AG2007/526, Transcript of Proceedings [2007] AIRCTrans 242 (15 May 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 16872-1
16873-1

SENIOR DEPUTY PRESIDENT CARTWRIGHT

AG2007/526 AG2007/527

s.170MH -prereform Act - Application to terminate agreement (public interest)
Application by Mayfield Engineering Pty Limited (formerly Amec Engineering Pty Ltd) & Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(AG2007/526)

s.170MH -prereform Act - Application to terminate agreement (public interest)
Application by Mayfield Engineering Pty Ltd (formerly Amec Engineering Pty Ltd) & Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(AG2007/527)

SYDNEY

10.17AM, MONDAY, 30 APRIL 2007

Continued from 10/4/2007

PN531

THE SENIOR DEPUTY PRESIDENT: No change in the main appearances so we will proceed. We left it last time on the basis that the evidence appeared to be have been completed and we were going to deal with submissions today. Is that still the situation?

PN532

MR KENTISH: As far as I am aware, your Honour, yes.

PN533

THE SENIOR DEPUTY PRESIDENT: Yes.

PN534

MS LEEDS: Yes, your Honour.

PN535

MR QUIGLEY: Yes, your Honour.

PN536

THE SENIOR DEPUTY PRESIDENT: Okay. Thank you. Well, Mr Kentish, I should turn to you first because we're dealing at this stage with the application made under section 111 of the Act and I'm in your hands.

PN537

MR KENTISH: Thank you, your Honour. Your Honour, the AMWU applies under section 111(1)(g)(iv) and ( v) of the pre reform Act that the Commission dismiss or refrain from further hearing Mayfield Engineering's applications under section 170MH to terminate the AMEC Engineering South Australia NDT Enterprise Bargaining Agreement 2003 and the AMEC Engineering National NDT Enterprise Bargaining Agreement 2003. Perhaps, if for the sake of convenience I can refer to this, the agreement applying in South Australia as the South Australian agreement from now, your Honour, and the other agreement as the national agreement given it has national NDT's name, although I think the parties agree that it applies only in Victoria.

PN538

THE SENIOR DEPUTY PRESIDENT: Yes, for practical purposes it's a Victorian application but it is called the national agreement.

PN539

MR KENTISH: That's correct, your Honour.

PN540

THE SENIOR DEPUTY PRESIDENT: Yes, okay. So, you're going to call it the national agreement?

PN541

MR KENTISH: I thought, given that it has national in its name - - -

PN542

THE SENIOR DEPUTY PRESIDENT: Use the name, yes.

PN543

MR KENTISH: Perhaps that would be appropriate. Your Honour, the AMWU submits that under section 111(1)(g)(iv) and (v) the Commission has power to refrain from hearing or to dismiss a matter where amongst other things there has been a breach of an agreement or an award or a party is hindering the settling of an industrial dispute. Although I'll come to these matters in more detail, by way of outline the AMWU submits that Mayfield Engineering has breached the relevant agreements in the following ways.

PN544

Firstly, Mayfield Engineering is breaching the terms of the South Australian agreement and the national agreement by failing to collectively bargain with the AMWU for a replacement agreement. Secondly, Mayfield Engineering is breaching the terms of the South Australian agreement and the national agreement by failing to pay sick leave entitlements in accordance with the agreements. Thirdly, Mayfield Engineering is breaching the terms of the South Australian agreement by failing to pay overtime rates in accordance with the agreement and fourthly, your Honour, we say that Mayfield Engineering is breaching the terms of the national agreement by failing to recognise entitlements that have accrued pursuant to the relevant notice period of Mr Jason Poulter. In addition, your Honour - - -

PN545

THE SENIOR DEPUTY PRESIDENT: Sorry, Mr Jason?

PN546

MR KENTISH: Poulter, it's P-o-u-l-t-e-r.

PN547

THE SENIOR DEPUTY PRESIDENT: Yes, sorry, I just didn't hear.

PN548

MR KENTISH: Sorry, your Honour. Your Honour, in addition it is the AMWUs submission that Mayfield Engineering is hindering the settlement of an industrial dispute by refusing to meet with the AMWU in order to bargain collectively in relation to a new collective agreement. Thirdly, your Honour, we say that the breaches of agreement and the hindering of settlement of an industrial dispute are occurring in circumstances where Mayfield Engineering has recently offered and entered into employee collective agreements that are not compliant with the Australian Government Implementation Guidelines for the National Code of Practice for the Construction Industry and, your Honour, perhaps if from now I will refer to those simply as the implementation guidelines.

PN549

Your Honour, we say this is particularly relevant because Mayfield Engineering purports to bringing its applications to terminate on the basis that it needs to comply with the implementation guidelines. Your Honour, the AMWU also submits that the employee collective agreements recently entered into by Mayfield Engineering are inconsistent with the employer's obligations under the Workplace Relations Act and we say this in itself is also a breach of the implementation guidelines. Finally, your Honour, is that uncontested evidence of Ms Donnellan that AWAs in relatively similar terms are being offered and in some cases accepted. If the agreements are in similar terms they too would not be complaint with the implementation guidelines or the Act.

PN550

Your Honour, when this matter was last before the Commission your Honour found that the Commission did have jurisdiction to hear the AMWUs applications under section 111(1)(g)(iv) and (v). Your Honour, during the argument over jurisdiction my friend Mr Quigley from the ABCC raised the issue of whether or not section 111(1)(g)(v) has any application whether there has been no finding of an agreement reached by the court. Indeed Ms Leeds and Mr Quigley both pursued Ms Donnellan at some length on the issue generally in cross-examination of Ms Donnellan.

PN551

Your Honour, the AMWU respectfully submits that section 111(1)(g)(v) requires the Commission to form a view whether or it appeared Mayfield Engineering has breached the certified agreement. We accept that our submission in this regard may be contrary to the decision of Senior Deputy President Marsh that I handed up to your Honour the last time the parties were before the Commission. That is the decision of the Commission in Tristar Steering and Suspension Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries union in print PR974417. Does your Honour have a copy of that decision?

PN552

THE SENIOR DEPUTY PRESIDENT: Yes.

PN553

MR KENTISH: If I could take your Honour to the relevant paragraph it's paragraph 36 of her Honour's decision.

PN554

THE SENIOR DEPUTY PRESIDENT: Yes.

PN555

MR KENTISH: Your Honour, at paragraph 36 the Commission provides:

PN556

In any event, it is not the Commission's role to form the view on whether the agreement has been breached and to this extent I am not required ...(reads)... because the matter has not yet been determined in the Magistrates' Court.

PN557

With respect to her Honour, we submit that her Honour's decision was in error to the extent that it suggests the Commission is not required to form the view about whether or not an agreement has been breached. It is our submission that the wording of subsection 111(1)(g) is clearly directed at the Commission coming to its own view about whether or not it is that the breach has occurred and if I could take your Honour to section 111(1)(g) of the pre reform Act. Does your Honour have that? Thank you. Your Honour, section 111(1)(g) starts, "The Commission may", and then it goes down to (g):

PN558

Dismiss a matter or part of a matter, or refrain from further hearing or determining the industrial dispute, or part of the industrial dispute if it
appears -

PN559

And if I can just stop there, your Honour, we say that the crucial words are it appears. If those words are to have any operation it must be that the parliament intended that the Commission should come to its own view regarding any of the circumstances contained in section 111(1)(g) and, your Honour, in this context we note that the word breached is defined in the pre reform Act and if I could take your Honour to section 4 of the pr reform Act. Breach includes non observance and, your Honour, we submit that there is no requirement that a court must finally determine that there has been a breach of an agreement under section 111(1)(g)(v). The requirement is simply that it appears to the Commission that there has been a breach or a non observance of a certified agreement.

PN560

Your Honour, we submit that the AMWUs position is supported by a long line of authority both at a single member and Full Bench level and if I could hand up a bundle of decisions. Your Honour, if I could first take the Commission to the decision of Commissioner Mahon. The decision was made on 12 December 1995 and it's contained in print M7660. It should be the first decision on the top of the bundle. I go to this decision first because whether or not the Commission had a role in considering a breach of agreement was a live issue before the Commission in dealing with a section 111(1)(g) (v) matter and the Commission goes through it in some detail.

PN561

Your Honour, the decision concerns an application of a company called Mallanbool for an approval of an enterprise flexibility agreement. The LHMU applied under section 111(1)(g)(v) that the matter be not heard and if I could take your Honour to page 3 beginning with the words, "The Commission has considered". Hopefully it's marked on your Honour's copy.

PN562

THE SENIOR DEPUTY PRESIDENT: Yes.

PN563

MR KENTISH: And your Honour, the Commission states:

PN564

The Commission has considered all of the submissions and material presented by the parties and has reached the following ...(reads)... in such circumstances it appears that the company is in breach of the award.

PN565

Your Honour, there the Commission gives an explanation of why it felt that it had power to consider those matters and then goes on to consider whether or not there has been a breach. Your Honour, the second decision I would like to take the Commission to is the recent decision of the Full Bench in the appeal by the AMWU and the AWU of Senior Deputy President Marsh's decision and order relating to the termination of the Tristar Steering and Suspension Australia Certified Agreement 2003 and the decision is contained in print PR976734 and should be the second decision on the bundle of documents that I've handed up.

PN566

Your Honour, we submit that the relevant paragraphs begin at paragraph 13, if I could take your Honour through those -

PN567

The first ground of appeal is that the Senior Deputy President erred in concluding that it would be inappropriate and beyond power to make a preliminary ...(reads)... an error in deciding not to make a judgment as to whether Tristar had breached the agreement.

PN568

And at 14:

PN569

The allegations of breach were initially by the AMWU in its application to which we have already referred under section 111(1)(g) ...(reads)... these allegations her Honour concluded as follows -

PN570

And then her Honour's comments in paragraph 36 are extracted and then the Full Bench goes on at 15:

PN571

In the decision under appeal the unions sought to rely on the alleged breaches in two ways. First, they argued that Tristar ...(reads)... public interest issue. The relevant passage reads -

PN572

And the passage is extracted at 69 which I won't read out, your Honour. But if I could then take the Commission to paragraph 18:

PN573

The parties submissions go to the nature of the Commission's task in determining an application under section 170MH of the Act ...(reads)... cannot operate as a binding declaration of rights.

PN574

The Full Bench goes on at 19:

PN575

In Ranger the court was concerned with the exercise of arbitral powers in the course of the settlement of an industrial dispute. The ...(reads)... it would not be beyond power for the Commission to form an opinion on the alleged breaches.

PN576

Your Honour, although the Full Bench determining the appeal is in the passages I've read out dealing with Tristar's section 170MH application rather than dealing with a section 111(1)(g)(v) application, we say that the manner in which the Full Bench extract the earlier decision concerning the section 111(1)(g)(v) application clearly shows that the principle that the Commission does have a role in forming a view whether or not a party has breached the certified agreement can properly be applied both to section 170MH and section 111(1)(g)(v) applications.

PN577

Your Honour, unless the Commission thinks it would be useful, given the findings of the Full Bench in Tristar I do not intend to take the Commission to each of the decisions in the bundle that I've handed up perhaps mercifully but ..... yourself, but instead, your Honour, we'd simply note that in each decision the Commission did form a view one way or another as to whether there had been a breach of a certified agreement or award in the context of section 111(1)(g)(v) and in order to assist the Commission we've highlighted what we say are the relevant paragraphs of each decision and perhaps for the record and for the benefit of my friends I could indicate the print numbers of the decisions which we've handed up and also the relevant passages.

PN578

Your Honour, after the decision of Commissioner Mahon in print M7660 and the Full Bench in Tristar the next decision that the Commission should find is a decision of Commissioner O'Shea of 13 June 1996. It's contained in print number M525 and the relevant passage can be found on page 6 beginning at paragraph (xi). Your Honour, the second decision in which the AMWU relies on in the bundle of Commissioner Blair of 26 May 1997 in print P1251 and the relevant passage can be found on page 3 beginning with the words:

PN579

And one refers to section 111(1)(g)(v)A.

PN580

The AMWU also relies on the decision of Senior Deputy President Watson of
4 March 1998 in print P9251 and the relevant passage can be found on page 6. The AMWU relies on the decision of Senior Deputy President Lloyd of
17 November 2004 in print PR953322 and the relevant passages can be found on page 1 at paragraph 5 and page 3 at paragraph 14. Your Honour, the AMWU relies on the decision of Commissioner Foggo of 20 March 2006 in print PR70045. That may be an error in my note, there doesn't appear to be enough numbers there. It's print PR970045.

PN581

Your Honour, the relevant passages in that decision can be found at paragraphs 97, 98 and 136. Your Honour, the AMWU also relies on a decision of the Full Bench of the Commission, Justice Peterson, Deputy President Harrison and Commissioner Simmonds of 16 September 1991 in print J9493 and the relevant passages can be found on page 4 of the decision and the AMWU relies on the Full Bench of the Commission's decision, Vice President McIntyre, Senior Deputy President McBean and Deputy President Harrison of 17 October 1996 in print M5615 and the relevant passages can be found at pages 46 to 48, beginning at the bottom. There's a heading at the bottom of page 46 and the text goes on for most of the remainder of the two pages to 48.

PN582

Your Honour, the AMWU submits in this matter that there have been significant breaches of the two agreements that Mayfield Engineering has applied to terminate and on this basis we respectfully submit that the Commission should exercise its power to refrain from hearing or to dismiss the employer's applications. The AMWU notes again that clause 2, subclause 1, paragraph (a) of schedule 7 of the current Workplace Relations Act preserves section 170LA of the pre reform Act and section 170LA(1) states that:

PN583

The Commission must perform its functions under the part.

PN584

That is part VIB of the pre reform Act, in a way that further the objects of the pre reform Act. Your Honour, the objects of the pre reform Act are provided in subsection 3 of the pre reform Act and perhaps if I can take the Commission to those objects. Section 3 provides that:

PN585

The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by -

PN586

And we say the relevant paragraph is paragraph (e):

PN587

Providing a framework of rights and responsibilities for employers and employees and their organisations which supports ...(reads)... awards and agreements applying to them.

PN588

Your Honour, we say this clearly means the parties who are bound by agreements under the Act should be obliged to abide by them. If the employer wants to have the Commission exercise its powers under the Act in relation to an agreement which has been certified by the Commission the employer should not fail to honour its obligations under that agreement and, your Honour, we say that Mayfield Engineering has outstanding breaches which it has not rectified and in those circumstances the employer's applications to terminate should not presently be heard or should be dismissed.

PN589

Your Honour, I would now like to go to what we say are the relevant breaches of the agreements. Firstly, your Honour, as the evidence of Ms Donnellan demonstrates, the employer is refusing to have negotiations for a union collective agreement or agreements. The AMWU submits that this is in direct breach of clause 25(2) of both of the agreements which are the subject of the 170MH applications and if I could take your Honour to clause 25 of either of the two agreements that are the subject of the applications. Does your Honour have a copy of those agreements?

PN590

THE SENIOR DEPUTY PRESIDENT: Yes, they're attached to Ms Donnellan's statement.

PN591

MR KENTISH: I don't believe they were, your Honour. I think that they were other agreements which were attached to Ms Donnellan's statement. I do have copies if it would be helpful of the South Australian agreement and the national agreement.

PN592

THE SENIOR DEPUTY PRESIDENT: Yes, you're quite right, they are different agreements. Sorry, I had assumed that that's what they - yes, if you might hand them up that would be helpful.

PN593

MR KENTISH: If I could take your Honour to clause 25. It probably doesn't matter which agreement, your Honour. I think clause 25 is the same in both.

PN594

THE SENIOR DEPUTY PRESIDENT: The South Australian one was on top of the two you handed up, so clause 25.

PN595

MR KENTISH: Thank you.

PN596

THE SENIOR DEPUTY PRESIDENT: Renegotiation.

PN597

MR KENTISH: Thank you, your Honour. Clause 25.1 provides that:

PN598

The company and the unions agree to commence negotiations for a replacement agreement no later than three months prior to the expiry of this agreement in a collective union forum.

PN599

25.2 point goes on to say that:

PN600

Subject to this agreement the company and the unions agree that they shall bargain collectively in relation to any matter ...(reads)... or renegotiation of this agreement.

PN601

Your Honour, the AMWU submits that clause 25.2 clearly envisages the union and the employer bargaining for a new union collective agreement and since early March of this year Mayfield Engineering has refused to bargain with the AMWU and we say is in breach of its obligations under clause 25. We respectfully submit that the Commission should not allow the employer to cure what we say is a significant breach by simply terminating the agreements. Your Honour, as the evidence shows, the AMWU has attempted to have this matter dealt with under the dispute resolution procedure in the agreement, however the dispute has not been resolved and the employer continues to refuse to negotiate with the AMWU.

PN602

Sorry, your Honour, if I could just have a moment. Your Honour, the second breach alleged by the AMWU is a failure to pay sick leave entitlements. As the evidence of Ms Donnellan demonstrates, the employer is refusing to pay sick leave entitlements pursuant to the agreements in relation to Mr Poulter, Mr Greigg and Mr Sakalides. Clause 5 of both agreements incorporates the terms of the Metal, Engineering and Associated Industry Award 1998. The agreements do not otherwise deal with sick leave, other than to also incorporate existing over award payments and conditions of employment and, your Honour, if I could take you to clause 5. Does your Honour have clause 5? 5.1 provides:

PN603

All the provision of the Metal, Engineering and Associated Industries Award 1998, the award, are hereby incorporated into this agreement.

PN604

5.2:

PN605

Where there is any inconsistency between an express provision of this agreement and a provision in the award the provisions of this agreement shall prevail to the extent of any inconsistency.

PN606

And at 5.3:

PN607

Existing over award payments and conditions of employment shall continue to apply as if they were a term of this agreement ...(reads)... other benefits which may apply.

PN608

Your Honour, we don't take the Commission to the relevant award clauses relating to sick leave as I don't believe that they'll be in contention, but they can be found at clause 7.2.6 to 7.2.10 of the Federal Metals Award. Your Honour, the evidence of Ms Donnellan indicates that in addition to the award provision there was an existing over award condition that no evidence would be required for sick leave for the first two days of a 12 month period. Ms Donnellan was not challenged on this evidence in cross-examination and in our submission this over award condition is a term of the existing certified agreement. Your Honour, it's our understanding that - - -

PN609

THE SENIOR DEPUTY PRESIDENT: How is it a term of the certified agreement?

PN610

MR KENTISH: Your Honour, by way of clause 5.3, existing over award payments and conditions of employment, and we say that it's an existing over award condition of employment. Your Honour, it's the union's understanding that Mr Poulton, Mr Greigg and Mr Sakalides complied with the relevant provisions in the agreement in relation to sick leave and the sick leave has not been paid. As the evidence shows, the AMWU has attempted to have this matter dealt with under the dispute resolution procedure in the agreement, however the dispute has not been resolved and the sick leave remains unpaid.

PN611

Your Honour, at the conciliation before Senior Deputy President Acton the employer suggested that the employees could not be paid as they were taking industrial action during this period and Ms Leeds was to go into this point with Ms Donnellan in cross-examination. While we accept that the AMWU had a protected action notice in place and indeed they were appended to Ms Donnellan's statement, no AMWU member has taken industrial action at Mayfield Engineering since 5 March 2007. The relevant sick days occurred for Mr Greigg on 7 March 2007, for Mr Poulter on 9 March 2007 and for Mr Sakalides in South Australia on the 21st and 22 March 2007. These were not days taken off as part of an industrial campaign and the union submits that there were legitimate sick days.

PN612

Except for these absences due to illness taken by obviously a small number of individuals because of their own personal circumstances members have been working as normal and being paid as normal since 1 March 2007. Your Honour, not attending work due to illness is not industrial action under the Act and in this respect we draw the Commission's attention to a footnote to the definition of industrial action in section 420 of the current Act. Your Honour, the footnote indicates that it simply must be drawn between an action which has an industrial character and action that is not. Does your Honour have the - - -

PN613

THE SENIOR DEPUTY PRESIDENT: Yes.

PN614

MR KENTISH: The relevant footnote is provided at note 2.

PN615

THE SENIOR DEPUTY PRESIDENT: Yes.

PN616

MR KENTISH: And it says:

PN617

The issue of whether action that is not industrial in character is industrial action was considered by the Commission in ...(reads)... who does not attend for work on account of illness.

PN618

Your Honour, this footnote at the bottom of section 420 makes it clear that the definition of industrial action contained in the Act was not intended to cover employees who do not attend for work on account of illness. As such the non attendance at work by three individual employees on separate days because they were ill was not industrial action and sick leave should have been paid. By not paying the sick leave at any time we say that the employer is in breach of the certified agreements.

PN619

THE SENIOR DEPUTY PRESIDENT: We only have hearsay evidence on whether they were sick or not.

PN620

MR KENTISH: Your Honour, that is the only evidence which is actually before the Commission. I would agree that the evidence was provided on the basis of what the employees have told Ms Donnellan and that she didn't witness them being sick on that day, but we submit, your Honour, that in the circumstances where the employer hasn't put on any alternative evidence that that evidence should be accepted. Thank you, your Honour. The third type of - your Honour, before I leave that point I should say that in relation to Mr Sakalides a medical certificate was provided to the company to cover the 21st and 22 March and I understand that it's contested by the company that that medical certificate was not given to the company.

PN621

Your Honour, the third of breach the AMWU wishes to take the Commission to is in relation to a failure to pay the correct rates of overtime under the South Australian agreement. The AMWU submits that Mayfield Engineering has breached the South Australian agreement by failing to use the appropriate hourly rate when calculating overtime. From 31 March 2006 overtime paid pursuant to the agreement is to be paid on a higher hourly rate than before 31 March 2006 and this is reflected in clause 7 and clause 27 of the South Australian agreement and if I could just have your Honour go to clause 7.

PN622

THE SENIOR DEPUTY PRESIDENT: Yes.

PN623

MR KENTISH: Your Honour will see at clause 7 a table of wages. In the final column of the table there is a list of hourly rates that are to be paid from 31 March 2006. We say that this is the rate upon which overtime should be calculated by the employer. Your Honour, at this time Mayfield Engineering is only playing the hourly rate contained in the column headed 1 April 2005 and we say that this failure to calculate overtime on the proper hourly rate is a significant breach of the agreement.

PN624

THE SENIOR DEPUTY PRESIDENT: So what's the evidence that that's occurring?

PN625

MR KENTISH: Ms Donnellan gave evidence to that effect, your Honour, and indeed wasn't asked any questions in cross-examination or in any way challenged on that point and, your Honour, the relevant paragraphs I believe are 29 and 30 of Ms Donnellan's statement.

PN626

THE SENIOR DEPUTY PRESIDENT: Of the statement?

PN627

MR KENTISH: Yes. Would it be helpful, your Honour, if I read it?

PN628

THE SENIOR DEPUTY PRESIDENT: No, no, that's okay. I’m just referring to it.

PN629

MR KENTISH: Now, your Honour, if it's not the case and employees are being paid at the hourly rate which we say the agreement indicates that they should be, well, then the company can tell us.

PN630

THE SENIOR DEPUTY PRESIDENT: And it would be a relatively easy matter to remedy if that were the case, wouldn't it?

PN631

MR KENTISH: It would be, although it may potentially be expensive. I don't know the exact details but it would be relatively simply to - it's certainly simply to establish which rate was being paid. Your Honour may have also noted there is evidence also disclosing that there is a related issue over a breach of memorandum of agreement that was attached to the certified agreement and that's dealt with in Ms Donnellan's statement at paragraph 30. I'm unable to take it any further than - well, my instructions go no further than Ms Donnellan's statement in that regard.

PN632

Your Honour, the fourth type of breach the AMWU wishes to bring to the Commission's attention relates to Mayfield Engineering's failure to correctly recognise entitlements under the national agreement, that's the one we're talking about. Your Honour, the AMWU submits that Mayfield Engineering has failed to correctly pay a former employer, Mr Jason Poulter, again, it comes up several times in this proceedings, the company failed to pay Mr Poulter his proper entitlements upon termination. Mr Poulter formally worked under the national agreement and Mr Poulter's employment with Mayfield ended in March of this year.

PN633

Rather than working out his notice period, Mayfield Engineering paid out
Mr Poulter. However, we say in breach of the agreement Mr Poulter's termination payment did not include a component for annual leave accrued during the notice period, annual leave loading or Incolink payments and superannuation contributions that were payable during the notice period and again, your Honour, these are matters which the company could check fairly quickly and remedy fairly quickly if you were minded to do so.

