C2004/372, Transcript of Proceedings [2005] AIRCTrans 669 (16 March 2005)

1800 534 258

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 10783

SENIOR DEPUTY PRESIDENT O'CALLAGHAN

C2004/372,C2004/374,C2004/373,C2004/376,C2004/375,C2004/377,C2004/378

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/372)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/374)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/373)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/376)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/375)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/377)
Furnishing Industry National Award 2003

s.113 - application to vary an award

APPLICATION BY CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
(C2004/378)
Furnishing Industry National Award 2003

ADELAIDE

10.10AM, MONDAY, 07 MARCH 2005

Hearing continuing

PN1

THE SENIOR DEPUTY PRESIDENT: Good morning, are there any changes in appearances?

PN2

MR IRONMONGER: Your Honour, I am from VECCI and am not involved, I am just observing today If the Commission pleases.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. No changes in appearances in Sydney?

PN4

MR P KHOO: Yes, there is, Commissioner. I am from the Furnishing Industry Association.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Mr Khoo.

PN6

MR KHOO: Thank you.

PN7

THE SENIOR DEPUTY PRESIDENT: Very well. Now, Ms Siami, I have received from you a most impressive folder which seems to indicate a great deal of work has been done trying to trace through respondency issues.

PN8

MS SIAMI: Yes, your Honour.

PN9

THE SENIOR DEPUTY PRESIDENT: And I understand from the letter that was attached to that folder that that document has been provided to all of the other employer organisations. Is that correct?

PN10

MS SIAMI: That is correct, your Honour.

PN11

THE SENIOR DEPUTY PRESIDENT: I have briefly had a look through that folder and I have noted that there is an apparent form of conclusion in the last section of it such that it appears that there are a number of South Australian and Tasmanian respondents to the award who were last served some time back in the early 1970s and that there is some difficulty in accessing that 1970s log.

PN12

MS SIAMI: That is correct, your Honour.

PN13

THE SENIOR DEPUTY PRESIDENT: Now that is about the sum total of the conclusions that I have reached other than that I called for the Commission's archive files and I have managed to procure a dispute finding in C1062 of 1979. I can't actually find the dispute finding as such, but I have found a log of claims that appears to operate from around that sort of time. I thought I would just mention what I know at this stage before handing over to you.

PN14

MS SIAMI: Yes. Thank you, your Honour. I have, I think I have had a look at that file. Your associate provided me with an opportunity to go through it and I believe the log of claims contained in that file was one served by VECCI and not the union log of claims. So it is still.

PN15

THE SENIOR DEPUTY PRESIDENT: They are probably quite different in that case, Ms Siami, I guess.

PN16

MS SIAMI: Exactly, your Honour. So it is still unknown as to what the actual contents of the union log of claims was, your Honour. Sorry, I think it was the Victorian Chamber of Manufacturers.

PN17

THE SENIOR DEPUTY PRESIDENT: Yes. There is probably still quite a different log to that which your union would have served, I am guessing.

PN18

MS SIAMI: I agree, your Honour. I thought perhaps in these submissions, I would just address the issue of ambit first in some detail and then go through the applications currently before you. As we are aware, in the ACT and Victoria, the award is common rule and therefore my concentration has really been on Tasmania and South Australia. This is because in relation to New South Wales, New South Wales only became bound to a federal award in 1994, and as such I didn't think there would be any real dispute as to ambit in the log of claims.

PN19

As you outlined your Honour, there was a log of claims for C01333 of 1977 and correctly pointed out that this log of claims has somehow vanished from the records unit of the registry and I also noted in that letter that the log of claims in relation to 32602 of 1994, 30860 of 1993 and 31330 of 1999 couldn't be found and I have actually managed to obtain copies of those log of claims just to complete the folder.

PN20

THE SENIOR DEPUTY PRESIDENT: I see. All right. Thank you.

PN21

MS SIAMI: I haven't provided these to the parties as yet but will on request.

EXHIBIT #CFMEU 1 FOLDER OF VARIOUS ROPING-IN CLAIMS/AMBIT LOGS AND RESPONDENCY LISTS.
EXHIBIT #CFMEU 2 C32602/1994 DATED 08/08/1994
EXHIBIT #CFMEU 3 C30860/1993 DATED 18/05/1993
EXHIBIT #CFMEU 4 C31330/1999 DATED 04/03/1999

PN22

THE SENIOR DEPUTY PRESIDENT: Now those latter three documents as I understand it, have not yet been provided to the employers. If I could just ask that at some stage you provide them to them. Perhaps if you send them a copy of the one that you have marked so that people will know which is which.

PN23

MS SIAMI: Which is which, yes.

PN24

THE SENIOR DEPUTY PRESIDENT: So that would seem to leave us then with the 1977 claim, on the basis that you are saying to me that the 1993 claim and the 1994 claims provide ambit within which the award can continue to operate. Yes.

