AG2008/1014, Transcript of Proceedings [2008] AIRCTrans 118 (19 March 2008)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 18208-1

SENIOR DEPUTY PRESIDENT O’CALLAGHAN

AG2008/1014

s.170MH -prereform Act - Application to terminate agreement (public interest)
Application by Lobethal Abattoir Pty Ltd
(AG2008/1014)

ADELAIDE

11.32AM, TUESDAY, 04 MARCH 2008

PN1

MR G KARZIS: I seek leave to appear on behalf of the applicant with
MR S DASAN.

PN2

MR G SMITH: I appear as a party bound pursuant to section 170M of the
pre-reform Act.

PN3

THE SENIOR DEPUTY PRESIDENT: Testing your memory, Mr Smith.

PN4

MR SMITH: It is.

PN5

THE SENIOR DEPUTY PRESIDENT: Mr Smith, have you got any objection to the application for leave made by Mr Karzis?

PN6

MR SMITH: No objection, your Honour.

PN7

THE SENIOR DEPUTY PRESIDENT: I grant that application. Mr Karzis.

PN8

MR KARZIS: Sir, I don't intend to say too much at the outset. As you would be aware the - first of all, I must apologise, sir, that in the application we erred with the particular sections of the Act that were quoted. It is a 170LJ agreement, not a 170LK agreement and that was something that was resolved in the hearings, I believe, before you in registering that agreement. It still, I think, records on the decision a 170LK but obviously the union - I think it's common ground between the parties, the union is a party to the agreement and that was done.

PN9

THE SENIOR DEPUTY PRESIDENT: Yes, but I understood it was an LK agreement to which the union was then made party and the Act, as it previously existed, allowed for that capacity. You see, if it was an LJ agreement it would have been an agreement reached with the union and subsequently ratified by employees. My understanding and recollection, aided and assisted by that decision in February 2004, was that the agreement was reached between the employer and its employees and prior to ratification of that agreement the AMIEU sought to be bound by the agreement pursuant to section 170M. I granted that application.

PN10

MR KARZIS: Sir, I'm happy to be guided by you on that. In any event, the application before you today, which is brought pursuant to 170MH of the pre-reform Act, sets out a fairly unusual process in that the applicant brings the application but if there is any evidence to be brought about there being a failure of the public interest or there being some public interest arguments, then certainly the process in cases before this Commission, most notably in Tristar, has been that in that case the union party, and in this case I suspect the union parties, would lead that evidence and we would then respond to that evidence. I'm not sure if there'd be anything to be gained by spending a great deal of time at this stage going through 170MH and the way it's been treated by the Commission over time.

PN11

We say that the application has been properly made to terminate the pre-reform Division 2 agreement, that that section of the Act operates pursuant to schedule 7 section 2K of the Workplace Relations Act and that this application for termination has been brought in accordance with 170MH(1)(a) of the pre-reform Act and therefore that requirement has been met and that we are in your hands as to - I should say one thing, sir, that we have served on each of the employees who we say is a party to the agreement, a copy of the application and a copy of the notice of listing. We did that by way of a covering letter to each of them which contained a response mechanism for them to indicate their acceptance of that documentation and for the purposes of just establishing their receipt of that, I thought I might tender an affidavit attaching that material.

EXHIBIT #L1 AFFIDAVIT TOGETHER WITH ATTACHMENTS

PN12

THE SENIOR DEPUTY PRESIDENT: Just bear with me for one moment, Mr Karzis, I'll have a quick look through it. Mr Karzis, before I let you sit down, can I just clarify a couple of issues.

PN13

MR KARZIS: Certainly, sir.

PN14

THE SENIOR DEPUTY PRESIDENT: I clearly understand that the agreement that's proposed to be terminated has exceeded its nominal expiry date. I understand that you've provided L1 to me as part of the employer position, such that I should be satisfied that the views of persons bound by the agreement about whether it should be terminated have at least been invited.

PN15

MR KARZIS: Indeed, sir. Ultimately, it's up to those people, if they wish to have their views known, to take the steps necessary to make those views known.

PN16

THE SENIOR DEPUTY PRESIDENT: I'm just interested in a little more background information that goes to the provisions of section 170MH(3). If my general understanding is correct, the employees don't currently have an agreement with the employer but I recall that Lobethal abattoirs were the subject of proceedings before Commissioner Bacon late last year.

PN17

MR KARZIS: That's correct, sir. There is no new agreement in place that was voted down by a majority of the employees. Actually, it was a very close vote and to memory I think it was about 130 to 110 - actually it was 130 to about 170 and that was the second attempt to create an employee collective agreement. I think that ballot concluded in early January of this year.

PN18

THE SENIOR DEPUTY PRESIDENT: What's the current state of play in terms of attempts to achieve some form of replacement regulation?

PN19

MR KARZIS: Sir, there has been offers of Australian workplace agreements made by the employer which have been accepted by a majority of the employees on site. I'm not sure what the latest figure is. If you'll excuse me a moment, sir.
Approximately 200 - there's just over 300 employees. It's a variable figure -
246 employees and over 200 have signed Australian workplace agreements which are very much in the terms - or entirely in the terms of the collective agreement which failed in early January of this year.

