AG2010/15289, Transcript of Proceedings [2011] FWATrans 105 (10 February 2011)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 38843-1

COMMISSIONER ROBERTS

AG2010/15289

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

Application by Southern Cross Credit Union Limited
(AG2010/15289)





Sydney

10.57AM, THURSDAY, 3 FEBRUARY 2011

Continued from 22/12/2010

PN53

THE COMMISSIONER: Good morning. I’ll take the appearances, commencing with the applicant credit union.

PN54

MR W. SMITH: Commissioner, my name is Smith, initial W, representing Southern Cross Credit Union. With me today is Mr Iwanuscha, initial P, the general manager – sorry, the chief executive officer of the credit union, and Mr Boyd, G, who is the executive manager, corporate services.

PN55

THE COMMISSIONER: Okay. The titles will be about as long as the case will be.

PN56

MR SMITH: Yes.

PN57

THE COMMISSIONER: Mr Peddie?

PN58

MR D. PEDDIE: Commissioner, Don Peddie for Finance Sector Union of Australia, and my colleague Ms Angela Budai, also from Finance Sector Union of Australia.

PN59

THE COMMISSIONER: Okay. Mr Boyd, what do you have to tell me?

PN60

MR SMITH: Mr Smith.

PN61

THE COMMISSIONER: You’re Mr Smith, are you? I’ve got – this is in reverse order.

PN62

MR SMITH: Sorry, Commissioner.

PN63

THE COMMISSIONER: It might have been done by a left-hander, I’m not sure.

PN64

MR SMITH: Commissioner, we’ve made a decision to continue with the application that has been made for this agreement along the lines that were discussed, I believe, during a conference that you had with Mr Boyd and with Mr Peddie from the FSU prior to Christmas.

PN65

THE COMMISSIONER: Yes, I did.

PN66

MR SMITH: Where there are some – it was agreed that there were some issues that needed to be addressed in the agreement, and the most pertinent one of those was the matter of the agreement not including minimum rates of pay, and I understand that that clause has now been amended through – by sending to yourself on 20 December last year an outline of what undertakings would be made in relation to the minimum rates.

PN67

THE COMMISSIONER: That was on 20 December, you say. The teleconference was on 22 December.

PN68

MR SMITH: Yes.

PN69

THE COMMISSIONER: But it came in before that, did it?

PN70

MR BOYD: It was early January.

PN71

MR SMITH: I’m just looking - - -

PN72

THE COMMISSIONER: I see, yes, because you received an email from us, I think. Sorry, I’ve got about a 100 of these on - - -

PN73

MR SMITH: Yes. No, that’s fine.

PN74

THE COMMISSIONER: - - - track at the moment.

PN75

MR SMITH: That’s right, yes.

PN76

THE COMMISSIONER: So you’ll excuse me if I fumble through some of the chronology. The problem I had was that there are no – well, if wage rates were not put to the employees in a vote how can they be inserted now? When employees voted on the agreement did they vote on a minimum rate?

PN77

MR SMITH: My guess, sir, would be that they would have voted on what was the pay increase on their current rate.

PN78

THE COMMISSIONER: Okay. Anyway, keep going.

PN79

MR SMITH: In addition to the minimum rates of pay there are a couple of other – well, three or four other issues that have been raised and the credit union is prepared to give you, or give Fair Work Australia, the undertaking that those matters would be addressed and certainly addressed in relation to matters in the NES standards that were neglected to be put into the agreement at the appropriate clause. This is the eighth agreement, enterprise agreement, that this organisation has had with the staff and a number of the clauses and the way in which they operate have been determined over those eight agreements.

PN80

In previous agreements, and I understand that under the new act and before making an agreement that the minimum salaries must be there so that the BOOT test can be applied and they should have been in there at the time that the application was made, but the credit union is prepared to make an undertaking to yourselves in relation to inserting – not inserting them into the agreement, because that will change the agreement, but certainly making clear that the minimum rates of pay that are determined by the credit union are the ones that they abide by. In fact, when we’ve done a comparison to the new award rates, the new Banking, Finance and Insurance Award rates, that were determined in June, I think, last year, the agreement with the salary increases that we have put into the agreement, the minimum excess to the award rates of any staff member employed is $2300 up to a maximum of $30,000 over and above.

PN81

The other matters that have been raised, sir, in relation to the application are the annual leave. The agreement neglects to include the wording that the annual leave clause should have in there in relation to accrual of the annual leave on a basis – on a monthly basis throughout the term of the year. What actually occurs is the leave is accrued on a fortnightly basis, so that if somebody starts on 1 January, in six months’ time they’ll have six months of accrued leave which they are able to take, which I understand is a requirement of the NES standard, the National Employment Standards.

