AG2003/10355, Transcript of Proceedings [2004] AIRCTrans 681 (19 February 2004)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 2, 16 St George's Tce, PERTH WA 6000
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TRANSCRIPT OF PROCEEDINGS


O/N 198
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT BLAIN

AG2003/10355

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LK of the Act
by RecruitWest Pty Ltd for certification of
the RecruitWest Certified Agreement 2003

PERTH

3.45 PM, FRIDAY 6 FEBRUARY 2004

PN1

MR D. JOHNSTON: I seek leave to appear on behalf of the applicant.

PN2

MR B. WARD: I appear as the Director of RecruitWest.

PN3

MR C. STAMBOROUGH: I appear as an employee of RecruitWest. Have been for the last 10 months now.

PN4

THE DEPUTY PRESIDENT: Is there any objection? Leave is granted.

PN5

MR JOHNSTON: Thank you, Deputy President. The Commission has before it a proposed certified agreement for RecruitWest Pty Ltd. RecruitWest is a labour hire company which supplies labour and tradespeople to various industries within the State of Western Australia. The agreement is made under section 170LK of the Workplace Relations Act 1996. It is an agreement between RecruitWest as the employer and employees of RecruitWest. The applicant, RecruitWest, has submitted to the Commission over the past few weeks details of how the rates of pay in the agreement and the agreement itself meets the no disadvantage test prescribed by the Act.

PN6

And it has been drawn to the Commission's attention in the documentation supplied that, in fact, some of the rates of pay in the agreement, when subsequently tested against the Federal awards which were nominated by the Commission as appropriate awards, have come up somewhat short. The original rates had been struck against State awards but the requirement of the Act for Federal awards to be used where possible rendered the State Acts redundant and the Federal awards as appropriate. In relation to those particular classifications, the Commission has supplied the applicant with a draft undertaking which the applicant had indicated that it was prepared to make in relation to certain rates and conditions under the agreement.

PN7

The draft undertaking, Deputy President, has been - well, we will seek to amend that draft undertaking in a very minor way in these proceedings here this afternoon by inserting - sorry, does the Deputy President have a copy of the draft?

PN8

THE DEPUTY PRESIDENT: Indeed. It is in front of me. Thank you, Mr Johnston.

PN9

MR JOHNSTON: Yes, thank you. By inserting after 2 on the draft undertaking that under 3 - and putting - or, rather, deleting the existing 3 and inserting:

PN10

The minimum rate of pay per hour for a paver in Schedule 1 of the agreement will be amended to delete the figure 15.50 and insert the figure 19.10.

PN11

I will hand up a copy of this, your Honour. And then - - -

PN12

THE DEPUTY PRESIDENT: It would be of assistance if was available now to - - -

PN13

MR JOHNSTON: Yes. It is available.

PN14

THE DEPUTY PRESIDENT: - - - hand it up now.

PN15

MR JOHNSTON: It has actually been - this is a copy of one signed by Mr Ward and Mr Stamborough in anticipation of the Commission granting the amended undertaking.

PN16

THE DEPUTY PRESIDENT: Thank you.

PN17

MR JOHNSTON: But, of course, may be modified if the Commission so wishes. So, what has happened there is that the rate for a paver has been sought to be dealt with in this undertaking in the same way as the rate for driller's offsider. The draft undertaking included paver in with bricklayer, carpenter, cabinet maker, joiner under the building trades. And while it does fall within that classification of employment, the actual rate in the relevant award for a paver gives a break-even point, if you like, Commissioner, against the award somewhat lower than the $23 per hour which is mentioned in the draft undertaking and, in fact, the no disadvantage test as it has been applied by the applicant has a break-in even point of $19.10 per hour for an employee carrying out the work of a paver, which is not a trade position as bricklayer, carpenter, cabinet maker, joiner are trade positions.

