AG2007/619, Transcript of Proceedings [2007] AIRCTrans 674 (11 December 2007)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17836-1

VICE PRESIDENT LAWLER

AG2007/619

s.170MHA -prereform Act - Application to terminate agreement (under agreement)
Application by The Hospital Contribution Fund of Australia
(AG2007/619)

SYDNEY

11.32AM, FRIDAY, 23 NOVEMBER 2007

PN1

MR A UMANSKY: I seek leave to appear on behalf of the applicant, the Hospital Contribution Fund of Australia.

PN2

MR G TYRRELL: I'm seeking leave to appear and intervene on behalf of Heath Services Union.

PN3

THE VICE PRESIDENT: Mr Umansky, do you have any - what's your attitude to Mr Tyrrell's application?

PN4

MR UMANSKY: Well, your Honour, I'd say we'd like to hear from the Union as to the basis upon which they seek to intervene.

PN5

MR TYRRELL: Your Honour, thank you. The basis for our intervention is in the first instance merely for observation of process, but secondary to that we do have some concerns about section 393 of the Workplace Relations Act 1996 and whether or not the process actually adheres to that or whether indeed it needs to adhere to that and we would take advice from your Honour on that. But ….. are ….. reasons for our intervention in today's matter

PN6

THE VICE PRESIDENT: Yes. Mr Tyrrell, I think the application's actually made under section 170MHA, not under 393. The agreement in question is a
pre-reform certified agreement, an LK agreement and schedule 7 of the Act, part 2, division 1, section 2, paragraph 2 - section 2.1, paragraph (k) preserves the operation of section 170MHA in respect of pre-reform agreements.

PN7

The precise consequences of a termination of an agreement of this sort pursuant to 170MHA is something I'm not a hundred percent certain about, but I think the legal effect is that the employees in question revert back to the Australia Fair Pay and Condition Standard subject to any common law arrangements that the employer may have made with the employees. Do you have any member who are employed by - - -

PN8

MR TYRRELL: As far as I'm aware, your Honour, we don't have members in these sites. We do certainly have potential membership, we have coverage of them.

PN9

THE VICE PRESIDENT: Yes. Well Mr Tyrrell, I think the better course at the moment is to postpone your application for intervention ruling of it and if you feel the need to want to say something can you renew your application. I'll deal with it then. One of the problems, having now looked at it a little more closely, is that, well problems, problems from your perspective, is that once section 170MHA, unlike section 170MH that was considered by the Full Bench in the Tristar litigation, it doesn't provide any discretion to the Commission once the conditions for the termination of the agreement that was set out in the agreement have been met.

PN10

So the issue before the Commission is only whether or not those conditions have been met, and if they've been met it's a matter of evidence. Then that's the end of the matter as far as the Commission is concerned, it has no discretion, it must terminate the agreement.

PN11

Under section 170MH there is a public interest requirement that - for practical purposes injects a form a discretion into the process. But that simply doesn't exist in relation to section 170MHA. So, unless you want to be heard further in support of your intervention application, then I think the better course is just to postpone it and for you to press it again if you feel the need.

PN12

MR TYRRELL: Certainly, your Honour.

PN13

THE VICE PRESIDENT: And there's no reason why you can't remain at the Bar table.

PN14

MR TYRRELL: We'll take your Honour's advice on that.

PN15

THE COMMISSIONER: Yes, thank you. Yes, Mr Umansky.

PN16

MR UMANSKY: Your Honour, also with me is Ms Mallon, from - she's a human resources manager for the applicant.

PN17

THE VICE PRESIDENT: Yes. I take it you don't disagree with me about the sort of brief legal analysis that I gave.

PN18

MR UMANSKY: I think you've done some of my work, your Honour. So, I agree with the process that is behind the application today.

PN19

THE VICE PRESIDENT: So you - - -

PN20

MR UMANSKY: And the significance of section - - -

PN21

THE VICE PRESIDENT: You seek to tender the statutory declaration of
Ms Mallon?

PN22

MR UMANSKY: Yes, sir. Could I tender that?

PN23

THE VICE PRESIDENT: Yes. Do you have any objection to Ms Mallon giving sworn evidence adopting the statutory declaration if that becomes an issue?

PN24

MR UMANSKY: No, your Honour.

PN25

THE VICE PRESIDENT: On that basis I'll mark the statutory declaration as Exhibit 1.

EXHIBIT #1 - STATUTORY DECLARATION OF
MS J MALLON

PN26

THE VICE PRESIDENT: Now, I think the position is that, clause 2.2 of the agreement provides:

PN27

Clause 28 of this agreement will apply in relation to a replacement agreement.

Sorry, clause 2.1:

PN28

This agreement applies on and from the effective date -

PN29

which is defined to be the date that the agreement was certified by the AIRC. That was 16 September 2005. So, clause 2.1 provides:

PN30

This agreement applies on and from the effective date, which shall continue in force for a period of two years.

PN31

Clause 2.2:

PN32

Clause 28 of this agreement will apply in relation to a replacement agreement if a new agreement is not approved by the time the nominal expiry date passes.

PN33

Which is two years after the effective date, so 16 September 2007.

PN34

The fund may, in consultation with staff, apply under the Act to terminate this agreement after it gives you at least four weeks written notice of its intention to terminate this agreement.

PN35

And Ms Mallon's statutory declaration indicates that, there were consultations with staff, information sheets were provided and the four weeks written notice was given to each of the employees and there's a sample of that notice. That's the guts of it and you say therefore the conditions in the agreement for termination have been satisfied.

PN36

MR UMANSKY: Yes, your Honour, there's various conditions. I think you've outlined most of them. The requirement for four weeks notice has been met and we say, with the notice to each individual employee covered by the agreement, the application to terminate the agreement was made after the four weeks notice has expired. Application was made on 12 November and the four weeks notice period expired on 8 November.