PN20

I should say, sir, just for your information, that - you can tell from the documents that were served - we served 14 people who we say are covered by the previous agreement which we're seeking to terminate. Of those 14 people - as we said there's 246 employees in total - one of them has resigned so we're actually looking at a group of 13 people who will be affected by this application.

PN21

THE SENIOR DEPUTY PRESIDENT: It probably won't come as any surprise to you for me to seek some further clarification. The majority of abattoir working arrangements that are the subject of an agreement replace the hours and breaks structure which is set out in the relevant award.

PN22

MR KARZIS: I believe that's the case, sir. I can confirm that but I'm pretty certain that's the case.

PN23

THE SENIOR DEPUTY PRESIDENT: In the past when this sort of difficulty or disagreement has arisen and there is a reversion to the award, there have been some issues that have arisen about just how the business can operate or will operate under the award hours structure. Can you tell me what the employer proposes to do in that respect?

PN24

MR KARZIS: I'm not sure that there is any special requirements that need to be put in place for that. The employer will be complying with conditions of the award and the arrangements that the employer will enter into for this group of employees will be consistent with those conditions. They're a particularly discrete group of employees, they work in a mutton slaughter area and they work - you know, it's a piecework arrangement in effect which I would suggest, and I can confirm this with the employer, but which I suggest would be perfectly amenable to having a slightly different arrangement to the rest of the plant.

PN25

THE SENIOR DEPUTY PRESIDENT: The final two questions by way of background information, can I take it that the AWAs that have been offered to employees will continue to be offered in the same terms as either AWAs or ITEAs in the future, or is it the case that the employer is looking to achieve some form of different agreement with those particular employees?

PN26

MR KARZIS: No. My only concern, sir, was about the provisions of whether one could offer an ITEA if there hadn't been a pre-existing AWA under the proposed transition arrangements. We can certainly undertake that the offer of AWAs is continuing at this time and in fact people have signed up quite recently in the last few days and those offers are still extant and if people are inclined to accept those offers, that is certainly open to them now and will remain so in the future.

PN27

THE SENIOR DEPUTY PRESIDENT: The last question is one that you ought not take offence on, but - - -

PN28

MR KARZIS: I'll do my best, sir.

PN29

THE SENIOR DEPUTY PRESIDENT: - - - given the history of this industry, I feel obligated to ask it at this stage in the proceedings. Can I take it that the employer position is that the duties of these particular employees who have not agreed to AWAs will not be changed as part of a campaign to make them or to encourage them to sign up to those AWAs?

PN30

MR KARZIS: I should say, sir, that there has been some structural change in the Lobethal abattoir in that the beef production has moved - it's no longer operating there so some of these employees have actually - - -

PN31

THE SENIOR DEPUTY PRESIDENT: The cows have gone elsewhere, have they?

PN32

MR KARZIS: The cows have gone elsewhere and some of these employees have recently been moved into the mutton slaughter room. Insofar as the - - -

PN33

THE SENIOR DEPUTY PRESIDENT: In terms of the duties that those employees would undertake, they would not, for instance, be allocated on a permanent or semi-permanent basis to, for argument's sake, an offal room with no chance of moving out of that function unless they signed up to some form of agreement?

PN34

MR KARZIS: No, sir, we're happy to give that undertaking on behalf of the company. These are, as you might be aware, quite skilled workers, their skills are valued and they will continue to be performing the work that they have traditionally performed, perhaps not in exactly the same circumstance.- excuse me one moment, sir. Just for your information, when the beef moved elsewhere a number of the people, obviously not these 13, but a number of the people that worked in those arrangements actually were offered employment and moved to the Murray Bridge abattoir with the work, as it were.

PN35

I think the substance of your question is - and I'm happy to give the undertaking on behalf of the company, that these people will be working in a different slaughter room. There's no proposition that that work will move anywhere else and they are working within that arrangement and will continue to be working in that arrangement. That's the basis upon which they will be offered any AWAs and that's the basis they have been offered AWAs in the past.

PN36

THE SENIOR DEPUTY PRESIDENT: I guess what's underpinning that question is, Mr Smith and I and indeed Mr Dasan may have been a party to a fairly protracted hearing in a very nearby courtroom some years ago where I think we might have been down to the last man standing in relation to an AWA proposal. I'm just anxious to know what would happen if the numbers of employees who have not agreed to an AWA continue to dwindle, given the requirement on the employer to apply a different hours regime and structure where the award has application.

PN37

MR KARZIS: Ultimately, sir, there are other protections for those employees in the legislation as well. I mean, they are - - -

PN38

THE SENIOR DEPUTY PRESIDENT: There have always been those protections but it hasn't stopped the arguments.

PN39

MR KARZIS: No, no. Sir, my instructions are that there is no difficulty in running the mutton slaughter room within the constraints of hours of work and the like, or placed by the award and that there is no difficulty in accommodating differing arrangements whatever the numbers present themselves at any given point in time. It's the company's intention, and on behalf of the company I can make the undertaking, that they certainly have no intention of doing anything which might prejudice those employees over the course of time, whatever the number is reduced to.