PN18

So, the pavers are not currently being paid $23 per hour by the applicant. They are currently being paid between $19 and $21 per hour, I am instructed. So, a minimum rate of $19.10, we say, meets the no disadvantage test and reflects what the actual current market rate is for people carrying out this particular type of work. Then, the references to bricklayer, carpenter, cabinet maker, joiner and painter remain as they were in the draft undertaking, except that becomes 4 rather than 3. And clause 5 of the undertaking reflects what was in clause 4 of the draft. So, the effect of the amendment, Deputy President, is to remove the position of paver from its position alongside bricklayer, carpenter, cabinet maker, joiner and painter in the draft undertaking and insert it on its own and set a rate of $19.10 by amending the schedule.

PN19

THE DEPUTY PRESIDENT: Mr Johnston, perhaps could you explain to me in relation to that on page 6 of the facts supplied to the Commission on 28 January 2004, if you have that to hand - - -

PN20

MR JOHNSTON: Yes, Deputy President, I have that.

PN21

THE DEPUTY PRESIDENT: The column for paver, which is the bottom of the two columns on page 6, does refer to two figures. The one on the left, as I understand it, relates to the agreement. And the one on the right relates to the award.

PN22

MR JOHNSTON: Yes.

PN23

THE DEPUTY PRESIDENT: And the figures given there in relation to the agreement is $16.90 and in relation to the award is $20.79. If you are with me there?

PN24

MR JOHNSTON: Yes, sir. Yes, I follow that. I see the Deputy President is asking how $19.10 meets the no disadvantage test when that tables shows $20.79. Am I anticipating the question correctly?

PN25

THE DEPUTY PRESIDENT: Yes, indeed you are.

PN26

MR JOHNSTON: Yes, thank you. Yes. What is shown in the table, Deputy President, is what we have called the effective rate under the award which is gained by applying the rate in the agreement or, in this case, the proposed rate in the agreement, to the conditions which apply under the award for working, as we have said in that document, 45 hours per week. So, effectively, if a person on award conditions were working 45 hours a week, that is 38 ordinary hours and 7 hours of overtime, if their amount of remuneration under the award were reduced to a flat hourly rate, the outcome under the award would be $20.79 per hour, as an aggregated hourly rate.

PN27

On the table on page 6 of that document, the $20.79 is, we submit, correctly shown as the effective rate under the award for a paver working a 45 hour week. The $16.90 which is shown there was the effective rate after applying the various conditions of the agreement that would be achieved at a base rate of $15.50 per hour, which was the rate in the schedule to the agreement. By what we have done to arrive at the rate of $19.10 is to increase that $15.50 per hour rate until it gives an effective rate of somewhere in the vicinity of $20.79, so that it matches the outcome under the award. And if I can just find the actual calculation, Deputy President, I shall give the actual result. Yes.

PN28

At $19.10 per hour, once we apply the conditions of the agreement to the work done by a paver, the effective rate under the agreement which is shown in that document as $16.90 becomes $20.82. So it, if you like, gives an advantage over the award conditions of 3 per hour on the method that has been used to calculate disadvantage or no disadvantage in this agreement.

PN29

THE DEPUTY PRESIDENT: Thank you. In the circumstance of that and the Commission not having had the benefit of that calculation in advance of the hearing, it would be of assistance to the Commission if that could be provided subsequent to the hearing if it is not available now.

PN30

MR JOHNSTON: Yes.

PN31

THE DEPUTY PRESIDENT: If it is available now, by way of a written explanation of that figure.

PN32

MR JOHNSTON: Yes, sir.

PN33

THE DEPUTY PRESIDENT: That would be of assistance. If it is not available now, then subsequently to the hearing, it would be of assistance if that could be provided by way of a follow-up written - - -

PN34

MR JOHNSTON: Yes, certainly, Deputy President. In relation to the position of paver?

PN35

THE DEPUTY PRESIDENT: Perhaps by way of a fax.

