AG2004/8222, Transcript of Proceedings [2004] AIRCTrans 4910 (14 December 2004)

AUSCRIPT AUSTRALASIA PTY LTD
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TRANSCRIPT OF PROCEEDINGS

O/N 2583
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/8222

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LS of the Act
by the Construction, Forestry, Mining and
Energy Union-FFPD-South Australian Branch
(No 3 Branch) and Another for certification
of the Aspect Packaging Dry Creek SA Enterprise
Bargaining Agreement 2004-2006

ADELAIDE

11.50 AM, FRIDAY, 3 DECEMBER 2004

PN1

MR M. NICHOLLS: I represent the CFMEU Forest and Furniture Products Division.

PN2

MR R. HICKEY: I am from Aspect Packaging.

PN3

THE SENIOR DEPUTY PRESIDENT: I can advise the parties that I have read both the statutory declarations and the agreement. Mr Nicholls, it will probably comes as no surprise to you that I have got a number of questions and they fall into different categories. First of all, looking at the statutory declaration, can you advise me the date upon which the agreement, in its final form, was made available to employees?

PN4

MR NICHOLLS: On 19 October, sir.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Secondly, is it the case that in accordance with paragraph 2.1 of the statutory declarations, the parties rely on the dispute finding in matter C50712 of 1994?

PN6

MR NICHOLLS: Yes, sir.

PN7

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Nicholls, what I will do now is take you to the agreement where I will ask questions that basically form three categories. There are questions that I have that go to the extent to which that dispute finding establishes the ambit within which the agreement might operate. There are questions that I have that have their genesis in the recent High Court Electrolux decision and then there are questions of clarification. None of those questions invite you to rewrite the provisions of the agreement but there does exist the opportunity, if the parties chose to do so, for them to change the jurisdictional basis upon which the agreement was sought from a division 3 agreement to a division 2 agreement.

PN8

Now, Mr Hickey, let me try to explain what I have said to Mr Nicholls. This application is made under division 3 of Part VIB of the Act. Division 3 relates to agreements about industrial disputes or industrial situation. The statutory declarations indicate that the parties are saying to me that the agreement either settles, further settles or maintains the settlement or prevention of an industrial dispute which was found in 1994 in that particular C number that I references. The questions that I have of Mr Nicholls go to the extent to which that dispute finding back in 1994 establishes the ambit or the parameters within which this agreement might then operate or whether this agreement contains provisions that were not considered in that 1994 dispute finding.

PN9

If it contains provisions that were not considered in that 1994 dispute finding, it may be, and I stress the word "may" that the parties agree that it would be better to change the basis upon which certification is sought from that division 3 back to what we call a division 2 agreement which is not limited by the issues of ambit. Now, division 2 and division 3, with respect to an agreement reached under section 170LJ, have a very similar process which - in terms of the steps the parties have to take to reach the agreement.

PN10

Fundamentally both section 170LJ and 170LR of the Act require the employer to reach an agreement with the union and then, for that agreement to be made available to employees with some 14 days notice and then for employees to approve that agreement. So whilst I raise a number of questions about ambit with Mr Nicholls, the opportunity exists for him to either demonstrate that ambit does exist or for the parties to say to me, either today or at a later stage, that they want to change the foundation upon which the application is made back to a division 2 agreement made in accordance with section 170LJ.

PN11

So that deals with the first issue. The second issue - category of issue that I will raise with Mr Nicholls goes to matters that I need to take into account following a High Court decision in the matter of Electrolux. On 2 September, the High Court determined, in effect, that I can only certify an agreement if all of the terms of that agreement are about the employment relationship or are matters that are ancillary or machinery nature so I have got a number of questions of Mr Nicholls on that basis.

PN12

The third category of issue that I will raise with Mr Nicholls are matters that would not preclude certification of the agreement but they go to issues of clarification. In effect, they are issues that I would rather raise with the parties now as an alternative to having you come back in here at some stage having an argument over that particular provision. Now, none of the issues that I am raising with Mr Nicholls invite him to rewrite the document and the opportunity exists for you to comment on any of his answers, if you wish to do so so I hope that explains the basis for the questions that I have of Mr Nicholls. Do you have any questions of clarification of me?

PN13

MR HICKEY: No, I do not, sir.

