AG2004/1415, Transcript of Proceedings [2004] AIRCTrans 738 (25 February 2004)

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TRANSCRIPT OF PROCEEDINGS

O/N 2217

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER RICHARDS

AG2004/1415
AG2004/1416
AG2004/1417

APPLICATION FOR VARIATION OF CERTIFIED AGREEMENT

Application under Section 170MD(2) of the Act by
Kuram Enterprises t/as Subway Blackburn South to
vary the Kuram Enterprises Certified Agreement 2003

APPLICATION FOR VARIATION OF CERTIFIED AGREEMENT

Application under Section 170MD(2) of the Act by
R & B Restaurants Pty Ltd t/as Subway to vary the
R & B Restaurants Pty Ltd Certified Agreement [2003]

APPLICATION FOR VARIATION OF CERTIFIED AGREEMENT

Application under Section 170MD(2) of the Act by
Subway Pakenham Pty Ltd t/as Subway to vary the
Subway Pakenham Pty Ltd Certified Agreement 2003

BRISBANE

10.00 AM, FRIDAY, 13 FEBRUARY 2004

THIS HEARING WAS CONDUCTED VIA TELEPHONE
AND RECORDED IN BRISBANE

PN1

THE COMMISSIONER: Good morning. For formality purposes and transcript purposes, can I just take your appearance formally.

PN2

MR B. THOMPSON: Sure. I appear for the employer in this matter.

PN3

THE COMMISSIONER: Good. Thanks, Mr Thompson. You're on your own, aren't you?

PN4

MR THOMPSON: I've got a colleague with me. If you don't mind, can I put the phone on speaker?

PN5

THE COMMISSIONER: Yes, certainly.

PN6

MR THOMPSON: Thank you. Can you hear me?

PN7

THE COMMISSIONER: Yes, I can. Can you hear us all right?

PN8

MR THOMPSON: Yes, that's fine.

PN9

THE COMMISSIONER: Okay, then. Let's proceed, Mr Thompson. Do you want to lead any argument to me on this?

PN10

MR THOMPSON: I'll give you a quick background if possible. You've received the Section 170MD application in order to vary the agreement in this matter. The reason for the proposed variation is to ensure that, where there is a requirement for overtime to be filled, that under the terms of the agreement it provides that flexibility for casual appointments and for AWAs in some cases to be used.

PN11

THE COMMISSIONER: That's right, but we're dealing with the three agreements here simultaneously, aren't we? Is that your understanding? We're talking now about the three agreements at once?

PN12

MR THOMPSON: Okay. We had listings that were spread across some different period, but I am more than happy to deal with them.

PN13

THE COMMISSIONER: Yes. Look, for record purposes, we're dealing with AG2004/1415, Kuram Enterprises Certified Agreement 2003; we're dealing also with AG2004/1416, R & B Restaurants Pty Ltd Certified Agreement [2003]; and we're dealing with AG2004/1417 in relation to Subway Pakenham Pty Ltd Certified Agreement 2003. Each of the amendments that are proposed in each case are substantially the same, if we can just absolutely double-check that. Is that the case, Mr Thompson?

PN14

MR THOMPSON: I believe that in the case of - - -

PN15

THE COMMISSIONER: Yes, there are three variations to the clause, and two of them make provision for the offering of Australian Workplace Agreements with individual employees and to engage casuals from time to time pursuant to the Victorian retail sector minimum. The agreements that have that clause in them are the Subway Pakenham Pty Ltd Certified Agreement 2003 - sorry. The agreements that are proposed to have that clause in it are the Subway Pakenham Pty Ltd Certified Agreement 2003 and the R & B Restaurants Pty Ltd Certified Agreement [2003]. The Kuram Enterprises Certified Agreement 2003 has an edited version of that phrase. It goes only to a new clause, 3.3, to be inserted, which reads:

PN16

This agreement permits the employer to engage casuals from time to time pursuant to the Victorian retail state sector minimum.

PN17

Now, is that your understanding as well how the variations present themselves?

PN18

MR THOMPSON: That's exactly how I understand it, Commissioner.

