C2004/5939, Transcript of Proceedings [2004] AIRCTrans 4009 (18 October 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 8671
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT WILLIAMS

C2004/5939
C2004/6103

APPLICATION FOR AN ORDER TO
STOP OR PREVENT INDUSTRIAL ACTION

Application under section 127(2) of the Act
by Simplot Australia Pty Ltd re alleged industrial
action at the Simplot Australia Pty Ltd site in
Denmark Road, Echuca, Victoria

AUTOMOTIVE FOOD METALS ENGINEERING
PRINTING AND KINDRED INDUSTRIES UNION

and

SIMPLOT AUSTRALIA PTY LTD

Notification pursuant to section 99 of the Act
of a dispute re the alleged contracting out of work
and subsequent redundancy

MELBOURNE

10.33 AM, THURSDAY, 7 OCTOBER 2004

PN1

MS C. CHEW: I appear, together with MS B. HALFPENNY and the stewards from the site.

PN2

MR R. MARASCO: I appear on behalf of the Australian Industry Group. I act on behalf of our member company Simplot Australia Pty Ltd, together with MR K. CASTWOOD, MR M. HEDLEY and MS F. MANIFOLD.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes, I will hear from you first, I think, Ms Halfpenny - sorry, Ms Chew, is it, or Ms Halfpenny going to speak?

PN4

MS CHEW: Well, your Honour, we are unsure as to whether the - well, we would be strongly arguing in favour of the section 99 being heard first. Mr Marasco has flagged that he will be pursuing the 127 application to be heard first. Logically and sensibly and practically speaking, the union sought the 99 last Friday in an attempt to have meaningful discussions with the company. I am instructed that Ms Halfpenny and the stewards have attempted to follow the dispute resolution clause.

PN5

I am also instructed that the company have referred to it in a superficial manner, in the sense that no meaningful discussions have been engaged in between the parties. The section 99 was an attempt to have the company here in order for meaningful discussions to occur. We would say that the 127 obviously should come after the 99 if the 99 fails to resolve the dispute between the parties. If your Honour pleases.

PN6

THE SENIOR DEPUTY PRESIDENT: Mr Marasco, what do you say?

PN7

MR MARASCO: Your Honour, I am completely in your hands as to how you would like to deal with it. Initially when the union lodged the section 99, as you can see on the section 99 application, they said no industrial action was occurring. The people that you see in the court room here today witnessing this proceeding today, approximately 60 to 70 employees, they all clocked on this morning at the Echuca plant, and now they have attended this proceeding to observe it, and we say that is unlawful industrial action.

PN8

I did say to Ms Chew that we would be seeking to have the 127 heard first, but that is entirely a matter for you, your Honour, however you wish to proceed. I am in your hands as to how you would like to progress.

PN9

THE SENIOR DEPUTY PRESIDENT: Thank you for that. What I propose to do is to hear the section 99 initially. It appears to me that if there is some matter at the heart of any dispute or disputation that might be taking place, then we should explore that first. Yes, Ms Halfpenny.

PN10

MS HALFPENNY: Thank you, sir. Senior Deputy President, the Simplot Echuca plant which this dispute notification involves, is a food manufacturing factory in Echuca, and there is also a warehouse attached to that factory. All work both in the warehouse and the factory, production work, is covered by the Food Preservers Award, and is performed by members of the AMW Food and Confectionary Division.

PN11

There is an enterprise agreement in force at the moment, which is the Simplot Australia Pty Ltd Simplot Echuca Enterprise Bargaining Agreement 2000. I have some copies of that to tender. I believe last week the company announced an intention to contract out, or outsource particular work from the warehouse. That was the picking of orders that is currently performed by members of the AMWU, and is work that is covered by the current enterprise agreement.

PN12

They announced that as a result of the contracting out of that work, there will be four redundancies in that area, and that those redundancies would take effect within 12 weeks. We have had discussions with the company, that is, union officials, shop stewards and representatives of the company. However, they have been a dismal failure because the company refuses to consult or discuss the actual issue of contracting out of that work from the warehouse which we believe is in breach and contravention of the enterprise agreement that is currently in force.

PN13

As you can see, as was just referred to, there are a number of the workers from the Echuca have come down today to attend this hearing. It is an indication of the concern and anger that they have and feel about the decision the company has made. Without any discussion, without any consultation a decision has been made, and the company is saying that they will not change it. There an be no discussions to look at some other ways.

PN14

In respect to - and we have advised the company of this - also may I add there is no intention or not discussion of any further stoppages of work at the plant. Today's stoppage was purely for people to be able to come down here today and see the proceedings in the Commission, and express their concern over what the comp;any is doing.

