AG2003/10362, Transcript of Proceedings [2004] AIRCTrans 535 (10 February 2004)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 6, 114-120 Castlereagh St SYDNEY NSW 2000
PO Box A2405 SYDNEY SOUTH NSW 1235
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

O/N 9015

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

MUNRO J
SENIOR DEPUTY PRESIDENT DRAKE
COMMISSIONER THATCHER

AG2003/10362

APPLICATION FOR CERTIFICATION OF AGREEMENT

Application under Section 170LC of the Act
for certification of The McDonald's Employees -
SDA Agreement 2003

SYDNEY

2.17 PM, FRIDAY, 30 JANUARY 2004

PN1

MUNRO J: This is an application under section 170LC of the Act lodged on 11 December this year by McDonalds Pty Limited and 41 other employer entities and the Shop, Distributive and Allied Employees Association for the certification under 170LC of the Act of a multiple business agreement to be known as the McDonalds Employees SDA Agreement. The matter was originally listed for hearing on 18 February in Perth at the request of the legal representative of the McDonalds Employers. The matter has been re-listed for hearing today to accommodate an ability under the Agreement to make payment from the first pay period after 1 February 2004. Could we have appearances please?

PN2

MR T.J. POPE: I appear on behalf of the Shop Distributive Association.

PN3

MRS E.G. HARTLEY: I seek leave to appear for McDonalds and the franchise as listed in the Agreement.

PN4

MUNRO J: Yes, thank you. We grant leave to appear Mrs Hartley. I think perhaps having regard to the fact that we are on video conference, the quickest way to proceed might be if I go direct to the points about which we are satisfied or as to which we have some concern. There has been some fairly extensive consultation between the Full Bench prior to the hearing today of necessity brought about by the video conference and there has of course also been the customary examination of the proposed Agreement against a check list that points in the same way as most of the agreements that come before the Commission. The first point to which I generally allude is the application clause.

PN5

We are disposed to find that the clause 3 may be construed consistently with the intention manifest in related provisions and definitions, that the Agreement applies to each of the McDonalds employers as single businesses and accordingly the Agreement is a multiple business agreement within the meaning of subsection 170LC(2) of the Act. That is based upon the wording of clause 3 which refers to the area and scope although the text of that clause says the agreement shall be binding with respect to the stores listed. If there's any difficulty about that finding of the Application then perhaps now might be the time to raise it. Do you have any difficulty Mrs Hartley?

PN6

MRS HARTLEY: No your Honour.

PN7

MUNRO J: Mr Pope?

PN8

MR POPE: No, sir.

PN9

MUNRO J: Yes. Going to the next aspect of the matter. It is necessary under section 170LC subsection 3 that a Full Bench must not certify a multiple business agreement unless it is satisfied that it is in the public interest to certify the agreement having regard to whether the matters dealt with by the agreement could be more appropriately with other than by a multiple business agreement and any other matters that the Full Bench considers relevant. We note that there are statutory declarations lodged by Mr De Brun on behalf of the SDA and Mr Warwick Atkins on behalf of McDonalds and that grounds are raised in relation to those.

PN10

We won't repeat the particular points of heading but we note that the substance is that the variety of industrial arrangements have resulted in inconsistent wages and working conditions between the 58 stores, I think it is, that are covered by the Agreement and would result in disagreements, disputation and potential dissatisfaction when wages, conditions, arrangements between employers are compared. The opening hours of stores would be affected. It notes also that the franchisees by reason of the Agreements to which they are a party are required to deliver consistency in terms of the range of products available for sale and the quality of those products.

PN11

It provides certainty not only for the franchisees but also for the employees and any potential employees seeking an employment at a McDonalds store. The same certainty and confidence could not be achieved through the negotiation and certification of individual agreements by each employer. We note and generally accept those grounds. We add a reference that is within the judicial notice of the Commission that recognition is given in the business community and more widely to the value of work experience with McDonalds company businesses in school to work transitions for juniors, and in that context we make reference to an observation of the Full Bench in the junior rates inquiry in July 1999 to the value of work experience in McDonalds in the school to work transition.

PN12

We consider that the achievements of such effects is in the public interest. Those effects are likely to be advanced by the certification in an Agreement of this kind providing for uniform conditions across the retail food establishments grouped under the McDonalds trade name. So, accordingly we find that public interest is satisfied. We note that up to 3480 employees, depending on season and location across all these institutions may be subject to the Agreement and a lower number on a standard basis that they are a mixed category of full time, part time and casual engagements. We have considered other aspects to the proposed Agreement and we consider that the proposed Agreement meets the requisite requirement to the Act and Rules.

