AG2007/561, Transcript of Proceedings [2007] AIRCTrans 391 (6 August 2007)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 17181-1

SENIOR DEPUTY PRESIDENT ACTON

AG2007/561

s.170MH -prereform Act - Application to terminate agreement (public interest)
Application by Wood Connections Pty Ltd
(AG2007/561)

MELBOURNE

10.13AM, MONDAY, 23 JULY 2007

PN1

MR D PROIETTO: I seek leave to appear on behalf of Wood Connections Pty Ltd.

PN2

MR T WETHERELL: I appear for the respondent.

PN3

THE SENIOR DEPUTY PRESIDENT: Is there any objection to the application for Mr Proietto to leave to appear?

PN4

MR WETHERELL: No, your Honour.

PN5

THE SENIOR DEPUTY PRESIDENT: Leave is granted, Mr Proietto.

PN6

MR PROIETTO: Thank you, your Honour. This is an application for the termination of a certified agreement, the Wood Connections Pty Ltd Enterprise Bargaining made which is made between Wood Connections Pty Ltd and the Construction, Forestry, Mining and Energy Union. The agreement was made prior to 27 March 2006. This application is therefore made under section 170MH of the pre reform Act as continued under paragraph 21(k) of schedule 7 to the Workplace Relations Act. Your Honour, unless it would assist the Commission I do not intend to make any opening submissions today. I rather propose to call evidence and then make closing submissions.

PN7

I guess a preliminary issue arises in relation to what was said by the Full Bench in the Kellogg v Brown case. It’s a negative test. So in effect the union has the onus of proving that it would be contrary to the public interest for the agreement to be terminated. It could be said therefore that while it’s our application a preliminary issue arises as to who is to go first. I’m happy to go first and I guess I’m really in the Commission’s hands in that regard.

PN8

THE SENIOR DEPUTY PRESIDENT: Are you content with that,
Mr Wetherell?

PN9

MR WETHERELL: Yes, your Honour.

PN10

THE SENIOR DEPUTY PRESIDENT: Yes.

PN11

MR PROIETTO: Well, in that case, your Honour, I filed on Friday during the day a witness statement of Ms Tzamouranis. It was unsigned at the time because Ms Tzamouranis was actually away on holidays at the time. But I’ve got a signed copy now I’d like to hand up. I also plan to lead some very little evidence from Ms Tzamouranis in the witness box as well. So I call Ms Tzamouranis.

<CHRISTINE TZAMOURANIS, SWORN [10.16AM]
<EXAMINATION-IN-CHIEF BY MR PROIETTO

PN12

MR PROIETTO: Ms Tzamouranis, please state your full name and business address for the record?---It’s Christine Tzamouranis and our business address is 46 Connell Road in Oakleigh.

PN13

And have you prepared a witness statement for these proceedings?---Yes.

PN14

Have you got a copy of that witness statement with you?---Yes I have.

PN15

Are there any changes that you would like to make to your witness statement?
---No.

PN16

Is your witness statement true and correct?---It is.

PN17

I’d like to tender that witness statement, your Honour.

EXHIBIT #P1 WITNESS STATEMENT OF CHRISTINE TZAMOURANIS

PN18

MR PROIETTO: Thank you, your Honour.

PN19

Ms Tzamouranis, could you please explain to her Honour why it is that Wood Connections is seeking to have this agreement terminated?---Yes. We no longer do the work that we were doing at the time we had the EBA. Our work has totally changed and it’s not really relevant anymore to us. We also don’t have the contracts that we had.

PN20

Ms Tzamouranis, do you think that if in the future you were to receive new contracts would you be more likely to employ new employees if you were not bound by the agreement?---Definitely.

PN21

Ms Tzamouranis, I'll just hand you a copy of a witness statement of Mr Frank Vari.

PN22

THE SENIOR DEPUTY PRESIDENT: Who’s this statement from?

PN23

MR PROIETTO: Mr Vari. It was filed on behalf of the CFMEU on Friday.

PN24

THE SENIOR DEPUTY PRESIDENT: I don’t think I have it, Mr Wetherell.

**** CHRISTINE TZAMOURANIS XN MR PROIETTO
PN25

MR WETHERELL: Yes, your Honour.

PN26

THE SENIOR DEPUTY PRESIDENT: Thank you, yes.

PN27

MR PROIETTO: Sorry, your Honour. Do you want a moment to read that? It’s a reasonably brief statement.

PN28

THE SENIOR DEPUTY PRESIDENT: Yes, I will take a moment to read it.

PN29

MR PROIETTO: Thank you.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes.

PN31

MR PROIETTO: Ms Tzamouranis, you will see in Mr Vari’s witness statement that he refers to AWAs. Do you know what an AWA is?---Yes.

PN32

If this agreement is terminated by the Commission today will you be offering AWAs to your employees?---No, not unless they want it. I wouldn’t be offering them unless they want it. It would be federal award.

PN33

Ms Tzamouranis, you’ve already given some undertakings in your witness statement in relation to wages and redundancy?---Yes.

PN34

It’s my understanding that you also want to give a further undertaking to the Commission today in relation to sick leave?---Mm mm.

PN35

Can I take you to the attachment to your witness statement which is marked A1 and that’s the agreement. If you go to clause 16, which I believe is on page 10.

PN36

THE SENIOR DEPUTY PRESIDENT: Hang on. What are you looking at sorry?

PN37

MR PROIETTO: Yes, your Honour. Exhibit A1 attaches the agreement.

PN38

THE SENIOR DEPUTY PRESIDENT: Yes. P1 actually. It’s P.

PN39

MR PROIETTO: Is it P? Sorry.

PN40

THE SENIOR DEPUTY PRESIDENT: P for you actually.

**** CHRISTINE TZAMOURANIS XN MR PROIETTO
PN41

MR PROIETTO: Right.

PN42

THE SENIOR DEPUTY PRESIDENT: Clause, what are you looking? 16 is it?

PN43

MR PROIETTO: Clause 16, your Honour.

PN44

THE SENIOR DEPUTY PRESIDENT: Okay, thank you.

PN45

MR PROIETTO: Just the last paragraph there.

PN46

Have you got that, Ms Tzamouranis?---Yes.

PN47

Could you just read out the last line?---

PN48

Unused sick leave shall be paid out upon termination of employment.

PN49

And Ms Tzamouranis, it’s my understanding that you want to make an undertaking today to continue to apply that provision to current employees to whom that applies?---Yes. That’s always been at Wood Connections anyway. We’ve always done that.

PN50

Okay. Thanks, Ms Tzamouranis. I have no further questions, your Honour.

PN51

THE SENIOR DEPUTY PRESIDENT: Mr Wetherell.

PN52

MR WETHERELL: Thank you, your Honour.

<CROSS-EXAMINATION BY MR WETHERELL [10.21AM]

PN53

MR WETHERELL: Ms Tzamouranis, just in relation to a comment regarding increased employees if you’re no longer bound by the agreement?---Yes.

PN54

Could you explain to the Commission why that would be the case?---Yes. Because we may be able to then tender or quote for jobs that are in more union related work. We’re in, like for instance in city area which at the moment we’re not doing because it hasn’t been, we have not been competitive enough. We’re not going to do it anymore.

**** CHRISTINE TZAMOURANIS XXN MR WETHERELL
PN55

So how is the company curtailed or restricted by the agreement?---It is a lot of work and I can’t really deal with all the submissions I have to give in. It just gives me extra work and I’m finding that we’re just avoiding doing that because I have to, I have a lot of administrative work extra. A lot of things involved like that.

