AG2008/1182, Transcript of Proceedings [2008] AIRCTrans 476 (28 August 2008)

60


TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 18971-1

COMMISSIONER RAFFAELLI

AG2008/1182

s.170MD(6) - pre-reform Act Variation of certified agreement to remove ambiguity
Application by Hudcoe Pty Limited
(AG2008/1182)

MELBOURNE

1.11PM, THURSDAY, 14 AUGUST 2008

PN1

THE COMMISSIONER: Yes, any change to appearances? Not really, Mr D’Arcy?

PN2

MR D D’ARCY: I seek leave to appear on behalf of Hudcoe Pty Limited, together with MS BUTTERWORTH who is finance manager for Hudcoe and MR DANIEL HUBY, who is a supervisor for Hudsons Coffee at Brisbane Private Hospital and MR JORDAN CRANE, who is store manager for Hudsons Coffee a the International Airport in Melbourne.

PN3

THE COMMISSIONER: Right.

PN4

MR D’ARCY: If it pleases.

PN5

THE COMMISSIONER: Yes, well leave is granted, Mr D’Arcy. One thing that I have been confused about, though, on this is that I note that the affidavits that are in the material, that have been presented, are quite voluminous. You need to help me right at the beginning, and the definition of whether the various payments comprehend weekend and other penalties; but what I never understood very clearly was, which are the two ways in which you can look at the problem?

PN6

That is why when you originally had sought it to be listed speedily in Sydney, I had some difficulties with it and I just wanted to be given a little bit more explanation, and that’s why we are here. You certainly have put a lot of material before me but perhaps you should just, for my own thickness, explain to me what is the predicament and what are the issues essentially?

PN7

MR D’ARCY: Certainly. I should say that what they are is that mainly there are competing views. There are three separate views from three separate law firms, including one from my own, in relation to the interpretation of this particular agreement.

PN8

The intersection of the clauses which have relevance - and they all relate to 4.1.1, the wages clause.

PN9

THE COMMISSIONER: Yes. You are taking me to it?

PN10

MR D’ARCY: Yes.

PN11

THE COMMISSIONER: Where is that?

PN12

MR D’ARCY: It’s attached to Mr Agnew’s affidavit.

PN13

THE COMMISSIONER: Yes.

PN14

MR D’ARCY: At D, attachment D.

PN15

THE COMMISSIONER: Yes, so that’s the agreement itself. Yes, okay.

PN16

MR D’ARCY: Yes, that is the Hudsons Coffee Certified Agreement.

PN17

THE COMMISSIONER: Yes, and we go then to four point - - -

PN18

MR D’ARCY: So they all relate to the wages clause at 4.1.1.

PN19

THE COMMISSIONER: Right, yes.

PN20

MR D’ARCY: Now the issue is this, if I could take you back to 1.2, the definitions clause? The first definition I will take you to is the base hourly rate which means the - and this is what the agreement says:

PN21

Means the hourly rate of pay paid to a full-time or part-time employee who works predominantly Monday to Friday as set out in clause 4.1.1 of this agreement. Weekend penalty and public holiday penalties apply to those employees who work outside these times as set out in clause 4.1 of the agreement.

PN22

Then the definition of casual rate of pay - - -

PN23

THE COMMISSIONER: So let me take it slowly. I know that we’re probably going against your plan of submissions, but bear with me. So the base hourly rate is the rate generally for Monday to Friday persons, and it doesn’t include weekend and public holiday penalties. That’s what base hourly rate is defined as?

PN24

MR D’ARCY: That’s correct.

PN25

THE COMMISSIONER: Right.

PN26

MR D’ARCY: Then they receive those penalties when they work in those times.

PN27

THE COMMISSIONER: Yes.

PN28

MR D’ARCY: But the important section or the important part of that particular definition for this proceeding is that it deals with the hourly rate of pay, and it talks about, “As set out in clause 4.1.1”. So there is a direct linkage between the definition and the wages clause at 4.1.1 and so quite clearly it says those are the rates themselves, for base rate employees.

PN29

Then looking at the casual hourly rate it does much the same. It says:

PN30

Means the hourly rate of pay for casual employees as set out in clause 4.1.1 of this agreement.

PN31

It is currently 30 per cent in addition to the base hourly rate of pay, so importantly that does the same. It then links the definition to the wages table and then it says it is currently 30 per cent in addition to the base hourly rate of pay.

PN32

THE COMMISSIONER: I think I’m - - -

PN33

MR D’ARCY: And currently, I presume, is the time of making - - -

PN34

THE COMMISSIONER: If you look at - sorry?

PN35

MR D’ARCY: Currently, at the time of making the document - - -

PN36

THE COMMISSIONER: Yes.

PN37

MR D’ARCY: - - -is passed as the definition.

PN38

THE COMMISSIONER: So when we look at that table the introductory adult full-timer gets $10.53; the casual gets $13.69. That’s a 30 per cent difference, is it?

PN39

MR D’ARCY: Yes.

PN40

THE COMMISSIONER: Yes.

PN41

MR D’ARCY: I actually haven’t done the figures myself and I didn’t draft the document.

PN42

THE COMMISSIONER: Yes.

PN43

MR D’ARCY: Mr Agnew did, and he is going to give some evidence.

PN44

THE COMMISSIONER: Yes, okay.

PN45

MR D’ARCY: Then the third definition, which is across the page on page 5 at clause 1.2, “Loaded Hourly Rate is an hourly rate of pay to full-time and
part-time - - -

PN46

THE COMMISSIONER: Sorry, where is this?

PN47

MR D’ARCY: Sorry, it’s the next page. It’s the definition at clause 1.2 of the agreement, “Loaded Hourly Rate”.

PN48

THE COMMISSIONER: Yes.

PN49

MR D’ARCY: It says:

PN50

Is the hourly rate of pay to full-time and part-time employees which is inclusive of the weekend and most public holiday penalties and other applicable allowances as set out in 4.1.1 of this agreement. It is 10 per cent in addition to the base hourly rate of pay.

PN51

So once again there’s a linkage between the definition and the wages clause at 4.1.1.

PN52

THE COMMISSIONER: Yes.

PN53

MR D’ARCY: Commissioner, if I can then take you to clauses 4.1.3 to 4.1.5 of the agreement.

PN54

THE COMMISSIONER: I’m sorry?

PN55

MR D’ARCY: If I can take you to clauses 4.1.3 through to 4.1.5 of the agreement.

PN56

THE COMMISSIONER: Yes.

PN57

MR D’ARCY: This is where the first contention comes in. So what it says is:

PN58

The base hourly rate of pay is the award Monday to Friday rate of pay, and it’s paid to employees who predominantly work Monday to Friday, and then -

PN59

et cetera, et cetera, and it goes through the penalties.

