AG2005/5985, Transcript of Proceedings [2005] AIRCTrans 2291 (4 November 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13245-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2005/5985

APPLICATION BY CADBURY SCHWEPPES PTY LTD & GWATKING, CHRIS
s.170LK - Agreement with employees (Division 2)
(AG2005/5985)

ADELAIDE

3.40PM, THURSDAY, 20 OCTOBER 2005

PN1

MR R CAIRNEY: I am from the South Australian Employee Chamber of Commerce and Industry Incorporated trading as Business SA, also on behalf of W Schweppes Pty Ltd. Today I have with me MR A MORRISON who is operations manager and MR C GWATKING who is the employee representative.

PN2

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Cairney.
Mr Morrison and Mr Gwatking please sit down, thank you. Now Mr Cairney I've read the statutory declarations and I've read the agreement I have a number of questions about first of all the process that was followed in this matter and then I have some questions about the agreement itself.

PN3

MR CAIRNEY: I'm happy if you are, Deputy President, to perhaps talk about them in that order if you wish.

PN4

THE SENIOR DEPUTY PRESIDENT: Yes, that's what I propose to do. If we go to the process then the statutory declarations refer to a notice of intention. Is that the notice or the internal memorandum that was forwarded to maintenance employees on the 23rd, 24 May of March 2005, I'll get it right in a moment?

PN5

MR CAIRNEY: That's my understanding.

PN6

THE SENIOR DEPUTY PRESIDENT: Now that document is attached to the back of my version of the agreement.

PN7

MR CAIRNEY: Well bearing in mind as you no doubt know from reading the agreement, there are only two employees.

PN8

THE SENIOR DEPUTY PRESIDENT: Yes. I understand that. The difficulty though I have is the extent to which that internal memorandum of the 24 March meets all of the requirements of section 170LK of the Act and you might need to help me in that regard, on the face of it, it doesn't seem to do so. Perhaps
Mr Morrison and Mr Wakeling? Gwatking, thank you. Gwatking's benefit, section 170LK represents the only section of the Act which provides the capacity for an employer to reach an agreement, a collective agreement, with employees without the necessary involvement of an union and as such it set out or it sets out a process in some detail and both the Act and numerous decisions of the Commission indicate that I need to be satisfied that each of the steps was followed.

PN9

It's at that point that it's not uncommon for people to fall fowl of the provisions of the Act and be the first to say it’s probably not worded as simply as it could have been. But Mr Cairney the issues that I have in that regard can be perhaps set out - should I understand that that memorandum was forwarded to employees at or at some time after the employees were given a copy of the agreement in its final form?

PN10

MR CAIRNEY: No.

PN11

THE SENIOR DEPUTY PRESIDENT: Yes. Well you see that's the first issue and that goes to section 170LK(2) and (3). Secondly the difficulty that I have is that section 170LK(4) sets out the requirement that the notice provided by the employees - sorry by the employer to the employees must state that if a person whose employment will be subject to the agreement is a member of a union in effect, and that union is able to represent that person's interest, the person may request the union to represent them in meeting and conferring with the employer about the agreement. There are numerous decisions that indicate that there is some flexibility associated with those words but in this instance there is a requirement in the letter of 24 March that if a person wishes to be represented they need to advise Mr Morrison or Mr Seecomb so that the representative can participate in the negotiations from the beginning.

PN12

Now there have been a number of decisions and in particular some Full Bench decisions that have called into question the extent to which that requirement that the employee who wants to be represented by someone must in effect tell the employer that, is consist with the provisions of the Act and that represents the second problem that I have. The third problem that I've got goes to the extent to which once the document was negotiated or changed section 170LK(8) appears to provide or require that a new notice be issued and I don’t know whether that happened.

PN13

Now if - or unless you're able to address those problems I need to indicate to you, I'm not going to be able to certify the agreement today, but having said that I should say all is not lost because what I propose to do in that event is to give the parties the option of repeating the agreement making process. Possibly taking into account the various questions that I have about the agreement itself, and providing me with a copy of the agreement in its then final form together with new statutory declarations and some sort of advice - sorry and I should say and a copy of the notice of intention together with some form of advice that enables me to rely upon information I might be given today and in that event I would hope to be able to certify that agreement without the need for a further hearing.

