C2003/6894, Transcript of Proceedings [2004] AIRCTrans 314 (21 January 2004)

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TRANSCRIPT OF PROCEEDINGS

O/N F8743

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER SMITH

C2003/6894
C2003/6971

APPLICATION FOR AN ORDER TO STOP
OR PREVENT INDUSTRIAL ACTION

Application under section 127(2) of the Act
by the Australian Customs Service for an order
to stop or prevent industrial action

AUSTRALIAN PUBLIC SERVICE AWARD 1998

Application under section 33 of the Act
for review of above award on Commission's
own motion

SYDNEY

10.22 AM, TUESDAY, 13 JANUARY 2004

Continued from 19.12.03 in Melbourne

PN635

THE COMMISSIONER: Any change in appearances?

PN636

MR M. McKENNEY: If the Commission pleases, I seek leave to appear on behalf of the Minister for Employment and Workplace Relations in C2003/6971 as a party to the Australian Public Service Award 1998.

PN637

THE COMMISSIONER: Thanks, Mr McKenney. Any objection to the application by counsel for leave to appear? Leave is granted.

PN638

Yes, Mr Ginnane?

PN639

MR GINNANE: Commissioner, we have drafted and I seek to circulate the order that we would - - -

PN640

MR A. RICH: Before Mr Ginnane continues, I might just say that I appear with MS A. McVEIGH who is an organiser in the CPSU in the Customs Division.

PN641

THE COMMISSIONER: Thank you Mr Rich.

PN642

MR GINNANE: I hand you Commissioner an order that we seek under section 127 of the Workplace Relations Act.

PN643

THE COMMISSIONER: I will mark that G6.

EXHIBIT #G6 ORDER UNDER SECTION 127 OF THE WORKPLACE RELATIONS ACT

PN644

MR GINNANE: Commissioner, that order by clause 2 would bind the union, officers, employees and agents, members of the union who are employees of the Customs Service employed under the certified agreement at the Container Examination Facilities in Sydney, Melbourne and Fremantle and other employees who are not members of the CPSU. It applies to the industrial action defined at clause 3.2 in A, B, C and then D deals with authorising, directing, organising or encouraging persons and then the order replies to engage in the conduct. It excludes relative occupational, health and safety matters by paragraph 4 and provides for service of the order in clause 5, the subparagraphs that are numbered 6.1 and 6.2 should be corrected to 5.1 and 5.2.

PN645

Commissioner, the matter was before you on 19 December on which day industrial action occurred in Melbourne and in Sydney at the CEF facilities and subsequent to that industrial action hasn't occurred because of the undertaking given to you on that day. The matter ended with the CPSU on that day not having put its submissions on section 127 application and you indicating Commissioner that you were contemplating or that you would call the matter on of your own motion under section 33 in January.

PN646

Commissioner, Customs' position is as indicated on 19 December, that the industrial action taken on that day was unprotected action and that seems to be the issue between the parties. The documents that are in the exhibits tendered on that day indicate on their face that the CPSU thinks the action is protected and we submit that the appropriate course this morning is for the CPSU to put all completed submissions in respect of the section 127 order and you then to consider those submissions and make a decision about the matter.

PN647

We say that although the decisions indicate that the Commission of course cannot make a court ruling on whether the action is protected or unprotected the real issue between the parties lies on that question and one would expect that if the Commission in the course of its ruling indicated that, for instance, our application was successful, that the order was being made because in the Commission's view the action was likely to be unprotected, that would be the end of the matter. We say that because the documents purport to indicate that the CPSU considers the action to be protected.

PN648

Now, I put all our submissions on that issue and save for reiterating what we then said and reiterating the point that any limitations in the dispute resolution clause that might be thought to apply should have no bearing on whether an order is made under section 127, where the conduct being engaged in is a legitimate conduct.

PN649

Now, Commissioner, I then go on by way of indicating how Customs sees this matter by indicating that it would be inappropriate and without jurisdiction for any action to be taken for whatever reason or for whatever purpose under section 33 to vary the award. As I think was indicated on the last occasion negotiations for the next certified Agreement have to commence not less than six months before 30 September 2004, that's provided for in clause 20 of the certified Agreement by a combination of the expiry date being 30 September and the second paragraph indicating that negotiations will commence at least six months prior, so that means by 30 March this year, so we're about ten weeks away from the next round of negotiations.

PN650

Now, Customs submits that the appropriate forum for further discussion about any of the issues that the CPSU seems to be raising at the Container Examination Facilities including the issues of allowances, rostered days off, if there was a heat issue, work on public holidays, any of those issues, the appropriate form for those matters to be considered is as part of the next round of bargaining that's seen to occur. The number of employees employed in connection with the Container Examination Facilities is 133 out of some 5000 in total Customs employees. It would be counter productive for any discussions, particularly discussions auspiced by the Commission to occur in connection with those group of issues seen to be identified as applying to the Container Examination Facilities outside of the next round of bargaining soon to occur.

PN651

Customs does not want one issue or issues that apply to a small number of its workforce to be considered and taken out of the context of the next round of enterprise bargaining. It does not want any cherry picking to occur and that is for the good reason that any such discussions may well hamper and affect the next round of enterprise bargaining negotiations. Now, equally any consideration by the Commission either in a purported conciliation approach or any abdication to vary the award would be likely, it is submitted, to hamper the enterprise bargaining that may soon occur.

PN652

Customs wants to consider any claims made by the CPSU on a service wide basis, not doing deals or succumbing to pressure or having awards varied in respect of a small group of its employees and that wish we say is underpinned by a sound approach to enterprise bargaining, in a context where the certified Agreement applies to the whole of the Service. Anything the Commission may do that raises expectations in this group of 133 that they are likely in the foreseeable future, and outside the next round of enterprise bargaining, to achieve some additions to the current certified Agreement would be counter-productive and are likely to hamper the certified Agreement. The forum for these issues to be raised is the forthcoming round of certified agreements.

PN653

So it is, Commissioner, that Customs' position is that where self-evidently the industrial action seems to have been taken because, on our case, a wrong view of what constitutes protected action, the path to resolve this matter is for the Commission to give its view on that matter. It may well be that when you do rule on that the CPSU may well be willing to give an undertaking. I say that because the papers suggest that they have an approach to whether or not the matter is protected that differs from ours.

PN654

THE COMMISSIONER: I am sorry, Mr Ginnane, I have understood the argument in relation to why you say it would be inappropriate for me to vary the safety net. Why do you say it is beyond jurisdiction?

PN655

MR GINNANE: I will come to that. But just before doing that can I just complete that?

PN656

THE COMMISSIONER: Yes.

PN657

MR GINNANE: We say that it is very important. We are here, Commissioner, on an application by Customs. The only other matter that is before us is your own motion. There has been no application by the CPSU to vary the award. We do not know what their attitude would be to that. So, we say it would be a curious, unhelpful, in fact likely to impede enterprise bargaining if the Commission of its own motion did not rule on the section 127 matter, but proceeded down the path of Award variation.

PN658

Now, Commissioner, can I go to jurisdiction. We started by saying we do not know what you have in mind. We would ask you to tell us. We would want to know why the variation was being contemplated? What variation was being contemplated? And what evidence was being proposed in support of it?

PN659

THE COMMISSIONER: The notice simply said:

PN660

To consider the merits or otherwise of varying clause 22.5 of the Award to include an allowance for work carried out by Customs Officers.

PN661

MR GINNANE: That is so.

PN662

THE COMMISSIONER: It should be no surprise that what is contemplated is precisely the controversy between the parties.

PN663

MR GINNANE: But what variation? What allowance? What amounts? When will it come in? All those sort of matters that in the old days a log of claims would tell you at an ambit level - - -

PN664

THE COMMISSIONER: Or an application to vary.

PN665

MR GINNANE: Yes. Now, as you are the author of the document we would say, Commissioner, what do you have in mind? However, we would submit - we do submit - that the variation is beyond jurisdiction because pursuant to the Act the existing certified agreement would override it.

PN666

THE COMMISSIONER: That doesn't make it beyond jurisdiction. It just simply says it does not operate. If you are right as to the operation of the agreement it would mean that any variation simply wouldn't operate. It doesn't mean that it is beyond jurisdiction.

PN667

MR GINNANE: We do get into a curious course of territory. When you say, if I am right, I am merely paraphrasing what section 170LY says.

PN668

THE COMMISSIONER: No, I am sorry, I meant if you are right about the operation of the agreement. And your no extra claims and the exclusivity of the operation of the agreement.

PN669

MR GINNANE: You tell us, if we are right about the operation of the agreement we think everything will go away.

PN670

THE COMMISSIONER: No, what I am saying is, if you are right about that proposition then a variation to the award will have no affect. But it does not deny the Commission the jurisdiction to vary the underpinning safety net award.

PN671

MR GINNANE: We wouldn't accept that. And we say that section 170LY indicates an intention to lead the parties to their certified agreement.

PN672

THE COMMISSIONER: Have you got any authority for that proposition?

PN673

MR GINNANE: Well, could I ask the same question? Do you know of any case like this where an underpinning award has been varied in circumstances where the certified agreement itself has dealt with the issue.

PN674

THE COMMISSIONER: Yes. Telstra.

PN675

MR GINNANE: Which Telstra matter?

PN676

THE COMMISSIONER: The Telstra matter involving a dispute settlement procedure. The certified agreements would override the operation of the award and, nonetheless, the parties - I am just giving you an example, I think the proposition is flawed, that you put to me - the parties argued for over 12 months as to the disputes procedure that ought to go into the award.

PN677

MR GINNANE: This is a case where if we are right we are not dealing with Telstra we are dealing with a case where there is an isolated allowance provision in the agreement. It is quite different from Telstra. We would invite any reference to authority that is on all fours with this case.

PN678

THE COMMISSIONER: Well, I am not going to give you any authorities, Mr Ginnane. I invite you to give me some authorities for the proposition which you advance, which I think is plainly wrong.

PN679

MR GINNANE: It is your motion, Commissioner, and if it is supported by any authority we would respectfully - - -

PN680

THE COMMISSIONER: You say there is no jurisdiction to vary the award. On what authority do you say there is no jurisdiction to vary the award?

PN681

MR GINNANE: We say it is the combined effect of a certified agreement dealing with a particular issue. The scheme of Part VIB of the Act, particularly section 170L. The object there expressed:

PN682

Facilitate the making and certifying the Commission -

PN683

etcetera, etcetera.

PN684

THE COMMISSIONER: Let me ask you a simple question. If your proposition is right it means that the Commission cannot vary safety net awards for national wage increases because wage increases are covered by certified agreements.

PN685

MR GINNANE: The power to vary that has been accepted, we accept. We would certainly say, if the jurisdiction exists it is to be exercised very sparingly and not in a context like this where there is a misplaced approach to what constitutes protected action.

