AG2011/11910, Transcript of Proceedings [2011] FWATrans 1234 (2 November 2011)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 64461-1

COMMISSIONER WILLIAMS

AG2011/11910

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

Application by Conspect Construction Pty Ltd
(AG2011/11910)





Perth

11.27AM, WEDNESDAY, 26 OCTOBER 2011

PN1

THE COMMISSIONER: Yes, good morning. If I could take appearances, please.

PN2

MR S. HARBEN: Thank you, Commissioner. My name is Harben, initial S., and I seek permission to appear in these proceedings on behalf of the applicant.

PN3

THE COMMISSIONER: Yes, thank you, Mr Harben.

PN4

MR K. SNEDDON: Good morning, Commissioner, Sneddon, initial K., for the CFMEU.

PN5

THE COMMISSIONER: Thank you, Mr Sneddon. Do you have any view about Mr Harben’s appearance?

PN6

MR SNEDDON: We have no objections to Mr Harben appearing.

PN7

THE COMMISSIONER: All right, permission is granted for you to represent the applicant, Mr Harben. In terms of the history of this matter there has been comprehensive written submissions filed by both parties which I appreciate and have read. My view in terms of how we should proceed this morning is: (a) not to go back over all of those, but (b) in terms of the order, I think given the respondent’s material – sorry the applicant’s material, has been the last material filed, I think, Mr Sneddon, I’ll be happy if I give you the opportunity to go first. You can respond to anything you have seen in the respondent’s – I keep saying that, I’m having difficulty, why don’t I say the employer? Anything in the employer’s group of materials that you wish to respond to feel free. Anything you wish to raise, feel free. Then we’ll give Mr Harben an opportunity to respond to that.

PN8

MR SNEDDON: Thank you, Commissioner, in which then I shall keep it brief if you’ve read the submissions, and I shall just respond to what I think are outstanding matters in the applicants’ submissions. I suppose, first, the applicant dealt in their submissions with the fact that our objections to the agreement may be disingenuous. I would just say two things about that, first, Commissioner. Firstly, the better off overall test is not subject to whether we were disingenuous or not and the tribunal still needs to take that into account. Secondly, we refute the fact that we were disingenuous indeed - - -

PN9

THE COMMISSIONER: Mr Sneddon, don’t bother refuting it, it’s not relevant. Given it that way the history of the parties’ relationships over this matter doesn’t affect the words in the agreement or the maths.

PN10

MR SNEDDON: Agreed, Commissioner. In which case I’ll touch briefly on the applicants’ justification held in their submissions. Firstly, it seems to be that they suggest that the only problem is absence of clauses, which the applicant submits are not necessary due to the fact that that work arrangements at the (indistinct) don’t exist. Well, we say that that’s not the case, Commissioner. The applicants’ submission do mention bitumen spraying allowance only. Taking that aside, if the Commissioner’s had the opportunity to look at the table that we prepared where we outlined what we considered to be detrimental, the Commissioner can see that there’s several other submissions that may still have some relevance. There’s a forklift operator, there’s a higher duties, there’s a loss of clothing allowance, there’s dispute resolution training leave, there’s job to job transfers, industry allowance, so on and so forth. Even if that argument didn’t stand stead, Commissioner, what we would do is adopt Commissioner Deegan’s logic, and again I provided some authority with our submissions. Deegan C in Canberra Building Services, what the Commissioner said in that case was that the better off overall test has to apply having regard to all situations which may occur, not which are occurring at this time, all situations which may occur over this time of the agreement, and in this case that would be four years. So if any of those clauses that have been omitted at this stage were to become part of the applicants’ business over the next four years, then undoubtedly those employed at the time would suffer detriment.

PN11

Also the Commissioner, in the matter that I noted earlier, also said that practices that may have previously have been avoided may well become common practice, so the fact that there is no bitumen spraying at the moment, well, the reason for that may well be the fact that there’s an allowance attached to it. In the future it may well become part of the practice because there is no allowance. So, overall, we can’t ignore the emissions from the base instrument which in this case is the modern award.

PN12

In addition to that, there’s several clauses which are delivering a lesser benefit. Again, if we refer to the table that the hours clause, breaks, overtime, leave, public holidays, so it’s not just a lack of clauses that’s the problem, which seems to be the main point of the applicants’ submission, Commissioner. It’s not just the lack of clauses it’s also: (a) the lack of clauses; and (b) the detriment that’s suffered in the clauses therein.

PN13

The applicants have suggested that undertakings may be appropriate in this case. We would say that undertakings are not appropriate in this instance, Commissioner.