PN14

THE SENIOR DEPUTY PRESIDENT: Can I take it that both parties have a copy of the agreement? Mr Nicholls, am I correct in understanding you might want to take these issues away and think about them?

PN15

MR NICHOLLS: Yes, sir. If they are indeed involved with the Electrolux decision or the dispute finding that I would like to, sir.

PN16

THE SENIOR DEPUTY PRESIDENT: Let me deal with the dispute finding questions first of all. Clause 8.5, which deals with environment issues, 8.6, which deals with job creation opportunities but is in effect about supporting the employment of people with disabilities and 9.1.2 which deals with women's committee representatives, all relate to matters which I doubt are addressed in that 1994 dispute finding.

PN17

In addition to that, clauses 8.7, which deals with right of entry, 8.8, which deals with trade union training, 8.9 which deals with union executive meeting and 10.5, deal with matters that are covered by the 1994 dispute finding but you will need to demonstrate to me that that dispute finding is in those respects about matters that pertain to the employment relationship. Can I then take you to clause 3 which is the application of parties bound clause. The second paragraph talks of other activities covered by this agreement. Are you able to tell me what the parties have in mind in that respect.

PN18

MR NICHOLLS: No, sir. Now that I look at that, that probably really leads to nowhere.

PN19

THE SENIOR DEPUTY PRESIDENT: It might be a question that you want to take on notice.

PN20

MR NICHOLLS: Thank you, sir.

PN21

THE SENIOR DEPUTY PRESIDENT: Any response in that regard would ideally be a collective one.

PN22

MR NICHOLLS: Yes, sir.

PN23

THE SENIOR DEPUTY PRESIDENT: Similar words appear in the last paragraph of that same clause 3 where that paragraph concludes with the words "and other activities covered by this agreement." Clause 6 is headed: Relationship to Awards. The first paragraph talks about other agreements applying to the parties of this agreement and it proposes that this agreement will prevail over any other agreements applying to the parties of this agreement. Are there any other agreements applying to the parties of this agreement?

PN24

MR NICHOLLS: No, sir, not that I know of.

PN25

THE SENIOR DEPUTY PRESIDENT: Thank you, well, that resolves that issue. If I can then take you to the second and third paragraphs of that clause 6. The second paragraph says:

PN26

Any increase, upgrade or broadening of entitlements to this award after this date would also be taken to be included in this agreement.

PN27

Now, what do the parties mean by that provision?

PN28

MR NICHOLLS: Sir, my opinion would be that it is probably trying to relate to - if the award had changed at that time and - - -

PN29

THE SENIOR DEPUTY PRESIDENT: That is at the time of signing?

PN30

MR NICHOLLS: Yes, sir, yes. That, yes, those two would be included in this agreement.

PN31

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Now, in that same respect, the third paragraph says:

PN32

Regardless of any future reductions to the Timber and Allied Industries Award of 1999 it is agreed not to reduce existing pay and employment conditions.

PN33

My suspicion, Mr Nicholls, is that clause has its genesis somewhere in the award simplification process or that era.

PN34

MR NICHOLLS: Yes, sir.

PN35

THE SENIOR DEPUTY PRESIDENT: Should I understand then that the parties intend to say that looking at both of those paragraphs together, if there are improvements in the award conditions, they will be taken into account but if award provisions are removed they will not be taken into account, is that what the parties are saying? There is nothing wrong with that as long as I know what it is that the parties are saying.

PN36

MR NICHOLLS: Yes, sir, that would be my understanding.

PN37

THE SENIOR DEPUTY PRESIDENT: Now, the last paragraph in clause 6 says:

PN38

The parties agree to maintain the existing collective process of negotiations of pay and employment conditions for employees through the CFMEU.

PN39

Again I see no impediment to a commitment to a collective process of negotiation but should I take the reference to the CFMEU in that regard as being an exclusive reference? That is, is there the capacity in effect for an employee of this company to be a member of any other union - - -

PN40

MR NICHOLLS: Yes, sir.

PN41

THE SENIOR DEPUTY PRESIDENT: - - - without being disadvantaged, Mr Hickey?

PN42

MR HICKEY: No, sir, they certainly wouldn't be disadvantaged by us if they joined another union.

PN43

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 8.2 relates to: Anti-Harassment. It references in the last paragraph:

PN44

The Building, Products, Manufacturing and Merchandising Award of 1996.

PN45

Does that reflect the reference of what the parties intended to reference because it is not the award which the parties seek to have underpin this agreement?

