AG2009/22396, Transcript of Proceedings [2010] FWATrans 315 (10 March 2010)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 24905-1

COMMISSIONER GOOLEY

AG2009/22396 AG2009/22397 AG2009/22398 AG2009/22399 AG2009/22400 AG2009/22401 AG2009/22404

s.185 - Applications for approval of a single-enterprise agreement

Applications by Perfumania Pty Ltd
(AG2009/22396)





Melbourne

2.30 PM, WEDNESDAY, 17 FEBRUARY 2010

PN1

MR C. POWER: Thank you, commissioner. I seek permission to represent the applicant employer in those matters.

PN2

THE COMMISSIONER: That's fine, Mr Power. I've called this matter on as a result of correspondence that I forwarded to the parties and the responses I've had, and to raise some other questions that I have in relation to these agreements. The way I propose to deal with them, Mr Power, is to start with the Victorian agreement and the statutory declaration which goes with all of the agreements, because I have a couple of questions about the entire process.

PN3

MR POWER: Yes.

PN4

THE COMMISSIONER: And you can sit down, because I think in terms of the situation where there's nobody else and there's just us, we can deal with this in this fashion.

PN5

MR POWER: Thank you. Can I just point out before we start, commissioner, that I'm embarrassed to say that my instructor, Jeff Sher, did - in this matter has pointed out a further error in the second statutory declaration. He points out that in paragraph 7(b) we talk about late night trading on Thursday and Friday nights, and it says there three occasions. In fact the assumptions were meant to be two occasions and that's what's reflected in the various calculations. It may be that we need to file a correcting stat dec, but that error I must take some responsibility for, because it certainly was the case that the instructions were that it was late night trading in every four-week cycle on two occasions.

PN6

THE COMMISSIONER: Okay. Thank you, Mr Power. If I go to the initial statutory declaration that was filed in all the proceedings, and we have a look at paragraph 2.3, it refers to a document called Making an Enterprise Agreement - Guidelines for Employees, which explains the process for making and the context of the proposed agreement. In paragraph 2.5 which talks about the steps that the employer is required to follow to explain the terms of the agreement and the effect of those terms to relevant employees – and it said, "The information was conveyed and the materials were available to employees as described above." I have a number of questions arising from that. Was a copy of the Shop Distributive and Allied Employees Association -Victorian Shops Interim Award made available to employees in every state?

PN7

MR POWER: Yes.

PN8

THE COMMISSIONER: And was the document that's described as Making an Enterprise Agreement – Guidelines for Employees the same in each state?

PN9

MR POWER: I believe so, commissioner.

PN10

THE COMMISSIONER: And what did that document contain?

PN11

MR POWER: It contained a number of sections. It explained, you know, why Perfumania was doing the agreement. It talked about the experience of - Perfumania had been down this exercise under the old Work Choices model earlier in 2009 and it explained that the purpose for making the enterprise agreement was sort of building on the feedback obtained from the then workplace authority as a result of that exercise. I need to refresh my memory.

PN12

MR SHER: There was information about – sorry, am I allowed to speak?

PN13

THE COMMISSIONER: Certainly. You need to come up near the microphone though.

PN14

MR SHER: It contained information about the process and also information about if there were concerns, who were the people available to contact. I've got a copy here.

PN15

MR POWER: All right. Thank you for your patience, commissioner. Essentially it's a letter that explains why we're doing this again. It talks about the experience with the first agreement. It then says that we can give you certain material in order to inform you about the agreement. It refers to the new agreement attached, a copy of the National Employment Standards, a copy of the Victorian award, a letter informing – yes, okay. I haven't actually read the – in ages, but it talks about changes to the industrial relations rules, the introduction of the Fair Work Act. It actually summarises the National Employment Standards. It summarises the Victorian Retail Award conditions that are incorporated into the agreement, including allowances, hours of work, but, as I said, it also made available copies of those instruments as well as the summary.

