AG2005/2749, Transcript of Proceedings [2005] AIRCTrans 154 (20 January 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10020

SENIOR DEPUTY PRESIDENT LACY

AG2005/2749

s.170(MD)(6) variation of certified agreement to remove ambiguity

APPLICATION BY COOTES TANKER SERVICE PTY LTD AND ANOTHER
(AG2005/2749)
Transport Workers/Cootes Aviation Services Agreement 2002

MELBOURNE

2.09PM, TUESDAY 11 JANUARY 2005

PN1

MR WEST: I seek leave to appear on behalf of Cootes Tanker Services Proprietary Limited, an administrator is appointed and Stevenson Transport Proprietary Limited, an administrator is appointed. The applicant is in relation to the ..... application..... notified in relation to section ......

PN2

THE SENIOR DEPUTY PRESIDENT: Yes, thank you Mr West.

PN3

MR SELLECK: And, your Honour, subject to your leave I will be seeking to appear on behalf of Cootes Transport Group Proprietary Limited which will simultaneously depose the purchase ..... of the businesses.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes, thank you Mr Selleck.

PN5

MS A RICHARDS: I appear on behalf of the Transport Workers' Union Australia.

PN6

THE SENIOR DEPUTY PRESIDENT: Yes, what do you say about Mr West's application for leave to appear?

PN7

MS RICHARDS: No, your Honour

PN8

THE SENIOR DEPUTY PRESIDENT: And Mr Selleck's application for leave to intervene?

PN9

MS RICHARDS: No, your Honour.

PN10

THE SENIOR DEPUTY PRESIDENT: What do you say about Mr Selleck's - very well, leave is granted in all cases. Yes, Mr West?

PN11

MR WEST: Your Honour, first I'd like to praise the attempt, your Honour, for listing this matter on short notice, which is much appreciated by the parties. The background to these applications arises out of the circumstances where the ION Group of companies were placed in voluntary administration on 6 December. Your Honour might be familiar with it.

PN12

THE SENIOR DEPUTY PRESIDENT: Saw something in the press about it.

PN13

MR WEST: Well, there was some press in relation to it. And the ION Group of companies, broadly speaking, has two brought businesses, on is in relation to automotive component manufacture, which is not part of these applications. The other aspect of this business is a business of fuel and LP gas distribution, and it's that business which forms the subject of the concerns. The ION business of LP gas and petrol distribution is principally conducted by two companies, the Stevenson Transport Proprietary Limited and Cootes Tanker Services Proprietary Limited, but there are several other companies in the ION Group who are involved in that business and I will take you to some specific amendments of ..... to the applications filed, take that into account ..... on the grounds we were to do that.

PN14

The administrator has negotiated an agreement to sell the LPG and petrol distribution business and, as part of those sale arrangements, there will be offers of employment to all of the employees to work for the purchaser on existing terms and conditions with continuity of service and a transfer of accrued entitlements. But there is a concern in relation to the uncertainty in the wording of the five agreements which are the subject of these proceedings in relation to the operation of the redundancy clause which I have taken you to. And also there is some concern about the operation of the award provisions in respect of any employees with long service leave where we envisage a proposal to transfer those entitlements across to the purchaser.

PN15

And it's in relation to those two issues that we would make the applications today. In order for the sale to proceed, I am instructed that these issues need to be sorted out and so it is a pre-condition to the sale going ahead with everything resolved ..... because there is some significant financial issues involved.

PN16

The five certified agreements that are the subject in these applications, each has a clause prescribing redundancy entitlements in bare terms and each of the agreements is subject to, or operates in conjunction with an underpinning award. And the terms that the underpinning award provide effectively for the employer to be relieved of the obligation to make that advance in payments in circumstances where there is "a transmission of business". The uncertainty - - -

PN17

THE SENIOR DEPUTY PRESIDENT: And employment follows ..... to within, yes.

PN18

MR WEST: Yes, I will take you to the versions of clauses, your Honour. In essence, the uncertainty that, particularly in view of the Amcor decision is that it's not as clear as it ought be that the entitlements is read subject to that limitation in the award. And the purpose of the application today are to address that uncertainty by simply uplifting the relevant clause from the award and in varying the agreement to include it. Unless the parties, it's our submission..... , it's supported by the union that that would reflect the attempt of the parties uncertainty so that then, the purchase can proceed on the basis that any risk which ..... is or unintended ..... risk, we should say.

