AG2009/24701, Transcript of Proceedings [2010] FWATrans 744 (28 April 2010)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 22477-2

COMMISSIONER GOOLEY

AG2009/24701

s.185 - Application for approval of a single-enterprise agreement - Wypeka Pty Ltd Enterprise Agreement 2009

Application by Australian Newsagents Federation Ltd
(AG2009/24701)





Melbourne

10.06AM, FRIDAY, 16 APRIL 2010

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA
TELEPHONE CONFERENCE AND RECORDED IN MELBOURNE

PN1

THE COMMISSIONER: I will take the appearances.

PN2

MR O. STANKOVSKI: Oliver Stankovski, Vana Ltd.

PN3

MS L. BROWN: Louise Brown, Wypeka Pty Ltd.

PN4

THE COMMISSIONER: Thank you.

PN5

MS T. HARRIS: Tanya Harris, Australian Newsagents Federation. I can bearly hear.

PN6

THE COMMISSIONER: Can you hear me now?

PN7

MS HARRIS: No, I can't. I could hear Oliver and Louise but, sorry, I can't hear you, Commissioner.

PN8

THE COMMISSIONER: Can you hear me now?

PN9

MS HARRIS: No. Bearly, just very, very low.

PN10

MR STANKOVSKI: We can hear Tanya, so that's fine.

PN11

THE COMMISSIONER: Can you hear me now?

PN12

MS HARRIS: Yes, thank you.

PN13

THE COMMISSIONER: All right. This is an application for approval of an agreement which I have asked to be called on as I have raised a number of concerns in relation to the agreement, in particular whether it passes the no-disadvantage test. I have received documentation from the employer's representative outlining a number of undertakings that the company is prepared to make in relation to this agreement. However, it still does not address the concerns I have about the issue of the no-disadvantage test.

PN14

I noted that you sought an adjournment of this matter to await the decision in the Bupa Care Services Pty Ltd matter. That decision came down yesterday and that decision has found the preferred hours clauses in the circumstances of the decisions under consideration by the tribunal in that instance did not pass the no-disadvantage test. The question that I need answered in relation to this agreement is, given that the rates of pay in this agreement are identical to the rates of pay in the Australian Fair Pay and Conditions Standard for both the relevant awards, and given that the agreement provides for lesser conditions than provided in those awards, how could I be satisfied that this agreement passed the no-disadvantage test?

PN15

MS HARRIS: Commissioner, I agree with you. I was actually waiting for the decision to be handed down and I read it this morning, the Bupa decision and the details included, and I understand what you're saying.

PN16

THE COMMISSIONER: I think, Ms Harris, I'm saying more than the issue of preferred hours.

PN17

MS HARRIS: Yes.

PN18

THE COMMISSIONER: This agreement has, for example, the rate of pay for a full-time retail worker is $15.86. $15.86 is the minimum rate of pay applicable under the modern award in Victoria for a retail worker and under the rate of pay that applied at the time the agreement was made. Unless this agreement provided for identical terms and conditions as the award - and it doesn't; for example, it has a casual call of two hours - even without the preferred hours clause, this agreement couldn't pass the no-disadvantage test.

PN19

MS HARRIS: My understanding was that the pre modernised (indistinct) Award, there was the two-hour minimum for casual employees.

PN20

THE COMMISSIONER: The pre award has a minimum call of three hours.

PN21

MS HARRIS: Excuse me, may I ask Oliver (indistinct)

PN22

THE COMMISSIONER: I will just - - -

PN23

MR STANKOVSKI: Sorry, Commissioner, the Victorian State Award was two hours pre the modern awards in Victoria under the NES award.

PN24

THE COMMISSIONER: Sorry, yes, you're right, it's two hours. For the transport workers of course it's four.

PN25

MS HARRIS: Yes.

PN26

THE COMMISSIONER: So the same issue applies.

PN27

MS HARRIS: We did have four hours for the transport workers.

PN28

THE COMMISSIONER: Sorry, you do, you're right.

PN29

MS HARRIS: Yes.

PN30

THE COMMISSIONER: Yes, you're right, sorry. Let me raise the other issues I have with this agreement. This agreement provides for the averaging of hours over 12 months and the underpinning awards don't.

PN31

MS HARRIS: Under the no-disadvantage test policy guides, I know that it probably has been since the Fair Work Act came in and it has changed. We averaged over 12 months and I understand that that isn't (indistinct) around now.

PN32

THE COMMISSIONER: That's all right. The documents that were prepared by the Workplace Authority in relation to agreements are not binding on this tribunal, and as you pointed out, for example, the preferred hours clauses which the Workplace Authority appeared to have approved were inconsistent with previous decisions of this tribunal in relation to preferred hours and is clearly inconsistent with the view that the current tribunal is taking in relation to preferred hours. So I would need more convincing than an argument simply that this had been something that the Workplace Authority had previously approved.

