AG2006/1326, Transcript of Proceedings [2006] AIRCTrans 941 (3 August 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 15434-1

VICE PRESIDENT WATSON

AG2006/1326

APPLICATION BY UNIVERSITY OF MELBOURNE
s.170MH pre-reform Act - Application to terminate agreement (public interest)
(AG2006/1326)

MELBOURNE

10.35AM, THURSDAY, 20 JULY 2006

PN1

MR N RUSKIN: I seek leave to appear on behalf of the University of Melbourne.

PN2

MR M BJORK-BILLINGS: I appear for the National Tertiary Education Union.

PN3

MR S MCKAY: I am from the CEPU Electrical Division.

PN4

THE VICE PRESIDENT: Thank you.

PN5

MR RUSKIN: Sorry your Honour, I should have said I appear with MR N WAUGH from the university. Thank you.

PN6

THE VICE PRESIDENT: Yes thank you, Mr Ruskin. My apologies for the interrupted start time this morning. If we had any notice of the evacuation we would have tried to contact the parties in advance but any event we're here. Mr Ruskin?

PN7

MR RUSKIN: Thank you, your Honour. On behalf of the University of Melbourne I, the application seeks to terminate the University of Melbourne Enterprise Agreement 2003. I would like to, in assisting the Commission today, hand up some short submissions to which I will talk to.

EXHIBIT #R1 SUBMISSIONS OF THE UNIVERSITY OF MELBOURNE

PN8

MR RUSKIN: I will also, your Honour, at this point hand up some decisions that are referred to in my submissions, a bundle of decisions which the Commission be aware.

PN9

THE VICE PRESIDENT: I don't think we need to mark those.

PN10

MR RUSKIN: Thank you. The application, I go to part 2 of my submission, is dealt with under the current version of the Workplace Relations Act which enables the Commission to hear and determine applications for the termination of pre-reform agreements using section 170MH and that part of the Act I set out there, which continues the operation of 170MH and section 170MH of the under amended Act just to refresh our memories, provides that after the nominal expiry date of a certified agreement the employer, in this case, may apply to the Commission to have the agreement terminated.

PN11

Section, subsection 2 provides the Commission must take such steps as it considers appropriate to obtain the views of persons bound by the agreement about whether it should be terminated and then thirdly, if after complying with subsection 2, that is taking such steps as it considers appropriate and if it's not contrary to the public interest it must terminate the agreement, take effect from today's date ….. your Honour may.

PN12

THE VICE PRESIDENT: I was going to ask you about subsection 2, Mr Ruskin.

PN13

MR RUSKIN: Yes.

PN14

THE VICE PRESIDENT: What do you say are the appropriate steps the Commission should take in these circumstances?

PN15

MR RUSKIN: Well I deal with that in paragraph 5 of my submissions, about that issue and in there I say the Commission must take such steps as it considers appropriate. It follows that the views of the parties have relevance to the Commission's determination. The question is how do you obtain those views. Those views are not determinative because it is the public interest which is determinative, the issue of obtaining views is simply a step and in here we say that the union, in fact the unions because there are two today and there are a few parties to the agreement, consent to the application and that as his Honour, Justice Munro said that he couldn't assume that the union respondents were able to speak for each and every employee so bound.

PN16

He had no reason to think that there would be a significant number of employees whose position is not covered by what was in that case a resolution on unionised employees. Now there has been no resolution of employees at the university that is certainly the case, but the unions are party to this agreement. Their representatives do not oppose the application and I don't believe that the Commission need seek the views of employees separate from the representations put by the unions today.

PN17

I do that for two reasons, for one primary reason which is that this application may itself not be necessary because the 2006 agreement which is referred to in the application, says in section 7 of the agreement and it was approved by about 98 per cent of employees, that was a figure that was provided to Commissioner Whelan on 1 May when this agreement was certified. Section 7.1 of the agreement, clause 7.1 says:

PN18

The agreement constitutes a comprehensive and closed agreement and operates to the exclusion of and wholly replaces any existing or future awards or certified agreements.

PN19

So it was certainly the intention of the parties that any prior agreement would be overridden. It was evident to the employees that that was its intent. The purpose of this application is to put the matter beyond doubt because at the time of certification and is evident from clause 7, there was no reference to section 170MG of the Act.

PN20

Section 170MG of the pre-reform agreement says that if you're to terminate an agreement prior to its expiry date which was 30 June this year, then you need to have a majority of employees who approve that and there's no reference to 170MG in this agreement so arguably because that was so made the effect of this agreement was not legally to extinguish the 2003 agreement. And so to put the matter beyond doubt we are making this application today but it was abundantly clear to employees that they would cease to have the benefits of the 2003 agreement.

PN21

THE VICE PRESIDENT: And certainly, well as I recall the Cement case.

PN22

MR RUSKIN: Yes.

