AG2005/2627, Transcript of Proceedings [2005] AIRCTrans 621 (11 March 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10166

DEPUTY PRESIDENT IVES

AG2005/2627

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

APPLICATION BY AUSTRALIAN PROPERTY PROJECTS T/AS AURORA KAKADU - KAKADU HOTEL RESORT
(AG2005/2627)

DARWIN

9.58AM, MONDAY, 24 JANUARY 2005

PN1

MR R POTTS: I am the Assistant Manager for the Aurora Kakadu Hotel.

PN2

THE DEPUTY PRESIDENT: Thank you. Yes, go ahead Mr Potts.

PN3

MR POTTS: John asked me to come in.

PN4

THE DEPUTY PRESIDENT: John who asked you to come in?

PN5

MR POTTS: John Jeffrey, General Manager of Aurora, he couldn't make it today unfortunately, he is in Adelaide. He asked me, apparently there was a question about clause 24.

PN6

THE DEPUTY PRESIDENT: Well I have questions about a few clauses in fact Mr Potts. In fact I have some concerns with regard to whether this agreement actually meets the requirements of the Act, namely the requirements of Section 170LT(2) of the Act which relates to the no disadvantage test. On the materials before me I am not able to come to a concluded view on that so that is something that I would need to take up with you. There is at clause 24 of the agreement, a confidentiality clause, and what appears to be at 24(1) a form of restrictive covenant which extends beyond the employment of individuals with the employer. Now I don't know how familiar you are with the requirements of the Act in respect of certified agreements, Mr Potts, but at Section 170LI of the Act there is a requirement that certified agreements be about matters that pertain to the employment relationship between the employer and the employees.

PN7

There has been a recent High Court judgment in respect of that provision that
re-enforces the position that all significant clauses in agreement must be clauses that pertain to that particular relationship. That is a relationship between the employer and the employee unless they happen to be ancillary or incidental or in some other way machinery to the relationship and it would seem to me that a restrictive covenant that applies to people who are not employees can hardly be about the employment relationship between the employer and the employees. So that gives me some cause for concern. I am not saying that, that is a preliminary view only, Mr Potts, I am not making a determination on that. I am really at this stage just highlighting to you my concern about it.

PN8

The same applies to the confidentiality provision at 24.2 which imposes an obligation upon employees in relation to keeping certain matters confidential during their employment but extends beyond their employment for a period of three months and I would want to be convinced that that is a matter that pertains to the employment relationship either directly or is incidental thereto. Now there may be an argument that such a clause in respect of confidentiality is incidental to the employment relationship and it is an argument that I would be prepared to hear.

PN9

The other provision that gives me some concern is at clause 2, Mr Potts. It is the application and it says:

PN10

That this agreement shall form the full extent of the contract between Aurora Kakadu Hotel Resort and its casual employees.

PN11

Do you issue contracts of employment to people that you employ at the resort,
Mr Potts, do you issue any form of letter of offer?

PN12

MR POTTS: Full time employees we do, casual staff, no .....

PN13

THE DEPUTY PRESIDENT: No. So you would intend that this agreement be essentially the only document covering their employment, is that correct?

PN14

MR POTTS: That is correct, yes.

PN15

THE DEPUTY PRESIDENT: Yes. Well, I note that in the correspondence that is associated with this application, there is some email correspondence that has passed back between the employer, I believe Mr Jeffrey, who you referred to earlier and the LHMU and part of that correspondence from the LHMU - well it appears to be from the LHMU at least from a Ms Irene Munro, is she from the LHMU? Yes.

PN16

It says that the LHMU will not oppose certification of the Aurora Kakadu Certified Agreement on the following basis. Well, leaving aside whether they have any right to oppose the agreement in any event, she goes on to say that provided that there is a statement on transcript from yourself on certification that the intention of the $17.50 base rate would be to cover employees typically covered on the lower grades of the award but employees who have been engaged on higher levels of the award i.e. supervisors with those with recognised qualifications et cetera would have rates of pay negotiated higher than the $17.50.
Now, I do not know what the status of that is except that there is an email response appearing to be from Mr Jeffrey saying:

PN17

We appreciate the common sense approach to this situation and will arrange as requested. We will provide at Commission on Monday along with details of our discussions.

