAGNEY.

PN3

SENIOR DEPUTY PRESIDENT ACTON: Leave is granted, Ms Willekes.

PN4

MS WILLEKES: Commission, the applications before the Commission this morning are made pursuant to section 170LC. Perhaps as a first process if we could deal with the award designation for the applications. Both the employers and the SDA seek that the National Fast Food Retail Award be designated pursuant to 170XF on this basis. The classifications set out under the Fast Food Award are comparable to that under the certified agreements on the basis that both grades 1 and 2 deal with the preparation and sale of food. Should I proceed on the basis that the application is - the Fast Food Award is designated?

PN5

SENIOR DEPUTY PRESIDENT ACTON: Is that all the submission you have in that regard?

PN6

MS WILLEKES: No, I can expand on that.

PN7

SENIOR DEPUTY PRESIDENT ACTON: Okay.

PN8

MS WILLEKES: The Fast Food Award establishes at clause 15.2.1 a retail food employee grade 1 and a retail food grade 2 and grade 3. The definitions of those employees are at clauses 3.5. Grade 1 includes the employee for the receipt of orders for the preparation, cooking and sale of food. Comparably under the certified agreement at clause 6 - sorry, I apologise, at clause 5.2.1 the definition of a retail grade 1 is also for the preparation, assembly of food, the maintenance of the work area, and a standard of cleanliness, and the cleaning of cooking and utensils as well as receipt of moneys, opening and closing of the store, and accepting of deliveries. In our submissions, we would submit that these two classifications are comparable.

PN9

Similarly grade 2 provides for the supervising of a retail - under the award provides for the supervising of a retail food employee grade 1. The agreement provides for at grade 2:

PN10

The supervising, limited supervision of employees performing grade 1 as well as banking daily takings.

PN11

The certified agreement doesn't deal with a grade 3 employee which would be the management of the store as store managers are specifically excluded under the agreement. It is also my understanding that there are several - there are five employers who are covered by the certified agreement who have actually been roped into the Fast Food Award. Therefore, we would seek that the Fast Food Award would be designated.

PN12

SENIOR DEPUTY PRESIDENT ACTON: Is it the National Fast Food Retail Award?

PN13

MS WILLEKES: Retail award, yes, 2000.

PN14

SENIOR DEPUTY PRESIDENT ACTON: Yes, thank you. Mr Galbraith, have you anything to add on that aspect?

PN15

MR GALBRAITH: No, your Honour.

PN16

SENIOR DEPUTY PRESIDENT ACTON: We can indicate that on the basis of submissions put to us we are satisfied that the National Fast Food Retail Award 2000 is the appropriate award for the purposes of applying the no disadvantage test in this area, and we so determine. Yes, Ms Willekes.

PN17

MS WILLEKES: Does the Commission have the benefit of the submissions which I sent through to Chambers on Friday afternoon in relation to these applications?

PN18

SENIOR DEPUTY PRESIDENT ACTON: Yes.

PN19

MS WILLEKES: If the Commission pleases, I can take the Commission through those submissions in relation to this application. The agreements before the Commission have been made between the Shop Distributive and Allied Employees Association, the SDA, the employers listed in the schedules to the two agreements and their respective employees. Apart from the employers listed in each of the schedules, the agreements are in identical terms.

PN20

The SDA Subway Agreement 2004 Number 2 is a Greenfields application. All of the employers listed in the schedules to that application did not have any employees at the time of filing. In these submissions, unless otherwise specifically indicated, if I could just refer to the agreements which will be reference to both agreements unless otherwise specifically indicated. The method by which I propose to deal with the certification today is really to go through the common provisions in both agreements, that being the greenfields and the multi business agreement which would deal with public interest, the grievance procedure, the union recognition clause, the anti discrimination, and the no disadvantage test. It would be at that point that I would like to deal with the greenfields application, followed by the multi business application where I could bring reference to the explanation of the terms of the agreement, the approval by the valid majority and any other matters.

PN21

The agreements pertain to 99 food establishments operated by 67 corporate entities which are franchisees of the Subway brand. It is perhaps pertinent to raise now that under the greenfields application there is one employer listed in the schedule who we would seek to have removed from that schedule, that being number 3, Subway Emerald. We would make - - -

PN22

SENIOR DEPUTY PRESIDENT LACY: Subway what? Sorry, I didn't catch that.

PN23

MS WILLEKES: Subway Emerald, number 3, by Perma Proprietary Limited.

PN24

SENIOR DEPUTY PRESIDENT ACTON: This is from the greenfields, is it?

PN25

MS WILLEKES: This is from the greenfields, yes. I have a new schedule which can be attached to that agreement if the Commission wishes. No previous agreements have been entered into by the employers and the employees. The agreements before the Commission are binding on the employers, the SDA and the employers listed in the classifications at clauses 5.2.1 and clauses 6 of the agreement. Each of the employers is a single business and, accordingly, the agreements are made pursuant to section 170LC(2) of the Workplace Relations Act.

