AG2006/4505, Transcript of Proceedings [2006] AIRCTrans 831 (21 June 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 15200-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2006/4505

APPLICATION BY RADIO RENTALS LTD
s.170MH pre-reform Act - Application to terminate agreement (public interest)
(AG2006/4505)

ADELAIDE

2.17PM, THURSDAY, 08 JUNE 2006

PN1

MR A SHORT: I seek leave to appear for the applicant, Radio Rentals Limited.

PN2

MS S NACHIAPPAN: We don’t object, Commissioner. I appear on behalf of the AMWU.

PN3

THE SENIOR DEPUTY PRESIDENT: Mr Short, leave is granted on that basis.

PN4

MR SHORT: Thank you, sir. This is our application to terminate a pre-reform certified agreement. I have provided to your associate and to my learned friend the complete set, if you like, of the certified agreements, that is the 2002 agreement and the predecessor 1995 and 1997 certified agreements. I have provided those because they continue to have a life pursuant to clause A6 of the 2002 document.

PN5

The Commission, hopefully, has also been provided with, as has my learned friend, three authorities to which I will seek to make reference and our written submissions.

PN6

THE SENIOR DEPUTY PRESIDENT: Yes. I've been provided with that. I obviously have not had time to read that material as yet.

PN7

MR SHORT: No. This is, we would contend, not an unduly complicated matter and it's got a narrow range to be covered. The nominal expiry date of the agreement, sir - - -

PN8

THE SENIOR DEPUTY PRESIDENT: Just a moment, Mr Short. I'm reading furiously as you're talking to me. This is an application for termination of an agreement which is past its nominal expiry date?

PN9

MR SHORT: That is so.

PN10

THE SENIOR DEPUTY PRESIDENT: Are you saying to me that it's a validly certified agreement?

PN11

MR SHORT: Sorry?

PN12

THE SENIOR DEPUTY PRESIDENT: Are you saying to me then that it's a validly certified agreement?

PN13

MR SHORT: Yes.

PN14

THE SENIOR DEPUTY PRESIDENT: I see. Thank you.

PN15

MR SHORT: The application is brought under section 170MH of the pre-reform Act and that arises by reason of schedule 7 clause 2 of the Workplace Relations Act which preserves the operation of that provision in respect of the pre-reform certified agreement.

PN16

The underpinning award, sir, as specified in clause A4 of the 2002 agreement is the Federal Metal Industry Award 1984. As you will be aware, sir, under section 170MH(2), the Commission is obliged to take such steps as it considers appropriate to obtain the views of persons bound by the agreement about whether it should be terminated. Sir, it is the position that the union and the employees covered by the agreement have all been provided with a copy of the application to terminate the agreement.

PN17

If, having obtained the views of the persons bound by the agreement, the Commission considers it is not contrary to the public interest to terminate the agreement, then the Commission must, by order, terminate it. That arises from section 170MH (3). In this instance, it is our understanding that the employees, the subject of the agreement, do not wish to have the agreement terminated and the company's position is that it does wish to have the agreement terminated.

PN18

The relevant principles in respect of the application are indicated in two Full Bench decisions with which I expect you will be familiar, Castricum Bros and Kellogg Brown and Root and I've outlined the references to those in the written submissions. Before turning to those, if I tell you a little bit about the employees covered by the agreement and the nature of the applicant's business.

PN19

Radio Rentals deals in electrical and furniture goods and sells them to the public. It has some 18 stores, it has a head office and it has two warehouses. Overall it has some 425 employees. In respect of employees covered by the 2002 certified agreement, sir, there are 36 technical services employees and they work either out of the head office or as field services technicians. What they do, sir, is repair faults in electrical items so the customers are happy and the business continues to prosper. As I've indicated they are subject to the underpinning award as the relevant industrial base, absent the enterprise agreement.

PN20

Following the nominal expiry date of the 2002 agreement, sir, on 1 October 2004, lengthy negotiations have been conducted to see whether a replacement agreement could be arrived at. That culminated in a document being put to a vote on 5 May of this year. That document was rejected by the technical services employees and since that time the company is no longer pursuing a certified agreement. We understand that the employees are interested in pursuing a certified agreement, so we've recently been informed. The company does not wish to do so. It's had enough. My instructions, sir, are that the negotiations have been exhaustive and painstaking and it's over.

PN21

The company is not aware of any adverse impact on the public interest which would result from termination of the certified agreement. While it may not be of great moment, having regard to the provisions of the Act, the company's stance is that the certified agreement is restrictive in relation to its method of operation. There is, for example, agreement required if there's to be a change of hours or change of location and there are provisions about sign on and sign off time for the field services technicians whereby their working hours start, it seems, from home.

PN22

As to the relevant principles, sir, if I could invite your attention to paragraph 8 of the written submission. I have commenced at paragraph 7 in relation to the guidance that Castricum gives. It seems that the authorities, up until the time of that Full Commission decision, had a tendency on occasion to blur the interests of the employees with the interests of the public. The Full commission in Castricum and Kellogg Brown and Root appears to have set that right and indicated what are the principles that the Commission is to apply.