PN23

THE VICE PRESIDENT: It was not a situation where there had been a replacement agreement made by virtue of a vote of employees approving the agreement made by unions.

PN24

MR RUSKIN: Indeed your Honour. Exactly right and – whereas in this case as our submissions set out there is a very comprehensive enterprise agreement that is in place for another three years which virtually mirrors many of the provisions of the 2003 agreement. It certainly is different. There's higher remuneration but there can be no suggestion that in an overall sense it's less than the 2003 agreement. There is 32 employees that the Commission, 31 employees that the Commission should be aware of and which is referred to in the application. And I should deal with those matters. The - - -

PN25

THE VICE PRESIDENT: These are people who are not covered by the 2006 agreement?

PN26

MR RUSKIN: That's right. Those employees of the university, which there are 31 who were covered by the 2003 agreement, are senior management. Under the 2003 agreement there was the capacity for people who were at the level of a Dean or above or the highest administrators of the university to go on performance based contracts and all of them are on performance based contracts derived from the 2003 agreement and that agreement must be, that contract must be comparable to the terms of the 2003 agreement in any respects. And they certainly are. Now those staff are not covered by the 2006 agreement.

PN27

THE VICE PRESIDENT: I had a look at the 2006 agreement and the classifications which were, or titles which were excluded.

PN28

MR RUSKIN: Yes.

PN29

THE VICE PRESIDENT: It didn't convey the impression that there were 31 in those categories. They seem to be a small number of the most senior employees in the university.

PN30

MR RUSKIN: Yes well the clause that says who is not covered, it says those not appointed as, those appointed as Vice Chancellor, well the Vice Chancellor couldn't be covered by the industrial instrument because his position is not covered by the rules of the NTEU or any other union so it's the Deputy Vice Chancellor, Assistant Vice Chancellor, Dean, Senior Vice Principal, Vice Principal and university secretary. There are a number of people, number of Deputy Vice Chancellors, Assistants.

PN31

THE VICE PRESIDENT: I see.

PN32

MR RUSKIN: So that's how it comes to 31. Now they are the most senior members of the university and they will not be covered by this industrial instrument. Of course they fall back on the breadth of industrial awards that still apply to employees who are not covered by an enterprise agreement and as his Honour, Justice Munro, said in the Cement case on page 325:

PN33

I do not have a clear

PN34

At paragraph 18:

PN35

I do not have a clear picture of what may be the effect of terminating the 1998 agreement on any subjacent but continuing individual contracts, however in the circumstances I have no sufficient reason to find that the basis of a bare speculation that it is contrary to the public interest to terminate the agreement.

PN36

Well those employees who could well be members of the union are, we assert, going to be covered by, continue to be covered by their detailed performance based contracts. They have the benefits of industrial, detailed industrial awards and may well be placed on other industrial instruments in the future but we say that that is not contrary to the public interest there and in terms of your question about consulting, we say that should be sufficient through the representations of the union today and at least bar for the 31, the terms of the 2006 agreement.

PN37

THE VICE PRESIDENT: Now you mentioned that that was approved by 98 per cent of employees. Is that - - -

PN38

MR RUSKIN: Who voted.

PN39

THE VICE PRESIDENT: Yes. Who voted. So, and were the votes convened by the unions, of union members only or - - -

PN40

MR RUSKIN: No it was a ballot.

PN41

THE VICE PRESIDENT: A ballot.

PN42

MR RUSKIN: It was an electronic ballot that was conducted by the university.

PN43

THE VICE PRESIDENT: I see.

PN44

MR RUSKIN: And with a returning officer and that's how the numbers were compiled.

PN45

THE VICE PRESIDENT: Yes with all employees.

PN46

MR RUSKIN: All employees - - -

PN47

THE VICE PRESIDENT: Having the opportunity to vote.

PN48

MR RUSKIN: Who were covered by the agreement had an opportunity to vote and - - -

PN49

THE VICE PRESIDENT: Yes.

PN50

MR RUSKIN: I think the density rate was quite high. It was reasonable, in the event they had an opportunity - - -

PN51

THE VICE PRESIDENT: Yes.

PN52

MR RUSKIN: Only interested I suppose in the fact that of those who voted, 98 per cent supported it.

PN53

THE VICE PRESIDENT: Yes.

PN54

MR RUSKIN: So having dealt with 170MH(2) in saying that I don't, we don't consider that there are any further steps the Commission need to take to consult or to obtain views, I deal with subsection (3) of 170MH in my submissions and paragraph 6 I say, I quote from Justice Munro:

PN55

That unless the Commission is affirmatively persuaded that termination is contrary to public interest, the Commission is by the Act obliged to terminate the agreement.

