AG2006/4654, Transcript of Proceedings [2007] AIRCTrans 4 (3 January 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 16358-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2006/4654

BEL ELECTRICAL PTY LTD
AND
COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
s.170MH -prereform Act - Application to terminate agreement (public interest)
(AG2006/4654)

ADELAIDE

8.33AM, THURSDAY, 21 DECEMBER 2006

Continued from 19/12/2006

PN1

THE SENIOR DEPUTY PRESIDENT: Good morning. Mr Wilder, I understand that you're just appearing by yourself this morning. Is that the case?

PN2

MR WILDER: No, Senior Deputy President. I have with me the employees of Bel Electrical who took the idea that they should be able to air their views and they're with me today. In fact, I have MR B BLACKBOROUGH sitting next to me, who is a representative of those employees.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. I will note that Mr Quigley is not here this morning, but I understand from the last hearing Mr Quigley's views in relation to this matter. Mr Wakelin, can you tell me what was done subsequent to the last hearing?

PN4

MR WAKELIN: Yes, sir. Subsequent to the last hearing, the company followed directions from the Commission and re-issued the memorandum that we'd submitted at that hearing, re-issued that memorandum to the employees and this time the employees signed off the receipt of that memorandum. Along with that, they issued the notice to employees written by the Commission alerting all employees clearly about this process and their entitlements going forward and all employees have signed off as receipt of both those documents. Following that, sir, then the notice of listing in this matter was obviously issued as represented by all the employees' attendance here today.

PN5

THE SENIOR DEPUTY PRESIDENT: Yes. I had phone calls from a number of employees after the last hearing. Is there anything further you want to say to me in this matter, Mr Wakelin?

PN6

MR WAKELIN: I would, sir, only that I thought we were hearing from the employees today.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes, I want to know whether you want to say anything first.

PN8

MR WAKELIN: I will, then, sir. For the benefit of these employees that have attended today's hearing, but were unable to be here for Tuesday's hearing, I would like to reiterate a small part of my opening submission from the earlier hearing, if the Commission pleases.

PN9

THE SENIOR DEPUTY PRESIDENT: Yes.

PN10

MR WAKELIN: At the time of making this application, the company issued a memorandum to all affected employees referred to at Tuesday's hearing as exhibit B1. This memorandum explained that code compliance was the sole reason for the company's application in this matter. The company also undertook in this memorandum to continue to provide all employee entitlements currently provided by the EBA. The company also made it clear that the award would become the sole industrial instrument applying to the company's electrical worker employees.

PN11

Furthermore, a summary table was provided in that memorandum, clearly outlining what the overall employee entitlements would be for the interim period until a new workplace agreement could be reached and it would have been clear from this summary table to all employees that in no way would employee entitlements be lessened if the termination of the EBA was ordered. Finally, sir, the company reiterated the point that the company's short-term commercial objectives required the EBA to be terminated immediately.

PN12

Now, unfortunately, sir, due to the fact that several company employees expressly refused to appear at the initial hearing on Tuesday in relation to this application, the employees could not verify that this memorandum had been issued to them back in November. Therefore, sir, under the Commission's direction, this memorandum as I've just explained was re-issued along with your notice. I might leave it there for the minute, sir. I have nothing further. Thank you, sir.

PN13

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Wilder.

PN14

MR WILDER: Senior Deputy President, due to the circumstances surrounding Tuesday's hearing, I was unable to give a full submission on that day due to the circumstances, obviously, that there were no views heard, so I'd like to have an opportunity now to give a full submission.

PN15

THE SENIOR DEPUTY PRESIDENT: Yes.

PN16

MR WILDER: 170MH(2) is an express provision for the Commission to obtain the views of the persons bound by the agreement, whether it should be terminated. These views have been obtained and there is unanimous opposition from those persons bound by this agreement. Surely the views of the persons bound must give weight to the decision of the Commission today. In the opinion of the union and its members here today, it would be grossly unjust just to ignore the views of these employees to continue to apply 170MH(3).

PN17

I refer to the new Act, section 3, principal object. The principal object of this Act is to provide a framework for co-operative workplace relations which promote the economic prosperity and welfare of the people of Australia by subsection (c), providing an economically sustainable safety net of minimum wages and conditions for those whose employment is regulated by this Act. The employer has given an undertaking to provide the current wage rates and some conditions currently applied to the employees.

