AG2006/745, Transcript of Proceedings [2006] AIRCTrans 732 (9 May 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 14942-1

SENIOR DEPUTY PRESIDENT KAUFMAN

AG2006/745

APPLICATION BY JANAGROM NOMINEES PTY LTD & GISBORNE SUPERFRESH PTY LTD
s.170LK - Agreement with employees (Division 2)
(AG2006/745)

MELBOURNE

10.50AM, THURSDAY, 27 APRIL 2006

Continued from 22/3/2006

PN968

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

PN969

MR B THOMPSON: Your Honour, with me today I have MR N MORGAN, director of Morgan's IGA.

PN970

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Thompson. Where are we at?

PN971

MR BURKE: Well, your Honour, I think last time I finished and had one witness, and was hoping to have further witnesses. However, I've spoken to Mr Thompson about it. We unfortunately don't have any further witnesses to put. We would have liked to but it has been difficult, but we have no further witnesses to put today. I think then the question is of submissions. Mr Thompson perhaps has made his, and unless he has anything to further to add we'd seek to make our submissions.

PN972

THE SENIOR DEPUTY PRESIDENT: Well, I think you're submitting that I shouldn't certify the agreement so perhaps I ought to hear from you first.

PN973

MR BURKE: Yes, your Honour.

PN974

THE SENIOR DEPUTY PRESIDENT: You might address me on section 170LT(3), having regard to the fact that if I don't certify this agreement the company could, under the present legislation, make another one in terms that would be somewhat inferior to this one I would have thought.

PN975

MR BURKE: Only if it was in the public interest.

PN976

THE SENIOR DEPUTY PRESIDENT: Why would it not be in the public interest to certify this agreement, given that if I don't, under the Work Choices legislation an agreement containing substantially inferior terms could be made could it not?

PN977

MR BURKE: Yes, it could, your Honour.

PN978

THE SENIOR DEPUTY PRESIDENT: Yes. Well, I'm interested to know why.

PN979

MR BURKE: However, your Honour, I think we would say - - -

PN980

THE SENIOR DEPUTY PRESIDENT: I want you to address that issue.

PN981

MR BURKE: You want me to now, your Honour. We'd say the company has given a commitment to employees in MORGANS3, the fourth page - sorry, fifth page on letterhead, Morgan's Super IGA, seven reasons to vote for the proposed agreement. Point number 6 in that, after involved - in capitals - this is untrue. The company says if the proposed certified agreement is not approved the employees will revert to the Master Grocers Award which does not contain guaranteed wage increases.

PN982

And what we say is that the company have made it clear to the employees if this agreement is not approved employees will revert to the award, because obviously our application to terminate the agreement would go ahead, so the agreement will be terminated, they would be put under the award, they would be put under far superior conditions in our view. The company could seek to - - -

PN983

THE SENIOR DEPUTY PRESIDENT: Far superior conditions to what?

PN984

MR BURKE: To this agreement and to - - -

PN985

THE SENIOR DEPUTY PRESIDENT: You were going to take me to those.

PN986

MR BURKE: Yes. We say far superior, we say superior, we say better conditions, and being on those conditions then the company could seek to make another agreement, it could do that at any stage. It would then have to convince employees that whatever it put under Work Choices would be better than the award, otherwise why would employees vote for it? We say the company has given a commitment, they made a big deal about that point, they were the reasons to vote, because if you didn't you just go back to the award. The only thing they said there is that there were no guaranteed wage increases.

PN987

THE SENIOR DEPUTY PRESIDENT: That's true is it not?

PN988

MR BURKE: Under the award?

PN989

THE SENIOR DEPUTY PRESIDENT: Mm.

PN990

MR BURKE: Yes. But it may also be true under this agreement as well
because - - -

PN991

THE SENIOR DEPUTY PRESIDENT: Has this agreement not built into it any wage increases?

PN992

MR BURKE: No. They only last for 12 months, your Honour. It has a mechanism by which the company might provide annual increases, but in terms of the rates that are in there they will be higher than the award rate, and we'd assume that those award rates will be the rates that the Fair Pay Commission will seek to vary, and unless the - - -

PN993

THE SENIOR DEPUTY PRESIDENT: Sorry, what will be higher than the award rate? I'm not sure about that.

PN994

MR BURKE: The agreement rate.

PN995

THE SENIOR DEPUTY PRESIDENT: The agreement rate is higher than the award rate is it?

PN996

MR BURKE: The agreement rate for - - -

PN997

THE SENIOR DEPUTY PRESIDENT: Perhaps you ought to just take your submissions in the order you intended to, Mr Burke.

PN998

MR BURKE: Well, your Honour, that's what we say in that matter, that the company has already given a given a commitment, that they've said to their employees if this does not get up, this is their one shot at it, if it doesn't get up they'll know that the application we already have in is on tomorrow, if it's not approved the agreement, we say the agreements will be terminated and - - -

PN999

THE SENIOR DEPUTY PRESIDENT: Well, they might not be.

PN1000

MR BURKE: They may not be, your Honour. But there would be no reason - in our view there won't be a reason not to because - - -

PN1001

THE SENIOR DEPUTY PRESIDENT: Yes. Well, I've indicated that I'm likely to - there's those other certified agreements, yes.

PN1002

MR BURKE: Exactly, your Honour. So that's the point we think that employees are under. The other thing though is - and we don't propose that this should happen I don't think under LT(8) I think - LU(8), the relevant provision that the Commission can - LV(1)(b), that in any case before refusing to certify the agreement the Commission must give persons who made the agreement an opportunity to take any action that may be necessary to make the agreement certifiable. So there's that final problem. We don't - we were going to put submissions in relation to that.

PN1003

THE SENIOR DEPUTY PRESIDENT: Well, you need to satisfy me don't you that it doesn't pass the no disadvantage test?

PN1004

MR BURKE: Or that the requirements of LK(1) and (2) and (7) are not required as well.

PN1005

THE SENIOR DEPUTY PRESIDENT: Yes. Well, would you proceed to do so please?

PN1006

MR BURKE: Yes, your Honour. We oppose the certification of the agreement and ask that the Commission not certify the agreement. We say so because the company is in breach of 170LK and LT, and the application is not a valid one, and also in terms of a valid majority under 170LE, that hasn't been achieved either.

PN1007

THE SENIOR DEPUTY PRESIDENT: Sorry, which section? No valid majority under what section?

PN1008

MR BURKE: LE. LE talks about the valid majority, definition of valid majority.

PN1009

THE SENIOR DEPUTY PRESIDENT: Yes, go ahead.

PN1010

MR BURKE: We say the breaches are evident from material provided by both the SDA and the company from the evidence produced to the Commission and because of relevant authorities. We do not believe that any of the breaches can be overcome with any undertakings that can be given by the company, or by giving the company an opportunity to take any action that may be necessary to make the agreement certifiable. In terms of LK the employer must make the agreement with a valid majority of the persons employed at the time whose employment will be subject to the agreement.

PN1011

We say the company did not have a proper vote on the agreement. It did not have a vote of only those employees whose employment will be subject to the agreement. It included in the vote employees whose employment was not subject to the agreement and, in particular, there were three employees that were given a vote who should not have been given one, Mr Dennis Lepp, Jay Morgan and Noel Maghamez.

PN1012

THE SENIOR DEPUTY PRESIDENT: Noel who?

PN1013

MR BURKE: Noel Maghamez, M-a-g-h-a-m-e-z. Each is the manager of one of the three shops to be covered by the agreement, and shop managers are excluded from the agreement. Department managers are - - -

PN1014

THE SENIOR DEPUTY PRESIDENT: Would that have affected the vote if they hadn't been given it?

PN1015

MR BURKE: It wouldn't have affected the vote, your Honour.

PN1016

THE SENIOR DEPUTY PRESIDENT: It wouldn't have affected the vote?

PN1017

MR BURKE: No. There was only three, and the vote, I think the difference is 26. However, they should not have been given a vote.

PN1018

THE SENIOR DEPUTY PRESIDENT: But why does that affect the valid majority, Mr Burke?

PN1019

MR BURKE: Well, because the vote was tainted to begin with, your Honour. It's unfair to give a vote to someone who is not entitled to a vote, and that that, we say, taints the vote to start with. And we come to a particular authority on that. But I think it's - sorry, your Honour. Department managers are included, but not shop managers who are above the department managers. So we look at 8.1 of the agreement and also 5.1.1. 5.1 of the agreement tells us the employees who will be covered by the classifications in 8.1 of the agreement.

PN1020

THE SENIOR DEPUTY PRESIDENT: Just let me find it. 5.1?

PN1021

MR BURKE: Yes, 5.1. It says at 5.1:

PN1022

This agreement applies to all employee parties otherwise covered under the following award classifications.

PN1023

And under the award, the Master Grocers Award 2005, which I believe the Commission has a copy from previously. I have another copy here.

PN1024

THE SENIOR DEPUTY PRESIDENT: Yes. What section? What clause rather?

PN1025

MR BURKE: 14.1.8 and point 7. There are above the levels mentioned in the agreement two further ones, level 8 and level 9, and we say level 9 means an employee allocated the responsibility for the control and supervision of a shop and that employee is in charge of two or more employees, and the employer expects an employee to perform those responsibilities. And therefore at least a level 9 employee should never have - is not covered by the agreement and shouldn't have been given a vote. There's no reason for someone to be given a vote. I could have been given a vote, the person on the street could have been given a vote. That is not fair to the people voting on the agreement.

PN1026

THE SENIOR DEPUTY PRESIDENT: How so?

PN1027

MR BURKE: Well, I have no say in the agreement. The agreement is not going to cover me afterwards, I'm not going to be working for the company.

PN1028

THE SENIOR DEPUTY PRESIDENT: But if your vote doesn't affect the valid majority why is it unfair to those who voted in favour of it?

PN1029

MR BURKE: It taints the vote to begin with.

PN1030

THE SENIOR DEPUTY PRESIDENT: How so?

PN1031

MR BURKE: People who vote on an agreement are entitled to know that the people in the ballot are the people who have a say in the ballot, otherwise the ballot is just being corrupted by extra votes being put in by one side.

PN1032

THE SENIOR DEPUTY PRESIDENT: I can understand that submission if the extra votes made a difference. If they don't make a difference how is that submission put, Mr Burke? You've got some authority I take it?

PN1033

MR BURKE: I'm sorry?

PN1034

THE SENIOR DEPUTY PRESIDENT: You've got some authority to support that proposition?

PN1035

MR BURKE: Yes, your Honour.

PN1036

THE SENIOR DEPUTY PRESIDENT: Well, it might be appropriate to go to it.

PN1037

MR BURKE: Yes, your Honour. It's a decision of his Honour, Senior Deputy President Duncan, in November 2004, the Diab Services Pty Ltd Certified Agreement 2004, if I take you to point 6. It's an agreement in the fast food industry.

PN1038

The relevant section in this matter is section 170LK. Subsection 1 of that section provides ...(reads)... destroyed the possibility that the agreement was approved by a valid majority.

PN1039

This being so, he found there was no valid application and didn't certify the agreement. And we say we're either in the same position or a better position. These people are not even in the future going to be covered by the agreement unless unfortunately they're demoted. They could never have been given a vote, they were total strangers, they were never going to come into the agreement. We say their votes were put in there to help the vote. There were three extra votes who should never have been given in there, and we'd assume - we didn't ask them - who they voted for, but I'd assume they voted for the agreement. They were certainly pushing the agreement with the employees because they were store managers.

PN1040

But his Honour makes it clear that they should just never have been given a vote. It doesn't matter how many of them there were. Having been given a vote the vote was tainted, it can't proceed any further. That's the point we make and that's the point in this matter, and one that Mr Thompson will be very well aware of from that matter as well. In case there's any dispute about the employees, the three employees being managers, we say that because I can provide some further evidence.

PN1041

THE SENIOR DEPUTY PRESIDENT: Do you have any objection to this being tendered as evidence, Mr Thompson, whatever it is?

PN1042

MR THOMPSON: I don't know what it is.

PN1043

THE SENIOR DEPUTY PRESIDENT: I thought the evidence had closed.

PN1044

MR BURKE: Your Honour, in case there's any dispute with the company that these three employees are managers. I think last time there was some dispute about that. But checking the company's website as late as Monday this week, it mentions that at the Melton store Mr Dennis Lepp is the manager, at the Sunbury store Mr Jay Morgan is the manager, and Mr Maghamez is listed there as being the manager at Delahey. Now, we believe he's gone to Gisborne, and perhaps that's why it hasn't been changed since October of last year. And on the back I've included for the benefit of the Commission - Mr Morgan is here himself today - but his title is in fact director of the company. There was some suggestion last time that perhaps he was the manager of the stores. We just want to put that, unless there's any objection from the company to their own website being used.

PN1045

THE SENIOR DEPUTY PRESIDENT: Mr Thompson, what's your attitude to this document?

PN1046

MR THOMPSON: No, I don't have an objection. We'll be dealing with the nature of this submission in due course.

EXHIBIT #SDA2 DOCUMENT FROM MORGAN'S WEBSITE

PN1047

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Burke?

PN1048

MR THOMPSON: Just before we proceed, your Honour, is there any other - I might just confirm. We have had our evidence closed in this matter. If there's anything else I'd be interested to - - -

PN1049

THE SENIOR DEPUTY PRESIDENT: Yes. Is there any other material you wish to produce by way of evidence?

PN1050

MR BURKE: There is, your Honour.

PN1051

THE SENIOR DEPUTY PRESIDENT: Well, the usual case is to do that before submissions. Perhaps you might just indicate to Mr Thompson what it is you want to introduce into evidence so he's not caught unawares.

PN1052

MR BURKE: I'm happy to provide them to him now. It's really calculations
on - - -

PN1053

THE SENIOR DEPUTY PRESIDENT: Well, they're part of your submissions.

PN1054

MR BURKE: That's all.

PN1055

THE SENIOR DEPUTY PRESIDENT: That's part of your submissions, yes. You might hand those to him.

PN1056

MR BURKE: Certainly.

PN1057

THE SENIOR DEPUTY PRESIDENT: I didn't issue written directions because I thought we were dealing with further evidence, but had I know that there were no further witnesses I might have issued some directions to have submissions in writing. Anyway, Mr Thompson will no doubt squeal if he feels that he's disadvantaged.

PN1058

MR BURKE: So they're really just some further calculations and some authorities that we rely on.

PN1059

THE SENIOR DEPUTY PRESIDENT: Well, calculations can be rather tricky things to deal with on your feet, Mr Burke. But let's see how we go. Mr Thompson will object if he's minded to at the time.

PN1060

MR BURKE: They're not as extensive as the ones already put by the company, your Honour. I think they're easy enough to follow.

PN1061

THE SENIOR DEPUTY PRESIDENT: Let's keep going, Mr Burke.

PN1062

MR BURKE: Thank you, your Honour. Therefore we say three employees were wrongly allowed to vote and their participation tainted the whole vote. If the vote is tainted then it cannot be said that to exclude the three votes still gives a majority. That is unfair to the rest of the voters who believed that they were voting about an agreement that was not covering the store manager. As well the employees covered by the agreement were entitled to know that the vote was being conducted impartially and independently, and this would have occurred with the returning officer who was not entitled to a vote.

PN1063

Each manager was also the returning officer in each store, and we say that that could lead to the perception of undue influence as the store manager is the manager of each employee and had control of the ballot as well.

PN1064

THE SENIOR DEPUTY PRESIDENT: Just remind me, is there anything in the evidence to suggest that the returning officers knew or could have known how people were voting?

PN1065

MR BURKE: No, your Honour.

PN1066

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN1067

MR BURKE: It's perhaps unusual though that someone who didn't get a vote - sorry, if the employee, if they had not got a vote and they were just the returning officers I think there would be a lot more impartiality about the outcome. But it just looks wrong in our view, that someone who is not entitled to vote gives himself a vote, says he's entitled to one, and also is a returning officer. We say that Ms Palise at PN 297 to 304 agreed that the three employees were store managers and that they had been given votes.

PN1068

THE SENIOR DEPUTY PRESIDENT: Just a minute, let me turn that up. Who is Ms Palise, remind me?

PN1069

MR BURKE: She was the human resources manager at the company.

PN1070

MR THOMPSON: Witness for the employer.

PN1071

MR BURKE: The witness for the employer.

PN1072

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. 297?

PN1073

MR BURKE: 297, your Honour, yes. Do you wish me to read 297?

PN1074

THE SENIOR DEPUTY PRESIDENT: No, I can read it, thank you. Yes, thank you.

PN1075

MR BURKE: Ms Bird, who was the union's witness, refers to Mr Lepp as the store manager and the person who gave her the ballot paper at PN 893, says that Dennis, the store manager, wasn't too impressed with that and wanted people to go to the meeting. Also in - - -

PN1076

THE SENIOR DEPUTY PRESIDENT: 893 did you say?

PN1077

MR BURKE: 893, your Honour, yes, she mentions Mr Dennis Lepp as the store manager. It's also mentioned in her statutory declaration as well.

PN1078

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1079

MR BURKE: Also in MORGANS3 on the second page there is information about the ballot. It says that employees are to collect the ballot paper from their store manager. Under the date there, Friday and Saturday 7 am to 5 pm, please collect the ballot paper from your store manager, and you fill it in. And Ms Bird in her evidence at paragraph 7 of the statutory declaration said she collected her ballot paper from Mr Lepp, that he was the store manager, that she also spent some time in his office after that, that he further explained what was going on with the ballot and complained about the union putting out something that said to vote no.

PN1080

Also we see from MORGANS3 on the next page, which was a memo from
Mr Neil Morgan, director, it highlights his title is simply director. And we've highlighted from the website that the contact details for each store highlight three managers, certainly two managers in their current position, and Mr Maghamez, who was at the time at Gisborne as the manager. In fact we'd say a bit embarrassing now, if these three people are not the store managers it would be embarrassing to them to find from the Commission that they're allowed to have a vote because the company might wish to say they are department managers. I think it would be not right for them to have it on the record, if the company wishes to say so, that they're department managers. Because we'd say that's the only way the company could put that they were entitled to a vote back then. I think the company should consider that.

PN1081

There was some reference to Mr Neil Morgan and Mr Peter Morgan having some role as the actual store manager, and we say that that isn't the case at all. The memo in MORGANS3, the first two are from Neil. I then mention the second one, as I said, that someone collects their ballot paper from the store manager. Melton is the head office of the company, the office is above the store. When Ms Bird, who works in the store, went to collect her ballot paper she collected it from Mr Lepp, and knew him as the store manager. She did not talk to Mr Morgan.

PN1082

I have a further authority to provide. This is from his Honour, Vice President Ross, as he was then, dealing also with a certification of a division 2 agreement with employees, and he dealt with some of the same issues.

PN1083

THE SENIOR DEPUTY PRESIDENT: That's where the two employees were employed by a different company isn't it?

PN1084

MR BURKE: Yes. There were five companies set up and it was sought to have one of those agreements put through on the basis that only two employees were given a vote. They weren't told the full facts of what was going on, and his Honour found that that was not correct and obviously tainted. It affected how the application was made. But in particular in number 11, point 11, he dealt firstly with the intervention of the CFMEU, and part of the union's grounds for intervening in that matter at 11, the third star or dot point, is that the employees who voted on the agreement were not engaged in work that is subject to the agreement. Then at 44 on page 7, section 170LK(1) provides that:

PN1085

The employer may make the agreement with a valid majority of the persons employed at the time whose employment will be subject to the agreement. Requirement for the agreement to be made with a valid majority is elaborated in section 170LE, which makes it clear that the relevant employees must generally make the agreement.