PN15

I would like to take the Commission to clause 40 of the current enterprise agreement, which is headed, The Contractors Agreement. The Contractors Agreement heading, as you will see, does not say that it is in house, out house, whatever: it is purely the contractors agreement. The first part of the contractors agreement applies to contractors working on the Echuca site, and it talks about:

PN16

The following conditions shall apply in relation to contractors working in the Echuca site.

PN17

And there are five conditions that apply to contractors that work on the site. And those are general sort of standards about consultation with workers and shop stewards when they come on to the site, that they must have an agreement with the AMWU and the ETU, and that maintenance employees, in house maintenance employees will be given preference to undertake work.

PN18

Then there is a separate and totally different provision, which is the last paragraph of this clause, which is that Simplot commits to not contract out any work normally conducted by food preservers during the period of this agreement except with the agreement of the AMWU. And it is this paragraph, Senior Deputy President, that we argue the company is in breach of. They cannot contract out work such as the work from the warehouse, and send it to a third party off site without there being agreement with the union.

PN19

The company is not in any way giving the intention that they are trying to seek agreement from the union, and therefore we have come here today to try to see whether we can sort this matter out. If the Commission pleases.

PN20

THE SENIOR DEPUTY PRESIDENT: The agreement was for three years, as I apprehend it, from the front of it. It has remained in force, has it, since March 2003 by virtue of the Act

PN21

MS HALFPENNY: Yes, Senior Deputy President. However, we do have another agreement which has been made, that is signed by both parties to the agreement, or the three parties to the agreement. That agreement has not yet been certified.

PN22

THE SENIOR DEPUTY PRESIDENT: Has it been lodged for certification, just out of interest?

PN23

MS HALFPENNY: The company will have to - I don't think we have done all the statutory declarations. No, no, it has not been lodged, and the statutory declarations have not yet been done.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Well, I will hear from Mr Marasco at this stage.

PN25

MR MARASCO: Thank you, your Honour. Perhaps firstly could I just tender you a copy of that new EBA.

PN26

THE SENIOR DEPUTY PRESIDENT: This is the one that has now been agreed upon, is it?

PN27

MR MARASCO: That is correct, your Honour.

PN28

THE SENIOR DEPUTY PRESIDENT: I will mark that, because it is not a document of the Commission.

PN29

MR MARASCO: I understand that, yes, it is in the process of having it voted on, and registered with the Commission, as Ms Halfpenny said.

PN30

THE SENIOR DEPUTY PRESIDENT: Well, it is agreed upon as between the union - or the parties, but it still has to go through the approval process?

PN31

MR MARASCO: Yes, that is correct, your Honour. I note, though, it does contain the same provisions in relation to contractors at clause 40 that Ms Halfpenny took you to, and also contains the same provisions of redundancy. In the current agreement, the 2000 agreement, you will find the redundancy agreement, your Honour, at schedule 3. So we say that they are the relevant provisions.

PN32

Can I first just take you to a chronology of what occurred. Firstly, your Honour, with the section 127 application there were some documents I attached to that application.

PN33

THE SENIOR DEPUTY PRESIDENT: Sorry, I think I said I would mark it, and I do not think I have.

EXHIBIT #M1 NEW EBA

PN34

MR MARASCO: And attached to the 127 application, your Honour, just some documents, if I could take you briefly to them. The first was a document which is headed, Echuca Warehouse Questions and Answers.

PN35

THE SENIOR DEPUTY PRESIDENT: Yes, I have that.

PN36

MR MARASCO: That document was not actually given to the union or employees. That was just an internal document that was given to managers on the Echuca site to help them understand what the background to the restructure was. Did you have any questions, your Honour?

PN37

THE SENIOR DEPUTY PRESIDENT: Well, I have not read that yet. Do you want to take me to anything in particular in it at this stage?

PN38

MR MARASCO: No, not at this stage, your Honour. If I can just take you to the last document which is headed, Echuca Warehousing Changes.

PN39

THE SENIOR DEPUTY PRESIDENT: That first document was four pages, was it?

PN40

MR MARASCO: That is correct, your Honour.

PN41

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN42

MR MARASCO: And then that last document, the one headed, Echuca Warehousing Changes, that was given to the employees in the warehouse that will be affected by the restructure, and that is 8 employees in total.

PN43

THE SENIOR DEPUTY PRESIDENT: So you say it is 8 employees involved, not 4?