PN18

If the National Electrical, Electronic and Communications Contracting Industry Award 1998 is the sole industrial instrument if this agreement is terminated, these employees will lose conditions, the inclement weather policy is one example. I am in your learned hands, Senior Deputy President, how we would enforce these undertakings that the company has stipulated. If there should be any disputation, what section of the Act do we file under and how would we invoke jurisdiction?

PN19

Section 3(h), supporting harmonious and productive workplace relations by providing flexible mechanisms for the voluntary settlement of disputes. The termination of this agreement in our view would not support harmonious and productive workplace relations, quite the opposite. The views of these employees regarding the termination of the agreement give me cause for concern that the harmony and productivity will be the big losers today if this agreement is terminated.

PN20

If the Commission should decide that 170MH(2) has been fulfilled and that the views of these employees are irrelevant, the Commission must invoke 170MH(3). The CEPU believe there is a public interest concern and that some employees may consider leaving the industry, at least in South Australia and at this time and in the future, this will surely exacerbate the skill shortage, especially for the state of South Australia.

PN21

The CEPU has also taken note that the ABCC has intervened on this matter. The primary reason that the employer gives to terminate this agreement is due to an inability to tender for contracts that have federal government funding. I would like to make it clear that the CEPU has never opposed a code compliant agreement. In fact, we have supported the development of an agreement which is code compliant. The employer has spent the best part of this year avoiding and ignoring our attempts to negotiate towards a code compliant collective agreement.

PN22

If the Commission desires, I have evidence here today that shows how the employer has not availed themselves of the bargaining process. There is an alternative. The alternative could be to apply 170MD of the pre-reform Act and vary the agreement that's currently in place in an effort to ensure code compliance with that agreement. That's all, Senior Deputy President.

PN23

THE SENIOR DEPUTY PRESIDENT: Which part of section 170MD would you suggest I consider, Mr Wilder?

PN24

MR WILDER: Just bear with me.

PN25

THE SENIOR DEPUTY PRESIDENT: Perhaps I will help you. My recollection is that the only surviving part of section 170MD under the new Act is MD(6).

PN26

MR WILDER: Is that the only surviving - - -

PN27

THE SENIOR DEPUTY PRESIDENT: That's my recollection. I stand to be corrected in that.

PN28

MR WILDER: I am in your learned hands, Senior Deputy President. I am unaware of all the legalities surrounding the new workplace reforms.

PN29

THE SENIOR DEPUTY PRESIDENT: I haven't made a practice of taking the Act to bed and reading it to memorise it, but that's my recollection.

PN30

MR WILDER: Where it states:

PN31

The Commission may on application by any person bound by a certified agreement by order vary a certified agreement for the purposes of removing ambiguity or uncertainty or the purpose of including, remitting or varying a term, however expressed, that authorises an employer to stand-down an employee.

PN32

Well, subsection 6(a), I suppose you could say that removing ambiguity and uncertainty may bring in the fact that the code compliance delivers ambiguity and uncertainty and we could in future if the Commission pleases use 170MD(6)(a) as an alternative arrangement.

PN33

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. Mr Blackborough, is that right?

PN34

MR BLACKBOROUGH: Yes, sir.

PN35

THE SENIOR DEPUTY PRESIDENT: Do you want to say anything extra to me, as an employee representative?

PN36

MR BLACKBOROUGH: Just as a representative of the employees, I'd like to say that we don't want the contract terminated, the EA as it stands. Yes, that's about it.

PN37

THE SENIOR DEPUTY PRESIDENT: What is the primary, or what do you understand to be the primary employee concerns in relation to termination of the agreement?

PN38

MR BLACKBOROUGH: Well, probably the uncertainty that it brings up if it is terminated, which can be a bit off-putting.

PN39

THE SENIOR DEPUTY PRESIDENT: Can you tease out that a little bit more for me? In what areas does that uncertainty sort of cause you and your fellow employees particular concern? Perhaps before you answer it, if you want to get into a huddle with those employees before you answer that question, I am very happy for you to do so.

