AG2012/10949, Transcript of Proceedings [2012] FWATrans 1041 (28 September 2012)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 1034672-1

COMMISSIONER RYAN

AG2012/10949

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

Application by Zakana Pty Ltd
(AG2012/10949)





Melbourne

9.20AM, TUESDAY, 18 SEPTEMBER 2012

PN1

THE COMMISSIONER: Good morning. It's Ryan C. Do I have Mr Gillman?

PN2

MR L. GILLMAN: Yes, Commissioner.

PN3

THE COMMISSIONER: Mr Ellery?

PN4

MR P. ELLERY: Yes, Commissioner.

PN5

THE COMMISSIONER: I've called on this hearing because I've got a couple of concerns in relation to the Zakana Pty Ltd 2012-2016 enterprise agreement. The first issue I raise is that the - when I look at the F16 and F17, it's very clear that you, Mr Ellery, are counted as one of the employees for the purposes of the vote, yet you're also the director of the company. It appears to me you can't be both. You can't be both the employer and one of the employees.

PN6

MR ELLERY: I thought I could be.

PN7

THE COMMISSIONER: You might be a working director, but I don't think you're - you're not an employee, because you are actually the employer. It's not going to cause any problems with the certification of the agreement, but it does mean that the statutory declaration is wrong in that there can't be three employees, there can only be two employees, because you can't be counted.

PN8

MR ELLERY: Okay.

PN9

THE COMMISSIONER: Can you file a new F17, please?

PN10

MR ELLERY: Yes.

PN11

THE COMMISSIONER: Because it's not going to change the vote. So it's not going to change the approval process, but it will be neater and tidier on the record if you're not counted as one of the employees.

PN12

MR ELLERY: Okay. Yes, I can do that.

PN13

THE COMMISSIONER: Okay?

PN14

MR ELLERY: Yes.

PN15

THE COMMISSIONER: All you need to do is just get a new F17 and file that with the tribunal. The next issues relate to the agreement itself. Clause 3.2 of the agreement, it refers to the award and says that the agreement is to be read in conjunction with the award. That doesn't do anything other than allows the agreement to be used to interpret - allows the award to be used to aid in the interpretation of the agreement, but it doesn't provide anything. Was it the intention to actually have the award incorporated into this agreement?

PN16

MR ELLERY: No, I think that was to do with the better overall test really, wasn't it?

PN17

THE COMMISSIONER: Okay. Mr Gillman - - -

PN18

MR GILLMAN: Yes, Mr Commissioner. I think the intention was to use the award as a back-up; if there's anything that's not in the agreement, that the award would then take the precedent in that particular respect.

PN19

THE COMMISSIONER: The only way that can be done is you actually incorporate the award. That's the normal practice. You incorporate the award, but then to the extent of an inconsistency, the agreement prevails over a term of the award.

PN20

MR GILLMAN: Yes.

PN21

THE COMMISSIONER: But what you've got at clause 3.2 is nothing other than saying that if you were interpreting a term of the agreement, you can actually use the award to help, because it says it's to be read in conjunction with the award. But that doesn't incorporate anything. So it doesn't allow the award to fill in any of the gaps that are in this agreement.

PN22

MR GILLMAN: Yes.

PN23

THE COMMISSIONER: My suggestion would be that you give an undertaking to say that clause 3.2 is to be read on the basis that the award is incorporated into the agreement, but the agreement applies or prevails over the award wherever there is an inconsistency between the agreement and the award.

PN24

MR GILLMAN: Yes. Thank you very much.

PN25

THE COMMISSIONER: Mr Ellery, are you happy with that?

PN26

MR ELLERY: Yes.

PN27

THE COMMISSIONER: The next issue is clause 6. It's flexibility, but it's missing a whole lot of words because it starts off with a lower case word, "notwithstanding", doesn't really do anything, and it certainly doesn't meet the requirements of the act to have a flexibility term. There's two ways I can deal with this. You can either give me an undertaking that you fix it up by putting in a proper flexibility term or I can deal with it by simply noting in my decision that the agreement doesn't contain a flexibility term, and therefore the model term is incorporated into the agreement.

