AG2005/3808, Transcript of Proceedings [2005] AIRCTrans 1168 (17 May 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 11491-1

SENIOR DEPUTY PRESIDENT KAUFMAN

AG2005/3808

APPLICATION BY AUSTRALIAN GRAPHIC SERVICING PTY LTD
s.170LK - Agreement with employees (Division 2)
(AG2005/3808)

MELBOURNE

10.17AM, MONDAY, 09 MAY 2005

PN1

MR H McPHERSON: I appear on behalf of Australian Graphic Servicing and appearing with me today is MR G MAYNARD who is the managing director of the company, MR P FELIX who is the company accountant and MR S LINTON who is the employee representative in this matter.

PN2

THE SENIOR DEPUTY PRESIDENT: Yes, Mr McPherson? Are you with an employer organisation or working for the company or - - -

PN3

MR McPHERSON: Your Honour, I work for a company called Employment Services and Solutions, we are bargaining agents and give some help to employers but not an employer association.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes. You need leave to appear do you?

PN5

MR McPHERSON: I don't seek leave because I am not counsel in this regard if that is - - -

PN6

THE SENIOR DEPUTY PRESIDENT: You are a paid agent aren't you?

PN7

MR McPHERSON: Yes, I am.

PN8

THE SENIOR DEPUTY PRESIDENT: Well, in that case you still need leave, don't you?

PN9

MR McPHERSON: Apologies, your Honour. I seek leave appropriately to appear in relation to - - -

PN10

THE SENIOR DEPUTY PRESIDENT: Yes, leave is granted. Yes, go ahead.

PN11

MR McPHERSON: Thank you, your Honour, this is an application under
Part VI of the Workplace Relations Act for the certification of a section 170LK agreement between Australian Graphic Servicing and its staff. The proposed title of the agreement is the Australian Graphic Servicing Certified Agreement 2005. Your Honour, we will mostly rely on the details of the statutory declaration and other information that is provided to your chambers but it would be remiss not to go through three major points in relation to this type of agreement. Firstly, we submit that all matters dealt with within the draft agreement in front of you at the moment, pertain to the employment relationship. Secondly, that the agreement itself does not result in any disadvantage to any of the employees whose terms are subject to the agreement. And thirdly, the servicing of notices especially in relation to the intentions of the party has been done in accordance with both legislation and recent cases as determined by the Commission.

PN12

THE SENIOR DEPUTY PRESIDENT: Yes. Now, you are going to make those points good, are you?

PN13

MR McPHERSON: Sorry?

PN14

THE SENIOR DEPUTY PRESIDENT: Now you are going to satisfy me as to those points are you, Mr McPherson?

PN15

MR McPHERSON: That's okay, your Honour. I suppose in relation to the matters pertaining I would just refer to the agreement itself and its contents. As far as no disadvantage there was an attachment submitted to your chambers I believe, in the original application itself but then later by email. Not that it had been varied but it was a calculation of the rates.

PN16

THE SENIOR DEPUTY PRESIDENT: Was that part of the agreement?

PN17

MR McPHERSON: No, it was not part of the agreement. It was supplied as a reference.

PN18

THE SENIOR DEPUTY PRESIDENT: Is that a document that was sent up to my chambers on Tuesday 3 May, is it?

PN19

MR McPHERSON: That is correct.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes. Would you like to go through that with me please?

PN21

MR McPHERSON: Yes, SENIOR DEPUTY PRESIDENT. Sorry, I will just find myself a copy. In relation to quantifying that there is no disadvantage, this obviously hangs on the actual structural elements of the remuneration itself. The way that this has actually been calculated is by taking into account all aspects of the award that would be provided to the employees if they were subject to employment under the award.

PN22

THE SENIOR DEPUTY PRESIDENT: Yes. Now, there are two awards, which award are you talking about?

PN23

MR McPHERSON: We are talking about both the Clerical and Administrative Employees Award and the National Electronic and Communications Contract Industry Award.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes.