PN40

MR BLACKBOROUGH: Okay.

PN41

THE SENIOR DEPUTY PRESIDENT: Do you want to do that?

PN42

MR BLACKBOROUGH: Yes, I might just ask them.

PN43

THE SENIOR DEPUTY PRESIDENT: I won't adjourn the matter, but just turn around and have a brief discussion with your fellow workers and see whether you can bring back any answers to me in that regard, because I want to fully understand those sort of concerns.

PN44

MR BLACKBOROUGH: Yes.

PN45

THE SENIOR DEPUTY PRESIDENT: You can have Mr Wilder with you if you want. Yes, Mr Blackborough.

PN46

MR BLACKBOROUGH: The interim agreement is not binding and we don't really know where to go for mediation from there and we may lose some of our entitlements.

PN47

THE SENIOR DEPUTY PRESIDENT: Things such as the inclement weather? Is that the sort of thing you're talking about?

PN48

MR BLACKBOROUGH: Yes, those sorts of things, yes.

PN49

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Wakelin, do you want to say anything having heard those concerns set out by Mr Wilder and explained by Mr Blackborough?

PN50

MR WAKELIN: Yes, I would, sir, thanks. Sir, due to the employees' reluctance to appear at Tuesday's hearing, it would come as no surprise to me to hear today that the company's employees are in fact opposed to this application, as their total lack of willingness to attend Tuesday's hearing would have indicated to me that they were not supportive of the application at that point either, but be that as it may, sir, there are in fact company employees who are covered by the EBA in attendance here today, as we can see and it is therefore my submission that the Commission has now completely satisfied section 170MH(2) of the pre-reform Act by taking these exhaustive steps to obtain the views of those persons bound by the EBA.

PN51

Unfortunately, sir, those views are not very positive ones. However, the employees and their union do not raise any matter that would make terminating the EBA contrary to the public interest and on that point, if I might refer the Commission back to the Kellogg Brown Root case that was submitted by the ABC at Tuesday's hearing, in particular paragraph 22, sir:

PN52

The views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which, on its proper construction, it does not include.

PN53

And also paragraph 28, sir, the Full Bench in that case made the point that:

PN54

It should be emphasised that the Commission's consideration of the public interest for the purpose of 170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part, the Commission should be guided by the likely and foreseeable consequences of termination, rather than speculation about possible consequences.

PN55

And we've heard some speculation about obviously the employee concerns about what may happen if the EBA is terminated and I think most of those concerns can be laid to rest with the memo that's been issued twice now, where the company undertakes that no entitlements will be lessened going forward, so I think I can quite safety submit that the likely foreseeable consequences of terminating the EBA is that the company will be able to tender for Australian government work which will provide greater job security and prospects. Additionally, its employees' terms and conditions of employment will not change, thanks to the undertaking as I just pointed out given by the company. In any event, sir, the employees have the underpinning safety net award. At paragraph 46 of the Kellogg Brown Root case again, sir, the Full Bench also commented that:

PN56

Even where termination of an agreement carried with it the loss of significant benefits, it was not of itself contrary to the public interest.

PN57

So just to summarise, then, sir, it has already been established that subsection 1 of 170MH has been satisfied because the EBA has passed its nominal expiry date. Subsection 2 has now clearly been satisfied in my view, as the Commission has exhaustively sought to obtain the views of those persons bound by the EBA and we have subsequently heard the views of at least half of the employees, I think just about all of the employees, sir, here today.

PN58

Finally, then, sir, because these employee and CEPU views obtained by the Commission here today did not raise any matters that may arise from the termination of this EBA that would be contrary to the public interest, subsection 170MH(3) has now also been satisfied in my view and therefore the Commission must under 170MH(3) terminate this EBA. I have nothing further at this point, if the Commission pleases. Thank you, sir.

PN59

THE SENIOR DEPUTY PRESIDENT: Mr Wakelin, I've got a couple of questions for you.

PN60

MR WAKELIN: Yes, sir.