PN23

It is not contrary to the public interest to terminate an agreement on the basis that it wouldn’t assist the parties to reach a new agreement, all but it might lead to industrial action. There is no preference in the Act for one form of industrial regulation over another. There is no preference for collective enterprise bargaining over individual bargaining.

PN24

In respect of the potential for protected action to occur, the Act recognises that and it has mechanisms to deal with both protected action and to deal with unprotected industrial action. It is recognised by the Act that those are consequences that may follow. They do not relevantly impact on the public interest in respect of termination. I submit there's nothing controversial about those propositions.

PN25

As to Kellogg Brown and Root, sir, as you will be aware the Commission there recognised that the relevant test is based on the public interest alone and that is materially different to the interests of the negotiating parties. The views of persons bound by the agreement are relevant to the exercise of discretion if they shed light upon the effective termination of the public interest but don't get any independent weight. The notion of public interest was outlined, as I've indicated, in paragraph 9 of the written submission so it really is a matter of looking to what might affect the public as a whole and the termination of this agreement, which binds 36 technical services employees is, in our respectful submission, going to have no impact on the public interest, as outlined in Kellogg Brown and Root, at all.

PN26

As to the maintenance of proper industrial standards, there being an underpinning award, it is clear that proper industrial standards will be maintained and indeed, even if there were not, following the Work Choices reforms, it is clear that there would now be minimum guarantees that would maintain in a relevant sense those minimum standards. It is clear that the notion of public interest is distinct from the interests of the parties.

PN27

I have at paragraph 10, sir, outlined some further contentions that we would maintain are supported by the authorities so the effect of advantage in one party over another in negotiations arising out of termination is not a matter that impacts on the public interest. Here, sir, the position is that the union would like to bargain but we do not wish to.

PN28

There is no inherent right to be a party to a certified agreement. It's a basic premise that a certified agreement is intended to exist for its nominal term and not indefinitely. I won't repeat all of the other contentions in paragraph 10, sir, but again I suggest that they are not controversial. Finally, sir, I would seek to make reference to a recent decision of yours, one that - - -

PN29

THE SENIOR DEPUTY PRESIDENT: That's normally a good move if I can remember it, Mr Short.

PN30

MR SHORT: I've handed up a copy just in case you can't, but I recognise, sir, that's it's usually a good move to rely on the presiding member's own reasoning. In this case, fortunately, it's absolutely right and we adopt it wholeheartedly. In TRW and Electronics Overseas Inc Enterprise Agreement, you recognised at paragraph 39:

PN31

There's no obligation of the Act to bargain in good faith and indeed there's no obligation to bargain at all under the Act.

PN32

THE SENIOR DEPUTY PRESIDENT: Under the then existing Act.

PN33

MR SHORT: Yes. If a party did not wish to negotiate an agreement - - -

PN34

THE SENIOR DEPUTY PRESIDENT: Under the legislation though as it existed at that time.

PN35

MR SHORT: Yes. There is no obligation now or then to reach an agreement to replace an expired agreement. Radio Rentals does not wish to enter into a certified agreement, it may be subject to protected action. The Act recognises that. It does not require us to negotiate, nor does it require us to maintain the expired certified agreement in place. We are entitled to exercise a right to apply for termination and we're entitled to say we do not wish to enter into a new certified agreement. Those actions could not be considered contrary to the public interest.

PN36

At paragraph 45 of the decision, sir, you recognised in that matter that while there was no doubt employees were likely to suffer a reduction in remuneration as a result of termination, that did not fall within the concept of public interest considerations. That, sir, is consistent with the Full Bench's approach of differentiating between the public interest and the interests of parties bound by the certified agreement.

PN37

For those reasons, we would submit that termination of the certified agreement is appropriate. I don't know if there is any dispute about any of the factual matters that I have raised. I'm happy to call evidence in relation to them if need be but I submit that I would expect that as to the factual matters, there would be no dispute. As to the legal consequences flowing from that, my learned friend may have something to say. I'm just looking for an effective utilisation of time here, sir. Unless, sir, you require anything further from me, then that is our position and in respect of calling evidence, perhaps if I hear from my learned friend before I seek to take up your time, if there's no need to do so.

PN38

THE SENIOR DEPUTY PRESIDENT: Mr Short, there is just one other aspect that I seek your comment on. It's clear that in looking at the previous agreements there were some provisions of those previous agreements that would have precluded certification of this agreement.

PN39

MR SHORT: Would have precluded?

PN40

THE SENIOR DEPUTY PRESIDENT: Certification of this agreement had an application for certification been made after the High Court Electrolux decision. A number of those aspects have been, if you like, remedied by the provisions of this current agreement, or are automatically remedied by virtue of the Electrolux legislative changes. One particular aspect, though, causes me some degree of difficulty, and that goes to clause C3.2. C3.1 is, as I would understand it, in effect removed by virtue of the post Electrolux changes.

PN41

MR SHORT: C3.1, yes, I see. C3.1, the first sentence obviously is no difficulty because that was ceasing a practice.

