C2005/4608, Transcript of Proceedings [2005] AIRCTrans 2629 (30 December 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13708-1

SENIOR DEPUTY PRESIDENT WATSON

C2005/4608

APPLICATION BY NATIONAL UNION OF WORKERS
s.113 - Application to vary an Award
(C2005/4608)

MELBOURNE

9.59AM, FRIDAY, 09 DECEMBER 2005

Continued from 8/11/2005

PN74

THE SENIOR DEPUTY PRESIDENT: Yes, Ms Parkes. You seem to be alone today, well, not alone, you've got Ms Fox to keep you company. That's perhaps explained by correspondence I've received from AIG on 2 December, which indicates that AIG wishes to withdraw its initial objection to your application.

PN75

Discussions were held with organisations, presumably members of AIG that operate within the coverage of the award to ascertain whether there were any difficulties with the proposed variation as a result of discussions. There's no objection to the application and VECCI, through Mr Eberhard as correspondent on the same day indicating that as a distributor and copy of the proposed variation to its members who operate within the coverage of the award and has received from its members no expression of concern or opposition to the application and as a consequence it doesn't oppose your application. So that may save you a bit of work. Yes.

PN76

MS PARKES: If the Commission pleases, as your Honour has noted the union has certainly received copies of the two pieces of correspondence referred to from VECCI and AIG, withdrawing their initial objections to the union's variation to the Commercial Sales (Victoria) Award 1999. Your Honour, in terms of preceding today, we'd obviously like to, your Honour, I should start by saying your Honour would have received a copy of the NUWs submissions.

PN77

THE SENIOR DEPUTY PRESIDENT: I have indeed. Actually, I perhaps should have mentioned one other thing before we proceeded. I did send a memorandum to the President in relation to the potential of one of the matters, the Motor Vehicle Allowance might constitute a departure from the current award, above or below a safety net requiring reference to the President. The President on 15 November indicated that he has considered the application for the matter to be dealt with by a Full Bench and decided it should be continue to be dealt with by myself. Yes, I'm sorry, I think that's all my administrative.

PN78

MS PARKES: Thank you your Honour. Your Honour, the NUW has filed submissions in relation to this matter. Your Honour would note from the submissions that one of the attachments is a witness statement of Ms Fox, and I have Ms Fox here today, given, and I would just like for Ms Fox to be called as a witness just to attest to the accuracy of this statement.

PN79

THE SENIOR DEPUTY PRESIDENT: Yes, very well.

<MADELEINE JAMIE FOX, AFFIRMED [10.02AM]
<EXAMINATION-IN-CHIEF BY MS PARKES

PN80

MS PARKES: Ms Fox, if you could please state your occupation for the Commission?---I'm an organiser for the National Union of Workers.

PN81

Ms Fox, have you prepared a witness statement for this matter?---I have.

PN82

If I could hand the witness a copy of the witness statement and also I've got a copy for your Honour. Ms Fox, does the statement before you state that you prepared this letter?---It is.

PN83

Could you confirm that that is a true and correct statement?---It is.

EXHIBIT #NUW1 DRAFT ORDER
EXHIBIT #NUW2 STATEMENT OF MADELINE JAMIE FOX

PN84

MS PARKES: Ms Fox, in your statement you've referred at paragraph 7 to two third party merchandising companies, namely Powerforce and Counterpoint Marketing, who are respondent to the Commercial Sales (Victoria) Award and attached to you statement there's some documentation that's labelled internet excerpts re Counterpoint Marketing and Powerforce. Are you able to explain to the Commission how those particular excerpts to your statement were obtained?
---Yes, I simply went to the web sites of both of the companies and downloaded, saved and printed those excerpts.

PN85

Your Honour, do you seek to mark those separately, or do you see those as coming within Exhibit NUW2?

PN86

THE SENIOR DEPUTY PRESIDENT: No, no, they form part of the statement.

PN87

MS PARKES: Thank you. Unless your Honour has any further questions, the union does not have any more questions to put to Ms Fox in relation to her statement.

PN88

THE SENIOR DEPUTY PRESIDENT: No. Thank you for your evidence
Ms Fox.

<THE WITNESS WITHDREW [10.05AM]

PN89

THE SENIOR DEPUTY PRESIDENT: Okay, where's Mr Donnelly?

PN90

MS PARKES: In respect of Mr Donnelly's statements your Honour, at attachment A we would note that that particular statement was admitted as evidence when the union made the application for the award to be made common rule before your Honour and that that is a copy of the witness statement that was provided to the Commission as evidence at that point in time. The statement primarily outlines the history of the award regulation, and as I said, we note that it is evidence in previous proceedings in the Commission. Would your Honour seek to mark that?

