C2005/1677, Transcript of Proceedings [2005] AIRCTrans 408 (18 February 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 10412

COMMISSIONER BACON

C2005/1677

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

South Burnett Beef Pty Ltd
and
Australasian Meat Industry Employees Union, The
(C2005/1677)
South Burnett Beef Pty Ltd Certified Agreement 2004 - 2006

BRISBANE

9.32AM, TUESDAY, 08 FEBRUARY 2005

PN1

MR HERBERT: I seek leave to appear on behalf of South Burnett Beef Pty Ltd.

PN2

THE COMMISSIONER: Very well. Mr Herbert, were you granted leave on the last occasion we were in conciliation?

PN3

MR HERBERT: No. I have not been in the matter before.

PN4

THE COMMISSIONER: That is correct. Very well.

PN5

MR BUCKLEY: I appear as industrial officer with the Australasian Meat Industry Employees Union, who is respondent.

PN6

THE COMMISSIONER: Thank you. Do you have any objection to the application for leave?

PN7

MR BUCKLEY: No, Commissioner.

PN8

THE COMMISSIONER: Leave is granted, Mr Herbert.

PN9

MR HERBERT: Thank you Commissioner, I am grateful for that. Commissioner, can I hand up a copy of the certified agreement in contention, or do you have one?

PN10

THE COMMISSIONER: I do have one.

PN11

MR HERBERT: Thank you, well I will not trouble the Commission with another one. Commission, I think you are familiar with the history of this matter. There was a notice seeking conciliation under the dispute settling provisions of clause 7 of this agreement, which was provided to the Commissioner by Mr Sentinella from the AMIC on 17 January. There was a conciliation conference which did not reach any satisfactory conclusion in relation to the matter. Subsequently, the company has taken the step of notifying the Commission that it wishes the matter to proceed to the next step provided for under clause 7.7 of the agreement, that is, that the Commission determine the matter by arbitration in the sense that arbitration is understood under section 170LW of the Workplace Relations Act.

PN12

The application has set out some orders and determinations which we seek. It is accompanied by a statement of Stephen Smith. Mr Smith is here. I am told that he is required to be cross-examination very briefly in relation to some matters in his statements. I am able to call him to do that. But just before I do that, Commissioner, can I indicate that if one goes to the original notice seeking conciliation in relation to this matter, there were particulars set out in that notice which refer essentially to two issues and as I am informed, and there was no transcript, but as I am informed the conciliation proceedings dealt or were concerned with one of those issues but not the other. And I am proposing to reventilate or to ventilate perhaps for the first time, the second of the issues. Those issues are that matter mentioned in paragraph (c) under the particulars of the dispute. That is the issue that was in fact discussed in the conciliation proceedings and that goes to the question or the existence of common law contracts of employment, on a one page format, entered into by the relevant employees which contain an express stipulation that the employees will work overtime to a prescribed extent. That is a matter, as I understand it, that was discussed in the conciliation proceedings.

PN13

But if one goes back to paragraph (b), that raises an issue which, as I understand it, was not discussed in the conciliation proceedings and is a matter which is a live issue which may in fact have the capacity to resolve this matter without a determination of the question that was discussed in the conciliation proceedings. It refers to:

PN14

The agreement provides the employees shall perform such work as the company requires.

PN15

That is a reference to clause 8.4 of the agreement. And the first sentence of that literally and sensibly, permits the employer to prescribe the quantum of work that will be performed by employees and employees are obligated to accept that. Now, that entitlement on the part of the employer, called the company in that sentence, and that obligation on the part of the employee is obviously tempered by other provisions of the agreement, such as relevantly, clause 11 which refers to overtime, and the hours provision in clause 9.

PN16

But what the effect of clause 11 concerning overtime, is not to truncate the right of the employer to ask employees to work particular hours, except for those provisions in clause 11.8 and 11.9 and 11.10 which refer to the fact that if one has worked some many hours that one does not have a particular break of I think eight hours between ceasing and commencing times, then eight hours must be provided or penalty rates apply. Otherwise, clause 11 simply prescribes that if the employer does prescribe hours under clause 8.4 which exceed ordinary hours as defined in clause 9, then clause 11 provides that those excess of hours are deemed to be overtime and there are, in many cases, punitive penalties that have to be paid in accordance with if the employer exercises its rights under clause 8.4, clause 11 specifies that the consequences of that but does not in any way limit or prevent that except as I have mentioned in relation to eight hour breaks.

PN17

So that the answer to this matter may very well be that is the primary dispute which has been notified in the Commission, that is the refusal on the part of certain employees to work overtime on the basis that they are not obligated to do so. The answer to that question, which can be the subject of a determination by the Commission in these proceedings, may well be that clause 8.4 provides an employer with all the rights that it requires in order to specify the hours to be worked, which by definition, must include overtime. And that clause 11 simply regulates the payment that is to be made for such hours if they are requested by the employer under clause 8.4. That can and should be a short, simple answer to this matter.

PN18

Of course, the proceedings did not deal with that issue at the conciliation phase, as I am instructed, as I was not there. But it is appropriate that that now be dealt with as part of this issue that is before the Commission today. The other issue, of course, is one which was ventilated at the conciliation conference and that is the question as to whether the literal terms of clause 4 operate so as to exclude the possibility of any other term of employment of any description from any source operating if it is not to be found within the four walls of this agreement. And that is the issue that we are obviously prepared to argue as well today.

PN19

But it may be that if the answer to the primary dispute is that clause 8.4 give s the employer ample power to prescribe the working of overtime and employees are obligated to do so if asked, then it is technically not necessary to answer the question as to whether clause 4 has the effect contended for by the union. But we seek, in any event, to put the arguments and ask that the Commission deal with the matter as a global issue because one way or the other the company needs an answer to the question as to whether the application of the certified agreement is such that it can or cannot prescribe overtime and employees are or are not obligated to work overtime.

PN20

That is the ambit of what we think the argument is today, Commissioner. Unless there is anything further, I can call Mr Smith now and clarify one issue of fact with him and then make him available for cross-examination.

PN21

THE COMMISSIONER: Very well, thank you.

PN22

MR HERBERT: I call Stephen Smith.

<STEPHEN JAMES SMITH, AFFIRMED [9.42AM]
<EXAMINATION-IN-CHIEF BY MR HERBERT

PN23

MR HERBERT: Mr Smith, can you tell the Commissioner your full name and your address and your occupation please?---Full name Stephen, with a p-h, James Smith. My address is 25 Harmer Street, Murgon, Queensland. And my occupation is human resources manager at South Burnett Beef Pty Ltd.

PN24

And Mr Smith, have you prepared a statement of evidence that you are able to give in these proceedings consisting of 13 paragraphs and dated 1 February 2005?---Yes I have.

PN25

Yes, does the Commission have a copy of that statement?

PN26

THE COMMISSIONER: Yes I do.

PN27

MR HERBERT: I tender that statement, if the Commission pleases.

