AG2005/5202, Transcript of Proceedings [2005] AIRCTrans 2127 (12 October 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13077-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2005/5202

APPLICATION BY COMSEAT AUSTRALIA PTY LTD
s.170LK - Agreement with employees (Division 2)
(AG2005/5202)

ADELAIDE

2.15PM, THURSDAY, 22 SEPTEMBER 2005

PN1

MS J BRUNT: I appear for Comseat.

PN2

MR S SMITH: I am an employee representative.

PN3

MS J BODYCOMB: I am also an employee representative.

PN4

THE SENIOR DEPUTY PRESIDENT: Now, I can advise the parties that I’ve read the agreement and I have read the statutory declarations that have been provided to me. I have a number of questions first of all about the process that was followed in reaching this agreement. Now perhaps I’ll get you to help me in this regard Ms Brunt. Did the employer issue a notice of intention to make the agreement? Is there a written advice that was given to all employees indicating the employer’s intention to meet this agreement?

PN5

MS BRUNT: Are we talking about initially your Honour?

PN6

THE SENIOR DEPUTY PRESIDENT: Yes let’s start initially at this stage.

PN7

MS BRUNT: Okay.

PN8

THE SENIOR DEPUTY PRESIDENT: How was the process kicked off in the first place?

PN9

MS BRUNT: The employees approached me at the time the previous agreement was coming to its dated end.

PN10

THE SENIOR DEPUTY PRESIDENT: Yes.

PN11

MS BRUNT: The evaluation process was then to follow and they said after that, can we please start negotiating a new agreement? So it was initiated by the employees.

PN12

THE SENIOR DEPUTY PRESIDENT: And was there any document given by the employer to the employees at the start of the negotiation process?

PN13

MS BRUNT: No, because it was a move by the employees and all the employees knew about it.

PN14

THE SENIOR DEPUTY PRESIDENT: Yes. Now moving on from that issue, and I’ll come back to that issue in a moment, the statutory declarations indicate there was a change made to the agreement whereby the duration of the agreement was reduced from a three year period to a one year period. Is that correct?

PN15

MS BRUNT: Yes.

PN16

THE SENIOR DEPUTY PRESIDENT: Can you tell me when that change was made?

PN17

MS BRUNT: It was just after the end of that draft reading period, they had just over two weeks whereby they were reviewing the draft agreement ready for submission and it was just after that, that I - - -

PN18

THE SENIOR DEPUTY PRESIDENT: The draft was finalised on about
5 August. Is that correct?

PN19

MS BRUNT: Yes.

PN20

THE SENIOR DEPUTY PRESIDENT: And sometime after that the change was made?

PN21

MS BRUNT: Yes. The draft went then out for consultation with the employees.

PN22

THE SENIOR DEPUTY PRESIDENT: Right. Are you able to give me a date upon which that change was made? It doesn’t really matter if you don’t have it to hand.

PN23

MS BRUNT: I can’t quite see it straight off, I’m sorry no.

PN24

THE SENIOR DEPUTY PRESIDENT: We’ll come back to that in a moment too. And finally, should I understand that the predecessor to this agreement was an agreement which was reached with the CFMEU?

PN25

MS BRUNT: It was actually the same processes we’re following today as we have followed to this agreement, but the period - the 21 days in which the agreement should have been registered lapsed due to, we had a factory shutdown over Christmas and therefore that period had lapsed and so the CFMEU said look we’ll register, do the statutory declaration and get it through more quickly, save you doing the whole process all over again. So in reality it was still the same section as this one registered as an employee/employer agreement but it was - when it went to registration it was registered under a dispute resolution but it was more a technicality.

PN26

THE SENIOR DEPUTY PRESIDENT: Now what I’m going to do is ask my associate to do me a favour and just show you a particular section of the Act that becomes critical in this regard, and hopefully the three of you can sort of all look over each other’s shoulder because the issue that I’m raising is not going to allow me to certify your agreement today, but it’s important to me that you understand that the problem that I think you’ve run into is certainly if you like, a consequence of the fact that this Act is not altogether easy to read, but you’ve run into a problem in terms of compliance with the section 170LK and perhaps before you pour over it I’ll give you a little bit of a background.

