C2003/4216, Transcript of Proceedings [2005] AIRCTrans 2158 (19 October 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13042-1

COMMISSIONER BLAIR

C2003/4216 C2003/4218 C2003/4217 C2003/4308

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
AND
PILKINGTONS (AUSTRALIA) OPERATIONS LTD AUTOMOTIVE DIVISION
s.99 - Notification of an industrial dispute
(C2003/4216)

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION-FFPD- VICTORIAN FFTS BRANCH
AND
PILKINGTONS (AUSTRALIA) OPERATIONS LTD AUTOMOTIVE DIVISION
s.99 - Notification of an industrial dispute
(C2003/4218)

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
AND
PILKINGTONS (AUSTRALIA) OPERATIONS LTD AUTOMOTIVE DIVISION
s.99 - Notification of an industrial dispute
(C2003/4217)

PILKINGTON AUSTRALIA AUTOMOTIVE DIVISION LTD
AND
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION-FFPD- VICTORIAN FFTS BRANCH
s.113 - Application to vary an Award
(C2003/4308)

MELBOURNE

11.10AM, WEDNESDAY, 05 OCTOBER 2005

Continued from 17/7/2003

PN20

MR A DALTON: I am from the Australian Industry Group, with me is
MR J FINDLAY from the company.

PN21

MR K REIDY: I appear on behalf of the CFMEU.

PN22

THE COMMISSIONER: Thank you. Mr Dalton?

PN23

MR DALTON: Thank you, Commissioner. This matter was before you back in 2003 and I'm not sure how you might recollect this matter given that you've had many many cases in between that time, but it's my intention just to give you a very brief summary and depending on how our colleague wants to progress this matter it might be simple or it might be complex, and if it is simple I think we should operate on that basis. Now, in terms of this, the issue that's still from the old 2003 is really the ….. man ship loading at Laverton, which is the issue that we're bringing before you today.

PN24

Prior to the award simplification the company operated according to the provisions of the Pilkington Australia Operations Limited Automotive Division Production and Warehousing Award 1993. Now, this award had an appendix a, which was a comprehensive document that covered the company's Laverton site. Now, at subclause 8F(1) of the appendix, the specified allowance for afternoon shift was 15 per cent of his or her ordinary rate. Now, this differed from the main part of the award which provided a thirty per cent loading for afternoon shift. The award was simplified in what I understand was a consent position by Commission Lewin in January 1999. The practice of paying the 15 per cent loading for afternoon shift at Laverton continued uninterrupted without issue, but sometime in 2003 - the first part of 2003 - the parties discovered that the appendix was left out of the award.

PN25

There's a letter from Dick Lowe, who was the industrial officer with the CFMEU furnishing trades division, acknowledging that. Would you like me to tender that at this point in time?

PN26

THE COMMISSIONER: If you wish.

EXHIBIT #PILKINGTON1 LETTER ACKNOWLEDGING APPENDIX LEFT OUT

PN27

MR DALTON: You'll see that letter, Commissioner - yes, to Simone Fisher, manufacturing support manager of Pilkingtons Australia Operations Limited North Geelong. It says:

PN28

Dear Simone, changes to ...(reads)... on this matter.

PN29

Now, in July 2003 a dispute about a number of issues was referred to the Commission under section 99 of the Act and the 15 per cent shift loading at Laverton was on one of those matters. Now, as a result of discussions regarding the dispute the parties agreed before the Commission to vary the Pilkington Australia Operations Limited Automotive Division Production and Warehousing Award 1993 by consent to reinstate the afternoon shift loading of 15 per cent at the Laverton site and reflect the practice at Laverton, Parooka, and Geelong. I have a copy of the transcript, Commissioner.

PN30

THE COMMISSIONER: Thank you.

PN31

MR DALTON: It wasn't a very long matter, but if I can go to PN8, Ms Delores says, if I read off, Commissioner:

PN32

And I would like to echo ...(reads)... will continue to apply.

PN33

Now, for some reason, that unfortunately I cannot explain, Commissioner, some of the work was completed on this matter; however, it was not referred back for finalisation for the variation of the award. The practice of paying the 15 per cent loading on afternoon shift at Laverton has continued throughout this period. The issue was identified as being incomplete by the new HR manager at Pilkingtons in July 2004. The HR manager met with Mr Lowe of the union to discuss the matter, there did not appear at that time to be a change in the position of the union; however, as Mr Lowe was about to go on holidays in the near future he requested that any activity to finalise the variation be put off until his return from leave. Now, sadly Mr Lowe passed away while he was on leave.