PN13

We have taken into account the content of the statutory declarations to which we have alluded and are, on that evidence, satisfied that the requirement of the Act and Rules have been met. That satisfaction has passed and is in part based upon an examination of the content of the Agreement against a check list of requirements to which we have referred. That check list has been completed on behalf of the Bench by myself as presiding member following perusal of the Agreement and the statutory declarations. It is retained as part of the file in the matter and constitutes an element of the decision of the Full Bench for the purposes of the statutory criteria referred to in section 170LT. In relation to the provisions of the proposed Agreement, there are some points that we wish to draw to attention of the parties.

PN14

We note firstly that we have considered clause 40 of the dispute settlement procedure. It is not necessary in our view that we consider the approval of any empowerment for the purposes of section 170LW of the Act. There is no direct empowerment as we understand it intended. Consequently, approval is not applicable. It has become necessary to consider also whether that clause and another provision clause 41 precluded the certification of the Agreement because they are objectionable provisions. Now in this context I won't read out clause 40 which is the grievance procedure or clause 41 which is union recognition and union membership. We draw to the parties' attention a series of decisions by Commissioner Richards and earlier decisions of Senior Deputy President Watson and Vice President McIntyre.

PN15

The decisions of Commissioner Richards are The Griffith University SRC Enterprise Agreement in print 942513, and a decision Re Coles Myer Logistics Forrest Lake Certified Agreement on 8 October last year. The decision of Senior Deputy President Watson in Sheraton Towers, Southgate in print 935830 and the decision of Vice President McIntyre as Re-employment advocate, section 298Z application, reported in print Q6068.

PN16

In brief those decisions are concerned with objections raised about provisions and agreements proposed for certification. The relevant provisions impose either a duty on the employer to promote or encourage union membership at the point of recruitment or engagement, or a duty on the employer to recognise, or accept, that employees covered by an agreement may be represented by the single union party to the agreement.

PN17

The content of a dispute settlement procedure clause has also been found to cause the relevant provisions to be objectionable in decisions of Commissioner Richards and one of Senior Deputy Watson to which we have referred. Now we have given some consideration to these points. We are drawing them to the attention of the parties. We would assume the probability that there is some familiarity with the antecedent decisions especially on the part of you, Mr Pope, because they involve I think, a couple of them at least, the SDA. In the interests of shortening what we have to say we have come to the conclusion that none of the provisions are of a kind that would cause us to be other than satisfied that they are not objectionable provisions.

PN18

In short the approach we take is that section 170LU2A provides what is termed a prohibitive condition. If the Commission is satisfied that a condition of the kind requires, or permits, conduct that is a contravention of part 10A then it must refuse to certify the agreement unless there is some way out of that predicament found, usually either through a section 170LV undertaking or through some amendment of the agreement. We note that clause 40 provides for a first step of an employee raising a grievance. At the second step there is, it would appear, a necessary involvement of the SDA in the dispute settling procedure. We do not consider that in the context of the agreement that involvement of itself causes that provision to require, or permit, conduct that is a contravention of part 10A.

PN19

Of course if in some way there were conduct associated, or ostensibly associated, with that provision that amounted to a breach of part 10A then that part of the Act would be available to restrain it. But the provision itself on its plain meaning does not constitute something that requires, or permits, such conduct to be undertaken. The participation of the union in the dispute settling procedure would appear to be a relatively conventional arrangement, particularly in a single union agreement and to be broadly consistent with the expectations in section 170LT8, section 91, I think it is, and 92 of the Act which encourage the development of dispute settlement procedures.

PN20

In relation to the encouragement of union membership, we have referred to the decision of Commissioner Richards in Coles Myer Logistics Forest Lake Certified Agreement. There is an aspect of that decision which effectively reverses we consider the prohibition into requirement for satisfaction negating the possibility of conduct being carried out which we consider to be misconceived. In relation to the provision that is contained in clause 41 we are satisfied that it is not a provision that offends section 170LU2A read in conjunction with section 298Z. In that reasoning we are fortified by a view adopted by a Full Bench in Domino Pizza and also another Full Bench in Independent Supermarkets Certified Agreement. The provision in this instance is consistent with, if not identical to the provisions that were considered in those two Full Bench decisions, and we are also in a position to agree with reasoning of Senior Deputy President Watson in print 935830 which we have referred to.

