BP2006/3343, Transcript of Proceedings [2006] AIRCTrans 1079 (26 September 2006)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 15756-1

COMMISSIONER HARRISON

BP2006/3343

WILKEN ELECTRICAL SERVICE PTY LTD
AND
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
s.431(1) - Appl’n for order to suspend or terminate a bp (pattern bargaining)
(BP2006/3343)

SYDNEY

10.08AM, MONDAY, 18 SEPTEMBER 2006

PN1

MR K KUTASI: I seek leave to appear for the applicant.

PN2

MR E QUIGLEY: I appear for the Australian Building and Construction Commissioner, as giving notice of intervention in this matter.

PN3

THE COMMISSIONER: Yes, I have it, thank you.

PN4

MR L BENFELL: I appear on behalf of the CEPU.

PN5

MR D WEIZMAN: I appear for the CEPU.

PN6

THE COMMISSIONER: Thank you. Leave is granted - - -

PN7

MR BENFELL: I wanted to say something about the application for an intervention order by ABCC.

PN8

THE COMMISSIONER: Yes.

PN9

MR BENFELL: You are no doubt aware, Commissioner, that section that section 72 of the Building Construction and Improvement Act 2005 empowers the Commissioner to apply to intervene before this Commission only if a matter arises under the Workplace Relations Act which involves a building industry participant or building work. The Commission has no evidence before it whatsoever or any other material that this matter involves either of those two classes of persons, and secondly we do not believe that there is an automatic right to appear before this Commission.

PN10

The legislation in the Building Improvement Act simply facilitates or empowers the ABCC to apply to intervene before this Commission. If you go to the Workplace Relations Act there’s nothing in the intervention section which says that the ABCC has automatic rights.

PN11

THE COMMISSIONER: Thank you, Mr Benfell. Mr Quigley?

PN12

MR QUIGLEY: Commissioner, I certainly take Mr Benfell’s point, but section 72 of the Building and Construct Industry Improvement Act does put an onus on the ABC Commissioner to meet a number of conditions. Commissioner, do you have a copy of the Act in question?

PN13

THE COMMISSIONER: No, I haven’t.

PN14

MR QUIGLEY: I understand Mr Benfell has got a copy. The provision in question, Commissioner, is section 72. Mr Benfell errs in suggesting that section 72 makes reference to the word apply or application. Section 72 merely says that the ABC Commissioner may, in other words, at his discretion, by giving written notice to the Registrar, which the ABC Commissioner has done in this case, intervene in a matter before the Australian Industrial Relations Commission, in other words, these proceedings, that arises out of the Workplace Relations Act, the application on behalf of Wilken Electrical Services made pursuant to the Workplace Relations Act and that the matter involves a building industry participant.

PN15

The CEPU is such a building industry participant. It’s a registered organisation that has members who are employed in the in the building and construction industry, or it’s a matter that involves building work. The work electrical tradespersons within the building industry, we submit, is building industry work. Mr Benfell didn’t say that building industry work wasn’t involved or that a building industry participant wasn’t involve. What he did indicate was that there was no evidence in relation to that.

PN16

We would submit, Mr Commissioner, that it is plain as a pikestaff that this matter involves a building industry participant. The provisions relating to the matter being before the Commission and a matter arising under the Workplace Relations Act are quite obvious on the basis of the application. That then takes me to the submissions that Mr Benfell has made in relation to the relationship between section 72 of the Building and Construction Industry Improvement Act and the Workplace Relations Act.

PN17

Commissioner, this is a matter that has already been determined by this Commission on many occasions. The first occasion where it was dealt with was a matter before Commissioner Gregor in Western Australia in December 2005 and I’d like to give the Commission a copy of the decision of Commissioner Gregor. It’s PR966077, and it’s a reasonably lengthy decision but it deals with matters other than the question of intervention by the ABC Commissioner, but I would like to take the Commissioner to a particular part of that decision. It’s at page 20 of the decision, Mr Commissioner, and it’s the paragraph that says:

PN18

The discretion contained in that section –

PN19

that section 72 –

PN20

to intervene is discretion of the ABC Commissioner, not of this Commission. The intention of parliament seems to be that the ABC Commissioner is at large, able to intervene in proceedings in this Commission. ...(reads)... It seems to me that this Commission is obliged to grant the intervention, and I do.

PN21

Now, Commissioner, one other point I should make about that decision of Commissioner Gregor’s is that the union involved in that matter, the CFMEU, sought leave to appeal against that decision in respect of matters, but not the question, the Commissioner’s decision in relation to the ABC Commissioner’s intervention. In the event, a Full Bench of the Commissioner, Senior Deputy President Harrison, Senior Deputy President Cartwright and Commissioner Simmonds in PR972196 on 9 May 2006 declined leave to appeal.

PN22

But the decision of Commissioner Gregor has been further considered by this Commission, Mr Commissioner, and that was in a decision given in transcript by Deputy President Ives who has been the head of the Building and Construction Industry Panel in this Commission and this was a decision given on 22 June 2006, and I’m just going to find the particular reference. If you have a look at paragraphs numbered 124 to paragraph 126, Mr Commissioner, you’ll see there that Deputy President Ives rules that the ABC Commissioner’s ability to intervene is not subject to the requirements of section 101 of the Workplace Relations Act.