PN26

If I could just take the Commission through some of the history of this agreement. Negotiations for the certified agreement commenced in about April 2001. At that time Subway was a large system of franchisees across Victoria, and really Australia and throughout the world which deals in predominantly the sale and preparation of food. Since this time the employee terms and conditions of employment have been governed by the Retail Trade Industry Sector Order, the minimum wage order Victoria 1997, and the Workplace Relations Act. In particular, sandwich artists which is the name given to grade 1 employees are paid 13.35 under the agreement - under the industry sector order.

PN27

In about April or July 2003 the negotiations culminated in the 2003 certified agreement which was sent out to 93 employers for voting. That agreement was passed by the employees and it was brought before the Commission for certification. However, for reasons between the SDA and the employers, it was decided to renegotiate and increase various wage rates, and to increase junior relativities and the removal of some - sorry, and the relativity, yes.

PN28

As a result, the agreement was re-drafted and sent out to all employers in about early December 2003. Between 10 December and 24 December voting took place across Victoria once again. I will expand on this further when I get to the multi business agreement. However, this is just really by way of background.

PN29

On 13 January 2004 the application was filed on behalf of the employers for the SDA Subway agreement certification. Each employer listed in schedule 8 to that agreement filed a statutory declaration, as did Mr Peter Frederick Coloretti - chair of the Subway franchisee owners advisory council, myself and Mr Ian Blandthorn for the SDA. Furthermore on 2 February an application was filed on behalf of all greenfields employers to the SDA Subway Agreement 2004 Number 2 for certification and support once again each of the employers filed a statutory declaration, as did Mr Peter Frederick Coloretti, myself and Mr Ian Blandthorn. If the Commission pleases, you should have as was filed at these times the statutory declarations by each of these people. Would the Commission like me to tender this?

PN30

SENIOR DEPUTY PRESIDENT ACTON: I have got statutory declarations on file.

PN31

MS WILLEKES: Okay.

PN32

SENIOR DEPUTY PRESIDENT ACTON: So there is no need to.

PN33

MS WILLEKES: Turning now to the common provisions of both agreements, if I could deal with the public interest considerations first. Pursuant to section 170LC(4), a multi business agreement may only be certified if it is in the public interest to certify that agreement. Given that both applications AG2004/1414 and AG2004/1603 are applications pursuant to section 170LC, the Commission must be satisfied that it is in the public interest. Further to the statutory declarations filed by Mr Peter Frederick Coloretti, myself, the SDA and the employers, it would be our submission that the agreements are in the public interest and should be certified.

PN34

If I could just turn to some of the key provisions in these statutory declarations and the key reasons for certification. On average there are approximately 13 employees per store. The range of employees employed is between two and 30. The business of each of the employers has limited financial capacity and, as such, to enter into an individual certified agreement and to undertake the negotiations for an individual certified agreement would be prohibitive. The cost and time would also be a factor which would heavily against many of the franchisees. There are - some 58 per cent of employers who are party to this agreement employ less than 15 employees.

PN35

The method by which the Subway branch works is that each of these franchisees are required to deliver consistency in terms of their product, and which is a fundamental underlying the Subway brand. As a result, staff also are required to achieve certain levels, both in terms of producing products for sale and in how they deal with customers. The multi business agreement before the Commission today provides certainty for all employers party to the agreement as well as providing certainty for the employees and transparency. It allows employees to be aware of their terms and conditions of employment for the next three years and on an ongoing basis. Individual agreements ultimately could result in inconsistent wages and working conditions between stores which may result in disagreements and disputations. In addition, this may affect the opening hours and the difference in wage conditions.

PN36

Finally, as with many sort of fast food outlets such as McDonald's, Red Rooster and the like, there is a sizeable proportion of youth employed by the employers to these agreements. With the aid of the junior relativity rates, this assists junior staff, particularly those at school, either in the transition between school and work, and gives access to employment for students. And on these basis it is submitted that for the reasons stated in the statutory declarations and those just mentioned, it is in the public interest to certify both the agreements. And the matters dealt with in the agreements could not be more appropriately dealt with by individual agreements. Does the Commission have any questions in relation to the public interest?

PN37

SENIOR DEPUTY PRESIDENT LACY: You are going to address the no disadvantage test in terms of public interest as well, are you?

PN38

MS WILLEKES: I was going to address the no disadvantage test but was more going to focus on the wage rates that are governed by the certified agreement.

PN39

SENIOR DEPUTY PRESIDENT LACY: Yes.

PN40

MS WILLEKES: The second point if I could take the Commission to is the existence of a grievance procedure clause. The grievance procedure clause is contained at clause 26 of the certified agreement. The clause before the Commission contains = or provides that the SDA may have some role in the grievance procedure, but that is just in the procedure itself. Primarily a grievance procedure must be - ideally would be resolved between the employee and the employer at first instance. Failing resolution, the employee may seek representation which may include the union. There is no exclusivity attached to the union's right to represent the employee. Would the Commission like me to develop further on the existence of the grievance procedure clause?

