C2012/6132, Transcript of Proceedings [2013] FWCTrans 197 (22 March 2013)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 1047610-1

SENIOR DEPUTY PRESIDENT HARRISON
DEPUTY PRESIDENT SMITH
COMMISSIONER ROBERTS

C2012/6132

s.604 - Appeal of decisions

Appeal by Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Construction, Forestry, Mining and Energy Union
(C2012/6132)





Sydney

10.36 AM, MONDAY, 11 MARCH 2013

Continued from 16/01/2013

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN SYDNEY

Reserved for Decision

PN743

SENIOR DEPUTY PRESIDENT HARRISON: Are there any changes to the appearance?

PN744

MR GIANETTI: No change for the company, your Honour.

PN745

MR REITANO: I appear instructed by MR KENTISH.

PN746

SENIOR DEPUTY PRESIDENT HARRISON: Very good. Thank you, Mr Reitano. Now, this matter is part heard. When we adjourned on the last occasion, Mr Gianetti, you were making submissions. Are there any matters we need to attend to before Mr Gianetti resumes.

PN747

MR REITANO: No, your Honour.

PN748

MR GIANETTI: No, your Honour.

PN749

SENIOR DEPUTY PRESIDENT HARRISON: All right. Mr Gianetti?

PN750

MR GIANETTI: Thank you, your Honour. If it please the Commission, we are, indeed, part heard. Last time, your Honours and Commissioner, just to briefly - very briefly go over the - I spoke about the general approach to the fairness test and of the issue of identity of the group and the question of distinctness. I also got in some explanation of the scheme of coverage set up by clause 2(b) and how that was intended to work within the agreement.

PN751

I've just commenced fairness, at paragraph 37 of the decision and, obviously, foreshadow that we would want to continue to walk through the decision for the remainder of Deputy President McCarthy's reasons. We also want to take a closer look at QBH v John Holland; and we'd also like to take you to (indistinct) which we'll talk to in terms of - the issues of mischief in this case that are alleged here, and the same practical outcome.

PN752

In the course of that exercise, obviously, the Bench has noted a number of concerns to do with section 58, concerns with the operation of clause 2(b). In the course of those submissions I'd like to offer any further clarity if I can, I'd just like to say at the start though that looking back at the transcript at PN582 to PN683 of the transcript is where I had exchange with, your Honour, Deputy President Smith, with respect to the say that the scheme is supposed to operate, or is intended to operate in terms of clause 2(b) and we stand by that.

PN753

So I think we've explained the way a Greenfields agreement starts the operation of the displacement at an enterprise agreement that replaces that particular Greenfields agreement, is there to continue that displacement and that's the way the clause intended to work. If I could just draw your attention quickly to - - -

PN754

SENIOR DEPUTY PRESIDENT HARRISON: What were those paragraph numbers again, Mr Gianetti?

PN755

MR GIANETTI: Sorry, your Honour. Yes, PN582.

PN756

SENIOR DEPUTY PRESIDENT HARRISON: 582.

PN757

MR GIANETTI: To 638.

PN758

SENIOR DEPUTY PRESIDENT HARRISON: To 638. Yes, thank you.

PN759

MR GIANETTI: If I can just quickly draw your attention to appeal book page 80, this is transcript at first instance, just to illustrate just one example in the transcript, your Honours and Commissioner, where the union - or at least the CFMEU via Mr Sneddon, followed by the Deputy President clearly understand the same scheme.

PN760

There was no issue at first instance about what this clause is intended to do or mean and at appeal book 80 at PN513, Mr Sneddon says:

PN761

Well, it's not actually confined to Greenfields agreements that are approved because if you look at the wording of the coverage clause it also applies to agreements that may replace Greenfields agreements that are approved. So it may well apply to enterprise agreements as opposed to just Greenfields agreements.

PN762

The Deputy President asked the question:

PN763

Yes, he could have a Greenfields agreement that is displaced by another agreement?

PN764

Yes. Correct.

PN765

And Mr Sneddon emphasises down at PN519 to give the full scope.

PN766

To give the scope clause it's full effect you would have to take it that far, Deputy President.

PN767

There's just no issue. I was - I think there was one aspect of section 58 which I would like to be upfront to clean up, your Honours and Commissioner arising out of that.

PN768

SENIOR DEPUTY PRESIDENT HARRISON: Well, can I indicate that the transcript you've just taken me to doesn't clarify anything at all for me as to how the clause is to operate. Are you saying that clarified that the exclusion is only for Greenfields agreements?

PN769

MR GIANETTI: No, I don't - the reference is in the transcript from day 1, your Honour.

PN770

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN771

MR GIANETTI: I've made it very clear that it applies to Greenfield agreements and that it applies to an enterprise agreement made under the Act that replaces such a Greenfields agreement.

PN772

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN773

MR GIANETTI: And mischief, if you will, your Honour, as far as enterprise agreements - the reason it doesn't get much attention is if you're negotiating an enterprise agreement that replaces a Greenfields agreement, that that was displaced, but the Greenfields agreement has passed its nominal expiry date and it's open for people to take industrial action in pursuit of a new agreement if that particular project is continuing.

PN774

I think that's why - and this point I'll come to in submission, why these - as far as that aspect of it goes there's no actually no mischief at all in terms of what's complained by the union.

PN775

SENIOR DEPUTY PRESIDENT HARRISON: I'm not entirely sure about the relevance of mischief. But we've had exchanges several occasions, I think all that is necessary for me to say, I continue to be concerned about section 58. I continue to be concerned about how it was explained to employees in a way they could have genuinely agreed as to how it is operate. The manner in which this clause is to operate was not the subject of any undertakings so as to make it clear in the way you now insist it is clear. So I think it's fair me to indicate I - I have reviewed the transcript; reviewed the submissions below; reviewed the ones here - they still continue to be of concern to me. Of course, we have the fairly chosen issue that is also another basis upon the decision is challenged.

PN776

MR GIANETTI: Well, your Honour, if I can come to section 58 in due course.

PN777

SENIOR DEPUTY PRESIDENT HARRISON: Of course. Having interrupted you - - -

PN778

MR GIANETTI: No, I - - -

PN779

SENIOR DEPUTY PRESIDENT HARRISON: - - - I don't think I spent any time at all clarifying that there is no issue about the appellant's standing?

PN780

MR GIANETTI: No, your Honour, we put that at first instance and - - -

PN781

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN782

MR GIANETTI: - - - Deputy President McCarthy found to be so and - - -

PN783

SENIOR DEPUTY PRESIDENT HARRISON: And there's no issue - - -

PN784

MR GIANETTI: No.

PN785

SENIOR DEPUTY PRESIDENT HARRISON: Thank you for that.

PN786

MR GIANETTI: The - so in the course of these submissions, we'd like to deal directly with section 58 and that is - I said on transcript last times, your Honours and Commissioner, that Justice Katzmann the 58 point - that's not having reviewed the transcripts and what I intended to say. What I intended to say was that her reasoning is relevant to that in terms of the way that you look at the particular words of section 58 and the clear words of the section in that if you don't follow the words of the section and what she's saying - what her Honour is saying in that case, that you read the large parts of the literal terms of the Act otiose, and I'd like to just revisit that if I can and I certainly apologise for taking it as far as I did. It was inadvertent.

PN787

The - and in the subset of the other issue that we will need to traverse is the proposition that has come through from the appellants that the agreement, in effect, terminates prior to its nominate term and that, I think, is bound up in, your Honours and Commissioner, the section 58 point which we'll deal with as well when dealing with QBH and what that means.

PN788

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN789

MR GIANETTI: And finally, we'll need to traverse collective bargaining and what it is in terms of what it is under the Act but, in our submission, there's no special primacy accorded to it in a way - or it doesn't - inhere in the Act in a way that the way that the appellant say that it does. What inheres in the Act is a balance of competing interest, one of which is collective bargaining and the right to take protected industrial action in limited circumstances.

PN790

Before I do that, I do - if I may, I'll do some quick housekeeping in terms of materials. In (iv) - I noted that there are a couple of things in the transcript that didn't appear in the appeal book that should. And if I may hand up just a small package of things which I'll - and I'll give you the reasons why I'd like to address you on those in due course.

PN791

If you - I put a single paperclip over the top. There's a number of things, the first - well, there are, what I would call two groups of things: the first is a - on the top is the outline - the original outline of the notification of objections. If you look at the way the appeal book is structured, it tends to suggest that we put on an outline of evidence and submissions and that was responded to and then responded to again.

PN792

Our initial outline of submissions, which is section 7 of the appeal book is actually responding to that document which I just handed up, which doesn't find its way into the appeal book, and the written submissions of the union at section 6 are responding to our section 7 and initiating the proceedings in the Tribunal.

PN793

Now, the consequence of that, your Honours and Commissioner, I just want to draw your attention to is the fact that we actually didn't provide written submissions on the day like the unions did, and the matter on the transcript at first instance are not only an amplification of our outline of submission, they are our actual submissions, and they are at appeal book 91 and following.

PN794

SENIOR DEPUTY PRESIDENT HARRISON: All right. Well, this document titled Outline of Objections - it's not dated - did it ever bear a date?

PN795

MR GIANETTI: I don't recall it having a date, your Honour, but it was the first provided - - -

PN796

SENIOR DEPUTY PRESIDENT HARRISON: It was the first document provided to - - -

PN797

MR GIANETTI: Yes.

PN798

SENIOR DEPUTY PRESIDENT HARRISON: - - - the Deputy President and it is the one that is responded to in tab 7 - or at least the - - -

PN799

MR GIANETTI: Yes, your Honour.

PN800

SENIOR DEPUTY PRESIDENT HARRISON: - - - I think tab 7 is on behalf of each of the - no, no, no, I'm so sorry, no, I don't understand that, that's yours.

PN801

MR GIANETTI: Tab 7 is responding to that document, your Honour.

PN802

SENIOR DEPUTY PRESIDENT HARRISON: Yes. This was the first in time in relation to - - -

PN803

MR GIANETTI: Yes.

PN804

SENIOR DEPUTY PRESIDENT HARRISON: - - - the written submissions, was it?

PN805

MR GIANETTI: Yes.

PN806

SENIOR DEPUTY PRESIDENT HARRISON: All right. Mr Reitano, any difficulty with us - - -

PN807

MR REITANO: No, no.

PN808

SENIOR DEPUTY PRESIDENT HARRISON: All right. That will - this document then comprising two pages, some 16 paragraphs, and it's an outline of objections by the three appellants, and even though we don't know the date of it, it was the first written submission lodged before the Deputy President.