PN634

Your Honour, the AMWU submits that those amounts should have been paid pursuant to the national agreement and we note in this context clause 4.3.1(d) of the Metal, Engineering and Associated Industries Award 1998 and, your Honour, I do have copies of the relevant extracts I'm in a position to hand up. If I could take your Honour to clause 4.3.1(d). Lucky this award has been simplified, your Honour. Your Honour. 4.3.1(d):

PN635

The required amount of payment in lieu of notice must equal or exceed the total of all amounts that if the employee's employment had ...(reads)... any other amounts payable under the employee's contract of employment.

PN636

Your Honour, we also say that clause 30 of the national agreement is relevant in this regard and if I could take your Honour to clause 30. Does your Honour have clause 30?

PN637

THE SENIOR DEPUTY PRESIDENT: Yes.

PN638

MR KENTISH: Annual Leave Loading is the title of the clause -

PN639

The award prescribed annual leave loading will be paid on proportionate annual leave entitlements on lawful termination by either ...(reads)... where an employee summarily dismissed.

PN640

Your Honour, we say that Mr Poulter has been underpaid and the employer is in breach of the agreement. This matter has been raised by Mr Poulter himself and by the relevant organiser of the union on Mr Poulter's behalf and my instructions are that the matter at this stage remains unresolved but Ms Leeds might have a more up to date story which she can give us in due course. Your Honour, in addition to the breaches of the agreement the AMWU submits that the employer is hindering the settlement of an industrial dispute and we say that this is relevant under section 111(1)(g)(iv) of the pre reform Act.

PN641

We submit that the union and Mayfield Engineering are in dispute over the wages and conditions to be paid to employees of Mayfield Engineering who are also eligible to be members of the AMWU and who work in the Metlabs division of the employer in Victoria and at the Australian Submarine Corporation site in South Australia. Under the existing agreements applying to those employees the employer has an obligation to collectively bargain with the AMWU. We say that employer is hindering the settlement of that dispute by refusing to bargain at all with the AMWU since 6 March of this year.

PN642

On this basis we respectfully submit the Commission should exercise its powers under section 111(1)(g)(iv) and refrain from hearing or dismiss the employer's applications under section 170MH. Your Honour, the AMWU is concerned that the Commission is also made aware of other matters regarding the grounds of the employer's application and the circumstances of this matter. The issues which I now intend to go to are clearly relevant to the employer's section 170MH applications themselves, however they would also appear to be potentially relevant to the union's applications given that the union is asking that the employer's applications be not further heard or are dismissed and, your Honour, it is for this reason that we raise them at this stage.

PN643

If the union's applications are not granted then the matters that I'm about to turn to would also go to whether or not the employer's applications should be granted in the 170MH proceedings themselves and we would also rely on the matters about to be raised for that purpose should the Commission be minded to entertain the employer's section 170MH applications. Your Honour, the employer alleges in its applications that the employer seeks to have the agreements terminated on the basis that they are not compliant with the implementation guidelines for the construction industry which is presumably the interest that Mr Quigley has in these proceedings.

PN644

Your Honour, in the circumstances the AMWU respectfully submits that the grounds as alleged by Mayfield Engineering are in no way a valid ground for termination. Mayfield Engineering alleges that compliance with the implementation guidelines is important for other companies in its corporate group as well as itself. The employer states that other related companies are seeking and engaged in government funded work and that Mayfield Engineering itself may seek to engage in government funded construction work. Your Honour, we do not dispute that the agreements the subject of these proceedings are not compliant with the implementation guidelines.

PN645

In fact it would appear for almost the whole time the implementation guidelines have been operational that Mayfield Engineering has knowingly been not compliant if for no other reason than by virtue of being bound by the agreements they now seek to terminate and that of course would mean that related companies were also not compliant. Your Honour, the elephant in the room of course if the company can't get Australian government work without its related entities being compliant with the guidelines as Mayfield Engineering suggests in ground 5 of its application how is Mayfield Engineering's high profile of related entities like Leighton's, Thiess and John Holden been successful in tendering for government work which the employer asserts in its own grounds up until this point?

PN646

Your Honour, I did ask Mr Harvey at about this in cross-examination and he said that he wasn't familiar with the government contracts of the other companies but the question must be asked if companies related to Mayfield Engineering have legitimately gained government work up until now why can't they continue to do so and Mr Harvey can't answer the question, your Honour, we submit that
Ms Leeds who will seek to rely on the contracts of Leighton's and others must provide some explanation. Having said that, your Honour, even if the company can provide an adequate explanation for why it now needs to be compliant whereas previously it apparently did not, the AMWU submits that the outcome of these proceedings will have no effect on the compliance of Mayfield Engineering with the implementation guidelines because Mayfield Engineering in the last few months entered into at least three employee collective agreements that are not compliant with implementation guidelines.

PN647

Your Honour, these employee collective agreements are appended to the statement of Ms Donnellan at A, B and C and they are the Metlabs WA Employee Collective Workplace Agreement 2006-2009, the Metlabs New South Wales Employee Collective Workplace Agreement 2006-2009 and the Metlabs South Australian Employee Collective Workplace Agreement 2007-2010. We note that the last of these agreements presumably has an expiry date some time in 2010. Your Honour, these agreements are not compliant with the implementation guidelines and we submit that that is the case.

PN648

This means that regardless of the employer's applications Mayfield Engineering and its related entities will not be compliant with the guidelines until at least 2010. Your Honour, as the statement of Ms Donnellan indicates, the AMWU also has cause to believe the employer has in addition to the employee collective agreements entered into AWAs that are likely to be in similar terms and we note that Ms Donnellan was not challenged on that evidence. Your Honour, I would now like to go to the reasons why we say that employee collective agreements appended to Ms Donnellan are not compliant with the implementation guidelines. Firstly, your Honour, we say that all three employee collective agreements by the employer contained dispute resolution procedures that are not compliant with the implementation guidelines and, your Honour, as the agreement for the most part are identical it may be easier just to go off the one document but the problems weld be the same for each and if I could have your Honour turning to the agreement appended at Ms Donnellan's statement, the Metlabs WA Employee Collective Workplace 2006-2009.

PN649

Your Honour, the dispute resolution procedure is contained in clause 36 of the Western Australian agreement. Your Honour, clause 36 provides at 36.1 that:

PN650

It is important that effective and quick action is taken to settle disputes about matters arising under this agreement.

PN651

36.2:

PN652

Save where there is an imminent risk to the health and/or safety of employees, work will continue in accordance with this agreement as required by the company while the dispute is being processed.

PN653

36.3:

PN654

The parties to the dispute must follow the following procedure should such a dispute arise.

PN655

And stage 1:

PN656

The employee will contact his or her immediate supervisor and make all reasonable attempts to settle the dispute at that level.

PN657

Stage 2:

PN658

If a dispute is not settled at stage 1 or if it is inappropriate for the employee to meet his or her immediate supervisor because of the nature ...(reads)... and any subsequent meeting.

PN659

Now, at stage 3:

PN660

If the dispute is not settled at stage 2 it may be referred to the Australian Industrial Relations Commission for conciliation. Either party may have a person of their choice represent them in any such conciliation.

PN661

Your Honour, we say at clause 36.3, that's the clause that contains stage 1, stage 2 and stage 3, is in direct breach of the implementation guidelines and can I have your Honour turn to the implementation guidelines. I believe they're appended to Mr Harvey's statement at attachment A, but if your Honour doesn't have it to hand I think I do have copies of the implementation guidelines which I would be in a position to hand up.

PN662

THE SENIOR DEPUTY PRESIDENT: That might be simpler.

PN663

MR KENTISH: Your Honour, if I could take you to - - -

PN664

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Harvey's statement was exhibit A1 and yes, they're attached there.

PN665

MR KENTISH: As far as I'm aware they contain the most up to date copy which is the revised September 2005, reissued June 2006, I think it's the same one.

PN666

THE SENIOR DEPUTY PRESIDENT: Yes.

PN667

MR KENTISH: Your Honour, if I could take the Commission to 8.7.4 of the implementation guidelines, they can be found on page 25.

PN668

THE SENIOR DEPUTY PRESIDENT: Yes.

PN669

MR KENTISH: Your Honour, 8.7.4 provides:

PN670

Dispute settlement provisions must allow an employee to have freedom of choice in deciding whether to be represented and if so by whom. Accordingly ...(reads)... or a representative of their choice.

PN671

Your Honour, under clause 36.3 an employee does not get the right to representation until conciliation before the Commission. We say that this is directly contrary to the plain words of 8.7.4 which provides that:

PN672

A dispute settlement procedure must allow matters to be raised through a representative of their choice.

PN673

Your Honour, the right an employee has under the procedure to have another person assist them at a meeting not only applies after the issue has been initially raised in stage 1 but we say is clearly not the same as a right to be represented. Your Honour, in case there's any question over the difference of the right to be represented and the right to be assisted, I do have extracts from the Shorter Oxford going to those two words, if I could hand those up.

PN674

THE SENIOR DEPUTY PRESIDENT: So you're wanting to differentiate between the rights at stage 3 and stage 2?

PN675

MR KENTISH: Yes, your Honour. The rights at stage 3 are a right to have a person of their choice represent them in a conciliation and the rights at stage 2 are a person assist them in a meeting, presumably be physically present at a meeting along with the employee and, your Honour, we say that this just doesn't fit with 8.7.4 which says:

PN676

The dispute settlement procedures must allow for an employee to raise an issue either directly with their employer or through a representative of their choice.

PN677

So the three stages fail on a number of grounds. They fail on stage 1 because that's where you have to raise the issue. They fail in stage 2 because there's no right to represent or to representation. There's only a right to have someone come to assist in a meeting and I would submit that by stage 3 we're probably there but that's too late and certainly couldn't be taken to be fitting within the words of allow for an employee to raise an issue either directly with their employer or through a representative of their choice. 36.3 makes it quite plain in the first sentence that stage 1, 2 and 3 must be followed, so the parties to the dispute must follow the following procedure should such a dispute arise. So there's no circuiting of going straight to stage 3.

PN678

Your Honour, if I could take the Commission to the definition of represent that I've handed up. It's from the Shorter Oxford. Your Honour, probably at points 6 and 7 are the definitions which closely match. At 6(a) -

PN679

Of a thing, stand for or in place of a person or thing to act as an image of something, also of a person denote something by a substitute.

PN680

And then at 7(a):

PN681

Take the place of another, be a substitute in some capacity for act or speak for another by a deputed right.

PN682

And then there's a more specific meaning -

PN683

Be an accredited deputy or substitute for a number of people in a legislative or deliberative assembly, be an elected member of parliament for a constituency, also be acted for in this way by someone.

PN684

And if I could take your Honour to the definition of assist, the dictionary defines assists at (1) as:

PN685

Help a person in, to do with -

PN686

Et cetera -

PN687

A person in necessity, an action, process or result, support, further promote to give help or support.

PN688

Your Honour, we submit that represent and assist differ significantly both in the commonly understood concept of what those words means and in the dictionary definitions and we say that to be complying with the implementation guidelines the procedure would have to allow that an issue be raised directly by a representative on behalf of, and if the employee so chose, in the absence of the affected employee and we say that clause 36.3 fails to do this. Your Honour, we submit that while ever Mayfield Engineering is a party to an employee collective agreements or any other type of workplace agreement that contains dispute settlement clauses like this of the Western Australian employee collective agreement that Mayfield Engineering and any related companies are not complying with the implementation guidelines regardless of the present applications under section 170MH.

PN689

The employer's applications are therefore on an entirely false assumption and no doubt the assumption is that by terminating the agreements the employer and its related entities will somehow become complaint with the implementation guidelines. Your Honour, in addition to prescribing certain matters in relation to dispute settlement procedures the implementation guidelines also provide the parties must comply with what are described legislative requirements and the AMWU submits that several clauses in the employee collective agreements attached to Ms Donnellan's statement do not comply with the Workplace Relations Act.

PN690

If I could take your Honour to the relevant part of the implementation guides perhaps to begin with and that is at 8.1. Your Honour, 8.1 can be found at page 20. In the box just under 8.1 the code states:

PN691

All parties must comply with the provisions of applicable awards and workplace agreements which have been certified, registered or otherwise approved under the relevant industrial relations legislation and legislative requirements.

PN692

Your Honour, this is picked up again in 8.2. I'll read from the start of the box:

PN693

Workplace arrangements which reflect the needs of the enterprise are important elements in achieving continuous improvement and ...(reads)... subject to them meeting legislative requirements.

PN694

Your Honour, the AMWU submits that the employee collective agreements entered into recently by the employer and appended at A, B and C or
Ms Donnellan's statement do not meet the legislative requirements of the Workplace Relations Act 1996 for two reasons. Firstly, we say that the agreements contain prohibited content under the Workplace Relations Act, and secondly, that the agreements contains provisions that are less than the minimum standards provided for in the Workplace Relations Act. Your Honour, the AMWU will first deal with the issue of prohibited content. In clause 39 of the Western Australian employee collective agreement contains certain obligations in relation to personal leave and it's those clauses which are of interest to the AMWU in the current context, your Honour. Does your Honour have 39?

PN695

THE SENIOR DEPUTY PRESIDENT: I do.

PN696

MR KENTISH: The clauses of particular concern to the AMWU are clauses 39.10, 39.12, 39.14 and 39.16. These clauses mandate certain conditions in relation to notice and evidence and it perhaps would be useful if I go to them specifically now. At 39.10 the agreement provides:

PN697

An employee's entitlement to sick leave is conditional on the employee promptly notifying the company that he or she requires leave because of personal illness or injury and the likely duration of the period of the leave.

PN698

And at clause 39.12:

PN699

In the event that a medical certificate or statutory declaration is not provided in accordance with subclause 39.11 the period of absence may be treated as annual leave or unauthorised leave without pay at the company's discretion.

PN700

And perhaps if I go to 39.14 and 39.16 now, your Honour, and I'll come back to them, but at 39.14:

PN701

An employee's entitlement to carer's leave is conditional on the employee promptly notifying the company that he or she requires leave ...(reads)... and the likely duration of the period of leave.

PN702

At 39.16:

PN703

In the event that a medical certificate or statutory declaration is not provided in accordance with subclause 39.15 the period of absence may be treated as annual leave or unauthorised leave without pay at the company's discretion.

PN704

Your Honour, we believe it's also relevant in this context to note the words of clause 29 of the agreement, if I can take your Honour to those. Your Honour, clause 29 is headed Absence From Duty and it provides at 29.1:

PN705

Unless a provision of this agreement states otherwise, e.g. personal leave, an employee not attending for duty will lose their pay for their actual time of non attendance.

PN706

Your Honour, as I indicated, the AMWU submits that clauses 39.10, .12, .14 and .16 contain prohibited content under the Act and section 357 of the Act that employers must not lodge agreements containing prohibited content. Section 356 gives the minister power to specify what is prohibited content by way of regulation and the union submits that there are a number of regulations in the Workplace Relations Regulation 2006 that are relevant. Does your Honour have a copy of the regulations? Your Honour, if I could take your Honour to regulation 8.5 of chapter 2 of the regulations, your Honour 8.5(1) provides:

PN707

A term of a workplace agreement is prohibited content to the extent that it deals with the following -

PN708

And then at (j):

PN709

The forgoing of annual leave credited to an employee bound by the agreement for an amount of pay or other benefit otherwise than at the written election of the employee.

PN710

Your Honour, just to flag the other regulation which we'll be looking at in relation to 39.10, 12, 14 and 16, it's regulation 8.5(8A) of chapter 2 and that regulation provides:

PN711

A term of a workplace agreement is prohibited content to the extent that the term allows for the imposition of a penalty on an employee for breach of a ...(reads)... of the employee's immediate family or household.

PN712

Your Honour, penalty as it's used in sub regulation 8.5(8A) is defined in sub regulation or in paragraph 8.5(10) of chapter 2 and that paragraph of the regulations provides:

PN713

In sub regulations (8A) and (8B):
Penalty:
(a) means any of the following:
(i) a deduction of an amount from an employee's ...(reads)...
an entitlement to which the employee was not entitled.

PN714

Your Honour, if I could now to clauses 39.10 and 39.14, one of the clauses deals with sick leave, 39.10, and 39.14 deals with carer's leave but they're relevantly the same for the purposes of what I'm about to discuss. Your Honour, the union submits that both 39.10 and 39.14 contain prohibited content because they allow for the imposition of a penalty on an employee for a breach of a requirement to provide prompt notification. Under those clauses if prompt notification is not given no entitlement is payable.

PN715

We say that this is in breach of regulation 8.5(8A) and again we note in this context that the penalty is defined in regulation 8.5(10) as including a deduction of an employee's remuneration or a reduction of an employee's entitlements unless it is authorised by law, which we say it would be potentially the relevant caveat. We say that clauses 39.10 and 39.14 effectively provide for a loss of pay or loss of entitlement to use personal leave that is not authorised by law. In this respect we say that it is significant that the clauses are less generous than the minimum guarantees in the Workplace Relations Act and if I could take your Honour to the relevant parts of the Workplace Relations Act. The two sections which I would like to take the Commission to are section 253 and section 255.

PN716

Your Honour, section 253 provides, it has a heading Sick Leave - Notice -

PN717

(1) To be entitled to sick leave during a period an employee must give his or her employer notice in accordance with the ...(reads)... could not comply with it because of circumstances beyond the employee's control.

PN718

Your Honour, section 255 is in substantially identical terms except that it's in the context of carer's leave and it provides at (1):

PN719

To be entitled to carer's leave during a period, an employee must give his or her employer notice in accordance with this ...(reads)... because of circumstances beyond the employee's control.

PN720

Your Honour, both subsections 253(2) and 255(2) of the Act refer to notice being given as soon as reasonably practicable which may be at a time before or after the sick leave has started. We say that this is less onerous than clause 39.10 and 39.14 in the employee collective agreements which makes leave conditional on an employee not only promptly notifying the company that he or she requires leave but also that the employee give the likely duration of the period of leave. In a similar way both section 253(4) and section 255(4) of the Act waive the provision of notice where it is beyond the employee's control. Neither 39.10 nor 39.14 make such an allowance.

PN721

Your Honour, under section 172 of the Act the Australian Fair Pay and Conditions Standard prevails over a workplace agreement to the extent that in a particular respect the standard provides a more favourable outcome and if I could take the Commission to section 172.

PN722

THE SENIOR DEPUTY PRESIDENT: Sorry, 172?

PN723

MR KENTISH: 172, yes.

PN724

THE SENIOR DEPUTY PRESIDENT: Yes.

PN725

MR KENTISH: I apologise if I've misquoted it, your Honour.

PN726

THE SENIOR DEPUTY PRESIDENT: No. Yes.

PN727

MR KENTISH: At (1):

PN728

The Australian Fair Pay and Conditions Standard provides key minimum entitlements of employment for the employees to whom it applies.

PN729

And then at (2):

PN730

The Australian Fair Pay and Conditions Standard prevails over a workplace agreement or a contract of employment that operates in relation ...(reads)... provides a more favourable outcome for the employee.

PN731

And if take your Honour to subsection (4):

PN732

The Regulations may prescribe what a particular respect is or is not for the purposes of subsection (2) or (3), or the circumstances in ...(reads)... a more favourable outcome in a particular respect.

PN733

So the definition of certain terms in section 172(2) can be affected regulation and, your Honour, the Workplace Regulations 2006 do prescribe what is a particular respect and what is a more favourable outcome. If I could take the Commission to regulation 7.1 of chapter 2.

PN734

THE SENIOR DEPUTY PRESIDENT: Yes.

PN735

MR KENTISH: And then to sub regulation or to the paragraph 15. It's headed Notice Periods and Evidentiary Requirements Relating to Leave.

PN736

THE SENIOR DEPUTY PRESIDENT: Yes.

PN737

MR KENTISH: And it begins:

PN738

Each of the following is a particular respect:
(a) The giving of notice in relation to a period of sick leave taken or to be taken ...(reads)... in relation to a period of compassionate leave taken or to be taken by the employee.

PN739

The regulations then go on at 16 to say:

PN740

The Standard provides a more favourable outcome in any of the respects mentioned in sub regulation (15) if a workplace ...(reads)... the requirements in this Standard.

PN741

And (17):

PN742

The Standard provides a more favourable outcome in any of the respects mentions in ...(reads)... requirement or condition to give the notice or evidence.

PN743

And then at (18):

PN744

In sub regulations (5A) and (17) penalty means any of the following:
(1) A deduction of an amount from an employee's ...(reads)... to which the employee was not entitled.

PN745

Your Honour, we submit that the standard in this instance in a commonly understood and in a technical sense is more favourable under the Act in terms of the giving of notice and as a consequence the Act will prevail over clauses 39.10 and 39.14 in employee collective agreements. Your Honour, the penalty purportedly introduced by Mayfield Engineering's employee collective agreements therefore cannot in any sense be said to be authorised by law, in fact it's attempting to undercut it and indeed it is rendered by ineffective by law.

PN746

In such circumstances the AMWU submits that both subclauses 39.10 and 39.14 contain prohibited content under regulation 8.5(8A) of chapter 2 of the regulations. Your Honour, I now propose to move to deal with clauses 39.12 and 39.16.

PN747

THE SENIOR DEPUTY PRESIDENT: Just before you do, what do you say the penalty is again?

PN748

MR KENTISH: The penalty?

PN749

THE SENIOR DEPUTY PRESIDENT: Yes.

PN750

MR KENTISH: Well, we say that the penalty is that no remuneration is received and personal leave is not able to be - any entitlements to personal leave and not able to be accessed.

PN751

THE SENIOR DEPUTY PRESIDENT: Yes.

PN752

MR KENTISH: Your Honour, if I could now move to deal with 39.12 and 39.16. We say that 39.12 and 39.16 contain prohibited content because they are clauses that deal with the forgoing of annual leave without the written election of the employee and forgoing of annual leave is, we say, in breach of regulation 8.5(1)(j) of chapter 2 of the regulations and I'll just re-read that regulation, your Honour, because it's been a while since we've gone to it -

PN753

A term of a workplace agreement is prohibited content to the extent that it deals with the following ...(reads)... at the written election of the employee.

PN754

Your Honour, if your Honour goes to 39.12, 39.12 provides:

PN755

In the event that a medical certificate or a statutory declaration is not provided in accordance with subclause 39.11, the period of absence ...(reads)... at the company's discretion.

PN756

Your Honour, the clause involves an employee forgoing annual leave without a written election. Relevantly in terms of regulation 8.5(1)(j), the employee forgoes the annual leave for an amount of pay or other benefit as referred to in the regulation insofar as under at least the purported terms of the agreement the employee receives remuneration where otherwise under the agreement at least the employee would be entitled to no payment. We say this means in effect that clauses 39.12 and 39.16 deal with prohibited content.

PN757

THE SENIOR DEPUTY PRESIDENT: Sorry, just run that by me again, I was looking again at the wording of the clause.

PN758

MR KENTISH: Yes, your Honour. We say that in terms of regulation 8.5(1)(j) which provides:

PN759

The forgoing of annual leave credited to an employee bound by the agreement for an amount of pay or other benefit otherwise than at the written election of the employee.

PN760

We say that under the purported terms of the agreement the employee forgoes the annual leave for an amount of pay or other benefit, as referred to back in (j), insofar as at least some arm of the terms of the agreement the employee would not be entitled to any remuneration if the employee hadn't provided the relevant notice or evidence against the relevant evidence.

PN761

THE SENIOR DEPUTY PRESIDENT: And you're saying that forgoing the benefit - sorry, forgoing the leave for an amount of pay is forgoing the leave for no pay?

PN762

MR KENTISH: It's forgoing the annual leave for an amount of pay in circumstances where the employee has no control and did not elect to forgo the annual leave. The employee was taking personal, or the hypothetical of the employee was taking personal leave but failed to provide the evidence as required pursuant to the agreement which gave rise to the company having an election to treat that period of absence as annual leave or as unpaid leave.

PN763

THE SENIOR DEPUTY PRESIDENT: So how does the person forgo the leave for an amount of pay?

PN764

MR KENTISH: Well, their annual leave, they're entitled to one day less of annual leave after the company's discretion is exercised and they receive pay on that day where otherwise they will get nothing.

PN765

THE SENIOR DEPUTY PRESIDENT: I see what you mean, yes.

PN766

MR KENTISH: Sorry, your Honour, it's a technical argument of - - -

PN767

THE SENIOR DEPUTY PRESIDENT: Yes, I'm not just used to the AMWU being so conscientious about prohibited content.