PN56

Can you explain for the Commission what’s some of that extra administrative work?---Yes. There’s activity, there’s the activity sheets and we have to list all
our - every time we have to list all our insurance work, all our insurances, everything. It’s just a whole folder of work that I have to do every time. I have to get certificates of currency for everything, I have to lists of workers who are going to be on site, I have to make sure they have their cards, I have to make sure they are all union workers, a lot of that. Because at the moment we’re not doing it anyway, so I have to see how we go. I can’t say I will be doing that work or not, but if I do I will be employing more people that way.

PN57

And just referring to your undertaking regarding Australian workplace agreements?---Mm.

PN58

Just if you that you were saying that the Award would continue to apply to all workers?---The Award was before I asked for the EBA, because I asked for the EBA. At the time I couldn’t go on constructions sites which I needed to go on to install my work. Now I don’t go on construction sites and I don’t install anymore and we won’t be doing that again. And I would just go back to how I was before the EBA, to a federal award. And also we were always above the Award, paying them above the Award. I never just paid anybody federal Award. They always had very good conditions.

PN59

Just one final questions. Are you prepared to sign, enter into a deed of agreement regarding those undertakings regarding the Award and redundancy provisions, above Award payments?---As in a deed? What’s a deed? I don’t understand.

PN60

A formal common law contract?---Yes.

PN61

With your employees and the company?---Saying that I will - the ones that are there now?

PN62

Those undertakings that were given will continue?---Yes. The undertakings I have given here will be continued?

**** CHRISTINE TZAMOURANIS XXN MR WETHERELL
PN63

Yes?---Yes.

PN64

And in your evidence today?---Yes.

PN65

Yes. Thank you, your Honour?---As in which part of my evidence, sorry? I don’t understand.

PN66

Regarding Australian workplace agreement?---Yes, I don’t, I was never really - unless somebody wants it. That’s not how I worked and I want to just continue how I worked before the EBA.

PN67

MR PROIETTO: To just clarify, your Honour, I don’t think any undertaking was given in relation to AWAs. I asked Ms Tzamouranis whether she would operate under AWAs and she said no, but in terms of the undertakings that she’s given relate to the two that were set out in her witness statement and also the payout of sick leave. To clarify that ......

PN68

THE SENIOR DEPUTY PRESIDENT: Mr Wetherell, I’m unclear about your question. Is your question directed to whether a deed would be entered into in respect of the undertakings and the conditions?

PN69

MR WETHERELL: Yes, that's correct.

PN70

THE SENIOR DEPUTY PRESIDENT: Right. Has there been any discussion with Mr Proietto about that?

PN71

MR WETHERELL: Not at this point, no.

PN72

THE SENIOR DEPUTY PRESIDENT: Right, okay. Well, you’ve got no further questions?

PN73

MR WETHERELL: No further questions.

PN74

THE SENIOR DEPUTY PRESIDENT: Mr Proietto?

PN75

MR PROIETTO: Nothing further, your Honour.

**** CHRISTINE TZAMOURANIS XXN MR WETHERELL
PN76

THE SENIOR DEPUTY PRESIDENT: You’re excused.

<THE WITNESS WITHDREW [10.26AM]

PN77

MR PROIETTO: Your Honour, Mr Vari is not here today to give evidence. I was not aware of that, although we have his witness statement and I did intend to ask him just a couple of questions in cross-examination, but they were not significant. But in the circumstances it’s I guess unsworn evidence and the Commission can place what weight it thinks appropriate in relation to that statement. I will in the course of my submissions take you to some of the matters raised by Mr Vari in any event and comment on them.

PN78

THE SENIOR DEPUTY PRESIDENT: Well, Mr Wetherell, are you going to rely on the statement of Mr Vari?

PN79

MR WETHERELL: I am, your Honour, and my serious apologies for him not being present. It was only late notice that he told me that he was - I will be relying upon it, but I will not be giving significant weight to that evidence. So if I could have my friend’s consent to have it as unsworn evidence for the ease of the Commission’s proceedings this morning.

PN80

THE SENIOR DEPUTY PRESIDENT: When was it filed?

PN81

MR WETHERELL: The statement?

PN82

THE SENIOR DEPUTY PRESIDENT: Yes.

PN83

MR WETHERELL: It was served on my friend on Friday afternoon.

PN84

THE SENIOR DEPUTY PRESIDENT: It wasn’t filed in the Commission?

PN85

MR WETHERELL: No, your Honour.

PN86

THE SENIOR DEPUTY PRESIDENT: Right. Well, the difficult it’s going to place me in is that we’ve got sworn evidence subject to cross-examination and you want me to take this as unsworn evidence because Mr Vari’s not here. In those circumstances it’s hardly going to have any weight at all. It can’t have any weight, hardly any weight at all, can it?

PN87

MR WETHERELL: Well, in the circumstances whilst it’s not preferable could it be tendered at this point and if Mr Vari is required to be called he could do so at a later date?

PN88

THE SENIOR DEPUTY PRESIDENT: What do you want to cross-examine him on, Mr Proietto?

PN89

MR PROIETTO: Your Honour, I don’t - look, I don’t think any issue arises out of the witness statement that are matters that I can not address you in submission. I don’t want to unduly delay this proceeding so I have no objection if the witness statement were tendered and if the Commission’s opinion is that less weight should be placed on it because it’s unsworn, then that will be fine.

PN90

THE SENIOR DEPUTY PRESIDENT: Well, technically the issue becomes this. You either challenge parts of it and you want to cross-examine on it, or you don’t and if you don’t then it will have the same weight as sworn evidence. So you need to tell me which of the parts you wanted to cross-examine on so that I can form some judgment about which parts are challenged and which parts aren’t and whether the matters that are challenged are of any consequence.

PN91

MR PROIETTO: The two areas, your Honour, were in relation to the offering of AWAs. I was going to put it to Mr Vari that the position at law in any event now is that regardless of whether or not the agreement is terminated, Wood Connections can still operate AWAs now. That is in any even a matter of law rather than a matter of fact.

PN92

THE SENIOR DEPUTY PRESIDENT: Right, yes.

PN93

MR PROIETTO: I don’t think anything turns on that.

PN94

THE SENIOR DEPUTY PRESIDENT: Yes.

PN95

MR PROIETTO: And the second issue again probably falls in the same category, your Honour, in relation to paragraph 9(a) which is the 5 per cent wage increases.

PN96

THE SENIOR DEPUTY PRESIDENT: Yes.

PN97

MR PROIETTO: Again that is simply a matter than can turn on the face of the clause, clause 12.2 and your Honour can read that yourself without Mr Vari that in fact there are no further wage increases under the agreement.

PN98

THE SENIOR DEPUTY PRESIDENT: Mr Wetherell, was that the point of
Mr Vari’s statement at 9(a), or is it some notion that the wages would be reduced by 14 per cent?

PN99

MR WETHERELL: It’s not to relate to the specificity of the agreement. It’s just purely to the general increase in wages under the agreement, if that answers the question, your Honour?

PN100

THE SENIOR DEPUTY PRESIDENT: No, I don’t understand the answer. The statement is that:

PN101

Members may no longer be entitled to the following 5 per cent wage increases per annum, clause 12.2 -

PN102

12.2 talks about increases that have applied in the past. What I am unclear of is whether Mr Vari’s statement is as suggested by Mr Proietto, are increases in the future, or whether this statement is about the 14 per cent increases being removed from employee’s wages? So in other words so that they are only subject to the Award rates?

PN103

MR WETHERELL: So if I understand you correctly, you’re talking about increases in wages in the future?

PN104

THE SENIOR DEPUTY PRESIDENT: Well, it might be hard - yes. What does 9(a) mean in Mr Vari’s statement?

