AG2008/38, Transcript of Proceedings [2008] AIRCTrans 464 (21 August 2008)

TRANSCRIPT OF PROCEEDINGS

---

Workplace Relations Act 1996 18913-1

COMMISSIONER LEWIN

AG2008/38

cl.2A(1)(b) Sch. 7 - Appl’n for an order to vary pre-reform cert. agt.
National Union of Workers
and
Peerless Holdings Pty Ltd
(AG2008/38)

MELBOURNE

4.37PM, WEDNESDAY, 06 AUGUST 2008

PN1

MS K TRAN: If the Commission pleases, I appear on behalf of the National Union of Workers.

PN2

MR R GILMORE: I appear on behalf of Peerless.

PN3

THE COMMISSIONER: Thank you, Mr Gilmore. Yes, Ms Tran.

PN4

MS TRAN: Commissioner, are we doing both agreements at the same time?

PN5

THE COMMISSIONER: Just do them one a time, I think, yes.

PN6

MS TRAN: One at a time?

PN7

THE COMMISSIONER: Yes, just if you address each of them.

PN8

MS TRAN: Is there any preference as to which one?

PN9

THE COMMISSIONER: Start with number 38. That's the 05 agreement.

PN10

MS TRAN: Yes, there's the refinery and the pack house agreement.

PN11

THE COMMISSIONER: Yes, the refinery agreement, 38. That's matter number AG2008/38.

PN12

MS TRAN: Yes. Commissioner, today's application is to extend and vary an agreement under item 2A of schedule 7 of the Act. This agreement is the Peerless Holdings Pty Ltd refinery enterprise agreement 2005. Your chambers would have received the NUW's application which includes the following attachments, form 49A, the application for an order to vary the agreement, 49B, the application for the extension of the agreement, rules 55 and 55A which is a written statement signed by our branch secretary and the company and also the statutory declaration signed by our secretary.

PN13

THE COMMISSIONER: Just bear with me for a moment. I'm not quite sure whether I've got the documents signed or not. I do have documents on the file here and now. You say that the application - that's not signed by Mr Kernot?

PN14

MS TRAN: Yes, that's the one, signed by Mr Kernot.

PN15

THE COMMISSIONER: Yes. Then there's a written statement with Mr Kernot and Mr Gilmore's name on them and then another statutory declaration with Mr Kernot's name on it and a place for the statement to be dated but there are no signatures.

PN16

MS TRAN: Yes, sorry about that, Commissioner.

PN17

THE COMMISSIONER: You have the originals?

PN18

MS TRAN: Yes, I have the original right here.

PN19

THE COMMISSIONER: Would you like to tender those?

PN20

MS TRAN: Yes.

EXHIBIT #A1 DOCUMENTS

PN21

MS TRAN: Also, a copy of the amended agreement and the draft order should be in your possession.

PN22

THE COMMISSIONER: Yes.

PN23

MS TRAN: Commissioner, the NUW relies on the documents submitted which outline that the statutory requirements have been met. We confirm that all parties bound by the agreement have genuinely agreed to the extension and variation and that the majority of employees have voted in favour of the agreement. The extension sought is until 30 April 2011 which doesn't exceed three years from today's date. The variation also provides for pay rises for each year of the agreement and does not disadvantage any employees covered by it.

PN24

We can also confirm that no industrial action has been taken or threatened in relation to this agreement. Subject to any questions you may have, Commissioner, we seek that the orders be made on the terms sought if the Commission pleases.

PN25

THE COMMISSIONER: Mr Gilmore, do you have anything to say?

PN26

MR GILMORE: No, Commissioner.

PN27

THE COMMISSIONER: You support the application?

PN28

MR GILMORE: Yes, I do.

PN29

THE COMMISSIONER: And the company has entered into the agreement?

PN30

MR GILMORE: Yes, we have.

PN31

THE COMMISSIONER: Well, there are some things that go not so much to the issue of whether or not the agreement should be varied but to the form of the order giving effect to the variation. Now, is there any change to the incidents and parties bound? Not in the refinery agreement, I don't think, no. But there is in the other agreement?

PN32

MS TRAN: Yes.