PN809

Whilst we're on dates, can anyone help me with some dates of other documents? There's a document that is behind tab 6, submissions of the appellants, that's not dated.

PN810

MR GIANETTI: Your Honour, I understood that was filed on the day of the hearing. I don't have the date of the hearing to hand.

PN811

SENIOR DEPUTY PRESIDENT HARRISON: Can we assume that to be so, Mr Reitano?

PN812

MR REITANO: I'm just waiting for someone in Perth to tell me whether that's been dated, your Honour.

PN813

SENIOR DEPUTY PRESIDENT HARRISON: Right. So I won't detain you now. If that is wrong, return to it, but for the time being I'll assume it is.

PN814

MR GIANETTI: Thank you, your Honour.

PN815

SENIOR DEPUTY PRESIDENT HARRISON: Then there's a document - no, the next one behind tab 7, is dated. The one behind that, tab 8, is not. At some stage, can someone let me know - - -

PN816

MR GIANETTI: Your Honour, that's referred to in - the additional submissions are referred to in the transcript below where Mr Sneddon asks for - or was given an opportunity to provide further material after the transcript below had been published and that we were given an opportunity to provide an additional submission after that as well.

PN817

SENIOR DEPUTY PRESIDENT HARRISON: All right. Well, maybe someone at some stage could confirm the date that the document behind tab 8, lodged by the CFMEU was forwarded to the Deputy President. And then finally, the - yes, the last document filed by you, Mr Gianetti, was dated - proceed.

PN818

MR GIANETTI: Thank you, your Honour. The second batch of three - they'll be covered by decision extracts - decisions, but they're actually agreement extracts, are decisions referred to also in the transcript below.

PN819

So the first one - I must confess I didn't put them in order in my - I'll read three that I've got. The first is ADJ Contracting Enterprise Agreement, and that's referred to not only in our response to the outline of submissions but also at PN710 below, at AB98.

PN820

SENIOR DEPUTY PRESIDENT HARRISON: And this extract was before the Deputy President you say.

PN821

MR GIANETTI: Yes.

PN822

SENIOR DEPUTY PRESIDENT HARRISON: It is just the two pages?

PN823

MR GIANETTI: Yes, your Honour.

PN824

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN825

MR GIANETTI: Well, that's my recollection - it will be on the Commission file what I handed up, but that's one the (indistinct) that I filed.

PN826

SENIOR DEPUTY PRESIDENT HARRISON: Well, I don't intend to ascertain for myself what I think you handed up to the Deputy President, because if it wasn't marked as an exhibit there would be no way I could be confident what may or may not be on the file as a working document was, in fact, before the Deputy President, so what say you deal with each of these and then I'll ask what - ask Mr Reitano, what, if anything, he wants to say about them.

PN827

So the first is the Senior Deputy President's decision in relation to approving the ADJ Contracting Enterprise Agreement and an extract from paragraphs - from it, namely, paragraph 1 - clauses 1 and 2.

PN828

MR GIANETTI: Yes.

PN829

SENIOR DEPUTY PRESIDENT HARRISON: All right.

PN830

MR GIANETTI: The second is an extract from John Holland CFMEU Building Agreement New South Wales.

PN831

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN832

MR GIANETTI: That was marked, your Honour, in the proceedings. It was R3 - sorry, A3.

PN833

SENIOR DEPUTY PRESIDENT HARRISON: A3. Yes.

PN834

MR GIANETTI: Referred at PN719 of the transcript.

PN835

SENIOR DEPUTY PRESIDENT HARRISON: And it was just this extract that you have given us - - -

PN836

MR GIANETTI: Yes, your Honour.

PN837

SENIOR DEPUTY PRESIDENT HARRISON: - - - the three pages.

PN838

MR GIANETTI: Yes. And I'll hand it up, the extract of the Mi & E Enterprise Agreement of 2004/2005 in Queensland, that was the original enterprise agreement that formed the framework agreement for which the model for what the company sought to do in Western Australia was founded upon.

PN839

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN840

MR GIANETTI: And that's referred to at appeal book 44 but, again, not marked.

PN841

SENIOR DEPUTY PRESIDENT HARRISON: All right. Thanks. Mr Reitano, any difficulty with these being put into the appeal book as if they were - and being before us?

PN842

MR REITANO: No, your Honour.

PN843

SENIOR DEPUTY PRESIDENT HARRISON: All right. Well, each of those we'll add to the appeal book, Mr Gianetti.

PN844

MR GIANETTI: Thank you, your Honour. I'll come to the significance of how I'd like to address each of those in turn, suffice to say that the agreement extracts refer to - I'd like to just pick up as part of submissions with respect to the immunisation point that industrial action that is alleged, which I raised before Deputy President McCarthy, and the other issue is I'd like to use them to illustrate my points in relation to section 58 in due course.

PN845

Moving along and continuing on where I left last time, the decision at - if I may just - the decision at paragraph 37 where I was up to, your Honours and Commissioner, is where we pick up the exploration of other considerations considering fairly chosen by his Honour. And prior to paragraph 48, which has the overall heading, Does The Published Clause of the Agreement Undermine Collective Bargaining.

PN846

His Honour traverses between paragraphs 7 to 47, a number of considerations in relation to the nature of the fairness considerations before him excluding the issue of just whether or not the coverage clause, in particular, undermines collective bargaining and/or is inimical to the operation of the Act.

PN847

In those paragraphs, the conclusions that he draws in paragraph 37 in terms of - it would be strange for employees at either of the two sites to have been involved in the making of the agreement, there are also sound reasons why some future employees may not be covered - are the conclusions that he draws at the end of 47, having reasoned his way through a number of considerations in relation to those exclusions and the appropriateness of the agreement so he way he concludes that 47 to be seems to be good grounds why the agreement excludes from the group any employees that will be covered by a Greenfields agreement or a replacement for a Greenfields agreement.

PN848

SENIOR DEPUTY PRESIDENT HARRISON: May I ask you a question about paragraph 37? There were some project enterprise agreement had reached its nominal expiry date prior to the enterprise agreement being made.

PN849

MR GIANETTI: Yes, your Honour.

PN850

SENIOR DEPUTY PRESIDENT HARRISON: In fact, I think on the last occasion, it was suggested that it may have reached is expiry date around about November - - -

PN851

MR GIANETTI: I think it was March, your Honour, but - yes.

PN852

SENIOR DEPUTY PRESIDENT HARRISON: Well, the clause reads that it's 8 March or an earlier date, namely, the practical completion of the project, whichever is the earlier. I had understood from the submission made on the last occasion that the practical completion date might have been about November.

PN853

MR GIANETTI: I think it's - Worsley, your Honour, finished in May, I think the evidence says and I think Shenton Park finished later - in November.

PN854

SENIOR DEPUTY PRESIDENT HARRISON: All right. Well, at some stage would you both take me to what was said to the Deputy President about when the project covered by the Worsley - this is the only one I'm asking a question - was completed? Because as I say, the nominal expiry date is worded in a way that (1) I have to identify the earlier of two dates. But in later - the later of them - the latest that could be was 8 March.

PN855

MR GIANETTI: Yes, your Honour.

PN856

SENIOR DEPUTY PRESIDENT HARRISON: Which was before this agreement - which was the day before this agreement was made.

PN857

MR GIANETTI: Your Honour, I believe it appears in the evidence (indistinct) and I'll get my instructor to find the reference for you.

PN858

SENIOR DEPUTY PRESIDENT HARRISON: Yes. So I'm just wondering, given the scope of the enterprise agreement being in operation throughout Western Australia and for all potential classifications that Mi & E could engage employees in, why do you say the Worsley employees were not entitled to vote on it? Is it because of the way you worded the coverage clause?

PN859

MR GIANETTI: Yes, it is the way we worded the coverage clause.

PN860

SENIOR DEPUTY PRESIDENT HARRISON: Had you not worded it that way, the Worsley employees will clearly have been entitled to vote on this agreement given the broad coverage of it?

PN861

MR GIANETTI: I think absent the exclusion provision, your Honour, they would have been covered, yes.

PN862

SENIOR DEPUTY PRESIDENT HARRISON: Thank you. Yes.

PN863

MR GIANETTI: Now, the preliminary points in - just before jumping back into 37, your Honours and Commissioner, is - in understanding the Deputy President's decision we need to be clear on one thing, and that is that as far as - the point about why they are exclusions, the business strategy of Mi & E and the changes to the composition of the workforce are about whether or not this agreement, without its exclusion clause, is sufficiently fairly chosen based on the material, of course, before the Deputy President.

PN864

The issue about undermining collective bargaining is that the unions are agitating to say that people won't be able to take industrial action because of that - the breadth or the scope of that agreement. Now, these considerations are relevant to why that scope was chosen. It's trite to say that every enterprise agreement will apply and to exclude people from taking industrial action while it's in operation. That's the affect.

PN865

Every future employee of a company is a prisoner to that course. The issue which I want to come to in QBH is that the reason - the reason that bargaining certainty, or the reasons that the bargaining certainty was said to inimical were driven out of the adverse consequences for people who were thrown out - effectively, thrown out of the system, "I agree to an enterprise agreement, I agree to be bound by it, now I agree not to be bound by it."

PN866

It inheres in the Act, the express provisions of section 417, it inheres in the objects of the Act with respect to the need for flexibility for business, that collective bargaining is not an unfettered right i.e., when I say collective bargaining there, I mean the way that the mischief is agitated by the appellants, that industrial action and the taking of protected industrial action is not an unfettered or an unregulated right.

PN867

That is what the Deputy President is grappling with. No-one - and including us - we don't shy away from the fact that a concern that was raised in the John Holland decision specific to its facts was that there may be circumstances where an agreement of scope may be said to restrict the taking of protected industrial action.

PN868

Our submissions, when we come to John Holland will be that it's not at the lofty level that's prescribed or described by the union. What we require is a balance and it is absolute overreach to say that the objects of the Act provide for the unfettered right contended for.

PN869

That's the pathway into 37. It's only - it's only the exclusion clause, I mean, one of the ironies of standing before you in this matter, and the ironies of standing before Deputy President McCarthy of seeking approval in the face of the objections was that - we sought to put in the exclusion clause for the purposes of ameliorating potential unfairness and providing a benefit, an advantage to the employee, and it seems ironic that we stand before you arguing about how we transgress their rights in ways where we only sought to provide them with a benefit.