PN105

MR WETHERELL: That the continuation of the agreement as relating to increases in wages will no longer be afforded to employees.

PN106

THE SENIOR DEPUTY PRESIDENT: But the last increase in the agreement was August, was it August 2005?

PN107

MR WETHERELL: That's correct.

PN108

THE SENIOR DEPUTY PRESIDENT: So that’s already been paid presumably?

PN109

MR WETHERELL: My understanding was - and maybe I'll stand to be corrected - that there would be a roll over of the clauses of the agreement and that they would continue to apply.

PN110

THE SENIOR DEPUTY PRESIDENT: Yes, okay. Yes, Mr Proietto.

PN111

MR PROIETTO: Just on that last point, your Honour, my understanding is there has been no wage increase since 1 August 2005. There certainly hasn’t been agreement between the parties and the agreement speaks for itself.

PN112

THE SENIOR DEPUTY PRESIDENT: Yes. Was that the only other issue you wished to cross-examine on?

PN113

MR PROIETTO: Yes it was, yes.

EXHIBIT #W1 WITNESS STATEMENT OF FRANK VARI

PN114

THE SENIOR DEPUTY PRESIDENT: Yes. On that basis it will have the same weight.

PN115

MR PROIETTO: Yes, your Honour.

PN116

THE SENIOR DEPUTY PRESIDENT: Yes.

PN117

MR PROIETTO: That’ll just be one of my closing submissions, if the Commission pleases.

PN118

THE SENIOR DEPUTY PRESIDENT: Yes.

PN119

MR PROIETTO: Section 170MH of the pre reform Act provides that after the nominal expiry date of a certified agreement an employer, amongst others, may apply to the Commission to have the agreement terminated. 170MH(2) provides that on receiving the application the Commission must take such steps as it considers appropriate to obtain the views of persons bound by the agreement about whether it should be terminated and 170MH(3) provides that if after complying with subsection (2) the Commission considers that it is not contrary to the public interest to terminate the agreement, then the Commission must do so.

PN120

Just firstly in relation to 170MH(2), your Honour. In Commissioner Bacon’s decision in BHP Coal - I might hand up a copy of that - I'll just go to paragraph 11 of that decision. The Commissioner there stated, the Commissioner listed the BHP applications to hearing:

PN121

Each of the three unions represented its members who were bound by one or more of the agreements. Most submissions were made or evidence given that there exists persons who are bound by any of the agreements whose views it is appropriate to obtain and who would not through the steps taken make those views known to the Commission. The Commission is satisfied that it has taken appropriate steps to obtain the views of persons bound about whether the agreement should be terminated.

PN122

And a similar approach was also undertaken by Munro J in the case of Joy Manufacturing at paragraph 26. In relation to the test itself which is in 170MH(3) it is the well established position that the Commission must terminate a certified agreement where it considers that it is not contrary to the public interest to do so. The test is not discretionary once you get past that threshold. Therefore the onus of establishing that the termination would be against the public interest falls on the union, not on the employer. The leading case concerning what constitutes a public interest is the Full Bench decision in Kellogg Brown v Esso Australia. That’s print 954 - - -

PN123

THE SENIOR DEPUTY PRESIDENT: Why do you say the onus is on the union? Why isn’t it up to you establish it’s not contrary to the public interest?

PN124

MR PROIETTO: The cases I'll go to later, your Honour, establish that there is no onus to establish a positive reason for the public interest.

PN125

THE SENIOR DEPUTY PRESIDENT: Yes.

PN126

MR PROIETTO: If it is not contrary to the public interest then the agreement must be terminated.

PN127

THE SENIOR DEPUTY PRESIDENT: Yes.

PN128

MR PROIETTO: Then the agreement must be terminated.

PN129

THE SENIOR DEPUTY PRESIDENT: Yes. So why don’t you have to establish it’s not contrary to the public interest?

PN130

MR PROIETTO: Well, in a way it’s a negative test.

PN131

THE SENIOR DEPUTY PRESIDENT: Yes.

PN132

MR PROIETTO: So unless the CFMEU can show that it is contrary to the public interest we say that the agreement must be terminated.

PN133

THE SENIOR DEPUTY PRESIDENT: Why isn’t it up to you to establish it’s not contrary to the public interest? I know it’s a negative test.

PN134

MR PROIETTO: Yes.

PN135

THE SENIOR DEPUTY PRESIDENT: Why can’t you establish that it’s not contrary to the public interest? Presumably you go to the issues that there’s no public interest considerations here, therefore it’s not contrary to the public interest. But the onus is still on you.

PN136

MR PROIETTO: I understand the point you’re making, your Honour. I think in this case even if you were to bear the onus I am confident of establishing that it would not be contrary to the public interest in this case to terminate and we’ll do that in our submissions, your Honour.

PN137

THE SENIOR DEPUTY PRESIDENT: Yes.

PN138

MR PROIETTO: I might just hand up a copy of Kellogg Brown. I don’t, I just intend to take the Commission to a couple of the exceptions. I won’t take your Honour to any provision just yet, but generally I think it’s fair to say that that case establishes that the public interest must be determined independently from the interest of the parties when deciding whether an agreement should be terminated and secondly what content of the notion of the public interest can not be precisely defined, it is distinct in nature for the interests of the parties. Now, the CFMEU’s case, your Honour, is based on two arguments and I say that based on the evidence that was provided in the witness statement of Mr Vari.

PN139

They appear to be that terminating the agreement would allow Wood Connections to introduce AWAs which would be contrary to the public interest, and secondly terminating the agreement will result in the removal of a number of rights and entitlements and that such removal is not in the public interest. I'll deal with each of these arguments in turn. Firstly in relation to the outline for the AWA argument. There are three reasons why the CFMEU’s contention to terminate the agreement would allow Wood Connections to introduce AWAs is completely without merit. The first is the sworn evidence of Ms Tzamouranis this morning that she would not introduce AWAs if this agreement were terminated.

PN140

And secondly, and probably I think we have a final argument here, is that even if the agreement was not terminated, ie. if it continues in operation as it currently is, there’s nothing stopping Wood Connections from offering AWAs to employees right now. And the third point is that the lean from Kellogg Brown is that the Commission should be guided by the likely foreseeable consequences of termination rather than speculating about possible consequences. Now, my first point needs no further elaboration again. I just refer to the evidence of
Ms Tzamouranis this morning.

PN141

The second point is that whether or not the agreement is terminated is irrelevant to the question of AWAs. Wood Connections can right now if it wishes introduce AWAs. If I can take you to item 3(2) of schedule 7 to the Workplace Relations Act, your Honour. I’m not sure which of the Act you have. Mine is the Thompson version, but it’s at page 1289 of my copy.

PN142

THE SENIOR DEPUTY PRESIDENT: What edition is it?

PN143

MR PROIETTO: It’s the very first one that came out upon commencement.

PN144

THE SENIOR DEPUTY PRESIDENT: Is it the tenth addition? Doesn’t matter. I’ve got CCH.

PN145

MR PROIETTO: Okay. Won’t have it anyway.

PN146

THE SENIOR DEPUTY PRESIDENT: Yes. What is it?

PN147

MR PROIETTO: Schedule 7. It’s towards the very end.

PN148

THE SENIOR DEPUTY PRESIDENT: Schedule 7 number what?

PN149

MR PROIETTO: Item 3 subsection (2), your Honour.

PN150

THE SENIOR DEPUTY PRESIDENT: What’s the point?

PN151

MR PROIETTO: Have you got that, your Honour?