PN28

MR GILLMAN: Leo Gillman. I think the latter would be very sufficient, thank you.

PN29

THE COMMISSIONER: Okay. Mr Ellery, are you happy with that?

PN30

MR ELLERY: Yes, happy with that.

PN31

THE COMMISSIONER: Then I can fix that one up.

PN32

MR ELLERY: Yes.

PN33

THE COMMISSIONER: The next issue is clause 12.3 and 12.4 of the agreement. It relates to the dispute resolution process, but it's worded in such a way that it actually doesn't do anything, because at 12.2, you have a provision which says:

PN34

If it can't be resolved at the workplace, a party to the dispute may refer the dispute to Fair Work Australia.

PN35

That's fine, but then what flows after that is that Fair Work Australia doesn't necessarily do anything, because 12.3 says:

PN36

The parties may agree on the process to be utilised by Fair Work Australia, including mediation, conciliation and consent arbitration -

PN37

which means if there's no agreement, Fair work Australia does nothing. Then at 12.4 it says:

PN38

Where the matter in dispute remains unresolved, Fair Work Australia may exercise any method of dispute resolution permitted by the act that it considers appropriate to ensure the settlement of the dispute.

PN39

The difficulty with that, it's a circular argument, and what the act permits is only what the agreement allows. Because the agreement doesn't allow anything unless it's by joint agreement of the parties, we have a circular process which means that Fair Work Australia does nothing. If the parties have an intention that if a dispute is unresolved it comes to Fair Work Australia for conciliation or mediation, and if it can't be resolved then Fair Work Australia arbitrates, then it really needs to be made a bit clearer. I think that an appropriate undertaking would be that you undertake that clause 12.3 and 12.4 won't apply, and that in their place, you would say, "Fair Work Australia may exercise conciliation and/or arbitration powers in relation to a dispute." Because you've already got the reference in 12.2, and you just need to have something in 12.3 and 4 which actually allows Fair Work Australia to do something, and the agreement has to specifically provide what we can do.

PN40

MR GILLMAN: Yes.

PN41

THE COMMISSIONER: Who is saying yes to that?

PN42

MR ELLERY: Leo is.

PN43

MR GILLMAN: Leo Gillman again, Commissioner.

PN44

THE COMMISSIONER: Mr Ellery?

PN45

MR ELLERY: Yes. Are you happy with that, Leo, to make those changes?

PN46

MR GILLMAN: Yes. When I read them a second time, I can see what the Commissioner is saying about that, yes. So we have to agree obviously there's got to be some sort of umpire in the end, and the umpire has to have some power to be able to do something.

PN47

THE COMMISSIONER: The way the act is - - -

PN48

MR ELLERY: Is it just any independent arbitrator?

PN49

MR GILLMAN: No, it would be the Fair Work Australia commission.

PN50

THE COMMISSIONER: If you've got unresolved disputes coming to Fair Work Australia, all you need to do is provide that Fair Work Australia can do something. So the easiest way is that after 12.2, you'd have something which would say, "Fair Work Australia may exercise conciliation and arbitration powers in relation to a dispute." That's simple. What you've got there in 12.3 and 12.4 doesn't do anything, because it's so circular it leads nowhere.

PN51

MR ELLERY: Yes.

PN52

THE COMMISSIONER: Okay.

PN53

MR ELLERY: Yes.

PN54

THE COMMISSIONER: So you can write up an undertaking on that, and that will settle that problem. The next issue is clause 13.5. You've got a reference to part-time weekly hire employment. The difficulty within the concept that you've got there, and at 13.5 you've got most of the elements of what constitutes part-time employment, but you don't have one of the protections that's in the award, and that is that if a part-time employee is required to work outside their agreed hours, they have to be paid overtime, and because that's absent out of this agreement, it would mean that an employee who's employed as a part-time weekly hire employee couldn't be better off under the terms of this agreement.

