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Australian Industrial Relations Commission Transcripts |
AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825
Level 10, 15 Adelaide St BRISBANE Qld 4000
(PO Box 13038 George Street Post Shop Brisbane Qld 4003)
Tel:(07)3229-5957 Fax:(07)3229-5996
TRANSCRIPT OF PROCEEDINGS
AUSTRALIAN INDUSTRIAL O/N 3208
RELATIONS COMMISSION
DEPUTY PRESIDENT IVES
C2003/5870
SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES
ASSOCIATION
and
EAGLE BOYS PIZZA and OTHERS
Notification pursuant to section 99
of the Act of a dispute re roping-in
award
BRISBANE
10.08 AM, TUESDAY, 24 AUGUST 2004
PN1
MR A. ROGERS: I appear for the Shop, Distributive and Allied Employees Association, and appearing with me is MR J. RYAN.
PN2
MR G. BLACK: I have with me with MS M. GOY, appearing for the respondent franchisees - Eagle Boys franchisees in these matters, your Honour.
PN3
THE DEPUTY PRESIDENT: Yes. Thanks, Mr Black. Look, just before we get under way, just a couple of housekeeping matters. I think - I don't know what the parties had in mind but I would think it's probably appropriate if we, after any very brief opening that Mr Rogers wants to make in support of his application that we then go straight to witness evidence and save the submissions until - the major part of the submissions until the end. I intend to adjourn for lunch at 12.30, that being okay as far as the parties are concerned?
PN4
MR ROGERS: Thank you, your Honour.
PN5
THE DEPUTY PRESIDENT: And I don't know, really, exactly what time this is going to take. I guess it, to a large extent, hinges upon you, Mr Rogers, in - as far as cross-examination of the witnesses are concerned, but I would prefer if it's at all possible to finish no later than lunchtime on Thursday. So perhaps if we can just keep that in mind.
PN6
MR ROGERS: Thanks. Could I just say a couple of things, Deputy President, about that?
PN7
THE DEPUTY PRESIDENT: Yes.
PN8
MR ROGERS: The first thing is I would not anticipate being very long with most of the witnesses. In the end, their evidence is of a similar quality. It doesn't - if you've had an opportunity to read the witness statements - - -
PN9
THE DEPUTY PRESIDENT: Yes.
PN10
MR ROGERS: - - - they don't vary much one from the other, and it's not as if I will be on a lengthy forensic exercise dealing with the evidence they've given. For that reason I expect we will finish well before lunchtime on Thursday. We may well finish tomorrow. That's - sorry, subject to my friend. That's the first proposition I make.
PN11
The second is this: there was a document served on ourselves last Friday by my friend, and I think a copy was sent to the Commissioner - an analysis of some awards. Since that time I've had the opportunity to speak with Mr Ryan about the matter. We will be putting a slightly different analysis upon the awards, and it can be done by way of submission but it's occurred to me that it would be more appropriate, given Mr Ryan's expertise in the matter, for him to prepare a statement setting out the reasons we differ from the analysis applied; serve that on my friend hopefully - or, as quickly as possible and then open Mr Ryan up to cross-examination. I can do it by submissions but it will mean leading the Commission through matters upon which Mr Ryan is far more familiar than I and more capable of giving a cogent and coherent analysis.
PN12
The third matter is strictly a housekeeping matter. As at Friday I had no authorities I wished to refer the Commission to. Having considered the matter more fully I have some. I have copies of those. The Commission won't need to extract them and I'll perhaps give those to your Associate at lunchtime, Deputy President.
PN13
THE DEPUTY PRESIDENT: Yes.
PN14
MR ROGERS: And the fourth matter is, I hadn't proposed to open because at the moment we're still at the 111(1)(g) phase. It's for my friend to establish that an award doesn't need to be made so we can move to the evidence, unless he wishes to open on that point. He carries that onus. Unless my friend wishes to open we can move to the evidence quite promptly.
PN15
THE DEPUTY PRESIDENT: Yes. Well, I suppose it's an arguable point as far as who opens is concerned. The application is an application by the SDA for an award to be made. There is opposition to that on the basis that - as I understand it, 111(1)(g) which is the public interest. I would still say that it's arguable that the initial application - - -
PN16
MR ROGERS: Indeed. Indeed. I had not proposed to open.
PN17
THE DEPUTY PRESIDENT: No. Well, that's fine. I don't - I was just going to give you the opportunity should you wish to make a brief opening statement, Mr Rogers. If that's not - if you don't consider that necessary, then that's fine with me and we can move straight to witness evidence. Is there anything that Mr Rogers has said, Mr Black, that gives you any difficulty, particularly with respect to the statement that's envisaged from Mr Ryan, recognising that that's a late eventuality?
PN18
MR BLACK: Your Honour, I suspect not, but in saying so I take it that what Mr Ryan will be doing will be perhaps drawing attention to some corrections that ought to be made to the material I filed. The material that was filed was an attempt to summarise the key conditions in a range of awards applicable in the fast food industry across - awards and agreements applicable across the industry in Australia. If it went beyond a mere repeating of a provision of a particular instrument and went into some explanation as to why these provisions were included or giving a particular perspective on the matter, then I may have a different view. But, if it's purely an exercise of ensuring that the material has been correctly extracted from the instruments, then there's no difficulty with that. And then, ideally, we ought to be able to agree on the contents of such a document, one would think.
PN19
THE DEPUTY PRESIDENT: Yes. Well, I understand - as I understand it, it's a response to the material that you've filed, Mr Black. Mr Rogers, have you got anything further on that?
PN20
MR ROGERS: Yes. I don't want to catch anyone unawares. It would go further than simply being a confirmation or a departure from the extracted analysis. It actually brings a slightly different analysis to the matters. I mean, among other things it is, we would say and we do say that the analysis brought by friend compares apples with pears. Mr Ryan's, by way of response to that, will be, to use the same analogy, compare apples with apples. But I don't wish to go into detail because I'm not fully on top of it at the moment but hopefully by the end of the day I shall be, and hopefully - I don't anticipate my friend will be caught in any difficulties. If he is, of course - - -
PN21
THE DEPUTY PRESIDENT: Well, he's free to object, I guess, at the time.
PN22
MR ROGERS: Yes.
PN23
THE DEPUTY PRESIDENT: So I think at this stage we will leave it at that and go forward on the basis that you've suggested.
PN24
MR ROGERS: If it please the Commission.
PN25
THE DEPUTY PRESIDENT: So am I to understand you don't wish - there's nothing you wish to say by way of opening?
PN26
MR ROGERS: No.
PN27
THE DEPUTY PRESIDENT: Thanks, Mr Rogers. Mr Black?
PN28
MR BLACK: Yes, your Honour. I'm happy to immediately lead evidence, your Honour. There is one matter. I am assisted by Ms Goy, who is in the courtroom and who will give evidence in this matter. As a matter of scheduling, ideally she may have given evidence first but our priority is to get the witnesses through that have travelled some distance or from interstate to be here. So, in those circumstances, I have asked Mr Rogers whether he would agree to Ms Goy remaining in the courtroom during the calling of the other evidence and he has said he has no objection to that proposal, your Honour, so seek your indulgence as well in that regard.
PN29
THE DEPUTY PRESIDENT: Yes, and aside from Ms Goy, I'll make the usual order for the exclusion of witnesses even though I note that there are none currently in the courtroom. Yes. Go ahead, Mr Black.
PN30
MR BLACK: Thank you. In those circumstances I now call Mr Rollings to give evidence in this matter.
PN31
MR BLACK: Mr Rollings, could you indicate to the Commission whether you prepared a statement in this matter?---Yes, I have.
PN32
I seek leave of the Commission to approach the witness. Could you indicate for the Commission that that is a true and correct copy of the statement you've prepared?---Yes, it is.
PN33
And would you confirm that you've signed that statement?---Yes, I have.
PN34
I now seek to tender the statement, may it please the Commission.
PN35
THE DEPUTY PRESIDENT: Yes, I assume that's in the same form as that which was provided in the materials to the Commission, Mr Black?
PN36
MR BLACK: It is, your Honour.
PN37
PN38
MR BLACK: Thank you. Your Honour, I have no additional matters for this witness.
PN39
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN40
MR ROGERS: Mr Rollings, for how long have you been engaged in the pizza industry?---Approximately 9½ years.
PN41
And what were you doing prior to that?---I was an electrician.
PN42
And have you only been engaged with Eagle Boys or you were engaged in the pizza industry in some other capacity before you were engaged with Eagle Boys?---No, only Eagle Boys.
PN43
And do I understand from your statement - you've said that you've been in the industry for 9½ years. You say you had operated the city store at Tamworth for 6 years. What were you doing for 3½ years before that?---I owned - I originally put a shop in in Muswellbrook in New South Wales and then I bought the city shop 2 years after that - 3 years after that.
PN44
And you no longer operate the Muswellbrook - - - ?---No, I sold - it's been sold.
PN45
When you say shop the Eagle Boys shop?---Yes, the Eagle Boys shop. Yes.
PN46
And when you operated the Eagle Boys shop under what industrial regulation did you operate?---We've run under our current certified agreement for - approximately the last 6 to - probably 6 years.
PN47
Right. Well, 3½ years before that you were at Muswellbrook?---Yes.
PN48
What was the industrial regulation that you operated under there?---The - we originally started - it was a New South Wales Shop Employees Award.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN49
Right. And you operated under that for the full 3½ years?---As far as I can remember about 1 to 2 years into the - owning the Muswellbrook shop we entered into the enterprise bargaining agreement. I can't remember the specific year.
PN50
When you say the enterprise bargaining agreement that was different from the certified agreement?---Sorry, I meant the certified agreement, yes. Yes.
PN51
From where did you get the expression enterprise bargaining agreement?---I don't know. I just - yes, got confused with the two, yes.
PN52
You've heard the expression enterprise bargaining agreement before?---Yes.
PN53
Okay. Do you know where you heard it?---No. I couldn't tell you off the top of my head. I've just - I've just heard it, yes.
PN54
Now, did I understand you to say you had a certified agreement at Muswellbrook or only when you started at Tamworth?---We had one at Muswellbrook.
PN55
All right. And it operated, what, for a short time, did it?---It started - I can't - like I said I can't remember the exact year but it was probably around - I opened Muswellbrook in '95, so it was probably '96 to '97 we entered into like an agreement.
PN56
And when you were operating the Muswellbrook store - - - ?---Yes.
PN57
- - - how did you come to enter into a certified agreement?---The whole of Eagle Boys - it was put together with our - with head office.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN58
Right. And was that because head office approached you and suggested that you should have a certified agreement?---Yes, as far as I knew that's what happened.
PN59
Right. Now, did you draft the certified agreement that operated at Muswellbrook or did somebody else draft it?---Somebody else drafted it.
PN60
And when I say somebody else - - - ?---RAQ, yes.
PN61
RAQ, which is what, sorry?---That's - - -
PN62
The NRA perhaps?
PN63
MR BLACK: We were with the RAQ?
PN64
THE WITNESS: Sorry, back then it was the RAQ.
PN65
MR BLACK: The pre-existing name was the Retailers' Association of Queensland.
PN66
THE WITNESS: Okay, yes, sorry.
PN67
MR ROGERS: Deputy President, I will retract.
PN68
THE DEPUTY PRESIDENT: Yes, the acronyms confuse me from time to time too, Mr Rogers.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN69
MR ROGERS: It's a common problem when you're out in the field for a while.
PN70
So I don't say Mr Black personally, but it was through Mr Black or someone in his - - - ?---Yes, that's right. Yes.
PN71
And when you proposed when you were at Muswellbrook to make the certified agreement how did you negotiate that with your employees?---Well, we went through the - just the voting process.
PN72
When you say "we", who is "we", sorry?---Myself and my employees I had at the time. There was a voting process put together by - or the RAQ at the time. There was like a process we were given to - you know, to get the whole thing, you know, working. You know, get it working.
PN73
And when you say it was a voting process put together by RAQ I take it that you weren't - your store wasn't a member of the Retailers' Association of Queensland?---We were, yes.
PN74
You were?---Yes.
PN75
Even operating in New South Wales?---Yes.
PN76
When you say you were a member do you mean you were a direct member or you were a member through Eagle Boys?---No, we had our own membership.
PN77
Right. Now, when - I will just take you back to a question I asked you a little while ago. You said sort of head office when you sort of said RAQ suggested the certified agreement?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN78
Do you remember whether you - I'm sorry, I withdraw that. Did you receive notification or, at least, advice that you might like to get a certified agreement as a sort of an individual thing or was there a circular letter sent out to Eagle Boys' franchises?---It was generally - it was sent out to all the franchises saying whether you - stating - everyone whether we would like to go onto that at the time.
PN79
Right. Now, what was the attraction to you of a certified agreement at the time?---The main attraction for it was the award - it had nothing to do with delivery drivers. It was too - it was a very grey zone with our pizza delivery drivers.
PN80
Right?---And we needed an award which could cover us or give our drivers and ourselves better - much more clarity - clarity in the whole thing.
PN81
Now, for that reason - sorry, I withdraw that. You considered at the time that the New South Wales State Award, the one that - - - ?---Yes.
PN82
- - - you worked under, had a deficiency which you were keen to have addressed?---That's right, yes.
PN83
And were you aware or were you not aware that you might have been able to approach - enter into an agreement at a State level? Do you understand what I mean by that? I'm not trying to confuse you?---Yes. That's right. No, at the time all that we were aware of was - was the agreement which we were currently undertaking.
PN84
In any event you embarked upon the course of getting a certified agreement?---Yes.
PN85
And you - to use the vernacular - you went Federal. Do you know what I mean by that?---Yes, as far as I knew the agreements we were doing at the time and with the ones we're still under were on a State basis anyway. Like, they are a bit different per State with - - -
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN86
THE DEPUTY PRESIDENT: Do you mind just elaborating on that for me?---Yes, sure. Yes, the - - -
PN87
MR ROGERS: What do you mean they were on a State basis?---Well, as far - where - like our new award which we're operating on at the moment is perhaps, you know, a little bit different to Queensland's or a little bit different to Western Australia.
PN88
THE DEPUTY PRESIDENT: The content of the agreement - - - ?---Yes.
PN89
- - - might vary from State to State?---Yes. That's right, yes.
PN90
But you're not referring to the certification of the agreement?---No, that's right. Yes, just the - yes, just the bits and pieces with the content.
PN91
There was never a suggestion - I'm sorry, Mr Rogers, I just wanted to clarify for my own purposes - - -
PN92
MR ROGERS: Yes.
PN93
THE DEPUTY PRESIDENT: There was never a suggestion that the agreement that you were entering into was going to be certified in the State jurisdiction?---No, not - as far as I know. I guess - - -
PN94
It was always envisaged it would be a federally certified agreement; is that correct?---As far as I know, I guess, with the no disadvantage test we thought we were going off - it was getting taken off the New South Wales Shop Award, and when we were going for it, like, it wasn't - obviously I'm not an expert and I'm not 100 per cent sure but it was my understanding that it was off a New South Wales award.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN95
Yes. I'm not so much interested in that. You were circularised, you said, by the Retail Association at the time of Queensland, suggesting that you might like to enter into a certified agreement with your employees?---Yes.
PN96
Was it put to you at any time - what was put to you in respect of the certification of that agreement?---It was - it was my understanding it was a State-based thing.
PN97
It was going to be certified in the State jurisdiction?---Yes, of New South - yes, it wasn't a national. Yes.
PN98
Thank you. I'm sorry, Mr Rogers.
PN99
MR ROGERS: Thank you, Deputy President.
PN100
Do you understand, Mr Rollings, the distinction between the State industrial relations system and the federal industrial relations system?---No.
PN101
And could I suggest to you that when you say you thought it might have been going to be registered in the State system, and I don't mean this discourteously, you really - now you really don't know - - - ?---Well, that's right, yes.
PN102
- - - what was put at the time?---Yes, that's right.
PN103
Now, in any event, and take it from me that the agreement that you got was certified in the Federal Industrial Relations Commission which is where the Deputy President is sitting today?---Yes.
PN104
You've mentioned the no disadvantage test?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN105
Sorry, you've got to answer questions. The tape is not amplified. Did you understand the no disadvantage test meant, firstly, that it wasn't a no disadvantage test for your benefit?---That's for the employees.
PN106
Yes?---Yes, that's right.
PN107
To ensure that, as you moved from the New South Wales State award to the federal system, that the employees would not be disadvantaged?---Yes, that's right.
PN108
And did you make the application yourself for the certification of the agreement?---I made the application through the Retail Traders' Association.
PN109
The New South Wales RTA or the RAQ?---I guess if we're talking now - we've just done a new one now. Are we talking - - -
PN110
I'm still in Musswellbrook at the moment?---You're still in Muswellbrook, well - sorry - it would have been the RAQ back then.
PN111
And when you did that, do you remember if you swore or made a statutory declaration to the effect that the employees suffered no disadvantage from the change?---Yes. We had to get it signed off with a JP or a solicitor at the time.
PN112
Yes. And that meant that you had to make a declaration - you tell me if this wrong - you made a declaration that employees would not be disadvantaged?---Yes.
PN113
And it was witnessed by a solicitor or a Justice of the Peace?---Yes, that's right.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN114
Now, your mention in paragraph 1 of your statement that you were the owner/operator of two franchisees; is that right?---Yes, that's right.