PN82

Personal leave, we’ve agreed that an offending sentence in the personal leave clause needs to be taken out and that is at clause 20.5.5. Clause 22, bereavement leave, the management of the credit union have always acted with compassion and flexibility for employees when they face matters that they need to take leave for in relation to bereavement and the clause entitles the CEO to grant additional leave should that be required. He has done so in the past and that’s a custom and practice of the organisation.

PN83

Communication and training, there seems to have been some misinterpretation of the clause. Whilst the clause allows the credit union to require an employee to attend training sessions of up to 15 hours per year with no additional pay, in the original collective agreement that was put together in the year 2000 the credit union negotiated that with the FSU at the time that allowed for them to have this 15 hours of training leave inserted into the agreement and the salaries of the time reflected that 15 hours for everybody, and they have been continued on for the last eight years.

PN84

Severance payments, I think you would agree that the severance payments that the credit union offers if there is to be severance in relation to redundancy, are well and truly over and above what is required in relation to the payment, the amount of the payment. The document that was put forward for approval did have a mistake in there that the first – and after the first 12 months it should have read “four weeks” rather than “two weeks”. It’s just a mistake and they would undertake that that would be adhered to.

PN85

THE COMMISSIONER: Right, so they’re the major points.

PN86

MR SMITH: They’re the major issues, yes.

PN87

THE COMMISSIONER: See, the problem I have, and this is not necessarily a terminal problem; I’ll hear from Mr Peddie further on the matter, you seek to amend the agreement in a couple of locations, don’t you, by adding new sub-clauses, et cetera/

PN88

MR SMITH: Sorry, Commissioner?

PN89

THE COMMISSIONER: Well, you do. In a letter dated 17 December to me there’s a provision to insert a new clause 19.1.3, or to amend that sub-clause by inserting additional wording, for example. I’m reading from your letter – from Mr Iwanuscha’s letter, 17 December 2010. I’ll pass it down, if that helps.

PN90

MR SMITH: That’s correct.

PN91

THE COMMISSIONER: Do you need a copy of it?

PN92

MR SMITH: Sorry, I don’t have a copy with me.

PN93

THE COMMISSIONER: That’s okay. Second page.

PN94

MR SMITH: Yes.

PN95

THE COMMISSIONER: Well, I think you know that can’t be done.

PN96

MR SMITH: No. No, I know that can’t be done.

PN97

THE COMMISSIONER: No. No defects, or potential defects, in the agreement can be cured by a change of wording or the addition of clauses or anything of a like nature.

PN98

MR SMITH: No, I understand that.

PN99

THE COMMISSIONER: It can be solved potentially by way of undertaking so I just wanted to make that piece of knowledge available to you.

PN100

MR SMITH: Yes.

PN101

THE COMMISSIONER: Mr Peddie, I’ll hear from you. We may go back and forth a bit about this. Mr Peddie?

PN102

MR PEDDIE: Commissioner, we first became aware of the agreement and the content of the agreement when it was listed on Fair Work’s Web site on 19 November. We did and still do have members employed by the credit union so, of course, we’re an interested party, but we did not participate in any bargaining or suggestions or review of wording to the point that the application was lodged with Fair Work.

PN103

THE COMMISSIONER: But you are the default bargaining agent so - - -

PN104

MR PEDDIE: We are, Commissioner, and I guess we’re a little surprised that we didn’t have any contact from either the employer or members, but that’s as it transpired. We also note that Southern Cross has had a number of prior agreements not dissimilar to this one, or with this one not being dissimilar to them.

PN105

THE COMMISSIONER: Right.

PN106

MR PEDDIE: But, of course, we are dealing with a new set of legislation and in fact a new underlying award as well. So are view is that that new legislation, part 2(4) of the act, in general has some very specific requirements about what agreements need to contain or not contain before they may be approved by Fair Work and there is detail as to undertakings which may be required and provided to allow an agreement to be approved. Section 190, in particular 190(3), indicates that any undertakings should not result in any substantial change to the content of an agreement. In our view, the number of undertakings discussed up till this point are substantial. They would result in substantial change to the agreement and of course that detail was never able to be considered by the employees in the ballot process.

PN107

THE COMMISSIONER: Specify for me which items they are, please.

PN108

MR PEDDIE: Section 190(3) - - -

PN109

THE COMMISSIONER: No, the bits in the agreement.