PN33

THE COMMISSIONER: Well, confining ourselves to the refinery agreement for the moment and looking at the draft order, I hope both of you have a copy of it, is that right?

PN34

MR GILMORE: Yes, I think so.

PN35

THE COMMISSIONER: I don't think it's appropriate to actually delete the 2005 part of the agreement title. I think it is appropriate to vary it so that the title is 2005 - 2011.

PN36

MS TRAN: Okay, yes.

PN37

THE COMMISSIONER: And the form of the order should also not delete any of the existing conditions up to the date of operation of the variations. Do you follow that, Ms Tran?

PN38

MS TRAN: I understand what you're saying, yes.

PN39

THE COMMISSIONER: So I don't see it as being appropriate to delete from the agreement anything which has been in operation since 2005.

PN40

MS TRAN: I understand what you're saying, yes.

PN41

THE COMMISSIONER: And will simply be the subject of variation of terms post 1 May 2008. Do you understand?

PN42

MS TRAN: Yes, I do.

PN43

THE COMMISSIONER: So I think that the agreement is varied so that it becomes, by extension, an agreement that runs between 2005 and 2011 and all of the operative parts of the agreement between 2005 and 1 May 2008 should be preserved in the form of the order. Now, what the order should provide for is that on and from 1 May 2008, there will either be a new allowance or new rate of pay operative from that date.

PN44

MS TRAN: Yes, Commissioner. So you're saying, for instance, insert clause XA and perhaps insert - - -

PN45

THE COMMISSIONER: Well, whatever the form of the order is, I can leave it to you to file that amended draft order and direct you to do so. But the form of the order should not be to, for instance, delete a wage rate or an allowance insofar as it operated between 2005 and 2011.

PN46

MS TRAN: Okay.

PN47

THE COMMISSIONER: But rather to add, by variation, a new provision such that the wage rate on or from 1 May 2008 will be increased to X or shall be Y or whatever it is.

PN48

MS TRAN: Effective as of a particular date.

PN49

THE COMMISSIONER: Yes, that's right.

PN50

MS TRAN: Yes, okay.

PN51

THE COMMISSIONER: The conceptual basis of what I'm saying to you is that, we shouldn't abolish an of the terms of the extant agreement. We should simply vary them because that's what the statute comprehends. It varies them for the future. I don't think the statute comprehends that, for instance, one might retrospectively remove a term and condition of employment from the agreement. That's a purely hypothetical proposition. I'm not suggesting that a right which an employee enjoyed or an obligation that they were under should somehow or other be removed retrospectively by this application. I'm just trying to explain the conceptual basis for the purposes of drafting an appropriate order.

PN52

MS TRAN: Yes, I understand fully, Commissioner, thank you.

PN53

THE COMMISSIONER: Otherwise, in many cases what you'd do is delete the existing agreement and put a new one in and that is not what the statute is about. It is about varying an existing agreement, not taking it out of existence insofar as its terms operated between 2005 and 1 May 2008.

PN54

MS TRAN: So in that case, should I prepare another draft order?

PN55

THE COMMISSIONER: Yes, I'm directing you to do that, which reflects my requirements in that respect but what the order should show is the way in which the agreement is varied on and from 1 May 2008. There's no practical necessity, as I understand it, to delete any of the operative terms up to that date but in most cases it is to actually improve them from that date.

PN56

MS TRAN: I understand.

PN57

THE COMMISSIONER: Just as an example, so that we're all on the same page, I'm not sure what the long service leave variation is designed to achieve. I read it and it seems to me what you're attempting to do by this agreement is to be certain to confer upon the employees an entitlement to the Victorian long service leave standard.

PN58

MS TRAN: Yes, the long service leave clause in the 2005 agreement I think only is two sentences long whereas this one, there's a few more sentences added to it so I just wanted to reflect that.

PN59

THE COMMISSIONER: But there's no question that the legal position was that the Victorian Long Service Leave Act applied independently of the agreement, is that right, up until the point of the variation?

PN60

MS TRAN: Yes, that's correct.