PN870

His Honour's reasons from 37 to 47 explain all the way as to why it was appropriate for the company to have an agreement of scope - but setting aside the exclusion of clause for a second. The reason that's important is because when you go to look at the mischief that's said to be created by the exclusion provision, the actual comparator for the test is not, "Am I making a Greenfields agreement in an environment where no agreement applies."

PN871

The proper comparator for the test is, if we had an Mi & E agreement that's been validly approved with they reach because it's appropriately made having regard to the business strategy of Mi & E, and whether or not things were properly explained to people or not, once you accept that there's nothing in the Act that prohibits the further attempts to make Greenfields agreements. And the Act actually specifically immunises, to use the appellant's language, it's the Acts that it immunises the ability to have a Greenfields agreement that would apply.

PN872

So the position that we're immunising for the purposes of preventing industrial action doesn't stack up. The basic proposition is that the employees are only better off under this clause, not worse off. I'd like to trace that.

PN873

Turning back to - - -

PN874

SENIOR DEPUTY PRESIDENT HARRISON: Well, when you do so, I wish you to constrain yourself to what you said about it before the Deputy President, not necessarily now telling us how you understood it would operate because that may not be relevant to the issue about employees generally agreeing to it, and the manner in which it's explained to them, and the fairly chosen test. I think we have to constrain ourselves to how it was put to the employees and how it was put to the Deputy President rather than how it's - how this Appeal Bench should understand it might operate.

PN875

MR GIANETTI: And the submissions - in my oral submissions and the reason for raising it in the transcript at first instance - - -

PN876

SENIOR DEPUTY PRESIDENT HARRISON: Yes, thanks.

PN877

MR GIANETTI: - - - talk about that, your Honour.

PN878

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Thank you.

PN879

MR GIANETTI: At paragraph 37, I was saying last time that the Deputy President eases himself into the issue of the other considerations of fairly chosen by looking at the exclusions first. And that is a segway from the group and distinction issues. It arises out of the submission from the union at appeal book 82 where Mr Sneddon says at paragraph 543 to 547 that it would have been fairly - you know, it would have been fairly made if all the employees voted on the agreement.

PN880

It also needs to be picked up in terms of the oral submissions from my friend on day one, as well as the submissions of Ms Ireland in the appeal book, that there are other suggested ways in which this agreement could have been made to be fair.

PN881

Now a few comments I'd like to say about that. First is that - and I was at the juncture, I think at the time at which we adjourned, is that we need to consider ResCo which is at tab 15 - sorry, I withdraw that, tab 14 of the authorities. Your Honours and Commissioner, you won't need to turn to it, I'll just read it quickly.

PN882

At paragraph 35, the Full Bench in that case, was at pains to point out that the Tribunal's task is not to determine the scope -

PN883

This is at the end of paragraph 35 -

PN884

The Tribunal's task, however, is not to determine the scope clause. It's task is to guard against unfairness by being satisfied that the group can be described in all the circumstances as fairly chosen.

PN885

What the Full Bench says in prefacing that comment is there is unlikely to be one fair manner of selecting the class of employees to be covered by an enterprise agreement. The reasons of his Honour and the reasons for going to all the facts was this was a particularly narrow case where the particular circumstances of the case dictated the scope in terms of why it was required. It's those reasons as to why part of - people were to be excluded and it's those reasons of - as to why Mi & E and it's submissions as to its business circumstances and economic needs are directly relevant to this issue.

PN886

The second point I'd like to make about it, which is - comes out of ANZ Stadium under tab 5 - is that on the proper construction of section 183(3) and (3a) - and this is tab 5 at paragraph 27 going through to 30 of the decision. ANZ Stadium as you know - of course know is approved by Cimeco Full Bench and that is not - even selecting all the - the structure of the section is such that selecting all the employees for the agreement can be unfair. It doesn't improve collective bargaining, that all the employees are involved.

PN887

His Honour finishes - this is Vice President Lawler, finishes that quote at paragraph 30 where he says:

PN888

The mere fact that one sub group of the group of employees covered by an agreement is smaller in number, even much small than another sub group cannot of itself lead to a conclusion that the overall group was chosen unfairly. It would be possible to identify such sub groups in relation to almost every enterprise agreement.

PN889

Now, he's talking about sub groups within a main group because a point of that case was that the union in that case was advocating that - well, the objecting employees in that case were advocating that all the employees should have been separated out into separate sub groups.

PN890

Now, the point that we - that the Deputy President picked up on in his decision, based on the evidence before him, was that there were good reasons why employees were to be excluded. Those are traced in the decision - in the affidavit of Alicia Norgrove.

PN891

SENIOR DEPUTY PRESIDENT HARRISON: Which employees are we talking about here?

PN892

MR GIANETTI: These are - - -

PN893

SENIOR DEPUTY PRESIDENT HARRISON: - - - which group of employees are we talking about?

PN894

MR GIANETTI: - - - at the time - both groups. So the groups that Shenton Park and Worsley - - -

PN895

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN896

MR GIANETTI: - - - the reason why they're not excluded, they're not part of the future of the changed direction of Mi & E - I'll come to this in a second, I'll actually explain some of the references. And the other group, being future employees.

PN897

SENIOR DEPUTY PRESIDENT HARRISON: And what about the Worsley group?

PN898

MR GIANETTI: Shenton - I'll treat Shenton Park and Worsley in the same group. They're current employees or Mi & E at the time it was made, they were covered by Greenfields agreement in operation.

PN899

SENIOR DEPUTY PRESIDENT HARRISON: I would treat them differently, Worsley being beyond its nominal expiry date at the date this enterprise agreement was made. I thought that that might - - -

PN900

MR GIANETTI: I don't think that that should be - it shouldn't matter, your Honour, because the agreement is in operation, which is the meaning of the clause 2(b) exclusion - - -

PN901

SENIOR DEPUTY PRESIDENT HARRISON: So omit clause - - -

PN902

MR GIANETTI: - - - and continue to operate beyond it's nominal expiry - - -

PN903

SENIOR DEPUTY PRESIDENT HARRISON: I think I'm concerned with this, to put it pretty bluntly, you've drafted a clause in a way that could be said to be artificial and in such a way as to deny any of the employees in the time expired in agreement to vote on it? That's what - that is putting fairly bluntly. It's drafted in a way that, as I say, it does on the face of it, look to be rather tortuous and artificial. It has the effect of not allowing the Worsley employees to vote on it, because clearly the coverage of it being all of Western Australia, all of the classifications, clearly, they would otherwise have been entitled to, drafted in such a way that only four get to vote on it.

PN904

That's what really exercising my mind, and it might be that I should not be thinking there's anything sinister in that. It is open to you have done this consistent with the Act and the only employees who would have been properly asked to vote on it were four employees and - I just shouldn't concern myself what, on the face of it, looks - - -

PN905

MR GIANETTI: Your Honour, this is - this goes - I mean - my friend - all the appellants case and all the way through, it has always been drawn from the persuasive affect of "you must think there's something wrong with this." You know, "It's artificial, it looks, you know, it's designed to" - and that's why - that's part of the reason for filing the original notice of contention.

PN906

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN907

MR GIANETTI: And that's why - his Honour talks about intention all the time, I'm trying to look into something to see if there is something sinister here. What's going on? Well, the purpose of filing evidence in the matter, we say, "Look, yes, there are four employees who did an agreement for a whole State." But that's because we had a totally changed business strategy. Business strategy - they won no work, there were five projects in seven years or something like that, and - because Mi & E is just not a known contractor in the West. So what they wanted to do was build this business up from the ground.

PN908

Now, the reason for excluding those employees is we knew those employees - those projects were coming to an end. We didn't have 200 permanent jobs back at - you know, because it's not - the other thing is it's - yes - it was - those businesses or the Shenton Park and Worsley sites are being operated for that particular project and the changed business plan required for a different type of employment to be created.

PN909

Now, we have 200 jobs based in Bibra Lake for 200 permanent employees. What was known at the time was that those people would be finished and be demobilised in due course, and that was what was expected to happen. So to have people vote on an agreement when they weren't even going to be part of our workforce for very much longer, but didn't share the community of interests and I'll come to that in paragraph 38 - - -

PN910

SENIOR DEPUTY PRESIDENT HARRISON: I think the relevant date is they were part of your workforce as at the day the agreement was made. I think that's when we look at who was entitled to vote.

PN911

MR GIANETTI: Yes. But, your Honour, the issue in this case - and it comes back to Cimeco in terms - it's not - you don't have to have everyone vote. And the idea is, and the way the structure in the scheme of the Acts applies and why the GOOD test, and geographical, operational, organisation, distinction exists is because you're trying to cover or create a particular type of employment of people who have the same community of interest. That's an indication of fairness, that's why the mandatory consideration exists.

PN912

Now, these people who were starting out at Bibra Lake we seeking to do something that was totally different from what was occurring at Shenton Park. It's the same type of work. The same could be said for what was happening in Queensland. I mean, Queensland is not included in this agreement either. Just because they were in WA doesn't - - -

PN913

SENIOR DEPUTY PRESIDENT HARRISON: Well, obviously, this agreement had - was constrained to cover the State of Western Australia geographically so using the Queensland analogy doesn't assist me.

PN914

MR GIANETTI: Well, they can be taken to that level of extraction though, your Honour.

PN915

SENIOR DEPUTY PRESIDENT HARRISON: No, it can't. This agreement - - -

PN916

MR GIANETTI: Why not?

PN917

SENIOR DEPUTY PRESIDENT HARRISON: Because this agreement is confined to Western Australia, so it would not be appropriate, therefore, to look at employees engaged in Queensland for the purposes of whether they were entitled to vote - - -

PN918

MR GIANETTI: Well, with respect, your Honour, that's not the case at all. Because it says, "The access" - section 186(3) says, "If not all employees" - sorry:

PN919

The agreement must be fair, if not all employees covered it must be geographically operationally distinct is the mandatory consideration.

PN920

The people in Queensland were as much our employees as the people in Western Australia.

PN921

SENIOR DEPUTY PRESIDENT HARRISON: I'm talking about who was entitled to vote because they were employees who will be covered by the agreement.

PN922

MR GIANETTI: And on the - - -

PN923

SENIOR DEPUTY PRESIDENT HARRISON: The agreement was constrained to Western Australia in the multitude of classifications deigned in it. That is why I raised the issue and - - -

PN924

MR GIANETTI: I'm suggesting that - - -

PN925

SENIOR DEPUTY PRESIDENT HARRISON: - - - and why, maybe, employees engaged by the distant States company may not have been a relevant analogy to point to.

