AG2007/617, Transcript of Proceedings [2008] AIRCTrans 16 (10 January 2008)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 17958-1

SENIOR DEPUTY PRESIDENT CARTWRIGHT

AG2007/617

s.170MH -prereform Act - Application to terminate agreement (public interest)
Application by Hays Personnel Services (Australia) Pty Ltd
(AG2007/617)

SYDNEY

2.17AM, MONDAY, 17 DECEMBER 2007

PN1

MR M SECK: I appear on behalf of the applicant together with MS B COPLEY.

PN2

MR A NIELSON: I appear on behalf of the AMWU, the respondent to the agreement, together with MR O'BRIEN. There is no objection to Mr Seck being granted leave.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Leave is granted. Mr Seck, it's your application.

PN4

MR SECK: Thank you, your Honour. Your Honour, this is an application to terminate the Hays Personnel Services Australia Pty Ltd trading as Hays Montrose Air Conditioning and Insulation On Site Enterprise Agreement for New South Wales 2005. The enterprise agreement is a pre reform certified agreement. Your Honour, I might hand up a copy of the agreement if the Commission doesn't have one at the moment.

PN5

THE SENIOR DEPUTY PRESIDENT: Thank you.

PN6

MR SECK: Your Honour, I tender that copy. Does the Commission propose to mark it as an exhibit?

PN7

THE SENIOR DEPUTY PRESIDENT: Well, it being a copy that's certified in the Commission it's probably not necessary to do so is it?

PN8

MR SECK: No, I don't think so your Honour. Your Honour, the application is made under paragraph 2 subparagraph (1)(k) of Schedule 7 to the Workplace Relations Act. That paragraph has the effect of preserving, amongst other things, section 170MH of the Workplace Relations Act in relation to termination of pre reform certified agreements despite their repeal and amendments affected under the Workplace Relations Amendment WorkChoices Act 1995. Does your Honour have a copy of the pre reform WorkChoices legislation?

PN9

THE SENIOR DEPUTY PRESIDENT: I certainly do.

PN10

MR SECK: Okay, I won't hand up a copy then your Honour of those provisions. Your Honour, I rely on the application for termination of the pre reform certified agreement which was filed on 7 November 2007. Does your Honour have a copy of that?

PN11

THE SENIOR DEPUTY PRESIDENT: Yes.

PN12

MR SECK: I also rely on the affidavit of Mr Ben Hiles. There should be two copies on the file, your Honour.

PN13

THE SENIOR DEPUTY PRESIDENT: Yes. They're in a slightly different format.

PN14

MR SECK: They are. Might I just explain that? There was Mr Hiles's affidavit affirmed on 22 November 2007, just contained a number of minor procedural deficiencies, and we thought just for the sake of completeness we would file an affidavit which addressed those deficiencies, and that was affirmed on
26 November 2007 and filed and served on 12 December 2007.

PN15

THE SENIOR DEPUTY PRESIDENT: Yes.

PN16

MR SECK: And we would read Mr Hiles's affidavit affirmed on 26 November 2007.

PN17

THE SENIOR DEPUTY PRESIDENT: Yes.

PN18

MR SECK: Your Honour, the enterprise agreement was made under section 170LL of the pre reform Workplace Relations Act. It was an agreement made under Division 2 of Part VIB of the pre reform Act. Commissioner Redmond certified the enterprise agreement on 19 July 2004. If I might take the Commission to the relevant provisions in the enterprise agreement? Clause 3 sets out the parties bound and the application of the agreement. Your Honour will see that the agreement is binding upon Hays Personnel Services Australia Pty Ltd trading as Hays Montrose. All employees of Hays, whether members of the organisation of employees listed in paragraph 3 hereof engaged in any of the occupations, industries or callings specified in the National Metal and Engineering On Site Construction Industry Award 2002. That award, your Honour, is a federal award, which I'll come back to shortly, and three, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.

PN19

Paragraph (b) sets out the scope of the agreement. It says that it applies to all employees, so to the employees of Hays Personnel Services Australia Pty Ltd trading as Hays Montrose, who shall apply the terms of the National Metal and Engineering On Site Construction Industry Award 2002 insofar as those provisions relate to the parties named in subclause (a) of this clause. Your Honour, I should just refer to various aspects of that application clause. The business of Hays Montrose has ceased. That is set out in Mr Hiles's affidavit in paragraph 5. It has been replaced by a business division called Hays Labour Hire.

