AG2004/8249, Transcript of Proceedings [2005] AIRCTrans 287 (7 February 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10221

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

AG2004/8249

s.170LK - agreement with employees (division 2)

APPLICATION BY PACIFIC BRANDS LIMITED T/AS DUNLOP FOAMS SA AND ANOTHER
(AG2004/8249)

ADELAIDE

10.03AM, TUESDAY, 25 JANUARY 2005

PN1
PN2

MR T EFTIMIADIS: I appear on behalf of Dunlop South Australian Operation, a division of Pacific Brands Limited.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Eftimiadis, have I pronounced your name correctly? Eftimiadis?

PN4

MR EFTIMIADIS: Correct, that's correct.

PN5

THE SENIOR DEPUTY PRESIDENT: Mr Eftimiadis, it might be more convenient for you to remain seated. It's entirely a matter for your choice.

PN6

MR EFTIMIADIS: Thank you very much.

PN7

THE SENIOR DEPUTY PRESIDENT: Most people feel a little uncomfortable standing up by themselves in a room.

PN8

MR EFTIMIADIS: Thank you. I was wondering about that, actually. Thank you.

PN9

MR R HOLLAND: I appear for Dunlop Foams SA and I'm the State Manager for Dunlop Foams in South Australia, together with MR P STAMATOPOULOS the employee representative.

PN10

THE SENIOR DEPUTY PRESIDENT: Thank you. I can advise the parties that I have read the statutory declarations and I have read the agreement itself. The initial question that arises is whether or not the employer is able to give me a copy of the notice of intention provided to employees. Mr Eftimiadis, if you have got one of those in Melbourne please do not wave it around in front of me. I would be reliant upon the people in Adelaide to tell me that they have got one or can provide me with one.

PN11

MR EFTIMIADIS: No, I haven't got one in my possession, Deputy President.

PN12

THE SENIOR DEPUTY PRESIDENT: I see. Could one be provided to me in the next couple of days?

PN13

MR EFTIMIADIS: Yes.

PN14

THE SENIOR DEPUTY PRESIDENT: Thank you and I understand from the statutory declaration that notice of intention was provided to all employees on 4 November. Is that the case Mr Eftimiadis?

PN15

MR EFTIMIADIS: My understanding, Deputy President, is that there was a meeting held. Mr Holland would have to respond to that, because I wasn't present at that meeting, in terms of whether a document was presented or not. But I know a meeting was held, and the employees were advised of the intention by the company of wanting to renew the previous agreement and the negotiated conditions, and it was the intention of the company to have it certified by the Commission.

PN16

THE SENIOR DEPUTY PRESIDENT: I see but are you able to tell me that all employees received a copy of that notice of intention to meet the agreement?

PN17

MR EFTIMIADIS: I cannot vouch for that Commissioner. I believe not.

PN18

THE SENIOR DEPUTY PRESIDENT: I see.

PN19

MR HOLLAND: I can probably answer that if you like, Commissioner.

PN20

THE SENIOR DEPUTY PRESIDENT: Yes.

PN21

MR HOLLAND: We did meet on that time. There wasn't a notice to individual employees. We have a fairly small site; we gave copies of the proposed agreement at that time and gave the employees the two-week period to review the documents and raise any questions. Taking into account that we had quite a lengthy period leading up to the 4th, of discussion between the employees and ourselves in regards to what conditions we wanted put into the document. So we had reached a reasonable area of agreement before the document - before that meeting was actually held.

PN22

THE SENIOR DEPUTY PRESIDENT: I see, but then should I understand that some employees received the formal notice and others did not?

PN23

MR HOLLAND: No, I'd have to say that there was no actual formal notice given. I wasn't in fact advised to do so, to be honest.

PN24

THE SENIOR DEPUTY PRESIDENT: Yes.

PN25

MR HOLLAND: We basically just had the meetings and the formal meeting on the 4th, at which stage the draft copies of the proposed enterprise agreement was made available to all members to discuss and look at.

PN26

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Eftimiadis the difficulty that I am having here is that it appears fairly clear to me on what I have been told so far and without hearing from our employee representative, that there was a fairly extensive consultation process?