PN926

MR GIANETTI: The Deputy President looked at the evidence and said, "What is the community of interest between these two groups of employees?" This company is having a fundamental business change. Now, this is why it's relevant that the union lead absolutely no evidence at all. Just this mere - I mean, they're constantly asking to draw an inference in relation to something they - if the people felt that they wanted a job at Bibra Lake and they were being excluded, where are the complaints?

PN927

The CEPU was well aware that this agreement was being made. And the bottom line is they did it, and that feeds into it as well. But more to the point, the actual evidence that's before the Tribunal it's not, you know - it's not - that needs to be accepted - my friend says that. I mean, in all his submissions, he says, "You can accept everything that's before you, you know, it doesn't bother us."

PN928

In accepting that evidence it draws an irresistible conclusion, and the interests of the employer in the balance of interest, because we're talking about whether this is fairly chosen, is that there is nothing axiomatically automatic about a test. It's not - is it - even if it's inimical to the Act it doesn't mean that something automatically occurs.

PN929

What it says it that it tends towards a particular result. And that's affirmed in Cimeco, it's affirmed in QBH and I'll take you - that's why I want to actually go to QBH because at the end of QBH in paragraph 73, early on in the decision neither party demurred on the issue that if it was inimical to the Act it's going to be unfair in that case.

PN930

Even in deciding the case, at paragraph 73, the Full Bench said, "Well, we take into account that we found that it's inimical, now I'm going to consider - now we are going to consider everything additional that the company has submitted as to why it should still be fair anyway, and we find that it's unfair.

PN931

So - and one of those competing considerations, and it - in the face of Cimeco it - it is impossible not to consider the employers' interests as part of this. If it's useful to take your Honours and Commissioner to the part in Cimeco - if I can find the correct tab - it's behind tab 10. The one I'm just going to if the very much often quoted (indistinct) in Cimeco at paragraph 21. It starts with this;

PN932

It's not appropriate to seek to exhaustively identify what might the other relevant considerations, they vary from case to case. The word fairly suggests selection of the group that's not arbitrary or discriminatory, for example, selection based on employee chrematistics such as date of employment, age, or gender would be unlikely to be fair.

PN933

Now, if you actually think our - the submissions from - just to digress briefly - the submissions from our friends that, you know, every time you get 10 new employees we should make another agreement so we make sure that these next 10 people get the right to take industrial action before they make another agreement. That's just arbitrary, that's just date of employment. What inheres in the Act is certainty, I'll come to that in QBH.

PN934

But, similarly, selection based on criteria, and this is what I want to build to, which could have the affect of undermining collective bargaining or other legislative objectives would also be unlikely to be fair. Not axiomatically unfair. And even more importantly, it is appropriate to have some regard to the interests of the employer such as enhancing productivity in the interests of employees in determining whether the group if fairly chosen.

PN935

Now, my friend, in his written submissions, and again on his feet, says, "It's utterly irrelevant. The business strategy of Mi & E and the employers interest, what does that matter?"

PN936

Now, a Tribunal member might have a view that something that was inimical or was creating disadvantage to employees and that's Vice President Lawler was saying, in every bargaining situation there's going to some disadvantage to employees. It's about impression and judgment of the balance between the interests of the two parties. There's nothing axiomatic about it being unfair and you're obliged to take into account. The argument - the business strategy of Mi & E is relevant is just plain wrong. That's where that's drawn from.

PN937

To turn to the evidence about that, and in answer your Honour, Senior Deputy President Harrison's questions about current employees and future employees and which group I'm talking about - - -

PN938

SENIOR DEPUTY PRESIDENT HARRISON: Well, I think I should make it clear that you should realise I was asking questions - the last lot of questions related to the employees who were entitled to vote. I wasn't addressing fairly chosen - a statutory consideration that must be taken into account when an agreement is filed for approval. I was going back even earlier. It was in that context I was asking the questions. I had rather understood you believed me to be asking them about fairly chosen.

PN939

MR GIANETTI: Well, the reason I put it in those terms, your Honour, is that's - the approval requirement that's being appealed here is the issue of fairly chosen. If your Honour has concerns about genuine - it was something I was going to leave for later in the submissions, I might as well raise it now, if your Honour has concerns about genuine agreement or anything else, well, we've never had an opportunity to even raise that. It's never been put.

PN940

To - for this Bench to now step in and say, "The Deputy President was wrong because, you know, (indistinct) genuine agreement questions and we're concerned because it might be artificial or that these people might have been given an opportunity vote." Well, that was never challenged below. Nothing about that.

PN941

We can't - we're trying to do agreements in a fast flexible way that answers the concerns that are put before us and assist the Tribunal to do its statutory task. There was material put in the F17 that, you know, is published by the Tribunal in a form that allows a Tribunal member to reach relevant state of satisfaction absent objection. If your Honour does - is minded to go down that path, then, I'm obviously in the Bench's hands, but our submission would be that it could only go back for rehearing. We don't think that's the appropriate - I'm sorry, back to - be remitted back to Deputy President McCarthy to pick up those concerns.

PN942

We're obviously in your Honour's hands in that. We've had - - -

PN943

SENIOR DEPUTY PRESIDENT HARRISON: It's had an unfortunate life, this agreement, hasn't it?

PN944

MR GIANETTI: It has, your Honour. But it's also unfortunate, dare I say it, without pressing it too far, but I dare I say it, but we've got four employees out there who voted up an agreement who chose not to have the appellants as their bargaining representatives and we've had to go and put them through the uncertainty for this because of that.

PN945

Now, the Tribunal is required to do its statutory task, but it's employees and us and have been prejudiced by this for people who, you know - I know we need a test but we oppose it - intervention at first instance.

PN946

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN947

MR GIANETTI: The Tribunal made, at least, a correct decision to be heard, at least be heard on the points that are relevant to the actual objection raised.

PN948

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN949

MR GIANETTI: Your Honour, just as a convenient juncture in terms of where you questioned about the expiry agreement - - -

PN950

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN951

MR GIANETTI: That's Alicia Norgrove's statement at paragraph 42: the Worsley agreement expired on March 12.

PN952

SENIOR DEPUTY PRESIDENT HARRISON: The latest it could - - -

PN953

MR GIANETTI: It would be filed - - -

PN954

SENIOR DEPUTY PRESIDENT HARRISON: - - - was 8 March.

PN955

MR GIANETTI: Yes, if we can file it later, your Honour.

PN956

SENIOR DEPUTY PRESIDENT HARRISON: Sorry?

PN957

MR GIANETTI: We will find it, your Honour, in terms of - - -

PN958

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN959

MR GIANETTI: Yes, your Honour, I'm instructed, I'll get a date in terms of when the project finished, but I think - and the submission in relation to that one actually remains the same and that is it is, yes, it is, depends on what your Honour's asking, it is an exclusion provision that prevents those people from voting.

PN960

SENIOR DEPUTY PRESIDENT HARRISON: Yes. And as I thought on the last occasion the relevant date was November 2011.

PN961

MR GIANETTI: It sounds like (indistinct)

PN962

SENIOR DEPUTY PRESIDENT HARRISON: No, no.

PN963

MR GIANETTI: But we'll get instructions.

PN964

SENIOR DEPUTY PRESIDENT HARRISON: You confirm or let me know what your instructions are, but that's what I thought had been the date - was suggested to be the date.

PN965

MR GIANETTI: Yes, your Honour. Returning to the decision at - Alicia Norgrove, at paragraph - and we're talking about why current employees are excluded from the agreement, this the material that was before his Honour, paragraph 42 - this is tab 5 of the appeal book at AB134. These were the reasons articulated at paragraph 45 as to why the existing project employees at Shenton Park and Worsley were excluded.

PN966

Building from that, the reason that future employees were to be excluded was because of the desire to regulate this business through this particular agreement albeit that if a Greenfields was done, which Alicia Norgrove says at paragraph 57 of her statement, in terms of the future direction of the business, that the people who had - that - this is at AB136, that it's not only in Mi & Es interest to do those agreements as they're referring to Greenfields agreements from paragraph 56, and they're always seeks to negotiate them in good faith.

PN967

She goes on to say:

PN968

We also know that the terms reached for onsite project as part of the Greenfields agreement will never be less than the terms and conditions of this agreement.

PN969

The purpose for excluding them was well known - and, again, this is in transcript as part of my submissions - it's well known in WA the terms and conditions on project are higher, and that the company committed to those terms and conditions being higher and that if we didn't have the exclusion provision here they'd be regulated by this agreement.

PN970

The exclusion provision actually enables a Greenfields to operate but confers higher terms and conditions.

PN971

SENIOR DEPUTY PRESIDENT HARRISON: That is not what clause 2 says. Nowhere in that clause does it say that the exclusion will operate only in relation to superior - an agreement that has superior terms and conditions.

PN972

MR GIANETTI: Your Honour, no, it doesn't but - - -

PN973

SENIOR DEPUTY PRESIDENT HARRISON: I noted that that's what you're saying - saying you understood this clause would operate.

PN974

MR GIANETTI: And we provided evidence directly on point to say that. We actually offered at the end of our additional submission, your Honour, in the face of the union's continuing objections in the appeal book - and this is behind tab 9, paragraph 19 - this is appeal book 159:

PN975

The applicant would naturally welcome a further opportunity to be heard if undertakings are considered and/or seems to be necessary.

PN976

SENIOR DEPUTY PRESIDENT HARRISON: There is a great deal about how you understood clause 2 would operate, that is not in clause 2. So I am - and there is no undertaking about how clause 2 would operate, that picks up all of these various ways in which you say it should be read.

PN977

MR GIANETTI: I think - - -

PN978

SENIOR DEPUTY PRESIDENT HARRISON: And I did not see any evidence other than that put on any employers statutory declaration that related to any explanation of the two employees about how this would operate.

PN979

MR GIANETTI: It was never objected to. The form 17 was accepted. Now, if the Deputy President had concerns then he could ask about that. The Deputy President was comfortable. Now, I'm not sure that what we're supposed to do in the face of that - I mean, we put up something that is negotiated with - as I said last time, people of a practical (indistinct) who understand things are to occur in a certain way.

PN980

The appellants, the unions, never opposed genuine agreement or never said that it wasn't well explained to people or anything like that. If the Deputy President felt that way then, you know, he can ask for more information but we say that in the absence of any objection on the material on the F17 saying that the terms of the agreement we statutorily declare have been explained to the employees. He doesn't require anything further to proceed on that point either.

PN981

SENIOR DEPUTY PRESIDENT HARRISON: Yes, it's a concern, isn't it?

PN982

MR GIANETTI: We certainly welcome, in the sense - always the opportunity of concerns of members and/or the unions or anything else like that. We can't deal with something we don't know about.