PN41

SENIOR DEPUTY PRESIDENT ACTON: No.

PN42

MS WILLEKES: I would then turn to 4.3 which is the union recognition clause. The agreements contain at clause 48 which provides for union recognition and membership. It is submitted that this clause recognises but does not require union membership. It indicates that the employers would strongly recommend that employees join the union but does not require them to join the union, and it commits the employer to deductions and remittal of union fees only if authorised by the employee.

PN43

Finally, it would be submitted that there is nothing inclusive in this clause which permits conduct contrary to part 10(a) or which is about matters which do not pertain to the relationship between the employees and persons who are employed. In terms of anti discrimination, the agreements before the Commission contain an anti discrimination clause at clause 55, and there are no other provisions in the agreement which would be contrary to 170LU(5).

PN44

Finally, in terms of the no disadvantage test and pursuant to the requirements of section 170LT(2), we would submit that the agreements pass the no disadvantage test. This is particularly with reference to the Fast Food Award and the comparison of the agreements with the Fast Food Award. The wage rates under the agreement at clause 6.1 show that the base rate for a grade 1 is $14.30 and a grade 2 is $15.02. There is no grade 3 as the agreement does not pertain to store managers. This base rate compared to the award, which is $507 a week, is some 95 cents higher than the award.

PN45

Additional benefits under the agreement is that at clause 10 the agreement contains a spread of hours, the spread of hours being from Monday to Sunday from 6 am to midnight, unless you have an inner city store where the opening hours may be extended to 1 am. In comparison, the award does not contain a spread of hours, save for providing for penalties after 6 pm. So the agreement has brought together the spread of hours that employees may be working without the requirement to pay overtime. The practical operation of the agreement - sorry.

PN46

SENIOR DEPUTY PRESIDENT ACTON: Hang on. You will have to explain that change to me in more detail. What do you say the benefit is under the agreement vis-a-vis the award?

PN47

MS WILLEKES: Well, that employees have set hours with which they will work within ordinary hours which, if they fall outside of those ordinary spread of hours they would be entitled to overtime, whereas there is no such provision under the award. So under the agreement where the spread of hours is 6 am to midnight, if someone works after midnight or before 6 am they would be entitled to overtime under the agreement. However, the award does not contain such a provision.

PN48

SENIOR DEPUTY PRESIDENT LACY: But they can work as many hours as - - -

PN49

MS WILLEKES: Well, no, the award provides that you can only work 38 hours maximum, as does the agreement. However, if someone was only working under 38 hours but after midnight, under the agreement arguably they wouldn't - under the award, I apologise, they wouldn't be entitled - - -

PN50

SENIOR DEPUTY PRESIDENT LACY: But the agreement doesn't limit, does it, the number of hours they can work in any one - - -

PN51

MS WILLEKES: Yes, it does.

PN52

SENIOR DEPUTY PRESIDENT LACY: - - - in any one day?

PN53

MS WILLEKES: Yes, it does. It limits it to ten hours in a day.

PN54

SENIOR DEPUTY PRESIDENT LACY: Ten hours.

PN55

SENIOR DEPUTY PRESIDENT ACTON: So you get overtime if you work after midnight or before 6 am?

PN56

MS WILLEKES: Yes.

PN57

SENIOR DEPUTY PRESIDENT ACTON: What are the operating hours of these stores?

PN58

MS WILLEKES: They vary across Victoria. It is becoming increasingly more popular for stores to open sort of past midnight, especially for the inner city stores. The more suburban stores I believe close at around 10 pm.

PN59

SENIOR DEPUTY PRESIDENT ACTON: And when do they open?

PN60

MS WILLEKES: When do they open? I think approximately about 7 am, if not a bit later.

PN61

SENIOR DEPUTY PRESIDENT ACTON: So for most employees that benefit is no benefit at all.

PN62

MS WILLEKES: It is a benefit for the inner city stores, as well as for stores which may look to extend their opening hours in the future such that I think it is becoming more prevalent that stores open - operating on a 24 hour basis, especially if you have a store which exists in a service station on a major thoroughfare.

PN63

SENIOR DEPUTY PRESIDENT ACTON: Yes.

PN64

MS WILLEKES: The practical operation of the agreements is that most employees will receive a great amount of pay when the increased base rate and additional penalties are taken into account.

PN65

SENIOR DEPUTY PRESIDENT ACTON: What are the additional penalties?

PN66

MS WILLEKES: At clause 20 of the agreement employees receive a Sunday penalty of 150 per cent.

PN67

SENIOR DEPUTY PRESIDENT ACTON: What do they get under the award?

PN68

MS WILLEKES: Sorry, it is clause 11.

PN69

SENIOR DEPUTY PRESIDENT ACTON: What do they get under the award?

PN70

MS WILLEKES: It is 175 under the award.

PN71

SENIOR DEPUTY PRESIDENT ACTON: So how is that an additional penalty?