PN25

MS SIAMI: Yes, your Honour. In relation to that 1977 log of claims, I have compiled a list that was at tab 5 of the folder, outlining what has happened to those companies or where those companies are now, and as you can see, a number of them have been deregistered according to the ASIC website. A number have no record. I think some of these were perhaps individuals that may have been roped in at the time and a number have been removed from the record. A few have been re logged and form part of later roping in claims and on my calculations, there was about 50 respondents that were still in operation but had not been re logged.

PN26

THE SENIOR DEPUTY PRESIDENT: They would appear to be candidates for a new log.

PN27

MS SIAMI: I think so, your Honour. Just on those 50, I think some of them perhaps are not involved in the furnishing industry any more. For example, just looking through the names, a couple of them have changed enterprise names, like Blueline Enterprises, which it was when it was roped-in, is now Altramah Fisheries. So I am not sure what the furnishing connection for that would be. In relation to the total number of respondents to the award, and this is including those that are named in Victoria, there is about 16.5 thousand, and if we disclude Victoria, it is about 9000.

PN28

So therefore the proportion of companies that are relying on this 1977 log, is about 0.3 per cent when one includes Victoria and about 0.55 per cent without Victoria. So it is the submission of the union that this total percentage of companies who remain reliant on the 1997 log is incredibly small and it is not known whether ambit exists or not. It is simply an unknown. So it is the submission of the union that it would be in the public interest to continue hearing these matters, and the union will undertake to look further into these companies and re-log them if appropriate.

PN29

THE SENIOR DEPUTY PRESIDENT: Well, it simply means that in relation to those employers where you are relying on that absent 1977 log, it may well be the award does not in fact have application to them.

PN30

MS SIAMI: Yes, your Honour.

PN31

THE SENIOR DEPUTY PRESIDENT: That is perhaps a bigger issue for you and the union in this circumstance than it is for the Commission.

PN32

MS SIAMI: Yes.

PN33

THE SENIOR DEPUTY PRESIDENT: Ms Siami, there is one other issue then that does arise. And it is one that I am simply asking the question of you and the parties about. I don't have an answer to my question. Like you, I have been comfortably excluding the Victorian companies from consideration of this question of ambit. But I am not altogether certain that I can do that. It is clear that I don't need to look at the issue of interstateness relative to Victoria, and that the provisions of the new section 493A require that Victoria be treated as if it were a territory for the purpose of section 141. But I am not yet altogether certain that section 141 in fact removes the need for a dispute finding and hence the role of that concept of ambit.

PN34

Now, given the extent to which the traditional Victorian respondents came into the award back in the 1960s, late 50s early 60s and 1970s, that that issue of ambit just leaves me a little uncomfortable. I don't propose to delay consideration of the application but it is a matter that I will raise with you. It seems to me to be incumbent upon both the union, and particularly the Victorian parties to ponder upon because it would be a very great pity if we ignored that question now, only to find it came back to haunt people in terms of the extent to which the award could be relied upon. Now I am not sure that I have spelt out my dilemma as clearly as I might have so that if you or, particularly the Victorian parties, want to clarify that question any further, feel free to do so.

PN35

MS SIAMI: Thank you. It is a question I was thinking about over the weekend.

PN36

THE SENIOR DEPUTY PRESIDENT: I wouldn't recommend it for weekend thinking, normally, Ms Siami.

PN37

MS SIAMI: No. That is why I didn't get very far.

PN38

THE SENIOR DEPUTY PRESIDENT: Yes. If you have resorted to reading the Act on weekends, in those circumstances, I can recommend some other form of reading.

PN39

MS SIAMI: I think, in relation to perhaps companies that aren't roped in yet, it is a much simpler issue in Victoria. But for those that have been roped in, what ambit does apply is, I think, something that will need to be considered.

PN40

THE SENIOR DEPUTY PRESIDENT: Yes. Now, perhaps before you go on, do any of the Victorian employer parties require any clarification of that question that I have raised?

PN41

MS WATT: Your Honour, the Cabinet Makers Association will most likely wish to have some discussions with Ms Siami about this issue before commenting.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes. All right. Thank you.

PN43

MS SIAMI: Thank you, your Honour. It is a submission of the union that ambit exists in the log of claims in relation to 2108 of 1987 and I have just taken a number of points from that log. Point 6 under contract of employment states the employment shall be by the week and so it is in the submission that there is still ambit in relation to casual employment. Weekly wage rates at point 12 is $2000 per week, and I think the current maximum under the award is about 620.

PN44

And point 18, employment of persons under the age of 21. It says no person under the age of 21 shall be employed except under a system of indentured training and that hasn't the zest or ambit there. Point 20 goes to the special rates, which gives ambit in relation to the allowances and point 67 and 77 give ambit for the jury service application. Similarly with 30860, employment shall be by the week. The weekly wage rate is $3000 per week. The employment of persons under the age of 21 is the same.