PN23

Deputy President Ives, dealing as he does with so many building and construction industry matters, has had cause to consider this question in a number of subsequent cases and I’d like to tender to the Commission a document that I have prepared for these proceedings, which identifies subsequent cases where the Commission has dealt with the question of the ABC Commissioner’s right to intervene. The list, Mr Commissioner, has an item number 1, that decision of Commissioner Gregor that I referred to, and the decision of Deputy President Ives is at item number 3.

PN24

But you’ll see there that are in fact 15 cases before the Commission where the ABC Commissioner’s right to intervene has been at issue. Number 2 was a matter of a Full Bench involving the CFMEU where the question of the ABC Commissioner’s intervention was not challenged. There was a case before Deputy President Ives on 23 June, before Commissioner Hingley on 23 June again, before Deputy President Ives on 6 July, before Deputy President Ives on 1 August, before Commissioner Deegan on 4 August, before Senior Deputy President Watson on 10 August, before yourself, Commissioner, on 11 August this year, before Deputy President Ives on 17 August, before Commissioner Simmonds on 22 August, before Senior Deputy President Acton on 11 September, before Senior Deputy President Watson again on 12 September and before Deputy President Ives on 12 September.

PN25

And, Commissioner, in none of those cases has the view propounded by the ETU in these proceedings found favour with the Commission and we would say that based on the decisions of Commissioner Gregor, Deputy President Ives and those subsequent decisions by members of the Commission that had endorsed that, that the Commission can satisfactorily accept that the ABC Commissioner’s notice of intervention is in accordance with the requirements of section 72 of the Building and Construction Industry Improvement Act and that his intervention in this matter is therefore in accordance with that and therefore appropriate, and not subject to challenge as to any suggestion that there is some obligation on the ABC Commissioner to seek leave to intervene. If it pleases.

PN26

THE COMMISSIONER: Thank you, Mr Quigley.

PN27

MR KUTASI: May I add, Commissioner, that the applicant in question here only performs construction related work, if that is of any use in helping.

PN28

THE COMMISSIONER: Thank you. Mr Benfell?

PN29

MR BENFELL: I won’t keep you much longer, Commissioner, except to say that what my friend has said about the decision of Commissioner Gregor is correct, but he didn’t tell you the whole story in relation to the appeal that was said in relation to that decision. That appeal was a matter concerning the CFMEU and Leighton Kumagi Joint Venture. It is print PR972196 issued on 9 May 2006. They note that the ABCC was granted intervention by Commissioner Gregor on page 1 of that decision in paragraph 3 and they say that, and I quote:

PN30

Commissioner Gregor allowed the ABCC to intervene in the proceedings before him and, in his reasons for decision, indicated why the provisions of the ...(reads)... and it is not a matter about which we should comment.

PN31

Now, they were aware of the issue but they failed to say they agree with Commissioner Gregor’s reasoning and, as you know, Commissioner, when Full Benches do this it often leaves a very big doubt as to whether the original Commissioner was correct. We say, Commissioner, there is no automatic right of intervention and if you were to allow intervention that would be pursuant to section 101 of the Workplace Relations Act which allows you to allow any person intervention, if you believe that the person or body should be heard. If it please the Commission.

PN32

THE COMMISSIONER: Thank you, Mr Benfell. I note that the decisions referred to by Mr Quigley were essentially single member decisions, including one of my own. Without ruling on whether there is an automatic right I think that’s a question of argument or debate at some other time. I’m more concerned in these proceedings to move to the issues arising from the application rather than spend too much time on the question of the right to intervene. I’m going to allow the ABCC to intervene on this occasion, and mainly for the purposes of, I want to move to the major reasons for the application. Perhaps Mr Kutasi?

PN33

MR KUTASI: Thank you, Commissioner. The application before you today includes two issues. The first one relates to the suspension under section 431 for patent bargaining. The other relates to a suspension on a 430(2) for failing to genuinely try to reach agreement. I’ll deal with firstly patent bargaining. Section 421(1) of the Act defines patent bargaining any party seeking common wages or conditions for two or more proposed collective agreements. May I hand up here a copy, Commissioner, which I’ve marked exhibit A, which is the Wilken Electrical Services Pty Ltd Enterprise Agreement, which is a proposed collective agreement for the purposes of this.

PN34

This was – do you need a copy?

EXHIBIT #NECA 1 DRAFT AGREEMENT

PN35

MR KUTASI: This was – the voting period commenced on 1 September. This was handed to myself on behalf of the applicant on 6 September. I also have here a copy of a proposed agreement which was given to Fredon Industries Pty Ltd on 1 September. It is exactly the same, word for word, except for change of company name.

EXHIBIT #NECA 2 PROPOSED AGREEMENT FOR FREDON INDUSTRIES PTY LTD

PN36

MR KUTASI: There’s not one single difference between these two documents including the wages and conditions, Commissioner. This in itself proves the patent bargaining. However I also have here a copy of 11 other pre reform agreements which were lodged in the State Commission prior to the commencement of the new Act. I’ll hand those up. They’re from Nilsen Electric, JA Courtney Electrical Pty Ltd, Grid Electrical Services Pty Ltd, Galpern Electrics Pty Ltd, City Electrical Services Australia Pty Ltd, Apex Electrical Pty Ltd, Simmons Electrical Pty Ltd, Dynamite Electrical Group Pty Ltd, FIP Electrical New South Wales Pty Ltd, Tony Electrical Pty Ltd and John Goss Project Pty Ltd. All these agreements also provide for identical wages, Commissioner. I’ll hand a copy to the union as well.