PN61

THE SENIOR DEPUTY PRESIDENT: My questions arise from some of the concerns that employees have put. They are driven in large measure by a concern that, as I understand it from one employee, later on today the employees will have their Christmas lunch and go away for a Christmas break. They will come back to work and if Bel Electrical is going to thrive and prosper, it obviously needs to have a good working relationship with its employees. Some of your words don't sort of lend great encouragement in that regard. A good relationship between the employer and its employees means they've got to be talking to each other and they've got to clearly understand where each other fits and where each other is headed in this respect. There are a couple of things that cause me particular concern. First of all, there is a concern expressed by employees about uncertainty attaching to the reliability, if I can call it that, of the undertaking given by the employer which is detailed in that memorandum that I marked B1 dated 15 November. Can I take it that that represents a personal undertaking from the employer to accord with those provisions?

PN62

MR WAKELIN: Yes, it does, sir, as we submitted at Tuesday's hearing, absolutely, sir.

PN63

THE SENIOR DEPUTY PRESIDENT: What does the employer intend to
do - - -

PN64

MR WAKELIN: Basically, sir, if I may refer back to Tuesday's hearing and my submissions again.

PN65

THE SENIOR DEPUTY PRESIDENT: Yes, certainly.

PN66

MR WAKELIN: The company has also made a strong commitment, I left that bit out today, but from my previous submission, they made a strong commitment in that memo to the bargaining process in the company as well and the company is still in negotiations and talks with their guys and with their union about going forward with a new agreement. Unfortunately, time is not on the company's side as with the other applications we've heard this week because tenders and the code compliance issue is an immediate requirement of the company and while these negotiations have not come to fruition in the last couple of months where we hope and the company had hoped they would, the company was left with no alternative, with tenders coming up in January, but to terminate this old agreement with the company's uncertainty going forward that the employees would in fact actually ever reach an agreement with the company, so this is the approach taken by the company to relieve their uncertainty going forward, to be able to tender for work and as we pointed out at Tuesday's hearing again, to be able to tender for that work guarantees these guys work going forward which we would have thought was a bit more of a prosperous future for these guys as well.

PN67

THE SENIOR DEPUTY PRESIDENT: That goes to the issue that I want to deal with next. Am I correct in understanding that early in the new year, the employer would look at re-activating discussions with the employees and/or their union with a view to establishing a replacement agreement?

PN68

MR WAKELIN: That's right, sir. The break for most of us is over the next couple of weeks and as soon as January, everyone is back at work, myself included. I'm quite confident that negotiations will continue at least at this company, definitely at this company and if not others towards new agreements which has been a constant work load for the last six months to this point, so I'm very confident in January, in two weeks' time, that will still be the case, sir, and the company will be endeavouring, as it has in the past, only two or three months ago they put a very beneficial offer, EBA, a new agreement on the table to their employees. That was rejected by the employees, so the company has been bargaining in good faith this year. It's been following through with that bargaining and offering documents with substantial increases in them. They've been rejected, so I'm confident in January, sir, we'll all be carrying on with what we do and bargaining agreements, especially at Bel.

PN69

THE SENIOR DEPUTY PRESIDENT: The current Act and for that matter the former Act, that is the pre-Work Choices Act establish the capacity for an employer and employees, sometimes represented by their union, to engage in industrial action as part of a bargaining exercise, so that on the one hand employees may take industrial action, provided they comply with all of the requirements of the legislation and on the other side of the coin, the employer could potentially lock employees out and in effect, what the Act is saying is that if discussions broke down, both sides can, so long as they stay within the law, try to use a bit of muscle to persuade the other side to change their thinking. I don't recommend it, because the vast majority of agreements are negotiated without the need for that. The simple fact that you've been negotiating for some time and that this agreement is proposed for termination probably contributes to the level of uncertainty that employees have.

PN70

MR WAKELIN: Can I just address one point there, sir, if I may?

PN71

THE SENIOR DEPUTY PRESIDENT: Yes.

PN72

MR WAKELIN: The CEPU submitted here today that the company has been avoiding I think proper negotiations for the best part of this year. Unfortunately, the reason for that was both industrial organisations in our industry have been working on a code compliance and a new Work Choices compliant agreement template for these companies to actually begin working with. Now, that template wasn't in effect available and deemed compliant until about June this year, so effectively companies like Bel have been negotiating for less than six months, sir, and like I said, within that six months there's been at least one document put on the table in offer to the employees which was rejected.