PN152

THE SENIOR DEPUTY PRESIDENT: No.

PN153

MR PROIETTO: Look, that’s fine. I can read it to you, your Honour. It’ snot - it just simply states:

PN154

A pre reform certified agreement has no effect in relation to an employee while an AWA operates in relation to the employee.

PN155

Now, there is a clause in the agreement which states that - it’s clause 29.6.3.

PN156

THE SENIOR DEPUTY PRESIDENT: 29.6.3?

PN157

MR PROIETTO: Yes. That’s attachment to P1.

PN158

THE SENIOR DEPUTY PRESIDENT: Yes.

PN159

MR PROIETTO: That provides, your Honour, that the company agrees not to offer individual contracts or Australian workplace agreements or other similar arrangements to its employees. The problem with that clause, your Honour, is that it’s no longer of any effect. It’s void because of the operation of item 8 of schedule 7. And again unfortunately I’m referring to schedule 7. My friend might have the same copy of the Act that you have, your Honour. I’m not sure if that might help.

PN160

THE SENIOR DEPUTY PRESIDENT: I think I can find it now. Item 8 is it? Item 8, yes, AWA terms.

PN161

MR PROIETTO: Yes that's right, your Honour. And it provides, amongst others:

PN162

Section 358 of this Act apply in relation to an anti AWA term in a pre reform certified agreement as if it contains prohibited content -

PN163

And so forth:

PN164

- and that the agreement was a workplace agreement.

PN165

And then if you go to 358, your Honour, in the actual body of the agreement, that provides that the term of the workplace agreement is void to the extent that it contains prohibited content.

PN166

THE SENIOR DEPUTY PRESIDENT: Yes.

PN167

MR PROIETTO: So the effect of all that, your Honour, is that the AWA point that the CFMEU seeks to make as nowhere to go because AWAs can be offered right now and terminating the agreement will not affect that. I won’t even go to the third point about speculating about the consequences because I don’t think there’s anything further I can say in relation to that point. The second point that the CFMEU makes is that terminating the agreement would be against the public interest because the employees would lose the benefits of the agreement. It’s well established that the notion of public interest is distinct in nature from the interest of the parties and this was made clear by the Full Bench in the Kellogg case.

PN168

If I could take your Honour to paragraphs 22 and 23 of that case. It says there:

PN169

No actions of any representatives of the negotiating parties in 170MH(3) is significant. It follows that usually the persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of the termination on the public interest, but they should not be given any independent weight.

PN170

And going on in paragraph 23:

PN171

The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.

PN172

An example of something in the last category may be the case in which there was no applicable Award and the termination of the agreement would lead to an absence of Award coverage for the employees. Or the content of the notion of public interest can not be precisely defined. It is distinct in nature from interests of the parties and it goes on. In Joy Mining Moss Vale Site Certified Agreement, a decision of Munro J - and I’m not sure if I handed you a copy of that decision, your Honour.

PN173

THE SENIOR DEPUTY PRESIDENT: It is an interesting observation that, isn’t it, that an absence of Award coverage. It might mean it’s contrary to the public interest.

PN174

MR PROIETTO: I think that might, your Honour, without speculating as to the reasons of the Full Bench, perhaps referred to the objects of the Act. I’m referring here, your Honour, to the pre reform Act because that’s obviously the Act upon which this ..... and one of those objects is .....

PN175

THE SENIOR DEPUTY PRESIDENT: Fair an enforceable, effective safety net.

PN176

MR PROIETTO: Yes, I think effective safety - I’m just trying to find the words effective safety net.

PN177

THE SENIOR DEPUTY PRESIDENT: It’s 3(d).

PN178

MR PROIETTO: Right, yes. And I think that’s possible where the Full Bench was going with that comment. I will take your Honour as well to another case where - of course we do have a safety net award in this case.

PN179

THE SENIOR DEPUTY PRESIDENT: Is the employer in this instance respondent to the Award?

PN180

MR PROIETTO: I thin it’s a common rule award, your Honour.

PN181

THE SENIOR DEPUTY PRESIDENT: Is it? Okay.

PN182

MR PROIETTO: Yes. And so there is a safety net award in this case.

PN183

THE SENIOR DEPUTY PRESIDENT: There is an interesting question about whether common laws in Victoria apply post Work Choices to - - -

PN184

MR PROIETTO: Yes, they do continue to, your Honour, as long as the employer was bound prior to reform commencement, which my client was. Then the pre reform Award continues to operate.

PN185

THE SENIOR DEPUTY PRESIDENT: As opposed to a new employer?

PN186

MR PROIETTO: Exactly right, as opposed to a new employer.

PN187

THE SENIOR DEPUTY PRESIDENT: Yes. Not formally bound, but bound by virtue of the commonwealth status prior to Work Choices?

PN188

MR PROIETTO: That's correct, your Honour.

PN189

THE SENIOR DEPUTY PRESIDENT: Yes.

PN190

MR PROIETTO: Yes.

PN191

THE SENIOR DEPUTY PRESIDENT: Yes, that is my understanding of it.

PN192

MR PROIETTO: Yes. Sorry, your Honour, I think I was going to hand up a copy of Joy Manufacturing.

PN193

THE SENIOR DEPUTY PRESIDENT: Yes.

PN194

MR PROIETTO: I might just take your Honour to paragraphs 42 and 46 of that decision. It’s a decision of Munro J. I’m just going to pick little extracts out from the paragraphs, your Honour. I’m not going to read the whole lot. At 42 Munro J states:

PN195

Something additional to the simple loss of those conditions is necessary to decide the public interest about the loss of the particular conditions at enterprise level.

PN196

And at 46 - - -

PN197

THE SENIOR DEPUTY PRESIDENT: Sorry, I can’t see it. What is it, 42?

PN198

MR PROIETTO: It is.

PN199

THE SENIOR DEPUTY PRESIDENT: Yes, the last thing?

PN200

MR PROIETTO: Yes, right at the end, sorry. And then at 46, your Honour - - -

PN201

THE SENIOR DEPUTY PRESIDENT: He talks about divesting of accrued rights.

PN202

MR PROIETTO: Yes, I'll get to accrued rights, your Honour.

PN203

THE SENIOR DEPUTY PRESIDENT: Yes.

PN204

MR PROIETTO: And I consider that an adverse effect on the public interest is established by reason of any immediate loss of entitlement to the conductions provided for in the agreement. The Act does not provide for an unconditional right to indefinite conditions of the terms, conditions of an expired agreement.

PN205

THE SENIOR DEPUTY PRESIDENT: Where is that, sorry?

PN206

MR PROIETTO: Sorry, this is at 46, your Honour.

PN207

THE SENIOR DEPUTY PRESIDENT: Right. Yes.

PN208

MR PROIETTO: Yes. In this case no head of public interest intrinsic to the Act would be offended if the conditions of the agreement were to be set aside by the termination sought in accordance with the Act. And just one further reference, your Honour, it’s to the first decision I handed up, which was Commissioner Bacon’s decision.

PN209

THE SENIOR DEPUTY PRESIDENT: Yes.

PN210

MR PROIETTO: At paragraph 37, your Honour.

PN211

THE SENIOR DEPUTY PRESIDENT: Yes.

PN212

MR PROIETTO: There the Commissioner states :

PN213

THE WITNESS: Further there exists a safety net Award system. This is nothing in the Act which suggests that it is contrary to the public interest to not have a certified agreement and to apply the safety net Award. And I’m not reading the whole lot, your Honour, I’m just sort of paraphrasing here:

PN214

In my view section 170MH operates to allow any of the parties to a certified agreement which is beyond its nominal expiry date to return to the safety net award. This is so irrespective of the size of the loss to the agreement, benefits to the agreements’ parties.