EXHIBIT #SBB1 STATEMENT OF STEPHEN JAMES SMITH

PN28

MR HERBERT: Thank you. Mr Smith, to the best of your knowledge, are the contents of that statement true and correct?---Yes they are.

PN29

Now, could I ask, have you since preparing that statement discovered within the company records a further version of the contract of employment in addition to versions A and B that are attached to the statement?---Yes I have.

PN30

Could you look at this document please. Is that a further version, an apparently superseded version, but nonetheless a version of the contract that has been used intermittently in the last couple of years as a contract of employment signed by employees?---Yes it is.

**** STEPHEN JAMES SMITH XN MR HERBERT
PN31

And how many of them did you find sprinkled amongst the others?---Twenty seven.

PN32

All right. And when was the first one and when was the last one that you were able to find in relation to current employees, what is the date range approximately, do you recall?---August '03 through to December '03 I think they were.

PN33

Now, was that intended - is that a current document? Is there something about the document that informs you whether it is a current document or not?---Yes there is, it is not a current document.

PN34

And how do you know that? Perhaps if I can hand up a copy to the
Commission?---Paragraph 10 in relation to the overtime spells out as per the South Burnett Beef Enterprise Agreement 2000, that is obviously no longer applicable and that was deleted out in the current conditions of employment no longer refer to that. These ones were used - - -

PN35

That agreement that is referred to, the South Burnett Beef Enterprise Agreement 2000, was that a certified agreement?---No it was not.

PN36

Do you know what it was?---Honestly, no. I know it was an uncertified agreement, to the best of my knowledge, from information - - -

PN37

Between whom? Who are the parties to it?---South Burnett Beef and the AMIU, so I am led to believe.

PN38

That was before your time?---Yes it was.

PN39

And it is not certified, to the best of your knowledge?---No it is not.

PN40

This was not certified, and are you able to find a copy of that within the company records anywhere?---No I am not.

PN41

And since that agreement, presumably, was entered into in 2000, has the ownership of the company changed?---No it has not.

PN42

All right. That was made during the life of the current ownership of the company, but no copy of it, as best as you can find out, has been kept within the company's records?---No.

**** STEPHEN JAMES SMITH XN MR HERBERT
PN43

All right. Now, if 27 of those are sprinkled throughout the contracts that you have, have you done or have you at this stage had time to redo the figures as to how many of these were confused for either attachment A or attachment B when you did your original count?---I was - the full 27 of them I would think are part of the 210 of part B.

PN44

All right. Of attachment B?---Mm.

PN45

All right. So they were sprinkled among the attachment B figures were
they?---Yes.

PN46

And when you did your original count, were these taken to be part of the attachment B group?---Yes they were.

PN47

Yes, all right. But it now appears that that was not correct, that there were 27 of these stray ones sprinkled through that group?---It was not correct, no.

PN48

Yes. I tender that contract. The copy you have, Commissioner, is one which is dated 28 October '03. It is a copy of the conditions of employment document which the witness has just referred to in his evidence.

EXHIBIT #SBB2 CONDITIONS OF EMPLOYMENT DATED 28/10/2003

PN49

MR HERBERT: And that is the further evidence of Mr Smith.

PN50

THE COMMISSIONER: Very well, thank you. Mr Buckley.

PN51

MR BUCKLEY: Thank you Commissioner.

<CROSS-EXAMINATION BY MR BUCKLEY [9.47AM]

PN52

MR BUCKLEY: Mr Smith, I might first refer you to this new document which you have produced today, the 27 written agreements that refer to the South Burnett Beef Enterprise Agreement 2000. It is similar in appearance at first glance to attachment B, that is right?---Yes.

PN53

And so they have simply been confused for attachment B?---Yes.

PN54

And as I understand your evidence, these forms were in fact used in error?---Yes.

PN55

They should not have been used in the first place?---No. They should have been - the correct ones should have been used in place of them.

PN56

That is fine. All right. Now, in fact, Mr Smith do you know yourself whether or not the South Burnett Beef Enterprise Agreement, whether certified or not, whether any final agreement was actually reached between South Burnett and the union?---No.

PN57

I am going to - there is an agreement in place at South Burnett Beef?---Yes.

PN58

It is a certified agreement?---Yes.

PN59

And that came into effect about the middle of last year, is that right?---In July at some stage, yes.

PN60

Okay. Now, is it the case that prior to the introduction of that certified agreement, employees at South Burnett Beef worked a 7.6 hour day?---Yes.

PN61

And they would, whilst 6.7 hours were their ordinary hours, they would regularly work overtime?---Yes.

PN62

Was that on a daily basis?---To my knowledge yes.

PN63

As a result of the introduction of the certified agreement employees at South Burnett Beef, there was an increase in their ordinary hours, is that right?---Yes.

PN64

From that time on they worked a 40 hour week?---Yes.

PN65

Is it the case that from the introduction of the certified agreement until about November last year regular overtime was not worked by the boning room?---No, that is incorrect.

**** STEPHEN JAMES SMITH XXN MR BUCKLEY
PN66

Did boning room employees work overtime on a daily basis between July 2004 and November 2004?---Yes they did. I am sorry, the way you worded the question before indicated that they were not working it, which I said was incorrect. But yes, they worked overtime. Every day.

PN67

My question was confined to the boning room?---Yes.

PN68

If I might have a moment, Commissioner. How much overtime do you say was worked in that period?---Approximately half an hour a day for each day. Occasionally, I should not say occasionally, but regularly Fridays was not worked, but certainly Monday through to Thursday half an hour a day.

PN69

That is not something that occurred only from the latter part of 2004, between October and December 2004?---No, not to my knowledge at all.

PN70

It is not the case that in October 2004 the production manager approached the boning room employees and asked them to work regular daily overtime?---Yes he did, because for the first three months that they agreed to do it was a three month period that ended. So he went and asked them to continue on to Christmas.

PN71

So he went and asked them and the boning room employees agreed?---Yes.

PN72

And they performed that during the October/December period, is that
right?---After completing the [9.52.07] through to October, yes.

PN73

Now, in your statement, Mr Smith, you refer to the number of employees there are at South Burnett?---Yes.

PN74

Can you tell me how many employees work in the boning room area?---About 144, 145.

PN75

Is that just South Burnett employees or does that also include people hired by the labour agency, Jobwise?---That includes labour hire personnel as well.

PN76

Of those, do you know how many are South Burnett Beef employees?---One hundred and five maybe.

PN77

Of the 144/145 employees in the boning room, how many would have signed one of these written employment declarations, in one form or another?---In one form or another?

**** STEPHEN JAMES SMITH XXN MR BUCKLEY
PN78

Yes?---I would say 130. When you say in one form or another, the - just to clarify, the people that are on the labour hire firm sign a similar condition of employment, so it encompasses both labour hire personnel and South Burnett Beef personnel.

PN79

Do the labour hire personnel sign a document with South Burnett Beef?---No they do not.

PN80

Or do they sign a document with another entity?---They sign a document with their own - with another entity.

