C2005/4994, Transcript of Proceedings [2005] AIRCTrans 2643 (30 December 2005)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 13650-1

VICE PRESIDENT LAWLER

C2005/4994

APPLICATION BY FINANCE SECTOR UNION OF AUSTRALIA-VICTORIAN AND TASMANIAN BRANCH
s.113 - Application to vary an Award
(C2005/4994)

MELBOURNE

10.32AM, TUESDAY, 06 DECEMBER 2005

Continued from 17/11/2005

PN86

THE VICE PRESIDENT: Mr Matson, I note your appearance for the FSU.
Mr Ruskin you seek leave to appear for AXA.

PN87

MR N RUSKIN: Yes your Honour, I think leave has been granted at the end of the last hearing, is that correct?

PN88

THE VICE PRESIDENT: Thank you.

PN89

MR D MATSON: That's correct your Honour.

PN90

THE VICE PRESIDENT: Thank you Mr Matson. Mr Ruskin is there anything that you wish to add to your outline of argument?

PN91

MR RUSKIN: Yes there is your Honour.

PN92

THE VICE PRESIDENT: Fire away.

PN93

MR RUSKIN: I've got a few things to say. I would like to just - I will be providing a summary of the relevant case law and other cases which are not mentioned in the submissions but the principles of which are in the submissions. There are some page numbering that might need correcting, it seems to depend on the online decision that you get, the number seems to change, so we've printed out another couple of decisions and the page number seems different from the ones last week. So I'll bring those to your attention.

PN94

Just to summarise the arguments before I deal in more detail with section 111(1)(g) matters and they are these. That firstly, as set out in the submission, one looks when it comes to consideration as to whether a matter is an allowable award matter, at the substance of the clause, and in our view the clause to which this variation concerns is a code for handling discipline or performance matters as well as all matters in fact, discipline or performance matters across Australia for all AXA operations.

PN95

Every time a discipline or performance matter is raised by AXA, which can be about whether a bonus should be paid, this procedure - that matter - that performance or discipline matter, that bonus matter must be filtered through this clause, whether or not there is truly a dispute between the employer and the employee. This is not a dispute settling clause this is a performance and discipline clause. In paragraph 10(b) of the submissions which I filed, I make the point that one looks at the characterisation of the award variation proposed - the clause. When one looks at the characterisation it is not a dispute settling clause.

PN96

Paragraphs 16 and 17 of my submissions, I look at the decision of the Full Bench - of a Full Bench of this Commission in the section 109 reviews decisions, which looked at a discipline procedure which was honestly called a discipline procedure but which also contained a disputes procedure about discipline and the Commission rejected that clause. At paragraph 17 the Full Bench said that clause would not allowable[sic] and I just read from paragraph 17 to give a flavour of the decision:

PN97

The clause was defended on the basis that it was part of a dispute settling procedure or incidental there to and necessary for the effective operation of an award. The clause is not a dispute settling procedure but a disciplinary procedure and is not allowable.

PN98

Whilst clause 9.2.6, which is in fact, your Honour, if you go to the bottom of page 7 of my submissions, it is not referring to the whole discipline procedure, but what I'm quoting is referring to 9.2.6 which says:

PN99

If a dispute should arise over the disciplinary action, the course of action to be followed is that -

PN100

Etcetera, etcetera. The Commission says:

PN101

Whilst that clause -

PN102

which is almost parallel to the clause before your Honour -

PN103

has the appearance of a dispute settling procedure it is more properly to be viewed as an adjunct to discipline procedure rather than a dispute settling procedure in its own right.

PN104

So we say your Honour, the Full Bench has rejected the notion that such a clause in the award is a dispute settling procedure. I move to paragraph 18-20 of my submission which is looking at - - -

PN105

THE VICE PRESIDENT: Mr Ruskin, if you took the words in the proposed clause 9(a).

PN106

MR RUSKIN: Yes, your Honour.

PN107

THE VICE PRESIDENT: If you took the words in the brackets out so that it read:

PN108

In the event of a dispute arising in the AXA group of companies in relation to any disciplinary performance matter, the procedure will be as follows.

PN109

Why wouldn't that be classically a dispute settling procedure, albeit a dispute settling procedure that's confined in the extent of it's reached to disputes in relation to disciplinary or performance matters.

