C2005/1730, Transcript of Proceedings [2005] AIRCTrans 295 (7 February 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10227
10228

SENIOR DEPUTY PRESIDENT LLOYD

C2005/1730 C2005/1731

s.170LW - application for settlement of dispute (certification of agreement)

National Union of Workers
and
Albi Imports Pty Ltd
(C2005/1730)
Albi Imports and National Union of Workers Certified Agreement 2003

s.99 - notification of an industrial dispute

National Union of Workers
and
Albi Imports Pty Ltd Cross Docks Australia Pty Ltd
(C2005/1731)
Storage Services - General - Award 1999

MELBOURNE

9.02AM, THURSDAY, 27 JANUARY 2005

PN1

MS A PARKES: I appear for the National Union of Workers and with me
MR E CURNOW, also from the National Union of Workers.

PN2

MR J D'ABACO: I seek leave to appear on behalf of Susskind and Dantijer Pty Ltd trading as Albi Imports.

PN3

MR D McLAUGHLIN: I seek leave to appear in matters C1731, the section 99 clarification, on behalf of Cross Stocks Australia Pty Ltd.

PN4

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr McLaughlin. Any, objections to leave?

PN5

MS PARKES: No, your Honour.

PN6

THE SENIOR DEPUTY PRESIDENT: Leave is granted. Now, do you wish to say, something on transcript first?

PN7

MS PARKES: Yes, your Honour. If the Commission pleases, your Honour, if I could perhaps outline the background to the dispute from the union's perspective and then it may more certainly be of assistance if we break into conference to see if we can resolve the matters that are outstanding between the parties. Your Honour, if I could start by saying that Albi Imports Proprietary Ltd is party to a section 170LJ agreement with the union called the Albi Imports and National Union of Workers Certified Agreement 2003, and this was certified on 13 February, 2004 by Commissioner Eames. Does your Honour have a copy of that agreement before you or would you like me to hand one up?

PN8

THE SENIOR DEPUTY PRESIDENT: No, I have a copy.

PN9

MS PARKES: Okay. Your Honour, just by way of background, Albi employs approximately 23 persons in its warehousing operations and this number excludes management. I am instructed that of those, eight of them are full time employees, five of them are regular casuals with more than two years service and the remainder are also casuals who work fairly regular hours, less than two years service. In addition to this, I have been advised that there are two warehouse managers who have been effectively running the warehouse for approximately the last six months, although these have both been brought in by Cross Stocks Australia Proprietary Limited.

PN10

On Monday of this week, Albi advised its warehouse employees that it had decided to outsource its warehousing functions to Cross Stocks. Now, this decision would take effect from Monday of next week, that being Monday 31 January and that further that the employment of all Albi warehouse employees would cease on this Friday 28 January.

PN11

Albi advised these warehouse employees on Monday that there were no guarantees of jobs with Cross Stocks but, that employees did have the opportunity to apply for employment with Cross Stocks to perform the same jobs and functions that they have been doing for Albi, which would take place at the same location, the Albi warehouse. So it's not a case of the work transferring somewhere else, it will all be performed in the same location. And Albi also advised employees that, in the event any of them are lucky enough to be offered employment with Cross Stocks, which would only be announced on this Friday if they were to be offered employment, that there would be continuity of service and that they would be employed in accordance with the agreement, that is the Albi agreement. Further, that the work would continue to be formed in the Albi warehouse. The union submission is that this is a transmission of business situation and that Cross Stocks would then become respondent to the agreement.

PN12

However, Albi has also made it clear to the employees that, notwithstanding that the work is still required to be performed and required to be performed at the same location and the same functions, that not all employees will receive offers of employment on Friday and that in this scenario, employees who are eligible to qualify for redundancy - and if I could just tender a copy of the correspondence sent to employees.

EXHIBIT #P1 DOCUMENT HEADED INTERNAL ANNOUNCEMENT WAREHOUSE STAFF AND OPERATIONS DATED 24/01/2005.

