AG2004/2663, Transcript of Proceedings [2004] AIRCTrans 2521 (7 July 2004)

AUSCRIPT PTY LTD
ABN 76 082 664 220
(Administrator Appointed)
Level 2, 16 St George's Tce, PERTH WA 6000
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 668

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT McCARTHY

AG 2004/2663

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Otis Elevator Company Pty Ltd and Others
for certification of the Otis Elevator
Company Pty Ltd - Western Australia
Construction & Service Employees
Certified Agreement 2003

PERTH

11.12 AM, THURSDAY, 24 JUNE 2004

PN1

MR M. BORLASE: I appear on behalf of the applicant. Ms Haldane, who was dealing with this matter, took sick this morning and she sends her apologies, sir.

PN2

MR P. CARTER: I appear on behalf of the CEPU and also, this morning, the AMWU.

PN3

THE DEPUTY PRESIDENT: Yes, I have circulated to the parties a certification report identifying issues that I wished you to address. I have had a response from Ms Haldane on behalf of Otis responding to those issues. Those explanations, with the exception of a matter in item 6.4, the statutory declarations, satisfy the concerns or clarification I had needed. The issue that I would ask you to address if you are in a position to is the provision of or the inclusion of the wages clause in the agreement that has been lodged for certification. What Ms Haldane indicated was that the attachments to the EBA were included in the document given to the employees for their consideration at least 14 days prior to the vote taking place but the wages are not included in the document provided to the Commission for commercial reasons.

PN4

They were made available to any employees and unions on request. So, it is that issue that I would ask you to address. I have some difficulty appreciating or understanding how I can certify an agreement when I don't have the agreement before me.

PN5

MR BORLASE: Yes, sir. In respect to that particular point, I would, I suppose, firstly put a submission to you that the actual wage schedule does not form a part of the agreement. The wages are dealt with by way of clause 12 which simply refers to wage increases. It says that there will be wage increases. And that specifies a percentage amount that will actually occur. Now, for the information of the employees and the way that is to be interpreted is that those increases are to apply on the rates of pay that employees are receiving. And that, obviously, can be discovered in the time and wages records of employees which are required to be kept in accordance with the regulations and the rules of the Workplace Relations Act 1996.

PN6

For the information of employees, as a part of the negotiating process and for the unions, that information was provided to them in terms of a schedule that was given to them. So, from that perspective, I would say to you that there is no difficulty with you in certifying the agreement because you do actually in fact have the full agreement before you and that agreement is that documentation which was filed in the Commission. Now, in terms of you being in a position to determine whether it passes the no disadvantage test, an examination of the agreement indicates, firstly, that the agreement will operate in conjunction with the parent award, that being the Lift Industry, Electrical and Metal Trades Award 1973.

PN7

So, that award is effectively going to underpin all of the terms and conditions of employment which, obviously, would include rates of pay as a bare minimum. Now, an examination of the agreement and the attachments to the agreement, being a number of sections which are referred to, don't display any alteration to the award which would be of a negative effect. There are various provisions in there which are, in fact, positives and there is a range of other clauses in there which provide benefits to the employees which are above the award. Therefore, from that perspective, we would say to you that you can examine the agreement and determine that there is no disadvantage to the employees and, therefore, it passes, without any reference to a wage rate.

PN8

The effect, obviously, of both the award and the agreement is such that the employer cannot pay less than what the award actually provides for the employees for each of their classifications. So, from that base point, one can be satisfied that in terms of wages there isn't any disadvantage to the employee and, further to that, and I will alert the Commission to the fact that we are prepared to provide you with a schedule to satisfy you for your particular purposes, but even without that we would say to you that you can be satisfied that the no disadvantage test is actually passed because taking the presumption that the award provides a minimum rate of pay for each of the classifications, then the clause 12 provides that there is going to be a series of wage increases that take effect on top of at least those award rates of pay.

PN9

Now, I can obviously inform the Commission that the rates of pay that employees receive are actually in excess of those particular amounts but that, I would say to you, is not an essential piece of information for you to have in terms of ensuring that the requirements of the Act are actually complied with. Having said that, I do have a schedule of the rates of pay which I can provide to you.

PN10

THE DEPUTY PRESIDENT: Well, before you do, the issue, prior to even considering the no disadvantage test, Mr Borlase, is whether I have a valid application before me, to use the commonly used terms. The requirements of the legislation is that the employer may make an agreement. The agreement must pertain to certain requirements. And that agreement can then be sought to be certified. So, the question I raise is, what agreement was made and what constituted the agreement? Was that agreement then approved and is that agreement then sought to be certified?

