AG2005/4383, Transcript of Proceedings [2005] AIRCTrans 1664 (8 August 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 12324-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2005/4383

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION-FFPD- SOUTH AUSTRALIAN BRANCH (NO.3 BRANCH) & AUSPINE LIMITED
s.170LJ - Agreement with organisations of employees (Division 2)
(AG2005/4383)

ADELAIDE

3.30PM, MONDAY, 25 JULY 200

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN ADELAIDE

Reserved for Decision

PN1

MR R MORITZ: I appear for Auspine Ltd and with me is MR C JONES and
MR T ROSS for Auspine Ltd.

PN2

MR B COATES: I am in Mt Gambier for the CFMEU.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, I have read the agreement in this matter and I have read the statutory declarations. I have forwarded to the parties the questions that I had. Can I work from the premise that you, Mr Moritz and you, Mr Coates have received those questions.

PN4

MR COATES: Yes, sir.

PN5

THE SENIOR DEPUTY PRESIDENT: All right. For ease of communication perhaps I will look first of all to Mr Moritz to help me out with my questions. Mr Moritz can we start with the date upon which the agreement in its final form was provided to employees?

PN6

MR MORITZ: I can confirm that I am sure. I can also confirm that the agreement in its final form was provided to employees on 30 May and that the ballot associated with indicated acceptance for the ….. of that agreement was conducted on 19 June.

PN7

THE SENIOR DEPUTY PRESIDENT: Thank you. And Mr Coates, I will read it from the premise that unless you are going to disagree with Mr Moritz I will take your silence as acquiescence with his position.

PN8

MR COATES: Yes, Senior Deputy President.

PN9

THE SENIOR DEPUTY PRESIDENT: Part 2 clause 11, the reference to company policies and procedures, are they in written form?

PN10

MR MORITZ: Yes, sir, they are. There is a comprehensive list of policies and procedures available for all employees to take on site and remote locations.

PN11

THE SENIOR DEPUTY PRESIDENT: And the same would apply in relation to clause 33.5 and the reference to the company's HR policy procedure manual.

PN12

MR MORITZ: Yes, these too and I can confirm that subjects to this agreement are familiar with it both content and the ….. those manuals. Following on, if I may, just confirming to if the wording changed in those policies and procedures during the life of this the agreement caters for the provision of those details to be ….. and addressed by the agreement and nothing ….. policies would not occur to …..

PN13

THE SENIOR DEPUTY PRESIDENT: And clause 37 which deals with the journey insurance cover. Now, are you able to advise me of the amount and the duration of that cover?

PN14

MR MORITZ: I can, sir. I will take it that having dispatch from Mr Gambier, a copy of it of the cover itself at section 2 of that document, I think I have got the cover. The cover is in fact, a corporate insurance cover which provides protection for all Auspine employees including those employees attached to the previous Treefarmer section. The benefits available under that cover as you will see there sir, are for death capital benefits, $100,000 and weekly benefits provided up to
95 per cent of the weekly payment up to a total of $1000 per week. The only requirability under that policy …..

PN15

THE SENIOR DEPUTY PRESIDENT: Thank you.

EXHIBIT #A1 FACILITY JOURNEY ACTS AND INSURANCE POLICY

PN16

THE SENIOR DEPUTY PRESIDENT: And I will retain that on the Commission's file, Mr Moritz. Now, that takes me to clause 39 which relates to outsourcing and contracting out. Clause 39 and for that matter, clause 1 of part 6 represent two provisions which have the potential to bring unstuck the agreement. Have you looked at the clauses about which I have sought clarification in the context of the Schefenacker decision, Mr Moritz?

PN17

MR MORITZ: Yes, we have, sir and there has been some discussion around those. There has been an amendment to the previous wording contained in the agreement which this agreement will succeed. Unfortunately, sir, as with other cases in recent times the company has not been able to reach agreement with the union parties to this agreement, to alternative terms that might be applied. Try as I might, sir, I don't believe it would be possible for me to justify the retention of those particular provisions in their current form. I could attempt to put them into some context but I think at the final analysis, certainly from Auspine's point of view, we believe that there is a prospect there that those particular clauses in their current form …..