PN19

THE COMMISSIONER: Okay. Now, can I ask you a question first of all, then. I have examined the documentation. There are statutory declarations which in their own right may attest to the outcome of the views of the employees covered by the agreement in relation to this matter, and in each instance they are demonstrably in the positive. They vary somewhat in their percentages, but, nonetheless, the percentages aren't that meaningful in their own right because they are talking about small numbers in the workplace, but, nonetheless, there are quite clearly a majority of employees who are covered by the agreement who voted in this matter, clearly voted in favour of the amendments in each of the cases, and the statutory declaration confirms that.

PN20

In each case as well I have before me a copy of a document signed by each of the persons who possibly voted in favour of the amendments so certifying that they voted in favour of the amendment, so those threshold matters are dealt with. What interests me, Mr Thompson, is the reference to the Victorian retail state minima in the proposed amendment, and I only say that because I think in all instances the award defined for purposes as a relevant award for purposes of the - I presume it's a relevant award for purposes of the pre-existing agreement - was the Shop Distributive and Allied - just let me get the - - -

PN21

MR THOMPSON: Retail?

PN22

THE COMMISSIONER: Yes. It's the Shops Award - Interim Award two thousand and - I think it's now 2004. It's the Shop Distributive and Allied Employees' Association/Victorian Shops Interim Award 2000.

PN23

MR THOMPSON: Yes, that's correct, Commissioner.

PN24

THE COMMISSIONER: That's as it was then, at least. I think it's now 2004 because it's been amended and so on.

PN25

MR THOMPSON: Yes. That award was designated in these cases as the designated award for the purposes of the no-disadvantage test. It also provides the back-up to the certified agreement which is to be read in conjunction with that award and applies to the classifications covered by the certified agreement. Where the proposed undertakings become necessary is that - - -

PN26

THE COMMISSIONER: Sorry. What proposed undertakings are these? Hello? Have we lost him?

PN27

MR THOMPSON: Sorry about that. I think the line may have dropped out. Can you hear me?

PN28

THE COMMISSIONER: Yes, yes. Sorry. You mentioned the word "undertakings" to me. I'm just wondering what that was about.

PN29

MR THOMPSON: It was a - it was a - I think at the time it was intending to say the proposed amendments to the agreement become necessary because the certified agreements deal - if you look at clause 6 of the certified agreements, they deal exclusively with full-time employees and part-time employees; the certified agreements don't deal with casual employees. So the proposed amendments are for the purposes of clarification in relation to the statement that casuals may be employed.

PN30

The employers in each of these matters have not been roped in to the award, the stated award in the agreement, or any other award, and are currently, but for the certified agreement, covered by the Victorian state sector minimum in these cases. So the proposed amendments are to clarify that the agreement will not jeopardise the employer's right to continue to employ casuals under the state sector minimum.

PN31

THE COMMISSIONER: That's fine. So the Shops Award was a designated award?

PN32

MR THOMPSON: Yes.

PN33

THE COMMISSIONER: You're not named respondents clearly to that award, but nonetheless it was a designated award. That designated award has provisions in it for casual employees, doesn't it?

PN34

MR THOMPSON: Yes, it does, but it's only been designated for the purposes of the no-disadvantage test in this agreement and in relation to part-time and full-time employees.

PN35

THE COMMISSIONER: Yes, but why wouldn't it have a designation role in relation to casuals as well?

PN36

MR THOMPSON: It wouldn't apply to casuals because it's only been designated in relation to the alteration of the agreement. The agreement, because it doesn't cover casuals, shouldn't affect the employer's right to engage casuals in accordance with the Victorian state sector minimum. It doesn't actually apply that.

PN37

THE COMMISSIONER: So just take me back then. So why didn't you just employ people under the State minima for the purposes of your full-time and part-time employees, then?

PN38

MR THOMPSON: Because the employer is aware that at the end of this year the likelihood - well, sorry; I'm trying to recall the legislation. If you could give me one second, I'll quote to you the new federal legislation.

PN39

THE COMMISSIONER: That's all right.