PN40

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Smith, do you want to say anything to me about this particular application?

PN41

MR SMITH: Yes, indeed I do, your Honour. The union, as a party, has a fundamental opposition to the termination of this agreement. We see that this is a bargaining tactic by the company. It was a well broadcast bargaining tactic by the company to try and encourage workers to sign Australian workplace agreements. We also say that the termination of this agreement would lead to a major dispute between us as to the operation of the provisions of the award.

PN42

We realise that it is incumbent on the Commission to look at the circumstances of public interest and determine whether or not the agreement should be terminated. We think that we can probably achieve a number of objectives here in the one hit and so we are going to propose a particular course of action which will lead to the termination of the agreement but one which takes into account those things that we say will give rise to a dispute between us.

PN43

The intention of the union is to try and avoid any further disputes with the company over this and what we intend to do is ask you for a particular date at which point the agreement should be terminated, that date being 5 May this year.

PN44

THE SENIOR DEPUTY PRESIDENT: What's so magic about 5 May?

PN45

MR SMITH: All will become clear. The long and the short of it, your Honour, is that the company's view of the world is that if they can terminate the certified agreement then they can also terminate the incentive system that applies to the employees that are currently bound by that agreement. You will recall that the agreement has a very, very limited application. Originally it only applied to 42 workers who were the incentive based workers. The rest of the factory at the time were the labouring workforce and they were covered by the award. The movement of the beef from Lobethal to Murray Bridge obviously reduces that number from 42 down to a much lower number but it was always only a very limited application scope of the agreement.

PN46

The agreement is one which provides for payment by tally. We see that on the termination of this agreement it would give rise to many disputes over what would happen with those workers falling back to the parent award, the parent award being the Federal Meat Processing Award 2000.

PN47

The award itself, and the reason for 5 May that we're asking for, the award itself actually gives within it a scope for terminating an incentive agreement and that's found at clause 16 of the Federal Meat Processing Award.

PN48

THE SENIOR DEPUTY PRESIDENT: Mr Smith, can I just take you back. You have a lot more to do with this agreement than I do, apart from one short period of time in 2004. Looking at the agreement coverage issue, clause 5 establishes that the agreement applies to employees who are covered by the classifications in, in effect, schedule 1. That has application to a reasonably broad range of people. I'm just wondering whether you might help me out in that what I'm understanding you to say us that the agreement only ever applied to a very small number of employees and I'm just having some little difficulty understanding that in the context of those classification descriptors in schedule 1. I'm sorry, I don't want to interrupt you at the overall thrust of your submissions but if I don't understand this bit now I might be lost for ever and a day.

PN49

MR SMITH: That true, your Honour, and there are two submissions that I make in respect of that. The first is that it's necessary to also look at the original certified agreement, the 2001 agreement. It was actually called the 2000 agreement. At that point the agreement when it was first made had a schedule 3 which was a list of employees. It actually named each of the people that the agreement would apply to.

PN50

The difficulty with that was that over a period of time people come and go, some people resign and new people come on. There arises a technical argument as to whether or not that agreement therefore has application to them so in the following agreement, the 2003 agreement, we replaced that list of employees with this list of employee classifications and you'll need to actually read this in conjunction with schedule 2. You'll notice that each of those levels in schedule 1 is level 5 with the exception of the supervisor and a probationary employee at level 1. All the rest are level 5.

PN51

In schedule 2, if you have a look at the remuneration structure, level 5 refers only to slaughtermen, beef boner, slicer, lamb butcher and brisket roller. They're the only classifications. They're the only jobs that this agreement has any application to and only those employees doing those particular jobs can be covered by this agreement.

PN52

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN53

MR SMITH: I can see where the issue arises, your Honour, because it is a little misleading. It was originally intended that at some stage we would try and bring in the rest of the workforce into the same agreement and that's why there's level 1, 2, 3, 4, 5, but it never happened. It never happened, it just remained with the one application to the slaughtermen, beef boners, slicers, lamb butchers and brisket rollers.

PN54

THE SENIOR DEPUTY PRESIDENT: I hear what you're saying.

PN55

MR SMITH: As I say, your Honour, the company's view is that if they terminate the agreement it terminates the incentive system that applies and that they can go back to paying a base rate under the award which is a considerable drop in income to the employees from this agreement.

PN56

Clause 16.10 of the award provides that:

PN57

The employer or the majority of the employees covered by any incentive payment system may elect at any time to terminate such system in force either in relation to the whole of the establishment or the enterprise or any part thereof upon giving not less than two months' notice of their intention to do so.

PN58

Hence the two months between now and 5 May. your Honour.

PN59

The relevance of the award in this particular case, even though the incentive system is determined by the enterprise agreement currently, the incentive system was always in place and was in fact an incentive system that was made pursuant to this award prior to the enterprise agreement being made.