PN110

MR RUSKIN: Well - - -

PN111

THE VICE PRESIDENT: I understand the argument that it's based upon as it were giving the word dispute an extended operation that extends beyond its ordinary meaning, but the Commission is not obliged to deal with applications only on the basis of a form of words put forward by an applicant. Whilst I understand the force of your argument - - -

PN112

MR RUSKIN: Yes.

PN113

THE VICE PRESIDENT: - - - if it's properly characterised as a disciplinary procedure, I was wondering how it would look if those words of extension in brackets were taken out. On the face of it it does then appear to be a dispute settling procedure.

PN114

MR RUSKIN: Your Honour two things- - -

PN115

THE VICE PRESIDENT: Which would probably not be capable of activation in most disciplinary or performance contexts.

PN116

MR RUSKIN: Well, your Honour, there are two things to be said about that. If those words were removed, then one would, aside from all other arguments, ask oneself, what is the - well, one looks at 9(a) - there are three things to say.

PN117

Look at 9(a)(1), what is a discipline or performance matter is very much widened in that definition. Provided that where the matter involves allegations of serious misconduct, result in a warning, any loss of earnings or income, now that's bonuses, that's not truly a performance matter that's a matter of management discretion as to whether a bonus should be paid for the performance in the last 12 months. That would be - that could be a consequence of the issue we are deciding, we've got to consider bonuses and we're not granting you one, or only a 5 per cent bonus, not a 10 per cent bonus. That comes into this clause or termination of employment.

PN118

So firstly it's wide, as to what it means by virtue of the definition of discipline performance. Secondly, one asks oneself, it that is rectified, one asks oneself, what is this purpose served of that clause if there is already a dispute settlement procedure in clause 9. If a genuine dispute arises in relation to discipline or performance matters and the process is where there is a dispute you meet with your supervisor then you meet with a representative, that is already in clause 9 and 9(a) does add nothing to it.

PN119

THE VICE PRESIDENT: As I understood the heart of this matter to be, having received a sort of 30 second report from Commission Smith. It was an - the issue was about union representation in the context of hostile discipline or performance reviews. Hostile in the sense that things are being raised which are critical of the conduct or performance of the employees.

PN120

MR RUSKIN: Yes your Honour. Yes the heart - - -

PN121

THE VICE PRESIDENT: That's the sole concern that the union has put on some evidence which is suggestive of their being circumstances where employees benefit from representation where they are subject to a hostile discipline or performance review. What's your attitude to an amendment to clause 9, which would underscore the entitlement to representation in the event of a dispute.

PN122

MR RUSKIN: Because the - just dealing with that merit issue, if you could call it that. I mean I understand your description of what this is about and I - and that's probably right. This seems to be driven by a concern by the union that somehow it's rights are being compromised and its members rights are compromised.

PN123

THE VICE PRESIDENT: I understand the union's concerns to be focused entirely on the interests of its members and that its members interests are more effectively advanced in certain contexts if they have the benefit of union representation if they want to have it.

PN124

MR RUSKIN: Well your Honour, certainly the second is - I agree with the second and I restate the first. But it is about the issue, let us say, of representation. Now the question is the degree of representation. If one looks at the policy of AXA, which your Honour has received in the materials from the FSU and in the correspondence between AXA and the FSU, what is apparent is that AXAs has a performance and discipline policy whereby a person can be - is entitled at a point where there is an issue that becomes more serious, is entitled to have a person present at the performance or discipline meeting. That person can obviously advise if it's a case of the union and its member before the meeting, it can stop the meeting and clarify or give advice to a member outside of the meeting.

PN125

Thirdly, it can stop the meeting and ask to speak directly with management about the matter. The difference it seems to me is that the union is saying during the meeting there should be a right - - -

PN126

THE VICE PRESIDENT: They want a speaking right.

PN127

MR RUSKIN: They want a speaking right. As the evidence itself - the union itself has filed in this Commission, it gives two, I think, examples in the second witness statement of that happening. There was the discussion beyond the silent witness process, it seemed to be right at the time and that occurred. So that's what this issue is about and if there is a - to the extent that clause 9 of the award does deal with performance and management matters, I don't see any need for any variation. But what we say about that is the third issue about the proposed - your Honour's suggested variation to the union variation, which is this, the Hegarty principle, which is that you can't have in an award a dispute settling procedure about a matter which is not already in the award.