PN44

MR MARASCO: Well, 8 employees are in the pool - there are 8 employees who currently work in the warehouse. As a result of the changes, 4 employees will have to be made redundant. The company will be seeking redundancies 2 from the day shift and 2 from the afternoon shift. The enterprise agreement talks about that if redundancies are to be held in any part of the business, then the process will be that volunteers are called for first. If there is insufficient volunteers, then redundancies will take place, after a process of last on, first off.

PN45

THE SENIOR DEPUTY PRESIDENT: That is clause 15, together with the schedule?

PN46

MR MARASCO: Yes, clause 15 of the 2000 EBA, which is read in conjunction with schedule 3. And clause 15 talks about the redundancy provision shall apply on the basis of volunteers, and in the event there are not enough volunteers, last on, first off, provided that at all times the company has the necessary skills to run the operations at the plant.

PN47

If I could take you just to a brief chronology of events, your Honour, leading up to the restructure. There was a meeting in Melbourne on Wednesday 22 September, where a decision was made by the two major customers of Simplot, namely, Woolworths and Coles, to change the way in which they source goods from Simplot. The Echuca plant, your Honour, manufactures Leggos Tomato Sauce. I am not sure if you are familiar with the product. It is well advertised on television. There has been Gough Whitlam and Kate Fisher doing the advertisements.

PN48

THE SENIOR DEPUTY PRESIDENT: I probably couldn't understand them. I think they were in Italian, and I don't speak Italian.

PN49

MR MARASCO: The have the subtitles, and as an Italian speaker myself, their Italian was quite good.

PN50

THE SENIOR DEPUTY PRESIDENT: But was the translation?

PN51

MR MARASCO: Yes, your Honour. Then on Monday - the final decision was made on Wednesday 22 September. On Monday 27 September the management of Simplot held meetings of the affected employees at the site in Echuca, and the decision was explained to them.

PN52

The company denies that they are contracting out any work pursuant to the

PN53

EBA. This is not a situation where the company is going to say, look, we are going to get Patrick's to be on site to do your job. This is a change imposed by Coles and Woolworths. They have said we want to change the way in which we take the delivery of stock.

PN54

So they have got a very big warehouse in Shepparton that Patrick's runs. There will be no Patrick's contractors actually working on the Echuca site. So we say it is not a case where contractors will be doing work that is normally performed under the terms of the agreement. It is a restructure in which it will be a change in which the way work will be performed. So, again it will be the Patrick's employees at the warehouse in Shepparton that will be doing the work, not contractors on site at the Echuca plant.

PN55

So after the meeting on Monday 27 September, there was a meeting with Mr Ray Campbell, who is an AMWU organiser. The company explained the decision to Mr Campbell, and the rationale behind it. Now, it is not a reflection at all on the people working in the warehouse. They are very valued employees. It was a change brought about by the two major customers wanting to change their logistics arrangements.

PN56

On Tuesday 28 September there was a further meeting. The shop stewards held meetings in the factory, brief meetings that were unauthorised, to discuss what the changes were. On Wednesday 29 September, Ms Halfpenny had a meeting on site. There were further meetings with all the employees. Later that day the AMW lodged the section 99 notification.

PN57

We understand, your Honour, part of the issue in dispute is the AMWU saying that if there are redundancies, then everyone in the whole factory should be given the opportunity to apply for them. We say that is not something that is required by the enterprise agreement, and nor has it been custom and practice on site.

PN58

I understand when the Kensington plant at Simplot shut quite recently, then the AMWU said that redundancies should be open to everyone to volunteer for a redundancy, but the company went ahead anyway, and just said only that specific part of the business affected, only they should be given the opportunity to apply for redundancies.

PN59

So we say in this case it is similar. Only the 8 employees affected in the warehouse should be able to apply for redundancies. The changes do not affect at all the people in the production process. There is about 100 employees in the manufacturing part of the business. They will not be affected by these changes at all. It is only confined to the warehouse.

PN60

In relation to the contractors agreement too, your Honour, there is also a potential, but it is not enforceable, pursuant to the High Court decision in Electrolux. As you may be aware, your Honour, his Honour Vice President Ross is currently hearing a matter for the certification of the KL Ballantyne agreement. In that matter ACTU and ACMI are intervening, and that agreement has clauses about contracting out as well. And it is one of the clauses the Australian Industry Group and ACMI have submitted are not enforceable pursuant to the recent High Court decision in Electrolux.