PN36

MR JOHNSTON: Yes, I can certainly undertake to do that.

PN37

THE DEPUTY PRESIDENT: Confirming that and just confirming the basis for that. You have mentioned this on transcript, but you may wish to perhaps embellish it a little to make it easy to understand.

PN38

MR JOHNSTON: Certainly, I will encapsulate the process that has been undertaken in order to arrive at that revised rate so that the Commission can see quite clearly where we have derived it from.

PN39

THE DEPUTY PRESIDENT: Yes.

PN40

MR JOHNSTON: Yes. I would say that the process that has been applied is the same process that has been applied to all other rates in the agreement, taking into account the varying award conditions that apply to different areas of work. So, the process is the same as has been undertaken for all rates, but I am quite happy, Deputy President, to give a written explanation of that particular rate.

PN41

THE DEPUTY PRESIDENT: Yes. Given that it is the only change that is being made to that fax which I indicated was of 28 January 2004. In effect, it is an amendment to that fax, as I understand what you are putting.

PN42

MR JOHNSTON: That is correct, Deputy President.

PN43

THE DEPUTY PRESIDENT: Yes.

PN44

MR JOHNSTON: I am quite happy to supply a written explanation of that rate.

PN45

THE DEPUTY PRESIDENT: Thank you. Please proceed, if there are any further submissions.

PN46

MR JOHNSTON: I think, Deputy President, we are pretty much in the Commission's hands when it comes to going further. The statutory declaration provided by Mr Ward outlines the process which was undertaken for the informing of employees; and taking a vote of employees; explaining the agreement to employees; allowing them the opportunity to ask questions and if necessary to seek amendments to the agreement. And we say that the process certainly follows the requirements of section 170LK of the Workplace Relations Act. The agreement was accepted by employees. There was no request for an amendment to the draft agreement. There was no request for an organisation of employees to represent any employee in relation to discussions about the agreement.

PN47

And a significant majority of employees voted in favour of the agreement. We would just reiterate, Deputy President, that the agreement is unusual in some ways, in that it is an agreement which covers a labour hire company and its employees. And there is a great deal of variation in the work that would be carried out by employees of the labour hire company. And a great variation in the conditions under which that work would be carried out. And it is a matter that we have alluded to in the written correspondence with the Commission. Because of that wide variation, we think, very hard for the applicant, and also very hard for the Commission, to make a determination, an exact determination, in relation to the no disadvantage test.

PN48

We have done the best we can in looking at a standard set of conditions which might be applied for the purpose of the test, but we would reiterate that the agreement is not intended to set particular rates of pay which will apply in all circumstances to employees of the company. The intention of the applicant is to create a framework within which rates of pay can be established for employees carrying out various tasks for clients of the applicant. And to give some degree of certainty in which is traditionally a rather uncertain area of enterprise, that is, labour hire. To give some certainty and comfort to employees of the company that their conditions are set down.

PN49

That they can read what they are, they can ask questions about it. And also give them some comfort that the Commission, if you like, Deputy President, has run a rule across them and is satisfied that as a minimum set of conditions they are satisfactory. The certification of an agreement for RecruitWest would also give comfort to its clients, that it is dealing with a reputable operator who seeks to look after his employees in a reasonable way. It is an industry, labour hire, which you could say has had some bad press in the past and RecruitWest is seeking to lift its profile, but also put forward an appearance, not just an appearance but put forward the fact that it is a company which cares about its employees and cares about setting standards in the labour hire industry.

PN50

So, while the agreement does not cover all the eventualities which might arise in the employment of casual employees on labour hire, it does allow, at clause 7, site specific conditions that where employees of the employer are engaged in areas where perhaps a particular award applies or a particular certified agreement or other site agreement applies which, when viewed as a whole, would give a better outcome to the employee than the minimum rates set in this agreement, then those conditions can apply to that employee and will be discussed with the employee and agreed in writing between the employer and the employee. There is no intention here to set rates to provide clients with cheap labour, if I could put it that way.