PN45

Special rates is the same and there is also ambit under point 62 and 73 for the jury service application. From then, the logs for 32602 of 1994 and 31330 of 1999 are I think identical and provide a minimum wage rate of $3000, and state that no person under the age of 21 shall be employed except under a system of indentured training which gives rise to ambit for the junior workers and the apprentices. And the log of claims for 5485 of 2002 differs slightly but still provides the minimum wage rate of $3000 and the employment of persons under the age of 21 is the same as other logs. So it is the submission of the union that the issue of ambit should be, is now well and truly answered and it is clear that there is no reliance on the log from the 1960s that I think was first raised by your Honour.

PN46

THE SENIOR DEPUTY PRESIDENT: Yes. That is the first issue. I am not sure that I can conclude that the issue of ambit has been fully addressed given the 1977 issue and the question I am asking about the common rule operation but as I said to you, I am happy to hear where the parties have got to in terms of the various components of these applications.

PN47

MS SIAMI: In relation to C2004/372, which was the application relating to apprentices and juniors, the Commission has the power under section 113 of the Workplace Relations Act, to set aside or vary awards and also under sub section 3A(b) of that Act it states that:

PN48

The Commission may on application by an organisation or persons bound by an award, vary the award by varying a junior rate of pay in the award.

PN49

And in part this is what this application entails because it is an application to vary both apprentice rates and junior rates in New South Wales. It is the submission of the union that the proposed variation of the rates of pay for apprentice and junior workers in the furnishing industry is necessary to ensure the objects of the Workplace Relations Act.

PN50

THE SENIOR DEPUTY PRESIDENT: Look, before you go on any further, is this a matter that is agreed or is it the subject of dispute?

PN51

MS SIAMI: It is, your Honour.

PN52

THE SENIOR DEPUTY PRESIDENT: I see. Thank you. Yes.

PN53

MS SIAMI: In particular sub sections 3D(2) and 88B(2) of the Act require the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions. Your Honour, this variation will essentially standardise the apprentice and junior rates throughout the award because at present the rates in New South Wales are different from those applying elsewhere and this really is a result of the historical origins of the two awards and was not adequately addressed at the time of consolidation. Since the consolidation of this award in 2003, this broad issue of apprentice and junior rates has been the subject of arbitration twice in the Commission in relation to which rates apply in the ACT, whether it was the same as New South Wales or the same as the other states and territories.

PN54

It was first raised in the union's application to make the award common rule in the ACT and Commissioner Deegan did not grant the exemption being sought to the common rule of the apprentice rates and therefore the rates of the other states and territories applied in the ACT. There was then an application by the FIAA to vary the award before Commissioner Hingley and he did not grant the application to make the ACT rates the same as New South Wales and in fact he suggested a course to standardise apprentice and junior rates.

PN55

Your Honour, the union and the employer respondents in New South Wales have been discussing and negotiating on this issue for a number of years and this has involved a serious commitment by the parties and the dedication of time and resources. It has resulted in a consent draft order which might be different to the one you have, your Honour, so I will hand one up.

PN56

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you.

PN57

MS SIAMI: This draft order was emailed to the parties last week so they have a fresh copy which included the operative date and I think there was a mistake with the operative date. That is supposed to be 2005 not 2004.

PN58

THE SENIOR DEPUTY PRESIDENT: Yes, Ms Siami?

PN59

MS SIAMI: Your Honour, the operative date has a gap between the date of the order and its enforceability and this is really to ensure enough time for the parties to educate the employers and the employees of the changes to the wage rates and of junior and apprentice workers in New South Wales and just give them the time to prepare for that, your Honour. And it is my understanding that this draft order is consented to by the FIAA, Australian Business Industrial and Australian Retailers Association and I do have a letter from the Australian Retailers Association indicating their consent.

EXHIBIT #CFMEU 5 LETTER FROM AUSTRALIAN RETAILERS ASSOCIATION DATED 24/02/2005

PN60

THE SENIOR DEPUTY PRESIDENT: So does that mean that you understand you have agreement with all of the employer associations representing employers in New South Wales?

PN61

MS SIAMI: Yes, your Honour.

PN62

THE SENIOR DEPUTY PRESIDENT: And the ACT? Or does it impact on the ACT at all?

PN63

MS SIAMI: It doesn't impact on the ACT. Your Honour, it is the submission of the union that this variation will assist, may assist in combating the skills shortage in the furnishing industry and it will also make the national furnishing industry more equitable with the same minimum wage rates applying across all states and territories in which this award applies. Just in finishing, on this application, your Honour, the union would like to thank the parties for their efforts in arriving at this consent position.

PN64

THE SENIOR DEPUTY PRESIDENT: I see. Now, before I hear from the employers on it, can I just clarify the treatment of the kitchen industry in New South Wales.

PN65

MS SIAMI: Yes, your Honour. The kitchen industry in New South Wales is also regulated by the State Joiners Award and, in fact, adult employees, their minimum rates are prescribed by the terms and conditions of the Joiners State Award as a joiner, and that is under 21.3.3 of the award, and there was an agreement between the parties that for junior workers and apprentice workers it would be the higher of the two.

