AG2005/4373, Transcript of Proceedings [2005] AIRCTrans 1877 (9 September 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 12371-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2005/4373

APPLICATION BY THE AUSTRALIAN WORKERS’ UNION - GREATER SOUTH AUSTRALIAN BRANCH & DISTRICT COUNCIL OF CEDUNA
s.170LS - Agreement about industrial dispute (Division 3)
(AG2005/4373)

ADELAIDE

2.43PM, FRIDAY, 29 JULY 2005

PN1

MR L DEGENHARDT: I appear for the Australian Workers' Union representing the employees and others at the Ceduna Council.

PN2

MR G DRUMMOND: I am from the District Council of Ceduna. I'm the General Manager of Operations representing the employer.

PN3

THE SENIOR DEPUTY PRESIDENT: This application was originally the subject of what I call an e-hearing process. The questions I had of the parties were emailed out and the parties were advised that, in the event that I was satisfied with their responses and no party sought to intervene on a nominal hearing date, I would certify the agreement. The parties responded to my question, but this particular hearing has been made necessary because I need clarification of three outstanding issues. I believe both you, Mr Drummond, and you, Mr Degenhardt, have been alerted to those particular issues.

PN4

MR DEGENHARDT: We have, Senior Deputy President.

PN5

THE SENIOR DEPUTY PRESIDENT: You have, thank you. The three issues are, first of all, the issue of clause 13 which relates to personal family and sick leave. Because the agreement is sought pursuant to Division 3 of Part VIB it is necessary that I'm satisfied that the terms of the agreement fall within the ambit created by the dispute reference by the parties. Now, I hasten to say that local government instrumentalities in South Australia tend to rely reasonably heavily on Division 3 agreements. There have been instances where the parties have agreed that they are in some difficulty relying upon the ambit created by a particular dispute finding and in some of those cases the employer has been able to demonstrate to me by way of information provided subsequent to the hearing, that the employer is in fact a constitutional corporation and, as such, is eligible to participate in a section 170LJ agreement.

PN6

Now, in that event I can advise that I'm satisfied that the approach that is required for consideration of a section 170LJ agreement is to all effects and purposes the same as that required for a Division 3 agreement. So in many of those instances I've simply accepted a request from the parties to change the basis upon which the application is made. I thought it appropriate to mention that at this stage of the proceedings to simply indicate that that is another option depending on the answer that you may choose to give me. Now, Mr Drummond, are you going to start with the answer in terms of clause 13 or should that fall to Mr Degenhardt who is probably the most likely expert in the nature of that dispute finding found in 1994?

PN7

MR DRUMMOND: If it pleases the court, I'd like to let Lance, with more experience in this area, start with the answer and I will provide any additional information required.

PN8

THE SENIOR DEPUTY PRESIDENT: Mr Degenhardt, the ball has been passed to you.

PN9

MR DEGENHARDT: Thank you, Senior Deputy President. In the clause for the personal family sick leave, in the first paragraph the clause refers to personal leave but then goes on to carer's leave and personal family leave. We believe that the three above terms are intended to be interchangeable and the three terms of leave are meant to be as interchangeable leave required paid for personal leave and sick leave.

PN10

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Degenhardt, the difficulty that I've got is perhaps best explained by referring back to that dispute finding, or more appropriately, the log of claims, upon which the dispute was found in 1994. Now, the log of claims which was served upon a broad number of employers contains provisions such as clause 31 relating to sick leave. Clause 31 in the log simply says, "An employee who is unable to attend work for reason of illness or accident shall be entitled to unlimited sick leave without loss of pay."

PN11

Now, there are other provisions relative to various different types of leave, but they all appear to grant some capacity for paid time off work. In this instance the particular difficulty that I have relates to the payment for a bonus in lieu of sickness and personal leave and the question that I'm asking is, how can I consider that payment to be within the ambit established back in 1994. Now, I don't want to rush you into an answer in that I'm very happy for you to consider my question in greater detail and possibly access advice from other personnel within the AWU, but if you do wish to answer, feel free to do so.

PN12

MR DEGENHARDT: Okay, Senior Deputy President. Look, you made reference to an application 3 and if that means that the agreement will be paid less through that application, I'm quite prepared to go with it as long as Mr Drummond is.