PN686

THE COMMISSIONER: I understand the discretionary side of the argument. It was the jurisdictional side of the argument that I was curious about.

PN687

MR GINNANE: We would be interested - safety net variations are usually done in a context that doesn't give rise to the arguments we are now putting.

PN688

THE COMMISSIONER: I can assure you it does. I can assure you that in safety net cases the first argument by the employers is to the extent that the Commission raises minimum wages it impacts upon bargaining.

PN689

MR GINNANE: There is no doubt about that. What we are saying here is that the Commission should not in the teeth of misplaced industrial action of this sought, in the context of these limited number of employees, entertain or enter on an application of this sort. Safety net applications are not ones that commonly come from a member of the Commission, their own motion. We would say that we are not aware of any case like this where a member of the Commission in the face of 127 application made to confront unprotected action, says, well look, let's consider varying the Award. We would certainly want particulars of that. I am putting this quite strongly, I don't mean any disrespect to the Commission obviously.

PN690

THE COMMISSIONER: No, I understand.

PN691

MR GINNANE: Secondly, we say very strongly as a matter of discretion this is not a case in which a variation should be contemplated.

PN692

THE COMMISSIONER: You do not say there is a valid bargaining period.

PN693

MR GINNANE: We don't say there is a valid bargaining period. There is no valid bargaining period.

PN694

THE COMMISSIONER: So to the extent that there would have been a jurisdictional impediment if a bargaining period existed, that doesn't exist in your submission.

PN695

MR GINNANE: There are a lot of "nots" going in there. I just want to think that through to make sure what I mean with that.

PN696

THE COMMISSIONER: Well, if you were in agreement with the union that there was a bargaining period in place, then the Commission's power to arbitrate on the same subject matter would be constrained.

PN697

MR GINNANE: That is so.

PN698

THE COMMISSIONER: But you do not go down that path.

PN699

MR GINNANE: No, we don't go down that path. We say that the whole process of any variation would be a frontal attack on the certified agreement.

PN700

THE COMMISSIONER: Why do you say that?

PN701

MR GINNANE: Because in the dark as to what the particulars of any variation might be, the only purpose of it being pursued would be to supplement, add to, or extend the provisions of the existing disability allowance or the isolated location allowance in the existing certified agreement. We are in the dark as to what you may have in mind.

PN702

THE COMMISSIONER: I had in mind simply resolving the controversy on its merits. Something which your client doesn't want to do.

PN703

MR GINNANE: We would, with respect, not accept those words characterising our submission. What we have said, let's discuss it on the merits in the context of the next round of bargaining, which is ten weeks away.

PN704

THE COMMISSIONER: But I am entitled to look at the safety net award, aren't I, and see whether or not work value or work performed there is a proper safety net provision for work performed, and that provides the basis upon which then bargaining can take place?

PN705

MR GINNANE: Not in this case where the parties are seeking to alter the effect of a certified agreement that still has at least until 30 March to run, if not later.

PN706

THE COMMISSIONER: But if you are right the agreement wouldn't be altered. Nothing happens if you are right about the operation of the agreement. Absolutely nothing happens.

PN707

MR GINNANE: Then we are all wasting our time here. Except that a variation to the award - - -

PN708

THE COMMISSIONER: Provides an appropriate no disadvantage test upon which negotiations can then take place for the new agreement.

PN709

MR GINNANE: In the circumstances where the parties themselves have to negotiate about a range of issues, of which this is one small set of issues, very shortly. This would be a lopsided approach to bargaining. We give 133 workers a leg up in circumstances where there are another 4800 odd employees who have their own interests, their own demands, which will have to all be reconciled when a new certified agreement is reached.

PN710

Now, Commissioner we are a long way down the path from our initial, our only application, which is to ask you to do what we say with respect is your duty, to rule on the 127 application. You rule on that, we think there is a very good chance everything else goes away except the parties go away and fashion their position for the bargaining that's got to occur. Simple as that. The more you go into the merits of your own motion or of someone else's motion the more expectations are raised to a point that is unhelpful. It is likely to add to industrial disputation if the CEF workers' expectations are raised whether by creating a platform for further bargaining or not. Customs has to consider the interests of all workers in negotiation a certified agreement and negotiating in respect of all of them.

PN711

THE COMMISSIONER: How would me examining the operation of the Safety Net award change your client's role in negotiating with all employees?

PN712

MR GINNANE: Well, let's take one example. We don't know what you have in mind but suppose at the end of it you thought that this particular part of the Safety Net Award required variation because it didn't provide in a manner that you thought appropriate for the conditions that were being undertaken, conditions being experienced. And there was a ruling by the Commission to that effect and the award is varied.

PN713

We say it would be very hard for Customs in later discussions to negotiate a position that was less than you had arbitrated. The question of these allowances and the issues covered by 22.5 are likely, and indeed we have said are appropriate to be dealt with by the parties as part of enterprise bargaining. It is inappropriate for the Commission to arbitrate at this point. It is counter to the approach of the Act to encourage the making of certified agreements and it would involve the Commission superimposing itself at an inappropriate time on enterprise bargaining.

PN714

Now, Commissioner, we would respectfully ask that if it is proposed by the Commission, or if any other party asks you to proceed with the variation application that you rule on your jurisdiction to follow that course and you rule on why you are not dealing with the section 127 application, because at that point with those rulings Customs would certainly want to consider its position.

PN715

Now, I have taken you to the order - - -

PN716

THE COMMISSIONER: Is there any threat of industrial action?

PN717

MR GINNANE: That is for someone else to say. We haven't received one but the undertaking that was given we accept as a bona fide undertaking of course and it has been observed thus far.

PN718

THE COMMISSIONER: Yes, thank you.

PN719

MR GINNANE: Thank you Commissioner, that is our submission.

PN720

THE COMMISSIONER: Mr Rich?

PN721

MR RICH: Thank you Commissioner. I might start by correcting what seems to be a fundamental misunderstanding or at least a mis-characterisation of what the dispute is between the parties. The dispute between the parties is not as to whether or not the action that was proposed in December and that may occur in the future if this matter is not resolved, whether that action is protected or not. The dispute is about the existence, or the payment or the non-payment more precisely of an allowance in this case to act as an isolated establishment allowance for want of a better term.

PN722

That was clearly the issue which came out in evidence on the last occasion existing between the parties that precipitated the action that took place in December and it was our understanding and I think clearly also it was, it should have been at least, the understanding of Customs' representatives that that was the matter which the Commission was calling on of its own motion to seek to resolve. Because the reality is that should that underlying dispute be resolved that the industrial action goes away because that is the matter that the union is trying to resolve through its industrial action.

PN723

So it is wrong to suggest that by resolving whether or not this action is protected action will in effect resolve the underlying dispute. The Commission took evidence that was led by Customs and which came out in cross-examination, was apprised of an industrial dispute and has jurisdiction to resolve that dispute we would submit by varying the underlying safety net award and varying it so as to resolve the dispute by inserting into the award an appropriate allowance. We do have a draft variation that we say would resolve the dispute. I may as well hand that up now given that that is where we are at. Well, I won't speak to it at the moment, I'll just hand it up so that it is in everyone's possession. I'll speak to that later.

PN724

THE COMMISSIONER: So I'll mark it CPSU1 which is a proposed draft variation to the award.

EXHIBIT #CPSU1 PROPOSED DRAFT VARIATION TO THE AWARD

PN725

THE COMMISSIONER: Yes, Mr Rich?

PN726

MR RICH: Now, granted there may need to be some time for Customs to consider its position in relation to that proposed variation but no doubt it would be within the contemplation of Customs arising out of discussions that occurred in conference on the last occasion and on the record that a variation of this nature might be proposed and that variation is aimed at resolving this dispute. As I said this dispute if it is resolved by arbitration necessarily resolves the industrial action which the 127 order seeks to attack.

PN727

What is more, the undertaking that has been given means that there is no threat of industrial action until such time as the matter that the Commission has called on is resolved. In our submission there is no requirement for the Commission first to resolve the section 127 matter. In fact the most appropriate course would be to hear the merits of the proposed variation that I have just handed up. To hear the CPSU witnesses. To allow them to be cross-examined and to hear any evidence that Customs may propose and to then hear submissions about the appropriateness of making the variation proposed.

PN728

To rule upon that and if the ruling is that there should not be a variation, or that there should be no variation made to the award either because of jurisdictional matters or because of a matter of discretion such an order shouldn't be made, at that point, then having failed to resolve the underlying dispute, the potential for industrial dispute is then re-ignited. At that point, it would be appropriate to hear final submissions and make a ruling on the 127 application.

PN729

In relation to the submissions put by Mr Ginnane, I think the clause that we're dealing with in the Customs agreement has been characterised or was characterised on the last occasion by Mr Ginnane as providing the mechanism by which any condition specific to the container examination facilities could be varied.

PN730

In our submission, the clause is more properly characterised as one which evidences an agreement between the parties to establish conditions appropriate to container examination facilities where that is necessary. The clause, if you like, recognises that the certified agreement was not going to deal with those matters but that those matters would be dealt with through other means.

PN731

So to the extent that the contemplation of an award variation might be said to be an attack upon the agreement, in our submission quite to the contrary. The agreement contemplates in its terms in that clause 12 that deals with what might be appropriate conditions for container examination facilities that those conditions will be determined outside of the agreement.

PN732

What that led to in December was industrial action. The means by which the CPSU on that occasion proposed to take industrial action was by notifying the bargaining period and it's been put to the Commission that that action was not properly protected action. One way or another the CPSUs position is that the agreement allows for container examination facility conditions being specific to those facilities to be determined outside of the agreement and therefore to the extent that there is a question about the operation that any order might have that there's room for an order to operate because the agreement explicitly does not deal with those issues.

PN733

It's not a question of the agreement being comprehensively silent on those issues and therefore there needn't be any argument that the agreement would be inconsistent with an order; the agreement is explicitly open on that issue and it doesn't cover those conditions.

PN734

THE COMMISSIONER: Aren't you now between the proverbial rock and a hard place because if you're right does 170N operate - that prevents me from now arbitrating the issue that I've called on? The employer says it doesn't.

PN735

MR RICH: I understand. There is an issue about the bargaining period. Mr Evans has just alerted me to a provision in 170N(2) which is an exception to the first subsection which prevents the Commission from arbitrating during a bargaining period on a matter in issue.

PN736

THE COMMISSIONER: That's for a wage adjustment and that was because it had the effect of preventing safety net awards being varied for national wage increases prior to that amendment to the Act.

PN737

MR RICH: I won't make any more submissions on that point. However, in one sense their alternative arguments - - -

PN738

THE COMMISSIONER: It all comes down to whether there's a bargaining period and protected action doesn't it?

PN739

MR RICH: Yes, it does.

PN740

THE COMMISSIONER: If there is I can't arbitrate, the employer's argument about the 127 falls away and you can take protected action. If you lose that argument and save for the discretionary arguments that Mr Ginnane raised, you get access to an arbitration of the matter on its merits for the purpose of the operation of the award.

