AG2011/11700, Transcript of Proceedings [2011] FWATrans 1099 (5 October 2011)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 63502-1

COMMISSIONER HAMPTON

AG2011/11700

Sch. 3, Item 16 - Application to terminate collective agreement-based transitional instrument

Application by Somerton Surf Life Saving Club
(AG2011/11700)
Somerton Surf Life Saving Club Casual Employee Collective Agreement 2009

[AC320146 Print ]]




Adelaide

10.07AM, THURSDAY, 29 SEPTEMBER 2011

PN1

THE COMMISSIONER: Yes, good morning, all. Please be seated. I'll take the appearances.

PN2

MR D. KILDARE: Thank you, sir. Kildare, initial D. And I'm appearing for the Licensed Clubs' Association of South Australia. With me I have MISS L. FLETCHER.

PN3

THE COMMISSIONER: Yes, good morning to both of you. Mr Kildare, this is obviously an application to terminate an agreement that's past its nominal expiry date.

PN4

MR KILDARE: It has.

PN5

THE COMMISSIONER: You've not provided the background. But before you do that I should confirm that as you appreciate we've made some arrangements to ensure that employees had an opportunity to communicate direct to the tribunal if they saw fit.

PN6

MR KILDARE: Yes.

PN7

THE COMMISSIONER: I presume that your client provided the notice to employees.

PN8

MR KILDARE: They did, very much so.

PN9

THE COMMISSIONER: I should confirm for the record the tribunal has received no contact from employees.

PN10

MR KILDARE: Okay, thank you. Sir, this application is to terminate the collective agreement and it's been unanimously agreed by all the casual staff that it covered. With the introduction - and perhaps can I just give you a little bit of chequered history of this. It is not for the Somerton Surf Life Saving Club in its entirety. There's a little cafe which a lot of us know about - cafe/kiosk that is appended to it. One of the problems they have always had with the staff and payment of the staff is what award do we pay them under? Going back - I think it's probably 10 years, it's been there - - -

PN11

MS FLETCHER: Seven.

PN12

MR KILDARE: Seven years, okay. I wasn't far out - seven years, the cafe has been there. This collective agreement came out of some award for cafe staff in Western Australia. It was prepared by an ex-employee. It's never really fitted in with anything, especially since the modern awards have come in. When the Registered and Licensed Clubs Award was introduced the club looked at that. I don't know if you've had a chance to have a look at the actual collective agreement pay rates, but there were some horrendous pay rates for staff that go to public holidays and long weekends. By the way, can I say this is not about doing people in for their pay, but the club - I'll just take you to those, sir, if you've got a copy of that.

PN13

THE COMMISSIONER: Yes, I do have a copy of the agreement.

PN14

MR KILDARE: If you go to table 1, it's in Schedule of Minimum Rates - Casuals. The second page thereof, if you look at some of the rates for the New Year's Day, Christmas Day; they were quite high. What's been happening is not just those days, but some of those other weekend and holiday rates - what's been happening is that there's been a downturn in business and if we applied the better off overall test to this I would suggest that the advantage to the staff is that they are going to retain their positions. The club has actually dropped their - they closed their doors for six months this year because of the downturn of business.

PN15

I think a little bit had to do with the weather as well because this sits right on the seafront at Somerton and it can get very blowy and cold and rainy down there and so they closed the doors; not necessarily all because of the pay rates - please, I want that understood - but it's also a fairly cumbersome document for where the club is heading. They're strategically planning functions; they want to bring on permanent part-time staff; they want to bring on junior trainees and so forth because as I said before, the business in these clubs is very competitive and they're all building these - dare I use the word "palaces" - but there are some magnificent looking buildings and really a lot of people are looking to run functions on the seafront, so it's a very competitive business.

PN16

The club looked at the - they called me in. I took them through the Registered and Licensed Clubs Award. They see it as a very seamless document. They see it as one that covers all that they wish to cover in terms of terms and conditions and also pay rates and the ease of administering those pay rates. Because there are a large amount of casuals they felt that the 50 per cent flat rate that applies here in South Australia under schedule B of that award more than covers everything off. As I said, it's easy to administer. Also the other thing that they do like - and I myself personally have found that some of the enterprise agreements I've seen are being made a little bit - if I dare use this word - redundant because of the flexibility clause in the Registered and Licensed Clubs Award, sir.