PN13

THE SENIOR DEPUTY PRESIDENT: What I will do in that instance is leave that issue so that it's a matter for you and Mr Drummond to have a talk about. I do need to advise you that I can only consider the Council to be a corporation which is a necessary prerequisite for the purposes of a Division 2 agreement in the event that a significant, and I emphasise the word significant, component of that Council's income comes from commercial activities. Now, for what it's worth, the extent to which local government authorities are able to be considered corporations for the purposes of the Act, it was considered at some substantial length by former Senior Deputy President Polites in a matter involving the Esperance Shire Council.

PN14

I've adopted his approach in relation to a matter involving the Port Augusta Council. In both cases Senior Deputy President Polites and myself were able to reach a conclusion that those councils could be regarded as organisations eligible to access Division 2. But it might be appropriate for you and Mr Drummond to have a look at those decisions to ensure that you could provide me with information that substantiated the Council's position in that regard. Now, I can't recall the print numbers of both those matters, but if you can't find them, I'd suggest that you give one of my staff a call and we'll dig them out for you without any difficult at all. Does that help you, Mr Degenhardt?

PN15

MR DEGENHARDT: That helps me a lot, Senior Deputy President, thank you.

PN16

THE SENIOR DEPUTY PRESIDENT: Mr Drummond, before we leave this question of clause 3, do you want to say anything about what we've been talking about? Have you got any questions about the approach?

PN17

MR DRUMMOND: Thank you, Senior Deputy President. I'm a little bit in the dark as to the content of clause 3 or this Division 2 corporation's relevance talked about.

PN18

THE SENIOR DEPUTY PRESIDENT: Let me try and help you and this is very much a thumbnail sketch. The Act provides a capacity for organisations to reach, in effect, two different types of certified agreement. The different types of certified agreement reflect a different constitutional basis upon which those different parts of the Act are founded. It might be best if I go to Division 2 first of all. Division 2 relates to the making of agreements with constitutional corporations or the Commonwealth, and it establishes the capacity for an employer who is a constitutional corporation to make an agreement with a union which we call the section 170LJ agreement.

PN19

It, secondly, establishes the capacity for a constitutional corporation to make an agreement directly with its employees, which we call the section 170LK agreement. Now, union might become involved in that process. And thirdly, it establishes a capacity for a new business to reach what we call a Greenfield's agreement under section 170LL of the Act. Now, in contrast, Division 3 does not require the employer party to the agreement to be a constitutional corporation and that Division 3 derives its authority from a earlier dispute finding where the Commission has found that one or more employers are in dispute with one or more unions.

PN20

It says that in that instance, the employer is able to make an agreement with a union that progresses the settlement of the dispute that was found on an earlier occasion by the Commission. In this matter the parties have identified a 1994 dispute finding and it may well be that you decide to come back and tell me how a particular provision in that dispute finding, or the log of claims that resulted I the dispute finding, allows you to have clause 13 in its current form. But what I am suggesting is that you might also want to give consideration to changing the basis upon which the application is sought, so that if you folks can demonstrate to me that the Council is in fact a constitutional corporation, then I can be satisfied that I don't have to look at the earlier dispute finding. I can simply look at the words in clause 13 in their own right, and there's certainly nothing in clause 13 in its own right that would preclude certification. Does that help you, Mr Drummond?

PN21

MR DRUMMOND: That was very, very helpful, thank you very much.

PN22

THE SENIOR DEPUTY PRESIDENT: So I'll leave that question with the parties. It may be we run into some more difficulty in a moment, see how we go. Now, Mr Degenhardt, before we progress further, I need to ask a favour of you

PN23

MR DEGENHARDT: Yes, Senior Deputy President.

PN24

THE SENIOR DEPUTY PRESIDENT: That little microphone that was causing you difficulty at the beginning of the hearing is right next to some of your papers. Can I ask you to move it off to one side a little, because at the moment whenever you turn a page, we get a clap of thunder from Port Pirie.

PN25

MR DEGENHARDT: Sorry, Senior Deputy President.