PN16

THE COMMISSIONER: What I'm concerned about - and I appreciate that what has occurred is a complex process because it's across the states and territories and it has a number of underpinning awards, but there are differences between for example the Western Australian award and the Victorian award, and the Queensland award and the Victorian award. The employer is obliged under the act to explain to the employees the terms of the agreement and the effects of those terms. What I'm concerned about is that the effects of the terms may differ from the state you're in. For example, in Victoria where if we set aside managers and assistant managers, you don't have to explain the change in overtime because overtime remains the same. You don't have to - et cetera, but in the other states there are some differences.

PN17

There are differences which, if you go to the – fortunately for myself – modern award research section, it has a whole series of comparisons between the different awards. They would impact on different states differently. What I'm trying to determine is whether in the process of explaining the new agreement and the effects of its terms, whether anything was explained other than the same document was provided to each group of employees and each group of employees was told, "Well, this is where you find your award."

PN18

MR POWER: Thank you, commissioner. I can attempt to answer that question with reference to a document that I'm looking at which I know was given to employees. It didn't compare the Victorian Retail Award conditions that were incorporated in the agreement with the applicable state award conditions, that much is true, but it did give a very good summary of the actual Victorian award conditions that were incorporated. For instance, I'm looking at the section that deals with rosters and it goes for some four paragraphs. I'm looking at the meal breaks, rest breaks, and again that goes for about a quarter of a page in pretty plain English terms. At the end of all those summaries it says, "Please read the relevant clauses for the full detail." All those summaries are prefaced with the following paragraph:

PN19

The following represents a summary of the key award provisions that will form part of the agreement. They have been extracted from the current Victorian Retail Award, which is the reference document in the agreement. It is important to read the relevant clauses to ensure that you have a full understanding of the employment conditions –

PN20

but then it goes on to really, you know, summarising in plain English terms the nature of those award entitlements.

PN21

THE COMMISSIONER: Would you be able to provide me with a copy of that document, Mr Power?

PN22

MR POWER: Yes, commissioner.

PN23

THE COMMISSIONER: Thank you. The other thing I was going to ask you, given that the Victorian Shops Award has in effect two different parts to it in reality – it has the first award that was made and then it has the interim roping-in award, which as you may be aware did vary some of the provisions, and when the Victorian award was made common rule – the Victorian award that applies in Victoria by virtue of the common rule, and I presume that this employer was picked up by virtue of the common rule and not - - -

PN24

MR POWER: That's correct.

PN25

THE COMMISSIONER: That varied some of the terms of the main award.

PN26

MR POWER: Yes.

PN27

THE COMMISSIONER: And I note that the agreement simply talks about the Shop Distributive and Allied Employees Association - Victorian Interim Award 2000 as at the date of making this agreement.

PN28

MR POWER: Yes.

PN29

THE COMMISSIONER: Which award were employees told would apply to their employment and which award does? In other words, is it the Victoria common rule award? Because if you simply told employees to go to the web site to have a look at this award, then unless I think they have some experience in industrial relations, I doubt very much whether any employee would not do anything other than look at the first part of the award that did change some matters.

PN30

MR POWER: Well, I can answer that simply by this, commissioner: the extracts from the relevant award were copied, extracted and made available to employees. I'm looking at one of those extracts right now. You know, as you're aware, it's a diabolical document.

PN31

THE COMMISSIONER: Yes, the modern award in fact would make things a lot easier.

PN32

MR POWER: Yes, indeed.

PN33

THE COMMISSIONER: But I'm just wondering, is this a class A exempt shop, Mr Power?

PN34

MR POWER: No.

PN35

THE COMMISSIONER: So, for example – and I must say that even I find it difficult to – what were employees told they'd get paid on a Sunday? In terms of the Victorian award, what were the penalty rates they were told they'd get paid on a Sunday?

PN36

MR POWER: Well, because that wasn't something which had been incorporated in the award, that's not something which we provided information on.

PN37

THE COMMISSIONER: So for Victorian workers, was it explained to them that the rate of pay was intended to include a component for Sunday penalties?

PN38

MR POWER: No, it wasn't, commissioner. What was explained was – and of course you haven't had an opportunity to read this, but there was a general statement made that the rates in the agreement are based on the minimum wage rates that are applicable, under the applicable Australian pay classification scale, with a loading upwards to compensate for weekend penalties.