PN768

MR KENTISH: Your Honour, I haven't appeared before you previously.

PN769

THE SENIOR DEPUTY PRESIDENT: No, no. I might welcome you back.

PN770

MR KENTISH: Yes. In the right context I'd be happy to, your Honour. Your Honour, in addition - - -

PN771

THE SENIOR DEPUTY PRESIDENT: I'm just not used to it, Mr Kentish.

PN772

MR KENTISH: Your Honour, I'll take that as a compliment perhaps, although I'm not sure how it's really said.

PN773

THE SENIOR DEPUTY PRESIDENT: It's a jocular, I mean it has no significance to it whatsoever.

PN774

MR KENTISH: Your Honour, in addition to what I've just said about regulation 8.5(1)(j) and the alternative should your Honour not accept what I've put to you, the union submits that clauses 39.12 and 39.16 contain prohibited content because they are clauses that allow for the imposition of a penalty on an employee for breach of a requirement to provide evidence. Again, your Honour, we say that regulation 8.5(8A) of chapter 2 makes this problematic for the employer. Your Honour, it is probably worth going back to 8.5(8A) at this point and it provides -

PN775

A term of a workplace agreement is prohibited content to the extent that the term allows for the imposition of penalty ...(reads)... the employee's immediate family or household.

PN776

Your Honour, under Mayfield Engineering's clauses if evidence of illness is not provide the clause allows the company to either withhold remuneration through unpaid leave or treat the period as annual leave and thereby reduce the employee's annual entitlement by that amount and we've drawn to your Honour's attention earlier, penalty is defined in regulation 8.5(10) of chapter 2 as including deduction of an amount from an employee's remuneration or a reduction of an employee's entitlements.

PN777

Now, under clauses 39.12 and 39.16, treating the period of absence as unpaid leave would appear to be a deduction both in remuneration and entitlements as the employee would not accrue other entitlements during a period of unpaid leave. On the other hand, treating the period as annual leave would be a reduction of the employee's entitlement to annual leave. In the context of what their rights would otherwise be under the agreement, neither the reduction nor the deduction would be for the employee's benefit as but for the strict requirement to provide evidence, the employee is otherwise entitled to take personal leave.

PN778

Your Honour, as with clauses 39.10 and 39.14, clauses 39.12 and 39.16 cannot be said to be authorised by law. The clauses are less favourable than the standard and would legally have no effect. This time, your Honour, it's relevant to compare the clauses with section 254 and 256 of the Act. Both of those sections allow for documentary evidence not to be given in certain circumstances where a failure to give evidence is beyond the employee's control, but if I could have your Honour go to the section.

PN779

THE SENIOR DEPUTY PRESIDENT: Yes.

PN780

MR KENTISH: Your Honour, section 254 provides and it's subsection (2) which is the relevant one, along with subsection (5). (2):

PN781

To be entitled to sick leave during the period the employee must in accordance with this section give the employer ...(reads)... a statutory declaration made by the employee.

PN782

And then at subsection (5):

PN783

This section does not apply to an employee who could not comply with it because of circumstances beyond the employee's control.

PN784

And your Honour, section 256 is relevantly similar. Section 256(2) provides:

PN785

To be entitled to carer's leave during the period the employees must, in accordance with this section, give the ...(reads)... the member the statutory declaration made by the employee.

PN786

Then, your Honour, at subsection (6) which I want to draw your attention to -

PN787

This section does not apply to an employee who could not comply with it because of circumstances beyond the employee's control.

PN788

Your Honour, unlike the Act, clauses 39.12 and 39.16 make no provision for an employee who cannot provide evidence because of circumstances beyond the employee's control.

PN789

The clauses therefore purport to apply a penalty to an employee who is not able to provide evidence through circumstances beyond their control. The penalty is not authorised by law and the AMWU therefore submits it's prohibited content under regulation 8.58A.

PN790

Your Honour, even if the Commission is against the AMWU on the issue of prohibited content, the AMWU submits that under the Implementation Guidelines an employer cannot enter into an agreement that purports to be less than the statutory minimum in the Workplace Relations Act. To meet legislative requirements, as required by the implementation guidelines, we say that means an employer must, at the least, not be purporting to undercut those entitlements.

PN791

Your Honour, I've already explained the way in which we say the personal leave entitlements causes in the Employee Collective Agreements purport to undercut the Australian fair pay and conditions standard in them, I won't go over that again. However, the AMWU wishes to draw to the Commission's attention the fact that the Employee Collective Agreements purport to provide the conditions in relation to public holidays that are less than the minimum guarantees in the legislation. If I could have your Honour go to clause 41 in the Western Australian Employee Collective Agreement.

PN792

Clause 41, it's titled Public Holidays and it provides at 41.1:

PN793

Each full time and part-time employee will be allowed all relevant appointed or gazetted public holidays or substituted public holidays in the state or territory where he or she is then employed without loss of ordinary hours pay. However to meet operational requirements from time to time the company may require an employee to work on public holidays or particular public holidays. Where an employee performs work on a public holiday he or she will be paid in accordance with sub-clause 25.7.

PN794

And at 41.2:

PN795

The terms of this clause operate to the exclusion of the terms of any other applicable industrial instrument relating to public holidays.

PN796

Your Honour, the relevant provisions of the Act going to public holidays are contained in section 612 and 615. If I could have your Honour turn to those sections.

PN797

THE SENIOR DEPUTY PRESIDENT: Yes.

PN798

MR KENTISH: Section 612, which is the key section for the purposes that I am highlighting to the Commission, it's entitled Entitlement to Public Holidays and provides at (1):

PN799

An employee is entitled to a day off on public holidays subject to subsections (2) and (3).

PN800

And at (2):

PN801

An employer may request an employee to work on a public holiday.

PN802

Then at (3):

PN803

The employee may refuse the request and take the day off if the employee has reasonable grounds for doing so.

PN804

(4):

PN805

A term to the contrary in (a) a workplace agreement or (b) an award, has no effect.

PN806

This clause was the subject of some debate in relation to the recent Anzac Day public holiday. Under the terms of the Mayfield Engineering Western Australia agreement an employee could be directed to work on Anzac Day, regardless of the family circumstances of that employee and we say that that is in breach of the Act.

PN807

THE SENIOR DEPUTY PRESIDENT: That's because of the terminology "may require an employee to work"?

PN808

MR KENTISH: That is correct, your Honour.

PN809

THE SENIOR DEPUTY PRESIDENT: Yes.

PN810

MR KENTISH: And I do note that it's "may require an employee to work on public holidays or particular public holidays". So it's not just on a particular one off day. It might be a direction that the employees always work on public holidays. Now those employees would be able to receive the rates, as contained in 25.7 but we say that that's not the point. The point is that employees should have the opportunity and indeed the right to refuse the request and take the day off, if the employee has reasonable grounds to do so.

PN811

Your Honour, at section 615, which is entitled The Employer Not To Prejudice Employee For Reasonable Refusal, at 1 the section provides:

PN812

An employer must not for the reason or for reasons including the reason -

PN813

I'm sorry, your Honour, I've tangled myself in words there:

PN814

An employer must not for the reason or for reasons including the reason that an employee has refused on reasonable grounds to work on a particular public holiday do or threaten to do any of the following: (a) dismiss an employee (b) injure an employee in his or her employment and (c) alter the position of an employee to the employee's prejudice.

PN815

Your Honour, under the Act employees have the right to reasonable refusal in relation to working public holidays and if Mayfield Engineering were to actually implement the wording of clause 41 it would be a clear breach of the Act, and possibly the subject of penalty under sections 615 and 616, which I won't take your Honour to 616. But your Honour, Mayfield Engineering's Employee Collective Agreements, we say, clearly fail to meet what could be described as legislative requirements with respect to public holidays. The clauses, we say, are therefore also a breach of the Implementation Guidelines.

PN816

Your Honour, the AMWU submits that all of the problems we have identified in relation to the three employee collective workplace agreements that are appended to Ms Donnellan's statement, that's at A, B and C, the Metlabs WA Employee Collective Workplace Agreement, the Metlabs New South Wales Employee Collective Workplace Agreement and the Metlabs South Australia Employee Collective Workplace Agreement, also apply to identical provisions of the Employee Collective Agreements that Mayfield Engineering has offered to its employees are bound by the agreements that Mayfield Engineering now seeks to terminate; one of which, your Honour, can be found at attachment D of Ms Donnellan's statement. I won't take you to the clauses but they, for all intents and purposes, are identical.

PN817

Your Honour, Ms Donnellan wasn't challenged in her evidence where she said that it was her understanding that all of the Employee Collective Agreements that had been most recently offered were in similar terms. But if there have been other changes, I'm sure Ms Leeds is capable of putting that to the Commission.

PN818

Your Honour, as far as the AMWU is aware, the problems will also be present in the Australian Workplace Agreements that are being offered and possibly entered into by Mayfield Engineering. But again, Ms Donnellan is perhaps the best person to make the comment in relation to those AWAs.

PN819

Your Honour, I can sum up the AMWU's case in the following way. We say that the Commission has power to refrain from hearing or dismiss the employer's applications under section 111(1)G's approved format, pursuant to clause 2 of schedule 7 of the current Act, and in particular paragraphs 2(1)A and 2(1)R. the Commission may exercise its power where the employer has breached a certified agreement or is hindering the settlement of an industrial dispute. Your Honour, we submit that there is solid evidence that the employer has breached, and continues to breach, the terms of the agreements that are before the Commission.

PN820

Your Honour, the breaches take place in the context of the employer clearly not being compliant with the Implementation Guidelines on the basis of other agreements it has entered into, even though this is the primary agreement upon which the application is determined to have been made.

PN821

Your Honour, the breaches also take place in the context of the employer's preparedness to enter into agreements and to continue to offer agreements that contain terms and conditions that purport to be less than the statutory guarantee minima and that it contained prohibited content. Your Honour, we submit the employer's application should not be dealt with where the employer is not meeting its obligations under the Implementation Guidelines Certified Agreements to which it is bound and the Workplace Relations Act.

PN822

Your Honour, in all the circumstances we respectfully submit that the application should be dismissed. If it pleases.

PN823

THE SENIOR DEPUTY PRESIDENT: Yes. Now, you have this morning only addressed the section 111 application, correct?

PN824

MR KENTISH: That's correct, your Honour. Yes.

PN825

THE SENIOR DEPUTY PRESIDENT: Yes.

PN826

MR KENTISH: Although many of the matters that I went to, including the discussion of prohibited content and statutory minima contained in the standard, should the Commission hear the employer's applications under section 170MH, we would not seek to repeat those submissions but rather rely upon, as we would argue, that they also go to matters affecting the public interest.

PN827

THE SENIOR DEPUTY PRESIDENT: Yes. You correctly discerned the purpose of my question. Yes, very well.

PN828

Would it be appropriate to take a short break or what would the parties like to do, in relation to timing?

PN829

MS LEEDS: Your Honour, if we could have a break till, say, 12.15 and reconvene.

PN830

THE SENIOR DEPUTY PRESIDENT: Yes, very well.

PN831

MS LEEDS: Or have an early lunch. I'm in your hands.

PN832

THE SENIOR DEPUTY PRESIDENT: Well, that's what I'm really asking; do you want to take a short break and continue or do you want to break early? It seems to me that taking a short break and continuing till, say, 1 o'clock makes sense. We will proceed on that basis.

PN833

MR QUIGLEY: Yes, Okay.

PN834

THE SENIOR DEPUTY PRESIDENT: Reconvene at 12.15.

<SHORT ADJOURNMENT [12.08PM]
<RESUMED [12.26PM]

PN835

THE SENIOR DEPUTY PRESIDENT: Ms Leeds.

PN836

MS LEEDS: Your Honour, much of the AMWU's case in their application under section 111(1)G is based on breaches of agreements by Mayfield Engineering. Specifically they allege that there was a breach of clause 25 of the agreement. In our respectful submissions we say that that can't be substantiated by the AMWU because there's been no finding or declaration such a breach by a court that has jurisdictional to make that finding.

PN837

Clause 25(1) of the agreement - and I know Mr Kentish has handed those up and they are, for all intents and purposes, the same drafting in both the South Australian and national agreement. Clause 25(1) places an obligation to commence negotiations no later than three months prior to the expiry of the agreement and to negotiate in accord with union forum. Mayfield submits this obligation has been discharged because Mayfield commenced negotiations with the AMWU in January 2006, this being three months prior to the nominal expiry date of 31 March 2006.

PN838

Further, the negotiations were put before a replacement Union Collective Agreement and the bargaining took place within, what the agreement terms, a collective union forum. That is, negotiations with the AMWU and a delegate nominated by the union and the company. We say that we have discharged this obligation and the discharge of that obligation was further supported by Acton SDP, or at least a reference to it in a recent decision on an application by the AMWU for a secret ballot. If the Commission pleases I would like to hand up the decision.

PN839

THE SENIOR DEPUTY PRESIDENT: I think I have brought my own.

PN840

MS LEEDS: Okay.

PN841

THE SENIOR DEPUTY PRESIDENT: That's PR 974707?

PN842

MS LEEDS: Yes, that's correct, your Honour.

PN843

THE SENIOR DEPUTY PRESIDENT: Yes.

PN844

MS LEEDS: Your Honour, in her decision on that application Acton SDP noted the evidence before her in this way - I refer to paragraph 1:

PN845

The AMWU and Mayfield have been meeting to negotiate a collective agreement for the Metlabs division of Mayfield since early 2006. however no such collective agreement has yet been made.

PN846

And she footnotes that sentence and the footnote there refers to an exhibit produced by the AMWU, which was given the number AMWU3. Further, at paragraph 46 her Honour notes:

PN847

The evidence before the Commission reveals that there have been numerous meetings since the 9th of May 2006 between the AMWU and Mayfield to discuss the proposed collective agreement. Further, since 9 May 2006 numerous drafts of a collective agreement have been developed and exchanged between the AMWU and Mayfield. Those drafts covered a wide range of wages and conditions and employment matters. Prior to the conclusion of the hearing of this matter, the latest draft of a collective agreement was one emailed from the AMWU to Mayfield on the 18th of August 2006. It was emailed at the request of the AMWU to Mayfield for further discussions.

PN848

Now, Ms Donnellan, on the last occasion on 10 April, gave quite detailed evidence under cross-examination about the number - as she did, I might add, in proceedings before her Honour Acton SDP. But Ms Donnellan gave extensive evidence about the commencement and the continuation of those negotiations and relevantly, in the transcript of 10 April those comments or those replies can be found at PN269 which - I don't have a page number for you, your Honour, but page 269(sic). It was the first question in cross-examination when Ms Donnellan was asked when did she commence negotiations with Mayfield and she states, "We commenced negotiations with Mayfield in January 2006".

PN849

We further asked Ms Donnellan why did the AMWU commence negotiations at this time and she says this:

PN850

We commenced them at the time on the basis of we were hoping to have discussions with the company towards reaching an agreement that we could have lodged prior to the application of the new legislation, which came into effect on 27 March 2006. So we initiated discussions with Mayfield at that point in time with the objective, from the union's perspective, of reaching an agreement prior to the current legislation.

PN851

Further in her evidence, over the page at PN280, when she was asked what was Mayfield's reaction to that request for the meetings, she says this:

PN852

Mayfield was prepared to participate in discussions with the AMWU and attended, from my recollection, three meetings at the union offices during the course of January 2006".

PN853

Three meetings during the course of January 2006. In the course of a month there were three meetings. Further, at PN 282 Ms Donnellan says:

PN854

Mayfield did meet with us. That is correct

PN855

Again at PN 288, when Mayfield quizzes Ms Donnellan about meetings since January 2006, she says:

PN856

Yes, since 31 March 2006 we've had numerous meetings with the company towards achieving an amicable agreement.

PN857

And further at PN 295 on the bottom of that page she says this:

PN858

I recall giving evidence about a number of meetings that we had with the company. I recall giving evidence that that also included proceedings before Commissioner Blair, where we sought the assistance of Commissioner Blair to ...(reads).... I recall giving evidence on the matters that were in dispute and not agreed by the parties at that particular point of time. I recall giving evidence probably on the scope of the matters that were at that point of time not agreed between the parties.

PN859

Your Honour, we respectfully submit that that evidence is not evidence that the Commission can find that Mayfield has not met its obligations or, at worst, has breached this agreement. Further, supporting that collective negotiations have been occurring between the AMWU and Mayfield is a letter from the national secretary of the AMWU, Mr Doug Cameron, which I would like to tender.

PN860

THE SENIOR DEPUTY PRESIDENT: Just while that is coming up, can you remind me what was the nominal expiry date of the agreements?

PN861

MS LEEDS: 31 March 2006.

PN862

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN863

MS LEEDS: Thank you, your Honour. This is a letter dated 3 January 2007 from Mr Cameron, the national secretary of the AMWU and in withdrawing - and it's a letter that withdraws a previous notice of intention to take industrial action that was served on the company on 22 December 2006. In withdrawing that notice to take protected action, Mr Cameron also acknowledges further discussions and correspondence between the AMWU and Mayfield. Indeed, a further meeting took place in Melbourne on 16 January 2007, in response to Mr Cameron's request for further meetings.

PN864

Clause 25(2) of the agreement requires the company and the unions to bargain collectively in relation to, amongst other things, "Renewal, extension, variation or renegotiation of his agreement". Mayfield submits that this is an obligation to bargain collectively. There is no obligation to make a new agreement with the AMWU. Again, we respectfully submit that Mayfield has discharged this obligation and we rely on the submissions that we have just made in relation to clause 25(1) in this instance, and in particular the evidence that the Commission has in terms of Ms Donnellan's cross-examination and Mr Cameron's letter.

PN865

25.3 of the agreement: insofar as this clause may be relevant to the AMWU's application, Mayfield submits that it has discharged this obligation as well because it has, for all intents and purposes, recognised the AMWU as the organisation that represents the interest of employees in those particular states and workplaces. To give the Commission an example of that, there was in around October 2005 a dispute before Commissioner Blair in Perth on the application of the site rates clause and on that occasion the AMWU was recognised as the party to bring those proceedings and Mayfield cooperated, had discussions with the AMWU and participated in the conciliation with Commissioner Blair. So to the extent that that particular subclause is relevant, we say that we have met those obligations.

PN866

THE SENIOR DEPUTY PRESIDENT: When did you say those proceedings were?

PN867

MS LEEDS: Around October 2005. Your Honour, the source of an obligation to negotiate was recently considered by the Federal Court in Australasian Meat Industry Union (WA Branch) v Woolworths Limited [2007] FCA 389, but I would like to hand up that decision. Your Honour, this decision relates to an application by the Australasian Meat Industry Union WA Branch alleging that Woolworths Limited was contravening Part VIII Division 1 of the Act by breaching the Woolworths Limited Western Australian Supermarkets and the Australasian Meat Industry Employees Union Agreement 2002, by failing to negotiate a replacement certified agreement.

PN868

The respondent, Woolworths, submitted the steps taken by the union, lodging a notice of initiating a bargaining period pursuant to section 170MI of the Act put Woolworths on notice that the union intended to try and make an agreement, under Division 2 Part VIB of the Act, with Woolworths. The responsibility submitted that by filing and serving that notice the applicant invoked a statutory framework for making a certified agreement so that, upon the statutory framework being established by the union, the obligations under clause - in this particular case - 1.3.2 of the agreement were nugatory.

PN869

The respondent submitted that the steps taken by the applicant to initiate the bargaining period overcame or superseded the obligation of the parties under, again, that particular clause, clause 1.3.2 of the agreement; or alternatively satisfied both the applicant's and the respondent's obligations under that clause. Further, it was submitted that it would be unreasonable for the respondent to be held to its obligations under clause 1.3.2 in circumstances where the applicant had, by initiating the bargaining period, created a statutory framework to facilitate agreement making or to enable a party to engage in protected industrial action.

PN870

Nicholson J considered the effect of section 170MI and concluded at paragraph 64:

PN871

In my opinion the effect of giving the notice by the applicant pursuant to section 170MI is to initiate - - -

PN872

THE SENIOR DEPUTY PRESIDENT: Hang on. Paragraph 64, the version I have doesn't have paragraph numbers. So what page are we looking at?

PN873

MS LEEDS: Okay, we are on page - -excuse me for a moment, your Honour, and I will - - -

PN874

THE SENIOR DEPUTY PRESIDENT: Is that on page 13?

PN875

MS LEEDS: Yes.

PN876

MR QUIGLEY: Excuse me, your Honour. Yours might be - the staple may have obliterated the paragraph number on page 13, your Honour.

PN877

THE SENIOR DEPUTY PRESIDENT: Right.

PN878

MS LEEDS: Yes. Yes, your Honour. It's actually over the page, your Honour. It's on page 14.

PN879

THE SENIOR DEPUTY PRESIDENT: Yes. Mine actually does have paragraph numbers but it just didn’t look like the paragraph numbers at first glance.

PN880

MS LEEDS: Yes. Your Honour, in paragraph 64 Nicholson J says this:

PN881

In my opinion the effect of giving of the notice by the applicant pursuant to section 170MI was to initiate the statutory bargaining process which took legal priority over any provision of the 2002 agreement and so over clause 1.3.2. As with section 170LX, the 2002 agreement can only take effect in the context of the statutory provisions, the application of which was attracted by the status certified agreement and the giving of notice under section 170MI. The consequence, so the source of the obligation to negotiate rests not on clause 1.3.2 but on the relevant statutory provision. It follows that the applicant cannot rely on any alleged breach of clause 1.3.2 as the foundation of this claim.

PN882

Mayfield submits that the principles established by the Federal Court apply in this case. That is, when the AMWU initiated the bargaining period on 1 May 2006, a fact noted in Acton SDP's decision at paragraph 1, obligations under both agreements were extinguished. The bargaining period gives the AMWU and the employees various rights which they have exercised, including two applications for secret ballots and periods of industrial action commencing 8 February 2007 and continuing through in consecutive periods to 30 March and for industrial action to continue past that date. One of those notices was subsequently withdrawn.

PN883

THE SENIOR DEPUTY PRESIDENT: Can you go back? What was the date you said that the notice of bargaining period was?

PN884

MS LEEDS: The notice of the bargaining period was 1 May 2006.

PN885

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN886

MS LEEDS: Now your Honour I can hand up the bargaining notices but I do note that they are attached to Ms Donnellan's statement. I might in fact hand them up because they represent all the notices that have been served.

PN887

MR KENTISH: Your Honour, I do have some concerns about evidence trickling in, in this way. I had asked, in fact, if the evidence had been put the last time the Commission sat; although subject to glancing at these, we have no objections of these particular notices because they are not contested, assuming that they are in fact the notices.

PN888

THE SENIOR DEPUTY PRESIDENT: Yes.

PN889

MS LEEDS: Thank you, your Honour. Your Honour will note that that collection of documents are Notice by Organisation of Intention to Take Protected Industrial Action and they are variously dated 2 February 2007, 13 February 2007, 21 February 2007, 27 February 2007, 6 March 2007. Mayfield submits there's been no finding by a court of competent jurisdiction that Mayfield has breached any certified agreement.

PN890

This relates to point 5 of the AMWU's application and I do note that - - -

PN891

THE SENIOR DEPUTY PRESIDENT: Sorry? Point five?

PN892

MS LEEDS: Yes, of the AMWU's application.

PN893

THE SENIOR DEPUTY PRESIDENT: "Mayfield Engineering breaches and continues to breach obligations under the agreement by refusing sick leave, to pay sick leave entitlements in accordance with the agreement"?

PN894

MS LEEDS: Yes, that's correct.

PN895

THE SENIOR DEPUTY PRESIDENT: Yes.

PN896

MS LEEDS: Your Honour, the allegation there relates to absences during the period that was covered by the notice of, I think 6 March, that I've just handed up. Mayfield's legal advice at that time is that a payment during a period of protection action would contravene section 507 of the Act. I note this was also the view of the Work Choices information line when they were asked to provide the company with advice.

PN897

Those matters were canvassed before conciliation proceedings before her Honour Acton SDP on 26 March 2007, and were not resolved at that conference. Mayfield submits that the statutory framework under which protected action was taken and the statutory prohibition of payments during periods of industrial action displaces the provisions of the award or the certified agreements.

PN898

If I look specifically and make some initial comments, because I do want to come back and address the points that Mr Kentish made in a little more detail. But in terms of some initial comments in relation to the AMWU's application, at point 6 of the application there is an allegation that Mayfield breaches and continues to breach the obligations under the agreement by not paying overtime rates, in accordance with clause 7of the agreement.

