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Australian Industrial Relations Commission Transcripts |
AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825
Level 7, ANZ House 13 Grenfell St ADELAIDE SA 5000
Tel:(08)8211 9077 Fax:(08)8231 6194
TRANSCRIPT OF PROCEEDINGS
O/N 2238
AUSTRALIAN INDUSTRIAL
RELATIONS COMMISSION
SENIOR DEPUTY PRESIDENT O'CALLAGHAN
C2004/1122
AUTOMOTIVE, FOOD, METALS, ENGINEERING,
PRINTING AND KINDRED INDUSTRIES UNION
and
F.H. FAULDING AND CO LIMITED
Notification pursuant to section 99 of the Act
of an industrial dispute re non-payment of tool
allowance
ADELAIDE
12.50 PM, TUESDAY, 21 SEPTEMBER 2004
PN1
MR P. BAUER: I appear on behalf of the Australian Manufacturing Workers' Union, and appearing with me is a delegate from Fauldings, MR P. HELYAR.
PN2
MS M. LAMSHED: I am responsible for human resources for F.H. Faulding and appearing with me is MR V. CARETTI, site operations manager.
PN3
THE SENIOR DEPUTY PRESIDENT: Thank you, Ms Lamshed. Now, Mr Bauer, this matter has been listed for a hearing today. The application made pursuant to section 99 of the Act cites the Metal, Engineering and Associated Industries Award. I have a copy of that award but whilst it wasn't cited in the application I also have a copy of the F.H. Faulding and Company Salisbury site enterprise agreement 2002 - I should say I don't have the entirety of that agreement but I do have a number of sections from it - I don't know whether that agreement is relied upon in any way but I thought it appropriate to tell you that they are the two documents that I have before me, so apart from that I'm in your hands.
PN4
MR BAUER: Thank you, in respect to the agreement I think the agreement does have a relevance in respect to this dispute. It is a matter of the application of the award which we will be relying on in regards to this matter.
PN5
THE SENIOR DEPUTY PRESIDENT: Yes, well, I'm in your hands.
PN6
MR BAUER: Okay. Look, Commissioner, we have notified a dispute on behalf of our members who work for F.H. Faulding and Company. They work in the engineering and maintenance departments. The dispute relates to, as identified in the notification, the non-application by the company in respect to the award entitlement of members in that area in regards to tool allowance.
PN7
Sir, it is the intention of the union today to outline the history and give some circumstances as to how the dispute has arisen to the Commission and then seek the Commission's assistance in resolving the dispute, initially, sir, by way of a conciliation, and should that not resolve the dispute then it will be the union's intention to seek further assistance from the Commission by way of an arbitrated outcome, but for the purposes of today, sir, we don't see that happening.
PN8
We see the application today simply going to the point where the Commission could offer some conciliatory support to the parties to try to resolve the matter and that has been relayed to the company. I understand the company is in agreeance in respect to enter into some conciliation process today.
PN9
To also assist the Commission we met prior to this Commission hearing to try to agree on some basic facts so that we can narrow down the issues in dispute and those facts are, sir, that the employees that we are seeking be subject to a decision of the Commission, five, who were at the time that we made the claim, full-time employees of the company. I understand two of them have since left.
PN10
The employees employment is governed by the Metal, Engineering and Associated Industries Award 1998 and is agreed between the parties and the employees in question are eligible to receive a tool allowance, as identified in clause 5.9.1(d) of the award, so those facts are agreed between the parties, sir, there is no dispute between us in relation to that. Sir, the union's position on behalf of our members is a straightforward one and, that is, that we believe the award provides, as identified at clause 5.9.1(d), the payment of a tool allowance. It says, to quote:
PN11
For supplying and maintaining tools ordinarily required in the performance of their work as trade persons.
PN12
2:
PN13
We believe the employees are in dispute as a result of the application did not receive a payment for the purpose of meeting this award entitlement.
PN14
3:
PN15
We believe the employees in question have never agreed to their current rate of pay being inclusive of a component for the purpose of meeting this entitlement for tool allowance. Or has it ever been...
PN16
Or:
PN17
...it was at the time that we made the claim to the company, or at the time that the employees are indeed employed by the company has it been identified to them that their rate of pay included a rate of pay for a component for the payment of tool allowance.