PN66

THE SENIOR DEPUTY PRESIDENT: I see. So with respect to kitchen workers there is not the level of uniformity that applies to other employees?

PN67

MS SIAMI: No, your Honour.

PN68

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Ms Siami. Now, do any of the employer associations want to add anything to Ms Siami's explanation of this matter or to clarify that they are, for some reason, not in consent over this draft order?

PN69

MS TOPRAKCI: Your Honour, Australian Business Industrial is not objecting to the application.

PN70

MR KHOO: Your Honour, the Furnishings Industry Association consents to the union's application.

PN71

MS WATLING: Your Honour, the Australian Industry Group has numerous members that operate up in New South Wales and we are still in the process of consulting members regarding this issue. We would respectfully request further discussions with Ms Siami from the CFMEU regarding this application.

PN72

THE SENIOR DEPUTY PRESIDENT: How much longer do you think you might need to discuss the matter with Ms Siami?

PN73

MS WATLING: By the end of this week we will have a final position on the issue.

PN74

THE SENIOR DEPUTY PRESIDENT: I see. Thank you. Any other employer association in Melbourne or Sydney want to comment? Mr Sheehan, do you have members in this regard?

PN75

MR SHEEHAN: Sir, we don't have a major interest in this application as it does not apply to South Australia, sir. We won't oppose the application.

PN76

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, Ms Siami, if I receive advice from either you or from AIG indicating over the next, let's say fortnight, that the parties are in consent in terms of this application, I will consider the draft order that you have provided to me, and if I am happy with that draft order, issue an order from the date with effect from the first pay period to commence on or after 7 June 2005.

PN77

If, over that next two week period either the parties advise they were not able to reach agreement or, alternatively, I simply didn't receive any advice, I will relist the matter and see what we can do to resolve the issue. Equally, if for some reason when I have had the chance to read through the draft order in detail, I have any questions, if possible I will put them to the parties in written form. Otherwise I will convene a further hearing. It does appear that you are getting close to an agreed position.

PN78

MS SIAMI: I hope so, your Honour.

PN79

THE SENIOR DEPUTY PRESIDENT: All right. Can we move on from that one to the next matter.

PN80

MS SIAMI: Yes. The next matter being C2004/373. It is about the casual and part time provisions in the award. In respect to this application, your Honour, the parties have had initial discussions by way of telephone conference on 15 February. However, I do not believe that all avenues have been exhausted in terms of negotiations and therefore we seek an adjournment for say, some six weeks for further discussions to take place.

PN81

THE SENIOR DEPUTY PRESIDENT: So in effect you are proposing that I relist that matter for a hearing in six weeks time, whereupon the parties will tell me whether or not they have reached agreement?

PN82

MS SIAMI: Yes, your Honour.

PN83

THE SENIOR DEPUTY PRESIDENT: All right.

PN84

MS SIAMI: Similarly, for C2004/374, classifications. There has been - again that was subject to the telephone conference and there has been some discussions with the FIAA about alternatives and broadening of the current draft order but, again, more time will be required.

PN85

THE SENIOR DEPUTY PRESIDENT: Yes.

PN86

MS SIAMI: In respect to c2004375, which is the jury service clause. It is the current award provision with respect to jury service disadvantages the employees under the award when compared to employees in Victoria who were, prior to 1 January 2005, not award covered. The jury service leave clause currently excludes casual employees and caps make up pay at the level of ordinary time earnings. However, the Victorian legislation, which determine the jury service entitlement for workers who were award free prior to the common rule application of the award, did not exclude casual employees and did not cap the make up pay at this level.

PN87

The union submits that the variation being sought is consistent with the Full Bench decision of Vice President Ross, Senior Deputy President Lacy and Commissioner Whelan, which is print PR952376 in the Grocery Products Manufacturing Grocers Award 2003, and the decision was on 11 October 2004. In that decision the Full Bench eased the disadvantage by varying the award clause in respect of Victorian employees only by removing the cap on the makeup pay and by including casual employees. An updated draft order was emailed to the parties last week which included - and really the changes to that in the application was the update of your name and the C number and the proposed operative date being today's date. I do have a copy if you like.

PN88

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN89

MS SIAMI: I also have a copy of a letter from Australian Retailers Association indicating their consent to this application.

EXHIBIT #CFMEU 6 CORRESPONDENCE FROM AUSTRALIAN RETAILERS ASSOCIATION DATED 04/03/2005

PN90

MS SIAMI: Thank you, your Honour. The union notes that the order sought is different to that which came out of the Full Bench decision and this is because the initial award clause and the Grocers Award was different to that in the Furnishing Industry National Award. And the Full Bench decision at paragraph 3 states that the application is in relation only to the first subclause ie in relation to casual employees and the quantum of makeup pay, and as such this is all that is being sought in this application. The award was declared common rule in the state of Victoria, operative of 1 January 2005, and the union is seeking the operative date for this application being the first pay period on or after today's date. And it is my understanding, your Honour, that this will proceed by consent.