PN27

Section 170LK is the only section of the Act that allows a collective agreement to be reached between an employer and the employees directly, that is without the necessity for a union to be involved. The option exists for a union to be involved but it’s not an essential, and as such this section sets out a fairly clear process that needs to be followed in order to protect both the employer position, but also the employee position, and there are a series of steps that are laid out section 170LK. If those steps aren’t followed then I don’t have a licence if you like, to ignore them and to go ahead and certify the agreement. I need to say to people you’ll need to go back and repeat the process so that you can demonstrate that those steps have in fact been followed. I can do everything I can to facilitate the certification of the agreement and quite possibly avoid you having to come back in here, but I can’t certify an agreement that was not reached by following the steps in section 170LK. So that’s the background.

PN28

Now if you turn to section 170LK(1) that simply says that the employer can make the agreement. Section 170LK(2) says that:

PN29

The employer must take reasonable steps to ensure that at least 14 days before the agreement is to be made the employees are advised in writing of the intention to making the agreement.

PN30

That’s what we colloquially term the notice of intention, that’s why I was asking you the question about what triggered the process and whether or not the employer provided a notice of the intention to make the agreement.

PN31

Now skip over section 170LK(3) for a moment and go to section 170LK(4) and you don’t need to write furiously because we’ll provide upon my associate to give you a copy of the section at the end of the hearing. In section 170LK(4) it says:

PN32

That the notice has to in affect provide an invitation so that any person or employee who is a member of a union that is able to represent them can ask that union to meet with the employer on their behalf.

PN33

Now keep going to section 170 - sorry let me stop just there for a moment go, back to section 170LK(3), another step in the process is that before that notice is given or at the same time the agreement needs to be provided to all employees or ready access has to be made to the agreement. Now in addition to that, if a union wants to, or requests a meeting with the employer about the terms of the agreement in accordance with LK5 then the employer has got to provide a reasonable opportunity to meet and confer in relation to that agreement, they don’t have to agree with the changes that might be requested of them, but there has to be a meeting, and there has to be a conference about the proposed agreement. Now section 170LK(6) talks about if there’s a withdrawal of that request, section 170LK(7) says that:

PN34

The employer must take reasonable steps to ensure that terms of the agreement are explained to all of the persons employed at the time whose employment will be subject to the agreement.

PN35

So at some stage in that 14 day period of time there needs to be this explanation of the terms, and very commonly that’s the sort of thing that I suspect the parties have referred to in answering question 5.4 in the statutory declarations. And the last part of section 170LK in affect says that, if the document, that is if the proposed agreement is varied in any way then a new notice of intention must be issued. It doesn’t have to be a new invitation in accordance with LK(4) but there has to be, if you like a new advice to employees, the 14 day period must start again and the requirement for an explanation of the terms of the agreement must be repeated.

PN36

It might simply be that that explanation just deals with the change that is made. Now, the approach is clearly set out to ensure that there is a measure of protection there for employers and for employees, but absent your ability to explain to me how that approach is met, I’m not going to be able to certify the agreement today and you would need to go back and repeat the process, you may not make a single change to the document, but that’s entirely your choice, but you would need to repeat the process. Now, I guess before we go too much further, do any of the people here today have any questions about the information I provided in relation to that section 170LK?

PN37

MS BRUNT: Your Honour can we have an opportunity to run through those - - -

PN38

THE SENIOR DEPUTY PRESIDENT: You certainly can, yes, you mean now just talk about it amongst yourselves? Yes, because if you can demonstrate to me that they’ve been done then I can look at certification, but on what you’ve told me to date I’m having some difficulty seeing how those requirements are being met.

PN39

MS BRUNT: Okay.

PN40

THE SENIOR DEPUTY PRESIDENT: So feel free to have a talk amongst yourselves about those requirements, I won’t adjourn the matter but just have a chat amongst yourselves about them.

PN41

MS BRUNT: Can I answer the first one first and then we can - - -

PN42

THE SENIOR DEPUTY PRESIDENT: You can ask whatever questions you want to ask of me.

PN43

MS BRUNT: Okay. In regard to giving the notice to employees that an agreement was going to be made.

PN44

THE SENIOR DEPUTY PRESIDENT: LK(2) yes.

PN45

MS BRUNT: It was discussed at a consultative committee meeting for which there are minutes recorded, and following which the employee representatives go back to the rest of the employees and give a feedback on what happened at the meeting and it was at that stage that they said that yes management has agreed to go ahead with a new agreement, so all were aware of it.

PN46

THE SENIOR DEPUTY PRESIDENT: But how do you say that that represents at least 14 days notice in writing?

PN47

MS BRUNT: I’m a little bit confused your Honour.

PN48

THE SENIOR DEPUTY PRESIDENT: Yes, that’s all right.

PN49

MS BRUNT: Are we talking right at the very beginning when there was agreement that a new agreement should be made and that we should start the process of negotiating?