PN60

Then when you go to clause 4.1.4:

PN61

The loaded hourly rate of pay is 10 per cent in addition to the base hourly rate of pay and is paid to employees who have full availability Monday to Sunday in ..... condition 1.

PN62

So effectively the base hourly rate is established and the argument is this, is that it is the award rate Monday to Friday, which is the base hourly rate. When you go back and look at the definition of award underneath 1.2 it says it means:

PN63

The relevant state or territory award or industrial instrument as varied from time to time.

PN64

So when you look at 4.1.4 it comes off the back of 4.1.3, and it’s 10 per cent in addition to the base hourly rate. Then when you go to 4.1.5 it does the same. It’s 30 per cent in addition to the base hourly rate of pay, paid to the employees who work on a regular basis.

PN65

THE COMMISSIONER: Right.

PN66

MR D’ARCY: So it then comes off the back of 4.1.3 again. So the argument here, in relation to the ambiguity, is the establishment of the actual wage rates and the movement of the wage rates going forward. Now there is a secondary issue as well, but just dealing with this, the question is what was the intent of the parties at the time? Was it to say that the award rates, whatever they would be in whatever state or whatever applicable instrument - - -

PN67

THE COMMISSIONER: Or is it the table?

PN68

MR D’ARCY: Or is it the table?

PN69

THE COMMISSIONER: I see.

PN70

MR D’ARCY: So that’s the argument being put forward and what we are saying clearly today is that there is an ambiguity here when you look at it from the cold light of day, without any of the understanding about the intent of the agreement, or how it was made and the subsequent conduct of the parties.

PN71

THE COMMISSIONER: Because the definitions take us to the table but the question in 4.1.3, 4.1.4 and 4.1.5 - it refers to the award.

PN72

MR D’ARCY: That’s correct.

PN73

THE COMMISSIONER: And that could be a whole range of four, five or six awards.

PN74

MR D’ARCY: That’s correct.

PN75

THE COMMISSIONER: Okay.

PN76

MR D’ARCY: So what we say about that - and this is getting a bit into submissions, but what we say about that - and after we can present the evidence in relation to intent, along with all the precedents - is that 4.1.3 through to 4.1.5 is merely there to inform the parties and any reader of the document about how the rates in the table were originally established.

PN77

So that also goes with the idea in 1.2, in definitions, the casual hourly rate, when it defines what the casual hourly rate is and when it says, “It is currently 30 per cent in addition to the base hourly rate of pay”. “It is currently”, which would then lend, we say, from the construction of the agreement validity to our argument that these clauses at 4.1.3 through to 4.1.5 are merely an explanation of how those were at the time the agreement was proposed and made, were established[sic].

PN78

Now there is a second issue as well. There’s a second ambiguity in relation to this application and it is particularly clause 4.1.9 of the agreement.

PN79

THE COMMISSIONER: Yes.

PN80

MR D’ARCY: It is the second question, 4.1.9, and 4.1.9 moves the wages. So if we start at 4.1.9 it talks about the hourly rates of pay being increased over the nominal period of the agreement, so there’s three per cent in October 2001 and three per cent in October 2002.

PN81

Then what it does is effectively it is a matching clause. So the matching clause is what if the National Wage Case decision is greater than the above wage increases for each year of operation of the agreement? It says:

PN82

The company will pay any shortfall if the National Wage Case decision awards employees an increase greater than the above increases in each year of operation of the agreement -

PN83

And the clause goes on. The argument that has been put is that the agreement has continued to operate. Now the company has tried to put new agreements in its place but they have failed for whatever reason, and we will present that evidence in due course.

PN84

But the agreement is formally still in operation, so the question comes about whether or not the parties intended that National Wage increases should continue to apply after the last increase in October 2002. Now we say that they don’t. We say that quite clearly there’s a linkage between the National Wage Case decisions and the increases at the start of the clause, in both A and B of clause 4.1.9.

PN85

That linkage itself is merely just about those two increases. If those increases were less than the National Wage Case decision in those years, then the company was bound to pay the higher rate of the National Wage Case increase.

PN86

THE COMMISSIONER: You’re not telling me that there has been no wage increases since 2002?

PN87

MR D’ARCY: I’m not telling you that, no.

PN88

THE COMMISSIONER: Okay, but what you are saying is whatever it has been, the National Wage supplement does not apply; it only applied in 2001 and 2002.

PN89

MR D’ARCY: That’s correct. That’s the evidence we are going to lead today.

PN90

THE COMMISSIONER: I see.

PN91

MR D’ARCY: I should also say that we are going to lead evidence about where wages are now, what the company has done. But the company’s view about what it wants to do is clear all this up and then have another attempt to renegotiate the agreement, probably through a variation back to the Commission of this existing agreement, underneath the last round of legislative amendments.

PN92

THE COMMISSIONER: Yes, I see. Right, that gives me the background. Yes, thank you Mr D’Arcy, it’s helpful.

PN93

MR D’ARCY: Just to run through what I’m going to take you through, Commissioner, very briefly. I’ve got two witnesses; Ms Butterworth, who is the finance manager who is here today, will be the first witness and Mr Agnew. Ms Butterworth is going to talk about service of the application. She is also going to talk about the history of workplace bargaining, wage increases since that date. Mr Agnew is going to go to the intention of the agreement - - -

PN94

THE COMMISSIONER: Where is Mr Agnew?

PN95

MR D’ARCY: He is sitting outside. He didn’t think it was appropriate that he was here for Ms Butterworth’s testimony.

PN96

THE COMMISSIONER: I see. Okay.

PN97

MR D’ARCY: Even though they really don’t cross at all.

PN98

THE COMMISSIONER: No, no.

PN99

MR D’ARCY: I’m then going to deal with the issue of service. I’m going to deal with the ambiguities as we say they exist. I’m going to deal with some of the case work although I know you’re very familiar with it, given the Qantas long haul case decision last year.

PN100

THE COMMISSIONER: Yes.

PN101

MR D’ARCY: Then I’m going to deal with the issue of retrospectivity, if we are going to make an order. There is one last and final matter that we are seeking to deal with and that will be that one of the reports, one of the advices from Mason Sier Turnbull, contains confidential commercial information. We are going to be making an application under section 839 for that to be suppressed. We would also ask at that stage - and we have also talked to the employee reps about it, that they be excluded from the room and we clear the court room whilst we make that application.

PN102

THE COMMISSIONER: Yes.

PN103

MR D’ARCY: But that will be through Mr Agnew’s testimony, if it pleases.

PN104

THE COMMISSIONER: Yes, okay.

PN105

MR D’ARCY: With that, I would call Ms Dianna Butterworth.

<DIANNA BUTTERWORTH, SWORN [1.28PM]
<EXAMINATION-IN-CHIEF BY MR D'ARCY

PN106

MR D’ARCY: Ms Butterworth, did you prepare an affidavit for today’s hearing?---Yes, I did.

PN107

Is that the affidavit in front of you?---Yes.