PN34

The company met with Reidy of the union in December 2004 regarding the issue, several more meetings took place whereby it was agreed in March 2005 that the company would prepare the application to vary the award. Through this process the company was not aware of any objections by the union. In fact, the union indicated that it was prepared to go ahead with the variation. The company ordered the draft of the award variation to the union in March 2005 but the matter was not responded to by the union. The company referred the matter back to the Commission and subsequently the union launched action against the company for a breach of the award of the issue in the Federal Court.

PN35

The company now seeks that this matter be rectified once and for all. Given the previous agreement by the union to the acknowledgement that an error occurred in the simplification and for the course of action to correct that error we do not see that the union has any grounds to renege on that position. The company would submit that if the union was to renege as a form of pressure because of a dispute about another matter that's occurring at this point in time that this would be unconscionable behaviour by the union that should not be given any succor by the Commission.

PN36

In terms of dealing with this matter, the company would submit that two approaches are available to the Commission. Firstly, that there was an error in the material presented to the Commission for the making of the simplified award. This error could be corrected by the issuing of a correction order inserting the relevant provision into the appropriate part of the award. The correction would have the same operative date as the simplified award. The second option would be to vary the award under section 113 of the Act. The company would submit that the variation would need to be made retrospective to the date of the simplification variation to avoid prejudice to the employer.

PN37

Given the unintentional omission by the parties, retrospective application of the decision would not disadvantage either party. We would suggest that there are exceptional circumstances that would support the granting of the retrospective application. If the option of varying the award is the most suitable to the Commission, the company understands there may be a question of safety net application, even though we do not concede the issue would be below the safety net. This would require the matter to be referred to the President of the Commission.

PN38

Commissioner, this is a brief summary of the company's position on this matter. Depending on how my colleague wishes to proceed, it may be enough for you to determine what course of action is appropriate, but if we need further detail on some of those parts of the submissions we're prepared to do that. If the Commission pleases.

PN39

THE COMMISSIONER: Thank you. Yes, Mr Reidy?

PN40

MR REIDY: Commissioner, if I could just start with the letter that was sent to you by Mr Findlay on the ninth of last month asking that this matter be brought back on. The second page of that letter, Commissioner, it has an excerpt from a transcript from 17 July when the matter was last before you. It says there:

PN41

The parties have agreed that they will.

PN42

And its got a section missing. It says:

PN43

Draw up a draft of an application ...(reads)... 15 per cent loading.

PN44

Now, just reading that, it looks as though the parties have agreed that they will actually just go ahead and draft up an application and away you go. Having read the transcript, and this is at paragraph 9 of the transcript, what it actually says is:

PN45

The parties have agreed that they will withdraw those matters

PN46

And that's the four matters that were before you that day, Commissioner:

PN47

And that the union agree ...(reads)... 15 per cent loading.

PN48

So, I'd just like to clarify at this point that there was never any agreement - or it was never agreed by the union - that a draft application was just a matter of course. It had to go back, it had to be drafted it up, if a consent application was going to be made then it had to be in the terms that both parties agreed with, so there was still some way to go. It was never actually the case that the matter was settled on the basis that we'd draft up an award variation in the terms sought.

PN49

THE COMMISSIONER: Why does the union say that?

PN50

MR REIDY: Our position, Commissioner - I'll go to the letter that Dick Lowe sent to Pilkingtons on 4 June 2003, which was tendered to you this morning. I think the important part of that letter is the actual date it was sent, that was on
4 June 2003. In that letter, Dick Lowe says that there has been an error in the award due to the award simplification process. I'll just point out that he doesn't say anything about appendices missing, or anything, he doesn't give any real detail about what the error is, just that there is one, and that it has to do with the shift allowance.

PN51

If that is the case, I am of course - as you'd be aware, Commissioner, Mr Lowe passed away last year - this - the dispute that came before you to do with the award variation came on 17 July 2003. So, as Mr Lowe is not here I can't really ask you what has gone on between 4 June when he sent this letter and 17 July when it came before you, but that's just - I mean, what I'm guessing is that
Mr Lowe's gone away, he's done some further research, and he's found that perhaps the company has not been correct and there hasn't been an error, because I've gone away, I've done that, I've had a look at the documents to do with the award consolidation back in 1998 and I haven't found anything there to say - to support - the company's position that this has been an error all along.

PN52

In fact, there's actually been change to add in that there's a 30 per cent loading for afternoon shift at Laverton, which is essentially the basis of Pilkington's position, is that an error took place at that time, but apart from being told that it was a mistake at the time by the company I've never been informed why. I've even gone to the trouble of getting the transcripts for the time the consolidation took place, to see if there's anything on there to explain it. I'm sorry, I haven't got it with me today, but I haven't been able to find anything in there. There's only two documents in that file. One's a deletion list. The other one is a consolidated award, a draft version of that that went on to become what is now the 1998 award.