PN741

MR RICH: Yes.

PN742

THE COMMISSIONER: It wasn't by accident I put you both between a rock and a hard place.

PN743

MR RICH: It's a true assessment of where we both stand. Given that conundrum the question is about the best way to proceed.

PN744

THE COMMISSIONER: It's a matter that you can correct.

PN745

MR RICH: Yes. I might need to take instructions on that to properly determine how - - -

PN746

THE COMMISSIONER: May be able to correct. All right, thank you. Mr McKenney?

PN747

MR McKENNEY: Commissioner, as you're aware when leave to appear was sought this morning we're not intervening in the section 127 application. Having said that reference would need to be made to that application in the context of your own motion, Commissioner. Can I perhaps deal with the procedural question first. I am happy to deal with the substantive issue of the Commission's own motion but in light of what's been said this morning by the parties it seems to us that when the section 33 motion arose it arose out of, amongst other things no doubt, consideration that the Commission would have given to the evidence that had been called at that stage on 9 December.

PN748

As we understand it that evidence is as yet incomplete and it's our understanding that further evidence will be called. In fact the union hasn't put its case in response to the section 127 application by the Australian Customs Service. On a procedural level, it would be our suggestion that it would assist the Commission to hear the complete case in relation to the section 127 application. Two reasons for that essentially; first, we think it would help in the Commission's determination as to whether it is still considered appropriate to go down the path of varying the APS Award. Further evidence may shed light of what has gone on in terms of the discussions about the underlying issues in the dispute that may be of relevance and it would certainly assist us - - -

PN749

THE COMMISSIONER: Would they be relevant to determining whether or not a 127 order - I suppose it might be relevant in the exercise of discretion but - - -

PN750

MR McKENNEY: My submission is not directed at shedding light on the 127 although that's what the evidence is directed at.

PN751

THE COMMISSIONER: Yes, indeed.

PN752

MR McKENNEY: But it may, in light of what occurred last time, where there evidence put forward by the Australian Customs Service about some of the negotiations and the discussions that occurred between union and Customs for the Commission to then consider calling a matter on its own motion. What I am submitting to you is that further evidence is yet to be brought about that albeit directed at the section 127 but it may indeed assist the Commission, with respect, and it would certainly assist us to know the complete factual matrix, as if often said, as to what has occurred and at this stage we've only heard evidence from the Australian Customs Service and not the CPSU. This is put really as a procedural matter.

PN753

THE COMMISSIONER: Yes, and can I ask you to pause for a moment? One of the reasons I called the matter on of my own motion was to see whether or not the merits of the controversy, the dispute between the parties, not the industrial action which is sometimes - it doesn't give itself, as you know, going back to one's history of dispute findings, is conclusive of an industrial dispute but it may be evidence of one.

PN754

We have now got a situation where there is no industrial action. Given the undertaking, depending upon my conclusion on 170N there is no threat of industrial action. I wonder what the urgency is in looking at a symptom of an industrial dispute ahead of looking at the actual dispute. Isn't that really putting the cart before the horse in one sense?

PN755

MR McKENNEY: Well, Commissioner I guess it is a matter of being in full possession of the facts.

PN756

THE COMMISSIONER: Yes.

PN757

MR McKENNEY: If I'm correct in assuming that part of the Commission's motivation related to what evidence was called last time in terms of considering what might be the underlying cause of the dispute and the Commission's desire to examine the merits, if that still remains the case as I assume it is, then it is appropriate in our view Commissioner, for further evidence to be brought so that consideration, as I say, is given by the Commission as to whether it still proceeds with the motion and consideration from our perspective as to what submissions we might make about the motion in light of the factual circumstances.

PN758

There is that procedural question Commissioner, but there is also the question of a section 127 application and despite the existence of the undertaking, we would support what Mr Ginnane said, that the appropriate course is for the Commission to determine the 127 application. I don't need to recite to the Commission the statutory context within which section 127 operates. It is contained within the Act itself as to the need to determine these matters as quickly as practicable. So there is that reason in addition to the procedural matters that I have raised this morning, Commissioner, about why the taking of further evidence is going to be helpful in making an assessment, certainly from our perspective, as to whether the Commission ought to proceed with considering varying the APS Award.

PN759

Now, Commissioner, I can address - I don't know if it is timely to do that yet. I don't think it is, but I can address on the instructions I have thus far and on the knowledge of the facts as we know it at this stage, if you like, the substantive reasons why we would urge the Commissioner not to go down the path of varying the APS Award but it might be a matter of considering firstly, the further evidence as to what those submissions might be. So I don't want to necessarily at this stage Commissioner, but I am in the Commission's hands as to whether I deal with those matters now. We would urge that the Commission consider the position put by Customs. We say it is consistent with the obligation on the Commission to hear and determine the section 127 application.

PN760

THE COMMISSIONER: Well, do you say there is any jurisdictional impediment to the Commission dealing with the section 33?

PN761

MR McKENNEY: Commissioner, I would like to consider those issues further and take instructions because I have heard what the exchange was between yourself and Mr Ginnane this morning and I would like to consider those issues further. We certainly have arguments on the discretion side to put but certainly would like to consider the jurisdictional issues that have been raised.

PN762

THE COMMISSIONER: Thank you. Mr Ginnane do you wish to respond to what Mr Rich has said and what Mr McKenney has submitted?

PN763

MR GINNANE: Well, there is only this Commissioner, that I heard Mr Rich - what he was saying was that the Commission should go ahead and vary the underpinning award. He has provided us with exhibit 1, which is what the CPSU would seek and he seemed to be then thinking not just that the underpinning award as varied would provide a platform for the next round of enterprise bargaining but that such a variation would then constitute provisions to which people at the CEF were entitled, as I heard him, and if that is the case, we say that exposes the problem with the course of seeking to consider a variation.

PN764

Expectations were raised - they were raised in the context of Mr Rich putting the matter as he did as I heard him and - - -

PN765

THE COMMISSIONER: Well, he said, "Win or lose, we would know the result".

PN766

MR GINNANE: Then he said, if the result is - - -

PN767

THE COMMISSIONER: In their favour. Yes.

PN768

MR GINNANE: - - - our way - I am paraphrasing it in his way, then we have got our allowance for the CEF at Melbourne and Sydney. I'm paraphrasing, putting words into his mouth.

PN769

THE COMMISSIONER: Yes.

PN770

MR GINNANE: That is what it is all about Commissioner. It is not some nice academic - I withdraw that. It is not some theoretical exercise of providing a nice platform for the parties to then go away and bargain. This is an exercise, that if it leads down the path that the CPSU wishes, will undermine the existing provisions of the agreement. That is why we say at the very least as a matter of discretion, the Commission should not go any further down that path and if the Commission is proposing to do so, make a ruling as to the basis upon which he sees the way open for it to go down that path.

PN771

THE COMMISSIONER: Very well. Well, Mr Rich, I'll adjourn for half an hour for you to consider that question in relation to section 170N because on your submission, if the 170N point is alive then I would have on your side of the argument, no power to arbitrate the matter that is the subject of bargaining. If it is not alive, then you have enlivened - well, depending what you do, you may have enlivened Mr Ginnane's argument? Mr Ginnane says it is not enlivened and he has raised some jurisdictional arguments which I haven't found persuasive and of course I will issue an appropriate decision to that effect as to jurisdictionally why I can't arbitrate.

PN772

In relation to the exercise of discretion, that is another matter, whether I do or I don't. So - and I haven't heard Mr McKenney yet fully, on the question of the discretionary aspects of whether I go down the path of considering the merits but like many of these matters, they were all about process not about the problem. I'll simply adjourn for half an hour. The matter is adjourned for half an hour.

SHORT ADJOURNMENT [11.00am]

RESUMED [11.39am]

PN773

THE COMMISSIONER: Yes, Mr Rich?

PN774

MR RICH: Thank you, Commissioner. During the adjournment the letter was handed to Ms Annwyn Godwin who is the National Manager of Staffing at Customs. I will just hand up a copy of that letter. Commissioner, you will see that the letter is addressed to Ms Annwyn Godwin at the Australian Customs Service. The letter refers to correspondence from Mr Evans to Mr Lyon in December notifying of the intent to make an agreement. And notes in the second paragraph:

PN775

In accordance with section 170MV(b) that the CPSU at this point in time no longer wants to reach agreement under division 2 in respect of CEF CPSU members.

PN776

Section 170MV(b) notes that a bargaining period ends:

PN777

If the initiating party -

PN778

In this case the CPSU -

PN779

tells the other negotiating party -

PN780

In this case the Australian Customs Service -

PN781

in writing that the initiating party no longer wants to reach agreement under division 2 or 3 with that other party or those other parties.

PN782

In our view, the letter that we have served on, given to, Ms Godwin is sufficient in accordance with 170MV(b) to end the bargaining period that was initiated back on 9 December.

PN783

THE COMMISSIONER: CPSU2

EXHIBIT #CPSU2 LETTER ADDRESSED TO MS ANNWYN GODWIN, AUSTRALIAN CUSTOMS SERVICE

PN784

MR RICH: I guess, obviously, the bargaining period was terminated thereby doing away with the restriction that 170N provides. The members in advising us that this was the course of action that was to be taken have done so because it has always been their intention to have the merits of their case heard and, obviously, given the variation that we have proposed that is the course by which we hope that can now occur.

PN785

THE COMMISSIONER: Thank you. Mr Ginnane, do you wish to make any submissions on CPSU2?

PN786

MR GINNANE: Well, we received it a few minutes before your have, Commissioner. We had little time for reflection about the significance of the words "at this point in time" which are not statutory language but we read what it says and I don't have any additional submission to make about that exhibit. I do want to make a few further submissions if I might, while I am on my feet?

PN787

THE COMMISSIONER: Yes, of course.

PN788

MR GINNANE: Mr McKenney mentioned before the adjournment that he needed further time in which to consider the Minister's position in respect of jurisdiction and discretion. In those circumstances it seems to us that it would be appropriate for you, Commissioner, to await those submissions before ruling on jurisdiction. I would therefore modify our request that you rule on jurisdiction instanter so to speak. I think it is appropriate, for obvious reasons, that you hear Mr McKenney's submissions on an important matter of that nature.

PN789

The second thing is this, that is on the basis that CPSU2 does terminate the bargaining period. We take it, although it has not been so said, but we assume that the CPSU is now making an application under section 113 of the Act to vary the Award and this is the proposed variation. It is important for that to be stated because from our client's point of view - - -

PN790

THE COMMISSIONER: I have made no such assumption.

PN791

MR GINNANE: Well, the agenda for the hearing from now on needs to be identified. The notice of listing refers to a possibility of a variation to clause 22.5 of the award.

PN792

THE COMMISSIONER: Yes.

