D2005/27, Transcript of Proceedings [2006] AIRCTrans 673 (26 April 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 14873-1

SENIOR DEPUTY PRESIDENT KAUFMAN

D2005/27

APPLICATION/NOTIFICATION BY NATIONAL UNION OF WORKERS
s.158(1) RAO Schedule - Application for alteration of eligibility rules
(D2005/27)

MELBOURNE

2.17PM, TUESDAY, 18 APRIL 2006

Continued from 23/3/2006

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN MELBOURNE

PN1

THE SENIOR DEPUTY PRESIDENT: Are there any changes in appearances?

PN2

MR A KENTISH: Your Honour, in Sydney, I appear on behalf of the AMWU.

PN3

THE SENIOR DEPUTY PRESIDENT: Mr Richardson.

PN4

MR P RICHARDSON: Your Honour, if I could briefly recap on matters as they stood when we were last before you in early March. At that time the union indicated and tendered settlements between itself in relation to this matter and three of the employee organisations that had filed objections and further indicated that it was confident that settlements with the remaining objectors would be reached.

PN5

I am able to advise the Commission on the record that that is the case and would seek to tender a signed deed of agreement between my organisation and the ASU and a partially signed settlement between my organisation and the CPSU. I would ask that they be marked as exhibits.

EXHIBIT #NUW4 DEED OF SETTLEMENT BETWEEN NUW AND ASU
EXHIBIT #NUW5 DEED OF AGREEMENT

PN6

MR RICHARDSON: Your Honour, you may also recall that on the last occasion in respect of each of the agreements that was tendered at that time that the union described or characterised those agreements as not being materially different in respect of that part of the agreement whereby the union would seek to amend its application within the proposed rule 5(MA). I draw to your attention at page 2 of the agreement, now marked as exhibit NUW4, within paragraph 4 of that exhibit, that again part of the matters settled required the union to seek to amend its application in a form the same as that of the earlier three settlements and in an identical fashion draw your Honour's attention to paragraph 4 of the second page of exhibit NUW5 where the agreement with the CPSU, and again within paragraph 4, it is proposed that the application be amended in the same terms.

PN7

THE SENIOR DEPUTY PRESIDENT: It seems to me that the impact of those modifications is that it will restrict eligibility to persons employed in those establishments at international terminals.

PN8

MR RICHARDSON: That is correct, your Honour. If I could just hasten to add, the agreement with the CPSU is not, as has been noted, signed at this point in time by the NUW. On Thursday of last week in discussions with the CPSU I asked that a copy of the agreement be faxed to our office as the original had not yet arrived. There is no impediment to it being signed and forwarded to the Commission in due course.

PN9

Your Honour, if I could briefly touch, before I seek leave to amend the application, on what I understand the position of both the AMWU and ABL on behalf of their client, the Nuance Group to be - - -

PN10

THE SENIOR DEPUTY PRESIDENT: Is there an appearance for ABL?

PN11

MR J MORLEY: If it please the Commission, I appear on behalf of the Nuance Group.

PN12

MR RICHARDSON: Your Honour, as I understand matters, in light of each and all of the settlements reached, it is the position of the AMWU that should the union seek leave and be granted leave to amend its application, that it is their intention to withdraw their objection. In a similar fashion I understand that it is the position of Australian Business Lawyers, on behalf of their client, either to withdraw their objection or at least no longer pursue their objection.

PN13

On that basis, sir, if I may seek to address you on the proposed or amended application as sought by the union and to guide you, your Honour, I seek to provide but not ask that it be marked as an exhibit, an entire copy of the union's rules as they currently stand.

PN14

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Richardson.

PN15

MR RICHARDSON: Your Honour, there are three rules that I intend to take you to. In numerical order they are rules 8, 52 and 65. Specifically two rules, that is rule A(A)(b) and rule 65 empower the national council of the union to generally alter, amend, revise, rescind or add to the rules subject to the processes described within the rules.

PN16

Rule 52 allows for a decision to be made by the national council by means other than physical sitting and in particular for a decision to be made by correspondence, that is by means of a postal ballot. The national council of the union, being that body which is invested with not only the power to amend or alter the rules, but also the supreme governance of the union, meets every second year. Rule 10A provides for that. Between meetings of the national council, the powers of the national council are invested in a body known as the national committee of management.

PN17

Within rule 29 the power of investiture for the national committee of management does not extend to the amending, altering or deleting of rules except for the purpose and to the extent provided in the rules. Therefore, your Honour, at first instance the only power by which a rule alteration may occur, and the subsequent application be made either to the Commission or the Registry is by virtue of a decision at the national council.

