AG2004/8229, Transcript of Proceedings [2004] AIRCTrans 4926 (15 December 2004)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 7, ANZ House 13 Grenfell St ADELAIDE SA 5000
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 2595

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/8229

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by Electrolux Home Products Pty Limited and
Another for certification of the Electrolux
Home Products - Dishwashing Plant
Administration Enterprise Agreement 2004/2007

ADELAIDE

12.46 PM, MONDAY, 6 DECEMBER 2004

PN1

MR S. BAKEWELL: I appear on behalf of Electrolux Home Products. Appearing with me today is MR G. QUIRK and there is also an appearance on behalf of employees, being Mr D. GOODHAND.

PN2

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Bakewell. Mr Bakewell, I can advise you that I've read the statutory declarations and I've read the agreement. Do you have a copy of the employer's Notice of Intention that you can provide to me?

PN3

MR BAKEWELL: Yes, I do.

PN4

THE SENIOR DEPUTY PRESIDENT: We will mark that document as E1 noting it is a letter to presumably all employees, Mr Bakewell?

PN5

MR BAKEWELL: That is correct.

PN6

THE SENIOR DEPUTY PRESIDENT: Dated 26 October 2004.

EXHIBIT #E1 LETTER TO ALL EMPLOYEES DATED 26/10/2004

PN7

THE SENIOR DEPUTY PRESIDENT: Mr Bakewell, should I understand that the agreement did not subsequently change from that which was provided with that letter?

PN8

MR BAKEWELL: No, it did not, Senior Deputy President.

PN9

THE SENIOR DEPUTY PRESIDENT: And I note that the statutory declaration indicates that there a number of non English speaking, or persons from non English speaking background. Should I understand that those persons all have a good grasp of the English language?

PN10

MR BAKEWELL: Yes, they do, Senior Deputy President.

PN11

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Bakewell, I will just clarify with Mr Goodhand, the process that was followed in this matter.

PN12

MR BAKEWELL: Thank you.

PN13

THE SENIOR DEPUTY PRESIDENT: How is that you are here today as an employee representative? Were you elected as such?

PN14

MR GOODHAND: Yes.

PN15

THE SENIOR DEPUTY PRESIDENT: And can you confirm that on or about 26 October, you received a letter from the employer which had attached to it an agreement?

PN16

MR GOODHAND: Yes, I can.

PN17

THE SENIOR DEPUTY PRESIDENT: Are you aware of whether that letter was sent out to all employees?

PN18

MR GOODHAND: Yes, as far as I'm aware, it was.

PN19

THE SENIOR DEPUTY PRESIDENT: And are you aware of anyone who sought to be - to have a union involved in discussions about the agreement with the employer?

PN20

MR GOODHAND: No-one did.

PN21

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Goodhand, I'm going to ask Mr Bakewell some questions about the agreement. You don't appear to have a copy of it, so I will loan you a copy from my file.

PN22

MR GOODHAND: Thank you.

PN23

THE SENIOR DEPUTY PRESIDENT: The questions don't invite Mr Bakewell to re-write the document, but they do go to a number of issues which are about which I have some significant questions in terms of this agreement. In part, my questions are due to, or arise as a result of a recent High Court decision which coincidently was in the matter of Electrolux. Now, that decision is authority for the position that an agreement can only contain terms which pertain to the relationship between the employer and its employees.

PN24

If an agreement contains other provisions, then it is not an agreement that I'm going to be able to certify under this part of the Act. If you have any questions of clarification about the issues that I'm going to raise with Mr Bakewell, please hop up and seek that clarification straight away. If you want to add anything to Mr Bakewell's responses, you can do so, or indeed you can disagree with him if you wish. Once again, please jump up and tell me if you want to say anything extra. If you don't hop up, I will assume that you are in agreement with Mr Bakewell.

PN25

MR GOODHAND: Okay.

PN26

THE SENIOR DEPUTY PRESIDENT: All right?

PN27

MR GOODHAND: Yes.

PN28

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN29

MR GOODHAND: Thank you.

PN30

MR BAKEWELL: Senior Deputy President, just for your information and for the information for Mr Goodhand, one of the key reasons that you are going to be asking me this series of questions, was that due to - it could only be described as inadvertent administrative oversight. When the document went out to a vote, clause 5 had missing from it a series of exceptions.