PN11

MR BORLASE: Taking your first question - - -

PN12

THE DEPUTY PRESIDENT: If I can just finish that.

PN13

MR BORLASE: I beg your pardon.

PN14

THE DEPUTY PRESIDENT: If an agreement is made, then on recent Full Bench decision the exact and precise terms of that agreement must be provided to employees. Not some other agreement or an agreement with omissions or an agreement with errors or an agreement with additions. The agreement must be provided. It follows from that, that the agreement must be sought to be certified. Not the agreement with some omissions or some extractions or some additions. The explicit agreement that was made. I don't wish to be seen to be pedantic on this but I am said to be obliged to follow Full Bench authority and there is increasing numbers of challenges to proper certification of agreements when either there is no complete satisfaction of the provisions of the relevant Division or there is a process that hasn't explicitly complied with the requirements of the Act for the making of agreements.

PN15

MR BORLASE: Yes, sir, I take your point. And I suppose the best way to address that question that you ask in terms of what is the agreement, I would say to you that the - - -

PN16

THE DEPUTY PRESIDENT: What was the agreement made, was my terminology.

PN17

MR BORLASE: Yes. What was the agreement made is that - - -

PN18

THE DEPUTY PRESIDENT: Not what it is now. What was the agreement that was made?

PN19

MR BORLASE: I would say to you that the agreement that was made is that which is reflected in the document which is before you. That there would be these various elements and taking, I think, the point which is causing the issue here, being the wages, the agreement was that there would be wage increases of 4 per cent on 1 January 2004, 4 per cent on 1 January 2005 and 2 per cent on 1 January 2006. Now, that, we say to you, is what the agreement was. And that is, consequently, reflected in the document which was drafted and that was filed in this Commission. And so we would say to you that you do have the full agreement before you. Now, in terms of what the actual wages were, that is a - - -

PN20

THE DEPUTY PRESIDENT: Before we get to the actual wages, I just want to clarify this. So, what you are then saying is the agreement that was made was an agreement where the unions and the employer said there will be a 4 per cent wage increase on your current rates. There will be a further 4 per cent in January 2005 and there will be a further 1 per cent in January 2006. Then that agreement was provided to employees. Sorry, that agreement was transcribed to writing. That agreement was then provided to employees. And as part of the explanation required in section 170LJ(3)(b), the current schedule of rates or the current rates of pay were also provided. Is that the essence of what you are saying?

PN21

MR BORLASE: Yes, sir, that is my understanding of what occurred. And a part of that explanation process transcribed out what those wage increases would be so that people could see what it actually meant in terms of a dollar term.

PN22

THE DEPUTY PRESIDENT: So, what was provided in terms of the actual wages was not part of the agreement but was an explanation of the terms of the agreement.

PN23

MR BORLASE: Yes.

PN24

THE DEPUTY PRESIDENT: Is that a correct reflection?

PN25

MR BORLASE: It is, sir. And the document reflects a consequence of what the agreement was, because the agreement was for a percentage wage increase to occur and that is reflected in the document.

PN26

THE DEPUTY PRESIDENT: Yes.

PN27

MR BORLASE: And as you say - well, I won't try to repeat exactly what you said but your explanation - - -

PN28

THE DEPUTY PRESIDENT: Well, it is not my explanation. I am trying to see what happened.

PN29

MR BORLASE: Or, sorry, your summation of the position is correct.

PN30

THE DEPUTY PRESIDENT: Yes. Okay. Thank you. And what you are then saying is that for the purposes of meeting a no disadvantage test all I need to be satisfied of is that those increases are on a base rate that would otherwise meet the test anyway. Is that what you are saying?

PN31

MR BORLASE: Yes. Yes, sir.

PN32

THE DEPUTY PRESIDENT: Yes. Yes, thank you. Is there any further explanation?

PN33

MR BORLASE: I understand that you are satisfied with the other responses Ms Haldane provided to you on the other issues you raised in the assessment. And if that is the case, I have no further submissions, your Honour.

PN34

THE DEPUTY PRESIDENT: Yes, thank you. Yes, Mr Carter, do you wish to shed any further light on this?

PN35

MR CARTER: Sir, I wish Otis management could have talked to us before. They have just explained their position on Sanskrit. Because it was our understanding that the wages schedule was going to form part of an appendix or at least form part of the agreement. And it is for this reason, notwithstanding your concerns in registering something which is got to comply with your obligations under the Act. We have recently been involved in an issue with a member regarding long service leave payments in the construction industry, of which some employees are also a party to. And because the certified agreement that was registered with this company never included the wages schedule, it simply adopted a similar pattern to what Otis are proposing in that it said there will be percentages on top of what they are already getting.