PN20

The National Metal and Engineering On Site Construction Industry Award 2002 is a federal award but it is an award which is not binding upon Hays Personnel Services Australia Pty Ltd as a respondent. And I'll come back to that as well shortly. Your Honour, clause 4 - - -

PN21

THE SENIOR DEPUTY PRESIDENT: So the agreement is binding on all employees - sorry, the award is binding on Hays Personnel Services Australia Pty Ltd, but you say that that company is not a respondent to the award referred to in (ii)?

PN22

MR SECK: Correct, your Honour. I know it seems like an anomaly but that is the outcome of our investigations, that Hays Personnel Services Australia is not named as a respondent to that award, it was merely used as the basis for defining the scope of the agreement.

PN23

THE SENIOR DEPUTY PRESIDENT: I see, okay.

PN24

MR SECK: I'll come back to that, your Honour, because it's obviously going to be relevant as to what the underlying award would be if the agreement is terminated. Your Honour will see in clause 4 the scope of the agreement is defined and it says the scope of the agreement is limited to the on site installation of air conditioning and insulation work in New South Wales. Your Honour, the agreement has expired. Clause 5 provides that the agreement operates from the date of certification and shall remain in force until 31 October 2005. So the agreement has expired for the best part of more than two years.

PN25

Clause 6 sets out the relationship between the award and the agreement. Your Honour will see that clause 6.1 sets out that the agreement is to be read wholly in conjunction with the relevant award.

PN26

THE SENIOR DEPUTY PRESIDENT: And there the reference is back to the award which you say that the employer is not respondent to?

PN27

MR SECK: Correct. So that does beg a few questions. Clause 6.2 states that the agreement is incorporated into the contract of employment of the employees covered by the agreement, and the award is incorporated. Clause 6.3 sets out that the terms and conditions of employment provided for in any agreement is incorporated into the contract of employment as well. And clause 6.4 provides that for any employee commencing employment after the date of this agreement they shall be employed in accordance with the terms of the agreement.

PN28

Your Honour, can I go to the grounds for the application? The applicant submits there are five grounds which warrant termination of the enterprise agreement. The first ground is that the enterprise agreement has passed its nominal expiry date and has not been replaced. Secondly, the enterprise agreement no longer has any application. The agreement applies to Hays Montrose which no longer operates as a business. Thirdly, Hays no longer employs employees to which the enterprise agreement applies.

PN29

THE SENIOR DEPUTY PRESIDENT: When you say Hays, I mean, point 2 was the agreement no longer has application, and you say Hays Montrose isn't operating. So when you say under point 3, Hays, to which entity are you referring?

PN30

MR SECK: I'm referring to the company which is Hays Personnel Services Australia Pty Ltd which has now been renamed as Hays Specialist Recruitment Australia Pty Ltd. So I'm referring - rather than Hays Montrose, which is the business division, I'm referring to Hays as the employer.

PN31

THE SENIOR DEPUTY PRESIDENT: Okay. And, sorry, what were you saying about - what was your point 3 again?

PN32

MR SECK: That Hays no longer employs employees to which the enterprise agreement applies. That is set out in Mr Hiles's affidavit in paragraph 7.

PN33

THE SENIOR DEPUTY PRESIDENT: Employees being?

PN34

MR SECK: Employees who are employed in the installation of air conditioning, on site installation of air conditioning and insulation work in New South Wales.

PN35

THE SENIOR DEPUTY PRESIDENT: Yes.

PN36

MR SECK: So Hays Personnel Services - - -

PN37

THE SENIOR DEPUTY PRESIDENT: As in clause 4, yes.

PN38

MR SECK: Sorry, paragraph 9, your Honour, sets out that - in Mr Hiles's affidavit sets out that Hays does not employ any person whether on a temporary basis or otherwise who is covered by the agreement, so that's in support of the third ground.

PN39

THE SENIOR DEPUTY PRESIDENT: Yes.

PN40

MR SECK: The fourth ground is that Hays, being the applicant, does not propose employing any employees whose employment would otherwise be covered by the enterprise agreement. Mr Hiles's affidavit in paragraph 10 supports that ground. And fifthly, your Honour, even if Hays employed any employees whose employment would otherwise be subject to the agreement the employees would have the benefit of safety net conditions under the Australian Fair Pay and Conditions standard and, we submit, a common rule award which is now a notional agreement preserving a state award, namely the New South Wales Metal and Engineering and Associated Industries State Award. That arises by virtue of clause 33(2) of Schedule 8 of the Workplace Relations Act. Those employees are employed as - - -

PN41

THE SENIOR DEPUTY PRESIDENT: Sorry, rather than turn that up just tell me what that provides.