PN115
Without being too technical, can I assume that what you mean by that is that you are either the, or one of the directors of the company which is the owner/operator of a franchise. Is that not the situation?---Yes, that's right. I'm the director of a - the shelf company that owns the Tamworth City and the Tamworth South Eagle Boys.
PN116
Well, what's the name of that company?---Rollings Investments Pty Ltd.
PN117
And I take it it's, to use the vernacular expression, a two dollar company?---That's right, yes.
PN118
And who are the shareholders in Rollings Investments?---Myself, my wife Renee Rollings and my father who's got a small shareholding.
PN119
And the directors?---Myself and my father.
PN120
And I take it that either yourself or your father is the company secretary?---Yes, that's right. Yes.
PN121
Now, do you work in the outlet, or either of the outlets?---Yes, I work between the two outlets, yes, wherever I'm needed.
PN122
And what about your father and your wife?---No.
PN123
And do you have any children who work for - - - ?---No, they're a bit young at the moment - four, two and three months.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN124
Well, they maybe are too young?---Yes.
PN125
THE DEPUTY PRESIDENT: Well, in a couple of years, Mr Rollings?---That's right. They're too young to get a tax file number just yet.
PN126
MR ROGERS: Now, are you what's called the nominated manager of the operator?---Yes, I'm the nominated - I guess it's - the term's franchisee, I presume, for the two outlets. Yes.
PN127
Well, can I put this to you?---Sure.
PN128
Rollings Investments is the franchisee?---Yes.
PN129
Eagle Boys - the corporation behind Eagle Boys is the franchisor?---Yes.
PN130
And you are the nominated manager?---Yes. In that case I'd be the - yes, correct. Yes.
PN131
Now, you mentioned earlier that one area and, if I understand, the main area of concern to you with the Shop Employees State Award was that it had no provision for delivery drivers?---That's right. That was, I presume - that was the number one reason. There was a couple of other little reasons but it was the main reason for the - for us wanting to look at changing.
PN132
And what was the concern about the absence of a classification for delivery drivers? Why was that a matter of concern to you?---Well, you had delivery drivers delivering pizzas and we were paying them, say, $4 a delivery or $3 a delivery, whatever the rate was back then, but there was - if they decided to come back with us with some sort of action saying, you know, "We're being underpaid", there was no real - there was a real grey hole in our award. There
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
was actually nothing we could find in our award where - you know, no-one really knew. It was more of a shop by shop basis on what delivery drivers were getting paid. It was just like you paid them whatever you could pay them to keep them quiet at the time and it was - obviously it was dangerous operating under those conditions.
PN133
Are you saying this, and I'm not asking you to speculate on the law, but are you saying that as far as you knew the delivery drivers were award-free?---Yes. Well, it was - I guess back then there was a lot of discussion with Eagle Boys franchisees of - and myself that we were all obviously concerned that our delivery drivers didn't have any - there was nothing stating what we should pay our delivery drivers and we were concerned that all of a sudden they may have to go under the - like, the truck drivers award or some other different award which could be extremely harmful to our businesses.
PN134
I won't debate it with you but I want to put it to you affirmatively that in fact the delivery drivers were covered by the Shop Employees State Award. I only put that to you formally. I take it you either say you don't know or you disagree?---Yes, the only section of that award that I think - there was a per kilometre rate on that award. I haven't read it for a number of years but as far as I knew there was a per kilometre rate for staff using their motor vehicle to deliver a pizza, not for - that's as far as I knew. I might be wrong.
PN135
Can I ask you this?---Sure.
PN136
Was the operation in Musswellbrook and in the early days of Tamworth much the same as it is now? I don't ask you to be too precise?---Yes.
PN137
And does that mean - firstly, is most business presently generated by telephone communication or persons coming through the door?---Probably 50-50, yes.
PN138
And those who come through the door, would the preponderance be people who take their pizzas away?---Yes. A lot of people ring up before they come in.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN139
Yes?---Yes, that's right.
PN140
Sorry, I - - - ?---Yes. They ring up and they drop in.
PN141
You've caught me out because I was receiving too much?---That's all right.
PN142
If you could break it - I'll give you a number of areas, and I don't ask you to be precise with this. I mean, I know you haven't got the figures in front of you, but doing the best you can, if we break it down in this way: persons who ring up and have their pizzas delivered?---Yes.
PN143
Persons who ring up and come through the door?---Yes
PN144
Persons who simply come through the door and take it away and persons who come in and eat in. Going from the bottom of the pile, how many people eat on the premises, roughly as a proportion of business?---Probably - it's changed a fraction due to our new - like our express system where you can actually walk in and grab a pizza and walk out again. So that's walking in, grabbing a pizza and walking out again without ringing is about 25 per cent of our business.
PN145
Right. Perhaps again I'm assuming too much?---Yes.
PN146
Do your shops or outlets have tables and chairs?---No. Generically, no. There's one - - -
PN147
So nobody eats on the premises?---No, it's less than half a percent of dining.
PN148
So about 25 per cent come in and - - - ?---They walk in off the street unannounced and either - - -
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN149
What percentage ring up and have their pizzas delivered?---Probably 30 per cent.
PN150
And the remaining 45 per cent - - - ?---Ring up, yes.
PN151
- - - and pick up their pizzas and take them home?---Yes.
PN152
Now, the percentage that - I'm sorry, when you were at Muswellbrook - - - ?---Yes.
PN153
- - - and this concern about delivery drivers, accepting that a significant proportion of your business was by delivery, I think you said as far as you knew there was only a kilometre rate in the award?---Yes, that's right.
PN154
You were aware or were you not aware that the award had and has - well, sorry, I don't press that. I withdraw that. Now, you identify in your statement a number of your competitors. You identify them as McDonald's, Hungry Jacks, Red Rooster and KFC?---Yes.
PN155
Do I take it from that - there are what's called the secondary level?---That's right, yes.
PN156
You say in paragraph 11 of your affidavit or your statement - Deputy President, I'll just put a proposition to the witness but it might - it might be unfair on the witness. I'm not sure the witness was sworn.
PN157
THE DEPUTY PRESIDENT: I'm sorry?
PN158
MR ROGERS: I'm not sure the witness was sworn.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN159
THE DEPUTY PRESIDENT: Yes, the witness was sworn.
PN160
MR ROGERS: He was sworn, was he?
PN161
THE DEPUTY PRESIDENT: Yes.
PN162
MR ROGERS: Did he affirm - sorry, perhaps I can ask him this question.
PN163
Your witness statement was tendered?---Yes.
PN164
You adhere to the contents of that statement, I take it?---Yes, that's right.
PN165
Now, in paragraph 11 of your affidavit you say:
PN166
I'm opposed to the SDA application to rope my business into the National Fast Food Award. I can not see how me and my staff could be assisted by such a step.
PN167
Do you see that?---Yes.
PN168
And then you say in the following paragraph:
PN169
I think that at present my conditions of employment are competitive with those applied by Dominoes.
PN170
Do you see that?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN171
Can you tell the Commission what do you think will happen if this award is made today, to your business?---In my business there won't - I guess, being in New South Wales there won't be a major - there won't be any major changes. There's a number of little changes which could be harmful to our business, being the driver - no driver provisions, inflexible part-time rostering conditions and - for example, in the classification of the cleaning duties where it says - like, our kitchen staff, 80 per cent of their duties are cleaning where the cleaning duties here would basically - you know, it's for someone who does - with 20 per cent of their job as cleaning.
PN172
When you say "cleaning", what do you mean 80 per cent of - - - ?---Washing - washing dishes, clean the floor. Because it's a fast food outlet obviously there's a lot of cleaning. Yes, cleaning a lot of stainless steel.
PN173
You've identified as the major - or one of the three major items the driver's one?---Yes.
PN174
Part-time is the second and cleaning duties is the third. You identified as the second of those the inflexibility in part-time labour. Am I right in saying that between your two stores of your 35 employees you only employ one part-timer?---Yes, it's actually at the time. It's probably three now but, yes, it's one to three part-timers.
PN175
Well, did I ask you not two minutes ago did you adhere to your statement. Are you saying now that you want to correct it?---With - - -
PN176
Did you read it before I asked you that question? Have you read it today?---Yes, I read it this morning and we have - like, it could have - with 49 staff - like we change classifications quite a lot and, you know, it could be between, you know, one and three part-timers at the moment. We could have like - and I don't believe that that would make - you know, if I rang up my shop this morning to find out exactly what staff were part-time and non-part-time, I don't believe it would make anything majorly different - majorly difference to my statement.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN177
You've just said you have 49 employees. Don't you say in paragraph 6 you've got 35?---We're including six employees - are we including delivery drivers in paragraph 6?
PN178
Yes. Well, it's your statement. Were you including delivery drivers in paragraph 6?---It doesn't look like I am. Yes, at the time of the statement it was probably around 35 - you know, like the business has grown a lot in the last probably month, two months, so we've probably put a few more staff on.
PN179
Right. So you think at the present time you've got around about 49 staff?---Yes, that's right.
PN180
And you may have between one and three part-timers?---Yes, that's right.
PN181
Can I suggest to you that if the - I'm sorry, how many hours a week do the part-time employees work?---Between 12 and 32. Most of the - the part-timers we have on at the moment - there's Celia who is doing the HSC at the moment so she's only working, I think, 12 hours at the moment.
PN182
And you're aware, are you not, that if the National Fast Food - sorry, I withdraw that.
PN183
THE DEPUTY PRESIDENT: Just before you move forward, Mr Rogers, just so we don't get too far away from it, you mentioned before, Mr Rollings, that - I think you said 80 per cent of the work of your kitchen staff was cleaning. Is that correct?---Yes, that's probably - I guess, as a general statement, yes, between 70 and 80 per cent, yes.
PN184
It just seems an inordinate amount of cleaning compared to the making of pizzas, which is - - - ?---I guess it depends. Like we - we have - if we have six girls or guys on - kitchen staff on a shift at once two of them might be in the sink the entire time and one of them might be making pizzas.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN185
It's not 80 per cent of the work of all of the kitchen staff?---That's - yes, some of them might - it might be 50-50. One might be 100 per cent. One might be 5 per cent, I guess.
PN186
Thank you.
PN187
MR ROGERS: Mr Rollings, when did you become aware of the difficulty that the cleaning provisions of the National Fast Food Award - when did you become aware that those provisions might cause you some difficulty?---Yesterday.
PN188
Right. And how did you come to that awareness?---In a briefing from Gary.
PN189
Right. Now - - -
PN190
THE DEPUTY PRESIDENT: From Mr Black?---Sorry, from Mr Black, yes.
PN191
MR ROGERS: But the cleaning which you're speaking about is washing up - the fundamentals of washing up - - - ?---Yes.
PN192
- - - making sure the machinery is clean?---Yes. Floors, yes.
PN193
The floors certainly. And at the end of - what time do you cease trading of an evening?---Between 10 pm and 1 am.
PN194
And do you have a cleaner or anyone like a cleaner who comes in and cleans up - - - ?---No.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN195
- - - or is that left to the staff at the end of the shift?---That's left - it's all left to the staff of the shift.
PN196
And that cleaning that occurs at the end of the shift, what proportion of the staff's time would that represent?---Towards the end of the shift it would certainly be 90 per cent of their time. Like because - - -
PN197
I'm sorry - no, sorry, their overall time?---Probably - I will speak, for example, of a manager who is doing that shift where probably - throughout their entire shift probably 40 to 50 per cent for a manager. Probably 40 per cent, I would say. Yes.
PN198
That would be 40 per cent of the manager's time would be occupied - - - ?---Yes, the first half of the shift - yes, by meaning half the time - the first half of their shift would have very little cleaning because it's the busy period and they are running the staff. The second half of their shift there's not a lot of orders coming in and they are performing pretty much all the cleaning.
PN199
Can I check this with you. The cleaning you've spoken about - I think you've said washing up, cleaning machinery, cleaning the floors?---Yes.
PN200
That is done, no doubt, or breaking them up into their individual parts the washing up is washing up of, what, those silver platters and - - - ?---Yes, you've got colanders which go inside our pizza-make benches. There's a lot of - - -
PN201
THE DEPUTY PRESIDENT: I'm not quite sure they are silver platters, Mr Rogers.
PN202
MS GOY: Fancy.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN203
THE WITNESS: Yes, I know what you mean.
PN204
THE DEPUTY PRESIDENT: You might have been going to a different outlet to me?---Yes, that's right. And - - -
PN205
MR ROGERS: Go on, Mr Rollings?---Yes. A lot of our equipment, you know, where we cut the pizzas, we make the pizzas, and a lot of the benches they pull apart and there's a lot of bits and pieces with them. So towards the end of the night all those parts have to be pulled out and put into the wash-up and cleaned.
PN206
This cleaning is all sort of incidental to the preparation process?---That's - yes.
PN207
You prepare something, you get a bench or a plate or whatever it is dirty, you clean it?---That's - - -
PN208
You put it back and you use it again?---Yes.
PN209
Yes. And I take it in the same way that the cleaning of the machinery is incidental because you need to ensure that the machines are clean for the purposes of cooking?---That's right. And one of the big cleaning things is the lids, the pizza lids on the pans we cook with. We might - all the lids have to be washed up every night, so there might be - on a busy night we might have up to 500 lids to get washed up.
PN210
Right. I don't know what you mean but again it forms part of the overall preparation process?---That's right, yes.
PN211
In anticipation of the sale process?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN212
If I can just take you to that for a moment, the sale process. Am I right in saying this; that so far as deliveries are concerned they will only occur, of course, where there has been a phone call? No one will come in and say, "I want my pizza delivered"?---They - - -
PN213
Or at least rare - - - ?---You're right. But occasionally someone may drop in a sale and pay for a delivery, especially if they have got a baby-sitter at home.
PN214
I see?---But that's - you know, maybe once a night.
PN215
Yes. But fundamentally 90 per cent - 99 per cent - - - ?---That's right. You're correct, yes.
PN216
- - - are over the phone. And would I be right in characterising it this way; that in such circumstances the sale process commences with the phone call received by the operator?---Yes.
PN217
And it then - the pizzas are prepared fresh, are they not?---Yes, that's right.
PN218
The process then moves to the preparation stage, if we can call it that?---Yes.
PN219
That is, the person who takes the phone call makes a - communicates, I think, by computer or - - - ?---Yes, dockets are printed up where we make the pizzas and then make - yes.
PN220
To a person in the back. That person then makes the pizza with the ingredients, puts it in the oven and presumably when it's ready takes it out. That's correct?---Yes, that's right. Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN221
The process then continues. I assume that somebody gives a hoy to the delivery drivers who are standing around or if they are working. Is that right?---Generally talking, yes.
PN222
Yes?---Yes.
PN223
And say, "This is to go to 1 Spring Street, Tamworth" or wherever?---Yes.
PN224
And the person then delivers it and collects - that is the driver then delivers the pizza to collect the money?---That's right, yes.
PN225
And that is the completion of the sale process?---Yes, within reason. Yes, that's pretty much, yes.
PN226
Yes. So it starts with a phone call. The selling of the pizza starts with a phone call and ends with the delivery and the collection of the money?---Yes.
PN227
Save only, I suppose - sorry, I withdraw that. That's not the end of their function, of course. They have to return the money to the store?---Well, that's right, yes.
PN228
But they have sold the pizza once they have delivered it and taken the money?---Yes. That's right.
PN229
Yes. Now, I started to ask you earlier what you thought would happen if the award came in - this award came in and you said being in New South Wales there wouldn't be any major changes and then - save only you gave three exceptions. You mentioned drivers and perhaps part-time and perhaps some cleaning duties. You mentioned a briefing with Mr Black was conducted. Was there anyone else present at that briefing?---Margaret-Ann and John McMaster.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN230
Mr McMaster was present?---Yes.
PN231
Now, the hours that the store trades - sorry, I will break it up in case it's different. If you can just look at paragraph 7?---Yes.
PN232
You identify the hours that the store trades at Tamworth City store - - - ?---Yes.
PN233
- - - as from - between 11.30 am to 10 pm, Mondays and Tuesdays?---Yes.
PN234
And then until 11 pm on the three nights of the week and to 1 am on Fridays and Saturdays. Do you see that?---Yes. They are all - none of that has changed, no.
PN235
Are those hours designated by the head office, by Eagle Boys head office?---No. All we have is a minimum framework by - meaning you can't shut your shop at 7 o'clock at night. Like there's minimum trading hours we have to - we would adhere to.
PN236
And what are the minimum trading hours that you're obliged to adhere to in relation to Tamworth City and Tamworth South City?---As far as I know it's 10 pm. But then there has been some exceptions in small regional towns.
PN237
But, I mean, just for you?---Yes, sure.
PN238
Sorry?---Yes, it's 10 pm.
PN239
So you're obliged to stay open until at least 10 pm?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN240
And open by any particular time?---Lunch is optional, lunch trading. However, we do quite well over lunch. You can see with the South shop we're not open lunch - for lunch on Mondays and Tuesdays on our South one. We're open from 11.30 every day of the week in the Peel Street store.
PN241
And when you say lunch is optional, I take it from that that dinner is not. What time does - what we would call the dinner trade start? What are the hours that you're obliged to open?---Yes. Dinner trade is generally open by 4 pm in the afternoon.
PN242
THE DEPUTY PRESIDENT: So is it correct, Mr Rollings, to say that the Monday and Tuesday at the Tamworth South store represent the minimum trading hours?---That's right, yes.
