AG2004/3008, Transcript of Proceedings [2004] AIRCTrans 2684 (14 July 2004)

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ABN 76 082 664 220

ADMINISTRATOR APPOINTED

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

O/N 1906
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/3008

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by the Construction, Forestry, Mining and
Energy Union and another for certification
of the Consolidated Plant Pty Ltd trading
as Brimco Crane Service/CFMEU Collective
Agreement 2003

ADELAIDE

2.30 PM, FRIDAY, 2 JULY 2004

PN1

MR D. ROBERTS: I appear on behalf of the CFMEU.

PN2

MR R. BROWN: I appear on behalf of Consolidated Plant trading as Brimco Crane Service.

PN3

THE SENIOR DEPUTY PRESIDENT: Now, I can advise the parties in this matter that I have read both the statutory declarations and indeed the Agreement. Mr Roberts, or Mr Brown, with particular relevance to paragraph 6.4 of the statutory declarations, are either of you able to advise me of the date upon which the employees received the agreement in its final form?

PN4

MR ROBERTS: The date would have been.

PN5

MR BROWN: Here is the date here, Darren, 4.3.04.

PN6

MR ROBERTS: That is when we had the meeting?

PN7

MR BROWN: Yes. That is when it was - that is the 4th.

PN8

MR ROBERTS: Ten days from there, between about February 14th.

PN9

THE SENIOR DEPUTY PRESIDENT: That is the final agreement?

PN10

MR ROBERTS: Yes.

PN11

THE SENIOR DEPUTY PRESIDENT: So the employees had the final Agreement for a number of months?

PN12

MR ROBERTS: '03, '04. 4 March we had the meeting.

PN13

THE SENIOR DEPUTY PRESIDENT: Yes.

PN14

MR ROBERTS: No, hang on.

PN15

THE SENIOR DEPUTY PRESIDENT: Employees voted on 11 June.

PN16

MR BROWN: 4 March, yes, sorry.

PN17

THE SENIOR DEPUTY PRESIDENT: And the Agreement wasn't subsequently changed?

PN18

MR ROBERTS: No.

PN19

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Brown, I am going to ask Mr Roberts a number of questions about the Agreement. Mr Roberts, looks forward to my questions but my questions don't invite him to change the document in any way. They simply go toward clarifying a number of issues in the document, a couple of which do cause me some concern. If you want to add or detract anything from Mr Robert's answers, please feel free to do so.

PN20

MR BROWN: Thank you.

PN21

THE SENIOR DEPUTY PRESIDENT: Mr Roberts, can I take you to clause 1.7? This is the clause that - Mr Brown, I am taking it that you have got a copy of the Agreement?

PN22

MR BROWN: Yes.

PN23

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Roberts, this is the clause that relates to the commencement date of the Agreement of the duration. Whilst I accept that the date of certification may be a different creature to the date upon which amounts of money payable might be applicable, the clause indicates that it is intended that the Agreement come into effect from the date upon which it is signed. Now, if I look at the signature page of the document which is page 20, there is no date that I can see there. So what do you say is the date upon which the Agreement was signed?

PN24

MR ROBERTS: 4 March.

PN25

THE SENIOR DEPUTY PRESIDENT: 4 March 2004?

PN26

MR ROBERTS: Yes.

PN27

THE SENIOR DEPUTY PRESIDENT: Thank you. Am I correct in understanding that in relation to clause 1.8, the Mobile Crane Hiring Award of 2002, it is effectively pegged at the point it was at as at 31 December 2002 for the life of this Agreement?

PN28

MR ROBERTS: That is correct.

PN29

THE SENIOR DEPUTY PRESIDENT: Clause 2.3 deals with the dispute or grievance procedure, 2.3.5 requires that I ask a question directed at Mr Brown. Mr Brown, if an employee is a member of a union other than the CFMEU, or indeed not a member of any union, do they have the capacity to be represented by a person or a union of their choice?

PN30

MR BROWN: Yes.

PN31

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Roberts, clause 2.3.8 refers to the appropriate industrial tribunal. Should I take it that the parties intend that to be this Commission?

PN32

MR ROBERTS: That is correct.