PN128

The Hegarty principle is that the purpose of the dispute settling clause is to ensure that the award is enduring and the variation proposed - - -

PN129

THE VICE PRESIDENT: No they would ensure that the settlement is
enduring - - -

PN130

MR RUSKIN: The settlement is enduring.

PN131

THE VICE PRESIDENT: - - - and that's a very significant distinction, because doesn't one need to go back and look at the log of claims and see what the ambit was and to see to the extent to which part of the issues in dispute extended to, for example, performance and discipline.

PN132

MR RUSKIN: Well they don't. The log doesn't deal with that, but in any event your Honour - - -

PN133

THE VICE PRESIDENT: I must say I thought that there were some parts of it that probably did but certainly it's not a seamless blanket. There are gaps in it, which would give rise to problems in any event because obviously the award can't extend beyond the ambit of the dispute.

PN134

MR RUSKIN: Yes, your Honour.

PN135

THE VICE PRESIDENT: Perhaps Mr Ruskin, I should hear from Mr Matson, without seeking to prevent you from fully developing your arguments if you need to. My concern at the moment is as to the utility of this proceeding given the inevitable passage and proclamation of the Workchoices legislation and the effect of section 116A.

PN136

Mr Matson, the Workchoices legislation has passed through the Senate. It's passage through the House of Representatives is a certainty. Its proclamation is a certainty and when it comes into effect, section 116A will have the effect of including in every award the model dispute resolution process and treating every other dispute resolution process and the award as a non-allowable matter. So the upshot will be that clause 9, that the award will disappear, if clause 9(a) were made it could disappear as well. We're here only today concerned with a jurisdictional argument because there are substantive arguments to be had in relation to the substantive matter. What's the utility of having the argument?

PN137

MR MATSON: Your Honour raises a very significant point. Look, the union has applied - - -

PN138

THE VICE PRESIDENT: Before you give me the - your full response, what I was minded to do was to simply adjourn this matter for the time being. There will be a High Court challenge, that much is clear and it's not clear that the Commonwealth's position will be a slam dunk in the High Court. There is a sound arguable case for the challenges.

PN139

If the challenge is successful, and depending upon the extent of the success of the challenge, section 116A may fall way, because I think it's reasonably well established that under the Corporations, rather under the Arbitration Power, parliament can't direct the Commission as to what its arbitrated settlement will be. It can specify criteria and the effect of section 116A is at odds with that particular proposition. Of course if the Corporations Power basis for legislation is upheld, well that's the end of it. Why shouldn't we adjourn the matter until after the court's disposed of it.

PN140

MR MATSON: Your Honour, I would add only one thing to that and that is that the status quo with the employer is - - -

PN141

THE VICE PRESIDENT: Should I say particularly given that agreements are applying at the moment.

PN142

MR MATSON: That puts the material on the agreements and in fact in the evidence that we've put, there are some submissions there as to the operation of the agreement when this matter was before the Commission, before Commissioner Smith, as a section 170LW and the employer argued pretty comprehensively then a very different approach to what it's taking now. So that there, in the employers view there's no room for these matters to be resolved through the enterprise agreement nor was it argued that - - -

PN143

THE VICE PRESIDENT: The agreement doesn't displace the award?

PN144

MR MATSON: It certainly was not arguable with the employer at that time that that was the case. What I would say in response to the proposition of adjourning the matter, is that we have a reasonably effective temporary operation in place that I referred to on the last occasion and that is that whilst this matter is being resolved the parties have undertaken to take a pragmatic, practical view to dealing with these sorts of issues and I would say that to my knowledge so far that has worked pretty effectively. The employer isn't taking the approach of walking into these meetings and reading the silent witness riot act to representatives of the union.

PN145

THE VICE PRESIDENT: I'm assuming Mr Ruskin had instructions to continue that pragmatic approach.

PN146

MR MATSON: I can see that there should be no problem in adjourning the matter on that basis. I would prefer to hand up the submissions that we've prepared today at least - - -

PN147

THE VICE PRESIDENT: Well please do that and I'll place them with the file. Mr Ruskin, are you able to get us instructions about continuing the pragmatic approach along with this matter being adjourned?

PN148

MR RUSKIN: It might be - thank you your Honour, it might that I need more than a turn of the head to get those instructions, it might be that we should adjourn the matter for 10 minutes.

