AG2010/19766, Transcript of Proceedings [2011] FWATrans 55 (27 January 2011)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 36697-1

COMMISSIONER DEEGAN

AG2010/19766

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

Application by AOFR Pty Ltd
(AG2010/19766)





Canberra

2.09PM, FRIDAY, 21 JANUARY 2011

Continued from 17/12/2010

PN72

THE COMMISSIONER: Could I have the appearances, please.

PN73

MS C. LENARD: Yes, Commissioner. Ms Lenard, for the applicant, representing. I have with me MR P. JACOB, managing director of AFOR, and MR S. HEWLETT, who is the employee representative.

PN74

THE COMMISSIONER: Right. Thank you, Ms Lenard. This matter has been re-listed because on the first occasion I raised with Mr Jacob in particular that I was not satisfied, looking at the agreement, that I could honestly say that any employee under the agreement would be better off overall. Mr Jacob has come back to me with a chart, which it is suggested should convince me now that with the undertakings that the company is prepared to give, the employees will be better off overall.

PN75

I need some convincing, I'm sorry, Ms Lenard, because I don't think on the basis of what I've seen - I'd say some of them were borderline, but I'd have to say there may well be employees under some of those awards where I'd be hard pressed to say they were better off. Not no worse off, but better off. If you can tell me why you think I should be reaching the view that people would be better off, tell me about it, and bearing in mind that I did say to Mr Jacob - unless you want to argue this one out, Ms Lenard - that I can't take the bonus, profit sharing, whatever it is, system, into account. Do you accept that?

PN76

MS LENARD: Commissioner, I accept that you can't take the absolute of a bonus profit system into account.

PN77

THE COMMISSIONER: Right.

PN78

MS LENARD: I would say you can take the fact that there's an entitlement under an agreement - that there is an entitlement to an entitlement, which may or may not come, but the fact that it is there as an entitlement can be taken and should be taken into account because it's an entitlement that doesn't otherwise exist under the awards.

PN79

THE COMMISSIONER: But how much weight would I give it?

PN80

MS LENARD: I think, and I would submit, that overall it should be given some weight.

PN81

THE COMMISSIONER: Right.

PN82

MS LENARD: If you'll allow me, Commissioner - - -

PN83

THE COMMISSIONER: So you're saying if everything in this agreement was exactly the same as the modern award, but they got a bonus, then I should say they're better off?

PN84

MS LENARD: I would say, yes.

PN85

THE COMMISSIONER: Right. Supposing though there was no detriment that had to be balanced, and then I have to decide where you lose an actual detriment, is an entitlement to an entitlement sufficient to make up for any amount of loss?

PN86

MS LENARD: I would also submit that there are other entitlements under the agreement that are better off that would also need to be taken into account in that equation.

PN87

THE COMMISSIONER: Okay.

PN88

MS LENARD: If I could perhaps expediate the process and put your mind at ease.

PN89

THE COMMISSIONER: Yes.

PN90

MS LENARD: Since your last hearing here, my client and - we have gone through the agreement again having regard to your concerns.

PN91

THE COMMISSIONER: Yes.

PN92

MS LENARD: AFOR, as the applicant, is prepared to offer up some additional undertakings.

PN93

THE COMMISSIONER: Additional to the ones you've already - - -

PN94

MS LENARD: Correct.

PN95

THE COMMISSIONER: Right.

PN96

MS LENARD: Which will, I think - - -

PN97

THE COMMISSIONER: Get it over the line.

PN98

MS LENARD: Absolutely.

PN99

THE COMMISSIONER: Right.

PN100

MS LENARD: With a lot of room to spare.

PN101

THE COMMISSIONER: Good.

PN102

MS LENARD: If I could be permitted to say that. What I suggest and propose we do, if I could hand up to you - I'll hand up a copy in marked up form of the changes that we've made to the undertakings.

PN103

THE COMMISSIONER: Right.