PN39

THE COMMISSIONER: Because I must say, Mr Power, when I read the provision in the award that said "all the award provisions dealing with hours of work", I must say I took that to mean hours of work in a general sense, which is if my hours of work were on a Sunday, I'd get what the award said I'd get paid for a Sunday. Is that not the case?

PN40

MR POWER: Well, the subject matter of the Hours of Work clause in the Retail Award does not deal with penalty rates.

PN41

THE COMMISSIONER: I just need to be clear that the - - -

PN42

MR POWER: The Hours of Work clause, clause 23, just deals with standards hours, ordinary hours, rostering, notification of rosters, employment on RDOs, so incorporating that clause it's not a question really of monetary, is it? It's specification of what ordinary daily and weekly hours are.

PN43

THE COMMISSIONER: So then I'm to take it from that, Mr Power, that for example the protection of existing clause 10.3 for regular part-time workers which actually deals with the hours of work for what are called regular part-time workers, are in fact not picked up this agreement, because it's not dealt with in the Hours of Work clause.

PN44

MR POWER: I think that's right, commissioner, in the sense that – and which particular subclause are you talking about?

PN45

THE COMMISSIONER: I'm talking about the provision that says that a regular part-time worker must be in agreement about the hours of work. It's 10.3.3.

PN46

MR POWER: Yes.

PN47

THE COMMISSIONER: 10.3.4 says there has got to be agreement for variation to that, and then the provisions about their rosters.

PN48

MR POWER: Well, I mean, I guess - - -

PN49

THE COMMISSIONER: That was going to be one of my questions, Mr Power. It's not absolutely clear to me from that clause in general what is included and what is not included in this agreement. If it's not clear to me, I'm not clear how it could have been clear to the employees.

PN50

MR POWER: Certainly the intention, commissioner, is to incorporate the relevant provisions in the award dealing with hours of work. If it's required that we give a clarifying undertaking to that effect, then we shall do so, but it's certainly not intended that anything – and these are my instructions – in clause 10, you know, not applying so far as it deals with the hours of work - - -

PN51

THE COMMISSIONER: Would you be able to provide me, with reference to the interim award, the specific clauses of the award that you say are incorporated into the agreement?

PN52

MR POWER: Yes, commissioner.

PN53

THE COMMISSIONER: Because one of the provisions that I noted that was clearly not intended to be picked up, was the public holidays clause.

PN54

MR POWER: Yes. It was intended that we rely on the NES, which would seem to be more universally applicable. There wouldn't be much point having the Victorian award provision for - - -

PN55

THE COMMISSIONER: It's just that I'm conscious of the fact that in the Victorian award – yes, I accept the Cup Day probably wouldn't be particularly applicable to people outside of Victoria, although they do seem to celebrate it in a way that impacts on work in those states, but the things I was more concerned about were things like – but I accept there in fact are no penalties for working on public holidays under this agreement. Is that correct?

PN56

MR POWER: No, commissioner. There is a public holiday rate in each of the pay schedules.

PN57

THE COMMISSIONER: Sorry. Yes.

PN58

MR POWER: For sales assistants.

PN59

THE COMMISSIONER: Yes.

PN60

MR POWER: The intention is it's loaded up in an hourly rate.

PN61

THE COMMISSIONER: Okay, yes. All right. So if you can make it clear for me what provisions were to be included in the general clause. Also indicate to me, when you define the award, what bits you mean.

PN62

MR POWER: I understand, commissioner.

PN63

THE COMMISSIONER: And you'll be providing me with the information that was provided to employees, but I should put you on notice I am concerned that if employees weren't told about what their existing underpinning entitlements were, they may not have been given the information that they were required – the explanation that was required to be given to them in relation to genuine agreement. You may recall, Mr Power, there has been a decision at least under the old provisions prior to Work Choices where even advising employees of the wrong award can affect their ability to genuinely agree; so I am concerned that given the differences between the different states, that it may not have been explained to employees that under their underpinning award in Western Australia they may have been entitled to – and this has been changed to why - "But you're being compensated for it in this way."

PN64

If we then look at some of the specific agreements, and that's particularly in relation to - if we look at, to start with, Western Australia – sorry, Mr Power, there's one other thing. Because I misunderstood how the agreement was going to apply and did in fact think that the penalties that went with working on Sunday – well, sorry, Mr Power, there do seem to be different rates for Sunday.