PN42

MR SECK: Yes, your Honour.

PN43

THE SENIOR DEPUTY PRESIDENT: In other words why do you say it applies by virtue of that section?

PN44

MR SECK: Clause 33(2) says:

PN45

If a person is employed in the business or that part of a business after the reform commencement and (b) under the terms of the original state award or the original state law as in force immediately before the reform commencement the person would have been bound by that award or law and (c) the person is not bound by a preserved state agreement, the person is bound by a notional agreement.

PN46

In our respectful submission - - -

PN47

THE SENIOR DEPUTY PRESIDENT: So this arises because you say that - by implication you say that was the award that properly applied rather than the one named in this agreement?

PN48

MR SECK: Correct. So there are a number of propositions, your Honour. Firstly, that is the proper award which applied to the employment of the employees, not the federal award which is referred to in the federal agreement. In the event that this agreement is terminated then they would default to the underlying award. That underlying award in our submission is the New South Wales Metal and Associated Industries Award, which is a common rule award which has effect pursuant to that clause 33(2) of Schedule 8.

PN49

The employees, your Honour, fall within the scope of that award. That is evidenced in Mr Hiles's affidavit in paragraphs 6 and 7 where Mr Hiles says that Hays supplied sheetmetal workers of varying grades to several clients during the period 19 July 2004 to 24 February 2006. And paragraph 7 annexes a document in annexure B setting out the details of those jobs. The position of sheetmetal worker is a classification under the New South Wales Metal and Engineering Associated Industries Award in paragraphs 63 and 64 of the classifications to that award. So we would say that there would be an appropriate safety net that would apply to any employees if there were any employees covered by the agreement, which we say there isn't.

PN50

Could I just address one remaining issue, your Honour? We were informed this morning by the union that there potentially could have been one employee whose employment was subject to the agreement, his name is Kevin Lowther. Mr Lowther was employed as a casual back in February 2006. He became injured and is no longer employed, in our respectful submission, by the applicant. He is however entitled to workers' compensation benefits. He received that pursuant to the New South Wales workers' compensation legislation, but he also received the benefit of top up payments which makes up the difference between the statutory rate under the New South Wales workers' compensation legislation and the actual rates to which he was otherwise entitled to receive under the enterprise agreement.

PN51

We would say that given that Mr Lowther is no longer employed by the company that should mean that his entitlement to workers' compensation shouldn't be a bar to the termination of the agreement. The union has pointed to clause 24 of the enterprise agreement as a relevant provision. Your Honour will see clause 24(c) that is on page 13 of the agreement, your Honour, it's headed Income Maintenance, and it provides 24 hours accident/sickness and top up workers' compensation insurance as provided by International Underwriting Services, IUS. Wage cover for an agreed like scheme will be taken out for each employee.

PN52

I have been instructed, your Honour, that to the extent that it's of any concern to the union the applicant is prepared to make an undertaking to the Commission that to the extent required by law the applicant will continue to make workers' compensation payments in accordance with the top up insurance policy, but only to the extent required by law. The concern there, your Honour, is that under legislation workers' compensation payments are only payable for a two year period.

PN53

THE SENIOR DEPUTY PRESIDENT: I see what you mean.

PN54

MR SECK: We don't undertake to continue on indefinitely. We do undertake to continue on to the extent that we're legally required to do so.

PN55

THE SENIOR DEPUTY PRESIDENT: Does that mean to February 2008? Because you said - - -

PN56

MR SECK: That would be my submission, your Honour.

PN57

THE SENIOR DEPUTY PRESIDENT: Sorry, I've noted down February 2006, but I'm not sure whether I've noted that down as - - -

PN58

MR SECK: That was the date of his commencement of employment, but it's also - and I didn't say this, your Honour - it was also the date of his injury. He was injured within two days of commencing employment with the applicant.

PN59

THE SENIOR DEPUTY PRESIDENT: I see.

PN60

MR SECK: So he would, on my submission, continue to receive workers' compensation payments until February 2008.

PN61

THE SENIOR DEPUTY PRESIDENT: The relevant date in February.

PN62

MR SECK: The relevant date.

PN63

THE SENIOR DEPUTY PRESIDENT: So what you're saying is that the applicant undertakes to continue paying - - -

PN64

MR SECK: Top up payments to the extent required by law which, on my understanding, is February 2008. I haven't got a copy of the policy with me, your Honour, and that's why I say to the extent required by law, because it could be longer, it could be shorter.