PN33

MS HARRIS: Yes. I find it hard because we followed due diligence in trying to ascertain whether we could draft an agreement like this and we received the okay from Fair Work Australia when we called, and referring us to the no-disadvantage test policy guide.

PN34

THE COMMISSIONER: I am disappointed to hear that Fair Work Australia would refer you to that policy guide, and I'm not suggesting that there's any bad faith occurring here. This is not the only agreement that has had run into difficulties because of the different approach taken by the old authority compared to this tribunal. So I'm not suggesting that there's any bad faith that's occurring here. I'm simply saying that my obligation as an officer holder is to assess the agreement against the no-disadvantage test. So I need convincing as to why I should approve the agreement.

PN35

MS HARRIS: We were following due diligence also by lodging an agreement ahead of the rest because we were a little bit concerned, even though we had had the advice from Fair Work Australia, so we lodged one and then had that approved.

PN36

THE COMMISSIONER: Yes.

PN37

MS HARRIS: Yes, that was a shame that that was approved because we wouldn't have gone ahead and lodged any others.

PN38

THE COMMISSIONER: Unfortunately, the nature of a tribunal such as this is that tribunal members may differ in relation to their approach and, as a consequence, often it requires the decision of a full bench, as occurred in Bupa, to determine whether clauses are agreed or not. As a consequence, I appreciate the difficulty that this has created for the employers in this industry but, again, my obligation is to be satisfied that the agreement passes the no-disadvantage test. The fact that another member of the tribunal has approved an agreement in identical terms, while a matter that I would have regard to in terms of looking at the rationale for that decision, in this instance it isn't sufficient to convince me that this agreement passes the no-disadvantage test.

PN39

MS HARRIS: No, I understand where you're coming from.

PN40

THE COMMISSIONER: In relation to pointing out a number of things that you might need to look at if you are intending resubmitting an agreement - and these are just a number of things I've noticed in relation to the transition from no-disadvantage to BOOT, but also the transition from the old system to the NES. There appears to be a commonly held view which is not correct, that employees on probation can be terminated on 24 hours' notice. The NES doesn't distinguish between employees on probation or not. Employees with less than 12 months' service are entitled to a week's notice. Obviously that is different if they're casual employee. The NES doesn't distinguish in relation to employees on probation.

PN41

MS HARRIS: We did state one week's notice.

PN42

THE COMMISSIONER: Is that in the undertakings?

PN43

MS HARRIS: I'm sure that the agreement, under probation, stated one week's notice.

PN44

THE COMMISSIONER: Clause 18(d).

PN45

MS HARRIS: (indistinct)

PN46

THE COMMISSIONER: Yes.

PN47

MS HARRIS: And under the probation clause.

PN48

THE COMMISSIONER: I'm under probation clause:

PN49

Full and part-time employees: during the probationary period, employment may be terminated by either party with the provision of 24 hours' notice.

PN50

MS HARRIS: Okay. I'm sorry about that. Yes, I did (indistinct) that there is a week's notice and when we were drafting (indistinct) week's notice. So thank you very much.

PN51

THE COMMISSIONER: I just wanted to point that out to you. I couldn't find a laundry - given this is in relation to this agreement, it is so close to the award rate - - -

PN52

MS HARRIS: Sorry?

PN53

THE COMMISSIONER: Given that this agreement is so close to the award rates, the issue of allowances, is there a laundry allowance in this agreement?

PN54

MS HARRIS: I went through that with Louise Brown and they don't have a uniform supplied.

PN55

THE COMMISSIONER: Okay, thank you.

PN56

MS HARRIS: I'm sorry, I actually originally had it in but then we removed it because it wasn't applicable.

PN57

THE COMMISSIONER: The other thing that you need to have regard to is the issue of part-time employees. As you would be aware, under the Shops Interim Award for part-time employees for retail workers, there is supposed to be an agreed number of hours, agreed days per week, and if people work outside of those agreed hours, they're required to be paid overtime.

PN58

MS HARRIS: Yes, unless (indistinct) operator venue hours, up to 38 hours a week with the ordinary rate of pay. Could you (indistinct) you could do that as well?

PN59

THE COMMISSIONER: No. What you can do - and I've had this discussion with a number of employers, obviously - is that the provision in the Shops Award enables those hours to be varied by mutual agreement in writing.

PN60

MS HARRIS: Yes.