PN33

THE SENIOR DEPUTY PRESIDENT: Should I take the parties intention as being one of meaning that the Agreement - that a dispute not capable of resolution in accordance with the earlier steps would be referred to the Commission for conciliation with arbitration as a last resort?

PN34

MR ROBERTS: That is correct.

PN35

THE SENIOR DEPUTY PRESIDENT: Clause 2.4 deals with demarcation disputes. First of all, should I understand that the ACTU demarcation disputes procedure is intended to be referenced in whatever form it currently exists in and that it is a document which is available to employees on request?

PN36

MR ROBERTS: That is correct.

PN37

THE SENIOR DEPUTY PRESIDENT: Now, in that clause the reference is to unions in the plural: The Agreement is binding on the CFMEU as the only union. Should I take it though that the intention or the hope of the parties is that other unions would similarly be bound or committed to comply with that an ACTU demarcation disputes procedure?

PN38

MR ROBERTS: Yes, that is correct.

PN39

THE SENIOR DEPUTY PRESIDENT: Clause 2.5, and in particular 2.5.1, also requires that I raise another question with Mr Brown. Mr Brown, are you in a position to give me an undertaking which is a binding obligation upon which I rely, if I were to certify the Agreement, that all prospective employees would be advised that the issue of union membership will not be taken into account in decisions relative to their employment?

PN40

MR BROWN: Could you just say that again for me please?

PN41

THE SENIOR DEPUTY PRESIDENT: Yes. All prospective employees will be advised that the issue of union membership will not be taken into account in decisions relating to their employment?

PN42

MR BROWN: That is correct.

PN43

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, just by way of background, the reason I am asking for that undertaking is that I am working from the premise that neither you nor the CFMEU would be acting in a fashion which was discriminatory in terms of union membership, but a person who is a prospective employee might read that clause 2.5.1 and think on the basis of that clause that they ought to join the CFMEU in order to gain employment. So my undertaking is designed to correct any misunderstanding on that basis.

PN44

MR BROWN: I can assure you, your Honour, that everybody understands what the ruling is of union representation in our employment.

PN45

THE SENIOR DEPUTY PRESIDENT: Thank you. As I said to you that undertaking that you have given me is one that is a binding undertaking. Mr Roberts, clause 3.3 deals with supplementary labour. There are two questions that arise here. The clause states that:

PN46

Labour hired will be based on wages and conditions this Agreement affords.

PN47

Now, to what extend then should I understand that that clause is intent on binding another employer to the conditions set by this Agreement?

PN48

MR ROBERTS: No, it is only an intent or principals of document.

PN49

THE SENIOR DEPUTY PRESIDENT: Yes, so there is no obligation on the other employer - another employer?

PN50

MR ROBERTS: That is correct.

PN51

THE SENIOR DEPUTY PRESIDENT: I have to say, that doesn't sit comfortably with that particular provision. I am happy to leave that particular matter there for the moment. We might come back to that one a little later. We might need to. Now, the second question that arises relative to 3.3 is that it states that:

PN52

Labour hire companies used must be acceptable to all the parties to the Agreement.

PN53

Now, to what extent then are you able to give me an undertaking that - or are the parties both able to give me an undertaking - that the issue of whether labour hire companies are acceptable will be determined without regard to issues of union membership and will not operate so as to require a labour hire company to be in breach of an agreement or a legal obligation which you may have relative to its own employees.

PN54

MR ROBERTS: That is correct.

PN55

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Brown, are you able to give me that undertaking too?

PN56

MR BROWN: Yes.

PN57

THE SENIOR DEPUTY PRESIDENT: Thank you. If I could then take you to clause 3.5. Mr Roberts, this is the clause that perhaps causes me the single greatest degree of difficulty relative to this Agreement. It might seem to you to be an innocuous clause but I am not sure that it says what the parties mean it to say. Clause 3.5.1 establishes that:

PN58

Redundancy payments will be in accordance with the mobile crane hire 1996.

PN59

I presume that means the Mobile Crane Hire Award of 1996.

PN60

MR ROBERTS: Yes, that is correct.