EXHIBIT # NECA 3 REGISTER OF ENTERPRISE AGREEMENTS

PN37

MR KUTASI: Thank you, Commissioner. Now, of course, because these were pre reform agreements, they’re in different format to the proposed collective agreements today, but what it proves, nonetheless, is that the wages and conditions which are being sought by the union are identical, not just in regards to the Wilken and the Fredon agreements, but also with all the other agreements that they’ve done today and there’s many, many more, Commissioner, but I didn’t want to print out 50 agreements.

PN38

I think the point is that it’s nonetheless clear. So therefore there can be no doubt the union is engaged in patent bargaining as defined by the Act. You will also note in the proposed Fredon and Wilken agreements that the expiry date for those is 30 October 2008. It seems a little bit odd that expiry date would be two years and a month and a bit from today. The reason why, Commissioner, is because that’s when all the other agreements pre reform expire. So you can see they’re attempting to set up a pattern, not in the past, not only now, but also for the future, there’s ongoing patent bargaining.

PN39

Therefore moving on to section 431 states that:

PN40

The Commission must -

PN41

and I note that –

PN42

must suspend or terminate a bargaining period where a negotiating party is patent bargaining.

PN43

This is clearly the case here. It’s not a matter of discretion, Commissioner. It’s simply, with all due respect, the Act states that it must occur. That’s the first part of the argument. The second relates to section 430(1) which states that:

PN44

The Commission –

PN45

again –

PN46

must also suspend or terminate a bargaining period where a party is not genuinely trying to reach agreement.

PN47

Now, a Full Bench of the Commission recently determined in United Firefighters’ Union and Country Fire Authority, in no uncertain terms, that a party cannot be genuinely attempting to reach agreement where it pursues claims which involved prohibitive content which is the former part 8 of the regulations.

PN48

THE COMMISSIONER: What’s the print number of that?

PN49

MR KUTASI: I’ll hand up the decision, Commissioner. Print number 973841.

PN50

THE COMMISSIONER: Thank you.

PN51

MR KUTASI: I refer to paragraph 38 of the decision from the Full Bench, quote:

PN52

In our view the pursuit of claims which involve prohibitive content at the same time as seeking a workplace agreement, whenever prohibitive content forms part of a proposed agreement ...(reads)... genuinely trying to reach a workplace agreement which complies with the requirements of the Act.

PN53

In this case the Full Bench cited previous decisions by the Commission in Kempe Engineering Services, which is referred to in that decision, I haven’t got the print number with me, sorry, Commissioner – actually I do. I’ll hand up a copy. It’s print number 973592. That was a decision of Senior Deputy President Action, and also National Union of Workers v Blue Circle Transport which I believe was a decision of Vice President Watson, print number 973654.

PN54

Those are cited as authority with regard to that Full Bench decision. So we have quite a few decisions now under the new Act, Commissioner, which support this contention. In the agreement which I tendered to you which I believe are NECA exhibit 1, the agreement is covered with a litany of prohibited content. Would you like me to take you through what those - - -

PN55

THE COMMISSIONER: Yes. You might tell me what you think is prohibitive?

PN56

MR KUTASI: I certainly will, Commissioner. I refer to regulation 8.5 of the Workplace Relations regulations which regards what is prohibited content. You will see in sub – well, (c), “Prohibited content is where employees bound by the agreement receiving leave to attend training” - - -

PN57

MR BENFELL: I’m sorry, where are you?

PN58

MR KUTASI: It was regulation 8.5(c).

PN59

MR BENFELL: Sorry, yes, I see.

PN60

MR KUTASI: Sorry. Regulation 8.5(c), Commissioner, if I may:

PN61

Employees bound by the agreement receiving leave to attend training however described provided by a trade union.

PN62

And at clause 54 of the proposed Wilken agreement provides for paid and unpaid leave for training which must be provided by the Australian Electro Technology Industry Training Centre Limited. This is an EPU organisation also known as Electro Group Training. If there’s any doubt that Electro Group is operated by the union, I hand up this, which is a printout from their website, Commissioner.

EXHIBIT #NECA 4 TRAINING CENTRE WEBSITE PRINTOUT

PN63

MR KUTASI: It states, this is part of the second paragraph of that printout:

PN64

This is why the ETU established the Electro Group Training company and a skill centre.

PN65

So they established it, they run it. It’s paid training or unpaid training, training leave - - -

PN66

MR BENFELL: Commissioner, I haven’t jumped up and opposed every outrageous comment made by my friend. I don’t intend to. I just simply, if you could note that what he’s saying, because we don’t jump up and object to it, doesn’t mean to say we haven’t got objections to it.

PN67

THE COMMISSIONER: Okay, thank you. Mr Kutasi, could I ask you also to slow down a bit. I’m finding it hard to keep up with my own notes.

PN68

MR KUTASI: I’m sorry, my apologies, Commissioner.

PN69

THE COMMISSIONER: Okay.

PN70

MR KUTASI: Yes. Would you like me to elaborate further on that point?

PN71

THE COMMISSIONER: No, that’s fine.