PN46

MR NICHOLLS: I might need to seek some clarification on that one, sir, by having a read of the 1996 award.

PN47

THE SENIOR DEPUTY PRESIDENT: Clause 8.4 references on page 5: The Enterprise Consultative Committee. I need to put you on notice now that I will need to ask you to look back at some of these clauses in the context of a question I have about the constitution of that committee. Clause 8.5 relates to: The Environment Committee. Now, leave aside for a moment the question of the extent to which that provision is within ambit. The issue arises as to how that particular provision pertains to the relationship of employers and employees, it may do so, but the parties will need to help me in that regard.

PN48

MR NICHOLLS: Yes, sir.

PN49

THE SENIOR DEPUTY PRESIDENT: Clause 8.7 details: Rights Of Entry and once again leaving aside the question of the ambit log, the issue that the parties will need to help me on in that regard goes to the purpose of the right of entry. I have previously held that Right Of Entry provisions can pertain to the employment relationship and that in arriving at that conclusion I've taken into account the purpose of the right of entry, so that if I can give you an example, I see a distinct difference between a right of entry provision which details a purpose of the right of entry being about matters that are covered in this agreement.

PN50

In contrast, a right of entry about for argument's sake union business, may not be a matter that would pertain so that I would seek from the parties some observations about the extent to which clause 8.7 can, in that regard, be regarded as a matter pertaining. You don't need to answer me now if you don't wish, but you can do so, it is your call.

PN51

MR NICHOLLS: Sir, I would say, yes, that the right of entry would be in accordance with what is in this agreement and anyway that this agreement affects the employees, our members, or our member employees but we might - - -

PN52

THE SENIOR DEPUTY PRESIDENT: That is a question that you might want to ponder on in terms of the stated purpose of the right of entry provision. Mr Nicholls, I can advise you that the issue of right of entry will be considered by a Full Commission in the week before Christmas.

PN53

MR NICHOLLS: Yes, sir.

PN54

THE SENIOR DEPUTY PRESIDENT: That might throw some light on the issue too. The provisions of clause 8.8 relative to: Trade Union Training, give rise to an identical question insofar as I've previously found that Trade Union Training provisions which can be related back to training that is linked to the role of a delegate can be said to be provisions which are incidental to a dispute resolution clause.

PN55

MR NICHOLLS: Yes, sir.

PN56

THE SENIOR DEPUTY PRESIDENT: In the same way, you will need to provide me with some advice as to how I can regard clause 8.9, which relates to: Union Executive Meetings, as a matter which pertains to the employment relationship.

PN57

MR NICHOLLS: Yes, sir.

PN58

THE SENIOR DEPUTY PRESIDENT: Clause 9.1 deals with: Journey And Accident Cover. Mr Nicholls, it could be simply the way that this clause is phrased but I am of the view that a traditional Journey and Accident cover clause, which simply obligates the employer to make payments, or to ensure a coverage is a matter that pertains and as you would be well aware I normally ask the parties just to clarify the duration and the extent of that insurance cover.

PN59

I'm having some difficulty reading this particular provision in that context. I simply don't know whether the clause is establishing an obligation on the employer to ensure that employees are covered for journey/accident insurance. Again, it is a question you might want to think about.

PN60

MR NICHOLLS: Yes, sir.

PN61

THE SENIOR DEPUTY PRESIDENT: Clause 9.1.2, again leaving aside the question of ambit, gives rise to a question as to the extent to which I can regard that provision as a matter pertaining to the employment relationship. Clause 10.3 deals with: Quality Systems. Should I understand that the employer's quality system is a document system?

PN62

MR HICKEY: No, it is not, sir, we rely on our workers to a certain degree because about the industry we are in.

PN63

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Mr Nicholls, clause 10.4 deals with a similar bargaining unit. It states in part that that single bargaining unit comprises of representatives from the company and the unions or parties to this agreement. That provision raises a question about the extent to which the agreement meets the requirements of section 170LU(2)(a).

PN64

MR NICHOLLS: Yes, sir.

PN65

THE SENIOR DEPUTY PRESIDENT: It is a provision then that might be dealt with by way of an undertaking but I need to alert you to the fact that I would require the parties to address me on the extent to which that particular provision does not offend the Freedom of Association requirements of the Act and I need to invite the parties to consider the extent to which an undertaking may or may not resolve issues associated with that clause.