PN61

THE COMMISSIONER: You see what I mean? Let us just take this long service leave point as an example, because I should be alive to this if this is an issue. Let us assume that there was a Federal long service leave award which prescribed a long service leave standard which was less than the Victorian standard and that that lesser Federal award standard applied to the employees. I see no reason why the parties cannot vary the situation, if that was the case, from 1 May 2008 so that a new standard would apply and it may well have some effective retrospective operation because there may be a different calculation of the entitlement by reference to service. But that would operate from 1 May 2008.

PN62

If you were just to delete long service leave in that hypothetical example I've just given and to replace that with the "new" long service leave standard. It maybe arguable that employees whose employment terminated prior to 1 May may have been entitled to a different long service leave entitlement than they had been paid.

PN63

MS TRAN: Okay, that wasn't the intent but - - -

PN64

THE COMMISSIONER: That may not be the intent and it may not be the effect of the variation. Perhaps it's easier to use another example. In clause 7, there's a variation in the leave arrangements, is that right?

PN65

MR GILMORE: Yes.

PN66

THE COMMISSIONER: And there's an additional ten hours of annual leave, is that not right? Have I got that right? This is at page 3 of the draft order that we've prepared.

PN67

MR GILMORE: Number 7.

PN68

THE COMMISSIONER: It's in item 7.

PN69

MS TRAN: Page 3, item 7.

PN70

THE COMMISSIONER: Well, we've prepared a draft order. I don't know whether it's in the same format as yours. Page 3 of your draft order, item 7.

PN71

MS TRAN: Delete subclause 4.2.1?

PN72

THE COMMISSIONER: No.

PN73

MS TRAN: Sorry.

PN74

THE COMMISSIONER: Delete 248 hours in clause 7 and replace with 258 hours.

PN75

MS TRAN: Yes, got that, yes.

PN76

THE COMMISSIONER: So up until 1 May 2008, as I understand it, the intention is that employees - there's some sort of recording of an amount of shift backup cover and public holidays. I'm not quite sure what that means. I don't think I can help you much on that one. But the point is that that number changes from 248 to 258.

PN77

MS TRAN: I think that the ..... rate changes which allows them to have additional hours.

PN78

THE COMMISSIONER: The intention of the parties is that changes from 1 May 2008, isn't it?

PN79

MS TRAN: That's correct.

PN80

THE COMMISSIONER: But if you deal the existing provisions, if you delete 248 hours, that just gets lost, doesn't it?

PN81

MS TRAN: Yes, I understand.

PN82

THE COMMISSIONER: So that the form of the order should try and establish when these changes are effective from without losing the pre-existing entitlement.

PN83

MS TRAN: Yes, I understand that. Okay.

PN84

THE COMMISSIONER: Because you see in clause 3, you propose that we delete clause 2, period of operation so that the agreement ceases to have any operation from 2005.

PN85

MS TRAN: I understand.

PN86

THE COMMISSIONER: Yes, if one is making a new agreement, obviously you file it in accordance with the provisions of the Act. If you vary an existing agreement, I think it's a different proposition.

PN87

MS TRAN: Yes.

PN88

THE COMMISSIONER: I mean, you can see there's a real problem there as to - the original agreement, when it was made and when it was certified, it had to have a commencement date. So that commencement date is lost by that variation and then suddenly you have an agreement that operates from 1 May 2008. The question that arises is what's the state of the instrument between 2005 and 2008, given its commencement date has been removed.

PN89

MS TRAN: Yes, okay.

PN90

THE COMMISSIONER: So that what I would like to see is a draft order that says "With effect from" - the provisions of clause 7A are varied so that this 248 hour figure becomes 258. Now, how you express that, I don't know. I haven't had a chance to format the order but that is what I'm seeking. I don't want to see chunks of this agreement disappear into the ether insofar as they operate from 2005 to 2008. I don't think it's appropriate to create a variation that says that the agreement doesn't operate from 2005.

PN91

MS TRAN: Unless that's deliberate by both parties, of course. I mean, that that needs to be removed.

PN92

THE COMMISSIONER: Well, I think that - - -

PN93

MR GILMORE: It was no longer - - -

PN94

THE COMMISSIONER: There may be some issues, if that is the intention, but it's not here so we don't need to deal with it but I do think there's probably some questions arising if that intention was ever sought to be realised in this matter. So I'll direct you to file that order in such a form that the variations with effect from 1 May 2008 are given effect without the removal of the provisions of the agreement that operated from 2005 until 1 May 2008.

