AG2005/4997, Transcript of Proceedings [2005] AIRCTrans 1991 (26 September 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 12864-1

COMMISSIONER CARGILL

AG2005/4997

APPLICATION BY CROWN SCIENTIFIC PTY LTD & THE AUSTRALIAN WORKERS’ UNION
s.170MH - Application to terminate agreement (public interest)
(AG2005/4997)

SYDNEY

10.02AM, THURSDAY, 08 SEPTEMBER 2005

Continued from 12/8/2005

PN214

THE COMMISSIONER: I note there is no change in appearance since the last occasion. Mr Amos, thank you for sending in the comparison of the agreement and awards as we discussed last time. Mr Clements, you've received a copy of that document, have you?

PN215

MR CLEMENTS: Yes, we have today.

PN216

THE COMMISSIONER: Firstly, Mr Amos, was there anything you wanted to say in relation to that document or in relation to the case generally and then I'll hear from Mr Clements as to what, if anything, the union wants to say about it.

PN217

MR AMOS: Thanks, Commissioner. I have nothing further to say in relation to the comparison. I think our views were quite clearly stated in the accompanying letter that the comparison was attached to. The only other issue I would like to raise at the moment is that of the nine employees that we're talking about here that supposedly are covered by this certified agreement, eight of those employees have signed a terms of engagement letter, and I'm happy to hand up a copy of those terms of engagement letters, which clearly says that they accept the terms and conditions of employment under the Storemen and Packers General New South Wales State Award. They signed the document agreeing to the terms and conditions of employment.

PN218

THE COMMISSIONER: When was that, Mr Amos? Maybe pass it up and then I'll have a look. When did they sign those letters?

PN219

MR AMOS: They've been signing them gradually over the last - this one was signed today, that one, but over the last two or three weeks, yes.

PN220

THE COMMISSIONER: You've provided a copy to Mr Clements, have you?

PN221

MR AMOS: I've just received copies myself today so I have got certified copies for the union. I might add, the only person who actually hasn't signed a copy of this terms of engagement letter is Mr Rodriguez who is here with us today. These terms and conditions, I might add also, Commissioner, were negotiated between the parties.

PN222

THE COMMISSIONER: Which parties, Mr Amos?

PN223

MR AMOS: The individual employees and the company, having regard to their current rates of pay and also their years of service and what they were looking for employment over the next number of years.

PN224

THE COMMISSIONER: Can you just in brief tell me firstly, are they all the same?

PN225

MR AMOS: They're all the same general terms and conditions. The only thing that may be different is the rate of pay of employees may be different.

PN226

THE COMMISSIONER: Their rate of pay may be different and do you say that that reflects what rate they're presently on, in other words what they were on before they signed the letter, it's the same rate. Is that the same?

PN227

MR AMOS: In fact, it's a little bit higher, Commissioner.

PN228

THE COMMISSIONER: I haven't got time at the moment to look through this, does the letter involve any increase in pay or any reference to how pay may or may not be increased over the coming times at least?

PN229

MR AMOS: It's in accordance with company policy, Commissioner.

PN230

THE COMMISSIONER: What's that?

PN231

MR AMOS: They're reviewed on an annual basis.

PN232

THE COMMISSIONER: No, no, I want something concrete. Does it say anything there about it will go up according to CPI, according to something like that?

PN233

MR AMOS: Yes, that's the company policy.

PN234

THE COMMISSIONER: Is that in writing somewhere?

PN235

MR AMOS: It's contained in the company policies.

PN236

THE COMMISSIONER: Yes, the policies, are they in writing somewhere?

PN237

MR AMOS: Yes, they are.

PN238

THE COMMISSIONER: Do you have a copy?

PN239

MR AMOS: No, I haven't got a copy here today, no.

PN240

THE COMMISSIONER: I gather that it includes the 38 hour week, does it, which would have been - - -

PN241

MR AMOS: It does.

PN242

THE COMMISSIONER: I remember there was a two hour difference between what was under the agreement and the award. The termination of employment provisions, I can see there's a clause saying "Termination of employment".

PN243

MR AMOS: It's in accordance with the Federal Act which is a maximum of four weeks.

PN244

THE COMMISSIONER: The Federal Act; you're saying they've agreed to be employed under a state award and yet you're saying - - -

PN245

MR AMOS: The termination of employment, the notice period you're talking about is in accordance with the provisions of the Federal Act.

PN246

THE COMMISSIONER: What about any severance pay?

PN247

MR AMOS: That's in accordance with the award provision.

PN248

THE COMMISSIONER: Where's that set out?

PN249

MR AMOS: They're covered under the Storemen and Packers General State Award which includes the redundancy provision in that award, which is a state provision. It's a test case decision.

PN250

THE COMMISSIONER: Yes, but there's no reference in this letter, I gather.

PN251

MR AMOS: There's no reference to redundancy because it's contained in the award. Commissioner, the terms of the notice period is different in the award to what it is in this letter, only because the New South Wales Storemen and Packers Award only provides for one week's notice.

PN252

THE COMMISSIONER: Regardless of length of service?

PN253

MR AMOS: Exactly. What we've done here is brought them into line with what the ILO convention is, which is the maximum four weeks and five if you're over 45.

PN254

THE COMMISSIONER: The notice is as per the Federal Act?

PN255

MR AMOS: Yes.

PN256

THE COMMISSIONER: You're saying there is no reference in this letter to the award redundancy provisions.

PN257

MR AMOS: The only reference in this letter to the redundancy provisions is to the say that the employees are covered by the Storemen and Packers General Award which contains the test case decision for redundancy.

PN258

THE COMMISSIONER: Where does it say that?