PN110

MR PEDDIE: The bits of the agreement.

PN111

THE COMMISSIONER: Or bits in the undertakings.

PN112

MR PEDDIE: Yes. The primary one, Commissioner, is, of course, the minimum wage rates and the related classification descriptors. They appear in the modern award, the Banking, Finance and Insurance Award, but the proposed agreement excludes in entirety the effect and content of that award, however, of course, the agreement as it was put to employees and some of our members had none of that detail contained in it. So that’s the primary concern we have. There are some smaller issues which aren’t clear as to whether in fact they may satisfy the better off overall test or not.

PN113

There is another issue that’s occurred, I guess, in the time that this matter has been running, and that is the agreement as lodged for application does have a long service leave clause in it which provides for a full cash-out of long service leave entitlement or accrual and we are aware that there is a decision by Fair Work by Commissioner McKenna in December which found that the terms of the State Long Service Leave Act should not be reduced and it was held that the cashing out of long service leave in fact was a reduction in the provisions of the State Long Service Leave Act. So that’s another matter that we have some concerns about, Commissioner.

PN114

THE COMMISSIONER: I’m familiar with the decision of my learned colleague and I find nothing to disagree with in that decision in relation to long service leave. Go on.

PN115

MR PEDDIE: So we simply make that point, that that is another matter that may not be able to be applied to how the agreement is written. So in summary, the extent and detail of undertakings being discussed and indicated by the employer that they’re prepared to make to us appear substantial and not in terms of section 190(3)(b) of the act regarding approval requirements for an agreement. In a practical sense, we also have concerns that that additional material to the agreement may make it somewhat difficult for the average employee to read and understand and may give rise to some disputes which could otherwise be avoided in the future. So in summary, that’s the union’s position, Commissioner.

PN116

THE COMMISSIONER: Thank you, and you say I should not approve the agreement, I take it.

PN117

MR PEDDIE: That is our position, Commissioner, yes.

PN118

THE COMMISSIONER: I think that sort of – it wends its way to that conclusion, yes, in your submissions. Mr Boyd, in reply?

PN119

MR SMITH: Sir, we don’t believe – well, we do – we understand that there are a number of small items in the agreement that need clarification and changing, but we don’t – we wouldn’t go to the extent of saying that they were substantial changes.

PN120

THE COMMISSIONER: I think the wage rates are, aren’t they?

PN121

MR SMITH: Apart from the wage, the minimum wage rate, yes.

PN122

THE COMMISSIONER: Yes. Can we just go off the record for a moment? Do you mind?

PN123

MR SMITH: No.

PN124

THE COMMISSIONER: No. We’ll go off the record.

PN125

OFF THE RECORD [11.15AM]

PN126

ON THE RECORD [11.17AM]

PN127

THE COMMISSIONER: I’ve discussed some matters, procedural matters, with the parties in conference, with both of them present. The applicant party wishes to consider its position and I’ll adjourn for 15 minutes while it does so.

<SHORT ADJOURNMENT [11.18AM]

PN128

<RESUMED [11.45AM]

PN129

THE COMMISSIONER: Mr Boyd?

PN130

MR SMITH: Commissioner, the employer has considered the options that were put to us earlier on this morning and have decided to make application to withdraw the application for that particular agreement. We’ve also spent some time that was available to us to discuss the process from here on in in relation to the FSU’s involvement and we have an agreement that we will start the process as quickly as possible early next week.

PN131

THE COMMISSIONER: Yes, okay. Well, I consent to your verbal notice of discontinuance and would expect something in writing to that effect to add to the file. I’m not happy that it’s had to reach this pass. It gives me no pleasure to put you in this position. Addressing the FSU, I’d say that rather late you’re now going to become involved in the process, I take it. The agreement, in my view, except for the identified areas, I see no problem with it, and I would expect, given the fact that this is a re-run and you weren’t involved in the first one, how do I put it, not to be too pernickety about this agreement, because it needs to be got through and it needs people to get their wage increases.

PN132

MR PEDDIE: Commissioner, we note your views and we will try our best to expedite the process and we’ve indicated that to the employer today. We are prepared to commence bargaining with them on Monday next week.

PN133

THE COMMISSIONER: As I see it, Mr Peddie, this is largely a technical exercise to remedy defects which were so great as to not allow the agreement to go forward, rather than to negotiate the entire – an entirely different agreement, but I have no power over that, I can just express my view. I’m adjourned.

<ADJOURNED INDEFINITELY [11.48AM]