PN65

THE SENIOR DEPUTY PRESIDENT: I see, okay. So I think when you said that initially you didn't say it in quite those terms, to continue top up payments. I think you said payments that would have been required under the policy or something like that. So what is the exact undertaking that you're making?

PN66

MR SECK: Let me try to re-state that, your Honour.

PN67

THE SENIOR DEPUTY PRESIDENT: I'm asking you because I probably haven't noted it down correctly.

PN68

MR SECK: That's okay, your Honour. The applicant is prepared to make an undertaking that it will continue top up workers' compensation insurance for the benefit of Mr Lowther to the extent required by law.

PN69

THE SENIOR DEPUTY PRESIDENT: And when you say to the extent required by law, I take that to be - you see, perhaps it could be argued that there is no requirement to continue those.

PN70

MR SECK: Absolutely, your Honour.

PN71

THE SENIOR DEPUTY PRESIDENT: But rather you're saying you're going to continue them for the period required by law? I'm just trying to clarify what you mean by to the extent required by law.

PN72

MR SECK: Both points that your Honour raises that, so it could be that we're not required to pay that, I'm just not sure about that, but it also embraces the period of time. So if the circumstances no longer apply to which Mr Lowther would be entitled to receive top up payments then that falls within the terms of the undertaking. But what I had in mind was the timing issue, but it could be there could be other circumstances besides the timing issue.

PN73

THE SENIOR DEPUTY PRESIDENT: The obligation to make top up payments would arise from where?

PN74

MR SECK: Potentially the terms of the contract of employment, your Honour.

PN75

THE SENIOR DEPUTY PRESIDENT: Okay.

PN76

MR SECK: It's difficult to say without looking at a copy of the policy, so that's why I simply make that undertaking in such broad terms, because we don't know what it says. We did try to make inquiries this morning as to the scope of the top up insurance policy but we were unable to obtain such information at short notice. But what the objective of the undertaking is, your Honour, is simply to ensure that Mr Lowther is not disadvantaged as a result of the termination of the enterprise agreement.

PN77

THE SENIOR DEPUTY PRESIDENT: And the part of the enterprise agreement that gives rise to these top up payments is just that 24(c)?

PN78

MR SECK: In my respectful submission, your Honour, yes.

PN79

THE SENIOR DEPUTY PRESIDENT: Which refers only to top up workers' compensation insurance?

PN80

MR SECK: Insurance. So it's expressed in very ambiguous terms.

PN81

THE SENIOR DEPUTY PRESIDENT: Yes.

PN82

MR SECK: But my instructions are that he currently does receive those top up payments.

PN83

THE SENIOR DEPUTY PRESIDENT: I see. Were there other things you wanted to go on to?

PN84

MR SECK: No. Those complete the grounds upon which rely upon, your Honour, so your Honour can ask those questions.

PN85

THE SENIOR DEPUTY PRESIDENT: Section 170MH(3) says:

PN86

If after complying with subsection (2) the Commission considers that it's not contrary to the public interest to terminate the agreement the Commission must by order terminate the agreement.

PN87

And I might add subsection (2) refers to the Commission taking such steps as it considers appropriate to obtain the views of persons bound by the agreement. Now, the matter's been listed for hearing today and so there's the opportunity for both the named respondents, but there was a practical issue for the Commission in obtaining views in circumstances where there was an affidavit saying that there weren't any employees covered. So why do you say, coming to (3), that it's not contrary to the public interest to terminate the agreement?

PN88

MR SECK: Well, your Honour, we say that - - -

PN89

THE SENIOR DEPUTY PRESIDENT: Is that anything separate from your five grounds?

PN90

MR SECK: No, your Honour. I would just simply emphasise that in our submission Mr Lowther is not bound by the agreement because he ceased to be an employee. So we submit that subsection (2) does not apply in those circumstances.

PN91

THE SENIOR DEPUTY PRESIDENT: Well, yes, we don't need to go to subsection (2). It's rather the question of whether it's not contrary to the public interest to terminate the agreement. Is there anything you want to say about that?

PN92

MR SECK: Nothing further, your Honour, beyond the five grounds that we've submitted.

PN93

THE SENIOR DEPUTY PRESIDENT: Yes, that's what I was wanting to clarify.

PN94

MR SECK: Thank you, your Honour.

PN95

THE SENIOR DEPUTY PRESIDENT: Okay, thank you.

PN96

MR SECK: Your Honour, unless your Honour has any further questions those are our submissions.

PN97

THE SENIOR DEPUTY PRESIDENT: Thank you. Mr Nielson?

