AG2004/7458, Transcript of Proceedings [2004] AIRCTrans 4124 (25 October 2004)

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TRANSCRIPT OF PROCEEDINGS

O/N 2325

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/7458

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Kraft Foods Limited and Another for
certification of the Suttontown Maintenance
Employees Enterprise Agreement 2004 - 2007

ADELAIDE

1.31 PM, THURSDAY, 14 OCTOBER 2004

PN1

MS K. HODGSON: I appear on behalf of Kraft Foods.

PN2

MR D. THOMAS: I appear on behalf of the AMWU.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Can I just raise a couple of preliminary issues in this matter? First of all, Mr Hodgson, as you are appearing by way of video link, if you wish to remain seated I am happy for that to occur. People sometimes feel a little uncomfortable standing up before a television screen.

PN4

MS HODGSON: Thank you, your Honour.

PN5

THE SENIOR DEPUTY PRESIDENT: Secondly, Mr Thomas, I am aware that this might be one of your early appearances before the Commission, so please feel free to ask me any questions about issues of a process nature should you wish to do so.

PN6

MR THOMAS: Thank you very much.

PN7

THE SENIOR DEPUTY PRESIDENT: I can advise the parties that I have read both the statutory declarations and the agreement itself in this matter. The immediate question that arises is it appears that the application was the subject of a vote on 11 August 2004 but was not filed in the Commission until 22 September 2004 which would mean that it was at least some 21 days out of time. Now, Ms Hodgson, can you advise me of both the reason for that delay on the assumption that the parties seek an extension of time and secondly, whether or not there were any changes in the make-up of the workforce?

PN8

MS HODGSON: Yes, your Honour, and you have pre-empted perhaps my first application which was to seek an extension of time under section 111(1)(r). The delay was substantially involved in shipping the paperwork between my offices in Victoria and the union offices in getting the documents signed and there has been no change in the personnel at the site. It is a small group of employees there. There are actually 6 that are covered by this agreement.

PN9

THE SENIOR DEPUTY PRESIDENT: Very well. I shall use the discretion inherent in section 111(1)(r) of the Act so as to extend the timeframe for lodgment of the application in that regard. Now, Ms Hodgson, I don't have any other questions about the process that was followed in this matter. I don't want to stop you giving me information in that regard if you wish to do so but I don't require additional material.

PN10

MS HODGSON: Thank you, your Honour. Other than to point out that as the information in the statutory declaration describes, it is otherwise in compliance with the requirements of section 170LT of the Workplace Relations Act.

PN11

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Having said I don't have any questions about the process, there is just one issue that I will raise with you and that goes to question 6.7 in the statutory declarations. Should I understand that the agreement was generally made available to employees or was it just given to the employee representative?

PN12

MS HODGSON: Once the final copy of the agreement had been negotiated and agreed with the representative a copy was given to him and copies were available from the Human Resources representative on site for the individual members to obtain access to if they wished to.

PN13

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Thomas, if I look at the union's statutory declaration at paragraph 7.7 should I understand that there is a typographical error there such that the union agrees the nominal expiry date is 30 June 2007?

PN14

MR THOMAS: 7.7, yes, that is a typographical error.

PN15

THE SENIOR DEPUTY PRESIDENT: Now, perhaps while you are on your feet, Mr Thomas, I am going to raise with Mr Hodgson a number of questions about the agreement itself. My questions do not invite the parties to rewrite the document. They go to clarification of the intention of the parties relative to various provisions that I need to have regard to in this matter and secondly, in a number of instances they go to matters that arise as a result of the recent High Court Electrolux decision.

PN16

Relative to that first category of issues, if you want to add or detract from anything that Ms Hodgson says to me, feel free to hop up and tell me just that. If you don't do so I will assume that you are in agreement with her responses. Relative to the Electrolux issues, having raised those questions, I will give both parties the opportunity to address those issues if they wish today or as an alternative, both parties will be given the opportunity to take those questions away, ponder upon them and reply by way of either a written response or oral submissions at a further later hearing.

PN17

MR THOMAS: Thank you, Commissioner.

PN18

THE SENIOR DEPUTY PRESIDENT: Ms Hodgson, can I take you to clause 9 of the agreement, which is the dispute settlement procedure?

PN19

MS HODGSON: Yes, your Honour.