PN60

I can probably help out with a little bit of background information on this, your Honour. The effective date of the Federal Meat Processing Award, I think it was about 19 November or somewhere thereabout, 2000 - 1 November 2000, I'm sorry, clause 4, was the commencement date of the award. The order for the original enterprise agreement 2000 had the enterprise agreement coming into place from 19 December 2000 so the enterprise agreement was actually made after the award was made.

PN61

Clause 16.15 of the Federal Meat Processing Award has transitional provisions for people on incentive arrangements and clause 16.15.1 says that:

PN62

If upon the date that this clause comes into effect an employer elects to maintain in force an incentive payment system that was in force and effect immediately prior to that date, then the employer shall be taken to have elected to implement that system in accordance with clause 16.1.

PN63

Our submission is fairly simple, that the incentive system was in place subject to the terms of this award which the employer was a respondent to through his membership to AMIC. He was an employer that elected to maintain in force the incentive payment system and therefore the incentive payment system was actually a benefit of the award. It wasn't something that came along afterwards that was created by the enterprise agreement.

PN64

If the agreement is terminated now, then we'll immediately have a dispute over whether or not the incentive system continues to apply. We'll have a dispute over a number of items because the incentive system doesn't just apply to payments, it applies to hours of work, the taking of smoko breaks and so on and so on.

PN65

As you've heard a large number of employees are now under Australian workplace agreements. Those Australian workplace agreements change considerably the hours of work, the standard hours that are worked each week by employees, the timing of their taking of breaks and that sort of thing, so we say that there is a range of issues that need to be addressed before this agreement can be terminated and I should say that this is not a particularly different argument than any that have been put here before when we've attempted to terminate Australian workplace agreements.

PN66

THE SENIOR DEPUTY PRESIDENT: Mr Smith, I'll just get you to run a remedial class for me. I'm looking at schedule 2.

PN67

MR SMITH: Of the enterprise agreement?

PN68

THE SENIOR DEPUTY PRESIDENT: Of the agreement that's proposed for termination. Clearly that provides for an incentive scheme.

PN69

MR SMITH: It does indeed. The incentive scheme was the scheme that was in place prior.

PN70

THE SENIOR DEPUTY PRESIDENT: The two months' notice provision doesn't appear to be referenced at all in that schedule.

PN71

MR SMITH: No, it doesn't, your Honour.

PN72

THE SENIOR DEPUTY PRESIDENT: From whence do you derive the two months' notice?

PN73

MR SMITH: The argument being that terminating the enterprise agreement doesn't necessarily terminate the incentive system because the incentive system was made pursuant to the award. The employer says that the award will continue to apply on the termination of this agreement and therefore there is nothing to say that by terminating this agreement that the incentive system is automatically terminated as a consequence.

PN74

THE SENIOR DEPUTY PRESIDENT: That's where you might need to expand on that a little for me. Is the incentive system in the award the same as that which is referenced in schedule 2?

PN75

MR SMITH: Yes, your Honour. The incentive system in the award - the arrangements for incentive in the award provide for the incentive system particular to each plant to be developed by each plant as they see fit. Once you implement that system, it's then deemed to be an incentive system pursuant to the award and subject to the two months' notice.

PN76

THE SENIOR DEPUTY PRESIDENT: That's what I'm struggling with because this agreement provides at clause 5.1 that it stands completely in place of the Federal Meat Industry Processing Award. If the agreement were to be terminated, let's say as of today, if I'm understanding what you're putting to me correctly, there might still be an argument about the two months' provision that's set out in the award - - -

PN77

MR SMITH: To terminate the incentive payment, yes.

PN78

THE SENIOR DEPUTY PRESIDENT: - - - to terminate the incentive payment but that argument would have its genesis solely in the award incentive payment provisions.

PN79

MR SMITH: Yes, your Honour, that's right. The award does allow for this type of incentive scheme to be in operation.

PN80

THE SENIOR DEPUTY PRESIDENT: The award doesn't allow for this type of - is that what you said?

PN81

MR SMITH: It does, yes. You see, the award was simplified in 2000. Prior to the 1996 award was the 1981 version of the award which had extensive tallying provisions within it which were essentially too difficult to operate with by many smaller employers in particular so many elected to make their own tally systems so ultimately the award, I think in 1996, abandoned the actual regulation of how the tally system would work and said, "You can work it out yourselves. If you want to modify it, then you've got to go through a particular procedure. If you want to terminate it, then you've got to give two months' notice."

PN82

THE SENIOR DEPUTY PRESIDENT: Bearing in mind I don't have that award provision in front of me, if I'm understanding you correctly, the award simply says that whatever incentive system you've got in operation you need to give
two months' notice of the termination of that system.

PN83

MR SMITH: Correct.

PN84

THE SENIOR DEPUTY PRESIDENT: I see. All right.