PN91

THE SENIOR DEPUTY PRESIDENT: Yes. The jury service issue was one of the matters that initially activated my interest in that question of ambit. Jury service probably wasn't a component of that 1970s log. So once again that is a question for the parties to ponder upon. All right. Are there any employer comments on the jury service application 375 of 2004? So I am working on the basis there is a consent position there. Very well. Ms Siami, I won't make the order today, simply because I want to have a look at that draft order in the context of that Grocery Products Award variation.

PN92

If I am able to make the order in the terms sought in that draft order, I shall do so within the next week or so. That order, if it is to be made, will have effect from the first pay period to commence on or after the date upon which I make the order. So that you may vary marginally from 7 March. I will endeavour to ensure that I don't delay the matter for too long and the publication of any such order may once again flag the issue of this ambit question. Not from the point of view of bringing agreement unstuck but simply because I would rather the parties address that issue now than leave it as an unresolved issue for the future. Yes?

PN93

MS SIAMI: In relation to C2004/376, which is the public holidays application for the allowance of half day public holidays, and c2004377 which is in relation to allowances, the parties have had initial discussions but on both these matters request further time.

PN94

THE SENIOR DEPUTY PRESIDENT: Is that to fall into the six week category?

PN95

MS SIAMI: Yes, your Honour. That would be helpful.

PN96

THE SENIOR DEPUTY PRESIDENT: Yes?

PN97

MS SIAMI: And the last application is in relation to C2004/378, about superannuation, and I will take on board your comments about the choice legislation and hopefully we will address some of those concerns. This application seeks to vary the superannuation clause in the award by removing companies from the exempt or leave reserved list which have either ceased trading or, in one circumstance, complied with the award. The application also seeks to update the names of some of the companies presently on the lists.

PN98

Sub section 113(3) of the Workplace Relations Act, gives the Commission the power to vary a term of the award referring by name to an organisation or person bound by the award to reflect a change in the name of the organisation or person or (b) where the registration of the organisation has been cancelled or the organisation or person has ceased to exist, and the reference to its name. And your Honour, this is in fact what the majority of the application is about. And the union is seeking only one company to be removed on the basis of compliance with the current award clause.

PN99

The award superannuation provision at present contains these lists and these lists have not been varied for, I think since their insertion. I think they have just remained static and even though the superannuation clause itself was subject to arbitration shortly after the consolidation of the award by Commissioner Blair, the issue there was about choice itself and the leave reserved and exempt lists simply weren't looked at or amended. As you are aware, the choice legislation is being introduced ostensibly from 1 July this year and it is largely encapsulated by the new part 3A of the Superannuation Guarantee Administration Act of 1992.

PN100

And it really means that on 1 July 2005, employers are required to give employees a standard choice form and using that form, an employee can choose any complying fund as a superannuation fund to which their employer is to contribute superannuation contributions on their behalf. However, if the employee does not fill out the standard choice form, the employer will contribute to a default fund on behalf of that employee.

PN101

Now it is my understanding, your Honour, that sub sections 32NA(2) and 32C(3) to (9) of the SGA Act, provide that an employer is not required to implement the choice of fund requirements if they are already complying with an obligation to make superannuation contributions under a certified agreement, a state award or an Australian Workplace Agreement. However, no such exception exists where superannuation contributions are governed solely by a federal award. Where superannuation is governed by a federal award, employers must provide employees covered with a standard choice form, and those employees are not limited to any fund that they can choose.

PN102

In these cases the employers must still comply with the employees nomination on the standard choice form despite any obligation contained in a federal award. And I think this is due to the effect of section 32Z of the SGA Act. And pursuant to that section the superannuation payment provisions of a federal award that name a particular fund, cannot be enforced if an employee has chosen another fund using a standard choice form. However, your Honour, the award clause still has importance and relevance in the circumstances where the employee does not fill in the standard choice form or does not select a fund on that standard choice form because in those circumstances the award provisions prevail.

PN103

Now the employer must pay the employees superannuation in that case to the award nominated fund or in accordance with the award otherwise the employer will be in breach of the award. And essentially where the award specifies a fund, that fund is the default fund to be used by the employer for employees covered by the award and in cases where more than one fund is specified, the employer may then choose any of those super funds contained in the award. So, in the case we have here in the Furnishing Award where we are looking at the exemption and the leave reserved lists, if a company on the exempt list hands out the standard choice forms to employees and an employee fails to include a fund on that standard choice form, then the employer is bound by the federal award.

PN104

And if they do not comply with the federal award, they are in breach. But, because they have an exemption to the federal award provisions, they may then go along with whatever fund that exemption was granted for. And for those on the leave reserved list, it really just gives the company an opportunity to have the matter brought back on to be put on the exempt list. So it is essentially an exemption from the default fund in my understanding, and as such it is appropriate to ensure that those lists are up to date.