PN61

THE COMMISSIONER: So the provision in the current award which says that you have to agree on the number of hours because of the idea that part-time employees are different to casual employees, but that doesn't prevent you having the situation - it may occur at certain times in this industry - certainly in some other industries it does, where they have very seasonal arrangements, where somebody enters into an agreement whereby they might work 35 hours a week in summer but only work 25 hours a week in winter. It may be that if there are busy times around - for example, Christmas - that you agree to either up or down the hours but it's mutual agreement in writing. That, it seems to me, would deal with the issue of the comparison between the award and the agreement about hours of work.

PN62

MS HARRIS: Yes.

PN63

THE COMMISSIONER: We've discussed the preferred hours provision. You would have seen that there was a decision of Whelan C that dealt with the issue of part-time employees effectively being paid in advance for their - - -

PN64

MS HARRIS: Yes, I did read that.

PN65

THE COMMISSIONER: I must say that I'm inclined to follow that decision in relation to part-time employees.

PN66

MS HARRIS: What we were trying to get - a lot of the members haven't had staff that would move to part-time from casual because they didn't want to drop in their hourly rate and that what the rationale was for was to allow them to then have guaranteed employment, permanent employment, and still receive a higher rate of pay. Also, did you notice I put the reconciliation clause in there.

PN67

THE COMMISSIONER: Yes, I did notice that.

PN68

MS HARRIS: Yes, I was trying to make sure that they were never worse off.

PN69

THE COMMISSIONER: Look, I appreciate the motivation. In some ways, in my view, both the NES and the Australian Fair Pay and Conditions Standard strikes me as a form of cashing out. While I appreciate that there may be reasons why some employees don't wish to go from casual employment to permanent part-time employment, effectively the quid pro quo for being part-time is that you get paid less than you are paid for casual. In that way, you get a whole range of entitlements that casual employees aren't entitled to, and that is the security of employment, that is access to things like parental leave, et cetera. It's my view that a comparison between the award and the agreement means that it doesn't pass the no-disadvantage test. There are of course always provisions within the agreement, in the flexibility terms, provided that the employees are better off overall, that enable employees and employers to reach agreements about particular matters.

PN70

MS HARRIS: Are you talking about (indistinct)

PN71

THE COMMISSIONER: Well, the agreement flexibility clause, provided the employee is better off overall. You may recall I think one of the examples given in the explanatory memorandum talks about a situation where somebody want to work different hours.

PN72

MS HARRIS: Yes.

PN73

THE COMMISSIONER: So you may wish to look at that. Just in terms of another matter which seems to have been - this is not a matter that would have caused me not to approve the agreement but you have defined in your carer's leave, compassionate leave section, "Immediate family and household shall mean" and then you use the definition of - but that is the definition of an immediate family and it doesn't seem to, in your definition of "immediate family and household" in fact pick up the provisions about members of someone's household.

PN74

MS HARRIS: Yes.

PN75

THE COMMISSIONER: It's just the wrong definition.

PN76

MS HARRIS: Okay.

PN77

THE COMMISSIONER: That's the definition of "immediate family". Immediate family is your spouse, your mother, father, child, et cetera, et cetera, but your household can be broader than that.

PN78

MS HARRIS: Yes.

PN79

THE COMMISSIONER: And I did notice that throughout this agreement you had that same definition.

PN80

MS HARRIS: Thank you for letting me know that.

PN81

THE COMMISSIONER: Now, as you would have seen from the Bupa decision, I am able to consider any undertakings you may wish to give in relation to that matter and I will give you an opportunity to consider whether there are any further undertakings you wish to give in light of that decision and in relation to the other concerns I have. If you wish to make any submissions as to why, despite the fact that this agreement does not pass the no-disadvantage test, that I should approve it in any event. As you would be aware, there are provisions of the act which enable me to approve agreements that don't pass the no-disadvantage test. If you wish to make submissions to that effect, you may do so.

PN82

MS HARRIS: I agree with you. To be honest, there's a lot of the past history (indistinct) so probably it would be very difficult to allow an undertaking with all the actual amendments that are required (indistinct)

PN83

THE COMMISSIONER: You may have seen some recent discussion about this in respect of undertakings and I have been in the position where I've received extensive undertakings in relation to agreements and had to consider the question about whether they in fact are then substantial changes, and despite the fact that every one of the proposed amendments to the agreement would have improved the agreement and ensured that the agreement passed the no-disadvantage test, the act does not appear to permit me to accept undertakings that would result in what I think is called substantial changes to the agreement - or there may be another word that's used. That is an issue I would have to turn my mind to, and an issue on which there is, as yet, no guidance as to what the terms mean. So it is entirely up to you whether you wish to do that. I'm just indicating that I'm prepared to give you an opportunity to do so, otherwise I can simply issue my reasons for not approving the agreement.

PN84

MS HARRIS: Can I just - sorry, I'm not (indistinct) Can you just repeat what you said about the examples that I gave, of where you were referring me to with respect to a moment ago, about flexibility.