PN983

SENIOR DEPUTY PRESIDENT HARRISON: No. Excuse me?

PN984

MR GIANETTI: Yes.

PN985

SENIOR DEPUTY PRESIDENT HARRISON: Thanks, Mr Gianetti.

PN986

MR GIANETTI: Thank you, your Honour.

PN987

SENIOR DEPUTY PRESIDENT HARRISON: Sorry. Mr Gianetti?

PN988

MR GIANETTI: I think I've taken you to enough of my submissions on that point, but it was open - the evidence is there and it was open. The next paragraph of the decision is paragraph 38, which, I think a large part of that discussion may have already covered - sorry, I work through this quickly - if I can just turn back to the decision at paragraph 38. The business strategy that Mi & E is a factor and I'll take it into account that the evidence establishes that when the agreement is made there are only four employees and the intention was to grow the business.

PN989

That's found in the evidence. It's meant to be a mix Bibra Lake based employees, that's also in the evidence - could perform work and be temporarily relocated to various sites. The intention was to provide Mi & E with flexibility.

PN990

Now, I've already picked up my submission in the written submissions that the union, paragraph 15 on appeal, but that - in that submission my friend says, "Well, there's absolutely no explanation that was provided as why you needed coverage beyond Bibra Lake. It's comprehensively dealt with by Alicia Norgrove, paragraph 32 of her statement and at appeal book 132.

PN991

What that evidence goes to is why it needed to apply beyond Bibra Lake to meet our business strategy and it also why it needed to be broader classifications. And point in submission about that is that it needed to be fair to the company as well, and it's part of the mix. That's why it's a relevant consideration. I've made this submission already based on Cimeco, paragraph 21, that it's irrelevant consideration, it's not true.

PN992

Paragraph 39, talks about whether his Honour finds that there's a community of interest:

PN993

(indistinct) he had a community of interest in the type of work they performed, the places where they performed that work, the permanency of their employment, and the capacity to be employed on projects where higher terms and conditions cover them.

PN994

My friend made a submission on day 1 that, "Well, what's the - there's no community of interest here, there's just a big community of construction workers and they should all be covered." And I think that goes to this question - it's the attempt that an inference of - there aren't two different communities of interest between the people who are on project and the people who, on what I would call -and I didn't use this term below, but it's a convenient way of summarising it, and that is what is called a multi project workforce. But at the time the idea was holding the Queensland model, you would send out people from a particular base, covering the whole State, who could go anywhere.

PN995

And it's in that respect, that there's a community of interest. These people were to be treated differently and have different needs. The business - the economic fundamentals that support the need to have that business need to be different. It's now talking permanent employment, we're going to make sure these people always have a job, not just for as long as the project survives. So it was not only open but appropriate for his Honour to make that finding about the community of interest.

PN996

That is the context that leads into paragraphs 40 to 47 of the decision. Read as a whole, it's his Honour's reasoning as to why the denial of industrial action, as claimed by the unions as being an objection in paragraph 40, it is, in his view, overcome by the evidence as to the needs of his business, and that he determines that as a question of impression of judgement.

PN997

At paragraphs 40 and 41 he chases - sorry, I withdraw that - traces the two arguments, and then he says that - at paragraph 42 - he balances what he understands to be occurring against where the exclusion (indistinct) the total project rates. He says that Ms Gregson, who made the form 17 was available for cross-examination and we deliberately put Ms Gregson in the witness box and made her available, having signed off the F17 for the purposes that if anything in the F17 was to be challenged, then they could do so then.

PN998

The unions asked briefly some questions and then ceased. There was nothing that came out of the cross-examination of Ms Gregson that overcame the contents of her F17.

PN999

At paragraph 43, he balances the considerations against his own relevant industry knowledge, that people go from project to project and they work for different employers as opposed to hanging around to stay with the same employer.

PN1000

It raises the question - well, sorry, the conclusion that - or the consideration he's giving there is - we're talking about a group of future employees who seem to have their transgressed in a very particular set of circumstances in an industry where these people aren't concerned by that. They will just go from job to job.

PN1001

So their inability to take protected industrial action is of no concern. And, again, there's no evidentiary challenge to any of that. I mean, the - there could have been employees from these various sites who came forward, or officials, or even the union could have got in the witness box and said, "Well, this is how it happens." Not just this higher level lofty inheres collective bargaining on it, disrespect the argument. What I mean is that there is no error in the Tribunal's understanding of it.

PN1002

In paragraph 44, he balances that against Ms Norgrove's of how the flexibility would benefit employees. In effect, unlike John Holland - which I'll come to when I trace John Holland - these are State wide employees. They're going to be working - their community of interest is to do project all around the State, therefore, you need an agreement that covers the whole State. It's no good just having agreement that didn't relate, it doesn't do anything for us.

PN1003

That's where he goes on to section - also clause 45, where he says, "Look, there may be something of the appearance of something that it's inappropriate because of the numbers involved, and that being four compared to the later application of the agreement being over 200." However, there are a variety circumstances we - where there can be substantial, maybe even significant changes to the composition of the workforce after an agreement is made. He quotes CJ Mansfield for that.

PN1004

Now, CJ Mansfield is a case about genuine agreement, but it demonstrates another case of long agreement opposition and litigation where you get to the end of it and you say, "Well, now what do I do because the composition of the workforce has changed so radically from when it began."

PN1005

And the point of that is, as is the case in fairly chosen, as is the case in genuine agreement, the appropriate test time is at the time it's made or the scope is agreed upon as per ANZ Stadium and Vice President Lawler, not some later time and/or taking into account irrelevant considerations that post dated that about things people didn't know about.

PN1006

I trace that last time in day 1 in terms of the evidence as to what the bona fides were and what was known. The Deputy President rightly answers the question that the test time is the time the agreement - the scope is made.

PN1007

In 46, I think, your Honour, Senior Deputy President Harrison, he goes through a number of things that might - that should cause, quite rightly, a statutory decision maker charged with responsibility under sections 186 and 187 of the Act to run through what could be other reasons that might not satisfy him.

PN1008

He says:

PN1009

The evidence here does not establish any information was withheld from those involved in making of the agreements.

PN1010

Ms Norgrove and Ms Gregson were available for cross-examination, and no-one was cross-examined about what was not said to them or what was unclear about the clause or how it was intended to operate. There's also no evidence that the agreement was not democratically made, i.e., people had the opportunity to take industrial action in support of an agreement. They agreed to it. There is no evidence that establishes that Mi & E embarked on a deliberate strategy to undermine collective bargaining.

PN1011

So if you look at the notice of contention of the unions - the original one that I put in earlier, it's all about how there must be a clear intention to undermine collective bargaining. No such intention, when the case bore itself out, was ever demonstrated.

PN1012

On the contrary, I consider the Mi & E intentions were to facilitate the capacity for collective bargaining once the agreement was made at those places where existing employees might be deployed or where new employees might be engaged where better terms and conditions might be obtained which would most likely be at major construction projects.

PN1013

Now, in that paragraph he clearly differentiates between - reading that again:

PN1014

were to facilitate the capacity for collecting bargaining once the agreement was made at those places where existing employees might be deployed -

PN1015

i.e., the multi project workforce that was coming out of Bibra Lake to go to different places or -

PN1016

where new employees might be engaged where better terms and conditions might be obtained.

PN1017

i.e., there's an opportunity here that these employees are doing these projects anticipated coming out of Bibra Lake, and they're actually tied up. There's actually now a project that Mi & E has won, somewhere else in the State, when there might be a capacity to do a Greenfields agreement because we - there are no employees currently employed to undertake the work.

PN1018

We don't want to - we don't want to cut off that flexibility based on a Greenfields agreement with a union, backed by public interest test backed by Fair Work Australia - the Fair Work Commission now, that would necessarily cut off that flexibility. That only improves the opportunity for better terms and conditions whilst also supporting our business needs and fairness to employees.

PN1019

That's the grounding for the conclusion in paragraph 47 that:

PN1020

It appears to me good grounds why the agreement excludes those groups.

PN1021

This is the point at which we probably now reach - or what my friend would say - probably not in these terms - but the meat and potatoes of what they say their case is with respect to the inimical operation of this particular provision.

PN1022

DEPUTY PRESIDENT SMITH: Can I just ask a question, please?

PN1023

MR GIANETTI: Yes, your Honour.

PN1024

DEPUTY PRESIDENT SMITH: If 2(b) of your coverage clause is found to be inconsistent with section 58, does it matter if it's excised?

PN1025

MR GIANETTI: Sorry, your Honour, I was flicking pages. My fault.

PN1026

DEPUTY PRESIDENT SMITH: If 2(b) is found to be inconsistent with your - with section 58, does it matter to you if it's excised, if it's taken out?

PN1027

MR GIANETTI: Is the question, your Honour - does it mean, does it matter if the coverage provision goes?

PN1028

DEPUTY PRESIDENT SMITH: No, 2(b) only?

PN1029

MR GIANETTI: Yes, yes. Well, your Honour - - -

PN1030

DEPUTY PRESIDENT SMITH: Because you can always give people over award payments.

PN1031

MR GIANETTI: Yes. I mean, we're trying to - we tried to do the right thing. Does it matter to us that it's not there in terms of future employees? Not at all. We tried to do the right thing. And we would - we'd always pay over award terms.

PN1032

DEPUTY PRESIDENT SMITH: Okay. Thank you.

PN1033

MR GIANETTI: So turning to - turning to the inimical arguments about - and there are a number of - I'll just quickly trace what the unions' arguments are. I'll turn, as the Deputy President does, to the inimical operation of removing or immunising the protected action point, vis a vis, the cause in due course, because his Honour deals with QBH first. And really those two points are the section 58 point and the point raised by our friends that, in effect, this terminates prior to the nominal expiry date.

PN1034

The only way I can characterise that argument from our perspective is that it seems to be said that because it does that it's inimical and because it's inimical it's unfair. Now, no explanation was actually provided by the other side as to what unfairness is actually said to arise in terms of its visitation upon employees in consequence of those two things, but I'll - I guess I'll come back to that in terms of immunisation of collective bargaining because I think that's their one and only point about it.

PN1035

QBH - it talks about the case in Family Counsellors. I'd like to trace Family Counsellors and what it means inside the QBH decision. The last part of the union's argument as described by my friend last time, basically, is that four employees can't make an agreement for all of WA. Just rankly unfair. I think what I've traced in respect to the Deputy President's decision covers the factual basis for why that's not the case and I'll come to John Holland in terms of the immunisation point as to why that's actually not the case at all.