PN31

THE SENIOR DEPUTY PRESIDENT: I see.

PN32

MR BAKEWELL: That sought to quarantine, or no doubt the arrange of other matters that you are going to take me to.

PN33

THE SENIOR DEPUTY PRESIDENT: Yes.

PN34

MR BAKEWELL: So to that extent, we've had a brief discussion with Mr Goodhand as we came up here today and in that context, we are aware of the sort of questions you are going to ask me, so we will bravely respond to your questions but fearful of what the end result is likely to be so - - -

PN35

THE SENIOR DEPUTY PRESIDENT: I see.

PN36

MR BAKEWELL: - - - I'm in your hands.

PN37

THE SENIOR DEPUTY PRESIDENT: Well, Mr Bakewell, the questions that I have fall into three broad categories. There are questions of a general nature where I seek clarification about the provisions of the agreement so that I can be assured that the parties have a common understanding that is not going to haunt me again in the form of a dispute. Because you see, it is not unheard of for Electrolux to come back with a dispute during the life of an agreement.

PN38

MR BAKEWELL: Certainly.

PN39

THE SENIOR DEPUTY PRESIDENT: The second category of question goes to the various Electrolux issues if I can call them that, and the third category which actually arises first, goes to the extent to which clause 5 can operate so as to in effect adopt the provisions of a number of previous agreements. When I enlarge those previous agreements, section 170LJ Agreements which had as parties to them, not just Electrolux, but a range of other unions.

PN40

MR BAKEWELL: Yes.

PN41

THE SENIOR DEPUTY PRESIDENT: Now, in the normal course of events, the certification of this agreement, would in effect do away with or terminate the provisions of a previous agreement, but in this matter the parties seek to call up and adopt the terms of a range of those previous agreements, the issue that then arises is one that I've recently dealt with in another Electrolux section 170LK decision, as such that I'm not at all sure that I'm going to be able to use, or that the parties can use a section 170LK Agreement to establish any obligations on parties who are not involved in this particular agreement.

PN42

MR BAKEWELL: Yes, I understand the issues, Senior Deputy President.

PN43

THE SENIOR DEPUTY PRESIDENT: Do you want to say anything to me about that particular issue?

PN44

MR BAKEWELL: Yes, I do, yes.

PN45

THE SENIOR DEPUTY PRESIDENT: I'm very happy to listen.

PN46

MR BAKEWELL: I can take you to clause 3 of the application or the agreement in front of you. It defines in the first paragraph the nature of the employees who sought to be bound by the agreement being the administration employees, and then establishes who the parties bound are, and in this case, they are only Electrolux Home Products and the administration employees as defined. Clause 5, which as you rightfully point out, seeks to call up a range of other agreements, some of which contain parties bound other than the two that I have named, or mentioned in clause 3.

PN47

The concluding sentence if you like of clause 5 we say excludes the previous party's bound clause, because it states that those agreement are caught up except where specifically modified by this agreement, otherwise they shall continue to apply, and in that context we say clause 3 is such a clause insofar as it specifically modifies previous terms, previous party's bound terms and therefore, applying clause 5, those if you like, inconsistent terms no longer apply to this agreement.

PN48

THE SENIOR DEPUTY PRESIDENT: I see, so that if I looked for example then, at the Email and National Manufacturing Agreement of 1999 which is one of the agreements adopted by clause 5 of this agreement.

PN49

MR BAKEWELL: Yes.

PN50

THE SENIOR DEPUTY PRESIDENT: I would see that 1999 agreement contains at clause 11, a commitment to the establishment of national and site consultative committees. Now, do you say that that would have any standing?

PN51

MR BAKEWELL: It would only have standing if a later agreement, being this agreement had a clause that was inconsistent with the subject matter of that clause.

PN52

THE SENIOR DEPUTY PRESIDENT: So - - -

PN53

MR BAKEWELL: In other words, except as specifically modified by this agreement.

PN54

THE SENIOR DEPUTY PRESIDENT: So it would have standing unless the new agreement has a clause which will over-ride it?

PN55

MR BAKEWELL: Correct.

PN56

THE SENIOR DEPUTY PRESIDENT: I see. Well, if I just looked at that consultative committees clause in that 1999 agreement, it constitutes - do you have a copy of that agreement?