PN66

MR NICHOLLS: Yes, sir. Both in doing this enterprise agreement, sir, even non-members of a union also were involved in the making of this agreement.

PN67

THE SENIOR DEPUTY PRESIDENT: Yes. You might want to cover those issues very simply by way of an undertaking.

PN68

MR NICHOLLS: Yes, sir.

PN69

THE SENIOR DEPUTY PRESIDENT: Clause 10.5 relates to: Union Information. There are two issues here, first of all, the extent to which the provision is consistent with the requirements of section 170LU(2)(a), insofar as it meets the requirements of the Freedom of Association provisions. The second issue is more specific. Looking at the first paragraph I'm unclear as to the extent to which the agreement then is purporting to deem employees who are not members of the CFMEU to be members of that union and, if so, for what purpose and to what effect.

PN70

MR NICHOLLS: I think I need some time on that one, sir.

PN71

THE SENIOR DEPUTY PRESIDENT: I spent some five minutes reading it myself and I'm afraid that I need your assistance to decipher that provision. Clause 10.7 relates to: The Skills-Based Grade Structure. It just goes to a question of clarification to the extent that the parties would need to advise me, or would be asked to advise me of the extent to which that Grade Structure Implementation Manual is a document readily available to employees, and the extent to which the parties would intend to rely upon it in whatever form it exists in during the life of this agreement.

PN72

MR NICHOLLS: Yes, sir, the union can make that available, but I'm unsure of whether it is available straight away if an employee were to ask Mr Hickey.

PN73

THE SENIOR DEPUTY PRESIDENT: All right. Should I understand that the document would be relied upon in whatever iteration it exists in at a given time?

PN74

MR NICHOLLS: Yes, sir.

PN75

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, I will take you to clause 11.1, which is the Wage Rates clause, and to the last of the dot points on page 11. This states:

PN76

A further payment of $22.50 per week shall be made no later than 12 months after the first increase.

PN77

How should I understand the words "no later than 12 months"? Does that mean that it could be paid earlier than 12 months?

PN78

MR NICHOLLS: I think it is just the unfortunate way that it has been written up, sir. I think that it will be 12 months after - - -

PN79

THE SENIOR DEPUTY PRESIDENT: So the parties intend that second increase to apply from 16 October 2005?

PN80

MR NICHOLLS: Yes, sir.

PN81

THE SENIOR DEPUTY PRESIDENT: Clause 12 relates to: Payroll Deductions. It says:

PN82

The company agrees to the payroll deductions of union dues and the forwarding of these to the union each month and shall continue to do so, unless requested otherwise by the union.

PN83

Now, Mr Nicholls, the Electrolux decision referenced and endorsed earlier High Court decisions in Alcan and Portus. Both Alcan and Portus dealt with the issue of deduction of union dues and both concluded that those were matters which did not pertain to the employment relationship.

PN84

MR NICHOLLS: Yes, sir.

PN85

THE SENIOR DEPUTY PRESIDENT: You will need to be able to convince me that that provision is a matter which does pertain and, if it does not pertain, then I'm not going to be able to certify the agreement in this form, no matter what else you do with the other provisions of the agreement.

PN86

MR NICHOLLS: Yes.

PN87

THE SENIOR DEPUTY PRESIDENT: Clause 13.6 is part of a Dispute Resolution provision and it concludes with the sentence:

PN88

This agreement may be varied by the Commission to reflect the outcomes of any conciliation or arbitration proceeding process.

PN89

Notwithstanding what the agreement may specify the Act specifies the circumstances under which an agreement may be varied. So should I understand the parties would intend to simply have regard to the provisions of the Act in that regard?

PN90

MR NICHOLLS: Yes, sir.

PN91

THE SENIOR DEPUTY PRESIDENT: Thank you. If I can then take you to attachment 1, which deals with the Enterprise Consultative Committee Charter and Operation. Clause 1 of that appendix says that - or 1.1 says:

PN92

The role of the ECC is to consider all issues relevant to the work site place which affect employees and to determine through consultation between CFMEU and management representatives how these issues should be dealt with.

PN93

It goes on to talk about:

PN94

Matters that affect an individual or a workplace.