PN793

MR GINNANE: The nature of that possible variation, whether it be CPSU1 or some other document, needs to be identified because the definitions that may be affected by such a variation, for instance, the definition of "isolated establishment", if there is to be insertion of new definitions may have an effect not only in respect of these 133 employees but in respect of a number of people who work at airports and ports across the public service.

PN794

What we would say should happen is that the nature of any variation should be identified and that service of any such application, in accordance with rule 22 of the Commission's rules, should take place - no doubt that can be done by the union promptly if it so wishes - so that all the different persons and departments, and organisations that have an interest under the operation of the Public Service Award can determine whether they wish to participate in these proceedings and are clear as to precisely what is being sought.

PN795

We do say in repetition of what was put earlier this morning but it is important that what is sought by the union be clarified if any arbitral proceedings be commenced, once that is clarified that the proper procedure set out in the rule of the Commission for a variation occur. We would say that should occur whether it be the union's application or some variation the Commission may propose pursuant to section 33.

PN796

THE COMMISSIONER: Who haven't I notified of these proceedings, Mr Ginnane, is there anybody?

PN797

MR GINNANE: We say that the parties to the - there are a number of parties to the Award who would in the normal course have to be served under rule 22(3).

PN798

THE COMMISSIONER: Yes. Have you got the list of who I have notified of the 33 matter?

PN799

MR GINNANE: We do.

PN800

THE COMMISSIONER: Is there anybody that you can see that I have not notified that I should have notified?

PN801

MR GINNANE: I think our point, Commissioner - perhaps we are at cross purposes. What we say needs to be notified is not a notice of listing which talks of a possible variation, but the actual application for variation itself if that is to be made. At some stage in this hearing someone will - if there is to be a variation - someone will take up the running and propose a variation to the award. Even though it may be one that is later the subject of alteration and modification.

PN802

Correct me if I am wrong, Commissioner, but we would assume that is not going to be you. You don't envisage that you would be leading the parties by proposing that particular form of variation.

PN803

THE COMMISSIONER: No.

PN804

MR GINNANE: I assumed that. So, therefore, if any variation is to be sought presumably it is to be sought by the union and we had thought, perhaps incorrectly, that CPSU1 was being put forward as the variation, albeit in draft form, that was being sought. Now, that is the document we say that all these other people need to know about.

PN805

THE COMMISSIONER: Yes. Why wouldn't that be constrained by what it is that I have said I have called on. Namely:

PN806

An allowance for work carried out by customs officers performing duties at the container examination facilities in Sydney, Melbourne and Fremantle.

PN807

Now, that does not inhibit the parties making submissions as to what might be the consequence or the flow-on effects of the variation.

PN808

MR GINNANE: We would say that the Commission needs to be satisfied that relevant parties have notice of the application that is being sought. You have identified, Commissioner, that you are not the one who is going to be putting forward a proposal.

PN809

THE COMMISSIONER: No.

PN810

MR GINNANE: They need to have notice and a proper application needs to be made under section 113. It needs to be served if the union is to seek a variation. If the union is to seek a variation a formal document with directions as to service needs to be served on the parties. At the moment what's been served on the parties is your notice of listing that the Commission is acting under its own motion. Now, I think you had indicated that it's not the case that you would be proposing a form of variation.

PN811

THE COMMISSIONER: Well, I'm not advocating any result, the only reason it's called on is to examine the merits or otherwise as the notification clearly says.

PN812

MR GINNANE: So when the advocate rises and puts forward the form of variation that's being sought that can only be sought under section 113. The advocate can't act under section 33 we say.

PN813

THE COMMISSIONER: No, but I don't need an 113 application to consider CPSU1 as constrained by my notice, do I?

PN814

MR GINNANE: Well, if a variation of the award is being sought by the CPSU we say yes, they have to act under section 113. Section 33 doesn't clothe the CPSU with powers.

PN815

THE COMMISSIONER: No, it clothes the Commission with powers.

PN816

MR GINNANE: Yes, but this is a bit circular but what we understand is being sought by CPSU1 or whatever the document is, is a variation of the Public Service Award by the CPSU, that's what has to be sought under section 113 and if that's to occur that application needs to be properly identified in the sense that we need to know what is being sought so that we can get instructions about it, how it will affect Customs, how it may affect other interested arms of Government.

PN817

Now, I think as you know Commissioner because of some confusion about the listing there are issues about gaining instructions, only so far as Customs are concerned. There are a number of other Government agencies and departments that are also affected. So we say putting first things first if the Commission is to go down the path of considering arbitration and what it's going to be asked to do is to vary the award by the CPSU, the variation that's sought should be identified and served. Then we would ask that the relevant evidence for the purposes of a shorter rather than a longer hearing, points of the relevant evidence that's going to be called in support of the variation should be filed, not perhaps whole witness statements but the major points.

PN818

Then in a timely way and in an efficient way subject to arguments about jurisdiction, that evidence can be tested, we could call evidence, we would of course be the respondent, one of the respondents to this application and the Commission can then hear arguments about jurisdiction, discretion and merit. At the moment we're to some extent in a half-way position, we say it's not satisfactory where the Commission has instituted the hearing but the CPSU is apparently going to take the step of seeking a variation of the award under 113 and has tendered this document that we thought, we assumed with the form of words that it was proposing was going to later speak to, to be inserted in the award.

PN819

Now, life's not as simple as that with an award as important as the Public Service Award which affects not just Customs and 133 employees but can affect people in other agencies and other departments. So Commissioner, to summarise that we would say we modify our request that you rule on jurisdiction prior to Mr McKenney putting the submissions he wishes to put and we then secondly say, we do need to set quite clearly on the record what is occurring here.

PN820

THE COMMISSIONER: Yes, thanks Mr Ginnane. Mr McKenney, when will you be in a position to deal with the jurisdictional matter, when can you take instructions, is 2.15 too early for you?

PN821

MR McKENNEY: Well, Commissioner, yes in short response. Can I come to the issue of jurisdiction at the moment and discretion but I suppose it might be appropriate Commissioner, the union have tendered CPSU1, I know it said a draft variation, it's not clear to us as it won't be clear to the Commission as to whether that is in fact going to be the variation that is pursued because it said a draft variation. It's not clear to us as it won't be clear to the Commission I'm sure as to whether that is in fact going to be the variation that is pursued because it said a draft variation and we would endorse what Mr Ginnane says in relation to section 113. If this is the application that is to be made by the CPSU, and I say if, if that is the application to be made by the CPSU it is made in accordance with the Act and the rules.

PN822

Clause 5 of the APS Award, Commissioner, lists the parties to that award. There are a substantial number of union parties.

PN823

THE COMMISSIONER: They've been notified?

PN824

MR McKENNEY: I take the point from the discussion with Mr Ginnane Commissioner, as we apprehend rule 23(3) it is a matter of an applicant who seeks to vary an award to actually provide the details of that variation, sorry, details of that application and I don't need to remind the Commission about why such a rule would be in place, it obviously goes to procedural fairness issues. We don't know at this stage Commissioner nor will the Commission know what other parties may say about any application that is lodged by the CPSU and that's not just from the union parties Commissioner but also from the employer parties because as the Commission is no doubt aware from many years experience of dealing with the public sector, that isolated establishment allowances don't just apply within the Australian Customs Service but right across a range of departments and agencies.

PN825

So, Commissioner, we endorse what Mr Ginnane says, it would be appropriate in our view for the union to confirm, if that's the right term, that it is going to make an application to vary to do so in accordance with the Act and the rules and if the Commission is so minded once the application is lodged and served to make directions about, as Mr Ginnane says, some of the evidence that might be brought by the applicant and clearly Commissioner we would be able to in any directions that may be issued deal with issues of jurisdiction and discretion as well.

PN826

THE COMMISSIONER: When would you be in a position to argue jurisdiction? When can you get instructions on that point?

PN827

MR McKENNEY: Commissioner, I can seek to get instructions as soon as possible but whether that transpires and I get instructions is another matter but if that's the Commission's wish I will certainly endeavour to do so.

PN828

THE COMMISSIONER: Well, I will adjourn until 2.15 to give you an opportunity to seek those instructions to see whether or not you would be in a position to present argument as to whether the Commission has the jurisdiction to deal with the safety net application. If there are any other arguments that you - I withdraw the word, application. I've called the matter on at my own motion, I've apprehended a controversy between the parties that could be further part settlement of the industrial dispute that no doubt underpins the award. The CPSU have put forward what they say would be a resolution of the controversy, I've tended to narrow it to the Customs officers performing duties, parties who I understand should be notified have been notified, that's what the proceedings were all about. It's an old fashioned dispute in an arbitration, nothing too exciting about it.

PN829

To the extent that you need time to consider what arguments might be put I will hear applications at the appropriate time but I am interested to know the Minister's view as to the jurisdiction of the Commission and any arguments you might have as to whether or not I should proceed down this, any discretionary arguments as to whether I should proceed down this course or not. Now, I'm content to resume at 2.15, if you haven't been in a position to get instructions at 2.15 I would expect that you would have those instructions by 10 o'clock tomorrow.

PN830

MR McKENNEY: Commissioner, can I ask through you perhaps whether the union is going to make an application to vary the award?

PN831

THE COMMISSIONER: Certainly. Mr Rich?

PN832

MR RICH: All I can do is reiterate what you, Commissioner, put just then that our apprehension was that the Commission was acting under section 33. Section 33, on my reading of it, empowers the Commission to perform a function or exercise a power of its own motion. The Commission has listed this matter pursuant to that section to consider the merits or otherwise of varying clause 22.5 of the Public Service Award. Quite clearly we have put to you our view of what will resolve the dispute between the parties. In our view there's no need for us to make an application under section 113 for the Commission to be seized of the matter and to vary the award as it deems appropriate to resolve the controversy that led to the Commission acting on its own motion. That's our position.

PN833

THE COMMISSIONER: Thanks.

PN834

MR GINNANE: Just pardon us a moment, Commissioner.

PN835

THE COMMISSIONER: Of course, Mr Ginnane.

PN836

MR GINNANE: Nothing arising.

PN837

THE COMMISSIONER: I just want to make it absolutely plain for those present today that I have no view as to whether or not it's a good or a bad thing to put an allowance, no view whatsoever. The only issue that I'm concerned to do is to see whether or not it's proper and/or appropriate and within jurisdiction to consider the merits of the controversy between the parties and for that purpose I'll hear arguments.

PN838

I've heard some arguments from Mr Ginnane, I'll hear further arguments from Mr McKenney. If it's not within jurisdiction or not proper then I won't hear it. If it is within jurisdiction and it is proper then the merits would be considered and whenever anybody considers the merits there are normally two answers; you win or you lose. The Commission is guided by section 110 that talks about acting in equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms. I will adjourn until 2.15.

LUNCHEON ADJOURNMENT [12.03pm]

RESUMED [2.20pm]

PN839

THE COMMISSIONER: Yes, Mr McKenney?