PN14

Now I'm in your hands you're welcome to persuade me that the requirements of section 170LK have been met but I do see some difficulties.

PN15

MR CAIRNEY: Perhaps I'll deal with, I think, which was the second issue in terms of representation. I obviously understand what you're saying and talking with Mr Gwatking prior to the hearing the two employees were certainly fully aware of their right to involve representation so if they so desired right from the outset.

PN16

THE SENIOR DEPUTY PRESIDENT: Look I have no doubt that's the case. The criteria in the Act is different though.

PN17

MR CAIRNEY: I understand where you're coming from.

PN18

THE SENIOR DEPUTY PRESIDENT: Yes.

PN19

MR CAIRNEY: Perhaps what I might do at the moment is if having heard what you've said, if you could indulge me for a moment.

PN20

THE SENIOR DEPUTY PRESIDENT: Certainly.

PN21

MR CAIRNEY: Just to talk with the parties about the best way to go about it.

PN22

THE SENIOR DEPUTY PRESIDENT: Look I won't adjourn the matter but by all means have a discussion amongst yourselves for a few minutes.

PN23

MR CAIRNEY: If we could.

PN24

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN25

MR CAIRNEY: Thank you. Thank you for that Deputy President. Having spoken to Mr Gwatking and Mr Morrison perhaps what we would suggest is, having heard your comment on the notice, is that we now listen to perhaps some issues with the agreement and take those onboard so that we would then go back and address any more issues by way of issuing a new notice, addressing any issues you may have with the agreement and then waiting the required 14 days and then having another vote and redoing the stat decs and any obviously adjustments to the agreement and then refile them.

PN26

THE SENIOR DEPUTY PRESIDENT: Yes. There is one other matter of a procedural nature. It appears to me the agreement was filed some four days outside of the time frame lodged identified in section 170LM. Given the process the parties now propose to follow, I'll use the discretion inherent in section 111(1)( r) of the Act to extend that time frame for lodgement.

PN27

MR CAIRNEY: Thank you.

PN28

THE SENIOR DEPUTY PRESIDENT: Clause 6 of the agreement, Mr Cairney, refers to commitments and it mentions in 6(2):

PN29

Previous site specific agreements.

PN30

Are those previous site specific agreements documented?

PN31

MR CAIRNEY: I just have to take instructions.

PN32

THE SENIOR DEPUTY PRESIDENT: Yes.

PN33

MR CAIRNEY: Yes. We have an interesting situation, Deputy President, because I am instructed that in fact, the reference which both Mr Gwatking and Mr Morrison drew on besides specific agreements agreed to, are in fact the previous certified agreements.

PN34

THE SENIOR DEPUTY PRESIDENT: I see.

PN35

MR CAIRNEY: Which it is my understanding, for example, the 2003 agreement would be superseded by this one.

PN36

THE SENIOR DEPUTY PRESIDENT: Yes.

PN37

MR CAIRNEY: And 2001 would have been superseded by the 2003.

PN38

THE SENIOR DEPUTY PRESIDENT: Except that what I'm reading into 6(2) is that where there is a particular benefit in one of those now superseded agreements that exceeds the benefits in this agreement, that earlier benefit will be retained.

PN39

MR CAIRNEY: Yes. I guess the difficulty from an arm's length point of view with that is that I understand from Mr Morrison and Mr Gwatking, agreements started in 1995, so I would see some difficulty in easily identifying back that far, 10 years, if there was a more superior benefit. I guess where I'm leading, Deputy President, is that could create in itself some inadvertent issues.

PN40

THE SENIOR DEPUTY PRESIDENT: Yes but the option exists in this regard for the parties to modify that provision.

PN41

MR CAIRNEY: Yes, I understand.

PN42

THE SENIOR DEPUTY PRESIDENT: I'm picking up that you may to do so.