PN14

Just as a general statement, it appears that what we’re saying here is that this is an instrument but what we actually want you to do is look at another instrument because all of this stuff in this instrument is potentially not going to apply. Now, I think that that leads the risk of, I think, employees being both confused and not understanding exactly where their entitlements lie, because, patently, if the detriment that’s suffered in the clauses, either by omission or the detriment in the clauses that are included, if they have to refer to another instrument every time, really, that’s just going to lead to confusion and don’t think can stand.

PN15

THE COMMISSIONER: Doesn’t the Act expressly allow all agreements to call up other instruments and documents, so that seems to have been envisaged as being not an unusual action.

PN16

MR SNEDDON: Indeed it does but I suppose the confusion comes and I think in this instance what we’re talking about, Commissioner, is the practicalities of it. How it’s going to be perceived on the shop floor, and on the shop floor if there was just an instrument, a modern award, then that would be the instrument that the employees would refer to. What we have here - - -

PN17

THE COMMISSIONER: It is of course being so easy to understand, Mr Sneddon.

PN18

MR SNEDDON: Yes, well indeed, but what we have here is we have the worst of both worlds then, Commissioner. Is that we have an agreement which I think is easy to understand but the agreement itself is causing, in our opinion, a huge amount of detriment to the employees. So we cannot have a double whammy. If we were trying to rewrite a modern award to make it easy for the employees to understand, we haven’t done that. What we’ve done is given them an instrument that doesn’t deliver, that doesn’t pass the better off overall test. It doesn’t deliver the benefits that they’re entitled to, and for them to understand that we then refer them to not just a part of the modern award, not just a clause but we essentially refer them to the whole of the modern award.

PN19

I think the confusion that our members would be subject to, and not just our members, Commissioner, I also think that when it comes to paying and understanding the interpretation of this we then leave ourselves wide open with dual instruments.

PN20

With regards to the undertakings, the legislation has claimed, Commissioner, that the tribunal can only grant an agreement with undertakings if it doesn’t involve substantial change, significant change to the agreement. In our opinion for this agreement to be up to a standard that would pass the better off overall test, it would need significant changes. It would need significant clauses added in, so that the employees could understand where they sat. It would also need a significant change of existing clauses, the multiple clauses that are under the table, Commissioner, for the employees to understand that.

PN21

The applicants have proposed an undertaking, and the wording of the applicants’ proposed undertaking are in their submissions. Even that undertaking that’s proposed at the moment, Commissioner, I think is just going to lead to a mass of confusion because the undertaking itself states that where there’s an inconsistency between the agreement and the award, that the agreement’s going to prevail. So I’m not quite sure how that’s going to resolve the issues that we see in the agreement and the passing of the better off overall test.

PN22

I’ll mention quickly the declaration because the applicants are still claiming that there are no provisions that are less beneficial than the award. The overtime meal allowance, the first aid allowance and the industry allowances are all less than in the award. On paper they’re less than in the award. So I’m not quite sure how that claim can be made. Equally, all of those clauses that are in the proposed agreement that are significantly less than those that are in the award, and again the ones that are on that list, Commissioner, I’m not quite sure how that statement can be made.

PN23

Just in summary, we say that the agreement doesn’t pass the better off overall test and any undertakings that would need to be made to correct this would need to be significant. The fact that they would need to be significant would lead us to suggest that the tribunal can’t allow it. So essentially, unless you’ve got any other questions, Commissioner, you have read the supporting material, then that would be our submissions.

PN24

THE COMMISSIONER: No, I have no questions. Thank you, Mr Sneddon.

PN25

MR SNEDDON: Thank you, Commissioner.

PN26

THE COMMISSIONER: Yes, Mr Harben.

PN27

MR HARBEN: Thank you, Commissioner. Just some context, Commissioner. The employer has an expired agreement which was made by the West Australian Industrial Relations Commission. That agreement expired in about 2006, so the business has been operating with an expired agreement for some five years. The business of the employer has never had any form of industrial action, on my instructions. There’s never been a dispute raised under the dispute settlement processes that has ended up in any form of conciliation or arbitration before the commission. Indeed, I’m instructed there’s never been unfair dismissals arising from this workplace.

PN28

When the previous workplace agreement was made there were three employees that the agreement stated it covered. There are currently now nine employees that cover the agreement. It’s just in that context that I think it’s worth noting the nature of the work that’s being performed out there and the number of personnel and the history of industrial problems which is limited – well, not limited, almost non-existent.