PN215

As I made the point, your Honour, there is an underlying safety net award here. It’s the Furnishing Industry National Award 2003. I haven’t got a copy of that award to hand up, but the number is AP825280. It’s common rule in Victoria. I believe it’s also common rule in the ACT.

PN216

THE SENIOR DEPUTY PRESIDENT: Yes.

PN217

MR PROIETTO: The applicant submits, your Honour, that there is nothing in this case that should excite the public interest if the agreement were to be terminated. There is no circumstance that means that the termination would be contrary to the public interest. The employer, as is Ms Tzamouranis’s evidence in her witness statement, currently employees four employees. We say three of those are bound by the terms of the agreement, two are casual employees, one is an apprentice, the other is a maintenance employee and we say he’s not bound by the terms of the agreement because he doesn’t do work which is within the classifications of the Award.

PN218

In any event even if the Commission were to have regard to the terms of the agreement - and in that regard I also refer your Honour to the comments made by Munro in Joy Manufacturing about accrued rights and that they may have some impact on the public interest. Given the scheme of the Act, which I'll take your Honour to in a sec, and also in Ms Tzamouranis’s evidence today, we say that the employees will suffer very little in terms of loss of terms and conditions if the agreement were terminated, particularly in relation to accrued rights.

PN219

THE SENIOR DEPUTY PRESIDENT: What loss in respect of accrued rights will they suffer?

PN220

MR PROIETTO: I don’t believe they’ll suffer any, your Honour. But accrued rights, as I understand it, relate to severance pay which I'll take your honour to, annual leave, long service leave and sick leave are all protected by the fair pay standard now and also the Award, whichever is more beneficial.

PN221

THE SENIOR DEPUTY PRESIDENT: Hang on, they’re protected by the fair pay standard?

PN222

MR PROIETTO: Yes, your Honour, and the Award.

PN223

THE SENIOR DEPUTY PRESIDENT: Let’s deal with the Award first. You said they were more beneficial under the Award, did you?

PN224

MR PROIETTO: No. My understanding, your Honour, is that we preserved Award terms and the interplay between the standard, but whichever is more generous of the standard or the Award will apply to employees.

PN225

THE SENIOR DEPUTY PRESIDENT: Yes.

PN226

MR PROIETTO: So at minimum they will have, they will continue to receive their entitlement to sick leave and annual leave under which is the more benefit of the standard or the Award.

PN227

THE SENIOR DEPUTY PRESIDENT: You were talking about the standard in the Act?

PN228

MR PROIETTO: Yes, your Honour, that’s right.

PN229

THE SENIOR DEPUTY PRESIDENT: Take me to that. This is annual leave, long service leave and sick leave as you say?

PN230

MR PROIETTO: Yes, your Honour.

PN231

THE SENIOR DEPUTY PRESIDENT: Yes.

PN232

MR PROIETTO: But long service leave is not dealt with in the Workplace Relations Act unless it’s state law.

PN233

THE SENIOR DEPUTY PRESIDENT: Yes.

PN234

MR PROIETTO: Provisions of the state Act will continue to apply.

PN235

THE SENIOR DEPUTY PRESIDENT: Yes. Are there provisions in the agreement which are in excess of the state Act?

PN236

MR PROIETTO: In terms of long service leave there is one provision which is part of the redundancy provisions and that forms part of the undertaking that
Ms Tzamouranis provided today.

PN237

THE SENIOR DEPUTY PRESIDENT: Yes. So otherwise you say the provisions in the agreement in respect of long service leave are no better than the state long service leave?

PN238

MR PROIETTO: That’s my understanding your Honour, yes.

PN239

THE SENIOR DEPUTY PRESIDENT: Yes. What do you say about the other two, annual leave and sick leave?

PN240

MR PROIETTO: Annual leave is dealt with in clause 11.

PN241

THE SENIOR DEPUTY PRESIDENT: Yes.

PN242

MR PROIETTO: There’s actually no entitlement to annual leave in the agreement, your Honour. It simply deals with procedure of taking leave. So it would be the entitlement in the Award that would have applied under the agreement and that will continue to apply now.

PN243

THE SENIOR DEPUTY PRESIDENT: Well, there’s a break of not less than 14 consecutive days in terms of entitlement and the remaining leave in one period or single days. So the 14 consecutive days provision, if we just take that.

PN244

MR PROIETTO: Yes. Well, in my submission, your Honour, that is not a matter of such import that would affect the public interest in this case.

PN245

THE SENIOR DEPUTY PRESIDENT: So what provision are we comparing this against?

PN246

MR PROIETTO: Well, I think in respect of accrued rights the important thing is the entitlement. That is what the entitlement actually is. In this case the agreement doesn’t actually provide for the entitlement to annual leave. That entitlement is provided under the Award and the Award will continue to apply.

PN247

THE SENIOR DEPUTY PRESIDENT: But the entitlement is more than just the number of days. In this instance there’s an entitlement to have one break of not less than 14 consecutive days.

PN248

MR PROIETTO: Yes, that’s true, your Honour. But I think the test in terms of what might excite the public interest in terms of the rights that an employee may lose goes to accrued rights. That is rights which, in my submission, in this case would only be limited to the actual entitlement. That is in this case unchanged because the Award continues to apply. I take your point that the right to take at least one break of not less than 14 days is a right that employees may lose if the agreement were terminated, but in my submission that is not a right that seems to be an accrued right within the meaning of Munro J’s decision. It is not something that should go to the public interest - - -

PN249

THE SENIOR DEPUTY PRESIDENT: Well, you’d better take me to what Munro J to find is an accrued right then.

PN250

MR PROIETTO: Well, Munro J’s decision is in Joy Manufacturing, your Honour. The reference, your Honour, is at the end of paragraph 42 which I think your Honour has already read and there he says:

PN251

Something additional to the simple loss of those conditions is necessary to excite a public interest. I consider that such a public interest might be generated in the termination of an agreement were to divest accrued rights to a significant degree. Other interests may be conceived.

PN252

Obviously he doesn’t go into any great length there as to what he means by accrued rights. My submission is that - and I think the references in subsequent cases really focused on redundancy pays, an accrued right that employees might lose. That is a right that has arisen in the past and if the agreement were to be terminated they would lose. So, for example, if the employee has been employed for 20 years under the terms of a generalist redundancy scheme but then the agreement is terminated, then the employee previous 20 years has been entitled to the benefit of that redundancy scheme would lose it because of the termination of the agreement. That is my understanding of how the Commission has applied this question of accrued rights.

PN253

So in this case the employee has been employed for 20, has pulled a bank of annual leave. If there was to be a termination of the agreement and somehow because there’s no protection in either the Award or the Act, the employee would lose the ability to take that annual leave. That, in my submission, would be a divesting of an accrued right. In my submission there is no issue of accrued rights that arises in relation to annual leave simply by reason of the fact that an employee may lose the ability to take a single block of annual leave of 14 days.

PN254

THE SENIOR DEPUTY PRESIDENT: Yes. So annual leave will be covered by the Award?

PN255

MR PROIETTO: Yes.

PN256

THE SENIOR DEPUTY PRESIDENT: What about sick leave? Where’s that in the agreement? Is that in the agreement? 16?

PN257

MR PROIETTO: The entitlement in the agreement, your Honour, is that an employer shall pay to each employee his or her accumulated sick leave up to a maximum of eight days. Some take annual leave at the end of the year. It’s actually less favourable than the standard which provides for 10 days personal and carers’ leave. A provision that sick leave accumulate is consistent with the terms of the standard.