PN899

Your Honour, this matter again was subject to proceedings before O'Callaghan SDP. It's a mater that is quite separate from this, the application, the 170MH application and needless to say it is a matter that is close to resolution. So I'm surprised to hear that Mr Kentish was not instructed that that was in fact the case. If I can hand up to the Commission an exchange of emails and an offer that was put to the AMWU in the submission of that matter.

PN900

MR KENTISH: Your Honour, I don't object to this but only on the basis that it's a signed condition of - - -

PN901

THE SENIOR DEPUTY PRESIDENT: Sorry, it's a what?

PN902

MR KENTISH: I don't object to this although again it's trickling through. But I mean it's obviously a signed admission that the company aren't meeting their requirements. But I would leave that as it is made. It was provided on a without prejudice basis but now the prejudice would appear to be the company's.

PN903

MS LEEDS: Your Honour, this is a - Mr Hamish Sinclair is the manager of the Metlabs eastern region and he has responsibility for employee matters in Victoria and South Australia. He attended the conference with O'Callaghan SDP in late December and following that conference some thought was given in regard of admission to the issue of whether Mayfield was paying the correct overtime deviser. A position has been worked out by the business where it was prepared to make, with a deed of release, certain payments to the employees in satisfaction of any claims they say they have in that regard. The documents I've just handed is a demonstration of the progress of those negotiations.

PN904

My advice prior to coming to the Commission this morning was that - and I did note an email over the weekend - was that there has been an agreement with the AMWU South Australian branch, Mr Peter Bower, of the methodology of calculating the back pay for those employees and we also have some details of concern about the deed of release from the AMWU, which we will then discuss with Mr Bower, and we believe that that matter is well on its way to being resolved. It's not a matter that the AMWU can insist is either a breach or continues to be a breach.

PN905

In relation to point 7 of the AMWU's application, in relation to the first part of the statement there are no specific details given at the time that the application was made and the alleged industrial dispute; and Mayfield is not able to make any further submissions other than what Mr Kentish said today, which we dispute and we dispute by evidence of the role that Mayfield has had in negotiations with the union, with a view to forming an Employee Collective Agreement. Again, I point to the evidence of Ms Donnellan in that case.

PN906

In response to the second part of the statement, I take the Commission to Acton SDP's decision and refer the Commission to the relevant statements in paragraph 98. Her Honour says:

PN907

With regard to section 4214D of the Act there have been numerous meetings since the 9th of May 2006 between the AMWU and Mayfield to discuss the proposed collective agreement.

PN908

And at 99:

PN909

The numerous drafts of a certified agreement developed and exchanged between the AMWU and Mayfield since 9th May 2006 is also demonstrative of the AMWU considering and responding to proposals made by Mayfield.

PN910

And I'll stop there because it's not a pat on the back necessarily for the AMWU, but it is recognition of proposals made by Mayfield. Now this is not the conduct - and I note that the Commission has to take the conduct of Mayfield into account in reaching a decision on this application. This is not the conduct, your Honour, of an employer that does not meet its obligations under the agreement as asserted by the union.

PN911

Further, at paragraph 112 her Honour notes - - -

PN912

THE SENIOR DEPUTY PRESIDENT: Sorry, when you say "the conduct", what are you referring to there?

PN913

MS LEEDS: I'm referring to the submission that Mayfield - - -

PN914

THE SENIOR DEPUTY PRESIDENT: Okay. Yes.

PN915

MS LEEDS: - - - refuses to meet or to bargain collectively.

PN916

THE SENIOR DEPUTY PRESIDENT: No, no, no. Sorry. I see what you are referring to is section 111(1)G(iv), that a party to the industrial dispute is engaging in conduct that.

PN917

MS LEEDS: That's correct.

PN918

THE SENIOR DEPUTY PRESIDENT: Yes. That was what I - - -

PN919

MS LEEDS: That's correct. At paragraph 112, her Honour states:

PN920

Indeed the evidence reveals the negotiations between the parties have been protracted with much time for the parties to consider each other's position and concerns. Notwithstanding that, agreement on the terms of the union certified agreement between the parties remains elusive.

PN921

The collective bargaining negotiations, your Honour, have been simply exhausted. Mayfield has met with the AMWU frequently from early January 2006 to 20 February2007. It is simply a case that an agreement cannot be reached. Mayfield's submission is that the agreement - certified agreements do not require the making of a new agreement but rather the commencement or the engaging in negotiations. Our respectful submission is that that has happened.

PN922

Your Honour, I would like some time to look at some of the submissions that have been made by the AMWU over the break and I wonder if it might be appropriate for me to leave my submission here and then continue on after lunch, if it's appropriate?

PN923

THE SENIOR DEPUTY PRESIDENT: Certainly.

PN924

MS LEEDS: Thank you.

PN925

THE SENIOR DEPUTY PRESIDENT: You are referring to the sick leave? Because you said you wanted to address that later.

PN926

MS LEEDS: Yes. All those matters of breaches and so on. I might just note, your Honour, before we adjourn that the Tristar decision referred to by - - -

PN927

THE SENIOR DEPUTY PRESIDENT: The Full Bench decision you mean?

PN928

MS LEEDS: Yes, the Tristar Full Bench decision.

PN929

THE SENIOR DEPUTY PRESIDENT: Yes.

PN930

MS LEEDS: It says at paragraph 10, the Bench says:

PN931

It is central to an understanding of the appeal that the AMWU has initiated legal proceedings against Tristar for breach of a number of terms of the agreement.

PN932

Now, I note that in these proceedings although there have been some very wild allegations about breaches of the agreement, there have been no proceedings instituted for such alleged breaches. There is a matter before the Industrial Relations Court South Australia and it relates to a claim under section 14, a monetary claim under the Fair Work Act on behalf of - it's an application by Christopher Sakalides and it relates to specifically those two days of payment for sick leave, which had not been paid by the company on grounds of section 507 of the Act.

PN933

That is the only - and I'm happy to hand this up. I note Mr Kentish's comments about the documents that are being handed up, but they are his - I'm happy to make them available to the Commission if Mr Kentish doesn't have an objection. They are his union's applications.

PN934

MR KENTISH: I have no objection, your Honour.

PN935

MS LEEDS: Your Honour, if I can take you to the page that starts, "Form number 7 of 35 summons".

PN936

THE SENIOR DEPUTY PRESIDENT: Yes.

PN937

MS LEEDS: "Substantial summons".

PN938

THE SENIOR DEPUTY PRESIDENT: Yes.

PN939

MS LEEDS: It is in the matter of a monetary claim arising under the Act, an award and agreement or contract of employment. It's not a matter of a prosecution against Mayfield Engineering for a breach - and I think that that is an important aspect of this application and in particular, of one of the founding issues or grounds in the Full Bench in Tristar.

PN940

THE SENIOR DEPUTY PRESIDENT: Yes. So you are wanting to break now?

PN941

MS LEEDS: If that's possible, please.

PN942

THE SENIOR DEPUTY PRESIDENT: Yes, certainly. It's just an appropriate time to do so anyway.

PN943

The Commission will adjourn until 1.45. Is that going to work for everyone?

PN944

MS LEEDS: Yes.

PN945

THE SENIOR DEPUTY PRESIDENT: Very well, 1.45.

<LUNCHEON ADJOURNMENT [12.59PM]
<RESUMED [1.57PM]

PN946

THE SENIOR DEPUTY PRESIDENT: Yes, Ms Leeds.

PN947

MS LEEDS: Thank you, your Honour. Your Honour, I reflected on the very extensive submission that Mr Kentish made prior to the adjournment and I would like to make some preliminary comments about the submissions; and I note that this is really the first time that those issues have been articulated by the AMWU, notwithstanding that they have had the application for the 170MH proceedings for months now. Indeed, in their own application for the section 111 proceedings they simply state - and I refer to paragraphs 7, 8, 9:

PN948

Mayfield Engineering has recently entered into -

PN949

This is number 9:

PN950

Mayfield Engineering has recently entered into employee certified agreements applying to its Metlabs employees that are not complying with the Workplace Relations Act.

PN951

And similar comments have been made about the National Code of Practice and Implementation Guidelines and - I should correct that about the National Code of Practice for the Construction Industry. We say that this is the first time that the union has provided any specifics about what it says are compliance issues, which the company dose not concede and does not agree that they are compliance issues; either in terms of the Workplace Relations Act or the National Code of Practice and its Implementation Guidelines.

PN952

However, if the Commission is minded to make a positive determination on the section 111 application, based on the submissions of Mr Kentish this morning, Mayfield would respectfully request an opportunity to make further written submissions to the Commission; because this is the first time these matters have been articulated or have been specified. So we are at a little bit of a disadvantage, however I can make some preliminary comments and I will leave it to the Commission to then give guidance to us from there on.

PN953

Your Honour, the evidence that Ms Donnellan has given, the only evidence in these proceedings, does not lead to the conclusion that Mayfield has breached the agreement in respect of the failure to negotiate or to commence negotiations under clause 25; or that the employee certified agreements and the Australian Workplace Agreements do not comply with the Implementation Guidelines. Our respectful submission is that the Commission must have some evidence on which to make such findings and to give - and to support the application or the granting of the AMWU's application in these proceedings.

PN954

The content of the Employee Collective Agreements are largely irrelevant to these proceedings and they are largely irrelevant, in fact totally irrelevant, to the employees covered by the agreements that are subject to the section 170MH applications. On the other matters of breach, it was put to the Commission that Messrs Greigg and Poulter had not been paid appropriate notice and had not been given appropriate payments for sick leave. With the notice payments, they were rectified once the company has become aware of that and I'm instructed by Mr Sinclair who manages the Victorian region that in fact a payment of some $260 - and likewise a similar payment will be made to Mr Poulter or has been made to him in settlement of those underpayments. They were not intentional; these things happen and they've been rectified.

PN955

THE SENIOR DEPUTY PRESIDENT: Sorry, so what are you saying about Mr Poulter's situation?

PN956

MS LEEDS: Well I'm saying that there was an underpayment in respect of the notice period. It didn't take account of a number of elements and that was drawn to the company's attention by Mr Poulter and that has since been rectified by further payment to him.

PN957

THE SENIOR DEPUTY PRESIDENT: Yes. I think that was referred to the last time we were together and the payment has since been made, has it?

PN958

MS LEEDS: Yes, I understand it has. It's been calculated- if I can find my - here we are. Sorry, your Honour. Mr Poulter was paid a further payment of $263.11 and Mr Greigg was paid $229.08 and they were payments to correct an apparent error in the notice payment. So our submission is that these are not breaches. They are simply an error which has subsequently rectified.

PN959

On the question of sick leave, and this applies equally to Mr Sakalides as it does to Mr Greigg and Poulter - - -

PN960

MR KENTISH: Your Honour, I apologise for interrupting but I will undertake instructions as to Mr Poulter's payment and if I could have an indication from the company when that money was paid, that would assist in the gaining of those instructions.

PN961

MS LEEDS: Your Honour, I can find that out. I have an email dated Friday 27 April which says, "J Poulter and M Greigg were paid a supplement. JP $263.11. MG $229.08 to their final pay which corrected apparent errors in the payment of lieu of notice". So I'm assuming that that payment has been made but I'm happy to take a short adjournment and make a phone call, if that is required.

PN962

MR KENTISH: Well, I could probably take the instructions prior to beginning my submissions in reply, perhaps so as to not interrupt Ms Leeds' flow.

PN963

THE SENIOR DEPUTY PRESIDENT: Yes.

PN964

MS LEEDS: Thank you.

PN965

THE SENIOR DEPUTY PRESIDENT: Perfectly appropriate.

PN966

MS LEEDS: Thank you.

PN967

The second breach or alleged breach was in relation to non-payment of sick leave for Mr Sakalides, Mr Greigg and Mr Poulter. There's no evidence before the Commission that these gentlemen did take sick leave on that day. The company's informed by a notice of intention to take industrial action and also it understands its obligations that arise in terms of making payments under section 507 of the Workplace Relations Act. In any event, Mr Sakalides has made his claim to the South Australian Industrial Court and his monetary claim is for some $413 or $400, around that mark, for two days lost.

PN968

Now Mr Poulter and Mr Greigg, as far as I'm aware, have not made any formal claims to recover any alleged underpayments. However, in the general scheme of things and in a big public interest argument, 400 or so dollars, two days in a period where there was protected industrial action in place and being taken, is not a matter of any great significance that would require the Commission to grant the application on those grounds.

PN969

The matter of the 36, 38 hour week deviser or what the union refers to as the overtime payments in South Australia for employees employed at the ASC, the submarine corp, that is on the way to being settled and I have provided the Commission with information on that. Indeed, as I've mentioned, the formula for working out any moneys that might be due has been settled. Again, not a significant breach. It might relate to four or five employees. It is not a breach that the Commission should take into account and grant the AMWU's application.

PN970

If we look at schedule 7 of the Act, and the AMWU referred to the objects of the Act and if I can briefly summarise by saying one was to create a framework for cooperation in relations and the other was to provide a framework, effectively, for agreement making and abiding by those agreements. Our submission is, your Honour, that the objects of the Act don't mean union involvement. They don't mean a framework that must have a union present. The framework for cooperative industrial relations and employer employee relations can in fact be between the employer and the employees.

PN971

Similarly, an agreement can be made between the employer and the employees. In fact the Act, both the current Act and the pre-reform Act if I could call it that, had facilities for that to happen. In the current Act, the Employee Collective Agreements are such of equal and in the Act before the Work Choices amending legislation, there was section 170LK. The Act anticipates that cooperative industrial relations can in fact exist directly between the employer and employee and it does not mandate union involvement in absolutely everything.

PN972

With respect to the 170MH application which this application seeks to have dismissed, the company's submission is that circumstances have been imposed on it by the National Code of Practice and the Implementation Guidelines that require us to terminate the agreements. These agreements were made prior to a revision of the National Code of Practice and Implementation Guidelines, which saw a lot more rigour and a lot more - far greater obligations on employers contracting with the Australian Government than was previously the case. These are circumstances that are not of the company's making but ones that we must respond to.

PN973

This is not an application. 170MH is not an application to avoid obligations of those agreements as may have been the case of the Tristar application. This is not that kind of application. There is no sinister intent in this and certainly now we have, as of Friday, three employees covered by the expired collective agreement - sorry, the certified agreement in South Australia and we have two employees in Victoria, so we're talking about five employees. Five employees who, if the agreements were to be terminated, would fall back on the award.

PN974

THE SENIOR DEPUTY PRESIDENT: Those numbers are less than I remember being given in evidence on the first day.

PN975

MS LEEDS: Yes, your Honour. There have been quite a number of resignations, which is I think much to the - I guess, the unhappiness that we are losing employees and a reflection of, I guess, the way the AMWU manage these negotiations. The Employee Collective Agreements are largely in similar terms to the expired certified agreements, subject of course to some of the compliance issues that arise under the Workplace Relations Act or the revised Implementation Guidelines, which have been tendered to in these proceedings; and a number of operational issues.

PN976

Mr Kentish took the Commission to section 420 footnote number 2. Again, we say that there is no evidence of illness in these proceedings. No one has given evidence that these people who the AMWU allege caused us to breach the agreement have or were sick on those days. The footnote in section 420 is not law, it's guidance and it requires circumstances to be considered and the circumstances in this case were that there was a notice of intention to take industrial action. The gentlemen in question, the employees in question, in fact participated since 8 February in industrial action. It was open to Mayfield to say that the absence could be the employees taking that protected action and therefore section 507 of the Act gave us certain limitations, imposed certain limitations on payment.

PN977

Now the failure to bring evidence about the sick leave, your Honour, could only be inferred by the Commission that it's not favourable to the union. The other point that was made by Mr Kentish was that the company was hindering the settlement of the industrial dispute relating to payment and terms and conditions for those employees that were eligible to be members of the union. What, of course, Mr Kentish's submission fails to take account of is in fact the well documented negotiations that have been on foot since January 2006 and the end of February 2007. It was a very, very hard bargain and it was one that did not result in agreement but the process was gone through and I won't make any more comments. I think the evidence of Ms Donnellan, the decision and the evidence of proceedings before Acton SDP support this proposition.

PN978

Again, the compliance of the Australian Workplace Agreements and the Employee Collective Agreements which have been made subsequent to the expiry of these agreements are not really relevant for the purposes of section 170MH. In any event, the AMWU has not led any evidence on the compliance or otherwise of those agreements.

PN979

THE SENIOR DEPUTY PRESIDENT: Well as I understand it, Mr Kentish isn't relying on outside evidence other than just the wording of the agreements and the wording of the Act. I wouldn't have thought that - I mean, I take your point about there being no evidence but I didn't interpret his submissions as relying on evidence, but rather the reading of those various provisions.

PN980

MS LEEDS: Well, that's his contention and we have a totally different view which, as I prefaced my comments with, we've not really had an opportunity to consider because the application has completely lacked any specific details and has not given us an opportunity to put those submissions to you about why we say that they do comply or that they don't breach the Workplace Relations Act. As I indicated, if the Commission was minded to allow us that opportunity, then we would certainly be happy to do that in a written submission, your Honour.

PN981

If I could turn briefly to - - -

PN982

THE SENIOR DEPUTY PRESIDENT: Well, it's not so much allowing you the opportunity is it? In the sense that there's an application made which is under consideration now; Mr Kentish has made his submissions in support of that application and you have got the opportunity to respond. Now, are you saying that you would like an adjournment of consideration to make further submissions or what?

PN983

MS LEEDS: Well, yes, I would. Yes, I would, or to do it in writing because the - you know, Mr Kentish was on his feet for 2 hours and made very, very extensive submissions about breaches, compliance issues relating to particular clauses, particular sections of the Act, and I think in fairness to Mayfield they can't be answered necessarily. You hear them once. There's 2 hours of submissions and we have 45 minutes to come and refute or put our submissions to the Commission and it's for that that I'm asking some forbearance from the Commission to either allow a submission or perhaps to take submissions in writing. I can go through all my notes - - -

PN984

THE SENIOR DEPUTY PRESIDENT: It means - - -

PN985

MS LEEDS: I can go through on my notes.

PN986

THE SENIOR DEPUTY PRESIDENT: Yes.

PN987

MS LEEDS: They might not be the submissions that we would want to make, after we've actually considered what Mr Kentish has said.

PN988

THE SENIOR DEPUTY PRESIDENT: Yes.

PN989

MS LEEDS: I think if you look, your Honour, at the application, it really doesn't give you much of a clue about what section they say breaches the Code, what section breaches, what part of the agreement breaches the Workplace Relations Act, how - you know, what conditions. I mean, the agreement contains provisions that are less favourable; well what are they? We know what they are now because we've had that detail but we don't have sufficient opportunity to address them as we would, other than these very preliminary comments that I'm making.

PN990

Sorry, your Honour, I'll just briefly look at the Full Bench decision in the Tristar matter. Again, I take the Commission to paragraph 9 and surrounding facts and the last sentence says:

PN991

The unions have attended the principal matter at stake and the 170MH application is the level of redundancy benefits, particularly severance pay.

PN992

That is a serious motive and given what we lay people know of that particular dispute, that we would be a serious motivation - - -

PN993

THE SENIOR DEPUTY PRESIDENT: Well, based on the newspaper reports.

PN994

MS LEEDS: Yes, that’s right. Very uninformed.

PN995

THE SENIOR DEPUTY PRESIDENT: Yes, they are.

PN996

MS LEEDS: But if we can take that the unions took the view that the principal matter at stake in that application was the level of redundancy and the company somehow had a motive to avoid those payments by seeking to terminate the agreement, we simply say that in the matters before the Commission we're not acting under any such motivation. That is evidenced by the process of negotiation, the repeated union collective agreement offers that have been made to the union, the fact that we've made another collective agreement with employees, is evidence that the company Mayfield is not motivated by similar considerations as Tristar may have been.

PN997

Furthermore I note that in paragraph 10 the Commission notes - the Full Bench notes that it's central to the understanding of the appeal that the AMWU has initiated legal proceedings against Tristar for a breach of a number of terms of the agreement. That has not happened in these circumstances - in this case, your Honour, and the AMWU allege in those proceedings that Tristar has breached provisions relating to the negotiation of the replacement of when - and redundancy. Now, we submit that the AMWU can not make those allegations in respect of negotiations of a replacement agreement, given the evidence that's before the Commission on that matter.

PN998

Further, in paragraph 13 the first grant of appeal in the case was that:

PN999

Senior Deputy President erred in concluding that it would be inappropriate and beyond her power to make a preliminary assessment as to whether Tristar had breached the agreement.

PN1000

And further:

PN1001

The allegations related to clause 6(2) which obliges the parties to commence negotiations three month prior to the end of the life of the agreement with the aim of formulating this agreement.

PN1002

This is a matter that was specifically addressed by the AMWU and our respectful submission is that in the matter before the Commission they cannot rely on this, because the evidence before the Commission is that the negotiations did commence and they were exhaustive.

PN1003

In respect of paragraph 15 of the decision, the unions in this case argued that Tristar had engaged in unfair bargaining or unconscionable conduct because they alleged, and I quote:

PN1004

It had not commenced negotiations for a new agreement as required by clause 11.

PN1005

That is not the case in these proceedings. On the evidence of Ms Donnellan, evidence before Acton SDP, the decision of the senior deputy president, it cannot be found by this Commission that the negotiations had not commenced, as was the case in the Tristar matter. Negotiations had commenced and had continued for some 12 months and more.

PN1006

In respect of paragraph 18, your Honour, of the Full Bench decision the parties submissions go to the nature of the Commission's task in determining an application under 170MH of the Act and in particular, whether the Commission should entertain the allegations of breaches of the agreement in question. I pause there and draw the Commission's attention to, "entertain the allegations of the breaches of the agreement in question".

PN1007

There is then also a quote from another decision, the Ranger Uranium Mines decision and our submission is that even if this was the case, the evidence was not - even if the Commission has the right to consider these breaches, the evidence in this case could not support this Commission making such a finding. Again, I point to the evidence in respect of clause 25 of Ms Donnellan and matters that were - and evidence that was brought before the proceedings before Acton SDP.

PN1008

Your Honour, in paragraph 21 the Commission notes:

PN1009

The extent to which the conduct of the parties is consistent with the agreement is a matter which is capable of affecting public interest. The fact that an application under section 170MH has previously breached the agreement in question may be a factor in determining whether the termination is contrary to public interest. It follows that the Commission should not lightly exclude evidence and submissions that ...(reads)... the opinion might well be a relevant consideration.

PN1010

Now, what the Full Bench has said in this paragraph is that the opinion of the breaches, the Commission may form an opinion of the breaches and it might well be a relevant consideration. It might well be. It doesn't have to be but it might well be a relevant consideration, and our respectful submission is that in these proceedings that finding of a breach is not open to this Commission; on the evidence and on the submissions.

PN1011

There is no evidence of a breach. The matters that have been identified as breaches of the agreement relating to the employees and payment of sick leave and so on are not substantial and they would be matters that the Commission, in our respectful submission should not consider as being breaches that would be relevant to any consideration.

PN1012

Finally, your Honour, this decision is not an authority for the proposition of the finding of a breach, preventing the Commission from terminating an agreement. It doesn't say that. It says that, "a breach may well be a relevant consideration". It doesn't purport to direct the Commission to say that a finding of a breach by the Commission must result in the granting of a section 111 application or not to terminate an agreement that is subject to an application under section 170MH.

PN1013

Thank you, your Honour.

PN1014

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1015

Mr Quigley.

PN1016

MR QUIGLEY: Thank you, your Honour. In the interest of perhaps saving some time, your Honour, I've reduced my submissions to writing, an outline of which I'd just like to refer to those on the way through, if I could?

PN1017

MR KENTISH: Your Honour, we would have to ask that Mr Quigley went to his submissions in some detail if they're to be relied on today, because the union hasn't had a chance to look at what is in the submissions. So if Mr Quigley were to not ..... orally which was then relied upon in writing, the union would not be in a position to respond, assuming that I'm given an opportunity to reply later this afternoon; which there must be some question about it, given the request from Ms Leeds for more time. The AMWU will simply have to be entered in a position where it knows what it's replying to. I do actually have more to say about that later, your Honour.

PN1018

MR QUIGLEY: Your Honour, can I indicate that given what has fallen from Mr Kentish, I'll read these. I don't want to get caught in the argy bargy about whether or not the union is being prejudiced.