PN149

THE VICE PRESIDENT: Fine.

PN150

MR RUSKIN: If that's all right your Honour.

PN151

THE VICE PRESIDENT: Yes, I'll do that. Yes, thank you, adjourned for 10 minutes.

<SHORT ADJOURNMENT [10.22AM]
<RESUMED [11.08AM]

PN152

THE VICE PRESIDENT: Thanks Mr Ruskin.

PN153

MR RUSKIN: Thank you your Honour. I have spoken with Mr Matson during the adjournment and put to him what AXAs approach would be in relation to what he describes as the current position or the pragmatic approach, how he describes it. I think that what I put to him didn't satisfy him, so it's probably pointless me telling the Commission what it is that we had proposed. I'm happy to do so if you would like it.

PN154

THE VICE PRESIDENT: Well I accept that I'm not the one making the decision as to whether or not there's going to be an adjournment. Mr Matson's opposition is something that has to be taken into account.

PN155

MR RUSKIN: Yes.

PN156

THE VICE PRESIDENT: But at the moment I'm having some difficulty seeing that it's a sensible disposition of the Commission's resources, let alone the resources of the parties to argue this matter further.

PN157

MR RUSKIN: Well we support that your Honour.

PN158

THE VICE PRESIDENT: Mr Ruskin, my provisional view is that there is jurisdiction in the Commission to deal with an application to vary this award. There is no jurisdiction to make the variation in the form that is proposed by the union at the moment, but it does seem to me that you could have a dispute settlement procedure dealing with disputes arising in connection with disciplinary and performance matters.

PN159

The mere fact that there's a disciplinary process occurring or a performance process occurring doesn't mean there's necessarily a dispute in relation to it, but one can hypothesise disputes arising in relation to disciplinary performance processes and one could have a dispute settlement procedure which was directed to disputes of that class without it offending the section 109 reference case principles or Hegarty subject to the question of ambit that arises in relation to this particular log. I think though the union is a long way from demonstrating that it's appropriate to exercise those powers at the moment. But my - - -

PN160

MR RUSKIN: Your Honour - - -

PN161

THE VICE PRESIDENT: But I just don't think it's appropriate to devote the time and effort and resources of the parties and the Commission to the resolution of this in the present context until it was clear that there would be some ongoing utility, which there won't be if the Workchoices legislation is upheld by the High Court.

PN162

MR RUSKIN: Yes your Honour.

PN163

THE VICE PRESIDENT: Mr Matson?

PN164

MR MATSON: Your Honour that leaves us with the question of what happens between now and when the legislation is gazetted, which is this stage mooted to be March, though I haven't heard any firm date about that. We would expect that there would be ample opportunity for disputation in that period also.

PN165

THE VICE PRESIDENT: I accept that things have been going well lately.

PN166

MR MATSON: Well they have with the current arrangement which the employer now doesn't propose to continue apparently.

PN167

THE VICE PRESIDENT: Well - - -

PN168

MR RUSKIN: I'm not sure that that's an accurate statement of - - -

PN169

THE VICE PRESIDENT: I imagine - I didn't think that it was necessarily going to be Mr Ruskin.

PN170

MR RUSKIN: No, your Honour, I don't - not quite sure - - -

PN171

THE VICE PRESIDENT: I understand. I imagine - let me see if I can guess between the lines, AXA simply doesn't want to commit itself on some open ended basis to the maintenance of some status quo when circumstances may change and it may wish to come to a different view about what it should do, but at the moment it's not disposed to conduct itself any differently to what it has been the rest of times.

PN172

MR RUSKIN: You're right your Honour. AXA does not wish to confine itself for the next two or three to some undertaking that's given to the Commission. There hasn't really been an issue that tests the status quo in relation to the FSU for a while, it has not implemented a policy or finalised its policy review pending this matter. Now if this matter's going to be adjourned off for a very long period of time it doesn't want to be held not to be able to complete its review. So in a sense, it wants to - it might not do anything immediately, but it needs - wants to get on with its overall review of a number of policies including that one.

PN173

THE VICE PRESIDENT: I understand. Mr Matson, what I wanted to do is adjourn the matter generally, with leave for you to relist it on short notice and if you have a particular problem with a particular employee who is being subject to a disciplinary or performance process in a manner that you think is materially unfair, and representation has been refused, or the silent witness policy's been revoked then you can have it relisted at short notice and I'll deal with it. I appreciate that what I'm doing is I'm not determining finally the jurisdictional challenge today and that will necessarily have to occur before anything can be done. But Mr Ruskin you have an indication of my provisional thinking - - -

PN174

MR RUSKIN: Yes your Honour.