PN53

As far as the union never indicating that we opposed the making of the draft application, I had a meeting with Mr Findlay on 16 December last year. That was just a week or so after I started. So, it was really that first meeting. Mr Findlay was just filling me in. I might have taken part in what the history of the matter was. We then tried to have a number of other meetings, they pretty much exclusively had to be rescheduled for a number of reasons both because of me and because of Mr Findlay. Then we had a meeting, the second meeting was on
2 March of this year. At that time, and I made a file note straight after I had that meeting, we spoke about the award variation that the company was after and I told Mr Findlay that I'd have to check with Frank Burrow who's our assistant secretary, and that I could not commit that the union would give its consent to the variation.

PN54

I dispute the company's position that we never indicated that we may have a problem with the variation going through, or the variation which they'd sought going through. That was on 2 March of this year, Commissioner. I believe that if the company wishes to make the variation it really brings up the issue of the safety net, that it will go below the safety net that exists at the moment, and as such previous cases have shown that this is a matter that should be dealt with by a Full Bench, because of that issue, principle 10, in the statement of principles in the safety net adjustment decision. That's where it should properly be dealt with.

PN55

I'd just like to add, Commission, drawing from one of your own decisions, this has to do with the current situation. It's been the company's position since the time the award was consolidated in 1998 - I don't think this is contested by the company - that the award has always said at clause 23.2 that if you work a fixed afternoon shift at Laverton you will receive a 30 per cent. The company's taken the view that that's an error and you will no doubt have that argument and couldn’t ….. as to why that was an error, but nonetheless that award provision has been there since 1998, it continues to be there, and as you say in your decision - and this is PR908734 - from 7 September 2001:

PN56

In regards to the issue ...(reads)... they must comply.

PN57

That is the nature of the Federal Court application that the union has made, because Pilkingtons had not in all the time since 1998 - quite a few years have gone by, Commissioner- sought to bring this, well it's been brought, but only after a dispute was lodged by the Commission. Otherwise, the unions just - the company's taken the view that oh well that's an error it doesn't matter what the award says we'll go ahead and pay it according to what we think. If they wanted to, they could have brought on an award variation. We could have had the matter arbitrated years ago, but that hasn't happened. There's been at least two, probably three enterprise bargaining agreements had been negotiated and certified during the time since the award was consolidated.

PN58

The company has not sought to include a clause in that to deal with this. That's another way they could have overcome the matter. They haven't done that. They've just taken the view that we consider that's an error so that's why we don't pay it. So, Commissioner, what I'd be seeking at this time from you is an order that reflects what is in your directions in that decision of 7 September, and that's that Pilkington comply with the provisions of clause 23.2 of the award and they pay their afternoon shift workers at Laverton the 30 per cent loading and that they also make restitution through backpay for the past six years for all affected employees. If the Commission pleases.

PN59

THE COMMISSIONER: Mr Dalton, do you wish to add anything?

PN60

MR DALTON: Well, there's an old saying, Commissioner, ….. and I think that's exactly what the union is doing here. You've got two clear examples where the union has agreed that there has been an error and that that error should be rectified. You have on transcript that was stated in front of you subsequent to the letter of 4 June so I'm not issue what Mr Reidy was saying about the timing, subsequent to ….. the company found that ….. Mr Lowe found some errors. Well, subsequent to the 4 June letter, Mr Lowe made a commitment on transcript in front of you. You would have thought he would have, before making such a commitment, have investigated the matter thoroughly, and which I'd say that he probably did investigate the matter thoroughly and found yes there was an error, that error needed to be corrected.

PN61

In terms of that, to now say well we're guessing Mr Lowe found an error - well I would say that guess is wrong. So, in terms of this, the principle was agreed. The principle that there was an error in the award simplification, the award made from the simplification process, in not addressing the issue of shift allowances at Laverton was in error. That principle was agreed. It was a matter of the process and really you're only talking about the wording in the agreement that needed to reflect what was the agreed practice at Laverton and Parooka and Geelong. So, in terms of this, we say that this matter can be dealt with quickly, expeditiously, and can be dealt with reflecting the consent of the parties as given to the Commissioner back in 2003. That is, that the shift allowance at Laverton for a standard fixed afternoon shift should be 15 per cent.