PN40

MR THOMPSON: Well, automatically - sorry. The Federal Award Uniform System Act 2003 and the Workplace Relations Amendment Improved Protection for the Victorian Workers Act 2004 will necessarily cause the employer to operate under a new federal agreement from 1 January 2005. The employers in this case are seeking to ensure that they have the right to choose the most flexible type of employment for their part-time and full-time employees and therefore have taken the steps at this point to use a certified agreement, but they do not wish to jeopardise their ability to employ casuals under the state sector minimum as they are entitled to do currently. And the proposed amendment is to clarify that that is the case.

PN41

THE COMMISSIONER: Yes. So we're dealing with an award that had a designated award - sorry. We're dealing with three certified agreements, each which had an award designated for purposes of assessing the no-disadvantage test, and that was the Victorian Shops Award. You're now proposing to vary the award such that it includes a new mode of employment for casuals, but for casuals' purposes the designated award, in effect, is the Victorian minima.

PN42

MR THOMPSON: Yes.

PN43

THE COMMISSIONER: So how does the Commission vary this as if it were a new agreement but without examining - or how do I vary this agreement as if it were a new agreement when the designated award basis to the agreement has changed or been altered as well?

PN44

MR THOMPSON: This proposed amendment would not affect the designated award because, I guess, we're dealing with - the certified agreement deals with only two types of employment, part-time and full-time, and the certified agreement wouldn't automatically affect or shouldn't automatically affect the ability of the employer to employ casuals under the relevant industrial instrument. In this case, the relevant industrial instrument is the state sector minimum as far as casuals are concerned.

PN45

So really by approving the amendment you're simply clarifying that that is still the case, that these employers can continue to employ casuals under the prevailing industrial instrument that applies to their workplace for casual employees. I'm not sure that that - - -

PN46

THE COMMISSIONER: Yes, I'm just looking for submissions on the fact that this is a variation to an extant certified agreement which has a designated award for purposes of assessing the no-disadvantage test.

PN47

MR THOMPSON: That doesn't change that designation.

PN48

THE COMMISSIONER: Sorry?

PN49

MR THOMPSON: It doesn't necessarily change the designation because the designation was only made in relation to the agreement and the agreement only applies to part-time and full-time.

PN50

THE COMMISSIONER: Yes, but wait on. Now you've introduced an amendment which introduces a new mode of employment, casuals, not covered in the extant certified agreement, and you've made the employment of those casuals referable to a different instrument, this being the statutory schedule, Schedule 1A of the Act, expressing the Victorian minima.

PN51

MR THOMPSON: And that proposed amendment is really to clarify that that is the case. I mean, maybe if the proposed amendment - if we were to consider the circumstances currently, should the employer not make the proposed amendment, then the question to be considered is what is the relevant industrial instrument applying for casuals in that workplace. And given that they haven't been roped in to an award, the state sector minimum would automatically apply to casuals and the certified agreement would automatically - this is in my submission - would automatically apply to part-time and full-time.

PN52

THE COMMISSIONER: Yes, but the thing is that you've done this within an agreement that has previously had the designated award designated formally as a particular award, the Shops Award. See, I'm just wondering how this all interacts, that we have a pre-existing agreement with a particular designated award; you have amended a clause to introduce a new mode of employment referable to a different industrial instrument. Whether or not it's legally entitled to - whether or not that - you know, there's no issue there at the moment, but I'm just trying to work out how do you have a certified agreement predicated on a particular designated award, then you create a variation that does not have the effect of altering the designation as well? Do you see what I mean? You're now really talking about two designated industrial instruments, one for purposes of full and part-time and another one for purposes of casuals.

PN53

MR THOMPSON: Well, it wouldn't be designated in so much as that - - -

PN54

THE COMMISSIONER: Well, no - - -

PN55

MR THOMPSON: - - - again, in my submission, with respect, it's simply a clarification. It doesn't affect or even designate the state sector minimum because, well, for instance - - -

PN56

THE COMMISSIONER: No, no. "Designation" is the wrong word. It's, in effect, the state minima are your defacto relevant award.