PN13

MS PARKES: Thank you. Your Honour, exhibit P1 is the document that was handed to employees on Monday. I might just let your Honour have a few minutes to read exhibit P1. Your Honour, it's important to note that the work that is performed by Albi's current warehouse employees is still going to be required to be performed and to be performed at the same location, not withstanding this alleged outsourcing of work to Cross Stocks. Further, your Honour, it's not a case of Albi or Cross Stocks alleging that there's going to be a massive reduction in staff required from 23 to two or three, for example, hence only limited numbers of jobs available. It's a situation where Albi and Cross Stocks, who have the six months presence in the warehouse through its management are, only wanting certain workers to continue working, but the remainder, essentially, sought to get rid of them.

PN14

And it's important, your Honour, to note that prior to Monday's announcement to employees and also to the union of the outsourcing arrangements as proposed by Albi, that prior to Monday there was no consultation with employees or discussions or with the union, about the prospect of Albi outsourcing the work to Cross Stocks, or about Albi proposing to make some employees redundant. And it's quite clear from the detailed nature of the letter that was sent, or the correspondence given to employees that it quite clearly appears to have been drafted from a legal perspective. It would appear quite apparent from that that a definite decision had been made prior to Monday in terms of outsourcing, and yet there had been no discussions, no attempts to mitigate employment loss et cetera with employees or discussions with the union prior to Monday.

PN15

Now, the NUW did meet with Albi on the Monday to try and address concerns, particularly our concerns were that one, that there hadn't been that consultation, two, that there hadn't been an attempt to mitigate job loss and three, given that the work was still required to be performed, it was our view that there wasn't a genuine redundancy situation and that Albi should insure that the jobs - Cross Stocks were offered to all employees, and further that it was not acceptable to say that employees one, had to reapply for exactly the same jobs that they were doing but two, wouldn't be told if they were given those jobs until Friday.

PN16

We would further submit that the interview process for the jobs has been a complete sham, the person that interviewed the employees, we have been instructed, is the same person that's been consulting for Cross Stocks and interview employees three months ago in the workplace and asked identical questions to what they have been asked in the interviews for their same jobs. We would submit that if management has been in the warehouse, Cross Stocks management, for approximately six months, given the small number of employees, it would be quite apparent that people have the skills et cetera. It should have been quite clear as to who could or could not be offered jobs and employees shouldn't have been left in the situation that we are in, where employees can't and don't know if they are offered a job.

PN17

It's further our position that there is scope for all of them to have jobs in that there is not a genuine redundancy as all work is required to be performed. The agreement, your Honour, the Albi Agreement, contains a dispute resolution clause at clause 10 which gives the Commission power to arbitrate over matters concerning the application of the agreement. I just take your Honour to clause 10 of the agreement.

PN18

THE SENIOR DEPUTY PRESIDENT: Yes.

PN19

MS PARKES: 10.1 refers to issues in dispute or grievances regarding the application of the agreement, then outlines a fairly standard dispute procedure and then at 10.1.5 provides the Commission is able to conciliate and, if necessary, arbitrate on the matter and I can advise the Commission that - I mention that upon being alerted to the redundancies on Monday, the NUW did meet with representatives of Cross Stocks and Albi Imports.

PN20

All of the proceedings that I have raised before you were not satisfactorily addressed and hence, we are here to today before your Honour. If, I could also, take your Honour, to the introduction of change clause at clause 9, An Employer's Duty to Notify.

PN21

THE SENIOR DEPUTY PRESIDENT: Yes.

PN22

MS PARKES: Once again, it's a fairly standard clause, your Honour. It certainly includes termination of employment. It requires at 9.2 a duty to discuss change, and in particular emphasises there, the effects the changes are likely to have on employees, measures to avert or mitigate the adverse effects of such changes, and prompt consideration to matters raised by employees and the union in relation to changes. And we say that there has been a failure on the part of Albi Imports to comply with that clause.

PN23

I can also take your Honour to the redundancy clause in the agreement, at clause 15. The agreement was made, your Honour, prior to the recent redundancy test case decision being handed down by the Commission and you will note that at the top of clause 15, it refers that the clause will change in line with any future Commission ruling, which is a reference to that decision. So that decision obviously has impact.