PN61

So we say that even if your Honour does not support our interpretation of that clause, potentially it is not even enforceable pursuant to terms of that - - -

PN62

THE SENIOR DEPUTY PRESIDENT: Are those clauses limited in any way to an agreement not to contract out work, or is the complaint being made in relation to those clauses relate to if work is contracted out, there is some obligation on the employer to ensure that it is only contracted out to contractors who already have EBAs, for example?

PN63

MR MARASCO: I do not think it is limited to that, to contractors. I think it is just a general contracting out provision. And, your Honour, that would be the company's point of view in relation to the dispute, unless you have any questions you would like me to address you on at this stage.

PN64

THE SENIOR DEPUTY PRESIDENT: Well, I have not had a chance to read the question and answer document, for example. Perhaps you can briefly outline from the company's point of view what the change is. Is it a situation where instead of the company distributing from its Echuca warehouse to these two - to Coles and Woolworths, that they will now be required to deliver to a Coles and/or Woolworths distribution centre, for the purposes of Coles and/or Woolworths then doing the distributing?

PN65

MR MARASCO: That is correct, your Honour.

PN66

THE SENIOR DEPUTY PRESIDENT: To their shops, and to their supermarkets?

PN67

MR MARASCO: Yes. I think the first answer and the first question, "Why is the warehouse operation changing?", that really sums up what the basic change is. If I can give your Honour a minute to read that paragraph.

PN68

THE SENIOR DEPUTY PRESIDENT: Did Simplot distribute form Echuca direct to Coles and Woolworths supermarkets?

PN69

MR MARASCO: Yes, they did, your Honour, and that will be the change. That will no longer be the case.

PN70

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Marasco.

PN71

MR MARASCO: Thank you, your Honour.

PN72

THE SENIOR DEPUTY PRESIDENT: Ms Halfpenny do you wish to say anything?

PN73

MS HALFPENNY: Thank you, Senior Deputy President. I think the first issue is, or the threshold issue, a number of things have been raised here. For example, our disputation, or disagreement with the company over the application of the redundancy agreement in terms of the 4 jobs that they want to go. They are all matters that we really do not think are necessary to address today, because the threshold point is whether or not the company can in fact contract out the work currently performed by food preservers in the warehouse, unless there is agreement with the union.

PN74

That point really is the first point that we need to resolve with the company before there is any discussion about whether or whether not there will be redundancies, and where or where not they will apply from. So our argument, or our proposal today is that we need to sort out the threshold matter, which is whether or not Simplot can contract out work currently performed by members of the Food Preservers Union.

PN75

The work that is to go, which is the picking of orders to be distributed to supermarkets, the work that is currently performed by members of our union, that work in its same form is to be relocated or transferred, or contracted out to Patrick's Distribution, where it will be done from there rather than at the Simplot site.

PN76

Again, we have not had the opportunity to go through all the reasons why, the how and why the company needs to do this, because they have already made the decision, without consultation, without any - with incredible arrogance, and without any belief that they actually had to get agreement with the union prior to doing this.

PN77

So in terms of the reason that they need to do it, and how much necessity is involved, we really do not know. All we know is that they are contracting out work from the warehouse, which is work performed and covered by food preservers, and that they are sending it somewhere else, which is contrary to the current agreement that we have with the company, and that is there is no contracting out of work currently performed by food preservers on the site. Thank you.

PN78

THE SENIOR DEPUTY PRESIDENT: But why do you say it is work that is being contracted out? As I apprehend it, and I may be wrong, as I apprehend it from what is being said, the employer manufactures its product. It goes to the warehouse. The warehouse employees then select from what is stored in the warehouse to meet orders that are received from Coles and Woolworths for delivery to their supermarkets. That has been the practice. In simple lay terms, is that what happens, or what happened?

PN79

MS HALFPENNY: That is as I understand it.

PN80

THE SENIOR DEPUTY PRESIDENT: Now what is to happen is the product goes to the warehouse, and then in its entirety is delivered to a distribution centre not under the control of Simplot, and then from that distribution centre the product of this company and of other companies would be forwarded to individual supermarkets in accordance with required orders. Would that be correct? Or has that not been fully explained?

PN81

MS HALFPENNY: That has not been in any way fully or in detail explained to us. But as we understand it, what is happening is that our understanding of contracting out is that the work that is performed at that site covered by an agreement is being handed over, given to a third party. And in that way it is being contracted out.

[10.58am]

PN82

THE SENIOR DEPUTY PRESIDENT: Well, perhaps it is more appropriate to explore this in conference, rather than backwards and forwards from me to the representatives. We may well need to go back on transcript at a later stage. But we might be able to ascertain this without the need to call evidence, etcetera.