PN61

THE SENIOR DEPUTY PRESIDENT: And I note that award is a different award to that which is called up by this Agreement in that it is the old version, it is the 1996 award.

PN62

MR ROBERTS: That is correct.

PN63

THE SENIOR DEPUTY PRESIDENT: Now, 3.5.2 - I should say that that award simply establishes that employees are entitled to various payments both possibly in lieu of notice and secondly, relative to redundancy. It doesn't say who has to make those payments in terms of that particular clause. If I then read 3.5.2, that clause obligates the employer to give the CFMEU a bank guarantee to cover all entitlements - and I don't know at this stage, what entitlements the parties are referring to - in case of redundancy. It doesn't talk about the bank guarantee being used in the normal situation, which is in cases of insolvency.

PN64

A direct reading of the entirety of the provisions of clause 3.5 implies to me that the parties intend that redundancy payments will be calculated in accordance with that 1996 award. That there will be a bank guarantee provided to the CFMEU to cover all redundancy entitlements, but if employees are to be made redundant then payments to that effect will be made by the CFMEU effectively acting as agent in accordance with that bank guarantee. Now, is that what the parties intended because that is the way it reads?

PN65

MR ROBERTS: The idea of it is that obviously we have our own entitlement banks concerning redundancy. The employer wasn't in a position to be able to pay into those entitlement banks, so to recognise that we've gained a bank guarantee to the sum to cover the redundancy payments, as would be if it was put into an entitlement bank.

PN66

THE SENIOR DEPUTY PRESIDENT: So you are saying there is an existing bank guarantee.

PN67

MR ROBERTS: Once this is certified we will be seeking a bank guarantee.

PN68

THE SENIOR DEPUTY PRESIDENT: What would you say that bank guarantee should cover? Does it cover all redundancy entitlements calculated on the basis of that 1996 award?

PN69

MR ROBERTS: That is correct.

PN70

THE SENIOR DEPUTY PRESIDENT: Does it then cover all of those entitlements at the date upon which the Agreement was to be certified?

PN71

MR ROBERTS: That is correct.

PN72

THE SENIOR DEPUTY PRESIDENT: Does it cover those entitlements on a continually changing basis.

PN73

MR ROBERTS: Accruing basis. Yes, that is correct.

PN74

THE SENIOR DEPUTY PRESIDENT: So the bank guarantee continually increases?

PN75

MR ROBERTS: That is correct.

PN76

THE SENIOR DEPUTY PRESIDENT: And the bank guarantee in that regard - let me rephrase that - bank guarantees are normally guarantees that are effectively paid for by the employer, that is, a fee is charged. So how frequently did the CFMEU intend that bank guarantee to be upgraded?

PN77

MR ROBERTS: Annually.

PN78

THE SENIOR DEPUTY PRESIDENT: I see. And in the case that the employer made an employee redundant, who would you expect to pay the redundancy payments?

PN79

MR ROBERTS: The employer.

PN80

THE SENIOR DEPUTY PRESIDENT: Yes. How do I reconcile that with 3.5.2? Do you follow the question I am raising?

PN81

MR ROBERTS: Yes. From what I am aware of, the bank guarantee just guarantees that that money is always available to the employees should they need redundancy entitlements.

PN82

THE SENIOR DEPUTY PRESIDENT: Yes.

PN83

MR ROBERTS: If there is something far more reaching than that, I'm not aware of it.

PN84

THE SENIOR DEPUTY PRESIDENT: Yes. It could be simply the way the clause is phrased.

PN85

MR ROBERTS: Yes.

PN86

THE SENIOR DEPUTY PRESIDENT: The reason I am raising the question at this stage is that if the parties intended that the bank guarantee applied in the event that the employer was not able to meet redundancy obligations, as a consequence of insolvency, then in all likelihood this clause would be considered by a group of people who would not be consisting of those that are in this room now. It is very likely to be considered in that instance by persons involved in the winding up of the particular employer. Then you are not going to know what it is that you have looked at, or what it is you have intended in this regard and a direct read of the clause would quite conceivably give rise to a view that the CFMEU would be the organisation, in effect, implementing that bank guarantee so as to make payments to employees on redundancy.