PN17

There are a lot of items in there that can be covered off. I'm involved in some negotiations with the Registered and Licensed Clubs Collective Agreement that 19 of our clubs have at the moment and a lot of them are saying, "We love this flexibility clause in the Registered and Licensed Clubs Award." So the club has looked at that. We've had some talks about it and had a good talk; had meetings with their casual staff. I have got one thing I would like to hand up if I could as an exhibit.

PN18

THE COMMISSIONER: Very well.

PN19

MR KILDARE: It's an email, actually, from the functions coordinator and manager and it's to all the staff and it's just what we alluded to at the start of this hearing, sir, where they have all agreed that they would like to adopt - they have agreed that the club would like to adopt that Registered and Licensed Clubs Award. I did just ask Ms Fletcher if we could have had all the emails. She said it was a lot of paperwork.

PN20

THE COMMISSIONER: This is appropriate. I will admit the email concerning the collective agreement dated 11 August 2011 and mark that as exhibit A1.

EXHIBIT #A1 EMAIL CONCERNING COLLECTIVE AGREEMENT DATED 11/08/2011

PN21

MR KILDARE: Sir, as I said, if we can go back to - they have a pool of 10 to 12 casuals. Those people will be guaranteed employment. The award just - it's a better fit for the club across the board. I don't want to go into minute detail unless you wish me to, but - - -

PN22

THE COMMISSIONER: Do I take it there are other employees of the club - that is non-casuals - - -

PN23

MR KILDARE: Yes, exactly.

PN24

THE COMMISSIONER: - - - who are already covered by the modern award?

PN25

MS FLETCHER: We have all casuals? Is that what you mean?

PN26

THE COMMISSIONER: Are there other employees of the club who are not casual?

PN27

MR KILDARE: Ms Fletcher is, you're not a casual, though, are you? I didn't understand you were a casual.

PN28

MS FLETCHER: I'm paid an hourly rate salary, I suppose.

PN29

MR KILDARE: Not a true casual where you would engage them by the hour and pay them as such. Ms Fletcher works long hours, as do two or three other people there. This is more to do - what we're talking about, as I said at the start, this is the cafe/kiosk that is appended at the end of the clubrooms. And it was always a difficulty because they don't serve liquor there and that was another problem.

PN30

THE COMMISSIONER: Right. So in that context do you say the Registered and Licensed Clubs Award 2010 applies?

PN31

MR KILDARE: We would like it to apply.

PN32

THE COMMISSIONER: In the absence of this agreement you say the modern award applies?

PN33

MR KILDARE: Yes. The modern award would apply and it would apply to people like Ms Fletcher in terms of where you would benchmark the minimum salary for them.

PN34

THE COMMISSIONER: Right. But in terms of the employees in the cafe are you saying the - - -

PN35

MR KILDARE: We would want - - -

PN36

THE COMMISSIONER: - - - modern award would apply but for the collective agreement?

PN37

MR KILDARE: That's exactly what we're saying.

PN38

THE COMMISSIONER: So it fits within the scope?

PN39

MR KILDARE: Most definitely.

PN40

THE COMMISSIONER: Because they're employed in or in connection with a registered club.

PN41

MR KILDARE: That's right.

PN42

THE COMMISSIONER: So it's the "in connection".

PN43

MR KILDARE: It's in connection and we've been able to fit their essential duties into the food and beverage attendant positions at those levels.

PN44

THE COMMISSIONER: I don't think there's any doubt about that part of it, but I was just picking up the point because obviously one of the considerations here is if the removal of the collective agreement meant they became award-free, that would be a different issue.

PN45

MR KILDARE: No. And that was probably my next point. I did preamble about the award. That's exactly what we want to do. I think the staff have been made very much aware of that. From an administrative point of view right across the board the club feels that it's a perfect fit for them. That will include those casual cafe staff.

PN46

THE COMMISSIONER: Have you or your client done a comparison between the collective agreement and the award?

PN47

MR KILDARE: As in?

PN48

THE COMMISSIONER: Rates of pay and other conditions?