PN91

THE SENIOR DEPUTY PRESIDENT: Yes, I think I will.

EXHIBIT #NUW3 STATEMENT ACCEPTED AS EVIDENCE IN PREVIOUS PROCEEDINGS

PN92

MS PARKES: Your Honour already has in Exhibit NUW1 the draft order that the NUW is seeking in relation to the variations to the Commercial Sales (Victoria) Award. Essentially your Honour, the union is seeking four variations to the award, involving one, the coverage of the award, two, the vehicle allowance payable to special class commercial travellers, three, the disputes procedure for special class commercial travellers, and four, redundancy provisions for special class commercial travellers.

PN93

Your Honour, as stated, the history of the award regulation is outlined in the statement of Mr Donnelly found in NUW3, and we note that since the making of that statement, the award was declared common rule with the order of issue by yourself on 10 November 2004. Your Honour, the NUW seeks to rely on the submissions that we have filed in relation to this matter to support the four variations in question.

PN94

Your Honour, paragraphs 5 through to 24 of our submissions deal with the first proposed variation, namely the coverage of the award. The NUWs arguments are outlined there, essentially our arguments in support of this particular proposed variation are that one, the variation falls within our traditional coverage of commercial travellers, two, the variation will update the award and avoid any potential ambiguity concerning the application of the award by specifically recognising the changing nature of the industry and how the work is performed.

PN95

Third, the primary argument that the award already covers third party merchandising companies and our variation merely seeks to clarify this and fourth, in the alternative, if the Commission finds against us on that point, that if employees of third party merchandising companies are not covered by the award, that the variation would then be necessary to ensure that they were. If I could take your Honour to the second and third points there, which are found in paragraph 11 onwards of our submissions.

PN96

THE SENIOR DEPUTY PRESIDENT: Yes.

PN97

MS PARKES: Ms Fox's statement adds to these submissions in explaining how the nature of the industry of sales representatives and commercial travellers has changed over time. Traditionally, such employees who are involved in soliciting orders or promoting business or sales of enquiry was done in-house essentially. For example, you might have a manufacturer that produced a range of food products and they would then hire sales employees such as sales representatives and merchandisers who would then go round to varying grocery stores for example and the sales representatives would seek to sell the products and the merchandisers would seek to promote the products and build displays etcetera, for example at a supermarket.

PN98

Traditionally, this role has been performed in-house, and that was the context in which the award was initially drafted, and its origins as outlined in Exhibit NUW3, being in the former state award of the Industrial Relations Commission of Victoria. Now, just like there's been an emergence in the labour force of contracting and labour hire arrangements, so there has been this, in this particular industry of sales representatives and commercial travellers. Ms Fox's statement has outlined some examples there, for example, GlaxoSmithKline and McCormick Foods is[sic] two companies who have previously employed merchandisers in-house, and have in more recent times contracted out such work to what we would call third party merchandising companies.

PN99

So, whilst the work performed is essentially the same, the identity or nature of the employers is not. We argue that the proposed variation will update the award in relation to any potential ambiguity as to whether employees who might be labour hire employees or arrangements for third party merchandising companies, because the variations specifically refer to these entities as employers.

PN100

Our next argument your Honour, is that we are strongly of the view that the award already covers what we call third party merchandising companies and that the variation merely seeks to clarify this. Ms Fox's statement outlines two particular companies. For example, Powerforce Total Merchandising Proprietary Limited and Counterpoint Marketing Services Victoria Proprietary Limited, which are both respondent to the Commercial Sales Award and are both what we would call third party merchandising companies, in that they outline, they perform key activities for example manufacturers and producers of goods.

PN101

If I could take your Honour to the attachments to Exhibit NUW2 of
Ms Fox's statement, the internet extracts for the two particular companies in question. The first one is Counterpoint Marketing and the profile, it states there:

PN102

Counterpoint Marketing Sales Proprietary Limited is a national leader in offering a range of sales and ...(reads)... major brands in the Retail, Grocery, Pharmacy as well as Wholesale channels in both Australia and New Zealand.

PN103

The next page then provides a picture of what looks like an employee in front of what looks like a grocery aisle, it states:

PN104

Our dedicated merchandising team who are co-ordinated by Field Sales Managers cover distribution ...(reads)... of merchandisers and sales representatives across Australia. We call on more than 3000 stores nationally.