PN56

And I refer to Deputy President Ives' decision in Job Security which is a recent decision which says a similar thing. I refer to the, paragraph 7 to the Kellog Brown and Root decision firstly dealing with Commissioner Whelan at first instant and then the Full Bench in overriding her decision and in that decision of the Full Bench the Commission considered the notion of public interest refers to matters that may affect the public as a whole doesn't mean the people covered by the agreement. And it looks at the objects of the Act, employment levels, inflation, proper maintenance, maintenance of proper industrial conditions.

PN57

An example of industrial conditions would be where there was no applicable award and the termination of the agreement would lead to an absence of award coverage for employees. Well clearly that's not here. We're not in that situation. The employees covered by the 2006 agreement have very detailed employment conditions and of the 31 who are not covered by it are under performance based contracts that are, that derive from the 2003 agreement and which are, and in any event they're covered by awards. And in paragraph, towards the end of paragraph 8 of my submissions I say it certainly made the distinction between the notion of public interest and the interests of the parties.

PN58

So we say – I mean even if one considered the interest of the parties, there's no issue but there's nothing against the public interest in terminating this agreement and in paragraph 9 I set out a number of matters that are relevant to this agreement. The first point is one I've talked about that the employees covered by the 2006 agreement were, probably thought they were extinguishing the 2003 agreement by virtue of its terms and that's also a similar point made in my second dot point on page 3 in paragraph 9. And the purpose of the application at dot point 3 is to avoid any doubt about the termination of the agreement.

PN59

The fourth dot point is that the University of Melbourne Enterprise Agreement 2006 is very comprehensive and detailed in its benefits, provisions and certainly better than the 2003 agreement in an overall sense, particularly in terms of remuneration. The fifth dot point is there are a number of underpinning awards which will continue to operate and in any event, were we to seek to terminate the 2006 agreement, we would be faced with 170MG if it was during its life and 170MH, so we'd have to come back here.

PN60

And the last dot point is that if the agreement is not terminated as was intended by the 2006 agreement, then it has a serious implication for this university and therefore for its students and its other stakeholders because the university is dependent, it must comply with HEWRRs, which are the Higher Education Workplace Relations Requirements which are set by the Federal government and if you don't comply with these HEWRRs which require certain content of enterprise agreements and policies and practices then there is a, funding is not provided to the university of a certain amount, in the millions.

PN61

And if this agreement was not terminated and there was an argument that the 2003 agreement continued then the university would not get that funding because it had an agreement, in place, to the extent that it might have been overridden by 170LY but which did not comply with those HEWRRs because it has things in it which the Federal government said should not be in agreements.

PN62

So it's important for that reason that it be terminated and my last paragraph, paragraph 10, just summarises the issues that are before the Commission about the importance of terminating the agreement, why it's not against the public interest and that on the case law we'd ask that the Commission terminate the agreement. And I've got a draft order which I can hand up to the Commission.

EXHIBIT #R2 DRAFT ORDER

PN63

MR RUSKIN: Thank you.

PN64

THE VICE PRESIDENT: It's a pretty straightforward order.

PN65

MR RUSKIN: Think so. Yes. They are my submissions, unless the Commission has further questions.

PN66

THE VICE PRESIDENT: Thank you, Mr Ruskin.

PN67

MR RUSKIN: Thank you, your Honour.

PN68

THE VICE PRESIDENT: Who would like to go next?

PN69

MR BJORK-BILLINGS: Thank you, your Honour. In appearing here today on behalf of the NTEU I wish to inform the Commission that this application has been discussed at the University of Melbourne, NTEU branch, involving the President of the branch and it's further been discussed with the Victorian division of the NTEU and the National Office of the NTEU and as a result of those discussions I will be very brief. The NTEU does not oppose the application of the University of Melbourne as put forward today. Thank you, your Honour.

PN70

THE VICE PRESIDENT: Thank you, Mr Bjork-Billings. Mr McKay?

PN71

MR MCKAY: Yes your Honour. The CEPU Electrical Division do not oppose the termination of the agreement and support the submissions and the applications for termination of the agreement.

PN72

THE VICE PRESIDENT: Thank you, Mr McKay. I can indicate that I do not believe that any further steps should be taken pursuant to section 170MH(2) of the Act in circumstances where the unions respondent to the agreement have indicated their agreement to the application and the application seeks to set aside an agreement which has been replaced by a recently made agreement which in turn was approved by a very significant majority of employees covered by the agreement who voted in a ballot available to all employees.

PN73

I further indicate that I do not consider that the termination of the agreement is contrary to the public interest and in particular in that regard I rely on the circumstance that this agreement has been replaced by the 2006 agreement. I therefore grant the application and I will make an order substantially in the terms of exhibit R2 in these proceedings which will have the effect of terminating the agreement and that order will issue with the effective date of today. Unless there is something further, I will adjourn on that basis.

<ADJOURNED INDEFINITELY [10.58AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #R1 SUBMISSIONS OF THE UNIVERSITY OF MELBOURNE PN7
EXHIBIT #R2 DRAFT ORDER PN62