PN43

MR CAIRNEY: Yes.

PN44

THE SENIOR DEPUTY PRESIDENT: Suffice to say, if you don’t wish to do so, I will need to be provided with some confirmation that those previous agreements actually exist in a written form and that they are readily available to employees.

PN45

MR CAIRNEY: They certainly exist in a previous form because as I understand it these are all the previously certified agreements.

PN46

THE SENIOR DEPUTY PRESIDENT: Now if we move then to clause 10 which is the dispute settlement clause. Clause 10(2) appears to be a remanent from a presumably an earlier iteration of an agreement which had a union as a party to it. There is absolutely no difficulty with retaining that particular provision. The question that I have though is should I understand that the reference to union in that regard is to any union that an employee may be a member of and that if an employee is not a member of any union they could be represented by a person or organisation of their choice?

PN47

MR CAIRNEY: I'll take some instructions on this. My understanding from the two parties are that it's to ensure that the employee has some form of representation.

PN48

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN49

MR CAIRNEY: Union or non-union.

PN50

THE SENIOR DEPUTY PRESIDENT: Clause 11 deals with the annual appraisal and wage increase. Should I understand that the appraisal system with particular reference to those team and personal objectives exists in a documented form in relation to each employee?

PN51

MR CAIRNEY: That’s correct.

PN52

THE SENIOR DEPUTY PRESIDENT: In terms of that appraisal system, the second last paragraph of that clause talks about an annual salary increase being based on the results of this proposal and taking into account the CPI figure, local industry wage increases and the performance of the company. Presumably that's some form of over award payment or over agreement payment?

PN53

MR CAIRNEY: Yes, be a minute.

PN54

THE SENIOR DEPUTY PRESIDENT: Yes.

PN55

MR CAIRNEY: Yes, Deputy President, it is an over agreement increase.

PN56

THE SENIOR DEPUTY PRESIDENT: Yes. Clause 12 talks about the annual salary and in that regard am I correct in taking the annual salary as that amount or those amounts set out in appendix 1 on the basis that those figures will be increased on an annual basis pursuant to clause 11? And if I am correct in that regard then should I understand that the review of the salary each year against the award wage levels will take into account all of the allowances and the totality of the award provisions so as to ensure that at least those award minimums are met?

PN57

MR CAIRNEY: That's correct and there's also in the second paragraph of clause 12 that the salaries will be audited from time to time to ensure that that occurs.

PN58

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Now clause 13 deals with the quality and productivity bonus. Is there a requirement that all of those targets are achieved so as to qualify employees for the lump sum bonus or is the case that if not all of those targets are achieved there might be a payment of part of that bonus? That is, is it a case of achieve all of the prerequisites and get the bonus or achieve less than all of the prerequisites and not get the bonus?

PN59

MR CAIRNEY: Deputy President, I understand from the parties that if all of the targets are met including the bonus will be paid. If they're not all met then it's discretionary.

PN60

THE SENIOR DEPUTY PRESIDENT: On the part of the employer?

PN61

MR CAIRNEY: Yes.

PN62

THE SENIOR DEPUTY PRESIDENT: All right and if we continue then to the last paragraph in clause 13 which says:

PN63

That there is an option for the bonus to be paid in cash before Christmas.

PN64

Am I correct in understanding that option is at the discretion of the employer?

PN65

MR CAIRNEY: As I understand, Deputy President, if the company is satisfied that the targets will be met and then the individual employee is happy to be paid in cash before Christmas, then it will occur. It needs the two elements.

PN66

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 15 refers to an arrangement that may be changed or - sorry to business coverage issues inside and outside of normal hours under a roster which might be changed by arrangement. Should I understand that that roster might be changed by arrangement with an individual employee or does it require an arrangement to be agreed with all of employees covered by the agreement?

PN67

MR CAIRNEY: Deputy President, it can be either individual or with both employees.