PN18

The intention of these particular clauses are to outline assurance to the employees being faced with the prospect of redundancy in the future and certainly redundancies arising from outsourcing of company processes. In terms of their capacity to obtain alternative employment with the new provider, were there to be one, and I might stress that there is no immediate prospect of that occurring, but if that were to occur, the company has sought in this agreement and in past agreements to ensure that there was sufficient information available to Auspine employees to make a considered decision about any or prospective offer of employment from a new provider. That is the context of the clause as it had been written.

PN19

However, if we were to analyse them it against a Schefenacker decision as we were required to do, I believe, we would probably agree that there is some potential there for misinterpretation of both context and the meaning of those ….. And it is not clear, in Auspine's view, that particularly those that might apply, that there is a guarantee employees retaining existing employment. There is a prospect of that running through and that would be constituting a breach of the provisions of the Act. And certainly not satisfying the principles which are laid down by Schefenacker. There are some probably qualifying statements I could make about that, sir, but in the end, final analysis, I don't believe that I can make that a reason that entered those provisions. And Mr Coates may have a different opinion to put to you and I understand he has. And perhaps if I …..

PN20

THE SENIOR DEPUTY PRESIDENT: Yes. Before I hear from Mr Coates, Mr Moritz, can I refer you to clause 39.4. Are you saying to me in relation to that particular subclause that that clause or that subclause imposes an ongoing obligation on the part of the business to whom the outsourcing or contracting out function is dedicated.

PN21

MR MORITZ: I believe, sir, that that proposed the potential ….. The intention of that clause is to, as I have mentioned, to provide assurance to existing employees that the intention of Auspine would be to negotiate employment conditions which do not disadvantage in terms of their overall package of wages and conditions entitlements. It does go to the extent of saying it does not mean the terms and conditions must be identical. However, the use of the term is not to be disadvantaged, I think is probably best put on this occasion.

PN22

THE SENIOR DEPUTY PRESIDENT: Well, you see that is what I am getting at and I am yet to hear from Mr Coates but it appears to me that I could read – or that that clause might be capable of interpretation in a couple of different contexts. Firstly, it could be that the clause simply sets out the conditions under which a redundancy arrangement might then apply, in that if the terms and the conditions of employment offered by the outsourcing or contracting out provider, not fundamentally the same as those set out in this agreement, the employee might be able to argue that they are entitled to redundancy.

PN23

The second way of reading it is to establish some form of obligation on that outsourcing and contracting out provider to ensure that the wages, conditions, entitlements and benefits of employment are the same as those, or substantially the same as those in this agreement. Now, I understand you putting to me that the potential exists for differing arguments. What I want to know is what the employer's view of its intention in relation to this particular provision is.

PN24

MR MORITZ: The intention, the clear intention of Auspine is to ensure that people have available to them sufficient information to make a decision about the overall package of wages, conditions, entitlements and benefits of employment which might be available from the external provider. In the event that those conditions and entitlements are not satisfactory for the employee then of course it is to give employees discretion whether they accept your offer or not. And that is precisely why this is not mean the terms and conditions must be identical. That was the intention, it was to provide the indication that there may be alternative offer but it was not going to be a compulsory offer.

PN25

The issue of whether or not those words impose directly an obligation on an external provider and I think ….. it is not the intention of the parties to imply that obligation but once again, from the individual employee's point it may well be that the company is faced with a claim for that from an employee affected by the implication of this particular provision but that is what they were entitled to.

PN26

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Coates, do you want to say anything to me about clause 39?

PN27

MR COATES: Yes, Senior Deputy President. I believe that because the issue about sourcing and contracting out has the ability to create a dispute, I mean, if you read that in the context of the words there is no – that clause, I think it's 39.4, an employee who takes up employment with the external provider as a result of outsourcing contracting is not to be disadvantaged. It doesn't actually lock down all the existing conditions, it just says that in their overall package they are not to be disadvantaged, does not mean in terms and conditions must be identical. I believe that gives an opportunity under the disputes and grievance clause to go through and negotiate an outcome. So I believe that it doesn't actually lock that down to I think, have third party involved in it.

PN28

THE SENIOR DEPUTY PRESIDENT: So can I clarify that, Mr Coates. Is it the case that you are saying to me that clause 39.4 does not impose any obligations on the outsource or external provider?

PN29

MR COATES: No, sir. What it does it imposes perhaps some obligation on behalf of Auspine Treefarms to negotiate the conditions of that outsourcing before that takes place. It doesn't impose any conditions on the external provider so I believe it does pertain to the relationship.