PN243
Yes. So you couldn't open any later than 4 pm under your agreement with the franchisor?---No, as far as I know it's 4 pm for - yes, I'd be pretty certain it's 4 pm, because 5 pm they are already getting busy - - -
PN244
Yes, thank you very much.
PN245
MR ROGERS: Now, am I right in saying this, Mr Rollings, that just about everything in your store - sorry, I was about to ask a question that was too general and it's unfair on you. Am I right in saying this; that the displays in your store are displays that are provided to you by Eagle Boys, the signage and all that sort of stuff?---Yes, you're correct.
PN246
And you're not allowed, am I right, by agreement to display any signs other than those that are approved by Eagle Boys?---That's right.
PN247
And similarly all packaging has to be approved by Eagle Boys?---Yes, you're correct.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN248
And, indeed, I think it's true to say the colour schemes have to be approved by Eagle Boys?---Oh, yes.
PN249
Yes. And are you familiar with a document called the Operations Manual?---Yes, I've read it once.
PN250
Yes, I thought you would be. And, again, I don't mean to be discourteous, but is it, in a sense, the Bible by which you operate the store on a day to day basis?---Yes, it gives us - it gives you a specific framework on how to operate your business.
PN251
Yes, and you're obliged to conduct your business according to the operations manual without departure, are you not?---That's right.
PN252
Yes, because if you depart from it you may have your contract terminated?---Yes.
PN253
I call for - I don't anticipate that your Honour will have a copy - I call for a copy of the operations manual. I don't imagine - unless my friend has it present I intend to defer the call to the time when it's available, but I do make a call for that.
PN254
THE DEPUTY PRESIDENT: Is that something that can be readily made available, Mr Black?
PN255
MR BLACK: Yes, your Honour.
PN256
MR ROGERS: I've discussed it with Mr Black. I understand there are commercial sensitivities. I don't intend to be waving it around but I do want access to it.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN257
THE DEPUTY PRESIDENT: Well, appropriate orders can be made in respect of it if necessary if it becomes tendered.
PN258
MR BLACK: Yes, we'll provide it.
PN259
MR ROGERS: Thank you, Deputy President.
PN260
Mr Rollings, if I'm not mistaken - do you have motor vehicles that you operate in your stores?---Yes. Delivery vehicles you mean?
PN261
Yes?---We have one, yes.
PN262
Yes, and it bears the Eagle Boys insignia?---Yes, it's got it.
PN263
It has to follow a particular colour and scheme that is required by the operations manual?---Yes.
PN264
Yes. And similarly all plant that you use has to comply with - strictly with the operations manual?---Yes, the plant and equipment, I guess, is - yes, I guess - I guess, yes, you're right. There is - it's a bit more generalised depending on each shop.
PN265
Yes, but the brands of machinery, for example - you may have a variety of brands - - - ?---That's right.
PN266
- - - but each has to be approved by Eagle Boys Head Office?---That's right. Generally it needs to be approved so I can - just to make sure I can operate effectively in our industry.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN267
And indeed, if I'm not mistaken, you're agreement requires fixtures and fittings have to comply with the operations manual?---That's correct, yes.
PN268
Now, is it right - am I right in saying this, that firstly the company, Rollings Investments, operates a bank account exclusively in relation to each franchise or do you have one bank account for the two?---I have one business account for the two franchises.
PN269
All right. And you're obliged, are you not, and you have, I presume, given the details of that account to Eagle Boys Head Office?---No, they haven't got the exact - sorry, they do have the account. They do have it because of direct debit facilities.
PN270
And do you - are you obliged to provide to Eagle Boys on a weekly basis a gross sales report?---Yes.
PN271
And on a monthly basis a separate gross sales report on the 7th of each month?---No, it's the 21st.
PN272
The 21st is it, I'm sorry?---Yes.
PN273
And similarly a monthly - - - ?---Sorry, 14th.
PN274
We're all getting mixed up. And similarly a monthly report on expenditure?---Yes, that's the same report, a monthly income statement on the 14th.
PN275
Yes. Sorry, the report will include - the monthly report will include your gross sales for the month?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN276
The expenditure for the month?---Yes.
PN277
The amount of stock used and the identity of the stock used?---Yes, that's right.
PN278
And on an annual basis you supply Eagle Boys Head Office with - you're obliged to and, I presume, do supply Eagle Boys with a balance sheet and a profit and loss sheet?---Yes, that's right.
PN279
Now, do you have a computer system at your franchise stores?---Yes, we've got a lot of computers.
PN280
Yes, and the software for that is supplied by Eagle Boys?---Yes.
PN281
And it is - the computer system is linked to a computer - I don't know if it's a mainframe, but it's a computer at Eagle Boys?---Yes. That's right, they can - I guess it's not linked but they dial into it via a modem.
PN282
And can you tell me what information - I don't want the detail of the information but just in broad, what sort of information is kept on your computer in relation to the operation of the business?---Pretty much just the sales information and probably the cost of goods or the stock information is kept on - it's called EBCOMS, which is our point of sale system, that's kept on there as well. The rest is on an office computer just with - yes.
PN283
And am I right in saying this, that Eagle Boys is entitled to and can at any time call up the information on that computer?---Yes, they can call up. Pretty much on that all they'll get out is the stock information and sales information.
PN284
Now, the pizzas that are made on your premises - I don't pretend to be an expert in pizzas, but I take it that there's a dough base?---Yes.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN285
They're familiar enough. And then there is the - - - ?---Sauce and cheese and toppings, yes.
PN286
Now, from where do you get the dough base - dough, I should say?---From - yes, from PFD Food Services. It comes as flour.
PN287
Is that PDF, or am I confused?---It's PFD, isn't it?
PN288
It might be. It's PFD?---PDF - is that Queensland or - okay, no. PFD, but, yes, the source of supply we're using, yes.
PN289
And that flour is from a - it's not direct from Eagle Boys itself?---No.
PN290
No, but PFD are a supplier that Eagle Boys has approved; is that correct?---That's right. It's a generic baking flour.
PN291
Yes. And all of the supplies we've just discussed - that is, the toppings, the sauces, the flours - all of those must come either from Eagle Boys or from suppliers who Eagle Boys have approved?---Yes, that's correct.
PN292
You mention in your statement that you've got a business which requires some give and take. I'm sorry, I'm not trying to trick you. I think it's paragraph 11?---Sure.
PN293
I might be wrong in that?---I'm not sure - - -
PN294
I might be verballing you unfairly. Excuse me a moment, sir. No. Look, I've been unfair to you, sir?---That's all right.
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN295
That wasn't a correct proposition.
PN296
THE DEPUTY PRESIDENT: I think it was in paragraph 5.
PN297
MR ROGERS: I'm indebted to you.
PN298
THE WITNESS: Yes, you're right. Yes.
PN299
MR ROGERS: I assume that means - yes, I'm sorry, Mr Rollings. I wasn't trying to trick you. I assume that means that you don't want to be rigidly bound to unreasonable and oppressive rules?---That's right, with dealing with so many, I guess, employees under the age of 16 or 17 or 18. Due to their school commitments as well, a lot of them are constantly changing the roster at any given time and there's a lot of like - see, there's a lot of give and take in this business where one might walk in tonight and say, "I can't work for the next two weeks.", and if - - -
PN300
Yes, and I take it that's always been the nature - as far as you're aware - of the pizza business?---That's right.
PN301
It's not a new phenomenon?---I'm just used to it, yes.
PN302
And I also assume that by that you don't mean that you consciously wish to take advantage of the employees?---No. That's right. I think it's - yes, I really try and make sure it's both ways for our young kids, yes.
PN303
Yes, I have no further questions.
PN304
THE DEPUTY PRESIDENT: Thanks, Mr Rogers. Mr Black?
**** STEVEN JOHN ROLLINGS XXN MR ROGERS
PN305
PN306
MR BLACK: Mr Rollings, you were asked, I think, to give some indication to Mr Rogers about a communique that first came to you dealing with the certified agreement process and there was a reference to RAQ on the one hand and Head Office on the other, and there appeared to be some confusion as to where the communique came from that described the certified agreement process. Could you indicate to the Commission what is the correct position there?---Right. With the - - -
PN307
I think there was - the questioning was going to some original communication to you individually or to franchisees generally about the making of certified agreements?---Yes, originally as far as I remember it came through head office and then - - -
PN308
Sorry, when you say head office you're referring to?---Eagle Boys head office.
PN309
Yes, I have nothing further?---Yes.
PN310
THE DEPUTY PRESIDENT: Just before you go, Mr Rollings, you have a current certified agreement?---Yes, that's correct.
PN311
When does that expire, Mr Rollings?---In - it's a three year agreement which expires - it actually was only stamped about a month ago.
PN312
Right. Thank you. You can stand down now, thank you, Mr Rollings?---Thank you.
**** STEVEN JOHN ROLLINGS RXN MR BLACK
PN313
You're free to stay or remain, as you wish?---Okay, thank you.
PN314
PN315
MR BLACK: Your Honour, the next witness is John McMaster. As he's arriving it may be appropriate that I provide you with a copy of the current certified agreement. I had provided the Commission with a copy of the pre-existing certified agreement and Mr Rogers has a copy of the current certified agreement applicable to Mr Rollings' enterprise.
PN316
THE DEPUTY PRESIDENT: Yes, thank you. This document is now certified, is it, Mr Black?
PN317
MR BLACK: That's my understanding. That seemed to be what the witness was saying that it was stamped. Yes.
PN318
THE DEPUTY PRESIDENT: You can be seated now, thank you, Mr McMaster.
PN319
MR BLACK: Mr McMaster, you've prepared a statement in this matter. Is that correct?---That is correct.
PN320
And I understand you've signed a copy of that statement this morning. Is that also correct?---Yes, that is correct.
PN321
Could I ask you to indicate to the Commission whether that is a true and correct copy of the statement you've made and then signed?---Yes, that is a true and correct copy.
PN322
I would seek leave to tender that to the Commission.
PN323
PN324
MR BLACK: Thank you. Your Honour, I have no additional matters for Mr McMaster.
PN325
**** JOHN DAVID McMASTER XXN MR ROGERS
PN326
MR ROGERS: Mr McMaster, if the Deputy President were to today make the National Fast Food Award applicable to your business what consequence do you understand that would have for your business?---Consequence? Well, it will affect me in regard to my delivery drivers because there's no rate in the new form - format. Also there's the cleaning duties of my kitchen hands. The flexibility of my part-time worker. I only have one. And, yes, they are the main - and there's no introductory classification.
PN327
If I were to tell you, and just assume for the moment that it's true, if I were to tell you that there were - that if his Honour made the award today, the National Fast Food Award today, binding on your company would have no consequence at all for your industrial regulation, would that be a matter that would please you?---Well, possibly.
PN328
Yes, well - - - ?---Yes.
PN329
Well, if I told you that his Honour made the award that it wouldn't affect the rates you pay staff?---Right.
PN330
It wouldn't affect the cleaning duties?---Right.
PN331
Or the part-time employees or the introductory rate - if you just assume that for the moment. And I assume it would be a matter of indifference to you whether the award was made or not?---Yes, that's correct.
PN332
Now, you say in paragraph 11 of your witness statement:
PN333
I am opposed the SDA application to make me a respondent of the National Fast Food Award. Respondence to the National Award will not assist me in any way. The provisions are not particularly suited to my operations.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN334
Can I take it that the areas that - where it's not suited to your operations are those that you've identified about two or three minutes ago, that is in relation to delivery duties, cleaning duties, part-time employees and the introductory rates?---Yes.
PN335
How many staff do you presently have in the Gunnedah store?---I actually have 11 at the moment.
PN336
All right. And, in fact, if you could turn to paragraph 4. I presume apart from the possibility that persons have increased in age - - - ?---Yes.
PN337
- - - that represents close to the current profile. There seem to be slightly more staff there, but - - - ?---Yes. And there are two 15 year olds that have left.
PN338
Yes. Now, in relation to staff that you presently have - I'm sorry, I withdraw that. In relation to the staff that are identified in paragraph 4 is the employee profile, subject again to ages, precisely that which appears except for the two 15 year olds that have left or has there been other changes?---No. No, that's pretty much - - -
PN339
And when - my copy of your statement is not signed. When is this statement operable from?---Pardon?
PN340
When did you make this statement? In other words, when was the statement prepared?---In - it was originally prepared in June.
PN341
So we're talking about a period of, at least, two months?---Yes.
PN342
And possibly a little longer?---Yes.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN343
Now, at the time that you made this statement in about June of the 11 staff who are presently employed how many - sorry, how long had the most recent employee been employed? Now, I know I've expressed that very badly. Did you understand or do you want me to rephrase it?---Okay. Yes, only - possibly three months.
PN344
Yes. That was my real question. How long have - has your most recent staff member been employed? That's what I'm trying to ask?---Yes. Probably about three months at the time of the statement.
PN345
And what is the typical, if there is one, period of employment of your staff?---Well - well, since I've taken over there's been quite a few changes but, yes, possibly - maybe a limit of two years. I have most of them.
PN346
Sorry, I didn't quite hear you then, sir?---Yes, I have - most of them have been there for two years in the two years I've owned the business.
PN347
And can I take it from that then that the consequence, for example, of the abolition of the introductory rate would be, at best, marginal to your profitability?---Yes.
PN348
Now, you mentioned you have one part-time employee. How many hours a week does - sorry, is it a male or a female?---A male.
PN349
Yes. And how many hours a week does your part-timer work?---He works about 30.
PN350
Okay. And you've also mentioned cleaning as an area of concern. What sort of cleaning gets done in the Gunnedah shop?---Well, everything, from the - from the lids to the pans - of the pans to the floor, make bench, the windows; just your normal stuff to - keep stuff clean.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN351
And putting aside the mopping of the floors - - - ?---Yes.
PN352
And I presume the floors get mopped on occasions?---Yes, they do every day.
PN353
Every day?---Yes.
PN354
And putting aside the mopping of the floors?---Yes.
PN355
And I presume the floors get mopped on occasion?---Yes, they do every night.
PN356
Every day?---Yes.
PN357
Well, putting aside the mopping of the floors, I take it that the other cleaning which gets done - for example, the platters, I believe you mentioned, that's as it were part of the - the last part of the preparation process. You're making a pizza. Something gets dirty and you clean it?---Yes, that's correct.
PN358
And it's a necessary incident of the preparation process?---Yes.
PN359
Now, am I right am I - I think your evidence is that when you took over the shop there was already a certified agreement, or am I wrong in that?---Yes, that's correct. Yes, there was an existing certified agreement.
PN360
So you've never had any experience of the operation of the award - no, as it were concrete experience?---No.
PN361
What were you doing before you took over the franchise?---I was a farmer.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN362
And I take it from that answer that you've not had - not been involved in the fast food industry previously?---No.
PN363
So when you say no, you mean - you agree with me?---Sorry, yes.
PN364
That's all right. I understand. Now, you say in paragraph 11 of your statement:
PN365
It is my understanding that staff are paid are more than what either McDonald's and KFC pay their staff and that these companies operate under certified agreements negotiated with the SDA.
PN366
Do you see that?---Yes.
PN367
How do you know that?---Well, I'm - according to Gary, yes - Gary Black.
PN368
Can I take it then that - and I don't mean this discourteously - - - ?---No.
PN369
You've been told that that's a fact and so that's what you understand to be the fact?---Yes.
PN370
But in fact you don't claim to have any direct knowledge of what McDonald's or KFC actually pay anybody?---Yes, I do.
PN371
You do have a direct knowledge?---Yes.
PN372
Of what - all their staff?---No, no, only the two 15 year olds that left my employment. They - one went to work for McDonald's and went to work for Kentucky Fried Chicken. Yes, and they have told me that, yes, I've paid more than they do.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN373
Right. Okay. Now, can I ask you just to look at the next line of that paragraph? You say - this is the fourth last line of paragraph 11 - towards the end you say:
PN374
For example, under my agreement before renegotiation the adult casual rate was $16.45 per hour. The equivalent rate under the KFC agreement is $14.07 per hour.
PN375
Why did you put your rate before renegotiation - I'm sorry, I withdraw that. What's the rate since renegotiation?---It is - I'll just check - the casual rate is - sorry - okay, it is $16.91 plus $1.28 leave loading.
PN376
Right. So it's $16.91 putting aside the annual holidays?---Yes, okay.
PN377
Yes.
PN378
And it was $16.45 excluding the annual leave component as well?---Yes.
PN379
THE DEPUTY PRESIDENT: Who was that negotiated with, Mr McMaster? You say "before renegotiation". Who was the renegotiation with?---With my certified agreement, my new - - -
PN380
Yes, but who did you negotiate with?---It was done through the Commission, wasn't it?
PN381
You say you renegotiated an agreement. The agreement, presumably, is an agreement to cover your staff so it's an agreement with your staff?---Yes.
PN382
Yes. Who did you negotiate the agreement with? Who's the other party to the agreement?---To initiate the agreement?
**** JOHN DAVID McMASTER XXN MR ROGERS
PN383
Yes. You say - you said in here "before renegotiation". I just wonder what you mean by that?---Before the renegotiation of the new agreement.
PN384
Yes?---But you're asking with whom?
PN385
Yes?---Yes. Well, it was through the - Gary, with you guys or - did we negotiate with you?
PN386
You're not free to ask Mr Black, I'm sorry, Mr McMaster?---Sorry, your Honour.
PN387
So you're not aware of who you negotiated it with?---Well, it's just - yes, it's just the - with the employees for the new rate to pay.