PN1086

Then at 45, in re AIRC ex parte CFMEU, the Full Federal Court held that the requirement of an agreement be generally made:

PN1087

This plainly betokens a concern with your authenticity and, as it were, the moral authority of the agreement. It is perfectly understandable, indeed, one might think plainly necessary this be so.

PN1088

And at 55 he granted leave for the union to intervene, but also dismissed the application as well. So we think that the Commissioner had a similar point - the Vice President had a similar point for himself, that he had to deal with the valid majority, and even with only two people voting there was an issue that perhaps they weren't covered by the agreement, but his Honour found that a valid majority hadn't made the agreement. The next point we wish to go to is LK(2), notice of intention to make agreement:

PN1089

An employer must take reasonable steps to ensure that every person employed at the time whose employment will be subject to the agreement has at least 14 days notice in writing of intention to make the agreement. An agreement must not be made before those 14 days have passed.

PN1090

Now, we say the company has breached this section as well. There is the evidence of Ms Bird in her statutory declaration and at PN 939 to 946. Certainly at 941, especially 939 talks about the attachment EP1:

PN1091

Was that on the noticeboard at all times during the time that you worked?

PN1092

THE SENIOR DEPUTY PRESIDENT: What's EP1?

PN1093

MR BURKE: EP1 was Ms Bird's attachment, and the first page of EP1 is the company's notice of intention, which is on letterhead. So Mr Thompson asked Ms Bird if she had seen EP1, which was the notice of intention, had she seen it on the noticeboard?

PN1094

THE SENIOR DEPUTY PRESIDENT: And that was said to have been attached to all pay slips?

PN1095

MR BURKE: Yes, your Honour. That's what I was going on to.

PN1096

THE SENIOR DEPUTY PRESIDENT: So from one witness not having seen it you want me to infer that LK(2) hasn't been complied with?

PN1097

MR BURKE: Yes, your Honour, plus further submissions. But in terms of Ms Bird, she was clear that it wasn't given to her, it hadn't been on the noticeboard.

PN1098

THE SENIOR DEPUTY PRESIDENT: No, she hadn't seen it.

PN1099

MR BURKE: She hadn't been up to the noticeboard, sorry.

PN1100

THE SENIOR DEPUTY PRESIDENT: Not that it hadn't been on the noticeboard, she hadn't seen it on the noticeboard.

PN1101

MR BURKE: Sorry, your Honour, she hadn't seen it on the noticeboard. "As I've said, I've never seen it before," she said, and she said that it hadn't been attached to her pay slip, and she was quite clear that her pay slip wouldn't have been tampered with, that the person in the pay office was most careful with those sorts of things, and so that unfortunately it hadn't been given to her. I think her evidence is quite clear on that. So at least one employee was not given a notice, and we say this is a clear breach because the Act talks about every employee should be given access to it.

PN1102

The way the company sought to provide it to all employees didn't occur for Ms Bird, in that it wasn't attached to her pay slip. That also Ms Palise, for the company, was also not sure that every employee entitled to the notice received one, and that's at 334.

PN1103

THE SENIOR DEPUTY PRESIDENT: Mr Burke, LK(2) places a requirement on the employer to take reasonable steps to ensure that every employee has 14 days notice, not that every employee must have 14 days notice. Why weren't the steps taken by the employer? The evidence is that the documentation was placed on the noticeboards and that it was attached to pay slips. One employee, on the evidence, didn't see it. How can I find on that that the employer didn't take reasonable steps?

PN1104

MR BURKE: Well, because I was going on to say Ms Palise herself also said that she couldn't be sure that all employees received it either.

PN1105

THE SENIOR DEPUTY PRESIDENT: Yes, because she didn't know. She didn't see each employee's pay slip attached, she didn't see each employee open the envelope or go to the noticeboard.

PN1106

MR BURKE: No, she didn't, your Honour.

PN1107

THE SENIOR DEPUTY PRESIDENT: Well, that's why she couldn't be sure.

PN1108

MR BURKE: But we'd say she should be sure.

PN1109

THE SENIOR DEPUTY PRESIDENT: How?

PN1110

MR BURKE: Well, because it's a requirement, a mandatory requirement that the company take reasonable steps to - - -

PN1111

THE SENIOR DEPUTY PRESIDENT: And what were the steps that the company took on the evidence, Mr Burke?

PN1112

MR BURKE: Well, the steps were to have pay slips, the notice attached to pay slips, and we have evidence that that unfortunately didn't occur.

PN1113

THE SENIOR DEPUTY PRESIDENT: In one instance out of 270-odd employees.

PN1114

MR BURKE: In one instance.

PN1115

THE SENIOR DEPUTY PRESIDENT: Why didn't the company take reasonable steps?

PN1116

MR BURKE: Because it should have made sure that that person received one as well. They then went on to say in MORGANS2 that they had further evidence that the notice was given to all employees. And we say that that's not evidence itself that it was given. The company went on to say, well, we can show that we did put it out, this is how we did it, we put this Team Talk out, or this newsletter to employees, and here's further evidence. And I was going to take the Commission to MORGANS2.

PN1117

THE SENIOR DEPUTY PRESIDENT: MORGANS2, yes.

PN1118

MR BURKE: I think it's got the word focus on the front of it. Now, this was not presented to us at the time of the hearing. Unfortunately there was only one copy provided. So we've only received this after the hearing. And so what we'd say is that the company relies upon MORGANS2.

PN1119

THE SENIOR DEPUTY PRESIDENT: Well, it was tendered at the hearing.

PN1120

MR BURKE: But it wasn't provided to us at the time, your Honour. The directions were that it be provided afterwards. The comments we'd make about it were that this is not the same notice in here that was handed out and as in EP1 or attachment 1 of the company's statutory declaration for a number of reasons. If you have MORGANS2 - - -

PN1121

THE SENIOR DEPUTY PRESIDENT: Well, what is MORGANS2, what was the evidence in relation to MORGANS2?

PN1122

MR BURKE: I think it's the Team Talk or the information that's provided on a weekly basis to all employees to look at, to look at things like specials and other information that employees need to know. And so the company included it in here, as the ladies were saying, that it should have been something that employees would be given a copy of to look at, and on the front of it there's a distribution list which is then, when the employee looks at it, obviously puts a note against to say that they've read it. And on the front page at least nine people did see it, down the bottom of the page. None of those is Ms Bird. Her first name is Elizabeth, there's no Elizabeth her. I'll come back to that.

PN1123

But if we look at the actual document on the third page, third and fourth page, which is really a copy, or a different copy to what was put out in EP1 and attachment 1. Firstly, the original that was put out was on letterhead. On the second page it's signed in the original in EP1 and in attachment 1, and also if you look at the bottom of the page under Attachment 1, schedule of meetings to explain the agreement, the meeting at Melton at 4 pm has been crossed out. Now, that wasn't the information that was provided to other employees on the official notice. There was to be a meeting on that Friday, that in fact was cancelled.

PN1124

THE SENIOR DEPUTY PRESIDENT: Are you submitting that employees didn't see this letter dated 31 January 2006 in MORGANS2?

PN1125

MR BURKE: Some employees may have, however there's no notice on the front page. On the front page, if we go to that, where employees have signed or made some mark that they've seen it, I think it's the 7th, nine people did see it. I'm not sure what SPT means, but there's employees names. If we go above there is supermarket manager, marketing manager, grocery manager, team leaders and various managers. At least those last few managers starting at meat manager, some of those may be covered by this agreement, but it's not noted there that any of them saw this or marked off that they've seen it. And if in fact they did see it we'd say that the earliest they saw it was 6 February, which was a Monday. We'd say that's because it's the start of the week.

PN1126

If they saw it on 6 February they didn't see it 14 days before the vote. The vote was on 17 and 18 February, and that's in MORGANS3 on the third page, where Mr Neil Morgan says:

PN1127

Thank you for participating in a secret ballot for approval of the agreement on 17 and 18 February 2006.

PN1128

So even if they did see it there's no marking that they did. If they did, they would have seen it no earlier than the 6th, they therefore weren't given 14 days. So we'd say that the company can't rely upon that as the proper notice under LK(2) as well. That adds to what we say, that one other employee didn't see it. Ms Palise couldn't be sure that everyone had seen it. But if they relied upon MORGANS2, well, MORGANS2 doesn't pass the test, it doesn't give employees at least 14 days. It's a different notice than the one that was given elsewhere. In fact it's probably correct in some respect that that meeting at Melton was cancelled, but that wasn't cancelled until, in my view, after 6 February when Mr Morgan rang me and told me it was not going ahead.

PN1129

So I'd say the only way that could have been done is if it was done after Mr Morgan had already cancelled that meeting, and therefore it was after the 6th, or the earliest 6 February, and people weren't given 14 days. In terms of authorities, your Honour, we've taken you already to the Grocon decision at 30. If I take you to 30 of that decision. Section 170LH sets out the requirements that must be satisfied for applications to be made. The language of the section is mandatory, and if any of the requirements are not met an application cannot be made. One requirement is that the agreement be made in accordance with section 170LJ, 170LK or 170LL.

PN1130

And in 32, if an agreement has not been made in accordance with section 170LK then an application for certification cannot be made. And at 38 - - -

PN1131

THE SENIOR DEPUTY PRESIDENT: Isn't there a Full Bench decision to the contrary?

PN1132

MR BURKE: I haven't got that with me, your Honour. I'm going on also to rely upon what Senior Deputy President Duncan also says. He says the same things in the Suncorp matters.

PN1133

THE SENIOR DEPUTY PRESIDENT: You're now making the submission that you can't make an application at all. I'm sure there's a Full Bench decision that says that there is an application even if those sections haven't been complied with.

PN1134

MR THOMPSON: There are numerous decisions, your Honour, including - - -

PN1135

THE SENIOR DEPUTY PRESIDENT: You can take that and tell me in due course, Mr Thompson.

PN1136

MR THOMPSON: Thank you.

PN1137

THE SENIOR DEPUTY PRESIDENT: I've just alerted Mr Burke to it.

PN1138

MR BURKE: I haven't come across those, your Honour. I'm sure Mr Thompson has. If he does, well, we'll address those.

PN1139

THE SENIOR DEPUTY PRESIDENT: Yes. Just repeat what your submission on this aspect is, that there's no valid application.

PN1140

MR BURKE: Not on what we've put to you so far, no, your Honour.

PN1141

THE SENIOR DEPUTY PRESIDENT: That's contrary to the Full Bench decision.

PN1142

MR BURKE: It may be, your Honour.

PN1143

THE SENIOR DEPUTY PRESIDENT: Yes, go ahead.

PN1144

MR BURKE: I'm not aware of that. If I take you to 38, 39 and 40, his Honour goes on to say that basically if those matters are not followed then the application would fail.

PN1145

THE SENIOR DEPUTY PRESIDENT: That's why his Honour refers to a purported application in the penultimate paragraph of his decision I think.

PN1146

MR BURKE: Yes. And I also said - - -

PN1147

THE SENIOR DEPUTY PRESIDENT: Yes, go ahead.

PN1148

MR BURKE: It goes to the same point. This is a decision of his Honour, Senior Deputy President Duncan, the Suncorp matter. Basically he confirms what VP Ross said a month earlier at point 18 and point 20 that - at 18, that other general considerations, whether the requirements in 170LK are mandatory. A Full Bench in Energy Developments Ltd and employees of the company, a certified agreement 2002, print PR928057 said they were. The Bench did not raise the mandatory directory dictum referred to by Mr Harmer. The Bench simply said section 170LK requirements are mandatory. I accept and apply that proposition.

PN1149

And then it goes on in 20 to say that the agreement must be genuinely made. That mentions the decision that is already in the previous decision of his Honour, Vice President Ross. We do say that the company has not provided the notice of intention to all employees, and how it has tried to show that. We can show that the 14 days hasn't been provided, and without seeing the Full Bench decision I can't see that the company can write on MORGANS2 to say that employees were given 14 days notice at least. And anyway, the notice that's given in MORGANS2 is different to the notice that was given to all employees, to other employees, and the notice should have been the same, because employees were entitled to know that - - -

PN1150

THE SENIOR DEPUTY PRESIDENT: What does the Act say? The employer must take reasonable steps to ensure that every employee employed at the time whose employment will be subject to the agreement will, at least 14 days in writing, with intention to making the agreement.

PN1151

MR BURKE: Yes, your Honour.

PN1152

THE SENIOR DEPUTY PRESIDENT: All they've got to be told is there's an intention to make the agreement.

PN1153

MR BURKE: Yes, your Honour, and then they have to go on to explain the agreement.

PN1154

THE SENIOR DEPUTY PRESIDENT: Well, that's not in LK(2).

PN1155

MR BURKE: No, it's not, your Honour, it's in LK(7). But what I was going to say is, the notice itself said that there was going to be a meeting. That was then cancelled. Originally that meeting was to be on and people were told that in the original notice, and so people looking at the notice would perhaps wonder why the notices are different. I think they're entitled to know that. So in dealing with the explanation of the terms under LK(6), before the agreement is made the employer must take reasonable steps to ensure that the terms of the agreement are explained to all the persons employed at the time whose employment will be subject to the agreement. And that's a similar involving T7, which we come back to.

PN1156

We'd say firstly that the terms of the agreement were not explained, we'd say that in terms of Ms Bird's evidence she believed from the meeting that she attended that she an others like her would receive a $1 per hour pay rise, that's in her statutory declaration. That's what she took away from the meeting, believing that she would receive a pay rise of up to $1. And later on in evidence in the statutory declaration I think said that - and in the evidence said that another manager said to her, why wouldn't she vote for it, she would get a $1 per hour pay rise?

PN1157

And obviously there is no such increase of $1 for her. Her hourly increase is 28 cents. She went from $8.77 under the AWA to the best, as Mr Thompson put to her last time, she would go to $9.05, and that would be 28 cents, or $4.90 per week on the 17½ hours that she works, which obviously is nowhere near the company's claim in its vote yes document in MORGANS3, that the average wage increase would be $29 per week. Obviously if she's only getting $4.90 someone must be getting a lot, lot more.

PN1158

Secondly, it's unclear from Ms Palise's evidence as to who explained the agreement, what was said, what was understood. For example, Ms Palise was present at meetings that Mr Morgan, Mr Neil Morgan held to explain the agreement, for example at PN 591. The question was asked by myself:

PN1159

How much of the agreement did you explain to employees? Did you explain that clause to employees?---I didn't explain everything to the employees, it was one of the directors.

PN1160

PN 593:

PN1161

Can you remember what he told employees about that clause?

PN1162

THE SENIOR DEPUTY PRESIDENT: Which clause are we talking about?

PN1163

MR BURKE: Clauses on the previous page, 3.4, which is:

PN1164

Notwithstanding this agreement the employer and employee are free to choose the most appropriate form of agreement for their particular circumstances, whether or not that form is provided for by the Act, including AWAs which may have replaced this agreement totally or to the extent of any inconsistency for separate casual engagements under the award or a combination of the above.

PN1165

And then at 588:

PN1166

How was this clause explained to employees?---I don't know.

PN1167

And then other parts that I went on to. Then 593:

PN1168

Can you remember what he told employees about that clause
Mr Morgan?---No, I can't remember, sorry.

PN1169

And so then it stopped at that point, as your Honour pointed out, that the witness was the payroll director and not a payroll officer, and not a director. But she was giving evidence in the matter as to what happened at the meeting to explain things, and that in one example there of what Mr Morgan explained, which we say is a very important point, she couldn't remember or she couldn't tell us what had happened. And we say that that's a very important clause, 3.4, which on the face of it allows casuals, the 42 casuals covered by the agreement to perhaps remain outside the agreement. But we're not sure that that was explained to them.

PN1170

Further on in MORGANS3, in the seven reasons to vote for the proposed agreement, casuals are told at the last minute that all existing casual employees will convert to permanent employment and receive regular rosters and hours. Now, that's not what that clause says, in my view, nor explained to employees at the time by Mr Morgan. So we say that there are 42 employees, if that clause was put to them they would not have understood what they could be into the future. They could remain in the agreement, they could be out of the agreement, they could be under an AWA, they could be under the award, what could they be?

PN1171

We'd also say then, if that was the case that they perhaps weren't going to be included in the agreement in the future, those 42, why were they given a vote as well? If it was up to them to stay out of the agreement why were they given a vote in the first place? That clause is very confusing, it would have confused any casual even if it was explained to them that by voting for the agreement you can be outside of the agreement, you can stay out of the agreement, stay under the award, stay under an AWA. Who would know what their conditions of employment would be? But unfortunately Ms Palise couldn't tell us how that clause was explained to employees.

PN1172

So we would say at least 42 people wouldn't have had the part of the agreement that was most important to them, the casual employees, wouldn't have had explained to them how the agreement was going to apply to them, because throughout the rest of the agreement there's no other reference to casuals. You're either a loaded or unloaded person, or a week day or seven day a week person, you're full time or you're part time, you're meat or you're shop. No reference to casuals. There's no casual rate, there's no other casual conditions. Now, that's the clause that deals with casuals, and just an unsatisfactory clause and it - - -

PN1173

THE SENIOR DEPUTY PRESIDENT: That's clause 4.3 is it?

PN1174

MR BURKE: No, 3.4. I'm just confirming that.

PN1175

THE SENIOR DEPUTY PRESIDENT: Why do you say that's confined to casuals?

PN1176

MR BURKE: Well, it goes on to talk about separate in 3.1.2, separate casual engagements under the award.

PN1177

THE SENIOR DEPUTY PRESIDENT: The rest of it doesn't apply only to casuals.

PN1178

MR BURKE: I'm sorry, your Honour?

PN1179

THE SENIOR DEPUTY PRESIDENT: The rest of it doesn't purport to apply only to casuals does it?

PN1180

MR BURKE: No, it may not, but certainly for those 42 it would. In fact it goes on to say:

PN1181

The employer and employee are free to choose the most appropriate form of agreement notwithstanding this agreement.

PN1182

So whilst you're covered by this agreement, notwithstanding that, you can do something else. Now, is the employee free to choose by themselves, or the employer? Were casuals - and I think I asked Ms Palise, were casuals given the right to stay as a casual? And she wasn't aware, she didn't know. But the company did at the last minute, as I say, tell casuals that they would be converted to part time employment. Well, we don't believe that that was explained to employees. That's not in the evidence.

PN1183

Now, Ms Palise herself did explain the agreement to a number of employees, as she said at PN 610 in answer to a question from yourself, your Honour. At PN 610 you asked Ms Palise:

PN1184

Did you conduct any of the employee meetings?---Yes, I assisted.

PN1185

Then PN 612:

PN1186

Yes. And did you explain the agreement to employees on an individual
basis?---Yes, this time, yes.

PN1187

So then I asked her in terms of clause 9.1.1, which relates to overtime, how overtime occurs, at 617 - sorry, 615, at the start of that:

PN1188

Well, 9.1.7, ordinary hours of work for seven day shop employees will not exceed 38 hours per week on average over 52 weeks ...(reads)... they will average people over one week or four weeks.

PN1189

THE SENIOR DEPUTY PRESIDENT: Well, Mr Burke, why does that clause need explanation? Isn't it clear on its face, you will average 38 hours over a 52 week period?

PN1190

MR BURKE: But that's not what was explained to employees, your Honour, by Ms Palise as she says there.

PN1191

THE SENIOR DEPUTY PRESIDENT: She says not in those terms. Why does it need further explanation?

PN1192

MR BURKE: Because employees are entitled to know what the agreement - how the agreement is going to work.

PN1193

THE SENIOR DEPUTY PRESIDENT: Well, the agreement says what it says. It follows from that that employees can work more than 38 in some weeks and less than 38 in other weeks. It follows as night follows day. I mean, you don't need to explain that black means black, Mr Burke.