PN1036

I also note just for now that my friend - and I'll come to dealing with John Holland myself, but my friend actually just read John Holland out. We actually haven't had an explanation on it, so I'd certainly reserve - if there are further comments about John Holland in more detail then I'd like the opportunity to be heard further on it, but I'd certainly propose to seek to deal with it as best as I can based on what John Holland actually decides.

PN1037

Moving to response to the inimical point: it's appropriate to deal with QBH first, and the best place to do that is to go to QBH itself, which is behind tab 12 of our book of authorities. The key point upfront to make is that none of the mischief that was so compelling to the Full Bench in QBH or New Acland, New Oakleigh decisions, none of it is found here. The point is about - or what is the mischief that is so visited upon employees, and I'll chart that through the decision.

PN1038

Now, the best place to start in QBH is actually to understand the ration of the decision at the final two paragraphs in 73 and 74. The decision making process is having made some conclusions in 72:

PN1039

On the basis of the foregoing and make the following findings.

PN1040

In number 3 of that finding is:

PN1041

The opt out mechanism in clause 1 of the agreement is inimical to the purpose and policy of the Act.

PN1042

Now, the arguments I'm going to put about how our scheme operates and not being inimical - our position is that it's not - but let's come to the way the decision is decided and that is we've taken into account each of these findings in determining whether the group of employees was fairly chosen. Findings 1 and 2 reflect the position of the parties in the appeal proceedings which relate to other matter.

PN1043

Findings 2 and 3, i.e.,

PN1044

The opt out mechanism in clause 1 of the agreement is inimical to the purpose and policy of the Act in (iii) tell against a determination that the employees covered by the agreement were fairly.

PN1045

Just tell against it, not it is unfair.

PN1046

We have also regard to the submissions advanced by QBH in respect of the issues and the matters set out in 59 to 71.

PN1047

i.e., there were further matters that were put by QBH about - and those were those points about it being democratically made and once it was democratically made that should have been enough.

PN1048

Consideration of all the relevant factors leads us to conclude the group in the agreement was not fairly chosen.

PN1049

Clearly, open to the Full Bench in that case because - in QBH and matters of the self executing opt out clause create a whole range of inimical problems and actually pitch people out literally into darkness. i.e., "I was covered by an agreement but now I’m not. I'm not covered by anything else at all." It's the conclusion at paragraph 73 - it actually goes to the question of undertakings.

PN1050

Now, given the else executing nature of the opt out provision in the agreement we're not satisfied that an undertaking could meet our concern. There's absolutely nothing else executing in our arrangement and that's something that when the Deputy President refers to - there's nothing that the company can do elect to leave this agreement, that's why he puts that in inverted commas, because that's not the scheme, the scheme is, "We need to reach a Greenfields agreement with the union."

PN1051

There is absolutely no way on this earth that - it's not remiss to put it that highly, that a union would agree to lower terms and conditions than what we put - not to mention the fact that we actually say that will always offer higher and terms and conditions under Greenfields agreement.

PN1052

So there is a gatekeeper and it's a process and it's protected by the Act in terms of the way Greenfields agreement would be approved if it's not contrary - if it is contrary to the public interest at some point there's an agreement. And your Honour, Deputy President Smith, that's - I'm just setting aside your question about undertakings earlier. I'm just putting the point that we - on which we run the matter.

PN1053

If we do an agreement that doesn't work or that has employees that are already employed or the public interest is not satisfied because we're doing the wrong thing, that will pull us up well in our tracks. The agreement that will apply will be this agreement. So we've still got a fair geographic agreement that covers a particular area.

PN1054

So to go QBH - sorry, the last point in 74 to make - another comment by the Full Bench at the end of that in 74 - I'll just go back to my page - the end of 74:

PN1055

We uphold the appeal and quash the decision. In doing so we note that such an outcome is consistent with that posited by the Deputy President -

PN1056

I think it was Deputy President Sams from memory -

PN1057

were he not obliged to follow a Full Bench decision that was relevant to the matter before him.

PN1058

Now, that's an interesting comment because that needs to be read fairly with what the original comment of Deputy President Sams's were - or comments were that were extracted from the decision from paragraph 5 onwards.

PN1059

Paragraph 5: I'm just going to run through these mischiefs and whether or not they appear here prior to coming to Family Counsellors. The Act provides that the agreement must be - involve all those who will be covered by it. All these - our agreement, you can't opt out of it. Once you're covered by this agreement, the employees will be covered and their bargaining certainty will remain. They will be covered by the Mi & E agreement, they cannot get out of it. And neither can we in respect of their particular employment, and I will come back to what means in a second.

PN1060

Greenfields starts the process and, obviously, the people who will be covered by it voted on it. Deputy President Sams then says, in paragraph 25, of his Honour's decision, it says:

PN1061

Moreover, I agree that if the objects and purpose in the whole scheme of the Act is designed to encourage enterprise bargaining it's difficult to reconcile this criteria within agreement which commutes the very opposite.

PN1062

Well, we encourage enterprise bargaining. We say, "Can we please have another Greenfields agreement because it will be good for our people and our business."'

PN1063

Paragraph 26:

PN1064

Agreements can have a maximum nominal term of four years. It seems that over time it would be entirely plausible for all employees including new employees to opt out of the agreement resulting in it covering nobody.

PN1065

That's the self executing nature of that clause. It is - other than through the ordinary and customary turnover of labour, which Justice Katzmann refers to in Newlands Coal, as to how people can come and go from agreements all the time - there's no operation of this provision that results in this agreement covering - the Mi & E agreement covering nobody.

PN1066

He goes on to say in paragraph 27:

PN1067

In addition I ask the rhetorical question: what might a prospective employee choose to do when applying for a job is faced with the lower rates and conditions?

PN1068

It's not too hard to imagine what any prospective employee might do in order to carry favour. It's not going to happen here either.

PN1069

Paragraph 28:

PN1070

For my own part, I do not understand what the benefits are (indistinct) employees in doing so. For me this raises some reservations as to what the motivations are in pressing for such provisions.

PN1071

Well, again, we actually lead evidence about what our motivations are for doing what we've done, and that evidence needs to be accepted and there is no contrary - there's not even a capability of inference to say that we've done the wrong thing.

PN1072

This brings me to Family Counsellors, which is the point of the Full Bench at paragraph 51, and it arises in two ways: the first is that what - and it's quoted 51, is the well established principles of what cannot be done directly, cannot be done indirectly. And the second principle is if there's - which is the Anthony Hordern case, which is over the page at 54, says that: if there's a special prohibition if you will - you can't then indirectly find a different way to get around that special prohibition or rely on a more general provision to overcome the specific non provision.

PN1073

Both of those principles and what I'll do, if I can hand up Family Counsellors.

PN1074

SENIOR DEPUTY PRESIDENT HARRISON: Is it going to assist us, Mr Gianetti if - - -

PN1075

MR GIANETTI: I'll just take you to one very brief point, your Honour, and that is - - -

PN1076

SENIOR DEPUTY PRESIDENT HARRISON: - - - therefore not - is it going to assist us - - -

PN1077

MR GIANETTI: Yes, it is, your Honour.

PN1078

SENIOR DEPUTY PRESIDENT HARRISON: This is an issue about an Act, which at the time had no equivalence to section 58?

PN1079

MR GIANETTI: Yes, your Honour. The reason it exists is that the very principle that's quoted here in QBH talks about a structure and scheme of the Act as it existed at the time and make a particular outcome. And the particular outcome was that the variation provision of certified agreements as it then stood in 134L is such that it could only be varied in particular says. The Commission was prevented from arbitrating in particular circumstances in relation to the variation of the agreement.

PN1080

So it could absolutely be said under section 134L in the scheme that operated at the time, that it was directly prohibited. That's the key turning point of the Family Counsellors' case.

PN1081

SENIOR DEPUTY PRESIDENT HARRISON: Yes, I'm sure - - -

PN1082

MR GIANETTI: That's the - - -

PN1083

SENIOR DEPUTY PRESIDENT HARRISON: - - - Deputy President Smith and I immediately recollect - - -

PN1084

MR GIANETTI: Yes.

PN1085

DEPUTY PRESIDENT SMITH: I think it's about time I retired. I'm appearing in too many decisions.

PN1086

MR GIANETTI: That's not fair on yourself.

PN1087

SENIOR DEPUTY PRESIDENT HARRISON: Anyway, where are you taking us?

PN1088

MR GIANETTI: That's the point I want to make out of that case.

PN1089

SENIOR DEPUTY PRESIDENT HARRISON: Okay.

PN1090

MR GIANETTI: That - it needs to be direct.

PN1091

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1092

MR GIANETTI: It can't be - what can't be done indirectly - can't be done because it indirectly prohibits it, which is the nub of my friend's submission. So Family Counsellors has limited affect, and it's at this point that I'll take you to section 58. I think take you through the operation of section 58 to understand two points: (1) is that section 58 actually has no work to do at all. It's just not engaged. Section 58 is a mechanism. It resolves the interaction between two agreements that are apply not two agreements that cover - because the words - the words of the Act are the words of the Act and they can't be rendered otiose by an implied reading of what they're supposed to mean.

PN1093

The second point is that the Act actually directly permits the arrangement to occur. And that's the point where you rely on the reasoning of Justice Katzmann. Now, if I can pick up my copy of the Act and go to section 58, which will take you to the key words.

PN1094

It's also, just while I'm flipping to that point, that section 58 was also canvassed at length in John Holland and we see - the Full Bench actually didn't rule on that at all. It ruled on just about everything else. But, again, the argument was put in that case quite rightly. But section 58 wasn't gauged, and it's just not a relevant consideration.

PN1095

Section 58(1) says this:

PN1096

Only one enterprise agreement can apply to an employee at a particular time.

PN1097

Now, "apply" means something. Apply is (indistinct) meaning in the Act. The definition of "apply" is found at section 52. There are three requirements of an agreement to apply.

PN1098

An agreement applies to an employee, employer/employee organisation give (a) the agreement is in operation -

PN1099

so it needs to be in operation. At the moment - at the point of which under our scheme the agreement comes into operation it ceases to cover, which goes to my second point and that is:

PN1100

To apply (b) the agreement needs to cover the employee/employer organisation.

PN1101

I think, your Honour, Deputy President Smith, in terms of your question about the escape hatch without it being pejorative is precisely the way this scheme works because when you actually look at it in its net result it - what it's doing is giving effect to the objects of the Act about giving flexibility to actually give parties the opportunity, in respect of different particular types of employment, i.e., a business strategy that involves two particular types of employment and catering for that for enterprise levels specific bargaining to be able to make an agreement that covers particular different workforces.