PN81

Can I ask you to take a look at, let us just use attachment B to your statement. It is a document headed "Conditions of Employment". As I understand it, that is the most recent form of the agreement that you are using?---Yes.

PN82

And that is currently in use at South Burnett Beef?---Yes it is.

PN83

Now obviously, when someone signs this document they are not yet any employee of South Burnett Beef? That is - I suggest, that flows from the first paragraph. It says:

PN84

I understand that if employed -

PN85

?---Yes, that is what it says.

PN86

Right. So at the time they sign the document they are not actually an employee of South Burnett Beef, is that right?---No. That would be incorrect because I ask these people to, the day they start, returned them to me signed. I let them take them home to read them, look at them, and then if they are due to start on a Monday morning they are required to give me a signed copy at my office prior to me taking them down to the point of employment for the time.

PN87

Well, if I can refer you to clause 2, it refers to the need to be inoculated against Q fever?---Yes.

PN88

Are you saying that does not happen until after they start work?---No I am not.

PN89

So that happens before they start work?---That they are inoculated, yes it does.

**** STEPHEN JAMES SMITH XXN MR BUCKLEY
PN90

All right. The way this document is written, it is written from the perspective of someone who is not yet an employee but is going through the process of becoming an employee of South Burnett Beef, is that right?---That is the way it is written, it appears to be, yes.

PN91

Clause 2 suggests that the prospective employee is agreeing to go away and get inoculated against Q fever. Is it your evidence that normally they have done that before they have signed this form?---Well, normally I interview the people to start with, some three, four weeks out knowing they have to be Q fever advised. And then if they wish to be employed it is a requirement they are Q fevered. So prior to them starting they are Q fevered.

PN92

So your evidence is that normally people have gone away and done that before they sign this form to start, is that right?---Yes.

PN93

You would agree with me that there are a number of matters in this document, the conditions of employment, which are now part of the certified agreement?---Yes there are some of them in there.

PN94

For instance, clause 1 refers to a three month probationary period?---Sorry, was that a question?

PN95

Clause 1, you can see that it refers to a three month probationary period?---Yes I can.

PN96

And that is now contained in the certified agreement?---Yes it is.

PN97

Clause 6 there is a - in fact, it also refers to the manner in which wages will be paid?---Yes it does.

PN98

And that is also contained now in the certified agreement?---Yes it is.

PN99

Clause 6 relates to public holidays and that is also contained in the certified agreement, is that correct?---That is correct.

PN100

Clause 10, there is a reference to a traineeship, do you see that there?---I do.

PN101

Is that contained now in the certified agreement?---I do not believe it is.

PN102

Well, I will read this to you. It may be talking about the same thing, it may be talking about something different. I suggest to you that clause 8.32 of the certified agreement reads:

PN103

Subject to the Training and Employment Act 2000 all eligible employees may be signed up on the company's training program.

PN104

Is that talking about the same thing as in clause 10 or is it talking about something different?---No, it appears that would be - I would read that the same way.

**** STEPHEN JAMES SMITH XXN MR BUCKLEY
PN105

All right. Mr Smith, I would ask you to take a look at paragraph 8 of your statement. Paragraph 8 refers to terms and conditions of employment that were agreed between South Burnett Beef and all of your existing employees. And there is a list from (a) to (l) of a number of terms and conditions of employment?---Yes, there is.

PN106

Now, some of those matters are covered by the signed employment declarations that you have?---Yes.

PN107

But other questions, for instance, general safety rules, anti-discrimination and harassment policies and the like, they are not actually referred to in the written employment contracts are they?---No they are not.

PN108

But you say that they form part of the employment contract between you and your employees?---Yes I do.

PN109

Well, can you tell me when those terms and conditions were agreed?---Well it is federal legislation, or it is current legislation, people need to adhere to those and when people are sat through their induction they are made aware of the requirements in regards to anti-discrimination, harassment, general safety requirements, et cetera.

PN110

All right. Mr Smith, I would ask you to take a look at paragraph 13 of your statement, it is the final paragraph. You express the opinion that without the terms and conditions set out in paragraphs 8 and 10 of your statement:

PN111

the regulation of the employment of all employees at the SBB meat processing establishment would be rendered inoperable and impracticable.

PN112

You have written that?---Yes.

PN113

What is the basis for your opinion? Why would it be inoperable and impracticable?---Well, let us go back to paragraph 8. Q fever, and why would it be possible for me to function in a facility without people being Q fevered, and why would it be possible for me or why would it be viable for us to run a company without properly adequately screening people for drugs and/or alcohol to stop them causing injury to other people and messing up machinery? Why would it be practicable for us to run a business outside the occupational health and safety requirements in this country? General hygiene requirements are a standard for AQIS which is the governing body of how we operate in an abattoir and how we export meet and as a result, reflects directly on whether we get customers domestically or internationally. So all those things combined, how is it possible not for us to run a viable business unless those criteria are met and adhered to? We might as well close up the doors and all go home.

**** STEPHEN JAMES SMITH XXN MR BUCKLEY
PN114

I think you have told us earlier that the people who work at South Burnett Beef have their Q fever shots before the commence their employment, is that
right?---That is correct.

PN115

And a number of those matters, in terms of discrimination, occupational health and safety, and AQIS, they would all be the subject of legislation would they not?---Yes they are.

PN116

The company would be required to comply with legislation that relates to those subject matters?---Of course.

PN117

Is it your understanding that the company could not require compliance with, for instance, occupational health and safety requirements unless it is a written term or condition of the contract of employment with your employees? Is that your understanding?---Can you rephrase that for me, sorry?

PN118

Certainly. Is it your understanding that you can only deal with the matters listed in paragraph 8 as an employer if they are part of the written terms and conditions of the employment contract you have with your employees?---No, that is not my understanding.

PN119

Yes, thank you Mr Smith. Thank you, Commissioner.

PN120

THE COMMISSIONER: Thank you Mr Buckley. Mr Herbert?

PN121

MR HERBERT: I have no re-examination, thank you, Commissioner. May Mr Smith be excused?

PN122

THE COMMISSIONER: He is. Thank you, Mr Smith?---Thank you Commissioner.

<THE WITNESS WITHDREW [10.05AM]

PN123

THE COMMISSIONER: That completes your evidence, Mr Herbert?

PN124

MR HERBERT: It does.

PN125

THE COMMISSIONER: Mr Buckley, are you calling any evidence?

PN126

MR BUCKLEY: I am not going to call any evidence, Commissioner.

PN127

THE COMMISSIONER: Very well, thank you. Mr Herbert.

PN128

MR HERBERT: Commissioner, I opened at some length what I had to say about the interpretation of this agreement in relation to clause 8.4. Can I just briefly go to that issue again.

PN129

The matter in contention, the subject matter of the dispute which is referred to the Commission under clause 7 as identified in the original dispute notification, was the refusal on the part of certain employees to work overtime as directed by the employer and an apparent insistence on the view that they were entitled to refuse to do so and that there was no existing legal obligations on employees to work overtime as nominated by their employer. That is the subject matter of the dispute and the matter that was referred to the Commission.