PN1019

Your Honour, you are aware of what the matter is that is before you. It's an application by the union that you should dismiss the company's application to terminate two agreements that we understand cover five employees in total. They rely on alleged breaches of existing agreements, those that the company seeks to terminate. Your Honour, the task that's before the Commission is a serious one as Lloyd SDP, as he then was, said in a decision which Mr Kentish provided to you this morning, that's a decision of 17 November 2004 in PR 953322; a matter involving CSL Limited v AMWU.

PN1020

Lloyd SDP said:

PN1021

The decision not to exercise jurisdiction -

PN1022

which is what the union wants you to do, not to exercise jurisdiction:

PN1023

- is not a question to be dealt with lightly. The High Court in Re Media Entertainment and Arts Alliance anors ex parte the Hoyts Corporation Pty Limited anors 1992 - 1993 112 ALR 93 has alluded to the need to treat this question in a careful manner. It is accepted that prima facie the employer has a right to access the jurisdiction. If this is to be prevented then the reason must be a matter of significance.

PN1024

Your Honour, there are a number of decisions both of this Commission and of the High Court that go to the question of the seriousness of a decision by the Commission not to exercise its jurisdiction, and they go to this question of the fact that there's a prima facie right of an applicant to have his or her application dealt with; and that's the barrier that the union has to meet. It has to convince that this Commission that a path open to an applicant to terminate agreements that have expired ought not to be exercised. For those reasons we say that you can't just come to this Commission with a few flimsy excuses and try to flaunt that as a serious argument. They have to be sound and serious arguments.

PN1025

Indeed, going back to only recently, the decision of the Full Bench in the Tristar case, the Tristar Full Bench as we've been referring to in these proceedings, it's our submission that the union's application under section 111(1)G is properly made in that the application is entitled to be heard by the Commission; and we say that this is probably about the only thing of significance to come from the Full Bench decision, and that is that the Commission as currently constituted is entitled to come to an opinion if the agreement had been breached.

PN1026

That's different from making a judicial ruling, which of course the Commission as currently constituted isn't empowered to do, but you are entitled and empowered to form an opinion. But what we would argue, your Honour, is that in coming to such an opinion you have to have regard to the seriousness of the task of declining to exercise jurisdiction. So you must have a seriously held opinion, we would submit, in order to refrain from acting or to dismiss the company's application.

PN1027

The circumstances of the Tristar case, even that much of it which we know from media reports or from decisions of the Commission, indicate that the matters involved in that case are of far greater seriousness than those before this Commission. Essentially, what the Commission has before it - and I'll come to an explanation of this shortly - is an alleged non-payment of overtime which we've heard has been the subject of negotiations between the parties and looks like that's been resolved; a question of alleged under-payment of termination payments, which again we've been told has either been resolved or is close to being resolved; a question concerning a disagreement as to whether payment to an employee who is absent from work on a day when a union says it is going to be on strike, a contentious legal issue as to whether or not that involves a breach of an agreement. They are essentially what the matters are that are before the Commission.

PN1028

Ms Leeds referred you to the recent decision of Nicholson J of the Federal Court in the case of the Meatworkers Union v Woolworths and it's clear from that decision that any arguments that the union has raised in relation to Mayfield's not negotiating or not fulfilling its obligations under the agreement, regarding renegotiating an agreement, are without foundation within that decision of the Federal Court. The union's application then must fall away by dint of the Federal Court's ruling.

PN1029

So your Honour the matters that are before you cannot on any measure involve serious issues. Your Honour, the question of the prima facie entitlement of an applicant to have their application heard has long been held in this Commission, and indeed goes back and more particularly enunciated quite clearly in a High Court decision back in 1999, in a case involving the Australian Bank Employees Union ex parte Citicorp; and that decision has been referred to in a number of decisions of this Commission, including the decision in the Media and Entertainment and Arts Alliance ex parte Hoyts Corporation, which was referred to in the decision of Lloyd SDP.

PN1030

What Lloyd SDP referred to as that they had to be matters of significance, the High Court used the terms that the discretion whether or not to exercise the jurisdiction was a discretion that should be exercised with due circumspection, on a proper consideration of relevant materials. But there's a clear onus on anyone who comes to this Commission to argue that the Commission should not hear a case or should dismiss it. It's a very clear definite onus on such an applicant to establish that it is desirable in all of the circumstances for the Commission to act in that manner.

PN1031

There's a body of cases in the Commission that indicate that one of the considerations that the Commission must give is whether or not dismissing an application or refraining from hearing it would assist in achieving the objects in the scheme of the Act. Now your Honour, you have already been taken to what I submit are the relevant scheme and object of the Act, and they go to this question about a framework for workplace agreements. As Ms Leeds indicated, the Act provides for a number of variations on that theme and it is not solely a question that the only sort of agreements that you can have are agreements made with a union.

PN1032

Indeed, where attempts to make an agreement with a union proved fruitless, after what - or "elusive" to quote Acton SDP, and which have engaged the parties in a marathon period, I think the parties are quite entitled to say, "Well, it's not against the objects of the Act to seek to find some other agreements that are available under the Workplace Relations Act to resolve our workplace agreement problems".

PN1033

There's a famous decision of the Commission, your Honour, in restructure the Australian Workers Union v Albion Reed, a decision going back to 1975 with an august Full Bench of the Commission, Coleman and Gaudron JJ and Commissioner Mancini, in which the Commission commented that:

PN1034

The underlying philosophy of the Act is to settle by award industrial disputes so defined.

PN1035

Well obviously we are in a different era at that stage, both the legislation and what was available under it. But nevertheless the - and in those days the provisions that we now know as 111(1) were section 41 and in particular 41(1)(D), which essentially related to the question of this Commission having a role as against State Tribunals. But nevertheless the question that was at the heart of the issue was the discretion on a member of this Commission to exercise the jurisdiction of the Commission.

PN1036

The Commission pointed out in the Albion Reed case that:

PN1037

The provisions of section 41(1)D assumed the existence of such a dispute but granted discretion to the Commission to dismiss or refrain from proceeding to an award in circumstances therein provided.

PN1038

and it then goes on to say:

PN1039

It is perfectly logical to proceed from the premise which is embodied in the philosophy of the Act and to conclude that he who wishes the Commission to dismiss or refrain from further proceeding should establish a case for the Commission to do so.

PN1040

My submission, your Honour, is that the principles set down by that Full Bench of the Commission has been applied consistently by Full Benches of this Commission ever since. In the cases that Mr Kentish referred you to this morning, that flavour still exists to this day and indeed in the most recent Full Bench decision in relation to Tristar.

PN1041

Your Honour, I would like to address in particular some of the claims by the union and commence with the suggestion that the company has refused to commence negotiations. Ms Donnellan in evidence sought to give the term "commence negotiations" a meaning way beyond the ordinary words themselves. To her mind it was clear - and this was her evidence - that it involved commencing and concluding a negotiation. Yet the ordinary words of that clause 25 of the agreements required only that the agreements - sorry, that the negotiations commence and that they be conducted with the union on a collective basis.

PN1042

Nowhere in the terms of that clause 25 is there an obligation on the parties to conclude. But in any event, your Honour, it's my submission that the decision of Nicholson J on 13 April this year removed the rug under the union's feet in relation to that argument. His Honour - and Ms Leeds has provided the Commission a copy of that decision - but what his Honour was dealing with was a question of the term "expiration" within the context of a certified agreement and the obligation to negotiate. The union said that Woolworths was failing to negotiate an agreement and that the terms of their agreement required that - similar to here - the union - that the company had to enter into negotiations at a certain time before the expiration of the agreement.

PN1043

Well, his Honour concluded at paragraph 53 of the decision that the term expiration meant ceases to be in operation and that in his Honour's view an agreement expires when it not only passes its nominal expiry date but also when it is replaced by another certified agreement. I might also add that his Honour could have said that an agreement ceases to operate when it passes its nominal expiry date and is terminated by the Commission. Bu the question of termination of the agreement wasn't a matter before his Honour so he didn't need to address that.

PN1044

His Honour also addressed the question of Woolworths' obligations to enter into negotiations for a replacement agreement and at paragraph 64 of his decision, Nicholson J ruled that the initiation of the bargaining period by the union took legal priority over any provision of the agreement. Now Ms Leeds has already taken your Honour to this question and I don’t propose to repeat that to your Honour but I do point out that attachments F, G and H of the witness statements of Ms Donnellan indicate that there a was notice of initiation of a bargaining period dated 1 May 2006, on which the union relies for the protected industrial action it put into place in respect of Mayfield Engineering. It's clear from the decision of Nicholson J that the union's claims in respect of Mayfield at points 4 and 7 of its claim are therefore without foundation in law.

PN1045

But your Honour even if it could be said the Nicholson Js decision has no effect on this union's application here, and that's certainly not my argument but even without Nicholson Js recent decision, it could hardly be said that Mayfield had not commenced negotiations for a replacement agreement. Again, Ms Leeds has already provided significant submissions in relation to that but I point out that Ms Donnellan's evidence at PN 282 of the transcript of 10 April give clear evidence of those negotiations.

PN1046

But what comes out of the evidence of Ms Donnellan quite clearly, your Honour, is that it's not that negotiations didn't commence, it's that no conclusion was able to be reached. Neither side has been able to convince the other that an agreement is able to be achieved and as Mr Harvey said in answer to a question from yourself, the company's position really was thus far and no further. They had run out of patience.

PN1047

Indeed, there's evidence that the union had sought and obtained the assistance of the Commission in respect of this issue, to try to use the dispute settlement procedures to try to achieve an agreement. The company took part in those proceedings but it's apparent that they also failed to achieve any outcome in respect of a new or replacement agreement acceptable to the union or indeed, for that matter, one acceptable to the company.

PN1048

Your Honour, there's no obligation in the Act or in the agreements that the company seeks to terminate that require that an agreement has to be made to replace the expired agreements. The obligation merely is, under the agreement, that the parties commence negotiations. Now, in relation to the sick leave entitlements question the union claims that the company has been refusing to pay sick leave to three employees, Mr Poulter, Mr Greigg and Sacramitis, who it claims were absent on sick leave on days when the union advised the company its members would be taking strike action.

PN1049

It's the ABC Commissioner's view, your Honour, that the Commission should note that the union has relied solely on evidence of Ms Donnellan, the union's assistant secretary, evidence that we submit falls within the category of hearsay. No evidence has been called from the employees concerned that, as we understand it, they were sick on the days when a strike was to take place, and we say the Commission is entitled to take a Jones v Dunkel view on this and to draw an adverse inference from the unexplained failure of the union to call the evidence from Mr Poulter or Mr Greigg or Sacramitis in respect of their absence during a strike day.

PN1050

In this day of modern communications, of video links, telephone links and so forth, it would have been without a doubt very simple for either all or one of those employees to have made themselves available to state their case. None have, and as Ms Leeds pointed out indeed only one of them has taken any steps whatsoever to seek to have the legal question determined by a properly constituted court. Your Honour, this is a matter to be determined on the evidence and it's got to take into account the employer's obligations under the Workplace Relations Act, in particular section 507.

PN1051

And bearing in mind that this particular issue has also been the subject of other proceedings before another member of the Commission without being resolved, but more particularly it's a contentious matter of law. What are the company's obligations pursuant to section 507 against the entitlements of an employee who in one case hasn't even bothered to produce a medical certificate. In the circumstances it's our submission that the Commission as currently constituted should be wary in the extreme about drawing any conclusions or, indeed, forming any opinion about alleged breaches of the agreement, or agreements in this case, based on the limited evidence put forward by the union.

PN1052

Now, in relation to the question of whether or not overtime payments have been made or not properly made, it's our submission that the Commission should consider the following. These are matter to be determined on the evidence. And as for the sick leave allegation there are differences of opinion as between the company and the union. We understand that the company has been engaged in negotiations with the union to settle the matter, and I think the submissions of Ms Leeds were that those negotiations were significantly advanced.

PN1053

Your Honour, we say that the Commission should be very wary about concluding whether the agreement has been breached given that the parties have already been before another member of the Commission in respect of this, and there just wasn't any material evidence before the Commission to draw a proper conclusion in relation to that. The other point we'd make, and Ms Donnellan conceded this at PN 445 on 10 April, that neither she nor any employees had bothered to refer this matter to the Office of Workplace Services, an organisation charged with monitoring compliance of agreements and awards to ensure the workplace rights and obligations are being complied with, nor were there any actions - and who could also seek to apply penalties through court action. There's just not enough evidence before the Commission in relation to this.

PN1054

Now, the company is also accused by the union of breaching the National Code of Practice for the Construction Industry, what I refer to as the code. Now, your Honour, it's my submission that this issue is a furphy and is quite irrelevant to the application before the Commission. True it is that the company has said that it seeks to terminate two agreements because they do not comply with the code, but even that submission, we would submit, is not a factor that needs to be taken into account were the Commission to be considering an application under section 170MH, because the Commission is those circumstances would be determining one question and one question alone, and that is whether or not to terminate the agreements would be contrary to the public interest.

PN1055

But here the union has sought to suggest I think that the basis upon which the company seeks or relies on its argument to terminate the agreement won't have any practical effect because it has other agreements that don't comply with the code. And I think that's the thrust of the union's argument. If I'm correct in my analysis of the union argument, again, your Honour, that's not a matter that needs to concern the Commission, and it's certainly not a matter that would warrant the Commission refusing to exercise it's jurisdiction to hear an application to terminate an agreement.

PN1056

The facts are that employee collective agreements are available under the Act. Employee collective agreements are not precluded by the current agreements between Mayfield and the union. And the allegations in the union application appear to be based solely on an assessment by the union. Now, in the written submission that I've provided to the parties I've erred in suggesting that the company had written information from the Department of Employment and Workplace Relations that the agreements in the union's - that the union argues do not comply with the code, but it's my understanding, that the company has in fact acted on legal advice that that is the grounds to comply with the code. But in any event - - -

PN1057

THE SENIOR DEPUTY PRESIDENT: Sorry, can you just run that by me again, I didn't quite understand what you were saying.

PN1058

MR QUIGLEY: In my written submission, your Honour, I'd been under the - I now discover the misguided view that the company had an advice from the Department of Employment and Workplace Relations that the recently made union collective - the employee collective agreements were co-complied. It's now my understanding that they're acting on legal advice that that is the case. Now, it's up to the company I think to explain anything further than that, but I was only pointing out that I've erred there in suggesting that the company had advice from the Department of Employment and Workplace Relations.

PN1059

But my point is this, your Honour. The union is making its own assessment as to whether or not those agreements are compliant with the code or not. The code guidelines which form attachment A to Mr Harvey's statement make it quite clear that the responsibility for determining code compliance doesn't rest with the unions, but rests with the Department of Employment and Workplace Relations. But as I say, it's a matter - the question of whether or not the company's employee collective agreements or Australian workplace agreements, whether or not they comply with the code or not isn't a relevant consideration for the Commission, whether or not it should exercise its jurisdiction. And it's the same point I make in relation to the Australian workplace agreements.

PN1060

Your Honour, in relation to the failure to comply with directions, I didn't hear anything from Mr Kentish this morning in relation to that, and I'm assuming in that case that the union does not press this claim, that because the union failed to comply with directions of the Commission to issue notices, that the employer failed to issue notices in relation to the hearings in relation to the 170MH application, that somehow that would justify the Commission not exercising its jurisdiction.

PN1061

I merely point out that whilst it's true that the Commission issues directions for a purpose and it's entitled to expect that such directions will be complied with, or that that alternatively requests would be made for variations to those directions, it's clear from the evidence given by Mr Harvey that when the company became aware that, through inadvertence it appears, the notices had not been distributed he arranged for it to be posted on or around 14 March. That's a period of some at least four weeks or around about four weeks between the time when the matter to be held before - the hearing was to be held before the Commission.

PN1062

But the company didn't try to sneak around that. The evidence is, and this is at PN 148 to 150 of the 10 April, Mr Harvey's evidence, that when the company discovered what had happened it informed the Commission of the omission and arranged to distribute the notices promptly. And in any event there's no evidence of any prejudice or that the company's omission was intentional. Your Honour, it's the ABC Commissioner's view that given that it's a very serious step for the Commission to take to refuse to exercise its jurisdiction or to refrain from hearing an application, the Metal Workers Union is to be expected to establish that it is desirable in all of the circumstances for the Commission to refrain from acting.

PN1063

The Commission has to form an opinion as to whether or not the allegations made out by the union have been substantiated and, if so, whether the Commission should dismiss the company's application or refrain from further hearing. The Commission must, in forming an opinion, act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form. That's a long standing provision of the Act both post reform and pre reform and even pre pre reform. And this involves the Commission weighing up such material as provided by the union against the prima facie entitlement of the company to have its application under 170MH on its merits.

PN1064

The ABC Commissioner submits that the union simply has not established a case that would warrant the Commission refraining from exercising its jurisdiction. We submit that to grant the union's application would not assist in achieving the objects and the scheme of the Act. Once those parts of its application which have been invalidated by the decision of Nicholson J are put aside, the union's argument consists of little more than a few gripes about paying the sick leave on a declared strike day, for which it called no evidence from the employee's concerned, the alleged non payment of overtime, about which other proceedings have already been held by the Commission, and which we now hear has been the subject of negotiations between the parties and is close to being settled.

PN1065

And the third part is that the company made agreements which the union alleges breached the code, notwithstanding that its an assessment made by the union itself. In all the circumstances, your Honour, the ABC Commissioner believes that the Commission should reject the union's application pursuant to section 111(1)(g) of the Act. If it please.

PN1066

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Quigley. Mr Kentish?

PN1067

MR KENTISH: Your Honour, there's unfortunately the issue of Ms Leeds's request for written submissions or the opportunity to put written submissions to the Commission. Your Honour, the union rejects that the union has somehow attempted to ambush Ms Leeds in this regard. The union made its application on 2 April, grounds were put in that application. If Ms Leeds was seeking further particulars she's had ample opportunity to do so. It's now 30 April.

PN1068

This matter was previously before the Commission and that would have been an opportune time to seek further particularisation, or the company could have called the union and asked for them to be provided. Your Honour, I did indicate last time before you that I would be making fairly extensive argument. I suppose if an opportunity is to be afforded to the company to make further written submissions after this time the union would seek an opportunity to do likewise. It strikes me as unfair that we show up today ready for hearing and make our submission, and the employer asks for two bits of the cherry.

PN1069

If that's what it's going to be, your Honour, the employer will need to push for or to press for an adjournment, and we simply can't respond until we know what we're responding to. If the Commission pleases.

PN1070

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1071

MS LEEDS: Your Honour, given the progress of this matter to date and the submissions that I have made, I simply want to record that Mayfield disputes the interpretations of the AMWU on all those matters that are noted or that were particularised in today's hearing in respect to paragraphs 8, 9, 10, 11, 12. But I'm prepared to say that in the submission of Mayfield those matters are not relevant for the Commission to take into consideration.

PN1072

THE SENIOR DEPUTY PRESIDENT: Sorry, say again.

PN1073

MS LEEDS: Those matters as particularised as they are, are not relevant to the Commission's determination of whether it's going to grant the application of the AMWU under section 111. In that respect and given the number of employees affected, the dwindling number of employees affected by either 170MH application, I propose not to seek written submissions, to rely on what I've put to you after the adjournment, and to - but however to have clearly noted that we dispute and have a different view about those alleged breaches in the application of the National Code and its implementation guidelines. But in the interests of expediency we're prepared not to ask for that opportunity.

PN1074

I think the matters that I've put to you relating to the gravity of the issues on which the AMWU relies, particularly on breaches, are really not that significant when they are carefully analysed. And Mr Quigley has made submissions in that regard. The other matters about compliance are simply not relevant and, again, there's been no evidence produced to support the union's claim that the agreements are not compliant with the Workplace Relations Act, it contravenes sections of the Workplace Relations Act or don't comply with the National Code of Practice and its implementation guidelines.

PN1075

I drew the Commission's attention to the decision of a Full Bench in Tristar, and in particular to the final point, that the Commission, while it may be open to such a finding it doesn't have to act once it's made a finding of a breach. It may be a consideration. And that's a very important section that I again reiterate. I support Mr Quigley's submissions, that this is a very important function of the Commission and that it should not be dismissed, the application should not be dismissed lightly. The circumstances and the facts in this case need to be carefully considered so that the employer, who has a right under section 170MH to bring an application, can indeed exercise that right.

PN1076

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1077

MS LEEDS: If the Commission pleases.

PN1078

THE SENIOR DEPUTY PRESIDENT: Yes, Mr Kentish, I think that answers your question.

PN1079

MR KENTISH: I think it does, your Honour. Perhaps just to go to various points which Ms Leeds made before the luncheon adjournment, and then Mr Quigley on a fairly ad hoc basis. And I apologise for not stringing it all together in some overarching framework. Look, the first issue which the union did want to respond to was the suggestion by Ms Leeds that the finding of the court is necessary for the Commission to form a view that there has been an agreement reached.

PN1080

Your Honour, we say that the Full Bench in Tristar deals with this issue and puts it beyond doubt that it is for the Commission to come to its own view in relation to breaches of the certified agreement under section 111(1)(g)(v) and indeed also under section 170MH. Your Honour, much has been made by Mr Quigley and Ms Leeds about whether or not the employer has met its obligations under clause 25.1 of the agreements, the subject of these proceedings. Your Honour, at the same time very little has been said about the company's obligations under subclause 25.2, and we say that those, the obligations under subclause 25.2 provide an ongoing obligation for the employer to negotiate with the union.

PN1081

There seems to be a view that what the union is putting, that there is an obligation for the parties to come to an agreement. Well, that's not what we're putting at all. What we're putting is that there is an obligation under 25.2 and under 25.1 that we agree that negotiations commenced and we agree that negotiations went for some time. Where we don't agree it would appear is that from early March the company has put up the shutters and won't speak to the union about a union agreement. And we say that this is a breach of 25.2.

PN1082

Your Honour, Mr Quigley and Ms Leeds handed up a decision of his Honour, Nicholson J in Australasian Meat Industry Employees Union, WA Branch v Woolworths leading to a decision of the Federal Court, 21 March 2007. Your Honour, the AMWU submits that it would be unsafe to rely on the decision of his Honour, Nicholson J in the manner proposed by Mr Quigley and Ms Leeds. Your Honour, firstly, we wish to draw the Commission's attention to the fact that the clauses considered by the court in the Meatworkers v Woolworths case are considerably different to those which are presently before the Commission.

PN1083

And, your Honour, if I could take your Honour to page 2 of the Federal Court decision, where your Honour will see what is the key clause in the agreement which was before the court. And the subclause which it all appears to turn on is at 1.3.2, which provides:

PN1084

The parties to this agreement agree that negotiations to renew this agreement will commence two months prior to its expiration.

And it goes on at 1.3.3:

PN1085

Should negotiations not achieve agreement the wages and conditions of the employment shall continue as at the date of expiration.

PN1086

Your Honour, this is quite different to the obligations under clause 25.2 of both agreements that are before you. While clause 1.3.2 does not on its face provide for an ongoing obligation to negotiate, we very much say that clause 25.2 does so. Your Honour, this is a particularly relevant matter. His Honour, Nicholson J goes on to suggest that clause 1.3.2 is rendered nugatory by the union, that's the meatworkers, invoking the statutory framework established for the commencement of bargaining. And, your Honour, this could only be relevant, if it's relevant at all, to a clause which merely facilitated the commencement of bargaining.

PN1087

We say that clause 25.2 in the agreements before your Honour goes further than that in a s far as it provides ongoing obligations in relation to bargaining with the union. Your Honour, in this way we submit that the two clauses are relevantly and importantly different. Your Honour, the AMWU is also concerned that with respect to his Honour, Nicholson J, his Honour's decision appears to be affected by error insofar as that his Honour suggests that at page 11, if I could take your Honour to it. It's a paragraph which has been brought to your Honour's attention. I apologise, it's not page 11 at all, it's page 14, and it's the paragraph beginning "In my opinion the effect of the giving of the notice."

PN1088

Your Honour, if I could take your Honour down to the second last sentence of that paragraph. Or perhaps it would be better if I read the paragraph in its entirety:

PN1089

In my opinion the effect of the giving of the notice by the applicant pursuant to section 170MI was to initiate the statutory bargaining process ...(reads)... under section 170MI.

PN1090

And, your Honour, we say that the following sentence is an important one:

PN1091

The consequence is that the source of the obligation to negotiate rests not on clause 1.3.2 but on the relevant statutory provisions.

PN1092

And his Honour says:

PN1093

It follows that the applicant cannot rely on any alleged breach of clause 1.3.2 as the foundation of its claim.