PN1194

MR BURKE: I think in terms of employees having an agreement put in front of them they're entitled to know - - -

PN1195

THE SENIOR DEPUTY PRESIDENT: That black means black.

PN1196

MR BURKE: - - - the changes of the agreement that will affect them, and that is a change from the award.

PN1197

THE SENIOR DEPUTY PRESIDENT: Yes, and that's clear on its face.

PN1198

MR BURKE: But it wasn't.

PN1199

THE SENIOR DEPUTY PRESIDENT: On the way you're making this submission no agreement would ever be sufficiently explained.

PN1200

MR BURKE: There would be some that would not be, no, your Honour.

PN1201

THE SENIOR DEPUTY PRESIDENT: Yes, go on, Mr Burke.

PN1202

MR BURKE: And this is one, your Honour. Then at 660 I asked in relation to clause 16, which I think is the public holiday clause, I asked:

PN1203

Did you also explain that as per the agreement they're under currently, and the award, that if it's their rostered day off on a public holiday they would no longer receive a day in lieu for that ...(reads)... then they get paid for that day.

PN1204

Now, that's a clear loss of entitlement under the award and also under the current agreement. Under the current award and under the agreement if a public holiday falls on an employee's day off they're entitled to another day in lieu. That wasn't explained to employees because that entitlement is disappearing from clause 16. In fact it could be read in 16 that if you don't work, if you choose not to work at all you won't be paid for the day at all. That wasn't explained as well. And also at 679, which was in terms of allowances, the laundry allowance that's currently paid under the award and the current, I asked Ms Palise:

PN1205

Did you explain to employees under clause 18 that the laundry allowance is no longer there and would not be paid?

PN1206

No, was her answer. So we'd say employees should have been told about those changes. They affected all employees, full time, part time and casual. Everyone was going to lose $5.60 per garment under the award in comparison to the agreement, because the new uniforms clause says at 18.2:

PN1207

Responsibility for the care and laundering of uniforms will rest with the employee.

PN1208

So I take it from that - - -

PN1209

THE SENIOR DEPUTY PRESIDENT: It's pretty clear on its face isn't it?

PN1210

MR BURKE: Yes, it is, your Honour, but not that the loss of the allowance was going to occur.

PN1211

THE SENIOR DEPUTY PRESIDENT: And where does the Act say that the loss of an allowance has to be explained to employees?

PN1212

MR BURKE: We'll come to some matters about that, your Honour.

PN1213

THE SENIOR DEPUTY PRESIDENT: Yes, go on. Just while you're interrupted, how long do you expect your submission to take, Mr Burke?

PN1214

MR BURKE: Look, it's not - I'm probably halfway through, your Honour, and it's some explanation of those tables as well.

PN1215

THE SENIOR DEPUTY PRESIDENT: Yes. I have another matter listed at 2.15. Yes, well, go on.

PN1216

MR BURKE: Employees either were not fully aware of the agreement, like Ms Bird, or, we say were misled as to what the agreement was going to do in the future. Ms Bird, in her statutory declaration, said that her only understanding of the agreement was that she would get a $1 per hour increase. But she was then - and as I've said, that now is only 28 cents. As I've said, if we look at the vote yes material put by the company, that was the first time that casuals would have been aware that they were going to be converted to permanent employment.

PN1217

It didn't explain - the agreement, as we say, doesn't explain how employees do convert. There's no mechanism under the award that we can see for that to happen. The only mechanism we see is the one in 3.4, where whoever can choose, the employer and the employee can choose that they can have separate casual engagements under the award. There's no reference to casuals in the contract of employment clause, clause 6. We also say that there was confusion about - sorry, in that case we say in our submission those casuals are left in limbo in what they were voting upon.

PN1218

They were voting to be covered by an agreement which then they could opt out of and be covered by the award. And that may be fair to them, they may be better off under the award, but that should have been explained to employees, and we don't think the evidence shows that it was to 42 employees.

PN1219

THE SENIOR DEPUTY PRESIDENT: Maybe they'd think about it at the time they decided to opt out. Surely people wouldn't opt out of something unless they knew what they were doing or thought they knew what they were doing.

PN1220

MR BURKE: They'd need to know beforehand before they voted, your Honour, as to what they were voting on. That's the purpose of the explanation in our view.

PN1221

THE SENIOR DEPUTY PRESIDENT: Yes, go on.

PN1222

MR BURKE: You need to know what you're voting for. We also say employees would have been misled by the company claiming at 3.3 of the agreement that this new agreement superseded the Master Grocers Association of Victoria and Shop, Distributive and Allied Employees Association Enterprise Agreement 2005. The two companies involved here are not parties to that agreement. If they were then we'd be happy with what we said in our material to employees, that they were receiving the benefit of a $98 wage increase over three years.

PN1223

The two companies are covered either by the 1999 agreement, which would be Janagrom Nominees Pty Ltd, and the 2002 agreement, which would be Gisborne Super Fresh Pty Ltd. Those agreements are in identical form so that there's no difference in conditions there, they're just certified at different times. The Commission may be aware of that from other proceedings. But employees would have been misled to see that this agreement totally replaced an agreement that they were not covered by.

PN1224

THE SENIOR DEPUTY PRESIDENT: And what is the effect of that misleading, if it be misleading?

PN1225

MR BURKE: Well, that people would have been thinking that they should have been covered by that agreement and receiving those rates of pay and conditions.

PN1226

THE SENIOR DEPUTY PRESIDENT: Which you say are superior to those that they voted on?

PN1227

MR BURKE: No. That's the agreement, your Honour, not the award.

PN1228

THE SENIOR DEPUTY PRESIDENT: Yes. The 2005 agreement is not superior?

PN1229

MR BURKE: The 2005 agreement is a three year agreement and it has a rate of pay that over time is superior to this agreement, because this agreement is only a 12 month agreement.

PN1230

THE SENIOR DEPUTY PRESIDENT: And is the 2005 agreement superior to the agreement that actually binds these two companies?

PN1231

MR BURKE: We'd say over time it is, yes, because there are guaranteed pay rises.

PN1232

THE SENIOR DEPUTY PRESIDENT: Is the 2005 agreement better than the agreement that you say is the right agreement that should have been - - -

PN1233

MR BURKE: Yes, your Honour.

PN1234

THE SENIOR DEPUTY PRESIDENT: So any misleading of employees would have been in favour of your submission would it not? If they were misled they were misled into thinking that they were entitled to something more than they are actually entitled to, and they still voted to displace that?

PN1235

MR BURKE: Yes, they may have.

PN1236

THE SENIOR DEPUTY PRESIDENT: So where does that take you?

PN1237

MR BURKE: Well, your Honour, it should have been - - -

PN1238

THE SENIOR DEPUTY PRESIDENT: If it be an error.

PN1239

MR BURKE: It has to be an error, your Honour.

PN1240

THE SENIOR DEPUTY PRESIDENT: Well, okay, let's assume it is. Where does it take you?

PN1241

MR BURKE: Well, the company - - -

PN1242

THE SENIOR DEPUTY PRESIDENT: Just because there's an error doesn't mean that they're misled in a relevant sense.

PN1243

MR BURKE: Employees should have had faith in the document that was being put to them.

PN1244

THE SENIOR DEPUTY PRESIDENT: And you've never made a mistake, Mr Burke?

PN1245

MR BURKE: Unfortunately, your Honour, I've probably made too many.

PN1246

THE SENIOR DEPUTY PRESIDENT: Let's assume that this was a mistake which, there's no suggestion that it was done deliberately because it certainly wasn't in the company's interest to do it deliberately, it was a mistake. The company said you're covered by an agreement that's better than the agreement that you're covered by. The employees could have looked at the 2005 agreement if they were minded to, and they still voted in favour of this agreement.

PN1247

MR BURKE: Yes, your Honour.

PN1248

THE SENIOR DEPUTY PRESIDENT: And if they'd looked at the agreement that they were actually subject to they would have seen that their terms and conditions were lesser than those in the agreement that this said it displaces. So where's the disadvantage to employees if there was this mistake made?

PN1249

MR BURKE: It's about the explanation, your Honour, not the disadvantage.

PN1250

THE SENIOR DEPUTY PRESIDENT: Yes, go on.

PN1251

MR BURKE: The explanation was that employees could have been led to believe that they were covered by that agreement, and they weren't. That's the explanation. Disadvantage is a different matter, your Honour.

PN1252

THE SENIOR DEPUTY PRESIDENT: Yes, go on. I understand your submissions.

PN1253

MR BURKE: We also say that the company did not give a proper explanation of the new agreement in comparison to the existing award.

PN1254

THE SENIOR DEPUTY PRESIDENT: Which section of the Act are we looking at now?

PN1255

MR BURKE: Still in terms of LK(6), and it goes on to say - - -

PN1256

THE SENIOR DEPUTY PRESIDENT: LK(6)?

PN1257

MR BURKE: Sorry, your Honour, (7), your Honour. I should have said 7 before, and also LT - - -

PN1258

THE SENIOR DEPUTY PRESIDENT: Well, that goes to the no disadvantage test. But the terms of the agreement have to be explained to employees.

PN1259

MR BURKE: LT(7) as well, your Honour, goes on to explanations.

PN1260

THE SENIOR DEPUTY PRESIDENT: Is it your submission that under LK(7) the agreement has to be compared with the award?

PN1261

MR BURKE: Not under LK(7), no. We're just saying that that wasn't part of the explanation. But it was information that was provided to the Commission, the company has done - - -

PN1262

THE SENIOR DEPUTY PRESIDENT: Well, it has to do that to satisfy the Commission about the no disadvantage test.

PN1263

MR BURKE: Yes, it does, your Honour.

PN1264

THE SENIOR DEPUTY PRESIDENT: It's a different submission.

PN1265

MR BURKE: Yes, your Honour. But we think that the people who should have received that in the first place, going on to LT(7) - - -

PN1266

THE SENIOR DEPUTY PRESIDENT: You may think that, but the legislation doesn't say that, and you've accepted that. With respect, Mr Burke, it doesn't matter what you think. I think all sorts of things about this legislation. It doesn't matter what I think either. It's a matter of what the legislation says.

PN1267

MR BURKE: Yes, your Honour. We say that there was only a simple explanation at best of the agreement, not enough detail given. There was no comparison with the award, there was no detailing of any losses, in particular the laundry allowance, the loss of the public - the day off in lieu of a public holiday falling on your day off, that penalty rates have been reduced. We say that what was put instead was a scare to employees in MORGANS3, that if employees did not vote to approve the agreement that they would revert to the Master Grocers Award, which does not contain wage increases, future wage increases.

PN1268

But those on AWAs would not revert, and under either an AWA or the 2006 agreement there were also no guaranteed wage increases.

PN1269

THE SENIOR DEPUTY PRESIDENT: Just remind me, Mr Burke, is this agreement in the same terms as the AWAs?

PN1270

MR BURKE: It's in similar terms, your Honour, as I understand from Mr Thompson and from my look at the two of them. They're different. But the interesting thing with the AWA that was provided by Mr Thompson in the last hearing was in fact approved the day before the notice of intention was given which was filed. It has in fact the same rate in it as the rates in the agreement, and so employees could easily, I suppose, vote for this agreement as there would be no change to their rates of pay.

PN1271

THE SENIOR DEPUTY PRESIDENT: Is there any evidence as to how many people are on AWAs?

PN1272

MR BURKE: The majority is what Ms Palise said. I think I asked her about that and she couldn't give an exact number. However, in my view 28 of the employees are full time and 42 are casual. Ms Palise said that those on AWAs were part timers, and I suppose we could assume that a number of the part timers then are on AWAs. Ms Bird herself was on one. It's not in the same term as the one that Mr Thompson provided because it doesn't have her rate of pay at the time being $8.77 in that agreement.

PN1273

So we say that employees were misinformed here and could not genuinely approve the agreement, and we'd rely upon what was said in the authorities that we provided to the Commission. Firstly, in the Grocon decision at 44, again we've mentioned 44 and 45, we've mentioned already, and we'd go to 46 and 7. At 46 his Honour said:

PN1274

Further, in dealing with an application to approve an enterprise flexibility agreement under a different statutory regime I make the following observations about the nature of the requirement ...(reads)... two days during which the ballot was held.

PN1275

Now, his Honour relied upon that in this matter, looking at the majority being - consent being informed. Now, it was difficult for us to disseminate the alternative view. We were going to attend two meetings, both of those were cancelled. One was subsequently held after Ms Bird and a number of other fellow employees attended, and the company decided to have the meeting, but that meeting had already been cancelled by Mr Morgan. He emailed me and said that. He also rang me and cancelled that 12 o'clock meeting at Melton on - at Gisborne on the Friday. So there were efforts made by the company to hamper our effort to disseminate an alternative view as well.

PN1276

In 47 similar views were expressed in Coles Supermarkets Australia Pty Ltd v SDAEA, where a Full Bench of the Commission said:

PN1277

The essence of the above provisions is that a valid majority of persons whose employment will be subject to the agreement must have genuinely approved the agreement ...(reads)... giving their approval to the agreement.

PN1278

We say in this case that that didn't occur. They weren't advised of the consequences of, for example, the loss of laundry allowance, the loss of penalty rates, the loss of the public holiday falling on their day off, of what a casual may be into the future, also were people aware of whether they were to be leave loaded or leave unloaded. Then at 49:

PN1279

The company contends that there is no evidence to show the employees consent was not genuine, nor was there any evidence which would support such an inference.

PN1280

I disagree. And 53:

PN1281

In my view the vote of the two employees of Grocon Pty Ltd in favour of the agreement was not genuine within the meaning of the WR Act because their consent was not informed and they were not advised of the consequences of their vote. Given this conclusion it is unnecessary for me to canvass the other arguments advanced by the CFMEU.

PN1282

And also his Honour, Senior Deputy President Duncan, mentioned the same matter really at point 50, where he says:

PN1283

The intervenors note that section 170LK(7) required the employer to take reasonable steps to ensure that the terms of the agreement were explained to all the people ...(reads)... and their fellow employees at paragraph 51.

PN1284

So we say it has to be more than a simple explanation. You have to explain how the agreement is bound to apply. You do that by taking reasonable steps. But we say that the reasonable steps the company took in this case were not enough to satisfy LK(7). We'd also say in dealing with - we go on to LT(7) and come back to the no disadvantage test, that in LT(7) the explanation must take place in ways that were appropriate, having regard to the person's particular circumstances and needs. We say that it was not appropriate to set meetings and then cancel them, meetings that employees wanted to attend, because those who wanted to go on the 13th to Melton, they were denied the right because the meeting was cancelled.

PN1285

Only those employees who turned up at the time, and the company therefore having a meeting, would have had that opportunity. And as a consequence of it being cancelled the union didn't attend, nor did it attend in Gisborne because those two meetings - they were the two meetings that we were going to attend, both of them were cancelled. Subsequently one was held, but by that time we weren't on our way to the meeting. It's a long way to Melton from Ballarat for the organiser, and so I advised the organiser the meeting had been cancelled, as Mr Morgan had told me.

PN1286

Also in terms of how employees were spoken to in relation to the agreement, it was how the ballot took place as well. So it's not appropriate for adult managers to speak to young employees, especially young women, one on one or in small groups in their office, and that was the evidence of Ms Bird, that when she went up to collect her ballot paper the manager was already speaking to two young people in his office. He then wished to speak Ms Bird, and she went into his office and he closed the door.

PN1287

THE SENIOR DEPUTY PRESIDENT: Is there some law against talking to your employees is there?

PN1288

MR BURKE: No, your Honour. But we say that if you look at LT(7) it talks about the particular circumstances and needs of the people in particular, and there's reference in LT(7) to the issue of women.

PN1289

THE SENIOR DEPUTY PRESIDENT: There's no evidence to suggest that there was an impropriety, Mr Burke.

PN1290

MR BURKE: Ms Bird felt pressured by going into the office. She felt pressured, that was her evidence. She had the door closed. A male manager, an adult male manager took a young 16 year old - - -

PN1291

THE SENIOR DEPUTY PRESIDENT: Take me to the paragraph in the evidence please.

PN1292

MR BURKE: I'm sorry?

PN1293

THE SENIOR DEPUTY PRESIDENT: Take me to the paragraph in the transcript please.

PN1294

MR BURKE: I think it's in the statutory declaration, your Honour. Sorry, your Honour, I can't get my hands on it at the moment. From memory it was - - -

PN1295

THE SENIOR DEPUTY PRESIDENT: Paragraph 10 of Ms Bird's statement goes nowhere near saying what you just said. Let me read it to you.

PN1296

On Friday, 17 February, I went to the store manager Dennis Lepp's office. He gave me a ballot paper to vote ...(reads)... he also told me what the bulletin said was wrong.

PN1297

MR BURKE: Well, it will be in her evidence, your Honour. Sorry, your Honour. PN 910, in response to a question from Mr Thompson about he gave her the ballot paper, that was Mr Lepp:

PN1298

And he encouraged - did he encourage you to vote?---When I actually walked into the room there were two girls walking, and he said something, and then I had walked into the room asking for a slip, and he told me to sit down, so I sat down, and he closed the door.

PN1299

And it goes on to talk about the rest said there.

PN1300

THE SENIOR DEPUTY PRESIDENT: Yes. Anything about pressure there?

PN1301

MR BURKE: Well, the pressure was in her statutory declaration, the evidence there that she felt - - -

PN1302

THE SENIOR DEPUTY PRESIDENT: Where's the evidence in her statutory declaration about pressure?

PN1303

MR BURKE: Unfortunately I don't have it in front of me. If it's not in PN 10 it may be - - -

PN1304

THE SENIOR DEPUTY PRESIDENT: It's not in paragraph 10. That seems to be the only paragraph about that conversation.

PN1305

MR BURKE: Then in 11:

PN1306

I was spoken to by ...(reads)... pressure from the company to vote for the agreement.

PN1307

THE SENIOR DEPUTY PRESIDENT: That's quite contrary to what you just put about her being taken into a closed room with a male manager and made to feel uncomfortable and pressured. That was a serious allegation and it's not supported by the evidence. You don't need to argue with me about it, Mr Burke, it's clear from the statutory declaration.

PN1308

MR BURKE: In 10 she mentions how she felt when she was talking to Mr Lepp.

PN1309

THE SENIOR DEPUTY PRESIDENT: Yes. He was putting forcefully that she should vote in favour of it.

PN1310

MR BURKE: Yes.

PN1311

THE SENIOR DEPUTY PRESIDENT: And the union was saying don't, putting out information saying why not.

PN1312

MR BURKE: That's correct.

PN1313

THE SENIOR DEPUTY PRESIDENT: That's a democratic process I would have thought. That's a rhetorical statement, Mr Burke, you don't have to reply to it. Well, perhaps I'd better give you an opportunity. You don't think that's democracy at work, the employer saying one thing, the union saying one thing, the employees being given both versions?

PN1314

MR BURKE: Not that, your Honour, no. Well, what did happen though was Mr Lepp, in his evidence, was that the company didn't like the vote no being put out, and went around and took them all away and had them on a pile on his desk, which was evidence.

PN1315

THE SENIOR DEPUTY PRESIDENT: That's not in his evidence, that's in her evidence.

PN1316

MR BURKE: That's her evidence, yes, your Honour. That hasn't been disputed by the company. The company obviously didn't like it.

PN1317

THE SENIOR DEPUTY PRESIDENT: Because they considered the union's information misleading, as you consider the company's information misleading.

PN1318

MR BURKE: Yes, exactly, your Honour. I was going to go on to deal with the no disadvantage test, your Honour.