PN72

MS WILLEKES: The Subway has 61 per cent of employees are casuals. The way the agreement has been structured is that casuals have a 25 per cent loading on the base rates in clauses 6.1. The Sunday penalty is 150 per cent on top of their loaded rate which equates to 175 per cent which is - - -

PN73

SENIOR DEPUTY PRESIDENT ACTON: So isn't it the same?

PN74

MS WILLEKES: Well, it is the same. But we are also taking into account a higher base rate of $14.30 for each employee, as compared to the $13.35 under the award.

PN75

SENIOR DEPUTY PRESIDENT ACTON: So you are better off on a Sunday if you are a casual. What about if you are a full timer and a part-timer?

PN76

MS WILLEKES: The full timers and part-timers, I do have a spread of hours where we looked at a four week roster spread, and those employees did come out ultimately out on top where they were working a week day and evening and, say, a Sunday, because of the increased base rate of pay.

PN77

If the Commission pleases, I can take you through some rostered sheets.

PN78

SENIOR DEPUTY PRESIDENT ACTON: I think you had better.

PN79

MS WILLEKES: If I can hand up the first two. There are four sets. Perhaps if we could first look at the four week spread casual, although it is appreciated that this has increased. On the right-hand side we have the agreement, on the left-hand side we have the award. The 128 hours under the agreement refers to the casual employee working two day shifts and two evening shifts per week. Under the award that would equate to 64 hours of normal and 64 hours at 110 per cent on top of their loaded rate. Now, although it says 138, when you do the calculations, that is how that total percentage would work out.

PN80

The net advantage to an employee in this case is 5 per cent, or 91 cents above the award rate of pay.

PN81

SENIOR DEPUTY PRESIDENT ACTON: This is over - so this is two day shifts of how long?

PN82

MS WILLEKES: They were 8 hour shifts for the day shifts.

PN83

SENIOR DEPUTY PRESIDENT ACTON: And how long were the evening shifts?

PN84

MS WILLEKES: They were also 8 hours. For the second option before the Commission it refers to a casual employee over a four week period working one day shift, two 8 hour Saturdays, two 5 hour Sundays, two 8 hour evenings of which 3 hours were pre 6pm. Again what this shows is there is a net advantage of 3 per cent or 62 cents to the employee.

PN85

SENIOR DEPUTY PRESIDENT ACTON: Well, can we go back to the first one again. Two day shifts and two evening shifts, although on the left-hand side there is something - 64 hours, is it?

PN86

MS WILLEKES: 64 hours at normal. That would equate to the day shifts. So over a four week period that employee would be working 64 hours during the day, which would be at a normal rate. And the 64 hours at 138 per cent relates to the evening rate that an employee would be working.

PN87

SENIOR DEPUTY PRESIDENT ACTON: And how common is this shift arrangement of two day shifts of whatever hours and two evening shifts of whatever hours in this example?

PN88

MS WILLEKES: These were just taken as sort of an average spread. I have four different options with 93 - well 100 food establishments across Victoria, the variance of hours can differ quite substantially, depending on whether the store is a suburban or a regional store. So these are just a generic spread of hours.

PN89

SENIOR DEPUTY PRESIDENT ACTON: Can you explain why you picked this as an example?

PN90

MS WILLEKES: Out of all the variances, we wished to show the Commission that it may be instances where employees were working day shifts and evening shifts, and then also employees that would work days, evenings and weekends. So this first example is just taken as a general spread.

PN91

I should also draw the Commission's attention to the fact that under the agreement employees are entitled to a meal benefit which includes a six-inch subway and three fountain drinks, either during or at the completion of their shift, regardless of whether their shift is for 2 hours or 8 hours. The value of that meal benefit has been valued at $6, whereas the true value would be anywhere between $8 and $10.

EXHIBIT #W1 FOUR WEEK SPREAD FOR CASUALS

PN92

SENIOR DEPUTY PRESIDENT ACTON: So, under this agreement - over a four week period is it?

PN93

MS WILLEKES: Yes, over a four week period.

PN94

SENIOR DEPUTY PRESIDENT ACTON: You are saying that the person would be 91 cents better off under one arrangement, and 62 cents per hour better off under another?

PN95

MS WILLEKES: Yes, that is correct.

PN96

SENIOR DEPUTY PRESIDENT ACTON: How many of these calculations did you do?

PN97

MS WILLEKES: I have four different versions which relate to both casuals and part-timers.

PN98

SENIOR DEPUTY PRESIDENT ACTON: So you had lots of rosters. Does this represent one of the rosters?

PN99

MS WILLEKES: This represents just a generic example of a possibility that could fall underneath the agreement.

PN100

SENIOR DEPUTY PRESIDENT ACTON: Well, there is lots of possibilities could fall under the agreement, including working all weekend and working nothing else. What I need to know is how typical is this.

PN101

MS WILLEKES: I can seek further instructions, if the Commission pleases. However, given the high casualisation of the workforce under the agreement, it is common for casuals to take up the weekend shifts, in which case they are highly advantaged under the agreement.