PN73

THE SENIOR DEPUTY PRESIDENT: All right. Well, what I am getting at is I understand that position and I also understand there have been fairly recent changes on the part of the Building and Construction Commission about what it considers would represent a code compliance agreement. What I am interested in is the employer's position in relation to these interim undertakings and I'm anxious to ascertain what the employer would intend to do in a negotiating environment relative to these interim undertakings.

PN74

You see, the negotiating environment has the potential to change the way in which you folks look at each other. You could, if things went pear shaped, if I can call them that, engage in a bit of muscle flexing. As I understand the undertaking given by Bel Electrical, it is to the effect that even if you were unable to reach agreement on a replacement agreement and there was disputation over that, so long as employees were working normally, that is not engaging in industrial action, the employer would continue to pay the rates and grant the conditions that are detailed under that column called interim entitlement.

PN75

MR WAKELIN: That's correct, sir, just with one very small amendment, however. It's come to light that the memorandum being of a generic nature had a $50 a week severance contribution for Bel Electrical where in fact under the EBA, the current EBA, that contribution is in fact $45. However, on the other hand, the travel allowance which is notated there is $20 per day is in fact being paid at $23 per day at the moment, so in light of a couple of those small variations to that undertaking, the company is certainly honouring those entitlements going forward.

PN76

THE SENIOR DEPUTY PRESIDENT: Is there a question about wage rates, too?

PN77

MR WAKELIN: No, not on this one, sir. The $26 is the current wage rate.

PN78

THE SENIOR DEPUTY PRESIDENT: I see, so what you're saying there is that there would be - that the employer would intend to vary that interim set of entitlements with respect to the severance pay, so the $50 would become $45.

PN79

MR WAKELIN: In line with its current EBA, sir, yes.

PN80

THE SENIOR DEPUTY PRESIDENT: And travel payments would move to $23 a day.

PN81

MR WAKELIN: That's right, sir.

PN82

THE SENIOR DEPUTY PRESIDENT: In both cases?

PN83

MR WAKELIN: Yes, sir.

PN84

THE SENIOR DEPUTY PRESIDENT: I see, but let me go back to the question I asked you. Should I understand that notwithstanding that the parties might be involved in a torrid negotiating process, so long as employees are at work and working normally, the employer will apply those interim entitlements?

PN85

MR WAKELIN: That's correct, sir.

PN86

THE SENIOR DEPUTY PRESIDENT: All right. What does the employer intend to do in relation to inclement weather in the event that the agreement is terminated? If you need to talk with the employer, feel free to do so. You can have your huddle.

PN87

MR WAKELIN: I think I might just act on the employer's behalf there, sir, given that we'd assume from you the inclement weather provisions of the safety net award are no longer allowable, in that situation the company would follow a very similar conference procedure, in fact, have got a conference procedure that's been drafted a lot more concisely and accurately and clearly than probably that one that existed in the award, anyway, that's part of their new proposed agreement going forward, so I would make an undertaking that that would be the conference procedure that the company would implement and that's basically - - -

PN88

THE SENIOR DEPUTY PRESIDENT: You had better set it out, because while you're talking to me, there are 10 or 11 other sets of ears listening and those people might be very interested. It might rain later this morning.

PN89

MR WAKELIN: The inclement weather basically means there's a conference procedure, much as occurs at the moment and we just set to clarify that conference procedure by putting a 60 minute time limit on it, but basically the conference procedure must occur before anyone leaves site and that's the nuts and bolts of the inclement weather provisions going forward. It makes it a fairly logical process where as long as it's essential that a conference procedure takes place and all that means is that the guys on site talk to their supervisor, the supervisor talks to management to talk about the conditions. Once they've established what the conditions are and there's parameters of about 60 minutes put on that decision, based on what the bureau says is the temperature in your local area and then you will be given the go ahead to either change site or go home, whatever the appropriate alternative is. That's pretty straightforward.

PN90

THE SENIOR DEPUTY PRESIDENT: All right. Thank you, Mr Wakelin.

PN91

MR WAKELIN: Thank you, sir.