PN18
And 4:
PN19
We believe the employees are seeking the company meet this entitlement and commence payment of their tool allowance, as well as back-pay any unpaid tool allowance entitlement for the period of time that they have been employed by the company.
PN20
Sir, the history of this matter has some length to it. The issue of the non-payment of tool allowance arose as a result of the delegates and our members in preparation for looking at items to put into the enterprise bargaining agreement for this year and identifying what items have already been in past agreements, and raise the question in relation to both tool allowance and annual leave loading.
PN21
The company managed to satisfy the employees that the issue of annual leave loading was indeed part of the rate of pay, as it was part of the initial enterprise bargaining agreement that was struck with the company, but the company could not identify where the tool allowance was part of the components of the rate of pay. They simply said that they believed that it had been rolled into the rate of pay.
PN22
THE SENIOR DEPUTY PRESIDENT: Mr Bauer, when you refer to "the rate of pay", as such, I take it you are referring to the rate of pay in the agreement, is that correct?
PN23
MR BAUER: That is correct, sir. The rates of pay are identified in the agreement as an appendix.
PN24
THE SENIOR DEPUTY PRESIDENT: Yes.
PN25
MR BAUER: Yes, so the company's position, sir, at the time it was raised by the delegates was that the rate of pay is already in the overall rate - sorry, the allowance is already in the overall rate and that was rolled in - but they could not identify to the employees with a formal agreement where that had been agreed for that to happen. So the employees raised it through the consultative processes at the company, they have got a Consultative Committee that meets on a monthly basis.
PN26
They put it on the agenda of that, however, again the company in that process simply rejected the issue being discussed to any finality on the basis, again, that they believed it was part of an agreed position that it get rolled into the rate of pay. Sir, the employees through their delegate eventually came to the union and sought our assistance in respect to satisfying this matter.
PN27
Sir, we wrote to the company and sought the company's interpretation as to why they believe the tool allowance issue was part of the agreed position - part of the rate of pay and how they could show that it was in fact part - in the rate of pay. If I can, Commissioner, I've got a copy of a letter sent to the company in March 2004 in relation to the first time this was raised by the union.
PN28
PN29
MR BAUER: So as you can see from that, Commissioner, the union after numerous discussions and exchanges of emails, came to the conclusion that the company had made a final decision in respect to the matter and we advised the company at that time that our members were not satisfied with the company's position and sought that the time and wages records of the employees be supplied to the union so that we can do a calculation as to what we believe the under-payment to be.
PN30
We also indicated at that stage, sir, that we believed that it was an under-payment and that our members had not received tool allowance entitlement over the period of 6 years, which was the legal entitlement that we get back-pay for at that particular point in time. We further wrote to the company again after not getting supplied the time and wages records, identifying to the company the individuals that we were talking about and, also, identifying approximate amounts of under-payment that we believe occurred at that time. I'm just trying to locate the copy of the letter.
PN31
PN32
MR BAUER: As you can see from that document, sir, it simply identifies the five individuals we believe had been under-paid. It identifies what we believe the under-payment to be and that was through calculations we made against the time that the employees had been employed with the company and the tool allowance, which was an award amount over the period of time that the claim existed, so we did a calculation of our own, not needing the time and wages records. All the time and wages records would have done was to verify that in fact there had been a tool allowance paid or not paid. We presented that to the company as a way of trying to at least get the matter further progressed at that time.
PN33
In response the company has met with us two times to my recollection and also has emailed us a number of times in respect to this matter and the company's position is also a straightforward one. Their position to us is that the tool allowance is included as part of the overall rate of pay. They indicated there was a vote of employees in and around 1992 in which they agreed through a vote by majority to roll the tool allowance into the rate of pay for the purpose of improving the tool allowance for an all purpose-type benefit, in other words, it gets rolled into sick leave, overtime, all those sorts of components and therefore has a benefit.
PN34
Sir, I don't know whether that occurred or not. I haven't had an opportunity to interview any of the employees. I am informed that there are some employees who have left and no longer in the company, who attest that they did not get a vote and they weren't in favour of the proposal. Sir, from our position all of those individuals no longer are employed in positions which attract a tool allowance and we would argue that for the employees that we are seeking the tool allowance payment to be recognised for, those employees were not part of the vote.