PN72

MR KUTASI: So that alone is prohibitive content under regulation 8.5. Then moving on, we have regulation 8.5(f) which states:

PN73

Prohibitive content where the rights of an organisation of employers or employees to participate in or represent an employer or employee bound by the agreement in the whole or part of a dispute settling procedure unless the organisation is a representative of employer or employee’s choice.

PN74

I refer in the proposed agreement to clause 51.4.2 which provides automatic rights for union shop stewards to represent employees with regards to an argument about gloves.

PN75

Now, it does seem rather minor, but nonetheless it’s still prohibitive content and I’ll get later to what the consequences are, prohibited content. Regulations 8.5(h) and 8.5(i) are somewhat related as well, but they provide that prohibited content is where an agreement provides for restrictions on engagement of independent contractors or labour hire workers or requirements relating to conditions of those engagements. I refer in the proposed agreement to clause 43, breaches both of these provisions, with regards to restrictions on the hiring of improvers and a stipulation that there must be at least one apprentice for every tradesman. That’s clear, both of those stipulations are in breach of the requirements not to contain prohibitive content.

PN76

Moving on, regulation 8.6 prescribes discriminatory terms, also prohibitive content. Clause 32.1.6 of a proposed agreement provides that only those employees who provide evidence of attendance at trade union picnic shall be entitled to payment for such holiday. This is clearly a preferential payment to union members. Therefore it’s discriminatory under, not only the freedom of association provisions of the Act, but also prohibited content as defined.

PN77

Finally, with regards to prohibited content, at regulation 8.7 which requires that matters which do not pertain to the employment relationship are prohibited content. Clause 24, relating to top up insurance, is arguably not a matter pertaining to employment relationship. I don’t wish to press this in any great detail because it’s highly argumentative, of course, Commissioner, and it’s not necessarily a matter for today, but I do question to what extent 24 hour, you know, accident insurance for an employee would be a matter pertaining to the employment relationship, given that we already have workers’ compensation and an accident, you know – we’re essentially saying employees should indemnify an employee in case they decide to bungee jump off the Harbour Bridge. Again I don’t wish to press it, but it’s potentially a matter which doesn’t pertain to the employment relationship, Commissioner.

PN78

Moving on, there’s also a number of breaches in the proposed collective agreement which breached the standard, the Australian Fair Pay and Conditions standard as defined by the Act, and it also breached the requirements of section 661 with regards to termination. If you look at the proposed collective agreement, clauses 11.3 and 44.6 requires that only one week’s notice of termination is to be provided to employees. Clearly, under section 661 some employees are entitled to up to five weeks’ notice. That is a breach of the Act.

PN79

We have got clause 31.1.3 of the proposed agreement, absence before or after a public holiday. The union agreement proposes that employees shall not be entitled to payment for public holidays where they have taken sick leave before or after a public holiday. That is now prohibited under the Australian Fair Pay and Conditions standard. So there’s a suggested breach of the Australian Fair Pay and Conditions standard. Clauses 46 and 47.4.3 regarding annual leave, the union proposed collective agreement provides that annual leave shall be referred to as the Annual Holidays Act.

PN80

The Annual Holidays Act does not necessarily agree with the new provisions of the Workplace Relations Act. Therefore there’s breaches of the Fair Pay and Conditions standard, and also in accordance with clause 47.5 of the proposed agreement relating to parental leave, the proposed agreement attempts to refer parental leave provisions to the New South Wales Industrial Relations Act.

PN81

Again, those don’t necessarily agree with the requirements of the Act and they’re potential breaches of the Australian Fair Pay and Conditions standard. Moving on with these two points together, Commissioner, an employee who lodges an agreement containing a breach of the Australian Fair Pay and Conditions standard or prohibited content can face penalties of up to $33,000 per offence, and I have to point out it’s the employer who faces the penalty, not the union or the employees who are engaged.

PN82

So you see, what we’ve got is a situation where the union is saying, you’ve got to take this, but if our member, our applicant wants to lodge this, then they’re the one that suffers the potential penalty for lodging an agreement in these terms, Commissioner. Therefore - - -

PN83

THE COMMISSIONER: Isn’t that a bit academic at this stage? I mean, you’re assuming that the employer, your member, is going to accept the proposed agreement lock, stock and barrel?

PN84

MR KUTASI: Commissioner, this is the point that I’m moving to, is that it’s also an offence to attempt to negotiate on the grounds of prohibited content, which is supported by section 365 of the Act. It says a party must not even seek to include prohibited content in a workplace agreement in the course of negotiations or such person is in breach of the Act. Therefore our member has no ability to negotiate anything in this respect with the union, Commissioner, or they’re potentially in breach of the Act, and if they do not negotiate with the union, given that a bargaining period has been initiated, then they potentially suffer from the potential of industrial action in support of these claims which contain, Commissioner, prohibited content, breaches of the standard.

PN85

Therefore balance of convenience must really lie with the applicant in this instance, Commissioner. I also point out the onus of proof was on the union in this instance to prove that they’re not offering patent bargaining or prohibited content in their agreements and I refer to that in section 431(5):

PN86

If subsection (4) applies –

PN87

no, hang on. There is an onus of proof – my apologies, Commissioner. 421(5) – I knew I was looking at a subsection (5).

PN88

Whenever a person seeks to rely on subsection (3), which is the defence to patent bargaining, the person has the burden of proving that subsection (3) applies.