PN49

MR KILDARE: Yes, we have. The award is by far ahead in terms of conditions. I go back to that flexibility clause that allows them to do so much which really - and Ms Fletcher wanted to make a comment - I do know that the collective agreement is a little bit cumbersome in some ways and just as I said, without going into a lot of detail unless you want me to, they've had a lot of meetings - the club, the management committee - with the staff; a lot of consultation. It's been made quite clear to them. I've met with two or three of the senior people in the club and it's been made very clear that that is a perfect fit.

PN50

THE COMMISSIONER: All right. But in terms of the net impact; I mean, on my calculations other than those public holidays that attract the extra rate and the weekend rates, the Monday to Friday rates are certainly higher under the modern award then they are in the collective agreement.

PN51

MR KILDARE: Yes, they are.

PN52

THE COMMISSIONER: So obviously it's a question of when employees work.

PN53

MR KILDARE: Yes.

PN54

THE COMMISSIONER: But in that context whilst I'm not obliged to apply the better off overall test I am obliged to consider whether or not the termination is appropriate having regard to the circumstances of the employees and the business. So in that context what you say about them needing to have an instrument that better reflects the actual trading conditions and the circumstances of the club is an important consideration.

PN55

MR KILDARE: Yes.

PN56

THE COMMISSIONER: The other consideration is of course what's the impact on the employees. You say they're going to get more employment. That's what's implied here. But obviously there's also a question of it's not employment at any cost, it's a question of whether or not the package is a reasonable one to fall back to.

PN57

MR KILDARE: And it's been made quite clear to them at the meetings exactly the sort of money they will be getting, talking dollars. They are very happy with it because I go back to the point I made earlier, sir, there's at least definite employment whereas there wasn't - and this is not something the club held over their heads, of course, it was just facts of life. In fact I just did a quick look at the rates myself this morning again and they're more than - the award rates actually are very good compared to - I mean, it's only those $33 for Christmas Day and New Year's Day. We've gone right through that with them and as I said, you can see from the voting that they're more than happy to go down that track.

PN58

THE COMMISSIONER: I think it's relevant that the tribunal in fact modified this award to provide for the continuation of appendix B, the South Australian transitional provisions, because the view - in fact I was on the full bench that did this.

PN59

MR KILDARE: Yes, you were.

PN60

THE COMMISSIONER: The bench took the view that they were reasonable and appropriate and had the strong support of the social parties in South Australia and that they were a fair package, certainly as part of the transitional arrangements. In that context that does suggest that the 50 per cent loading which is implicit in the transitional provisions is a fair balance of employees exactly in this circumstance in this industry. I think that's relevant to the consideration as to whether or not the award is appropriate to become the instrument as against your present agreement.

PN61

MR KILDARE: I agree with that. I just didn't want to make too big a deal about the actual dollars because there is a lot more to that award too that does fit the club very much.

PN62

THE COMMISSIONER: I understand. I also think that the collective agreement is a little curious. It is very unusual in my experience, having dealt with these matters for many, many years.

PN63

MR KILDARE: Yes, me too.

PN64

THE COMMISSIONER: It is an unusual agreement. It's also a bit clunky, I think, from my perspective, particularly if it only applies to some of the staff.

PN65

MR KILDARE: You keep being very nice.

PN66

THE COMMISSIONER: In that context I think there are considerations which would support the application that are not strictly speaking related just to the headline rates of pay.

PN67

MR KILDARE: Yes.

PN68

THE COMMISSIONER: All right. Is there anything further you wish to put?

PN69

MR KILDARE: Not from me, sir. Thank you.

PN70

THE COMMISSIONER: All right. One of the discretions given to the tribunal is as to when, if the termination is granted, it takes effect. Section 227 indicates that it takes effect from the day specified in the decision to terminate the agreement. What are the relevant considerations here? Do you have pay periods that might dictate when termination should take place?

PN71

MS FLETCHER: From the next pay period.

PN72

MR KILDARE: On or after the next - from the next pay period, which is when? What's the date?

PN73

MS FLETCHER: Fortnightly, next Friday. So it finishes Sunday. Sunday would be the end of the pay period.

PN74

MR KILDARE: So we'd want to be the day before, wouldn't we? Friday the 7th, so midnight, Friday the 7th, so effective from the 8th, which is a Saturday.