PN108

As filed with the Industrial Commission?---Yes, it is.

PN109

Commissioner, I would like to tender that affidavit.

PN110

THE COMMISSIONER: Yes.

EXHIBIT #H1 AFFIDAVIT OF DIANNA BUTTERWORTH

PN111

MR D’ARCY: Ms Butterworth, how long have you been employed with Hudcoe?---Two years at the end of August.

PN112

I note in your affidavit that you are in the position of finance manager?---That’s correct.

PN113

Ms Butterworth, does Hudcoe employ any employees less than 15 years of age
?---No.

PN114

If I can hand up to you - this is an email correspondence?---Yes.

PN115

Did you write this email correspondence?---Yes, I did.

**** DIANNA BUTTERWORTH XN MR D'ARCY
PN116

Can you identify the date and what the content of this email correspondence is
?---Yes. Last Wednesday I sent an email out to the directors, the national operations manager and the area managers around the state - around the country, sorry - to advise them that we would be going to the Industrial Relations Commission to have a hearing heard. I attached three documents to the email. One was an internal memo explaining what we were doing at the hearing. The second was a notice of listing of the matter before the Industrial Relations Commission, showing the date and time; and the third document was the application form to vary the wording in the certified agreement. I put this out there to make it clear that all three documents were to be printed and posted up on the staff notice board, effective immediately, and that all staff were to be made aware that there was a hearing happening the following Thursday, and that everybody was to be contacted and made aware that there would be a hearing.

PN117

Can I also hand you this copy of this notice; could you identify that document for me?---Yes, that’s our internal notice that we drafted to post on the internal noticeboard, advising the staff that we would be going to the hearing and that there were two representatives that they would be able to contact if they had any questions, and also that it was important for the employees to read the information on the noticeboard, and contact either one of the two representatives or the two people at the bottom of the form if they had any questions.

PN118

So this internal notice is the notice mentioned in your email of the 6th?---That’s correct.

PN119

And it was attached?---That’s correct.

PN120

Could I collectively tender both the email and the internal notice?

PN121

THE COMMISSIONER: Yes.

EXHIBIT #H2 EMAIL FROM DIANNA BUTTERWORTH TO THE DIRECTORS, THE NATIONAL OPERATIONS MANAGER AND THE AREA MANAGERS
EXHIBIT #H3 INTERNAL NOTICE FOR EMPLOYEES

PN122

MR D’ARCY: In relation to the - what I might do first is hand this up to you
?---Thank you.

**** DIANNA BUTTERWORTH XN MR D'ARCY
PN123

Have you seen this document before?---Yes, I have.

PN124

Can you tell me what the document is?---Yes. Following on from that email, the next day, we sent around an email to all store managers advising them that again the notice had to be listed on the noticeboard with all three documents; and we also sent out a template for all store managers to attach on the noticeboard, to acknowledge that all staff had received a copy of the notice of listing and also the internal memo. The staff were also advised on that email to contact any staff members that were away, so that they could come in and pick up a copy of both the internal notice and the notice of listing, so that they were made aware of that notice.

PN125

Was the application included in that?---Yes, so.

PN126

So the application made to the Commission as varied?---Yes. We asked all stores to print out a copy, various copies of all three documents and have them sitting with this request, so that when they came in and signed and picked up a copy, then they received it.

PN127

And are they complete yet?---No. As discussed with the store managers, not everybody was coming into work before the Thursday of today ,but I asked all store managers to go to reasonable steps[sic] to contact people on their mobiles, so that they were made aware of the hearing. So they’re currently in store. We took copies of them as at this morning, so.

PN128

In terms of all the stores - - -?---We’re currently - yes, we are currently missing three stores at the moment; three Melbourne stores they - they’ve been made available to head office this morning and due to be faxed through at the moment.

PN129

So Commissioner, if I can explain. There are three coming to the fax machine hopefully very, very shortly?---As we speak.

PN130

MR D’ARCY: To complete this document.

PN131

THE COMMISSIONER: Yes, I see.

PN132

MR D’ARCY: However, I would like to tender it.

PN133

THE COMMISSIONER: Yes, okay.

**** DIANNA BUTTERWORTH XN MR D'ARCY
PN134

MR D’ARCY: And then obviously have the remaining pages attached to that tendered document.

PN135

THE COMMISSIONER: Yes.

EXHIBIT #H4 EMAIL TO ALL STORE MANAGERS TOGETHER WITH FAX

PN136

MR D’ARCY: Ms Butterworth, can you tell the Commission of Hudcoe’s history of workplace bargaining; and you said your start date was?---August 2006.

PN137

Have you had access to the files in relation to Hudcoe’s history of enterprise bargaining?---I have, yes.

PN138

Can you the please tell us what your knowledge is?---What my understanding is? Yes, my current understanding is that the most certified agreement is the 2000 to 2003 certified agreement. There were steps taken around 2003, 2004 to rewrite a new certified agreement, a copy of which is attached to my affidavit.

PN139

That’s attachment C?---No, attachment B.

PN140

Sorry, yes, you’re quite right?---Attachment B. I’m not sure why the certified agreement wasn’t put out to the staff. My understanding is that it wasn’t. It was drafted but wasn’t put out to the staff, so therefore it wasn’t certified at the time. Most recently the company attempted to write a further agreement to that, a 2007 to 2011 agreement which is annexed to my - at C. The agreement was put out to the staff to vote around last year, June last year. It got rejected on a majority vote by the staff so we went back and rewrote the agreement to ensure that it was going to pass, I guess, the vote again; and rather than put it back out to the people we decided to put it straight through the fairness test; however it was rejected at the time.

PN141

That was the pre-lodgement procedures?---That’s correct.

PN142

Commissioner, the fax has just arrived from the registry.

PN143

THE COMMISSIONER: Yes. Well that will be added to H4, yes.

PN144

MR D’ARCY: Thank you.

**** DIANNA BUTTERWORTH XN MR D'ARCY
PN145

Can you also tell the Commission about the history of wage increases, to the best of your knowledge, from the commencement of the agreement?---Yes. I believe, from discussions with internal staff, there was an increase in October 2001. That was put out to the staff, but there was a subsequent increase in October 2002. The next increase after that was in February 2005, and then a further increase in October 2007.

PN146

A final question; are you aware whether or not the employee representative at the time of making the original agreement, a Ms Than Evans, whether or not she is still an employee of the company?---She is no longer employed by the company.

PN147

I have nothing further for this witness, if it pleases.

PN148

THE COMMISSIONER: Yes, thank you, Ms Butterworth. You are excused.

<THE WITNESS WITHDREW [1.38PM]

PN149

MR D’ARCY: If it pleases, I call Mr Christopher Agnew.

PN150

THE COMMISSIONER: Yes.