PN102

SENIOR DEPUTY PRESIDENT ACTON: So the majority of employees are casuals, and there is a high proportion of their work falls on the weekends?

PN103

MS WILLEKES: Yes, that is correct.

PN104

SENIOR DEPUTY PRESIDENT ACTON: And on Saturdays the casual rate under the agreement is less than under the award, is it not?s

PN105

MS WILLEKES: Well, the award does provide for 125 per cent penalty on a Saturday which isn't provided under this agreement. However, we would say that on average the increased base rate of pay provided to employees, the 14.30 plus the loading of 25 per cent, overall would not disadvantage any employee.

PN106

SENIOR DEPUTY PRESIDENT ACTON: On a Saturday?

PN107

MS WILLEKES: No overall. If they do experience any slight disadvantage on a Saturday, that would be compensated by the increased base rate of pay, which they would work at any other time during the week.

PN108

SENIOR DEPUTY PRESIDENT ACTON: Well, my calculation is per hour on a Saturday they are $3 an hour worse off.

PN109

MS WILLEKES: For a part-timer or for a casual?

PN110

SENIOR DEPUTY PRESIDENT ACTON: For a casual.

PN111

MS WILLEKES: For a casual. I did have - perhaps if I can take you to option 2 of the W1 exhibit. That shows a casual employee working one day, two 8 hour Saturdays, two 5 hour Sundays, two 8 hour evenings of which 3 hours are pre 6pm. Perhaps this is more reflective of a standard possibility that a casual may work, and in which case they would be 62 cents above the award. The loaded rate under the agreement is 17.88, whereas under the award, it is 16.69. so that it is - - -

[9.35am]

PN112

SENIOR DEPUTY PRESIDENT ACTON: But most of these casuals just work every Saturday or every Sunday or both, won't they? It won't be a matter of two out of - two Saturdays out of four weeks, or - - -

PN113

MS WILLEKES: Well, I think, it was looking at casuals, which are students, so they may work after hours, or after school. So sometime after 3.00 pm. And may also work, yes, a Saturday, and a Sunday, or an evening, in terms of earning additional - - -

PN114

SENIOR DEPUTY PRESIDENT ACTON: Well, when do these employers employ most of their people? Is it in the evenings? Is it at weekends? Is it both?

PN115

MS WILLEKES: I believe it would be in the evenings and the weekends - well, it sometimes - it depends across the stores. There are some stores which are very quiet over the weekends, and there are some stores which are busier over the weekends. The variance is depending on where the store is located.

PN116

SENIOR DEPUTY PRESIDENT ACTON: Do you want to take us to the other one?

PN117

MS WILLEKES: The second document you have before you, is a part-time employee. This part-time employee, the first example workers one 8 hour shift - one 5 hour evening shift and one five hour Saturday shift per week. When you take into account annual leave, leave loading, super, the meal benefit and personal leave, the part-time employee is 40c - 48c above the award, or 2 per cent advantage. This is purely on a base rate of pay of $14.30 an hour as compared to the $13.35.

PN118

The option 2 again as a casual, working one Saturday, two Sundays, two evening shifts and one weekday, which also reflects a $1.08 increase above the award, and a 5 per cent advantage. As does option 3, again refers to a casual employee, and option 4 is a permanent employee which does show a 29c disadvantage, where that employee works predominantly Saturdays. But we would say, on balance, all the employees are advantaged by the increased base rate. If the Commission pleases, I can take you through two further examples, or - - -

PN119

SENIOR DEPUTY PRESIDENT ACTON: Yes, if you could.

EXHIBIT #W2 FOUR SPREADSHEETS RE NON-CASUALS

PN120

MS WILLEKES: If I could hand up to the Commission. If I could take the Commission to the document titled, Final NDT. This is just a reflection of the standard 38 hour spread, and comparison between the 13.35 and the $14.30. It shows that the net advantage to employees is 7 per cent or a $1.20 per hour for a part-time employee. This is taking into account such things as annual leave, leave loading, super, the meal benefit and personal leave.

PN121

Option 2 before the Commission shows - sorry, it isn't written in the box, but it is a two 8 hour shift, with one 5 hour evening shift for a part-time employee, thus equating to 21 hours.

PN122

SENIOR DEPUTY PRESIDENT ACTON: So it is two by 8 hour shift?

PN123

MS WILLEKES: Yes.

PN124

SENIOR DEPUTY PRESIDENT ACTON: And one by 5 hour - - -

PN125

MS WILLEKES: One 5 hour evening shift.

PN126

SENIOR DEPUTY PRESIDENT ACTON: Yes.

PN127

MS WILLEKES: The next advantage to a part-time employee is 4 per cent and 69c above the award. The next example is a casual employee, working 8 hours on a Sunday, and 8 hours on a Saturday.

PN128

SENIOR DEPUTY PRESIDENT ACTON: Could I just ask you about this - the meal benefit and the laundry allowance, is that over a year?