PN259

MR AMOS: It doesn't say that in - I've got a copy of the award here if you would like to have a look at it.

PN260

THE COMMISSIONER: No, no. Doesn't the state award though not apply - those provisions don't apply if there's less than 15 employees and there's only nine employees.

PN261

MR AMOS: No, there's a lot more employees. There's only nine storemen. The company employs a lot more.

PN262

THE COMMISSIONER: How many?

PN263

MR AMOS: About 90 people the company employs.

PN264

THE COMMISSIONER: Crown Scientific employs approximately 90 people, is what you're saying.

PN265

MR AMOS: That's correct.

PN266

THE COMMISSIONER: Doing?

PN267

MR AMOS: Various jobs. There are only nine storemen with the company.

PN268

THE COMMISSIONER: What else do these other people do?

PN269

MR AMOS: They do clerical type positions, sales type positions, there's management.

PN270

THE COMMISSIONER: You're saying there's actually more employees, Mr Knox, are you?

PN271

MR AMOS: What Mr Knox is saying is that there's more then nine storemen, if you take into consideration employees in other states. They have operations in other states.

PN272

THE COMMISSIONER: I suppose, for practical purposes, what I need to know, though, the less then 15 employees exemption would not be relevant if in fact any of these employees were made redundant?

PN273

MR AMOS: I would concur with that, yes.

PN274

THE COMMISSIONER: Redundancy would be as per the state award provisions?

PN275

MR AMOS: That's correct.

PN276

THE COMMISSIONER: Can I just check, Mr Amos. The other things that are in this letter, the other conditions that are in the letter, are they the same as what would be under the state award, in other words what you have set out in your comparison document?

PN277

MR AMOS: Yes, they are.

PN278

THE COMMISSIONER: Leave and other provisions are the same as what would be under the state award. Is that what you're saying?

PN279

MR AMOS: That's correct. This letter is basically to just identify a number of those provisions that would be relevant to employees under the state award. I do agree there's no provision in there for redundancy but it's my instruction that the redundancy provision contained in the award was explained to all of those employees that signed this document prior to them signing it.

PN280

THE COMMISSIONER: No, no. I'm not worried about what was explained to them, I'm more worried what will apply to them rather than what was explained. At the end of the day that's going to be what's relevant. In other words, can I take it that the leave provisions, long service leave, sick leave, public holidays, et cetera, et cetera, and overtime, is all as per your comparison document which is as per the state award?

PN281

MR AMOS: That's correct.

PN282

THE COMMISSIONER: The only difference, you say, is in relation to the rate of pay, that it's different to what's under the state award?

PN283

MR AMOS: Yes, it is, yes, much higher, also that the notice period for termination of employment is different.

PN284

THE COMMISSIONER: Because it's the federal standard?

PN285

MR AMOS: Yes.

PN286

THE COMMISSIONER: Anything else, Mr Amos?

PN287

MR AMOS: I might also add that each of those employees were also supplied with a position description which clearly sets out what the role of a store person is within the organisation at this point in time.

PN288

THE COMMISSIONER: Thank you. I'm not going to mark the letters. In fact, I don't know that I really want them on the file because they contain personal information that I would rather not have on a public file. Subject to what Mr Clements has to say, I might arrange for perhaps a photocopy of one without anyone's name on it as a template for putting on the file but I don't really want people's addresses and rates of pay sitting on a file that anyone can come and have a look at.

PN289

MR AMOS: That's fine. We would arrange that, Commissioner.

PN290

THE COMMISSIONER: Whatever. With the comparison document I think I might mark that. I don't think we've marked anything so far in this matter.

PN291

MR AMOS: We have marked one document which was the letter supplied by my colleague on the last occasion, exhibit 1, which was the letter signed by the employees.

PN292

THE COMMISSIONER: By the employees, right, if I can find that, which I can't find.

PN293

MR AMOS: I think it was just marked exhibit 1, Commissioner.

PN294

THE COMMISSIONER: There it is, I've got it, thank you. There's nothing from the company as yet, no exhibit from you, Mr Amos?

PN295

MR AMOS: No, there hasn't been.

PN296

THE COMMISSIONER: Do you want the letter and the attachment marked together?

PN297

MR AMOS: Yes, I do.

PN298

THE COMMISSIONER: I suppose it might be easier rather than have them separated.

EXHIBIT #CROWN1 LETTER AND ATTACHMENT

PN299

THE COMMISSIONER: As I say I won't mark the terms of engagement letters as such. Is there anything else, Mr Amos, at this point?

PN300

MR AMOS: No, Commissioner.

PN301

THE COMMISSIONER: Mr Clements.

PN302

MR CLEMENTS: Thank you, Commissioner.

PN303

THE COMMISSIONER: Perhaps firstly, in relation to - I suppose there is a couple of things; one is comments you might wish to make or submissions you wish to make in relation to the comparison document, et cetera, but also what do you have to say about the fact that eight of your people seem to have - - -

PN304

MR CLEMENTS: The first thing I would say is, I've got six signed and one unsigned, so I'm not sure if there's eight. If I may just grab the box, Commissioner.

PN305

THE COMMISSIONER: The box, yes, certainly, Mr Clements.

PN306

MR CLEMENTS: Perhaps I'll accept my friend's submission that there are eight. The first thing I would say, it's a fairly disturbing development in that proceedings are before the Commission listed for today, in the intervening period without informing the union or this Commission my friends have sought to sidetrack these proceedings and offer a different contract of employment.

PN307

The first thing I would say about that contract of employment is, my understanding of section 109 of the constitution was that Federal laws have precedence over state laws and the implication here is that a federally certified agreement exists and prevails over a state award. In terms of the ability to offer different contracts of employment or to contract out of the relevant certified agreement, I think this may well be in breach.