PN18

So it appears that the LHMU has asked Mr Jeffrey to put something on the record in relation to particular classifications and Mr Jeffrey on the basis of that email has agreed to do so. However, you have in your agreement a clause which says that this agreement shall form the full extent of the contract between Aurora Kakadu Hotel Resort and its casual employees which suggests to me that no matter what you put on the record if the agreement is certified, whatever you put on the record would not be enforceable at law.

PN19

MR POTTS: Normally with anyone like supervisor, their salary, that is a negotiated salary.

PN20

THE DEPUTY PRESIDENT: Yes.

PN21

MR POTTS: As such.

PN22

THE DEPUTY PRESIDENT: Yes. But the difficulty is that this agreement says that this agreement will be the full extent of the contract between Aurora Kakadu and its casual employees. Now that suggests any casual employees or relevant casual employees in any event. It does not make any distinction in the agreement about those lower down versus those higher up, it simply says a pay rate of $17.50, and it then says that this is the full agreement. So whatever you might say about those other classifications, the agreement says otherwise, and the agreement once it is certified is the document that has the force of the law behind it. So if you determined at some point in time, either via Mr Jeffrey or somebody else that might be the general manager that you weren't going to operate in line with whatever commitments you might give on the record, the agreement would tend to support that circumstance.

PN23

In any event, Mr Potts, I have some concerns about that $17.50 rate of pay as to whether it is in fact sufficient to enable me to come to a view that the agreement when considered as a whole passes the no disadvantage test. Because if I look at the classifications in the award and I extrapolate those classifications to casual employees and apply the loading in the award then depending on which particular classification of employee I am looking at when I take into account such things as the fact that there are no Saturday or Sunday penalties or public holiday penalties in the agreement, it may well be that the payment under the agreement is less than would be provided for by the award and as you would possibly and probably be aware, that is a circumstance which would lead to a view that the agreement does not pass the no disadvantage test and it is therefore not certifiable.

PN24

MR POTTS: Sir, well at grades, most of the staff out there now are basically on level 2 .... hospitality number 2, which is a Monday to Friday $15.92 an hour and all their penalty rates are based on 12.74 which is weekends, time and three quarters, double time. There is also night loadings which is an amount of $4.53 a night maximum after seven and their weekly administrative allowance which is 16.60 if they do 38 hours. We just base it on the fact that Monday to Friday, which most of them work, they would be $1.58 an hour I think much better off.

PN25

THE DEPUTY PRESIDENT: Yes. Well, look perhaps this is something that we should go off the record and have some discussion about. I would have some concerns in its current form about certifying this agreement. You may be able to put things to me either now or in the future that would alleviate those concerns but perhaps if we can have some discussion in conference I can clarify some of the things that would be necessary to make the agreement, in my view, certifiable.
I just refer you to one other clause and that is the disputes clause at 14, and there is nothing particularly wrong with this clause that I can see, Mr Potts, except that it is to some extent in conflict with the statutory declaration that has been filed in support of this application.

PN26

The clause at 14.1 provides for any matter that cannot be resolved to be referred to the Australian Industrial Relations Commission. The statutory declaration filed in support of this application answers the question about whether or not the Industrial Relations Commission is empowered to resolve any dispute between the parties in the affirmative. So in other words, the statutory declaration says that if there is a dispute and the dispute comes to the Industrial Relations Commission that the Industrial Relations Commission has the power to resolve the dispute but that is not what the agreement says. It simply says that it may be referred to the Australian Industrial Relations Commission. So you understand the point of difference. Now it does not matter either way, it is quite permissible that the disputes procedure does not provide a power of resolution or determination to the Commission and simply a referral but the referral would be interpreted as a power to conciliate only and not to arbitrate.

PN27

However you have said in your statutory declarations that it does provide a power to arbitrate, so you need to clarify what it is that you want the disputes procedure to do. They are in essence the issues that I have but as I have said perhaps we can have some discussion off the record. I doubt on the basis of what is before me that at the moment that I am going to be in a position today to certify this agreement. I think there is going to have to be some more information provided and perhaps I can clarify that for you. Is there anything further you wanted to me while we are on the record, Mr Potts?

PN28

MR POTTS: No. That is all.

PN29

THE DEPUTY PRESIDENT: All right. Thank you. I will go off the record. I don't think that we will be going back on again.

<NO FURTHER PROCEEDINGS RECORDED