<CHRISTOPHER WILLIAM AGNEW, SWORN [1.39PM]
<EXAMINATION-IN-CHIEF BY MR D'ARCY

PN151

MR D’ARCY: Mr Agnew, did you prepare an affidavit for the purposes of today’s hearing?---Yes, I did.

PN152

Have you got a copy of it there?---Yes, I have a copy in front of me.

PN153

Is that the copy that was also with the original tendered to the Commission
?---That’s correct.

PN154

Commissioner, if it pleases, I would like to tender.

PN155

THE COMMISSIONER: Yes.

EXHIBIT #H5 AFFIDAVIT OF CHRISTOPHER WILLIAM AGNEW

PN156

MR D’ARCY: Mr Agnew, your affidavit said you drafted the Hudsons Coffee Certified Agreement 2000 and 2003?---That’s correct.

PN157

If I can take you to the agreement itself, which is marked attachment C to your affidavit. Could you please tell me what the drafting intention of clauses 4.1.3 to 4.1.5 of the agreement was?---If you just bear with me, I’ll just turn the clauses up. Commissioner, the intention of those clauses was effectively to provide the reader an interpretation of the clause 4.1.1, which is the wages table above it.

PN158

At the time the agreement was originally proposed, did you have discussions with any employees?---I had a number of discussions both with the employer and the employee representative, yes.

PN159

Do you remember her name?---I do refer to her in my affidavit as Tara Evans but I’ve been able to recently get the file. It’s some eight years, I should say Commissioner. It was only yesterday I was able to get the old file. Thank goodness it wasn’t destroyed, but her name is actually Than Evans, Miss Than Evans.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY
PN160

Do you recollect having any discussions with Ms Evans concerning the wage rates and the construction of those wage rates?---Again, it’s some eight years and I can only say this, that I do recollect a conversation with her. In light of the fact my standard practice when implementing these agreements, Commissioner, is that I request from the employer an opportunity to speak to the employee representatives to explain the process, in terms of how the agreement was put together and what the process is, because ultimately on occasions the employee may actually be required, like today, to attend a hearing for certification of the agreement. But my recollection would have been that I would have indicated to her a broad overview of the agreement, that being the rates of pay, the effect of the agreement; for instance, it replaced the award; and that in particular I do recollect saying to her that this is a new way to negotiate pay increases; and the purpose of these agreements are to sit down the parties to negotiate a pay increase; and at the end of the agreement another agreement would possibly be done.

PN161

Do you remember talking about the future wage movements inside the document itself, at clause 4.1.9?---I - again, I’m just going on a memory of eight years ago, Commissioner. It - my standard practice would be to refer to matters like that, yes, and again that clause is a standard clause and the - I’ve sort of drafted over 200 collective type agreements and that’s a standard clause that I draft, and I - from the best of my recollection I would have had a conversation, more along the lines of[sic] there’s a three per cent pay increase for each year of the agreement. I do note that the agreement unusually is only for just over two years, as opposed to the normal three, and that those increases would be matched by any National Wage Case decisions; and I would have explained to her what a National Wage Case decision was.

PN162

Can I take you then to 4.1.9 and just ask you what your recollection of the drafting attempt was, concerning particularly the second question in 4.1.9, dealing with the National Wage Case increase?---The intent, as I probably just answered for you, is it’s a two-year agreement. There were two pay increases. They were to be matched by a National Wage Case decision and the company - I do recollect expressing to the company that it was in the interest of all parties that this document be renegotiated and - because the purpose of it, as I explained to Miss Evans and the company, is to negotiate pay increases.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY
PN163

Commissioner, at this time I would like to introduce some evidence, however as I explained in my opening submissions it is of some commercial privacy. So I would like to hand that up but make an application under 839, and whilst I make my submissions in relation to that I would ask that the court room be cleared and that the two employee reps please be outside whilst I do that.

PN164

THE COMMISSIONER: Yes, okay.

PN165

MR D’ARCY: I believe that - it doesn’t matter. She is with the firm that wrote the advice, Commissioner, so I’m sure she has - - -

PN166

THE COMMISSIONER: Okay.

PN167

MR D’ARCY: Sorry, I didn’t get your last name?

PN168

UNIDENTIFIED SPEAKER: Katrina.

PN169

UNIDENTIFIED SPEAKER 2: Ms Webban.

PN170

MR D’ARCY: I’m sure Ms Webban has access to the advice anyway.

PN171

THE COMMISSIONER: Okay, she can stay, can’t she? Yes.

PN172

MR D’ARCY: Commissioner, this advice deals with - and I’ve called them MST, the firm doing due diligence on behalf of a third party, in relation to a proposed sale. Now I’m not sure where that sits, but I suppose it’s none of our concern. However, it is of commercial confidence that that is only known by very few people inside the company itself, and obviously very few external people as well. However, it is of relevance because they do an assessment of the 2000 agreement.

PN173

THE COMMISSIONER: I see.

PN174

MR D’ARCY: Which is where I want to lead evidence from, but what I would ask is that the Commission make an order in relation to this particular document.

PN175

THE COMMISSIONER: Yes.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY
PN176

MR D’ARCY: And of the conversation we have just had, under the trade secrets section, as tendered in evidence, section 839, to suppress both this submission and the document.

PN177

THE COMMISSIONER: Yes. What about the transcript? Will that reveal anything, by the questions?

PN178

MR D’ARCY: Well I would like to suppress that as well if I could.

PN179

THE COMMISSIONER: Yes.

PN180

MR D’ARCY: Particularly just in relation to this, but if it has to be the whole transcript then - - -

PN181

THE COMMISSIONER: Yes, well the transcript will be in confidence.

PN182

MR D’ARCY: Thank you.

PN183

THE COMMISSIONER: And this document will also be confidential and will be sealed appropriately.

PN184

MR D’ARCY: After I’ve made those submissions I don’t have reason to keep the employee reps out.

PN185

THE COMMISSIONER: Yes.

PN186

MR D’ARCY: So I’m happy to go and get them or have them back in the room now, because we don’t need to refer to why the report - the substance of the report or the body of the report, there’s no difficulty with that; it’s merely just the reason for the report.

PN187

THE COMMISSIONER: I see. Okay.

PN188

MR D’ARCY: Commissioner, I would formally tender that report from MST.

PN189

THE COMMISSIONER: Yes, certainly.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY

EXHIBIT #H6 REPORT PREPARED BY MASON SIER TURNBULL TO BE TREATED AS CONFIDENTIAL MATERIAL

PN190

MR D’ARCY: Mr Agnew, if I could take you through to point 3.3 of that particular report, on page 4, halfway down the page. Could you explain to me what MST’s view is of the interaction between clauses 4.1.3 to 4.1.5 inclusive, and the wages clause?---They hold a view that those clauses, Commissioner, because they reference the word award, and read together with clause 1.2, definition of award, they hold a view that that means the rates of pay in this agreement should, for all purposes, match the award and, I mean, I don’t want to sound patronising, but awards - a lot were amended in March 2006, so - but that’s - in a sum total, that’s their view.