PN308

THE COMMISSIONER: That you can take somewhere else, Mr Clements. I can't really deal with breaches of agreements, as you well know.

PN309

MR CLEMENTS: I understand. I'll come to why that's relevant, Commissioner. On my initial view of them, and this is the first I've heard of it, my initial view is that these offers of employment would be in breach of the concept that you can't contract out of award entitlements, ie. you cannot contract out of these - unless there's an Australian Workplace Agreement to offer conditions which are not as good as the certified agreement, that these terms of engagement letters are in fact invalid.

PN310

If in fact these are new positions I'll perhaps accept that. If they were new positions, then terms of engagement letters could be offered. In those circumstances the redundancy entitlements under the old contract of employment would have to be paid out. That's why this is important, Commissioner. If in fact these are new positions then the entitlements of the employees under their old positions are only enforceable under this certified agreement.

PN311

Setting all that aside, we still have at least one employee who is still covered by the certified agreement and I do stress that these terms of engagement letters do actually make the certified agreement more important because there may be enforcement issues.

PN312

THE COMMISSIONER: Yes, Mr Clements, would you accept though, if ultimately it was characterised that these were new position and that in fact people should have been made redundant from their previous positions, and that would have been under the agreement, it would still be enforceable until its date of termination so therefore, if these - - -

PN313

MR CLEMENTS: I do accept that, Commissioner, and that is one - - -

PN314

THE COMMISSIONER: It's not really an argument against it being terminated in the future, I mean, as a matter of logic.

PN315

MR CLEMENTS: That side of the argument isn't, however, the other side is, well, if these aren't new positions, then there is obviously going to be some dispute under this agreement as to whether these terms of engagement letters can be offered. There is, I think, a live issue there. Either way, irrespective of all of that, there is still one employee at least under the certified agreement.

PN316

If I can just go to the comparison document which was created. We've actually got a document entitled Amendments to the Document Submitted by WRC and if I can hand a copy of that up just to assist the Commission as I go through what I see as the - - -

PN317

THE COMMISSIONER: As I said previously, Mr Clements, I really want to focus on the main provisions, it wasn't to be a sort of trawling through.

PN318

MR CLEMENTS: That's exactly what we're going to do, Commissioner.

PN319

THE COMMISSIONER: Thank you.

EXHIBIT #AWU2 COMPARISON OF RATES DOCUMENT

PN320

THE COMMISSIONER: You've provided a copy to Mr Amos, have you?

PN321

MR CLEMENTS: Yes, Commissioner. The first point I would like to make is in relation to the letter from Mr Amos which clearly states that:

PN322

Whilst generally and on balance there is a little difference between the two awards, although the certified agreement does provide substantially higher redundancy provisions than that provided in the awards, at the end of the day this is where we have major concerns.

PN323

I think it's made clear in that letter that the company is not prepared to maintain those redundancy provisions if this certified agreement is terminated. That's the first thing I would like to point out.

PN324

THE COMMISSIONER: I took that as the case.

PN325

MR AMOS: We don't back away from that, Commissioner. That's the case.

PN326

MR CLEMENTS: I need to make that point because in the transcript of the last proceedings, one of the last things that you said, Commissioner, was - - -

PN327

THE COMMISSIONER: I asked them to give consideration to that, yes.

PN328

MR CLEMENTS: I just wish to point out, as a preliminary point, that the company clearly decided that they will not maintain or honour those redundancy provisions. Crown1, the document which was handed up by my friend, we've got some misgivings with that, firstly, in relation to wages. The wages which are set out in Crown1, it lists the wage under the award. The problem with that is that, whilst the original rate of pay for these employees is based on the award, they have been provided with percentage increases through the enterprise agreements to push them above that.

PN329

THE COMMISSIONER: Can I just check, Mr Clements, you're looking at the attachment B document, are you, where the individuals' rates are set out. Is that what you're looking at?

PN330

MR CLEMENTS: At this stage I'm just looking at Crown1 where it says "Store attendant 504.60."

PN331

THE COMMISSIONER: I see, just the rates that are set out there. Yes, I see.

PN332

MR CLEMENTS: Yes, but if you go to our document AWU2, at the top you'll see we've actually taken the figures used by my friends and pointed out that the six employees are currently paid at 668.59 a week and two employees at 702.74 a week. The reason why that's way above the 504.60 under the award is because under the enterprise agreements, including the enterprise agreement that's before us for termination, these employees have been paid percentage increases. That's what it amounts to. There is a substantially higher rate of pay under the agreement than there is under the award.

PN333

THE COMMISSIONER: Right, but I think I remember that either in one of the letters or on the previous occasion, Mr Amos did - either it's in the letter or alternatively Mr Amos has said that the company is prepared to maintain the rate of pay that the employees are presently receiving. That's the case, Mr Amos?

PN334

MR AMOS: That's correct, Commissioner. You asked me to do a comparison between the two awards and the agreement and part of that was that we give a commitment that wages will be maintained.

PN335

THE COMMISSIONER: Mr Amos, I think what Mr Clements is getting at is that in your comparison you have in fact said there's an advantage for the award.

PN336

MR AMOS: There is an advantage between the two awards.

PN337

THE COMMISSIONER: No, no, but there's not an advantage compared to the agreement. The agreement rates are higher than the award rates.

PN338

MR AMOS: That's true and if you read my letter that's attached to the comparison, it basically says that.

PN339

THE COMMISSIONER: Yes, but I think it's a bit misleading where you've said that the award has an advantage, if you look at your right-hand column.