PN85

MR SMITH: That, we say, is one of a number of disputes that would arise if the agreement was terminated immediately. The main thrust of our proposal, your Honour, is, as I say, to try and avoid a great deal of disputation over what hours of work people are going to work because, for instance, the people that will be working next to them on the same sort of jobs will be working on Australian workplace agreements that say your ordinary hours can be worked up to 40 hours a week with no paid breaks and so on. The workers under the award do get paid breaks and they've got a standard 38 hour week after which time they get paid overtime so there's a range of disputes that would arise on the - - -

PN86

THE SENIOR DEPUTY PRESIDENT: You're an expert at resolving those sorts of issues, aren't you, Mr Smith?

PN87

MR SMITH: I try hard, your Honour. That's exactly what we're trying to do here, we're trying to avoid all of that disputation and simply say, look, we will accept that ultimately if the employer really wants the agreement to be terminated, then we won't resist that but we would rather avoid the confrontation and the disputes that would arise over the immediate termination of that and look at an orderly phasing out of those arrangements so that it give us a chance to address some of the issues that arise between the people that will be on Australian workplace agreements and those people that will be under the award and also resolve this issue about the tally system.

PN88

THE SENIOR DEPUTY PRESIDENT: Is it the case that there's a priority list so that if you listed the items that were likely to give rise to some form of disagreement, the tally system would rank way out in front of all the others?

PN89

MR SMITH: Way out in front of all the others, your Honour. If you take a person who works under the tally incentive system and then say, "All right, we're going to pay it on the flat basic award rate" for a slaughterman, for instance, or a boner, there are lamb boners there too, that would be a significant drop in terms of hundreds of dollars a week to the earnings of those people. Obviously, that's going to give rise to a major dispute. On top of that there would be those issues that I raised in respect to hours of work, calculations of earnings, what happens with make-up time because the Australian workplace agreement says that if they a breakdown during the day, they can work on for, you know, sometime after the end of the rostered hours to pick that time up, whereas the award doesn't allow for that same provision.

PN90

There's a range of things that we need to address and discuss and work out and I just think that the simplest way of resolving all of those issues is to simply to give a practical phasing out time of the agreement to allow us to resolve those before they become any further issue.

PN91

THE SENIOR DEPUTY PRESIDENT: There's a piece of legislation that's being talked about in Canberra.

PN92

MR SMITH: I've heard of it.

PN93

THE SENIOR DEPUTY PRESIDENT: That would have to have the potential to put an end date on the period within which an employer could continue to offer AWAs to employees. To what extent do you envisage any degree of difficulty or do you want to comment on the extent to which your 5 May 2008 proposed termination date might take you out over the time within which the employer could offer AWAs?

PN94

MR SMITH: I'd make a number of submissions in relation to that.

PN95

THE SENIOR DEPUTY PRESIDENT: You'd better not oppose the legislation because someone might hear about that and report it in The Advertiser.

PN96

MR SMITH: Who would do such a thing? Your Honour, the fact is that the employer has now put up two collective agreements that have failed and on the second occasion there was a gap of 170 to 130 with a workforce of 246. I'm not quite sure how you arrive at that answer but anyway the employees that rejected that agreement have continued to reject AWAs that have been proposed in the same terms as that agreement and they've continued to oppose those right until now. There seems to be no immediate rush for them to rush in and sign AWAs. If those employees wanted to sign AWAs, I think that given the two month period that the company has now been offering them, that they would have done so by now.

PN97

The other submission that we'd make in relation to that particular piece of legislation, your Honour, is that that, as far as we're concerned, would have to be very high on the agenda for public interest on the basis that the major battleground for the last federal election was based on the abolition of AWAs. The Australian people have spoken and if you ask me there's no higher test of public opinion and public interest than that of particular issues being taken to a referendum such as the federal election. In our submission, the time for AWAs is over and it simply shouldn't be taken into consideration what the significant or particular piece of timing that the new legislation is if those employees don't want to sign the AWAs and the AWAs are going to be abolished, we say that that, like I say, is sufficient public interest to put that issue aside and simply look at the issues of the disputes that will arise between us as to the immediate termination of this agreement. In fact, we go so far as to say that on that particular basis the termination of the agreement should be properly spelled until after the new legislation takes effect. I see no reason why not.

PN98

THE SENIOR DEPUTY PRESIDENT: Mr Smith, the position you put to me you've put as an AMIEU position. That's as I should understand it, is it?

PN99

MR SMITH: Yes, your Honour. We are party to the agreement. I should also add to that that that is the view of the remaining workers who are still covered by that certified agreement. We have asked them.

PN100

THE SENIOR DEPUTY PRESIDENT: Mr Karzis.

PN101

MR KARZIS: Sir, I thought I'd ask first of all if there are any matters arising from some of the submissions that Mr Smith made that you wanted me to specifically address before - - -

PN102

THE SENIOR DEPUTY PRESIDENT: I'm interested in your response to some of the information Mr Smith has provided to me. Firstly, if I can perhaps deal with that tallies issue and the employer position on the tallies question.

PN103

MR KARZIS: Our view would be, sir, that if this award is terminated, for instance - - -

PN104

THE SENIOR DEPUTY PRESIDENT: If this agreement is terminated.