PN105

Finally, further on in that first extract, is then a reference to a job description for field merchandising which provides that:

PN106

Presently we have several opportunities. The successful applicant must be motivated, energetic and have ...(reads)... is desirable. Also, applicants must posses excellent communication skills, an eye for detail and a reliable vehicle.

PN107

So we say that is the first example of something, what we would call third party merchandising, where the particular company would have contracts or commercial arrangements in place with for example, manufacturers and suppliers to perform that sort of merchandising work for them.

PN108

The second example is Powerforce, which is also contained in that particular extract. Similarly, at the end of the Powerforce documentation there is once again a job description for merchandisers which provides that:

PN109

We currently have a number of positions available for Grocery/Impulse Merchandisers working with well ...(reads)... providing. Plano gram experience is also well regarded. These roles offer flexible working hours

PN110

Etcetera, etcetera. So, we would use those two excerpts in addition with the fact that those two particular companies are named respondents to the award to support our argument that the award indeed already covers third party merchandising companies and that the variation we seek just merely seeks to clarify this.

PN111

THE SENIOR DEPUTY PRESIDENT: Is the effect of varying, or sorry, deleting the current 6.4 and inserting the new 6.4 is essentially to include in 6.4.2 express reference to third party merchandising company?

PN112

MS PARKES: That is correct your Honour. The other reference in relation to that is that the first point of 6.4 that the reference is to change it to promoting products rather than the employer's products, because with third party merchandising, you're planning product of the manufacturer, as distinct from the third party merchandising company perhaps having its own grocery products that it itself manufactures. Because those two examples that we've provided are where they're offering their services to other companies, it's not a situation where those companies manufacture their own grocery or pharmaceutical products. That is the effect of the variation your Honour, yes.

PN113

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN114

MS PARKES: We would also note your Honour, that Exhibit NUW3, the witness statement of Mr Donnelly that was, that was an exhibit in the common rule proceedings noted that it was not objected to by AIG or VECCI in that particular matter noted that a cursory review of the respondence list of the award back in November 2004 indicated that it applied to sales representatives and/or merchandisers in the following sectors and one of those sectors was third party sales and merchandiser operations.

PN115

Your Honour, the next argument is essentially an alternative argument if your Honour does not find favour with our earlier arguments. The alternative argument is this, is if the Commission is of the view that employees of third party merchandising companies are not covered by the award, a variation would then be necessary to ensure that they were. Essentially, the basis of this alternative argument is notes the purpose of common rule awards to apply across a particular industry in to provide a safety net there in force of the minimum wages and conditions.

PN116

Under that alternative argument, granting the variation would then ensure access to the award safety net for all Victorian employees employed within the industry of commercial traveller, regardless of the nature or type of the particular employer and we would say that that's consistent with section 141(1) and section 493A of the Act. We'd further note that we're not aware of other industry awards that would apply to employees of third party merchandising companies to perform the type of work covered by this particular award.

PN117

The second variation your Honour that the NUW seeks is in relation to the vehicle allowance for special class commercial travellers. This is outlined from paragraph 25 through to 37 of the NUWs written submissions. The essence of the variation sought is that special class commercial travellers who are not provided with a motor vehicle by their employer should be entitled to receive a vehicle allowance that is no less than the minimum allowance established by the award in relation to commercial traveller.

PN118

I'll just take your Honour through that proposition. The award currently outlines two classes of commercial travellers. One is what is called a commercial traveller and there is[sic] four varying different levels there. The second category is what is called a special class commercial traveller, who essentially earns a higher rate of income and have specific conditions outlined in appendix A to the award.

PN119

Now, the, clause 22.9 of the award outlines the vehicle allowance for the normal commercial travellers, and there's two components to that your Honour. One is an overhead cost allowance, which factors in a range of things such as the cost of buying a car, the cost of insurance, the cost of cleaning and maintaining it, depreciation etcetera. It's spelt out in a 1977 decision of Chairman Saker of the Commercial Travellers Wages Board of the then Industrial Relations Commission of Victoria, the various components that add to that and if I could hand your Honour a copy of that determination.

EXHIBIT #NUW4 DETERMINATION

PN120

MS PARKES: If I could briefly just take your Honour though that particular determination. Chairman Saker indicates on the first page, there's an underline section where he's stated that:

PN121

In pursuit of these claims the employee sought to introduce new concepts and standards in assessing overhead ...(reads)... overhead costs allowances based on identifiable components and acceptable accounting procedures.

PN122

On the second page, his Honour notes, and unfortunately these paragraphs aren't numbered, but at the second paragraph from the bottom, Chairman Saker stated that:

PN123

This is certainly the largest in-depth examination of these allowances that has been undertaken before the Commercial Travellers Wages Board.