PN89

So having said that, the contention of the balance of convenience lies with the applicant, Commissioner, is also in section 430(4) which requires the Commission to make an interim order to suspend or terminate the bargaining period in circumstances where it’s unable to determine the application before it. This suggests that the Act is very strongly in support of a contention that the balance of convenience lies with the applicant and also that the damage to be suffered by the applicant if the bargaining period is not terminated or suspended, is much more severe than any damage which may be suffered by any other parties if it is terminated or suspended.

PN90

Again, I point to that fact, which is if it is not terminated or suspended now, Commissioner, and the union decides to seek industrial action in support of its illegal claims, the applicant is clearly the party that suffers as a result. They’re caught between a rock and a hard place. On one hand they can’t negotiate, but on the other hand they can have industrial action sought against them, and this is what the purpose of this section of the Act is, Commissioner, to suspend or terminate, which is to say to the union, you must go back to the start, provide an agreement which complies with the Act, the requirements of the Act, and then we can negotiate.

PN91

The final point to make, which is regards to the Code of Practice, the National Code of Practice for the building and construction industry. No doubt my colleague from the Australian Building and Construction Commission will talk more about this, but one of the reasons why the applicant is being forced to seek a new agreement is because the applicant is required to comply with the National Code of Practice, primarily because all they do is construction related work, and as you’re aware, it’s not just government related work which is covered by the code. It’s also private work of any of those head contractors who engage in government work.

PN92

It pretty much means that anyone involved in construction now has to be compliant with the code. If an agreement contains provisions which breach the Act, that means breaches of fair pay and conditions standard, or contain prohibited content, such an agreement is automatically code compliant under the implementation guidelines as set down by the Department of Workplace Relations. Perhaps if I hand up a copy. If the agreement is not code compliant, Commissioner, it means the applicant is prevented from tendering for any code affected work, and as I just explained, given that that’s pretty much all construction work, that means that any agreement which contains non compliant clauses, if they are entered into or signed, the applicant is effectively rendered incapable of getting pretty much any work any more and in to the future.

PN93

The implementation guidelines also preclude other clauses which, although they may not breach the Act, are prohibited by the code. The proposed collective agreement before us also includes many such clauses, and would you like me to take you through those as well, Commissioner?

PN94

THE COMMISSIONER: If you wish.

PN95

MR KUTASI: Yes, thank you. Section 8.3 of the implementation guidelines which are before you provided that:

PN96

No payments can be required by outside parties. Only those payments which are expressly provided for in an agreement must be made.

PN97

Clause 19 of the proposed collective agreement related to productivity allowance would require a site allowance to be stipulated on an ongoing basis by head contractors. This is in breach of the Code. Clause 8.5, freedom of association, again I refer back to clause 32.1.6 of the proposed agreement and 54.1.2 regarding preferential treatment for union members and automatic rights to union shop stewards, that breaches section 8.5 of the implementation guidelines.

PN98

8.7 of the implementation guidelines, if you look at clause 13 of the proposed collection agreement this clause automatically provides for dispute settlement to be conducted by the New South Wales Industrial Relations Commission. The code is very clear that dispute settlement powers cannot be referred for conciliation or arbitration by external bodies except where such decisions must be consistent with the code. That is not stipulated in clause 13, therefore this clause breaches the code. Section 8.10 of the implementation guidelines, agreements cannot contain employee ratios. Again, I refer you to clause 43 of the proposed agreement regarding apprentice ratios and also, cannot contain restrictions on labour, and I refer you to clause 11.4.1 of the proposed agreement regarding casual conversion.

PN99

Given all this, one again must question how genuine attempt to reach agreement could be, if the agreement being proposed by the union clearly breaches the code – sorry, if the applicant engages in this agreement, they’re rendered incapable of tendering for any further work. It’s not really a genuine attempt to negotiate, Commissioner. So finally in summary, the union has been very reckless in this instance, Commissioner. It’s not weighted for the OEA to perform a pre lodgement prohibited content check. It’s not weighted for the Department to perform a pre lodgement check on the code. Compliance, that’s what most people are doing at the moment. They’re not entering into agreements until departments and government bodies have checked these things out.

PN100

The sole reason that this bargaining period has been initiated, Commissioner, is because the union wants to hold an axe over the head of the applicant and say, enter into our agreement now or we’ll take industrial action against you. I submit that this bargaining period should be terminated, Commissioner, so that when the union decides to put together a legal and valid agreement, that they can then come back and we can begin to negotiate properly, but until such time the applicant stands to use by keeping this bargaining period open, Commissioner, and that’s why we ask that, the spirit of the Act and the obvious intention of the Act is that the Commissioner must immediately terminate this bargaining period. Thank you, Commissioner.

PN101

THE COMMISSIONER: Thank you. Just for the record, I’ll mark the last document that you handed up, the implementation guidelines for the Code, as exhibit NECA 5.

EXHIBIT #NECA 5 IMPLEMENTATION GUIDELINES

PN102

MR KUTASI: Thank you.

PN103

THE COMMISSIONER: Mr Quigley?

PN104

MR QUIGLEY: Commissioner, the ABC Commissioner is concerned that the claims that the applicant has made in this matter do point to patent bargaining, a proposal that an employer in the building and construction industry should agree to terms which include prohibited content. The concern arises that the initiation of the bargaining period is the first step of a process which can lead to, subject to other provisions of the Act being complied with, protected industrial action being taken against an employee which can, in many respects, force the hand of that employer to the extent that decisions that might otherwise be made in a different manner, where an employer might be having his arm twisted, for example.