PN57

MR BAKEWELL: Yes, I do.

PN58

THE SENIOR DEPUTY PRESIDENT: You can see it contains a commitment to establish national and site consultative committees. To what extent should I see that that, first of all, that that particular clause is overridden by anything in the new agreement, and secondly, if it is not, then how would say that it operates?

PN59

MR BAKEWELL: There is no corresponding clause in the current agreement that you could call as a consultative committee clause and therefore the previous clause would operate. To answer your question as to how it would operate in practical terms, I think that was the question.

PN60

THE SENIOR DEPUTY PRESIDENT: Yes.

PN61

MR BAKEWELL: So clause 12, was it?

PN62

THE SENIOR DEPUTY PRESIDENT: It is clause 11, Mr Bakewell.

PN63

MR BAKEWELL: Clause 11? I would, I suspect, Senior Deputy President, it could have and would have application insofar as there is an obligation there to have a committee at the site level, which I understand Electrolux do in any event, at all of its operations throughout South Australia. So that part of it could continue to operate insofar as there is reference in the agreement to the parties, heresy, that would have to be read down to have application to the parties only to this agreement, insofar as the parties clearly have intended to alter.

PN64

There's an intention in this agreement as I've said with clause 3 to alter the parties bound. So we would say that Electrolux would be obliged to follow those obligations through insofar as there is a further obligation to establish a national consultative committee which consists here. I think it talks about national MTFU representatives and up to 10 rank and file representative, plus representatives from Email National Management. In practical terms, that would not operate for the following reasons: number (1) is that the Email National Management Structure as referred to in that agreement no longer exists.

PN65

At the time the 1999 agreement was written, Electrolux was not the company that it is today. Email was an organisation that consisted of a range of parties which I think are noted in that 1999 agreement to which that MTFU arrangement applied outside of the Electrolux Group and since that time in practical terms as I understand, that consultative committee no longer operates, so at a practical level, Senior Deputy President, it does not have application because the Email National Management Group no longer exists, nor does the National Consultative Committee, but the balance of those provisions would and could continue to operate.

PN66

THE SENIOR DEPUTY PRESIDENT: Well, given that clause 11.2 you say, could no longer operate, then to what extent did the explanation of the terms of the agreement cover issues such as that?

PN67

MR BAKEWELL: They wouldn't have covered that, Senior Deputy President, it is the response.

PN68

THE SENIOR DEPUTY PRESIDENT: Then can I take you to clause 12 which is in the 1999 agreement.

PN69

MR BAKEWELL: Yes.

PN70

THE SENIOR DEPUTY PRESIDENT: Which is the union officials and shop stewards clause.

PN71

MR BAKEWELL: Yes.

PN72

THE SENIOR DEPUTY PRESIDENT: Now, do you say that clause has any effect?

PN73

MR BAKEWELL: Yes, it would have effect because there is no corresponding clause in the current agreement.

PN74

THE SENIOR DEPUTY PRESIDENT: Now, to what extent do you say to me that that clause represents a matter pertaining to the employment relationship?

PN75

MR BAKEWELL: It does not.

PN76

THE SENIOR DEPUTY PRESIDENT: Yes.

PN77

MR BAKEWELL: As I suspect, there will be a range of provisions that you will take me to.

PN78

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Bakewell, I won't keep going through that 1999 agreement, so far as to say that agreement itself calls up previous agreements, the nightmare seems to continue in that regard. There's one other provision in that 1999 agreement that I will ask you to just confirm to me - that relates to clause 28 which is the payroll deductions clause.

PN79

MR BAKEWELL: 28?

PN80

THE SENIOR DEPUTY PRESIDENT: Yes, clause 28.

PN81

MR BAKEWELL: Yes.

PN82

THE SENIOR DEPUTY PRESIDENT: Does that provision still remain in effect by virtue of this new agreement?

PN83

MR BAKEWELL: It would.

PN84

THE SENIOR DEPUTY PRESIDENT: Yes.

PN85

MR BAKEWELL: The second question to that would be, is it a matter - - -

PN86

THE SENIOR DEPUTY PRESIDENT: Yes.

PN87

MR BAKEWELL: - - - that would pertain? The answer is no it could not be a matter.