PN55

The easiest way to do that is to simply give an undertaking that if a part-time employee is required to work outside their agreed hours, they will be paid overtime, because that is exactly what the award provides. It doesn't mean that you have to pay overtime every time a part-time employee works outside their agreed hours. It's only when they're required to work. If they agree to work, then they just get paid their ordinary time rates until they reach 38 hours, and then they get the overtime rate. Mr Gillman and Mr Ellery, would you give me an undertaking on that one?

PN56

MR ELLERY: Yes.

PN57

MR GILLMAN: Yes, from Mr Gillman.

PN58

MR ELLERY: Mr Ellery here.

PN59

MR GILLMAN: Yes, and from Mr Gillman's point of view, yes.

PN60

THE COMMISSIONER: The next issue is clause 13.6, casual employment. You've got, "Casual employee is one engaged and paid in accordance with the provisions of this clause." That's too loose. This is really me having my lawyer's that on. The concept of being a casual is you're a casual because you are casual, not because you're employed under a particular clause of an agreement. The way it's worded in most agreements and most awards is, "A casual employee is one engaged and paid as such." In other words, the engagement itself has to be a casual engagement, not an engagement under the provisions of a particular clause of a particular agreement.

PN61

This won't change anything in a practical sense for you, but it makes it clear to me and from an enforcement point of view that casual employment is genuinely casual. So I need an undertaking there that just says clause 13.6 is to be read on the basis as follows, "A casual employee is one engaged and paid as such and in accordance with the provisions of this clause." Mr Gillman, do you understand that?

PN62

MR GILLMAN: Yes, I do, and as far as I'm concerned, I've just written that onto my computer. So from my point of view, that's agreed.

PN63

THE COMMISSIONER: Okay. Mr Ellery?

PN64

MR ELLERY: Yes, I'm happy with that.

PN65

THE COMMISSIONER: Thank you. The next issue is clause 14.2 which is your redundancy pay. I don't have a problem with the way you've structured redundancy. The only thing is you've got an eight-week maximum payment. That might be fine, but I need to be satisfied for BOOT purposes - better off overall test - that an employee who is likely to be employed during the life of this agreement is not going to end up with enough service that if they were made redundant, then under the award they would have got a higher payment than what's provided under the agreement. That might be - because you've only got two existing employees, it's really a case of how long have they been there at the moment, and would it be possible for them during the life of this agreement to end up with enough service that their entitlement under the award would have been greater than their entitlement under this agreement. That you could probably satisfy me with just by giving me an email to let me know exactly how that calculation would work out.

PN66

MR ELLERY: Okay.

PN67

THE COMMISSIONER: Because if this is providing more than they could possibly have earnt or got under the award, then it passes the BOOT, but at the moment it's just unclear to me because I've got no idea what your existing employees have by way of length of service.

PN68

MR GILLMAN: Leo Gillman here, Commissioner. One of the employees is relatively new and the other one has been there for a couple of years. So we have two different circumstances, because the agreement goes for four years. So one would just sit on the four years pretty much as of now when the agreement transfers to another agreement, and the other one would be more than the four years.

PN69

THE COMMISSIONER: Yes, but it's not a case of whether they've got more than four years; whether if they've got more than four years under the award, does that equal eight weeks' pay or not?

PN70

MR GILLMAN: My understanding is yes, because I've taken this particular clause out of the award, out of the Construction Industry Award, the one we referred to earlier in the document.

PN71

THE COMMISSIONER: But the construction industry - okay.

PN72

MR GILLMAN: Under theirs where they go on to talk about redundancy being greater if redundancy is paid through industry process, and the redundancy scheme in Victoria for instance would be much higher than what the award or this agreement would say anyway.

PN73

THE COMMISSIONER: Yes. Are you party to that redundancy scheme?

PN74

MR GILLMAN: Yes. Mr Ellery's people are.