PN36

The long service leave prerogatives are that they need to satisfy their positions of paying something which is certified and they actually had to go back to the award and the two previous certified agreements we have had with that company. And because one of the payments was an over-award payment, which was not certified, that individual actually lost out on what he should have had if the last certified agreement would have included the wages schedule. It is for this reason that I would be asking Otis management to include it in an appendix, similar to which they do elsewhere in the country, because it doesn't seem to attract their commercial sensitivities elsewhere. And I just wouldn't mind a brief discussion with Otis management over that issue.

PN37

THE DEPUTY PRESIDENT: Yes. Well, Mr Carter, the issue becomes, as I explained to Mr Borlase, what was the agreement that was made? If the agreement that was made was specific rates of pay with increases to be applied to those rates of pay, then that was the agreement. If that is what you are saying, then it is not what I have before me.

PN38

MR CARTER: That is true. I would have to concur with Mr Borlase's submission that the agreement that the employees of Otis voted on did not include the wages schedule in that agreement. However, they were totally aware of the wages situation and I don't know how we are going to get over that.

PN39

THE DEPUTY PRESIDENT: Yes.

PN40

MR CARTER: Can I ask for a brief 5 minutes, 2 minutes even, break?

PN41

THE DEPUTY PRESIDENT: I will grant it to you.

PN42

MR CARTER: I am aware of what you are saying.

PN43

THE DEPUTY PRESIDENT: And I suggest you do have those discussions. And I will adjourn for that purpose.

SHORT ADJOURNMENT [11.31am]

RESUMED [11.42am]

PN44

THE DEPUTY PRESIDENT: Yes?

PN45

MR CARTER: Yes, thanks, Deputy President for granting us that short break. I am satisfied that in my mind that given the past agreements with Otis have all been certified either by State or Federal Commission, that it would be recognised for other members benefit when they are taking long service leave under the construction industry part of that, that their wages would be paid as per the certified agreement. As such, I would concur with the submission of Mr Borlase in that the agreement in front of you, sir, was the agreement that was made and was voted on by the employees of Otis.

PN46

THE DEPUTY PRESIDENT: Yes, thank you. Mr Borlase, you were going to provide me with the schedule of rates.

PN47

MR BORLASE: Yes, sir. Sorry, there is a second page to that.

PN48

THE DEPUTY PRESIDENT: Yes.

EXHIBIT #A1 SCHEDULE 1

EXHIBIT #A2 SCHEDULE 2

PN49

THE DEPUTY PRESIDENT: So, I take it from these rates, Mr Borlase, that the rates that are currently paid and the adjustments to them indicated in the agreement will be the basis of those adjustments into the future that is provided for in the agreement?

PN50

MR BORLASE: Yes, am I instructed, your Honour.

PN51

THE DEPUTY PRESIDENT: Yes. As the rates don't form explicit part of the agreement directly, would you be prepared to provide an undertaking that the rates will be readily accessible and provided to employees should they so request?

PN52

MR BORLASE: Yes, sir.

PN53

THE DEPUTY PRESIDENT: And you have no objection to these rates being kept on the agreement file in the Commission?

PN54

MR BORLASE: Not on the file, yes.

PN55

THE DEPUTY PRESIDENT: Yes. Okay, thank you, Mr Borlase.

PN56

MR BORLASE: Thank you.

PN57

THE DEPUTY PRESIDENT: If there is nothing further from either of you? Well, I am satisfied that the agreement that was made is that agreement that is reflected in the agreement that has been lodged for certification and that it was the agreement that was provided to and approved by employees. On a cursory examination of the rates, it would appear that the requirements of the no disadvantage test are clearly met, however, I will take further examination of that before I certify the agreement. The other requirements of the legislation have been met, with the exception of the requirement that the agreement be lodged for certification within 21 days of it having been approved.

PN58

I am prepared to extend that time using the provisions of section 111. However, I would suggest to you, Mr Carter, that the manner of signatories being obtained with agreements of this type be reviewed by your and other unions to try and ensure that agreements are lodged within the requisite time. I will also ensure that a copy of the rates upon which the increases are kept on file and that the undertakings that have been provided will be included in the certificate, should there be no problem with the certification, which I don't envisage there will be. However, I need to have a closer examination of those rates. The parties, I think, should safely assume that the agreement will be certified to take effect on or from today's date. If that is not to be the case, then obviously you will be given the opportunity to address me further. This matter is adjourned.

ADJOURNED INDEFINITELY [11.48am]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 SCHEDULE 1 PN49
EXHIBIT #A2 SCHEDULE 2 PN49