PN98

MR NIELSON: Your Honour, the union doesn't propose to make any substantial submissions. We've had the opportunity of perusing the affidavit of Mr Hiles, both the earlier one and the one filed recently. And I've taken instructions from the relevant persons who were responsible for members who were engaged by Hays. We can indicate that our inquiries thus far haven't shown anything to be inconsistent with the statement of Mr Hiles, and that's why we don't require him for cross-examination today.

PN99

The union does not in its view represent anyone who is covered by the terms of the agreement save with the exception of Mr Lowther, and we raised his concerns and his circumstances with the company today. Can I indicate that I am a little bit concerned with the wording that was proffered by Mr Seck today insofar as I think the intention of - - -

PN100

THE SENIOR DEPUTY PRESIDENT: I didn't want to contribute any uncertainty by my questioning by the way.

PN101

MR NIELSON: No, your Honour was right to clarify it. I think the intention of what Mr Seck was saying, and I appreciate his confirmation that this was his intention, is to say that effectively the policy that was binding upon the company at the time of Mr Lowther's injury will be honoured. Now, there may be circumstances in which the company is entitled to stop payments under the terms of that policy, and we have no objection of course to that occurring, but we would seek a clear undertaking from the company that the policy that was entered into would be honoured by the company with respect to Mr Lowther.

PN102

THE SENIOR DEPUTY PRESIDENT: That's what I took to be the thrust of - - -

PN103

MR NIELSON: And so did I. I just wanted to clear up any ambiguity with respect to that question as to law because, of course, your Honour would appreciate that when the obligation to maintain the policy as it's set out in the terms of the agreement is terminated that, as required by law, may in fact become relevant. And so if the company has given an undertaking here today that they'll apply the policy as it existed as at the time of Mr Lowther's injury or as existed from time to time, then I think that addresses that particular concern. And I think to be fair to Mr Seck that was his intention in the undertaking that was given.

PN104

THE SENIOR DEPUTY PRESIDENT: Yes.

PN105

MR NIELSON: Your Honour, in relation to the requirements for the Commission to consult pursuant to section 170MH(2), our inquiries, as I've said, have revealed that there are no persons bound by the agreement who aren't present here today so, your Honour, we would submit, and the Commission has satisfied it's obligations under that clause to consult with the relevant parties and seek their views.

PN106

THE SENIOR DEPUTY PRESIDENT: That was my hunch about what the situation was.

PN107

MR NIELSON: Yes, your Honour. And in relation to the requirement under section 170MH(3) of course that's a submission that Mr Seck has to make. We don't necessarily put anything before the Commission that would indicate that there would be matters contrary to the public interest save for the circumstances of Mr Lowther. But given the undertaking of Mr Seck here today we don't necessarily think that we need to make any further submissions on that point.

PN108

THE SENIOR DEPUTY PRESIDENT: Thank you, Mr Nielson. Mr Seck, I think Mr Nielson probably put fairly succinctly what I was trying to get to.

PN109

MR SECK: Yes, your Honour. I can confirm that the applicant is prepared to honour the policy in respect of Mr Lowther's circumstances. So I hope that allays any concerns.

PN110

THE SENIOR DEPUTY PRESIDENT: I took that as the thrust of what you were saying, that Mr Nielson has very appropriately targeted in on what the applicable issue is.

PN111

MR SECK: I am grateful to Mr Nielson for clarifying that for my purposes. Thank you, your Honour.

PN112

THE SENIOR DEPUTY PRESIDENT: Yes. Mr Nielson, I think that picks up your point doesn't it?

PN113

MR NIELSON: It does, your Honour, thank you.

PN114

THE SENIOR DEPUTY PRESIDENT: Is it necessary to do anything further than the fact that that has been given orally and will be recorded in the transcript for today's proceedings?

PN115

MR NIELSON: Your Honour, I think Mr Seck's undertaking is sufficient on the transcript. Perhaps if a copy of the transcript could be made available to the parties that would suffice, your Honour.

PN116

THE SENIOR DEPUTY PRESIDENT: Yes, okay. Gentlemen, there's nothing further then?

PN117

MR SECK: Nothing further, your Honour.

PN118

THE SENIOR DEPUTY PRESIDENT: In the circumstances I think that it is clear that the Commission should make the order as sought with the understanding that that undertaking takes care of Mr Lowther's circumstances and, as Mr Nielson suggests, that a copy of the transcript will be sent to the parties as a record of that undertaking as well as placed on the file of the Commission in relation to this matter. The Commission will adjourn.

<ADJOURNED INDEFINITELY [2.49PM]