PN104

MS LENARD: Sorry, if I could also hand up the comparison table that has got those changes referred to in it, as well.

PN105

THE COMMISSIONER: Thank you.

PN106

MS LENARD: You identified correctly the first time obviously that you had a concern and we accept that; that there was a problem with the overtime or the lack thereof. AFOR came back to you with the undertaking that a 3 per cent for every 1.1 hours averaged over a 12-month period thereafter would then be - the award entitlements would kick in. What we propose to do is increase that to 5 per cent. That is, that there's an extra automatic payment to all employees of 57.2 hours per year that they're getting based on the assumption that they don't even have to and there's no requirement to work that overtime.

PN107

You've heard previously that overtime isn't part of the culture and is not a requirement at AFOR, and I appreciate that notwithstanding that you have the awards to compare against. We say that given that 5 per cent for every 1.1 hour averaged over a 12-month period prior to the award provisions kicking in - that that's sufficient and far more beneficial for the reasons I've outlined; that overtime isn't actually a requirement and isn't actually worked. In addition to that, we've added - if you could turn to paragraph 5 of the undertakings - changes to the allowances clause. We propose that travel allowance and car expenses be included in the agreement. These have traditionally been and are policies that exist within AFOR, but by putting them in the agreement we hope to satisfy Fair Work Australia that they are therefore minimum entitlements.

PN108

THE COMMISSIONER: Yes.

PN109

MS LENARD: Those entitlements are commensurate with the award.

PN110

THE COMMISSIONER: With the award.

PN111

MS LENARD: So therefore that is an improvement which we say should be taken into account. Finally, the notice provision at clause 20. What we've done there is - previously the notice provision was in accordance with the NES. We've identified that the Professional Employees Award has a notice provision minimum entitlement to four weeks' notice, which we've included in the award. If I could just say that in taking that into consideration, it's also a current policy of AFOR that all current or existing employees are given four weeks' notice.

PN112

THE COMMISSIONER: Four weeks, yes.

PN113

MS LENARD: And that's in their letters of offer, so that's better off. If you turn, Commissioner, to the last page of the entitlements comparison table, you'll see there a brief analysis of what we say is the overall weighting. Those better off, equal to and then less beneficial entitlements are listed there in that table. That table doesn't take into account the fact that the bonus plan does exist, which as I've said previously is an entitlement to an entitlement, and it also doesn't take into account - which we say should be a factor that Fair Work Australia does - the fact that in practice employees are paid well above the award rates that are listed in the agreement.

PN114

THE COMMISSIONER: Okay. I don't have a problem with any of that and that would actually, Ms Lenard, probably make me say yes, it's better. There's no doubt. I have concerns about the allowances because they have got an entitlement to them under the awards and they seem to be less to me, not equal. As I said, the 3 per cent was pushing it for the overtime even to begin with. I'm just trying to think why I didn't think the undertaking that was originally offered up - yes, all right. No, I'm convinced that's sufficient. What I would like to see though, Ms Lenard, given that these are just going to be in the way of undertakings, is - the pay rates are actually in the agreement, aren't they?

PN115

MS LENARD: They are indeed, yes.

PN116

THE COMMISSIONER: Yes. I would like to see the pay rates set out, rather than just 5 per cent more.

PN117

MS LENARD: Yes.

PN118

THE COMMISSIONER: The pay rates actually set out in the undertaking; that these are the pay rates rather than just changing the 3 per cent to 5 per cent. All right?

PN119

MS LENARD: Certainly.

PN120

THE COMMISSIONER: And then I don't have a problem.

PN121

MS LENARD: Thank you very much.

PN122

THE COMMISSIONER: All right. So as soon as I get those undertakings in that form, I'll approve the agreement. If you get it to me this afternoon, Ms Lenard, I'll approve the agreement this afternoon.

PN123

MS LENARD: Consider it done. Thank you.

PN124

THE COMMISSIONER: All right. Thank you. I'll adjourn.

<ADJOURNED INDEFINITELY [2.17PM]