PN29

Now the previous agreement, which was a state agreement, which was an agreement under the Industrial Relations Act which allowed the state version of the union to be a party. It did contain a relationship to parent award clause, and that clause at clause 4 of the Perth Precast – I’ll just read the proper name of the award. It was called the Conspect Construction and CFMEU Precast Yard Agreement. It contained a clause that said:

PN30

This agreement is supplementary to and must be read and interpreted wholly in conjunction with the award. Unless provided otherwise, if there is any inconsistency between the award and an expressed provision of this agreement, the terms of whichever provision is more beneficial to the employees will prevail to the extent of any inconsistency.

PN31

Now the relevant award is an award that no doubt you’re well familiar with, Commissioner. The Building Trades Construction Award 1987 which on any account is probably a good three times longer than the Concrete Products Award, and certainly a much more complicated document to interpret, given that that award has gone through the modernisation process. So we would say in relation to the submission that agreements which call up and incorporate provisions of awards are likely to confuse employees, is not a submission you should follow. There would be thousands of workplaces around the country that have agreements which contain clauses in them that are not dissimilar to the clause in the Perth Precast Yard Agreement, or indeed not dissimilar to the proposed undertaking that the employer is proposing to give. So we simply say that to say that the giving of the undertaking would cause confusion and on that basis it shouldn’t be done, is not a submission you should follow.

PN32

Mr Sneddon does make a point which we would accede to, and that is a point in relation to the allowances that are applicable for the industry allowance, I think it was the overtime meal allowance and perhaps the first aid allowance. Now what has occurred there, Commissioner, is that under the Concrete Products Awards those allowances are paid to an employee by reference to a percentage of the standard weekly wages that term is defined under the award. The Perth Precast Award sought to unwind the weekly rates of pay and to pay things on an hourly basis and in doing that there was an oversight in the drafting such that the percentage that is paid for performing that work under the agreement is calculated by reference to the hourly rate and it should be by reference to a weekly rate and we accept that. What we would propose in relation to those allowances where there’s a reference to a percentage of a weekly rate, is to adjust the undertaking so that the undertaking provided fairly and squarely that those allowances would be paid in accordance with the award provision and not the agreement provision.

PN33

In terms of the approval process that was gone through, one thing that the employer did do was make available to the employees access to the Concrete Products Award at the beginning of the access period. I’ve got a copy of that letter where it quite clearly sets out that:

PN34

Any employee who wished to access any of Perth’s Precast Policies or the Concrete Products Award could access a copy of that document from the offices in the yard.

PN35

The other point I’d like to make about the calling up of the award provisions is that there are a number of clauses in the current agreement that already call up the award. So there’s clause 10.5 which says:

PN36

Employees may be required to perform shiftwork rosters in accordance with clause 25 of the award.

PN37

The entire classification structure is predicated on the award and the classifications in the award. So we would say that there is already referencing of the award in the agreement. All the employer wants to do is to make sure it complies with its obligations under the legislation in relation to its workforce. As you can see from the submissions the employees are all paid well in advance of the rates set out in the agreement, and that’s just a function of supply and demand.

PN38

THE COMMISSIONER: The existing employees.

PN39

MR HARBEN: The existing employees. The giving of the undertaking, we say, will not have the effect of causing substantive change to the agreement. In fact, it should have very minimal change to the agreement. All it will do is maintain the practice that has gone on since 2003 which is to have an agreement which operates in conjunction with an award. Now that’s an arrangement that came into existence through the cooperation of the CFMEU in the making of the state agreement. So there would, in my submission, be no basis upon them from no resiling from such an arrangement, and indeed I’m sure if we search the commission records we’d find a number of CFMEU agreements made under the Fair Work legislation and that operated in a similar fashion. As I said, the employees had access to the award before they approved the agreement. The awards are generally available on the internet. All the employer is seeking to do, as it has a right to do where Fair Work Australia has concerns about whether or not an agreement passes the better off overall test, is to put in place an arrangement that enables the agreement to be approved. Unless, Commissioner, you have any questions?

PN40

THE COMMISSIONER: No, I don’t, Mr Harben. All right, this is what I propose we do. I want to just consider your comments, before I make my decision, and I will issue a decision in writing as is normal for these matters. In the interim, Mr Harben, I understand you to be saying that the employer is now offering an alternative undertaking which deals with the allowance issue?

PN41

MR HARBEN: Yes, it is, your Honour, and I’d be happy to provide a copy of that undertaking in a signed format to both my friend and to yourself.

PN42

THE COMMISSIONER: Yes, well if you can do that as soon as possible and I’ll consider that. Mr Sneddon, I’ll give the union seven days having received that from the employer to make any observations about the particular wording of the undertaking if you wish.

PN43

MR SNEDDON: Thank you, Commissioner.

PN44

THE COMMISSIONER: In due course then, following that, I will issue my decision. Thank you for your time and your submissions.

<ADJOURNED INDEFINITELY [11.47AM]