PN24

But input, in terms of any potential severance pay in the event there is genuine redundancy but also you will be aware from that decision, there was also a redundancy disputes clause, that arose out of a test case that where the employer contemplates redundancy of termination of employment, there should then be discussions and we would certainly say that this, clearly - on the face with hindsight, appears to have been contemplated for some time, yet there has not been those discussions with employees or the union prior to Monday. Secondly, if I can take your Honour, to the definition of redundancy, clause 15.1 states that:

PN25

Redundancy occurs when Albi decides that it no longer wishes the job the employee has been doing to be done by anyone and this is not due to the ordinary and customary turn over of labour and that decision may lead to termination of employment.

PN26

Your Honour, we say that this is not a genuine redundancy scenario, in that the work is still being required to be performed, the same functions, that is store worker functions, the same location. The only thing that will change is that Cross Stocks would be the actual employer. The work is still required to be performed for the benefit of Albi. And we would also note that Cross Stocks is not a stranger to this arrangement, it's not a situation where Albi has said we are going to outsource to some labour hire firm that we have had no relationship with. Cross Stock management has been in that warehouse for approximately six or seven months, so it's not a case of Cross Stocks being a stranger to this relationship. We say, your Honour, that the Commission is dealing with the dispute over the application of an agreement and also a dispute in relation to section 99 concerning Cross Stocks.

PN27

We say that the Commission does have power to arbitrate, particularly in relation to Albi concerning the failure to properly consult and the issue of the application of redundancy clause concerning whether there is appropriate redundancies. Your Honour, it may be appropriate that we break into conference to see if we can resolve the issues between the parties. We just wanted to put on record our concerns and our belief that the work is still required to be done, in that it is not a case of genuine redundancies. If the Commission pleases.

PN28

THE SENIOR DEPUTY PRESIDENT: Thank you, Ms Parkes. Mr D'Abaco.

PN29

MR D'ABACO: Thank you, your Honour. Perhaps, your Honour, if I could indicate the points where there is no disagreement between the parties and the points where, as your Honour may well expect, there is some scope of disagreement. Can I indicate firstly, your Honour, that no point is raised by Albi Imports in respect of the 170LW notification regarding the capacity of the Commission to arbitrate in relation to this matter in the event that that is what is called upon by the NUW. Albi acknowledges that the dispute between itself and the NUW, in respect of its decision to outsource the warehousing operation, is one dealing with the application of the agreement in circumstances where the issue is whether there has been proper notification and proper discussions in accordance with the terms of clause 9 of the relevant agreement.

PN30

Where there is difference between parties, your Honour, is in terms of the actual obligations upon Albi, where your Honour, will not be surprised to be told, that there is a difference between the parties as to the obligations of Albi. Now, my learned friend has put to your Honour, that there has been a failure of consultation between my client and the NUW. Your Honour, the obligations of Albi are contained in clause 9 of the relevant agreement, and to paraphrase clause 9, there are two relevant obligations upon Albi Imports and they are both predicated upon one jurisdictional step, or one jurisdictional issue, and that is there being a definite decision.

PN31

Once a definite decision is taken by Albi, in relation to major change of its operation and Albi acknowledges that the decision to outsource the warehousing component of its operations is a definite decision. There is an obligation to notify and there is an obligation to discuss and in the event this matter does proceed to a formal arbitration, it would be submitted by my client that it has indeed notified and it has indeed endeavoured to discuss this change with the NUW. And it will be put that on that basis, Albi has complied with its obligations pursuant to clause 9 of the agreement. If I can round out, - - -

PN32

THE SENIOR DEPUTY PRESIDENT: Just one question . Has it discussed with the employees as well? That's an obligation.

PN33

MR D'ABACO: Yes, certainly, your Honour, and what I was going to take you to is briefly the chronology of facts and what has occurred. To answer your question now, your Honour, there was an announcement to staff at approximately 10 am on Monday morning, Monday 27 January, and it was at that point in time where the internal memorandum was handed out to staff, it has now been marked at exhibit P1. Your Honour, will have noted, after having perused the document, that there are a series of questions and answers and indeed, I am instructed that at the conclusion of the meeting when that memorandum was read out, the opportunity was given to staff to ask those questions and to the capacity of those present, those questions were asked. Furthermore and moreover, your Honour, individual letters were sent to the employees or were provided to employees at that time.