PN340

MR AMOS: If that's the case, well, yes, there - - -

PN341

THE COMMISSIONER: You would accept that the rates that are under the agreement are higher than what's under the award. I mean, it would be an odd agreement if it wasn't. Most people wouldn't be bothered entering into an agreement if they didn't get higher rates.

PN342

MR AMOS: Exactly right.

PN343

THE COMMISSIONER: Okay, Mr Clements, I think - - -

PN344

MR AMOS: I think it's an argument that's irrelevant. The company has already given a commitment that they would maintain the rates of pay and in fact they have actually increased the rates of pay for the employees that would be covered under the agreement, or supposedly covered under the agreement.

PN345

THE COMMISSIONER: Okay. Yes, Mr Clements, I'll take that the agreement rates are higher.

PN346

MR CLEMENTS: I just couldn't let that stand, Commissioner. In relation to safety incentive, clause 9.11 of the enterprise agreement, for the period February to November each year, if there is less than 40 days in workers compensation, each worker is paid a $110 bonus under the enterprise agreement. That's clause 9.11. That's not included.

PN347

THE COMMISSIONER: In other words they will lose their $110 bonus. Is that what you're saying?

PN348

MR CLEMENTS: That's right, which is contingent on conditions being met.

PN349

THE COMMISSIONER: Yes, yes.

PN350

MR CLEMENTS: There's also additional payments for reduction - this is clause 10.3 of the agreement - in the total overtime casual wages bill. This is quite complicated, but I understand that if savings are made from the $84,000 in overtime and casual costs, 60 per cent of those savings actually go to the workers under the agreement so there is also another incentive payment there under the agreement which isn't mentioned in the comparison. There's also a higher duties allowance at clause 10.4 of the agreement which isn't covered.

PN351

THE COMMISSIONER: There's no higher duties under the state award?

PN352

MR CLEMENTS: If there is, it certainly hasn't been covered in the comparison, although I won't claim to be an expert on that award.

PN353

Interestingly, there are a lot of over award benefits which are provided to the employees which aren't specifically mentioned in the certified agreement. However, at clause 5 of the agreement, which says on the page above clause 6:

PN354

The company agrees to maintain existing award and over award conditions except as provided otherwise by the certified agreement.

PN355

We would see that as being enforceable for some of the over award conditions which currently exist. These are, an additional 1 per cent in superannuation payments; there is a service payment to employees of $267 a year; the employees currently have a 36 hour week, and accumulated sick leave is paid out on termination from the company. These are all well known over award conditions which are enforceable through the enterprise agreement according to clause 5. All of these conditions aren't mentioned in the comparison.

PN356

THE COMMISSIONER: Can I just clarify, Mr Clements, these four things that you've just mentioned, are not actually set out in the agreement as terms of it as such but clause 5 - - -

PN357

MR CLEMENTS: They are over award conditions which have existed for some time at the company, which are entrenched at the company and clause 5, we submit, would be enforceable under section 170LW, if any of these conditions were sought to be taken away. These are conditions which are substantially beneficial to the employees which aren't actually mentioned in the comparison.

PN358

We submit the comparison itself is not an accurate reflection of the difference between the Storemen and Packers Award and the Crown Scientific (Fourth Generation) Enterprise Agreement. The conditions that my friend has undertaken to maintain, if this enterprise agreement is terminated, the employees would be substantially worse off, most notably in terms of the redundancy provisions, which are very relevant at the moment, and the company, as I mentioned on the last occasion, are reluctant, refusing to negotiate in good faith or negotiate at all.

PN359

MR AMOS: Commissioner, I object to that. I made it quite clear at our last occasion that we did not reject negotiation, we certainly are not rejecting that we're to negotiate in good faith. We just said at this point in time it is not appropriate until such time as the company that has just taken over Crown Scientific get things in order with the operation of the company.

PN360

MR CLEMENTS: I'm not sure if that's an objection or a submission.

PN361

THE COMMISSIONER: Mr Amos, maybe you could raise that in your reply, perhaps.

PN362

MR CLEMENTS: I do see these letters of engagement as a disturbing development and we would seek that this termination not be granted. We submit that it's not in the public interest for all the reasons stated. We submit that there are authorities which back up our position, which we listed on the last occasion, and unless there are any further questions, Commissioner, that's - - -

PN363

THE COMMISSIONER: Mr Clements, I have noted what you said earlier on that there were five, I think you said five, yes, "I've only got five letters that appear to have been signed by the employees."

PN364

MR CLEMENTS: That's what we have.

PN365

THE COMMISSIONER: Presumably they're the same five - I've actually got six letters, but the sixth one isn't signed.

PN366

MR CLEMENTS: We have no information about - it says, "Further letter dated 28 July 2005" on these letters, I've got no information. I haven't had a chance to speak to the members involved about why they signed them. Anything could happen with these, and I don't think that they are particularly relevant in these proceedings. They're certainly not relevant to the public interest, in my submission. Thank you, Commissioner.

PN367

THE COMMISSIONER: Thank you. Mr Amos, firstly, as I said to Mr Clements, I notice that out of these there are five that have been signed, the sixth one hasn't been signed.

PN368

MR AMOS: Commissioner, we have a full set of the originals and there is actually eight been signed.

PN369

THE COMMISSIONER: Maybe that's what you should provide and that's what you should have provided to Mr Clements.

PN370

MR AMOS: I was of the understanding that the copies that I provided to Mr Clements were all signed copies.

PN371

THE COMMISSIONER: What I've got, and I can assure you, there's five that are signed and there's one that's not.

PN372

MR AMOS: I will endeavour to get you a full set.