PN18

Rule 65 also, within subrule 65(4) requires that once a decision is made by the national council, that the general secretary of the union take all necessary steps to have the alteration take effect. Your Honour, I draw to your attention in particular subrule 65(5) which provides, and I quote:

PN19

The national council or national committee of management may at any time make or amend any of these rules so as to comply...(reads)... Registrar's powers under section 205 of the Industrial Relations Act 1988.

PN20

I end the quote there.

PN21

THE SENIOR DEPUTY PRESIDENT: I take it that those references should now be to the RAO schedule by implication at least.

PN22

MR RICHARDSON: Yes, your Honour, and I might indicate that there is an application shortly to be lodged to reflect that.

PN23

Your Honour, if I could refer to a meeting of the national committee of management of the NUW held on 2 March of this year which received a report on the status of the application in these proceedings and provide as an exhibit an extract from the minutes of that meeting. I might indicate that I undertake to provide a copy of these to Mr Kentish by mail.

EXHIBIT #NUW6 MINUTES OF NATIONAL COMMITTEE OF MANAGEMENT MEETING HELD 02/03/06

PN24

MR RICHARDSON: Your Honour, you have before you an extract, in essence you have the first page which records the attendance and the apologies and those that were also in attendance. Then across the second and third page there is an extract of that item of business that is described as eligibility rules. Under the heading Eligibility Rules there are essentially two matters, firstly a report, unrelated to these proceedings, relating to an application made by the CPSU to alter its rules and then secondly, a report on the application presently before you. Then there is a motion which is moved and seconded by two members of the national committee of management to the following effect, and I quote:

PN25

That national committee of management approve the terms of the deeds of agreement between the National Union of Workers and the SDA, the LHMU and the TWU in deed 200527.

PN26

Then that goes onto the third page, being the extract:

PN27

That national committee of management authorises the approval of the remaining objections made by the ASU, CPSU and AMWU provided that any such settlement is in the same material terms as those settlements reached and referred to above.

PN28

I end the quote there and indicate that that resolution was carried unanimously.

PN29

Your Honour, in essence we say that the powers afforded to the committee of management, pursuant to rule 65(5) and the approval of each of the deeds of agreement referred to in their decision, which the Commission now has before it as exhibits, contain undertakings which are in our submission consistent with the meaning of section 158(5) of the RAO schedule and that the decision of the committee of management to approve each of those agreements and subsequently in these proceedings seek to amend its application, in essence ensures that the alteration, if granted, of the amended application, if granted, complies with the requirements of the legislation and importantly remains within the scope and intent of the original application. In fact, it narrows the application as has already been observed by the Bench to particular classes of employees within particular employers.

PN30

Furthermore, we would submit that the application is consistent and the amended application is consistent with the objects of the Act as they then were, that is at the time of filing and at the time of amendment, and in particular section 3H of the objects of the Act, as it then was.

PN31

Accordingly, your Honour, we would say that the amended application should be granted and is made in a manner consistent with the rules and specifically those rules to which I have referred. We would seek that the application be amended so that we can proceed to address you on the substance and merit of the application. If the Commission pleases.

PN32

THE SENIOR DEPUTY PRESIDENT: Does anybody wish to say anything in relation to that? Very well. I do grant leave to amend the application in the terms indicated, Mr Richardson.

PN33

MR RICHARDSON: Thank you, your Honour. I might just pause at this moment because, in light of that, the application is now quite clear and it may be that Mr Kentish or Mr Morley wish to address you and subsequently seek your leave to withdraw from proceedings. If the Commission pleases.

PN34

THE SENIOR DEPUTY PRESIDENT: Mr Kentish.

PN35

MR KENTISH: Your Honour, the AMWU does now seek to formally withdraw our objection to the NUW's application. We do so on the basis that the amendment which has just been made, and on the basis as the NUW indicated in their original application, that the proposed alteration is not intended to disturb the status quo of coverage or membership interests amongst registered employee associations or organisations. Aside from, your Honour, unless any questions arise, I have nothing further and I would seek leave to withdraw.

PN36

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Kentish. I have no further questions and you have leave to withdraw and I grant leave to the AMWU to withdraw its objection.

PN37

MR MORLEY: If it pleases the Commission, similarly on behalf of the company I would seek leave to withdraw the company's objection on a similar basis in that the NUW has now made an amendment to its application in respect of its rules to the satisfaction of the company.