PN19

It might assist the Commission if I actually take you to - unless you want me to, your Honour, I won't take you to all of these groups, they are set out in the application, several various provisions and they are - - -

PN20

THE SENIOR DEPUTY PRESIDENT: Yes, I have actually seen the applications, I have seen the provisions.

PN21

MR WEST: Yes. Well, the particular clause of the - if I could take you first to, say, the Transport Workers', Cootes Transport Group Agreement 2003.

PN22

THE SENIOR DEPUTY PRESIDENT: Yes. Actually, that's the only agreement I don't have a copy of. I have a copy of the all the other agreements.

PN23

MR WEST: Perhaps I will take you to another one.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes, that might be - - -

PN25

MR WEST: I think it is here.

PN26

THE SENIOR DEPUTY PRESIDENT: They are all the same, the terms of anyway.

PN27

MR WEST: Yes, it seems to be all right, yes. Actually I do have a spare copy of that. The relevant clause is, clause 18.

PN28

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN29

MR WEST: And you will see that the redundancy clause, clause 18 says:

PN30

If the company is forced to reduce the work force due to loss of business, relocation or any other cause, the company shall pay four weeks per year of service cap in seven weeks.

PN31

That is the definition of that week's pay. And if you go to the application clause, clause four, the effect of clause four is that this agreement is read in conjunction with the Transport Workers' LP Gas Industry Award 2002 and applies .....

PN32

And that award, in turn, provides in clause 17.7 for - in particular 17.7(1)(a):

PN33

Where the employee accepts employment with the transportee which recognises the period of continuous service, this employee ...(reads)... then the provisions in relation to that statement apply.

PN34

So it's the intent of the parties that the obligation to pay redundancy pay ..... it was always intended to be read subject to the application made ..... to make that clear.

PN35

THE SENIOR DEPUTY PRESIDENT: Sorry, say again that the application redundancy clause - in the agreement, did you say?

PN36

MR WEST: In the agreement, yes.

PN37

THE SENIOR DEPUTY PRESIDENT: Yes, should be read subject to the award.

PN38

MR WEST: Subject to the award. It seems to me it is not clear ..... certification of the application. I think the principals associated with the application under the section ..... Act.

PN39

Now, set out in the applications, each of the separate agreements and the relevant underpinning award clauses, there is one amendment to the application I would seek to make. In relation to the Transport Workers' Cootes Transport Group agreement, the employment entity in that case is correctly named as I R Cootes Proprietary Limited and, with the leave of the Commission, I would seek to amend the application to change the name from the applicant, from Cootes Tanker Services Proprietary Limited to I.R. Cootes Proprietary Limited.

PN40

THE SENIOR DEPUTY PRESIDENT: To I R Cootes Proprietary Limited, yes.

PN41

MR WEST: Yes, and then when the order is made, it will reflect that change.

PN42

THE SENIOR DEPUTY PRESIDENT: Subject to any objection about that application.

PN43

MR WEST: Yes. I don't believe it will.

PN44

THE SENIOR DEPUTY PRESIDENT: No, it doesn't at first appearance.

PN45

MR WEST: So that, in essence, deals with the basis of the application to then..... continue to operate. The applications to vary the awards themselves arise because the intention of the parties in the commercial transaction, is that employees would be offered employment with the purchaser on the basis that their accrued entitlements in respect of annual leave and long service leave carry over to the purchaser. And the concern is to remove the effect of the award provisions which, on their face at first, require the vendor award.

PN46

THE SENIOR DEPUTY PRESIDENT: Require what, sorry?

PN47

MR WEST: The vendor, the ..... selling, to pay annual leave and long service leave on termination in certain circumstances. And rather than vary the awards, we seek an order applicable only to this transaction which would relieve the various companies involved from obligations under the specific clauses of the awards to make termination payments in circumstances where an employee accepts employment with the preservation of their entitlements.

PN48

THE SENIOR DEPUTY PRESIDENT: That would be under 143, would it? What section of the Act am I making an order under?

PN49

MR WEST: Well we're simply just seeking an order under the general housing, Commissioner, ..... awards.

PN50

THE SENIOR DEPUTY PRESIDENT: Yes. I think I can make that.

PN51

MR WEST: 111?

PN52

THE SENIOR DEPUTY PRESIDENT: Sorry?

PN53

MR WEST: It's 111. The - - -

PN54

THE SENIOR DEPUTY PRESIDENT: Yes. I was thinking actually in terms of section 149. I can also make an order of that nature under section 149, I believe.

PN55

MR WEST: Yes, I even contemplated an order under that section but I thought that there is sufficient power under section 111.