PN42

THE SENIOR DEPUTY PRESIDENT: It's the payroll deductions part that gets erased, if you like, in a mandatory sense by the post Electrolux legislative changes.

PN43

MR SHORT: Yes.

PN44

THE SENIOR DEPUTY PRESIDENT: C3.2 though, what do you say to me is the effect of that provision and to what extent does it potentially impact on any consideration of this agreement?

PN45

MR SHORT: I would suggest, sir, that it does not impact on the application to terminate the agreement on the basis that the agreement has been certified. Whether or not there may be arguments as to whether it should have been certified, the fact is it was and we seek to terminate it. We are not agitating as an issue in these proceedings whether or not it was properly capable of being certified, rather, for this application we accept it was certified and we want to end it and this is the most appropriate method to do so. Is that an answer to your question, sir?

PN46

THE SENIOR DEPUTY PRESIDENT: It is. Can I just take that a step further. Correctly understanding your position then that clause could become an issue in the event that your application was not approved.

PN47

MR SHORT: I haven't turned my mind to it, sir, but I can turn my mind to it and I have no instructions to do that.

PN48

THE SENIOR DEPUTY PRESIDENT: Maybe we should leave it there, yes. Thank you. Ms Nachiappan.

PN49

MS NACHIAPPAN: Thank you, your Honour. Prior to commencing I note that my learned friend advised that he has his witnesses present. My understanding was today would be treated as a directions for the hearing and a timetable would be set. As the union's and we've not got our witnesses prepared for a hearing in this matter.

PN50

THE SENIOR DEPUTY PRESIDENT: I see. Perhaps could you outline for me the basis of the case that you propose to present in this matter?

PN51

MS NACHIAPPAN: Yes, I certainly can outline the background to this application and our negotiation process with the employer.

PN52

THE SENIOR DEPUTY PRESIDENT: What I'm particularly focused on are the criteria that I need to take into account that are set out in section 170MH of the pre-reform Act.

PN53

MS NACHIAPPAN: Termination under the public interest. Yes, your Honour, I agree with my friend that this matter certainly has got a long and complicated history. If I may, let me quickly take through the Commission today on the history of this matter just briefly as it does pertain to the termination of the agreement and the impact it will have. Also, allow me to highlight that it is the role of the Commission that on receiving the application the Commission must take steps as it considers appropriate to seek the views of persons bound by the agreement which is namely the workers. The history of this matter does impact on the view of the workers.

PN54

This matter, your Honour, has a complicated and protracted history. On
15 May 2004 the union, AMWU, lodged its log of claims. The union sought an agreement with Radio Rentals in respect of the technical services area pursuant to section 170LG of the Workplace Relations Act '96. There was a series of meetings conducted and there was report back to members in this instance.

PN55

There were four identified areas of non-agreement between the parties, namely redundancy, KPI and performance indicators, minimum standards by the employer and the issue of remuneration. There has been a series of Federal Court applications by the employer and the union. I have elaborated details is the Commission does require. There is one application which is still outstanding which is made by the employer Radio Rentals on 8 November 2005, Radio Rentals Limited v AMWU. Brad Jackson, who was one of the union officials present here with me, Vin Evion who is our shop steward, Anthony Walker an employee and 11 other named employees were named in the proceedings. The action was brought by the company under section 170NC of the Workplace Relations Act.

PN56

The employer alleges that the AMWU and others named, engaged in industrial action in order to cause the employer Radio Rentals into an enterprise agreement.
The applicant employer seeks orders of permanent and interlocutory injunctions, section 170NG and penalties under section 170NA. After a series of directions hearings this matter has now been set down for hearing on 21 October '06 before Lander J.

PN57

In February and March 2006, the union made an application to the AIRC for a conciliation conference due to the inability of the parties to reach agreement and the escalation of dispute. A series of conciliation conferences were conducted by Commissioner Bartel. The outcome of the conference was productive in the sense that the issue of dispute was narrowed down, namely the agreement arrived by the parties after the process of conciliation conference was that the union agreed to reduce the duration of agreement from its initial request of three years to one year. The employer agreed to increase the wage to 2½ per cent and the union has agreed to the KPI and minimum standards proposed by the employer.

PN58

The agreement was put to membership in April 2006. The agreement went up with the union endorsement. Membership rejected the agreement as there was the issue of actual practical implementation of KPI, which the membership viewed to be problematic. The understanding between the parties is that the Federal Court application will be discontinued if agreement was voted in and this was submitted to Lander J in one of the Federal Court direction proceedings.

PN59

We seek the Commission to note that the union may not reflect the views of the membership. Cancellation of this agreement requests the Commission to seek the views of persons bound. The fact that the union views may not reflect that of membership is an important consideration in the termination of today's agreement. Hence the issue of dispute between the parties has been narrowed from numerous issues to one, after Commissioner Bartel's series of conciliation conferences, namely, the practical implementation of KPI and the minimum standards provision.