PN37

THE VICE PRESIDENT: Can I ask you, have all the employees signed the, or returned a signed copy of the continuity letter?

PN38

MR UMANSKY: Your Honour, I'm instructed that, out of 31 employees covered by this agreement, 28 employees have signed the agreement. There are three individuals that, for whatever reason, have not. They have certainly been involved in the process that has been outlined in the declaration. It appears that, each individual has their own reasons for not doing so. The company has extended or allowed an extended period for employees to consider signing and the company's of the view that - - -

PN39

THE VICE PRESIDENT: The company's just, correct me if I'm wrong, basically issued - the continuity letter effectively represents an offer for a common law contract of employment and the company's put that out on a take it or leave it basis, and in the information sheeting having identified that it thinks that what its offering is fair.

PN40

MR UMANSKY: Yes, your Honour. It is certainly a common law agreement and it's a comprehensive agreement.

PN41

THE VICE PRESIDENT: But it's been put on as a take it or leave it basis.

PN42

MR UMANSKY: Yes. The employees are free to take - to accept the agreement or not accept it.

PN43

THE VICE PRESIDENT: And if they don't accept it your analysis is that, they would fall back on the terms of legal entitlement of the Australia Fair Pay and Conditions Standard.

PN44

MR UMANSKY: Certainly the standard which hitherto has not applied to these employees because this has been a pre-reform agreement, it will now apply - will apply if termination of the agreement happens.

PN45

THE VICE PRESIDENT: Does the company intend to, in respect of those three employees who haven't signed, to go ahead and to treat them in accordance with the terms and conditions of the letter of continuity even though they haven't signed? Or are they going to be falling back, is the company going to say, "Well, your legal entitlement's the federal minimum wage and here, you can now have the federal minimum wage".

PN46

MR UMANSKY: Your Honour, there's certainly no attempt or no intention to reduce anybody's salary. The common law agreement offered to employees includes salary increases.

PN47

THE VICE PRESIDENT: I noticed that under reduction in working hours.

PN48

MR UMANSKY: Yes. Now, the individuals that have not signed would still be entitled to the benefit of reduced working hours and will remain on their current salaries, but they would not have access to the salary increases being offered on the basis that they have not agreed to the terms in the proposed common law agreement.

PN49

THE VICE PRESIDENT: Which inter alia requires them to comply with all of the eight shift policies now, which is, I suppose, a pretty stock standard approach in large businesses.

PN50

MR UMANSKY: Yes.

PN51

THE VICE PRESIDENT: I suppose that's all very interesting from my perspective, but it's not to the point of the application.

PN52

MR UMANSKY: Well I suppose, in a way, indirectly - - -

PN53

THE VICE PRESIDENT: I was just interested to know what the consequences for these three employees would be of not accepting the take it or leave it offer.

PN54

MR UMANSKY: Yes.

PN55

THE VICE PRESIDENT: And you're telling me that the company's position is, it will continue to pay them in accordance with their existing salary, but they won't get the other benefits, improved benefits as it were of pay increases unless and until they sign it.

PN56

MR UMANSKY: That's correct, your Honour.

PN57

THE VICE PRESIDENT: It's a pretty extraordinary state of affairs on the legislation that allows for a unilateral termination mechanism that reduces peoples leave entitlements to that minimum standard. Anyway, that's what parliament's done, that's what the Commission has to uphold.

PN58

I'm satisfied on the basis of what you've put that, the agreement specifies conditions for the termination of the agreement beyond its nominal expiry date. Once its nominal life has expired. That has occurred. I'm satisfied on the basis of the material that the conditions have been met, that there have been consultation with staff and that at least four weeks written notice of intention to terminate the agreement has been given to each staff member.

PN59

Accordingly, the conditions in section 170MHA (1) have been satisfied and having been satisfied the requirements of paragraphs 170MHA (1) (a) and (b) have been complied with. The Commission must by order approve the termination and approve the termination of the agreement. A formal order to that effect will issue today. I think that's the end of the matter.

PN60

MR UMANSKY: Thank you, your Honour.

PN61

THE VICE PRESIDENT: So, Mr Tyrrell, you haven't sought to press the point again? I think the reality is though that, this ….. 170MHA will be public interest considerations which may provide some foundation for argument if you could persuade me that intervention was appropriate, but in this particular case, 170MHA as distinct from 170MH doesn't leave the Commission with any discretion at all.

PN62

MR TYRRELL: Even saying so, your Honour, certainly I guess the - because we don't appear to have any members in the area our propensity to intervene might struggle a bit for its justification as well, although certainly that's our concern as well. The concerns that your Honour has raised with regard to dropping back to the minimum wage, federal minimum wage. However, as I understand it - - -

PN63

THE VICE PRESIDENT: Well the company said it's not going to do that, it's going to maintain peoples wages, of the three individuals who haven't accepted the take it or leave it common law offer and have their wages maintained.

PN64

MR TYRRELL: Certainly that does appease some of our concerns as well. And I think, in my understanding of the situation as it stands, after the termination and those three outstanding people that is it still for us to seek to negotiate an agreement for those three people with regard to this.

PN65

THE VICE PRESIDENT: If you can organise yourselves in that work place, that will be your entitlement and how HCF responds to that if it occurs is a matter for HCF. But in any event, Mr Umansky, a formal order will issue to that effect forthwith and it will be sent to you, but the effective date will be today.

PN66

MR UMANSKY: Thank you, your Honour.

PN67

THE VICE PRESIDENT: The Commission is adjourned.

<ADJOURNED ACCORDINGLY [11.48AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #1 - STATUTORY DECLARATION OF MS J MALLON PN25