PN258

THE SENIOR DEPUTY PRESIDENT: Well, it seems to raise a question about whether this is eight days sick leave as opposed to 10 days personal carers’ leave.

PN259

MR PROIETTO: Well, if an employee - - -

PN260

THE SENIOR DEPUTY PRESIDENT: Whether they’re different things.

PN261

MR PROIETTO: Yes I understand your point, your Honour, yes. On one view I think you’re saying that it could be eight days sick leave would be more favourable. I think that’s only if there would be an equivalent provision to take carers’ leave and I don’t believe that there is, your Honour. I think the other point to note, your Honour, is that really the accrued right here is in relation to the last line of that paragraph of that clause which deals with unused sick leave being paid out on termination.

PN262

THE SENIOR DEPUTY PRESIDENT: Yes.

PN263

MR PROIETTO: That, in my submission, is an accrued right because employees who are there currently who have accrued that are entitled under this agreement to be paid at termination on sick leave.

PN264

THE SENIOR DEPUTY PRESIDENT: Yes.

PN265

MR PROIETTO: If the agreement were to be terminated they would lose that right.

PN266

THE SENIOR DEPUTY PRESIDENT: Yes.

PN267

MR PROIETTO: But Ms Tzamouranis today has given an undertaking today that she will, in relation to existing employees, continue to apply that clause.

PN268

THE SENIOR DEPUTY PRESIDENT: So there was a question about a deed on the undertakings. Is the company prepared to enter into a deed?

PN269

MR PROIETTO: Yes. That had not been raised with me, your Honour. Look, Ms Tzamouranis accepted in the witness box that she’d be prepared to enter into a deed in relation to these matters so that is the company’s position.

PN270

THE SENIOR DEPUTY PRESIDENT: Yes. So therefore the undertaking becomes enforceable?

PN271

MR PROIETTO: Yes in relation to the current employees, yes that’s right. Just further in relation to accrued rights. The final one, your Honour, and probably the one that as I said has excited the most interest from the Commission over the years is redundancy. Now, obviously Ms Tzamouranis has given an undertaking today in relation to redundancy pay for employees who currently receive it, but in addition, your Honour, there is a further protection provided by the Act. It’s what I might call the Tristar provision. If I could take your Honour to 6(a) of schedule 7. I don’t know, this is a reasonably recent addition to the Act. It may not be - - -

PN272

THE SENIOR DEPUTY PRESIDENT: Yes, I don’t think it’s in mine, but I’m aware of the provision that you’re talking about.

PN273

MR PROIETTO: Yes. It’s not in mine either. But basically it provides that if a pre reform certified agreement is to be terminated under section 170MH(3), which is the current provision, then the company’s obligations under the redundancy provision continue for a period of 24 months from the time the pre reform agreement is terminated. In any event we have Ms Tzamouranis’s undertaking today as well to continue to apply that in relation to existing employees. So in my submission, your Honour, all the accrued rights that arise under the agreement are either the subject of legislation or are provided for by Ms Tzamouranis in her undertakings and therefore there is nothing that would arise in the public interest in respect of the rights of employees that would give rise to the termination being contrary to the public interest.

PN274

THE SENIOR DEPUTY PRESIDENT: Does it cover, this notion of accrued rights, does it cover things that employees might have, for want of a better word, accrued but have not yet taken? For example, and you covered this, but you’ve already banked up four weeks annual leave but you haven’t taken it yet? Then are those sort of things covered, applied to unused sick leave? So it’s unused annual leave, unused sick leave, unused long service leave, I can’t think of anything else that would be accrued but not taken.

PN275

MR PROIETTO: I don’t think so, your Honour, because I think if the agreement were terminated and the company was to turn around and say well you haven’t taken your annual leave that accrued under the agreement and therefore you can’t take it, I think that would be a breach of the certified agreement because the breach would have arisen at the time. Because the employees would have accrued the annual leave at a time when the agreement was current, I think that would still be capable of being enforced in the Federal Court.

PN276

THE SENIOR DEPUTY PRESIDENT: In any instance I presume that your employer, or your client, is prepared to give an undertaking that such accruals will be maintained?

PN277

MR PROIETTO: Be recognised, yes.

PN278

THE SENIOR DEPUTY PRESIDENT: Yes.

PN279

MR PROIETTO: Yes, your Honour, thank you. So your Honour, if the Commission were to have regard to the terms of the agreement, in our submission given the scheme of the Act and the undertakings provided by Ms Tzamouranis the employees would suffer very little, if any, reduction in the terms of conditions of their employment, particularly by reference to those accrued rights. And I might just take you briefly to Mr Vari’s witness statement. You’ve already looked at this provision, your Honour, but he talks about the five per cent increases. I can not see how the agreement provides for a further five per cent increase after 1 August 2005 and in any event, Ms Tzamouranis has given an undertaking to maintain Award wages.

PN280

Ms Tzamouranis has provided an undertaking in relation to redundancy and severance pay and that includes the long service leave provision which there’s a clause in the redundancy provision which provides for long service leave payable on pro rata basis after five years of service. Given that’s part of the redundancy provisions, that’s covered by Ms Tzamouranis’s undertaking. I also already mentioned payment of sick leave upon termination. There are some other issues raised in Mr Vari’s witness statement, your Honour, in relation to terms and conditions that employees may lose, but in my submission they are not accrued rights in the meaning of that term and they do not excite the public interest if the employees were to lose those rights.

PN281

In this regard I refer to the decisions of Munro J in Joy Manufacturing and also Commissioner Bacon that there is nothing contrary to the scheme of the Act for employees to fall back on terms of a safety net Award.

PN282

THE SENIOR DEPUTY PRESIDENT: Another example might be of the accrual, but untaken, might be the rostered days off. You’ve accrued a rostered day off but you haven’t yet taken it.

PN283

MR PROIETTO: Yes, that would be true, your Honour.

PN284

THE SENIOR DEPUTY PRESIDENT: Which is mentioned in Mr Vari’s statement. Am I to assume the employer would Honour those?

PN285

MR PROIETTO: I’d seek instructions on that, your Honour.

PN286

THE SENIOR DEPUTY PRESIDENT: Yes.

PN287

MR PROIETTO: My instructions are, your Honour, that employees take their rostered day off regularly by way of leaving early on a Friday and my client is prepared to continue that. So my understanding is there are actually no significant accrual of rostered days off in the past, but in any event the current practice will remain in respect of current employees.

PN288

THE SENIOR DEPUTY PRESIDENT: Right, yes.

PN289

MR PROIETTO: So your Honour, in our submission terminating the agreement would not be contrary to the public interest and therefore the agreement must be terminated. In the circumstances there is no need for Wood Connections to establish that it would be in the public interest for the agreement to be terminated and so much was made clear by Munro J in Joy Manufacturing. If I could take your Honour to clause 40 of that decision. It provides there:

PN290

If there is no identified effect of termination -

PN291

Sorry, your Honour.

PN292

THE SENIOR DEPUTY PRESIDENT: Sorry, clause?

PN293

MR PROIETTO: Yes, sorry. Paragraph 40 of Munro J’s decision.

PN294

THE SENIOR DEPUTY PRESIDENT: Yes.

PN295

MR PROIETTO:

PN296

If there is no identified effect of termination that is against the public interest it appears to be immaterial that there is or is not a positive public interest in the termination of the relevant agreement.