PN50

THE SENIOR DEPUTY PRESIDENT: Well the Act envisages that at some point, and it needn’t be right at the very beginning, but when the employer definitely wants to make an agreement, that 14 days notice in writing of the intention to make the agreement is provided to employees. Seems to me you’ve got two sets of problems here, two big ticket impediments to certification today.
The first is I don’t understand that a notice of intention was provided to all employees in writing and that that notice detailed the invitation that is set out in LK4. And the second problem that you’ve got which is by itself enough to prohibit certification, is that the agreement was changed at some point and I’m struggling with how I can be satisfied that the requirements of LK(8) have then been met so that the exercise, was if you like, substantially restarted.

PN51

Now let me make it absolutely clear, I don’t suggest in any way either the employees or the employer set out to deliberately avoid the Act, it’s not great bedtime reading, it’s not a user friendly document, but nevertheless it is the Act and I don’t have a discretion to ignore it. Now I can try and find ways and means of expediting the certification of your agreement, but each one of those ways and means that I see so far involves repeating the process, and it will get you out of coming back in here hopefully, but I can’t get you out of repeating the process if you haven’t done it.

PN52

MS BRUNT: Okay. The 14 day period I don’t think was necessarily spelt out as 14 days, it was spelt out as everybody was handed - there was written notice on the blackboard to say that the drafts would be handed out for the reviewed period. It was also noted on the blackboard which was the notice board for all staff that it must be registered within 21 days so that all feedback must be done within that period of time.

PN53

THE SENIOR DEPUTY PRESIDENT: The 21 days is not fatal to the application, unlike this section there is a capacity for the Commission to extend that 21 days in certain circumstances. There isn’t the capacity on the basis of successive Full Bench decisions that determine how I need to look at section 170LK, there is not the capacity for me to ignore provisions such as LK(2) and LK(4). They become absolutely critical to this process and they go to the intention of the section which was designed to ensure that those built in protections for people are there, once again I’m not suggesting people set out to avoid them, but I don’t hear you telling me that they’ve been met.

PN54

MS BRUNT: The 14 day notice was known to all employees that it was a 14 day period.

PN55

THE SENIOR DEPUTY PRESIDENT: It may well have been but if it wasn’t a notice of intention in accordance with LK2 then I can’t climb over that problem.

PN56

MS BRUNT: Can I - - -

PN57

THE SENIOR DEPUTY PRESIDENT: Yes certainly.

PN58

MR SMITH: Could I ask a question?

PN59

THE SENIOR DEPUTY PRESIDENT: Yes certainly.

PN60

MR SMITH: The actual 14 days where does that start from? Is that right at the beginning of the process?

PN61

THE SENIOR DEPUTY PRESIDENT: It needs to be 14 clear days, if you work backwards. Backwards from the date upon which the proposed agreement be made and in this case presumably it was an employee vote to endorse the proposal, working backwards from there you have to be able to count out 14 clear days from that point.

PN62

MR SMITH: Okay.

PN63

THE SENIOR DEPUTY PRESIDENT: Please don’t overlook the fact that LK(2) talks about this notice of intention which the employer is obligated to ensure is made available in writing to all employees, at least 14 days prior to the date upon where it’s supposed to be made, and further look at LK(4) which says:

PN64

A component of that notice of intention has to include this invitation such that if a person is a member of a union and they want that union to represent them or to meet and confer with the employer then they have to be told in that notice in writing of that capacity they have.

PN65

So as I’ve heard you refer to blackboard notices and the like, it might be possible, and stress the word might, might be possible to argue that the blackboard notice is a notice in writing but you’d need to ensure that both the 14 day requirement is met and then those LK(4) provisions about the invitation in relation to people who might be members of the union are met. Then you need to ensure that if the document is changed after that date which it appears it was, there is repetition of at least part of the process in LK(8), so I hope you can follow there that the dual areas of concern that I’ve got. Does that help you?

PN66

MR SMITH: Yes, thank you.

PN67

MS BODYCOMB: The actual change of this agreement was done on notification with the union and they advised us of the change, not done by say the employers, we were all discussing it and had our agreement and then a copy of the document was sent to the union for them to overlook it before any final decisions were made, and on consultation with them they had one meeting down there with us after the draft was done where they read through it, very happy with the way it was laid out, but the only problem that they found is said to consider the length of the agreement and they advised us to change which is on that. On their advice we then went to Jan and put that proposal to them, and she’d had the same information, that a one year agreement was probably a better way to go.