PN35
Those employees have never agreed to a tool allowance being in the rate. Those employees were never informed at the time that they commenced employment, nor since, other than the fact that they raised it, that the tool allowance was part of their rate of pay and they believe - and the union supports their belief - that they have an entitlement for that tool allowance as it was never an agreed or negotiated position with them in relation to that payment being - or their current rate of pay being inclusive of a tool allowance payment.
PN36
Sir, the union says that, you know, there was opportunity for the company to raise this matter at the time that employees started commencement of employment to say to the employees: look, this is the rate and it is inclusive of your tool allowance. There is opportunities for the company to place this into enterprise bargaining negotiations. We have had at least two agreements that I'm aware of since 1992 in which they could have put this on the table and said: we want to include this.
PN37
They have included it now in the current round of negotiations that we are having with the company, but I would say quite confidently, that is because of the claim that the union has now made of the company in relation to having this matter and this under-payment met. We simply say, sir, that there is an under-payment which has occurred and that the tool allowance is an allowance which is an award obligation and an entitlement for the employees.
PN38
We don't believe that entitlement has been met and we believe that the under-payment has occurred and we are seeking the assistance of the Commission in getting that recognition from the company to have that entitlement paid. If it pleases the Commission.
PN39
THE SENIOR DEPUTY PRESIDENT: Mr Bauer, is there a bargaining period in place at the present time?
PN40
MR BAUER: There is, sir, yes, sir.
PN41
THE SENIOR DEPUTY PRESIDENT: I see. If I look at the document I called AMWU2, how should I understand, or what period of time was taken into account in calculating the quantum of the under-payments which you believe apply in this matter?
PN42
MR BAUER: Sir, I understand it was from the commencement of the individuals employment date and all of those individuals commenced after 1992. I think the earliest was 1995. Up until - I think I used the end of July 2004 as the date of calculation. I need to go through my - - -
PN43
THE SENIOR DEPUTY PRESIDENT: I see, so was there a limit at all in terms of how far back you went in looking at the under-payments sought?
PN44
MR BAUER: No, sir, look, I used the commencement date for all of the employees. I understand that there is a limit through the Court in pursuing those matters to 6 years, but for the purpose for making the claim on the company I used the commencement date of all the employees.
PN45
THE SENIOR DEPUTY PRESIDENT: I see. Mr Bauer, I understand that you are seeking that I facilitate discussions with a view toward reaching a conclusion in this matter, but what do you say to me about the capacity of the Commission to arbitrate relative to the matter at all?
PN46
MR BAUER: Sir, I understand under the Act the Commission has the power to resolve a dispute. In respect to the arbitration, again, I would be seeking that, but the issue about whether the Commission has the power to do that under the Act, I haven't turned my mind to - haven't turned my discussion with the company about their preparedness to enter into a consent arbitration process, on the basis of hoping that the conciliation will lead to a conclusion. If that does not then, yes, sir, we need to turn our minds to those issues.
PN47
THE SENIOR DEPUTY PRESIDENT: Even where there is a bargaining period in place?
PN48
MR BAUER: Sir, we don't see this as part of the enterprise bargaining claim. I understand the company has raised it as an issue in their processes. We made this claim way before the bargaining periods commenced and we see it as separate to the enterprise bargaining process. It is simply an award - the application of an award matter that we are seeking to get resolved through a dispute process.
PN49
THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Bauer. Ms Lamshed.
PN50
MS LAMSHED: If it pleases the Commission, the company believes this matter was negotiated and agreed with our maintenance team some 12 years ago. According to our records the company engaged in an engineering award restructure in 1991 and in November of that year the company and its staff affected by the restructure, agreed to a new remuneration structure which we believed included items like tool allowance and leave loading.
PN51
THE SENIOR DEPUTY PRESIDENT: What year was that, Ms Lamshed?
PN52
MS LAMSHED: 1991. We believed the tool allowance and annual leave loading would be incorporated into the hourly rate. As Peter said, we have current staff who are still employed with the business today, who also recall this agreement. One of those staff members would be affected by this present dispute and is covered by the award. The AMWU has requested the company supply documented evidence on behalf of its members with regard to this agreement.