PN105

MR KARZIS: Sorry, if this agreement is terminated, that the employees would revert to the award, that there is nothing preventing - or there is nothing providing, we say, a requirement for us to engage them on a tally system basis and that if there were an argument - if there is a proposition which is to be seriously advanced by the union or those employees that they should be employed on a tally basis, that that is a matter for another time and another place and is not a matter which we say is appropriately or should be resolved by you or that there is a basis for it to be resolved by you in these proceedings. That is a matter either for a dispute or for an underpayment of wages in the fullness of time.

PN106

Our view, sir, is that that section of the agreement, section 5, provides for this agreement to stand in place of the award in its entirety and that includes, quite specifically, the creation of a tally system. The schedule itself that deals specifically with creation of a tally system is included in this agreement. When this agreement is terminated that schedule ceases to have effect. I haven't heard that argument before so we aren't fully briefed on it but it seems to me a fairly long series of logical jumps to say that an agreement which entirely sits above an award and replaces an award is somehow providing for conditions of employment which are somehow, through the agreement, then bound to that award or a certain clause in that award.

PN107

One of the things that Mr Smith did say in his submissions is that the provisions in the award are provisions which provide for a tally system to be implemented by agreement, both the fact of the tally system, we would submit, and also the effect of the tally system. That's in fact what this award does. It doesn't need to rely on a clause in the award - sorry, that's what this agreement does and the employer and the employees and the union don't need to rely on a clause in the award to actually construct a tally system and to give a tally system force. We say that it's probably a bridge too far for Mr Smith to suggest that there is some relationship between clause 16 of the award and the tally system at Lobethal abattoir, given that this agreement specifically provides for it and excludes the application of the award quite specifically.

PN108

THE SENIOR DEPUTY PRESIDENT: Mr Karzis, can we interrupt you there just to test that a little further.

PN109

MR KARZIS: Certainly, sir.

PN110

THE SENIOR DEPUTY PRESIDENT: You've been briefed by the employer in this matter. Mr Smith has been consulting with his members and his members and the employer have no doubt exchanged differing views over time and in essence you folks are all up to your neck in the various industrial forays involved in this matter. Standing back and looking at it, it seems to me very likely that what's motivated this action is that there are a relatively small number of employees who've declined to sign a standard AWA and the employer has taken this action as part of a bargaining strategy to try to bring the matter to some form of conclusion.

PN111

The employer could adopt the view, as you've just outlined, that the termination of the agreement terminates the tally arrangement that is prescribed in schedule 2 and that if anyone has a contrary view, then you'll work that through the award dispute resolution procedure and/or the courts, as the case may require.

PN112

The employer could alternatively adopt a view that it would still seek termination of the agreement but would agree to do so from 5 May, as Mr Smith has proposed, or alternatively again the employer could seek an earlier termination of the agreement but on the basis that it would undertake to apply the existing tally prescription for a designated period of time. Each of those options, and there may be more options, are no doubt being considered by the employer in the context of where it wants this application to take it in that broader, grander plan.

PN113

I'm interested in the employer's view on any or all of those options with a view toward just exploring the possibility that you folks may be able to come up with form of an agreed arrangement in this regard. I say that having spent large amounts of time in courtrooms and around conference tables associated with actions not dissimilar to this and in essence it's sometimes a great pity that we have to devote so much time to a dispute about in effect how you're going to conduct a dispute.

PN114

MR KARZIS: I see the force of your Honour's view and my suggestion would be perhaps that after a few more comments we might recess for about five minutes so that I might take some instructions from my client and I'm not sure, he might need to seek some instructions from - - -

PN115

THE SENIOR DEPUTY PRESIDENT: Yes, I'd be very happy for that to occur.

PN116

MR KARZIS: What I will say, though, sir, I'm not sure if there are any other matters that you might want to address at this moment arising from Mr Smith's submissions but there was one matter that I wanted to - - -

PN117

THE SENIOR DEPUTY PRESIDENT: You go first.

PN118

MR KARZIS: The matter that I thought it's important to put on the record is that Mr Smith in my view has not advanced any submissions or put forward a view that it is against the public interest, as we understand it, in the context of the application of this section of the Act, to terminate this agreement and indeed, he has conceded that there is no public interest argument to be advanced about the fact of termination. The only submission he has made is on the question of when it should occur. I think that that's quite a significant concession on the part of Mr Smith and one that I think it's important to draw to your attention.

PN119

The other point that I would make, sir, is that - - -

PN120

MR SMITH: If I may, your Honour, that wasn’t our submission at all. We elected not to advance any public interest arguments in preference to a pragmatic approach to terminating the agreement. We never said that there were no public interest matters to consider. I just wanted to clarify that point. We just elected not to put anything forward.

PN121

THE SENIOR DEPUTY PRESIDENT: Mr Karzis, I think Mr Smith is probably - if his position wasn't clear before, it is now.

PN122

MR KARZIS: I'm not sure I fully comprehend it but it is certainly clear to that regard.

