AG2004/8325, Transcript of Proceedings [2005] AIRCTrans 39 (4 January 2005)

AUSCRIPT AUSTRALASIA PTY LTD
ABN 72 110 028 825

Level 3, 105 St George's Tce, PERTH WA 6000
Tel:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 1157
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT McCARTHY

AG2004/8325

APPLICATION FOR CERTIFICATION
OF AGREEMENT

Application under section 170LJ of the Act
by Wesfi Manufacturing Pty Ltd (A Division
of the Laminex Group) and Others for
certification of the Wesfi Manufacturing Pty
Ltd Dardanup Plant Certified Agreement 2004

PERTH

10.05 AM, TUESDAY, 21 DECEMBER 2004

PN1

MR M.C. BORLASE: I appear on behalf of the applicant in this matter.

PN2

THE DEPUTY PRESIDENT: Mr Borlase.

PN3

MR T.P. DALY: I appear on behalf of the Australian Workers' Union in regard to this matter.

PN4

THE DEPUTY PRESIDENT: Mr Daly.

PN5

MR J.D. FIALA: I appear on behalf of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, the CEPU.

PN6

THE DEPUTY PRESIDENT: Quite a mouthful, not the CEPU. Yes, I had this matter allocated to me, it is an application for an agreement to be certified, agreement asserted to have been made pursuant to section 170LJ of the Act. I circulated to the parties a report on a provisional assessment basis of matters where I felt satisfied that the requirements of the Act had been met. There were a number of items within the agreement that I had some concerns over that I required explanation about and I've identified those for the parties. Those items being the clause 16: Right of Entry, clause 17: Contract Labour; and clause 34: Salary Sacrifice. So, is anyone going to address me on those issues?

PN7

MR BORLASE: Your Honour, I have instructions to address you on the item pertaining to the salary sacrifice and we would say, in respect to that particular matter, that that does fall within the scope of the employer/employee relationship. There are a number of decisions which deal with this particular matter and I would refer you to a very recent decision of Senior Deputy President Hamberger, handed down on 13 December 2004, relating to Origin Energy Limited v the National Union of Workers and it's the Origin Energy Limited (Port Botany Operators) Certified Agreement 2004, PR954225 and in that particular matter there was a similar clause, dealing with salary sacrifice and the salary sacrifice was into a superannuation fund in more or less the same concept as is contained in the agreement which is before you for certification today.

PN8

In the decision to which I referred, Senior Deputy President Hamberger, at paragraph 16, noted that the salary sacrifice arrangements at Origin Energy, with the exception of superannuation contributions that are clearly covered by manufacturing grocers, which refers to an earlier decision he cited, being Bream Manufacturing Grocers Employees Federation of Australia ex parte Australian Chamber of Manufacturers [1986] HCA 23; (1986) 160 CLR 341. They did not involve payments made by the employer to a third party and do not involve the employer acting as an agent either for the employee, or a third party. This is quite different from the bargaining agent fees at issue in the Electrolux decisions.

PN9

He then goes on at paragraph 17 that unlike payroll deductions of union dues, considered in Portus, the Origin Energy Salary Sacrifice arrangements do not establish any type of debtor/creditor relationship done at the direction of the employee as an employee and not in some other capacity, unlike payroll deduction of union fees considered in Portus v Alcan, where it was held that the arrangement concerned the employee as a union member, rather than as an employee and did not involve the creation of a relationship between the employer and some third party. Effectively, Senior Deputy President Hamberger found that those types of arrangements, in the agreement, did pertain to the employer/employee relationship.

PN10

Similarly, in another decision in October of Senior Deputy President O'Callaghan, relating to Schefenacker Vision Systems Pty Ltd and Others, AG2004/4610, which is print PR952801. There was a similar issue considered in that particular matter where again salary sacrifice arrangements, particularly for the purposes of superannuation, were found to properly fall within the scope of the employer/employee relationship. I am aware - I beg your pardon your Honour?

PN11

THE DEPUTY PRESIDENT: In that decision?

PN12

MR BORLASE: Yes, at paragraph 62, he noted that:

PN13

I am satisfied that salary sacrifice arrangements for payments into an employee's superannuation is properly described as a matter pertaining to the employment relationship. This is clear from the conclusion reached by Menzies J in Portus.

PN14

And then he goes and cites a section from that particular decision. I won't go through the detail, it is fairly lengthy. But, yes, in both of those decisions, which are fairly recent and post the Electrolux decision, those matters were found to pertain to the employer/employee relationship. I am aware that the Schefenacker decision is under appeal, but I don't believe that it is for that particular point, for the transcript I will just spell that, it's S-c-h-e-f-e-n-a-c-k-e-r.