PN1319

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1320

MR BURKE: The company did its own comparison of the agreement. We did one as well, your Honour, and I'm not sure if it was handed up last time or not, but I have provided a copy now. The one I have today I've just provided to Mr Thompson today.

EXHIBIT #SDA3 COMPARISON OF AGREEMENT

PN1321

MR BURKE: And obviously the agreement must pass the no disadvantage test. There is disadvantage if the certification would result on balance in a reduction in the overall terms and conditions of those employees under the relevant award, and we say that on balance there is a reduction for the majority of employees in the overall terms and conditions of employment under the main relevant award, which is the Master Grocers Association and the Shop, Distributive and Allied Employees Association Award 2005. And the comparison you have in front of you, your Honour.

PN1322

Some of the rates - I'll come to the rates later on, your Honour. Some employees are not disadvantaged financially if they're perhaps weekday full timers, so probably the 28 full timers are not disadvantaged. They will either receive a pay rise above the award, they only work Monday to Friday, they get overtime if they work on Saturdays, but that's financially, but they would be losing some other benefits. We'd say that for the rest, the majority, we'd say that casuals are disadvantaged financially. We say many of the part timers are as well, and we have some examples of those.

PN1323

But if we look at in terms of other entitlements that the - if we look at on balance the reduction of entitlements. If we take the Commission to, on the second page, which is the spread of hours, spread of hours in the award is Monday to Friday, 7 am to 10 pm, Saturdays seven till six, Sundays seven to six, and here now the spread will be from 7 am till 10 pm Monday to Sunday. There's an additional four hours of ordinary work on both Saturday and Sunday, no penalties apply at those times, and we'll come to the penalties later. But obviously now employees can be rostered on till 10 pm every night for no penalties at all. Currently they wouldn't be rostered past 6 pm on a Saturday and Sunday, but under this new agreement they can be. We say that's a significant change to the agreement and is not offset by the pay increase if there is any for any, firstly, week, for any of the employees.

PN1324

But looking at the penalties, as I've said, in the agreement there are no penalties Monday to Sunday from seven to 10. They're probably the trading hours of the store. They may have employees working past 10 pm, but I'm not sure. But in terms of the penalties in the award on Saturday 7am to 6 pm there's a 25 per cent penalty for casuals and permanent employees. There isn't under the agreement. On Sunday between seven till six it's 50 per cent for permanents and 60 per cent for casuals. In fact the award will become double time in April of next year.

PN1325

So there are reductions of penalties we say that the pay increase for employees, if there is one, doesn't compensate employees for the loss of those penalties, and we'll show examples, as I've said. In terms of full timers currently under the award they can have 38 hours every four weeks as against the award that being averaged over 52 weeks. That is a huge difference, a difference that people are not being compensated for by the other benefits of the agreement, the pay rise in particular, because we'd say it's hard to keep track of the hours that employees work, the overtime they might do over time, over the 52 weeks.

PN1326

We say the weekly maximum could be - and we put this to Ms Palise - 50 hours per week because there is a maximum of 10 hours a day, but it would be only five days a week because the employees must get two consecutive days off under the agreement. But it could be as much as 50 hours a week for a number of weeks until a point where either they stop working or in the quieter times they might work less, but it's a full timer who could be working 50 hour weeks for a considerable amount of time.

PN1327

Under the award they can't do that. They can only do 38 hours averaged over four weeks. So we say that that's a proper benefit for employees in the retail industry, and it's easy to keep track of things like overtime as well over a four week period, but not over 52 weeks. A person might have to wait 52 weeks to find out if they've worked any overtime and what they're going to be paid. Now, that is going to be an administrative nightmare, and it will be difficult for employees to know if they've been properly paid.

PN1328

And as we say, the increase in the rate of pay, the fact that they may not have paid leave as well which boosts their pay, we don't say that that properly compensates employees for that change. Also, as I've said, that they can be forced to work after 6 pm on Saturday and Sunday for no penalty rate. We go on to part timers. The agreement has no daily minimum engagement. The award obviously does. It has three hours. It's basically the standard part time clause that's in most awards.

PN1329

Now, if a part timer works additional hours as per the award, the standard clause, their additional hours are treated as overtime. Under the agreement they can be overtime or they can be the ordinary rate if agreed. So before a person works any additional hours under the agreement they could be agreeing to be paid the ordinary rate of pay, working extra hours and getting no extra benefit for it we say in terms of a comparison with the award, because obviously under the award they're not required to work overtime. If they did they'd be paid the additional hours, if they did work those additional hours they'd be paid the proper rate of overtime.

PN1330

Under the award part timers have an agreed number of hours, they have permanency, they have security by knowing they have an agreed number of hours. It might be 12, it might be 20, it might be any number, but it's agreed and it doesn't change by the whim of the employer. The only thing that can change, the clause is quite clear, is that the roster can be changed with up to 14 days notice. But a roster change can't cut someone's hours. What the employees under the agreement have is no minimum set number of hours, they have only a maximum average of 35 hours I think over 52 weeks as well. They've got no minimum, they don't know if they're working any hours next week or not, they don't know if it's going to be averaged up to 25 or beyond. They have no permanency, no security in those terms.

PN1331

What they have perhaps is a higher rate of pay, but they are in fact, we say, being treated as casuals, that permanents under the agreement are casuals. They've got no permanency, no security. The way they're being treated under the - if they were being treated like this under the award they would be casuals because they would not be having an agreed number of hours and they would not be having set rosters. So we say that that's a huge reduction in entitlements for part timers and is not offset by the benefit of a pay increase, and a pay increase that's only for 12 months.

PN1332

In terms of rosters, the next point, rosters under the award can be changed with 14 days notice to 48 hours if there's an emergency or unforeseen circumstances. This is reduced down to seven days in the award. Seven days is not very much time to be given a roster change. If it, for example, was this week, which is a public holiday, it wouldn't be much time for someone to look at child care arrangements, transport arrangements, whether their hours at university or at school allowed them to do the new roster, it wouldn't give them much time if they had a dispute under the agreement to have that resolved within seven days. That's why 14 days is the bare minimum we say, certainly what's in the award, that 14 days does give enough time for someone to look at the issue, to raise a dispute, to have a dispute resolved.

PN1333

So in having seven days notice as a roster change is not fair on employees, it's a huge reduction and on balance is another reason for the agreement not to be certified, as it's an entitlement that has been diluted and not improved by the wage increase under the agreement. In terms of casuals we say there's no clause for casuals except the one we've been through, which says that you may in fact be under the award. So we may be arguing against ourselves here, your Honour, that if a casual wants to be a casual they will get the award entitlement and they're not disadvantaged. But if they're not, if they go from being a casual to a permanent part timer, as the company may do that to them, then they're losing the benefit of the higher casual rates on Monday to Saturday, on Sunday. There's no minimum engagement for casuals under the agreement.

PN1334

The other loss for a casual may be that they may not be receiving regular - sorry, they may not receive sick leave if they're a regular casual as they do under the award as well. But I suppose if the company was able to convince the Commission that the 42 casuals can remain as casuals, then I suppose on that point there is no disadvantage. But Ms Palise couldn't enlighten anyone on that, and I think those 42 will be in the dark. But as I say, if they're able to stay under the award then there is no disadvantage to them.

PN1335

In terms of overtime and additional hours, Monday to Saturday in the award it's time and a half for the first two hours and double time thereafter. That seems to be the entitlements in the agreement as well, time and a half for the first two hours and double time thereafter, however, that's on every day. On Sunday though in the award it's double time for the whole time, so under the award you'd be receiving a far higher rate of pay for overtime on a Sunday than you will under the agreement. But we say therefore the increase in the agreement rates of pay does not compensate that reduction down to 50 per cent for the first two hours.

PN1336

The other thing though is, in relation to this, that overtime is paid under the award if you work more than 38 hours, or a part timer works more than the additional hours. But under this agreement, as we've said already, that employees may agree to work at the ordinary hourly rate for additional hours. So they may not be getting any benefit from working additional hours. They could work past 38, they could in fact do 50 hours each week if, I suppose, they agreed to. We'd say they shouldn't be put in that position because in comparison with the award they would be getting time and a half for the first two hours and double time thereafter, and it would be unfair for that to occur, for that to be allowed.

PN1337

We say there's no reference to the number of allowances, the meal allowance, the travel expense allowance, the disability allowance. The company's position is that if they're not mentioned in the - they're not excluded by the agreement then they don't apply. I suppose that's to be seen. We can only point out that those provisions are not in the agreement. In terms of public holidays there is no additional rate of pay for working on a public holiday. It's the ordinary rate of pay every day of the week. So for example this week on Tuesday, if the agreement had have been in place, someone would have received the unloaded rate for a full timer, $14.87, and under the award double time and a half would be $35.75. I've got some rates to show you in a minute.

PN1338

In this week alone there's a huge disadvantage for employees if they hadn't been covered by the agreement, be they full time, part time or casual working on the day, they would have got their ordinary rate of pay this week, it would be a huge loss for them. I think they would be surprised to see their pay packet less. Certainly under the agreement, the current agreement it's also double time and a half, so they would know that they're going to get less on a public holiday, and it would be - it's a huge reduction in the rate of pay for work on a day which under the agreement you can be required to do. Under the agreement you can be required to work a number of public holidays and you will just receive your ordinary pay for that week.

PN1339

THE SENIOR DEPUTY PRESIDENT: What clause in the agreement is that?

PN1340

MR BURKE: Clause 16, your Honour. 16 is a clause on public holidays, but in terms of work parameters in 15, shop employees can be required to work up to 18 ordinary hours on public holidays, and meat employees can be required to work up to 45 ordinary hours on a public holiday. Probably worse if you're a meat employee. If the ordinary day was, say nine hours, into both those days at least two public holidays, you're forced to work for. So in this week if this was one of the days you have to work you just get your ordinary pay.

PN1341

Over Easter there's more than one public holiday so you could be in fact perhaps asked to work on Good Friday and either Easter Saturday or Easter Monday. The company stores open on Good Friday, employees could have been required to work on this Good Friday and on future Good Fridays for their ordinary rate of pay. And we say that that is a significant reduction in pay, a significant reduction in the terms of the employees' entitlements overall, and on the balance should mean the agreement should not be certified.

PN1342

Speaking of Easter again, we wish to highlight that there is a clause also missing from the agreement that I mentioned before, that in the award at clause 38.7 of the award, clause 38.7 of the award is holiday on a rostered day off. Provided that a holiday falls on the employee's rostered day off or a full time employee or a part time employee who works five days per week, or six if they are so elected, shall be entitled to receive by mutual agreement another day off in lieu or an equivalent day's pay or an extra day added to his or her annual leave.

PN1343

The day on which the employee is not rostered to work shall be deemed to be their rostered days off. Therefore a week day employee under this agreement is deemed to be a Monday to Friday employee. Under the award Saturday is their rostered day off, it falls on a public holiday, Easter Saturday, which is mentioned in 38.1.1 of the award, Easter Saturday is a public holiday, this year if the agreement had have been in place those employees would have lost the benefit of one public holiday.

PN1344

We say that that's unfair compared to seven day a week employees. The award entitlement is not compensated by the wage increase or the other benefits of the agreement. It in fact would be worse for those week day employees if Christmas Day or New Year's Day also fell on a Saturday because they follow each other, so there could be some years where Saturday or even Sunday public holidays would be a loss for week day employees. Now, we'd say that that's at least 28 full timers. We'd say that those 28 employees, most of them would be week day employees, Monday to Friday employees. This is a loss for them, a significant loss.

PN1345

They can be required to work on a public holiday during the week for no penalty. They can then lose, for example, one or more public holidays each year and not receive anything in return. Every other employees may get more public holidays than them because their day off, they may have - there may be days that they don't work and that don't fall on public holidays, but in terms of week day employees at least Easter Saturday is a loss for them every year.

PN1346

In terms of meal breaks there is a change. Now an employee is guaranteed 45 minutes, up to 60 minutes if they work five hours or more. They can if they mutually agree work 30 minutes, but under the new agreement they will only be granted 30 minutes. There is a reduction there. Someone may want to have 30 minutes now, that may be their choice or that may be mutually agreed, or they may get up to an hour, but in future they will only have half an hour. There's no clause in terms of tea breaks, so we have to take it again that the company says that the award will apply, and I assume that that's what will happen. If it doesn't then there's a disadvantage in the clause not being in this agreement, as we say also with the payment of wages clause, that there's not reference to it in the agreement, and so under the award the employer for example pays any EFT charges for it's depositing wages into a bank or credit union. So I suppose employees have to take it that that will still continue even though it's not mentioned in the agreement.

PN1347

In terms of annual leave there's no guarantee of four weeks paid annual leave for some employees now and for many employees into the future. New employees could be put straight onto the leave loaded rate, they could be a full timer, they could be a part timer, but if they're a full timer and they're put onto the leave loaded rate it means that they don't receive four weeks paid annual leave. The 17½ per cent has been added into the rate of pay, but in terms of having an automatic entitlement to four weeks off, which employees would take because they have pay so therefore they can sustain themselves for the four weeks, that entitlement won't be there into the future. There's no guarantee that any full timers or any part timers will be put on the leave unloaded rate.

PN1348

Employees might want to take the leave themselves, but we'd say that there will be really no employees that we could think of who would be able to take four weeks off without pay at any stage, and so they will be forced to work the whole 52 weeks. And when you come to sick leave it's in fact then worse because the same thing could happen again. If you're on the loaded rate you have no entitlement to sick leave, you have no entitlement to carer's leave, so you in fact may not be sick yourself, but if you wish to care for your family member you will have to do that in your own unpaid time. That's another 10 days of leave you might take without pay. That's six weeks of annual leave and sick leave that leave loaded employees can't take with pay, and we say that that's too great a burden for employees. That is not compensated by the added rate of pay.

PN1349

We would say that it would be impossible for people on these wages to set aside any amount of money to keep them for a full week holiday or even a single day of sick leave wherever that might occur, and it would be wrong therefore for the agreement to be in place to allow that to occur. We'd say if there are leave loaded employees in the agreement then they're not permanents, they're not full timers or part timers, they should be treated as casuals. Casuals under the award receive annual leave and they also receive sick leave.

PN1350

The annual leave can be paid to employees in terms of an hourly rate of pay. I'll come to it a bit later. Their sick leave can't be bought out under the award, so a regular casual who works still has entitlement to sick leave. So we'd say that it's wrong to have permanent employees being on a leave loaded rate which won't guarantee them any paid leave throughout the year, as I've said, not even family leave. So whilst they mightn't be able to have a rest for themselves they wouldn't even be able to have time, paid time off to look after a sick family member.

PN1351

There's no clause on bereavement leave. There's reference to jury service but not a clause, reference to the award applying in that case, but there's no clause in the agreement, as I said, on bereavement leave. There's no clause also on accident makeup pay, so it remains to be seen if the company still follows the award which, as we've highlighted in the comparison, states that if someone is injured that they receive their full rate of pay for at least 39 weeks from the date of injury. So there's no clause in the agreement but the company will therefore have to be tested that it still honours the award, which it says that it does.

PN1352

Now, in terms of - we have at number 28 dress and presentation standards. Under the award where an employee is required to wear a uniform the employer shall provide the uniform at no cost to the employee, and if the employer doesn't launder the uniform employees receive an allowance of $5.60 per garment, not per week but per garment. So in fact they could have more than one garment. They might have two uniforms. They in fact receive $5.60 for each uniform they have. But we say they have at least one, so there's a loss there of $5.60 in the new agreement because there is no allowance. Employees are provided with a uniform, and under the clause they're responsible for the care, for the laundering of the uniform and they do not receive the $5.60. That is a loss for each employee.

PN1353

We'd say it's a greater loss for casuals and part timers who receive less pay, so in terms of $5.60 as a percentage of their wages it would be far greater than for a full timer, but nevertheless it's still a significant loss, and we say it's not on balance overcome or compensated for by the increase in the rates of pay, which is the main benefit of the new agreement.

PN1354

In terms of parental leave the agreement provides for 12 months on paid leave for full timers and part timers and irregular casuals with 12 months continuous service, which is the basic award entitlements. However the award has been varied as of, I think December last year. Late last year the award was varied last year in December by Commissioner Eames for the family provisions decision which allows for improved parental leave provisions. It allows for loaded provisions for casuals, the use of sick leave for family leave and the like, and the right for employees to request to work more than - to have more than 12 months off on parental leave, and also that during parental leave there would be communication with the employee if there are any changes in the workplace that may affect the employee.

PN1355

None of those provisions were put into this agreement. That the award was varied, as I said, in December, the agreement was put out in January. The company would have had time to know that the award had been varied, or at the least knew that that was a test case provision and it's an award provision, but it doesn't apply in this agreement, and we say it's a benefit that employees won't be able to automatically access or apply for, and it's another loss for employees. If they were to stay under the award they would have a far greater entitlement we say, and we don't think that the increase in the rates of pay is enough to compensate the loss of that very important entitlement that the Commission granted last year, and which has gone into many awards. Commissioner, we have some comparisons. I'll provide the first one.

PN1356

THE SENIOR DEPUTY PRESIDENT: Should I sit until you conclude before I adjourn for lunch?

PN1357

MR BURKE: If you wish?

PN1358

THE SENIOR DEPUTY PRESIDENT: How long will you be?

PN1359

MR BURKE: I think perhaps I can wrap this up in the next 15 minutes, half an hour, your Honour.

PN1360

THE SENIOR DEPUTY PRESIDENT: Yes, very well, continue.

PN1361

MR BURKE: We did our own comparison on hourly rates of pay, your Honour.

EXHIBIT #SDA4 COMPARISON IN RATES OF PAY

PN1362

MR BURKE: And we did a comparison of the 2005 Master Grocers Agreement and the 2006 proposed agreement. We look firstly at week day shop employees who work Monday to Friday. We looked at the adult team member. We didn't go through each one individually. But we'd say there that there's an increase in the rate of pay for those employees. It's difficult for us to dispute that. But if the person is a casual we'd say that they should be on $19.07. If we're to compare that to at least the leave loaded rate of $16.24, there is still a huge difference.

PN1363

At the bottom of the page we've outlined that the award for casual rates include one twelfth as payment for annual as per clause 32.5 of the award. This can therefore give the comparison between the casual rate in the award and the leave loaded rate in the agreement. That's the agreement rate that buys out annual leave. So the 28 full timers probably are going to have an increase if they work Monday to Friday. However, as I said, this week if they worked on Anzac Day, if the agreement had have been in place, the full timer would get - and the part timer would get double time and a half, which would be $35.75, but under the agreement would have only received $14.87.

PN1364

The casual would get a little bit more because of the annual leave entitlement, $36.94 as against $16.24. That's a huge difference. I don't think there's any pay increase that - we don't think the pay increase in the agreement compensates those reductions on a public holiday, nor for the casual who is a week day shop employee. If we then go to seven day shop employee, they work Monday to Sunday, we again look at the adult team member only. Monday to Friday, on those days the full timer and the part timer would be ahead under the agreement. There's an extra $3. But they don't only work Monday to Friday. If they only work Monday to Friday the benefit they'd be getting would be 57 cents.

PN1365

But they're only working some of the time on Monday to Friday because they have to be rostered on Saturday or Sunday to be under this provision. So looking then at the rates that they would get on the Saturday before 6 pm, the full timer or part timer under the award is ahead. The time and a quarter under the award is higher than the base rate of an unloaded person. If you were to compare it to leave loaded it's four cents. But then we say they're not the same person because the part timer under the award is getting paid annual leave and paid sick leave, and the annual leave loading as well. So we would compare it then to the leave unloaded.