PN75

THE COMMISSIONER: Midnight, Friday 7 October is what you're proposing?

PN76

MR KILDARE: October.

PN77

MS FLETCHER: Sunday is the end of the pay period, I said. Is it Monday?

PN78

THE COMMISSIONER: It should be the pay period, not when the pay is made, if there's a difference.

PN79

MS FLETCHER: Yes, so the pay period finishes on Sunday - this Sunday, whatever that date is.

PN80

MR KILDARE: Sunday the 9th, I think it is.

PN81

THE COMMISSIONER: You're a week too far forward, I think.

PN82

MS FLETCHER: It's a public holiday Monday.

PN83

MR KILDARE: Where are we? October. I'll get this right in a minute. Sunday the 9th.

PN84

THE COMMISSIONER: It would be the 2nd.

PN85

MR KILDARE: Sorry.

PN86

THE COMMISSIONER: Is that the one you're talking about?

PN87

MS FLETCHER: It's this Sunday coming.

PN88

THE COMMISSIONER: I'll deal with the application now. Of course I have had the benefit of both the application and the background material. I have considered the terms of the collective agreement and the modern award and Mr Kildare, you have now filled in some of the gaps for me so I will deal with the application now. Firstly in order to terminate this agreement I need to be satisfied that it is not contrary to the public interest to do so. In my view the considerations which have been raised by the parties here are relevant to the public interest; that is in particular the circumstances in which the agreement was made, the circumstances in which the agreement currently operates, and the impact that has on the capacity of the organisation to operate. In my view it would not be contrary to the public interest to terminate the agreement.

PN89

The second matter I need to consider is whether or not the termination is appropriate. The Act requires me to have regard to two circumstances: that is the views of the parties including any employee organisation - and there is not a relevant one in terms of this collective agreement; and secondly the circumstances of the employees, employers and organisations if that were relevant, which it is not here. In terms of the views of the parties, I am satisfied that the employer and all of the current relevant employees support the application. That of course is a significant consideration. Secondly in terms of the circumstances of the employees and the employers, that is a balance.

PN90

There is no doubt from the club's - employer's point of view that there are certain efficiencies and operational benefits associated with the termination of the agreement. In terms of the employees, that is a balance. Certainly they lose some of the higher rates that would apply to some of the work that is performed. However, when I consider the whole package including the higher rate which will apply to the majority of the work under the modern award, in my view that consideration also supports the application.

PN91

For those reasons the tribunal will grant the application and will issue a decision terminating the Somerton Surf Life Saving Club Casual Employee Collective Agreement 2009. In accordance with section 227 that decision will nominate - at midnight, Sunday, 2 October 2011 is the date that that decision is effective. As from that date the Registered and Licensed Clubs Award 2010 will apply to the club and all of its employees. Mr Kildare, the only other thing I should say is you have made mention of the IFAs, to use the shorthand title - - -

PN92

MR KILDARE: Sorry, the - - -

PN93

THE COMMISSIONER: Individual flexibility arrangements - - -

PN94

MR KILDARE: Yes.

PN95

THE COMMISSIONER: - - - which apply under the modern award, as they indeed do under every modern award.

PN96

MR KILDARE: Yes, sir.

PN97

THE COMMISSIONER: My only comment about that is that yes, that does provide considerable flexibility but the parties should be aware that unlike a collective enterprise agreement which if approved operates without challenge, an individual flexibility agreement, because it isn't approved by anyone, always operates subject to the better off overall test and can be assessed at any stage in the future.

PN98

MR KILDARE: Yes.

PN99

THE COMMISSIONER: Of course if a view is taken that it is not better off overall then there will be consequences of that. I just point that out in terms of the relative advantages and disadvantages of using an IFA or an enterprise agreement, but ultimately that's a matter for the parties. The parliament has certainly indicated that that is a flexibility that exists, but it does need to be used in context and perhaps with that caveat. But subject to that I will wish the club and its employees all the best for the future.

PN100

MR KILDARE: Thank you very much, sir.

<ADJOURNED INDEFINITELY [10.27AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 EMAIL CONCERNING COLLECTIVE AGREEMENT DATED 11/08/2011 PN21