PN30

THE SENIOR DEPUTY PRESIDENT: Well, then if I took you to clause 39.6.

PN31

MR COATES: Yes, sir.

PN32

THE SENIOR DEPUTY PRESIDENT: How should I understand the third dot point in that subclause which does deal with redundancies?

PN33

MR COATES: That relates directly to the consultation procedure which if you read the first paragraph in 39.6:

PN34

If the company decides to outsource, contract out function, it will consult with the employees and their representatives regarding the transition process from in-house work to the external provider. Work opportunity with the external provider including terms and conditions that will apply to that work.

PN35

It doesn't actually impose those conditions. It just mentions that that is part of the consultation process for those points to be discussed.

PN36

THE SENIOR DEPUTY PRESIDENT: And 39.7, does that impose any obligations on the contractor?

PN37

MR COATES: Well, I don't believe it does. I believe that once again, that all that does is impose an obligation on behalf of Auspine Treefarmers to negotiate those conditions as part of their outsourcing agreement with an external contractor, sir.

PN38

THE SENIOR DEPUTY PRESIDENT: I see. All right. Thank you.

PN39

MR COATES: Sorry, just in conclusion of that, I mean, I believe that any other clause would perhaps bring up the position that it would create a dispute. Well, what this clause is actually seeking to do is to get all those points sealed off before there is any final decision for that outsourcing to take place or for any redundancies to be put in place.

PN40

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Coates, what I am going to do is take that particular provision away and ponder upon it, depending of course on the answers I am given in the relation to the next issue to be raised. You probably want to have a look at the transcript in relation to that particular provision. And that takes me to part 6 of the agreement and to clause 1 which deals with right of entry. Now, the issue that I have raised with the parties in this regard has its genesis also in the Schefenacker agreement and this may well overshadow the earlier clause. In essence Schefenacker concluded in relation to right of entry issues, that an unfettered right of entry or unrestrained right of entry was not a provision which could be said to pertain to the employment relationship.

PN41

In that regard it drew a distinction between a right of entry clause which was for a specific purpose related to the employment relationship and a right of entry clause which was either for no stated purpose or alternatively simply for union business. The difficulty I had with this particular clause is that the purpose of the clause does not appear to be immediately obvious to me and I wanted to give the parties the opportunity to deal with that particular issue. Mr Moritz?

PN42

MR MORITZ: Yes, sir. From the employer's point of view, I think that matter would be qualified to make just a few observations in that regard. The intention once again, is not to provide open access or rather unlimited access for union representatives. The intention, if this clause is to be read in the context of others in the agreement, is to ensure that if a union representative nominated by a member or group within the workforce to represent their interests in matters relating to dispute resolution and consultation then perhaps an extended renegotiation of this agreement and should be allowed to do so under reasonable conditions. That was the intent. I take the point that you have just made and I think we have addressed that on a number of other occasions.

PN43

And unfortunately I think that your observation has not been able to be effective, certainly not from Auspine's point of view. And I can't, once again, mount any particular argument for the intention of these words in their current form. I think there is prospect as has been in other cases that we may need to readdress that.

PN44

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Coates, do you want to say anything to me about this particular clause?

PN45

MR COATES: Yes, sir, I do, Senior Deputy President. I believe, if my memory is correct, in the Schefenacker ruling that I think the words, extraneous, and pertaining to union business. Now, sir, I would have to question as to whether – I believe this clause, this right of entry clause is incidental and ancillary to matters pertaining to the employment relationship as it relates to maintaining the settlement reflected in the agreement whereas it directly relates back to members eligible – sorry, sir, I have just lost my place – to interview employees eligible to be covered by this agreement which I believe does pertain to the relationship as
a - - -

PN46

THE SENIOR DEPUTY PRESIDENT: Do you draw a distinction, Mr Coates, between the concept of interviewing employees eligible to be covered by this agreement and a purpose for which that interview might be conducted or the subject matter of the interview. You see, what Schefenacker said or what the Full Commission said in Schefenacker was that right of entry which is confined to entry for the purposes of investigating and securing compliance with any relevant award applicable agreement or other matters that pertain to the relations between employers and employees as such, may be included in an agreement. A right of entry which is unconfined is capable of being exercised for purposes extraneous to the employment relationship, and it continues on.