PN27

MR EFTIMIADIS: That is my understanding, that they certainly started discussions way back in early October.

PN28

THE SENIOR DEPUTY PRESIDENT: Yes.

PN29

MR HOLLAND: Yes, September, yes.

PN30

MR EFTIMIADIS: The discussions were actually initiated by Mr Stamatopoulos himself when he became aware that the agreement was up for renewal.

PN31

THE SENIOR DEPUTY PRESIDENT: It also appears that the very best of intentions existed. The difficulty that I am having in taking this particular application too much further today is that section 170LK is in effect the only section which provides the capacity for an employer to make a collective agreement with employees, which agreement may or may not include a union. Section 170LK sets out with some degree of particularity the steps that have to be followed in order for the Commission to conclude that that requirement or that the requirements of that section have been met. The provisions of section 170LK(2) say:

PN32

That the employer must

PN33

And I stress the word "must" because the Act states that word:

PN34

take reasonable steps to ensure that every person employed at the time, whose employment will be subject to the agreement, has at least 14 days' notice in writing of intention to make the agreement and the agreement must not be made before those 14 days have passed

PN35

Various other aspects of section 170LK deal with other issues but section 170LK(4) goes back to that question of the notice that has to be given to employees and it sets out that:

PN36

That notice must also state that if any person whose employment will be subject to the agreement is a member of an organization of employees and the organization is entitled to represent the person's industrial interests in relation to work that will be subject to the agreement. The person may request the organization to represent the person in meeting and conferring with the employer about the agreement.

PN37

So that the question that I need to clarify with the parties is simply, that my understanding of what I am being told this morning is that that requirement has not been met, albeit the parties did not set out to deliberately avoid it. They were simply not aware of the requirement that that is specified in that particular section of the Act. Is that a fair summation of the position? Let's start with you, Mr Eftimiadis.

PN38

MR EFTIMIADIS: Yes, it is Deputy President. I don't believe there was any avoidance by anyone concerned. There certainly was a lot of consultation and employees - in fact a large number of the employees that are involved in this enterprise agreement were obviously involved in the previous one which was also a 170LK agreement.

PN39

THE SENIOR DEPUTY PRESIDENT: Yes.

PN40

MR EFTIMIADIS: So they were very well aware of their rights and who could actually represent them but it's a historical thing that they wished to negotiate directly with the company.

PN41

THE SENIOR DEPUTY PRESIDENT: Thank you, and Mr Stamatopoulos, does that reflect your understanding of the situation?

PN42

MR STAMATOPOULOS: Yes, we're aware that we're allowed to have the union involved, but we elected not to because it was a renewal of the previous - - -

PN43

THE SENIOR DEPUTY PRESIDENT: Yes, but employees did not actually receive a notice to that effect?

PN44

MR STAMATOPOULOS: No.

PN45

THE SENIOR DEPUTY PRESIDENT: I see. Now, that means that I am not going to be able to certify the agreement today. I am going to suggest to the parties that you might go back and repeat that process. At the conclusion of this hearing I will ask my associate to perhaps photocopy the relevant section of the Act so that you have all got copies of that particular section. I am suggesting to the parties that you will need to repeat the process, ensuring that employees get that requisite 14 days' notice with the necessary notice of intention to make the agreement.

PN46

If the agreement is not changed in any way or indeed is only changed to reflect a number of questions that I have about the agreement today, and I am provided with a statutory declaration from both the employer and from the employee representative that confirms that the required steps set out in section 170LK have been met; and that either the agreement has not been changed or if it has been changed, provides me with a copy of that revised agreement; and I am satisfied on the basis of those revised statutory declarations that the requirements of section 170LK have been met, then I would certify the agreement from the date upon which I receive that additional material. Do not send me that within the next 14 days because I will then know that you have not met the requirements of that section 170LK. If am not satisfied then you would need to come back for another hearing. Now, perhaps starting with you Mr Eftimiadis, does that reflect an approach that you think would be desirable in this instance?

PN47

MR EFTIMIADIS: Yes, Deputy President.

PN48

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, I do urge very strongly that you look at the photocopy of section 170LK because there are a number of other requirements there. They include the obligation for the employer to meet with a union if a request is made to that effect.