PN1366

If we go back to Monday to Friday and look at casual, the casual rate again on Saturday is $19.07. It's always ahead under the award than the leave loaded rate under the agreement. So I suppose if the casual remains under the award they will be far better off than if they take up a leave loaded rate. Then Saturday 6 pm to 10 pm under the award it's overtime, it would be 100 per cent, so it's $28.60 as against $16.42. A casual is also on double time plus the annual leave loading, the annual leave component, the one twelfth, they're on $29.79 as against $17.92, nearly $10 - sorry, nearly $12.

PN1367

If we go to Sunday, Sunday being 50 per cent for full timers and part timers, they're on $21.45 up until 6 pm, the leave loaded rate is only - sorry, the leave unloaded rate is $16.42 and the leave loaded rate is $17.92. The casual is a little higher again. They're on 60 per cent on a Sunday up until 6 pm. Under the award they're on $24.07. On Sunday after 6 o'clock it's the same as Saturday, it's double time, so we have the same difference there, $28.60 as against $16.42, and $29.79 as against $17.92. So for those on Sunday night it's $12 an hour more under the award for a full timer or part timer, on Sunday during the day it's $5 an hour more, on Saturday night it's $12 again more under the award. It's greater on Saturday and Sunday under the award. Remembering these employees have to work on Saturdays and Sundays to be part of this agreement - part of this provision here. They can't rely solely on working Monday to Friday.

PN1368

Now they may work only four days Monday to Friday, but at least one of the days, Saturday or Sunday, they are going to be disadvantaged under the award, and that's for an adult and that's for a full timer. They're going to be disadvantaged in their rates of pay, and made worse if we then look at again Anzac Day this week, where for the full timer and part timer double time and a half is $35.75, and the leave unloaded is $16.42, casual $36.94, the leave loaded $17.92. We say that that clearly is the loss for employees on an hourly basis. Any number of calculations can be made, as Mr Thompson did, and they can be loaded, changed, put together to have a benefit in terms of employees under the agreement.

PN1369

But if you remember the evidence of Ms Palise was that she didn't produce any of the figures herself. They are not based on any rosters, any set rosters, they weren't based on any rosters that applied in the store to her knowledge. She wasn't aware how they were made, she couldn't answer that question. However if we look at all of them - I won't take you to all of them specifically, but all of them are full timers, all of them are 38 hours a week except for the meat worker who can be 25 hours a week. The statutory declaration, 2(a) (b) and (c). (d) is the meat employees.

PN1370

THE SENIOR DEPUTY PRESIDENT: So which one do you want me to look at?

PN1371

MR BURKE: Just to let you know the first one, 2(a), and in fact they're all full timers, they work 38 hours a week, every one. The only calculation that's been made has been on a full timer, and there is - I think there's more than 28 versions here, and there's not 28 full timers who work for the company. So what we say is that if the company showed any benefit for employees, for 28 people only, the time for us to argue that many of those 28 are not getting a financial increase. But there's been no examples of any part time or casual shop assistants. There is of the meat employees who are part timers. They could be butchers or apprentices. We find it difficult that there'd be any part time butchers or part time apprentices. For an apprentice we would have thought they'd be in a full time apprenticeship.

PN1372

But there have been no examples made of any part timers or casuals by Mr Thompson. So we've done one calculation just to highlight that at least, and we've based it upon an actual roster.

EXHIBIT #SDA5 ROSTER COMPARISON

PN1373

MR BURKE: We've done a roster, an actual roster, 17 hours a week, a roster that Ms Bird herself was doing. There was some debate about it last time so we went back and did a more thorough, hopefully, calculation of the award versus the agreement. If you look at Ms Bird, she's on an AWA and she's doing 17 hours a week as a 16 year old. If we compare the rosters that she did, the roster that she provided to the Commission, it was that on Tuesday she worked from four until six, Friday 4.30 till nine, Saturday 7.30 to 2.30, Sunday nine until one.

PN1374

If we compare that roster with the award, then firstly, under the award you can't do a two hour minimum as a part timer, so that would have to be a three hour minimum, and so we would say that three hours would go in there. Friday is four and a half hours. On Saturday, while she works seven hours she should have a half hour meal break so I've taken that out, whereas I believe under her AWA she doesn't get a break, she has two three hour engagements, one on top of another, and she doesn't have a break. But I've included in, for the award purposes, a half hour meal break at the time and a quarter, and on Sunday as a part timer 50 per cent, and my calculations would lead to her getting $168.94.

PN1375

As per the agreement I've calculated a buy out of the annual leave loading and calculated that at 10 cents per hour, and also at least the loss of the garment allowance, the laundry allowance, at least $5.60, at least one loss of that, added that for a total of $176.34. That would be her entitlement under the award if we compare it to the agreement. If we go to the agreement, the rates there, we say that she's entitled to two hours under the agreement for her shift on Tuesday, so she actually would get in total $140.94. That includes the 17½ per cent annual leave loading and incorporates the $5.60 for the laundry allowance. That's as an unloaded employee. If we said she was a loaded employee, which Mr Thompson put to her last time, we go at $9.05 for the 17 hours, she'd be on $153.85. That again includes the pay out of four weeks of annual leave, 17½ per cent and the garment allowance.

PN1376

So we'd say there is a significant difference. There's at least $36 as against an unloaded person, and $23 if she was a loaded employee. Now, we'd be happy to take out in our calculation and say that it should be only 17 hours, and be fair, can compare 17 to 17, so take another $7.15 off the rate we put for $176.34, that would leave it at roughly $170. Under the agreement she would still be $30 better off under the award or probably $17 better off under the award. So as I said, none of the calculations that Mr Thompson did were for a part timer or in fact for a casual. We showed previously the hour by hour rates of pay and how there is a difference, and a significant reduction for part timers and casuals certainly on the seven day a week situation.

PN1377

So the company in its comparison to you, in its calculations to you, your Honour, has only given you a calculation in relation to 28 employees. The other 157 part timers and 42 casuals, most of those have not been included in the calculations. There might be some who are meat part timers, but I don't think there would be - there's only - there certainly wouldn't be that many, that wouldn't be all of those employees. So the company hasn't shown any true comparison for the majority of employees under the agreement.

PN1378

We say here is one real example, a real roster and a real loss, a significant loss that's not overcome by the increase in the rates of pay because those rates of pay don't compensate the employee. Now, if that employee can be - if any employee in the future wants to be a casual then they're not disadvantaged, they're - Ms Bird was part time and so she's not in that boat. She will remain a part timer. One final comparison.

EXHIBIT #SDA6 DOCUMENT RE SEVEN DAY LEAVE

PN1379

MR BURKE: This calculation, your Honour, was one I did compared to what Mr Thompson had done in one of his actual calculations. I have attached to the document photocopies from a statutory declaration for, as it says at the top, the seven day leave loaded 21 year old team member, and then on the back the week day leave loaded 21 year old team member. I think the calculation for the week day leave employee is correct as against the award. They would be on $543.40. There may be a number of employees in that boat, but in terms of the leave loaded team member on the first page, I pointed out to Mr Thompson I think his figures are not correct.

PN1380

I should say though that even if he does his calculations he'll find that his employee under the agreement is still ahead, but I'm just pointing out that his calculations are not correct because the leave loaded employee for 38 hours still gets the same rate even working penalty hours that the week day person and for whatever reason the calculation should have been 38 ordinary hours and then the penalty rates on top. I think it's the only error that I can find in the statutory declaration, but as I say, if we just for argument sake added those up with the 38 hours as normal pay and those other calculations I think you still get less than five - sorry, 680, I think you get about 650 or thereabouts, but we say that that's not the correct calculation anyway.

PN1381

The calculation should have been the one we did on the front page. As we have said, the loaded team member should be the equivalent of a casual under the award, whether they be week day or seven day employees. So I took the same number of hours that Mr Thompson had for the seven day leave loading person, roughly, it's a bit hard to read his numbers, but I looked at 30.4 hours at the casual rate on Monday to Friday and on 2.6 hours on a Saturday during the day, 2.6 hours at night - sorry, on a Sunday and 2.5 hours on a Sunday night and our calculations we say would show that they'd get a lot more than what
Mr Thompson put.

PN1382

If you look at that under the award we'd say you'd get $763.39 as against what
Mr Thompson says would be either 617.12 or 680.96 and it's quite clear from his own calculations and it appears in none of them that the casual loading in the agreement is not included in any of the calculations, obviously because they're all full times. They're all 38 hour a week people so therefore they're not casuals but we'd say if this person is a casual or is in fact a leave loaded person, they're entitled to casual loading because that's the equivalent person. That person is not guaranteed, has no paid annual leave, has regular sick leave but has no paid annual leave and you have to do a like with like, apples for apples and you have to say that the leave loaded person is the equivalent of a casual, otherwise you're ending up, even on Mr Thompson's own figures, with a loaded person just getting the weekly rate of pay for a full timer and that obviously couldn't be the case there hasn't been the buy out of the annual leave or the 17½5 per cent.

PN1383

So we would say that we can show that on balance the majority of employees will be disadvantaged as against the award. The agreement doesn't pass the no disadvantage test, certainly for the majority of employees. The comparisons are not based on any real employees or their rosters or at best only 28 of those because they're the only calculations that we could say would equate to a full timer. But there may be a few meat employees but there certainly wouldn't be the majority, so we'd say that that's hardly typical of a supermarket, especially here where 157 employees are part time and 42 are casual. So to only do calculations on 28 is not a proper showing of the disadvantage and in fact we say also the company - sorry, I withdraw that.

PN1384

We say our comparisons are real and show the real disadvantage on balance and that therefore the agreement should not be approved. In conclusion, your Honour, we'd say the company has failed to put a valid agreement to the Commission hasn't passed the test that we say it should, that there being no valid majority the vote was tainted from the beginning by those three employees being there. Not everyone was given notice of intention to make the agreement. There was no proper explanation to allow employees to make a genuine approval. We also say that the agreement fails to pass the no disadvantage test as we've outlined, therefore request the Commission to either find there's no valid application and not certify it or if there is a valid application, to not certify on the basis of failing the no disadvantage test.

PN1385

I'm not sure if I answered your question earlier, your Honour, on what happens if you fail to make, LT(3), and I think we know the company's position and they can refute if that's their position still and I mean there could be some steps that you could still take to deal with the matter. We don't think that should occur but so long as the agreement is not changed in its format it could still be looked at again by employees. If the Commission is of the mind that employees were not given enough notice or that if the ballot was tainted, then another vote could possibly be held. But so long as the agreement is not varied because I think then it wouldn't be an application that could be put back under the old legislation, but we'd say the agreement should not be certified.

PN1386

But if the Commission is of a mind to take some other avenue there may be other points to raise on that, but on our submission today we seek the agreement not to be certified. If the Commission pleases.

PN1387

THE SENIOR DEPUTY PRESIDENT: I will adjourn to not before 2.30.

<LUNCHEON ADJOURNMENT [1.07PM]
<RESUMED [2.51PM]

PN1388

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Thompson.

PN1389

MR THOMPSON: Thank you, your Honour. I would like to make my closing submissions. In the hours before the break we heard submissions from Mr Burke of the SDA regarding reasons that in his opinion the application should fail. These involved interpretations, his interpretations or the union's interpretations of section 170LK(1) of the Act, 170LK(2) of the Act, 170LK(7), section 170LT and section 170LE. I intend to address these but in a shorter form, I am conscious of the Commission's time.

PN1390

THE SENIOR DEPUTY PRESIDENT: Yes, well, the afternoon is yours, gentlemen.

PN1391

MR THOMPSON: Yes, I intend to use it as such. Section 170LK(1), your Honour, as you know, deals with the offering of the agreement to employees and achieving a valid majority of the persons employed at the time whose employment will be subject to the agreement. In the case of this application the results of the ballot as you are aware were 102 votes for the agreement and 67 votes against the agreement, that is a majority of 26 votes. The union have attempted to cast some doubt on the votes cast by three employees, Mr Lepp, Morgan and Mughamez and it is I guess arguable in the circumstances that those particular employees could be classified as store managers. Their titles may be as such but a background for the Commission's benefit I think is useful. The business was commenced 30 years, more than 30 years ago.

PN1392

THE SENIOR DEPUTY PRESIDENT: Are you now introducing new evidence?

PN1393

MR THOMPSON: No, just simply a background for the Commission. It's not evidence at all.

PN1394

THE SENIOR DEPUTY PRESIDENT: Yes, very well.

PN1395

MR THOMPSON: With one store, since the commencement of that store the Morgan's second generation have been running each of the businesses and have opened four additional supermarkets but have always been involved at the grass roots level from a very, very early age. In the minds of the directors, Mr Peter Morgan and Mr Neal Morgan, they have retained the responsibilities of store management and have consistently worked at the store level. That understanding of their duties and the duties of those returning officers who took part in the ballot is the reason that they were involved and if an interpretation of the Shop or the MJV Award in Victoria were to allow them to be classified as store managers, then it could be argued that they may not have been necessarily or should not necessarily have been involved in the ballot process.

PN1396

But it's not necessarily clear that they would or would not have been classified as store managers. In any event, the outcome of the ballot should those three employees be excluded from the ballot, would be 99 in favour and 76 against with a valid majority of 23 votes. It's my submission, your Honour, that should those three employees who voted have not been included or should not have been included, that does not taint the valid majority as it occurs. Whether you have a valid majority of 23 or a valid majority of 26 there is still a valid majority and those votes of the remaining employees should be carried and so should their decision which is to certify this agreement and to have this agreement put to the Commission for certificate.

PN1397

In that issue I wish to provide the Commission with two precedents. I might actually hand up three just to save some time.

PN1398

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1399

MR THOMPSON: Those are, I presume you will have the order correct in your pile, Endeavour Petroleum Pty Ltd Certified Agreement 2004, a decision by Senior Deputy President Cartwright on 8 April 2005.

PN1400

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1401

MR THOMPSON: An appeal against that decision, Endeavour Petroleum Pty Ltd Certified Agreement 2004, Melbourne 5 September 2005 upon which your Honour was a part of the Commission as formed on that day, the Full Bench as formed on that day, sitting alongside the President and Commissioner Foggo. And finally a decision on 22 October 2002 titled Magnet Mart Pty Ltd, a Full Bench decision with the sitting members being Senior Deputy President Duncan, Senior Deputy President Cartwright and Commissioner Harrison. If I might take you to each of those cases and the way in which they considered the issues of valid majority.

PN1402

In the first instance in Magnet Mart you will see in the opening paragraph of the decision that we're dealing with exactly the same complaints or I guess issues raised by the SDA in the decision of Magnet Mart as has been raised here today, section 170LK(1), section 170LK(2) and section 170LK(7) and section 170LT(2) have all been objected to on very similar grounds by the SDA in the Magnet Mart cases as has happened here today, so it's a quite a fortunate decision that we have in the raising of the Full Bench on these issues.

PN1403

In particular it was determined by the Full Bench at clause 15 of the decision - sorry, I withdraw that. Clause 24 deals with the - - -

PN1404

THE SENIOR DEPUTY PRESIDENT: Cutting to the chase.

PN1405

MR THOMPSON: Yes.

PN1406

THE SENIOR DEPUTY PRESIDENT: As far as LK(1) the Full Bench decision of which I was a member seems to be conclusive, doesn't it, that if the inclusion of people who shouldn't have voted wouldn't have effected it doesn't matter?

PN1407

MR THOMPSON: That's exactly where I was going, your Honour.

PN1408

THE SENIOR DEPUTY PRESIDENT: Let's just go straight to that shall we.

PN1409

MR THOMPSON: If we go straight to it then, very well - - -

PN1410

THE SENIOR DEPUTY PRESIDENT: That's paragraph 6 of that Full Bench decision, is it not?

PN1411

MR THOMPSON: Yes, it is.

PN1412

THE SENIOR DEPUTY PRESIDENT: Yes, okay. Well, I don't need to hear you further on the LK(1) aspect. I don't accept the union's submission that the inclusion of those three managers even if they shouldn't have been included has invalidated the vote.

PN1413

MR THOMPSON: Thank you, your Honour.

PN1414

THE SENIOR DEPUTY PRESIDENT: And my decisions are essentially those of the Full Bench that including those three people didn't affect the vote. It would have been a valid majority even if you took those three people out of the vote and to which you've referred me to is authority for that proposition.

PN1415

MR THOMPSON: Thank you, your Honour.

PN1416

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1417

MR THOMPSON: If I move then to the requirements in the legislation under section 170LK(2), without reciting this particular provision, the fact that reasonable steps must be taken to ensure that all employees at the time will have at least 14 days notice in writing of intention to make the agreement - - -

PN1418

THE SENIOR DEPUTY PRESIDENT: Well, it's not even that, is it? It's that
the - - -

PN1419

MR THOMPSON:

PN1420

The employer must take reasonable steps to ensure that every person employed at the time whose employment will be subject to the agreement has at least 14 days notice in writing of intention to make the agreement.

PN1421

Reasonable steps.

PN1422

THE SENIOR DEPUTY PRESIDENT: Yes. Now, what's the evidence of what you say are the reasonable steps the employer took?

PN1423

MR THOMPSON: Well, first of all there was an instruction given by the directors and Ms Palise as attested to in paragraph 343 of her evidence that she provided an instruction to the payroll officers or to the people who send out the payslips to attach the notice of intent, that is - - -

PN1424

THE SENIOR DEPUTY PRESIDENT: Now, Mr Burke doesn't quibble with the form of the notice of intent. He just says it didn't get to everybody. Is that right, you don't say there's anything wrong with that notice of intent?

PN1425

MR BURKE: No, it's just the evidence was that not everyone did receive it.

PN1426

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1427

MR THOMPSON: But certainly instructions were given that everyone should have received it. It was attached to everybody's payslips and certainly I'm not aware and I've not been informed of any other people that didn't receive the notice of intent in the manner Ms Bird has alleged. It was also attached to the noticeboard. Now, it's important that - - -

PN1428

THE SENIOR DEPUTY PRESIDENT: What's the evidence of that? Where is the evidence as to that?

PN1429

MR THOMPSON: It's in the statutory declaration.

PN1430

THE SENIOR DEPUTY PRESIDENT: Where?

PN1431

MR THOMPSON: Excuse me, your Honour.

PN1432

THE SENIOR DEPUTY PRESIDENT: Yes, at 5.5 -

PN1433

A copy of the agreement was placed in the staff tea room and readily accessible to all employees to read through during the notice period.

PN1434

MR THOMPSON: Yes.

PN1435

THE SENIOR DEPUTY PRESIDENT: How many sites were there,
Mr Thompson?

PN1436

MR THOMPSON: Three.

PN1437

THE SENIOR DEPUTY PRESIDENT: And it was at the tea room of each site, was it?

PN1438

MR THOMPSON: Yes, it is my understanding that's the case. The tea room and the position of the notice of intent I'm instructed is beside the - I'm not sure if they're still called bundy clocks but the sign in and sign out clock.

PN1439

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1440

MR THOMPSON: So as an employee was attending the notice would have been right beside their sign on and sign off position. There was evidence provided that the notice of intent in a form identical in almost all respects was also included in the Focus Newsletter - - -

PN1441

THE SENIOR DEPUTY PRESIDENT: Yes, but that was after the 14 - it wouldn't have come within the 14 days, would it?

PN1442

MR THOMPSON: No, and it didn't go to all employees either. It's my understanding that there was channel of communication to management to ensure that they could not have been in any doubt.

PN1443

THE SENIOR DEPUTY PRESIDENT: So you rely on the evidence that there was an instruction given that it be attached to everybody's payroll and that it was put up on the noticeboards at the three locations in particular?

PN1444

MR THOMPSON: Yes.