PN840

MR McKENNEY: If the Commission pleases, prior to the luncheon adjournment you asked whether I'd get instructions in relation to whether the Minister would make any submissions about the jurisdiction of the Commission, I've got those instructions and the Minister won't be raising any jurisdictional objections in these proceedings.

PN841

THE COMMISSIONER: Thank you.

PN842

MR McKENNEY: Mr Ginnane I think wishes to say something about some matters, Commissioner, but I haven't yet dealt with what I think the Commission has already referred to as the discretionary considerations as to why it is or is not appropriate for the Commission to proceed to consider a variation of the award and I am happy to deal with those matters at the Commission's convenience.

PN843

THE COMMISSIONER: I'm content for you to deal with them in the way which you believe is appropriate. Whether or not it's a threshold matter is a matter for you. I'll hear from Mr Ginnane.

PN844

MR GINNANE: Could I just say, Commissioner, that we pursue our arguments as to lack of jurisdiction.

PN845

THE COMMISSIONER: Thanks, Mr Ginnane. Yes, Mr McKenney?

PN846

MR McKENNEY: Prior to the luncheon adjournment the issue was raised about the process as to how this matter is being dealt with. Over the luncheon adjournment I've had cause to think about that issue further and I want to put this to you that irrespective of the procedure that is adopted by the Commission to consider varying an award whether it be by way of its own motion or whether it's by way of a section 113 variation what I want to say is that if, as a result of whatever process is adopted, there ends up being a variation to the award that will require the Commission to presumably make an order to that effect that the award is varied in whatever terms may be made.

PN847

What I want to put to you is this; as a result of that the substantive rights of the parties to that award are affected and what I want to draw your attention to, and I don't know if you've got a copy of the APS Award?

PN848

THE COMMISSIONER: I hope so. Yes.

PN849

MR McKENNEY: In terms of what the Commission has raised as a possible variation to clause 22 of the award and it's confirmed by CPSU1 as to what the union would be seeking to vary, you may be aware that the award is divided into a main part and various attachments or appendices that apply specifically to specific agencies and there is a Customs specific attachment which is appendix I to the award.

PN850

THE COMMISSIONER: Just a moment, let me track it down first. Schedule A, Agency Specific Provisions; is it that?

PN851

MR McKENNEY: Yes, and I don't have a full copy of the award myself.

PN852

THE COMMISSIONER: No, I probably haven't either.

PN853

MR McKENNEY: I'm aware that there's an attachment I but I don't know that you need to go to the actual attachment, Commissioner, for the point I want to make. The point I want to make is that the consideration of varying clause 22 of the award isn't a part that, for want of a better term, applies generically across the Australian Public Service and as a consequence of that any variation to that part of the award has the potential or in fact more than the potential but will in fact bind all the parties - - -

PN854

THE COMMISSIONER: All agencies.

PN855

MR McKENNEY: All agencies and all the unions that are party to that award. So as I say irrespective of the processes adopted, the concern that we have relates to procedural fairness. What I would like to take the Commission to is a decision of the High Court which I think encapsulates the concern I'm expressing which is the Re Australian Railway Union and Others Ex parte The Public Transport Corporation which is a decision of the High Court of Australia and it's reported at [1993] HCA 28; 117 ALR 17; if I could hand you a copy of that decision?

PN856

Commissioner, I want to take you to page 23 of the report. This case concerned proceedings in the High Court that arose out of Commission proceedings where the Commission made a final award. You will see at line 25 and following on page 23 Commissioner that the relief that was granted by the Commission in that case was not relief sought by any of the parties to the application and that the unions had sought an interim award but the relief granted was a final award.

PN857

Now, that is by way of background Commissioner. The general principle that arises from that case is encapsulated at line 40 and following that says that:

PN858

The wide scope given to the Commission in determining the relief which it will give does not absolve it from an obligation to observe the rules of procedural fairness in exercising its arbitrarial function.

PN859

The Citicorp case is then referred to and stating that it is well settled that the Commission and then its predecessor was bound to follow rules of procedural fairness. Now, that led into a discussion about the duty to act judicially and a duty to hear and to allow parties a reasonable opportunity to present their case and a duty to consider the case put and moreover, Commissioner, at page 24:

PN860

In considering an application to afford a party a reasonable opportunity to allow his or her case to be put.

PN861

What I want to say Commissioner is that irrespective of what procedure is being adopted here it is appropriate and in fact put higher than that it is probably a duty on the Commission given what has been observed by the High Court to give those parties who aren't represented here, but who are party to the award, at least an opportunity to consider putting a submission about a possible variation to the award that they would become bound to if the award was so varied.

PN862

THE COMMISSIONER: Didn't I put them on notice with the terms of the 33 notification that that was - now to the extent that that has possibly broadened the scope of it, that was clearly not my intention as exhibited by the section 33 notice. My intention was to allow the ventilation of the controversy between these officers at Customs and Customs. Now, that may have consequential flow on effects which can be the subject of submissions but it wasn't my intention to affect the Forestry Commission if there be one.

PN863

MR McKENNEY: Yes, and this is no criticism of the Commission at all. What has happened is that the way events have proceeded today I mean no one necessarily envisaged the way things would occur this morning in terms of the proceedings or in fact that the Commission or the other parties who appear today were aware that the union were going to in fact submit a draft variation which, as it were, puts flesh on the type of the variation that the Commission may well consider and it would be our submission that for the opportunity to be a real one for parties to the award they would need to know in more detailed terms, which this CPSU one goes to, what type of variation might be being considered by the Commission.

PN864

I certainly accept Commissioner that the Commission has notified parties of its view that it may well consider the variation but if the duty to hear a party that is referred to by the High Court and the duty to allow them a reasonable opportunity - - -

PN865

THE COMMISSIONER: Is it the duty to hear, or duty to give an opportunity to be heard?

PN866

MR McKENNEY: Well, it probably goes beyond the latter, Commissioner. If you read the words at top of the page 24 of the High Court's decision, it is a duty to hear a party, is on one of the aspects of the duty to act judicially - - -

PN867

THE COMMISSIONER: That's if they want to be heard. I mean I can't compel people to attend or remain frozen if someone elects not to take up an opportunity to be heard.

PN868

MR McKENNEY: I accept that Commissioner but it would seem to us that if there is such a thing as CPSU1 or any other variation thereof that might be being considered that for the party to properly consider whether it should make a submission will be in a more informed state to do so and as the High Court point out in the following line:

PN869

Of course what is reasonable will depend upon the circumstances of the case.

PN870

Obviously that depends on the factual circumstances but we now have a specific variation that the Commission may well consider that has been put forward by the union so I think that the duty can't be understated and that part of the opportunity to respond is to understand what is being considered and with all respect, Commissioner, the notice that there may be a possible variation to clause 22 doesn't indicate to a party to the award what the nature of that variation may well be.

PN871

THE COMMISSIONER: No but it certainly must create some curiosity to the extent that somebody wishes to be heard they would come along. You are here Mr McKenney, you wouldn't have let such a notification slip idly by and pay no attention to it.

PN872

MR McKENNEY: But now Commissioner there is an opportunity for the Commission to answer some of the curious questions that may be asked by providing those parties with more detail as to what may be being considered. That is the submission we make about procedural fairness and - - -

PN873

THE COMMISSIONER: Well, what do you say should happen?

PN874

MR McKENNEY: Well, this is an interesting question Commissioner because - - -

PN875

THE COMMISSIONER: Thank you.

PN876

MR McKENNEY: - - - of the fact that of course we are responding to the Commission's own motion and as the Commission is well aware the procedure is in the Commission's hands as to what it may do but as Mr Ginnane and I were putting to you before lunch, I mean had this been a 113 application of course the text of the variation would be in the hands of the parties to the award to consider and it would seem appropriate to us Commissioner to - whether it is in terms of CPSU1 or some other variation that may be being considered, for such a variation to be distributed to the award parties.

PN877

THE COMMISSIONER: Would it make a difference? Let's say it is confined to Customs as I said to you I intended, does it make a difference as to what is sought given the exchange that occurred on the previous occasion? That is no way, no how is there ever going to be an agreement? I mean I haven't yet, but I am obliged to find at some stage that conciliation is at an end. Everything I have heard to date makes such a conclusion very easy. What consideration needs to be given to the terms of the proposed variation in circumstances where the employer has made it plain that they are against any allowance in its totality and that there can be no room for discussion and no room for compromise?

PN878

MR McKENNEY: Can I just have a moment Commissioner?

PN879

THE COMMISSIONER: Of Course.

PN880

MR McKENNEY: Commissioner, if that is the state of affairs, well, that is the state of affairs and you were told various things on the last occasion. The question that now arises Commissioner is that because of the consideration that the Commission is obviously going to give as to whether it varies the award then certain consequences flow from that. I don't think I am putting it any higher than that, that consequences flow from that. They are serious consequences potentially and if the award is varied substantive rights are effected to the parties to that award.

PN881

THE COMMISSIONER: No, there is no question about people not having the opportunity to be heard and to be heard fully. The only issue which is exercising my mind is time frames where that is appropriate and if confine it to this agency then is it a denial of natural justice if I say we start tomorrow morning. It might be seen as being a little too aggressive to ask them to start straight away but is it a denial of natural justice for me to hear the union on their proposition to my matter and then hear the employer following that?

PN882

It is not the type of circumstance where an application is made, the employer has to form a view, it comes out of the blue if you like, the employer has to form a view about the circumstances, consider a response, the Commission has to decide whether conciliation is at an end. This is a matter which has apparently agitated the minds of the parties for some time.

PN883

MR McKENNEY: My response to that Commissioner is, in trying to work out what is the appropriate way to ensure procedural fairness the situation may well be that if other parties to the award are made aware of what's being considered then they may have concerns about that application being made.

PN884

THE COMMISSIONER: Whether it applies to them or not because of the flow in consequences.

PN885

MR McKENNEY: No doubt that may well be a concern and they may well have a view, I am only speculating, Commissioner, I don't know but they may well have a view about a rate that's payable for particular types of duties that are performed, for example. If you look at CPSU1 - - -

PN886

THE COMMISSIONER: Yes, we've come up with an amount.

PN887

MR McKENNEY: Yes, I am speculating again. It may be exercising the mind of - - -

PN888

THE COMMISSIONER: It doesn't seem to be a random amount, $4.89.

PN889

MR McKENNEY: No, it doesn't. To be a bit perverse, Commissioner, it might be that other unions might think that that's too low and might want to say something about that or it might be that other employers, more probably the case, they may think they could be caught by such a clause if such a clause was to apply to them.

PN890

THE COMMISSIONER: Yes, I follow.