PN123

THE SENIOR DEPUTY PRESIDENT: I think Mr Smith, and correct me if I'm wrong, but in a sense he's extending what he might describe as a olive branch in that he's suggesting that a 5 May date might result in an agreed position. He's doing so on the basis of an added concession in that he recognises that whilst there might be scope for all sorts of arguments over the impact of this agreement termination, that the issue of greatest concern simply relates to the tally system.

PN124

MR KARZIS: I stand corrected on that point, sir. The only other point I would make before the adjournment is on the question which I think was vexing you somewhat, insofar as the notice of hearing seeking employee views or the views of the employees, I take it from Mr Smith's comments that - and I stand to be corrected again if this is wrong - but I take it from his comments that he's not just speaking on behalf of the union as party but also as the representative of members who he has consulted with on these matters.

PN125

THE SENIOR DEPUTY PRESIDENT: That's my understanding of his position.

PN126

MR SMITH: That is correct, your Honour.

PN127

MR KARZIS: On that note, sir, perhaps rather than going to any further argument which may or may not be disputed, we might seek an adjournment for perhaps 10 minutes, if it's convenient to your Honour.

PN128

THE SENIOR DEPUTY PRESIDENT: I'm very happy to give you 10 minutes. I'll adjourn the matter accordingly.

<SHORT ADJOURNMENT [12.20PM]
<RESUMED [12.41PM]

PN129

THE SENIOR DEPUTY PRESIDENT: Mr Karzis.

PN130

MR KARZIS: Thank you for the brief adjournment. The applicant is quite happy to consider a delayed implementation of the termination as suggested by Mr Smith. We're not entirely ad idem with him on the proposed date and there is some basis for that in that the issue of notification in the award to use the basis of this argument is one that we say commenced sometime ago. There have been
two collective agreements, any number of negotiations and indications on the part of the employer for sometime of the desire to remove the tally system from its application in this workplace. The in-principle issue of notice and two month period we say at the very least should run from - well, at the very least from the date they received notification from the Commission that we were seeking to terminate the agreement.

PN131

Leaving aside the specifics of what the date should be, one of the things that came out from our discussion, and we've advised Mr Smith of this, is that part of the rationale for agreeing to such a date, the pragmatic resolution as he put it, would be to resolve or ensure that future disputes about the implementation of the arrangements post the termination of the agreement don't bedevil the employer and don't bedevil the employees in this instance. He indicated certainly one of those issues, the hours of work and the timing of breaks, but it would be, we say, of some assistance if we perhaps had a specific enunciation from the union and from the employees through the union of what those issues are so that at very least there is an opportunity to address those issues before the implementation date of the termination commences.

PN132

If it's convenient for you, sir, we would seek that sort of indication from Mr Smith on transcript of what exactly are the issues that this pragmatic solution either resolve or leave to be addressed.

PN133

THE SENIOR DEPUTY PRESIDENT: Mr Karzis, it's another remedial class for me, the notice of listing was sent out on 20 February. Can I take it then that what you're proposing to Mr Smith is that that would be the date upon which the termination of this agreement should take effect?

PN134

MR KARZIS: No, no, sir. I was simply alluding to the fact that there has been any number of notices of one form or another given to the other party of the employer's desire to be rid of the tally system. The provision that Mr Smith seeks to rely on, and it's purely in dealing with the argument as he's famed it, the provision that he seeks to rely on is one which is simply a notification provision and I was simply drawing to the Commission's attention, and to Mr Smith's, that he's put on notice and his organisation has been put on notice on any number of occasions, the most recent of which was them receiving this notice on the 21st.

PN135

On the issue of when the date should be, we're certainly of the view that 5 May is excessive, but for the purposes of ensuring that there is no dispute or limited disputation between the parties, which Mr Smith's suggestion was the basis of the requirement - or partly the basis for the desire for his two months of notice, we would certainly contemplate it and ideally for a date much sooner than 5 May but whether it's two weeks or whether it's four weeks from this date, can also be perhaps affected by the nature and magnitude of the issues that Mr Smith says need to be resolved or would be resolved by a delay.

PN136

For clarity, from the employer's perspective, they would seek some indication from him in pursuing that pragmatic solution, not in addressing the provisions of the Act and how it applies in this instance, but in pursuing that pragmatic solution if we get to an agreed position - if we are to explore getting to an agreed position about a termination date at some stage in the near future, what exactly is the other side of that equation is basically what we're seeking, some indication of what those issues are and what will be resolved by a delay and what needs to be addressed between the parties in the period of that delay before the termination takes effect.

PN137

Is that clear, sir? I've got a feeling I may have confused you more than - - -

PN138

THE SENIOR DEPUTY PRESIDENT: It's a funny thing, Mr Karzis, Mr Smith has only got one head and he's right next to you. What about if I suggested that I adjourn the matter again - I've had my lunch now, I'm right in that respect - and you folks might actually sit down and have a little talk about some of those issues. You see, as I understand what Mr Smith has said to me, there is a high priority issue likely to give rise to a dispute, being the tally system and the date upon which that might be brought to an end. Then there's a second order set of issues that I somewhat flippantly commented that Mr Smith ought to be expert at working out, given that he has participated in discussions to that end over a long period of time, but they go to issues such as hours and breaks and reconciling the award provisions with the customary arrangements.