PN129

MS WILLEKES: Yes, it is. It is taking into account - we only actually valued one garment at $4 per garment per week. And the meal benefit is the value of $6 per shift.

PN130

COMMISSIONER HINGLEY: But there is no laundry allowance under the agreement?

PN131

MS WILLEKES: No, there isn't. So we would say that the meal benefit and the laundry allowance offset each other.

PN132

SENIOR DEPUTY PRESIDENT LACY: Well, it doesn't on this example, does it? This option 2?

PN133

MS WILLEKES: Option 2. No, that case, the laundry allowance would be slightly higher under the award. But once again, the increased base rate of pay over the year would be factored in.

PN134

COMMISSIONER HINGLEY: How do you make that comparison between those two?

PN135

MS WILLEKES: It is not so much a comparison, it is more that where we take away one benefit that would be provided under the award, such as a laundry allowance - - -

PN136

COMMISSIONER HINGLEY: But one is money, and one is not.

PN137

MS WILLEKES: But we also pay an increased base rate of pay of $14.30 per hour - - -

PN138

COMMISSIONER HINGLEY: It has got a lot to cover, hasn't it?

PN139

MS WILLEKES: - - - whereas under the agreement they only receive 13.35. Option 3 - - -

PN140

SENIOR DEPUTY PRESIDENT ACTON: And the meal benefit is $6, said to be worth $6.

PN141

MS WILLEKES: That is what we have valued it at, yes.

PN142

SENIOR DEPUTY PRESIDENT ACTON: What is that, if they walked in off the street and bought what they got, would be $6 or - - -

PN143

MS WILLEKES: No. The way it works is the 6 inch subway, obviously can cost anywhere between sort of $4 and $5.45 for a hot sub, and then the fountain drinks are $2 each for a medium fountain drink, which would take it up to $10.45, if you had two fountain drinks and a hot sub. We have just discounted that value to $6 as a real value to employees.

PN144

SENIOR DEPUTY PRESIDENT LACY: What happens if they don't want a meal, they don't get anything?

PN145

MS WILLEKES: That is right. However, I guess with the significant youth employment - and I did discuss this extensively with the franchisees throughout the negotiation of the agreement, and was always advised that it is highly unlikely that students or youth do not take up the value of the meal. Option 3 is our 8 hours on a Sunday - or 8 hours on a Saturday and a Sunday for a casual. So if that employee was working those hours, it shows a net advantage of 2 per cent or 40c per - 40c, yes, over the agreement. And then finally, option 4, again shows an advantage. This is in a case of two evening shifts and one Sunday shift for a casual employee with an 87c increase and a benefit of 4 per cent.

PN146

The final sheet that the Commission has before it, just has only one option on it, and that is for apart-time employee working two day shifts and two evening shifts, and the advantage being 5 per cent or 93c. Overall it would be submitted that employees receive a benefit or an advantage underneath the agreements before the Commission as compared to the award.

PN147

SENIOR DEPUTY PRESIDENT ACTON: I will mark the final NDT options as W3.

EXHIBIT #W3 FINAL NDT OPTIONS

PN148

SENIOR DEPUTY PRESIDENT ACTON: And you have got the last sheet of four weeks spread for a part-timer?

PN149

MS WILLEKES: The last sheet is just an individual two day shifts and two evening shifts per week, yes, for four weeks.

PN150

SENIOR DEPUTY PRESIDENT ACTON: I will mark that as W4.

EXHIBIT #W4 SPREADSHEET RE FOUR WEEKS FOR PART- TIMER

PN151

MS WILLEKES: The additional benefits under the agreement are that the junior relativities provide the 20 year olds and over are paid at 100 per cent.

PN152

SENIOR DEPUTY PRESIDENT ACTON: Don't 20 year olds get adult wages under the award?

PN153

MS WILLEKES: Yes, they do, under this award. However, the inquiry into junior rates, which occurred in 1998, stated that junior rates should only be payable for 21 year olds and over. However, we have adopted a fairly consistent approach as with the award in this case. And the junior relativities for 19s, or 16, 17, 18 and 19 year olds is the same as the award.

PN154

Work on public holidays is voluntary for all employees. The agreements contain a leave of absence clause, a blood donor leave clause, and a natural disaster leave clause, which are not clauses contained under the award. There are weekly wage increases of $14 per year which would be payable on the anniversary of the certification of the agreements.

PN155

SENIOR DEPUTY PRESIDENT ACTON: How does that work? In clause 7 of the agreement it says:

PN156

Wage increases will apply in the second and third year. On each occasion the increase will be $14.

PN157

How does that $14 apply to a casual?

PN158

MS WILLEKES: The casual, how it would work is the $14 would be added on to the 543.50, of which Grade 2 would be 105 per cent of that 543.50, and the casual would be 25 per cent loading on top of the $14 plus 543.50 - 557.50.

PN159

SENIOR DEPUTY PRESIDENT ACTON: Is the 25 per cent loading mentioned in the agreement, because the actual wage rates set out in the agreement are flat amounts, not - - -

PN160

MS WILLEKES: No, there isn't a mention of the 25 per cent into the agreement. It is purely calculated into clause 6.1.