PN1445

THE SENIOR DEPUTY PRESIDENT: Yes, I accept that. I think I made it pretty clear to Mr Burke when I was questioning him that the mere fact that one person didn't receive it doesn't seem to me to indicate that the employer may not have taken reasonable steps. I think reasonable steps were taken in that it was attached to each - or instructions were given that it go out with each payroll and notices were given. I reject that aspect of the union's claim. I'm satisfied that the provisions of section LK(2) were complied with.

PN1446

MR THOMPSON: The next section dealt with by the union was section 170LK(7), the form of explanation of the agreement. The statutory declaration provides that meetings were held with all employees to explain the agreement. At clause 5.8 of the statutory declaration there is an outline of the meetings held. There's also mention of the fact that the employees were employed on Australian Workplace Agreements that were in substantially similar form and most employees that were on those AWAs had been employed on those AWAs for some time. So there was an expectation that they would have fully understood the terms of the proposed agreement that was so similar to their existing arrangements.

PN1447

The nature of explanation I think as Ms Palise had mentioned in her evidence was that the agreement was explained to the employees on a clause by clause basis by Mr Morgan, a director of the company, and that where particular questions were raised by employees they were dealt with directly by either Mr Morgan or
Ms Palise. I'm also instructed and I think again it's within the transcript of evidence that there were numerous phone calls made directly to Mr Morgan who addressed each of those questions in person.

PN1448

THE SENIOR DEPUTY PRESIDENT: There's evidence as to that, is there?

PN1449

MR THOMPSON: I think there is. If I’m misleading the Commission it's unintentionally but it was only my recollection.

PN1450

THE SENIOR DEPUTY PRESIDENT: Yes, well, I just don't have a recollection in relation to that, that's why I'm asking you.

PN1451

MR THOMPSON: At paragraph 402 of the transcript it says - - -

PN1452

THE SENIOR DEPUTY PRESIDENT: Sorry, paragraph?

PN1453

MR THOMPSON: 402.

PN1454

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1455

MR THOMPSON:

PN1456

No, okay. Would that have been the case of both the Sunbury and Melton meetings that not everyone attended a meeting and had an ...(reads)... everything they needed to know about the agreement.

PN1457

Regarding the phone calls, I can't see it there, your Honour. If it does come to my attention later on I will try and bring it up.

PN1458

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1459

MR THOMPSON: But quite clearly there was a considerable attempt to explain the agreement. There were numerous meetings held at store. There has been some discussion and submissions regarding the cancellation of a meeting at the Melton store on or about 10 March 2006. It has been explained to me that that meeting was cancelled but rescheduled and was held at a later date.

PN1460

THE SENIOR DEPUTY PRESIDENT: Again, is there evidence of that? I think Ms Palise did give evidence - - -

PN1461

MR THOMPSON: She did mention that it had been rescheduled and held on a later date.

PN1462

THE SENIOR DEPUTY PRESIDENT: Yes, or later that day.

PN1463

MR THOMPSON: Yes, it was because the school kids bus was running late or something.

PN1464

THE SENIOR DEPUTY PRESIDENT: Yes, but it was held later that day, was it not, but the union couldn't attend?

PN1465

MR THOMPSON: No, it was early the following week is my recollection.

PN1466

THE SENIOR DEPUTY PRESIDENT: But a meeting was cancelled and rescheduled and held and the union couldn't attend that rescheduled meeting?

PN1467

MR THOMPSON: No, no. On that matter as well the attendance of the union at meetings it should be mentioned that the employer in this matter did hold a meeting, a confer meeting with the SDA and Mr Burke and one of his associates which ran for some time during which the agreement was explained to them and there were considerable discussions about the nature of the agreement and it was put to Mr Burke that attendance by the union in relation to the agreement would be dealt with in accordance with the Act and that was that if the union intended to meet and confer with the employer regarding particular questions on the agreement then it was free to do so in accordance with the requirements of the Act and that was in fact observed by the employer. That again is set out in the statutory declaration in answer to a question regarding that issue.

PN1468

Regarding the submissions by the union that there must be genuine understanding of the agreement in relation to the Grocon decision by his Honour Vice President Ross and the decision by Senior Deputy President Duncan in Suncorp GIOA General Insurance Business Integration Agreement 2002 it is my submission that these matters have been dealt with by the Commission. I don't have a copy of the decision to hand to your Honour but you may be familiar with it in that you were on the Full Bench when it was considering the decision of Austral Construction Pty Ltd on 24 February 2004 and to paraphrase - - -

PN1469

THE SENIOR DEPUTY PRESIDENT: What's the print number, Mr Thompson?

PN1470

MR THOMPSON: PR943994. In that decision, if I can quote it says:

PN1471

It has been said that the requirements of section LK(4) are mandatory -

PN1472

So dealing with the issue of the mandatory words in the notice of intent -

PN1473

That is so in that in the sense that they are conditions that must be complied with for an agreement with employees pursuant to Act. It is only ...(reads)... and all of the relevant circumstances.

PN1474

Now, whilst it's dealing with LK(4), your Honour, the notion that what is reasonable and the manner in which section 170LK(7) is to be considered by the Commission I think flows from that decision and that is that the Commission must look at the relevant circumstances, consider what would form a reasonable purposive interpretation of the requirement and determine whether or not in the circumstances of the particular matter the explanation were reasonable. In this case I submit that it was more than reasonable in that meetings were held twice at each site with the employees present and further submission or further information was provided to employees either directly on a one on one basis or in small groups via mobile telephone calls directly with Mr Morgan and that as such it was certainly in compliance with section 170LK(7).

PN1475

If it's of any assistance to the Commission, Commissioner Richards on
5 March 2004 made a decision in the matter of Sheldon College Corporate Certified Agreement 2004 whereby he dealt with the decision of Vice President Ross in Grocon in some detail and drew a conclusion, if I'm being fair to Commissioner Richards, drew a conclusion that the notion of having to explain both the agreement and the secondary materials related to the agreement was not a requirement of section LK(7) as the union are submitting.

PN1476

Another meeting dealing with that is the decision of Deputy President McCarthy on 20 May 2003 in Grace Christian School 170LK Certified Agreement 2003 where at paragraph 20 Deputy President McCarthy says:

PN1477

There is a stark contrast between Grocon and the present case. In Grocon there was evidence brought, exhibits produced and substantive ...(reads)... whether they wanted to make the agreement.

PN1478

In this case I don't believe there is any evidence to suggest that employees were incapable of forming a proper view on whether or not they wanted to make the agreement. There are particular aspects of the agreement that have been raised in relation to this issue by the union and Mr Burke. Firstly, there was Ms Bird's evidence that she believed that she would get a $1 pay rise as a result of a meeting that she attended that the agreement if certified would provide her with a $1 pay rise. Your Honour, I would submit that Ms Bird's interpretation of the meeting and its outcome is not indicative of the entire group of employees who were being offered the agreement.

PN1479

She may have formed that view but she also formed the view that if she was paid under the agreement she would actually be earning less and that is stated in her statutory declaration. When we examined the actual calculations provided in her statutory declaration she also admitted that she had formed the wrong conclusion and that she would actually be paid more than what she had believed that she was entitled to - - -

PN1480

THE SENIOR DEPUTY PRESIDENT: What's the reference there?

PN1481

MR THOMPSON: Pardon?

PN1482

THE SENIOR DEPUTY PRESIDENT: What's the transcript reference to that? Is it 804 and 805?

PN1483

MR THOMPSON: 868 through to PN887. At PN884 I said:

PN1484

The witness will actually receive a pay rise under the certified agreement from 887 that you are currently receiving to an amount of $9.05 per hour under the proposed agreement.

PN1485

You asked the witness at PN885:

PN1486

Do you agree with that is that - is the question?---Yes.

PN1487

THE SENIOR DEPUTY PRESIDENT: Yes, so she accepted that she'd be getting more, yes.

PN1488

MR THOMPSON: Similarly there is the question of the casual employees being covered by the agreement. The notice of intent and other statements provide that the agreement is being offered to all employees. As Mr Burke has conceded, the information provided to employees also informed the casuals that they would become part time under the terms of the certified agreement. The documents provided at Morgan's I think, the seven reasons to vote, also provide that no employee will be worse off as a result of the agreement and I think at this point it's important for the Commission to be aware that the nature of the workplace in this instance is one of, I guess to use the word meritocracy.

PN1489

The proposed certified agreement is not a paid rates certified agreement. In the case of existing casual employees, all existing employees an undertaking or a common law offer has been made in writing to all employees that even if the rates in the agreement are less than what they're currently earning that their actual pay rates will not be reduced from what they are earning under the existing certified agreement.

PN1490

THE SENIOR DEPUTY PRESIDENT: Apart from the fact that I don't have any evidence of that is it relevant?

PN1491

MR THOMPSON: Well, it is relevant to the extent that there is a lot - - -

PN1492

THE SENIOR DEPUTY PRESIDENT: I am to ascertain, now we're getting to the no disadvantage test I suppose, but I'm to ascertain whether it passes the no disadvantage test, not whether there's some site agreement that says that if it doesn't pass the no disadvantage test you'll be okay.

PN1493

MR THOMPSON: Yes, I agree with your Honour. The submission I guess that I'm making is not in relation to the no disadvantage test, it's in relation to the fact that when the agreement was explained and the terms of the agreement were offered to the employees it was no in isolation of other issues and other common law contracts. The offer and even the notice of intent deals with - itself is a common law offer and Mr Burke's submission that employees on the available information would not have been fully informed presumes that the information provided or that he has seen is the only information.

PN1494

He wasn't party to those meetings held with the employees. He wasn't party to other discussions had on a one on one basis and there was considerable information provided to employees to ensure that they understood beyond the terms of the agreement itself. I guess again in the union's submission that the award or secondary industrial instrument should be explained to the employees, this should also be considered in the context of the industrial environment at the time weeks before Work Choice was about to commence. The question over whether or not the existing certified agreements would continue to apply, the question over how awards will be consolidated in the coming months or years, these are all issues that not even the best of industrial experts can grapple with and no explanation of those secondary terms by even the most considered minds in this industry in my opinion would ever adequately explain to some people the nature of the agreement.

PN1495

I don't intend to say that people didn't understand the agreement but it was reasonable and that's the submission that I'm making in these terms. Clause 3.4 of the agreement was also raised by Mr Burke. Simply clause 3.4 of the agreement enlivens the objects of the Workplace Relations Act as it stood at the time. It's actually within section 3 of the Act at that time that employers and employees would be capable of making the most appropriate form of agreement for their particular circumstances whether or not that form is provided for by the Act. It's an extension of that that was added to the agreement, that is, that it could be AWAs, it could be combination of AWAs, separate casual engagements or both.

PN1496

It is only to ensure that the objects of the Act were being considered and actually put into use when this agreement was being made, but I don't see how on earth almost a reciting the object of the Act is actually causing any confusion to the employees. It's also necessary in the context that where the agreement operates and provides employees with reasonably rosters and hours there may be opportunities for employees to become casual employees to fill gaps and similarly if employees wished to make alternative arrangements with the employer under an Australian Workplace Agreement, then that is an option that hasn't been closed out.

PN1497

Obviously under the current law it wouldn't be necessary to make that statement but here it was necessary to make it to ensure that AWAs were not excluded from future operation. Your Honour, in relation to the statement at clause 3.3 of the agreement as it was raised, I confirm for the Commission that that is a typographical error. It's an error that shouldn't have been made and we apologise to the Commission for any confusion that it may have caused, but I think you have already made a good point that if it is an error it is not necessarily going to be at the detriment of the agreement process.

PN1498

THE SENIOR DEPUTY PRESIDENT: It's never bad advocacy to adopt the judge's point I suppose, is it?

PN1499

MR THOMPSON: What it should have said and if it's necessary we could do is to replace the page with a proper reference to the terms, the agreements that currently operate but may not exist tomorrow and what it was supposed to say is that the MGAV and SDA enterprise agreements in 2002 would be replaced by this agreement. It was only that the 2005 agreement was I guess at the forefront of somebody's mind in drafting this. However I think it's within the ability of the Commission to provide leave under section 111(1)(r).

PN1500

THE SENIOR DEPUTY PRESIDENT: One of those sections, yes.

PN1501

MR THOMPSON: To amend an application. One of those sections, 111 something.

PN1502

THE SENIOR DEPUTY PRESIDENT: Yes. If I'm minded to certify the agreement I don't think there'd be any difficulty in amending that particular clause or giving you leave to do so.

PN1503

MR THOMPSON: Thank you, your Honour.

PN1504

THE SENIOR DEPUTY PRESIDENT: That's the least of your problems,
Mr Thompson.

PN1505

MR THOMPSON: Yes. Coming then to the no disadvantage test, your Honour, unless there are particular issues regarding the explanation of the terms that you would like me to address re-address.

PN1506

THE SENIOR DEPUTY PRESIDENT: No.

PN1507

MR THOMPSON: I might move to section 170LT. Submissions have been made in my opening to this matter regarding the no disadvantage test and I took your Honour through the provisions of the no disadvantage test calculator that was used to create the rates in the agreement. First and foremost is Mr Burke has pointed out within the no disadvantage test calculations the rates of pay for a seven day adult or 21 year old employee there appeared to be some inconsistency in the calculation method. On that page of the calculations it supposed that the weekly average rate of pay was $543.40 but it did provide for a rate of pay in the agreement of $17.92.

PN1508

During the break I've had my office provide a copy of that page of the no disadvantage test calculations which confirms the calculations are correct but that the award weekly work profile box for that employee in the photocopy made was somehow, I don't know how, but the spreadsheet didn't represent the right figures on the left hand side. I'm not sure, I don't have a copy, it's just come through on the fax but - - -

PN1509

THE SENIOR DEPUTY PRESIDENT: What should that figure be? It's missing that box that says 543.40 per week?

PN1510

MR THOMPSON: Yes, so the hours would be 30.40385 hours at normal rate, $14.30. Below the $434.78 it did say $73.13. It should be $46.41.

PN1511

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1512

MR THOMPSON: It did say $37.83, it should be $55.69. It did say $34.38 which should be 68.75 and the total should be $605.62, not $543.40.

PN1513

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1514

MR THOMPSON: When those figures are extrapolated and the no disadvantage test is worked you still end up with the 17.92 and that's why it surprises me that those figures haven't fallen out. Usually they would automatically fall - - -

PN1515

THE SENIOR DEPUTY PRESIDENT: Sorry, what's the 17.92?

PN1516

MR THOMPSON: That's the correct hourly rate for a 21 year old.

PN1517

THE SENIOR DEPUTY PRESIDENT: Under the agreement?

PN1518

MR THOMPSON: Under the agreement. So the agreement the rate - - -

PN1519

THE SENIOR DEPUTY PRESIDENT: So the agreement rate is right but the award total is wrong?

PN1520

MR THOMPSON: It's just the calculations in that box were incorrect.

PN1521

THE SENIOR DEPUTY PRESIDENT: Yes. So the certified agreement would still provide 680.96 as opposed to 600 and something for the award?

PN1522

MR THOMPSON: Yes.

PN1523

THE SENIOR DEPUTY PRESIDENT: Yes, if you will give that to my associate she'll make photocopies and you can then tender it. Yes, well, that deals with
the - - -

PN1524

MR THOMPSON: What appeared to be a miscalculation but in fact wasn't.

PN1525

THE SENIOR DEPUTY PRESIDENT: Yes, but you've got some more serious problems with the no disadvantage test, haven't you?

PN1526

MR THOMPSON: Well, no, not in my submission, your Honour.

PN1527

THE SENIOR DEPUTY PRESIDENT: Well, Mr Burke's submissions sounded pretty good before lunch, let's hear what you have to say about it.

PN1528

MR THOMPSON: Okay. The submission, with all respect to - well, the submission I think appears as a misrepresentation or a misunderstanding of the requirements of the no disadvantage test. The no disadvantage test is not a snapshot in time between the rates of pay for an employee under the award versus the rates of pay at the same under an agreement. The no disadvantage test provides for an on balance calculation of rates and conditions under an agreement versus the terms and conditions of an award. Now, it's been consistent in applying the no disadvantage test that it can be applied over a weekly period, or a 52 week period, a one year period or more.

PN1529

The issue is to balance the entitlements under an agreement in comparison to those provided under an award and in this case the comparisons that the SDA has made are comparing a casual rate of pay under the award with a permanent rate of pay under the agreement. That is not the correct comparison. An employee under the agreement is entitled to sick pay. The employees paid the unloaded rate of pay are entitled to full sick pay entitlements and paid annual leave entitlements, whereas the loaded rates of pay - - -

PN1530

THE SENIOR DEPUTY PRESIDENT: The agreement doesn't provide for casuals, does it?

PN1531

MR THOMPSON: No, so we're comparing - - -

PN1532

THE SENIOR DEPUTY PRESIDENT: Mr Burke says you're not, you're only dealing with 28 employees is it? He says who are full time and the rest are part time or casuals. You say, well, the casuals will be covered by the award anyway if they want to be, is that right?

PN1533

MR THOMPSON: No, I'm saying that the casuals will be covered by the agreement.

PN1534

THE SENIOR DEPUTY PRESIDENT: Because they're going to become part timers.

PN1535

MR THOMPSON: Yes, and they will be - but unless they ask to remain casual, and that was an agreement made, but the offer made by the employer to the employees was to pay people - make them all permanent, give them regular rosters and hours, provide them with an entitlement to four weeks annual leave and sick leave, given the ability to choose between a loaded rate of pay or an unloaded rate of pay.

PN1536

THE SENIOR DEPUTY PRESIDENT: Really your submission is and just before we get to that I will mark that correct comparator for a loaded team member 21 years of age. You still have 543.40 on that. That's still the wrong sum, isn't it?

PN1537

MR THOMPSON: Did I hand you the wrong one?

PN1538

THE SENIOR DEPUTY PRESIDENT: You handed my associate the wrong one. It better the right one - - -

PN1539

MR THOMPSON: I'm sorry for wasting your time - - -

PN1540

THE SENIOR DEPUTY PRESIDENT: We'll try that exercise again. Now, while we're doing that, is your argument this, the award provides for a casual rate of pay, Morgan's has made a decision that it's not going to employ casuals any more, it's going to only employ part timers or permanents, therefore you can't compare the casual rate in the award with the rate in the agreement? It's not to the point to say well look at what a current casual will be earning under the award and look at what that person - and when that person becomes a part timer because that's apples and oranges, is that right?

PN1541

MR THOMPSON: That's precisely right.

PN1542

THE SENIOR DEPUTY PRESIDENT: And Morgan's is entitled to offer casual or non casual employment as it sees fit and we're not going to offer casual employment in the future, is that the position?

PN1543

MR THOMPSON: Well, the reserve the right to offer some casual positions under the terms of the award if it becomes necessary but look, they're making a fairly fundamental change and that is to create single hourly rates of pay for employees, to offer permanency, not casual engagement, and to offer, in addition to that, to offer training for all employees as - well, not as a condition but to really try and create the most highly skilled and stable workforce that they can and this agreement has been drafted in that context. They can't offer casual employees any training, not recognised traineeships.

PN1544

THE SENIOR DEPUTY PRESIDENT: Is there something in the agreement about training?

PN1545

MR THOMPSON: Yes, there is. And what they are attempting to do is create a permanent workforce that will receive training, will receive more permanent and regular rosters and hours and will clearly delineate those employees from being casuals who are employed on irregular rosters and hours. That was the notion of offering this agreement to those casual employees and that - - -

PN1546

THE SENIOR DEPUTY PRESIDENT: Yes. Just give me the figures again, there are how many permanents, approximately?

PN1547

MR THOMPSON: There's approximately 157 part time employees, approximately 42 casual employees at the time of the agreement.