MR EFTIMIADIS: Yes.

PN49

THE SENIOR DEPUTY PRESIDENT: They also include the obligations for explanation of the terms of the agreement, access to the agreement and what would happen in the event of a change made to the agreement. Now, Mr Stamatopoulos, are you happy with that approach?

PN50

MR STAMATOPOULOS: Yes.

PN51

THE SENIOR DEPUTY PRESIDENT: I have a couple of other issues to raise with you Mr Stamatopoulos before I go to the agreement itself. You are here today as an employee representative.

PN52

MR STAMATOPOULOS: That is correct.

PN53

THE SENIOR DEPUTY PRESIDENT: Should I understand you were elected as such?

PN54

MR STAMATOPOULOS: Yes.

PN55

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, can I also take it that both of the Adelaide representatives have got copies of the agreement?

PN56

MR HOLLAND: Yes, Commissioner, I've got the agreement.

PN57

THE SENIOR DEPUTY PRESIDENT: Mr Eftimiadis, I am going to address my questions about the agreement to you. Mr Stamatopoulos should feel free to add or detract from any of your answers. Normally questions of the nature that I am raising with the parties would not invite the parties to rewrite the document in any way. They would simply go to the need to clarify the intention of the parties. In this instance there is an option and the option is the parties may choose to make modifications to the agreement reflecting those questions or alternatively, may choose if you are to repeat the process, to simply ask that I rely upon your answers given to me today. Can I take you, Mr Eftimiadis, to clause 4, it's the party found clause.

PN58

MR EFTIMIADIS: Yes.

PN59

THE SENIOR DEPUTY PRESIDENT: Should I understand that the provisions of clause 4(b) and 4(c) are talking about the same group of people?

PN60

MR EFTIMIADIS: Yes, it's just that there's no distinction on the site between production and warehousing in terms of designation of work, if you like, but it is the same group of people.

PN61

THE SENIOR DEPUTY PRESIDENT: But the agreement covers both the production and the warehouse functions?

PN62

MR EFTIMIADIS: Yes.

PN63

THE SENIOR DEPUTY PRESIDENT: The agreement is applicable to employees in those production and warehouse areas who are covered by that rubber plastic and cable making industry award?

PN64

MR EFTIMIADIS: That's right.

PN65

THE SENIOR DEPUTY PRESIDENT: Thank you. If I can then take you to clause 6. Clause 6 refers to a sub-clause 4(d) which does not exist. How should I understand the provisions of clause 6?

PN66

MR EFTIMIADIS: Deputy President, I think that's an error of the person who typed it obviously. That should refer to 4(c).
THE SENIOR DEPUTY PRESIDENT: I see, thank you. Well that is one instance where the parties may choose for the sake of clarity to either rely upon the answer that you have given to me, Mr Eftimiadis, or alternatively to change the document in that respect. If I can then take you to clause 7 on page 5 and immediately under the column of - or the table showing wage rates is the statement that:

PN67

In addition, a bonus of $500 per year will be paid to each employee for achieving improvements as specified in clause 13.

PN68

Now does that $500 bonus apply in the first instance effective from 1 October 2004?

PN69

MR EFTIMIADIS: It's an annual bonus which certainly would apply from the operative date and payable at the completion of the 12 months.

PN70

THE SENIOR DEPUTY PRESIDENT: So does it apply from the first pay period on or after 1 October 2004?

PN71

MR EFTIMIADIS: Yes.

PN72

THE SENIOR DEPUTY PRESIDENT: Thank you, and presumably then, each of the other two annual bonuses apply from those 1 October anniversary dates; is that correct?

PN73

MR EFTIMIADIS: That's correct, yes.

PN74

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, clause 8 has a heading:

PN75

not to be used as a precedent

PN76

MR EFTIMIADIS: Yes.