PN51

This is a framework for providing a minimum rate. It is based on 45 hours a week. Clearly, if an employee were to work only 38 hours a week at the rate set in this agreement, they would be well in front, if I can put it that way, of what would be available under the award. In circumstances where allowances, and in the construction industry there are many, such as height allowances, travel allowances, where they apply on particular jobs, the employer currently pays those and this agreement also endorses that the employer will pay those where that will give a better outcome to the employee. So, the purpose of this agreement is to provide a solid framework on which to build rates for employees in this industry.

PN52

And that is its intention. And so, while it does pose some difficulties in giving an exact comparison against awards because the circumstances in which it might be applied are many are varied, we submit, your Honour, that it is a sound basis on which to establish rates of pay in this industry. And at the end of the day, what drives rates in the industry are market forces. And in the vast majority of cases the rates currently being paid under classifications shown in the schedule to this agreement are well in excess of the minimum being shown here. For example, I am instructed that a crane driver currently and the rate here is shown as $20 per hour. The market rate for a crane driver is in excess of $30 per hour at the moment.

PN53

And it is not a case of if the applicant were to employ a crane driver, they could impose a rate of $20. The market is such that no-one would work for them at that rate. And so they have to pay well in excess of that. So, taking into account that this intended as a framework for establishing rates and that this is an industry in which the market operates, we submit, with the undertakings given, Deputy President, that the agreement does, for the purposes of the Act, meet the no disadvantage test. It is accepted by employees. It is generally put forward for certification by the employer. And we would submit that the Commission should certify this subject to any further undertakings or questions which the Commission might have.

PN54

THE DEPUTY PRESIDENT: Thank you, Mr Johnston, for your helpful explanation. I do have a question in relation to the market forces that was referred to in the final paragraph of the aforementioned facts on page 6. And you just mentioned it briefly in your comments there. The Commission's understanding is that schedule 1 sets minimum rates for the classifications mentioned for the employees. And the Commission's understanding is that if market forces were to change and the circumstance arose whereby in fact the supply of labour increased relative to demand, that the schedule 1 minima are the actual minima that would apply in any market situation.

PN55

MR JOHNSTON: Yes, that understanding is correct, Deputy President. And to some extent it may be seen that the employer is taking a risk in introducing a certified agreement in an industry which is dominated by market forces. However, the employer is prepared to take that risk in order to provide some sort of certainty and establish framework for its employees and for setting rates of pay.

PN56

THE DEPUTY PRESIDENT: Thank you. I have no further questions at this point, other than simply to seek your confirmation that the agreement would pass the no disadvantage test as of today's date.

PN57

MR JOHNSTON: Yes, we confirm that it would with the undertakings provided to the Commission today.

PN58

THE DEPUTY PRESIDENT: Thank you. I would seek, then, the opportunity, if Mr Ward would wish to express any submission to the Commission in support of certification of the agreement.

PN59

MR WARD: Thank you, sir. Just to clarify what Mr Johnston has already said today. It is a foundation for the company. What we are trying to do is give some stability to a workforce which has been insecure for a number of years now, with high fluctuations of pay rates and insecurity in what they are going to receive at the end of the day. What I am trying to do is to have workers have a good undertaking of what the requirements are; what RecruitWest is willing to supply. And in this document, sir, we give responsibilities of RecruitWest that - different areas we will cover and help employees with, as well as expectations of what we expect from our employees.

PN60

It is basically a foundation for the employees to have some sort of confidence in RecruitWest and say, yes, we know what our work platform is. We understand what work ethics we are supposed to have. There are policies in there that say the standards of people that we require regarding drug, alcohol, environment issues. Safety issues as well. We have inductions to help people along with safety. We induct people into the workforce to make sure that they are instructed in a safe manner. And, also, with the clients, we work very, very closely with the clients as far as safety initiatives are concerned as well. So, it is this foundation for a workforce, although it is a labour hire company.