PN1548

THE SENIOR DEPUTY PRESIDENT: And full time?

PN1549

MR THOMPSON: 28.

PN1550

THE SENIOR DEPUTY PRESIDENT: 28 full timers, okay. Now, we'll mark that document exhibit MORGANS4 which is the document that indicates that the comparison between a loaded team member 21 year under the award such person would earn $605.62 - what's the $15.94 under that?

PN1551

MR THOMPSON: That's the 605.62 divided by 38.

PN1552

THE SENIOR DEPUTY PRESIDENT: I see, that's the hourly rate, yes. Compared with the 680.96 for a certified agreement employee.

EXHIBIT #MORGANS4 COMPARISON BETWEEN A LOADED TEAM MEMBER 21 YEAR UNDER THE AWARD AND UNDER THE CERTIFIED AGREEMENT

PN1553

THE SENIOR DEPUTY PRESIDENT: Okay. Well, that's got that paperwork out of the way. All right. What about Mr Burke says that you haven't done calculations for part timers as I understand his submission and that they're worse off under the agreement - - -

PN1554

MR THOMPSON: That's his submission, yes, but you don’t - - -

PN1555

THE SENIOR DEPUTY PRESIDENT: Now, has he done any figures to show that or not? He's talked about - - -

PN1556

MR BURKE: SDA4, your Honour.

PN1557

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes, SDA4. In the course of your submissions you to deal with SDA4, don't you, Mr Thompson? Are you going to go to - - -

PN1558

MR THOMPSON: Yes, I do. I need to deal with that and - - -

PN1559

THE SENIOR DEPUTY PRESIDENT: Well, you get to that in your own time then. So what was the next thing you were going to take me to?

PN1560

MR THOMPSON: Well, the way in which the agreement has been constructed and the way in which it deals with the part time - well, first of all we'd strongly object to any comparison between the rates of pay under the agreement and a comparison to the casual rates of pay under the award.

PN1561

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that submission.

PN1562

MR THOMPSON: Secondly, that the way of calculating part time rates under the agreement is identical to the way in which you calculate the full time rates. You would load the rates for Saturdays, Sundays, public holidays, et cetera, on a full time basis and if the employee works less than - so you're loading the rate up in consideration of those penalty provisions and if a part time employee works less than 38 hours then the rate has already been loaded pro rata for all of those penalties, loadings and allowances.

PN1563

THE SENIOR DEPUTY PRESIDENT: So you say that SDA4 just looks at rates in isolation not having regard to the roster or the number of hours worked. But if you go back to your - - -

PN1564

MR THOMPSON: Precisely. It's comparing a rate of pay at a snapshot in time so on a Sunday, for example, versus a rate of pay that's been loaded over a 52 week period taking into account a parameter of Saturdays, Sundays and public holidays, all of which has been calculated within the no disadvantage test calculator to be fully inclusive within the hourly rate - - -

PN1565

THE SENIOR DEPUTY PRESIDENT: And part timers are just pro rata on the number of hours they work as against full timers so the calculations would apply, is that your submission, equally to part timers as to full timers?

PN1566

MR THOMPSON: Yes, absolutely, and that's been accepted by the Commission on hundreds of occasions previously. It's also been the accepted method of calculating a single hourly rate under the no disadvantage test by the Office of Employment Advocate for many, many years and again I don't mean for the OEA to be leading the Commission but I'm only drawing your attention to an established method of creating a single hourly rate. We've seen that the - the Commission is aware that there are numerous ways, some people might load a rate by 11.5 per cent, the union itself when they're dealing with fast food franchises will just wipe out penalties and make some form of loading which gives them a single hourly rate.

PN1567

But in this case in order to meet the no disadvantage test and without the support of the SDA we've created a set of parameters for Saturdays, Sundays and public holidays and during for which employees may be required to work but they cannot be required to work beyond those parameter have been calculated in full within the hourly rate as it has been determined using this no disadvantage test calculation.

PN1568

THE SENIOR DEPUTY PRESIDENT: And Mr Burke submitted that apart from that mistake that's corrected in MORGANS4 the other calculations are correct in your material I think.

PN1569

MR THOMPSON: Yes, I believe they are.

PN1570

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1571

MR BURKE: Sorry, if I could just clarify, your Honour, that was in relation to full timers because that calculation was made on 38 hour employees.

PN1572

THE SENIOR DEPUTY PRESIDENT: Yes, well, I be interested to see what you say about the pro rata in the part timers. Yes.

PN1573

MR THOMPSON: Well, coming back to SDA4 and the comparisons there, I don't believe that the Commission can give any weight to that snapshot. Again as I've said, with respect to Mr Burke, the no disadvantage test requires an on balance consideration over the term of the agreement between all of its terms and conditions and all of the terms and conditions under the award. If we look for example at the full time/part time comparison under the award versus the agreement on SDA4, a full time employee for a Monday to Friday position is being paid less under the award and more under the agreement on that particular day.

PN1574

The reason they're being paid more on that particular day under the agreement is because within that hourly rate they've had added to it an amount for public holidays which they could be required to work, an amount for laundry allowance, an amount - - -

PN1575

THE SENIOR DEPUTY PRESIDENT: That's been added where?

PN1576

MR THOMPSON: Within the - - -

PN1577

THE SENIOR DEPUTY PRESIDENT: What are you looking at? Let me look at the same thing.

PN1578

MR THOMPSON: Okay. You could take any page of the no disadvantage test calculations provided to the Commission.

PN1579

THE SENIOR DEPUTY PRESIDENT: Yes, okay.

PN1580

MR THOMPSON: They show within the award weekly work profile box, the first rectangular box, what that is doing is taking the ordinary rate under the award, in this case, 14.30.

PN1581

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1582

MR THOMPSON: Calculating 2.596154 hours which is the number of Saturday hours over a year back to a weekly basis because we're working out an average week.

PN1583

THE SENIOR DEPUTY PRESIDENT: Yes, and that's the maximum number of Saturday weeks - - -

PN1584

MR THOMPSON: That the employee can be required to work.

PN1585

THE SENIOR DEPUTY PRESIDENT: Because there's a clause in the agreement that says that, isn't there?

PN1586

MR THOMPSON: Yes, there is.

PN1587

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1588

MR THOMPSON: And then likewise the 150 per cent represents another penalty provision.

PN1589

THE SENIOR DEPUTY PRESIDENT: Yes, yes.

PN1590

MR THOMPSON: Double time on Sundays represents the award provision there. So Saturdays, Sundays and Saturday and Sunday late nights I think we're representing there. It then for the loaded rate provides the four weeks annual leave, leave loading at 17½ per cent, superannuation payments which would have been made anyway, public holidays, three days at 250 per cent and a uniform, if you see under the entitlements under the award.

PN1591

THE SENIOR DEPUTY PRESIDENT: Yes, I have got that.

PN1592

MR THOMPSON: So that is one uniform per week of $5.85 which is the updated. I think Mr Burke mentioned that the uniform allowance had been updated. Now, we have confirmed that the employees at these sites only have one uniform item and that it's the relevant loading for this.

PN1593

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1594

MR THOMPSON: There's no expectation that that will change.

PN1595

THE SENIOR DEPUTY PRESIDENT: And what I've forgotten is that the clause in the agreement that provides for the maximum parameters that employees can work and that they can be required to work on public holidays and other penalties and hours that attract penalties and these calculations are all done on a maximum within those parameters - - -

PN1596

MR THOMPSON: Yes, that's right and if they exceed - well, they can't be required to exceed those parameters but if they do exceed those parameters they're entitled to claim penalty rates, 150 per cent for the first two hours and 200 per cent for any subsequent hours.

PN1597

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1598

MR THOMPSON: So there is within the agreement a 52 - what we have is an hourly rate which has been adduced from a 52 week period taking into account all Saturdays, Sundays, public holidays, annual leave loading, laundry allowance and everything else and then averaged out to give you an hourly amount. Now, if that hourly is compared at a snapshot against a Sunday it's always going to look less, but on average over a period of the agreement according to the balancing act that we're required to undertake with no disadvantage test it is in compliance in my submission with the requirements of the Act.

PN1599

THE SENIOR DEPUTY PRESIDENT: Yes, I follow.

PN1600

MR THOMPSON: I don't believe there's any point in labouring that throughout SDA4 and particularly, you know, it's just emphasised when we look at Anzac Day for example where a full time or part time employee would be paid a lot more than a person under the agreement, fails to take into account that they'd be paid more on an hourly basis ongoing.

PN1601

THE SENIOR DEPUTY PRESIDENT: And do you make the same submission in relation to SDA5, do you, that that's a - - -

PN1602

MR THOMPSON: That's the 17 hours of work for a part time AWA 16 year old.

PN1603

THE SENIOR DEPUTY PRESIDENT: Yes, that's Ms Bird. Yes.

PN1604

MR THOMPSON: It's a snapshot in time. It doesn't have any real comparison to the rates in the agreement.

PN1605

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1606

MR THOMPSON: If the employee worked - well, an observation is that if this employee worked those hours on a continuous basis they would be entitled to overtime penalties because they may exceed the parameters at the rate that they would be working. But the nature of the business is that - and I think this was raised also by Mr Burke, that it would be difficult to ascertain whether or not - it was his submission that it would be difficult to ascertain whether an employee had worked overtime but the fact is that the clock on/clock off system is computerised and every employee's hours of work are recorded on a consistent and ongoing basis so that at any point in time the employer would be able to tell an employee how many hours they have worked on average in a week, how many weekends they have worked as a percent of their time and that all of these things are trackable on a real time basis and that's what we've had to do to create a system that allows for a singularly rate in a supermarket under the no disadvantage test.

PN1607

So no, I wouldn't agree with the submissions or concede to the submissions made in relation to SDA5. As a matter of fact I would say that they're significantly flawed. I also draw out the point of saying that annual leave loading and $5.60 per garment laundry allowance hasn't been incorporated, but I would again submit that it certainly has. The comparison which I think was that SDA6?

PN1608

THE SENIOR DEPUTY PRESIDENT: 3.

PN1609

MR THOMPSON: 3. I have dealt with the rates of pay on the first page in my submissions regarding the no disadvantage test and the method of calculating the rates. I think that there is little to be gained from providing a snapshot comparison between the casual rates or the rates under the agreement, or even the weekly rates and the rates under the agreement. There's a very different system of work contemplated under the terms of the agreement than that under the award. The agreement operates for a period of a year up till 1 April 2007, that speaks for itself.

PN1610

The spread of hours is proposed to be changed, absolutely. It's looking to create two types of spreads of hours, one is Monday to Sunday and one is Monday to Friday. It doesn't work for my client to work within the limited scope of ordinary hours under the award and that's exactly why he's endeavoured to use AWAs in this certified agreement - - -

PN1611

THE SENIOR DEPUTY PRESIDENT: Has that change been taken account of in your calculation sheets?

PN1612

MR THOMPSON: There has been, to be fair, there hasn't been an account taken of the fact that three hours is the minimum shift under the award whereas two hours is the minimum shift under the agreement purely because we believe it's favourable and the employees have certainly expressed that it's more favourable for them to be able to do a short shift of two hours under the agreement or under their AWAs at present because they can fit in between school and sport and that type of thing.

PN1613

THE SENIOR DEPUTY PRESIDENT: Pity there's no evidence as to that. Yes, I understand your submission.

PN1614

MR THOMPSON: But it doesn't necessarily flow from the no disadvantage test that any deviation from the ordinary hours is a disadvantage.

PN1615

THE SENIOR DEPUTY PRESIDENT: But I was really looking at the spread of hours, the Saturday and Sundays spreads from six to 6 pm.

PN1616

MR THOMPSON: Yes, and in that case all of the penalties that would have otherwise been paid have been incorporated into the hourly rates - - -

PN1617

THE SENIOR DEPUTY PRESIDENT: Yes, and full penalty rates have been taken into account in your calculations?

PN1618

MR THOMPSON: Yes, they have, your Honour.

PN1619

THE SENIOR DEPUTY PRESIDENT: Yes. What about the roster for the four week - well, you haven't that into account over a 52 week cycle.

PN1620

MR THOMPSON: Yes.

PN1621

THE SENIOR DEPUTY PRESIDENT: But what about Mr Burke's point that it's a disadvantage to be able to average out 38 hours over 52 weeks as compared with four weeks?

PN1622

MR THOMPSON: Well, that's his opinion.

PN1623

THE SENIOR DEPUTY PRESIDENT: Yes, well, it's his submission that go to 52 weeks is a disadvantage. What's your submission?

PN1624

MR THOMPSON: My submission is that it's probably an advantage because it gives people more flexibility to work the hours that they may wish to work and secondly, that there's no difficulty in calculating those hours and whether or not an employee's average hours exceed 38 or are less than that because of the payroll system, the computer system that exists and provides real time guidance as to what an employee's average weekly hours are in the business.

PN1625

THE SENIOR DEPUTY PRESIDENT: Can I take judicial notice of the fact that many of the casual or the younger employees are likely to be students who will want to work longer hours over their vacation period, shorter hours during the examination period and different hours during school time?

PN1626

MR THOMPSON: Yes, your Honour.

PN1627

THE SENIOR DEPUTY PRESIDENT: Yes, I think I can. Mr Burke can address me on that later but I'm inclined to take judicial notice of that unless persuaded to the contrary, having regard to Ms Bird being a student herself. Yes.

PN1628

MR THOMPSON: The penalty rate comparison under part 4 we've explained.

PN1629

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1630

MR THOMPSON: For full time employees the maximum daily engagement under the agreement is 10 hours and not nine under the award, although the award provides for different cycles anyway so it's just adopting a different level of hours. The maximum number of ordinary hours, there's a difference in the maximum three Sundays in any four week cycle. Under the agreement it's 135 ordinary hours between 7 am and 6 pm on Saturdays and Sundays so that the parameters that we've provided there provide for a limitation on weekend work. Part time employees, no daily minimum.

PN1631

THE SENIOR DEPUTY PRESIDENT: Yes, no daily minimum. Now, why is that not a disadvantage to people?

PN1632

MR THOMPSON: Because on some days as a part time employee as a student for example they may not wish to work a minimum of three hours. That was the point made about working fewer hours in between school and sport, et cetera.

PN1633

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1634

MR THOMPSON: The overtime applies for any additional hours while under the proposed agreement additional hours paid as overtime or ordinary rate if agreed but no employee can be required to work additional hours. Rosters, I don't agree with the submission that making a roster one week in advance is a detriment on balance with the 14 day notice that could be provided under the award. It's worked very effectively in the past.

PN1635

THE SENIOR DEPUTY PRESIDENT: It was 48 hours in an emergency, here it's 24 hours if the employer wants to.

PN1636

MR THOMPSON: It can be changed with 24 hours notice by agreement with the employee I think is what - or by mutual agreement is what's in the - - -

PN1637

THE SENIOR DEPUTY PRESIDENT: Yes. Where's the clause?

PN1638

MR THOMPSON: 10.1 is:

PN1639

Changes to rosters may occur with 24 hours notice or subject to availability of the employee, less notice if by mutual consent.

PN1640

THE SENIOR DEPUTY PRESIDENT: Yes, so the employer can change the roster on 24 hours notice whereas under the award 14 days has to be given.

PN1641

MR THOMPSON: Yes.

PN1642

THE SENIOR DEPUTY PRESIDENT: Except in an emergency. What is that not a disadvantage to the employees?

PN1643

MR THOMPSON: It allows the employer to accommodate emergency changes, people calling in sick, unexpected spikes in trade.

PN1644

THE SENIOR DEPUTY PRESIDENT: Yes, it's good for the employer.

PN1645

MR THOMPSON: If it provides more employees with more opportunity for work I don't think that it could be necessarily be said to poor for the employee either.

PN1646

THE SENIOR DEPUTY PRESIDENT: Well, it might provide some with less if the employer says 24 hours notice I don't need you tomorrow.

PN1647

MR THOMPSON: It works in conjunction with the obligation for the employer to provide reasonably regular rosters and hours.

PN1648

THE SENIOR DEPUTY PRESIDENT: Yes, it's 10.2 and 10.3 you would no doubt submit somewhat balance that.

PN1649

MR THOMPSON: Yes. In 10.2:

PN1650

The employer will use reasonable endeavours to roster employees in a manner that is both fair and equitable to ensure that the allocation of weekend and ...(reads)... on a rotating basis.

PN1651

And 10.3:

PN1652

The employer will use reasonable endeavours to accommodate each employee's preferred hours and days taking into consideration family, study and personal priorities of the employee.

PN1653

So I mean again it's not - it's providing flexibility for both parties and on balance it is submitted that it's not of such detriment that it would cause for the entire agreement to be considered to fail the no disadvantage test. It's an on balance comparison, not simply a line by line comparison, your Honour.

PN1654

THE SENIOR DEPUTY PRESIDENT: Casuals you don't need to deal with because they're not covered by the agreement.

PN1655

MR THOMPSON: Yes. Overtime and additional hours - - -

PN1656

THE SENIOR DEPUTY PRESIDENT: That's been calculated.

PN1657

MR THOMPSON: Yes. Meal allowance, the allowance - - -

PN1658

THE SENIOR DEPUTY PRESIDENT: Well, there's no meal allowance in the agreement, is there?

PN1659

MR THOMPSON: The meal allowance provision of the award - - -

PN1660

THE SENIOR DEPUTY PRESIDENT: Would apply.

PN1661

MR THOMPSON: Yes, would continue to apply. Travel expenses would continue to apply. Cold work disability allowance would continue to apply in accordance with the award. Public holidays, the agreement provides for 11 public holidays. It provides each employee is going to be paid whether or not they work on at least three public holidays. They can be required to work up to three public holidays but cannot be required to work beyond three public holidays. There's no penalty rate for work on a public holiday because it's already been calculated into the single hourly rate in the agreement.

PN1662

There is the question which Mr Burke raised of clause 38.7 where a Monday to Friday employee working under the agreement where a public holiday that fell on a weekend might be - they might receive an additional day. I admit I wasn't aware that that provision existed in the State Act and it I guess could be seen that they might get that additionally.

PN1663

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1664

MR THOMPSON: If it was adduced that on balance there was a disadvantage then it's my instruction that we would give an undertaking to address that issue, but I don't see that on its face at this time that there is any on balance failure to the no disadvantage test.

PN1665

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1666

MR THOMPSON: Meal breaks, there's no, in my opinion and submission, your Honour, there's no significant variation from the award there. Employees can take 30 minute unpaid meal breaks and it's equivalent under the agreement. Tea breaks are included and will continue to apply. Payment of wages, of course people will continue to be paid their wage in accordance - - -

PN1667

THE SENIOR DEPUTY PRESIDENT: The award or - - -

PN1668

MR THOMPSON: Yes. There was some contention previous to hearing that people wouldn't be paid because it wasn't dictated by the agreement. Superannuation, again fairly similar. Junior rates have been used in the same ratio, been calculated in the same ratio as the award. Annual leave, full time employees are entitled to equivalent annual leave as under the award. Paid annual leave, employees paid the loaded hourly rate are entitled to take four weeks annual leave but they have already been paid or are paid within the agreement for that annual leave within their hourly rate.

PN1669

Sick leave is identical to the award, unless the employee is paid the loaded rate of pay. It's important to note that if an employee elects to receive the loaded rate of pay that they are being paid for all sick days whether or not they're taken.

PN1670

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1671

MR THOMPSON: Whereas under the award they wouldn't receive them unless they were legitimately ill. Family leave there's no change. Bereavement leave applies according to the award and I think the agreement sets that out quite clearly, as with jury service leave. Grievance procedure there's no change and notice of termination is identical as well. There's redundancy payments in there. Accident make up pay will continue. Dress and presentation standards and employees will provided with a uniform which is a tie, in some cases a jumper. There is no allowance for laundry allowance because it's already been loaded into the hourly rate.