PN105

What the ABC Commissioner is concerned about is that if a union is serious about seeking to get an agreement with an employer, and in this case an employer who has not indicated that he’s not willing to reach agreement, in fact the indications are that it’s significantly in the interests of Wilken Electrical Services to reach an agreement, that the company has a new agreement that is compliant with the building code and guidelines and is also an agreement that is current in terms of the terms and conditions of employment for its employees.

PN106

But the point that we would think needs to be taken into account by the Commission are the mandatory requirements that the Act now places on the Commission when faced with an application to suspend or terminate a bargaining period where the evidence does seem to suggest very strongly that the union is pursuing patent bargaining, that we submit that the Commission doesn’t have much choice other than to grant the application. We would submit that the appropriate thing for the union to do would be to, as the applicant has indicated in its submissions, that is to go back to the drawing board, if it is interested in reaching an agreement with the employer, to provide a document that would meet those concerns that the employer has.

PN107

The Office of Employment Advocate currently provides a service to negotiating parties to vet agreements and to provide advice to the parties as to whether or not the proposed document does contain any prohibited content or other material that might offend the requirements of the Workplace Relations Act, and similarly the Department of Employment and Workplace Relations provides advice to building industry parties as to whether or not a proposed workplace agreement would contain any material that would be non compliant with the building code and the associated guidelines.

PN108

The point that Mr Kutasi makes is a very strong one, is that it’s commercial suicide for a building industry employer not to have an agreement that is compliant with the building code and the guidelines. It’s the difference between being able to get work or not be able to be tendering for work. In an industry where the nature of the game is that you try to get contracts and you put in tenders, if you’re out of that process, then your business isn’t going to last very long.

PN109

For a union to seek to make life difficult for an employer in those circumstances, to propose an agreement or a document for agreement that is not code compliant, we would submit is pretty clear evidence that there is a lack of genuine intention to negotiate. The particular circumstances of an employer in this industry has to take into account, when the union is seeking to negotiate an agreement, has to take into account the realities of the industry as far as the employer is concerned, and it would be improper, we would submit, to expect that a building industry employer to seek to agree to something that was going to preclude that employer from being able to get work in the industry, and for those reasons the ABC Commissioner supports the application that’s been made and, as we indicated, suggest that the Commission ought, as is required, to terminate the bargaining period and that the union ought to be going back to the drawing board and producing a proper document upon which negotiations could proceed. If it pleases.

PN110

THE COMMISSIONER: Thank you. Mr Benfell?

PN111

MR BENFELL: Thank you, Commissioner. We oppose the application, Commissioner.

PN112

THE COMMISSIONER: All right.

PN113

MR BENFELL: I note in both sections 430 and 431 the Commissioner is obliged to allow the other negotiating party to be heard before any order is made. This morning we’ve had a rather elaborate array of allegations made with absolutely no attempt whatsoever to lead evidence to provide a factual basis of which the Commission can make a finding before the Commission decides whether or not the order should be issued. Of course, if you do make a finding that there is patent bargaining, then you are obliged to issue the order, but one can’t come - - -

PN114

THE COMMISSIONER: I’m sorry?

PN115

MR BENFELL: Sorry. Once you do make a finding that patent bargaining is taking place, you are of course under the terms of the Act obliged to issue an order, but you have to make that finding first, and that finding has been based on fact rather than wild allegations made from the bar table. We will lead evidence when the matter is to be heard, Commissioner, and that foreshadows an application that we’re going to make. The Commission can’t issue an order like this which essentially completely robs the union of any capacity to defend its members unless the Commission is satisfied that on an evidentiary there was a need for that order to be made.

PN116

We would seek to have a further hearing so we can lead evidence and cross-examine their witnesses, if they have them, to make that factual finding. Some of the background, Commissioner, which you may be interested in. The union sent a notice to initiate a bargaining period on 1 September this year. On the same day a meeting of members took place and endorsed the claims being made. By Monday, 4 September the company was offering all of the employees AWAs, setting strict time lines under when they should sign them. On Monday the 4th an organiser for the union approached NECA, who is representing the company, to start discussions with the company about the claims made by the union. That request was refused.

PN117

The union has on four occasions asked for a meeting with the employer to discuss the claims. On those four occasions the employer has refused or said we’re not available or in some other way not been able to meet to discuss the claims. On 14 September the union wrote to the company, I have a copy here of letter dated 14 September to Wilken Electrical Service Pty Limited from Daniel Weizman, Recruit Officer. Do you want to mark that document, Commissioner?

EXHIBIT #ETU 1 LETTER UNION TO COMPANY DATED 14/09/2006

PN118

MR BENFELL: You will see in that letter, Commissioner, that, in the third paragraph, we make it abundantly clear:

PN119

The union is prepared to modify the claims contained in the draft collective agreement to take into account any specific needs or individual circumstances peculiar to the business.

PN120

And we have made that clear verbally. We have been attempting to meet with the employer to discuss the matters. They at no stage whatsoever until this morning have advised us as to what they think is prohibited content, as to what they think is matters not pertaining and as to what they think is not compliant with the building code.