PN34

Perhaps if I can just flesh out for a few moments, your Honour, the fact of the matrix and then there are some other documents which should find there way onto the Commission record and then perhaps deal with some of the points which have been advanced by Ms Parkes. First, your Honour, is that once a definite decision had been made by Albi to outsource its warehousing and storage operations.

PN35

Attempts were made to contact the NUW to advise of that decision - I should note, your Honour, that Ms Parkes is correct when she indicates that there are paid full time employees engaged in the warehouse, however, my instructions in terms of casual employees do differ from that of Ms Parkes. Albi acknowledges that there are a small number, a handful of number of employees who have been engaged on a fairly regular basis but the vast majority of casual employees within the warehouse are just that, casual employees who are usually engaged to meet seasonal demand and in particular, the period leading up to Christmas which is a very busy time for Albi Imports.

PN36

Albi Imports, as your Honour may or may not be aware is essentially a distribution company, it acquires products from overseas in respect of kitchenware and giftware and tableware and then sells that onto major retail clients such as David Jones and Coles Myers of the worlds and other similar organisations. So in terms of size, it's a relatively small operation in the northern suburbs, your Honour.

PN37

Eight full time employees in the warehouse and approximately 20 employees involved in administration and sales and marketing. As I indicated, your Honour, steps were undertaken on Friday to contact the NUW to inform it of the decision and a meeting was arranged between Albi Imports and the NUW at 10 am on Monday 24 January. A representative of NUW attended Albi premises as requested and, at that point in time, the individual who attended was handed a copy of this letter, by those responsible at Albi Imports.

EXHIBIT #D1 LETTER HANDED TO REPRESENTATIVE FROM NUW

PN38

MR D'ABACO: Your Honour will note in the first paragraph of the letter that it stated that the purpose of the letter is to notify the NUW of the changes which were taking place at Albi Imports. Paragraph three refers to the definite decision which has been taken in respect of the outsourcing of the warehousing and transport management functions and the fourth paragraph refers to an invitation to the union to discuss the impact of the changes and what steps can be taken to ameliorate any adverse effects of those changes in accordance with the obligations pursuant at clause 9 of the agreement.

PN39

Your Honour, will then note that the letter goes on to explain the consequences of what is proposed to occur. There was very brief discussion, I am instructed, at that point in time and the NUW representative then accompanied Albi management and a representative of Cross Stocks Australia to a meeting of all warehouse staff who were working on that day.

PN40

The internal announcement which has been marked as exhibit P1 was circulated and as I have indicated to your Honour, after that announcement was read out to all staff there was an opportunity for people to ask questions and for those questions to be answered. Moreover, your Honour, I am instructed that all employees, all full time employees at work were then handed a letter which was addressed to each of them in individual terms which, essentially, your Honour, paraphrases and reiterates the contents of the internal memorandum which I have handed up to your Honour. This, your Honour, is a sample of a letter which was provided to all permanent employees.

EXHIBIT #D2 SAMPLE OF LETTER PROVIDED TO ALL PERMANENT EMPLOYEES

PN41

MR D'ABACO: Your Honour, will note that the letter invites all permanent employees to apply for employment at Cross Stocks Australia. Those interviews took place on Tuesday 25 January and they were also scheduled to take place during the course of today and I understand that full time employees, or seven of the eight full time employees, have indicated their willingness to participate in such an interview. Indeed, the majority, I understand, have already done so. One of the full time employees has indicated that he does not wish to take up employment and he will be accepting the redundancy package which will be provided to him on the cessation of his employment.

PN42

Now, there are certain matters which ought to be also put on the record to deal with those which Ms Parkes has put to you. The first is this, your Honour. In relation to the suggestion that this is not a genuine redundancy, it is quite clear that after Friday this week, Albi Imports will no longer employ, or Susskind and Dantijer, to be precise, will no longer employ any individuals in the warehousing and transport operations.

PN43

Those positions, with the relevant employer, will have ceased to exist. It is fully conceded by Albi Imports that, of course, the work will still be there and the duties will still be required to be performed but the positions with Albi itself will no longer be there and that, of course, triggers an obligation pursuant to clause 15 of the relevant agreement, Severance Pay to be Paid. And were that not the case, your Honour, and were Ms Parkes' argument to be accepted, that would lead to both the anomalous and, we would say, the unfair result that employees who were not to be successful in accepting employment would simply have their employment terminated this Friday with nothing but their accrued pay in lieu of notice and statutory entitlements and missing out on severance pay and that, obviously, is an unfair result. And we would also submit, in accordance with the law, an incorrect result. The relevant decisions can be referred to you from but if the need to do so arises.