PN191

Now in relation to the wage increases clause and particularly the matching clause at 4.1.9; can you tell us what their view is in relation to that clause and the operation of particularly the matching clause?---Again they have a view that that clause is basically an all-purposes clause for time immemorial, so each year that the agreement continues to operate there’ll be a matching of the National Wage Case decision.

PN192

THE COMMISSIONER: Even though no National Wage Case decisions, either any more, and were not styled National Wage Case decisions by this Commission for a number of years - but anyway, that’s just an additional complication or perhaps over-technical for the life of the Commission’s role. I think probably the words became meaningless once the work - whatever that gang was called, I’m not sure. Fair Pay Australia?---Yes.

PN193

No, not that, it’s whatever that tribunal is called. It would have no meaning anyway, but in any case that doesn’t solve your problem necessarily.

PN194

MR D’ARCY: No, and we - that’s further advice that we have delved into.

PN195

THE COMMISSIONER: Yes.

PN196

MR D’ARCY: However you’re right, it doesn’t make a great deal of difference; the difference of stopping it at 2005.

PN197

THE COMMISSIONER: Yes.

PN198

MR D’ARCY: As opposed to today and continuing to run.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY
PN199

THE COMMISSIONER: Yes.

PN200

MR D’ARCY: I suppose, Mr Agnew, I ask you a question in terms of the ambiguities. There are two of them raised by the MST advice; do you recognise those ambiguities?---Well if I didn’t know the intention of the parties at the time the agreement was made, or the subsequent conduct, and read in isolation of the definitions of clause - the definitions of base rate and loaded rate and casual rate in clause 1.2, definitions - I mean, it’s an arguable view. I think it has some merit. I don’t, you know - personally I think it’s incorrect but it does have some merit.

PN201

If I can then hand up a copy - Mr Agnew have you seen this before?---Yes, I’ve been provided this by the company several weeks ago.

PN202

Advice from Middletons?---That - that’s correct.

PN203

Again on the 2000 agreement?---Yes, it’s the current agreement that the company operates under. Yes.

PN204

If I take you through to page 2 particularly, can you inform us of what Middletons’s opinion in relation to an ambiguity that they see, or possibly see, in the agreement?---Again, I don’t want to pose a commentary on what lawyers think but if you wanted to, Commissioner, put their view in a nutshell they seem to be middle of the road. My view is on one end, MST is on the other, but basically Middletons don’t make any comment about clause 4.1.3 through to 4.1.4 and 4.1.5. They do make a comment on page 2 in the second paragraph, and if I could read it, Commissioner, it’s probably better, rather than me to summarise. But in that second-last paragraph, if I read from the second sentence they state, “There is obviously a linkage in clause 4.1.9 between the National Wage Case decisions and specific increases for the 2003 agreement and it may be that clause 4.1.9 is not seen as having more general application. It is also common for collective agreements to only provide wage increases during the nominal life of the agreement as later increases are often intended to be subject to further negotiation in the context of agreeing to a later collective agreement”. That last sentence effectively summarises what the - when I was assisting the company and its employees, summarises what the intentions of the parties were with respect to the agreement. Middletons do go on to say that there may be some risk, I think in the last paragraph, and that the company should take some steps to at least increase their rates to a certain level, which they prescribe.

PN205

Yes, that’s particularly on page 3 underneath the wages table?---That’s correct.

**** CHRISTOPHER WILLIAM AGNEW XN MR D'ARCY
PN206

If it pleases, I have nothing further.

PN207

THE COMMISSIONER: That’s it?

PN208

MR D’ARCY: That’s it.

PN209

THE COMMISSIONER: Yes, thank you Mr Agnew. You are excused.

<THE WITNESS WITHDREW [1.55PM]

PN210

MR D’ARCY: Commissioner, I apologise. I did miss one question with Ms Butterworth just in relation to her affidavit, if I could briefly just re-swear her? It’s a very simply matter in relation to the Workplace Ombudsman; an investigation which is contained at the back of her affidavit.

PN211

THE COMMISSIONER: Well, do we need to, given that there was no cross-examination? I will take it that your submission, that if you ask the question on the transcript and she answers it on the transcript, that will suffice I think for present purposes.

PN212

MR D’ARCY: Certainly. Just a question in relation to the last attachment, which is D, and it’s really just to explain that particular attachment and the audit which was conducted under the national fast food outlets including juice bars campaign by the Office of the Workplace Ombudsman. Ms Butterworth, if you could explain that?

PN213

THE COMMISSIONER: Yes, Ms Butterworth.

PN214

MS BUTTERWORTH: The company was contacted last year around July, August, to undertake a wage audit for one of our stores in Queensland. We had to provide evidence of wages payments, hours worked, payslips and time recording for about a fortnight period. We were also asked if we fall under a work - a certified agreement, which we provided them evidence of. The information was sent off to them and we came back with an initial letter saying that we were complying with the aspects of the time and wages records at that time, so.

PN215

MR D’ARCY: That’s all still covered by the agreement?

PN216

MS BUTTERWORTH: That’s still covered by the certified agreement.

PN217

THE COMMISSIONER: Yes, right.

PN218

MR D’ARCY: If it pleases, Commissioner, I now just want to address the issues in submission, please.

PN219

THE COMMISSIONER: Yes.

PN220

MR D’ARCY: Firstly in relation to service, there’s a requirement in relation to the Commission’s rules, rule 72, service of documents, and particularly sub rule 72(2) which deals with service of documents on an individual, and particularly if I take the Commission to (b) - sorry, (c)(i):

PN221

Leaving the document with an individual apparently above the age of 15 at the residence or usual place of business of the individual intended to be served.

PN222

Ms Butterworth gave evidence that there are no employees under the age of 15 employed by Hudsons. Service happened at their regular place of work and that, I believe, was exhibit H4, the employee acknowledgement of receiving all of the application, the notice of listing and the explanation document that was prepared by the company. That, together with the email correspondence which required that to go out to all employees; and they were obviously then posted in each of the stores, as was the evidence I believe of Ms Butterworth. We would submit that we have - - -

PN223

THE COMMISSIONER: Sorry, Mr D’Arcy. Yes, sorry Mr D’Arcy, go ahead.

PN224

MR D’ARCY: We would just respectfully submit that we have met the requirements of service under rule 72, if it pleases.

PN225

THE COMMISSIONER: Yes.

PN226

MR D’ARCY: Commissioner, in relation to the ambiguity itself, as explained earlier the ambiguity arises - well there are two ambiguities, but the first ambiguity arises in relation to the interaction between clauses 4.1.1 of the agreement, the wages clause at 4.1.9, which is the wage increases clause; and then the clauses which we say are explanation clauses in relation to 4.1.3, 4.1.4 and 4.1.5.