PN53
Given the length of time that this was initially agreed, talking over a decade the advances technology have made, it has been very difficult to get our hands on to such evidence. We have searched our archive records from the early nineties. We've also approached the Industrial Commission to search its records, however, all attempts have failed to produce anything to the satisfaction of the AMWU.
PN54
I just wanted to clarify that this decision not only affects AMWU members, there are nine employees that would be affected by this decision within the maintenance team. In the correspondence received, AMWU1, I did not receive and I contacted the AMWU following receipt of their correspondence of 23 June, which you have listed as AMWU2, that was the first time they have raised this matter with me since December of 2003. Upon receiving that 23 June document I requested from the AMWU how they calculated the dollar figures to assist us in coming to some sort of agreement and I never received anything.
PN55
This item was first raised in October 2003, just for the record. AMWU did write to me seeking confirmation of which EA showed the tool allowance was traded off and rolled into the hourly rate. We do not believe it was traded off in an EA, we believe it was before that through the award restructure. On 10 November 2003, I emailed the AMWU confirming that we would review our archives. The AMWU followed up with me in December. I contacted them again, 8 December 2003, reporting on the engineering restructure and how that had incorporated the loadings into the hourly rate. They were seeking further recorded evidence to support this.
PN56
On 19 December I emailed the AMWU confirming that we were in receipt of group certificates that showed a phase out of the tool allowance between 1990 and 1992, with a current employee who is prepared to offer those as evidence, if required. On 23 December, Vince Caretti, myself and the engineering manager met with the trade staff to discuss the tool allowance and the witnesses that were prepared to testify that they do recall this occurring, and I also contacted the AMWU confirming that this had happened. They were still seeking something more substantial with further recommendations of Commission archive searches. On 24 December I confirmed:
PN57
We have not been able to turn up anything.
PN58
And that is when the matter was not raised again until 23 June, so just to note, I did not receive 2 March correspondence. My first correspondence was 23 June. Peter is correct, on 15 July we commenced our EB negotiations for the Salisbury site enterprise agreement, where we have listed to recognise the tool allowance was rolled into the hourly rate.
PN59
We were seeking to settle this throughout EA negotiations, however, the union have requested that this be settled outside of the negotiations and we were presented with a notification of dispute last Thursday. I would be seeking the Commission's assistance to conciliate on this matter. It has been ongoing for some time, 12 years is a long time for me to locate records, and as I said the technology isn't friendly to me to assist me to find anything, so we would hope the Commission could support our application.
PN60
THE SENIOR DEPUTY PRESIDENT: Ms Lamshed, first of all, what do you say to me about the jurisdiction of the Commission to resolve what the parties appear to be telling me is a claim for underpayment?
PN61
MS LAMSHED: We don't believe it is a claim for underpayment. We believe a tool allowance is being paid.
PN62
THE SENIOR DEPUTY PRESIDENT: No, perhaps I will rephrase it. The union are claiming that the employer is not paying employees under the award or the agreement. So we have a claim for underpayment. What does the employer say to me about the jurisdiction of the Commission to determine or become involved in a matter of that nature?
PN63
MS LAMSHED: Well, I would be following our dispute resolution procedure which we list the Commission's right to conciliate on matters of dispute. We would have preferred to have settled it through our EA negotiations but that does not seem to be possible. I think it is clause 11.4, says that:
PN64
Should the matter still remain unresolved, any party may submit the matter to the Australian Industrial Relations Commission whose decision shall, subject to any appeal in accordance with the Act, be final and accepted by all parties.
PN65
THE SENIOR DEPUTY PRESIDENT: Yes, except, Ms Lamshed, that agreement has reached and exceeded its nominal expiry date of 31 August 2004.
PN66
MS LAMSHED: Yes, it has.
PN67
THE SENIOR DEPUTY PRESIDENT: Mr Bauer has advised me that there is a bargaining period in place.
PN68
MS LAMSHED: There is.
PN69
THE SENIOR DEPUTY PRESIDENT: Section 170N, of the Act, says that:
PN70
During a bargaining period, the Commission must not exercise its arbitration powers under Part VI, in relation to a matter that is at issue between the negotiating parties.