PN121

As you are aware, Commissioner, the parties are not obliged to negotiate under the Workplace Relations Act to provide a code compliant agreement. That is entirely a matter between the employer and the Federal government under those guidelines. There is nothing in the Workplace Relations Act that says that anyone has to attempt to reach a code compliant agreement. It’s simply a furphy to suggest otherwise.

PN122

Commissioner, I can’t go through all the allegations made this morning because they were numerous and quite clearly fanciful in part. We, under the instructions of our members, are in the process of making an application for a secret ballot before the Commission. Of course when we make the application for a secret ballot for industrial action we are obliged to show that we are not patent bargaining and that we are genuinely trying to reach agreement. So the question has been raised today that was raised in the content of our application which will be made within the next 24 to 48 hours.

PN123

The union is clearly prepared to amend the document so that it is not containing prohibited content. The employer has consistently refused to talk or to identify what they thought was prohibited. This is the first time we’ve been advised of their allegations, and quite frankly, Commissioner, it’s an outrage, for a party to refuse to talk to the other party and then come to the Commission and allege that the other party is not genuinely trying to reach agreement. What else can we do?

PN124

Do they suggest we go and knock their door down and insist that they sit down and negotiate? We can’t do more than invite them to discussions about the claims made. In relation to the issue about seeking prohibited content and whether or not it automatically determines whether you are genuinely trying to reach agreement, it is not as straightforward as what has been put. My friend provided you with a copy of a decision, Commissioner, the National Union of Workers v Blue Circle Transport Limited.

PN125

THE COMMISSIONER: Yes.

PN126

MR BENFELL: Print 973654 by Vice President Watson and he has an interesting discussion about this point at paragraph 23 of that decision where he’s talking about what he thought the intention of the legislation was in relation to the union who may, during the bargaining period, ask for prohibited content and I’d like to quote to you a part of that paragraph 23, Commissioner, starting with the third sentence, and I quote:

PN127

The intent of the legislature appears to be preclude a union from access to secret ballot and protected action provisions ...(reads)... during the bargaining period even though at some point in time claims of prohibited content are made.

PN128

That’s the view of the Vice President who was the member of the Commission in charge of the Full Bench decision that you were first referred to in the United Firefighters’ decision which was not as conclusive as what was put. They said – I’m sorry, Commissioner, I’ve been handed so many documents this morning I can’t find that decision conveniently, but – thank you. You referred to paragraph 38 of that decision, that is print 973841, the Full Bench appeal and the United Firefighters matter, and they say that:

PN129

Whether the prohibited content forms part of the proposed agreement or otherwise strongly suggests that the union is not genuinely trying to reach agreement.

PN130

Now, that’s not conclusive. It’s indicative. It strongly suggests. There may be other facts that suggest otherwise and you can’t tell what the other factors are until the matter is heard, until we are given the opportunity to put evidence and defend the allegations that have been made.

PN131

Finally, Commissioner, in relation to the volume of agreements registered in the state of New South Wales, in the Industrial Relations Commission of New South Wales, how that helps the applicant determine or show that we are patent bargaining at the moment when he refers to agreement that are certified some time ago under another Act is beyond, we have to say. We proposed, Commissioner, that we go into conference to try and reach agreement on days for this matter to be heard.

PN132

THE COMMISSIONER: Thank you, Mr Benfell. Just while you’re on your feet, how many employees are involved in this matter?

PN133

MR BENFELL: Approximately 16, I’m advised, Commissioner, and the union has not taken industrial action. We do not intend to take industrial action unless we get a protected action published, so there’s no imperative on the Commission to act now in fear of, if you don’t act, we’re going to somehow harm or damage the applicant.

PN134

THE COMMISSIONER: The Act does say at section 430(4) that the Commission must hear and determine an application within five days before it is determined. What’s your view about that? The qualification is as far as practicable.

PN135

MR BENFELL: No, sir. Our view on that is that (4) only deals with the circumstance set out in subsection (3) where there is industrial action.

PN136

THE COMMISSIONER: I see, yes.

PN137

MR BENFELL: To afford or advise the claim, or adversely affecting, or threatening or would threaten, and I just want to make it very clear. We have no intention whatsoever of taking industrial action prior to a secret ballot order being issued and a secret ballot – we have no intention of taking industrial action unless it’s in accordance with the Act.

PN138

THE COMMISSIONER: Thank you, Mr Benfell. Mr Kutasi?

PN139

MR KUTASI: Yes. If I may, Commissioner. This is the whole point of the contention the applicant makes. The reason they have not been able to negotiate with the union on this matter is because under section 435 they will be in breach of the Act attempting to negotiate on the grounds of prohibited content. The Act is very clear on that, Commissioner, and that is why we have advised the applicant not to discuss this matter with them until they come back with a proper agreement, Commissioner.

PN140

Moving on to a number of the issues which are being raised. You see here, Mr Benfell has mentioned that they will be seeking a secret ballot order and this is where the whole problem comes in, Commissioner, as to why this bargaining period shouldn’t be suspended or terminated, is that in the absence of being able to negotiate, it means that the applicant is between a rock and a hard place. On one hand the applicant has been unable to negotiate prohibited content being sought, or breaches of fair pay and conditions standard et cetera. On the other hand, if they don’t negotiate, they could have industrial action sought against them and as the whole intention of this section is to wipe out the bargaining period and say to any party, if you’re going to seek prohibited content or you’re going to seek patent bargaining, you must start again, you must go back to scratch and re-initiate the bargaining period and do things correct.