PN60

The employer is being represented by EMA Legal at the Federal court application. EMA consultants are responsible for the EBA negotiations and the union has had numerous communications with the EMA consultant on the basis of EBA negotiations. This includes one which was conducted yesterday by myself with Rod Reid who conducts EMA negotiations and advise that the door to enterprise agreement is still open and that the employer will seek to hear from the union as to further views. Now Minter Ellison is handling the termination agreement. The union is concerned that at times they have problems in communication channels between the employer in order to seek their views and opinion concretely and correctly. This is perhaps due to the various representations.

PN61

The employer, through EMA consultants have indicated that the door to EBA negotiations is still open. The employer has indicated that membership put their concerns about EBA, namely the one issue which is still the outstanding matter, ideally the practical implementation of KPI in written format and they will consider putting a second agreement to membership. Senior officials of the union, including assistant secretary John Gresti and state secretary John Camillo are committed to address membership about their concerns and this has been highlighted to EMA consultant as part of the EBA negotiations about their concerns and make all endeavours to arrive at an agreement.

PN62

I've indicated that the only issue of contention at this point is the implementation of KPI. The union is in the process of putting a proposal to the employer about how the actual implementation of KPI can be improved to the satisfaction of the workers. Senior officials of the union, including John Gresti and Brad Jackson have had a series of conversations with the employer's representatives to resolve this matter.

PN63

Due to the complexity and protracted history of this matter, the workforce is disillusioned and that's why we do stress that the union views may not reflect that of the workforce and this is an important feature in the termination of the 2002 agreement Senior union officials are in the process of addressing the workforce and their concerns in a series of meetings. We anticipate that we should be able to put new agreement to the workforce in the near future.

PN64

Termination of the current agreement will limit the union's endeavours to reach an agreement. Workers will suffer serious loss of entitlements, including wage and redundancy. The union is concerned that it will change the balance of bargaining relationship between the parties and contribute towards escalation of the dispute. Please note I also seek to highlight to the Commission that the termination application refers to the Federal Metals Award in 1984. The current Federal Metals Award is 1998.

PN65

THE SENIOR DEPUTY PRESIDENT: Yes, I understand what you say but I'm not quite sure what I should make of that.

PN66

MS NACHIAPPAN: Yes, well, it's just a point which I have observed from the application. They refer to the agreement - or the application to terminate refers to the 1984 Federal Metals Award, although the - - -

PN67

THE SENIOR DEPUTY PRESIDENT: The agreement refers to the 1984 award.

PN68

MS NACHIAPPAN: The agreement refers to the 1984. I must say that the agreement is dated 2002 and I'm not sure why it would have referred to the 1984 agreement.

PN69

THE SENIOR DEPUTY PRESIDENT: You see, I'm the wrong one to ask because I didn't write it.

PN70

MS NACHIAPPAN: I know, your Honour, but it's just a point of observation that that's what it refers and perhaps the termination application needs to be amended to reflect the 1998 Federal Metals Award because the '98 Metals Award would have been out by the time the agreement was certified.

PN71

THE SENIOR DEPUTY PRESIDENT: Can I take you then to section 170MH and whilst I appreciate two particular aspects of the information that you've given me, the first is that the union's views may not reflect the views of all of the employees involved and to that extent I understand the union to be sort of pushing for an agreement - - -

PN72

MS NACHIAPPAN: Yes, we are.

PN73

THE SENIOR DEPUTY PRESIDENT: - - - whereas - and I'm reading between the lines such that I understand you to be suggesting that a significant number of employees might be so disillusioned with the process, they may not be seeking an agreement. Is that a fair way of summarising that concern?

PN74

MS NACHIAPPAN: No. At this stage I must say that when - I said we had sought feedback from membership as a whole, and what we are getting is - the feedback we're getting is there is a finetuning of the KPI and minimum standards provision. That's the only issue that's outstanding which the parties have not come to an agreement.

PN75

THE SENIOR DEPUTY PRESIDENT: How do you say that the views of the union may not be consistent with those of the employees?

PN76

MS NACHIAPPAN: Because, your Honour, when the agreement went up for voting it was certainly the union's view that, you know, this is not the ideal agreement but it's the best under the circumstances.

PN77

THE SENIOR DEPUTY PRESIDENT: You're recommending that it be adopted?

PN78

MS NACHIAPPAN: Yes, we certainly endorse that and we were aware of the disillusionment and the views of the workforce, but it was when it was voted down and bearing in mind the termination agreement, the union thinks that it's certainly important that it's highlighted to the Commission that this has occurred and once again the Commission needs to put a set of process in order to seek the views of the workers in this instance.

PN79

THE SENIOR DEPUTY PRESIDENT: I see. The second issue that I particularly understand you to be telling me is that the union is still endeavouring to reach an agreement. I've got some inconsistent information here. I've got the union saying it understands that an agreement is quite a possibility, whereas Mr Short has told me that the employer is no longer interested in pursuing an agreement.

PN80

MS NACHIAPPAN: Yes, your Honour.