PN65

MR POWER: Different rates in - - -

PN66

THE COMMISSIONER: For Sunday.

PN67

MR POWER: Yes, the Sunday rate in the agreement. Each agreement has a Sunday rate.

PN68

THE COMMISSIONER: There's a Sunday rate in the agreement.

PN69

MR POWER: For sales assistants.

PN70

THE COMMISSIONER: Right.

PN71

MR POWER: And then loaded, I should imagine - - -

PN72

THE COMMISSIONER: Well, yes, for sales assistants. They all appear to be double time.

PN73

MR POWER: Yes.

PN74

THE COMMISSIONER: Okay. I'll just have to go back and have a look at that. What's the pattern of work of employees in these businesses, Mr Power?

PN75

MR POWER: Well, the rosters of the sales assistants vary, but the intention of the sales assistants' rates is essentially to putting the minimum wage; so it's really designed to really pick up the minimum wage clause.

PN76

THE COMMISSIONER: Minimum wage for each classification.

PN77

MR POWER: For the sales assistants.

PN78

THE COMMISSIONER: Yes. That way you're above award rate and therefore pass the no disadvantage test.

PN79

MR POWER: Yes.

PN80

THE COMMISSIONER: I think the only one in that regard I do need to look at – and this is about managers – you've said you're prepared to give an undertaking that managers' rates will go up to $35,230.

PN81

MR POWER: In Western Australia. Store managers, yes.

PN82

THE COMMISSIONER: In Western Australia, yes – which is 84 cents more than the award rate that you've calculated the store manager would get.

PN83

MR POWER: Well, the award rate for the store manager is $17.10.

PN84

THE COMMISSIONER: Yes, and you say you're going to put that up to 17.83 in the statutory declaration.

PN85

MR POWER: Yes.

PN86

THE COMMISSIONER: Which you say gives them an annual rate of 35,230.

PN87

MR POWER: Yes.

PN88

THE COMMISSIONER: So when I look at the table you prepared for me as part of the attachment to the statutory declaration - - -

PN89

MR POWER: Yes.

PN90

THE COMMISSIONER: - - - you've got the total amount earned in the year if the award applied, $35,229.16.

PN91

MR POWER: Yes.

PN92

THE COMMISSIONER: And that means that the amount the person would actually earn under the agreement is $35,230.

PN93

MR POWER: Yes.

PN94

THE COMMISSIONER: Which is an 84-cent a year difference.

PN95

MR POWER: Yes.

PN96

THE COMMISSIONER: I'm just not sure 84 cents is enough, Mr Power.

PN97

MR POWER: Yes.

PN98

THE COMMISSIONER: Do you want to have an opportunity to have a look at that - - -

PN99

MR POWER: Yes.

PN100

THE COMMISSIONER: - - - in relation to the things that will not be covered by the award to ensure that – it's the Western Australian award, of course, not the Victorian award – the store manager's rate in fact will pass the no disadvantage test?

PN101

MR POWER: Yes, okay. I will do that. I think what I anticipate, commissioner, is a further statutory declaration dealing with these matters.

PN102

THE COMMISSIONER: If you could provide that information to me, Mr Power. If I have any matters that arise out of that, I will contact you to see if we can resolve them without bringing you down here, but I was trying to avoid another sort of flurry of correspondence between us. If you could provide that information to me, I will attempt to deal with it as quickly as possible because I am conscious of the fact that the agreements were lodged in December and time is getting on; but unfortunately this process is – while it takes time, it ensures that we don't just have a situation where you have the agreements not approved and then you lodge them again without having some understanding of what are the issues that we may be concerned about.

PN103

MR POWER: I appreciate the way the commission has conducted this process today. It has been very useful.

PN104

THE COMMISSIONER: Okay. All right. Have you got any other matters you think I should - - -

PN105

MR POWER: No, I think I understand what's needed, commissioner, and we'll attend to those promptly.

PN106

THE COMMISSIONER: Thank you, Mr Power. Thank you, Mr Sher.

<ADJOURNED INDEFINETLY [3.00PM]