PN388
So you negotiated with your employees?---Yes.
PN389
MR ROGERS: How was that conducted? How was the negotiation conducted?---By - we had - with general meetings and, yes, and then they just had to all vote on the matter.
PN390
This is - when did that vote take place?---In May.
PN391
And - - - ?---15 May.
PN392
And the agreement was certified what - most recently or fairly recently, was it?---Yes, it was.
PN393
And do you remember - were you present when it was certified in the Industrial Relations Commission?---No, I wasn't.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN394
Now, can I take it that the agreement - the folks with whom you renegotiated the agreement were those people identified in paragraph 4 of your affidavit?---Yes, that's correct.
PN395
I may have asked you this before but if I haven't, in the opening paragraph of your statement you say you're the owner/operator of the Eagle Boys Pizza franchise. Am I right in saying that the actual franchisee is a company of which you are a director?---Yes, that's correct.
PN396
What's the name of the company, please?---It's Allawah Gunnedah Pty Ltd.
PN397
Sorry, can you repeat that name?---Allawah, A-l-l-a-w-a-h.
PN398
Allawah Gunnedah Pty Ltd, is it?---Yes.
PN399
And are you the sole director of that company?---Yes, I am sole director.
PN400
Are you the sole shareholder?---Yes.
PN401
And I take it that you're also the company secretary?---Yes.
PN402
Now, do you work in the store - that is, in the Gunnedah store yourself?---Yes.
PN403
Do you have other employment?---No.
PN404
And, for want of a better term, you're the manager in the store?---Yes.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN405
And I take it you're also what's called the nominated manager to Eagle Boys?---Yes.
PN406
Now, the pizzas that you manufacture or produce, to what extent do you have a discretion independently of anything Eagle Boys says, to make pizzas that they have not authorised?---How do you mean?
PN407
Do you understand the question?---No, I don't.
PN408
Well, if I can just give it by way of example. If I go home tonight, back to Sydney, and I ask my wife to make a pizza and I say nothing to her about the content of the pizza she can make whatever she likes?---Right.
PN409
Have you got that freedom in the operation of your business to make whatever pizzas you want?---For the public, to sell?
PN410
Yes?---Well, if that's what the public want.
PN411
Do you mean if - - - ?---If that's what the customers want.
PN412
Yes. Are you saying this, that you're entitled under your contract with Eagle Boys to make whatever pizza you like, whether or not - whether Eagle Boys has authorised it?---Yes.
PN413
And do you in fact make any pizzas other than those that are authorised by Eagle Boys?---No.
PN414
Have you ever made any such pizzas?---No.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN415
And indeed, is it not the case that all the ingredients in the pizzas that you make are from suppliers authorised by Eagle Boys?---Yes.
PN416
And you're not entitled to go to suppliers beyond those who are authorised by Eagle Boys?---Yes.
PN417
When you say "yes" you're agreeing with me?---Yes. Yes.
PN418
And the signs, the displays, the colour schemes in the store, they are all Eagle Boys authorised?---Yes.
PN419
And must be so?---Yes.
PN420
And, indeed, the uniform must be authorised by Eagle Boys?---Yes.
PN421
Yes. And is that the uniform you're wearing today or is that - - - ?---No, this is just a - yes.
PN422
Yes. And do you have a motor vehicle - an Eagle Boys motor vehicle?---No.
PN423
Do you ever attend meetings called by Eagle Boys?---Yes.
PN424
Yes. How frequently do you attend those meetings?---Well, probably once every three months or so.
PN425
And they are compulsory meetings, are they not?---No.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN426
Are these called State meetings or National meetings or something else?---Well, just a franchisee meeting - the local franchisees.
PN427
Sorry, say that again?---They were just the local franchisees in our area have a meeting.
PN428
Is it a meeting among those people without anyone from Eagle Boys head office?---Yes.
PN429
I'm sorry. Do you ever attend meetings that are called by Eagle Boys?---Only road shows.
PN430
What is a road show?---Would that be what - well, it's just sort of a training seminar.
PN431
Right. And who conducts those training seminars?---Different trainees. You know, from head office.
PN432
Different persons?---Yes.
PN433
When you say "trainees" trainers?---Trainers, yes, sorry.
PN434
From head office. And who attends those seminars? Or who has been in attendance when you have been present?---As a collective group?
PN435
Sorry, as among the franchisees or - - - ?---Yes, there's been a number of stores, store managers, that sort of thing. Yes.
**** JOHN DAVID McMASTER XXN MR ROGERS
PN436
And apart from - when you say store managers I take it they are people who you would assume are the so-called nominated managers?---Yes.
PN437
Yes. Do other persons attend? That is, persons who are not the direct operator of the franchise arrangement?---Possibly. I'm not sure.
PN438
But you're not aware?---Yes.
PN439
And you provide on a weekly basis a gross sales report to Eagle Boys?---Yes.
PN440
And you provide a monthly report which includes gross sales, expenses, stock used?---Yes.
PN441
Yes. And, of course, annually you give them a copy of your balance sheet, your profit and loss sheet?---Yes.
PN442
No further questions.
PN443
THE DEPUTY PRESIDENT: Mr Black.
PN444
PN445
MR BLACK: Mr McMaster, you were asked questions about the extent and perhaps nature of the cleaning duties performed by your staff?---Right.
PN446
Are you able to give the Commission some indication as to how much time the cleaning functions occupy? If you take all your staff put together?---Yes, well, it would be possibly - you know, 50 per cent of their actual job.
**** JOHN DAVID McMASTER RXN MR BLACK
PN447
This is - - - ?---Their - - -
PN448
- - - a general proposition you're making now, is it?---Yes. Yes, pretty much.
PN449
Yes, I have nothing further.
PN450
THE DEPUTY PRESIDENT: So you're saying, Mr McMaster, that 50 per cent of the work that any of your employees would do would be classified as cleaning work. Is that correct?---Yes.
PN451
Thank you.
PN452
MR ROGERS: Could I just ask a question arising from that, your Honour.
PN453
PN454
MR ROGERS: I infer from that you don't include the drivers?---No. Well, they do clean at the end of the night.
PN455
What, mop and broom sort of thing?---Yes. Sweep the floor.
PN456
Sorry.
PN457
THE DEPUTY PRESIDENT: Well, a further clarification then. That wouldn't represent 50 per cent of their work, though, would it?---No, no. No.
**** JOHN DAVID McMASTER FXXN MR ROGERS
PN458
Yes?---But as a whole the kitchen hands.
PN459
Yes, thank you. Yes, you are free to step down now, Mr McMaster, and you can leave or remain as you wish?---Okay. Thank you.
PN460
MR BLACK: Mr Meiklejohn is the next witness.
PN461
THE DEPUTY PRESIDENT: Yes, just before you call your next witness I might just take a brief adjournment, Mr Black.
PN462
MR BLACK: Thank you.
PN463
THE DEPUTY PRESIDENT: It will be no more than 10 minutes, I would think.
PN464
MR BLACK: Thank you.
SHORT ADJOURNMENT [11.32am]
RESUMED [11.56am]
PN465
THE DEPUTY PRESIDENT: Yes, Mr Black.
PN466
MR BLACK: I call Neil Meiklejohn, may it please the Commission.
PN467
THE DEPUTY PRESIDENT: Yes, you can be seated, thank you, Mr Meiklejohn?---Thank you, your Honour.
PN468
MR BLACK: Mr Meiklejohn, you've prepared a statement in this matter?---I have.
PN469
Could you, please, examine that statement and indicate whether that is the true and correct copy and confirm that you've signed that copy of your statement?---I have. I would just like to make some adjustments, if I can, just to the employee details which have altered slightly since I - - -
PN470
Are you talking about paragraph 4?---Paragraph 4 and 5 just require some minor alteration. Where - - -
PN471
THE DEPUTY PRESIDENT: If you just bear with me a moment, Mr Meiklejohn?---Sorry.
PN472
I'm just locating - yes, go ahead?---Okay. In item number four that schedule just needs to change. Should I just amend this?
PN473
MR BLACK: Could you tell us what the changes are, please?---Sorry. Instead of six employees aged under 16 that's five. Instead of three between 16 and 17 that is two. And five between 17 and 25 is still correct and it's two between - sorry, two over 25. And then in item number five there's one company director, two assistant managers, seven pizza employees and still five delivery drivers. And, your Honour, those changes have just taken place as a result of - I've had two people resign and one that I've since terminated.
PN474
Could you mark those - - - ?---Changes?
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN475
- - - changes on the signed copy of your statement and I would seek leave to tender that, please?
PN476
MR ROGERS: Well, I do have one objection to that statement, Deputy President.
PN477
THE DEPUTY PRESIDENT: Yes.
PN478
MR ROGERS: I object to the final sentence in paragraph 14.
PN479
THE DEPUTY PRESIDENT: Yes, the basis for the objection, Mr Rogers.
PN480
MR ROGERS: Well, it's simply argumentative. He doesn't purport to have any intimate knowledge and, indeed, does not have any intimate knowledge of the workers of other companies.
PN481
THE DEPUTY PRESIDENT: Yes. Mr Black.
PN482
MR BLACK: This witness may actually have some knowledge - I would seek leave that he, at least, be able to defend the statement, your Honour. I don't contest it being eliminated.
PN483
THE DEPUTY PRESIDENT: Yes. I intend to uphold the objection, Mr Black. I will have that sentence deleted from 14.
PN484
MR BLACK: Thank you.
PN485
THE DEPUTY PRESIDENT: Yes, I'm not sure that - just before you tender the statement, Mr Black, that you've finished as far as having Mr Meiklejohn attest to the accuracy of the statement. You may have but I - - -
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN486
MR BLACK: Now that you've made those corrections, Mr Meiklejohn, could you indicate for the Commission that that is a true and correct copy of your - or record of your views in this matter?---It is true and correct.
PN487
Yes. I would now seek leave to tender the statement.
PN488
PN489
MR BLACK: Thank you. I have no additional matters, Deputy President.
PN490
THE DEPUTY PRESIDENT: Go ahead, Mr Rogers.
PN491
MR ROGERS: Mr Ryan has pointed out to me, Deputy President - it's only a matter of notice - that the changes in paragraph 4 and 5 presumptively affect the figures in paragraph 6. It's not a matter of concern to me.
PN492
THE DEPUTY PRESIDENT: Yes. That will be the case, Mr Meiklejohn, presumably, is it?---Sorry.
PN493
The changes you made to paragraphs 4 and 5, presumably make some alteration to paragraph 6 as well?---They do, your Honour. That will be two full-time and 12 casual. Do I - - -
PN494
Yes, you may as well mark those on there as well. Yes, go ahead, Mr Rogers.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN495
MR ROGERS: Mr Meiklejohn, do you know how much - and if it's a range tell me, the ingredients to make a pizza cost to you?---As the - sorry, the - - -
PN496
To you, the - - - ?---The food cost only?
PN497
Yes, just the food cost for the moment?---The food cost only varies between two and three dollars depending on - for the cost of the pizza.
PN498
And that, of course, is a cost which is incurred at the moment of purchase of the raw materials, whether or not you sell the pizza subsequently?---Yes.
PN499
I don't mean you may pass the money over in that moment, but that's when the liability to pay that money arises. And so if the materials are used they're converted into a pizza; if they're not used then either they get used at some later point or they presumptively are disposed of. Is that right?---Yes.
PN500
Now, you mention in paragraph 3 that you employ your staff under a certified agreement which you negotiated directly with them. Do you see that?---Yes.
PN501
When did you first enter into a certified agreement with your staff?---The first - the current certified agreement that I have was approximately three years ago and there was one that was approximately three years before that as well.
PN502
So six years ago roughly you entered into a certified agreement with your staff?---Correct.
PN503
And was the employee profile at the time you entered into that agreement vastly different from what it is now, as amended in paragraph 4 of your statement?---To be honest, I couldn't comment accurately but anecdotally I would say that it's not vastly different.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN504
Now, at any given moment - let's say over the course of a year - do you - and I don't hold you to these figures strictly, but do you have roughly the same proportion of under 16s, 16 to 17, 17 to 25 and the like that's reflected in paragraph 4?---I guess that's - it's fluctuating and so - but I'd say roughly, yes.
PN505
Among other things people - - - ?---Come and go.
PN506
People get older?---Some do. Sorry, they all get older but I suppose the profile stays stable because inevitably there's some that come and go.
PN507
There's turnover?---Yes.
PN508
And what - - -
PN509
THE DEPUTY PRESIDENT: Mr Rogers, sorry, just before you proceed with that question, if I can just take you back to the previous questions Mr Rogers was asking you about your certified agreement, Mr Meiklejohn. Prior to six years ago, how did you determine the terms and conditions of your employees - that is, before you had a certified agreement?---I suppose there's a limited history with that, but the - Eagle Boys previously - and my business was in terms of the State Fast Food Award, which obviously our certified agreement still is based on. The - - -
PN510
So you used the Queensland State award as the basis for determining terms and conditions of your employees at that time?---For the pizza employees and the management staff, yes. Some of the history, though, dates back where we - part of the reason that - I suppose as a franchisee some history changed insofar as the Australian Tax Office made a ruling where our delivery drivers - where we'd previously treated them as what we termed as a contract driver, the Tax Office made a ruling after having treated them as that for some years that they were in fact an employee, and because the delivery drivers did not fit under any particular award that we could find, we sought to have a - to get some information about how they could fit into an award or agreement, and that's what initiated that process.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN511
Okay. Thank you. Sorry, Mr Rogers.
PN512
MR ROGERS: Do you recollect when that ruling that you just mentioned occurred?---No, not the specific year.
PN513
Now, do you - you just said - we were just sort of chatting about the possibility of the profile would change as people got older and you said some come and some go, although that maintains constancy. I think my question when I was back last was this: what level of turnover do you have - labour turnover, staff turnover - in the course of a year? That is, how many come and go?---Specifically, I'm honesty not sure. I've not sat down and analysed that because I - and to that extent I have some staff who've been with me for a very long time and others who may last a very short time and I guess that depends on what other jobs they have. So, you know, I couldn't specifically answer that question.
PN514
THE DEPUTY PRESIDENT: Just following on from that though, Mr Meiklejohn, would you expect at the beginning of the year to employ a number of people during that year and, if so, how many would you expect to employ during that year?---I try not to have to employ any, your Honour but - - -
PN515
No, I would understand that, but do you have - - - ?---For example - - -
PN516
Obviously there are some costs involved with doing that and perhaps you would forecast that in a year you would - - - ?---It's changed over the time. For example, this year I hope that I won't lose any of the current employees but in other times where I've had staff who've been with me for, say, two to four years that - particularly the school age employees, once they graduate I've been able to keep a couple of those over time but inevitably in my case, being in Warwick, we don't have any tertiary institutions and so the greatest loss of particularly those pizza employees is when they leave Warwick to go to university. So that this year that circumstance is different. I don't have an employee in year 12 at this time, but sometimes I've lost, say, four or five staff
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
in January as they move on towards university, and that's why it's difficult for me to sort of say - but, you know - so, immediate forecast for this coming period of time, none, but the last - a couple of years ago I lost three for that reason. Some of the other movement depends on, for example, some of the senior staff where I may be able to only offer them a casual position with a limited amount of work but if they manage to obtain a full-time position elsewhere, that's largely a job market issue.
PN517
Okay. Good, thank you.
PN518
MR ROGERS: Well, if you look at paragraph 4 of your statement as amended, Mr Meiklejohn, you say there now you've got five employees aged under 16 years. Do you see that?---Yes.
PN519
I take it that those five employees were five of the six who were present when you made the statement?---Sorry, five of the six?
PN520
Yes. There's one person gone and the other five who are present now were all present when you - when this statement was created?---Yes.
PN521
Right?---Yes.
PN522
Well, of those five, how many have started in this year - that is, since 1 January 2004?---I just need to see if I've got some information out of the staff listing because I don't recall of the top of my head, your Honour. Your Honour, I can't be 100 per cent sure but it's probably two or three.
PN523
THE DEPUTY PRESIDENT: What other information do you have there in the witness box with you, Mr Meiklejohn?---I'm trying to ascertain this from a roster and going from the top of my mind, your Honour.
PN524
But besides your statement, do you have some other information there with you, do you?---Just notes of things - - -
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN525
Yes, it might be an idea if you hand that to Mr Black whilst you're under cross-examination. If there's anything that you need to refer to, then you can put it to Mr Rogers.
PN526
MR ROGERS: I must say I'm not troubled if he does get something from it. It's not a - this isn't the sort of litigation where I'm trying to catch him out.
PN527
THE DEPUTY PRESIDENT: No.
PN528
MR ROGERS: I'm just trying to get to the facts. I'm assuming all throughout all this that Mr Meiklejohn is being frank.
PN529
THE DEPUTY PRESIDENT: Yes.
PN530
MR ROGERS: Mr Meiklejohn, your best recollection is that two or three were probably there at the beginning of the year among those in the under 16 category?---Yes.
PN531
When did you employ the most recent of the two or three who were not there in the beginning of the year?---Sorry, when did I - of those that weren't there - that were there at the start of the year?
PN532
Look, I'll stop you and I'll ask the question differently. Of those who were under 16 - - - ?---Yes.
PN533
- - - when was the most recently employed?---Between 15 and 20 weeks ago because he was most recently - - -
PN534
And of the two employees - I'm sorry, that was just one person, was it, you're talking about?---Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN535
Okay. And can you recollect how long before that was the second most recently of the under 16s employed?---No.