PN81

THE SENIOR DEPUTY PRESIDENT: I'm not sure what I make of all of that at this stage. I'm not sure that I need to make anything of it because the issue that I'm particularly seeking clarification from you about, goes to section 170MH. As I understand what you put to me, there's no argument that the employer is entitled to make this application and I also understand there is no argument that the parties agree that the Commission is obligated to ascertain the views of the persons bound by the agreement in a fashion which I consider to be appropriate.

PN82

The issue that I'm wanting some clarification on is the union's position in relation to the public interest. In that regard I'm seeking some indication of the basis upon which you say I ought to even entertain a refusal to terminate the agreement.

PN83

MS NACHIAPPAN: Yes, your Honour, we are aware of the case law in this instance and it is our view that the union certainly thinks that termination of this agreement is not the right move. As for the issue of public interest, as I've indicated to the Commission it is my understanding that today was a directions process to set the timetable and hence the union will be allowed the opportunity of calling its witnesses at a later stage for a full hearing.

PN84

THE SENIOR DEPUTY PRESIDENT: Except that, unless you can establish to me some basis upon which I could consider or entertain a refusal of the employer's application, then there wouldn't seem to be much point in having any further witness evidence or another hearing.

PN85

MS NACHIAPPAN: I understand, your Honour.

PN86

THE SENIOR DEPUTY PRESIDENT: If you can establish that to me, that is that there are grounds upon which I might consider a refusal to terminate the agreement, then it would logically follow that I give you the opportunity to substantiate those grounds. The issue that I initially need you to address for me is the question of upon what basis could I refuse Mr Short's application. I just need a basis at this stage. You don't need to substantiate it, but I need a basis upon which I might even consider refusing the application.

PN87

MS NACHIAPPAN: Rather than the issue of public interest, the issue of a reduction in entitlement is something which past Commissions have considered in case law. Whilst the issue of reduction in wages of the employee has been held by the Commission on numerous occasions, that the parties' interest is one which is different to that of the public interest, the issue of reduction in overall entitlement, including provisions such as redundancy, is something which the Commissions have given weight to in the past.

PN88

In this instance, from the existing agreement if it was to revert back to the Federal Metals Award, and here I refer to the Federal Metals of 1998 from what we base our comparisons, we note that the Federal Metals Award has got a redundancy clause capped at 52 weeks with accrual of three weeks per year, whilst the agreement of 2002 refers to four weeks accrual and uncapped redundancy provisions. This is something case law has given weight to in the past, although I must be allowed some time to clarify exactly which one, your Honour.

PN89

THE SENIOR DEPUTY PRESIDENT: Yes, well, you will need to do that because my recollection of the Bass Strait, the Kellogg Brown and Root decision of December 2004, is that in that decision the Commission confirmed the position that it had arrived at previously, such that the reduction of the employment benefits as a consequence of the termination of the agreement was not a factor that could be considered in the context of public interest, particularly where there existed an underpinning award. That approach appears to be consistent with that adopted on numerous occasions in the past and applied, as Mr Short will probably recall, in instances where termination of AWAs has been sought.

PN90

I recall a Full Commission disagreeing with me on that very issue in relation to a Conroys Meats matter. I don't want to deprive you of the opportunity to mount an argument to the extent that section 170MH of the pre-reform Act should be used to refuse the application in this instance, but I do need to put you very clearly on notice that I struggle with that argument insofar as it appears to be founded simply on a reduction in benefits.

PN91

MS NACHIAPPAN: I understand, your Honour, but what of the issue of seeking the workforce views?

PN92

THE SENIOR DEPUTY PRESIDENT: In that regard, section 170MH(2) requires that I must take such steps as I consider appropriate to obtain the views of persons bound by the agreement about whether it should be terminated. I'm very conscious of the extent to which you've foreshadowed to me that the views of the union may not be the same as those of the employees covered. I don't want to deprive those employees of the opportunity to present a view, but to the extent that that view is simply a concern about a reduction in benefits, it's not going to take us very far.

PN93

MS NACHIAPPAN: The fact that it's a reduction in benefits is the union's submission. As I said, the workforce is reasonably disillusioned and it's not a position which the union is proud of, but there is difficulty in linking and discussing issues with this workforce because of the protracted nature of the dispute and the various other implications.

PN94

If I may mention to the Commission, your Honour, today we have filed a disputes settlement application seeking the Commission's assistance in resolving this dispute because it is our view that - of course it's not related to today's termination application on its own but the entirety of this process has gone on long enough and we are seeking the guidance and the assistance of your Honour in attempting to resolve this dispute.

PN95

THE SENIOR DEPUTY PRESIDENT: Is there any other public interest argument that you intend to put to me other than a reduction in benefits?

PN96

MS NACHIAPPAN: Other than the reduction in benefits, what I can refer to is the removal of balance of negotiation between the parties which, in the short term, I suppose the union's primary concern is the reduction in benefits, namely our wages which will be reduced by about 4 or 5 dollars every hour if it reverts from the 2002 agreement to the Federal Metals, and the reduction in redundancy. Of bigger concern is the escalation of the entirety of this dispute. It is a workforce with 36 workers in the technical services area and this certainly can't be beneficial to the employer's business and perhaps the industry as a whole in this instance.