PN25

MR McPHERSON: Ours is set up separately there. I suppose the nature of the agreement itself is to instil a 40 hour work week and the way of achieving that in providing for the rates was to accommodate as far as the value of the two hours overtime at the applicable penalty rate and to have that then factored in with annual leave loading into the weekly rate and then the hourly rates as you might see in front of you are therefore divided by the 40 hours as would be the work week under this particular agreement. It's a little bit more extensive in relation to the award for the National Electrical - - -

PN26

THE SENIOR DEPUTY PRESIDENT: How many employees are clerical employees, there is 10 in total aren't there?

PN27

MR McPHERSON: There is 10 in total and as I understand there is only one clerical employee?

PN28

MR MAYNARD: No, none at the moment. There is a position for one in the future.

PN29

MR McPHERSON: Sorry, your Honour.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes, I heard that. And that employee will only be at a grade 3 level, is that right, Mr McPherson?

PN31

MR McPHERSON: That's correct. The nature of the role itself, I should add that there will be other people within the company working in administrative areas that work at a higher rate whose position, I suppose, would fall within a management or supervisory capacity that wouldn't fall under the terms of the certified agreement. But as I understand, this particular classification relates to a role that would include a bookkeeper and/or receptionist type level within the organisation.

PN32

THE SENIOR DEPUTY PRESIDENT: And that is the equivalent of, what, grade 3 in the clerical award?

PN33

MR McPHERSON: That's correct. As part of the exercise, your Honour, I, in conjunction with the employer went through the relevant classifications and came to what was the, using the classifications descriptors, the most appropriate for the purposes of instilling within the terms of this grade.

PN34

THE SENIOR DEPUTY PRESIDENT: Yes. Now, just explain to me how that table works in relation to the clerical employee. You have got the award rate of $561.20.

PN35

MR McPHERSON: Yes. We have calculated on the basis of $561.20 divided by 38 times time and a half being the 150 per cent applicable overtime penalty for the first two hours of work which would take it up to 40.

PN36

THE SENIOR DEPUTY PRESIDENT: Yes.

PN37

MR McPHERSON: Obviously, adding those together. As far as annual leave loading, the way that that actual calculation works is to say taking the award rate of $561.20, multiplying it by 0.7 or 70 per cent and then in itself dividing by 38. Now, the theory behind the calculation in that regard is that annual leave loading is 17 and a half per cent on the award times four, so across four weeks so that the real value of annual leave loading is 70 per cent.

PN38

THE SENIOR DEPUTY PRESIDENT: 70 per cent.

PN39

MR McPHERSON: 70 per cent of an ordinary week's wage across 12 months.

PN40

THE SENIOR DEPUTY PRESIDENT: Yes, that is the equivalent of 17 and a half per cent, is it?

PN41

MR McPHERSON: Yes, that's correct. And then factored in accordingly within the wage.

PN42

THE SENIOR DEPUTY PRESIDENT: And then divided by 40.

PN43

MR McPHERSON: Yes, by 38 in that particular regard for annual leave loading, and then obviously as you can see by the weekly total.

PN44

THE SENIOR DEPUTY PRESIDENT: And that is divided by 40 to give you $15.40.

PN45

MR McPHERSON: That is correct.

PN46

THE SENIOR DEPUTY PRESIDENT: Which is the precise amount of the hourly rate of a grade 3 employee employed under the Clerical and Administrative Award, is it?

PN47

MR McPHERSON: That's correct.

PN48

THE SENIOR DEPUTY PRESIDENT: Yes. And what about in relation to the Electrical Award?

PN49

MR McPHERSON: Your Honour, the same general rules apply in relation to annual leave loading and the overtime but also included there are a number of allowances. The two allowances that apply across all classifications under the award are the industry allowance and the attendance allowance from our reading of the award. The allowances, allowance 2 and 3 as earmarked within the document, tool allowance and A grade licence allowance prescribed to those at the tradesman's rate or above and as such have been accommodated or taken into account when it comes to AGS class 6 and above.

PN50

THE SENIOR DEPUTY PRESIDENT: Yes. Now, there is a myriad of allowances in the National Electrical et cetera Award that don't apply.

PN51

MR McPHERSON: That's correct.

PN52

THE SENIOR DEPUTY PRESIDENT: Well, explain to me why the agreement passes the no disadvantage test if those allowances have been excluded and the wage rate is identical.