PN373

THE COMMISSIONER: Perhaps now, because I don't want you making a statement and then find out later on I get some papers that don't bear that statement out. Perhaps you could get Mr Knox to go through them at the moment and check which ones.

PN374

MR AMOS: The set that we've got here, we've just had another one that - he thought he had eight with him this morning and there was only seven. We've had another one faxed through to the registrar's office. We will endeavour to go down and get that copy and then we'll - - -

PN375

THE COMMISSIONER: Now?

PN376

MR AMOS: Yes.

PN377

THE COMMISSIONER: Maybe you can provide copies of that and the other ones to myself and Mr Clements. We'll adjourn for five minutes.

<SHORT ADJOURNMENT [10.35AM]
<RESUMED [10.50AM]

PN378

THE COMMISSIONER: You've got those documents, Mr Amos, have you?

PN379

MR AMOS: Yes, I have.

PN380

THE COMMISSIONER: You've provided a copy to Mr Clements?

PN381

MR AMOS: I have, Commissioner.

PN382

THE COMMISSIONER: What I might do, I know I said earlier I wouldn't keep them on the file because of the personal information, but I think, in view of the fact of what has transpired since, I will, but what I'll do is I'll put them in a sealed envelope marked confidential so that the details are not available on the public file, nevertheless they're actually on the file..

PN383

MR AMOS: We might request that the copies from the other side be handed back to the company.

PN384

THE COMMISSIONER: I don't know whether Mr Clements wants or needs them for any further purpose. Do you need them, Mr Clements?

PN385

MR CLEMENTS: I think we would like to have a look at them. I'll hand back the signed ones.

PN386

THE COMMISSIONER: Maybe you could undertake to either send them back to the company or destroy them. What I'm concerned about is the personal details, Mr Clements, that's all.

PN387

MR CLEMENTS: They're members of ours, we have those details anyway.

PN388

THE COMMISSIONER: The addresses?

PN389

MR CLEMENTS: Yes.

PN390

MR AMOS: They're not all members. Commissioner, it's my instruction that they're not all members but certainly a number of them may be.

PN391

THE COMMISSIONER: Unless I get them all along to tell me whether they are or they aren't, you know, I can't - they've signed the request that the agreement, the AWU1 document - that doesn't mean they necessarily are members of the union, but anyway. Mr Amos, was there anything else you wanted to put?

PN392

MR AMOS: There was just a couple of items. Firstly, these documents had been negotiated between the company, and those negotiations commence back in early July. As soon as the new owners took over Crown Scientific, they immediately discussed the working conditions with their employees, which they're quite entitled to do, and they negotiated those working conditions and those negotiations have been ongoing to the extent that we're now at the situation where the employees have come to an agreement between the company and themselves over what their terms and conditions of employment are.

PN393

I can't see how that is contrary to any legal obligation on the company. I think it's appropriate that a new organisation that comes in, takes over a company, makes itself known, makes its intentions quite clear where they see the company heading for the security of the employment of those employees. I certainly can't see any problem with negotiating any arrangement with employees, even knowing that there was an agreement in place.

PN394

THE COMMISSIONER: Certainly I would have hoped, Mr Amos, that the company would have recognised and continues to recognise its obligations under that agreement. The agreement is not terminated, it's still current, it's still in force.

PN395

MR AMOS: That's correct and they still do.

PN396

THE COMMISSIONER: I am rather disturbed by the fact that these letters have been provided to these employees. It seems to me it's a bit of coercion on them. That's what it appears to me anyway.

PN397

MR AMOS: That's not the case, Commissioner.

PN398

THE COMMISSIONER: I know that's what you're saying, Mr Amos.

PN399

MR AMOS: In relation to the other issues that were raised by my colleague regarding the comparison, those terms that aren't contained in the agreement or the awards weren't contained in the comparison. If there are arrangements made at the workplace that are outside of the provisions of the agreement, then those provisions weren't taken into account when we did any comparison. In fact, I've got to admit I was unaware that any of those gentlemen's agreements, for want of another word, were in place.

PN400

THE COMMISSIONER: What do you have to say about the provisions of clause 5 of the agreement, in the last paragraph of the clause, which is where the company agrees to maintain existing award and over award conditions?

PN401

MR AMOS: That's the current situation at the moment.

PN402

THE COMMISSIONER: In other words, if the agreement is terminated, the employees will lose any over award conditions?

PN403

MR AMOS: The company has already agreed to pay wages which are far above the award so they've already agreed to pay those provisions.

PN404

THE COMMISSIONER: No, no. This says that they agree to maintain any existing over award conditions. Mr Clements has identified what he says are some over award conditions and if the agreement is terminated, what's the situation with those conditions?

PN405

MR AMOS: Commissioner, the only thing that won't be continued as over award payments, the way I see it, is the sick leave, the payment of sick leave on termination of employment.

PN406

THE COMMISSIONER: And the 36 hour week?

PN407

MR AMOS: And the 36 hour week, although they'll be still maintaining their current rate of pay so they won't lose - - -

PN408

THE COMMISSIONER: Mr Amos, can I just say to you, I have some real difficulty with this argument. I think you've stated it each time we've been here. Maintaining a particular rate, whilst requiring someone to work two extra hours a week, in my view is not maintaining wage rates. Maintaining wage rates, in my view is, you have a wage under an agreement, you agree to maintain it if the agreement is removed and no extra hours, nothing else. It's the same money for the same amount of work. That's what, in my view, is maintaining wage rates, not, "We'll give you the same money, but we want you to work an extra two hours." There may be reasons for it and that's relevant, but that's what you're saying. They presently work 36 hours a week for getting X-amount. They are going to be required to work 38 hours for the same amount.