PN95

My understanding is that it is not the intention of the parties that any of these provisions have any retrospective effect beyond 1 May 2008 and I therefore think it is inappropriate to cancel or delete any of the provisions that the parties want to retain that operated between 2005 and 1 May 2008. There are a number of reasons for that. I think it's orderly management of the agreement and proper representation of what the Commission is actually doing and thirdly for legal certainty in relation to the rights, duties and obligations of the employees and the employer in relation to the period between 2005 and 1 May 2008.

PN96

So there can be no doubt there will be a document in existence which has been certified by the Commission at one point, varied at another point and the continuity of all the terms and conditions of employment during the life of the agreement are preserved at all times. So I can indicate to you that subject to - and I'm satisfied that all the other conditions of the Act have been met for the purposes of the extension of the life of the agreement and its variation as sought, it's just a question of the order being brought into an appropriate form that I can sign.

PN97

MS TRAN: Okay, then. So would that mean that the matter needs to be listed again?

PN98

THE COMMISSIONER: No, it doesn't. If you furnish me with an appropriate draft order, I can sign it without the need for any further proceedings.

PN99

MS TRAN: I can have that to your chambers on Friday.

PN100

THE COMMISSIONER: Very well. All right. If you'd like now to deal with AG2008/39.

PN101

MS TRAN: Commissioner - - -

PN102

THE COMMISSIONER: Yes, well you've got all the papers on the file that deal with the statutory requirements.

PN103

MS TRAN: Yes, do I just jump straight to it?

PN104

THE COMMISSIONER: I've read the variations that are intended. On my reading of them, they entirely confer additional and more beneficial terms and conditions. Is that right, Mr Gilmore?

PN105

MR GILMORE: Correct.

PN106

THE COMMISSIONER: But there are in fact no reductions of the existing terms and conditions of employment prescribed by the agreement and that in all material respects, they are equal to or greater than an award entitlement in relation to that particular term and condition of employment or any legal entitlement of the Commonwealth or State law. Is that right, Mr Gilmore?

PN107

MR GILMORE: Yes, that's correct, Commissioner.

PN108

THE COMMISSIONER: So that the statements establish the statutory requirements and certification. There's only, once again, the question of the form of the order. The only other question that I had, and I just apply the comments that I made in relation to the refinery agreement. They apply in a similar way to the draft order that you've submitted, Ms Tran.

PN109

MS TRAN: Yes, sure.

PN110

THE COMMISSIONER: There is an expansion of the scope of the agreement. This now includes the hydrogenation plant, is that right?

PN111

MS TRAN: Yes, that's correct.

PN112

THE COMMISSIONER: All right, but those employees are employed at a particular location, are they not? Laverton North.

PN113

MR GILMORE: No, Commissioner. It's a different location but those particular employees which ..... have always been employed under that particular agreement and have - - -

PN114

THE COMMISSIONER: That's part of your business?

PN115

MR GILMORE: Yes, it is, yes.

PN116

THE COMMISSIONER: And that hydrogenation plant, where is that?

PN117

MR GILMORE: At Laverton North.

PN118

THE COMMISSIONER: Yes, that's what I thought.

PN119

MR GILMORE: Yes.

PN120

THE COMMISSIONER: And they form part of the process of approval of the agreement, those employees - - -

PN121

MR GILMORE: Yes, they do.

PN122

THE COMMISSIONER: - - - whose terms of employment are to be covered by this agreement now?

PN123

MR GILMORE: Yes.

PN124

THE COMMISSIONER: So they're brought into the fold, so to speak?

PN125

MR GILMORE: Yes, in practice they've always been part of that, right back since 2000.

PN126

THE COMMISSIONER: And these operator rates - what are they doing there?

PN127

MR GILMORE: It's a hydrogenation refinery so it actually alters the state of vegetable oil. It's a refinery.

PN128

THE COMMISSIONER: These rates of pay, are they greater than the award rate of pay?

PN129

MR GILMORE: Yes, they are.

PN130

THE COMMISSIONER: Do you have any idea by how much?