PN92

THE SENIOR DEPUTY PRESIDENT: Mr Wilder and Mr Blackborough, you raised a number of other issues. Can I deal with those? Another concern related to how it is that if the agreement is terminated, disputes could be resolved and if the agreement is terminated, then the underpinning arrangement is that set out in the award and accordingly, what we call the model dispute resolution provisions in the Act apply. Section 669 and thereafter set out the capacity for either employees or their union as their representative to ask the Commission to help resolve the dispute. Now, there are a number of preconditions that are imposed upon the Commission by virtue of the Act. First of all, the Commission has to be satisfied that you people have endeavoured to resolve the dispute yourselves, that is that you've talked together.

PN93

MR WILDER: Which is normally the case, I believe, sir.

PN94

THE SENIOR DEPUTY PRESIDENT: Which is normally, but not always the case, so you're on notice that irrespective of what I did with your agreement, that requirement is there. If the model dispute resolution process then continues to ask the Commission to do something, then the Commission can - I should say the Commission or an alternative dispute resolution provider can assist the parties by a conciliation process, so we'd sit down, very similar to the conferences that you've participated in numerous times in the past, Mr Wilder.

PN95

MR WILDER: Yes.

PN96

THE SENIOR DEPUTY PRESIDENT: A key difference is that the capacity of the Commission to arbitrate the matter if it's not resolved is no longer there, so that the Commission is not in a position of saying you folks are unable to reach an agreement here and therefore I will come up with an answer. The Commission can do that to a limited extent if the parties both agree that that's what they want the Commission to do, but the Act doesn't provide an arbitral function as such. Now, that's not all that dissimilar to a great number of agreements and, in fact, one of the critical issues that you will need to deal with collectively, if you're negotiating a new agreement, is just what power you want to allocate to the Commission or an alternative dispute resolution provider to arbitrate a dispute as a last resort, so that's an issue there for you people to deal with.

PN97

In any event, even if this agreement was not terminated, as soon as the union commenced a bargaining period or the bargaining process began, the Commission is not going to be in a position under this Act or its predecessor to go about arbitrating, because the Act is built around the idea that you folks are going to be discussing your replacement agreement, so in practical terms, there's probably very little effect in termination of the agreement given that you're in the business of trying to negotiate a new agreement. Does that help? I'm expecting you to fully understand that, Mr Wilder, but I'm anxious that Mr Blackborough understands what I am saying.

PN98

MR BLACKBOROUGH: Yes, sir.

PN99

THE SENIOR DEPUTY PRESIDENT: You understand that position?

PN100

MR BLACKBOROUGH: Yes.

PN101

THE SENIOR DEPUTY PRESIDENT: Now, the next concern that was raised is the potential for disputation and in that regard, I would need to say you're in a bargaining environment, the potential exists and whether or not you're going to seek to have industrial disputation is in the hands of the employer and the employees. Irrespective of what I do with the agreement, the capacity to have disputation as part of a bargaining process exists, so long as you sort through and meet the various requirements of the Act.

PN102

MR WILDER: That's fully understood, Senior Deputy President.

PN103

THE SENIOR DEPUTY PRESIDENT: The next concern as I understand it is the issue that employees may consider leaving the industry and that fundamentally is a call for the employees. The concern that I have in this regard is that if the agreement is not terminated, then Mr Wakelin has put it to me and it's certainly my understanding that the employer would be precluded from being able to tender for various federal government projects. Now, no-one has said to me that's wrong and it certainly reflects my understanding. Now, if it's right and the employer cannot tender for projects, then the choice to leave the industry might be an involuntary one in that if the employer doesn't win work, there might not be too many jobs around and that causes me some concern.

PN104

MR WILDER: It throws another question that I've been wanting to ask.

PN105

THE SENIOR DEPUTY PRESIDENT: Feel free.

PN106

MR WILDER: And the ABCC is not here and obviously there's so many laws to go over and I'm the same as you, Senior Deputy President, I don't read the Acts in bed, but the award as I believe is not code compliance either.

PN107

THE SENIOR DEPUTY PRESIDENT: Yes, but, you see, the Act does a couple of things in that regard. First of all, the Act if you like legislatively excises or cuts out various parts of the award. They might still be there in written form, but the Act in effect removes them from the award as non-allowable matters and if and when the award simplification process as distinct from the rationalisation process gets under way, then I would expect some of those parts of the award that are prohibited by the code and more particularly are non-allowable matters under the Act would be removed.