PN88

THE SENIOR DEPUTY PRESIDENT: Mr Bakewell, I'm not going to be able to certify this agreement on the authority of the High Court in Electrolux. It seems to me that there are a number of issues that arise, not the least of which is that I do have questions about the extent to which that, or the earlier agreements with a number of unions as parties to those agreements are in effect called up, thereby establishing obligations and to some extent rights available to those unions who are not parties to this agreement.

PN89

Even leaving that question aside, the reality is that this agreement calls up certain clauses in those earlier agreements which I consider do not pertain to the employment relationship. The deduction of union dues is but one of those and in the circumstances of this particular matter, the union officials and shop stewards clause in the 1999 agreement is a second example of that type of provision. Even leaving that aside, looking at the 1997 agreement, there are various provisions in that agreement that similarly cause difficulty.

PN90

I'm very much in your hands, Mr Bakewell. I'm happy to take you through the various matters that I would have raised, had the parties been able to satisfy me that this agreement was about matters which pertain to the employment relationship.

PN91

MR BAKEWELL: Certainly.

PN92

THE SENIOR DEPUTY PRESIDENT: It occurs to me that might help the parties in re-visiting this particular matter. I can also advise that should the parties which I'm happy to explain the basis of the approach that I'm adopting to refuse certification in this instance, by way of a written decision.

PN93

MR BAKEWELL: No, thank you, that would be useful. On the first proposition in terms of going through the matters that don't potentially pertain, again, I believe that would be a useful exercise. It is also perhaps going to foreshadow what might happen in a later application where the company has sought to specifically exclude particular matters, so without prejudicing those proceedings at all, I think it would be useful particularly as we have Mr Goodhand here today to hear first hand from you those matters that you think are either don't pertain or potentially questionable.

PN94

THE SENIOR DEPUTY PRESIDENT: All right. Well, then before we leave clause 5, it occurs to me that the parties might want to climb or try to climb over the difficulties that we've been referring to by excluding various of the provisions of those agreements. There are two issues that I would raise in that regard. First, is this question of irrespective of any exclusions, that relate to matters which clearly do not pertain in earlier agreements, the parties will need to climb over the difficulty associated with the extent to which those earlier agreements establish are the rights and obligations on unions which are not party to this section 170LK Agreement.

PN95

The second issue is a practical one. By identifying a list of excluded provisions of previous agreements which themselves call up other, sometimes unnamed previous agreements, the parties are creating an absolute nightmare. They may well be creating extra work for you, Mr Bakewell, but they are not going to help themselves in terms of establishing a clear readily understood agreement which is capable of explanation to employees in the terms required by section 170LT.

PN96

MR BAKEWELL: Yes, I see Deputy President, I think your comments are well founded, so insofar as this process might provide that opportunity.

PN97

THE SENIOR DEPUTY PRESIDENT: Clause 11 of the agreement details wage increases. I can put the parties on notice that I will require a wages schedule on an agreed basis if one is not attached to any future application.

PN98

MR BAKEWELL: Thank you, we were in a position, Senior Deputy President, to provide you with that, today.

PN99

THE SENIOR DEPUTY PRESIDENT: Thank you. That is simply because perhaps for Mr Goodhand's benefit, the Act requires me to look at the agreement and assess whether it represents any disadvantage in overall terms to employs as against the relevant award, and without a wages schedule, then I'm in some difficulty in that respect. The latter part of that clause 11 deals with an arrangement which I understand the parties intend to apply so that if increases in other Electrolux agreements apply, and those wage increases exceed those in this agreement, the higher increase for a relevant period would apply.

PN100

Now, there are a couple of questions that arise in this respect and I should say these questions don't necessarily preclude certification, nor indeed do they necessarily have a right or wrong answer. The first issue is whether or not the parties intend that in the event that another agreement provides for a higher level of wage increase, they would then seek to vary this particular agreement. The second question is whether or not if another agreement provides for a higher increase, the parties intend to apply that higher increase from the relevant date that is stipulated for that other agreement or whether it applies from the date of the proposed increase or last proposed increase in this particular agreement, that is, from 1 July 2005 or 1 July 2006.

PN101

As I said, there is no necessarily right or wrong answer, it is more a question of clarification. Clause 12 relates to the temporary transfer of employees to other Electrolux sites and again, I was going to seek clarification from the parties as to which agreement would apply to employees when they engaged in such a transfer. Clause 18 relates to salary sacrifice, the question I have with the parties in this regard is drawn directly from the High Court Electrolux decision and it goes to the extent to which I can regard as salary sacrifice arrangement as a matter pertaining to the employment relationship.