PN20

THE SENIOR DEPUTY PRESIDENT: It in effect calls up the provisions of clause 3.2 of the award but should I understand that the intention of the parties is that arbitration is available as a last resort relative to that agreement dispute resolution procedure?

PN21

MS HODGSON: That is right, your Honour, conciliation in the first instance.

PN22

THE SENIOR DEPUTY PRESIDENT: Clause 14 relates to the health care plan. It is the first of the questions that I have relative to Electrolux and I seek from the parties advice as to how that particular provision can be seen to pertain to the employment relationship. It may well be that it does and in that regard I am conscious that the clause actually contains very little information upon which I can reach a conclusion in that respect.

PN23

MS HODGSON: If I can expand upon that slightly. Kraft Foods has a corporate health care plan which simply means that it has negotiated with a health care provider - in this case Grand United - at discounted rates, if you like, just through sheer force of bargaining power, such that if employees wish to make available, or wish to access a health care policy with Grand United they get the benefit of the discounted rates. But it is done so at the employee's individual expense.

PN24

THE SENIOR DEPUTY PRESIDENT: Then tell me how it is that Kraft are not acting in effect as an agent for Grand United in that Kraft are, as I read that clause on its plain words, collecting and then distributing money from employees to Grand United.

PN25

MS HODGSON: That might be something that I am going to need to get some further instructions on because I am not entirely sure whether that is something that is deducted from employees' salaries and remitted directly to the health fund or whether the employee has to provide their own bank details for that.

PN26

THE SENIOR DEPUTY PRESIDENT: All right, well I am happy to leave that issue with you so that you can decide on an appropriate response to me in that respect. Clause 16 relates to retirement. It references a company policy. Should I understand that the company policy in that regard is a written document, that it is readily available to employees and that the possibility of changing it during the life of the agreement exists?

PN27

MS HODGSON: The company policy is readily available through our company intranet, which is available to all employees and my understanding is that the company does reserve the right to alter its policies which would apply during the course of the certified agreement.

PN28

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 23 relates to the conversion of leave. With particular reference to that second paragraph, what happens if the target is not achieved, or is not maintained?

PN29

MS HODGSON: Then the clause is not activated as such.

PN30

THE SENIOR DEPUTY PRESIDENT: I see.

PN31

MS HODGSON: So the options that the employees have to convert some of their leave, their sick leave balance, in effect, wouldn't be triggered unless the pre-conditions, being the absenteeism rate averaged across the 12-month period, was achieved.

PN32

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 28.3 relates to trade union training leave. It forms the basis of a further Electrolux founded question such that I will need to be satisfied that that clause pertains to the employment relationship. Clause 29 falls into that same category. That clause relates to the use of sub-contractors.

PN33

MS HODGSON: Yes.

PN34

THE SENIOR DEPUTY PRESIDENT: Clause 31 also falls into that same category. Now, as I indicated to you, I am happy to hear responses now if the parties wish but I am equally happy to give the parties the opportunity to consider their position relative to those issues.

PN35

MS HODGSON: Certainly from my perspective, your Honour, I welcome the opportunity to consider those clauses.

PN36

THE SENIOR DEPUTY PRESIDENT: I see. Mr Thomas, are you of a similar view?

PN37

MR THOMAS: Yes, I am. If I could just make some comments on clause 28.3? We believe that to try and embrace industrial harmony on the work site that obviously trade union training leave, as far as disputes resolutions and other issues relating to industrial harmony, are important to bed down so that our shop stewards or delegates have an understanding of the Industrial Relations Act. So we believe that that does pertain to the employer/employee relationship, the union being a training provider rather than facilitating anything that comes out of the training leave. We believe our shop stewards are responsible for that.

PN38

As far as the union recognition and the payroll deduction, I suppose when we look at that we think that as a service provider between an employer and an employee and given that there are probably three ways that a union member can pay his or her union fees, it does relate to the employer/employee relationship in a convenient manner, I guess, for the employee. But we will also like to consider these as well. If it pleases the Commission.

PN39

THE SENIOR DEPUTY PRESIDENT: Now, Ms Hodgson, that concludes the questions I have about the agreement. Within what time frame would you expect to be able to either request a further hearing or provide me with written submissions? Would a week be an appropriate time frame or do you require longer?