PN124

Now, at the end of Chairman Saker's determination, there are some tables outlining all the various factors that were identified as contributing to the overhead cost allowance and they include the average price of an automatic vehicle, government stamp duty, dealer's delivery charge, external weather windshield, front seat covers, first aid kit, compulsory third party insurance, drivers license registration fee, garage, repaint and panel beating

PN125

And there was a discounted amount for private use. There was also then factored in in later years, items such as depreciation. So your Honour, this was something that was contested, this was an outcome that was determined and this has essentially been followed for the overhead cost allowance component of the allowance in the form of Victorian award, it was then updated before Commissioner Luckman of the then Commercial Travellers and Market Researchers Board in 1991.

PN126

When the state award, or when the union sought to make a federal award it reflected the previous state Commercial Travellers Award and that particular aspect of the allowance was recognised and maintained by the parties. The second aspect of the allowance is a kilometre rate, which is adjusted annually on a CPI basis in respect to increased costs to private motoring and petrol. So they are the two components of the allowance for commercial travellers.

PN127

In respect of this special class commercial travellers, clause 2 of appendix A of the award, appendix A governing their conditions, provides that the employee should be provided with a statement of engagement, which details conditions of employment with respect to:

PN128

Provision of motor vehicle or any allowance in lieu of providing a vehicle.

PN129

The issue is that appendix A does not directly specify the amount of the allowance that should be paid where the employer does not provide a motor vehicle. So the essence of our application is that the allowance be no less than the allowance applicable to other commercial travellers under the award.

PN130

So, essentially we're seeking to create or to avoid ambiguity in relation to whether there is a safety net in respect of the allowance for special class commercial travellers by specifically referring, by specifically inserting the variations sought. We would say that is unfair to have an established minimum vehicle allowance for one category of employees under the award and to have ambiguity or doubt as to what allowance may or may not be applicable to a second category of employees under the same award.

PN131

We say that the allowances in the main part of the award have been recognised and accepted by the parties to the award, been adjusted in accordance with a statement of principles and as such are an appropriate amount which should apply to the special class commercial travellers. Your Honour the third variation sought by the NUW seeks to avoid any potential ambiguity in relation to whether the disputes procedure in the award has application to special class commercial travellers and our arguments are outlined at paragraphs 38 to 40 of our submissions.

PN132

Essentially we seek to once again specifically state in appendix A that the disputes procedure that applies for special class commercial travellers is the same that applies to other commercial travellers under the award. We would say that this is also consistent with the objects in section 3(b), (e) and (h) of the Act and also consistent with section 91 of the Act, clarifying that there is indeed a procedure to the parties to prevent and settle disputes between them.

PN133

Your Honour, the fourth variation is outlined at paragraphs 41 to 43. This is essentially in relation to the redundancy provisions. The NUW seeks to give effect to the redundancy case decision found at PR032004 and the redundancy case supplementary decision of the Full Bench found at PR062004.

PN134

When the award was varied to insert the Redundancy Test Case provisions, the reference to redundancy for the special class commercial travellers was overlooked by the parties, so the redundancy provisions were updated for the commercial travellers that are covered by the main part of the award, but the redundancy provisions in appendix A were not updated so the union seeks to rectify these and via the variation by providing that the redundancy provisions for special class commercial travellers are in accordance with the Redundancy Test Case decision. Once again, we say that that is consistent principle one, role of arbitration in the award safety net and principle four, test case standards.

PN135

Unless your Honour has any questions, that would conclude our submissions, if the Commission pleases.

PN136

THE SENIOR DEPUTY PRESIDENT: Right, thank you for that. Bear with me one moment. This is an application pursuant to section 113 of the Workplace Relations Act 1996 by the National Union of Workers to vary the Commercial Sales (Victoria) Award 1998 to in four respects to clarify the application of the award and secondly to vary the award to make it clear or create an entitlement to receive the vehicle allowance for special class commercial travellers. Third to make clear or apply in disputes procedure to special class commercial travellers and finally to apply Redundancy Test Case provisions to special class commercial travellers.

PN137

The application and notice of hearing was subject to an order for substituted service and I'm satisfied that the union complied with the requirements of the order for substituted service and indeed at the first hearing on 8 November of this year each of the employer organisations required to be notified of the proposed variation attended and appeared and put submissions. The initial submissions of the employer organisations made on 8 November sought in effect an adjournment of the application to allow each of them, VECCI and AIG, to confer with relevant members and to in effect obtain instructions from relevant members.