PN227

We say the structure of the agreement, particularly the definitions of base hourly rate, casual hourly rate and loaded hourly rate, and particularly when you look at the casual[sic], where at clause 1.2 it talks about, “It is currently 30 per cent in addition to the base hourly rate”. We say the construction of the agreement lends weight to the fact that the clauses 4.1.3 inclusive to 4.1.5 - - -

PN228

THE COMMISSIONER: Just wait, Mr D’Arcy. I was trying to find the agreement then I was looking at the wrong affidavit.

PN229

MR D’ARCY: No worries. It’s attached to Mr Agnew’s.

PN230

THE COMMISSIONER: Yes, yes, I know that.

PN231

MR D’ARCY: Yes. I’m sorry, I don’t think we marked them.

PN232

THE COMMISSIONER: No, no, they were just attachments, and it’s attachment D so I’ve now got it. Now tell me again, what was that? You made a point about casuals in particular?

PN233

MR D’ARCY: Yes, the casuals in particular; when you look at the casual hourly rate definition it says, “It is currently 30 per cent in addition to the base hourly rate of pay”. It clearly shows the intent that 4.1.5, which deals with what we say is merely just the original calculation of those rates - it deals particularly with “is currently 30 per cent”.

PN234

So if you took the interpretation of MST, you would say, “Well, that’s inconsistent”, because it didn’t stay at 30 per cent which is what MST’s evaluation of the agreement would leave it at. They would say, “Well,
because - - -

PN235

THE COMMISSIONER: Clause 4.1.5 - - -

PN236

MR D’ARCY: 4.1.5, sorry?

PN237

THE COMMISSIONER: Yes, sorry, 4.1.5 says, “It will be 30 per cent in addition to the base hourly rate”. It doesn’t say now or once, it basically says forever and a day.

PN238

MR D’ARCY: And when you link that to 4.1.3 and say you make the assumption that it is linked to the award, then it’s always going to be 30 per cent.

PN239

THE COMMISSIONER: Yes, yes, I understand.

PN240

MR D’ARCY: So you can see the clear difference, and what we say is when you look at base hourly rate and the casual hourly definitions and the loaded rate definitions, they particularly just refer to the wages clause. They don’t refer back to clauses 4.1.3 through to 4.1.5.

PN241

We also heard Mr Agnew’s testimony that the employer was due to renegotiate. We also Ms Butterworth’s testimony that they tried to renegotiate at the end of 2003, 2004 and there was clear intent that the parties were going to come back. So when you look at the wage increase or matching clause under 4.1.9 there was never any attempt, we say, based upon the evidence, to continue on the wage increases from the National Wage Case. In fact when you look particularly at that clause 4.1.9 it says:

PN242

The company will pay the shortfall if the National Wage Case decision awards employees an increase greater than the above increases in each year of operation of the agreement.

PN243

So it only deals with the wage increases above at October 2001 and October 2002; it doesn’t go any further we say. Now when you look at the interpretation that Middletons have got, on the face of it yes, they could be right; and therefore it creates the ambiguity, which is why we are seeking the variation to clarify the original intent of the parties; which was that it was merely a matching clause for the purposes of both the 2001 and 2002 wage increases.

PN244

Middletons actually say in their advice, Commissioner:

PN245

Due to imprecise drafting in relation to how the pay rates are increased over the life of the agreement it is difficult to be certain of the current applicable minimum rates of pay-

PN246

Therefore creating the ambiguity, however, when you look at the construction of the agreement itself, together with the evidence which was led about the intention of the parties, we say that clarifies the intent and we would ask, obviously, the Commission to grant the draft order as requested in relation to 4.1.9.

PN247

Further, Mr Agnew did talk about how the wages would move over the life of the agreement, it was his intent. But he concurred or he put evidence to that effect, that they would move by either three per cent in October 2001 and October 2002, or if the National Wage Case decision was greater in those years it would be greater.

PN248

In relation to Ms Butterworth’s evidence, it clearly shows that Hudcoe’s subsequent conduct supports this interpretation of the agreement. There were wage increases following 2002 but they were not in line with the National Wage Case increases, and through that period there is no evidence, and we are not aware of any issues that employees have brought up in relation to those. In fact there were renegotiations which occurred, obviously with the employees’ knowledge, in 2004 and 2007 but the wage increases that occurred in those years, I think it was 2005 following the 2004 agreement not going ahead, and then the increase of 2007 which followed the 2007 agreement not going ahead, they were not in line with the National Wage Case increases when they were given. So the subsequent conduct of the parties clearly shows that that was not the intent of that particular matching clause.

PN249

THE COMMISSIONER: When this agreement was made in 2001, I think, did it operate in only one state or more than one state?

PN250

MR D’ARCY: When it was made it was only operating in this state. However since that date Hudsons has expanded and they have operations now in Queensland, New South Wales and about to be in the ACT.

PN251

MS BUTTERWORTH: South Australia, and we’re about to go into WA.

PN252

MR D’ARCY: South Australia, and about to go into WA, so it has expanded over the life of this particular agreement, which is part of the evidence I suppose and I know it’s not germane to this application, but part of why we are saying that there is another renegotiation process about to kick off, through Ms Butterworth’s testimony, to try and address some of those issues.

PN253

In fact I think you’ll find that there was an award designated because at the time there was only an industry sector award here. I think you’ll find that there was the State Restaurants Award.

PN254

THE COMMISSIONER: Yes.

PN255

MR D’ARCY: Or the Restaurants Award, which was in fact used for the purposes of the MBT notice and test at that particular time of certification. Commissioner, the only other thing in relation to the ambiguity itself; we presented the evidence, albeit it was a little late, for the Workplace Ombudsman. When they did the review of the document itself they clearly didn’t think that the subsequent national wage increases would have applied; because at that time Hudcoe may very well have been behind in relation to those, or would have been, given the extra 30 per cent on the casuals and the 10 per cent on the loading.

PN256

THE COMMISSIONER: Yes.

PN257

MR D’ARCY: It would have been behind at that time and would have been, importantly, in breach. But they got a clean bill of health from the Workplace Ombudsman after that random audit, as part of that campaign.

PN258

Commissioner, I don’t intend to spend a lot of time on the cases. I know you’re very familiar with them, as I said earlier. I have read your decision in relation to the Qantas Airways Limited Flight Crew Long Haul Certified Agreement in July last year. But I will say these particular issues. You quote Vice President Watson in his earlier decision in relation to Qantas and it deals with firstly in all these cases with finding an ambiguity in the first instance. So if an ambiguity exists, and we obviously say that it does, then the question is whether or not the Commission is going to use its discretion to vary that particular ambiguity. Is it appropriate to vary and what variations would be appropriate in the circumstances?

PN259

VP Watson, in that particular quote which you use from his earlier Qantas long haul decision, says:

PN260

It is well established that a significant factor is to objectively ascertain the mutual intention of the parties at the time the agreement was made. It is not appropriate to rewrite an agreement or install something that was not inherent to the agreement since it was made.