PN68

THE SENIOR DEPUTY PRESIDENT: Thank you. Now that takes me to appendix 2, Mr Carney, which is the national redundancy agreement. Given that this is proposed for inclusion in this agreement which does not have the LHMWU as a party to this agreement, should I understand that this national agreement exists in some other certified form? Because if it does not then it gives rise to a question as to how I can endorse this agreement or certify this agreement which incorporates a parties bound clause which binds a union which is not a party to this agreement?

PN69

MR CAIRNEY: Just bear with me.

PN70

THE SENIOR DEPUTY PRESIDENT: Yes.

PN71

MR CAIRNEY: Thank you, Deputy President, in discussions with the parties, I think what we'll do with that is take your comments on board and address those when we go through the process again.

PN72

THE SENIOR DEPUTY PRESIDENT: I see.

PN73

MR CAIRNEY: I understand certainly it's in a state certified agreement as I understand it and it is I also think in one or two federal agreements but obviously there are a couple of options.

PN74

THE SENIOR DEPUTY PRESIDENT: Well one option you might want to consider, Mr Cairney, is simply recognise in the body of the agreement in a redrafted clause 28 the parties intend to apply the redundancy benefits that are set out in that agreements and side step all together the question of parties to that particular agreement.

PN75

MR CAIRNEY: I understand.

PN76

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Now that completes the questions that I have in relation to the agreement. I can indicate that I consider all of those issues are relatively easily resolved and hence I would be optimistic that if I am presented with material that demonstrates that a process was followed consistent with section 170LK and those issues are addressed then I would be hopeful that I could certify the agreement from the date upon which I am provided with that information.

PN77

MR CAIRNEY: Thank you. All of us go back and start the process.

PN78

THE SENIOR DEPUTY PRESIDENT: Now I will be reliant upon you to help the employer out in terms of the steps in 170LK.

PN79

MR CAIRNEY: Yes, we have already discussed that, Deputy President, and I will provide a draft and Mr Morrison can fill in the gaps and we will start the process and ensure that it's done correctly.

PN80

THE SENIOR DEPUTY PRESIDENT: I see. Thank you.

PN81

MR CAIRNEY: Thank you.

PN82

THE SENIOR DEPUTY PRESIDENT: Now Mr Gwatking, in terms of your understanding of this matter it's important that I stress to you that I've reached a conclusion here which is that in effect the parties have arrived at this agreement through a process which suited you people which was probably unquestionably fair and equitable in terms of its various steps. The unfortunate reality is that it doesn’t meet the requirements of the Act. The only potential down side of the requirement that the process be repeated is that sometimes there is confusion in the workplace about why that is necessary. So do you have any questions about why it is that I'm asking the parties to repeat the process because if you do I'm very happy to try to answer them for you now?

PN83

MR GWATKING: I think I'm pretty - what would you say, sort of understanding of it.

PN84

THE SENIOR DEPUTY PRESIDENT: Yes.

PN85

MR GWATKING: I mean, I was there when the first Act started in 1995 and I sort of knew how it all came together and the only thing that sort of confuses me, they could get it stamped like last time and why can't it happen this time because there is hardly anything between it?

PN86

THE SENIOR DEPUTY PRESIDENT: Yes that's one of the great mysteries of life in the Commission, Mr Gwatking.

PN87

MR GWATKING: Okay.

PN88

THE SENIOR DEPUTY PRESIDENT: Different Commission members have tended to look at some of these things in different ways.

PN89

MR GWATKING: Okay.

PN90

THE SENIOR DEPUTY PRESIDENT: I can't speak for whoever it was that certified the agreement previously just as I am not aware of the information that was provided to that Commission member about the process that was followed. I can only look at the Act and the information provided to me.

PN91

MR GWATKING: Okay.

PN92

THE SENIOR DEPUTY PRESIDENT: All right. Mr Cairney, please make sure that your client doesn’t give me the documentation that I've asked for within the next 14 days.

PN93

MR CAIRNEY: I can assure you he won't.

PN94

THE SENIOR DEPUTY PRESIDENT: All right. I will adjourn the matter accordingly.

<ADJOURNED ACCORDINGLY [4.11PM]