PN15

My instructions in respect to the other two points, your Honour, is that they are items that are in the agreement particularly at the behest of the unions party to the agreement and that they should address you in respect to those two particular points in terms of whether or not they do fall within the employer/employee relationship. I haven't received any instructions from our member to put to you in respect of those other two points. May it please the Commission.

PN16

MR DALY: If it please the Commission, I adopt the submission of Mr Borlase in regard to the issue of salary sacrifice and the Commission accepts that submission. In regard to the other two issues, in particular the right of entry provision, it is my submission that that clause pertains to the employment relationship in that it links directly to the dispute resolution procedure, which sees the union having a pivotal role in that process and obviously in that process we will require officials of the union on occasion to visit the site to discuss obviously issues pertaining to any disputes that may arise, between the employer and the employee and it is an instrument and a mechanism towards the resolution of those disputes. In regard to the issue of the contract and - - -

PN17

THE DEPUTY PRESIDENT: Well just a moment Mr Daly, the clause says that for the purpose of discussing legitimate union business with employees covered by this agreement, well that could be matters totally unrelated to the employer and totally unrelated to the agreement, could it not, legitimate union business could be anything related to the union and the employee, but nothing at all to do with the employer. Presuming some union business is business not related to employers, or this particular employer, it might be whether you're affiliated with the Unions WA, or the ACTU, or any other form of relationship you have, whether it be with superannuation funds or whatever, so how does that pertain to the relationship?

PN18

MR DALY: I would have to accept that it is possible, I suppose, under that interpretation, that there could be issues other than matters pertaining to the relationship which could be discussed, if that was the case. My understanding and you will be able to correct me if I'm wrong, is that certainly the primary purpose of that, for the purpose of these proceedings, I've got to be honest at least and saying it is in terms of that speed resolution procedure. Now if it is, I've got to be careful of my choice of words, because it is not only my own union that's a party, or proposing to be a party to the agreement, if it is that the wording of that clause is framed in a way that is going to cause a problem, then it may be prudent to look at some further wording.

PN19

THE DEPUTY PRESIDENT: I think it might be.

PN20

MR DALY: I'm more concerned, at this stage, perhaps about the contract including the agency how they hire of labour. In regard to that all I can suggest is that that relates to the employment relationship in this instance and it is - it impacts on our employees in terms of how either labour hire - labour people are employed, or contractors are employed in terms of the security of employment of employees at the site, their training opportunities and their career paths, which may be developed. I don't think I have any other submission that is going to be terribly much help in regard to that provision. Perhaps Mr Fiala may have something which will enlighten you further.

PN21

THE DEPUTY PRESIDENT: I hope so, because it's pretty thin at the moment, there is nothing from the employer and very little from you, perhaps Mr Fiala will be able to satisfy me that it is a pertaining matter. Thank you Mr Fiala.

PN22

MR FIALA: Yes sir, I thank you sir and may I apologise for my submissions this morning, they were about to come because the documentation supplied to me this morning the last two pages for some reason didn't come out, so I wasn't aware that there was actually three issues at hand. However, I will do my best to try and address it.

PN23

THE DEPUTY PRESIDENT: Well, if you're not sufficiently prepared you can provide me with written submissions at a later date Mr Fiala.

PN24

MR FIALA: Well I'm reasonably - sir, I'm reasonably happy to put something here today and then take advice from the Commission. Sir, in respect of the superannuation, notwithstanding Mr - - -

PN25

THE DEPUTY PRESIDENT: Well I don't give advice.

PN26

MR FIALA: Subject to your direction sir, as to where we progress. But, sir, in respect of the super from the CEPUs point of view, salary sacrificing we would see it as an extension of the employer/employee relationship in respect of occupational superannuation, so whilst there is already a legal requirement to contribute under certain circumstances, superannuation guarantee percentages, whether an employee makes an individual decision to contribute more, we would still see that as an employment/employer relationship as an extension already of the superannuation provisions. Sir, in respect of the right of entry, yes certainly the words "legitimate union business" obviously would highlight to the Commissioner some alarm bells in respect of recent decisions.

PN27

I will also just extend what Mr Daly has said and ..... only the dispute resolution procedure 21(1), it does relate to all matters, all claims regarding the employment of the employees. So certainly the dispute resolution procedure, as contained in the agreement is very broad and actually allows for matters to be dealt with outside the traditional say 20 allowable matters, or whatever. So it is a very broad DSP.

PN28

THE DEPUTY PRESIDENT: No, it's nothing to do with allowable matters.