PN77

THE SENIOR DEPUTY PRESIDENT: How should I understand that particular provision, Mr Eftimiadis? Perhaps before you answer the question I will give you a little more detail on the question. In September last year the High Court determined a decision known generally as the Electrolux decision. The effect of that decision was that an agreement can only be certified under this division 2 of the Act - of part 6(b) of the Act if that agreement contains provisions which relate to the relationship between the employer and its employees. Literally read, that particular clause may in fact not relate to the relationship of the employer and its employees to be covered by the agreement. In most instances, those clauses are a carryover of long-distant pasts and the parties advise me they are very much of a nonsense in that they are unenforceable; that they don't have any practical effect and that they certainly do not impose any obligations on parties outside of the agreement. I am simply seeking advice from the parties to this agreement as to how I should consider that particular provision?

PN78

MR EFTIMIADIS: I agree with you, Deputy President. This is an historical clause that as you described it, a carryover of the past, where there was a tendency in agreements of the past - because we have similar clauses in other enterprise agreements in the Pacific Brands Group, where some employees or employee representatives were using the agreement as a launching pad, if you like, for further increases. Like I suppose what we used to call a comparative wage approach. Whether that extends to the Electrolux decision or not, I'm not sure but I think, given the opportunity that we need to start this whole process again, it may be best that we actually delete that clause.

PN79

THE SENIOR DEPUTY PRESIDENT: I see, thank you. The provisions of clause 9 relate to the objectives of the agreement. There are a series of some seven dot points included in efficiency measures. Should I understand that those dot points are in fact identified as simply the objectives rather than specific requirements that are linked in any way to payments under the agreement?

PN80

MR EFTIMIADIS: They are objectives that the parties must strive to. So they are targets in many respects and they are targets that they agreed to through a consultative process in-house, whether they be the safety benchmarks or whether they be the absenteeism or the productivity. So they are benchmarks that have to be strived for.

PN81

THE SENIOR DEPUTY PRESIDENT: If one of those benchmarks is not met, is there any penalty or punitive step taken relative to payments to be made to employees?

PN82

MR EFTIMIADIS: Not in respect of their particular base rate but some of those do link to the bonus payments under clause 13.

PN83

THE SENIOR DEPUTY PRESIDENT: All right, well let's go to that clause 13 which is headed "Improvements". Should I understand that if any of those requirements designated in clause 13 are not met, then the bonus would either be halved or not applied at all?

PN84

MR EFTIMIADIS: There is a possibility that if that particular quality is to not met, yes. It's 50 per cent of the bonus hinges on quality and the other 50 per cent on housekeeping and flexibility.

PN85

THE SENIOR DEPUTY PRESIDENT: So let me put that by way of an example. If I asked you to look at the second last paragraph in that clause 13 which relates to housekeeping standards. It requires that each team member must ensure that his or her immediate work area passes the required standard each month. If, for example, a given work area failed to meet that standard in, say, the month of February, does that deprive that group of 50 per cent of the bonus for the entire year?

PN86

MR HOLLAND: Ted, I can answer that if you like?

PN87

MR EFTIMIADIS: Rob, do you want to answer that because that might - - -

PN88

MR HOLLAND: Yes, I will. No, basically the 50 per cent only really refers to the fact that out of that $500 bonus per annum, 50 per cent is linked into housekeeping, 50 per cent into the quality programme. The housekeeping is actually accrued monthly. If a particular person doesn't meet those housekeeping standards for a particular month, they may in fact jeopardise that monthly accrual but not necessarily their overall accrual for other times.

PN89

THE SENIOR DEPUTY PRESIDENT: I see.

PN90

MR HOLLAND: So it is an area that we did actually discuss at some length with the employees to get the right wording, I guess, and at the end of the day it was felt it was fair and reasonable to make it attributable to each individual person; but that we wouldn't penalise people if they overall, over a period of 12 months, their performance was quite good. Maybe they'd just had one bad period of time.

PN91

THE SENIOR DEPUTY PRESIDENT: Thank you. Now clause 14 is the dispute resolution provision. Clause 14.7 envisages that a matter which is not resolved would be referred to the Commission for assistance in resolving the dispute. There is no right or wrong answer to this question, save and except that I normally expect that parties will give me the same answer. The normal approach is that parties expect that the Commission would then try to resolve any dispute by way of conciliation with arbitration as a last resort. But that is by no means a mandatory approach. Some agreements stop the process at the conciliation phase. Have the parties got an expectation of the role of the Commission in this matter?