PN130

One short, simple and easy answer to that is that the certified agreement which as the force of Commonwealth law by virtue of being certified and is binding upon those employees and upon the company, contains clause 8.4 in which it states:

PN131

An employee shall perform such work as the company requires, at such times as the company may require.

PN132

And that, in short and simple terms, gives to the employer a right to set the working hours. There is nothing in the agreement which suggest that the employer's ability to set hours is limited in any way other than there are financial penalties which apply, in some cases punitive penalties which apply, if the hours which the employer chooses to set in exercise of the rights conferred by that clause, fall outside a certain spread, or a certain time limit. Those provisions, as I indicated earlier, are set out in clause 11. At clause 11.1:

PN133

All time worked outside the ordinary hours on any day shall be deemed overtime and paid as follows.

PN134

And there are very significant penalty rates which apply if the hours which the employer chooses to set fall within the definition of overtime at any time.

PN135

As I also earlier indicated, clauses 11.8, 11.9 and 11.10 actually in many respects do prevent the employer from setting hours which do not have the effect of allowing an eight hour break between one shift and another. But other than that limitation, there is no other express or implied limitation in the terms of the agreement that suggests that the otherwise open ended entitlement conferred upon the employer in clause 8.4 is limited in some way.

PN136

There are a number of other provisions which impinge upon that right, such as the granting of meal breaks, meal breaks must be granted at certain times and certain limits, after working certain periods of time. And the meal breaks have to be for a certain duration. And that the ordinary hours of work for the purposes of defining what is ordinary hours and what is overtime, are specified in clause 9, particularly 9.1 and 9.2. There are some mandatory provisions in relation to the rostering but subject to the rostering being organised, a four day roster et cetera, and the ordinary hours of work being between 5am and 8pm, being a spread of 15 hours except for meal breaks and rest pauses, et cetera, then the employer within those very broad limits has the entitlement to ask employees to work such hours as they specify.

PN137

So that on a plain and simple interpretation of clause 8.4 and clause 11, there is no basis upon which employees can say that they are entitled to refuse to work overtime. Just as there is no entitlement on the part of the employer to say that if you do work overtime I am not going to pay for it. The mutual rights and obligations flow both ways in relation to that.

PN138

One would have to say in addition to the express restrictions set out in the agreement in relation to the employer being able to specify the hours of work, there are obviously implied restrictions related to questions of workplace health and safety and fatigue management and things of that kind. In the modern era, it just simply would never be permitted for an employer to continue to work employees such excessive hours that it might result in fatigue, excessive fatigue. But they are matters which are not dealt with anywhere in the agreement, they are obviously implied, both by operation of the occupational health and safety laws and by the usual duty of care which an employer has to employees.

PN139

But so far as the terms of this agreement are concerned, unless the hours specified by the employer offend the eight hour break provision or the meal break provision, then the employer is entitlement to nominate that employees will work one hour's overtime, two hours, whatever they nominate, per day, and that employees are required to work that time. And if those hours happen to fall into overtime prescription, then the employer's call is accompanied by an obligation to pay the overtime rates of pay.

PN140

That, in my submission, is a complete answer to the matter to the dispute which has been notified to the Commission and in respect of which we ask a determination from the Commission.

PN141

The second issue is slightly more complicated. But the answer is just as easy, in my submission. It is, from the evidence you have both before and after the certification of this agreement, all employees, all current employees who are currently bound by the terms of this agreement, have signed an agreement in the form of either attachment A or B to exhibit SBB1 or in the form of exhibit SBB2. In each case, the parties have endeavoured or have successfully set out a number of terms and conditions of employment which they themselves have personally contracted in a common law contract to observe as between themselves. And that was done both before this agreement was certified and after this agreement was certified on what appears to be a very similar format, depending upon the time and whether someone took the wrong form out of the filing cabinet. But, in any event, the terms and conditions are very similar for some years.

PN142

As at the time of the making of this certified agreement, as I understand it, it is now argued that the terms of the certified agreement operate to completely displace all of the agreements which existed at that time, that is the common law agreements, and it must be argued, as I understand it, that the certified agreement also operates to displace all agreements that were entered into after the agreement was certified. So that in full knowledge of the existence of the agreement, if an employee's turned up and solemnly signed an agreement with their employer which was placed on the personnel file, that was waste of ink and paper because it in fact has no legal operation as between the parties.

PN143

And all of that argument, as I understand it, is raised because each one of those contracts specifically acknowledges and agrees that the employer has the right to ask for overtime, either of a specified amount, which I think is one and a half hours per day in an early version of the contract, and subsequently, such overtime as the employer requires. But in any event, expressly and specifically confers upon the employer an entitlement to require employees to work overtime. And as the argument goes, as I understand it, it is suggested that clause 4 operates so as to obliterate that obligation. And one would have to say obliterate the rest of the contract as well, that you cannot simply pick that provision out and say that provision does not operate but the rest of the contract does.

PN144

It is now plainly established that those written contracts contain a number of provisions without which the employment relationship and the operation of the business could not function and the last line of questioning from Mr Buckley established that really beyond any doubt, as if really most of things mentioned by Mr Smith in his evidence were so obvious that they hardly need to be said, but he was asked to say them anyway and he did. Things such as mandatory Q fever inoculation, not dealt with in the certified agreement but dealt with in the contract, you could not run a plant without having your employees inoculated against Q fever, it is just not safe, not practical, not possible. And the other matters that he referred to in his evidence are matters in respect of which you could not run a plant; if there were not hygiene standards, if hygiene standards are not being observed that could conceivably lead to a failure of AQIS standards and a closure of the business. Workplace health and safety obligations being required by employees to be observed, you could not possibly run a business without requiring employees to assist in that regard. A number of things of that kind, none of which are referred to anywhere in the certified agreement, many of which are contained in the contract, many of which the business could not operate without them.

PN145

Now, it is said that against that background and in that context, that it was the intention of the parties to the certified agreement to obliterate all those obligations so that, for example, to take the very obvious case, the company could no longer require employees as a condition of employment, to undertake Q fever inoculation. Could not do it. There is nothing in the certified agreement about it. The contract they signed that said that they are required to produce evidence of or be inoculated has been obliterated by the certified agreement and the employer has no right to require it. And an employee who refuses in those circumstances, there is no - an employee who was employed and it turns out that they have not been inoculated, the employer cannot do anything about it, cannot dismiss them, cannot do anything. There is no contractual obligation on the part of the employee.