PN1102

DEPUTY PRESIDENT SMITH: At particular times.

PN1103

MR GIANETTI: At particular times. Section 53 is where you read what it is to cover an employee as per section 51 - sorry, I withdraw that - 52(1)(b). 53 says:

PN1104

An enterprise agreement cover an employee or an employer if the agreement is expressed to cover howsoever described.

PN1105

Her Honour, Justice Katzmann - and this is the reason - the transcript references are picked up in - from day 1, where her Honour says;

PN1106

There is absolutely nothing inimical in the requirements of section 186 or 187 that says that an agreement can't cover who its expressed to cover. The Act permits it. It's defined by inclusion and exclusion.

PN1107

And she goes on to say further on day:

PN1108

There is nothing uncertain about who it covers or who it doesn't cover at this time or at any later time.

PN1109

The agreement is source and ResCo - is by ResCo makes the proposition that it does. It's not for the Tribunal to stand in and determine what - or who should be covered.

PN1110

There's a guardianship of unfairness. You have to actually identify what is the unfairness that flows to you, and you have to show in the balance of competing considerations whether or not that balance falls out in a particular way.

PN1111

DEPUTY PRESIDENT SMITH: Is the agreement in operation for those employees that you seek to excise?

PN1112

MR GIANETTI: The - which agreement? The second, the later agreement?

PN1113

DEPUTY PRESIDENT SMITH: No, the first agreement? The Greenfields agreement, is it in operation at the time you seek to apply 2(b).

PN1114

MR GIANETTI: Your Honour, if we accept the same time. So the excision begins at the point of which it begins to operate.

PN1115

DEPUTY PRESIDENT SMITH: So it doesn't operate because it doesn't cover?

PN1116

MR GIANETTI: Yes, your Honour.

PN1117

DEPUTY PRESIDENT SMITH: Is that consistent with 52(1)?

PN1118

MR GIANETTI: Yes, your Honour. There are three requirements for it to apply
- - -

PN1119

DEPUTY PRESIDENT SMITH: Yes.

PN1120

MR GIANETTI: - - - in order for section 58 to apply. Well, it may operate - an agreement may operate but it replies in respect of different employment at this point because it covers somebody different.

PN1121

DEPUTY PRESIDENT SMITH: Yes, but what you're arguing - if I understand it correctly, is the effect of 2(b) means that it is not in operation and it does not cover.

PN1122

MR GIANETTI: In respect of those employees - - -

PN1123

DEPUTY PRESIDENT SMITH: Who are subsequently - - -

PN1124

MR GIANETTI: No, before the Mi & E agreement. People who are bound by the Mi & E agreement - - -

PN1125

DEPUTY PRESIDENT SMITH: Yes.

PN1126

MR GIANETTI: - - - are not bound - are not covered by and that Greenfields agreement does not operate in respect of those Mi & E agreement employees.

PN1127

DEPUTY PRESIDENT SMITH: Yes. Thank you.

PN1128

MR GIANETTI: The other words that are important in terms of resolving the mechanism - going back to section 58(2) that section is - that section is prefaced with an almighty if. If certain conditions are met, certain things happen. It is erroneous to read - at least, it's an invitation to error to read section 58 as requiring certain things to happen or not happen other than unless certain statutory conditions are met. It requires that it cover, and it requires that it come into operation.

PN1129

It does - the two agreements do not cover that particular employment at the same time. Now, we - we are upfront about this in the same way that we were upfront with Deputy President McCarthy, and this is why we actually say that Deputy President McCarthy considered this point.

PN1130

Now, he doesn't - and it's a fair reading of his decision. He doesn't say, "Look, I've considered section 58." We understand he doesn't say that. But what he say in commenting on the evidence that's before him is, he says:

PN1131

The agreement structured on the evidence of Ms Gregson to give Greenfields agreements effective application.

PN1132

It uses this - it uses the fact that it doesn't contravene section 58 in order to arrive at a particular outcome that enables it to happen. So the Act directly permits what we've done for it. And the reason it directly - also directly permits is that because Greenfields agreements themselves, as the Deputy President rightly finds, are flexibilities available in the construction industry.

PN1133

DEPUTY PRESIDENT SMITH: Can I ask another question?

PN1134

MR GIANETTI: Yes, your Honour.

PN1135

DEPUTY PRESIDENT SMITH: Just so that I understand what you're putting.

PN1136

MR GIANETTI: Yes.

PN1137

DEPUTY PRESIDENT SMITH: You see 52(1)(a) and (b) must both be there for an agreement to apply.

PN1138

MR GIANETTI: Yes, your Honour.

PN1139

DEPUTY PRESIDENT SMITH: As I understand what you're arguing is if you undertake a separate project then the underlying agreement, the Mi & E agreement is not in operation and it does not cover.

PN1140

MR GIANETTI: No, it just - it's in operation in respect of particular employment. It's not in operation in respect of that Greenfields any longer because it doesn't cover.

PN1141

DEPUTY PRESIDENT SMITH: So you there - that you don't have to have both (a) and (b) you can have (b) alone.

PN1142

MR GIANETTI: All it takes is one of those three requirements to drop out for an agreement to cease to apply. So it's enough - it's enough that (b) has occurred.

PN1143

DEPUTY PRESIDENT SMITH: I see.

PN1144

MR GIANETTI: Yes.

PN1145

DEPUTY PRESIDENT SMITH: I see. I see. I see the argument, thank you. So 54 means - section 54 means that the agreement is still in operation but it just doesn't cover?

PN1146

MR GIANETTI: Yes.

PN1147

DEPUTY PRESIDENT SMITH: Is that the point?

PN1148

MR GIANETTI: Yes, your Honour. It doesn't - - -

PN1149

SENIOR DEPUTY PRESIDENT HARRISON: And what does 54(3) mean in this exchange?

PN1150

MR GIANETTI: Well, what it means is that if it ceases to operate in relation to a particular population of people, then it can never operate again.

PN1151

SENIOR DEPUTY PRESIDENT HARRISON: So once you've been covered by the Greenfields employees can't go back - - -

PN1152

MR GIANETTI: Unless they accept employment back in the other place. But once a Greenfields occurs, and this again goes to the practical operations of the action, once the Greenfields operates you've got this agreement that applies.

PN1153

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1154

MR GIANETTI: When that Greenfields expires - - -

PN1155

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1156

MR GIANETTI: - - - these nominal expiry dates pass, section 417 doesn't apply, and people take industrial action. They have that choice, or they can - or in an unfair dismissal - just to, sort of, pick up the unfair dismissal genuine redundancy point, say, the project comes to an end - like any future employee doing different - the best analogy is employee operate, you know, the - a company that's regulated by enterprise agreements where each particular site has the same enterprise agreement.

PN1157

The other sites don't get a say in what the other sites are doing. They're regulated by their own site. If their own site was to shut down and they become redundant, well, of course, we're obliged to consider in our related and associated entities whether there are other jobs and those people are going to have to accept terms and conditions of employment that are set someone else, don't have a right to take protected industrial action to improve that situation.

PN1158

SENIOR DEPUTY PRESIDENT HARRISON: That wasn't really what I was concerned - what I was trying to understand.

PN1159

MR GIANETTI: Sorry, your Honour.

PN1160

SENIOR DEPUTY PRESIDENT HARRISON: You said you've got this underlying agreement that will continue to both cover and from time to time apply and - - -

PN1161

MR GIANETTI: What - sorry - - -

PN1162

SENIOR DEPUTY PRESIDENT HARRISON: - - - an employee might go off to another project, (indistinct) to a project, it will then - that employee then will have a project agreement apply to them and you say when the project finishes the employee comes back to the - I think you call it a framework agreement, don't you?

PN1163

MR GIANETTI: Yes.

PN1164

SENIOR DEPUTY PRESIDENT HARRISON: Yes. I'm just trying to understand that - - -

PN1165

MR GIANETTI: Yes.

PN1166

SENIOR DEPUTY PRESIDENT HARRISON: - - - in fact, is the affect of the Act, and that the affect of the Act isn't that one the employees have gone out, they don't legally come back again and find themselves both covered and - - -

PN1167

MR GIANETTI: Yes, they don't - - -

PN1168

SENIOR DEPUTY PRESIDENT HARRISON: - - - in respect of that agreement have it applied to them. You might observe the terms and conditions in relation to the terms and conditions in relation to the engagement, but it might be that the Act doesn't allow the swing, once you've gone out, it may not be the Act recognises coming back in again in a way - - -

PN1169

MR GIANETTI: It doesn't - it doesn't recognise an automatic right in respect of particular employment.

PN1170

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1171

MR GIANETTI: It doesn't say, "I can stick my hand in the air and require myself to go back to Mi & E at Bibra Lake that brings this agreement into operation."

PN1172

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1173

MR GIANETTI: But what it does do is say that, "Now that we've got two particular types of employment on foot and both are covered by agreements, and the Mi & E agreement hasn't terminated and still applies, and over the next four years it will approach its nominal expiry date as well," you're going to have a whole bunch of people who take industrial action in support of that agreement- the new agreement.

If there their particular mode of employment changes because they want it to change or the project comes to an end and then - if they go back across, like any future employee in the business, you come in on the terms and conditions that are present until the next opportunity to bargain. That's not a - that's just a feature of the Act. I mean, chaos would prevail if everyone had an opportunity take industrial action in support of everyone else's terms and conditions, which is really the way we overcome the immunisation point. That's what 417 does, it immunises - creates a balance between you can take protected industrial action and you can't because business actually has to go on from time to time.

PN1174

So what I've - I'd just like to go to those union extracts that I handed up - although I say they're union extracts because they're all union agreements in terms of the extracts of - I'm just wondering where I put my own copy. Sorry, can I just have a second to find - sorry.

PN1175

SENIOR DEPUTY PRESIDENT HARRISON: We might just take a five minute break.

PN1176

MR GIANETTI: Okay.

<SHORT ADJOURNMENT [12.07PM]
<RESUMED [12.18PM]

PN1177

SENIOR DEPUTY PRESIDENT HARRISON: Mr Gianetti?

PN1178

MR GIANETTI: Thank you, your Honour. Thank you for that short break. I found the three agreement extracts. I'll just refer quickly. I can make the point quickly just by reference to ADJ Contracting. On the second page, your Honours and Commissioner, there's an application provision. Now, this is CEPUs pattern agreement Victoria. It says, 1.2:

PN1179

Part A of this agreement does not apply to work performed at any enterprise or project where a site specific or project specific agreement is made between the parties and applies to the employees entered into after this agreement is made.