PN38

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Likewise, Mr Morley, I grant leave to the Nuance Group Australia Pty Ltd to withdraw its objection and you have leave to withdraw should you so desire. Yes, Mr Richardson.

PN39

MR RICHARDSON: Thank you, your Honour.

PN40

THE SENIOR DEPUTY PRESIDENT: Where does that leave us with the other objectors who have entered into deeds?

PN41

MR RICHARDSON: Your Honour, because I note that they're not here, my submission would be that the deeds stand for themselves and in light of the fact that it is now my intention to address you on the amended application, that those submissions as well as the deeds should be sufficient for you to proceed in the knowledge that each of the remaining objectors has effectively withdrawn their objection, that each of the deeds require the objectors to do so. That appears in the same terms for all five deeds. In fact, the absence of those parties today, I would respectfully suggest, could be interpreted to that extent.

PN42

THE SENIOR DEPUTY PRESIDENT: Yes, very well.

PN43

MR RICHARDSON: Your Honour, if I could address to you to the extent that I can be brief on both merit of the application and the requirements under the schedule. In the first instance, if I could simply refer you to a decision of then Vice President Ross of 10 March of last year, PR956396. Your Honour, this decision concerned an application made by the NUW in late November of 2004 wherein an application was made to create the new subrule that is now proposed to be deleted, namely subrule 5(MA). His Honour granted that application and so at this point in time the rules of the union read, and I quote:

PN44

All persons employed by the Nuance Group Australia Pty Ltd and/or any successor, transmitee or assignee within on airport duty free operations throughout the Commonwealth of Australia.

PN45

To the extent that that decision is relevant in these proceedings, we say that that application or the approval of that application by Vice President Ross, stands for the proposition that at least since that time, that is 15 March 2005, the NUW has had uncontested and unchallenged coverage of persons employed by a particular company in relation to its on airport duty free operations. I stress the words "on airport" because they have, in our submission, a particular meaning. The meaning normally ascribed amongst industrial participants to the words "on airport" means something that is operated at an airport terminal. Your Honour, in essence, the operations of the Nuance Group that at that time were on airport and duty free, were those stores that the Commission may be familiar with as duty free operations. In fact they trade - - -

PN46

THE SENIOR DEPUTY PRESIDENT: They were all at international terminals?

PN47

MR RICHARDSON: Yes. They operate under the name in respect of the Nuance Group under the trading name of Downtown Duty Free.

PN48

At that point in time the Nuance Group, trading as Downtown Duty Free, was the sole operator of on airport duty free operations at each of our country's international terminals. Since the time that both the application before Vice President Ross was made and in particular in the second half of last year, that situation has changed and in fact potentially will change further. That change and those possible changes are referred to within the grounds in support of our application but can in essence be summarised in the following manner.

PN49

Firstly, that the Nuance Group no longer holds what is known as a concession, that is a licence to operate on on airport duty free operation in respect of the Adelaide international terminal. Your Honour, it may or may not be known to the Commission but in October of last year a new international terminal was opened in Adelaide, in fact it has attracted a fair bit of controversy, and the Nuance Group was unsuccessful, as the NUW understands it, in securing that ongoing concession. That concession is operated by a company trading as Duty Free Shopping Australia.

PN50

The second change that occurred since those proceedings before - at least since the application was made and heard by Vice President Ross, was the announcement of the Sydney Airport Corporation to place out to tender in the first half of this year, the concession that the Nuance Group currently holds for the Sydney international terminal. The deadline for any tender, it's an open tendering process, is April this year, the end of this month with an announcement being made for any new tenderer, should that occur, to take effect from October this year.

PN51

Whilst at this point in time there is nothing known at least to the NUW in respect of concessions that Nuance hold in respect of other international terminals, it is possible, if not highly probable, that such concessions may also be the subject of open tender into the future.

PN52

Your Honour, the Nuance Group and the National Union of Workers have in place agreements certified by this Commission in respect of each of the operations that Nuance holds, with the exception of Darwin, and in our submission Nuance as an employer employs a quite substantial number of persons who are or are eligible to be members of the National Union of Workers. The total number of employees that Nuance employs who are or are eligible to be members of the union exceeds, in our submission, 800.

PN53

If I could refer back to the two specific changes or announcements that led to this application, in respect of Adelaide only a small number of permanent or weekly employees were engaged by Nuance, but in contrast, the current certified agreement between the parties as it relates to Sydney, at least based on the statutory declarations filed earlier this year when the agreement was certified, applies to over 340 employees, 263 of whom are employed on a permanent basis, the overwhelming majority of which are members of the National Union of Workers.