PN261

So we say that our variations don’t do that. Clearly the evidence given by Mr Agnew goes to the intent, the original intent. When you look at the structure of the agreement itself it’s quite clear that whilst on the fact of it there is an ambiguity, the intent of the drafting and the intent of the parties at the time of making the agreement favours our view, we would submit.

PN262

VP Watson goes on to say:

PN263

The exercise of discretion conferred on the Commission in relation to the ambiguity or uncertainty does not give rise to a general discretion to determine a matter based upon industrial fairness. The task is to place the parties in a position they intended by their agreement insofar as the wording of the agreement does not reflect the intention. Although a serious factor, to objectively ascertain the mutual intention of the parties is not the only consideration. However it would be unusual for other considerations to weigh in favour of a variation that is inconsistent with the intention of the parties.

PN264

Commissioner, I’m not sure how much you want me to go into it, but that pretty much summarises a lot of the case law in relation to - - -

PN265

THE COMMISSIONER: Yes. This is off left field but in the definitions clauses there is a definition of an award. It says at 1.2, “Award means relevant state or territory award”.

PN266

MR D’ARCY: Yes.

PN267

THE COMMISSIONER: Where else is the word award used other than in 4.1.3?

PN268

MR D’ARCY: It is used in clause 1.3.2.

PN269

THE COMMISSIONER: I see. Good, yes.

PN270

MR D’ARCY: So it’s used for total exclusion.

PN271

THE COMMISSIONER: Yes, I see.

PN272

MR D’ARCY: So this was a standalone agreement.

PN273

THE COMMISSIONER: I see.

PN274

MR D’ARCY: Which was primarily why the definition would have been included.

PN275

THE COMMISSIONER: Yes, okay.

PN276

MR D’ARCY: So we say really it is drafting error. It should have more fully explained that those were really instructional clauses about how those calculations were arrived at, to give you the wage rates at 4.1.1.

PN277

Commissioner, as I said, I’ve got other cases that I can run through all the things that have been said, but primarily, as I said, I know that you’ve been involved in some - - -

PN278

THE COMMISSIONER: No, you need not. I’m aware of them, yes, thank you.

PN279

MR D’ARCY: In relation to the retrospectivity, I believe you also said - I mean, there’s a whole range of retrospectivity. If you look at Coles Myer v NUW, Woodlands 2002 Agreement, the Comalco Aluminium (Bell Bay) Limited Employment Agreement 2000, when they held the variation as proposed was consistent with the original intent of the parties. There was no party opposing the variation and there was no evidence of any detriment to likely flow from the application. The variation was approved from the date of certification.

PN280

I would also say that as you noted in the long haul flight crew, it’s appropriate to clear up the ambiguities from the commencement of the agreement, because if you have done that you have cleared the intention of the parties, and you have no past issues or problems to deal with.

PN281

In fact the vast majority of decisions where they have found an ambiguity and made an order under this section do lend themselves to retrospectivity to the commencement of the agreement, to clear up that ambiguity. If it pleases.

PN282

THE COMMISSIONER: Yes.

PN283

MR D’ARCY: So we would make a formal request for an order for retrospectivity in relation to this particular application.

PN284

THE COMMISSIONER: From the date that Senior Deputy President Leary or Commissioner Leary made it.

PN285

MR D’ARCY: Yes.

PN286

THE COMMISSIONER: Whenever it operated from, whichever date it is.

PN287

MR D’ARCY: It’s 2 February 2001, if it pleases.

PN288

THE COMMISSIONER: Yes.

PN289

MR D’ARCY: Commissioner, unless you want to hear some more from me, and as I say, I can run through some more case law but unless you want to hear from me some more I have no further submissions and we would respectfully request that the application be granted.

PN290

What I didn’t run through, I suppose, is the variation or the order as sought, which I should do briefly.

PN291

THE COMMISSIONER: Yes, you have presented a draft order, haven’t you?

PN292

MR D’ARCY: We have, and it’s attachment A to the application itself.

PN293

THE COMMISSIONER: Yes.

PN294

MR D’ARCY: That draft order takes out, in terms of 4.1.3, the reference to the award as such.

PN295

THE COMMISSIONER: Well yes, it deletes the word award and also Monday to Friday. You have re-jigged it a bit but that’s the substance of it in 4.1.3

PN296

MR D’ARCY: That’s correct.

PN297

THE COMMISSIONER: What is the change in 4.1.4?

PN298

MR D’ARCY: 4.1.4?

PN299

THE COMMISSIONER: I don’t know that there is any, is there?

PN300

MR D’ARCY: No, I think that they still run off the back of 4.1.3.

PN301

THE COMMISSIONER: Yes.

PN302

MR D’ARCY: And that’s the same for 4.1.5.

PN303

THE COMMISSIONER: Yes.

PN304

MR D’ARCY: What they have taken out of 4.1.5 - sorry, the two changes are the same. They have taken out the - 4.1.4, “Ten per cent above the award Monday to Friday rate loading” and then, “Five per cent above the award Monday to Friday loading” in - - -

PN305

THE COMMISSIONER: But there was no reference to the award in 4.1.4 and five was there?

PN306

MR D’ARCY: Yes there is. There is a reference in the last - - -

PN307

THE COMMISSIONER: Yes, you’re right. Yes.

PN308

MR D’ARCY: They have both been deleted in the draft order.

PN309

THE COMMISSIONER: Yes, sorry.

PN310

MR D’ARCY: Then at 4.1.9 - sorry, you see just the reference - - -

PN311

THE COMMISSIONER: Yes, there is the additional one. You could have put in 10 per cent above the Monday to Friday loading, but anyway you choose not to. But anyway it’s okay. Yes, we’ll keep on going. Yes, because you have deleted the words, “Award Monday to Friday” above it.

PN312

MR D’ARCY: Yes.

PN313

THE COMMISSIONER: Yes, okay, I understand, that’s consistent. Then for 4.1.9 what do you do?

PN314

MR D’ARCY: We’ve changed the wording from - - -

PN315

THE COMMISSIONER: Yes, nominal.

PN316

MR D’ARCY: - - -“In each year of operation of the agreement” and it now says, above, “Over the nominal period of the agreement”.

PN317

THE COMMISSIONER: Yes.

PN318

MR D’ARCY: So referring to the nominal expiry date.

PN319

THE COMMISSIONER: Yes. Thank you Mr D’Arcy.

PN320

MR D’ARCY: Thank you Commissioner.

PN321

THE COMMISSIONER: Mr Viewby or Mr Crane, do you have anything to say, either in support or more importantly, in opposition to what Mr D’Arcy and the company have said?

PN322

MR CRANE: No, sir.

PN323

THE COMMISSIONER: No, I don’t mean to pin you down but you have come along and it had to be noted that I gave you that opportunity.