PN57

MR THOMPSON: Yes. That would remain the defacto relevant award for casuals who are not covered by the agreement, but for all other types of employees, part-time and full-time, the certified agreement would - well, currently is the relevant industrial instrument. I guess, if I might make a submission, Commissioner, it comes back to the principal objects of the Act in that the object of the Act is to allow employers and employees to agree and choose the relevant form of instrument or agreement that would apply to their workplace. And in this case they are choosing to take a combination of the state sector minimums applying for casuals and the certified agreement applying for part-time and full-time.

PN58

THE COMMISSIONER: Yes, but these are all within the one certified agreement now, though. I'm just troubled by this matter, particularly at a technical level, about how you have these - we have a pre-existing agreement where you've applied for, and have had approved, a designated award for the purposes of your full and part-time employees. Now you're seeking to amend that certified agreement with that designated award to introduce a new mode of employment, a casual, which is regulated by the Victorian retail state sector minimum, and I'm just trying to fathom how these sit together and how the specification of the Victorian retail state minimum, by way of Schedule 1A of the Act, interacts with the previous designation for the purposes of the certified agreement.

PN59

MR THOMPSON: With respect, Commissioner, does it not beg the question also that how does the ability to make AWAs in addition to the certified agreement also affect the certified agreement and the relevant award, etcetera?

PN60

THE COMMISSIONER: Yes, but that's not my problem. That's the OEAs problem. Your no-disadvantage test is executed by the OEA in relation to that matter and the issue of the awards and applicable instruments is dealt with by them. So that's not a matter that necessarily weighs on my mind, only because it's just not my statutory responsibility.

PN61

MR THOMPSON: Also, a further submission would be that a certified agreement can cover any aspect of employment and can really deal with particular issues in relation to an award, but it doesn't have to cover everything. In this case, the certified agreement covers part-time and full-time employment only, and therefore the default which is being clarified by this amendment is that casuals are covered by the prevailing industrial instrument, in this case Schedule 1A.

PN62

THE COMMISSIONER: Yes. Look, I know the argument. I'm just trying to fathom how this fits with the designation, the previous designation.

PN63

MR THOMPSON: Well, with respect, as well, Commissioner, the designation is purely for the purposes of applying the no-disadvantage test.

PN64

THE COMMISSIONER: Yes, that's right.

PN65

MR THOMPSON: And if casual employees were excluded from the consideration because they're excluded from the agreement, then the designation has already served its purpose and becomes largely irrelevant.

PN66

THE COMMISSIONER: So what are you saying about the way in which this clause operates? You're saying this clause doesn't operate for purposes of the no-disadvantage test relevant to the designated award? Sorry. I'm just trying to fathom how this clause actually lives in the agreement then. So you're saying this is not a clause that should be seen in conjunction with full-time and part-time employees?

PN67

MR THOMPSON: No. My submission is that it merely clarifies the fact that the employer is subject to Schedule 1A for the purposes of casual but the agreement has carved out terms and conditions for part timers and full timers.

PN68

THE COMMISSIONER: Right. So this is why you haven't included it and you've included in clause 3 or its equivalent in the other certified agreements but not in clause 6?

PN69

MR THOMPSON: No. If you look at clause 3, the purpose of clause 3 is to - well, it's actually titled The Duration of the Agreement. That may not be - - -

PN70

THE COMMISSIONER: Yes, I know.

PN71

MR THOMPSON: - - - the best title, but it deals with the relationship - sorry - deals with the relationship to the award. It may actually be better to have been in clause 4, which deals with its relationship to the award.

PN72

THE COMMISSIONER: Well, yes, I don't know about that either but - well, maybe, or some other heading or something. Yes. Look, I need to consider this matter to ensure that I am in a position to properly permit this variation, so I need to reflect on this somewhat. In the course of so doing, I may well have some questions. Mr Thompson, I may well have to ask you about a number of issues about how this matter actually - anyway, to clarify some issues as they occur to me.

PN73

I take it your submission to me generally is that - and correct me if I'm wrong - is that the variation functions to specify that there is an entitlement under this certified agreement for the employer to employ a casual employee but only pursuant to Schedule 1A of the Act. It does not operate to designate the modes of employment that the certified agreement provides for that are referrable to the designated award and for purposes of the no-disadvantage test. It is in essence not the inclusion of a new mode of employment for purposes of clause 6?