PN141

But, look, I’d also point out, Commissioner, the onus of proof as I mentioned earlier under section 430 is for the union to prove that it is not patent bargaining. It’s not for us to provide that evidence, and I have provided significant evidence to prove that they are, Commissioner, but the union, it’s on them to prove that they aren’t patent bargaining, and with regards to that letter which was tendered to you, this was sent four hours after we filed on behalf of the applicant. Until this point in time we were told to take the agreement or leave it, and you know, Commissioner, it says a lot about the true intentions - - -

PN142

MR BENFELL: Commissioner, I must object to that. I’ve been advised there was never any statement of take it or leave it, and my friend should be careful making statements which are untrue before the Commission.

PN143

THE COMMISSIONER: Thank you.

PN144

MR KUTASI: I’ll pretend that that didn’t happen. Commissioner, this, as I pointed out, letter was sent four hours after this application was filed. The bargaining period was started on 1 September. This application was filed on 14 September. The first correspondence received, other than the proposed collective agreement, was this 13 days later. It says a lot about the true intentions of the union, Commissioner, that they send the letter which is no more than a page, if you take out headers et cetera, which just spits out the Act and sets up an attempted defence under section 421(3) as to why they aren’t attempting to patent bargaining.

PN145

If they were genuine, Commissioner, this would have been the first things that were asked, but they never were. The simple point of the matter is that up to the date that this application was filed, Commissioner, all that had ever been put in front of the applicant was the proposed collective agreement which contained prohibited content, contained numerous breaches of the standard, breaches of the code and as Mr Benfell said, there’s no requirement in the Act for an agreement to be in compliance with the code. I don’t disagree with that.

PN146

However, asking an applicant, this applicant to agree to a proposed agreement which contains breaches of the code, numerous breaches of the code is effectively the same thing. It’s saying we don’t really want to genuinely attempt to negotiate, Commissioner, because we’re trying to get you to sign up to something which is going to preclude you from getting any future work. That’s not a genuine attempt to negotiate, and which has also been pointed out by my colleague from the ABCC - - -

PN147

THE COMMISSIONER: But hasn’t that subsequently been clarified by the letter of the 14th?

PN148

MR KUTASI: No, because the letter of the 14th, Commissioner, doesn’t point out the changes that they wish to propose.

PN149

MR BENFELL: Commissioner, what you are saying yourself, this is the first time today we've heard what we're actually talking about. You refuse to talk to us.

PN150

MR KUTASI: Commissioner, if I may continue?

PN151

THE COMMISSIONER: Yes.

PN152

MR KUTASI: If the union was genuine, they would take this off the table, which was the offer that was put to them on the 14th, withdraw the bargaining period and get an agreement, it's not the applicant's job or the job of NECA to draw up the union's agreement for them and point to them what the prohibited content, the breaches of the standard, breaches of the code are. That's their job, Commissioner, but it shouldn't be - the balance of convenience should fall on the applicant to have this terminated. So that the applicant is not sitting there with an axe over their head that industrial action can be taken at any time because the union has not got its act together and got a valid legal agreement put together. That's what the whole point of this section of the Act is, Commissioner.

PN153

I mean, I've made my points. It's pretty straightforward. The fact that they have now said that they're going to seek a secret ballot, Commissioner, means that this is an urgent application and must be dealt with. The onus of proof is on the union to prove otherwise. They have not done so and the Commission is required under the Act to mark, that they must, the exact word used in the Act, to terminate or suspend the bargaining period where there is failure to genuinely attempt to agree all prohibited content.

PN154

So, if it please the Commission.

PN155

THE COMMISSIONER: Thank you. Do you have anything further to say, Mr Quigley?

PN156

MR QUIGLEY: Mr Commissioner, any of the submissions that I made ought not to have pre-empted Mr Benfell's rights to put his argument. I certainly accept what he said in relation to the fact that the union hadn't had an opportunity to put its case and I note that the union has indicated that it would have evidence to lead to substantiate its claims, that it's not engaged in patent bargaining. The other point I would make, Commissioner, is that if the union is proposing to make an application for a secret ballot or protected action ballot, the issues that the Commission would have to consider in relation to such an application, were it to be made, are not dissimilar from those that apply in this case.

PN157

It might be useful, and I understand that the union has suggested that maybe a conference in the Commission to work out where we might go forward might not be a bad idea, because it might be that if the union is to press with such an application and if the employer in this case is still pressing with its application, there's going to be a convergence of material, I would suspect, if the Commission pleases.

PN158

THE COMMISSIONER: Yes. I'm going to take up that suggestion of Mr Quigley's and adjourn into conference to see whether we can find some more efficient way of resolving this matter. Thank you.

<NO FURTHER PROCEEDINGS RECORDED

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #NECA 1 DRAFT AGREEMENT PN34
EXHIBIT #NECA 2 PROPOSED AGREEMENT FOR FREDON INDUSTRIES PTY LTD PN35
EXHIBIT # NECA 3 REGISTER OF ENTERPRISE AGREEMENTS PN36
EXHIBIT #NECA 4 TRAINING CENTRE WEBSITE PRINTOUT PN62
EXHIBIT #NECA 5 IMPLEMENTATION GUIDELINES PN101
EXHIBIT #ETU 1 LETTER UNION TO COMPANY DATED 14/09/2006 PN117