PN139

It may be that those discussions identify a two phase sort of exercise so that Mr Smith could advise you within a certain period of time of any issues of that nature in order to ensure that those issues could be addressed before the second date, which is the date of termination of the agreement. At some point you folks probably have to make a decision about what date you propose to me the termination of the agreement and it seems to me that the very best person you could consider talking to in that respect might be Mr Smith in order to inform that decision.

PN140

MR KARZIS: I think there might be some logic to that suggestion, sir, so if we might trouble you for that other adjournment. Perhaps we could say 15 minutes.

PN141

THE SENIOR DEPUTY PRESIDENT: Yes, I'm happy to give you 15 minutes. I do have another matter at 2 o'clock or thereabouts so as long as you give me time to fit that matter in, I'm very much in your hands. What we'll do is we'll adjourn on that basis but if you finish earlier, let my associate know. If you need another couple of minutes then you let my associate know accordingly.

PN142

MR KARZIS: I appreciate that, sir.

PN143

THE SENIOR DEPUTY PRESIDENT: Mr Smith, I take it you're happy to engage in those discussions.

PN144

MR SMITH: Of course.

PN145

THE SENIOR DEPUTY PRESIDENT: You won't growl and be cross and misbehave in any nature.

PN146

MR SMITH: I'll try not to growl.

PN147

THE SENIOR DEPUTY PRESIDENT: I'll adjourn the matter accordingly.

<SHORT ADJOURNMENT [12.49PM]
<RESUMED [1.18PM]

PN148

THE SENIOR DEPUTY PRESIDENT: Mr Karzis.

PN149

MR KARZIS: Sir, we think we've resolved the matter and with your concurrence I might just put to you the terms of the proposed resolution. It's agreed between the parties, and I'll ask my friend to address it in a moment, but it's agreed between the parties that the agreement terminates on Friday, 4 April and that on that date the tally system ends with the agreement's termination. The parties would also either notify the Commission or seek to have included in your orders, if that's appropriate, sir, that the union will advise the company of the issues resolving resolution as a result of the implementation of the termination within the week.

PN150

THE SENIOR DEPUTY PRESIDENT: Did you say within a week or within the week?

PN151

MR KARZIS: Within a week, sorry, sir. My apologies, sir. That the company and the union agree, or if appropriate, are directed to meet and attempt to resolve the issues identified by the union expeditiously and before Friday, 4 April in any event. Finally, that there will be no industrial action relating to the termination of the agreement and the ending of the tally system within that period.

PN152

THE SENIOR DEPUTY PRESIDENT: By either party.

PN153

MR KARZIS: By either party. Sir, I'm sure you'll want to hear from my friend in a moment. I'm just wondering if you wish to hear any more on the arguments for termination or if in the absence of a contested application you are happy with the material that's been presented to you or you might want to consider that.

PN154

THE SENIOR DEPUTY PRESIDENT: Mr Karzis, on the information presented to me I've got no reason to have any concerns that the termination of the agreement will be contrary to the public interest. I would comment that if Mr Smith confirms that arrangement, I'm happy to note that that has been agreed between the parties in any order that I make but I don't think I've got the capacity to make an order to that effect.

PN155

MR KARZIS: That's entirely a matter for you, sir. I think the parties are certainly acting in good faith and even if that's noted there, that will be of assistance to a future hearing, if there is one arising from any disputation that might occur.

PN156

THE SENIOR DEPUTY PRESIDENT: Mr Smith.

PN157

MR SMITH: Yes, sir, I agree with the comments from Mr Karzis and we agree on that basis or on the basis of that resolution that the agreement terminates on 4 April.

PN158

THE SENIOR DEPUTY PRESIDENT: On the basis of the information provided to me I am satisfied that section 170MH of the pre-reform Act continues to have effect by virtue of schedule 7 of the existing Act. I'm satisfied that the agreement in question here, being the Lobethal Abattoir Pty Ltd Agreement 2003 has reached its nominal expiry date and there is a legitimate application before the Commission for termination of that agreement. On the information provided to me I'm satisfied that the employer has advised the employees covered by the agreement directly and also their agreement of the proposition that that agreement be terminated so that those employees have been able to express a choice about participation in this hearing.

PN159

There is nothing before me that indicates that termination of the agreement would be contrary to the public interest and accordingly, I will terminate the agreement with effect from 4 April 2008. an order to that effect will be forwarded out to the parties shortly. That order will recognise the terms of the agreement reached between the parties with respect to the potential effect or impact of that agreement termination .

PN160

It remains for me to comment that it is clear to me that, notwithstanding the agreement reached today, the potential exists for ongoing differences between the parties in their endeavours to reach some form of agreed position on industrial regulation. If I can assist in that regard, then I'm only too happy to do so. I'll adjourn the matter accordingly.

<ADJOURNED INDEFINITELY [1.24PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #L1 AFFIDAVIT TOGETHER WITH ATTACHMENTS PN11