PN54

To the extent that we say those developments and those facts are relevant as considerations of merit, we say this, that if the rule were confined to the employer as currently described and if a new operator were granted the concession and that that displaced Nuance, it would not in our view constitute a succession, an assignment or a transmission of business. Therefore, the union would prima facie - I'll return to that point shortly - be incapable of continuing to represent the industrial interests of the employees of the new operator. There is, in our submission, no other part of the union's overall eligibility rules, no matter how broadly one might seek to read or define them, any coverage of such persons.

PN55

In essence, your Honour, these persons are by and large sales assistants or sales representatives working in an environment not materially dissimilar from that that one would experience in any department store or major retail store within the city or the suburbs, save and except that the transactions and the nature of the promotion and sales is one of duty or tax-free operation and that the customer base is obviously determined or defined by persons who are departing overseas for whatever reason.

PN56

If a new operator were to come into play, or to be granted a concession in lieu of Nuance in whole or part, then it is highly probable, in our submission, that they would require the skills and experience of the unsuccessful operator's staff. Again I draw your attention to the fact that in Sydney there are over 340 employees engaged and if a new operator secured the concession, to simply find such personnel with the necessary skill and experience would be, in our submission, extremely difficult and that as such, it's highly likely that many, if not all, of the persons would be offered employment with the new operator, but again, in our submission, not on the basis of transmission, assignment or succession.

PN57

This is not a new phenomena but it is a phenomena that for the best part of the last 10 years the union has not experienced, that is to say that the granting of concessions for periods of time within this industry or subsection of industry is not new and it is not new in the union's experience. However, over the last
10 years or so the industry has undergone, in our submission, major consolidation which up until recently is reflected in the fact that Nuance Australia is the only operator of concessions at all bar one international airports.

PN58

In fact, if I may with your indulgence, and I was trying to understand to the best of my ability the historical reasons as to why the then Federated Storemen and Packers Union and the now National Union of Workers had enrolled these persons as members, and I must admit that is still a bit grey, but it would appear at least back as far as 1971 that the union has successfully secured, albeit at that time in conjunction with the SDA, awards for these persons, but at least since 1976, has been aware of this phenomena. If I might, just with your indulgence, quote briefly from a report that I was able to find from the 1976 federal conference of the then Federated Storemen and Packers Union. That report is titled International Airports duty Free Stores Award as the relevant award at the time applying to this industry was known. The report says and I quote:

PN59

The major area of disputation in this award concerns the changeover of employers at Sydney Airport. James Richardson Pty Ltd ...(reads)... operates duty free stores in the United Kingdom and on cruise ships.

PN60

If I could then go on, your Honour, the report says:

PN61

James Richardson have agreed to take four men to their duty free shop in the Sydney city area, the balance, that is 14, we ask the new company Aldous to employ. After a number of meetings this was agreed to.

PN62

I end the report there.

PN63

Your Honour, it's interesting that not only is the phenomenon not new but the two employers referred to then, firstly James Richardson Pty Ltd, made in our submission a conscious decision or a commercial decision to exit duty free operations in a non-airport sense, some eight or nine years ago, and that the company Aldous International was acquired, as I understand it in the mid nineties by the existing employer, that is Nuance, that one the grounds that the union cites in support of its application is the fact that new operators are possibly going to tender for this work. In fact, in a report known as the Moodie report, which I understand to be a industry journal, if I can describe it as such, for retail and duty free sales, in a report dated 16 December 2005, the Moodie report says, and I quote:

PN64

James Richardson has put in an expression of interest for the Australian dollar $220,000,000 duty free and tax free contract at Sydney Airport.

PN65

I go on to quote that it says:

PN66

James Richardson who was one of the pioneers of Australian duty free sold its Australian duty free operations to Swiss Air in 1995 ...(reads)... opened Downtown stores in Melbourne, Perth and Adelaide.

PN67

I end the quote there. So whilst it might only be a passing interest, it appears that not only is the phenomenon not new but the principal players remain the same.

PN68

If I could summarise the submissions in respect of merit as follows, that the industry is experiencing change and that the union seeks to be able to follow its membership, or at least be able to represent or at least seek to represent the industrial interests of employees of new operators within the industry, should they merge, or as they have already, in the case of Adelaide, do merge.