PN108

Someone will take to them with some electronic white-out and they just won't be there. Now, that's part of that answer. The second part of the answer is that the code takes account of that as I understand it and the limitation on a would be contractor from tendering is not a limitation imposed on the basis of the award, because it's understood the employer has got no capacity in effect to change the award under the present system, but the tendering requirements say that irrespective of what's in the award, if a would be tenderer has an agreement that is seen to be circumventing the code, then they can't tender for various work which is why we've got concerns from construction contractors around Australia about the potential for some of their agreements to stop them being able to bid for various critical projects. Does that answer that question?

PN109

MR WILDER: It does answer the question, Senior Deputy President.

PN110

THE SENIOR DEPUTY PRESIDENT: There was also a proposition that you raised about the potential to use section 170MD(6) or MD in total. Looking at the Act, I think MD(7) might be available in limited form, too. MD(6)(a) is available, so that the capacity exists for the Commission to vary an existing agreement for the purpose of removing ambiguity or uncertainty. Now, the difficulty here is that no-one has first of all put to me that there are specific ambiguities or uncertainties and even if they were put to me, then the question arises as to whether or not I can take the existence of a contractual requirement on the one hand as then creating uncertainty for an agreement.

PN111

That section has historically been utilised where you've got two contradictory provisions, where you folks haven't done your job properly, if you like, when you drafted out the agreement and you've got two provisions that when you read them side by side, they just don't make sense. What you're putting to me here is that I should be able to use that same section to take a perfectly clear set of provisions in the agreement and regard them as uncertain or ambiguous because of another contractual requirement.

PN112

Now, you might get away with it, I don't know, but I'd have to say it's a big leap. I'm aware that it's been taken in some cases, so I'm not ruling it out, but it is a big leap. The second issue is that MD(7)(a) really just refers back to section 170MDA which relates to discrimination which doesn’t apply here, as I understand it and 113(2)(a) dealing with discriminatory agreements. 170MD(7)(e) deals with the removal of objectionable provisions. Now, they are the only surviving parts of section 170MD.

PN113

MR WILDER: What was that last section, sorry?

PN114

THE SENIOR DEPUTY PRESIDENT: MD(7)(e) which relates to section 298Z.

PN115

MR WILDER: Yes, I see.

PN116

THE SENIOR DEPUTY PRESIDENT: I've reached that conclusion on the basis of the provisions of schedule 7, clause 13(i) and placitums K and L in the new Act.

PN117

MR WILDER: Volume 1? Volume 2?

PN118

THE SENIOR DEPUTY PRESIDENT: I've only got one volume. You've got more than me, Mr Wilder. It's schedule 7. I'll tell you what I'll do to save time, I'll ask my associate to loan you her copy. If you don't give it back to her, you will be in diabolical trouble on 25 December. Schedule 7, clause 13(i) which relates to the continuing operation of pre-reform agreements under old provisions and go down to K which resurrects section 170MD(6)(a) and MD(6)(a) only and then go down to L which resurrects section 170MD(7)(a), (b) and (e). The last issue that I noted down as a concern related to the binding nature of that interim entitlement.

PN119

I've tried to cover that already to some extent in that Mr Wakelin has indicated that there is a clear and unequivocal commitment to that interim entitlement. There is a question as to its enforceability at law. The minimum set of entitlements notwithstanding that commitment are those that are set out in the award, because if the agreement is terminated, then it's the award that forms the basis. However, if the employer breached that undertaking, then I would have thought that a couple of options might exist. One is that I would suspect that you would probably look to come back to me under those model dispute resolution provisions fairly quickly.

PN120

MR WILDER: I think now I've been enlightened, that we would.

PN121

THE SENIOR DEPUTY PRESIDENT: And secondly, the employer would be at risk of action of a civil nature given a very, very clear undertaking that's been given in this regard. I think it would be a great pity if you looked at this whole exercise from that perspective because as I understand Mr Wakelin's position, it is to the effect that now the code compliance issues have been sorted out, the employer is anxious to get on and negotiate a new agreement and I would be very surprised if this employer was different to most others. They don't want to have industrial disputation. They want to sort through issues through a process of discussion.