PN409

MR AMOS: Their rates have been adjusted to take account of the extra two hours in the - - -

PN410

MR KNOX: Hourly rate.

PN411

THE COMMISSIONER: Perhaps you could show me exactly where those rates have been adjusted to take account of that.

PN412

MR AMOS: They're in the attachment to the comparison.

PN413

THE COMMISSIONER: That didn't mean anything to me, Mr Amos, I must say. It just seemed a whole lot of figures and you haven't taken me to them.

PN414

MR AMOS: I might take you through it now, if that's appropriate, Commissioner.

PN415

THE COMMISSIONER: Perhaps you could take me through that in detail and also maybe show me where in these letters people have agreed that that's what they're going to be paid.

PN416

MR AMOS: Let's go to the current hourly rate which is shown, in Mr Rodriguez' case being the first on the list, as $18.57. The additional super which was part of the over award payment has been added to that amount.

PN417

THE COMMISSIONER: Hang on, Mr Amos, can you wait, please. I haven't got the documents. This is attachment B.

PN418

MR AMOS: That's correct. We'll look at Mr Pike because we have got a signed document from Mr Pike.

PN419

THE COMMISSIONER: Perhaps you can take me through each of them and show me where, in fact, people are going to be paid the same - in other words, they're not going to lose anything. I still accept Mr Clements is still going to have to work an extra two hours a week, which obviously is a disadvantage, but what you're taking me to - - -

PN420

MR AMOS: Which he'll be paid for.

PN421

THE COMMISSIONER: Yes. He's still required to work the extra two hours.

PN422

MR AMOS: Yes. Just take Mr Pike for an example, and I'll go through all of them if you like.

PN423

THE C1OMMISSIONER: Perhaps start at the top then, as you were going to Mr Amos.

PN424

MR AMOS: Mr Rodriguez, his current rate of pay is $18.57. There is an amount added in of $347.67, which is an additional 1 per cent which is the agreement that my colleague talked about, one of those over award payments.

PN425

THE COMMISSIONER: That's going to be maintained, is it?

PN426

MR AMOS: It's now built into the hourly rate. It won't be as an additional 1 per cent, it will now be an all purpose rate, built into an all purpose rate which in fact has benefits, as you know, to the employees because it's paid on annual leave, it's paid on sick leave, it's paid on overtime. In fact they will benefit out of that.

PN427

THE COMMISSIONER: They get an extra 1 per cent in their pay then. Is that what you're saying?

PN428

MR AMOS: That's right, for the extra super. The gain share has been averaged over three years and that has also been added into their rate of pay which is also those areas for the productivity bonus that we talked about that's in the agreement That gain share has also been converted to an all purpose rate which, in fact, will benefit the employees, as I said, with the super. They get that on overtime, they get it on annual leave, so they're going to get it for all purposes of their work.

PN429

They've got an EFT amount which is an amount that has been allocated to them to assist in the cost of maintaining a bank account for their wages to be deposited into their bank account. There again, that's not showing as a one off allowance, it's actually been converted to an hourly rate which is also going to be an all purpose rate.

PN430

THE COMMISSIONER: Is that new?

PN431

MR AMOS: No, that's always been there. That then has been converted to an adjustment to the hourly rate on what they're currently on and if you have a look at the document regarding Mr Pike that's been handed up in those terms of engagement letter, at pay details on page 2, you'll see that:

PN432

You'll be paid an hourly rate including any over award payments of $20.41. Adjustments to the hourly rate will be in accordance with variations to the applicable award as determined from time to time and company policy.

PN433

In fact, they're going to get not only increases on that rate in accordance with any state wage case decision that's been handed down from time to time, they may also get increases in relation to company policy. They're certainly not going to be disadvantaged in any shape or form.

PN434

THE COMMISSIONER: Except in relation to redundancy.

PN435

MR AMOS: We admit that there is a redundancy difference but two of those long serving employees that we're talking about here, the company has already had discussions with them. One has indicated that he intends to work until he's 62, which is another two years, and he's happy, he wants to retire. The other long serving employee is looking for another 18 months or so, he'll be 65 and he wants to also retire. Those implications were all dealt with during negotiation between the employees and the signing of these letters.

PN436

THE COMMISSIONER: Sorry. Yes, Mr Amos.

PN437

MR AMOS: I can go through each one of them and go through the document but they're exactly the same. All those issues that my colleague raised about over award payments have all been accounted for in the new hourly rate that has been provided to all the employees. I do agree that there is a difference in the redundancy provision and I've made that clear in my letter to the Commission the reason why we want to remove that provision from the agreement and from the terms and conditions of their employment, and secondly, the sick leave provisions.

PN438

THE COMMISSIONER: As in the paying out of it, you mean?

PN439

MR AMOS: Exactly right.

PN440

THE COMMISSIONER: Not the accrual of it?

PN441

MR AMOS: Yes.

PN442

THE COMMISSIONER: The accrual is the same?

PN443

MR AMOS: There's no difference in the accrual, it's just paying it - - -

PN444

THE COMMISSIONER: No, I'm just checking that's what you mean, the paying out of it.

PN445

MR AMOS: Yes, just paying out that, and as you're aware, Commissioner, in New South Wales it's illegal to have those provisions contained in the New South Wales award.

PN446

THE COMMISSIONER: Even upon redundancy?

PN447

MR AMOS: Even upon redundancy, yes. The only way a person can be paid their sick leave out is if they are genuinely sick and they can provide medical evidence to say that they will off sick, and that's still the case in this situation.

PN448

THE COMMISSIONER: What about the other issues that Mr Clements raised? We've dealt with the sick leave, the 36 hour week they won't be working, the super you say is in fact added into the hourly rate. Service payment?