PN146

Similarly, there is no contractual obligation in relation to a range of the other matters dealt with in paragraphs 8 and 10 of Mr Smith's statement. Many of which are, as Mr Smith said, are matter without which the business simply could not operate and without which the business would have severe difficulties in relation to enforcing proper behavioural standards on employees. For example, if one takes attachment B, there is an obligation under paragraph 4 to undertake a hearing test and that the - for the employer to take steps in relation to an adverse report in relation to a hearing test. There is a no smoking policy and the enforcement of a no smoking policy under paragraph 5, which is a very standard workplace health and safety issue in the modern era. There is a requirement under paragraph 7 that employees will undertake a blood urine test to detect the presence of drugs or alcohol if they are on the company's premises, responsible for an injury occurring on the company's premises so as to ensure that workers are safe both to themselves and to other employees. The range of those issues which are not matters which are the subject of statutory obligations on the part of employees at all, some of them are reflective of statutory obligations on employers, but without being able to enforce certain conduct on the part of the employees, the employers cannot carry out their statutory obligations. The whole system falls down.

PN147

Now, it is accept that it is not beyond the legal capacity of parties to obliterate a contractual provision of this kind, or contract of that kind, by making it a certified agreement which says in terms every single other obligation that might otherwise have existed between you and me is hereby obliterated, put to nothing and is completely and totally replaced and supplanted by this agreement we are now making. Perfectly possible to do that, from a legal perspective. The question here is whether that is what the parties have done by the agreement of clause 4.

PN148

Now, when one looks at the context and the environment within which this agreement is made and the history and the background and the fact that the parties have taken and set down a lot of fundamental and core issues without which the business cannot operate if the employees cannot be forced to do these things, into a common law agreement which the parties have then taken the trouble to sign and put on their employment file, is it feasible or possible to suggest that they would then have entered into a certified agreement which does not deal with nearly all of those matters and provide deliberately and intentionally for that agreement to obliterate all of those matters which are not in the agreement, without which the plant cannot operate, but to wipe them off the face of the earth anyway and not replace them with anything? Is that likely or feasible, and the answer is plainly, no, it could not possibly be interpreted that in that context and that environment that the parties intended to wipe out all of those provisions and replace them with nothing of the kind.

PN149

But not only that, the language utilised in clause 4 does not even admit of that possible explanation or that possible intent. If one looks at clause 4, the language is - well, if one looks at the heading to start with, the heading is:

PN150

Relationship to other industrial instruments

PN151

And that, in context, when one reads the clause, is intended to refer to - industrial instruments is usually taken to be, and in this clause appears to be, a reference to formal industrial instruments, such as awards and certified agreements. Because that is what is mentioned in the clause. So one needs to note that what is being done is that this agreement, being an industrial instrument, reference is being made to how it applies as against other agreements and awards, which is the general use of the terminology industrial instrument. And the agreement itself says:

PN152

This agreement contains all the terms and conditions of employment of employees employed under it and shall apply to the exclusion of any other award or certified agreement that would otherwise apply to the plant.

PN153

The first concession that has to be made is that it is badly phrases in that respect, because it appears at first blush, that the first half of the sentence appears to have words - by using the word "all", it appears to be words of exclusivity. Read in context of the whole sentence where it goes on to say:

PN154

and shall apply to the exclusion of any other award or certified agreement -

PN155

There is a plain reflection or carry through if you like from the heading of the clause, that the subject matter of the clause is reflected in the heading, namely, what is the relationship between this certified agreement and other industrial instruments. Not, what is the relationship between this agreement and anything else that we might have agreed in the past or we might agree in the future.

PN156

THE COMMISSIONER: The problem for the parties is they included the word "all".

PN157

MR HERBERT: Yes.

PN158

THE COMMISSIONER: The clause would have done the same work without "all" in it. It would have excluded any other award, because that is what the legislation says and that is what the parties intend in this.

PN159

MR HERBERT: It may not have, Commissioner. It is possible for parts of an award to survive ..... - - -

PN160

THE COMMISSIONER: You are right. But the problem I have with it is it says "all".

PN161

MR HERBERT: Yes. I understand that.

PN162

THE COMMISSIONER: And it says:

PN163

all terms and conditions

PN164

MR HERBERT: Yes, but historically at that time, against the context in which it appeared, it is plain as a pike staff, in my submission, that the parties did not mean every single term and condition to the effect that - - -

PN165

THE COMMISSIONER: The problem you have is that you have to rely on what the parties agreed. They swore statutory declarations saying they knew and understood what this meant. And the Commission certified the document based on their submissions and their statutory declarations.

PN166

MR HERBERT: Yes, I accept that.

PN167

THE COMMISSIONER: And now we are coming here saying, well, no, they did not actually know what they were doing.

PN168

MR HERBERT: Well, could I put - sorry.

PN169

THE COMMISSIONER: And I have some concerns about that.

PN170

MR HERBERT: Yes, no, I am not saying they did not know what they were doing, but when they used the word "all", they did not mean every single term and condition that applied to the employment relationship - can I put it in this way, there is not a certified agreement on this planet, in my submission, that encompasses every single term and condition of employment. For example, the common law applies a duty of fidelity and good faith in the employment relationship, in the employment contract. No question or issue about that. Nowhere in any certified agreement would there be a clause which deals with every single aspect of the duty of fidelity and good faith that is between the employer and employees.

PN171

THE COMMISSIONER: But you can waive it. You can agree not to - you can negotiate it away.

PN172

MR HERBERT: Yes but by not mentioning it, not mentioning that question at all, you are not thereby - well, legally it would be possible to do away with a duty of fidelity and good faith, I must say I have never seen it, and one - - -

PN173

THE COMMISSIONER: Nor have I.

PN174

MR HERBERT: And one would have to say that no employer in his right mind would say to the employees, I am not holding you to any duty of fidelity or good faith in relation to your employment relationship. But by the same token, you never see it in certified agreement, it almost never exists. Certainly if we - - -

PN175

THE COMMISSIONER: You almost never see the inclusion of the word "all" terms and conditions of employment of employees under this agreement.

PN176

MR HERBERT: Well since N/West I think people have had a college try at those sorts of clauses, but - and not always done it well. But if one burrows down to here, there could be no doubt that the law implies a duty of good faith and fidelity on this employment relationship so that every employee of South Burnett Beef owes the employer a duty of good faith and fidelity as understood by the common law, implied by law in the employment relationship. That is therefore a term and condition of the employment relationship. The High Court said so much recently in the Concut decision, Concut v Wells. I did not bring it but they - where they relooked at the duty of good faith and fidelity in employment contracts for the first time in about sixty years and said very clearly that duty exists and it is implied by law. That is a term and condition of employment. It is not in this agreement and yet it exists. Therefore, when you use the word "all" even in this context, "all" cannot literally mean every single express, implied or other term implied by law, implied by circumstance - - -

PN177

THE COMMISSIONER: Except that is the exact meaning given to it by every dictionary that I have looked at.

PN178

MR HERBERT: Yes, but the parties in that context did not mean the dictionary, literal meaning of the word "all". What they did mean, what they did mean, is all the terms and conditions of a kind which are contained in awards and industrial instruments. That is, there is no other industrial instrument condition which applies to these employees. It contains all of the industrial instrument conditions.