PN297

So to the extent that it is necessary for us to give cause of terminating, Wood Connections argues that the agreement contains construction site specific clauses and relates to work scenarios that are no longer relevant to the employees or business of Wood Connections. Ms Tzamouranis’s evidence is that since March 2006 Wood Connections has ceased to enter Woolworths construction sites as Woolworths now employ their own shop fitters and installers and Wood Connections now only manufactures products for Woolworths rather than install it. Some of the clauses referred to by Ms Tzamouranis which relates to construction work are the construction site rates at clause 36, inclement weather provisions which is 36.9, flexible hours of work to maximise daylight hours which is 13.4 and a provision for employees starting on site and warranting a travel allowance which is clause 28.

PN298

The agreement also refers to IncoLink which is the construction industry redundancy fund. Now, obviously in relation to existing employees
Ms Tzamouranis will continue to apply that because it’s part of the undertaking in relation to redundancy. But IncoLink is really there for construction workers who work on project specific projects and at the end of each there is uncertainty as to whether they might have future employment. That’s the basis of the fund. In this case none of Ms Tzamouranis’s employees do construction work. They don’t go out on site. They are ongoing employees based at the factory.

PN299

So we say IncoLink is one such further provision that is now not relevant to
Ms Tzamouranis’s business. Ms Tzamouranis does not know what the future holds for her business. It is coming towards the end of a contract for Woolworths. However she must just have flexibility in her business so that if she is awarded a new contract she’s able to engage new employees and she no longer wants to be wedded to an agreement which she considers is no longer relevant to her business and contains such clauses as I’ve set out above. In the witness box
Ms Tzamouranis referred to some of the administrative practices such as in relation to IncoLink and also the workers involved for her in a small enterprise in applying the agreement.

PN300

It may be that if there are new employees engaged they might be engaged on a new agreement entered into between the company and the union. It may be that they are employed on the basis of a safety net award. But in terms of the evidence given by Ms Tzamouranis in my view there are some positive reasons for arguing that it would be in the public interest to terminate the agreement, even though such arguments are not necessary. If the Commission comes to the view that it is not contrary to the public interest to terminate the agreement, they are that
Ms Tzamouranis’s evidence was that she would be more likely to employ new employees if she was not wedded to the agreement.

PN301

That is a factor which I say the Commission should take into account because it goes to the objects of the Act which are to increase employment. The fact that the employer intends to continue to afford employees over Award payments, I don’t have this case here, your Honour, but that was a factor considered by Ross VP in Winprint Products Pty Ltd. The undertaking preferred by Ms Tzamouranis and she’s also agreed to provide those undertakings in the form of an enforceable deed. In Joy Manufacturing Munro realised that undertakings would not necessarily be forcible but commented that he was still willing to give the undertaking weight. In this case in my submission it carries further weight because Ms Tzamouranis is prepared to do it in the form of a deed.

PN302

And finally the scheme of the Act which provides for the 24 month period of redundancy plus in addition to Ms Tzamouranis’s undertakings in respect of accrued rights. So for the reasons stated today, your Honour, it is our submission that it would not be contrary to the public interest for the Commission to terminate this agreement and in fact there are positive reasons for saying it is in the public interest for the agreement to be terminated. In any event if the Commission reaches a conclusion that it is not contrary to the public interest then the Commission must terminate the agreement. Unless you have any questions, your Honour, I have nothing further.

PN303

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Wetherell.

PN304

MR WETHERELL: Thank you, your Honour. Your Honour, if I could start by referring to the test my friend has already referred to, Kellogg Brown. We accept that loss of conditions on their own do not excite or invoke the public interest necessarily, however in paragraph 23 of that decision it’s said that the various objects of the Act and the maintenance of proper industrial instruments would invoke that interest. And that forms the basis of our submissions. If I refer specifically to the example given by the Full Bench in that decision, namely where there would be no applicable award on the termination of such an agreement.

PN305

I would firstly raise that we have that possibility in this instance, that no award would apply despite the evidence provided by Ms Tzamouranis.

PN306

THE SENIOR DEPUTY PRESIDENT: On what basis do you say that?

PN307

MR WETHERELL: In the event that individual Australian workplace agreements would provide it and I would refer to the decision in FIP Pty Ltd by Marsh SDP in relation to the issue of undertakings and the unenforceability and lack of ability to apply to the Commission for alternative dispute resolution on any undertaking and/or deed. So at this point we have unenforceable undertakings and we have your assurance that the conditions, allowances and so on that are afforded under the agreement will continue for the employees of Wood Connections. And if I could turn to the objects of the Act portion of our submission.

PN308

Firstly it is our submission that the objects of the Act within the pre reform Act, section 3 apply and I'll turn to those in due course. But in addition we would submit that schedule 6, the objects within schedule 6 of the current Act, would also apply seeing we’re dealing here with the transitional period of a federal award. And if particularly could turn to the objects at paragraph 8 within schedule 6 which talks about transitional awards to continue in operation and are maintained by the Commission within the limits specified in this schedule. And transitional period for the purposes of that schedule is defined as a period of five years. So I would again refer to the decision by Marsh SDP, which I’ve got copies here if the parties would prefer.

PN309

And if I refer to, I believe it’s paragraph 58 of that decision where the Senior Deputy President refers to the objects in the schedule. Admittedly that is relating to state agreements and he looks at the intention of the legislative in preserving the terms and conditions of employment as they were immediately before the reform commencement. We would submit, your Honour, by analogy that the intention of the legislative provision regarding transitional awards should also apply in this instance and that the only guarantee that we have of the continuation is by the continuation of the relevant agreement for today’s proceedings. May I continue?

PN310

I will now refer to section 3 of the pre reform Act, paragraphs (a) and (d) which we say are relevant to the continuation of this agreement in the public interest, namely that it would not be in the public interest for the agreement to be terminated. Specifically paragraph (a), the encouraging the pursuit of improved living standards and a fair labour market in particular. We would say that on principle the erosion of rights, obligation and allowances that may occur as a result of this termination would cut across that objective. and specifically if I could refer to the evidence of Mr Vari and his list of possible entitlements that could be removed as a result of this termination.

PN311

And I would also suggest that the section 3 in the current Act has wording which is of similar effect. In addition section 3 paragraph (d) which states that:

PN312

Providing for the means for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level upon a foundation of minimum standards to ensure the maintenance of effective award safety net -

PN313

Et cetera. We would submit that similarly to paragraph (a) the likely removal of these conditions and allowances would run contrary to that objective. My final point or submission in relation to the objects of the Act relates to the current Act in section 3 paragraph (l) which states that the object of the Act is to assist employees to balance their work and family responsibilities effectively through to the development of mutually beneficial work practices with employers. We would say that as a consequence of the post Work Choices reforms that the objects of this current Act have been enlivened and we are given this situation today where there is a possibility of entitlements being removed in consequence of the current Act and therefore the objects of the current Act also need to be considered in obtaining the legislative intent in terms of the by-product of the current Act.

PN314

So we would also suggest that any removal of conditions and allowances that appear in Mr Vari’s statement would run contrary to section 3 paragraph (l). If there are no questions on that, your Honour, I'll proceed to the second part of my submissions, namely the maintenance of proper industrial standards. As was raised in the Full Bench decision of the Tristar case, in the event of termination of agreement there would only be recourse of the Australian fair pay condition standard and we now have recent amendments to the fairness test and in this matter the undertaking of the company. As I’ve already addressed we have an unenforceable undertaking which does not give recourse to the Commission for any dispute resolution procedures on that undertaking.