PN536
Now, of the two employees remaining who were employed between - who were aged between 16 and 17 years, how long have they been employed? Just do the best you can. I'm not trying to get you to give dates?---One would be approximately 18 months and the other would be probably two years.
PN537
And of the five employees, are you able to give a range - who are aged between 17 and 25, are you able to give a range that they have been employed for, the most recent to the longest serving?---Most recent is four or five weeks and up to one, I think, is probably five and a half or six years.
PN538
And the second most recent among that class?---Probably four months.
PN539
And lastly, of the two employees who are over 25, how long have they worked there?---Well - hang on, I might have got confused because I think I said five and a half years for one of those between 17 and 25. In actual fact that's one of the over 25s. I beg your pardon.
PN540
That's okay?---So that there's one that's over 25 that's been there for five and a half years. The other one that's over 25 has worked for me on two occasions. That goes back about three and a half years.
PN541
Look, I'm sorry to have taxed your memory?---Sorry, I'm just - - -
PN542
I wasn't aware it was as difficult as it sounded?---No. You're right.
PN543
Now, your opposed, are you not to being joined as a party to the SDA National Fast Food Award?---I am.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN544
Yes. And why is that?---Most significantly, it has a massive impact on my business. I'm a - I own my business and so that effectively I rely on that as a major part of my income, and I said in my statement that I've made a significant investment. But, on the data that I have about the National Fast Food Award, that impact could be - without making any rostering alterations, could be over 40 per cent increase in my weekly wages.
PN545
Now, tell me this: where do you get that figure of 40 per cent from?---I've calculated that based on my current - the wages or salaries that I pay under my current certified agreement versus the information about the National Fast Food Award that was supplied to me by Mr Black.
PN546
All right. So you haven't - can I take it from that you haven't sat down with a copy of the National Fast Food Award and done a comparison. You've based it on information that was supplied?---Information - a summary of information from the National Fast Food Award as I understand it, supplied to me by Mr Black.
PN547
Yes, but you've not sat down with a copy of the award and done the calculation?---The award document itself?
PN548
Yes, the draft - the National Fast Food Award. You've not sat down with that and a copy of your certified agreement and done a calculation?---Not the award document but with what I understand is a summary of that document, yes.
PN549
Yes. You sat down with a document supplied to you which you were advised represents a part of, at least, the National Fast Food Award?---Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN550
Can you tell me, putting the document you used to one side, what precise steps you took to make the calculation?---Went through an old employee roster, which I costed based on my certified agreement. And then using the same hours, walked through and costed that based on the information supplied, for example, with the 10 per cent penalty for work performed between 6 o'clock and 12 o'clock Monday to Friday with the penalties for Saturday and Sunday and the hourly rates, as I understood them, from the information supplied by Mr Black, and compared them.
PN551
All right. Now, when you say you went through a roster, the roster for what period are you speaking of?---I can't remember the specific week now, your Honour, but it's one of my actual recent rosters from the last two or three months.
PN552
All right. Do you still have a copy of the calculations?---Yes.
PN553
Where are they?---They're in that file, your Honour. They're my rough calculations. It might be meaningless to anybody else because I did them.
PN554
I don't ask this discourteously, but you are not and don't purport to be, or are you a person with accountancy qualifications?---I'm not, no.
PN555
And I think you've already agreed you did not sit down with a copy of the award, you sat down with what you were told - what you understand was a summary of the award to do the calculations?---Correct.
PN556
Now, did you have any regard to, for example, the provisions of the National Fast Food Award other than wage rates and penalty rates?---Some of the other provisions insofar as there's, for example, eight sick days for the State award and I think there's 10 by my recollection, as I've been advised, for the National Fast Food Award. Other conditions that affect the - potentially affect the business like conditions about cleaning duties and these sorts of things - now, I
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
didn't account for any of those conditions, but in over-viewing the summary I'd say that they introduce more onerous conditions in my workplace than what the - my current certified agreement or the State Award provides for. And so the cost to me will be greater if I account for those as well, not less.
PN557
Now, can I take it from what you've said that if you give me a copy of your calculations I won't be able to follow them?---No.
PN558
When you say "no" you mean "yes"?---If I give it you won't be able to follow them.
PN559
Yes. That is what I thought. And I don't say this discourteously, in a sense, if we're to accept the figure of 40 per cent we've just got to take your word on it? I don't mean that rudely, but that's what it comes down to, does it not?---At this moment, yes, but I'd able to sit down with you and calculate them through and explain it. It wouldn't be a problem.
PN560
Now, did you have any regard - sorry, have you ever heard of the expression the safety net adjustment?---Yes.
PN561
Yes. Did you have any regard in your calculations to the effect and timing of safety net adjustments?---My comparison was purely on a one week basis, so it was not on the basis of what future increases may or may not occur.
PN562
So am I right in saying this, and I think you've just agreed with this but tell me if I'm wrong, you did a calculation which was on a straight dollar for dollar at a particular moment basis?---Correct.
PN563
And in so doing you did it over a one week roster?---Correct.
PN564
And if I understand also your evidence you say that if your calculations are extrapolated over the course of a year - well, sorry, for the one week there was a 40 per cent increase in costs - in labour costs?---Correct.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN565
And if that were reflected over 52 weeks it would be a 40 per cent increase over the course of a year?---Yes.
PN566
Yes. Now, did you - in your calculations did you treat all employees of the business as if they were or are covered by the certified agreement?---I treated them on the basis of what I'm currently paying in my current certified agreement. I've just negotiated a new agreement. But - and in some of those instances I pay above my - as I think I've said in my statement there I pay above the - what my current certified agreement does, particularly for delivery drivers.
PN567
Yes. Do any of your family work in your business?---One, my brother.
PN568
Yes. And your wife?---No, not in my business. She does some administrative duties at home.
PN569
Was your wife not working in the franchise when we inspected - not at the franchise but in the business of the franchise when we inspected it earlier this year?---No.
PN570
Now, your brother, how old is he?---He's 26.
PN571
And for how long has he been employed?---It's on two occasions. He was working for me when we first opened and he's then left for a period of time, came back, and he's the full-time employee that's finished last week.
PN572
Sorry, I don't mean to be discourteous, he doesn't work for you now but he did work for you?---He finished with me at the end of last week.
PN573
Now, your staff - your kitchen hands - am I right in saying are generally of school age?---The kitchen hands are all at school, yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN574
Yes. And they work something in the order of between six and 12 hours a week. Is that right?---Typically, yes.
PN575
Typically, yes. And do you manage the store yourself or do you have somebody else as store manager? I'm sorry, I should withdraw that. Was your brother working as store manager before he left your employment recently?---He's been an assistant manager, but - - -
PN576
Right. Was he - apart from any authority that he had - that you have rather - was he in charge of the operation? Putting yourself out of the picture for the moment?---I'm not sure what you mean by in charge of the operation.
PN577
Right. Do you have anybody apart from yourself who is - who was, until your brother resigned, the highest ranked employee apart from yourself?---It would be probably two. My brother and one other assistant manager.
PN578
Right?---And one of the other - the other assistant manager is a more junior assistant manager.
PN579
But that other assistant manager is now the only assistant manager, is that right?---Correct.
PN580
Yes?---Well, sorry, no, no. The other assistant manager and there's still also the one who I referred to as the junior assistant manager. So there's still - I've had three assistant managers.
PN581
Sorry, sir?---One was my brother, who has since left. And then there's two. One that I refer to as being on a par with my brother and the other one who remains the junior assistant manager. There are still two full-time assistant management staff.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN582
Now, do you work in the shop at all yourself?---A lot, yes.
PN583
Sorry, did you say a lot?---A lot. Well, I - this week seven nights, but I will be working tonight when I go home. But I usually work four or five nights a week.
PN584
And are you the sole director of the company that operates the franchise?---I am.
PN585
And sole shareholder?---Yes.
PN586
Now, does your daughter ever work in the shop?---My daughter is two and a half.
PN587
You don't have a daughter older - are you able to tell me, Mr Meiklejohn - I'm sorry, I withdraw that. Your principal competitor in Warwick is who?---My principal fast food pizza competitor is Domino's Pizza.
PN588
And the secondary line of competition, I understand, is KFC and Hungry Jacks. Is that correct?---No, there's no Hungry Jacks. There's KFC, Red Rooster and McDonald's and, I suppose, times have changed where we consider all of those businesses as direct competitors now and we term - home meal replacement market.
PN589
Sorry, I didn't quite catch the end of that?---Home meal replacement market. I consider all of those businesses operating in Warwick as competition.
PN590
As competition?---Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN591
So when you say secondary - when I say secondary line of competition you actually say they are your primary - - - ?---I think they are all primary competition, yes.
PN592
And do you know how much, for example, KFC pays to its staff?---No.
PN593
Do you know how much McDonald's pays to its staff?---No.
PN594
And do you know how much any of your competitors pay to their staff?---I suppose my limited knowledge of what some of the competitors do or don't pay more so relates to the awards that they may or may not refer to. And the - I have a small amount - more knowledge about Domino's Pizza primarily because the local business is a corporate business, so a company owned store, and what I know about what they have been paying their staff this year, particularly delivery drivers, I've gained from the fact that I now employ two drivers who were working for the local Domino's store who have since been employed by me.
PN595
I note that it's 12.30, Deputy President,
PN596
THE DEPUTY PRESIDENT: Yes. How much longer did you intend to have this witness under cross-examination?
PN597
MR ROGERS: It could be a few minutes. I mean, unfortunately I've got to go through the standard - - -
PN598
THE DEPUTY PRESIDENT: Yes, I think it might be in everybody's interest if we allow you to finish with this witness, Mr Rogers.
PN599
MR ROGERS: I'm content with that, Deputy President.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN600
Mr Meiklejohn, you say in paragraph 4 that the majority of your employees are what you describe as young people. I don't again mean to tie you down, but what do you mean by young? What do you mean by young, I mean?---I think anybody aged 17 to 25 is a young person.
PN601
All right. The assistant managers - your brother, I take it, is a person over 25?---Yes.
PN602
Taking your brother out of the equation, the other two assistant managers, how old are they?---One's 25, the other is 19 now. I think she's 20 in October.
PN603
And when they're absent, is anyone appointed as a temporary assistant manager or is simply the shop run on the basis of everyone's levels and classifications remaining as they are?---Sorry I - - -
PN604
Do you understand the question? I'm sorry?---Yes.
PN605
Do you ever have a circumstance where both assistant managers and yourself are absent from the shop?---No.
PN606
So, in essence, there's never any cause for anybody other than the designated assistant managers or yourself to be the sort of a person to for the running of the shop, on a particular night?---Currently there's not. I suppose previously there has been.
PN607
But certainly - would I be right in saying this: certainly that would not be done on a regular basis?---No.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN608
And do you have any sort of formal training structure in the establishment?---I suppose outside of - we have some systems that are in place as part of our franchise, but over and above that I developed some of my own training because I find that my operations differ, as they do from store to store - they're all individually owned and operated in my area and so that, yes, there's certain things that are different or ways that different franchisees or different owners implement some programs.
PN609
Right. And when you - I think my question was do you have a formal training structure in place? I'm not quite sure whether your answer was in the affirmative or the negative?---Okay. Sorry. There's a training program that forms part of the system that I've purchased from Eagle Boys as part of my franchise system and I think that's the - if that's what you mean then, yes, that's the formal program.
PN610
I'm not sure that it's what I mean or not, but I'll ask you, what does that - when you say you purchased a training scheme or a system from Eagle Boys, what do you mean by that? What have you purchased and how does it work?---Well, I mean I purchased a franchise and I - whilst that's a - I own and operate my business as I see fit within that franchise, like a lot of other franchises, not the least of which my competitors. There's a training package as part of that which we use to train staff.
PN611
Perhaps I'm just being obtuse, Mr Meiklejohn. Just centring on those last few words, this "training package which we use to train staff", what does that mean? There's a book or there's a video, or there's a school?---All of the above. There's a manual which we can use for in-store training. From time to time there's training videos that have been developed by franchisees in consultation with our training staff at Head Office, and from time to time there's courses that are run to help with the development of our employees.
PN612
And who attends the courses?---It's a variety of people. Sometimes, for example, we've had training courses in Toowoomba where I'll take my staff down there, and that's kitchen hands included, for training. Other times when - there might be staff sent to help with training in-store, and then other management programs for assistant managers.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN613
Sir, can I understand from what you've just said, among other things the kitchen hands will, on occasions, go to a formal training seminar; is that right?---Yes, in loose terms, yes. It's a workshop, yes.
PN614
Yes, and you may be in attendance but it's not conducted by you?---No, some of that's with franchisee participant - participation in delivering the training but, as I say, that was I suppose a Darling Downs - that's the Darling Downs region and we identified a training need amongst the franchise owners and we held a course.
PN615
This is what I'm trying to get to: who held the course - the franchisees, did they?---The franchisees. We got our staff and got together in Toowoomba and, I suppose, if you're getting towards the Head Office participation in that, they had a trainer come out from Brisbane and helped us deliver that training.
PN616
Thank you. And I think when I first started asking you questions about the training you said you pay for a franchise that includes a component for training, so the training would be included in that fee you're paying, would it not?---As in the delivery of the training or - sorry, I'm just - - -
PN617
Well, the trainer comes out from Head Office. You've either paid for it already or you pay for the trainer then; is that not so?---Most of the time. There's some training that's been provided where we've paid for courses. For example, a component of the Train the Trainer course, we identified - a lot of franchisees identified a need for that training and jointly we engaged a separate company to deliver that training. We paid for the trainer and paid wages for staff to attend.
PN618
And when you say we, you mean the franchisees or somebody else?---The franchisees.
PN619
It would be right, though, I presume that the one thing that would be a constant would be that the training would not be conducted by the kitchen hands and the other staff. They would be the participants in the training, not the people running the training?---That's right.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN620
And are there any people engaged in your shop - and, sorry, I don't mean that in any strict sense, it's just a choice of words - who are required to have trade skills?---Trade skills as in like a chef or something.
PN621
Yes, having done an apprenticeship, but before they can do the work?---Not within hospitality. I'm just trying to think whether they have any other skills that they've brought to the - - -
PN622
I'm sorry - - - ?---The specific hospitality industry?
PN623
Yes. Are there people there who you require to have a chef's - - - ?---No.
PN624
Indentured chef or anything like that?---Typically I employ people and I need to train them up to be proficient.
PN625
Now, I think there was a promotion in your store called the Tastes of the World. Do you remember that?---Yes.
PN626
Was that something that you thought up or did it come from elsewhere?---As it so happens, as part of that promotion which I did think up which has been adopted by the Head Office marketing team which was part of the flyer that's been out for the last three or four weeks, and that was - - -
PN627
Yes, and that's a flyer that goes to all the franchisees?---It did, and as I say part of that promotion probably only happened two or three times but it's been my idea, but part of the current promotion was part of an idea that I forwarded to the office which has been implemented.
PN628
You forwarded that to Head Office and they then implemented it?---Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN629
Now, the pizzas, as I understand it, are served and delivered - served, I think, on aluminium silver coloured trays?---No.
PN630
They're delivered or served on trays of some description, or cooked?---They're cooked, but they're placed in pizza cartons.
PN631
Yes, I'm sorry. One step back. Are you familiar with the trays I'm talking about? They're a silver coloured metal - - - ?---They're cooked in that.
PN632
Yes?---But they're removed from that once they're cooked.
PN633
Where do you get those - from where do you get those silver trays?---A supplier in Adelaide called Metal Spinners.
PN634
A supplier in Adelaide called?---Metal Spinners Pty Ltd.
PN635
And how did you come across Metal Spinners?---From my perspective - you need to appreciate I work for Eagle Boys head office for some time, your Honour, and so I've known of them through my association with Eagle Boys for a long time.
PN636
They are a designated supplier of Eagle Boys, are they not?---One.
PN637
Yes. There are a number of designated suppliers and they are one of them?---Yes.
PN638
Do you have any other businesses apart from Eagle Boys?---No, no other businesses.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN639
When I say you, I mean you or companies with which you're associated?---No. The only other role that I have is that I'm a representative on our local council.
PN640
Now, Mr Meiklejohn, did you or more accurately did your company enter into an agreement - a franchise or franchisee agreement with Eagle Boys when you commenced the franchise?---I did. Or the company did, yes.
PN641
Yes. And am I right in understanding that in consequence of that agreement that firstly it was a condition of the agreement that the franchisee be a corporation, it couldn't be an individual? If you don't recollect I'm not asking you to - - - ?---No, again, your Honour, I've got a previous - my previous role with Eagle Boys that's normally the case, but in some limited cases there has been, to my knowledge, different entities that have owned Eagle Boys pizza franchises, not necessarily a registered company.
PN642
And in your case it is a registered company?---It is a registered company and that's a usual requirement, but hasn't always been the case.
PN643
And was it a requirement that there be a guarantor in the contract held by your company?---Yes.
PN644
And are you the guarantor?---Yes.
PN645
You're familiar with the operations manual of Eagle Boys, are you?---I wouldn't say that I know them verbatim, but I'm fairly familiar, yes.
PN646
You're familiar with the existence of the operations manual?---Absolutely, yes.
PN647
Yes. And you know that it sets out in some detail the procedures you're obliged to follow as a franchisee?---I wouldn't say obliged to follow, but certainly - because in some cases there is some flexibility for us as a business owner to implement those things, but I would say they are the normal guideline, yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN648
When you say guidelines, is it not the fact that when you contracted with Eagle Boys you contracted to follow the obligations or the terms of the operations manual strictly? Is that not so?---In your literal definition of it, yes, but in practice there's instances where there's flexibility so long as the standards are met.