PN97

THE SENIOR DEPUTY PRESIDENT: That's a matter for the employer to determine.

PN98

MS NACHIAPPAN: I understand.

PN99

THE SENIOR DEPUTY PRESIDENT: I've no doubt that Mr Short has advised the employer about the upsides and the downsides of this application. It's not a matter that the Commission has generally found to be part of this concept of public interest.

PN100

MS NACHIAPPAN: I understand, your Honour, but overall the view of this dispute, as I've indicated, the union has had difficulty in seeking appropriate directions as to whom of the employer representatives to be communicated with and which view of the employer representative do we uphold. As I've indicated, we've had discussions as late as late yesterday evening with the EMA consultants who have indicated that negotiation is still certainly on and to put a view and hence, part of the problem in this matter has been communication with the various employer representatives.

PN101

THE SENIOR DEPUTY PRESIDENT: I see. Just to summarise where we're at, what you're wanting to do is to, in effect, have me list the matter for a further hearing where presumably all those employees who want to come along and be heard in relation to the matter, will have that opportunity and that you propose, notwithstanding the authorities that line up fairly heavily against you, to argue that the agreement should not be terminated because of the detrimental impact that would have on employees' take home pay as a result of the application of award provisions. Finally, I read into what you're saying to me the hope that sometime between now and when that next hearing occurs, you might be able to strike a deal.

PN102

MS NACHIAPPAN: What we are seeking, perhaps ideally, would be - as I've indicated, your Honour, we have filed a disputes settlement application this afternoon to the Commission seeking your Honour's assistance in resolving this dispute. If allowed, what we may seek is an adjournment of these proceedings which will allow us to ascertain the workforce and where they are at. If it is the workforce concrete view that the agreement can be terminated and it doesn't worry them, then I suppose that's the move forward but at this stage we really have not - have had conflicting messages from the workforce. We do seek that if the agreement is to be terminated, then the union be allowed a full hearing where the workforce will be allowed to present its views and if at all possible, an adjournment of the proceedings in order to allow the disputes settlement provisions to take effect.

PN103

THE SENIOR DEPUTY PRESIDENT: What's the matter that you say is in dispute?

PN104

MS NACHIAPPAN: What is in dispute is the issue of methodology of managing the KPI. There was a series of conciliation - - -

PN105

THE SENIOR DEPUTY PRESIDENT: Is it a dispute about the provisions of this particular agreement, the KPI arrangement, or is it a dispute about what should be written into the next version of the agreement?

PN106

MS NACHIAPPAN: The KPI is in the next version of agreement. This agreement does have a renegotiation clause and it refers to renegotiation within three months of expiry and that's what the union instigated. The dispute is essentially about how the KPI method is to be managed.

PN107

THE SENIOR DEPUTY PRESIDENT: Yes, all right. Thank you. Mr Short, I would be happy to hear you respond to the union's submissions but I do need to foreshadow to you I've got a proposition for you too.

PN108

MR SHORT: Perhaps if I hear the proposition.

PN109

THE SENIOR DEPUTY PRESIDENT: Mr Short, the suggestion that I have, and it's simply a suggestion at this stage, is that I would list the matter for either next Tuesday afternoon or next Thursday afternoon and that I would produce for all the parties at some stage later today or early tomorrow a brief statement. That statement would reflect in general terms the three issues that I just sought to clarify with the union in this matter, and that that statement would ideally be published or made available to employees so that those employees who wished to could come along and present their views next Tuesday or next Thursday, but they would do so knowing full well that the weight of authorities in relation to this matter indicates that the issue of an advantage or a disadvantage to either or both parties has not of recent years been found to be a component of the public interest test which is inherent in section 170MH.

PN110

Whether that has any impact on the views of those employees or their desire to come along to the Commission, I don't know. Whether it has any possible impact on the views of the employer and of the employees in relation to the possibility of an agreement, I don't know either, but it does seem to me to be an approach which is consistent with that set out in section 170MH(2) and to preserve the rights of all parties to argue whatever it is they want to argue to me next week. As I said, it's simply a proposition at this stage. If you want to confer with your client before responding to that proposition I'm happy for that to occur.

PN111

MR SHORT: Just briefly, that's probably the appropriate course. Thank you, sir. We might just step outside for a moment.

PN112

THE SENIOR DEPUTY PRESIDENT: You may, so long as you come back at some stage.

PN113

MR SHORT: We promise we will, sir.

<OFF THE RECORD

PN114

MR SHORT: Thank you for that time, sir, and what I would seek to do is persuade you that the matter can be dealt with today and obviously, if that doesn't find favour, then the suggestion you've raised is a sensible one. If I could just put to you some brief points in respect of proceeding with the matter today.

PN115

First, in relation to the union's understanding, I am a little concerned because I had a discussion with my learned friend on Monday in this Commission about the process to be followed and my understanding was that I made it clear that the union should be prepared to deal with a substantive hearing. I am quite surprised to hear the suggestion that there is some lack of preparedness.