PN138

In letters of 2 December in each case both AIG and VECCI advised that they had consulted relevant members in relation to the application, held discussions with them in the case of AIG. There had been no VECCI member indicating a desire to confer with that organisation. The outcome of the investigations and discussions, communication with members in each case was neither VECCI nor AIG opposes the application in any respect.

PN139

In the initial hearing, the NUW raised the potential that one element of its application variation in respect to the vehicle allowance might involve an increase above or below a safety net which pursuant to principle 10 of the May 2005 safety net review principles would require a reference to the President to consider whether or not a Full Bench should be constituted. By memorandum of
11 November 2005, the matter was referred to the President on that basis. By memorandum of 15 November, the President decided the matter should continue to be dealt with by myself.

PN140

The application of the union is supported by written submissions and additional verbal submissions put today, evidence in the form of an affidavit, a witness statement of Ms Fox which was sworn adopted by her. An affidavit of
Mr Charles Donnelly, General Secretary of the NUW which was admitted as evidence in common rule proceedings and not challenged in any respect in those proceedings.

PN141

The first variation sought is to delete the current clause 6.4, which deals with coverage of the award and to insert a new clause 6.4, the effect of which is to make explicit the coverage of the award in respect to commercial travellers engaged by third party merchandising companies, agents or brokers. This application is brought to reflect a trend within the agency evidenced in Ms Fox's statements, statement of an increasing incidence of manufacturers entering into commercial arrangements with third party sales and merchandising companies to have performed the traditional work of commercial travellers in respect to their products.

PN142

The NUW contends that the award already covers third party merchandising companies and the variation seeks to clarify the application of the award to relevant employees of those companies or in the alternative, if they are not, to ensure that the award does operate in respect to commercial travellers engaged by that third party through those third party arrangements. In either case it is contended the work falls within the eligibility rules of the NUW in respect of rules 4 and rule 5(d).

PN143

From the evidence before me that Ms Fox and the statement of Mr Donnelly from the earlier proceedings, it appears to me that the award has application in respect to third party merchandising and the effect of the variation sought would be to address and rectify any potential ambiguity concerning the application of the award. Even if I'm wrong in relation to that, the variation should in my view have effect in any case to reflect the changing circumstances of the industry in relation to the manner by which commercial traveller employment is undertaken.

PN144

I am satisfied that the work does fall within the coverage of the NUW and that your variation can be made within the coverage of the NUW. In respect to that matter I will approve the variation sought by the NUW, as I said, removing any potential ambiguity concerning the application of the award by making clear the application of the coverage of the award.

PN145

In respect to the vehicle allowance, again it is arguable that the allowance applies already to special class commercial travellers, although on balance I'd think that the award turns, not specifically have that effect, however I'm satisfied that the award should be varied in this case to create an entitlement to the vehicle allowance if it does not already exist to special class commercial travellers. The allowance in question hadn't been properly fixed and has been subject to extensive consideration by Commissioner, Chairman Saker in the four month Victorian Industrial Relations Commission Board.

PN146

I'm of the view that the allowance as currently applies to commercial travellers in the award is appropriately fixed and constitutes an appropriate safety net which should be applied to special class commercial travellers. Accordingly the award will be varied to extend that allowance if there's not already exists to special class travellers.

PN147

In respect to the disputes procedure, the award will be varied to remove any potential ambiguity and ensure that the disputes procedure does apply equally to special class commercial travellers as to other commercial travellers under the award. The variation is consistent with the objects of the Act in section 91 of the Act and finally I'm satisfied the award should be varied to apply test case redundancy standards to special class commercial travellers. The variation has the effect of applying the most recent test case standard which is an appropriate safety net standard. I'm satisfied that the award should be varied in that respect.

PN148

Accordingly I will vary the award in the terms of the draft order tendered by the NUW and mark Exhibit NUW1, the order shall come into force in the first full pay period to commence on or after 9 December 2005 and shall remain in force for a period of 6 months. Unless there's anything further I'll now adjourn.

<ADJOURNED INDEFINITELY [10.41AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

MADELEINE JAMIE FOX, AFFIRMED PN79
EXAMINATION-IN-CHIEF BY MS PARKES PN79
EXHIBIT #NUW1 DRAFT ORDER PN83
EXHIBIT #NUW2 STATEMENT OF MADELINE JAMIE FOX PN83
THE WITNESS WITHDREW PN88
EXHIBIT #NUW3 STATEMENT ACCEPTED AS EVIDENCE IN PREVIOUS PROCEEDINGS PN91
EXHIBIT #NUW4 DETERMINATION PN119