PN71
Now, there is an exception to that, relative to safety net adjustments. There is also an exception or a qualification set out in section 170NA, that allows the parties to request the Commission to assist them in reaching a conciliated outcome relative to matters in dispute as part of the bargaining process. That does not go to arbitration. The function of enforcing awards is a function that the Act clearly designates to the Court not to the Commission. So to the extent that you say to me that clause 11.4, of the existing certified agreement establishes a capacity for the Commission to arbitrate the matter, I must say I am in some difficulty accepting that submission.
PN72
I raise the issue now because I am not adverse and am happy to assist the parties in trying to give effect to a conciliated or agreed outcome but there is often a difference in a conciliation process where the parties know that in the absence of an agreed position, the Commission can arbitrate as distinct from both parties committing themselves to trying to reach a resolution through the conciliation process. What I am seeking is your view - I will come back to Mr Bauer in a moment, as to what you see is the next step in this matter? Perhaps, before you respond to me, I will give you the opportunity to talk with Mr Caretti. But I should also note that the Act establishes that the enforcement of certified agreements is a function of the Court rather than of the Commission. Necessarily, in the resolution of disputes about an agreement or the application of an agreement or an award or the application of an award, the Commission is often called upon and required to interpret the provisions of the agreement or the award.
PN73
But that is a function which is fundamentally ancillary to the task of trying to resolve a dispute. It is not a function which can be assumed by the Commission for the purpose of determining an order for enforcement of an award provision, otherwise, we would achieve the nonsensical provision or possibility of the Commission having to order that its earlier orders be put into effect. Now, in that context, can I also invite you to consider that the certified agreement and in this regard I am looking at print PR928893, establishes at clause 6, a relationship to parent award. That clause reads:
PN74
This agreement should be read and interpreted in conjunction with the Manufacturing Wholesale Chemist and Grocers Award (SA), the Draftsperson, Planners, Technical Officers Consolidated Award (SA) and the Metal Engineering and Associated Industries Award 1998. If there is an inconsistency between the awards and this agreement, this agreement shall take precedence to the extent of the inconsistency.
PN75
It does not - when I say "it", the agreement does not appear, on my read of it, to reference any earlier arrangements or provisions. It simply appears to be saying that it should be read in concert with the award for that purpose, the metal industry award, and where the agreement provides for something that is inconsistent with the award then the agreement will prevail but in other respects, the award prevails or operates. So I must say I am having a little difficulty not accepting that there may well have been an agreement reached in 1991 but I am having some difficulty seeing how that agreement can be relied upon in the context of this matter?
PN76
It may well be the case that it can. It may equally be the case that the employer wants to rely upon that 1991 arrangement in the negotiation of the agreement as part of a trade-off or a consolidated suite of arrangements and hence, in considering what action you propose that I might take from the employer's perspective, can I also ask you to give consideration to what position you put to me or might put to me, such that if I was to become involved in discussions in this matter, those discussions could be corralled to this particular issue as distinct from the whole gambit of issues that the parties might want to consider in their collective discussions directed at achieving a new agreement. They are matters for the employer to consider.
PN77
What I propose is that I will give you 5 or 10 minutes to ponder upon those issues so that you can come back and give me a considered response. Whilst you are doing that, can I suggest, Mr Bauer, that you might want to ponder on the exact flip side of those questions so that you can consider what it is you propose to me. I must say that whilst I am happy to try to assist the parties in reaching a conciliated outcome, I would have some reservations about just how far the Commission's jurisdiction extends in this particular matter. Are there any questions, first of all, Ms Lamshed?
PN78
MS LAMSHED: No.
PN79
THE SENIOR DEPUTY PRESIDENT: Mr Bauer?
PN80
MR BAUER: No, sir.
PN81
THE SENIOR DEPUTY PRESIDENT: All right, I will adjourn the matter for 5 minutes and let the parties consider their position.
SHORT ADJOURNMENT [1.21pm]
RESUMED [1.35pm]
PN82
THE SENIOR DEPUTY PRESIDENT: Who is going to start first? Ms Lamshed?