PN40

MS HODGSON: Your Honour, I am conscious of a - certainly, in Victoria, we are expecting a decision to be handed down during the course of next week that relates to a lot of these issues, which we are hoping for some clarification on particular clauses. Certainly, if we could extend it for a week beyond that so that we had time to discuss with the union and work some resolutions out in a 2 week period therefore, it would be of benefit to the parties than to appear before your Honour again.

PN41

THE SENIOR DEPUTY PRESIDENT: Very well. Mr Thomas, is 2 weeks an appropriate time frame from your perspective?

PN42

MR THOMAS: Yes, Commissioner.

PN43

THE SENIOR DEPUTY PRESIDENT: Within that time then I would expect to receive either written submissions or a request for a further hearing. If the parties are going to respond to the issues that I have raised by way of written submissions then I would ask that they exchange those submissions as well as providing a copy to me. Now, there are a couple of other issues that I will raise in this sort of context. Firstly, there are a significant number of parties that are going away to respond to various questions put to them by Commission members relative to what pertains or does not pertain. There is somewhat of a tendency to look for a one size fits all solution. Indeed, even to the point of looking at matters that might be before Vice President Ross or any other Commission member.

PN44

Can I urge the parties to pay particular attention to the specific agreement that we have got here and the specific provisions contained in it rather than making assumptions based on earlier High, Federal or Commission decisions which conclusions might be based on clauses with similar titles but quite possibly very different provisions. Secondly, if on the basis of the written submissions I can conclude that the agreement should be certified, then I will certify it and forward out to the parties a certificate that details the various clauses about which I have sought clarification but does not outline the responses that I have been given on certain of these issues because those are recorded on the transcript. Thirdly, the parties will need to be aware of the fact that I have a number of decisions of this nature pending.

PN45

My best guess at the moment is that you are looking at least a fortnight after I receive either the written material or convene a further hearing. That means that it is incumbent on me to outline to the parties a possible alternative that might be considered. I stress the word "possible" because the parties ought not conclude that I have reached any definite decision in this regard at the present time. The parties always have the option of withdrawing their agreement and enter into a new one on whatever terms they choose.

PN46

Alternatively, the parties have the option of taking the existing agreement, deleting or amending the particular provisions to which I have drawn attention in the context of Electrolux, resubmitting that agreement to employees in accordance with the requirements of section 170LJ and then seeking that I certify the agreement on the basis of the information provided to me today, together with written material that confirms the process that was followed was consistent with section 170LJ. If that latter course of action is to be sought then I endeavour to certify agreements without the need for a further hearing.

PN47

Now, it is entirely a matter for the parties' election but I thought it appropriate to alert the parties to the reality that a number of other unions and employers have opted for an approach which is founded on having a debate about what does or does not pertain at another later occasion and as a consequence, expediting the certification of their agreement. I cannot stress more highly that the option is simply there as an option rather than my recommending it to the parties. Now, Ms Hodgson, I can advise the parties that if the issues associated with the application of section 170LJ and the extent to which various clauses do or do not pertain to the employment relationship is resolved, I am satisfied that in all other respects the agreement meets the prerequisites necessary for certification that are set out in sections 170LT and LU of the Act.

PN48

Accordingly, it may be of value to the parties to be aware of the fact that if issues relating to the extent to which various clauses pertain to the employment relationship were to be removed or fundamentally changed and the revised agreement was put to employees in accordance with the Act then the parties can expect to have the agreement certified. Now, do you have any questions about the information that I have either requested or provided to the parties in this respect, Ms Hodgson?

PN49

MS HODGSON: Your Honour, if I could seek just to clarify the clauses that your Honour has referred to this afternoon. Those that you were seeking additional information on as distinct from those that you thought raised concern as a result of the Electrolux decision?

PN50

THE SENIOR DEPUTY PRESIDENT: The Electrolux related questions impact on clause 14. They impact on clause 28, clause 29 and clause 31.

PN51

MS HODGSON: And in particular, your Honour, 28.3?

PN52

THE SENIOR DEPUTY PRESIDENT: Yes, 28.3, sorry.

PN53

MS HODGSON: Thank you, Commissioner, I have nothing else regarding the information you have just supplied.

PN54

THE SENIOR DEPUTY PRESIDENT: All right, now, Mr Thomas, have you got any questions about the information I have provided?

PN55

MR THOMAS: No, I am fine, thank you, Commissioner.

PN56

THE SENIOR DEPUTY PRESIDENT: All right, I shall adjourn the matter on that basis.

ADJOURNED INDEFINITELY [1.55pm]