PN449

MR AMOS: That's the EFT.

PN450

THE COMMISSIONER: No, the EFT would be surely the cost of running a bank account or whatever.

PN451

MR AMOS: I'm unaware of any service payments, to be honest with you, Commissioner. I'm sure the new owners of the business are unaware of it also. I've just been instructed, Commissioner, that the company is happy to roll that into the hourly rate as well.

PN452

THE COMMISSIONER: Rather than have it separate.

PN453

MR AMOS: Rather than have it separate. We want to simplify the process rather than make it more complicated.

PN454

THE COMMISSIONER: What about the $110 bonus in clause 9.11 which I seem to recall was - I'm not sure whether that was productivity or that was the workers comp related - it might be the workers comp related - I'm just running through the things that Mr Clements has raised, Mr Amos.

PN455

MR AMOS: They are all dependant on things that are outside of the control - in lots of cases some of these issues are outside of the control of the employees. For instance, how many casuals the employer engages is up to employer, therefore, to have a system that's related to how many casuals you have in place, I really can't understand why any organisation would have that in place.

PN456

THE COMMISSIONER: Mr Amos, can I just say it's in the agreement. You accept that it's in the agreement.

PN457

MR AMOS: I accept that it's in the agreement.

PN458

THE COMMISSIONER: Therefore, presumably the company, when it entered into that agreement with the employees and the union, had some reason for doing so.

PN459

MR AMOS: I accept that but I'm not quite sure what bonuses have been paid over the last period of time. I'll endeavour to find that out.

PN460

THE COMMISSIONER: No, no. I just want to know is that going to be maintained?

PN461

MR AMOS: It certainly hasn't been put into these calculations, no.

PN462

THE COMMISSIONER: I think you're dealing with them both the same, the issue about the workers comp bonus, if you could term it that, and the
casual - - -

PN463

MR AMOS: Yes.

PN464

THE COMMISSIONER: Yes, okay. I think they were the issues that Mr Clements raised. I don't know whether a higher duties allowance, I must say, is going to be - I don't know.

PN465

MR AMOS: There is a higher duties provision in the award, I might add, Commissioner which is very similar - - -

PN466

THE COMMISSIONER: I don't know whether that's relevant or not.

PN467

MR AMOS: I beg your pardon?

PN468

THE COMMISSIONER: I must say I don't know whether that's going to be particularly relevant.

PN469

MR AMOS: There's what they call a mixed function which is exactly the same as the higher duties clause in both awards.

PN470

THE COMMISSIONER: There's a bit of a debate, Mr Amos, whether it's the same but for present purposes I'll give you that it is.

PN471

MR AMOS: It's called mixed function under the New South Wales award but it refers to higher duties, a person performing higher duties.

PN472

THE COMMISSIONER: Yes, there's just some debate about that, but as I say, I accept for the moment that it's the same thing.

PN473

MR AMOS: I have nothing further to add, Commissioner. As I said, we could go through each employee that's contained on this list and say exactly the same thing for each one.

PN474

THE COMMISSIONER: Can I just confirm that what you're saying is, if I go through these seven letters - - -

PN475

MR AMOS: Should be eight.

PN476

THE COMMISSIONER: There is in fact an eighth, I've put it in the wrong pile, sorry, eight letters and look at the rate of pay, which is under paragraph Pay Details, that in each case you're saying to me that figure that's there reflecting an hourly rate is the same as what's going to be on the relevant part of attachment B of Crown1, in other words, whatever the hourly rate is for the individuals, the end column, if you like.

PN477

MR AMOS: Yes, that's correct. There is one additional employee that's not on that list that was a casual employee. He has since been put on as a permanent.

PN478

THE COMMISSIONER: One of these people here isn't on that list?

PN479

MR AMOS: That's correct.

PN480

THE COMMISSIONER: Right, but as you saying that the way that their pay rate has been struck is in accordance with the same formula, if you would like to say, as the other employees?

PN481

MR AMOS: That's correct.

PN482

THE COMMISSIONER: I think that's clear. There's nothing else you wanted to put, Mr Amos?

PN483

MR AMOS: No, Commissioner, only to say that if you look at the 36 hour and the 38 hour week, they are being required to work an additional two hours but they're also getting an additional two hours pay because the rate that we're talking about here is an hourly rate.

PN484

THE COMMISSIONER: Yes, okay. Nothing further?

PN485

MR AMOS: Nothing further, Commissioner.

PN486

THE COMMISSIONER: Mr Clements, I don't want ping pong matches, but given that certain material has come in then, perhaps I should give you a chance, if you wanted to comment specifically on that.

PN487

MR CLEMENTS: I wish to hand over to Mr Bali. He's a qualified accountant who is attempting to make a point to me which I'm not in a position to be able to understand.

PN488

THE COMMISSIONER: You think I might?

PN489

MR CLEMENTS: I have faith in your mathematical ability over mine, Commissioner. It relates to AWU2, the behind page - - -

PN490

THE COMMISSIONER: Sorry, AWU2?

PN491

MR CLEMENTS: AWU2 which has been handed up. If you look on the back of that there's actually more information. Mr Bali can explain.

PN492

MR BALI: Commissioner, I suppose ..... if we go through also the report that we just heard , based on the - - -

PN493

THE COMMISSIONER: Sorry?