PN26

THE SENIOR DEPUTY PRESIDENT: That's all right, thank you. Now, if I can then take the parties - and perhaps I'll take Mr Degenhardt to it first of all, to clause 24 of the agreement. Now, clause 24 gives rise to a quite different sort of question. It provides for payment of salaries and wages to all employees covered by this agreement by way of direct transfer to the employee's bank or other recognisable financial institution, and I have no question at all in terms of that provision. The capacity to do so was considered by the Commission earlier this year in a Full Bench decision called Schefenacker.

PN27

The second paragraph deals with wage receipts, and again, I have no question with that provision. The third paragraph is the paragraph with which I have some significant difficulty. That says that the employer who undertakes to, on receipt of a written request from any employee, deduct from that employee's wage such union membership fees as may be designated, and perhaps for Mr Drummond's help in that regard, the question that I'm asking there is derived from the requirement that exists irrespective of whether the parties pursue a Division 2 or a Division 3 agreement, that the terms of the agreement must relate to matters between the employer and the employees to be covered by the agreement.

PN28

The High Court in a decision last year referred to as the Electrolux decision made it absolutely clear that if there's a clause which does not pertain to the employment relationship, then the Commission can't consider the agreement for certification. The High Court endorsed an approach which had been adopted many years before by earlier High Court decisions in looking at what did or did not pertain. Unfortunately they didn't answer all our questions, but they did answer a number of them and they particular endorsed an approach that had been adopted in a matter called Portis and a later matter involving the company called Alcan where they concluded that in relation to the deduction of union dues, that was a matter between the employees and their union. Hence a provision for union fee deductions was not a matter that could be said to pertain to the relationship between the employer and the employees to be covered by the agreement.

PN29

Now, the extent to which union membership fee deductions are now allowable, and yet other forms of salary sacrifice arrangement are allowable, has been a matter of some conjecture. It was again considered by the Full Bench in the Schefenacker decision. The Commission was able, in that matter, to draw a distinction between the two. But it confirmed that union fee deductions were not matters that were capable of being included in an agreement.

PN30

Now, Mr Degenhardt, that is a long winded way of explaining my question. I've done so to try to assist both you and particularly Mr Drummond. But it underpins the issue that I've raised with the parties. I'm very happy to either hear something from you now or, should you wish to do so, you could go away and have a think about this particular provision. You do not have an option that could change the words that the employees have voted on. If you do so, then you'd need to resubmit the agreement to employees with the requisite notice period. So are you in a position to answer my question now or do you want to have a think about it, Mr Degenhardt?

PN31

MR DEGENHARDT: We would say to you, Senior Deputy President, I've had a long think about it and I take on board what you have expressed to us through Alcan and Schefenacker. I'm quite happy to come back to you at a later date. I'd have no problem at all, on the reading of that third paragraph that, as you said, it's got to be agreed to by the employees, and that means resubmitting. I believe that Mr Drummond and myself can come to some arrangements regarding that third paragraph of clause 24, because the provision was covered in clause 11.4 of the Local Government rule anyway.

PN32

THE SENIOR DEPUTY PRESIDENT: All right. Now, Mr Drummond, have you got any questions of me in relation to the issue that I've raised?

PN33

MR DRUMMOND: Thank you, Senior Deputy President. I do understand the issue. I believe the only reason that paragraph is there is basically a service the Council would provide on behalf of the employees in relation to the payment of the leave.

PN34

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Now, if I can then take the parties to the inclement weather policy which is one of the two appendices to the agreement. Now, this appendix says that the inclement weather policy and inclement weather procedures will operate in conjunction with clause 21, inclement weather provisions of the AWU Enterprise Agreement No 4 of 2002 as applicable to AWU employees. Now, the parties have confirmed to me that those provisions are applied universally irrespective of union membership.

PN35

I'm just wondering whether either Mr Drummond or Mr Degenhardt could give me a little bit more information about that AWU Enterprise Agreement No 4 of 2002, or more particularly, whether you can confirm to me that the only aspect of that agreement that the parties are looking to adopt are the inclement weather provisions, whether those provisions are identical to the Council's existing inclement weather policy and if so, whether that existing policy exists in a documented form.

PN36

MR DRUMMOND: I will take that one, if I can, Senior Deputy President. The policy itself and the reference to it has not changed on this agreement to the previous agreement, No 4. The policy itself applies to all employees of the District Council of Ceduna, whether they be the ASU union, the AW Union or whether in fact they have no union representation at all.