PN179

Now, to the extent to which the parties have implied obligations, they are no here. To the extent to which the parties have sat down and written on a piece of paper, I am going agree to give you a hundred dollar a week pay increase if you do these few extra bits and pieces, we will not bother with the certified agreement but it is here on a piece of paper, a common law contract between you and me as an individual, it is not in here but is nonetheless enforceable. It was never, on the face of it, intended by this clause to obliterate all implied obligations and all other common law obligations.

PN180

THE COMMISSIONER: So does that mean that the agreement that Mr Smith has just told us about, that was made in the common law, is still in force and not superseded by this document?

PN181

MR HERBERT: Those parts of it that are not - and Mr Buckley went to some of them - some of the parts where the certified agreement picks up and deals with the same subject matter, the extent to which the certified agreement contains more generous provision or more beneficial provisions to the employees, the certified agreement as a matter of law, binds. And to that extent, the common law contract is overborne by the certified agreement. But, in relation to matters in respect of which the certified agreement is completely silent, those matters remain in force and effect between the parties because they are matters of mutual consent.

PN182

See, the important thing about certified agreements, with respect, it needs to be borne in mind, that certified agreements involve an agreement by a majority of employees only and following certain procedures, that agreement so-called, is then imposed as a matter of law on a lot of people who never agreed to it, in a lot of cases, where there is a 51 per cent majority votes, 49 per cent have this document imposed on them even though they have never agreed to it. So it is not an agreement in any sense so far as they are concerned.

PN183

Now what happens in that situation - and that is a way that federal industrial law deals with these issues, so it is not really an agreement, it is an imposed industrial regime to a large extent. And it may well be, for example, a valid majority - you may have only had 10 per cent of the workforce voting for it, so long as they comprise a valid majority and only 10 per cent of people voted and six out of the ten voted in favour, then it gets up. The other 94 per cent know nothing about it, not interested, and do not agree with it. So in that sense it is not an agreement. But, a contract that somebody personally signs with their employer, "I bind myself to the employer in relation to these conditions" is a horse of a completely different colour and is quite a different type of undertaking and obligation that people enter into. And in that sense, it is not an industrial instrument and is plainly intended by the parties to be something which supersedes all of these arrangements because they have personally entered into that contract, one between the other. Or one with the other.

PN184

So for that reason, it is to be taken to be a completely different species of obligation because this paragraph 4 is dealing with terms and conditions of employment insofar as they are contained in industrial instruments, it is referring to all of the industrial instrument terms and conditions because what the - the effect of that is to say that all other instruments and all other terms contained in all other instruments such as the safety net award or any other award that might apply here, plus any certified agreement that might have otherwise applied that has not been terminated yet, all of those things are supplanted by this. But if we choose to have a site agreement or a private agreement, that is not the subject of this clause. And was on the face of it, could not have been taken to have intended to be by the parties, and the use of the word "all" is not intended to mean every single, possible obligation that might subsist between an employer and employee either before or after certification of this agreement.

PN185

You see, the result of that interpretation would mean that the parties would be taken to have agreed not only are their existing agreements obliterated, but they cannot enter into a further agreement afterwards over and above this agreement, even if they wanted to. It is not possible to agree to anything. This is the start and finish of their obligations. And as I say, as a matter of law that is simply not true. And as a matter of ordinary understanding of the words that are used in the context in which they are used in a matter of the plain purpose of clause 4 not being to obliterate every other arrangement between them but to explain the relationship between the industrial instruments that might otherwise apply, the use of the word "all" is unfortunate but is not to be taken literally as meaning every single aspect of the employment relationship.

PN186

Now if that is the case, then the common law agreement insofar as it has not - it deals with matters which are not expressly uplifted and dealt with in the certified agreement, the common law agreement continues to operate between the parties, because that is what they personally agreed between themselves should occur. And they must be taken to have agreed to those things continue to apply between themselves in the absence of a further common law contract in which they have agreed that those matters are to be obliterated, or in the absence of a binding certified agreement which specifically says that all other aspects of the relationship between these parties and every single one of them is hereby terminated and brought to an end. And will never arise again unless it is written in this document. And reading the document as a whole, as one is required to do, one could never deduce that as an intention of the parties from the words that they have used.

PN187

The only other clause that bears on that subject is clause 3.3 which is a no extra claims clause:

PN188

The parties bound agree no further claims will be made against the company during the two year period -

PN189

covered by this document. But that is a no extra claims provision against the employer. It does not say that the parties cannot agree on things. The employer may go to the employees and say, listen, we want to change these things, how about we agree. And they are perfectly capable of doing that, it is not proscribed by 3.3.

PN190

But one would have to say that if clause 4 means what is suggested, then the parties would probably have acted very much against the spirit and the intent and the purpose of the Workplace Relations Act in any event. That is, cutting off the possibility of reaching any further agreement in relation to any further matter that arises within the workplace. At all. Not to agree, not to conciliate about some issue that comes up, there is no point in conciliating it because they are not allowed to agree about it. Because there can be no further terms or conditions of employment at this place. No further common law agreements of any description whatever, no further informal agreements or arrangements or understandings or anything can be reached during the life of this agreement, we are stuck with what we have got.

PN191

And again, to interpret the agreement so that it would put the parties in breach of the spirit of the act where they are supposed to have reached agreement about matters that arise in the workplace during the life of the agreement and make accommodations without necessarily putting them in a certified agreement, they would not be allowed to do that and that would, in my submission, be a very curious interpretation of the intent of the parties. And then perhaps one would even say, the understanding of the Commission when an agreement of this kind was certified.

PN192

But if the interpretation by the company is correct, then the provisions of these common law agreements which permit the employer to prescribe overtime remain as an express entitlement but consistently with my earlier argument, it may well be that in relation to the issue of overtime, that the clauses allowing the employer to prescribe certain hours of overtime have been overborne by clause 8.4 of the agreement in any event. Which grants to the employer, as I have earlier submitted, a general power to prescribe the hours of work for employees and at the same time impose an obligation on employees to work the hours prescribed by the employer. That would encompass very clearly, in my earlier submissions, an entitlement to require employees to work hours which are overtime hours, subject to the obligation of the employer to pay the penalty rates which would be attached to those hours.

PN193

Now, on that interpretation, there is no work left for clause 11 or clause 10 of the respective contracts to do, because it is simply replicated in clause 8.4. But in the event that the Commission was against me about the clause 8.4 issue, then the appropriate interpretation of clause 4 would allow clause 11 to survive. So either way, in my submission, the employer retains the right to require overtime to be performed and we ask that the Commission make a determination and an award, as it is called, pursuant to the entitlement of the Commission under section 170LW to resolve these matters, which is an entitlement conferred by clause 7 of the agreement between the parties. And to determine either or both of the interpretations put forward by the employers in these proceedings are correct and that accordingly, the employer under clause 8.4 has the - the entitlement conferred by clause 8.4 includes an entitlement to require employees to work overtime, and employees have a commensurate obligation under clause 8.4 to work such overtime as may be prescribed by the employer, subject always to appropriate levels of payment being made, otherwise in accordance with the award, is the first matter. In the event of a determination of that kind it is accepted that in all probability overtime clauses in the contracts will have been subsumed in clause 8.7.