PN649
When you say in practice, does this mean - and I don't mean to embarrass you asking this question - do you mean people take short-cuts or on occasions head office will allow departures from the strict rules?---No, I don't mean short-cuts, but - you know, these things evolve over time. For example, recent changes to food handling procedures have meant that our operations procedures have had to be updated and changed. So that instead I would say that there's ongoing changes to those procedures, not necessarily always reflected in those operations procedures manuals that you're referring to. But, no, I don't think there's necessarily a wholesale rebellion against those. And a great deal of the operations procedures are normal requirements that we operate in as a fast food business.
PN650
And you're aware that there's an obligation on a franchisee to have what's called a nominated manager?---Yes.
PN651
Yes. And would I be right in assuming that you're the nominated manager for the Warwick store?---I am.
PN652
And you, or more particularly your company, is not free to have a manager who is not proved by Eagle Boys. That's a fact, is it not?---As in a nominated manager under the terms of the franchise agreement?
PN653
Yes?---No.
PN654
When you say "no" do you agree - - - ?---That means I - they - Eagle Boys need to - and on my understanding typically the nominated manager, as far as it relates to me, is me as the franchisee, and so effectively they are saying they need to approve me as a franchisee as being part of the Eagle Boys system.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN655
But if the company nominated somebody else - let's assume that you, for whatever reason were incapacitated - Eagle Boys can refuse the nomination. That is, they can refuse to accept a particular person as the manager of the operation. That's so, is it not?---I suppose under the hard and fast legal interpretation, yes, but I don't think that there's been an instance where that's been unreasonably upheld.
PN656
Well, when you say under the hard and fast legal interpretation, you accept that you signed a - or you, on behalf of your company, signed a franchise agreement?---Yes.
PN657
And to the extent that it bestows benefits on you I assume that you would enforce them if need be against Eagle Boys?---Yes, but as I'm saying, and I will repeat it, under the legal interpretation what you're saying is correct. But to that extent there's also a practical day to day application of those rules and so I don't - in my relationship with Eagle Boys are a long period of time there hasn't been an instance where that's been unreasonably implemented on that term. So that if I was incapacitated I think it would be quite reasonable for me to appoint a nominated manager.
PN658
THE DEPUTY PRESIDENT: Yes, I think we're probably just getting a little bit heavily into it. All Mr Rogers is saying is that there exists under the agreement an ability for Eagle Boys to refuse a nominated individual?---And I agree with that, your Honour.
PN659
Yes?---Yes. I'm just not quite sure what - where - - -
PN660
MR ROGERS: And is it also the fact that under the agreement you or your company more accurately is obliged to supply what's called the full range of products that Eagle Boys requires to be sold. That's so?---Yes.
PN661
And you're not entitled to sell anything other than those products?---I agree with that, but then there's a great deal of - as I've just said before a great deal of franchisee input, both individually and jointly through our franchisee association which influences what products we can and can't sell.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN662
And the displays, the colours, the signs, they are all from and approved by Eagle Boys?---For the most part, yes.
PN663
Well, when you say for the most part, do you say under the agreement you've got a right to erect signs other than those specified by Eagle Boys?---No. Well, they need to meet a standard as part of an image or the brand as it currently sits but I regularly have some of that produced locally and I'm doing that at the moment.
PN664
And is it true to say that on a weekly and monthly basis you produce gross - you provide to Eagle Boys gross sales reports?---Weekly basis for sales reports, yes, for the purpose of - the fact that we have a franchise agreement and they use that data to then charge us the franchise fees.
PN665
And monthly gross sales reports?---Not monthly sales reports, monthly income statements.
PN666
And those statements include, among other things, detail of stock used, expenses?---Yes.
PN667
Yes. And each year you supply your balance sheet and your profit and loss sheet to the head office?---Yes.
PN668
And were you in July, I think it was, this year, either in the process of or about to upgrade your computer system?---Yes.
PN669
Have you done so yet?---No.
PN670
The computer that you have - the computer system you have - is it one which Eagle Boys can access?---Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN671
And the information on that computer can be called up by Eagle Boys?---Yes.
PN672
Yes. And is the information on the computer sales data and the like?---Basically, yes. There's some other limited information.
PN673
Now, I asked very early in cross-examination one or two questions about the introduction of a certified agreement and I moved away from it. When you took over the Warwick store, was there already a store in place?---No.
PN674
Or did you open it?---It was a new store.
PN675
And how long after opening the store did you enter into the certified agreement?---I think it was after about 12 months, because some of that process that I mentioned earlier happened over that period of time, so when we opened we were operating under a different award.
PN676
And did you draft the document which became the certified agreement yourself?---No. Part of that process happened - as I say, we had the ruling from the Tax Office in relation to our delivery drivers, and after that we jointly - the franchisees together with Head Office were working towards a solution and at that point in time, or after some various negotiations, had RAQ - Retailers' Association of Queensland, now National Retailers' Association, worked together with franchisees as a consultant.
PN677
Were you independently - that is, as a franchisee - a member of the Retail Association of Queensland - Retailers Association of Queensland or was it Eagle Boys that was the member?---No, I'm independently; have been for a large number of years and still am now a member of the National Retailers' Association.
PN678
When you say you've been independently a member for a large number of years, what, only since you took over an Eagle Boys franchise?---Yes, only since I've got the Eagle Boys franchise.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN679
And how did you become aware of this taxation issue, or this taxation ruling, I should say?---I just don't recall the specifics, your Honour. If I had to guess - - -
PN680
THE DEPUTY PRESIDENT: Don't guess, Mr - - - ?---- - - it was as a result of a - sorry?
PN681
You don't have to guess, Mr Meiklejohn. If you don't recall, you don't recall?---Right.
PN682
MR ROGERS: And has anyone explained to you the immediate consequence of a decision by his Honour, if his Honour was so minded, to rope your franchise into the National Fast Food Award?---I'm not sure what you mean by immediate consequence.
PN683
Yes. Well, let's assume - - - ?---I mean I've calculated for myself what the financial effect will be.
PN684
Well, if his Honour - has anyone - if his Honour were to make an award today, operable today under the National Fast Food Award, and accepting your calculations for the moment as accurate, is it your understanding that from next week you would be obliged to pay, on those calculations, 40 per cent more in wages than you are paying now, or from this week than you are paying now?---Assuming that my certified agreement remains in place, for the time being it would be that my certified agreement would remain current, but upon expiry of that - the current or new certified agreement that those new conditions would come in place.
PN685
So do you understand this: you know quite well that if his Honour makes an award, for so long as your certified agreement is operable it will have no effect on your wage structure at all?---Except to the extent that the - even the new certified agreement expires within three years and so it has an immediacy to it, I've got no short term goals of getting out of this business but notwithstanding that that hasn't gone before the Commission yet to be approved.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN686
Well, just so we're not at cross-purposes here, you're aware - or tell me if you are not - that if the certified agreement remains in force, no decision by his Honour will have any effect on your business at all. You know that, don't you?---No, that's not right.
PN687
That's not right?---I know that it will. I know that when the certified agreement does expire that that will have an effect.
PN688
Well, that's not when it's in force. Listen to the question. You know that while the certified agreement is in force, any decision by his Honour will have no effect on your business?---While the certified agreement is in force that's the case.
PN689
Yes. Well, I've asked you that three times. Why were you so reluctant to say it?
PN690
THE DEPUTY PRESIDENT: Surely the witness doesn't need to be pushed to that extent.
PN691
MR ROGERS: Well, he's dancing around the answer.
PN692
THE DEPUTY PRESIDENT: I think it's a technical question that the witness is not qualified to answer in most cases.
PN693
MR ROGERS: Well, the witness has acknowledged that he knows the answer. He just didn't want to answer it.
PN694
THE DEPUTY PRESIDENT: Yes.
**** NEIL LESLIE MEIKLEJOHN XN MR BLACK
PN695
MR ROGERS: And - well, I won't press the question.
PN696
My question was, Mr Meiklejohn, why didn't you want to answer it, and I don't press that.
PN697
I have no further questions, your Honour.
PN698
THE DEPUTY PRESIDENT: Yes, Mr Black?
PN699
MR BLACK: No re-examination, your Honour.
PN700
THE DEPUTY PRESIDENT: Yes, thank you.
PN701
You're free to step down now, Mr Meiklejohn, and you can remain or leave as you see fit?---Thank you, your Honour.
PN702
THE DEPUTY PRESIDENT: I'm going to adjourn now for lunch. I'll reconvene at 2.30.
LUNCHEON ADJOURNMENT [12.57pm]
RESUMED [2.31pm]
PN703
THE DEPUTY PRESIDENT: Yes. Go ahead, Mr Black.
PN704
MR BLACK: Thank you, your Honour. I seek leave to call Greg Death to give evidence.
PN705
THE DEPUTY PRESIDENT: That's Death, is it?
PN706
PN707
MR BLACK: Mr Death, you prepared a statement in this matter; is that correct?---Yes.
PN708
Could you confirm that this is a signed copy of the statement you've made that is a correct record?---That is the signed copy but there are changes since signing it.
PN709
Can you indicate to the Commission what changes need to be made?---With the total number of staff, I've got - - -
PN710
Which paragraph should we go to?---Sorry, my apology. Paragraph 4.
PN711
THE DEPUTY PRESIDENT: Could you mark the signed copy as you go through it?
PN712
MR BLACK: Paragraph number 4?---Yes, under "Assistant Managers", that should read now six. Do I mark the copy?
PN713
Yes?---Pizza employees goes to 57.
PN714
Yes?---Paragraph 5, employees aged between 14 and six months and 16 is now 10. The one after that, employees between 16 and 17 remains unchanged. The next line should be 10 employees employed between 17 and 18 years.
**** GREGORY PAUL DEATH XN MR BLACK
PN715
Is there any change at paragraph 6?---Six? There is. There are four employees now employed full-time, and there are 60 employees on a casual basis. Also at paragraph 7 under "Highfields" , note we do not open for lunch on Fridays.
PN716
So where it says "also open for lunch Friday, Saturday and Sunday", we should delete Friday. Is that correct?---Friday. Yes, your Honour.
PN717
Yes?---And that's all the changes to that statement.
PN718
MR BLACK: Thank you, Mr Death. I would seek leave to tender a copy of the statement, may it please the Commission.
PN719
THE DEPUTY PRESIDENT: Yes, I will mark it NRA4.
PN720
MR ROGERS: I have one objection to the statement, Deputy President.
PN721
THE DEPUTY PRESIDENT: Yes.
PN722
MR ROGERS: I object in paragraph 11 to the sentence commencing on the bottom of the second page. It's the third line in paragraph 11. It begins with the words - it's these words:
PN723
It seems to me to be very unfair that the Commission might consider putting a small business like mine under this sort of pressure when no action is being taken to increase the costs of the major pizza operators.
PN724
The objection is this. The witness is in no position to know what steps are being taken in relation to major pizza operators. He simply can't comment on that.
**** GREGORY PAUL DEATH XN MR BLACK
PN725
THE DEPUTY PRESIDENT: Yes. Mr Black.
PN726
MR BLACK: Your Honour, the witness under advice might know that no log of claims has been served on major pizza operators seeking to include them in the National Fast Food Award. So - - -
PN727
MR ROGERS: Well, look, I will concede that in a moment. I will concede that - if that's the proposition I will concede it because there has been no log served on them to rope them into the National Fast Food Award.
PN728
MR BLACK: So in that context his statement would appear to be - it's a matter for him as to whether he can sustain it after cross-examination. It would seem open to him to put it.
PN729
THE DEPUTY PRESIDENT: Yes.
PN730
MR ROGERS: I apologise, your Honour. I'm instructed that even my concession is wrong. In fact, logs have been served on them. That's the very point. I mean, the witness isn't - it's not the sort of thing he's to know - could possibly know.
PN731
THE DEPUTY PRESIDENT: Well, that's probably a matter for cross-examination, isn't it, Mr Rogers?
PN732
MR ROGERS: Well, I will open with that, because it's a fairly short point.
PN733
THE DEPUTY PRESIDENT: Yes.
PN734
MR ROGERS: Mr Death, how do you know - sorry.
**** GREGORY PAUL DEATH XN MR BLACK
PN735
THE DEPUTY PRESIDENT: I'm not sure that I marked the statement. In any event I will mark it NRA4.
PN736
PN737
MR ROGERS: Mr Death, what do you know about what - you've seen the objection I took and I say - I took objection to you saying that it seems to you to be unfair that pressure is being put on you and nothing is being done to increase the costs of the major pizza operators. Can I say this; do you have any - do you have discussions with the head offices of major national pizza operators?---No, but I've had information given to me from Eagle Boys and the National Retailers' Association saying - - -
PN738
So what you're saying is somebody has told you that nothing is being done. That's correct?---Sorry?
PN739
Somebody has told you that nothing is being done to increase the costs of the major pizza operators?---That's the information I've been given.
PN740
Yes. And if that's correct you think it's unfair?---Well, it's a personal opinion I've got.
PN741
Yes. But you have no knowledge one way or the other of whether what you were told is correct?---No.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN742
Thank you. Now, mentioned in your statement - you make reference to the - you might not have used the expression "low season", but quiet periods in February and June. Do you recall - - - ?---Yes.
PN743
Firstly, is there any factor or factors to which you're able to point to identify why trade is down in February and/or June?---Yes. Well, the Toowoomba rates are due in February, coming off the Christmas holidays. School is back and the history of my sales always looks at February as being a low period of sales. It's been a trend I've had - well, I've been in Toowoomba 10 years and my history of sales reflects that.
PN744
And June likewise. Is that what you're saying?---June, yes.
PN745
Which are your peak months and if you can just - as best you're able which are the peak months of sales, which are the trough months and how does the pattern establish itself?---Winter time is peak period, especially with a lot of football on. Also leading into spring, sort of October/November leading into Christmas is peak periods. February is our quieter period. About the middle of June is - reflects the historical figures. That does come off a bit, the sales, in that period. But overall it's the winter and into the spring. January is a slower period with people going away on holidays.
PN746
And, I suppose, you would assume even though you may not know directly that, of course, in some areas it might be a busy period because people have gone there on their holidays, but not for you?---No. Well, we notice that in the coastal areas.
PN747
Yes?---Yes.
PN748
And would I be right in assuming that in busier times you require more staff?---Yes, you've got to roster your - according - adjust your rosters according to demand and customer service.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN749
Yes. And so that the level of staff will be reflective of a number of factors, one factor being those periods that you anticipate are likely to be quiet - sorry, you're being recorded. You have to say something?---Right.
PN750
And I take it that there are also less tangible - I withdraw that - less anticipatable matters such as local - I presume that if it's raining heavily you get fewer customers than if it's a nice clear night?---Yes. That's come into - into the equation. Also you have black-outs in particular areas of Toowoomba you will have sales - you know, people ringing in for pizza because they can't - haven't got electricity, which has happened in the past.
PN751
I wasn't going to ask you about black-outs but, I guess, that's right. And I presume if you had a black-out, of course, it would have the opposite effect. You wouldn't be able to conduct your business?---Just recently there was a major black-out. We had to close for the night.
PN752
Yes. Now, can I ask you to, with some detail of specificity, break down your costs? Firstly, can I ask you to divide your costs between fixed costs and those which are not fixed. Do you understand what I mean by this? Perhaps - look, I don't want to make it a guessing game. I will try and make it easier. You refer in your statement to some of the costs associated with - and can I ask you to turn to it for a moment, sir - some of the costs associated with the production of a pizza. Sorry, again, you've got to say something. Just say "yes" or "no"?---Sorry, I - - -
PN753
You say - you refer in your statement to some of the costs associated with manufacturing a pizza?---Yes.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN754
And you refer to the - not that this literally a cost, but you've heard of the Goods and Services Tax?---Yes, GST.
PN755
Yes?---Yes. I'm aware of GST.
PN756
And you refer to a 6.5 per cent franchise cost?---That's correct.
PN757
Yes. Tell me if I'm wrong, but is that a percentage charged by Eagle Boys to you on turnover?---That's correct.
PN758
And you refer to a national marketing charge of 10 per cent?---Yes.
PN759
Is that also a charge levied on turnover?---Yes, it is.
PN760
Yes. So for every pizza you sell - let's assume a pizza cost $10 just to pick an easy figure - one dollar goes - sorry, six and a half cents or 65 cents rather goes to Eagle Boys as your franchise fee charge and a dollar goes to Eagle Boys as part of the so-called national marketing levy?---Yes.
PN761
Yes. What's the national marketing levy for?---It helps with our production of TV, flyers, distribution of the flyers. That's the major cost it covers.
PN762
And when you say "our", you mean Eagle Boys?---Well, that covers my costs in Toowoomba, or whichever store. I've got the three stores, so cover that local area, my franchise territory.
PN763
Well, just so I understand, is the 10 per cent a levy which is put into a fund against which your name is sort of kept, or is it simply 10 per cent which is paid to Eagle Boys for which you derive some benefit?---It's for Eagle Boys and pays for my flyer distribution and radio and TV.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN764
All right. When you - we may be at cross-purposes here. When you say it pays for it, does that mean this, that the 10 per cent, the money which is levied for the so-called national marketing levy, or raised for the national marketing levy, every - that money, like, every cent of it that you pay is allocated to you for advertising in your area?---I'm not aware of the expenditures, what the costings or information - financial information to what is actually spent.