PN891

MR McKENNEY: So the duty of procedural fairness obviously depends on the circumstances but if there is something specific, not to the nth degree necessarily but something specific that can be considered by the parties to the award they are in an informed position to consider whether they respond or not and so what I urge the Commission to do and the procedure, of course, is in the hands of the Commission has to how it wishes to proceed but to be aware that as undoubtedly it is that duty and procedural fairness is stated as a duty. If it is going to have meaning in a real sense that the detail of what may be being considered or what may be being put not just by the Commission but what may be being put by the union is understood. For example, if the union decides to call evidence then there may be a desire by other agencies to cross-examine or make submissions about the evidence. It is speculation but that is because that's a consequence of those agencies and other departments not being aware of what it is that may be being varied in more specific terms.

PN892

Commissioner, that's what we say about procedural fairness. As to other issues of discretion we say that if the Commission were to proceed it would, with respect, be inconsistent with the focus given to enterprise bargaining in the Workplace Relations Act and the objects of the Act. The Commission would be very familiar with the objects contained in section 3 of the Act. Just to briefly remind the Commission of section 3B which refers to ensuring that the primary responsibility for determining matters reflecting the relationship between employers and employees rest with the employer and employees in the workplace or enterprise level.

PN893

We submit that if the Commission were to proceed to consider an award variation would be to act inconsistently with that object, particularly when regard is had to the role of awards and I will come to that and the industrial circumstances that the Customs Service now finds itself in and I will deal with that issue later. As to the role of awards, again, the Commission will be familiar with the objects in Part VI of the Act. If I could take the Commission to section 88A of the Act which sets out the objects of Part VI.

PN894

Two references in section 88A are important, Commissioner, in our submission: firstly, that awards act as a safety net of fair minimum wages and conditions of employment. I put it no higher at this stage, Commissioner, but it's not clear to us that a possible variation to the award to provide for an allowance for work carried out by customs officers performing duties that contain examination facilities is about an update of the award safety net.

PN895

Secondly and perhaps more fundamentally, Commissioner, we would say that contemplating the variation to the APS Award would not give effect to the object contained in section 88A(d) of the Act. This is because in our submission the proposed variation would not ensure that a variation to the award, to use the language of the Act, encourages the making of agreements between employers and employees at the workplace or enterprise level.

PN896

This is particularly so in this matter, Commissioner, given the existence of the Customs Certified Agreement, its terms and, in particular, the pending crystallisation of the obligation on the parties to that agreement to commence negotiations for a replacement agreement and you have already been told, Commissioner, that that requirement will come into being on 30 March 2004.

PN897

It is also noted that the safety net has already been established for the APS and includes, as I have mentioned earlier, a specific attachment dealing with the Customs Service which is Attachment I of the award. Again, I put it no higher than this at this point in time, Commissioner, but it is not obvious to us how the Commission's contemplation of a variation to the APS Award in the potential terms being considered would ensure the maintenance of an effective award safety net. It is not clear that the insertion of an allowance of the award is required given that the agreement deals comprehensively with allowances and other terms and conditions of employment.

PN898

THE COMMISSIONER: Couldn't I only form a conclusion upon that sort of submission after I've heard the merit? I raised with you earlier whether or not what you are putting is a threshold matter. Some of the issues you have raised seem to be arguments that can be raised in response to merit.

PN899

MR McKENNEY: Commissioner, I think it's fair to characterise part of my submission as relying on issues of merit but there are fundamental issues that we say are being raised about whether proceedings to consider a variation is appropriate given the objects of Part VI and particularly 88(8)(d) which I have taken the Commission to.

PN900

THE COMMISSIONER: Is it a 111(1)(g) application?

PN901

MR McKENNEY: I don't have instructions in relation to that, Commissioner, but I'm happy to - - -

PN902

THE COMMISSIONER: I'm not inviting you to.

PN903

MR McKENNEY: No, but I'm happy to obviously think about the way in which the argument is put.

PN904

THE COMMISSIONER: It sounds to me as if that's the tenor of the argument, that it's not in the public interest for me to hear the merit of the application or the merit of the controversy.

PN905

MR McKENNEY: I may need to take some instructions as to how the submission is put in terms of what relief may be sought by us at this stage of the proceeding but it's not just about those points of principle and public interest that are clearly raised by what's being put, Commissioner, as you've acknowledged but it's also the particular circumstances that Customs are in.

PN906

THE COMMISSIONER: Yes, you said you were coming to that.

PN907

MR McKENNEY: We would urge the Commission to give considerable weight to that. You have been taken previously to the terms of the agreement and you were told on 9 December about clause 21 of the Customs agreement.

PN908

THE COMMISSIONER: I'll just ask my associate to get it; I think I've left it on my desk.

PN909

MR McKENNEY: I don't have a spare copy, I'm sorry. Clause 21 of the Customs Agreement provides that the agreement constitutes a closed agreement instead of all matters for its duration and that for the duration of that agreement there would be no further claims that would increase labour costs except where consistent with the terms of the agreement. We do have spare copy, Commissioner.

PN910

THE COMMISSIONER: It's on its way.

PN911

MR McKENNEY: Thank you. In our submission it is appropriate to give full effect to that agreement that there would be no further claims to increase labour costs. The creation of a new allowance obviously has the potential to increase labour costs. Despite the fact that - - -

PN912

THE COMMISSIONER: If Customs is right about the agreement ousts the operation of the award it will have no effect.

PN913

MR McKENNEY: I was going to come to that, Commissioner, because I was anticipating what might be the Commission's response. Despite the fact that section 170LY of the Act provides that:

PN914

A certified agreement will prevail over an award to the extent of any inconsistency.

PN915

The consideration of a variation of the award would, in our view, not be consistent with the parties' intentions to not increase labour costs over the life of the agreement. What we say is that the parties clearly on its face in the agreement agreed to certain terms and conditions of employment and agreed not to alter the terms of that agreement that would have a specific effect, ie. increase labour costs.

PN916

We say it would be inconsistent for the Commission to proceed in terms of what the parties agreed to about how they would operate the agreement. I didn't put that quite succinctly but - - -

PN917

THE COMMISSIONER: So if such an allowance was granted and it permeated through the agreement contrary to the submissions made by the employer then you say that would act to increase labour costs inconsistent with the agreement?

PN918

MR McKENNEY: Well, it's inconsistent with the intention of the parties because the parties intended not to increase labour costs and I suppose that goes to another point, Commissioner, that given the terms of clause 19 of the agreement the APS Award is displaced by the agreement.

PN919

THE COMMISSIONER: Could I just ask you to pause for a moment. I might be wrong but my recollection was, and I can't put my hands on it, that the agreement comprehended that there would be wages and conditions set for these persons - - -

PN920

MR RICH: It's clause 12 I think, Commissioner.

PN921

THE COMMISSIONER: 12, is it - prior to the commissioning of the facilities. So I would have to reach the conclusion would I on that argument that - yes, there it is - the operation of clause 12 could not have led to an increase in labour costs?

PN922

MR McKENNEY: This is a question which arises frequently in my view about the operation of an agreement, how you read clauses together.

PN923

THE COMMISSIONER: Yes.

PN924

MR McKENNEY: The agreement has got to be read as a whole. There is nothing startling about that proposition but an interpretation that ensures that the clauses operate coherently together is one that would be preferred.

PN925

THE COMMISSIONER: And it's an exercise that you think I should undertake, namely look at the terms of the agreement and determine its proper operation in the exercise of any arbitral power or a consideration of any arbitral power?

PN926

MR McKENNEY: Commissioner, what it - - -

PN927

THE COMMISSIONER: Because that is clearly against the agreement of the parties that the Commission is specifically excluded from undertaking such an exercise.

PN928

MR McKENNEY: Commissioner, if I make two observations about that. The terms of clause 24 of course the Commission is referring to, what is referred to as the dispute mediation arrangements, I am aware from reading the transcript and I have had a look at the decision that Commissioner Richards made about the construction of clause 24 so the Commission has put a view about that.

PN929

What I would say, Commissioner, in the context of any potential exercise of arbitral power, and I would say there is nothing controversial about this, the Commission ought to have regard to all aspects that impinge upon the employment relationship and clearly - - -

PN930

THE COMMISSIONER: And it can take a view as to the state of the law.

PN931

MR McKENNEY: Yes, and there's nothing controversial about having regard to a major document such as an agreement that relates to the employment arrangements of the employees and the employer.

PN932

THE COMMISSIONER: Yes.

PN933

MR McKENNEY: Whether that then leads to the Commission being able to exercise powers under the agreement I don't intend to make any submissions about that matter.

PN934

THE COMMISSIONER: One expected to hear though an argument that says one shouldn't try and achieve through the back door what one can't do directly through the front door.

PN935

MR McKENNEY: Yes. Returning though to clause 12 which Mr Rich alerted you to a minute ago, in terms of going through that review process, and I think the state of the evidence was, and I think this was put to you by Mr Ginnane on the last occasion, that there simply was no agreement reached about these matters and as a consequence the clause didn't have any operation. If that's the case then that clause can operate in conjunction with clause 19 satisfactorily. The question I guess is if that wasn't the case and in fact there was some agreement reached how that would be implemented but I'm not here to make submissions about that.

PN936

THE COMMISSIONER: It couldn't be could it that the parties had by the operation of the no extra claims provision debarred themselves from reaching agreement?

PN937

MR McKENNEY: I don't think I'm in a position to respond, Commissioner, because - - -

PN938

THE COMMISSIONER: No, that's a matter for Mr Ginnane and Mr Rich.

PN939

MR McKENNEY: I think so, Commissioner, and they would need to make submissions but I can say on a general level and one that I think is supported by the Act that if there is an intention that's clear in the agreement then it ought to be given effect to.

PN940

THE COMMISSIONER: Yes.

PN941

MR McKENNEY: In that regard section 3E of the Act relevantly provides for parties to comply with the agreements they make.

PN942

THE COMMISSIONER: Yes.

PN943

MR McKENNEY: The other issue about clause 19 is that because the agreement displaces the award, the question is raised about the utility and workability of any award variation in any event and that should also be considered by the Commission on a discretionary basis as to whether it is appropriate to go down this path.

PN944

THE COMMISSIONER: Well, it doesn't absolve the Commission from maintaining effective and fair safety nets simply because they might not operate because of the existence of a certified agreement.

PN945

MR McKENNEY: Commissioner, we accept that the safety net, and consistent with the principles, can be updated. There may well be an issue, as I have flagged, about whether in fact what the Commission might be considering in a case such as this is about an updating of the safety net. That might be something that further submissions may be made about. But it is a question of the Commission having regard to the agreement.

PN946

THE COMMISSIONER: The principles provide for the creation of new allowances.

PN947

MR McKENNEY: Yes, principle number 5, Commissioner. I am familiar with that principle.

PN948

THE COMMISSIONER: I am embarrassed to say that I don't have the wage fixing principles, very rarely are they invoked.