PN194

But in any event, we would ask for a determination by the Commission in terms of the first order that we have sought for determination that we sought in the application that we brought. And or an award or determination to similar effect, namely, that the agreement is not to be applied so as to limit or remove or displace any obligation of an employee working under the agreement to work overtime in accordance with the written contract of employment made between the company and any affected employee. We do not need to go to clauses 2 and 3 in the scheme of the matters in the way they have fallen out.

PN195

If it pleases the Commissioner, unless there is anything further those are my submissions.

PN196

THE COMMISSIONER: No. Thank you Mr Herbert.

PN197

MR HERBERT: Thank you, Commissioner.

PN198

THE COMMISSIONER: Mr Buckley.

PN199

MR BUCKLEY: Thank you, Commissioner. Does the Commission have a copy of the written submissions that I forwarded?

PN200

THE COMMISSIONER: I do.

PN201

MR BUCKLEY: Yes. I might start however, with the question of clause 8.4 of the certified agreement. Clause 8 of the certified agreement deals with the question of contract of employment. It would be the union's submissions, Commissioner, that clause 8.4 should not be interpreted as an unfettered discretion on the part of the company to require however much overtime it wishes from any employee on any particular day. The union's submission is that clause 8 contains general provisions governing the contract of employment. There are specific provisions limiting the certified agreement that deals with the subject of overtime and that those provisions should be the ones which govern the terms and conditions of employees in relation to overtime.

PN202

In fact, my learned friend in his submissions in relation to clause 8.4 examined the whole range of what I believe he referred to as implied restrictions that would have to be imposed upon clause 8.4 in relation to health and safety, fatigue and other obligations, if that interpretation of clause 8.4 was the preferred one, that it did provide this unfettered discretion to the company.

PN203

It is the union's simple contention that clause 8.4 does not in its terms confer such a discretion upon the company. But again, ultimately, that is a matter of interpretation of the clause and what effect it has.

PN204

THE COMMISSIONER: I am sorry. To understand the submission, you are saying that it does not what Mr Herbert says it does, and I am particularly referring to the first sentence of 8.4 here, you say it does not do that work because of the occupational health and safety implications of an unfettered right?

PN205

MR BUCKLEY: No, that was not my submission, Commissioner. I was referring to - my learned friend discussed a whole range of implied restrictions. That would have to be imposed on clause 8.4 if it did have the meaning for which he contended.

PN206

THE COMMISSIONER: Yes.

PN207

MR BUCKLEY: And my submissions is that the fact that such implications would be necessary is a basis for inferring that that is not the proper interpretation of clause 8.4. My submission essentially in relation to clause 8.4 is that there are specific provisions of the agreement which deal with the subject of overtime and that clause 8 generally - or sorry, clause 8 is simply intended to deal with the general terms relating to the contract of employment. In its terms, clause 8.4 is a term which allows the company to give directions to its employees but the union's submission is that it does not go so far as to give the company an unfettered discretion as to the hours that the employees work.

PN208

In relation to the question of the written employment contracts, the Commission has a copy of my written submissions. In respect of -the second item is the jurisdictional argument. Now that, I would make it clear that jurisdictional argument relates to the issue of the employment contracts. Obviously that has got no bearing upon clause 8.4 and the interpretation that is ultimately made upon that. In respect of the operation of clause 4 of the certified agreement, my learned friend has conceded that it is certainly within the realms of legal possibility for the parties to agree that a certified agreement is exhaustive. But the issue is here, whether that is in fact what the parties have done.

PN209

Here the union's submission is that it is simply that there is no real reason, or there is no reason, to limit or to somehow impose restrictions upon the meaning of the word "all" in that clause. And there is no reason not to give the clause its plain, literal meaning. Indeed the N/West decision provides an example of why the parties might want to do that, making it an exhaustive agreement in that sense would preclude industrial disputation or claims being advanced in relation to matters between them. Whereas of course, if there are terms and conditions of employment outside the agreement then there is still scope for arguing and disputation about those matters.

PN210

My learned friend also referred to the relationship between clause 4 and clause 3.3 of the certified agreement. He referred to the parties agreeing that no further claims would be made against the company during the period of the agreement. Now, he then went on to suggest that that would still allow the parties to agree upon matters. And indeed, upon one interpretation of the evidence that is what has been occurring at South Burnett Beef. Mr Smith's evidence was that at the end of last year the production manager approached and asked the employees, not directed, but asked employees if they would perform the overtime and they agreed to do so. If - there was also evidence that the parties increased the span of hours as a consequence of the certified agreement. One might have thought that if the intention of the parties was to keep alive those provisions of the contracts that were not incorporated into the certified agreement that the company would not have been asking employees to do anything, it would simply have been directing them to do so.

PN211

And in fact, a number of the terms and conditions contained in those employment agreements were subsequently incorporated into the certified agreement. And one could infer from the fact that a combination of clause 4 with the evidence that certain terms of those employment agreements were not incorporated into the certified agreement, that the intention of the parties was for the certified agreement to be exhaustive.

PN212

There also remains the question of if clause 4 does not have the meaning contended for by the union, then what meaning should be attached to it. Now, I may have misunderstood my learned friend's submission, but I believe he was contending for an interpretation that clause 4 operated to exclude what I believed he described as the industrial instrument terms and conditions. Well, of course, then we had an examination of what is meant by industrial instrument terms and conditions. Certainly, overtime for instance, is a term and condition covered by this industrial instrument and industrial instruments generally. And so a possible interpretation would be that the effect of clause 4 is to exclude any terms or conditions that relate to a subject matter which is covered by the agreement. In which case, the submission there is that those provisions of clause 11 of the certified agreement are exhaustive in relation to the subject of overtime.

PN213

Commissioner, unless the Commission has any questions of my written or oral submissions, I have nothing further.

PN214

THE COMMISSIONER: Thank you Mr Buckley. Mr Herbert.

PN215

MR HERBERT: Commissioner, briefly in reply, Mr Buckley indicated that there are specific provisions of this agreement that refer to overtime and that clause 8.4 should not be read as having any effect on them. It is useful to note that the overtime provisions of the specific clause to which he refers, that is clause 11, does not impose any restriction on the quantum of overtime, it does not say how overtime gets to be worked, it does not say the employer is entitled to or not entitled to or must seek the consent of employees, employees are entitle to veto, it says nothing, it is absolutely silent as to how overtime gets to be worked. Now, for overtime to be worked, somebody has to - the employer has to want it and they have to ask for it or direct it, as the case may be. That clause is completely silent on how it all happens.