PN324

Yes, this is an application by the company known as Hudcoe Pty Limited to do two things. One is to find that there is an ambiguity or uncertainty in respect of the agreement known as the Hudsons Coffee - Certified Agreement 2000-2003, and secondly, to take steps to remove that ambiguity.

PN325

The Commission is first of all satisfied that the applicant has taken steps that are adequate to notify and inform the persons affected by this application, that is parties to the agreement, employee parties to the agreement, as to these proceedings today and the nature of them.

PN326

The first so-called ambiguity arises because of the combined operation or the interrelation of the definitions found in clause 1.2, the table of rates found in 4.1.1 and certain definitions or phrases used in clauses 4.1.3, 4.1.4 and 4.1.5. For simplicity the ambiguity arises as to whether or not the relevant rates, base hourly rates and associated loaded hourly rates and casual hourly rates, are referable to what is set out in that table; or whether they are affected by rates found in an award, a relevant state or territory award that might operate in this industry or might operate on this company.

PN327

An ambiguity cannot be manufactured and thus if a provision is clear one can’t trigger 170MD, or one could not trigger 170MD merely by another person saying, “No, it might look black but it’s not black it’s actually white”. There has to be some legitimate basis for the competing contentions. I’m satisfied that here there is a difficulty and that a person picking up this instrument may very well say, “Well, the rate of pay is referable to the relevant Queensland award” or, “It’s not. It’s referable to the rates set out by the parties and established, and found at 4.1.1”.

PN328

So I’m satisfied that there is an ambiguity in that regard. I’m also satisfied that there is an ambiguity as to the operation of that second question, or second feature, of 4.1.9; because on one view the national wage cases, however styled, can only provide any additional rate if relevant to those increases of 18 October 2001 and 18 October 2002. However, because this agreement has failed to be replaced by force of certain provisions of the Act, the agreement has continued in operation for many more years since then.

PN329

There have subsequently been National Wage Case decisions after that and there may be an argument that they ought to have been added and to have applied the shortfall, being the shortfall of whatever the National Wage Case was, to a wage increase that might at times have been zero. In fact even though the company has granted wage increases since 2002, they don’t represent agreement type wage increases and therefore on a strict application of the agreement, on one view all national wage cases would be applied fully to the non-increase applied by the company. So there is certainly a contentious view there and I find that there is an ambiguity in that regard.

PN330

Having found that an ambiguity exists, it’s then a question of what ought occur. I have been taken to decisions and I think it’s well settled that to do something after finding such an ambiguous provision is a discretionary matter for the Commission. It may take a range of means of correcting that ambiguity, or it might take the view that it will not correct it.

PN331

In my view, I propose to exercise my discretion and correct the instrument so that it is no longer ambiguous. I propose to do that, and to do it by applying the variation sought by the applicant which will be to redraft 4.1.3, 4.1.4 and 4.1.5 so that those definitions are not referable to the relevant - what is called the award - but rather to be more in line with the definition found at 1.2, which itself is referable to a set table of rates of pay.

PN332

My reasons for preferring that as the means of correcting is, first of all there is nothing before me that suggests that it was the intention of the parties that the award mechanism be the way that rates of pay ought be set. I also note that at 4.1.9, which is a provision of contention for other reasons in this application, there is reference to any shortfall of National Wage Case decision. Now in my view if the parties had intended that the awards ought to have applied, and the awards by definition are awards operating in some cases in the federal jurisdiction, but in many cases in the state jurisdiction, then it would be inappropriate to refer to shortfalls based on the National Wage Case decision, when in fact there are state wage case decisions that are not always identical to the National Wage Case.

PN333

In my view the reference to the National Wage Case decision in 4.1.9, the existence of a table which seems to be applicable in general terms, tells against this agreement being seen as an agreement that only applies or is referable to any particular state within the Commonwealth. In my view, notwithstanding its origins perhaps in Victoria, this was an employer that intended to go national in its operations and there are a number of references to that throughout the agreement.

PN334

That, in my view, tells against the continued operation of references to awards which would have resulted, obviously, in a whole range of wage rates, as opposed to a more consistent single rate applicable at all locations. In fact that is underscored by the fact that at Melbourne Airport there is in fact different rates. So once again, where the parties specifically wanted something different from the unitary system of rates of pay, it has actually set that out as a particular provision.

PN335

In my view therefore I propose to favour the operation, if I might call it that, that relates to following what is in 1.2 rather than in 4.1.3. For that reason I propose that the appropriate variation is to excise references to awards from those provisions in clause 4, and it’s for that reason that I favour the proposal set out by the company in its application, and in its proposed draft order.

PN336

Secondly, as to 4.1.9, I also support or propose to vary the agreement in line with the draft proposal of the applicant. I do that for two reasons. Firstly, references to National Wage Case decisions being applicable, where they are greater than the above increases, in my view the word “increases” is not the same as quantum. In other words, it’s not to be taken as referable to the increases of three per cent. The word increases is a wider concept and,” the increases above are three per cent from the first full pay period on or after 18 October 2001” and similarly, “On or after 18 October 2002”. In my view, it’s only those increases where the National Wage Case is to apply, not in any other instances.

PN337

Secondly, I consider that the evidence of Mr Agnew is telling to the extent that he conveys what I consider to be practical industrial relations usage and practice, in that it is very unusual for the parties to an agreement, particularly the employer party, to set out or to accept that wage increases will apply even after the nominal expiry date of the agreement. True it is that wage increases are sometimes applied, but they are in the form of what we might call rollover agreements, where nothing has changed except an increase and it does normally require specific agreement between the parties.

PN338

It is not usual for a respondent to be affected by clauses as to future wage increases or adjustments once the agreement has passed its nominal expiry date. Therefore for those reasons I propose to vary the agreement so that where it talks about operation of the agreement, I think it ought talk about the nominal operation of the agreement.

PN339

I note what is said about the applicable date for the variation. I propose to vary the award as sought in the draft and to make it applicable from that date first, where the agreement applied by Commissioner Leary on 2 February 2001. A formal order will issue in due course. On that basis these proceedings are adjourned. Thank you.

<ADJOURNED INDEFINITELY [2.34PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

DIANNA BUTTERWORTH, SWORN PN105
EXAMINATION-IN-CHIEF BY MR D'ARCY PN105
EXHIBIT #H1 AFFIDAVIT OF DIANNA BUTTERWORTH PN110
EXHIBIT #H2 EMAIL FROM DIANNA BUTTERWORTH TO THE DIRECTORS, THE NATIONAL OPERATIONS MANAGER AND THE AREA MANAGERS PN121
EXHIBIT #H3 INTERNAL NOTICE FOR EMPLOYEES PN121
EXHIBIT #H4 EMAIL TO ALL STORE MANAGERS TOGETHER WITH FAX PN135
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