PN85

THE COMMISSIONER: There's a flexibility clause in your - if there's not a flexibility clause in your agreement - - -

PN86

MS HARRIS: We haven't got a flexibility clause.

PN87

THE COMMISSIONER: - - - then I'd put one in anyway - you get the model. So at the moment, your flexibility provision deals with arrangements when work is performed, overtime rates, penalty rates, allowances and leave loading.

PN88

MS HARRIS: Yes.

PN89

THE COMMISSIONER: So I think we were taking about - - -

PN90

MS HARRIS: We were talking about the two examples that I gave.

PN91

THE COMMISSIONER: What were they again, sorry?

PN92

MS HARRIS: Under the agreement, one of the employees wanted to work on the Sunday because her husband could mind the children because they went to school and they weren't paying after school care. The other one was the delivery driver who had two jobs.

PN93

THE COMMISSIONER: Clearly they would be arrangements about when work was performed.

PN94

MS HARRIS: Yes.

PN95

THE COMMISSIONER: I think certainly in one of those cases you might see that one of those examples is actually given in the - - -

PN96

MS HARRIS: Sorry, do you mind speaking up a bit? Sorry.

PN97

THE COMMISSIONER: I think one of those types of examples is actually given in the explanatory memorandum of the kind of matter that an individual flexibility agreement could be entered into.

PN98

MS HARRIS: (indistinct)

PN99

THE COMMISSIONER: So have a look at the explanatory memorandum, about individual flexibility agreements because I think that's precisely the kind of example they give. I think it was somebody who wanted to start earlier so that they could do something with their children.

PN100

MS HARRIS: The only thing is he won't be doing the four hours; that would be the issue.

PN101

THE COMMISSIONER: That's right.

PN102

MS HARRIS: So with that (indistinct) working arrangement when work is performed?

PN103

THE COMMISSIONER: Well, it would be an arrangement when work is performed. The question is whether the employee would be better off.

PN104

MS HARRIS: Because he's - - -

PN105

THE COMMISSIONER: Getting paid less.

PN106

MS HARRIS: In a sense that he's better off because he can go to a second job.

PN107

THE COMMISSIONER: It's actually not a matter of whether he feels he's better off. It's a matter of whether, if this was ever audited, whether the person who made the assessment of the individual flexibility agreement, whether it was found that they were not better off. I mean, one of the difficulties with these individual flexibility agreements is nobody's ever going to know whether they're appropriate until the time somebody comes in and says, "Have you got an individual flexibility agreement?" you say, "Yes" - say, for example, the Workplace Ombudsman does an audit and the Workplace Ombudsman comes in and the Workplace Ombudsman will presumably - and I'm speculating here - ask for copies of all the individual flexibility agreements to make sure they have complied with the provisions of the requirement and then they will have to make an assessment about whether there's compliance or not.

PN108

MS HARRIS: Yes.

PN109

THE COMMISSIONER: Fair Work Australia, in the capacity of the tribunal, will have no role in assessing - - -

PN110

MS HARRIS: That will be the Fair Work Ombudsman.

PN111

THE COMMISSIONER: It will be the Fair Work Ombudsman.

PN112

MS HARRIS: Thanks very much for that. May I just ask (indistinct) are you happy if we don't put any undertakings in place and allow the agreement to be declined?

PN113

MR STANKOVSKI: Yes, Tanya.

PN114

MS HARRIS: I beg your pardon?

PN115

MR STANKOVSKI: That's correct, Tanya.

PN116

MS HARRIS: Okay, thanks very much. So, Commissioner, we won't put any undertakings in place, thank you.

PN117

THE COMMISSIONER: Okay. This agreement will not be approved and I will publish reasons for not approving it. Again, as I've said earlier, I appreciate the effort that was made in terms of attempting to draft the agreement to ensure that it complies with the act. I appreciate that this is a very new system that we're all participating in and hopefully the guidance that's been given by published decisions in this instance will assist parties in the future in relation to drafting agreement.

PN118

MS HARRIS: And thanks very much for explaining some of the clauses that (indistinct) it made it a lot clearer for me.

PN119

THE COMMISSIONER: Can I say that one of the things that we have done is, for example, had meetings with representatives of different employer groups to go through the kind of issues that are arising out of agreement approval so that people get a better understanding of what they need to do to ensure their agreements will be approved without difficulty.

PN120

MS HARRIS: Maybe we could ask to have a meeting with you and the Australia Newsagents Federation.

PN121

THE COMMISSIONER: Certainly, that would be possible.

PN122

MS HARRIS: Thank you very much.

PN123

THE COMMISSIONER: Thank you.

PN124

MR STANKOVSKI: Thank you very much.

<ADJOURNED INDEFINITELY [10.31AM]