PN83
MS LAMSHED: If it pleases the Commission, we have considered the options that you have put to the company and we believe the matter of tool allowance is an issue that is still up for negotiations through our EA, so we would like to continue those discussions as we initially requested through the company's log of claims in July.
PN84
THE SENIOR DEPUTY PRESIDENT: So how should I understand that in the context of this application?
PN85
MS LAMSHED: Well, we are not seeking for conciliation on this matter.
PN86
THE SENIOR DEPUTY PRESIDENT: Yes.
PN87
MS LAMSHED: Thank you.
PN88
THE SENIOR DEPUTY PRESIDENT: Mr Bauer?
PN89
MR BAUER: Yes, Commissioner, I think in response to the company's position, it seems to have differed from the original one but in respect to that, I mean, I show some concern. The reason we are here and not going through the process as you have identified, which is the Courts, which have clear jurisdictional grounds to hear this matter, is that the company has made it a part of the enterprise bargaining arrangements. Those arrangements getting close to conclusion. We are the only union that is affected by this matter and we have a concern that we may find ourselves in the position where this matter becomes an outstanding issue which affects not just us but other employees who we are seeking to have it resolved so that it does not become a dispute situation in the enterprise bargaining process.
PN90
However, if the company isn't prepared to enter into a conciliation process to resolve that, I would suggest that we need to go back and confer with our members about our position in regards to the enterprise bargaining arrangements and it is more than likely it will become an issue that we may be before the Commission again under a different section of the Act.
PN91
THE SENIOR DEPUTY PRESIDENT: Yes. Mr Bauer, if you do go back to your members and the possibility of the Commission's involvement in either a conciliation process under this application or indeed, under an application made pursuant to section 170NA, there is an issue that you may want to take into account and that goes to the extent to which the issue that is being debated is a prospective issue as distinct from a retrospective issue. I am having some difficulty seeing how I could in effect, assist the parties on rights that they claim exist relative to the past. It seems to me that whatever - even looking at it from the very best of outcomes, whatever could be negotiated would not necessarily extinguish the right of an individual to pursue an underpayment claim.
PN92
The issue of underpayment relative to the past might be considered to be an entirely different issue to the question of what future arrangement should apply. Now, if the parties were to limit the matter in dispute in either this application on another day or indeed, in an application made pursuant to section 170NA, to future arrangements, it might be that there are all sorts of caveats that are put on those discussions whereby both parties sought to protect their rights as to underpayment claims that might be made. But there would appear to me to be the capacity for the Commission to help in that regard.
PN93
That is entirely at the election of the parties and I would propose, on the basis of your submissions to me, to not take the matter further today but to allow you that opportunity to consider with your members, what it is that you think should happen. Are you happy with that approach?
PN94
MR BAUER: Yes, I am, sir. I don't share confidence that the issue about whether it can be resolved by limiting the current matter in dispute is one that would work, on the basis that the company's position has been one of both resolving the question of the payment of tool allowance now and retrospectively, rather than just dividing that issue.
PN95
THE SENIOR DEPUTY PRESIDENT: Well, you see, I am looking at the matter simply from the perspective of what jurisdictional power the Commission has and it does not appear to me, on the basis of what I have been told, that I have really got a capacity to assist in any binding sense on arrangements that might be held to extinguish the rights of individuals because those rights exist under the Act. Mr Bauer, if I leave the file open for say, a 2 week period, if I hear back from you in that time, then I am happy to relist the matter. Now, that does not preclude the company from running an argument to say that I should do nothing with the matter but it gives you the opportunity to indicate whether or not you want to relist the matter.
PN96
If I have not heard from you in that time then the file will be closed. Neither course of action precludes the union or indeed, the employer from seeking the assistance of the Commission relative to the agreement negotiations under section 170NA, of the Act. Are you happy with that approach, Mr Bauer?
PN97
MR BAUER: Yes, I am, sir.
PN98
THE SENIOR DEPUTY PRESIDENT: Ms Lamshed, are you happy with that approach?
PN99
MS LAMSHED: Yes, I am.
PN100
THE SENIOR DEPUTY PRESIDENT: Very well, I will adjourn the matter on that basis.
ADJOURNED ACCORDINGLY [1.40pm]
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