PN949

MR McKENNEY: So, in the event that such a clause would not be in effective operation, that there would be some doubt about its utility and workability the Commission has referred in the context of these proceedings to the controversy between the parties. We would raise this, Commissioner, that in circumstances where the clause may not have the workability or the utility that doubt must be thrown upon the capacity of an award variation to resolve the underlying controversy. To resolve the dispute, if that is the Commission's view as to why it is actually going down the path of considering a variation.

PN950

THE COMMISSIONER: Well, there goes the dilemma in minimum rates awards.

PN951

MR McKENNEY: Other issues, Commissioner, about the agreement if I could turn to that. You have got issues as to the duration of the agreement and the timing of a replacement agreement. The agreement has a nominal expiry date in September of this year and these issues as to the duration and the timing for a replacement agreement are highly relevant to the Commission's considerations to how it would act consistently with the objects of the Act.

PN952

Clause 20, already referred to in terms of the six month obligation to recommence negotiations, can I make two observations about the effect of that clause in the context of the Commission's consideration of an award variation? Firstly, the agreement is obviously in the latter part of its operation of its nominal life. Secondly, because of that six month requirement for negotiation to commence the parties have indicated very clearly that it is there intention to soon be engaged in discussions about a replacement agreement.

PN953

It is respectfully submitted that the Commission's role should be to encourage not only compliance with clause 20 of the agreement but also if it is necessary to ensure that the parties commence a re-negotiation process that is conducive to the parties reaching agreement about terms and conditions of employment, including in relation to allowances. The subject of allowances on perusal of the Customs Agreement is dealt with in a comprehensive fashion, Commissioner, and there is no doubt that those issues may well be the subject of further discussion in the next round of bargaining. That is obviously speculation on my part but given the level of detail and the current agreement that is a fair assumption that that will be also an issue in the next agreement.

PN954

Can I also say, Commissioner, that there is a broader context within which APS Enterprise Bargaining operates. It is not unique to the Australian Public Service but particular relevance for departments and agencies. The document which the Commission has probably seen on other occasions which are called Policy Parameters for Agreement making in the APS, it should be noted that this document has been in existence for some time and guided APS departments and agencies such as the Australian Customs Service in the conduct of its workplace relations.

PN955

The central tenet as it is referred to in the policy parameters, or what is referred to as "The supporting guidance document" is the development of that direct employer/employee relationship. Applying that to the circumstances of this case it would be entirely consistent with that approach for the parties to deal with all terms and conditions of employment but, in particular, allowances. Be it an isolated established allowance or some other form of allowance.

PN956

Commissioner, you referred to the principles before. If this matter proceeds - I guess these issues are raised not as a high point at this point in time, but two issues might need to be addressed that I can identify in relation to the principles. Firstly, principle number 1 refers to the role of arbitration in the award safety net. The question needs to be asked - as I have already identified - as to whether the change that is contemplated is a change to the safety net.

PN957

It may also be appropriate, Commissioner, to consider - and for the Commission as currently constituted to consider - as to whether this matter should be dealt with by a Full Bench, consistent with principle number 10. There is also the issue which you identified about new allowances in the application of principle number 5. I raise those issues at this point as a subsidiary submission but they are issues that need to be considered for the Commission to be acting consistently with not only the Act but also its own principles.

PN958

In summary, Commissioner, what we say is that consistent with the Act it would be appropriate for the Commission not to proceed with its own motion in C2003/6971 but to recognise that consistent with the terms of the Customs Agreement the objects of the Act and the workplace relations system within which Customs operates that the matters the subject of the motion be considered within the context of the next enterprise bargaining round which will focus on having a replacement agreement by 30 September 2004.

PN959

We also say, finally, Commissioner, to refer again to clause 19 that the award being displaced by the Customs Agreement is a significant matter which throws doubt on the capacity of a variation of the award to resolve the underlying disputation. If the Commission pleases.

PN960

THE COMMISSIONER: Thank you. Mr Ginnane?

PN961

MR GINNANE: Commissioner, we support the submission that has been put by Mr McKenney. We also submit that the Commission should determine as a threshold issue that it is not appropriate in the exercise at its discretion to continue hearing this matter because a number of the threshold matters that I put this morning and which Mr McKenney has put this afternoon are important but discrete matters which do not depend on any evidence or merit but rather depend on the structure of the Act and the importance to be given to the parties negotiating their own agreements.

PN962

Now, Commissioner, underlying this whole process is the question of the utility of any variation to the Public Service Award of the character that the CPSU is seeking. On the one hand, in the course of argument, it has been suggested that if we are right, they have little utility. It might be said it would do no harm. That, however, it is clear I think from the submissions this morning from the CPSU that that is not their perception. Their perception is that if this variation were successful, then it would be anticipated that it would flow on to the relevant employees. Now, if that is the case, we say that to allow such a process to go on, whatever the Commission may have intended, in light of the CPSU indication, would be to undermine the agreement and the effect of the agreement that we have drawn attention to, coupled with the proximity of the next round of negotiations that Mr McKenney has emphasised

PN963

PN964

Whatever impression the Commissioner may have got from 19 December as to Customs' position in respect of the allowances, we clearly indicated this morning that the next round of negotiations are coming. A range of matters, including allowances, could be put on the table by the CPSU, but that Customs would want to respond to them in a packaged approach, an approach that took account of the interests of all aspects of Customs.

PN965

Could I indicate further to that, that as the CEF operations are now approximately one year old, if this matter was not proceeded with, Customs would give an undertaking to review the business model that applies to the container examination facilities and issues such as the current failure to meet through-put targets and negotiations could occur about the current working arrangements on a total package basis and those arrangements would be considered in that context and in preparation for the upcoming round of certified agreement negotiations due to commence shortly.

PN966

So we wouldn't want the Commission to think that the Customs Head was not willing to undertake a review of the CEF operations, and as I indicated this morning, it might be anticipated that the CPSU would be pursuing this question of the allowance as part of the next round of enterprise negotiations with Customs wanting to respond with a view that took account of the interests of all aspects of the service, but if we are right about the CPSU anticipating that this turn in the course of events, if successful, although only varying the award, would, so far as the CPSU is concerned, be expected to flow through to the conditions of the 133 employees.

PN967

Well, then one clearly would have an anticipation of doing through the "back door" to coin your phrase, what can't be done through the "front door", and if we are right about the interpretation that we give to the agreement - - -

PN968

THE COMMISSIONER: No, you misunderstood the observation. I wouldn't want you to - - -

PN969

MR GINNANE: I was coining it for the purposes of this submission Commissioner.

PN970

THE COMMISSIONER: Yes, but my use of the phrase related to the parties' specific rejection of a disputes procedure that allowed the Commission to determine the proper application of the agreement.

PN971

MR GINNANE: I understood that. I am coining that phrase for the purposes of what the CPSU would be achieving. It would be seeking to achieve, by way of variation to the award, something that can't be achieved if we are right, by variation to the certified agreement. Now, if we are putting it too highly, no doubt we will hear from the CPSU in reply about what purpose they would see in a variation to the award being achieved. We say it is being sought on the basis that as things have turned up during the course of today or in the course of the hearing on 19 December, the CPSU anticipates it is a possible avenue for achieving the allowance that he is not part of the certified agreement.

PN972

THE COMMISSIONER: Wouldn't it follow from their approach to the bargaining notice and intention to conduct industrial action that if the Award was varied to include the allowance, that no inconsistency arises and that it would apply. That must follow mustn't it?

PN973

MR GINNANE: No. What would follow is that the CPSU wanting to achieve what was indicated in the bargaining notice now takes the opportunity of seeking to vary the award, but with the same ultimate objective, and until such time as it is ruled on whether a demand for such an allowance could be the subject of protected action, we don't really know whether they are entitled to seek such a variation of the certified agreement or not.

PN974

THE COMMISSIONER: Is that a matter that should trouble me now?

PN975

MR GINNANE: It should, for the reason I have just put, that the CPSU is pursuing this matter now through an application to vary the award with the expectation that if that variation is successful an amount would be payable to employees. If we are right, no such payment could flow to employees because the certified agreement on our interpretation would supplant the award. We say that is a fundamental matter. The CPSU should articulate precisely what effect it sees a variation to the award having.

PN976

THE COMMISSIONER: For my purposes, does that matter? I mean it can be a matter for the parties to decide either through an application to the Federal Court or a court of competent jurisdiction as to what terms and conditions actually apply.

PN977

MR GINNANE: Yes.

PN978

THE COMMISSIONER: My focus, if I am to proceed, is simply - what is a fair and enforceable safety net?

PN979

MR GINNANE: It should matter, for the reasons Mr McKenney put. The reasoning that we see the CPSU adopting would undermine the agreement that has been reached between the parties and undermine the process of negotiation that has been reached and if, as is likely, in the absence of the Commission ruling, the parties still were at loggerheads about whether the certified agreement covered allowances or not in the sense we have discussed, there would be an increased likelihood of disputation if the award was varied and that would run counter to the whole object that the Commission seeks to achieve.

PN980

THE COMMISSIONER: But you don't need a dispute to talk about whether the Award or any agreement applies. You can make an application to the court.

PN981

MR GINNANE: I know, but at the moment there is no variation to the award. If the award is varied, we submit the likelihood of further industrial disputation is increased because we will still be maintaining that the certified agreement supplants the award.

PN982

THE COMMISSIONER: Sure.

PN983

MR GINNANE: The Union will be saying, "No, it doesn't".

PN984

THE COMMISSIONER: But you don't need industrial action in those circumstances. It would be - well, I wouldn't like to pre-judge it but it would be surprising when there is an avenue available, to go straight to the court to decide whether or not the award percolates through the agreement.

PN985

MR GINNANE: A problem doesn't currently arise. There is now, at the moment no issue other than the one as to whether protected action is available. If variation is sought, the issue as to what conditions apply in respect of allowances becomes heightened, so we submit that the Commission should rule on those threshold issues, the fundamental ones as to the effect the application would have on the objects of the Act in encouraging agreements between the parties and secondly, we support Mr McKenney's submissions about procedural fairness.

PN986

THE COMMISSIONER: I'm still having difficulty in understanding why, if the matter was arbitrated, and let us say for the purposes of debate you have got two options - either there is no merit and the answer is nothing, how does that impact upon the negotiations and, on the other hand, the award is varied, how does that impact upon the negotiations? When you look at a package principle, you already told me there is 133 out of 5,000.

PN987

MR GINNANE: Yes.

PN988

THE COMMISSIONER: The employer decides it is going to put up a package that overrides the allowance, well 133 votes out of 5,000 is not going to get anywhere.

PN989

MR GINNANE: It supplants the parties' right to negotiate about that issue in the coming round.

PN990

THE COMMISSIONER: No it doesn't. It is just the quantum.

PN991

MR GINNANE: Well, it is more than the quantum. It is the application of the allowance to particular sites where no allowance is currently paid.

PN992

THE COMMISSIONER: Yes.

PN993

MR GINNANE: That represents an important alteration in the safety net provisions applying to particular employees in Sydney and Melbourne.