PN131

MR GILMORE: No, I don't. I know they are certainly higher.

PN132

THE COMMISSIONER: Do you know what the relevant award is?

PN133

MR GILMORE: I've got it here. I think it's the - - -

PN134

THE COMMISSIONER: It isn't in the agreement, is it?

PN135

MR GILMORE: It is sitting in the front of the agreement.

PN136

THE COMMISSIONER: The storeman and packers et cetera stores award?

PN137

MR GILMORE: Correct, yes.

PN138

THE COMMISSIONER: All right. I can just illustrate, Ms Tran, one of my concerns in relation to the form of the order. The original agreement, in clause 4, sets out certain wage rates and wage increases that operate until 30 April 2005. There are certain wage rates to 30 April 2005 and then there are wage increases that apply. That's the scheme of things, isn't it?

PN139

MR GILMORE: That's correct.

PN140

THE COMMISSIONER: Until 1 May 2007.

PN141

MR GILMORE: Yes.

PN142

THE COMMISSIONER: That's in 4.1.1 of the original agreement.

PN143

MS TRAN: Okay.

PN144

THE COMMISSIONER: You have the agreement, I take it?

PN145

MS TRAN: Yes, I do.

PN146

THE COMMISSIONER: The agreement the subject of variation.

PN147

MS TRAN: Yes.

PN148

THE COMMISSIONER: Can you look at clause 4, it's on page 1, it sets out what the base rates were at the time the agreement was made - - -

PN149

MR GILMORE: That's right.

PN150

THE COMMISSIONER: - - - which are to operate until 30 April 2005. Then those wages are to be increased by certain amounts.

PN151

MS TRAN: Yes.

PN152

THE COMMISSIONER: Now, those things are rather important to the employees and indeed to the employer because they constitute what the wages to be paid and the increases to be provided between the certification of the agreement and today, or at least until the variation, and the draft order says that they are to be deleted. You see in item 5 on page 2 of the draft order, it's proposed that all of those things be deleted.

PN153

Now, the effect of doing that means that there will be no record of that and then in it's place is simply put rates of pay and increases to operate from 2008 for the rest of the life of the agreement. So it creates a vacuum as to what the wage rates and wage increases are to be for the period 2005 to 2008. Now, I just don't think that's appropriate.

PN154

MS TRAN: I understand where you're coming from so that can be corrected, yes.

PN155

THE COMMISSIONER: So I think the appropriate variation and clearly the intention of the agreement the parties have reached is that new wage rates are to apply from 1 May 2008, not that the old wage rates don't apply anymore or they have no enforceability or they disappear into the ether. They remain and an additional set of wage increases are agreed which commence their operation from 1 May 2008.

PN156

I mean, one way of solving this is to just produce a schedule of the wage rates between 2005 and 2011 and I think that would be a much better out come and I mean, quite apart from all the questions of the form of the agreement and what the nature of the statutory action is in varying and extending the agreement, I would have thought both the union and the employer would be well served by having a schedule of wage rates contained in the agreement to cover the whole of the period from 2005 to 2011 as a matter of record.

PN157

MS TRAN: Yes.

PN158

THE COMMISSIONER: In case an employee comes along and says, "I was underpaid."

PN159

MS TRAN: Yes.

PN160

THE COMMISSIONER: Very well.

PN161

MR GILMORE: Can that be included, Commissioner, as part of the appendix or does it still need to be - - -

PN162

THE COMMISSIONER: I'm not terribly fussed about where it would appear but I think that's the best way of expressing the variation to the agreement is to preserve the terms of the agreement that are not to be varied and to show the additional terms which are the variation and they take effect from 1 May 2008. It's unnecessary to delete anything that happened before that date because that's not part of what has been agreed and the form of the order to the extent that it does delete things doesn't actually represent the agreement - I'm sorry, the variations which have been approved.

PN163

MR GILMORE: Yes.

PN164

THE COMMISSIONER: So on receipt of those orders, I indicate that I will vary the agreements and extend their lives. Thank you.

PN165

MS TRAN: Thank you, Commissioner.

<ADJOURNED ACCORDINGLY [5.07PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 DOCUMENTS PN20