PN44

The second aspect of what has been put by Ms Parkes in respect of, the work will be the same and it will be provided in the same organisation and so forth, perhaps a matter more for my learned friend, Mr McLaughlin, to detail to your Honour, in respect of section 99 notification, but warehouse facility where Albi is currently operating from is a relatively new facility. Previously, Albi was located at another premises and it has been in its current premises, I understand, for approximately six months and part of the attraction for Albi in actually outsourcing the warehousing and transport arrangements, is that part of its commercial arrangement with Cross Stocks is that new technology will be introduced in respect of the transport and warehousing function, and indeed, the volume of stock which is going to be processed through the warehouse will increase substantially in respect of what happened in the past, in terms of Albi's operations.

PN45

So what we are dealing with is not, as my learned friend would have you believe, the same operations doing exactly the same work in the same locale but indeed, an operation in which it is envisaged in the very, very near future will change substantially in terms of the technology employed, the methodology of the work and, indeed, the actual volume of quantum of the work to be performed.

PN46

Part of the attraction for Albi Imports and part of the matters which Albi is more than willing to discuss with the union, had the union been prepared to discuss the matter, to detail these matters and to explain the reason why the definite decision was taken. So we take issue with the NUW in respect of that point. The second matter which I wish to note, your Honour, is that my learned friend, Ms Parkes, has made much of an alleged failure to consult. Your Honour, this is not an application pursuant to section 170GA of the Act. We are not dealing with a situation, where 15 or more employees are being made redundant, in which case, clearly, there would be an obligation to consult.

PN47

There is an obligation to notify pursuant to clause 9 and an obligation to discuss. In my respectful submission, Albi has endeavoured at all times to do that at the appropriate times once the decisions have been made. The fact that the documentation provides fulsome detail and is strictly in accordance with the agreement and, as a result, appears to have been drafted by legal counsel or solicitors is neither here nor there.

PN48

We can hardly be criticised for doing things properly as opposed to doing things improperly. And the fact that they have been done properly does not mean that a definite decision has been taken until the appropriate time. Albi is prepared to move into conciliation and to have these discussions with the union. We have indicated that willingness at all times. We should add, however, that, in respect of those employees and who will be employed by Cross Stocks Australia Proprietary Limited. That is ultimately a matter for Cross Stocks Australia Proprietary Limited. And Albi is not, it says, an expert in warehouse and logistics management and that's why it made the decision that it did.

PN49

Ultimately, Cross Stocks Australia will be the employer of these individuals and will have obligation, will have the responsibility for their management, the supervision and their direction. We are not dealing here, your Honour, with two organisations which are somehow related. My instructions are that these companies are clearly at arms length. There is no suggestion of any common shareholding or directorship between the two companies and Cross Stocks Australia, I am instructed, is a separate stand alone company which has its own commercial business in providing services of this nature. We say that in those circumstances, it would be most improper for any orders or, indeed, any recommendations to be made in respect of Albi concerning the employment of the employees and that, ultimately, that is a matter most properly within the province of Cross Stocks Australia. If the Commission pleases.

PN50

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr McLaughlin?

PN51

MR McLAUGHLIN: Yes, your Honour. I don't need to go into too much about more about the background to this matter. Perhaps what I would seek to do is to reserve our position in relation to the dispute notification and the allegation that Cross Stocks is in some way involved as a party to a dispute with the NUW. Clearly, there are significant, we would say, jurisdictional issues in relation to that and that obviously impacts on your power concerning Cross Stocks. I think Ms Parkes has almost conceded that the Commission's power defending to make - to arbitrate is limited to helping. Having said that, your Honour, we have no objection to participating in a conference that you are chairing today.

PN52

THE SENIOR DEPUTY PRESIDENT: I would firstly like to adjourn to conference and go off the record. We will do that now.