PN74

MR THOMPSON: No. Without disagreeing with what you've said, I think, with respect, it could be expressed more so in the terms of saying that the proposed amendment is simply a clarification that the relevant industrial instrument for the casuals is the state sector minimum or Schedule 1A and that it doesn't involve a change to the agreement or the operation of the agreement. It's purely an amendment for the purposes of clarification. The only substantive amendment is the amendment in some of the agreements to clarify - or in two of the agreements to clarify that Australian Workplace Agreements may be made to replace the agreement totally; that is a substantive amendment. The issue of casual employment is really for the purposes of clarification only. I don't think that it varies. My submission is that the amendment does not vary the operation of the certified agreement.

PN75

THE COMMISSIONER: But there was no provision in the certified agreement for the employment of casuals.

PN76

MR THOMPSON: Right, so the prevailing industrial instrument would have applied anyway, but this simply clarifies that that is the case.

PN77

THE COMMISSIONER: How would you have employed casuals in the absence of a reference to casuals in the agreement?

PN78

MR THOMPSON: We would have employed them pursuant to Schedule 1A of the Workplace Relations Act, the state sector minimum. That is the prevailing industrial instrument for these employers.

PN79

THE COMMISSIONER: And you say even if you had a certified agreement with all the employees that did not specify that you would be employing casuals, you're arguing that you nonetheless had a right to employ casuals pursuant to Schedule 1A?

PN80

MR THOMPSON: Yes. Because the certified agreement excludes casual employment, does not deal with casual employment, then it therefore does not affect the employer's right to employ casuals under Schedule 1A.

PN81

THE COMMISSIONER: But under the heading, clause 4, Relationship to Award, it says:

PN82

Except as provided by this agreement, the conditions of employment of the employee to whom this agreement applies shall be those contained in the award at the date of this agreement as certified by the Commission. Where there is inconsistency between this agreement and the award, the agreement shall prevail.

PN83

So that essentially means that where there is a gap not dealt with by the agreement the award prevails, and the award specifies the basis on which casuals are employed.

PN84

MR THOMPSON: Well, again this certified agreement - the only employees to whom it applies are part-time and full-time employees.

PN85

THE COMMISSIONER: Yes, again, so - - -

PN86

MR THOMPSON: And not casual employees.

PN87

THE COMMISSIONER: Yes, but you told me before that you had a right to employ casuals somehow not under this certified agreement. So you have a certified agreement with the employees that says certain things, but then you say you can nonetheless, notwithstanding that, go and employ someone not specified in the certified agreement under another instrument.

PN88

MR THOMPSON: Yes. For instance, you could have a certified agreement that deals purely with full-time employees and, for example, may extend additional annual leave or sick leave provisions to those full-time employees without affecting your ability to employ casuals or part-timers under Schedule 1A.

PN89

THE COMMISSIONER: So you hadn't previously employed any casuals?

PN90

MR THOMPSON: Before these agreements were made, all employees were employed as casuals under the state sector minimum. On the making of this agreement, written confirmation has been given to employees that they are now part time under the terms of the agreement. However, anyone who hasn't had their agreement confirmed as part time under the certified agreement would remain a casual under the state sector minimum, and the employer has a right to engage casuals from time to time under the state sector minimum to essentially top up any additional work that needs to be done outside of his part-time employees.

PN91

THE COMMISSIONER: Yes. Yes, okay. Well, look, that will do us for the time being. As I said, I'm going to have a reflect on this matter. I may have to contact you to ask you for some further clarifications. Are you accessible by email, are you?

PN92

MR THOMPSON: By all means, Commissioner. I'm in your hands.

PN93

THE COMMISSIONER: Right. Well, if you could just make sure you just periodically check your email, because as I reflect on this I may have a number of questions to ask you by way of additional submissions, if you don't mind. I will attempt to do this as quickly as I can so there is not any excessive delay, but I need to ensure that I approach this matter in an appropriate way. So on that basis, for today's purposes at least, we're adjourned. Thank you.

PN94

MR THOMPSON: Thank you, Commissioner.

ADJOURNED INDEFINITELY [10.33am]