PN29

MR FIALA: Sorry, sir?

PN30

THE DEPUTY PRESIDENT: The agreement is nothing to do with allowable matters and the dispute resolution clause doesn't relate to allowable matters. The dispute resolution clause relates to what is in the agreement and the application of the agreement, the dispute settlement in respect to the agreement.

PN31

MR FIALA: Yes, but it also sir, is open to matters with the employment which are possible outside the agreement, it does cover - - -

PN32

THE DEPUTY PRESIDENT: Well how has that come about? Because what is being certified is the agreement and the dispute resolution clause requirements of 170LT(8) and 170LW about matters relating to the application of the agreement. So what you are saying is the dispute resolution clause applies to application of anything in relation to the employment relationship, maybe not even in relationship to the agreement. Is that what you're saying?

PN33

MR FIALA: It certainly relates to the employment matters, or claims regarding the employment of the employees. So we would then see the right of entry provisions dovetailing into those provisions. In respect, sir, of 17: Contract Labour and this is from the CEPUs point of view and I've no doubt Mr Daly would also agree, is that it is very much an employment security clause, if you have a look at 17.1 and the last two sentences, it does say:

PN34

Contractors will not be used to replace, or diminish permanent employee status. Some examples are short term demand are...

PN35

So it is very much sir an employment security provision to protect the employer/employee relationship security between the employers and the company and we would view it that way and sir, I was privy to an agreement just recently that was certified in this Commission, the Inghams Maintenance Agreement and they had similar wording in there to protect the employees and sir that got up, so - - -

PN36

THE DEPUTY PRESIDENT: Inghams Maintenance?

PN37

MR FIALA: Yes, Inghams Maintenance Agreement and that was certified in this Commission, probably about a month ago sir, after the Electrolux decision. So certainly we would view that as an employment security issue that would relate to the employees employed by the company to protect them from having their jobs contracted out. And certainly also sir, is that in terms of restrictions we don't see any because the very first sentence says:

PN38

It is agreed that contract, including agency hourly hire, may be used on site to satisfy the short term demands of the business, or to perform work that cannot be performed by company personnel.

PN39

So we don't see it as being too many restrictions. I will leave it at that thank you sir.

PN40

THE DEPUTY PRESIDENT: Yes, no one else have anything further to say?

PN41

MR DALY: I don't sir.

PN42

THE DEPUTY PRESIDENT: Mr Borlase anything to say?

PN43

MR BORLASE: I have fairly limited instructions your Honour and they were limited very specifically to the salary sacrifice issues, so - - -

PN44

THE DEPUTY PRESIDENT: So the employer is saying: we made an agreement, we are not prepared to make submissions as to why the agreement should be certified?

PN45

MR BORLASE: Yes.

PN46

THE DEPUTY PRESIDENT: Other than with respect to salary sacrifice?

PN47

MR BORLASE: Yes sir, the two items in question were claims of the union and - - -

PN48

THE DEPUTY PRESIDENT: But the employer agreed Mr Borlase, it's not very satisfactory to say well, you know, we will wash our hands of it now, we've made an agreement and we will just see how the penny drops and leave it up to the other side to put forward their case and this is an agreement between all parties, even though some parties may have put forward claims and maybe the employer put forward claims, the ownership is not by one side or the other.

PN49

MR BORLASE: Yes, sir, I'm not aware, I wasn't privy to the negotiations, in terms of what occurred, but - - -

PN50

THE DEPUTY PRESIDENT: Well it is self evident isn't it?

PN51

MR BORLASE: In terms of, you know, whether there were counter claims and things of that nature.

PN52

THE DEPUTY PRESIDENT: It doesn't matter whether you are involved in the negotiations or not and it was you who brought up that it was a union claim, some of these items, but the fact is the employer agreed and what has happened is the employer is then saying: well, let's wash our hands of it. That's not all that satisfactory.

PN53

MR FIALA: Sir, if I can add any weight to that issue. Certainly it's my understanding sir, that the clauses that relate to right of entry and the clause that relates to contract labour has been in the previous five or so agreements, certainly the salary sacrifice clause is something that has been brought later on when the taxation - - -

PN54

THE DEPUTY PRESIDENT: Well that may be all right if there isn't any High Court decision that I've got to have regard to.

PN55

MR FIALA: Yes, but I'm just saying that certainly there is a long history with those clauses, they're not just clauses that have come up in the last agreement or so, they've been long-standing that have just rolled over from one agreement to another.

PN56

THE DEPUTY PRESIDENT: Yes. I will adjourn the proceedings and just go off record.

OFF THE RECORD

NO FURTHER PROCEEDINGS RECORDED