PN83

MR MARASCO: Yes, we have no objection going into private conference, your Honour. Can I just say for the record before we do, that your brief interpretation of what the change actually is, in your exchange with Ms Halfpenny, was correct. And we say that has been clearly explained to both the union and to the employees at the meetings they have had with them. And that is certainly what the letter headed, Echuca Warehousing Changes, says as well. If your Honour pleases.

PN84

THE SENIOR DEPUTY PRESIDENT: Have you any objection to going into conference, so we can try and sort this out, and get the facts correct in some way?

PN85

MS HALFPENNY: That would be good. We do not have objections to conference. I don't know if anyone objects to members staying, because they have come all the way down from Echuca, staying with us during the conference.

PN86

THE SENIOR DEPUTY PRESIDENT: Any objection?

PN87

MR MARASCO: We think it is appropriate that the people stay. We do not have an objection that if delegates or shop stewards stay, they can remain, and the people that are in the warehouse, we do not object to them staying. But as I said to you before, your Honour, the overwhelming majority of the employees in the production area, they are not affected by these changes at all, and they do not have any interest in this proceeding.

PN88

MR COOK: Excuse me, your Honour?

PN89

THE SENIOR DEPUTY PRESIDENT: Yes. For the record, you are Mr Cook, are you?

PN90

MR COOK: Yes, sir.

PN91

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Cook.

PN92

MR COOK: The gentleman on my left keeps referring to people in the warehouse. He is not stating that the people in the warehouse also consist of people that come down from the production area to do that work as well. Thank you.

PN93

THE SENIOR DEPUTY PRESIDENT: Mr Marasco, it may well be that the conference will range a little further than just the area which I was exploring then. I am of the view that subject to what I will say to the members of the union present, that they should be allowed to attend, on certain conditions.

PN94

MR MARASCO: Certainly. As your Honour pleases.

PN95

THE SENIOR DEPUTY PRESIDENT: What I propose to do is to adjourn into conference. I propose to allow the members who have come down for this hearing to attend during the course of that conference, on the clear understanding that, as someone said, you are here to hear, and by that I mean you use your ears and not your mouths unless spoken to and asked a question. And bear in mind that while we are tying to conduct a conference, we would rather conduct it without additional noise, other than those from myself or those at the bar table.

PN96

So unless during the course of that conference there are matters that arise that I wish to discuss with the representatives in the absence of anybody, then you are welcome to attend, but it is on the condition that I have clearly outlined. We will adjourn into conference.

SHORT ADJOURNMENT [11.02am]

RESUMED [12.50pm]

PN97

THE SENIOR DEPUTY PRESIDENT: Following a conference that has taken place with the representatives of the parties and in the presence of a substantial number of the employees of the company at Echuca, it has been agreed that the company will now provide information about certain matters which have been discussed in conference to the union, with a view to satisfying the differences between them relating to the application of the agreement concerning contracting out and redundancy.

PN98

The matter notified by the union, the section 99 notification, will be adjourned until 10.30 on 18 October for report, and if necessary further hearing. The union is prepared, and I will ask it to confirm in due course, that it is prepared to give an undertaking that there will be no further industrial action taken by the union or the employees in relation to these matters whilst the discussions between the union and the company take place, and pending the further listing of this matter on 18 October.

PN99

If that undertaking is confirmed, I understand that the company's application under section 127 currently before the Commission will be withdrawn. Is that undertaking confirmed, Ms Halfpenny?

PN100

MS HALFPENNY: Yes, Senior Deputy President.

PN101

THE SENIOR DEPUTY PRESIDENT: And Mr Marasco, the section 127 application is withdrawn?

PN102

MR MARASCO: That is correct, your Honour. It is just also the issue, if I can raise it, about people being paid during the period of industrial action. I understand from the company's representatives that some employees are under the understanding that as they had clocked on this morning, that they would still be paid, even though they have attended this proceeding today. We just wanted to confirm that pursuant to the provisions of the Workplace Relations Act, the company is unable to pay those employees. If the Commission pleases.

PN103

THE SENIOR DEPUTY PRESIDENT: Is there anything else for the record?

PN104

MS HALFPENNY: Not for the record, thank you.

PN105

THE SENIOR DEPUTY PRESIDENT: The section 99 then is adjourned, as indicated, the section 127 is withdrawn, and the matters are dealt with on that basis. The Commission itself is adjourned.

ADJOURNED UNTIL MONDAY, 18 OCTOBER 2004 [12.53pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #M1 NEW EBA PN34