PN116

As to the underpinning award, whether it's '84 or '98, what we're, I think, all clear about is that the Federal Metal Industry Award underpins the employment of the relevant workers. As to section 170MH(2), sir - - -

PN117

THE SENIOR DEPUTY PRESIDENT: Just as a matter of interest, before you leave the issue of the award, Mr Short, how does Radio Rentals achieve respondency under that award?

PN118

MR SHORT: I haven't investigated that, sir.

PN119

THE SENIOR DEPUTY PRESIDENT: All right. Thank you.

PN120

MR SHORT: I haven't looked into it. I've raised it because the award recognises that it can only apply to people who are subject to that award, so if they're not a respondent to it, then I suppose the document is meaningless because it doesn't actually apply to anyone.

PN121

THE SENIOR DEPUTY PRESIDENT: We'll come back to that if we need to.

PN122

MR SHORT: Then, I suppose you would obtaining the views of no one because no one would be bound by it. No one is advocating that approach and it need not trouble us. At to 170MH(2), sir, I recognise the provision imposes an obligation to take such steps as you consider appropriate. In this instance you sent out the listing notice indicating that there needed to be workers represented. The union is here, as we understand it, representing the workers and you've heard from them but they oppose termination of the agreement.

PN123

THE SENIOR DEPUTY PRESIDENT: I've also heard the union has a concern that its views may not be consistent with those of all of the employees.

PN124

MR SHORT: What we don't know, what you're not hearing is in respect of termination, whether that reflects their views. The union is saying it opposes termination on behalf of those employees. If there's some different view, then presumably, at its highest, if it's different, well, they don't oppose termination. That's fine. Alternatively, it's a consistent view that the employees oppose termination in their own right. That's exactly the same as the union's position and that's the position that we've related to the Commission as what we understand the relevant workers' attitude to be, namely, they oppose it.

PN125

That takes you no further, sir. You are informed that there's opposition to the application. What you rightly then sought, having obtained that information, is to move onto well, the public interest element. What you've rightly identified is that the authorities are against the union's propositions.

PN126

Sir, to hear that people oppose the application , that's nothing to the information you already have because you are already informed that persons bound by the agreement oppose the termination. You have the information which is appropriate under subsection (2). In our submission, the Commission can and ought proceed to consider and determine this matter by reference to subsection (3).

PN127

What has been advanced in that respect, as I apprehend it, is first, a loss of benefits under the certified agreement and sir, your reference to the Kellogg Brown and Root decision was correct. Your memory is better than my research is, but at paragraph 46 of that decision, sir, the Full Bench said, and I quote:

PN128

It may safely be assumed that the termination of a certified agreement carrying with it the loss of significant benefits is not itself contrary to the public interest.

PN129

As you are aware, sir, and I have put to you the following - sorry, prior to those Full Commission decisions, some members of the Commission were confusing public interest with interests of employees. That has been set to right by those Full Bench decisions and correctly applied by you and your fellow brethren since that time.

PN130

What's also been put to you, sir, was that the union is seeking to negotiate an agreement. Well, let me make it clear, I think again, the company does not wish to pursue an agreement. What has been indicated to the union is, if employees want to put something, they can put it but we are not interested in pursuing an agreement. We can't stop people putting something to us and we won't, but we're not pursuing an agreement. I trust that is clear.

PN131

It would be my submission that that wouldn't matter to our application for your consideration under subsection (3), as you have rightly indicated. We're entitled to terminate. Whether that impacts on the bargaining positions of the parties is not a barrier or a relevant consideration, except insofar as it impacts on the public interest and there is nothing, nothing that has been raised that could enliven a public interest issue such as to warrant delay in termination of the agreement. We see that as seeking a tactical advantage only to cause delay. We are not attracted to it.

PN132

It was also suggested that there may be escalation of - I'll put it generically, differences between the parties. There might be industrial action. The authorities have clearly dealt with that already and recognise that the Act contemplates protected action might be taken, unprotected action might be available. The Act has sanctions and procedures for dealing with both of those courses. That is no barrier to termination. It is not a relevant ground of opposition. It is not relevant to the public interest.

PN133

It was also put to you, sir, that a dispute had been lodged this afternoon to deal with, as I understood it, the wording of the proposed agreement. Now, I have not seen that dispute notice but it is my submission that that could have no bearing on subsection (3). Whether or not there's a dispute about negotiation of a potential agreement has nothing to do with our right or the Commission's considerations under subsection (3) regarding termination.

PN134

For those reasons, sir, it is my submission that the appropriate and better course is to proceed to deal with the application now and on the material that is before you, sir, it is my submission that it is inevitable and appropriate that the agreement should be terminated at this time. Those are my propositions, sir.