PN102

MR BAKEWELL: Could I possibly ask a question of you there, Senior Deputy President?

PN103

THE SENIOR DEPUTY PRESIDENT: You may.

PN104

MR BAKEWELL: It was our intention today, being faced with that clause to provide the Commission with a copy of the relevant company policy on point, because that company policy exclusively relates to the topic of superannuation.

PN105

THE SENIOR DEPUTY PRESIDENT: Yes.

PN106

MR BAKEWELL: It relates to no other form of salary sacrifice and if we were hypothetically to do that, would that be an appropriate approach?

PN107

THE SENIOR DEPUTY PRESIDENT: It may well climb over the difficulties that I'm referring to. The other factor that I will note in that regard, Mr Bakewell, is that the Commission is considering three decisions on appeal, two of which as to say are mine, just prior to Christmas.

PN108

MR BAKEWELL: That is on the 20th, I believe.

PN109

THE SENIOR DEPUTY PRESIDENT: Yes, the issue of arrangements such as this, is going to arise in the course of those appeals and it may well be that the parties want to take on board the deliberations of the full Commission in that respect. I don't know how long it will be before a decision is published but it would appear to me that the parties are unlikely to have a clear conclusion in this agreement until some time after Christmas. Clause 21 relates to development plans. I was going to seek clarification from the parties as to whether of those performance reviews and employee development plans are part of a documented policy which policy might, or is available, or readily available to employees and might be changed over the life of the agreement.

PN110

Similarly, clause 28 refers to the company policy on payment for sick leave accruals. I was going to seek clarification from the parties as to the extent to which that policy document was in a written form readily available to employees and capable of change during the life of the agreement. Those latter two questions again are simply questions of clarification. Now, Mr Bakewell, so there's no doubt in my mind, do you require a written decision on this matter? I'm in your hands in that regard, and I'm happy to provide one. I'm at least a fortnight away from being able to do so.

PN111

MR BAKEWELL: Senior Deputy President, I think it would nevertheless be useful and I think it would be useful in the respect that both Mr Quirk and Mr Goodhand walk away from here today and both have respective roles in debriefing management and employees on the topic and I think the decision outlining the difficulties that we have encountered would be useful for them to do that.

PN112

THE SENIOR DEPUTY PRESIDENT: Yes.

PN113

MR BAKEWELL: And useful perhaps, in ultimately having the parties arrive at a position that would mean an agreement going back to employees through a vote in a form that was capable of being certified.

PN114

THE SENIOR DEPUTY PRESIDENT: All right, thank you. Mr Goodhand, do you want to clarify any issues with me before we conclude today's hearing?

PN115

MR GOODHAND: No .....

PN116

THE SENIOR DEPUTY PRESIDENT: Perhaps it might help you if I simply confirmed the key reasons why I'm not able to certify the agreement have nothing to do with the benefits in terms of wages and conditions established by this particular agreement in that you will not conclude that the agreement was deficient in terms of the benefits provided to employees. What you can conclude is that the agreement is deficient in that particularly given the High Court decision in Electrolux that was handed down on 2 September, this particular agreement now contains a number of provisions which mean that it is not qualified to be capable of being certified.

PN117

The second conclusion that I think that you should reasonably draw from today's hearing, is that with particular regard to clause 5 and that is sweet of other agreements that are called up by this particular document, there are significant problems associated with such an approach. They form into two categories. The first category is such that they might well preclude certification, the second category is they created enormous difficulty in terms of any normal human being understanding what it is that the parties have agreed to and indeed explaining it as the Act requires so that in the current day and age, I would have thought there's a very compelling case for simple agreements of this nature.

PN118

So that I would suggest that the parties identify perhaps by looking through some of those earlier agreements, the provisions that they want to incorporate and actually incorporate them in an agreement, rather than trying to work the other way and work out what they don't want to incorporate from the past. Does that help you?

PN119

MR GOODHAND: It does. Thank you, sir.

PN120

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

ADJOURNED INDEFINITELY [1.18pm]

INDEX

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #E1 LETTER TO ALL EMPLOYEES DATED 26/10/2004 PN7