<SHORT ADJOURNMENT [9.32AM]
<RESUMED [11.24AM]

PN53

THE SENIOR DEPUTY PRESIDENT: Mr D'Abaco.

PN54

MR D'ABACO: Thank you. Your Honour. I am pleased to inform the Commission that it appears the parties do have an in principle settlement in respect of this matter and if I can indicate to the Commission the terms of the agreement. The agreement is as follows, Albi Imports will extend to its eight full time employees and the five permanent casuals, if I can call them that, an opportunity to express an interest in a voluntary redundancy and the relevant 13 employees would have the opportunity to express an interest in voluntary redundancy until 5 pm today.

PN55

In the event that an employee does express an interest to take voluntary redundancy, in addition to their severance entitlements and other termination payments in accordance with the relevant certified agreement, they will be paid an additional severance payment of four weeks. And that severance payment of four weeks will be calculated in the same manner as the other severance payments are to be calculated in accordance with the agreement. In the event that an employee does express an interest in a voluntary redundancy, that offer will be automatically accepted by Albi Imports, with the consequence that their employment will cease with Albi on Friday 28 January.

PN56

However, if an employee has expressed an interest in a voluntary redundancy package and it transpires that tomorrow Cross Stocks has decided to have offered that employee employment, Cross Stocks will contact the employee concerned and inform him or her that they have been offered or are being offered a position and if the employee chooses, in those circumstances, to accept employment with Cross Stocks, then Albi will not act upon their expression of interest in voluntary redundancy and that employee will commence employment with Cross Stocks as is envisaged in the material of the submissions which are being put to you today.

PN57

The agreement is reached, your Honour, on the following basis, that, if an employee or if employees do accept the voluntary redundancy then that will resolve all issues between Albi and the individual employees in respect of the cessation of the employment and it also resolves all issues in respect of the introduction of the change between Albi and the National Union of Workers.

PN58

Of course, however, if any employee does not express an interest in a voluntary redundancy and they are not offered employment by Cross Stocks, so that that employee is compulsorily retrenched, they can, of course, pursue their individual rights pursuant to division 3A of the Workplace Relations Act. If the Commission pleases.

PN59

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Curnow?

PN60

MR CURNOW: Thank you, your Honour. The position outlined to you is the terms of the agreement that we have accepted. I just wanted to clarify one point that I am not sure if it is Cross Stocks solicitor that needs to answer this, that if people are offered jobs with Cross Stocks and choose to accept them that they simply go across as a continuing employee, there is no probation on their employment. We would expect that if their entitlements are transferred that they are seen as a seven year employee, that there is no probationary period.

PN61

MR McLAUGHLIN: Yes, your Honour, I can confirm that for any full time employee who is offered employment, they would come across not on a probationary period .....

PN62

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr McLaughlin. Do the parties accept that as an acceptable settlement?

PN63

MR CURNOW: Yes, your Honour.

PN64

MR McLAUGHLIN: Your Honour, can I just for the completeness confirm that my understanding is that the agreement that has been reached also resolves all matters between the NUW and Cross Stocks.

PN65

MR CURNOW: We would need to have, and it's not part of this proceeding, but we would need to have some discussions with Cross Stocks about the terms and conditions new employees are employed under. If they say to me today that they are going to continue the Albi agreement for any new starters as well, that resolves that as well, but it's not something I have raised, but did intend to raise it at an appropriate time.

PN66

MR McLAUGHLIN: I can confirm that on the record now, that Cross Stocks will continue to observe the terms of the Albi agreement, for all employees

PN67

THE SENIOR DEPUTY PRESIDENT: I am satisfied then that the settlement and the clarifications as given this morning achieve the settlement of this matter. I commend the parties for the way in which they have conducted the conciliation proceeding this morning and we wish them well on their future endeavours. The Commission now adjourns.

<ADJOURNED INDEFINITELY [11.30AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #P1 DOCUMENT HEADED INTERNAL ANNOUNCEMENT WAREHOUSE STAFF AND OPERATIONS DATED 24/01/2005. PN12
EXHIBIT #D1 LETTER HANDED TO REPRESENTATIVE FROM NUW PN37
EXHIBIT #D2 SAMPLE OF LETTER PROVIDED TO ALL PERMANENT EMPLOYEES PN40