PN105

THE SENIOR DEPUTY PRESIDENT: But Ms Siami, those lists presently operate within the context of clause 28 of the award.

PN106

MS SIAMI: Yes, your Honour.

PN107

THE SENIOR DEPUTY PRESIDENT: And I think what you have outlined is that clause 28 was designed and built in a different era.

PN108

MS SIAMI: Yes.

PN109

THE SENIOR DEPUTY PRESIDENT: In a sense it was designed and built in a pre seat belt era and we now have impending legislation requiring seat belts. The award provision in its proposed amended form may well have the legal effects to which you have referred. But I must say, I am struggling with why it is that a few short months before the choice of funds legislation comes in and at the same time as which a substantial amount of information is now being circulated within workplaces about choice of funds, I would make an amendment to this particular provision without ensuring that we try to upgrade the provision, so as to express what effect it will in fact have in the context of that choice of funds legislation.

PN110

I am not closed to it, but I must say I am struggling with it. I am continually putting myself in the position of either an individual employee or an employer and I am struggling with how I would read this particular clause if at the same time I had read or seen something, talking about the choice of funds legislation. And I just wonder whether you might help me in that regard.

PN111

MS SIAMI: Your Honour, I don't, with respect, I don't think that is what this application is about. This application is simply removing deregistered companies from that exempt list, it is not seeking to have the clause rewritten in light of the superannuation legislation. It may be that there is a test case run before the Commission which does that, and in that case the union will reconsider its position, but at the moment it is simply removing deregistered companies and in one case, if Fallsha and sons Pty Ltd, I believe they have been - - -

PN112

THE SENIOR DEPUTY PRESIDENT: Sorry, that is Fallsha is it?

PN113

MS SIAMI: Yes, your Honour, F-a-l-l-s-h-a and sons. They have been deleted and they have been contributing to FIRST for, I believe, for about 13 years, and solely contribute to them. I have an amended draft order which may have been changed from the one you have. And I also have for your Honour a copy of the letter that was sent to F Bellshaw and Sons, and a list of who else it was sent to.

EXHIBIT #CFMEU 7 STATEMENT VERIFYING SERVICE OF DOCUMENTS

PN114

MS SIAMI: Your Honour, I also have a copy of the printouts for those companies that have been removed just from the ASIC website indicating that the company has either been deregistered or removed from the business registrar.

EXHIBIT #CFMEU 8 LIST OF COMPANIES FROM ASIC

PN115

MS SIAMI: Your Honour, the letter that was sent to F Bellshaw and Sons Pty Ltd and a couple of others indicated the union's intention to tidy up the award clause and stated that if the requirement for them to remain on the exempt or leave reserved list remain, for them to simply reply and inform the union of this position. All the other companies replied and said, in the main said that they had, you know, 50/50, 50 were in FIRST, 50 were in other funds and they quite were happy with them, and the union simply left them on that exempt list, but there was no reply received from F Bellshaws and Sons. And I do understand that they have been contributing solely to the Furnishing Industry Retirement Superannuation Trust for between 10 and 15 years.

PN116

And, as stated, the other companies that are being deleted have either been deregistered or removed as a business entity and it's the suspicion of the union that the application is consistently the objects of the Act in that it maintains an effective safety net by keeping the companies listed in it up to date and it has also consistent with the requirements of the rules of the Australian Industrial Relations Commission. It is also my understanding that the application is one by consent with a number of the parties informing me of their members who wish to remain on the list and those requests have been acceded to. And that's really all I have to say about that.

PN117

THE SENIOR DEPUTY PRESIDENT: All right, thank you. I might start with you first in South Australia, Mr Sheehan.

PN118

MR SHEEHAN: Thank you, sir. Sir, that is confirmed by my friend from the union, we have had discussions in relation to the employers that are contained in clause 28(10) and 28(11) and we confirm that we won't oppose the application, the application is by consent before you today.

PN119

THE SENIOR DEPUTY PRESIDENT: In discussing the matter with your members, Mr Sheehan, has the impact of the superannuation choice of funds legislation been considered?

PN120

MR SHEEHAN: Sir, the only issue we have taken up with them is to whether or not it is appropriate for them to still be listed in the exemption clause or in the lead preserve clause in relation to when the original draft order was circulated by the union there were members of ours that had been excluded and we sought for their reintroduction into those particular clauses again. At the particular time when I spoke with members of ours, certainly members included in 28.10, we did discuss the issue of choice of funds and what was currently operating in the workforce and we didn't discuss it to any great degree at that particular time but certainly, the views of the employees that we spoke with indicated that they wished to be listed still under 28.10. I am not quite sure whether, I don't think there was anyone in the leave reserve that we had an issue with but certainly, at 28.10 they did indicate quite clearly that they did follow other funds and they wished to be listed as an exempt employer under that particular fund, under that particular clause.