PN56

THE SENIOR DEPUTY PRESIDENT: 111.

PN57

MR WEST: I had hoped to hand up some draft terms of orders but I regret that I am not able to do that now but I can in short time, provide both - - -

PN58

THE SENIOR DEPUTY PRESIDENT: That's for the award?

PN59

MR WEST: For the award. But the form of the order which we have received would be that, just in, perhaps for the transcript:

PN60

In the circumstances of the sale of the assets of the ION Group of companies who are in turn defined to include the companies involved with the petrol and LP distribution business, namely Cootes Holdings Proprietary Limited, Stevenson Transport Proprietary Limited, Cootes Tanker Services Proprietary Limited, Cootes Transport Proprietary Limited and I R Cootes Proprietary Limited, all administrators appointed. The sale by those companies to Cootes Transport Group Proprietary Limited, which was the purchaser in this case, of their petroleum and LPG distribution business on or about 18 January, 2005, that the obligation on the ION Group companies to make a payment in lieu of accrued long service leave, and this is the order in relation to long service leave. Entitlements on termination of employment under subparagraph 33.6 of the Transport Workers' (LP Gas industry) Award 2002 shall not apply in respect of any employee of the ION Group companies who accepts employment with Cootes to the extent that the employee accepts that all of the accrued long service leave be transferred from the ION Group companies to Cootes, in accordance with the written agreement of Cootes as part of the sale.

PN61

Now, a similarly worded order - - -

PN62

THE SENIOR DEPUTY PRESIDENT: So, the award will otherwise apply, according to transmission of business provisions, save for that provision in the - yes.

PN63

MR WEST: Yes. It's simply an order to relieve the obligation of payout on termination, nothing else and it's only related to this transaction.

PN64

THE SENIOR DEPUTY PRESIDENT: Yes.

PN65

MR WEST: And a similarly worded order in relation to annual leave entitlements referring to the entitlements arising under subparagraph 30.7 of the Transport Workers' LP Gas Industry Award 2002, subparagraph 26(1)(2) of the Transport Workers' Oil Distribution Group 2001 and subparagraph 32(3) of the Federated Gas Employees Industrial Union Liquefied Petroleum Gas Industry Award 1991.

PN66

THE SENIOR DEPUTY PRESIDENT: Yes. So they will still carry those entitlements over with them.

PN67

MR WEST: Yes.

PN68

THE SENIOR DEPUTY PRESIDENT: Yes.

PN69

MR WEST: But the obligation of payout is only relieved where the employee - - -

PN70

THE SENIOR DEPUTY PRESIDENT: Yes, same company.

PN71

MR WEST: - - - accepts an offer with accrued entitlements.

PN72

THE SENIOR DEPUTY PRESIDENT: Yes.

PN73

MR WEST: The long service leave order refers only to one provision because the other awards in question refer to state legislation in which there are provisions of transfer of accrued entitlements in these circumstances under state legislation. So it would only arise in relation ..... to one award ..... its obligation entitlements.

PN74

THE SENIOR DEPUTY PRESIDENT: Yes.

PN75

MR WEST: If that clause, after hearing from my friend if that clause is acceptable to the Commission, I propose to provide a draft of an order to the effect for - to be put on transcript. I know I can do that in short order, this afternoon.

PN76

THE SENIOR DEPUTY PRESIDENT: Just on the ambiguity in the agreements, as I understand the point is that the agreement is actually a silent order but because of the terms of the redundancy provision there is some ambiguity about whether or not the award does apply, and it was the intention of the parties at all times, that the award would apply in respect of that issue.

PN77

MR WEST: Well, the agreement provides for a severance pay.

PN78

THE SENIOR DEPUTY PRESIDENT: Yes.

PN79

MR WEST: And the agreement is to be read subject to the award to the extent of inconsistency. The intent of the parties was that the provision of the award that says that on the transmission of business, in circumstances that I've taken you to that redundancy pay does not apply and that the intent of the parties was that the entitlements ..... were not subject to that award provision.

PN80

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that.

PN81

MR WEST: And the uncertainty arises because of the way it is expressed.

PN82

THE SENIOR DEPUTY PRESIDENT: Yes. It's just that I have to be satisfied that there isn't ambiguity, that's all and I am just trying to articulate a way in which that might be couched from the terms in which the ambiguity might be couched.