PN161

SENIOR DEPUTY PRESIDENT LACY: I thought I understood you to say that they get, for example, a Saturday and Sunday, the rates incorporate a 25 per cent loading on top of the hourly rate that is specified in clause 6.1.

PN162

MS WILLEKES: Yes, that is right. There is no Saturday penalty under the agreement, but on Sunday in accordance with clause 11, which states:

PN163

The ordinary spread of hours for employees on a Sunday shall be paid at 150 per cent.

PN164

That would be on top of the Grade 1 casual rate of $17.88.

PN165

SENIOR DEPUTY PRESIDENT ACTON: So the way clause 7 is intended to operate, as opposed to an interpretation perhaps of what is says, is that the $14 applies to the Grade 1 rate. When you apply it, the $14 also only - only that amount applies for the Grade 2?

PN166

MS WILLEKES: Well, Grade 2 is 105 per cent relativity of Grade 1, so it would be 105 per cent of $14 plus the 543.50 would take it up to 557.50, so it would be 105 per cent of 557.50.

PN167

SENIOR DEPUTY PRESIDENT ACTON: And then for a casual, one also has to add on a 25 per cent loading?

PN168

MS WILLEKES: Yes, that is right. And this is all calculated on the basis of a 38 hour week.

PN169

SENIOR DEPUTY PRESIDENT ACTON: Yes.

PN170

MS WILLEKES: The agreements also provide for an employee's ability to use sick leave for family leave purposes, and includes clauses for setting up pre-natal leave and leave of absences.

PN171

The agreements when compared to the award do not include the following provisions for Saturday or evenings, although we did canvass that with them and wage - there were tables. There is no laundry allowance, and the award provides for 10 days sick leave, whereas the agreements provide for 8 days sick leave when an employee has been employed for more than 12 months. However, we would say that those- well, the fact that the agreements do not provide for Saturday of evening penalties is taken into account, when compared with the increased base rate of pay of the $14.30.

PN172

The other entitlements under the agreement which confer a number of advantages upon employees that are not available under the award, is that all equipment has to be provided to employees for their use throughout their shifts. The employee benefits clause, which is the subway and the drinks. The first-aid kit. Employees are entitled to an escort to cars. There is the leave of absence of not more than three months with the agreement with the employee. There are the supported wages clauses, and the savings and no reductions clauses.

PN173

As a consequence, we would submit that the agreements do not disadvantage employees in relation to their terms and conditions of employment. And the agreements do not result on balance in a reduction in overall terms and conditions of employment of those employees.

PN174

[9.50am]

PN175

If the Commission were to feel that the agreement does not pass the no disadvantage test, we would submit that the agreements should still be certified on the grounds of public interest.

PN176

Does the Commission have any further questions in relation to the no disadvantage test, or additional benefits which are contained in the agreement?

PN177

SENIOR DEPUTY PRESIDENT ACTON: Can I take you to clause 6.2.2.

PN178

MS WILLEKES: 6.2.2 of the award?

PN179

SENIOR DEPUTY PRESIDENT ACTON: No, the submission.

PN180

MS WILLEKES: Of my submissions, yes.

PN181

SENIOR DEPUTY PRESIDENT ACTON: 6.2.2(d) suggests that 93 employees participated in the voting process. They had 1200-odd employees, and then you go and break those up. You have got 61 per cent were casuals, 20 per cent were part-timers, 7.5 per cent were full timers: what are the other 10 per cent?

PN182

MS WILLEKES: I would have to - I didn't work it out on the basis of 100 - we just it from the statistics which were provided pursuant to the statutory declarations which were provided by the employers and have been filed with the Commission. In many instances the numbers quoted by the employers are perhaps approximate figures, although they should be correct.

PN183

The figures I have are that the totals which are calculated out of all the statutory declarations where there were 1221 employees, of which 272 were trainees, 752 were casuals, 254 were part-timers and 92 were full time.

PN184

SENIOR DEPUTY PRESIDENT LACY: Just say those figures again, please.

PN185

MS WILLEKES: The total number of employees was 1221, 272 trainees, 752 casuals, 254 part-timers, and 92 full timers.

PN186

SENIOR DEPUTY PRESIDENT ACTON: The trainees, how long is their training?

PN187

MS WILLEKES: It depends on which approved traineeship scheme they are going under, but I believe that there are some which last for three years. In terms of trainees, whilst they are entitled to be paid in accordance with the National Training Wage Award, all benefits and entitlements under the agreements would pass to those trainees, or they would be entitled to be paid in accordance with them.

PN188

SENIOR DEPUTY PRESIDENT ACTON: So, is there any special provision of the agreement which deals with trainees?

PN189

MS WILLEKES: 6.3 of the agreement.

PN190

SENIOR DEPUTY PRESIDENT ACTON: So the trainees get the rates of pay as set out in the National Training Wage, but do they get the other benefits of this agreement?