PN494

MR BALI: If you look at Rodriguez, you've got $34,766.60. To work out the hourly rate they based that on a 52 week by 36 hour, because it's a 36 hour week that they're operating under. There's no problems with that. If you look at the super of 347.67, plus the gain share of 1354.65 plus the EFT, if you add the three together you get 1722.43. Currently they're operating under a 36 hour week. What my colleagues here have done is used the 38 hour week which has given the adjusted rate of 87.16. Since they're actually working a 36 hour week, for them not to be any worse off, it should be actually 92.01. There's about point 0485, so 4.85 cents - - -

PN495

THE COMMISSIONER: Sorry, point who?

PN496

MR BALI:  Point 0485 is the adjustment you should do to the hourly rates, so four cents point 85.

PN497

THE COMMISSIONER: Can I just get it down to something that's understandable to me, Mr Bali, if you'll excuse my mathematical ignorance. I think I'm with Mr Clements there. Just in simple terms, are you saying that there should be an extra four cents an hour - - -

PN498

MR BALI: Yes, four cents.

PN499

THE COMMISSIONER: - - - on top of the hourly rate.

PN500

MR BALI: 4.85 cents an hour.

PN501

THE COMMISSIONER: To be precise, you're saying point 485 cents per hour so that, for instance, take Mr Rodriguez' rate, it should - - -

PN502

MR BALI: It should be 19.492 roughly, so it should be almost five cents more, just a fraction under five cents.

PN503

THE COMMISSIONER: Per hour?

PN504

MR BALI: Per hour more. The other thing is our colleagues have said ..... service, that's $267 a year so once again it would be about 14 cents an hour difference. Just another point, they're talking about the 38 hour week conversion. During our negotiations with the company, they were actually saying to buy back the rostered day off, which is essentially - I know they're just saying "Pay the extra two hours. You're getting paid for the 38 hours, it's not as if you're working 38 hours on 36 hours pay," but the company is actually offering up to $3000 to get the workers to work the 38 hour week and not to have a rostered day off.

PN505

THE COMMISSIONER: This is at some previous negotiations?

PN506

MR BALI: Yes, before the new management took over. What we're trying to say here is that when the workers went from the 38 hour week to the 36 hour week, I think they forgave some money in that process, as I understand it, and now to go back up to a 38 hour week, they're losing the comfort of the - at that stage I was told that it was paramount as far as party negotiations originally, that they didn't want to forgo any of the rostered days off so obviously I'm a bit surprised at the latest development there. Initially the company wanted to negotiate and buy the rostered day off so that's about $1.54 I think they worked it out to be, per hour.

PN507

THE COMMISSIONER: Mr Bali, I think this matter is complicated enough without me trying to go back and unscramble what might have occurred leading up to - - -

PN508

MR BALI: But it's another condition, Commissioner. What we're saying is, just to go from 36 to the 38 hours, the company may simple say, well, they're getting paid for the extra two hours, but essentially the overtime rate previously kicked in at the 36 hour mark. Now, we're saying the overtime rate doesn't kick in until the 38 hour. We're also looking at the inconvenience, that the workers now need to be there five days a week and don't have the additional day off. They used to have one day per fortnight, so there's 26 days now lost. How do you price that, is the issue?

PN509

THE COMMISSIONER: That's a good question, isn't it. Anyway, thank you. Mr Amos, did you - - -

PN510

MR AMOS: The only thing I would say on this document is that to look at an extra four cents - - -

PN511

THE COMMISSIONER: Five, I think Mr Bali said.

PN512

MR AMOS: Five cents, if he had sat down and done his figures, then if he looked at paying this as an all purpose rate, if you go back over the history of what the employees have worked, I'm sure they're going to be much further in advance of five cents an hour.

PN513

MR BALI: It's 19 cents, including - - -

PN514

MR AMOS: If you look at, for instance, the super, we're now including an additional 1 per cent super as an all purpose rate so not only are they getting additional super, they're now getting an additional 9 per cent on top of that again when the super is paid. I think the company is trying to be as flexible and as accommodating as possible, having regard to - a company needs to operate and a company needs to operate efficiently. That's the reason we're going down this path.

PN515

The company, prior to the new owners coming in, was in a situation where it may have been closed down and these employees would be all out of work. What we're trying to do here is to ensure that there is ongoing employment for these employees over a long period of time. That's all we're trying to achieve here. We've already seen what happened to Farmaglass, it has gone. We don't want the same thing to happen to Crown Scientific. Thanks, Commissioner.

PN516

THE COMMISSIONER: Mr Amos, can I just clarify, and this is a point I should have picked up before, just on your attachment B where you've got the employees listed with their rates, there's three there where in fact there's no super added in. Are they casual employees, are they, or why haven't they got - - -

PN517

MR AMOS: They were new employees. My instructions are that they were new employees who didn't qualify for the additional super.

PN518

THE COMMISSIONER: They didn't qualify, sorry.

PN519

MR AMOS: I'm not 100 per cent sure and I'll have to seek further instructions from the company about that.

PN520

THE COMMISSIONER: You're saying, Mr Knox, that you think you had to what, have a certain length of service or something to qualify for the extra 1 per cent?

PN521

MR KNOX: Yes.

PN522

MR AMOS: This document was prepared by the accountant of Crown Scientific.

PN523

THE COMMISSIONER: Maybe he and Mr Bali should get together.

PN524

MR AMOS: He's been there for a long period of time and he certainly knows what - - -

PN525

THE COMMISSIONER: No, I was just curious as to why three of them didn't have that amount. Nothing further from anyone?

PN526

MR AMOS: Nothing further, Commissioner.

PN527

THE COMMISSIONER: In that case I'll reserve my decision. Thank you.

<ADJOURNED INDEFINITELY [11.19AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #CROWN1 LETTER AND ATTACHMENT PN298
EXHIBIT #AWU2 COMPARISON OF RATES DOCUMENT PN319