PN135

THE SENIOR DEPUTY PRESIDENT: Mr Short, you may well be right, however, from an abundance of caution I'm inclined toward giving the persons bound by this agreement the opportunity to outline their views about whether or not the agreement should be terminated. I must say I'm fortified in that view by Ms Nachiappan's concern that the union may not have a full grasp of the views of the various employees involved. On that basis I am inclined toward listing the matter for next week. I don't want there to be any doubt on the part of the employer in this matter that I will take into account all of the material that you've provided to me. You need not, once again, repeat all those iterations.

PN136

MR SHORT: No.

PN137

THE SENIOR DEPUTY PRESIDENT: At this stage I would expect the union and the employees to have the initial task of identifying to me what particular public interest considerations are relevant pursuant to section 170MH(3) at that hearing. If in the course of discussions with employees and members between now and when that matter is to be held, the union reaches a conclusion that it is not anxious to pursue this particular line of argument, then I would expect
Ms Nachiappan to advise me of that and I would, on the basis of the submissions that you've already made, then terminate the agreement with effect from that particular day.

PN138

In terms of the application made pursuant to the agreement dispute settling procedure, I can advise that if that matter is referred to me, I don't intend to action that particular matter until such time as I've determined a position in relation to the section 170MH application. If I resolve that the agreement ought not be terminated, then it is incumbent upon me to act under the provisions of clause B.1 of the existing agreement. On that basis, does the employer have a particular preference for earlier or later in next week?

PN139

MR SHORT: Earlier.

PN140

THE SENIOR DEPUTY PRESIDENT: All right. Thank you. Ms Nachiappan, just to confirm, I intend to produce a statement and provide it to the parties which might assist you and indeed the employees. Should you or the employees bound by the agreement wish to pursue an argument that termination of the agreement would be contrary to the public interest, then I could only urge you to look very carefully at some of those very well established authorities. I would add to the authorities that Mr Short has referred you to, the decision of Munroe J in Joy Manufacturing. If you will bear with me for one moment - - -

PN141

MR SHORT: It's referred to in your decision, I think, sir.

PN142

THE SENIOR DEPUTY PRESIDENT: It probably is. Yes, it's referred to in that decision of TRW Space and Electronics. Munroe J sets out fairly clearly his understanding of the concept of public interest as it relates to section 170MH. So you ought be under no illusions that the weight of authorities dictates that I not take into account the competing interests of what Munroe J calls the industrial protagonists, nor indeed the extent to which termination of the agreement would drop back or result in a return to the relevant underpinning award. Are you happy with a hearing to that effect on say Tuesday afternoon?

PN143

MS NACHIAPPAN: Tuesday afternoon at what time, your Honour?

PN144

THE SENIOR DEPUTY PRESIDENT: 2 o'clock.

PN145

MS NACHIAPPAN: 2 o'clock on Tuesday, that should be convenient. The only concern here is, your Honour, you did state that you will issue a statement to the workers asking them to attend, if interested, the hearing on Tuesday.

PN146

THE SENIOR DEPUTY PRESIDENT: I'm simply advising of the hearing and the issues that will be taken into account in that hearing and I'll make sure that it is forwarded out to the union and to the employer this afternoon.

PN147

MS NACHIAPPAN: Will the Commission entertain a postal ballot to ascertain the views of the workers because it's our concern that with the mental state of the workforce, they would highly likely not come in for that hearing.

PN148

THE SENIOR DEPUTY PRESIDENT: Ms Nachiappan, I need to keep stressing to you, if you can demonstrate to me that the Act requires that I take into account the competing views of those industrial protagonists, then it might make sense to consider a ballot, but the blunt reality is that in the absence of being able to establish that obligation, a ballot would make no sense at all. See, section 170MH is not worded so as to rely upon a majority view in favour of retention of the agreement. The presumption is that the agreement will be terminated in these circumstances unless the Commission is satisfied that termination will be contrary to the public interest.

PN149

MS NACHIAPPAN: I understand, sir.

PN150

THE SENIOR DEPUTY PRESIDENT: I don't want you to leave this hearing under any delusion that it's simply a question of ascertaining the majority view.

PN151

MS NACHIAPPAN: I understand that.

PN152

THE SENIOR DEPUTY PRESIDENT: The majority view is relevant to the formation of a new agreement but not to the termination of this particular agreement in these circumstances. Does that help you?

PN153

MS NACHIAPPAN: Yes, it does.

PN154

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Short, there is one other matter that occurs to me. Could I prevail upon you to advise me on Tuesday of the basis upon which Radio Rentals would achieve respondency to the Federal Metal Industry Award in the event that the agreement was terminated. In an ideal world I would ask you to advise the union of that before the hearing too.

PN155

MR SHORT: I'll see what I can find out, sir.

PN156

THE SENIOR DEPUTY PRESIDENT: It will either be by virtue of named respondency or by membership of an appropriate organisation.

PN157

MR SHORT: Must be one or the other.

PN158

THE SENIOR DEPUTY PRESIDENT: Yes. I'll adjourn the matter until 2 pm Tuesday and again confirm to the parties that I'll endeavour to get a statement out to them this afternoon. I'll adjourn the matter accordingly.

<ADJOURNED UNTIL TUESDAY 13 JUNE 2006 [3.20PM]