PN61

Predominantly labour hire has been - had a view of not looking after its workforce, not looking after its people. And I have always felt this was wrong. I have been in industry where I have actually hired labour hire in. Managers of workshops where I have had people come in as labour hire people. And they were treated no different to my own workforce. And I have always felt that that should be the case. The reason for this certified agreement, as far as I can see, is that I am trying to give something to the workforce. I am trying to give them some confidence and some stability within RecruitWest and confidence that we are going to do our best for them. Generally, this is what it is for.

PN62

Again, the minimum award, in all honesty, if I was paying the rates that are on that agreement there, I wouldn't have too many people working for me. We pay above that award at the moment, as it stands, and in all honesty I can't say it going below that. But if it does, it is a risk I am willing to take, as Mr Johnston said. And at least give people a reasonable standard of living. And, generally, that is what we are trying to do here. Thank you, sir.

PN63

THE DEPUTY PRESIDENT: Thank you for that, Mr Ward. Mr Stamborough?

PN64

MR STAMBOROUGH: Yes, your Honour?

PN65

THE DEPUTY PRESIDENT: Do you have any comments in support of the certification of the agreement by the Commission?

PN66

MR STAMBOROUGH: I am in favour of it. There is nothing in there that is any drama to me or anything. What RecruitWest is doing, it is a step forward to making you a lot more secure for what jobs you go to and how the clients treat us as labour hire people. I am that happy with it, my son actually works for RecruitWest as well. Basically, yeah, I am very happy. I get paid above the award rate where I am working now for them. And, yeah, no problems whatsoever. Everything is fine, as far as I can see.

PN67

THE DEPUTY PRESIDENT: Thank you very much. That is helpful, Mr Stamborough. I turn now to the certification of the agreement, noting that it is an application pursuant to Part VIB, Division 2, section 170LK of the Workplace Relations Act 1996 to certify an agreement to be known as the RecruitWest Certified Agreement 2003. Having heard Mr D. Johnston and Mr B. Ward on behalf of RecruitWest Pty Ltd, RecruitWest, and Mr C. Stamborough on behalf of the employees, and having read the statutory declaration of Mr B. Ward on behalf of RecruitWest, I am satisfied that the agreement filed relates to a constitutional corporation, namely, RecruitWest Pty Ltd, ACN098515201. The agreement passes the no disadvantage test.

PN68

It was in accordance with section 170LK and a valid majority of persons employed at the time whose employment would be subject to the agreement genuinely approved the agreement. The explanation of its terms was appropriate. It includes procedures for preventing and settling disputes between the employer and employees whose employment would be subject to the agreement. And it specifies a nominal expiry date not more than 3 years after the date on which it would come into operation. I have further satisfied that there are no reasons set out in section 170LU of the Act why I should refuse to certify the agreement. On 28 January 2004 the applicant advised that it was prepared to give certain undertakings to ensure the agreement passes the no disadvantage test.

PN69

In the light of that, on 29 January 2004 I prepared an undertaking and the applicant employer and the employee present have signed a varied form of that undertaking as at the date of 6 February 2004. Subject to the applicant providing, as agreed earlier in this hearing, to the Commission a fax outlining the further information request by the Commission, and that being received by the Commission as soon as possible and within 3 days at most but earlier the better, the Commission having received the varied undertaking will certify the agreement with effect from 6 January 2004 to operate in accordance with its terms from the same date.

PN70

The formal certificate will issue upon receipt of the fax which will be sent to the Commission subject to the Commission not having any further questions in relation to that fax. In those circumstances, therefore, as I have indicated, the date of effect of the certification by the Commission is intended to be 6 February 2004. And the certificate will issue in accordance with the procedure just outlined. Thee proceedings are now adjourned.

ADJOURNED INDEFINITELY [4.15pm]