PN191

MS WILLEKES: Yes, that is correct. Clause 6.1 only deals with the wage rates, setting out the various wage rates for either a full time or a part-timer, casual and a trainee. All other benefits under the agreement would flow on.

PN192

SENIOR DEPUTY PRESIDENT ACTON: So the trainees don't get the benefit of the 95 cents that you mention?

PN193

MS WILLEKES: The 95 cents above the award?

PN194

MS WILLEKES: No. They are paid in accordance with the Training Wage Award.

PN195

SENIOR DEPUTY PRESIDENT ACTON: And they don't get the penalty rates?

PN196

MS WILLEKES: Yes, they do get the penalty rates. They are entitled to the Sunday 150 per cent.

PN197

SENIOR DEPUTY PRESIDENT ACTON: But that is the only penalty rate they get?

PN198

MS WILLEKES: That is the only penalty rate under our agreement, yes.

PN199

SENIOR DEPUTY PRESIDENT ACTON: Are they entitled to penalty rates under - if the agreement was not in place, are they entitled to penalty rates?

PN200

MS WILLEKES: No.

PN201

SENIOR DEPUTY PRESIDENT ACTON: For Saturdays and evenings?

PN202

MS WILLEKES: No, unless the employers were roped into an award. But as it stands now, those employees would only be entitled to the Industry Sector Order which is the - well, they would be paid in accordance with the National Training Wage Award, but there is no relevant award which governs their employment.

PN203

SENIOR DEPUTY PRESIDENT ACTON: They are not entitled - - -

PN204

MS WILLEKES: They are also entitled to overtime as well. So all employees under this agreement would be entitled to overtime which - sorry to digress - but there is a significant benefit, because under the award, overtime is payable on the first three hours at 150, and thereafter at double time, and under the agreement it is the first 2 hours at 150, and thereafter double time. Under the award, on the weekends double time is only payable on a Sunday, whereas under the agreement double time is payable from 12 noon Saturday right through Sunday.

PN205

SENIOR DEPUTY PRESIDENT ACTON: But to the extent we have designated the Fast Food Award as the appropriate comparison for the no disadvantage test, shouldn't we be looking at the penalty rates trainees would get under that?

PN206

MS WILLEKES: That is correct. However, on a practical level - well, not on a practical level, but how it would exist if this agreement was not certified, would be that those trainees would not be entitled to any penalty rates.

PN207

SENIOR DEPUTY PRESIDENT LACY: But we have to look at it, don't we, in terms of how they would be remunerated under the agreement as compared with the award, if the agreement is certified.

PN208

MS WILLEKES: That is correct. However, we would still say that there is an overall benefit for all employees on a global scale across Victoria for all the Subway franchisees.

PN209

SENIOR DEPUTY PRESIDENT ACTON: Does that complete your submissions?

PN210

MS WILLEKES: The only other submissions would be that the Greenfields application, at the time of making the application none of the employers employed any employees, and in terms of the multi-business agreement that the requirements of section 170LT(7), being that the agreement was explained to all employees and that a valid majority of employees approved the agreement, have been met.

PN211

Finally, we would say that the nominal expiry date is three years from the date of certification, and the parties would seek that the agreement be certified from 4 April onwards to allow for all the employers to make amendments to their payroll systems, and to give us an opportunity to send out notification to all employers.

PN212

That completes my submissions.

PN213

SENIOR DEPUTY PRESIDENT ACTON: Mr Galbraith.

PN214

MR GALBRAITH: Your Honour, we support the submissions of Ms Willekes.

PN215

SENIOR DEPUTY PRESIDENT ACTON: We will adjourn briefly.

SHORT ADJOURNMENT [9.58am]

RESUMED [10.12am]

PN216

SENIOR DEPUTY PRESIDENT ACTON: We have given consideration to the submissions put to us in these matters, including the material that has been put to us. However, at this stage we are not persuaded that the agreements pass the no disadvantage test. Accordingly, we seek further information.

PN217

We require the parties to provide us by close of business on 17 May 2004 with detailed information setting out for each employee employed by the employers covered by the agreements their roster, and what each of those employees would have earned over the month of March 2004 under the agreement, compared to what they would have earned under the award we have designated, being the National Fast Food Retail Award 2000.

PN218

Such information - I repeat - setting out for the month of March 2004, the roster for each employee, and what they would have earned under the agreement vis-a-vis the award, will assist us in our considerations of this matter.

PN219

The material should be forwarded to my chambers for the consideration of the bench. Again, the information is to be provided by close of business on 17 May 2004. We will now adjourn.

ADJOURNED INDEFINITELY [10.14am]]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #W1 FOUR WEEK SPREAD FOR CASUALS PN92
EXHIBIT #W2 FOUR SPREADSHEETS RE NON-CASUALS PN120
EXHIBIT #W3 FINAL NDT OPTIONS PN148
EXHIBIT #W4 SPREADSHEET RE FOUR WEEKS FOR PART-TIMER PN151