PN83

MR WEST: We put our application in terms of the uncertainty your end. To some extent, an ambiguity is a bit more of an onerous test at best, there is clearly uncertainty, particularly given the approach in the Amcor cases to what the intent of the parties was and as to who the intent was instructioned by ..... and that's the uncertainty which we would seek to remove and we seek to do that simply by uplifting the provision of the award and putting it on the agreement so there's no doubt that it is .....

PN84

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you.

PN85

MR WEST: If it pleases your Honour.

PN86

THE SENIOR DEPUTY PRESIDENT: Ms Richards.

PN87

MS RICHARDS: Thank you, your Honour. TW consents to all the applications before the Commission today. I would just like to make a few comments with respect to the section 170MD applications. We consent to the resolution of the ambiguity or uncertainty in this particular instance because of the special circumstances with which exist. However, the TW would like to note that we do not see this as a precedent which would ordinarily be applied. Further, with respect - - -

PN88

THE SENIOR DEPUTY PRESIDENT: If I find there's an ambiguity or an uncertainty, then - no, that's right, it only binds you in terms of that agreement. Yes, that's right.

PN89

MS RICHARDS: Just with respect to this agreement. Further, with respect to the final sentence of the award transmission of business clause which I will read out on transcript to clarify. The sentence says:

PN90

The Commission may bury this clause if it is satisfied that this provision will operate unfairly in a particular case.

PN91

And then section 170MD application, this would be the award clause transmission of business.

PN92

Now the TW shall not seek to rely upon this sentence on behalf of any of our members in context of member entitlements with regard to this particular transaction. We make this undertaking based on the clause you received by both purchasers and the appointed administrators that all employees are envisaged to transfer over to the new company, Cootes Transport - - -

PN93

THE SENIOR DEPUTY PRESIDENT: Sorry, all employees are, what? Sorry?

PN94

MS RICHARDS: All employees are expected to transfer over to the new company, Cootes Transport Group with all existing entitlements intact so it would seek - - -

PN95

THE SENIOR DEPUTY PRESIDENT: Well, it's the intention that all will be offered.

PN96

MS RICHARDS: That is correct.

PN97

THE SENIOR DEPUTY PRESIDENT: What does the TW say if they don't want to go over? The normal redundancy provisions apply, do they? That is if they are offered and they don't take it then they are not entitled to any redundancy payment, is that right?

PN98

MS RICHARDS: It was my instructions that all employees, work would be offering, they would be accepting and offered re-employment and considering the situation would be that all employees would be expected to turn up to work, undertake the same duties for the same depot for all intents and purposes, we could see no change. So we wouldn't seek to rely on that particular sentence in this particular instance.

PN99

THE SENIOR DEPUTY PRESIDENT: And do you agree that it was the intention of the TWU that the provision that is to be inserted was to be understood in the agreements?

PN100

MS RICHARDS: That is correct, your Honour, we understood that that agreement condition was to be read in conjunction with the award which it's subject to. If the Commission pleases.

PN101

THE SENIOR DEPUTY PRESIDENT: Thank you, Ms Richards. Mr Selleck, will you have a say?

PN102

MR SELLECK: Thank you, your Honour. My client also wishes to support and consent to fashioning the orders that have been proposed today and in response to the undertaking effectively just provided to the Commission today. I have instructions to provide the following undertaking and that is that my client, Cootes Transports Group Proprietary Limited, will commit to providing a copy of its annual audited accounts to the TWU and, further, that it and the TWU will meet twice per year to discuss the company's accounts to ensure that the company finances will meet all employee topics, including redundancies.

PN103

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Selleck. Do you want to say anything else, Mr West?

PN104

MR WEST: Not unless you have any questions, your Honour.

PN105

THE SENIOR DEPUTY PRESIDENT: How long will it be before you can get those draft orders to me?

PN106

MR WEST: Within an hour, I can email them through in an hour.

PN107

THE SENIOR DEPUTY PRESIDENT: All right. Well, subject to settlement of those orders, I will grant the applications, as sought, as I say, subject to settlement of the orders themselves and provided they are provided today then I will make it effective from today's date. All parties affected are here or represented here, aren't they?

PN108

MR WEST: Yes.

PN109

THE SENIOR DEPUTY PRESIDENT: Unless you had some other date in mind? It certainly wouldn't be retrospective.

PN110

MR WEST: No, from today's date.

PN111

THE SENIOR DEPUTY PRESIDENT: Yes. All right. I will give some reasons for decision but they won't be forthcoming today, just for the record and say that if there is any dispute about the clauses there might be an understanding as to why they were altered.

<ADJOURNED ACCORDINGLY [2.34PM]