PN53

MR McPHERSON: The nature of the work, your Honour, if I might say that there is a question to some extent of whether the industry allowance in itself would apply because of how it is prescribed to work. The nature of the Act in the employer's business is one whereby they attend as specialist technicians, client sites which are all indoors because they work with industrial printing equipment and their service is one of repair. As such, things like dirty work as may apply in the award or issues to do with toxic substances and things like that will never apply within the context or the practical context of the services in which the employer provides.

PN54

THE SENIOR DEPUTY PRESIDENT: Well, what about things like a licence allowance, for instance? And service increments? And you have included the allowance, an attendance payment per week doesn't seem to be - yes, that's included.

PN55

MR McPHERSON: Yes. We have included the four allowances as discovered through the process. I would say that the employer has always had knowledge of which allowances were applicable and has in the past provided those.

PN56

THE SENIOR DEPUTY PRESIDENT: Well, what about the service increments, for instance? They are not included.

PN57

MR McPHERSON: I am unfamiliar with the situation in relation to the service increments.

PN58

THE SENIOR DEPUTY PRESIDENT: Well, it's not a matter of being familiar with the situation. There are service increments that apply after one year, three years, five years, seven years and 10 years.

PN59

MR McPHERSON: To which classifications, may I ask, do they relate?

PN60

THE SENIOR DEPUTY PRESIDENT: I am looking at table B of the award which has the allowances. I assume that is the relevant clause, I don't know.

PN61

MR McPHERSON: Your Honour, I - - -

PN62

THE SENIOR DEPUTY PRESIDENT: Do you have the award?

PN63

MR McPHERSON: I don't have a copy of the award here, I am sorry, no.

PN64

THE SENIOR DEPUTY PRESIDENT: Well, how can you persuade me that the agreement has passed the no disadvantage test?

PN65

MR McPHERSON: It is my apologies, your Honour. I had - - -

PN66

THE SENIOR DEPUTY PRESIDENT: Well, that's all very well but where do we go from here?

PN67

MR McPHERSON: Your Honour, am I right in saying that the service increments as far as the no disadvantage test are the main concern as far as the no disadvantage test?

PN68

THE SENIOR DEPUTY PRESIDENT: No. That is just one matter that I noticed immediately and there is an attendance payment per week, that has been included. There is a leading hands allowance, well, that's zero full weeks, I don't know why it's there. Tool allowance has been included. There is a multi-storey allowance, I don't know whether that applies or not, a first aid allowance.

PN69

MR McPHERSON: I think you will find within the - - -

PN70

THE SENIOR DEPUTY PRESIDENT: There is accident pay, is that included in your agreement?

PN71

MR McPHERSON: Yes, it is included within the agreement.

PN72

THE SENIOR DEPUTY PRESIDENT: There is a travel time allowance per day, has that been included?

PN73

MR McPHERSON: That is included. If I can refer to, your Honour, if I can refer to clause 12 of the agreement.

PN74

THE SENIOR DEPUTY PRESIDENT: Yes, I recall that. Yes.

PN75

MR McPHERSON: It does exclude, I suppose, all agreements other than those that are put there now. My concern is - - -

PN76

THE SENIOR DEPUTY PRESIDENT: What about meals by travelling jobsite up to 50 k from registered office allowance? I don't know. I need a bit more than you are giving me, quite frankly. For instance, another matter that just came to my attention is overtime. You have included overtime two hours at time and a half but then the agreement provides for time off at the employer's discretion on an hour by hour basis whereas the award provides for double time after three hours, I think. Why is that not a disadvantage?

PN77

MR McPHERSON: As I understand it was time off in lieu or the overtime penalty that would prescribe in the award after 40 hours worked per week would be at 200 per cent or at the double time rate.

PN78

THE SENIOR DEPUTY PRESIDENT: Sorry. Show me that.

PN79

MR McPHERSON: Within the award.

PN80

THE SENIOR DEPUTY PRESIDENT: Within the award?

PN81

MR McPHERSON: I am sorry. As I don't have the award here I can't reference the clause so my apologies, your Honour.

PN82

THE SENIOR DEPUTY PRESIDENT: Well, just a minute. I am looking at the Electrical et cetera Award, it is quite a long clause but the main provision is time and a half for the first two hours, double time thereafter in Victoria and Tasmania. Now, your agreement as I understand it provides for time off in lieu for hours worked in excess of 40 at the employer's discretion.