PN1094

Your Honour, it's well accepted that the Workplace Relations Act in either its pre or post reform stages never contained an obligation to negotiate. And indeed we say it would be, with respect, contrary to the scheme of the Act to suggest that a clause that creates a clear obligation on the parties to negotiate can be in some way usurped or rendered ineffective by statutory provisions that provide no such obligation.

PN1095

Your Honour, if parliament had intended such an outcome, we submit, it would have expressly provided as much. Your Honour, the AMWU further submits that any reliance on the decision of his Honour, Nicholson J, would be further complicated by the question of which statutory provisions provide the context in which the clause should be interpreted. Is it the pre reform Act which was in place when the agreement was certified or the post reform provisions facilitating bargaining?

PN1096

Your Honour, we say that the appropriate way for the Commission to form a view on whether or not there has been a breach of the agreement or whether there has not been compliance with the agreement is, with respect, the most straightforward one, that is, for the Commission to look at the ordinary or natural meaning of the words in clause 25, assess that in the light of the evidence of Ms Donnellan about the intent and meaning of those words and form a view of whether Mayfield Engineering has or is complying with any obligations to be found in that clause.

PN1097

And if your Honour does adopt that course we respectfully submit that it's clear that Mayfield Engineering has an obligation to negotiate with the union, and it's not complying with that obligation and, in fact, it hasn't done so since 6 March. We say this brings section 111(1)(g)(v) into play and gives the Commission power to dismiss or refrain from hearing Mayfield Engineering's application.

PN1098

Your Honour, if I could move on from a discussion of that decision and clarify a submission that Ms Leeds made from the bar table to the effect that industrial action was occurring at the employer's place of business until 30 March. The union certainly doesn't accept that. And it was the evidence of Ms Donnellan that from 5 March no employees took industrial action at Mayfield Engineering. And we accept that there are issues of contention between the parties relating to sick leave and the payment thereof, but lest it be thought that that was a smaller part of some kind of widespread guerrilla warfare, for want of another word, I did want to make it quite plain that employees were working in accordance with their contracts of employment from March and being paid as such with the exception of the sick leave periods which have been the subject of some discussion before the Commission.

PN1099

Your Honour, I also wanted to go to an assertion of Ms Leeds from the bar table about the company calling the Work Choices hotline, or the Work Choices line I think it may have been called, in relation to the payments of sick leave. Your Honour, we submit that it's relevant that no evidence has been put before the Commission about how made the call, what was said, on what basis the advice was provided or even what the advice was except in a very general and, we would say, self serving sense.

PN1100

Your Honour, Ms Leeds handed up a copy of a draft deed which would appear to go to, or to propose a basis for a proposal for the settlement of the overtime rates issue which is between the parties. Your Honour, we say this is clearly an admission on the company's part that something's not right. Overtime rates and back pay are being proposed to be made up, and that's because there's an agreement been reached. The company wouldn't go out of its way to send a draft where it really thought that it wasn't really breaching the agreement.

PN1101

And, your Honour, Ms Leeds has said that the parties are close to resolution. Well, that's good if, indeed, it means that the employees are going to be paid their back pay which they have been waiting over 12 months for. Your Honour, close to resolution of what? It's resolution of the breach. The resolution may, in Ms Leeds's view be close but it's not here yet and it's been over 12 months. Your Honour, if ever there were grounds for refraining to hear a matter until a breach was rectified surely this would be one of them.

PN1102

Your Honour, Ms Leeds described at one point that negotiations between the parties were exhausted. Well, your Honour, the negotiations are only exhausted from the employer's point of view and they're only exhausted to the extent that the company has decided that it will no longer negotiate. It's not as though the company has an offer on the table on a take it or leave it basis. There are to be, and there are no negotiations with the union over a union collective agreement. Now, the union is ready and willing and able to negotiate, but the employer simply refuses or has done so since 6 March. And, your Honour, as I've made the point before, we say that this is a clear breach.

PN1103

Your Honour, documents were handed up to your Honour which would appear to be an application on behalf of or by Mr Sacramitis in relation to the payment of sick leave, and it appeared to be suggested that the fact that those were being pursued in proceedings under the Fair Work Act somehow meant that it wasn't a breach of agreement. Well, to the extent that that was what was being put, your Honour, we reject that and say that it is immaterial if the employer is also breaching what may be a provision of the South Australian legislation.

PN1104

We say there is clearly a breach and the breach is of the federal agreement. And if I could take your Honour to the document which was handed up. Your Honour, on the fourth page of the document which was handed up under the heading - there are certain points made out by way of particulars of a claim and, your Honour, the claim is for some $413.60 which is payable pursuant to the AMEC Engineering Pty Ltd South Australia NDT Enterprise Bargaining Agreement 2003 and the Metal Engineering and Associated Industries Award.

PN1105

So, your Honour, it can't be said that this is somehow a matter which is only relevant to the state jurisdiction. Clearly this application - and I don't know the details of it other than what's contained in the document that I've been handed, the nub of the issue, if you will, is whether payments have been made pursuant to the agreements which are proposed to be terminated. Your Honour, there's been a common refrain from Mr Quigley and Ms Leeds that the AMWU has not brought evidence for various matters in these proceedings. Well, we have, and it's contained in Ms Donnellan's statement. The employer is actually the person who has not brought any evidence in these proceedings. And if any Jones v Dunkel inferences are apt to be drawn it is truly to the employer rather than the union.

PN1106

The union has put forward evidence, and we conceded I think in answer to one of your Honour's questions that to a certain extent that does involve hearsay evidence. The Commission is of course not bound by the rules of evidence and is able to take that evidence for what it's worth but, your Honour, we would submit that it's actually worth a very great deal where the company has not sought to present evidence to counter it. There were comments made that the union could have called Mr Poulter or Mr Sacramitis or Mr Greigg, well, the company could have done that too. The company is just as able to either ask those witnesses to appear or to have them ordered to appear. Again, if an inference is to be drawn, with respect, it should not be against the union who has evidence, it should be against the company.

PN1107

Your Honour, Ms Leeds indicated that there had been a payment to Mr Poulter of some $260 which apparently has been made in a rectification of the breach, which previously was denied, of the national agreement. I've sought urgent instructions from Mr Warren in relation to that, and we can confirm that an amount, I think it was around the $260 mark, has been put into Mr Poulter's account, but no one has told him why or on what basis that money has been put in or, indeed, we understand, even that money was put in. And, your Honour, arguably this in itself is a breach of clause 35 of the national agreement which talks about pay slips and showing full details and so forth, although I don't press that in any vigour, but money appearing in your account is a nice thing, but we can't say whether the breach has actually been rectified because we don't know what that money represents.

PN1108

Your Honour, in relation to sick leave and the evidence provided establishing that employees were ill on that day, I don't repeat what I've just said about the evidence of Ms Donnellan being the only evidence before the Commission, but clearly that's a relevant factor. And we do want to highlight to the Commission that a medical certificate at least was provided by Mr Sacramitis in relation to his day off, and I would have thought that would not lead to a contentious argument that it was related to sick leave and, indeed, we say where it's a condition of employment that you don't have to provide a medical certificate for the first two days in a 12 month period, an employee rings up and says look, I'm sick, I'm not coming in, that's it, that's sick leave.

PN1109

Your Honour, Ms Leeds tried to play down the fact, and Mr Quigley did too, that these are just minor breaches, and $413 Ms Leeds says it is not much of an amount to hold up the employer's applications. Well, with respect, why don't they just pay it? These matters can appear trivial to an employer who is part of a multi billion dollar corporate entity or group of companies, but $413 has a lot more significance to an individual employee and, with respect, it seems to show a certain cavalier attitude from the company and indeed from the ABCC as to whether agreements should be complied with. Agreements are there to be complied with and, with respect, they should be and, in fact, they must be.

PN1110

Your Honour, my comments would equally go to the significance of the breach in relation to the payment of overtime. Again the Commission is told, well, we didn't pay the overtime but we're fixing it. Well, with respect, it's been over 12 months. We're getting closer apparently. Well, that's good, but agreements are certified by the Commission, or were, to make them legally enforceable documents and they should be followed and abided by.

PN1111

Your Honour, I note that there was mention of the framework of the Act and the objects of the Act. Well, we rely on the objects of the Act not to say that the union must be involved in some way in negotiations which appear to be what the employer was suggesting the union was putting, but we rely on the objects of the pre reform Act and in particular the objects found in section 3(e) to say that agreements are meant to be abided by.

PN1112

Your Honour, again Ms Leeds tried to compare the current proceedings to the proceedings in Tristar and to say that there was no sinister intent on behalf of the company in these proceedings as opposed to what is presumed to be the intent of the employer in the Tristar proceedings. But again there's an underlying and, we would say, unacceptably cavalier approach to saying that some breaches are okay. Well, no breaches are okay. Certified agreements are there to be abided by.

PN1113

Your Honour, Ms Leeds went to the issue of the code or the compliance with the implementation guidelines, or the code. We say that a question is still out there and hasn't been answered. Why does the company now need to be compliant with the code when they've had advice on the evidence of Mr Harvey that they've known that they weren't co-compliant since late 2005? It's all very well to throw up your hands and say, well, we're just trying to get by under the government's code. But they've know that they weren't compliant with the code for an extended period. Your Honour, we submit that it must be asked how has entities relating to Mayfield continued on business as usual with this clear lack of compliance?

PN1114

Your Honour, if I could now go to some of the matters that Mr Quigley raised. Again there's an attempt to characterise breaches of agreements as flimsy, what the union says are breaches of agreements, as to quote Mr Quigley, flimsy excuses. Well, this is the first time I've ever heard the ABCC taking such a cavalier view of compliance with the law. It's astonishing to me that a body which is charged in part with the enforcement, or what I understood to be the enforcement or monitoring of the compliance with laws, would get up here and say, well, it doesn't really matter, they breached but they're fixing it eventually. Your Honour, we submit that the characterisation of the breaches alleged by the AMWU as flimsy excuses should be rejected.

PN1115

We say they're significant particularly in the context of the power being specifically given to the Commission to not hear proceedings because there has been a breach. It doesn't say that only if the breach is a significant breach or as long as the breach is not flimsy. The Commission is charged with the power to refrain from hearing or dismiss, and although I agree with Mr Quigley, it's not something which should be done lightly, agreement breaches should likewise not be taken lightly.

PN1116

Your Honour, to the extent that Mr Quigley took your Honour to the decision of Nicholson J in the Federal Court and to the interpretation of the word expiry or expiration, we say that clearly that is the interpretation of a word that's contained in another agreement, that the interpretation afforded to that by the court was not known to the parties when they entered this agreement, so it can't be that they somehow sought to adopt such an interpretation and, in any case, we say the best way, with respect, to interpret the agreements before your Honour is to look at what they say and what the parties intended that they say.

PN1117

Your Honour, on page 9 of Mr Quigley's submissions Mr Quigley states - and I note that Mr Quigley corrected an error which was brought about by a misunderstanding in relation to the provision of an advice from the department, and I make not criticisms of Mr Quigley for that. But I do note the final arrow point to the effect that the ABC Commissioner submits that code compliance in any event is not a relevant consideration for the Commission.

PN1118

Well, Mayfield Engineering is not currently - sorry, I withdraw that. The union had been under a misapprehension that Mr Quigley was here because of code compliance and, indeed, the union is somewhat at a loss to know why the Commissioner is intervening if it's not to support an agreement which is purportedly being terminated on the basis that that termination will make the company co-compliant.

PN1119

Your Honour, we reject that any inference can or should be drawn from what is said to be the failure of the union to go to the Office of Workplace Services in relation to any matter in these proceedings. There's no obligation on any party to seek the advice of the OWS, and to the extent that the OWS can bring proceedings in relation to breaches or the like, well, so can the union and so can the members involved, your Honour. In any case the view of the OWS would not have been binding on the Commission and it is, with respect, for the Commission to come to its own view rather than the view of the OWS.

PN1120

Your Honour, I should make it clear that the primary reason for the AMWU raising the issue of code compliance or compliance with the implementation guidelines was that it's absolutely riddled through the grounds of the applicant's application. The applicant comes here with grounds saying that they need to be co-compliant, and in the AMWUs view they simply aren't, and they won't be whether or not the applications were ultimately successful or not.

PN1121

Your Honour, there are other aspects which the AMWU has dealt with whilst talking about the reasons why the company is not, we say, compliant with the Building Industry Code, and some of those go to what we say are breaches of the Act or failure to provide entitlements which meet the legislative requirements of the Act. And, your Honour, those matters would appear to be relevant as part of the circumstances where your Honour is considering whether the Commission should exercise its powers under 111(1)(g)(iv) and (v), if there's been a breach of the agreement we say it's also relevant that there's also been a breach of the Workplace Relations Act.

PN1122

There's also been a failure to comply with the implementation guidelines when the company asserts that that is what this whole proceedings is about. Your Honour, we submit that those things are at least relevant because they are raised as grounds, but are also relevant in the general context in which the Commission is asked to consider the breaches of Mayfield Engineering and whether or not the Commission should exercise its powers to refrain from hearing or to dismiss the matter. Your Honour, unless you have any questions I have nothing further.

PN1123

THE SENIOR DEPUTY PRESIDENT: Thank you. The Commission will adjourn briefly.

<SHORT ADJOURNMENT [3.44PM]
<RESUMED [3.52PM]

PN1124

THE SENIOR DEPUTY PRESIDENT: Thank you for your patience. Having considered all that's been put I've decided not to exercise the discretion under section 111(1)(g) on the basis of subparagraphs (iv) and (v). The Commission will issue reasons for decision in due course. I propose to hear the section 170MH application, and accordingly turn to you, Ms Leeds.

PN1125

MS LEEDS: Thank you, your Honour. Your Honour, this is an application by Mayfield Engineering Pty Ltd under section 170MH of the pre reform Act for the termination of two certified agreements in the public interest after the nominal expiry date. The two agreements are the AMEC Engineering Pty Ltd National NDT Enterprise Bargaining Agreement 2003, and that has a number of AG2003/6421, and the AMEC Engineering Pty Ltd South Australia NDT Enterprise Agreement 2003, and that agreement number is AG2003/9346.

PN1126

In terms of providing the Commission a snapshot of the Mayfield business and the agreements, the 2005 Mayfield purchased, or Mayfield, the company owned by Leighton Contractors Pty Ltd, purchased the Victorian - purchased a business or part of a business of AMEC Engineering, and therefore it had transmitted to it a number of certified agreements. Now, those agreements had expired in the course of, I believe, 2005. They were renegotiated with agreements in Western Australia and New South Wales NDT when certified. Subsequent to that two other agreements were made, but on the 31st - they all had common expiry dates which was 31 March 2006.

PN1127

The discussions with the AMWU produced no agreement of making a collective agreement, and the decision was taken by the company to settle the terms and conditions of employment by contracting or bargaining directly with the employees, which it did in terms of the Western Australian employees. It proposed an agreement to those employees which was accepted and voted, and approval was obtained by those employees around 28 December 2006, and that agreement was duly lodged with the Office of the Employment Advocate.

PN1128

Similarly in January of 2007 the New South Wales employees accepted an employee collective agreement which again was lodged with the Employment Advocate. In February 2007 some employees of Mayfield Metlabs division in South Australia, specifically those who work at the Gillman facility, also accepted an employee collective agreement.

PN1129

Now, your Honour, there is no other employee bound by the two agreements subject to this application. Mayfield submits that each of the agreements it seeks to terminate is past its nominal expiry date, this being 31 March 2006. As the employer and the employer bound by the agreements Mayfield is entitled under section 170MH of the Act to make these applications to the Commission and to have each agreement terminated. And the Commission must terminate each agreement once it has obtained the views of the persons bound by the agreements unless it considers that it is contrary to the public interest to do so.

PN1130

The reasons for the applications made is that the applications do not, or the agreements, both of the agreements do not comply with the National Code of Practice for the Construction Industry, and the Australian Government Implementation Guidelines for the Construction Industry issued in June 2006.

PN1131

THE SENIOR DEPUTY PRESIDENT: Why do you say they don't comply?

PN1132

MS LEEDS: They don't comply because they contain provisions which are inconsistent with the operation of the guidelines, and the consequence of that is that the company Mayfield and its related entities - and I'll take the Commission to this - is not eligible to contract to the Australian government for projects that the Australian government either funds directly or funds indirectly on the basis of certain thresholds that are in the guidelines.

PN1133

Your Honour, Mr Harvey has given evidence in these proceedings and he has attached to his statement, there's a copy of the implementation guidelines which I would now like to refer to. And if I could take the Commission to - they are attachment A to Mr Harvey's statement, and if I can take the Commission to section 2 of 6.1 on page 9. The guidelines say:

PN1134

Entities related to a contractor seeking or engaged in Australian government construction activity are also required to comply with the code and these guidelines in respect of any building and construction activities they undertake.

PN1135

And further at section 2.6 on 5, the guidelines go on to define related, and related for these purposes:

PN1136

means the body corporate within the meanings in the Corporations Act 2001 Commonwealth. (a) is a holding company of the tenderer; or (b) is a subsidiary of the tenderer; or (c) is a subsidiary holding company of the tenderer; or (d) has one or more directors who are directors of the tenderer; or (e) without limiting (a) to (c) of this paragraph controls the tenderer.

PN1137

Now, the Commission will note that they are fairly broad reaching requirements in terms of related entities, and the company to which Mayfield belongs is structured in such a way that would fall clearly within the scope and definition of section 2.6.5.

PN1138

THE SENIOR DEPUTY PRESIDENT: So which is it? Is it a subsidiary of a tenderer?

PN1139

MS LEEDS: Yes, it's a subsidiary. It can be at any given time a subsidiary of a tenderer, it can be a subsidiary of a holding company - well, yes, it can be a subsidiary of a holding company of the tenderer because it may be that Thiess or John Holland, who are also operating companies of Leighton Holdings, the holding company, Leighton Holdings Limited, Mayfield would fall into category (c), the definition of (c) the subsidiary of a holding company, and indeed so would Leighton Contractors, of the tenderer. The tenderer in this case might be John Holland or Thiess.

PN1140

THE SENIOR DEPUTY PRESIDENT: Just remind me of the ownership of Mayfield.

PN1141

MS LEEDS: I can assist the Commission, your Honour, by providing you with a profile of Leighton Holdings and a company profile.

PN1142

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1143

MS LEEDS: Your Honour, if I could take you first to the Leighton Group profile, 07 profile, and specifically to - I'm just trying to see if it has a page reference. No, it doesn't. If you go to - - -

PN1144

THE SENIOR DEPUTY PRESIDENT: The one with the tab?

PN1145

MS LEEDS: Yes, sorry, I have got a tab, it doesn't have a page reference. Yes, to the tab section please. The Commission will note that Leighton Holdings is a holding company and it has a number of independently operating companies, those being Thiess, John Holland, Leighton Properties, Leighton Contractors, Leighton Asia Southern, Leighton Asia Northern, and if we look specifically under Leighton Contractors it is 100 per cent owned by Leighton Holdings, as indeed all the operating companies are, and its major subsidiaries are listed, and they are HWN Mining, Leighton Services, Visionstream, LSE Technology, Broad, which is another construction company, Mayfield, Metlabs, In Focus.

PN1146

If you look at the Thiess company and the subsidiaries that Thiess owns, they own PT Thiess, Thiess Services, HB Silcar, Sedgman, BOS Australia. And similarly with John Holland, their major subsidiaries are GridComm, Infotech, DMM and ...... Now, Mayfield is a company wholly owned by Leighton Contractors. Leighton Contractors is one of a number of companies within a group of companies controlled by Leighton Holdings Limited, to which I'll refer to whole group as the Leighton Group. Companies in Australia of the Leighton Group include but are not limited to Leighton Contractors, Thiess Pty Ltd, John Holland Group and Leighton Properties. All of those companies have some interest or have some business with the Australian government in the area of building and construction and major engineering.

PN1147

THE SENIOR DEPUTY PRESIDENT: So your point is that section 2.6.1 applies to Mayfield?

PN1148

MS LEEDS: Yes.

PN1149

THE SENIOR DEPUTY PRESIDENT: And to Metlabs?

PN1150

MS LEEDS: Yes. And it would have - the compliance status of Mayfield and Metlabs would have implications on companies that I've just taken the Commission through on the Leighton Holdings 2007 profile. The Leighton work undertakes work in all states and territories of Australia. Collectively the Leighton Group employs more than 25,000 employees, and Leighton Contractors alone employs more than 5500 employees. In addition to these employees Leighton Contractors engages thousands of subcontractors, material supplies and plant hire supplies each year.

PN1151

A number of companies within the Leighton Group, including Leighton Contractors, Thiess and John Holland perform work on construction projects that are directly or indirectly funded by the Australian government. Some of the construction projects currently being undertaken will be tendered for by Leighton Contractors or other companies in the Leighton Group include variously major public infrastructure projects including freeways, railways, ports, significant government buildings, which is a contract with Leighton that Praco has, a major contractor, it's principal contractor is Leighton Contractors, and that is to design and build and operate a defence headquarters. It's a joint facility for all the defences forces in Bungendore in New South Wales. It's a very significant project and one that my colleague's organisation - or the regulator I should say, not my colleague - Mr Quigley's organisation ABCC has taken a big interest in.

PN1152

In any event the funding of the projects, your Honour, becomes irrelevant if the contractor wishes to undertaken Australian government funded work because the contractor's privately funded activities must also be consistent with the code and guidelines. And this is a requirement which can be found at section 2.5.2 of the guidelines. The guidelines in terms of privately funded work isn't forced contractually, and it's done so between the contractor and the Australian government, and the contractor committing to apply the code and guidelines on its private projects if it wants to undertake work for the Australian government.

PN1153

It's essential to the ongoing viability of the companies within the Leighton Group that they continue to perform work on such construction projects and remain eligible to tender construction projects that are directly or indirectly funded by the Australian Government of the future. Guidelines provide comprehensive code compliance requirements for workplace relations and occupational health and safety. One such requirement is that the terms in awards and agreements binding on contractors, including their related entities, must be consistent with the code and guidelines.

PN1154

The Department of Employment and Workplace Relations assists contractors to determine whether their awards and agreements comply with the code and guidelines. It is a not a mandatory requirement that contractors go to the department. They can rely on other advice. The obligation is theirs contractually to make sure that their agreements are not inconsistent with the national code and guidelines, but the department does offer that service.

PN1155

An assessment of the expired agreements have Metal, Engineering and Associated Industries Award 1998 as obtained from the department on 6 December 2006 by the company. The department advised that the four expired agreements contained provisions which are non compliant with the code and guidelines. The department further advised that the Metal, Engineering - - -

PN1156

THE SENIOR DEPUTY PRESIDENT: Sorry, so you're saying on 6 December last year the company got an assessment of the four agreements that are past their nominal duration date?

PN1157

MS LEEDS: That's correct.

PN1158

THE SENIOR DEPUTY PRESIDENT: Yes, the four agreements including the national and the South Australian agreements?

PN1159

MS LEEDS: Yes.

PN1160

THE SENIOR DEPUTY PRESIDENT: Okay.

PN1161

MS LEEDS: For the purposes of these proceedings only those two are relevant, your Honour. The other two haven't been replaced - - -

PN1162

THE SENIOR DEPUTY PRESIDENT: I just asked because it was Mr Quigley's submission that, I think, that hadn't been done.

PN1163

MS LEEDS: No. The employee collective agreements have not been assessed by the department. They're the ones that we've relied on our legal advice. But the previous expired agreements, in order for us to make this application we sought a second opinion if you like, and they have, the department has confirmed that they are not complying. But the department has further advised that the award, the Metal, Engineering and Associated Industries Award 1998 by virtue of the Work Choices legislation complies with both the code and the guidelines. And that written advice - - -

PN1164

THE SENIOR DEPUTY PRESIDENT: So there was an assessment of the four certified agreements and also of the Metals Award?

PN1165

MS LEEDS: Correct.

PN1166

THE SENIOR DEPUTY PRESIDENT: Right, okay.

PN1167

MS LEEDS: Now, that advice, that written advice from the department is at attachment B to Mr Harvey's statement. And, your Honour, the reason why the company sought advice on the status of the award was that in the event that those agreements were terminated the industrial instrument that will regulate the employment of these people also has to be compliant, so we wanted to make sure that if the employees were to fall back onto the award then that wouldn't cause any compliance issues for us.