PN87

MR ROBERTS: Again, if we had the ability - if we have a bank guarantee of - I don't know what the figure would be, $100,000 - and that money is to be divided up amongst the employees for redundancy and the company is being made insolvent, then I suppose that would be the role. It is the whole idea of entitlement protection banks.

PN88

THE SENIOR DEPUTY PRESIDENT: Yes, well you see the term "bank guarantee" is one that is taken in a number of different contexts. Sometimes, a bank guarantee is such that there is a guaranteed minimum amount of money available to cover - to meet a designated purpose. On other occasions, there is a guarantee of money to be paid to a given organisation in a particular situation, and I am having difficulty working out what it was the parties intended, in this instance. If you and Mr Brown would have a brief talk so as to be able to help me out in that regard, feel free to do so.

PN89

MR BROWN: Can I try to help you out now?

PN90

THE SENIOR DEPUTY PRESIDENT: You certainly can, Mr Brown.

PN91

MR BROWN: Right. The whole thing is, in the industry there have been a couple of crane hire companies that have been insolvent and haven't been able to pay the employee entitlements.

PN92

THE SENIOR DEPUTY PRESIDENT: Yes, I suspect I'm about to see one next week. Go on.

PN93

MR BROWN: So virtually what we have agreed to do is to give the union a letter saying that we will guarantee, right, that there will be enough money in the bank at all times to pay the entitlements of all our employees, in case the company decides that: we have had enough, we don't want to operate any more, we want to close down the business, or we want to - you know, there will be no talk of the company becoming insolvent. Because of the extent of the Radford Group of companies there would be - in the event that Gary Radford, who was the director of Brimco Cranes, passed away and the family decided that they didn't want to run Consolidated Plant Pty Ltd any more in Adelaide, well then what we are saying is there will be enough money to pay or close down the yard and pay all the employees their entitlements.

PN94

THE SENIOR DEPUTY PRESIDENT: So that would be a letter that the employer wrote to the union guaranteeing that there was sufficient moneys in the bank.

PN95

MR BROWN: Yes.

PN96

THE SENIOR DEPUTY PRESIDENT: The employer would understand that the requirement or the obligation to pay redundancy money, was a requirement vested with the employer, not the union?

PN97

MR BROWN: Yes.

PN98

THE SENIOR DEPUTY PRESIDENT: I see. Mr Roberts, does that reflect your understanding of the provision?

PN99

MR ROBERTS: Yes.

PN100

THE SENIOR DEPUTY PRESIDENT: So I should take it that the intention of the parties is that redundancy payments will be calculated in accordance with the 1996 award, that the order of retrenchment would be in accordance with that 1996 award, that the obligation to make redundancy payments is an obligation imposed upon the employer and that I should understand the provisions of clause 3.5.2 such that the employer will give the CFMEU a letter which guarantees or assures the union that it has a sufficiently - that it has sufficient funds or assets to meet all entitlements in cases of redundancy?

PN101

MR BROWN: Correct.

PN102

THE SENIOR DEPUTY PRESIDENT: I see, thank you. The provisions of clause 3.6 refer to the company's occupational health, safety and welfare policy and a little later in 3.6.6 to the construction industry drug and alcohol policy. Should I understand those policies to be documented, readily available to employees and able to be reviewed during the life of this Agreement?

PN103

MR ROBERTS: That is correct.

PN104

THE SENIOR DEPUTY PRESIDENT: Clause 4.2 refers to a CPI adjustment. Should I understand that by that provision the parties intend to refer to the amount or the percentage amount by which the expense related allowances in the 2002 award - that is not the 1996 award, but the 2002 award - are increased each year such that that comparison of wage increases will occur on the date - on or around the date - that the award expense related allowances are changed?

PN105

MR ROBERTS: That is correct.

PN106

THE SENIOR DEPUTY PRESIDENT: I must say, Mr Roberts, that represents a masterpiece in innovative reading on my part, but nevertheless, I'll understand that to be the view of the parties. Clause 8.2 on page 18 talks of the development of a training program. Should I understand that to be an ongoing process throughout the life of the Agreement?

PN107

MR ROBERTS: That is correct.