PN95

The issue that I'm raising with you here is based on the Freedom of Association provisions and it goes to the extent to which I can understand that - or could be given to understand that the agreement provisions in this regard do or do not operate so as to discriminate against people on the basis of their membership or non-membership or the CFMEU. It may be a matter you can address by way of an undertaking, but I cannot begin to conceive how you could come up with such an undertaking.

PN96

MR NICHOLLS: Yes, sir.

PN97

THE SENIOR DEPUTY PRESIDENT: Going further looking at clause 2.2:

PN98

The structure of the ECC which provides for up to six members, including three CFMEU representatives and three management representatives.

PN99

If the ECC was simply a consultative forum with no capacity to make binding commitments which would only be made following an opportunity for all employees to participate, that particular structure might be viable, but the agreement is at pains to point out that the structure has a far broader role.

PN100

MR NICHOLLS: Yes, sir.

PN101

THE SENIOR DEPUTY PRESIDENT: Equally, 2.3 gives rise to a similar concern, given that there does not appear to be an election process. Clause 2.7 provides for: Observers. It appears to establish a right available only to the CFMEU members.

PN102

MR NICHOLLS: No, sir, that wouldn't be the case as far as I would be concerned and I'm sure Rick is of the same opinion that anyone from the shop floor who wished to observe whether they were a union member or not, would be able to observe.

PN103

THE SENIOR DEPUTY PRESIDENT: Well, you may well be able to overcome some of these issues by way of undertakings. The extent to which the agreement clauses refer back to the role of that Committee is however far more problematic in terms of just what can be done to address these issues by way of undertakings without changing the actual words of the document. There is a similar question that arises with regard to 3.1. There is a similar question that arises in relation to 4.2 and there is a question that has its genesis in the Electrolux decision, relative to clause 5. I'm at pains to point out I have no pre-conceived view in this regard. I'm simply pointing out that the clause is headed: Training of ECC Members. It then talks about:

PN104

Capacity to attend union training courses.

PN105

MR NICHOLLS: Yes.

PN106

THE SENIOR DEPUTY PRESIDENT: It does not appear to link those training courses back to the role of the member, but you may be able to do so for me. The role of the ECC is again referenced in attachment 2 relative to Skills Development And Training Issues, in particular, in paragraph 1 of that provision. Now, Mr Nicholls, do you have any questions of clarification about the issues that I've raised?

PN107

MR NICHOLLS: No, sir, I think - - -

PN108

THE SENIOR DEPUTY PRESIDENT: I'm conscious that I've raised a fairly substantial number of issues. In summary, the parties will need to make an initial decision as to the jurisdictional basis upon which they are going to rely.

PN109

MR NICHOLLS: Yes.

PN110

THE SENIOR DEPUTY PRESIDENT: They might want to take into account the extent to which any clauses of the agreement - with particular regard to that payroll deductions clause might preclude certification in any event.

PN111

MR NICHOLLS: Yes, sir. I think we foresee some changes to the - - -

PN112

THE SENIOR DEPUTY PRESIDENT: If the parties are proposing to vary the agreement in any way, they will need to ensure that it is submitted back to employees with the requisite 2 weeks notice.

PN113

MR NICHOLLS: Yes, sir.

PN114

THE SENIOR DEPUTY PRESIDENT: I can advise you that if you were going to re-submit the agreement and did so very quickly, I would endeavour to determine the matter prior to Christmas, but I can't give you a guarantee that I'm going to be able to do so.

PN115

MR NICHOLLS: Yes, sir.

PN116

THE SENIOR DEPUTY PRESIDENT: Please don't cut corners in terms of the 14 days in trying to achieve that.

PN117

MR NICHOLLS: No, sir.

PN118

THE SENIOR DEPUTY PRESIDENT: All right, thank you. Now, Mr Hickey, do any of the questions that I've raised with Mr Nicholls mean that you need to seek clarification from me?

PN119

MR HICKEY: Not as such, sir, no.

PN120

THE SENIOR DEPUTY PRESIDENT: All right. Mr Nicholls, I will await further advice from you. I should say that if the parties are going to re-write the agreement and re-submit it for certification as either a division 2 or a division 3 agreement, I won't require a new application, but I will require new statutory declarations and a revised copy of the agreement.

PN121

MR NICHOLLS: Yes, sir.

PN122

THE SENIOR DEPUTY PRESIDENT: I will adjourn the matter on that basis.

ADJOURNED INDEFINITELY [12.25pm]