PN1168

So for the purposes of these applications DEWRs assessment, the department's assessment is relevant only in relation to the national NDT agreement and the South Australian NDT agreement. The other two agreements haven't been replaced with employee collective agreements to which I referred previously. Mayfield has delayed making these applications, your Honour. They were filed on 1 February, and I know that this is the - in the previous proceedings, this is the elephant that's in the room and they delayed making that application because we genuinely believed that we would reach agreement with the AMWU and the certification of that or the lodgement of that agreement is therefore overcome, the compliance issues that are apparent.

PN1169

That isn't the case, and I think from a practical application our experience with the organisation that monitors compliance, as well as the other parties to the contracts, the organisation that noticed compliance, the ABCC, are prepared to allow a transition for those agreements to be replaced. It can't be that, noting the requirements under the Act, from the day the guidelines operate everyone having an industrial agreement will be compliant, and certainly steps have been taken by the parent company of Mayfield Engineering, as indeed steps have been taken by Mayfield to amend their agreements or to renegotiate them to ensure that the company is not prejudiced in respect of performing of obtaining Australian government funded work.

PN1170

Your Honour, in terms of the chronology of the negotiations, they began between Mayfield and the AMWU in January 2006, originally for a national union collective agreement to replace the then four expired certified agreements.

PN1171

THE SENIOR DEPUTY PRESIDENT: Just before we leave that issue of compliance, because you will recall I asked some time ago the question of why don't they comply, is there any easy answer to that?

PN1172

MS LEEDS: Yes. If I could take you to the letter of the department. They have provisions which, under the National Code and Implementation Guidelines, they're not allowed for certain things to happen. For instance, one might be that the union has a mandated role in disputes settlement. Now, I'm just looking for Mr Harvey's statement, which I thought I had, but if you'll just excuse me a moment, I'll tell you specifically what the reasons for it.

PN1173

THE SENIOR DEPUTY PRESIDENT: So is that what the table is?

PN1174

MS LEEDS: Yes. The table attached to the department's assessment contains the provisions of those agreements that do not comply with the implementation guidelines. The guidelines seek to regulate freedom of choice, freedom of association in numerous ways in terms of union membership, in terms of contractors paying and observing the terms of their own agreements rather than creating project type arrangements on building construction and heavy engineering sites, and so on.

PN1175

It limits the role of union officials and shop stewards too strictly in accordance with the Workplace Relations Act. It makes inconsistent with the code any restriction on labour in terms of quotas or periods from which time a casual employee may be converted to a permanent employee or a full time employee, and so on, and takes away a lot of the, I guess the underlying coercive element of workplace relations on building construction sites where employers observed, notwithstanding their own agreements, observed terms and conditions of a site or a project agreement. So that the guidelines seek to do away with those kinds of practices in a contractual sense.

PN1176

The second part of it is that the guidelines require compliance with what has now become aspects of the Workplace Relations Act.

PN1177

THE SENIOR DEPUTY PRESIDENT: Yes, I understand.

PN1178

MS LEEDS: Your Honour, the four agreements covering Mayfield and NDT non destructive testing operations in New South Wales, Western Australia, Victoria and South Australia all expired on 31 March 2006. Negotiations between Mayfield and the AMWU are frequent and continued for over five months. On 1 May 2006 the AMWU made an application to this Commission for a secret ballot so that employees of Mayfield who were members of the AMWU could take protected action to advance their claims.

PN1179

Having reached no agreement with the AMWU despite many months of negotiation Mayfield attempted unsuccessfully to make an employee collective agreement with employees in New South Wales and Western Australia in May and August 2006. On 21 November 2006 Senior Deputy President Acton handed down a decision favourable to the AMWU on a secret ballot application. In her decision on the AMWU application for a secret ballot and the proceedings BP2006/3266, Senior Deputy President Acton noted the evidence before her in this way.

PN1180

The AMWU and Mayfield have been meeting to negotiate a collective agreement for the Metlabs division of Mayfield since early 2006, however, no such collective agreement has been made. And further, at paragraph 46 of that decision, the evidence before the Commission reveals that there have been numerous meetings since 9 May 2006 between the AMWU and Mayfield to discuss the post collective agreement. Further, since 9 May 2006 numerous drafts of the collective agreement have been developed and exchanged between the AMWU and Mayfield. Those drafts have covered a wide range of wages and conditions of employment matters.

PN1181

Prior to the conclusion of the hearing of this matter the latest draft of the collective agreement was one emailed from the AMWU to Mayfield on 18 August 2006. It was emailed at the request by the AMWU to Mayfield for further discussions. And further, supporting the collective negotiations have been occurring between the AMWU and Mayfield. This is the letter that was tendered in the previous proceedings from the national secretary of the AMWU, Mr Doug Cameron. In withdrawing the notice to take protected action Mr Cameron acknowledges "Further discussions in correspondence" between the AMWU and Mayfield.

PN1182

Following that the ballot process was instigated. A secret ballot was conducted by the Australian Electoral Commission, and that was declared on 19 December 2006. A majority of employees of Mayfield voted to take - or members of the union voted to take protected industrial action nationally. Throughout this whole period Mayfield continued to negotiate with the AMWU. So we're talking now a period of 1 May to the end of December, notwithstanding the AMWUs application for a secret ballot and accessing that ballot.

PN1183

Mayfield tabled proposals and agreements and was prepared to make an agreement with the union provided the agreement was sustainable. Indeed, even with these applications filed there were two applications for secret ballots forcing the further application. The company continued to negotiate with the union, the final meeting having occurred on 20 February in Melbourne this year. Mayfield made significant concessions in order to make the agreement attractive to the AMWU, however AMWU was simply not prepared to reach a compromise on the small number of matters that remained outstanding and consequently no agreement could be reached with the union.

PN1184

Now, your Honour, I mentioned the number of employees affected by this application and I put my submission together as five full time employees at the ASC site who were taking protected action at the time, and 14, 12 - 16 in Victoria. Now, those numbers have come down significantly, as I indicated in the previous proceedings. I think we have two in Victoria and something like three at the ASC site. The numbers of employees have either accepted Australian workplace agreements or have left the company.

PN1185

With respect to the remuneration of those employees affected by this application, Mr Harvey has given evidence to the Commission that Mayfield has firstly given the employees affected by the application a written undertaking that the company will maintain their current remuneration arrangements, and that is an appendix to those statements - those commitments are attachment C and D to Mr Harvey's statement. And secondly, that the same undertakings will today be given to the Commission, and those undertakings that are obtained in appendix - in attachments C and D are duly given once again to the Australian Industrial Relations Commission.

PN1186

Your Honour, section 170MH requires a test, and the test, the principal test is the public interest test. The Commission must, after taking reasonable steps to obtain the views of persons bound by the agreement about whether it should terminate the agreement if it considers that it is not contrary to the public interest. The public interest as it pertains to Mayfield's application is the determining factor. The authority of what constitutes the public interest are in the context of section 170MH(3) which is the Full Bench decision in Kellog, Brown and Root and Others v Esso Australia Pty Ltd, and that print number is PR955357.

PN1187

This decision has been relied on in subsequent decisions including decisions of Senior Deputy President Ives in Chubb Security Pty Ltd trading as Chubb Electronic Security, print number P97269, and the decision of Senior Deputy President O'Callaghan in Radio Rentals Technical Services Certified Agreement 2002, PR973113. If I may, your Honour, I might tender those decisions.

PN1188

Your Honour, if I can take the Commission firstly to Chubb, and the public interest considerations are discussed at paragraphs 20 and 21, and again the principles of Kellog are restated in the paragraphs of the decision. For the record, the Commission knows in the case of Kellog, Brown and Root and Others v Esso Pty Ltd, the Full Bench of the Commission has provided a useful guide for the consideration of the public interest as it pertains to applications of the type before you.

PN1189

The notion of the public interest refers to matters that might affect the public as a whole such as the public interest refers to matters that might affect the public as a whole ...(reads)... that fact does not lessen the distinction between them.

PN1190

Similarly in Radio Rentals. Similarly Deputy President O'Callaghan refers to the consideration of the Full Bench in Kellog and Others. His Honour states at paragraph 11:

PN1191

The issue of a public interest in the context of section 170MH(3) ...(reads)... such as the achievement or otherwise.

PN1192

And that's the statement that's previously been read onto the transcript. Further, at paragraph 14 his Honour relies on a decision of Munro J, where relevantly Munro J states:

PN1193

I have concluded that the termination of the certified agreement is likely to result in the loss of benefits ...(reads)... public interest consideration.

PN1194

Sorry, that was his Honour O'Callaghan:

PN1195

As Munro J stated in Joy Manufacturing "However it does not follow in my view ...(reads)... the Commission."

PN1196

The public interest was further considered in the Full Bench decision in an appeal by the Australian Meat Industry Employees Union against an order of Commissioner Simmonds on 12 May 2004. Now, that print number is P946603, and it's a decision in relation to a 170MH matter relating to Castricum Brothers Pty Ltd. If the Commission pleases I might hand up that decision.

PN1197

THE SENIOR DEPUTY PRESIDENT: Just while that's coming up, you will recall that on the first day I referred to letters that I received from three employees, one that was undated and one that was dated 29 March, and another
2 April, they were from Nick Farrugia, Dean Mason and Mark Cooper. Are those people still employed? Are they among the five who you've referred to?

PN1198

MS LEEDS: I believe they may be employed. Dean Mason has subsequently signed an Australian workplace agreement which has been lodged. The other two gentlemen, I can make a call and find out. I'm not certain that they remain with us but I have no reason to doubt that they're not the two that have remained.

PN1199

THE SENIOR DEPUTY PRESIDENT: Yes, very well. Carry on.

PN1200

MS LEEDS: Your Honour, in the Castricum decision the Full Bench found that the public interest does not require the Commission to consider whether termination of an agreement would assist the parties to make a new collective certified agreement, and further, that the Act has no preference whether parties make individual or collective agreements. And those references are found on paragraph 28 onwards.

PN1201

In paragraphs 35 to 37 the Full Bench considers the public interest again. In paragraph 35 the Bench notes:

PN1202

It is apparent that terminating the Castricum agreement will offend ...(reads)... the Castricum agreement must be terminated.

PN1203

And that is a discussion about balancing conflicting interest in the public interest. Your Honour, other relevant decisions that the Commission has made to terminate a number of agreements for grounds in circumstances not too dissimilar to the present application before the Commission include Chubb Security Services, Chubb Security Australia Service Department Victoria ETU Enterprise Agreement 2003-2005 and Another, and that was a decision of Deputy President Ives on 26 May 2006, print PR972689. Further agreement - - -

PN1204

THE SENIOR DEPUTY PRESIDENT: That's the one you've handed up is it not?

PN1205

MS LEEDS: I think it may be. Yes, it is. Yes. Some further decisions which may assist the Commission and provide some authority are the Wormald Contracting Victoria ETU Enterprise Agreement 2003-2005 and Wormald Services Victoria ETU Enterprise Agreement 2003-2005, and that decision was one of Senior Deputy President Watson on 20 September 2006, and it's print is PR974115. If the Commission pleases, if I may hand up the final three decisions. If I can firstly take the Commission to the Wormald decision, and specifically to paragraph - - -

PN1206

THE SENIOR DEPUTY PRESIDENT: I see Mr Quigley is - - -

PN1207

MR QUIGLEY: I get around, your Honour.

PN1208

MS LEEDS: At paragraph 28 the Commission states:

PN1209

I'm cognisant of the opposition for determination of each agreement by the CEPU ...(reads)... 170MH of the pre reform Act.

PN1210

And the Commission will note that the background to this application is not dissimilar to Mayfield's, specifically in paragraphs 5 and 6. The Commission notes the efforts that were made by Tyco and CEPU to renegotiate an agreement and how that became stalled in 2006, and that agreement was just not possible. But notwithstanding the agreement which was non complying with the National Code and Implementation Guidelines was terminated by the Commission.

PN1211

In the Siemens Ltd decision, this one appears to be a transcript, a decision given on transcript, your Honour. It's at PN 53, and it's the Commission once more noting its obligations under the public interest test:

PN1212

Beyond that the Commission is required under the relevant provisions to terminate the agreement unless it considers it would be contrary ...(reads)... only to the extent that they bear upon the public interest.

PN1213

Again another agreement not too dissimilar to these circumstances. In Thiess, again another decision on transcript, and specifically at PN 603:

PN1214

In any case breaches of the type referred to ...(reads)... to any breach or breaches.

PN1215

And I think that statement is relevant in these proceedings in anticipation of what I expect would be the union's argument against the termination of these agreements.

PN1216

THE SENIOR DEPUTY PRESIDENT: Sorry, which are you referring to now?

PN1217

MS LEEDS: Thiess, in PN 603.

PN1218

THE SENIOR DEPUTY PRESIDENT: 603, thank you.

PN1219

MS LEEDS: Your Honour, in conclusion, Mayfield is entitled to bring these applications. The agreements have passed their nominal expiry date. Employees of the union are not prevented from lawfully pursuing a workplace agreement at some future time. There is no prejudice. The Act provides an avenue for the employees and their union to advance their claims for workplace agreements at some future time by facilitating the taking of protected industrial action.

PN1220

There is no prejudice further to either the union or the employees because breaches, alleged breaches under the agreements are actionable even if the agreements are terminated. The viability of the Leighton Group may be undermined by two time expired agreements binding on fewer than 10 employees. The security of a large number of employees and subcontractors may be undermined by the two agreements, again binding on so few employees.

PN1221

Companies within the Leighton Group may be prevented from working on or tendering on major infrastructure projects. That being the case we believe that the public interest test has been satisfied and the Commission must terminate the agreements. If the Commission pleases.

PN1222

THE SENIOR DEPUTY PRESIDENT: So essentially your argument that the reason it's not against the public interest is that there's a risk to the Leighton Group and the contractors it works with if it's non compliant with the code, that the opportunity exists to pursue another agreement in the future, that breaches are still, of the agreements, remain actionable at law. And why else is it not against the public interest?

PN1223

MS LEEDS: I'm sorry?

PN1224

THE SENIOR DEPUTY PRESIDENT: And why else is it not against the public interest? I'm just trying to, you know, among all the decisions, I understand all that, but I'm just trying to understand why do you say it's not against the public interest?

PN1225

MS LEEDS: The employees who are covered by the agreement are not left without any regulation, industrial regulation. The terms of the Metal Industry Award will apply to them and, indeed, the undertakings given today on transcript and by Mr Harvey as attached to his statement will mean that the employees who remain covered by the - or will be covered by the awards will not suffer any detriment as a result of the termination of those agreements. The public interest must be served in allowing companies the size of the Leighton Holding Group to be able to present itself as a contractor to the Australian government for very, very large infrastructure projects that the Australian government funds. And it will not be in the interests of either the company nor the government to limit the companies that have been shown in the profile from providing those services to the Australian government, and ultimately would not be in the public interest to not engage in those infrastructure projects.

PN1226

THE SENIOR DEPUTY PRESIDENT: Okay.

PN1227

MS LEEDS: And it would not be in the public interest not to terminate them. There is no - until we hear from the union I guess - - -

PN1228

THE SENIOR DEPUTY PRESIDENT: Sorry, the test is that it's not contrary to the public interest.

PN1229

MS LEEDS: Yes.

PN1230

THE SENIOR DEPUTY PRESIDENT: So what's that last point you say again?

PN1231

MS LEEDS: That it would not be contrary to the public interest if the agreements were terminated because it would allow the contractors in the Leighton Holdings Group to remain eligible to tender for Australian government projects, and it would be in the interests of the Australian government to have competition and to have tenderers who were eligible to provide those construction services for the very large infrastructure projects that the Australian government funds.

PN1232

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1233

MS LEEDS: Your Honour, finally, the Leighton 06, the annual report, concise annual report of the Leighton Holdings Group, and I just wanted to draw the Commission's attention to just a couple of points. The orange tab is a statement with regard to submissions that I made regarding the number of employees employed by the group. The orange tab with the title Who Are We? halfway through the paragraph says:

PN1234

With over 2500 employees the groups operations are spread all around Asia Pacific region projects in Australia, New Zealand -

PN1235

And so on. At tab number 2 the relevant aspects of the value of the work one, and that's the chief executive's report for the previous year, the value of the work for the year topped $10 billion. Now, that is a substantial commitment and a commitment to build very substantial projects, to employ a substantial number of people, to engage many subcontractors, material, supplies and so on.

PN1236

At tab number 3 is another explanation of the group structure of Leighton Holdings. And at tab number 4 again it indicates that the total number of employees have grown by 25 per cent to 25,405 people in line with the increased activity levels, and our respectful submission is that that's good for everyone, not just for the company but for the employees, subcontractors, suppliers and ultimately for the Australian public who share the benefits of the infrastructure that Leighton Holdings provides. If the Commission pleases.

PN1237

THE SENIOR DEPUTY PRESIDENT: Thank you. Who wants to go next?

PN1238

MR QUIGLEY: Perhaps I'll go next, your Honour.

PN1239

THE SENIOR DEPUTY PRESIDENT: Noting the time, are there views on how we should proceed?

PN1240

MR QUIGLEY: I have no view on that. I will mention, your Honour, I was about to get on a plane in 45 minutes.

PN1241

THE SENIOR DEPUTY PRESIDENT: It's only 12 minutes from here to the airport.

PN1242

MR QUIGLEY: Your Honour, my submissions have been decimated by the amount of material that Ms Leeds has put forward, and I don't want to bore the Commission with a repetition of what you've already received, so to that extent it would be necessarily brief. If the Commission didn't want to continue sitting today I'd be more than happy to provide a brief written submission which could be provided to the parties and the Commission tomorrow. It's only a matter of preparing that one I had already prepared without repeating what you've already received.

PN1243

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1244

MR QUIGLEY: Subject of course to what Mr Kentish wants.

PN1245

THE SENIOR DEPUTY PRESIDENT: Mr Kentish, do you have a view on how long you'll be?

PN1246

MR KENTISH: Your Honour, I would expect I would only go for a period of around perhaps ..... so half an hour.

PN1247

THE SENIOR DEPUTY PRESIDENT: All right. Well, what would you like to do? Do you want to, you know, keep the bit between your teeth and try and complete this today, or do you want to schedule another day? From my point of view we can do it either way?

PN1248

MR KENTISH: Your Honour, the bit is between my teeth and I'd be happy to continue on today, but I don't have a strong view.

PN1249

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Quigley, how does that place you?

PN1250

MR QUIGLEY: If I can make a request of the Commission? If I were to make a short submission would the Commission grant me the indulgence of leaving the proceedings?

PN1251

THE SENIOR DEPUTY PRESIDENT: Certainly.

PN1252

MR QUIGLEY: Ms Aloisio could remain on behalf of the ABC Commissioner.

PN1253

THE SENIOR DEPUTY PRESIDENT: Yes, certainly.

PN1254

MR QUIGLEY: In that case I'm more than happy to proceed, your Honour.

PN1255

THE SENIOR DEPUTY PRESIDENT: Okay.

PN1256

MR QUIGLEY: Now, your Honour, the ABC Commissioner makes these submissions in the light of the submissions that have already been made by the applicant, Mayfield Engineering. And at the risk of boring the parties by repeating much of what the Commission's already received, I would like to point out some particularly key elements that the Commission should have regard to in an application pursuant to section 170MH of the Workplace Relations Act in its pre reform guise.

PN1257

Under that section, unless the Commission is positively persuaded that termination of the agreement is contrary to the public interest the Commission is required to terminate the agreement. The Commission must be alerted to the distinctions to be drawn between what are the private interests of the parties and what is the public interest. Those elements were dealt with quite conclusively by his Honour Deputy President Ives in the Chubb decision which Ms Leeds has drawn to your Honour's attention, and I refer in particular to paragraph 21, but also paragraph 24 where his Honour drew the point that in that case the company had given an undertaking similar to the undertaking that Mayfield has given to its employees to maintain the terms and conditions of their employment, but his Honour said that even if such an undertaking hadn't been given there was the ongoing application of the award which would deal with any public interest issues that might arise.

PN1258

So what his Honour is saying is that even if an agreement were no longer to apply the public interest can be catered for by the fact of a safety net or an underpinning award being in place. His Honour also clarified that the test isn't whether it's in the public interest to grant the application, but whether it would be contrary to the public interest not to grant the application. And with respect to some of the submissions that you have received already, notwithstanding that it would certainly be good for a company like Leightons and the construction industry generally and for the Australian government to have contractors prepared to do work for the government with certain industrial instruments in place, that is not really the test that the Commission has to address here.

PN1259

The test is, as the Commission in the Full Bench decision in the Kellog, Brown and Root said at paragraph 27 of that decision, the Commission should be guided by the likely foreseeable consequences of termination of the agreement rather than speculation about possible consequences. And again it's a question of what the negatives from the public interest sense of terminating rather than what is in the public interest if it does terminate.

PN1260

In the event that there's any argument about the impact on the ability of the parties to achieve an agreement and that the loss of an agreement is somehow or other a barrier, that's featured in any number of these decisions, including the Kellog, Brown and Root case. And the Commission at paragraph 27 of that decision said that:

PN1261

The scheme of the Act contemplates the parties taking industrial action as part of the enterprise bargaining process.

PN1262

So what it's indicating there is that, look, an agreement might be being terminated, but there's scope under the Act for the parties to take a range of measures, protected industrial action or whatever to seek to procure an agreement with another party. Now, the ABC Commissioner is not aware of any grounds that could be raised that would suggest that by the termination of two agreements which, on the evidence of the company, affects five employees, and in respect of whom undertakings have been given by the company to maintain their existing terms and conditions of employment, it's hard for the ABC Commissioner to see how that would be contrary to the public interest for the Commission to terminate such agreements.

PN1263

And whilst the company has submitted good grounds as to why its application should be made in a positive sense, it's the ABC Commissioner's view that the Commission only has to look at any negative public interest factor that might be in place should it terminate those agreements. And the ABC Commissioner for his part can't find any that this Commission should have regard to.

PN1264

Whilst the undertaking that has been given by the company is not necessary, the fact is that such undertakings have been viewed favourably by the Commission in a number of cases, and one example is that of Deputy President Ives in the Chubb case that we've referred to. And the other point, your Honour, and this also was dealt with both in the quotations from Senior Deputy President O'Callaghan, is that I understand that the Commission has received the views of some employees, and the union and the employer of course are also parties to the agreement, and the Commission is entitled to take the views of those, but at paragraph 21 of the Chubb decision his Honour, Deputy President Ives referred to - I think it's paragraph 21 of the Kellog, Brown and Root case. I'll just check that, your Honour.

PN1265

THE SENIOR DEPUTY PRESIDENT: Well, it's also 21 of Chubb.

PN1266

MR QUIGLEY: Yes, paragraph 21 of Kellog, Brown and Root. And this goes to the question of how much regard the Commission has to take of the views of the parties. And the Bench said:

PN1267

All that need be said is that despite the requirement of 170MH(2) to take steps to ascertain the views of the parties to the agreement ...(reads)... specific reference to those interests.

PN1268

Your Honour, on that basis I'll leave my submissions with the conclusion that in the ABC Commissioner's view there are no reasons that the ABC Commissioner is aware about which the Commission should regard granting the company's application as being contrary to the public interest. And in the absence of such grounds the company's application should be granted and, indeed, if the Commission is of the view that there are no such grounds then the application must be granted.

PN1269

THE SENIOR DEPUTY PRESIDENT: What do you say about any alleged breaches of the agreements?

PN1270

MR QUIGLEY: Your Honour, they were dealt with in the Tristar case and they did say that the - I'll just find it. They did draw attention to that, but my submission would be this, your Honour. That such breaches would have to be very significant breaches, a breach of the sort that indicates a flagrant disregard to the responsibilities and obligations of a party to an agreement. It's our submission that the sorts of breaches to which the union have referred are in one sense breaches - not so much breaches but disputations on matters of law, certainly in relation to the sick leave issue, the breaches in respect of overtime I think could also be regarded as a difference of opinion, which is the subject of negotiations and close to or being resolved.

PN1271

The breaches alleged in relation to negotiations are, in my submissions, vitiated by the decision of Nicholson J in the Federal Court. And the breaches that are alleged in relation to the issuing of notices to employees I don't think is being pressed, or, if it is, indeed I would suggest that that was minor. But in each respect, your Honour, they're allegations of breaches. They're not attended by significant amounts of evidence. The only evidence that the union has provided is evidence which is of the hearsay variety. It could have provided substantive evidence but for reasons best known to it has chosen not to do so.