PN175

THE VICE PRESIDENT: - - - - on what it would - - -

PN176

MR RUSKIN: Yes your Honour, can - - -

PN177

THE VICE PRESIDENT: - - - on which way it would be heading, you can tally your arguments in the, I hope unlikely event, that we find ourselves regathering to deal with the application further.

PN178

MR RUSKIN: Yes your Honour. I'm intrigued by your finding, your interim finding, I accept it's a provisional one and of course there would be a lot more that one would say on the matter to see if - particularly on the issue of the log of claims, that might ….. something else - - -

PN179

THE VICE PRESIDENT: I think I've acknowledged that there - - -

PN180

MR RUSKIN: Yes your Honour.

PN181

THE VICE PRESIDENT: - - - are problems with the - I've only looked at the log, this is a finding that was made 23 December 1983?

PN182

MR RUSKIN: Yes your Honour.

PN183

THE VICE PRESIDENT: By Commissioner Barts, in relation to a log - - -

PN184

MR RUSKIN: Yes your Honour. It's the only clause that seems to bear on the issue is a dispute settlement clause.

PN185

THE VICE PRESIDENT: Clause 11(b), termination of service may have some relevance, clause 12 in relation to redundancy and retrenchment may have some relevance, it seems to me on a quick reading of the log of claims.

PN186

MR MATSON: Your Honour we would obviously have quite a bit to say about that, but among that would be references to some of the clauses in 4(b) relating to the classification, promotion, appeals mechanisms and so forth. In fact we would say that there are a number of clauses there and - - -

PN187

THE VICE PRESIDENT: What did you say, 4(b)?

PN188

MR MATSON: 4(b) under the heading classification, I, IV, VI, XI and XIII all the way to classification and promotion mechanisms. We would also say that in the obvious settlement of disputes clause, I think you've already noted, provides also for, that's clause 43, clause 44 boards of reference is picked up. So there are quite a number of clauses that we would take the Commission to in the event that we were to make proper submissions on the matter.

PN189

THE VICE PRESIDENT: Fine. Look, Mr Ruskin you shouldn't draw the inference that I have some provisional view that you ought lose at the end day.

PN190

MR RUSKIN: Sorry your Honour I didn't hear that.

PN191

THE VICE PRESIDENT: You ought not go away from here with the understanding that I have formed some provisional view that you ought lose at the end of the day.

PN192

MR RUSKIN: In respect of what?

PN193

THE VICE PRESIDENT: The provisional view - - -

PN194

MR RUSKIN: Lose in respect of the jurisdiction you mean?

PN195

THE VICE PRESIDENT: - - - in relation to the full gamit of jurisdiction and 111(g) arguments.

PN196

MR RUSKIN: Yes your Honour, thank you.

PN197

THE VICE PRESIDENT: The only provisional view I've expressed is a provisional view that it seems to me that it is capable of crafting a clause that it would be possible to draft a clause which was dealing properly with the subject matter of disputes being disputes over - arising in connection with disciplinary or performance matters. In other words, it ought be possible to construct a clause which would be technically within the jurisdiction of the Commission, subject to the arguments about the log of claims and ambit, and one that would be consistent with Hegarty as well. That's the only extent of provisional view. Whether that ought to occur whether it's appropriate for the application to proceed and all of those matters I really don't have any provisional view at all.

PN198

MR RUSKIN: Thank you your Honour.

PN199

THE VICE PRESIDENT: So Mr Matson, I adjourn this matter generally, with leave to the parties to relist it on 24 hours notice. If there is some significant problem arises you can rest assured that the matter will be reactivated and disposed of properly.

PN200

MR MATSON: Thank you your Honour.

PN201

THE VICE PRESIDENT: Yes Mr Ruskin.

PN202

MR RUSKIN: I was just standing up because you were standing up.

PN203

THE VICE PRESIDENT: That's fine. Well, thank you very much for your assistance and for the effort with the submissions, very helpful Mr Ruskin and thank you Mr Matson also.

<ADJOURNED INDEFINITELY [11.18AM]