PN92

MR EFTIMIADIS: Yes, Deputy President, our expectation is that if you look at, in particular subclause 14.7, we do state that we would be seeking the matter to go to the Industrial Relations Commission for assistance in resolving the dispute and it is our understanding that we would expect both conciliation and arbitration.

PN93

THE SENIOR DEPUTY PRESIDENT: I see, thank you. Mr Stamatopoulos, do you have a similar view in that regard?

PN94

MR STAMATOPOULOS: Yes.

PN95

THE SENIOR DEPUTY PRESIDENT: Thank you. Clause 15 relates to hours of work. Should I understand that the intention of the parties is that the working hours arrangement specified in the award may be changed by agreement to reflect the various subclauses identified in clause 15 but that excepting for the spread of hours, which is specified in clause 15(iv), this would need to be by agreement rather than a mandatory change; is that correct Mr Eftimiadis?

PN96

MR EFTIMIADIS: It is. It's subject to consultation if and when there are needs to redress the hours because of customer requirements.

PN97

MR HOLLAND: Yes, just if I can make a comment on that. As an example of that situation we're trying to make it flexible enough to be able to change things to meet workers' requirements. In extreme hot weather conditions we have the flexibility with this type of agreement that if all parties are happy to do so, the employees can in fact start early in the day to beat the extreme hot weather and finish at an earlier time in the afternoon; and that's something we do currently.

PN98

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Clause 16 relates to attendance guidelines. The last sentence in clause 16 refers to disciplinary procedures. Should I understand that those disciplinary procedures are documented procedures, that they are readily available to employees and that they might be c hanged over the life of the agreement?

PN99

MR HOLLAND: They are documented, Commissioner. We keep, obviously, records of everyone's attendance and if it's excessive, we certainly have means to have discussions and warnings and that type of thing, but it's all documented.

PN100

THE SENIOR DEPUTY PRESIDENT: That disciplinary process or procedure, is it conceivable that would be changed over the life of the agreement?

PN101

MR HOLLAND: No, it won't be.

PN102

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN103

MR EFTIMIADIS: If I may add one more point there, Deputy President. The disciplinary procedures are actually provided by the corporate office and if they are to be changed, we normally change them by consultation.

PN104

THE SENIOR DEPUTY PRESIDENT: Last question, clause 23 relates to company policies. Should I understand that all those polices are documented and readily available to employees?

PN105

MR EFTIMIADIS: Yes, they are.

PN106

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Eftimiadis. Now Mr Stamatopoulos, do you want to add anything to any of Mr Eftimiadis's responses or can I take it that you are in agreement with company management on this issue?

PN107

MR STAMATOPOULOS: Yes.

PN108

THE SENIOR DEPUTY PRESIDENT: I can advise the parties that I am satisfied that the agreement meets the requirements necessary for certification on the basis of the information provided to me. That is, it meets the no-disadvantage test, it is of a duration envisaged by the Act, it contains the necessary dispute resolution procedures and it does not contain provisions which are contrary to the Act. Changes that might be made to the agreement are entirely at the parties' discretion. You can advise me that you are simply going to rely upon the answers given to me today. I would have though that it might make sense to remove confusion associated with typographical errors and potentially to remove the confusion associated with clause 8, which we will call the nonsense clause relative to precedents. But that is entirely a matter for the parties to consider.

PN109

Mr Eftimiadis, do you have any questions about the repetition of the agreement-making process that I am requiring of the parties?

PN110

MR EFTIMIADIS: No, I fully understand your instructions and the Commission's expectations on these matters.

PN111

THE SENIOR DEPUTY PRESIDENT: Mr Stamatopoulos, do you have any questions?

PN112

MR STAMATOPOULOS: No.

PN113

THE SENIOR DEPUTY PRESIDENT: Very well, and as I said to the parties, I will ask my associate to copy that particular section of the Act. There is no need to make a new application. The revised statutory declarations, together with the agreement if there are any changes made to it, can simply be forwarded to my office and if I can certify the agreement on the basis of that material, I will do so from the date upon which I receive it. If I do need to have a hearing, then the parties will be advised of that hearing. I wish you well in your agreement-making process and adjourn the matter accordingly.

<ADJOURNED INDEFINITELY [10.32AM]