PN1272

So we would say, your Honour, that whilst the Commission is entitled to take that into account the question still becomes, would termination of the agreements be contrary to the public interest? And the ABC Commissioner would say even in the context of allegations of some, what the union calls breaches and what the company I dare say would call differences of opinion as to interpretation or application of an agreement, they are in relation to a handful, literally a handful of people, the notion of the public interest of anything would be contrary to the public interest in terminating those agreements, indeed it's very hard to see in those circumstances.

PN1273

THE SENIOR DEPUTY PRESIDENT: And the proposition that Leighton would still not be in compliance with the code because of other agreements that have been made also in breach of the guidelines?

PN1274

MR QUIGLEY: Your Honour, the question of whether or not Leightons and its subsidiaries had agreements that complied with the code is a matter between Leightons and the Department of Employment and Workplace Relations. It's my understanding that Leightons takes the view based on discussions with the department and on its own legal advice that by the termination of these two outstanding agreements it will not have any agreements which do not comply with the code. So that if these two agreements remained on foot Mayfield and, for that matter, Leightons and other companies within the Leightons Group would be at risk of not being able to tender for Australian government work.

PN1275

Now, what we would say to that is, that is a question of, it would be against the public interest for the Commission not to terminate the agreements because it would put Leightons and Mayfield in an untenable position in respect of Australian government work. But that's not the test that the Commission has to meet under 170MH. The test is, would it be against the public interest if you terminated the agreements? We would say it would not be contrary to the public interest to terminate those agreements.

PN1276

THE SENIOR DEPUTY PRESIDENT: Yes. The test is, if it's not contrary to the public interest to terminate the agreement.

PN1277

MR QUIGLEY: Yes. What we would say is it would be contrary to the public interest if you did not terminate those agreements because it could leave a situation where the Australian government doesn't have at its resources a significant employer in the building and construction industry available to tender for Australian government work. Now, we would say that is the public interest issue.

PN1278

THE SENIOR DEPUTY PRESIDENT: But the test needs to be applied correctly.

PN1279

MR QUIGLEY: Yes, your Honour.

PN1280

THE SENIOR DEPUTY PRESIDENT: And if there are other agreements that put at risk Leightons compliance with the code?

PN1281

MR QUIGLEY: Well, I think that takes us back to the comments of the Full Bench in Kellog, Brown and Root, your Honour, and that is, you have to look at the foreseeable consequences and not be speculative. And I would submit that it is getting into the realms of speculation to start talking about any other agreements that might pertain to some entity within the Leightons empire, if I can refer to it as that.

PN1282

THE SENIOR DEPUTY PRESIDENT: At any rate, thinking about the effect of that on the Leightons Group, it needs to be done in the context of the correct application of the test.

PN1283

MR QUIGLEY: Yes, absolutely, your Honour.

PN1284

THE SENIOR DEPUTY PRESIDENT: That it's not against the public interest, that it's not contrary to the public interest to terminate the agreement.

PN1285

MR QUIGLEY: Yes, absolutely.

PN1286

THE SENIOR DEPUTY PRESIDENT: I see. Anything further?

PN1287

MR QUIGLEY: No, that's all, your Honour.

PN1288

THE SENIOR DEPUTY PRESIDENT: Okay, thank you. Why don't you make a dash for it?

PN1289

MR QUIGLEY: Thank you, your Honour.

PN1290

THE SENIOR DEPUTY PRESIDENT: Mr Kentish?

PN1291

MR KENTISH: Thank you. Your Honour, the AMWU relies on the evidence and the submissions that the union put in its earlier section 101(g)(v) and (iv) applications. Your Honour, the AMWU opposes the applications under section 170MH of the pre reform Act to terminate the agreements that are before the Commission. Your Honour, the AMWU submits that the grounds provided in Mayfield Engineering's application, that is, that termination is necessary for Mayfield Engineering and the whole of the Leightons Group to be compliant with the implementation guidelines is based on a false assumption.

PN1292

As the AMWU has argued earlier in its 111(1)(g) applications, Mayfield Engineering will not be compliant with the implementation guidelines regardless of the outcome of these proceedings because Mayfield Engineering has recently entered into a number of agreements that are not compliant with the implementation guidelines, and those agreements have nominal expiry dates which go out to as far as 2010. And, your Honour, it's not a matter that's speculation. The words are quite clear, they won't be compliant until those agreements are no longer agreements which bind Mayfield Engineering.

PN1293

It's not as though as it's a remote entity in the Leighton's empire, it's the agreement and the company which are before your Honour, so it's not a speculative matter. Your Honour, as the AMWU has also pointed out in the union's section 111(1)(g) applications it would appear that non compliance has so far not been sufficient to prevent companies related to Mayfield Engineering getting government work. And Ms Leeds spoke interestingly of some kind of agreement between the company and the ABCC in relation to the ABCC being prepared to allow transition for compliance.

PN1294

Well, it's been a transitional period which has been for almost the entire operation of the code, your Honour. Mayfield Engineering have known that they've not been complying since the end of 2005, and who knows, perhaps before that. Your Honour, it's not clear at all what will happen about the employee collective agreements which Mayfield Engineering has now entered into or what the ABCC will do, or whether some kind of transitional compensation will also be granted for another period of time outside 2010. But we would submit that unless some kind of transitional period is allowed then clearly Mayfield Engineering will not be compliant with the implementation guidelines until 2010.

PN1295

Your Honour, in the attachment to Mr Harvey's statement, attachment B, if I could take your Honour to it, at page 6. At the end of the table, which I believe is summarising agreement clauses that are not compliant with the code and guidelines, there's a table with three rows and I'm looking at the bottom row on what is numbered page 6 of 17 at the top of attachment B to the statement of Arthur Harvey.

PN1296

THE SENIOR DEPUTY PRESIDENT: That's the National Technical Services. Is it the National? It's the next one we need to look at isn't it, the National NDT Enterprise Bargaining Agreement 2003 on page 7?

PN1297

MR KENTISH: Your Honour, for the purposes that I wish to take the Commission to it probably doesn't matter, but yes, your Honour, I accept an error there.

PN1298

THE SENIOR DEPUTY PRESIDENT: And I think the entry's the same isn't it?

PN1299

MR KENTISH: In that case page 8, yes.

PN1300

THE SENIOR DEPUTY PRESIDENT: Yes, it's the same entry.

PN1301

MR KENTISH: It's the same entry. And the reason I seek to take the Commission to it is that the Department of Employment and Workplace Relations are obviously concerned about whether or not 8.7.4 is adhered to in agreements in terms of code compliance. And your Honour may recall 8.7.4 is the clause that I took your Honour to in the union's section 111(1)(g) applications concerning dispute resolution procedures and the code.

PN1302

Your Honour, we submit that it's a bit rich to say that, well, we've got to comply with the code and the views of the Department of Employment and Workplace Relations and submit this as evidence in these proceedings and then say, well, yes, but of course 8.7.4 doesn't matter in relation to our employee collective agreements, which I note the company hasn't sent to the Department of Employment and Workplace Relations. Your Honour, we submit that - - -

PN1303

THE SENIOR DEPUTY PRESIDENT: I notice by the way, looking at the column, that a clause referred to as classification of disputes procedure, is that the same as - - -

PN1304

MR KENTISH: Your Honour, the clause referred to is not the same clause as you will find in the employee collective agreements. But the matter I want to draw from it is that the Department of Employment and Workplace Relations does care whether or not particular provisions meet the requirements of 8.7.4.

PN1305

THE SENIOR DEPUTY PRESIDENT: Yes. The dispute settlement procedure here in this agreement is quite different to the one we were looking at earlier on today.

PN1306

MR KENTISH: Yes, indeed, your Honour. And I didn't mean to suggest otherwise. If I created that impression it was not intentional, your Honour.

PN1307

THE SENIOR DEPUTY PRESIDENT: No. I mean, the point of referring to that you say is that the department is concerned with - sorry, how did you put it?

PN1308

MR KENTISH: Well, the department is concerned with any provision in an agreement which doesn't meet 8.7.4. The point I'm trying to draw is that 8.7.4 is not an obscure matter which can somehow be disregarded. Clearly the department has a view that the employers who send agreements to it should be compliant and, in fact, all employers who are in the building and construction industry and seek to conduct government funded work should have provisions in it which don't breach 8.7.4.

PN1309

THE SENIOR DEPUTY PRESIDENT: Yes. Whereas you'd say looking at clause 20 of the National NDT Enterprise Bargaining Agreement that it clearly does breach the code.

PN1310

MR KENTISH: Your Honour, we make no bones about the fact that the existing agreements before your Honour breach the code.

PN1311

THE SENIOR DEPUTY PRESIDENT: Yes. But I was going on to say probably the reason it breaches the code is that the employees' choice of representation is restricted to a union official, and the entry in this table from the department seems to be emphasising freedom of choice in deciding whether to be represented, and if so by whom.

PN1312

MR KENTISH: Well, certainly, your Honour, the table says an employee must have freedom of choice in deciding whether to be represented and if so by whom? Well, your Honour, in the dispute resolution procedures in the employee collective agreements employees have no option to be represented at all until they get to conciliation proceedings.

PN1313

THE SENIOR DEPUTY PRESIDENT: I was just noting that this clause is really quite different to what we were looking at this morning.

PN1314

MR KENTISH: It is quite different but, your Honour, at least under this clause you get represented by somebody. Under the clauses which the company has entered into in its employee collective agreements there's simply no right for them to make a choice for representation, be it by the union or otherwise. And, your Honour, we submit that that clause cannot simply be dismissed in the way that Ms Leeds and even Mr Quigley appear to be relaxed, or I think Mr Quigley said that it was speculative as to whether or not that might breach the code.

PN1315

Well, your Honour, there's nothing speculative about it. It's actually one of the clearest things I've read in terms of code compliance. And, your Honour, I was very critical of the code in the proceedings before her Honour Senior Deputy President Acton when these parties were together talking about ballots and how the code was at times very difficult to understand because it wasn't written as a legal document per se. Are we still on transcript? There's nothing I enjoy more than sitting back and reading myself on transcript. I'd hate to be denied that.

PN1316

THE SENIOR DEPUTY PRESIDENT: Get a life, Mr Kentish.

PN1317

MR KENTISH: A dubious pleasure. Your Honour, I think I've made the point that I was trying to make in relation to the code compliance. Your Honour, broadly we submit that the employer's application in those circumstances provide no valid grounds for the termination of our agreement. And, your Honour, with respect to the test that must be met in section 170MH, the union submits that it's contrary to the public interest for the agreements to be terminated. And we say that it is contrary to the public interest for substantially the same reasons that the AMWU identified in relation to the union's section 111(1)(g) applications.

PN1318

And, your Honour, in considering the public interest the AMWU respectfully submits that the Commission should take into account the objects of the pre reform Act, and in particular the objects contained in section 3(e), and, your Honour, I've gone to that section a number of times. Essentially the AMWU is concerned about the part of that section which provides that the employees and their organisations abide by awards and agreements applying to them.

PN1319

Your Honour, the Full Bench in the most recent Tristar appeal, print PR976735, confirmed that whether a party has abided by an agreement may affect the public interest in section 170MH applications, and that was made clear in paragraph 21. Your Honour, I won't read out the paragraph, I believe it's been read out by either Mr Quigley or Ms Leeds.

PN1320

THE SENIOR DEPUTY PRESIDENT: I can assure you I've read it.

PN1321

MR KENTISH: Thank you, your Honour. Your Honour, we say that Metlabs has breached relevant agreements to which it is bound in the manner described in our section 111(1)(g) applications, and we say on that basis the public interest is enlivened and that your Honour should not terminate the agreements. Your Honour, at this point I should just note that there appeared to be a suggestion again from Ms Leeds and Mr Quigley that the number of employees were somehow relevant to the question of agreement breaches.

PN1322

Your Honour, with respect, we think that misses the point. It's not that it applies to a small number of employees, it's that an agreement which was certified by the Commission and which has been given legal force by the Commission has not been complied with. And whether that's in relation to 1000 people or whether it's in relation to, we submit, one person the principle is that it's in the public interest that parties abide by the agreements that apply to them, not that parties abide by agreements applying to them where there are a lot of employees employed, but simply that agreements are abided to.

PN1323

Your Honour, the AMWU further submits that the termination of an agreement for the benefit of a party which has resorted to unfair bargaining or unconscionable behaviour may be contrary to the public interest. In this respect the AMWU relies on the decision of Munro J. The decision of Munro J and his decision concerning the termination of the Joy Mining Machinery Moss Vale site certified agreement contained in print T1133, and regrettably I was about to hand up a copy of that decision which will be in the circumstances difficult.

PN1324

THE SENIOR DEPUTY PRESIDENT: Yes. I'm familiar with the Joy Mining.

PN1325

MR KENTISH: Your Honour, perhaps if I could just read out the paragraph which we say is relevant.

PN1326

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN1327

MR KENTISH: That may get us there without causing any uncomfortableness to either the Bench or the bar table. At paragraph 61 his Honour stated:

PN1328

It is not necessary to develop a detailed formulation of the principle I have outlined ...(reads)... of the party which had -

PN1329

And we say this is the key part of the passage:

PN1330

- which had resorted to unfair bargaining conduct to subvert the bargaining process most consistent with genuinely trying to reach a replacement agreement.

PN1331

And, your Honour, the AMWU also relies on a passage from Kellog, Brown and Root. I think that decision has already been handed up to your Honour. No, it hasn't. Perhaps if I can read the relevant passage, I'm happy to. The relevant paragraph is paragraph 35, and the paragraph provides:

PN1332

Before leaving this part of the decision it is opportune to comment on the submission advanced by some of the appellants ...(reads)... this however is not such a case.

PN1333

Your Honour, the AMWU submits that Mayfield Engineering has resorted to unfair behaviour or unconscionable conduct on the following grounds. Mayfield Engineering is refusing to negotiate with the AMWU on a collective basis despite being bound to do so in the agreements the subject of this application. Instead Mayfield Engineering has offered and continues to offer alternative agreements to employees that have certain terms and conditions that are less than statutory minima contained in the Workplace Relations Act.

PN1334

Further, Mayfield Engineering has sought to include prohibited content in a workplace agreement and has lodged agreements containing prohibited content to the potential disadvantage of employees. Your Honour, the AMWU relies upon the submissions we made in support of the union's section 111(1)(g) applications with respect to the employee collective agreements contained in provisions that are less than the statutory minima and that are prohibited content. Your Honour, the AMWU adopts but does not repeat those submissions, but the AMWU does however note that the same comments that applied to those agreements also apply to the workplace agreements most recently offered to employees who are currently working under the agreements that are the subject of Mayfield Engineering's application.

PN1335

Your Honour, the AMWU further submits that given the apparent bargaining intentions of Mayfield Engineering, terminating the agreements is likely to inhibit the maintenance of proper industrial standards. And, your Honour, the maintenance of proper industrial standards is relevant to the public interest, as the Commission found in Kellog, Brown and Root. And, your Honour, I was intending to take the Commission to paragraph 23 of that decision, and we'll hand it up if it's convenient.

PN1336

Your Honour, the paragraph that I wanted to take the Commission to is paragraph 23. That paragraph provides:

PN1337

The notion of public interest refers to matters that might affect the public as a whole ...(reads)... does not lessen the distinction between them.

PN1338

Your Honour, the key point I wanted to draw out of that is that maintenance of proper industrial standards is a matter which is relevant to the public interest. Your Honour, the AMWU submits the proper industrial standards are being put at risk because Mayfield Engineering is attempting to move employees on to agreements that have some terms that are less than the relevant statutory minima and, your Honour, we would submit that in terminating these agreements that is more than likely to be the case.

PN1339

Your Honour, I now just wanted to deal with a number of points which Ms Leeds raised specifically. In particular Ms Leeds made a reference to a decision on transcript, and it's the decision of his Honour Deputy President Ives in Thiess v CFMEU, and Ms Leeds took your Honour to paragraph PN 603. That paragraph says:

PN1340

In any case questions of the type referred to, if they exist, remain ...(reads)... to any breach or breaches.

PN1341

Your Honour, we say that's not consistent with what the Full Bench has found in Tristar. The Full Bench has found that a breach is relevant to the public interest, and it's not enough to say that there are other avenues which can be pursued. We would also say, your Honour, that pursuing other avenues in relation to an obligation on the employer for the renegotiation of an agreement will not really be in any way useful given that once the agreement is terminated the obligation for the employer to negotiate with the AMWU will pass, and there's no way that specific performance can somehow be resurrected there.

PN1342

Your Honour, if I could go to some of the comments of Mr Quigley. Mr Quigley resisted characterising the breaches, or the alleged breaches as flimsy excuses this time and tried on the expression differences of opinion. Your Honour, these aren't differences of - or these aren't merely differences of opinion. These are differences of opinion which have the consequence that the employer is not compliant with the agreement. It's not an academic point to which base rate employees should be paid in the calculating of overtime in the South Australian agreement. It's something which has led to a long sustained breach of that agreement, which is the underpayment of employees.

PN1343

So it's not helpful we submit or accurate to characterise what we say are significant breaches as mere differences of opinion. They're matters which have had consequences which have been very real and they're not just some moot point. Your Honour, again Mr Quigley was raising the issue of evidence and the union not bringing evidence. Well, again I submit that the union is the only party that has brought evidence in relation to the breaches. The employer was clearly able to do so and hasn't, and if any inference should be drawn it's not that there is some inadequacy in the evidence provided, but rather that it hasn't been counted.

PN1344

Your Honour, Mr Quigley also suggested that the code was simply a matter of issue between the Department of Employment and Workplace Relations and Leightons. Well, we say that by making compliance with the code or the implementation guidelines a ground for this application, there's necessarily no longer a matter which is just between the department and between Mayfield Engineering and its related entities. It's a matter which is now in the public and must be dealt with there.

PN1345

Your Honour, unless your Honour has any questions I think that concludes the submissions of the AMWU. Sorry, your Honour, there was one further point that I wanted to finish on, and that was that, your Honour, we do note that the employees covered by the agreement, or at least three or possibly two, two or three employees have written to your Honour.

PN1346

THE SENIOR DEPUTY PRESIDENT: Three.

PN1347

MR KENTISH: And there would appear to be some question in Ms Leeds's mind about whether one of them is still with the company. I'm not able to assist in that regard, but we do note that they have written to your Honour expressing their opposition fairly unequivocally to the agreements being terminated. And, your Honour, we submit that in all of the circumstances that I've outlined to your Honour both in our section 111(1)(g) applications and in our submission in relation to the section 170MH applications that it would be contrary to the public interest for the agreements to be terminated. Unless your Honour has anything further that does in fact conclude the submissions of the union.

PN1348

THE SENIOR DEPUTY PRESIDENT: Yes. I note they don't say why they're opposed, they just say they're opposed to the termination of the agreement.

PN1349

MR KENTISH: Your Honour, I'm unable to take it further.

PN1350

THE SENIOR DEPUTY PRESIDENT: Yes, thank you very much. Ms Leeds, how do you respond?

PN1351

MS LEEDS: Thank you, your Honour, just a few points in reply. The AMWU submits that the grounds relied on for this application are based on false assumption. Our view is that - and I know that the dispute resolution clause of the employee collective agreements has had a bit of a work over today, but I note that that clause in fact allows at stage two an employee to be assisted by someone of the employee's choice. Now, in our respectful submissions the AMWU has been too restrictive in saying that - in excluding representation that's been part of the assistance that might be offered at stage two. And in practical terms it would not be - the dispute resolution clause would not be applied on the job in a way that the AMWU suggests.

PN1352

Similarly on a question of a breach, the AMWU raised public holidays for example. And, your Honour, this goes to whether in fact the agreements that are in place now are compliant, how relevant that is and, as I've said in the previous proceedings, we don't think it's relevant and we don't agree that they are not non compliant. But if I can have a look at very quickly the public holiday clause. Much has been made about - - -

PN1353

THE SENIOR DEPUTY PRESIDENT: Sorry, the public holiday clause of which one?

PN1354

MS LEEDS: Yes, clause 41, I think of either of the agreements, your Honour, the employee collective agreements.

PN1355

THE SENIOR DEPUTY PRESIDENT: I think we were looking at attachment A to - - -

PN1356

MS LEEDS: To ......

PN1357

THE SENIOR DEPUTY PRESIDENT: Yes.

PN1358

MR KENTISH: That is correct, your Honour, it's the Western Australian employee collective agreement. But they're all the same, your Honour.

PN1359

MS LEEDS: Your Honour, in clause 41 the statement is that:

PN1360

However, to meet operational requirements from time to time the company may require an ability to work on a public holiday or particular public holidays.

PN1361

And I pause there to emphasise the word may require. Not mandatory, may require. Now, Mr Kentish has made much of this clause, but he's omitted to have regard to section 613 of the Act, and in particular 613G, where regard might be had to certain grounds. And one of those grounds, 613G, is whether a workplace agreement contemplates that an employer might require employees to work on a public holidays. Now, we say - - -

PN1362

THE SENIOR DEPUTY PRESIDENT: Hang on, let me just catch up. It is 613G, reasonableness of refusal, yes.

PN1363

MS LEEDS: And we say that that public holiday clause in that agreement does nothing to override the employee's right to refuse. In fact what it does is it acts in accordance with 613G by contemplating in the workplace agreement that work may be required on those days. It does not override an employee's refusal to work. It does not contradict - it does not contravene the Act. So our submission is that the view of the AMWU in those matters of breach or compliance is either too narrow or plain wrong.

PN1364

Mr Kentish referred to some agreement that we had with the ABCC. That's not the case. There is no agreement with the ABCC. But in terms of practical application under the workplace relations laws you simply can't walk away from an agreement, and I think that Leighton and Mayfield have tried very hard to rectify the compliance problems in their agreement within the context of the current workplace or applicable workplace laws. And Mr Kentish also noted that we've been operating like this and so the code - you know, the code has been in operation since 1997, that's when the code was made, but the guidelines have been recent additions, I think in about 1999 or 2003, and the 2006 version of the guidelines are by far the most restrictive.

PN1365

So it is a new consideration, it's a new imperative for us that must be accommodated. And in any event it's simply the opinion of the AMWU that our employee collective agreements are non compliant. We further rely on - in terms of his Honour Munro Js decision regarding evidence of genuine bargaining and so on, the AMWU cannot in any consciousness come to these proceedings and say that there has been no genuine bargaining in the context of the negotiations that have taken place with the union and Mayfield since January of last year.

PN1366

We rely on the Federal Court decision in Meatworkers v Woolworths. The unfairness of the arrangement, well, it's only unfair because the AMWU is not a party to the agreement. There's nothing unfair about it. There's nothing unconscionable about the actions that Mayfield has taken. In fact it would probably satisfy one of the objects of the Act which Mr Kentish has called and relied upon today, and that is to provide the framework for relations between an employer and employee.

PN1367

In making Australian workplace agreements and employee collective agreements Mayfield has acted lawfully. It is a facility, a lawful entitlement that it has, and the only reason it's unfair is because the signatory to those agreements is not the AMWU. In our respectful submission the AMWU has had a lot of time to make an agreement with Mayfield and has chosen for whatever reason not to do so.

PN1368

The reference to the Kellog decision, well, I don't think Mr Kentish can rely on that, on paragraph 23, because in the current circumstances there is an award that would be applicable. It's not that those employees are left without any industrial regulation. There is an award that would be applicable, it operates by virtue of the law and it operates by virtue of the commitment that has been given to those employees by their employer.

PN1369

In respect of the Tristar decision, again I take the Commission to paragraph 21 and simply state that the opinion of the Full Bench is that a breach - the Commission is open to make an opinion of whether a breach has occurred but that the opinion might well be a consideration. It must not - it doesn't have to be the only consideration. And it appears that in the AMWUs submission it is putting to this Commission that if there is a view about a breach then it must be the only consideration. That is not what the Full Bench is saying in the Tristar decision.

PN1370

Finally, in terms of any prejudice that might be suffered, can an agreement be resurrected? Yes, it can, because the Workplace Relations Act allows the AMWU and the employees the opportunity to lawfully make agreements, and they've been doing that for many years, they continue to do it, they did it on 1 May by virtue of the notice to initiate the bargaining action. Your Honour, that's all I have, if the Commission pleases, thank you.

PN1371

THE SENIOR DEPUTY PRESIDENT: Thank you. Can I first of all express my appreciation for your patience and long suffering in carrying on to deal with this matter today. I think in view of the matters raised and the time the most appropriate thing is for the Commission to reserve a decision and adjourn. Thank you.

<ADJOURNED INDEFINITELY [5.44PM]