PN216

Clause 8.4 is the only clause of the agreement that says how overtime happens to come into existence in the first place. And that is the clause which says the employer can direct it and employees have to work it, with no quantum restrictions whatsoever. In relation to the reference to the - and further, one would have to say that before a restriction of the kind for which employees contend, that is they only can be required to work the minimum ordinary hours per week and no more, one would ordinarily in the context of modern industrial relations, expect to find some form of negative stipulation in the agreement that says that once employees have reached 38 or 40 hours for the week they are entitled to stop dead and work no more. Now, that would be contrary to practice, industrial practice, in a vast range of workplaces. One would expect the agreement to contain a stipulation to that effect and it does not. There is nothing in the agreement that says that you can stump at 40 hours and do no more. And that the employer is not entitled to ask you to work one hour or one minute more without your consent. One would expect to find a very clear clause to that effect. That would be a dramatic reduction in managerial prerogative in any workplace and you would expect to see it written there, and it is not. So all of the signs are that 8.4 was intended to cover all of those issues between the parties.

PN217

There is a reference to the N/West decision by Mr Buckley and he suggested that were it not for this clause 4 amounting to an exclusive or exhaustive statement of all the terms and conditions of employment, you could find N/West type situations of people coming and making other claims. Well, I have already drawn the Commission's attention to clause 3.3. Clause 3.3 is the N/West clause in this agreement, not clause 4. That is the one that would prevent any claims of that kind being brought. So that on that basis, one would have to say clause 4 is not an anti-N/West clause at all.

PN218

Mr Buckley also referred to the fact, as the evidence discloses, that the parties have been agreeing on overtime arrangements since the agreement was certified. How could they? There was no possibility of the parties agreeing if clause 4 is to be interpreted the way it is being suggested, because an agreement which gave rise to a term of employment is prohibit by the agreement. Working overtime for one hour a day on a regular basis is not in the agreement and therefore the parties cannot agree to such a thing, they cannot enter into a term and condition of employment by way of a consent agreement, according to the union's argument. And yet they did. How is this so? And what is the status of that agreement? It is a non-agreement, it does not exist. The employer could never enforce the agreement between the parties at any level. It could not say to employees who had cheerfully signed up to a written agreement saying, yes I will work an hour's overtime as you direct, the employer could not hold them to that agreement because the certified agreement says that all agreements are unenforceable. All agreements outside the certified agreement are unenforceable. No-one, before or after, has interpreted this provision in this way. And it is just non-sensical, with respect.

PN219

Could I submit then that the words in clause 4 or the proper sense to clause 4 can be obtained by putting the word "award" in front of the word "terms" in the first line. And that is plainly what the parties were intending to do on the face of it, so that this agreement contains all the award terms and conditions of employment. And no other award or certified agreement other than this apply, "award" being the generic adjective used to describe terms and conditions prescribed by industrial instruments.

PN220

That is what the clause is dealing with, that is how this agreement effects other awards and agreements. What happens to all your award terms now before you brought this agreement in? The answer is they all go. This agreement is it. And on the officious bystander test, if an officious bystander had poked their nose into that discussion and said, "What happens to the contracts you signed when you started?", the answer will be, well, this does not effect that. It is as plain as a pike staff, in my submission. So that the - or if you read it as being all of the award terms and conditions are here and all of the awards and agreements which previously applied are gone, but if the parties have seen fit to enter into some other sort of agreement, that is - - -

PN221

THE COMMISSIONER: But that cannot be right. That cannot be right. Where this agreement specifically alters something - I mean, even if "all" was not in there, where this agreement specifically alters a common law contractual arrangement, then the common law contractual arrangement cannot prevail over the certified agreement.

PN222

MR HERBERT: As a matter of law. But that happens by operation of law.

PN223

THE COMMISSIONER: Correct.

PN224

MR HERBERT: Not by the term of the agreement. The agreement merely provides what the parties have agreed to be the ongoing situation. The Act then is the thing that overrides the agreement. And that is because the agreement is not made between the employees and the employer, they are not the same parties.

PN225

THE COMMISSIONER: It simply was the submission that if someone stuck their nose in and said, "What do you mean by this?" about your contract of employment arrangements when you signed up, your submission was they would still stand and would not be altered.

PN226

MR HERBERT: I accept that, Commissioner, I stated that too widely. And to the extent - - -

PN227

THE COMMISSIONER: If they were specifically prevailed over - - -

PN228

MR HERBERT: Yes.

PN229

THE COMMISSIONER: - - - by the content of the agreement then whilst ever the agreement was in place, the common law arrangement would still be in place but the enterprise agreement would prevail.

PN230

MR HERBERT: And I think - that is right, and to that extent I have overstated the position, Commissioner, and that it to be corrected. I think the correct legal position is that the contract between the parties remains as between those parties, but the Workplace Relations Act says it cannot be given effect to to the extent that it operates as between the parties, so that if, for example, this agreement were to be terminated, that common law contract would remain in operation, it would then spring up again and be enforce in effect between the parties. But you are right about that, that it is - it would have to be taken to be the understanding of the agreeing parties that this instrument would prevail over any inconsistent provision in the common law contract but otherwise than as we have expressly discussed in the course of the making of the agreement, anything that we sign between ourselves is to remain in force and effect. And again, that must be so because the parties to this certified agreement are not the same parties as the parties to the common law contract. And you cannot - parties to a common law contract can vary or remove their contract, but they have to be the same parties. They have to agree that that contract is to go. The certified agreement is made between two different parties. It only applies to one of the parties to the common law contract by operation of the Act once it has been certified. But the parties to this agreement are the union and the employer. So one of the parties of the common law contract is not even a party to this. He might be bound by it once it has been certified, but he is not a party to it in that sense. Not a party to the making of the agreement. It would be particularly not so if he actually voted against it.

PN231

So that in that sense, a certified agreement cannot be taken to have anywhere near the same standing as between the operative parties as a common law contract between these parties. But that does not - and for that reason, the common law contracts are as a matter of law, taken to remain in force until the parties to those contracts cancel them themselves by some mutual agreement or there is a breach or something of that kind. But it is accepted that as a matter of Commonwealth industrial law, if a certified agreement comes into force which in its terms is more beneficial to the relevant employees, it must prevail. But subject to that legal position, the answer to the question is still as I have put it, having regard to these matters, so that the appropriate interpretation of clause 4 is to put the word "award" or something like it in front of terms and conditions and the clause is as sensible as it was intended to be by the parties.

PN232

Unless there is anything further, that is all I have by way of reply.

PN233

THE COMMISSIONER: No, thank you Mr Herbert. While I will reserve my decision in this matter, I can indicate to the parties that they should expect a written decision certainly within the next few days.

PN234

MR HERBERT: Thank you.

<ADJOURNED INDEFINITELY [11.10AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

STEPHEN JAMES SMITH, AFFIRMED PN22
EXHIBIT #SBB1 STATEMENT OF STEPHEN JAMES SMITH PN27
EXHIBIT #SBB2 CONDITIONS OF EMPLOYMENT DATED 28/10/2003 PN48
CROSS-EXAMINATION BY MR BUCKLEY PN51
THE WITNESS WITHDREW PN122