PN75

MR ELLERY: Yes.

PN76

THE COMMISSIONER: Don't worry about it. That will cover it. The last issue is clause 15.1 and 16.1. At 15.1, you've got annual leave, and you've got a leave entitlement and payment for annual leave, and then at 16.1, you've got a leave entitlement and a payment of annual leave. You've actually got the same subject matter twice - - -

PN77

MR GILLMAN: Twice.

PN78

THE COMMISSIONER: - - - but in completely different language. At 16, people are entitled to four weeks' paid annual leave, but at 15, employees are entitled to 18 days plus two annual leave per 12 months of employment equalling 20 days. It's just all expressed differently. I'm not certain which clause you intend to apply, and it might be a case - have a look at it and tell me which one - because you can resolve this by an undertaking. Just tell me which parts of which clause you don't intend to apply.

PN79

MR GILLMAN: Yes.

PN80

MR ELLERY: Okay.

PN81

MR GILLMAN: I agree to that. Leo Gillman.

PN82

THE COMMISSIONER: Mr Ellery?

PN83

MR ELLERY: Yes, I agree with that.

PN84

THE COMMISSIONER: I need from you then - Mr Ellery, I need a new form F17 which has corrected numbers so that you don't count yourself as an employee. I then need a set of undertakings - undertakings are simply things that you put on your own company letterhead, you sign off on them, and it would - I mean, you commence the undertaking with words like, "Zakana Pty Ltd undertakes that in relation to the Zakana Pty Ltd 2012-2016 Enterprise Agreement as follows," and then you just say, you know, "In relation to clause 3.2, that is to be read on the basis that the award is incorporated into the agreement, and where there's an inconsistency between the award and the agreement, the agreement prevails."

PN85

So it's just a series of points in a letter format on company letterhead. You sign it. Show it to Mr Gillman, because he's the employee bargaining representative, and send it to me. If it addresses each of the points I've raised, then your agreement will be approved.

PN86

MR ELLERY: Okay. Thank you very much.

PN87

MR GILLMAN: Mr Gillman here, Commissioner. Would I need to also countersign that as proving that Mr Ellery has shown it to me?

PN88

THE COMMISSIONER: It would be nice if you do, because one of the requirement of the act is I must seek the views of bargaining representatives for the employees, and the easiest way to get those views is that if the letter of undertaking is simply countersigned, then I know that you've seen it and you're happy with it, and therefore I've met the requirements of the act as well.

PN89

MR GILLMAN: Yes, I will do that. It's the simplest and cleverest way of doing things.

PN90

THE COMMISSIONER: Yes. Once you've got that done, simply scan it and send it as an email to my chambers' email address which is on the bottom of the notice of listing.

PN91

MR ELLERY: Got that, yes.

PN92

THE COMMISSIONER: If I get both documents sent to me, then the agreement will be approved.

PN93

MR GILLMAN: Thank you very much.

PN94

THE COMMISSIONER: How long do you think it will take you to get the new F17 and get the undertakings done?

PN95

MR ELLERY: How much time have you got, Leo?

PN96

MR GILLMAN: I have a bit. Commissioner, once we get the transcript, let's say seven days from the time we get the transcript, that will make it very simple. That way we can make sure we've got the right wording.

PN97

THE COMMISSIONER: Yes.

PN98

MR GILLMAN: That way we don't have another impose on your time, so to speak.

PN99

THE COMMISSIONER: Okay. I'm happy with that.

PN100

MR ELLERY: Thank you very much.

PN101

THE COMMISSIONER: Nothing else needs to be said by anyone?

PN102

MR GILLMAN: No. Just thank you for your time.

PN103

MR ELLERY: No, not that I can think of.

PN104

THE COMMISSIONER: Good. On that basis, the tribunal stands adjourned. Thank you.

PN105

MR GILLMAN: Thank you, Commissioner.

PN106

MR ELLERY: Thank you, Commissioner.

<ADJOURNED INDEFINITELY [9.53AM]