PN47

Now, I can see where the clause makes it clear as to what is going to occur in terms of interviews of employees eligible to be covered by the agreement but what doesn't stand out and strike me is the purpose of the clause. I am very happy to be corrected in this regard and invite you to point out where there is such a purpose but I can't see it.

PN48

MR COATES: Well, sir, if you read the clause, it says:

PN49

Shall have the right to visit and inspect any job at any time where work is being carried on to interview employees eligible to be covered by this agreement.

PN50

So basically, I would argue that that sets a strong case to say that it pertains to matters that are in the agreement that are contained in the agreement. The agreement also refers back to the award. Sir, I am mindful of the Schefenacker decision but I don't see any wording in there to say that, and I think I have discussions, well, we have had arguments in the past which bring up the wording, union business, and all sorts of recruitment matters and induction processes and things like that. I don't believe – and I believe that that clause is fairly close to 285G which is contained in the Workplace Relations Act, sir. I mean, I don't believe that 285G actually goes into that sort of detail either and yet that is actually part of the Act.

PN51

THE SENIOR DEPUTY PRESIDENT: Yes. All right.

PN52

MR COATES: I mean, it makes – the substantive provisions' effectiveness and I believe it should be an allowable matter in the certification.

PN53

THE SENIOR DEPUTY PRESIDENT: Yes. All right.

PN54

MR COATES: Because while it doesn't directly pertain to the relationship it is an incidental or ancillary matter.

PN55

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Coates. I will put that provision in the same category as the earlier one and I will take what you said to me away and ponder upon it.

PN56

MR COATES: Thank you, sir.

PN57

THE SENIOR DEPUTY PRESIDENT: Now, Mr Moritz, schedule 1, can you undertake that link for me between those classifications and the award classifications?

PN58

MR MORITZ: To assist the I just have a made up a sort of tape which sets out the intention for the comparison ….. to the award …..

PN59

THE SENIOR DEPUTY PRESIDENT: Has that been shown to Mr Coates?

PN60

MR MORITZ: Yes, sir.

EXHIBIT #A2 TAPE

PN61

MR MORITZ: If I could just outline briefly. Level 1 is a rate of pay under the award which is not utilised under that particular level, utilised the base, in effective terms, the base level and also under the strengths level 2 and progressively through to level 6. You can see also, sir, at level 1 there is reference to a level 6L which is effectively the award level 6 to which is added leading hand allowance taking and to establish a separate and unique classification that pertains only for this extra agreement.

PN62

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you. Mr Moritz and Mr Coates, I am going to reserve a decision in this matter. I would hope to have that conclusion reached within the next week or so. In the event that I can certify the agreement I will do so from today as I am satisfied, and can advise you now that I am so satisfied that the agreement was reached through a process consistent with section 170LJ of the Act. Equally I am satisfied that the agreement meets the prerequisites for certification that are set out in sections 170LT and LU of the Act. The only outstanding issues then relate to the extent to which the agreement is consistent with section 170LI of the Act.

PN63

If I am not able to certify the agreement I will set out the reasons for that and in accordance with my normal process, endeavour to help the parties by expediting the process for certification of a revised agreement. Are you happy with that approach, Mr Moritz?

PN64

MR MORITZ: Yes. Thank you, sir.

PN65

THE SENIOR DEPUTY PRESIDENT: And Mr Coates, are you happy with that approach?

PN66

MR COATES: Yes, Senior Deputy President.

PN67

THE SENIOR DEPUTY PRESIDENT: I guess the extent of your happiness will depend on the outcome of my deliberations, Mr Coates.

PN68

MR COATES: I dare say that will be the case, sir.

PN69

THE SENIOR DEPUTY PRESIDENT: Well, I will adjourn the matter on that basis.

PN70

MR COATES: Sir, just before we go, sir, can I just – I am not too sure about getting a copy of the transcript down here, sometimes we do and sometimes we don't. Can I just - - -

PN71

THE SENIOR DEPUTY PRESIDENT: Mr Coates, I will adjourn the matter. The link will remain open for a couple of minutes and my associate will sort that issue out with you.

PN72

MR COATES: Thank you very much, sir.

<ADJOURNED INDEFINITELY [3.57PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 FACILITY JOURNEY ACTS AND INSURANCE POLICY PN15
EXHIBIT #A2 TAPE PN60