PN122

MR WILDER: I have to say, Senior Deputy President, that's definitely not our position either.

PN123

THE SENIOR DEPUTY PRESIDENT: I would expect you to be in the same position, too, so I hope that answers those various concerns. I haven't yet expressed a final position in relation to the application. Before I do that, does it resolve the various issues that you've raised, Mr Wilder?

PN124

MR WILDER: It resolves the issues - if there were to be disputation, it resolves the issues of enforcement of the undertakings today. I do have some difficulties, but obviously we're not here to hear about the bargaining process.

PN125

THE SENIOR DEPUTY PRESIDENT: No.

PN126

MR WILDER: I think from this time forward, that we should whether the agreement is terminated or not, we can sit down and try to work something out.

PN127

THE SENIOR DEPUTY PRESIDENT: Yes.

PN128

MR WILDER: If the Commission pleases.

PN129

THE SENIOR DEPUTY PRESIDENT: Thank you. Now, Mr Blackborough, does the information provided by Mr Wakelin and by myself help in terms of addressing your concerns?

PN130

MR BLACKBOROUGH: Yes, it does.

PN131

THE SENIOR DEPUTY PRESIDENT: Now, do me a favour. Just turn around and check out with the rest of the employees as to whether there are any outstanding concerns that they have.

PN132

MR BLACKBOROUGH: Okay. No, nothing else.

PN133

THE SENIOR DEPUTY PRESIDENT: All right. Thank you. Mr Wakelin, the application is made under section 170MH. Section 170MH relates to the termination of a certified agreement after it reaches its nominal expiry date. The nominal expiry date is if you like the use by date of the agreement. It's the date after which the parties can negotiate a new agreement and if they meet the requirements of the Act, potentially engage in industrial action.

PN134

I'm satisfied that the application has been made in respect of an agreement that's passed its nominal expiry date. I'm satisfied the application has been made by the employer, so the requirements of the first part of section 170MH has been met. In relation to subsection (2), that requires the Commission to take such steps as it considers necessary or appropriate to obtain the views of persons bound by the agreement about whether it should be terminated.

PN135

I am satisfied that I've done that. I understand those concerns fall into three broad categories. There are concerns about the credibility and the dependability of the undertakings that have been given which in shorthand form represent an undertaking to apply the better of the provisions of the agreement or the award, so whichever is the better entitlement in that regard. I understand the concerns fall into secondly the possibility that there could be some form of disputation, but I've noted that because the agreement has already reached its nominal expiry date, that potential exists here and now and lastly I've noted that there are concerns about how disputes might be resolved, but again because the provisions of the Act and the extent to which the nominal expiry date has already been achieved, the termination of the agreement is unlikely in my view to fundamentally change the rights and the capacities of the parties in that regard.

PN136

The third requirement is that having consulted or obtained the views of employees, I then need to consider whether or not termination of the agreement would be contrary to the public interest and I've decided it would not be contrary to the public interest because of fundamentally the employer's need to be able to participate in tendering processes with a view to obtaining additional work, the extent to which there is an underpinning award so there is a base legislative set of conditions that have application and thirdly there are some very clear undertakings that have been given by the employer about not just those interim arrangements, but how they will apply in a bargaining environment.

PN137

On that basis, I am satisfied that it would not be contrary to the public interest to terminate the agreement. I will do so with effect from today and an order to that effect will be forwarded out to the parties. Could I make one final set of comments? How you folks go about negotiating a replacement industry arrangement is up to you, but I hope that today might help provide some base information about that. Successful agreements and agreements that are negotiated with a minimum of pain require both the employer and the employees to be eyeballing each other pretty regularly and openly discussing any issues of concern. The sooner you get on and do that, the more certain will be your industrial environment and the less likely you people will need to ever come back here again. Don't take it the wrong way. I enjoy seeing customers, but I don't necessarily have to recommend that you come here. On that basis, I will wish everybody here a very merry Christmas and the employees particularly, I hope they have a good wind up day today. I will adjourn the matter accordingly.

<ADJOURNED ACCORDINGLY [9.24AM]