PN68

THE SENIOR DEPUTY PRESIDENT: There’s no problem with changing from three years to on year, the difficulty is that the Act requires that if that change is going to be made, 14 days needs to start again and it needs to be predicated by that revised notice of intention.

PN69

MS BODYCOMB: Right.

PN70

THE SENIOR DEPUTY PRESIDENT: Now, it seems to me that these problems are just incapable of being resolved, simply put the process that you follow was not consistent with the process of section 170LK. Now, if I work from that premise my suggestion to the parties is that there are a couple of issues that I want to raise with you about things in the agreement, but once we’ve raised those then the employees and the employer consider going away from here to issue a notice in accordance with that section 170LK, LK(2), you’ll be armed with a copy of that particular section of the Act so you’ll know the various steps that have to be followed. That notice could simply refer, or very easily refer to this hearing and indicate that the Commission is requiring you to follow this process in accordance with the Act, and it might explain to employees why the process is being repeated, that you set a date upon which the document is to be voted on again and that date is included in the notice of intention.

PN71

You include in the notice of the intention words that if not identical to those to LK(4) are substantially the same, and if the document is then endorsed by employees and let me go back a step, that if there is a request from a union to be involved in the process then the employee would need to meet with that union. As I said you don’t need to change the document, that’s a matter for negotiation, that at some stage during the 14 day period the employer must ensure that the terms of the agreement are explained to employees, it might simply be a convening another very brief meeting to say does anybody else have any questions about the agreement or why we’re repeating the process.

PN72

If there are any changes that are made to the document during that 14 day period, there will need to be a new 14 day period, the revised copy of the agreement will need to be given to the employees and a new notice of intention that doesn’t have to contain the invitation in LK(4), it just needs to in effect, state that the employer intends to make an agreement with the employees on a given date which must be 14 days in advance.

PN73

Now let’s say you’ve done all of that and you’ve ended up with a document which might be identical to this one, what I’d need you to do would be to send that new document, new agreement with a different signature date on it in to me together with revised statutory declarations that layout the process and a copy of that notice of intention. If on the basis of all of that I’m satisfied that the process that was followed was consistent with the requirements of the Act then I’d simply certify the agreement from the date of which I received that. If I had a question in my mind about the process then I’d get you folks to come back in here and you could explain what you’ve done. Now, that’s the best that I can do in terms of expediting the process set out in section 170LK.

PN74

Now do any of you have any questions about that? All right. Now that then takes me to the agreement itself. Have you all got copies of that agreement?

PN75

MS BRUNT: Yes.

PN76

THE SENIOR DEPUTY PRESIDENT: In order to consider the agreement for certification I need to be satisfied that it meets what we call the no disadvantage test, that means when I look at clause 9.1, I need the parties to provide with the revised version of the agreement a wages schedule which shows the actual and agreed wage rates. They could either be the wage rates payable now, to which the new rates in the agreement will apply, or they can be the first round of wages increases under this new agreement, that’s entirely a matter for the election of the parties, but I need something that establishes the dollar amounts of the wages under the agreement.

PN77

The next question I have of the parties is one that you may well be able to answer now and that goes to 9.1.2 which talks about an individual bonus system. Is that bonus system Ms Brunt documented somewhere? Is it set out in terms of the understanding the parties have?

PN78

MS BRUNT: Yes, your Honour. It’s been in place for a couple of years now.

PN79

THE SENIOR DEPUTY PRESIDENT: And presumably all employees have access to that document and arrangement?

PN80

MS BRUNT: They all have a copy.

PN81

THE SENIOR DEPUTY PRESIDENT: Might it be changed over the life of this agreement?

PN82

MS BRUNT: No.

PN83

THE SENIOR DEPUTY PRESIDENT: The next question I have goes to appendix B, this is the appendix relating to avoidance of industrial disputes. Now there are a couple of questions that I have here. First of all the references to the Federated Finishing Trade Society Union, is that the union to which you propose to refer?

PN84

MS BRUNT: Yes your Honour.

PN85

THE SENIOR DEPUTY PRESIDENT: Not the CFMEU?

PN86

MS BRUNT: There’s a section of the CFMEU that is the FTS section of that plain union.

PN87

THE SENIOR DEPUTY PRESIDENT: Yes thank you. And should I understand that if an employee is not a member of the union, that union, then they have a capacity to be represented by a person or a representative of their choice. Should I understand that?

PN88

MS BRUNT: Yes.