PN994

THE COMMISSIONER: But it is inherent isn't it in the system under which we operate that the safety net award will be the basis on which the parties negotiate? It is not a concept where you decline to make a safety net award to allow the parties a clean book in terms of negotiation.

PN995

MR GINNANE: There is no clean book here. They have got an existing agreement, they are negotiating about that. We say the parties should to be left to negotiate about all issues in the coming round of negotiations.

PN996

THE COMMISSIONER: Do I set the award aside? That gives you what you ask for.

PN997

MR GINNANE: No, you don't set the award aside because the current agreement supplants the award and so does the relevant section of the legislation I referred to.

PN998

THE COMMISSIONER: Yes, but to the extent a safety net award exists then it inhibits you in negotiation on that line of argument.

PN999

MR GINNANE: No what we say is that the safety net award at the moment is there when we are so close to another round of enterprise bargaining these sort of matters should be left to the parties.

PN1000

THE COMMISSIONER: Well, why wouldn't equally it be appropriate for me to tell the parties what the safety net is so that they go into the negotiations with open eyes, so that they know what to negotiate?

PN1001

MR GINNANE: Because they know what the safety net is at the moment and the question of the appropriate allowances is already governed by the agreement at the moment and any alterations to that should be the subject of agreement between the parties. That is how we put the submission.

PN1002

THE COMMISSIONER: Yes, I follow you.

PN1003

MR GINNANE: Thank you Commissioner.

PN1004

MR McKENNEY: If I may just before Mr Rich's responds, can I just address two matters just by way of supplementation - - -

PN1005

THE COMMISSIONER: That's all right, I'll hear everybody to exhaustion and I won't tell you whether it is yours or mine.

PN1006

MR McKENNEY: In that decision I handed up in the Australian Railways Union v The Public Transport Commission, can I just also refer to page 25 of that decision. There is one other extract I would like to take the Commission to. It about line 15 in which the court indicates that one aspect of the requirement to act judicially is that the parties be given an opportunity to put their case. Just to emphasise the words, that is no mere procedural or statutory requirement Commissioner. The High Court obviously viewed that as a fundamental issue. I won't repeat the submissions I have made, but in terms of parties being given an adequate opportunity to understand what it is that might be being considered - - -

PN1007

THE COMMISSIONER: Doesn't it also go the other way? I mean both you and Mr Ginnane have asked me to refuse to hear the case that wishes to be put by the CPSU.

PN1008

MR McKENNEY: The basis of those submissions Commissioner - - -

PN1009

THE COMMISSIONER: Is that it is not in the public interest.

PN1010

MR McKENNEY: - - - is that it is not consistent with the Act. It is not consistent with the agreement. There is a whole collection of strands to the arguments Commissioner that we have put this afternoon.

PN1011

THE COMMISSIONER: No, I understand.

PN1012

MR McKENNEY: I wanted to just refer that because it is put more highly - - -

PN1013

THE COMMISSIONER: Neither of you have put that I should as a threshold matter refrain from further hearing the matter because it is not in the public interest. It appears to me from the submissions that I have heard, they are important submissions, but integral to the whole case as to merit or otherwise. They don't seem to me to be submissions of such a threshold nature pursuant to 111(g) that I should turn to the CPSU and say, the game is over, the case put by the employer is so persuasive that I won't even hear you on any merit associated with the argument.

PN1014

Now, what you may have put at the end of the day might influence the exercise of discretion depending upon the merits or otherwise but is it of such a character that I shouldn't even hear the grievance and why these people say that the safety net order comprehend an allowance?

PN1015

MR McKENNEY: There are various responses to that Commissioner. One important response is that, and I don't think that this should be lost sight of, is that there is a vehicle that the parties contemplate to deal with the negotiation of terms and conditions of employment - - -

PN1016

THE COMMISSIONER: And this led to a strike and it led to an application pursuant to section 127 that matters were so serious that Australia's border protection was in danger.

PN1017

MR McKENNEY: Well, the situation Commissioner with respect - - -

PN1018

THE COMMISSIONER: That was the parties dealing with the matter.

PN1019

MR McKENNEY: But the situation Commissioner, with respect, as at 13 January 2004 is that that is no longer the case, that there is any threat of industrial action because there is no bargaining period and therefore no protected action.

PN1020

THE COMMISSIONER: Well, there is no threat.

PN1021

MR McKENNEY: So the situation is that you've got an agreement without repeating all the submission, but you've got an agreement that commits the parties, and neither party is demurring from the obligation that they are under to start negotiations in March. No one has said that the issues that may go to the underlying controversy, as you have referred to it Commissioner, cannot be dealt with in the that context, they can.

PN1022

THE COMMISSIONER: In doing this am I allowed to look at the historical context then and say, what does establishing appropriate rates and conditions ahead of commissioning those facilities mean? Am I allowed to look at that and say well the parties have put something in there, what has been the experience and should I in looking at the experience use that as a guide to the exercise of discretion as to whether I should proceed to consider the merits? Because you have asked me at this stage, you say that there are just so many threshold matters having to do with the agreement, that I shouldn't consider the merits.

PN1023

MR McKENNEY: I'm not sure that I've got instructions to respond to that particular question Commissioner. It might be appropriate for Customs if Mr Ginnane so wishes. I wonder if I may Commissioner, I'm conscious of the time and I understand the Commission has got another matter.

PN1024

THE COMMISSIONER: It seems that during this period that people aren't available notwithstanding the urgency of the application nobody can come at 4 o'clock so we are free.

PN1025

MR McKENNEY: But some of the issues that the Commission has raised this afternoon, I wouldn't mind a brief opportunity to talk to my clients about - - -

PN1026

THE COMMISSIONER: Of course and I need to hear from Mr Rich and Mr Rich needs to consider the submission made by Mr Ginnane in relation to the undertaking he gave.

PN1027

MR GINNANE: I offered to give.

PN1028

THE COMMISSIONER: Offered to give, yes.

PN1029

MR McKENNEY: And the other thing without wanting to provoke an extensive debate about this matter Commissioner but in terms of the award, I was involved in the simplification of the APS Award back in 1998 - - -

PN1030

THE COMMISSIONER: Yes, you have my sympathies.

PN1031

MR McKENNEY: - - - and I suppose when you say in the exchange held with Mr Ginnane about, you can get rid of the whole award, I know it was put as part of an argument but the reality is that without telling the Commission what the nature of that simplification process was, it was about establishing what is the safety net - - -

PN1032

THE COMMISSIONER: Yes, indeed, but that is not fixed in time forever.

PN1033

MR McKENNEY: Of course not Commissioner but it was established comparatively recently in relation to the Australian Public Service.

PN1034

THE COMMISSIONER: And that's a merit argument, undeniable.

PN1035

MR McKENNEY: Well, Commissioner, I'm not sure what the next step of this proceeding is. Mr Rich hasn't been heard in relation to what I've said or Mr Ginnane has said but we would like the opportunity to consult with my clients about whether any application is made beyond what is put today.

PN1036

THE COMMISSIONER: I understand. Mr Rich?

PN1037

MR RICH: I'm not sure given Mr McKenney's submissions to you then about - - -

PN1038

THE COMMISSIONER: Well, do you want to adjourn until 10 o'clock tomorrow?

PN1039

MR RICH: It might be an appropriate thing to do. Before we do that, I mean it is simply so that then Mr McKenney can take instructions as to what application he is putting before you I can then respond more properly in full knowledge of what I am responding to. But also if I could have the undertaking repeated so that I know what I am taking instructions on at least?

PN1040

MR GINNANE: It is the offer of an undertaking but it is conditional upon these proceedings ceasing and that is that Customs would undertake its set circumstances to review the Container Examination Facility business model including the current failure to meet through-put targets and negotiations about working arrangements at the CEF on a total package basis would be considered in that context and in preparation for the certified agreement negotiations due to commence shortly.

PN1041

If Mr Rich wanted any further and better particulars of that undertaking we would be happy to have those negotiations with him and perhaps that could occur outside the context of the formal hearing.

PN1042

THE COMMISSIONER: Yes, of course. Now, Mr Ginnane, do I take it that you have asked me as a threshold question to rule that I should not entertain merit arguments by the CPSU on the detail, for example, of CPSU1 because of the existence of the certified agreement, the structure of the Act which encourages bargaining and the fact that on your submission there would be no utility in varying the safety net award because it wouldn't apply.

PN1043

MR GINNANE: All of those plus the pendency of the next round of enterprise bargain, yes.

PN1044

THE COMMISSIONER: The next round of enterprise bargain.

PN1045

MR GINNANE: Yes, Commissioner, as I indicated earlier we don't ask you to rule that you don't have jurisdiction.

PN1046

THE COMMISSIONER: Yes, I follow.

PN1047

MR McKENNEY: Commissioner, just for the benefit of - - -

PN1048

THE COMMISSIONER: And you agree with that?

PN1049

MR McKENNEY: Not quite Commissioner. I wanted to say I've asked for time to consider, to get instructions on some matters that have been raised this afternoon. I don't want to raise expectations that any other application is going to be made, just so Mr Rich is aware of that, I just want time to consult my client about that. In terms of Mr Ginnane's request for a ruling on those matters I wonder if I could take the opportunity over the adjournment to consider what our position is in relation to that but can I add the sort of matters that you identified with Mr Ginnane are the sort of matters that are obviously raised by our submissions as well and I will just add this Commissioner, that it's not just the existence of the certified agreement but it's the terms of that certified agreement. I assume that may have been encompassed in what you were referring to there Commissioner but the terms of the certified agreement - - -

PN1050

THE COMMISSIONER: Now, it's the terms of the certified agreement but particular emphasis, and I think Mr Ginnane raises the same point, on clause 21, the closed agreement.

PN1051

MR McKENNEY: Yes, and indeed the other matters that I took you to as well, Commissioner, clause 19 and those sort of matters.

PN1052

THE COMMISSIONER: But that's the proposition that is about to be renegotiated.

PN1053

MR McKENNEY: Well, yes, what I'm saying Commissioner is that all of the terms specifically referred to I think are relevant to your consideration but I appreciate the opportunity to consider some issues overnight and then I will report to the Commission tomorrow morning.

PN1054

THE COMMISSIONER: Of course and in case anybody doubts I haven't yet found conciliation to be at an end and I've indicated a preliminary view that it is hard to see that it's not but I might be disabused of that. I will adjourn until 10 o'clock.

ADJOURNED UNTIL WEDNESDAY, 14 JANUARY 2004 [3.30pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #G6 ORDER UNDER SECTION 127 OF THE WORKPLACE RELATIONS ACT PN644
EXHIBIT #CPSU1 PROPOSED DRAFT VARIATION TO THE AWARD PN725
EXHIBIT #CPSU2 LETTER ADDRESSED TO MS ANNWYN GODWIN, AUSTRALIAN CUSTOMS SERVICE PN784