PN121

THE SENIOR DEPUTY PRESIDENT: Yes. I am still a little lost. Am I correct in understanding then that what you are saying to me is that the discussions with your member employers, which have predicated your agreement to this proposed order, addressed the implications of that choice of funds legislation.

PN122

MR SHEEHAN: Not fully, sir. The issue of choice of funds was not taken up to any great degree with the employers. It was mentioned only briefly. The only issue that was taken up to any great extent was whether or not they still wished to be listed under clause 28.10, exemptions, and that was certainly the case on the understanding that they did not follow one particular fund as nominated by the union in this particular case, but they had a number of funds in place in their workplaces.

PN123

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you.

PN124

MR SHEEHAN: Thank you, Commissioner.

PN125

THE SENIOR DEPUTY PRESIDENT: We might move down to Victoria, do any of the Victorian parties want to comment on this application?

PN126

MS WATT: Your Honour, the Cabinet Makers Association does not object to the award being varied as sought. We have had some discussions with individual members about the impact of the choice of funds legislation and this particular award application and we have indicated to members that the impact is really to specify what would be the default fund, superannuation fund, if an employee fails to make a choice.

PN127

THE SENIOR DEPUTY PRESIDENT: Yes. Have your members commented or has there been discussion over the extent to which in a post 1July environment where the choice of funds legislation has effect, then the issue of the default fund does potentially arise that, in effect, the award provision then has a very different connotation to that which is currently expressed. You see, the issue that I am wrestling with and that I have endeavoured to outline to Ms Siami is a question of why it is that three months or so short of the choice of funds legislation, which appears to me to fundamentally change the basis upon which award superannuation schemes will operate, and particularly exemption arrangements will operate, I should be considering a variation which, if you like, operates in the old form and has the potential to create confusion when people read that particular provision in the context of the impending legislation. It's a matter that I don't have a fixed view on as yet but I must say I am struggling with it.

PN128

MS WATT: Your honour, I can't say that I have discussed that particular issue with members. I believe that the interaction between awards and various pieces of legislation is quite complex and not only in the area of superannuation choice of funds. My understanding is that the impact of the award after 1 July will simply be to specify where an employer should put superannuation guarantee if the employee shows no interest whatsoever in choosing a fund. I believe that this application, I don't believe that the timing - I certainly haven't had any indications that the timing is to do with the superannuation choice of fund legislation but that would be something that you could - - -

PN129

THE SENIOR DEPUTY PRESIDENT: I am not suggesting that at all.

PN130

MS WATT: My understanding of the object of the application is simply to tidy up a clause that has become a little out of date because of companies coming and going.

PN131

THE SENIOR DEPUTY PRESIDENT: Look, I very clearly understand that to be the case from Ms Siami. The issue that I am grappling with is, first of all, as you said, the choice of funds legislation will fundamentally change the way in which exemption provisions in federal awards operate and, in fact, I am not altogether sure what impact this clause will have at all in that post choice of funds legislation time. It would appear to me that in effect what the parties are suggesting is that after 1 July 2005 an employee who does not make an election to have their superannuation dedicated to a defined or nominated fund will have it paid to a default fund, but then I am still wrestling with the extend to which the exemption provisions in this particular award can be relied upon to establish that default fund.

PN132

And again, I don't have an answer to my own question at this stage but I must say it is causing me some unease, given the propensity for people to become very concerned about where their superannuation money is being put and the reality is that this particular issue has, and possibly will continue to be the subject of some angst. It's a matter that I have had to turn my mind to on a number of occasions in terms of trying to resolve disputes. It could be that I am simply being lazy and I don't want to have to do it again between now and 1 July but I would prefer to say to the parties, look, I think it's important that we get it right.

PN133

MR WATT: I agree with you, your Honour, and I would have to say that I am probably not in a position to answer the question at this stage. I would want to have further discussions with Ms Siami about that.

PN134

THE SENIOR DEPUTY PRESIDENT: Yes. Any other comments from Victorian employers?

PN135

MS WATLING: We have reviewed, the Australian Industry Group has reviewed the order served by the union and don't oppose a variation of terms sought. We have had discussions with member companies regarding choice of fund legislation through the forum of member briefings I am probably not in a position to reply regarding the issue of post 1 July and the issue of the default fund.

PN136

THE SENIOR DEPUTY PRESIDENT: I see. Thank you. New South Wales?

PN137

MR KHOO: Your Honour, the Furnishing Industry Association doesn't object and in fact consents to the application of the union in this matter. With regards to the issue that you have raised before the parties this morning, your Honour, I am afraid I am also not in a position to be able to answer that question. I need to obtain further instructions.

PN138

THE SENIOR DEPUTY PRESIDENT: Yes. Ms Topracki?

PN139

MS TOPRACKI: Your Honour, I am also not in a position at this stage to answer the issues in relation to choice upon legislation but would see the value in having some further discussions with the parties as well as our members on the issue of post 1 July 2005, and also the default fund issue, your Honour. Thank you.