PN21

Now I have shortened that by not taking you to the references and the sources of authority on which we have relied. The short answer we give is that we have considered clauses 41 and clause 40. We consider that they do not offend the prohibitive condition in section 170LU2A and in arriving at our reasons for that conclusion, or our provisional reasons, because we would need to hear you on them, we have had regard to the terms of the Act, to some of the decisions and to what we consider to be supportive authority at Full Bench level and some first instance level.

PN22

With that somewhat unexpected, on your part, introduction, is there anything you wish to say to dissuade us from taking that course or from issuing in due course that would, at somewhat greater length than I have summarised, spell out reasons for reaching that view, Mr Pope?

PN23

MR POPE: No, thank you your Honour. I don't have anything further to say other than I have been involved in some of those earlier cases, or an earlier case that was specifically the Domino's case and the SDA throughout Australia certainly doesn't in any respect whatsoever require people to join the SDA if they don't want to and that clause is certainly never used in that way. That clause is interpreted by us as any requirement to join the union is completely up to the individual as to whether they want to or whether they don't.

PN24

I might just add in Western Australia that we have had certified agreement with McDonalds for three years and there are several thousand young employees covered by that particular agreement and I am unaware of anyone ever complaining that they have been under any obligation whatsoever to join the SDA and I might also add that under the operation of that agreement there has never been the necessity to forward any matters to the Commission for resolution. All matters have been resolved at the individual store level and we think that is a good relationship both for McDonalds and their franchisees and both for the employees themselves that youngsters can get some representation when they run into problems and youngsters have problems that are fairly unique to themselves you know such as you know looking - their uniforms being untucked or they sleep in too long in the morning and all sorts of problems that they have. We have resolved them satisfactorily with McDonalds.

PN25

I think the industry works very well and I might just add that prior to 1990 the fast food industry in Western Australia was somewhat in turmoil. There was a lot of exploitation and the WA Industrial Relations Commissions recognised that when the underpinning award, the Fast Food Outlet Award was handed down to provide some administration of that particular industry and this Agreement is a refining of that particular Fast Food Outlet Award.

PN26

MUNRO J: Thank you, Mr Pope. Ms Hartley, do you wish to add anything?

PN27

MS HARTLEY: Thank you, your Honour. No, we have nothing further to add to the comments that you have made.

PN28

MUNRO J: Thank you. We perhaps should indicate we have not overlooked the existence of antecedent agreements here or elsewhere. Nor have we entirely overlooked the fact that they seem to have all been made under section 170LJ some of which is still extant. Without wanting to labour the point we consider that to have involved at least the possibility of some carriage or some oversight of the conjunction between LJ and 170LC of the Act. But whatever may lie behind those LJ Agreements and Commission O'Connor's certification of the predecessor of this Agreement we are satisfied that we should certify this one and that it is in conformity with the requirement of the Act and rules.

PN29

We have adopted this course. We do have a draft decision which we will finalise and publish I would expect this afternoon. That will include the Certificate. It is broadly to the effect that I have outlined in transcript. So the remarks on transcript may be taken to be a curtailed form of the decision that we will deliver in a written form. It is sufficient, I think, for this purpose to indicate that we are satisfied that we should certify the Agreement in the form presented.

PN30

In accordance with section 170LT of the Act the Commission certifies the written Agreement between McDonalds Australia Limited and the Shop Distributive and Allied Employees' Association. This Agreement shall come into force from 30 January 2004 and shall remain in force until 31 December 2006.

PN31

Where I said, "McDonalds Australia Limited" that should read, The McDonalds Employers, because that is the term which in the body of the decision we have defined and in the Agreement the McDonalds Employers appear as "McDonalds" for that shorthand.

PN32

Just out of more abundant caution, so it is on record, Commissioner Thatcher is in Perth. He does not have the opportunity to make eye-contact, I will just confirm that that decision I have just pronounced is in accordance with your concurrence, Commissioner Thatcher, if you could not nod.

PN33

COMMISSIONER THATCHER: Yes, I concur, your Honour.

PN34

MUNRO J: Thank you. Very well, the Commission has certified the Agreement. We thank the parties for putting up with this form of interlocutory and we will publish as soon as practicable the decision. I expect that will be later today on Perth's time.

PN35

All done? Very well the Commission will adjourn.

ADJOURNED INDEFINITELY [2.41pm]