PN765
THE DEPUTY PRESIDENT: So you're saying that it's simply your share of the overall costs of marketing and advertising by Eagle Boys; is that correct?---Simply, yes.
PN766
MR ROGERS: Yes. And when you say that, what you mean is you pay a levy to Eagle Boys, and you assume other people pay a similar levy, I expect?---I suppose it's like a franchise agreement, that - - -
PN767
And Eagle Boys does what's called a national marketing exercise?---Well, it's a national advertising ad fund.
PN768
And you derive a benefit from that because there are flyers in your area, and there are TV campaigns, and people in your area will presumptively, or hopefully, come to your establishments?---Yes.
PN769
Now, those two costs, the 6½ per cent and the 10 per cent on turn-over, are you able to identify what those two costs represent as a percentage of your total costs, and so you don't misunderstand me, do you appreciate the distinction between the percentage of turn-over and the percentage of costs?---I do not understand.
PN770
You don't. Okay. If you sell, in the course of a year, and I don't know how many pizzas you sell in the course of a year, sir, but if you sell in the course of a year $1 million worth pizzas, as if - if there is a 16½ per cent levy, that will be 16½ per cent of your turn-over. Do you appreciate that?---And $16,500.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN771
More likely $165,000?---Sorry. I dropped a nought.
PN772
However, it isn't 16½ per cent of your total costs because, obviously, you don't - not every dollar that you turn-over will you expend. Do you understand that?---I'm a little bit lost.
PN773
Yes. I'll try and slow this down because it is not easy. You appreciate that turn-over means the number of dollars which pass through your till in return for the product that you supply?---Yes.
PN774
You understand that?---Yes.
PN775
Good. And if you turn-over, for example, in the course of a year $1 million, if your total costs were also $1 million, you would not make a profit?---That's right.
PN776
I note that you've opened three stores, so can I infer - and I don't ask you to give me the figure - but can I infer that, on balance, the businesses that you've been operating have been profitable?---Yes. Can I sort of back that up with saying I have some borrowings there of some considerable amount to keep abreast - - -
PN777
Oh, yes. Look, I don't suggest that you're particularly profitable. I don't know, and I don't really which to inquire, but you opened the businesses because you've made profits in the past and you hope to make profits into the future. That's why one conducts a business?---And look for opportunity to expand, yes. All businesses - - -
PN778
And that must mean that the costs that you have expended are less than the turn-over, that is, less than the income that you have generated?---Yes.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN779
And what I'm asking you is this, if you're able to tell me. Of those costs, what percentage does the 16½ per cent paid to Eagle Boys represent?---I'm missing something.
PN780
THE DEPUTY PRESIDENT: Mr Death, do you know the costs - the total costs, on an annual basis, of your business? Not the turn-over, what it actually costs you to run that business. Do you know that figure? I'm not asking you what the figure is, just do you know it? Do you know what your total costs are?---Figure-wise or percentage-wise?
PN781
No. Just in dollars. Do you know what it costs you to run each of your franchises each year, how much money you have to expend to do your business? Do you know that number?---I don't know that number offhand. No.
PN782
So you don't know what your costs are?---Not off the top of my head.
PN783
How would you know whether you were making a profit then, Mr Death, if you don't know much your costs are?---We do a monthly income statement on a monthly basis, doing our sales and break-up of costs, and that gives me a monthly, saying if I made a profit or - - -
PN784
So on a monthly basis, you would know how much it costs you to run each of those businesses?---That's right.
PN785
Yes?---Yes. Righto.
PN786
So on a monthly basis, in answer to Mr Rogers's question, would you be able to say what proportion of those costs is represented by the amounts of money that you have to pay to Eagle Boys, being 10 per cent and the 6½ per cent?---No, I couldn't calculate off the top of my head at the moment.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN787
MR ROGERS: Thank you, Deputy President.
PN788
Mr Death, do you know as a - again, only approximately - do you know as a percentage of turn-over your labour costs over the course of a year?---An estimate, an average, would be around the - it does vary - anywhere between 26 and 30 per cent.
PN789
Is that figure not your percentage of total costs?---Total labour costs?
PN790
Yes. Is 26 - am I not right in saying that somewhere between 25 and 30 per cent is the percentage of your total costs which you expend on labour?---That is my labour costs. Yes.
PN791
But it would be a lower figure, would it not, of your turn-over?---That labour cost is based on turn-over.
PN792
Right. Excuse me a moment, Deputy President.
PN793
Can you tell me this, Mr Death? Do you know what the material costs are to produce a pizza? I accept that pizzas vary in size and quality and style but, on average, can you tell me what the material costs are to you?---On my calculations, just the material costs would be around the $2, $2.50.
PN794
Right. When you say the material costs, you mean the flour and the bits and pieces you throw on top?---Yes, including - and the box.
PN795
And the?---The box, sorry.
PN796
The box. Thank you. From where do you procure the box? From where do you get the boxes?---We order them through our suppliers.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN797
Right. And who is the supplier who supplies you with Eagle Boys boxes?---It's Bidvest or Burleigh Marr Distributors, I think.
PN798
And they're what's called an approved supplier. Do you understand that expression?---Yes.
PN799
They're approved by Eagle Boys?---Yes.
PN800
I understand when you made your statement you purchased or opened Highfields store three months earlier, or commenced in Highfields store three months earlier. I take it's - we're now about five months out; is that right?---That's right.
PN801
Was there a store there which you purchased previously or did you open it?---It's a new store in a new shopping centre, Highfields.
PN802
And are all three stores operated by the same corporate entity or do they have different - - - ?---No, it's my family company, Nicamhay Pty Ltd.
PN803
And it's the same for each store?---Yes, the company owns the three stores.
PN804
And are you the sole director?---No, it's my wife and myself.
PN805
And you're both the shareholders, I take it?---Correct.
PN806
Sole shareholders?---Yes.
PN807
And do you and your wife both work in the shop?---My wife did. Now, its more sort of looking after my youngest daughter. I've got a stepson - I call him my son but he's actually my stepson, his wife and my natural daughter working in the stores with us.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN808
Okay. And I think if I understand your statement correctly, you have a certified agreement at Highfields; is that correct?---The one certified agreement covers the three stores.
PN809
Thank you. And the certified agreement - the one which covers the three stores, when did that come into existence?---It would have been six years ago was the first certified agreement, then it was renewed three years ago and it's due for renewal now.
PN810
Now, how did you come, six years ago, to obtain a federal certified agreement?---It was through Eagle Boys - having a meeting with Eagle Boys saying - looking at certified agreements and we had a meeting, it would have been in Arthur Street, the old Eagle Boys Head Office.
PN811
Right. Can I assume that you didn't approach Eagle Boys and say, "Look, I would like a federal certified agreement", or did you?---No, it was raised by Eagle Boys to us saying to look at certified agreements.
PN812
And when it was first raised with you, did you know what a certified agreement was?---I think I started to call in an enterprise bargaining agreement, because that's what I - - -
PN813
Because you'd heard that expression used - - - ?---Expression before, and I thought it was enterprise bargaining.
PN814
And the form of the agreement - were you given a form of document that you might look to have made into a certified agreement at the time at your Toowoomba and Gatton stores?---Yes, I think it was given to us in a package form from Eagle Boys from RACQ.
PN815
And when that occurred, was that - were you given a package, as it were, at a meeting with other franchisees or was it posted out to you?---No, from memory I think it was given to us at a meeting. I'm not quite sure whether it was that meeting but.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN816
And were you told at the time why it might be advantageous to consider getting a certified agreement over and above - sorry, in substitution for whatever industrial regulation was applying at the time?---I can't recall. The only thing that sticks in my mind was our drivers weren't covered under any awards or anything like that, and it was going to cover that, so.
PN817
Your concern at the time - or, your concern in relation to the time was that as far as you knew, in any event, there was no regulation of your drivers?---No, no.
PN818
Sorry, when you say no, do you mean you agree with me or disagree with me?---Sorry, I'll try to explain. When I purchased Toowoomba, the drivers were actually called contract drivers and they were actually under contract and that's - - -
PN819
But someone made you aware at some stage that the Tax Office at least, or a court - one or the other - had formed the view - expressed the view that such people were not contractors but in fact were properly characterised as employees?---Yes, and to do something about it.
PN820
Yes. Of course, you understand that not every employee is necessarily covered by an industrial award, or don't you know that?---I don't. Employees?
PN821
I don't mean at Eagle Boys particularly. I mean, it's not a necessary consequence of being an employee that one is covered by an award? I'm sorry, you nodded so I presume you're saying yes?---Yes.
PN822
Tell me this: why was it a matter of such concern to you that the drivers be covered by some industrial regulation?---Well, it sort of come to notice when the WorkCover definition sort of come into play saying are they contractors or are they employees. I was unaware of it.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN823
But do you appreciate this, that if a person is not covered by an industrial award, you are free to contract with them as you wish even though they are an employee; do you understand that?---I probably wasn't aware you could just carry on without being covered under the award.
PN824
The point I'm trying to make badly, and tell me if you understand this or not, is that by making - sorry, creating an industrial instrument - that is, a certified agreement in this case, covering drivers, you were obliged to pay them amounts which, if they were not covered by an award, you would not have been obliged to pay them. Do you understand that or is that news to you?---Sorry, I'm - - -
PN825
I'm sorry, Mr Death. Look, I'll pass on it. I'm not trying to catch you out on any of this. In any event it was to do with the drivers that you entered into the certified agreement, was it? That was - - - ?---Not - - -
PN826
- - - a fundamental issue?---One of the issues we had.
PN827
What were the other issues?---Because when we opened Toowoomba - when we bought Toowoomba, there was only four kitchen hands and there was about eight drivers but that's all changed now. There's more kitchen hands and drivers, and just - I think it was that the driver situation was - - -
PN828
That was the main issue, was it?---Yes.
PN829
And there was nothing else that particularly troubled you about award industrial regulation?---No. No.
PN830
Now, you say in your statement that you have, and the figures seem to bear this out, a large number of employees under the age - or, 18 years of age or less?---Correct.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN831
Are any of those employees required to have a trade certificate to do their work at Eagle Boys?---No. No.
PN832
And do any of those employees, or indeed do any of the other employees - are they required to have a trade certificate?---No.
PN833
Is there any - do you have any formal system of training of staff?---Just mainly in-store training from the managers and the franchisees - myself.
PN834
And can I take it that the training of staff - sorry, I withdraw that. When you say in-store training, do you mean on the job training or do you mean - - - ?---Mainly on the job training, yes, from managers and supervisors.
PN835
Because inevitably there will be things everyone has to learn as soon as they start?---That's correct.
PN836
Whether it simply be how to answer the telephone. That's - they need to be told, that's formal training?---And location of everything.
PN837
But there's no - you don't have a regime of formal training where a day might be set outside and people are trained in tasks, or do you?---If there's anything new coming out we might have a staff meeting and inform them what's - something new coming along - new pizzas or the like but not a set training session.
PN838
And that training is conducted, I take it, by somebody in authority, either by yourself or one of the assistant managers?---Yes.
PN839
Tell me this. The expression "assistant manager" seems to imply that they're assisting a manager. Apart from yourself, if there anyone who one would designate as a manager?---Well, I'll just go through my managers. I've got a full-time store manager at Toowoomba, full-time store manager Highfields, and a full-time store manager at Gatton.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN840
And is it they, or is it yourself, or it someone else who - sorry, are you familiar with the expression "nominated manager"?---Yes, I am. Yes.
PN841
And is it yourself, or it one or other of these people, or is it someone else who is, as between each of those franchises and Eagle Boys, the nominated manager?---The nominated manager for Toowoomba is my wife, I am nominated manager for Gatton, and Nick Tory, my step-son, who's nominated manager for Highfields.
PN842
And when you say that the nominated managers, are also yourself, your wife and your step-son the actual managers that you were speaking of before or are they different people?---Nick Tory who's my step-son, he's the actual store manager. Tony Jackman is my store manager at Toowoomba and Bev's the nominated manager. I'm the nominated manager for Gatton, and Neil Jones is the store manager for Gatton.
PN843
Now, I'm not sure whether you still do, but the time when this statement was first made, you had one part-time employee?---Yes. Ben Thomas, he's part-time.
PN844
And how many hours a week, roughly, does Mr Thomas do?---Around 30, offhand, going by memory.
PN845
Is that fairly consistent from week to week?---Thereabouts. We do use him in a role of relieving with days off between the stores. He does some sort of relief in each store covering days off and when we're short, you know.
PN846
But one way or another, he does his 30 hours?---Yes, thereabouts.
PN847
Now, you mention in, I think it's paragraph 7, which you've slightly amended, and that will affect my question slightly, I might say, that you do 65 per cent of your - 65 per cent of your revenue is taken in a three hour period on Friday and Saturday nights?---I think that's an error. I think it was Friday, Saturday, Sunday, the weekends.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN848
I'm sorry. Could I just get you to tell me between what period, then - just look at - I think I said paragraph 7. I should have been paragraph 8:
PN849
My stores typically generate the majority of their revenue in a three hour period on Friday and Saturday night. In these two periods, the company earns about 65 per cent of total weekly says.
PN850
What should it say?---To be more factual, it would be Friday, Saturday, Sunday.
PN851
What, in a three hour period Friday, Saturday, Sunday, or - - - ?---Yes.
PN852
That's Sunday night?---Yes. Most of our sales are generated on evenings.
PN853
So if I'm not - if my maths are right, that's 27 trading hours in the course of the week - three hours in each of three stores over three nights - - - ?---Mm.
PN854
- - - represents about two-thirds of your weekly sales; is that right?---Thereabouts. Yes.
PN855
Now, is that the period in which you have maximum staff?---Correct.
PN856
Would I be right in assuming that you also need similar levels of staff both before and after those three hour periods?---Not before, because we're - I'm talking of Toowoomba. Your preparation is done during the lunch period leading up to your evening. You'd only need two or three staff during that period. For Gatton and Highfields, they're not open during the lunch - Gatton is not open for lunch at all, so the prep would be done after your main rush, same with Highfields during the week, and the weekends would be done through the lunch period, or after lunch period.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN857
You'll see, if you look at paragraph 7 of your statement, even as it's been amended, that the store trades - sorry, the stores trade for a considerably longer period than those 27 trading hours referred to in paragraph 8?---Correct.
PN858
In light of your evidence changing slightly, I'm not quite sure, but would I be right in saying the remainder of the week is something like, over the three stores, 120 trading hours. In fact, I might just ask you to do that maths because, unfortunately, my calculations have now been thrown out by your answer. But am I right in saying this, Toowoomba South trades something like 84 hours a week?---Yes. I would say around the 84 hours, yes.
PN859
I'm not asking you to be precise. Gatton trades something like 40 to 42 hours a week, and I'm simply doing that by saying seven times 6?---Yes.
PN860
And, likewise, Highfields - - - ?---Would be - - -
PN861
Again, something in the range of 40 to 42 hours a week - - -
PN862
THE DEPUTY PRESIDENT: Or maybe slightly more given you say you've got later closer on Fridays and Saturdays?---Yes.
PN863
MR ROGERS: And also open for the lunch hours?---For the lunch hours. So you'd be looking at around a bit over the 50 - 52.
PN864
Approximately 50. Which is a total of, and I mean, just in round figures, something like 174 or 175 hours a week between the three stores?---Mm.
PN865
Why, if 65 per cent of your business is generated in not much more than 15 or 20 per cent of that time, do you trade such long hours?---Probably competitors. In Toowoomba, located close by is McDonald's, KFC, Pizza Hut, Subway, KFC. There's Red Rooster, Super Rooster. So we're sort of open to - along with the competitors.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN866
Right. Do you not employ staff, or not employ many staff, in those other times?---Normally, on a lunch shift, with Toowoomba if you have two staff earlier on in the week, Thursday, Friday, you'd have three to do your preparation to lead up into the evening trade.
PN867
And when you say you might have two in the lunch shift, where was that?---At Toowoomba.
PN868
And three leading up to the evening?---No. Three Thursday and Friday to do your prep and additional bases, because you sell more pizzas - - -
PN869
And what's the largest number of staff you have in the course of a week at any one time?---Friday is normally the biggest volume or - biggest number of staff on shift.
PN870
And putting aside drivers - I'll come back to those in a moment - how many people are we speaking of?---I'll just refer to a roster I've got here. There's 13 kitchen-hands
PN871
And when is that?---On the Friday.
PN872
Friday, the evening?---Yes.
PN873
At - what, over the three shops or at Toowoomba alone?---That's Toowoomba alone.
PN874
Gatton?---I would have to give you an estimate. It would be around seven.
PN875
And Highfields?---Highfields is looking around about six.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN876
And they are, in the main, kitchen hands?---They are kitchen hands. I haven't quoted any managers.
PN877
You don't draw a distinction between kitchen hands on one hand and people answering the telephone on the other? They are all kitchen hands?---Kitchen hands, yes.
PN878
Now, tell me this. During these high turnover periods what are the staff in the main doing?---We have a chalkboard position in the shop and we allocate positions to those people. We allocate to the front counter, dispatch area. We assign them to a make bench. And you've got your - in the kitchen sort of filling up the make bench and sort of general duties - well, like phone duties. So - - -
PN879
Well, there's a percentage - is a percentage of a person's time in the shop in these busy periods - I'm sorry, how many telephone lines have you got? I will just ask you to centre on Toowoomba because I don't want to make it more confusing than it needs to be?---Yes.