PN140

THE SENIOR DEPUTY PRESIDENT: Thank you. Ms Siami, can I put a couple of proposals to you for consideration? I am very loathe to bring undone a consent position but I should also say I am distinctly uncomfortable about modifying a clause the whole foundation of which might be changed in a few months time. I am particularly concerned that the clause might then, in terms of the roller Act, not be expressed in plain English or might be facing inherent redundancy but still be expressed in terms which might cause confusion. One option would be that I simply say to you that I will consider this draft consent order and would propose to make a decision as to whether or not I simply endorse that order in, say, a fortnight's time. If during that time the union or any of the employer groups wanted to further address me in relation to the draft order, they could do so. That could be by way of a written response or if any party requested it, the matter would be called on for a further hearing.

PN141

In the event that I was not able to, or didn't hear from the parties at all, and simply worked on the basis of that draft consent order, but was not able to accede to that agreed position then at the end of that time, or shortly after that two week period, I would set out the basis for the concern and give the parties the opportunity to address any of those issues. It seems to me that is the best approach to adopt in this situation. An alternative position might simply be to give the parties a couple of weeks and if you advise me at the end of that two week time that there is still an agreed position and that this draft consent order provided to me today still reflects that position then I will consider it from that basis.

PN142

So I am not particularly concerned as to which of those approaches we follow and I am very much in your hands in that regard. I do need to stress I am very loathe to bring undone a consent position but, equally, I have to say that superannuation and the choice of fund is so frequently an issue in dispute that I am a little nervous about updating this particular clause in its present form at the moment. I am in your hands as to which of those options we follow or indeed if you have a third option, I am happy to consider it.

PN143

MS SIAMI: Your Honour, I think the first option is probably pretty similar to something I would suggest.

PN144

THE SENIOR DEPUTY PRESIDENT: All right. And are the employer organisations happy with that approach?

PN145

MS WATT: Yes, your Honour.

PN146

MR TOPRAKCI: Yes, your Honour.

PN147

MS WATLING: Yes, your Honour.

PN148

MR KHOO: Yes, your Honour.

PN149

THE SENIOR DEPUTY PRESIDENT: Ms Siami, I have noted that if my memory serves me correctly there is no Tasmanian employer organisation involved in these particular applications. Have there been discussions with the Tasmanian employers?

PN150

MS SIAMI: Your Honour, all the material has been sent to the Tasmanian Chamber of Commerce and Industry, but no reply has been received.

PN151

THE SENIOR DEPUTY PRESIDENT: All right. Thank you. Is there anything further, Ms Siami?

PN152

MS SIAMI: Your Honour, perhaps if a date could be set for about six weeks.

PN153

THE SENIOR DEPUTY PRESIDENT: What about 11 April? It's exactly six weeks, I think. No, we could make it actually 18 April.

PN154

MS SIAMI: Your Honour, that day looks fine to me, the 18th.

PN155

THE SENIOR DEPUTY PRESIDENT: Any of the employer organisations have a problem with 18 April?

PN156

MS WATT: No, your Honour.

PN157

MS WATLING: No, your Honour.

PN158

MR KHOO: No, your Honour.

PN159

MS TOPRAKCI: No, your Honour.

PN160

THE SENIOR DEPUTY PRESIDENT: I will list the matter for 18 April at 10 am central standard time. Does that represent a problem for the Victorian or New South Welsh parties? That is 9.30 your time?

PN161

MS WATT: No, your Honour.

PN162

MS WATLING: 10.30 our time?

PN163

THE SENIOR DEPUTY PRESIDENT: Sorry, 10.30 your time. Yes.

PN164

MR KHOO: 10.30 our time. That's fine, your Honour, thank you.

PN165

THE SENIOR DEPUTY PRESIDENT: All right. I shall adjourn the matter on that basis.

<ADJOURNED UNTIL MONDAY, 18 APRIL 2005 [11.16AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #CFMEU 1 FOLDER OF VARIOUS ROPING-IN CLAIMS/AMBIT LOGS AND RESPONDENCY LISTS. PN21
EXHIBIT #CFMEU 2 C32602/1994 DATED 08/08/1994 PN21
EXHIBIT #CFMEU 3 C30860/1993 DATED 18/05/1993 PN21
EXHIBIT #CFMEU 4 C31330/1999 DATED 04/03/1999 PN21
EXHIBIT #CFMEU 5 LETTER FROM AUSTRALIAN RETAILERS ASSOCIATION DATED 24/02/2005 PN59
EXHIBIT #CFMEU 6 CORRESPONDENCE FROM AUSTRALIAN RETAILERS ASSOCIATION DATED 04/03/2005 PN89
EXHIBIT #CFMEU 7 STATEMENT VERIFYING SERVICE OF DOCUMENTS PN113
EXHIBIT #CFMEU 8 LIST OF COMPANIES FROM ASIC PN114