PN37

THE SENIOR DEPUTY PRESIDENT: Yes, and can you confirm to me that the provisions, the inclement weather provisions, set out in clause 21 of that 2002 agreement are in existence as a documented policy in any form? Or do you simply refer back to that particular clause of the 2002 agreement?

PN38

MR DRUMMOND: The inclement weather policy is a stand alone policy of councils, and it's contained in a council's policy manual which is available to all employees.

PN39

THE SENIOR DEPUTY PRESIDENT: I see. So in reality you have no call or need to go back to clause 21 of the 2002 agreement?

PN40

MR DRUMMOND: That is correct.

PN41

THE SENIOR DEPUTY PRESIDENT: And should I understand that the policy that you have in a documented form is readily available to all employees?

PN42

MR DRUMMOND: That is correct because it is made available to all new employees. In fact they actually sign to say they have a copy of it and all polices relating to employment are available to all employees at their normal place of work.

PN43

THE SENIOR DEPUTY PRESIDENT: And am I correct in understanding then, that the inclement weather policy, which is set out in that appendix and in the Council's policy document, will remain unchanged from the form set out in this appendix throughout the life of the agreement?

PN44

MR DRUMMOND: Yes, that is correct.

PN45

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Degenhardt, Mr Drummond has done an admirable job of explaining this particular issue. I don't need to hear from you on that matter unless you want to raise any particular matter.

PN46

MR DEGENHARDT: Thank you, Senior Deputy President. I think he's done an excellent job on it and it's relevant, the contents of that clause and the appendix, and I think he has done an admirable job on it.

PN47

THE SENIOR DEPUTY PRESIDENT: Let me recap in terms of where we're at. Obviously I'm not in the business of certifying your agreement today. I understand that the parties are going to go back and review the provisions of clause 24 and the parties are going to either revisit the provisions of clause 13 or, alternatively, they are going to review the extent to which a Division 2 application could be made, or alternatively again they're going to look through the dispute finding that's been relied upon in this matter so as to be able to establish how such a bonus is something that can be countenanced under that 1994 dispute finding.

PN48

I further understand that once you folks have done that, the agreement would be resubmitted to employees. Obviously the requisite 14 days' notice would need to be given and irrespective of whether or not you are pursuing a Division 2 or a Division 3 agreement, I would then need to be provided with that agreement and revised statutory declarations, together with some advice to the effect that the information you've provided to me in this matter remains appropriate to that new agreement.

PN49

If, when I look through all of that material, I am satisfied that the agreement can be certified, then I'll do so without the need for any further hearing from the date upon which I receive that material. I need to advise y you that there are a couple of steps that you will need to take to ensure that's possible. If you're going to rely on a Division 2 application, that is, if it's a section 170LJ agreement, you will need to provide me with some information that confirms how I can regard the Council as a constitutional corporation. If you're going to still rely on Division 3 you will need to address that question of, if clause 13 remains, unchanged, how I can consider it under the current dispute finding.

PN50

So there are a few extra jobs that you will need to do to be able to get the agreement across the line. Now, perhaps starting with you, Mr Drummond, have you got any questions about what I've said?

PN51

MR DRUMMOND: No, thank you very much. Your explanation has been very good and I understand what there is to do.

PN52

THE SENIOR DEPUTY PRESIDENT: Mr Degenhardt, have you got any questions?

PN53

MR DEGENHARDT: No, thank you, Senior Deputy President. It's been very well explained by yourself.

PN54

THE SENIOR DEPUTY PRESIDENT: What I'll do is I'll adjourn these proceedings. Whilst I'm refusing to certify the agreement in its present form, I'll leave the file open. So I don't need a new application. I just need that revised agreement and the other material that I've talked about. Don't give that to me within the next fortnight, because then we'll have a problem associated with the 14 days' notice. But I wish you well in that negotiating process and I look forward to being able to certify the agreement. I can advise you that in all other respects, the agreement meets the requirements necessary for certification, and I would hope that at some stage in the next few weeks I can send out your certificate. I shall adjourn the matter on that basis.

<ADJOURNED INDEFINITELY [3.12PM]