PN1672

Parental leave is as it appears in the Workplace Relations Act. It's the same parental leave conditions as are in the Act. I don't submit that there's a problem with following the terms of the Act, particularly the extended provisions that are in the revised Workplace Relations Act. Supported wage continues, anti discrimination, there's no change there. Retail traineeships, the retail traineeship rates are calculated in accordance with the section 170XC which is the only exemption from the no disadvantage test that's drafted into the Act and would appear to be the appropriate method where there is a certificate agreement for adducing the traineeship rates of pay. Protected clothing applies according to the award.

PN1673

So you can see, your Honour, that the agreement where it does deviate in our submission only results in a net balance if not an advantage to the employees. There is copious precedent through the Commission of an acceptance of an ability to create a single hourly rate of pay in the method that has been adopted here. In fact in this business there is already a certified agreement that has been approved and in operation for some three or four months at the Delahey site which this is seeking to reflect. The difference being, which I think was raised originally, that the initial certified agreement was calculated taking into account the Retail Award in Victoria or the Shop Employees Award in Victoria because that store was not bound by the MGAV Award. That resulted because of the differences in the two award in a 10 per cent higher rate but in all other respects the agreement is very similar.

PN1674

THE SENIOR DEPUTY PRESIDENT: Yes, who certified that?

PN1675

MR THOMPSON: Commissioner Whelan. The remaining issues for the no disadvantage test I think have been addressed already. As I say, Commissioner, if the Commission is satisfied that the applicant is valid and that the agreement fails the no disadvantage test then there are options open to the Commission to address any particular problems. Similarly if those options aren't taken up and the agreement does pass the no disadvantage test section 170LT(3) is relevant particularly given that the Australian Fair Pay Commission's standards provide for a national set of terms and conditions that will apply in future and which would underpin or undercut the rates in the agreement and I think there is some importance in noting that there is a new national standard that provides for terms and conditions that are less than what is in the agreement and that unlike the submissions made by the SDA, if this agreement isn't made today or in the future.

PN1676

Not all of the employees will revert back to the award. Certainly the majority of them will revert back to AWAs which have lower hourly rates and it is the intention to move them into a collective agreement with a higher hourly rate. There is also the fact that any future employee could be employed on an AWA that was made under the new Australian Fair Pay Commission's standards and the new version of the Act that is far different or much different to the proposed agreement and in that respect, unlike over the preceding years, I think that section 170LT may have a real significant effect on whether or not this agreement can be satisfied or this agreement satisfied section 170LT of the Act. The final matter which I would address is that of again the casual employees who have been offered the agreement.

PN1677

It is our submission that it was clearly explained to those employees that they would be offered permanent part time employment under the terms of the agreement should it be approved, that their rates of pay, their actual rates of pay would not be reduced from their current rates of pay and that was the understanding upon which they were coming permanent, not on the grounds that they would be offered permanent part time employment under the agreement at the rates in the agreement which may explain why existing casuals are happy to continue in a permanent position but with much higher rates of pay that exist in the agreement. That was provided in evidence within MORGANS3 and the reasons to vote for the agreement.

PN1678

THE SENIOR DEPUTY PRESIDENT: Can you just take me to that.

PN1679

MR THOMPSON: Point 2, that existing minimum conditions are guarantee, no employee will be worse off by signing the proposed certified agreement, meaning I guess in explanation that the average hourly rate of pay would not be reduced by signing the agreement.

PN1680

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1681

MR THOMPSON: Point 3, that existing casual employees will be converted to permanent employment and receive regular rosters and hours under the heading of Improved Quality of Employment.

PN1682

THE SENIOR DEPUTY PRESIDENT: Yes. And do you say it was separately told to casuals that they would retain their current rates even if they became part time, permanent part time?

PN1683

MR THOMPSON: Yes. Those submissions, your Honour, and the submissions made at the outset of the hearing in relation to the no disadvantage test are our submissions in relation to the agreement in our opinion. Until I hear from
Mr Burke I would suggest that it's in a form that meets the requirements of the Act and the agreement can and should be certified by the Commission.

PN1684

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Burke, in reply only in relation to LK(7) and the no disadvantage test. I have ruled in relation to your other objections.

PN1685

MR BURKE: Hopefully within LK(7) then I can address the decisions given in relation to Senior Deputy President Richards and McCarthy that they are decisions of single members of the Bench, as is VP Ross's. We say that VP Ross took the right step in having the higher standard in looking at whether or not things are explained to employees, remembering that this is an LK agreement and so we'd say that those decisions may have been made by those two single members of the Commission but someone took a higher test and the higher test should be taken, not a lesser test as we are looking at the terms and conditions of employees.

PN1686

THE SENIOR DEPUTY PRESIDENT: What paragraph of Vice President Ross' decision were you relying on there? That's in the Grocon matter, is it?

PN1687

MR BURKE: I'm sorry?

PN1688

THE SENIOR DEPUTY PRESIDENT: That's in the Grocon matter?

PN1689

MR BURKE: Grocon, yes, your Honour.

PN1690

THE SENIOR DEPUTY PRESIDENT: 44 and 45 was it?

PN1691

MR BURKE: 45, 46, 47. In 47 he relies upon the Coles Supermarkets decision. He says in the middle:

PN1692

Before such approval is given the terms of the agreement must be explained to all of the persons asked to give their approval. The need to explain ...(reads)... giving their approval to the agreement.

PN1693

In terms of the no disadvantage test then we say there isn't any evidence put that employees were told about additional payments or over award payment or other benefits they get before they voted on this matter. In fact the AWA that was provided to the Commission was for a part timer. It showed that employees rates of pay were going to be exactly the same as the agreement so that employee wouldn't have been looked at any extra payments.

PN1694

THE SENIOR DEPUTY PRESIDENT: Sorry, what are you talking about?

PN1695

MR BURKE: Mr Thompson said that it could be relied upon the fact that employees and in particular casuals had been told that besides what was in the agreement that - - -

PN1696

THE SENIOR DEPUTY PRESIDENT: Yes, but you were going on beyond that and saying something about a particular employee, part time.

PN1697

MR BURKE: Well, there's one AWA that had been provided to the Commission last time. The point I'm making out there is that the evidence of that is that the rates of pay that are in that agreement, that AWA, are the same rates that are in the agreement that the person voted upon, so there's no evidence from that that employee was looking at any additional entitlements that they were already on. They were only voting for exactly the same conditions and entitlements. We say that you should give weight to obviously SDA3, 4, 5 and 6, that we've done a comparison between the agreement and the award on balance. That's highlighted in 3 and there have been a few things raised by Mr Thompson and perhaps things that the company weren't even aware that should have been taken into consideration and put in the agreement together, for example, entitlement on public holidays, an additional day in lieu.

PN1698

The other thing is that in looking at in particular SDA5, its calculation is based on a real roster that the Commission has seen and one that can be therefore compared against the award, that there may be some benefit for that employee will only be seen if an employee like that was to work more than 27 weeks on Saturdays if they're currently working say five or six hours a week. So there's no guarantee an employee would work that long, be employed that long, be employed on that roster for that long. We think that the Commission needs to look at a real comparison of the award and what they would get under the award, not the fact that if the employee was still employed in two years, three years or four years that there might be some extra benefit for the employee if they work outside the parameters of the agreement.

PN1699

The award comparison we say is therefore showing a real loss to employees and the only comparison that the employers have shown have been employees who work 38 hours. Now, in terms of I think there was suggestion that I think in SDA3 that the Commission could take note of the rosters that employees might work than 38 hours, or up to 38 hours in their school holidays if they were students, we'd point out that that's a roster provision for full timers. If we were to look at the agreement, the agreement says in fact that if you work additional hours you can just agree to get additional - you will just get the ordinary rates of pay. So if - - -

PN1700

THE SENIOR DEPUTY PRESIDENT: Instead of getting overtime rates?

PN1701

MR BURKE: Instead of getting overtime rates, yes, your Honour.

PN1702

THE SENIOR DEPUTY PRESIDENT: Yes, so it's a choice between working additional hours at ordinary rates or not working additional hours at all.

PN1703

MR BURKE: It may be, your Honour.

PN1704

THE SENIOR DEPUTY PRESIDENT: Why is that not an advantage other than a disadvantage?

PN1705

MR BURKE: Well, because under the award if the person - - -

PN1706

THE SENIOR DEPUTY PRESIDENT: The person may not be offered anything if it's going to be at penalty rates. Another casual may be brought in.

PN1707

MR BURKE: Or a part timer, your Honour, yes.

PN1708

THE SENIOR DEPUTY PRESIDENT: Or part timer. That's a disadvantage, is it not?

PN1709

MR BURKE: Well, I think we need to look at the entitlement. The entitlement if they did work under the award would be overtime. That's what the true comparison should be.

PN1710

THE SENIOR DEPUTY PRESIDENT: Well, Mr Burke, one looks at realities and if the employer says to somebody I'll offer you some additional hours if you want them but it will be at your base rate, I'm not going to pay you overtime, that employee can choose to work those additional hours or not and make some additional or not make some additional money. If the award prevails the employer is at liberty to say I'm not going to offer any overtime and I'll give it to another casual or part timer or whatever. To me that seems to be certainly not a disadvantage to an employee. I'm against you on that.

PN1711

MR BURKE: I'm making our submissions based upon comparisons of entitlements under both the agreement and the award.

PN1712

THE SENIOR DEPUTY PRESIDENT: I'm against you on that particular point, that's all.

PN1713

MR BURKE: Yes, I'm just making - - -

PN1714

THE SENIOR DEPUTY PRESIDENT: Just so that you know where you stand.

PN1715

MR BURKE: Yes, your Honour. In terms of comments made by Mr Thompson that the union does have some agreements in particular in the fast food industry that buy out rates of pay, we certainly do. We have 170LJ agreements in the fast food industry. However I would point out in all of those that I can think of they do have public holiday rates. This agreement doesn't and certainly the ones I can recall also have casual rates of pay and they have a higher rate of pay for a casual, so if Mr Thompson wants to draw any comparison between the two I think that one reason we haven't been supportive of what's been put here is because in the other agreements we do we recognise that work on public holidays or the work done by casuals should attract higher rates of pay.

PN1716

In terms SDA3 it's put perhaps why would part timers be happy with no daily minimum. Well, perhaps some of them could be but the reason that there should be a minimum is that if it's less than three it could be any small amount. It could be an hour, could be half an hour and it maybe the only work that's being offered to employees. The award is a proper minimum, it's the one that needs to be tested against in this process, as against the suggestion that it would be a good idea if the employer could give 24 hours notice of a roster change, that could lead to the possibility of someone having a roster change every day and I don't think that's advisable under this agreement or under any proposal. Under any contract of employment there is mention of the employer taking I think reasonable endeavours to accommodate each employee's preferred hours and days, so it's only reasonable.

PN1717

It would be far better if the award provision was there, that they're given at least 14 days or 48 hours in an emergency, but not a continual basis being 24 hours each day. Mr Thompson made the suggestion that employees can work up to three public holidays under the agreement. I'm not sure that that's totally correct. It' s up to 18 hours for shop employees and up to 45 hours for meat employees, so I think that could be more than three public holidays, certainly for a meat employee as well and as I said, it's unfortunate the employer notes only now that there was an award provision in the public holidays clause that wasn't taken into consideration.

PN1718

THE SENIOR DEPUTY PRESIDENT: Clause 37, is it?

PN1719

MR BURKE: Yes, 38.7, yes. I think it - and the other point I'd make is that if the company is looking at an undertaking of the Commission it's an undertaking that it should be any full timer or part timer under the award.

PN1720

THE SENIOR DEPUTY PRESIDENT: Under the agreement.

PN1721

MR BURKE: Well, under the award the entitlement is for any full timer, any part timer who works five days a week. Under the agreement I was only making the example of an Easter Saturday position but under the award it could have been Easter Monday, it could have been Labour Day which would be a Monday. A part timer, for example, could work five days Tuesday to Saturday. Under the award they are entitled to an additional day for the Monday so we're not saying it only applies to week day employees, it applies to any employee certainly as full time and any part timer who works five days a week, so if the company is going to look at it, it should be for any employee who is in the same position under the award.

PN1722

What I'm looking for, your Honour, is Ms Palise in her evidence said that they weren't relying upon in MORGANS3, seven reasons to vote for the proposed agreement as a mechanism for explaining the agreement to the employees. I believe that that was her evidence.

PN1723

THE SENIOR DEPUTY PRESIDENT: But wasn't Mr Thompson's submission that they were?

PN1724

MR BURKE: Yes, that's right, your Honour.

PN1725

THE SENIOR DEPUTY PRESIDENT: Well, this is reply, Mr Burke.

PN1726

MR BURKE: I'm sorry, I can't find it, your Honour, but that was my recollection. But the other point to make is that that document was only put out I think on the day or the day before the vote and if that was the first time employees saw it they wouldn't have been given much notice as things such as existing casuals being converted to part time, to permanent employment and we wouldn't have thought they would have been given enough time then to consider how the agreement was going to affect them. I'm not sure if the company is backing away from its commitment now in the same document, MORGANS3, but if the proposed agreement is not approved, that they won't go to the award for those employees - - -

PN1727

THE SENIOR DEPUTY PRESIDENT: I didn't understand Mr Thompson to make any submissions about what happens if the agreement is not approved.

PN1728

MR BURKE: Well, I think he said that those on AWAs would revert to AWAs.

PN1729

THE SENIOR DEPUTY PRESIDENT: Well, that's the law.

PN1730

MR BURKE: Yes, your Honour, yes. We would have that it's not being put by the employer that if the agreement is not certified that the company is not going to honour what it put to people that if it wasn't approved that they wouldn't go back to the award and we'd hope that that's not the submission the company is making. We do still oppose the agreement being made for the reasons that we've outlined and we think if there are any undertakings they should be finalised as well but we certainly oppose the making of the agreement. If the Commission pleases.

PN1731

THE SENIOR DEPUTY PRESIDENT: Yes, thank you, Mr Burke. It's important that I make a decision in this matter today given that the termination of the agreement is back before me for the umpteenth time tomorrow and unless we have finality in relation to that and it's for that reason that I rule in running on
Mr Burke's submissions in relation to section 170LK(1), LK(2) and rule against him. In relation to section 170LK(7) and also LT(7), I'm of the view that the explanation of the terms of the agreement complied with the provisions of the Act. LK(7) requires that before the agreement is made the employer must take reasonable steps to ensure that the terms of the agreement are explained to all persons employed.

PN1732

On the evidence that's contained particularly in the company's statutory declarations, as expanded upon by Ms Palise, I'm satisfied that the employer took reasonable steps to ensure that the terms of the agreement were explained. Whether some employees didn't completely understand or whether there was some employees who didn't receive that explanation is not to the point. The requirement is that the employer take reasonable steps and reasonable steps were in my view taken. In relation to section 170LT(7), again having regard to the statutory declaration I'm satisfied that the steps taken were in ways that were appropriate having regard to the person's particular circumstances and needs.

PN1733

That brings me to the question of the no disadvantage test and I must say as I put to Mr Thompson that when I heard Mr Burke's submissions prior to lunch it seemed to me that there may have been some difficulties with the no disadvantage test but I think Mr Thompson has met those objections. The only error that
Mr Burke points to in the calculations that accompany the statutory declaration in support of the application are those that are identified in exhibit MORGANS4 and other than that Mr Burke accepts that the calculations are correct.

PN1734

Mr Burke points to the casual employees and draws a comparison between what they earn under the award and what permanent part time employees will earn under the agreement if it's certified and says that because casual employees are going to be converted permanent part timers that indicates a disadvantage. In my view that submission is misconceived, it is not comparing like with like. The agreement doesn't provide for the employment of casual employees. Any casual employees that will be employed by Morgan's or who will remain as employees of Morgan's will have their terms and conditions of employment regulated by the award.

PN1735

Accordingly the submission in relation to casual employees does not persuade me that the no disadvantage test has not been made. In relation to part to part time employees it seems to follow that if the calculations in the sheets for permanent full time employees are accurate on a pro rata basis they will be accurate for part time employees and merely have a diminution in earnings commensurate with the diminished number of hours that they work. I didn't understand Mr Burke to contend otherwise. No submission was made on the basis that a part time employee who doesn't work 38 hour weeks will be disadvantaged in any other way as against the award.

PN1736

Mr Burke seems to ignore clause 15 of the agreement relating to work parameters and that provides that there are certain hours beyond which and certain days beyond which employees can't be worked without incurring additional penalties. Within the work parameters the calculations have been made and demonstrate that there is no disadvantage as between the agreement and the award for employees who work within the parameters that the agreement requires them to work up to their maximum capacity under those parameters and accordingly it seems to me that there is an advantage if anything when one compares the agreement with the award.

PN1737

I accept Mr Thompson's submissions that the exhibits that Mr Burke presented today are a snapshot in time type exhibit that merely draws a comparison between a penalty that might be earned on a particular occasion with what will be earned for all occasions under the agreement. That is not the way in which the no disadvantage test should properly be applied. If I'm wrong about the no disadvantage test having been met, in my opinion certifying the agreement would not be contrary to the public interest and under section 170LT(3) the agreement is taken to pass the no disadvantage test. It seems to me that this employer has made strident efforts to come up with a certified agreement that meets the requirements of the Act and if I’m wrong about the no disadvantage test not actually being passed it will be deemed to have been passed because in my view it is in the public interest having regard to the nature of the work performed by these employees and the nature of the operations of the employer that this agreement be certified.

PN1738

Mr Thompson, you have indicated that you're prepared nevertheless to give an undertaking regarding the public holiday in clause 38.7 because that was an inadvertently omitted matter and that also I would ask that you confirm what you've undertaken to the casual employees to an undertaking to the Commission that current existing casual employees will not have their wages or their entitlements reduced if they convert to permanent employment. Do you need instructions on those two matters?

PN1739

MR THOMPSON: Yes, your Honour, the undertaking provided by the employer as their representative by me, would be that where - it may be that a mirror of clause 38 of the award in the form that is suitable to the particular arrangements of the certified agreement be provided.

PN1740

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1741

MR THOMPSON: That being that if an employee, for example, a Monday to Friday employee who wouldn't regularly work on a Saturday and Sunday but where there is a public holiday for example, Easter Sunday that falls on a Sunday, then they would receive an additional public holiday or day of annual leave. If I can confirm the words of the undertaking in writing to ensure that we can get them correct?

PN1742

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1743

MR THOMPSON: Secondly, that there has been an undertaking made to the casual employees that should the agreement be certified their average hourly earnings over the last four weeks shall not be reduced on an hour by hour basis and those confirmed to the Commission.

PN1744

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Well, having received those undertakings I will certify the agreement which will operate from today's date. I will see you gentlemen tomorrow no doubt, or probably. I will adjourn the Commission.

<ADJOURNED INDEFINITELY [4.37PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #SDA2 DOCUMENT FROM MORGAN'S WEBSITE PN1046
EXHIBIT #SDA3 COMPARISON OF AGREEMENT PN1320
EXHIBIT #SDA4 COMPARISON IN RATES OF PAY PN1361
EXHIBIT #SDA5 ROSTER COMPARISON PN1372
EXHIBIT #SDA6 DOCUMENT RE SEVEN DAY LEAVE PN1378
EXHIBIT #MORGANS4 COMPARISON BETWEEN A LOADED TEAM MEMBER 21 YEAR UNDER THE AWARD AND UNDER THE CERTIFIED AGREEMENT PN1552