PN315

Furthermore we would distinguish the facts of Tristar to this instance in that the principal matter at hand in Tristar was relating to a breach of the agreement and in this instance we have complicity and compliance by the company with the agreement so therefore it is distinguishable from the Tristar case. If I could refer your Honour to paragraph 26 of the Full Bench decision and if I could hand up a copy at this point. The Full Bench judgment there raise at paragraph 26:

PN316

It also raises broader issues about fairness to employers who do observe their agreement and other workplace relations obligations about the observance of agreements generally. These broader issues clearly attract the public interest. Significance of them is not diminished by the fact that redundancy provisions in the agreement would continue to operate for a period of 12 months should the agreement be terminated.

PN317

We would submit that statement, or portion of the decision by the Full Bench, runs to the principle of the public interest in upholding an agreement and that any undertaking regarding redundancy or legislative amendment would not be relevant in this instance seeing we’ve had compliance from the company, compliance to the terms of the agreement that’s an issue today.

PN318

THE SENIOR DEPUTY PRESIDENT: Sorry, compliance is an issue?

PN319

MR WETHERELL: Sorry, compliance has been undertaken or there has been no breach as in Tristar by the agreement. So that’s not an issue today.

PN320

THE SENIOR DEPUTY PRESIDENT: Yes.

PN321

MR WETHERELL: So I guess I am raising an issue of obiter as a result of the Full Bench decision which they were not given cause to investigate or decide upon, however raise that point in paragraph 26 about the broader issue.

PN322

THE SENIOR DEPUTY PRESIDENT: Yes.

PN323

MR WETHERELL: If I could turn to a couple of specific points that were raised by my friend, specifically sick leave. That would be an example of a specific right that was afforded under the agreement upon termination of one’s employment, that any accrued right to sick leave would be paid out to an employee and that would be lost as a result of this termination. That concludes my submissions, your Honour.

PN324

THE SENIOR DEPUTY PRESIDENT: Yes. Accepting that the company is prepared to enter a deed so it won’t be lost?

PN325

MR WETHERELL: Well, I welcome that undertaking, however we do not have a deed at present and we also - - -

PN326

THE SENIOR DEPUTY PRESIDENT: Well, a deed would take how long to do? A day? It wouldn’t take very long, would it?

PN327

MR WETHERELL: No, it wouldn’t. And I’m sure my instructions would be to accept that, but I don’t have those instructions at this point.

PN328

THE SENIOR DEPUTY PRESIDENT: Can you get them?

PN329

MR WETHERELL: Yes I can.

PN330

THE SENIOR DEPUTY PRESIDENT: Why don’t I adjourn? How long will it take you?

PN331

MR WETHERELL: Unfortunately both Mr Vari and Mr Skourdoumbas who are the power brokers at the particular branch that I work at are interstate today. So I may be able to catch one of them, but otherwise it will probably be tomorrow.

PN332

THE SENIOR DEPUTY PRESIDENT: Yes, thank you.

PN333

MR WETHERELL: Thank you.

PN334

THE SENIOR DEPUTY PRESIDENT: Mr Proietto?

PN335

MR PROIETTO: Just three points very briefly in reply, your Honour. The first point was in relation to maintaining industrial standard and that the applicable Award would be replaced if the company were to enter into AWAs. Just two quick points in relation to that. The first is that Ms Tzamouranis has given sworn evidence that if the agreement were terminated she wouldn’t be replacing federal award with AWAs. The second point is that in Kellogg Brown the Full Bench of the Commission stated that it was not open when determining whether a termination was in the public interest for the Commission to speculate what the future consequences of that decision might be.

PN336

The second point just briefly is in relation to the decision of Marsh SDP that my friend provided. I think it’s important to distinguish that case and this again goes to maintaining a safety net. In that case the agreement which was up for termination was a preserved collective state agreement and the effect of terminating that was that employees would fall back not on an award but to the fair pay standard. In this case there is a safety net award that the employees will fall back on and that’s an important point. And just finally in relation to the undertakings and so forth.

PN337

My client has indicated that she is prepared to enter into an agreement with each of the employees to give effect to the undertaking she’s given in the Commission today. All I know is that in all previous - I won’t say in all because I haven’t read all the cases, but in the cases I’ve handed up today - in Joy Manufacturing and BHP Coal the company has accepted the undertakings while acknowledging that they may not be necessarily enforceable. That’s not to say that my client will not enter into a deed. She said in sworn evidence today that she will, but for the purposes of today’s proceedings I'll just say that undertakings have in the past been accepted by the Commission. That’s all I have, your Honour.

PN338

THE SENIOR DEPUTY PRESIDENT: In respect of the deed I must say my understanding of it was that that’d be a deed with the union in respect of the employees.

PN339

MR PROIETTO: I think when the question was asked to Ms Tzamouranis she was asked whether she’d enter into a deed with the individual employees. I wonder whether that might be more enforceable in that regard, your Honour.

PN340

THE SENIOR DEPUTY PRESIDENT: Well, perhaps you might ask her more importantly whether she’s prepared to do either.

PN341

MR PROIETTO: Yes. She is prepared, as she did give evidence, your Honour, to undertake to give a deed in respect of each of the four employees, with the employees.

PN342

THE SENIOR DEPUTY PRESIDENT: Not with the union?

PN343

MR PROIETTO: I think she’s be happy to provide a copy to the union. I mean, it’s really this is about the employees’ rights more than the union’s rights. Without having looked at the issue I would consider that the deed’s - - -

PN344

THE SENIOR DEPUTY PRESIDENT: But when it comes to enforcement there may be an issue of who has the ability to enforce in the sense of financial ability to enforce if it comes to that issue.

PN345

MR PROIETTO: I understand, but there would be no reason why that union could not, as it has done today, appear on behalf of the employee to enforce the deed. I mean, either way if the deed is made directly with the employee or with the union, either way if the deed is not adhered to it would be the union who - if the deed is made directly with the union it would be the union who would have to pay for it as well. I think in terms of enforceability the deed is possibly more likely to be enforced if it’s made directly with the employee because that’s where the relationship is. It’s similar to the question of whether side deeds which are made now that go along with certified agreements are necessarily enforceable is an issue in relation to those which has never been tested. I think similar issues would arise here, your Honour.

PN346

THE SENIOR DEPUTY PRESIDENT: What do you say about that,
Mr Wetherell?

PN347

MR WETHERELL: I’d have to get instructions on the number of members that we would have there. As I understand we only actually have one member at the company so in that instance it may be relevant to only provide it to individual employees, but I would have to get instructions your Honour.

PN348

THE SENIOR DEPUTY PRESIDENT: Yes, okay. Is there anything else?

PN349

MR PROIETTO: Nothing further, your Honour.

PN350

THE SENIOR DEPUTY PRESIDENT: Well, in this matter I am able to give a decision. I am satisfied in respect of the matters under section 170MH(2) in that regard in my view and consistent with earlier decisions of this Commission the appearance and submissions of the CFMEU in these matters has enabled me to obtained the views of the persons bound by the agreement about whether it should be terminated. In respect of the matters in section 170MH(3) I consider that it’s not contrary to the public interest to terminate the agreement. In that regard I have noted the undertakings given by the employer and the employer’s preparedness to enter into an enforceable deed in respect of each of those undertakings.

PN351

Accordingly I will issue an order terminating the agreement. The termination will take effect on the date of the order. I will now adjourn.

<ADJOURNED INDEFINITELY [11.34AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

CHRISTINE TZAMOURANIS, SWORN PN11
EXAMINATION-IN-CHIEF BY MR PROIETTO PN11
EXHIBIT #P1 WITNESS STATEMENT OF CHRISTINE TZAMOURANIS PN17
EXAMINATION-IN-CHIEF BY MR WETHERELL PN52
THE WITNESS WITHDREW PN76
EXHIBIT #W1 WITNESS STATEMENT OF FRANK VARI PN113