PN108

THE SENIOR DEPUTY PRESIDENT: Clause 9.2.3 refers to the:

PN109

BIRST agreed procedure on inclement weather or extremes of heat.

PN110

Should I understand that that reflects an agreement reached between the Master Builders Association and the CFMEU but that, more particularly, it is an arrangement which is set out in the coloured brochure readily available to all employees wherever they may be working?

PN111

MR ROBERTS: Yes, that is correct.

PN112

THE SENIOR DEPUTY PRESIDENT: If I could then take you back to that signature page, and I note that the employees have not signed in the space that has been provided for them. Should I read anything into that?

PN113

MR ROBERTS: No, not at all.

PN114

THE SENIOR DEPUTY PRESIDENT: Mr Roberts, I have actually overlooked an earlier question. My apologies for that. Can I take you back to the wages clause which is 4.1? If the intention of the parties is that the Agreement would become operative from the 4th of - did you say 4 March?

PN115

MR ROBERTS: Yes, 4 March.

PN116

THE SENIOR DEPUTY PRESIDENT: 2004? Then how should I link that date in with the various wage rates that are set out in that clause?

PN117

MR ROBERTS: 1.7.03 was an original target date. We had a fast track of negotiations and then it slowed right down and then we've tidied it all up towards the end.

PN118

THE SENIOR DEPUTY PRESIDENT: I see, so what you are saying there is that that first set of wage rates that appear under the heading of: 1 July 2003, don't, in fact, come into effect then but come into effect on 4 March 2003?

PN119

MR ROBERTS: They actually probably come into effect on 1 July.

PN120

MR BROWN: Yes, in good faith, because our other enterprise agreement had expired and we were in the throes of compiling this new enterprise agreement and the clause in the old agreement did state that we would flow-on this agreement. So when we negotiated with our employees and the union, we came up with those rates and our employees were paid those rates as from 1.7.03.

PN121

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes. Thank you, Mr Roberts. Can I then take you - given that you have answered all the questions that I have to my satisfaction, with the exception of the issues relating to supplementary labour or labour hire companies, can I go back to that issue? It is clause 3.3. If a labour hire company is engaged then to what extent or how would you see that particular sentence that indicates, at least in part that labour hired be based on wages and conditions as Agreement affords. Should I read that clause, or that statement, as meaning that labour hired directly by this employer, will be based on wages and conditions as Agreement affords?

PN122

MR ROBERTS: That this employer uses, yes.

PN123

THE SENIOR DEPUTY PRESIDENT: So the employees being referred to in that regard are employees of this employer?

PN124

MR ROBERTS: That is fine.

PN125

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Roberts. Mr Brown, I am taking it that where you wanted to express a view, you have done so?

PN126

MR BROWN: Yes, that is correct.

PN127

THE SENIOR DEPUTY PRESIDENT: Okay. I will indicate to the parties that I am satisfied that the Agreement was reached through a process consistent with that set out in section 170LJ of the Act. I am similarly satisfied that entirely on the basis of the undertakings given to me that the Agreement meets the prerequisite requirements necessary for certification. Whilst it is of a duration envisaged by the Act and it contains the necessary dispute resolution provisions, the operation of which the parties have clarified for me, it contains a number of provisions where in order to conclude that the agreement meets the necessary requirements associated with section 170LT and LU of the Act, I have had to rely upon undertakings given to me by the parties. On that basis, I would certify the Agreement with effect from today.

PN128

The certificate giving effect to that certification, will be forwarded out to the parties within the next few days. It will identify the various undertakings that I have been given. The certificate will also identify the clauses about which I have sought clarification. It will not detail the answers to the questions that I have asked, because those are recorded on the transcript. In that regard I have taken it that the parties have given me undertakings with respect to the provisions of clause 2.5, involving union representation, the provisions of clause 3.3 and the provisions of clause 3.5.

PN129

I congratulate the parties on reaching this Agreement. Don't leave the next one quite so long because the potential for confusion over operative dates is a very real one. If I can suggest to the parties that they might review the extent to which some of the words in this particular agreement could, perhaps, be more clearly set out to express your collective intent. I will adjourn the matter on that basis.

ADJOURNED INDEFINITELY [3.02pm]