PN62

We say that the quickest and most expedient way to deal with that is to make a correction order correcting the decision of Commissioner Lewin for reflecting the error that was made at that time. To now say that this matter should have been dealt with with the EBAs, that this matter now requires backpay for six years for these underpayments, to now say that it was the company's responsibility to negotiate and put the changes through, the union itself admits that it was preparing the order in front of you, Commissioner. To now say that this is all the company's fault and the company should be applying the award, the whole position here is that the simplified award was in error. That is an agreed position as stated in the letter and as stated in transcript.

PN63

To apply an erroneous award is only compounding the error. So, in terms of - I can't speak for the motivation of the union in terms of bringing this matter before the Federal Court. I can't speak to the motivation of the union for not properly progressing this matter in a timely way when it had numerous opportunities to do so. What I will say is that to not correct this error would be a grave injustice to the employer and would serve no useful purpose at all. In terms of that, Commissioner, depending on which way you think this matter should be progressed, I'll just leave it there.

PN64

THE COMMISSIONER: Thank you. Mr Reidy, do you wish to add anything?

PN65

MR REIDY: Only that I'll just bring to your attention Commissioner that an award was made between the CFMEU and Bax Global in 2003. This award provides for 30 per cent loading on afternoon shift, was approved by the Commission in 2003. Will it be the case that the facts will turn around and do what Pilkington are trying to do now, read the award as they like not what it says, leaving employees in complete uncertainty as to what conditions apply to them. A strict reading of the Pilkingtons award leaves no doubt that the 30 per cent is the loading that applies.

PN66

The award was made in 1998, the company sat back and did nothing about it, now they're trying to say the union and the company had an agreement about what in principle would happen and that was 15 per cent. Commissioner, case law says that that's not acceptable. That even if the union and the employer do agree they still have to make a variation of the award. Otherwise you end up in a situation where you have an award, it says one thing, but then the union and the employer have fifteen side agreements about what the agreement really means, anyone who reads it can come to the Commission, say this is what the award says, and then say hang on we had this deal. That's why we had the award. It's there so anybody can read it. You don't need to be in the union and know which deals are being done and you don't need to be an employer and know the history of this thing to understand what you're entitled to be paid.

PN67

Now that we've brought this issue up, and it was the union who brought the issue up in 2003, and we're bringing it to a head now. It's only then that the company has responded, and now they want a retrospective variation, which means they don't have to pay what they should have been paying for the past six year. Quite frankly, Commissioner, I mean it's a ridiculous and unfair position that the company is putting, that they're going to be disadvantaged because they have to pay what they should have paid in the first place. It was always open to them to make a variation and they decided not to. They're not a small company. It's their only award. They should know this award back to front and they should have had the change made. I reiterate, Commissioner, it's because of the impact this has upon the minimum terms and conditions in the award that should be dealt with properly by a Full Bench of the Commission. Thank you, Commissioner.

PN68

THE COMMISSIONER: Thank you. I have to say, the Commission was of the view that there was an acknowledgement from both parties that there was an error. That error was to be amended by consent. Unfortunately, both parties - and the Commission recognizes that Mr Lowe who was the industrial officer at the time unfortunately passed away and therefore the matters wasn't concluded in line with what both parties expectations were - this matter reminds me of a similar matter that applied in the auto industry. An application was made for a retrospective order. I've got to say that had to go to a Full Bench that was provided over by Justice Munroe. At the same time, there were proceedings in the Federal Court.

PN69

There are two issues here. One is a retrospective order, which goes back to 1998. The Commission has concern as to whether it has the capacity to do that, but it appears that both parties seem to agree that there might be an issue in regards to the wage fixing principles and that the matter might be best referred to the President as required under those principles to see whether it is appropriate that if the principles don't apply a) whether the Commission has the capacity to issue a retrospective order going back to 1998 and if the principles do apply then it's a question of again whether the President deems it appropriate to put in place a Full Bench.

PN70

Accordingly, what I will do is get the transcript and forward it to the President and seek his opinion as to whether or not it is appropriate for a Full Bench to be convened to deal with either one of the two issues or both those issues. That is, the ability to issue a retrospective order, and the second is the application of the wage fixing principles. In terms of what the union seeks today, the Commission is not prepared to do that given that it is the very clear understanding of the Commission that there was an acceptance from both parties that there was an error, and that's very clear in the Commission's mind and in the transcript.

PN71

For some reason or other, what appears to have been a consent position to amend that error has now been withdrawn by the union in this instance and I'm not quite sure why, but that being the case that's what happened so the matter will be referred to the President.

<ADJOURNED INDEFINITELY [11.42AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #PILKINGTON1 LETTER ACKNOWLEDGING APPENDIX LEFT OUT PN26