PN69

If I could turn briefly, and in conclusion, to our submissions as to the requirements of the Act, or at least the schedule, firstly, in respect of section 158(2) which requires that the application is made in a manner consistent with the rules, if I could refer the Commission's attention to the declaration of Mr Donnelly, the general secretary of the union, which appears as an attachment to the application and in particular, paragraphs 4 and 5 of that declaration. Within paragraph 4 Mr Donnelly declares that a postal ballot of all members of the national council was held seeking approval of the alteration, that ballot papers and instructions as to the completion of the ballot were forwarded to members of the council on 10 October 2005, that the ballot closed on 9 November 2005 and he refers to two attachments marked as A and B, namely a copy of the ballot paper and ballot instructions as well as a copy of the report prepared after the closing of the ballot, indicating that a valid majority of the members of the council had approved the ballot.

PN70

Furthermore, at paragraph 5 within the declaration, Mr Donnelly declares that the union caused, consistent with the regulations, a copy of the notice, in fact the entire application, to be published on the union's website so that the declaration is, in our submission, sufficient for the Commission to be satisfied that the application has been made consistent with the rules of the organisation and that further, given the earlier decision from the Bench that the amended application is also consistent with the rules of the application.

PN71

If you turn next to section 158(5) which requires that the Commission not have regard to the provisions of section 158(4) in the event that there are undertakings which are considered appropriate, I would refer to each of the deeds of agreements with the objecting employee organisations which essentially manifest themselves in the amended application but further, in respect of the ASU, that is exhibit NUW4, require that the union also undertake that nothing in its proposed alteration would be regarded by the applicant as disturbing or intending to disturb the ASU's traditional coverage of persons employed in or in connection with the industry of airline operations or airport operations.

PN72

Also there is an additional undertaking in similar terms in that agreement that was tendered on the last occasion between the NUW and the LHMU and if I could summarise that undertaking as follows, that the union not only undertakes not to disturb the traditional coverage of the LHMU. That is then defined by reference to an award to which the LHMU is principal which operates in respect of retail and food service, if I can describe it as such, operations within the airport. On the basis of each of the agreements and the withdrawal of the AMWU's objection, we would say that these undertakings are sufficient for the Commission not to be taking into account the requirements of section 158(4) of the Act.

PN73

In respect of section 158(6) we say that that is not relevant in these proceedings as there are no agreements or understandings between the applicant and other organisations which would conflict with the application as amended in these proceedings and in a similar fashion, section 158(7) is not relevant as there are no orders that exist in relation to demarcation and in our submission we say that the application as amended is unlikely to give rise to demarcation disputes between employee organisations.

PN74

Finally, your Honour, we say that there are no other reasons, in our submission, that can be identified that should prevent the Commission approving the application as amended. Subject to any questions, your Honour, that is our submission.

PN75

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Richardson, for a very thorough and comprehensive set of submissions. I will consent to the alteration to the eligibility rule of the NUW, as amended. I am satisfied that the amendment has been made in compliance with the Act and the regulations and the rules of the organisation, having regard to the agreements reached with the five objectors.

PN76

I would not be in a position to find under section 158(4) of the schedule that there was another organisation to which the employees affected could more conveniently belong and which could more effectively represent those persons' interests. Also having regard to the agreements reached and the undertakings given in at least some of them, I am satisfied that there is no likelihood of there being any demarcation issues and there are no other reasons why I should withhold my consent.

PN77

A brief decision will issue shortly but the rule change will be made. When should it take effect, Mr Richardson?

PN78

MR RICHARDSON: Your Honour, I stand to be corrected, because seeing the matter arose before his Honour Senior Deputy President Lacy in another application, it's my understanding, although I must confess I don't have a copy of the new Act, although I know the schedule is the same albeit renumbered, is that the earliest date the alteration can take effect would be the day that you publish your decision. In any event, that would be satisfactory to us in light of your decision.

PN79

THE SENIOR DEPUTY PRESIDENT: Usually, I think our administrative requirements necessitate a delay of some period after that.

PN80

MR RICHARDSON: Normally, as I understand involving the Registrar because the - - -

PN81

THE SENIOR DEPUTY PRESIDENT: Yes, to enter the - - -

PN82

MR RICHARDSON: Yes. If the Commission pleases.

PN83

THE SENIOR DEPUTY PRESIDENT: It will take effect from whatever time our administrative arrangements need, whatever it will require. Unless there is anything else, I will adjourn the Commission.

<ADJOURNED INDEFINITELY [2.58PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #NUW4 DEED OF SETTLEMENT BETWEEN NUW AND ASU PN5
EXHIBIT #NUW5 DEED OF AGREEMENT PN5
EXHIBIT #NUW6 MINUTES OF NATIONAL COMMITTEE OF MANAGEMENT MEETING HELD 02/03/06 PN23