PN89

THE SENIOR DEPUTY PRESIDENT: And a final question which goes to paragraph 5 of appendix B, this talks about the referral of an unresolved issue to the Commission for settlement, there’s no right or wrong answer to this question, but I’d much rather know now. It’s commonly the case that when parties want to use those words they would intend that the Commission first of all try to resolve any dispute by way of a conciliation discussion, that is a conference, but the reference to the words for settlement generally involve an expectation there would be the capacity for the Commission to arbitrate if an agreed result was not achievable. Now is that the case here? It’s entirely a matte for the parties to tell me what that role is. Do you want to have a talk amongst yourselves? Sometimes people say no we just want the Commission to conciliate and we don’t empower the Commission to arbitrate.

PN90

On other occasions more consistent with the words here, they provide for a last resort arbitration and the reason for raising this question with you now is that in one sense it’s almost too late to raise it if you do have a dispute because the last thing most people want to do if they have a dispute is to then have another dispute on how they’re going to resolve the first one. So do you folks want to have a quick talk about it now?

PN91

MR SMITH: We’ve got a very good working relationship with our employer and we don’t think we’d ever get to the stage where we’d actually need to the Commission to arbitrate.

PN92

THE SENIOR DEPUTY PRESIDENT: I’m not advocating it at all.

PN93

MS BRUNT: No, no.

PN94

MR SMITH: So we’re happy to take the settlement out we don’t think it’s needed it in there.

PN95

THE SENIOR DEPUTY PRESIDENT: You do have the option to take out whatever you want to take out given that you’re going to be repeating the process.

PN96

MR SMITH: Yes.

PN97

THE SENIOR DEPUTY PRESIDENT: My only comment to you is that I’m anxious to try to avoid the need for another hearing, so that if you envisage leaving any part of five in there, you do need to say what it is that you want the Commission to do, that is what power do you want the Commission to have. If you want the Commission’s function to be, to stop at a conciliation conference you need to say that. Conversely if you want the Commission to have the ultimate power to arbitrate a matter that’s not resolved, you need to say that. You can say whatever you want to say as long as you’re clear about the expectation on the Commission. So that’s one that you folks can take away and think about from there, all right. Yes?

PN98

MS BRUNT: But if we do alter it that means coming back for another hearing?

PN99

THE SENIOR DEPUTY PRESIDENT: No.

PN100

MS BRUNT: No?

PN101

THE SENIOR DEPUTY PRESIDENT: Let’s say for arguments sake you erased paragraph five entirely, then that’s not going to give rise to another hearing, however if you left five exactly as it is, you’ll probably need to come back in just to tell me what you want the Commission to do. Alternatively if you changed five to say for instance, that should the matter still not be resolved, then it may be reserved to the Australian Industrial Relations Commission for conciliation, that tells me and a future member of the Commission exactly what capacity they have in relation to the matter.

PN102

MS BRUNT: I think that was our intention that should it go that far there was some other realm in which you could make your hearing and make your points made.

PN103

THE SENIOR DEPUTY PRESIDENT: It’s entirely a matter for your choice but you do need to be specific about what powers you give the Commission if you’re to avoid another hearing. Does that help you?

PN104

MS BRUNT: Yes.

PN105

THE SENIOR DEPUTY PRESIDENT: That completes the questions that I have about the agreement. What I’ll do I’ll work from the basis that - leave aside that appendix B for the moment, where you know you can make whatever changes you want to make there, but if you’re going to avoid a hearing you’ll need to be specific about the powers being allocated to the Commission. In terms of the other two issues that I’ve raised, I will expect a wages schedule if you’re to avoid a hearing and I’ll rely upon the answer that you’ve given to me in relation to 9.1.2, when I next look at the agreement unless you advise at that stage with a different answer. All right? Now as I indicated to you my associate will give you a copy of that much loved section 170LK, I don’t expect to receive anything from you within the next at least 14 days. If I do then we’ll know we’ve got a different problem, but at some stage in the not too distant future I would expect to receive new statutory declarations, wages schedule and revised agreement together with the notice of intention.

PN106

MS BRUNT: Okay.

PN107

THE SENIOR DEPUTY PRESIDENT: And if I can certify the agreement on the basis of that material then I’ll do so from the date upon which I receive that information. Do you have any questions Ms Brunt about that process?

PN108

MS BRUNT: No your honour.

PN109

THE SENIOR DEPUTY PRESIDENT: Do our employee representatives have any questions?

PN110

MR SMITH No your Honour.

PN111

MS BODYCOMB: No.

PN112

THE SENIOR DEPUTY PRESIDENT: All right, I’ll adjourn the matter on that basis.

<ADJOURNED INDEFINITELY [2.51PM]