PN880
In Toowoomba how many telephone lines have you got into the shop?---Six.
PN881
And during the busy periods typically how many people will be working answering the telephones?---I assign about four to the phones; other associated duties with that.
PN882
And what's an associated duty?---Filling up make bench.
PN883
Could you say that again?---Filling up the make bench, the toppings, putting toppings in the make bench as they are making their pizzas.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN884
So they are doing that and if the phone rings they grab it and take the call and - - - ?---Yes. Go back to - - -
PN885
- - - go back to filling up the make bench, as you say?---Yes.
PN886
Okay. So you've got four people allocated to the phones. So we've got 13 we're speaking of. What are the other nine doing during this period?---We have about three to four sort of looking after the front counter. You would have - there's three point of sales on the front counter. You normally have two to three at dispatch.
PN887
What are they doing in dispatch?---Boxing - cutting and boxing pizzas, putting them in delivery bags, filling up the boxes.
PN888
And does that pretty much - I mean, I'm not sure the figures accurately came out, but does that pretty much sort of take account of what people are doing during that period? The telephones, the front counter and dispatch?---And your back area.
PN889
And what are the back area doing?---Sink area. Filling the make bench and the sink area.
PN890
Sorry, say that again?---Putting up the make bench, the sink, kitchen sink. You've got washing up to do.
PN891
Washing up?---Yes.
PN892
Necessarily because things are getting dirty while all these other things are going on, no doubt?---That's right.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN893
Yes. And typically what - in your shop what percentage of time would a person spend on washing up and cleaning machines and that sort of thing - cleaning floors?---The only major one is after your rush. It would be an hour and a half finishing the washing up. The floor is only washed - cleaned once a night.
PN894
Well, if a person, a young person, sort of came into work and had - let's assume - would a four hour shift be unusual?---Not on a Friday night.
PN895
Well, let's assume on a four hour shift, what percentage of time would they be - would they spend doing washing up, doing the floor and including machines?---An hour and a quarter.
PN896
Now, you mention in paragraph 8 - if you look at the last dot point in paragraph 8 you use the word there "optimum". You refer to the optimum method for employing and remunerating delivery drivers. In fact, just so you understand, you've said in your statement at the top of paragraph 8:
PN897
In these two periods the company earns about 65 per cent of total weekly sales. This business pattern impacts on -
PN898
And then the last dot point:
PN899
... the optimum method for employing and remunerating delivery drivers.
PN900
What do you mean in that sentence by the word "optimum"?---With the drivers Toowoomba is a fairly large delivery area and we do deliver to other little townships outside Toowoomba. And we do have a delivery surcharge for those areas which are paid back directly to the driver because they are missing out on deliveries closer to - they are not getting the benefit of getting closer deliveries. So we can - - -
**** GREGORY PAUL DEATH XXN MR ROGERS
PN901
I'm sorry, I just don't understand what you mean. You've said in the statement the mechanism or the fact that there is a sort of a rush period for three hours on Friday and Saturday nights impacts on - and you've identified a number of things. And then it says:
PN902
... the optimum method for employing and remunerating delivery drivers.
PN903
What I'm asking you is how does that business pattern - sorry, my first question was what do you mean by "optimum". And my second question following up from that will be in what way does the business pattern impact on the method for employing and remunerating delivery drivers. How are the two things related? That's what I'm asking you?---What I think I was getting at we would be able to reward them with a surcharge and we've got two ways of doing it with the hourly rate or the - they have got a - or we can by the set rate. They can work the - just the peak periods where all the deliveries are there instead of - - -
PN904
I'm sorry, Mr Death, I'm still not understanding. The - and I will try to do this slowly. You say:
PN905
My stores typically generate the majority of their revenue in a three hour period on Friday and Saturday night.
PN906
And I think - sorry - and Sunday night too. And then you say:
PN907
In these two -
PN908
obviously three periods -
**** GREGORY PAUL DEATH XXN MR ROGERS
PN909
... the company earns about 65 per cent of total weekly sales.
PN910
So that's just an analysis of turnover. You accept that?---Yes.
PN911
And then you say:
PN912
This business pattern -
PN913
which is the analysis you just applied -
PN914
... impacts on the potential for growth, the ability to respond to price wars, staffing arrangements -
PN915
and then you say:
PN916
... the optimum method for employing and remunerating delivery drivers.
PN917
Can I suggest to you that the two things just have nothing to do with one another?---I think I was trying to say there the peak deliveries - the deliveries come in that peak period and we can remunerate drivers with hourly rate or just a set rate once - the way I'm trying to explain it.
PN918
That's at whose election?---Sorry?
PN919
Sorry. At whose election? Your election or the driver's election?---Well, they can choose.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN920
And you also say, if I can then just take you back to the beginning of the paragraph:
PN921
So the business pattern impacts on potential for growth because we have such a limited trading period within which to maximise volume.
PN922
What do you mean by that?---That's probably saying that's when our peaks are. That's an evening meal period and doesn't last forever. It's in that select range.
PN923
Well, what do you mean then by the potential for growth? Growth of what?---I've confused myself, I think.
PN924
Can I ask a question? This is not meant to be discourteous but you may think it is. Are these words or somebody else's?---The majority are mine.
PN925
All right. Well, can I ask you then to look back at that dot point and think about what you were trying to say and then if you would tell the Commission what it is you're trying to convey by that?---I'm sorry, I'm not feeling that well but I'll try.
PN926
Look, I won't - if it comes to you tell me. What then, if you look at the next dot point, are you trying to say? I mean, the words have a meaning I accept, but what relation do you say there is between the short periods of intense sales and the ability of the business to respond to price wars or other factors?---When they put out the low pricing, it really sort of impacts on people coming through the door and ability to service and serve those customers quickly, and that's what I'm trying to get at there.
PN927
Can I ask you to repeat that. I didn't quite follow?---Volume does go up and down with the pricing. If it's a low price point out there, that seems to impact on your customers coming through the door and ability to serve them.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN928
Could I suggest this to you, that the only consequence of 65 per cent of the total weekly sales being concertinaed into such a short period is that there is - is that you have very large flat spots through the rest of the week?---We have lunch periods are not often - little trade during your lunch periods Monday, Tuesday, Wednesday. They're slow lunches.
PN929
Yes, because over the remaining 140 odd hours of the week or 150 hours of the week you're doing only half the business you do in those 27 working hours, if we can put it - or trading hours, if we can put it that way. So, would I be right in inferring there must be long periods - - - ?---Yes, yes.
PN930
- - - of very, very slow business?---Yes.
PN931
Now, are you able to make an estimate of the cost to you if the National Fast Food Award were introduced in place of your certified agreements?---I have made a calculation. I would say my actual wages bill would increase by 30 per cent based on my calculation.
PN932
Now, can you explain - can you tell the Commission, firstly, what documents did you use to calculate that figure?---I used my wages figure at 30 May 2004 for Toowoomba, then you've got the National - the comparison with the national award and calculated what you had to pay under that national award.
PN933
When you say you got the comparison of the national award, what, you had a summary document, did you?---Yes.
PN934
You didn't have a copy of the national award itself?---No.
PN935
And I think you said you did it, where, only for Toowoomba?---Only if that time allowed. I did have - I've got a sick father and - - -
**** GREGORY PAUL DEATH XXN MR ROGERS
PN936
I'm not critical. I'm - - - ?---I didn't have the time. I just did the Toowoomba - - -
PN937
And you mentioned 30 May. It was for that day or was it for that week?---A week. We pay weekly. It was over one rostered period - week roster.
PN938
Do you have your workings there?---I have some workings.
PN939
When you say you have some workings, do you have a calculated out sheet?---I've just got a comparison break-up of total general staff, drivers and managers.
PN940
Well, I call for that document. That reminds me, Deputy President, I put a call on earlier for the manual.
PN941
MR BLACK: Can we do that tomorrow?
PN942
MR ROGERS: Well, you agree with me, Mr Death, that the document that I've just called for and that you produced doesn't show your workings, it merely shows the end result?---I said it's a comparison.
PN943
And you agree with what I've just said - that is, it doesn't show the workings?---No.
PN944
It just shows the result?---Yes.
PN945
Sorry, yes?---Yes, that's only for comparison, not the actual calculation.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN946
I'll return that document. Now, you say in paragraph 11 of your statement that:
PN947
If brought under the award it will increase my labour costs by about 30 per cent and threaten the viability of my businesses.
PN948
What do you mean by "viability"?---Ability to service cash flow; ability to do repairs and maintenance and refurbishments; to have reserves there to cover actual operations.
PN949
When you say that, I take it that that's your - I don't mean this discourteously but that's your instinctive reaction based on a 30 per cent increase in salaries?---Well, you'd have to look at - when you're looking at increased costs then you've got to look at the overall operations of your - of any business.
PN950
But you haven't done that - again, I don't say this with any criticism, but you haven't taken that figure - the notional 30 per cent increase in wages and gone to a chartered accountant or some other person with expertise in such matters and obtained a report from that person - - - ?---No, it's only - - -
PN951
- - - as to the probably viability of any of your businesses if this were to occur?---Only this calculation that equates to 11 - nearly a 12 per cent increase in costs overall, so that's my calculation.
PN952
Well, I think you said - earlier you said wages were about 25 to 30 per cent of your overall costs, or was it overall turnover?---I've got total sales. It does vary but - as your sales go up and down.
PN953
I just have to stop you there and go back a step because I may have misunderstood. The figure of 25 to 30 per cent that you mentioned very early when I was cross-examining you I thought you said was 25 per cent to 30 per cent of total costs, but you've just said it was 25 to 30 per cent of total sales.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN954
THE DEPUTY PRESIDENT: With respect, Mr Rogers, I think actually the witness said that it was 25 to 30 per cent of turnover, and said that on a couple of occasions.
PN955
MR ROGERS: I'm sorry. In that case, accept my apologies, Mr Death, I'm wrong.
PN956
Yes, I think that is right now, Deputy President, we had a lengthy exchange about it.
PN957
THE DEPUTY PRESIDENT: Yes.
PN958
MR ROGERS: I won't pursue that, Mr Death. Would you accept this, that if it is - and I just pick this figure not because it's the lower figure but it's just easier to think about - 25 per cent of total sales, an increase of 30 per cent in wage costs does not convert to a - necessarily, to be 30 per cent increase in overall costs. Do you accept that, or is that being too obscure?
PN959
THE DEPUTY PRESIDENT: Well, I think the witness does accept it because I think what he said was it converts to about an 11 per cent - - - ?---Yes.
PN960
- - - increase in - - - ?---In costs. Yes.
PN961
MR ROGERS: You say in paragraph 12 you're not trying to identify all of the provisions in National Fast Food Award that would harm your operations, but the list includes - and then you list six items. From where did you get those six items?---Mainly from that classification.
PN962
The summary sheet?---Yes.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN963
Have you ever seen a copy of the National Fast Food Award?---No.
PN964
When you say in paragraph 14 that the average costs of making a pizza is between $4 and $4.50, is that a materials costs, or is that a - - - ?---No.
PN965
- - - not to be discourteous, a notional cost, having regard to all the expenses that go into running the business?---It's an overall cost calculation provided from Eagle Boys.
PN966
So it has regard to rent?---Yes.
PN967
Electricity, labour, materials, national marketing fee, the works?---Yes.
PN968
And you accept this, do you not, that, in a sense, that's an artificial figure because, of course, it will always depend on how pizzas you make in the course of a year. Your rent cost doesn't change, for example, but if you sell twice as many pizzas, the rent cost becomes a lower proportion of turn-over?---Yes, but you're still - there's always increase in costs in your rent, subject to CPI.
PN969
The proposition I'm putting to you is this, that when you speak of the average cost of making a pizza as being between a certain price and another price, you're not really identifying the costs of making the pizza. You're identifying the costs of running the business by reference to the number of pizzas you make?---At one particular time, yes.
PN970
Yes. And, of course, in the course of a year if you make no pizzas, or one pizza, the cost of making that pizza is prohibitively high?---Thousands.
PN971
Yes. Now, are you aware, or have you been made aware, of the effect on your business if his Honour makes - the immediate effect on your business, if his Honour makes an award today or tomorrow, roping your businesses into the National Fast Food Award?---It would have an effect.
**** GREGORY PAUL DEATH XXN MR ROGERS
PN972
All right. And what's that effect?---Well, you allow for increases in your costs, wages costs.
PN973
That's what you anticipate would happen, that if his Honour made an aware, you'd have to pay higher rates, pretty much immediately?---Yes. Well, I'm not quite sure of the process involved.
PN974
That is your immediate concern?---Yes.
PN975
No further questions.
PN976
THE DEPUTY PRESIDENT: Thank you. Mr Black?
PN977
PN978
MR BLACK: Mr Death, you were asked about your method of remunerating delivery drivers, and you referred, I think, to different methods. Could you give the Commission more information about what are the arrangements applicable to remuneration of your delivery drivers? What is prescribed in your certified agreement?---I have a copy of the certified agreement here. Under the paragraph 3.3, "Wages for Delivery Drivers", they call it method A, which is a set fee for per delivery, or method B, where they're paid an hourly rate and so much per delivery. The first method is normally just a set rate that's higher than the method B. So they've got a choice of one set rate, or an hourly plus a smaller set per delivery rate, including the hourly rate.
**** GREGORY PAUL DEATH RXN MR BLACK
PN979
And what would be the circumstances that would influence you to choose between which method you employed?---Well, the driver can select, by agreement, which way he wants to go. Most of my drivers are on the hourly rate plus a small delivery fee. I think I've only, at the moment, got one driver on the set - just the set rate because he's got a second job and he can't sort of actually - he gets called away on his job and he said, "Well, I'll just - go - work the peak periods because I can't sort of stay. I might be called away to my other job."
PN980
Just clarify when you say "set rate", you're referring here to the per delivery rate or to the hourly rate plus - - - ?---That one driver, just the set rate, one fee - - -
PN981
Per delivery?---Per delivery.
PN982
No hourly rate?---No.
PN983
Just a rate per delivery?---Per delivery.
PN984
I have nothing further, your Honour.
PN985
THE DEPUTY PRESIDENT: Yes, thank you.
PN986
You can step down now, Mr Death, and you're free to remain or leave, as you wish?---Thank you, your Honour.
PN987
MR ROGERS: Deputy President, I was wondering - I know that we're not to 4 o'clock.
PN988
THE DEPUTY PRESIDENT: Yes.
PN989
MR ROGERS: I was wondering whether we might break early. I need to deal with Mr Ryan - the matter I raised with Mr Ryan this morning, and I'm not confident that I'll have anything for my friend this afternoon, but I'd like to give it a fair shot, and I certainly won't if we go till 4. I won't go close to finishing with any further witnesses this afternoon. I mean, I wouldn't be in the hunt.
PN990
THE DEPUTY PRESIDENT: No. That's probably an appropriate course. Mr Black, have you any objection?
PN991
MR BLACK: No.
PN992
MR ROGERS: Yes. And for what's it's worth, I'm certain, or I'm as certain as one can be, that we'll finish by lunchtime on Thursday. I'd expect, even allowing for the fact that I'll probably be a bit longer with one or two of the witnesses tomorrow, that the evidence will finish before the close of play tomorrow.
PN993
THE DEPUTY PRESIDENT: Yes. That's fine. All right. Well, we'll adjourn and we'll reconvene at 10 am in the morning. I wonder if I might have a very brief word with you, Mr Ryan, over another matter. It is over another matter.
PN994
MR ROGERS: Might I just pass - I'll give copies to my friend as well - those authorities that I mentioned. I'll give them to your Honour's associate, perhaps.
PN995
THE DEPUTY PRESIDENT: Yes. That would be fine.
ADJOURNED UNTIL WEDNESDAY, 25 AUGUST 2004 [3.42pm]
INDEX
LIST OF WITNESSES, EXHIBITS AND MFIs |
STEVEN JOHN ROLLINGS, SWORN PN31
EXAMINATION-IN-CHIEF BY MR BLACK PN31
EXHIBIT #NRA1 STATEMENT OF STEVEN JOHN ROLLINGS PN38
CROSS-EXAMINATION BY MR ROGERS PN40
RE-EXAMINATION BY MR BLACK PN306
WITNESS WITHDREW PN315
JOHN DAVID McMASTER, SWORN PN318
EXAMINATION-IN-CHIEF BY MR BLACK PN318
EXHIBIT #NRA2 STATEMENT OF JOHN DAVID McMASTER PN324
CROSS-EXAMINATION BY MR ROGERS PN326
RE-EXAMINATION BY MR BLACK PN445
FURTHER CROSS-EXAMINATION BY MR ROGERS PN454
WITNESS WITHDREW PN460
NEIL LESLIE MEIKLEJOHN, SWORN PN467
EXAMINATION-IN-CHIEF BY MR BLACK PN467
EXHIBIT #NRA3 STATEMENT OF N.L. MEIKLEJOHN PN489
WITNESS WITHDREW PN702
GREGORY PAUL DEATH, SWORN PN707
EXAMINATION-IN-CHIEF BY MR BLACK PN707
EXHIBIT #NRA4 STATEMENT OF GREGORY PAUL DEATH PN736
CROSS-EXAMINATION BY MR ROGERS PN737
RE-EXAMINATION BY MR BLACK PN978
WITNESS WITHDREW PN987
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