PN83

MR McPHERSON: The clause, and maybe this is something that needs revision, your Honour, should be read as that the person or an employee working in excess of 40 hours would be paid at their single rate and in addition to that would receive an hour of time off in lieu.

PN84

THE SENIOR DEPUTY PRESIDENT: Does it say that?

PN85

MR McPHERSON: It reads as such at clause 15.2:

PN86

For all work performed in excess of 40 hours per week, employees may be afforded time off in lieu. One hour of time off in lieu will be provided for each hour of overtime performed.

PN87

The translation of that practically, as was struck or is explained within relation to the parties was that the payments would extend beyond 40 hours on the single rate but that for any hours worked in excess of 40 hours also, or in addition, an hour of time off in lieu would be accrued for each such hour worked.

PN88

THE SENIOR DEPUTY PRESIDENT: So, being the equivalent of double time.

PN89

MR McPHERSON: Yes.

PN90

THE SENIOR DEPUTY PRESIDENT: Well, it doesn't say that, does it?

PN91

MR McPHERSON: Probably not as specifically as it should do. That certainly was the intention.

PN92

THE SENIOR DEPUTY PRESIDENT: Well it doesn't say it at all.

PN93

MR McPHERSON: It certainly was the intention of the parties in making the agreement in that regard. I would refer to 15.3, the employer at their discretion may elect to make payment for overtime at the rate of double time. I know that they may read somewhat mutually exclusively but that is to the heart of the basis of how this issue has been dealt with within the context of the agreement.

PN94

THE SENIOR DEPUTY PRESIDENT: Well, I am not very comfortable with that I must say. Well, what are we going to do? You haven't satisfied me today that the no disadvantage test it met and I don't think you are able to do that given that you don't even have the awards in front of you. What do you want to do? Do you want me to adjourn this matter or do you want me to dismiss it outright today on the basis that I am not satisfied?

PN95

MR McPHERSON: Your Honour, I would seek an adjournment but on the basis that I would look for your opinion in this regard that given the issue with service increments especially, if that in itself is going to be prohibitive to you being comfortable then it may be best that I return to my clients and discuss with them about making the relevant revisions within the agreement itself.

PN96

THE SENIOR DEPUTY PRESIDENT: Well, Mr McPherson, it is a matter for you. I have just pointed to some of the matters that stand out on a quick reading of the awards. I haven't gone through the awards with a fine tooth comb. I don't know that that is my function, quite frankly. It is your function to persuade me that the agreement passes the no disadvantage test as compared with both awards. And I have just almost at random shown you some clauses that on their face seem to indicate to me that it may not have. I notice that the rates of pay are calculated in a way that they reflect precisely the award rates so it is not as though the employees are getting a pay increase at all. It is precisely the rates provided by the award which means that you are skating on very thin ice. If there is anything in the award that has not been compensated for by the agreement, the no disadvantage test won't be passed. Even the clause that says there will be wage increases in accordance with CPI over the next two years, I think, raises a question because National Wage Cases may well, and I think have in the last year or two provided for more than CPI.

PN97

So I need a bit of persuading on this one and I think you are just going to have to provide a much more detailed analysis of all the clauses in the award that on their face appear to provide more than the agreement provides before you can satisfy me. So what I will do is I will adjourn this matter. You can take such counsel as you wish and speak with your client and then either have the matter re-listed or do whatever you are advised to do. I think that's the best thing because you are obviously not able to satisfy me today that the no disadvantage test has been passed, are you?

PN98

MR McPHERSON: It would seem not, no.

PN99

THE SENIOR DEPUTY PRESIDENT: Well, is that a satisfactory course to you?

PN100

MR McPHERSON: I have no objections to that. I will seek counsel from my client in that particular regard but as far as responding to your concerns in this regard, an adjournment is welcomed in seeking to clarify further issues and bring this back to you.

PN101

THE SENIOR DEPUTY PRESIDENT: Well, that is what I will do and if you want to bring the matter back on when you are in a position to properly satisfy me I will re-list it or if you don't want to bring it back on and want to do something else, we will accommodate that too. Yes, adjourned. Thank you.

<ADJOURNED INDEFINITELY [10.35AM]