PN1180

This is classic case of a provision that offends section 58.

PN1181

SENIOR DEPUTY PRESIDENT HARRISON: I'm sorry, where did you read from?

PN1182

MR GIANETTI: Sorry, 1.2 paragraph - sub paragraph A.

PN1183

SENIOR DEPUTY PRESIDENT HARRISON: Sub paragraph A.

PN1184

MR GIANETTI: Yes.

PN1185

SENIOR DEPUTY PRESIDENT HARRISON: Yes, thank you.

PN1186

MR GIANETTI: So what's happening here? We've got an agreement that applies, i.e., the ADJ Contracting Framework Agreement of Victoria. Then it refers to an enterprise or project or site specific agreement, no reference, mind you, to what sort of agreement that's going to be or how, but it's entered into after this agreement is made and applies.

PN1187

What this enterprise agreement provision is seeking to do is to subvert section 58. It's using the enterprise agreement to overcome what section 58 directly prohibits. I just put that up as an example, and the John Holland agreement does the same.

PN1188

The broader point that we want to make about that - or we make about that as well below is that here's a perfect of case of immunisation of collective bargaining. There's no industrial action permitted for the purposes of negotiating such a site specific or project specific agreement.

PN1189

If the need is - or it inheres so deeply in the Act that it offends so much the prospect of collective bargaining then the consequence of this agreement is that it immunises protected action and that's the - why we say in our outline of submissions to this appeal, that there's plenty of project agreements - sorry, pattern agreements from unions running around that actually are in section 58 and that actually immunise protected action. The only principal different between their agreement and our agreement is we made it with our employees and they were, obviously, a party to those agreements.

PN1190

Moving onto the rest of QBH, I think I've mostly dealt with it as part of Deputy President Sams concerns about the remainder of the concerns. My friend made the point that bargaining certainty - we're now at paragraph 64 of QBH where the Full Bench itself now comments on what the problems are with a self executing opt out. But the bargaining certainty - and my friend tried to say that, "Well, that - it operates bigger than that. There's some overall scheme that inheres, you know, in people being able to take protected action and nominal expiry dates."

PN1191

Frankly, they're - those are just words on a page. What the Act says is that protected industrial action can be taken at certain times and the actual mischief in QBH was it enabled people to take protected action and undo that exact bargaining certainty. There is no undermining of the bargaining certainty that arises in our case. And, similarly, I've always made the no practical effect submission with respect to paragraph 66.

PN1192

As far covering one employee goes, paragraph 67, that's not possible for us for the reason that our Mi & E agreement employees are locked within this agreement. The employees don't reduce down to one employee and undermine collective bargaining.

PN1193

The point that his Honour, Deputy President McCarthy makes, which is also consistent with QBH is that Greenfields are a flexibility permitted by the Act, and we rely on the explanatory memorandum in 693 and the ability and choice to make a Greenfields agreement for a new project that can be the same or similar to your existing business. Same - the same as your existing business. It has all the legislative protections that neither John Holland was said not to have and it has all the legislative protections that QBH say are required for the purposes of a flexibility provision I use as the example.

PN1194

The important aspect in paragraph 7 is it's the consequences which flow from such an agreed term are also relevant. That's the - the union is talking about consequences, well, the consequences here are none of those mischiefs. So that's QBH.

PN1195

Turning to the immunisation of collective bargaining. I've already dealt with the headline issues that it's a balance of competing interests. It's not an unfettered right. It's consistent with QBH in terms of what we've done. I just need to deal with John Holland, I think, at this point, in terms of turning on its facts.

PN1196

There are some key differences with John Holland.

PN1197

SENIOR DEPUTY PRESIDENT HARRISON: I think you addressed on this on the last occasion, Mr Gianetti. So you only need address that which you didn't on the last occasion.

PN1198

MR GIANETTI: Yes, okay, your Honour. I did want to briefly - I'm just not sure how much of the relevant facts I've traced as being different, but suffice to say, your Honour, if I can keep it brief - that John Holland can't mean - it just can't mean what the union would love it to mean, and that is that - and I'm talking about the passages here, because it's raised as being analogist, in paragraphs 30 to 32. They're the key paragraphs which the union relies on as being broader than just relying on Greenfields agreements, and that's the case.

PN1199

The key distinguishing feature for paragraphs 30 to 32 is - and the key motivator in the decision on John Holland is the words "on one site." In John Holland, there were three employees at NCH - new children's hospital, who weren't going to go work at other sites, their enterprise was confined to NCH and it wasn't State wide.

PN1200

Now, you can't say that paragraph 30 says that everyone is eligible to take industrial action and bargaining. It's just wrong. The objects establish clear rules governing industrial action. Section 417 is the point. QBH says certainty is to be - the principle of certainty is to be freed from industrial action, which occurs here, and bargaining itself - going back to some of my submissions I made about paragraphs 37 to 47 - bargaining itself has rules about it.

PN1201

But it's got to - you have a mandatory consideration of the good criteria, that things that are arbitrary in terms of date of employment aren't relevant. So - and equally, paragraph 32 can't be read at what the union would love it to mean as well at its broadest that (indistinct) to an agreement with a union in order for it to be fair.

PN1202

There is nothing in the Act at all that says that. The first point about that is that the whole scheme of bargaining under the Fair Work Australia is directly with employees. Unions are just bargaining representatives. Section 172 provides a choice. In fact, you're jurisdictionally barred if you go back, which is one of the distinguishing features. We employ and then we go back and find that people have been employed so we can't a Greenfields now. So it's not like we can actually go back and do a deal with the union to answer my friend's submission.

PN1203

The reason for the public interest test in item - section 118 of the supplement EN is to ensure that - that - it's because there are no employees to look after themselves that you need certain tests in place. We had employees who are looking after their own business whose enterprise and interest covers what we're seeking for it to cover to meet our business strategy, and that once you have those employees they're entitled - that is collective bargaining - they're entitled to look after themselves.

PN1204

They have freedom of association to choose or not to choose to be a member of the union. They - there's no special rights afforded to unions as bargaining representatives other than as a default bargaining representative and our employees chose not to have those - the union representative them.

PN1205

There's nothing in the Act that says that - when you actually look at the provisions of the Act that say being in a union is anything special. In fact, the best thing I could find was section 180(b) which is about explaining an agreement to employees to make sure when you explain it to them in proper terms it's whether or not they had a bargaining representative, not whether or not the bargaining representative was a union. People had a bargaining representative.

PN1206

So John Holland is a unique case which turns very much on its facts, and the rhetorical devise used by the union below about, "Oh, just substitute Mi & E for John Holland and that's easy and, therefore, I'll just read the decision, and once you substitute Mi & E for John Holland you get this answer." You don't.

PN1207

We - all our business circumstances as to why we needed it to be the case, what are employees were part of our enterprise and the reasons for the exclusion are irrelevant in understanding John Holland and its distinguishing features from our case. It just does not mean anything close to what the union would like to believe because - and that leads into this whole "put to bed" argument at the end of their submissions.

PN1208

Let's just put it to bed. It's got to be put to bed that four employees can't do an agreement for a State and that's just wrong.

PN1209

Finishing up, I was going to take you to Premier Electrical - I don't need to take that to you in detail, suffice to say I put this agreement behind tab 15 as an example of an agreement where, again, it almost raises issues of estoppel for the CEPU.

PN1210

Premier Electrical is a case involving the pattern agreement and CEPU and South Australia. It was heard about the same time as our case - the two cases crossed over, where you had 11 employees doing an agreement for the whole State which is in paragraph 5.

PN1211

The coverage clause was also to exclude agreements - sorry, to exclude project agreements. Same mischief, same issue, but the CEPU are filing evidence in support of their application, they're running the application in support of their agreement. And, again, the only difference in principle is that the did they agreement, not directly the employees.

PN1212

Now, some of the conclusions of Senior Deputy President O'Callaghan are important, that is that QBH is distinct and is distinguishable and different. And the second conclusion is that John Holland, yes, needs to be treated with caution but, again, with undertakings making that case that agreement was approved.

PN1213

What it illustrates to us is that the test time is the making of it; it's consistent with what the business plan is; and it begs the question, what would happen if, you know - what if Premier Electrical suddenly won a project that it didn't expect to win 200 extra employees, does it make it unfairly chosen. In our submission, the answer to that is "no" because the test time is back at the time. So I'll leave that case with you but it's certainly worth an analogous read as to the points that we make.

PN1214

In conclusion, the group and the distinctiveness issue, we've covered that - it's amenable; it's distinct because Greenfields make it distinct; it doesn't suffer the problems of John Holland; the evidence says that it's good.

PN1215

Contrary to the Act, I covered that today, and the four employee argument doesn't withstand scrutiny. The submission that parliament could not have intended for that to occur doesn't bear scrutiny in terms of the objects, structure, or policy of the Act either. It very intends that future employees will be covered and bound to the agreement without taking industrial action.

PN1216

As to the disposition of the appeal, we had some discussion about certain matters -if remains a concern to the Tribunal, other than that if the Commission pleases.

PN1217

SENIOR DEPUTY PRESIDENT HARRISON: Yes. Thank you. Mr Reitano?

PN1218

MR REITANO: If the Commission please. Could I, before I, perhaps, deal with some submissions head on just reiterate in a general way the response to the submissions that have been made because it appears that - at least, in some respects, there are some aspects of the submissions that pass like ships in the night.

PN1219

We contended below and contend on appeal and say that Deputy President McCarthy erred in this respect, that the - the approval of this agreement undermines collective bargaining and we did - the fulcrum upon which our case is built did so on the basis that the agreement is anathema to the scheme of collective bargaining that's provided for by the Act.

PN1220

It's anathema to that scheme for two very important reasons that are developed some month ago. Firstly, it takes away the ability to engage in protected industrial action in order to turn the heat up in order to negotiate an enterprise agreement. That's the first aspect of it and I'll come back to it.

PN1221

The second one is that the whole scheme of the Act, the whole foundation of this Act is built upon the premise that agreements that are approved and entered into and operate may be terminated in one or two ways: one, is by the negotiation of a new agreement, which replaces it, which can only come into affect after it's nominate term has expired; and the other is by a vote to terminate it and the people covered by it.

PN1222

It does not comprehend any other scheme for the interaction of enterprise agreements, probably for good reasons, but for present purposes, does not matter. The Act simply does not comprehend, for example, an agreement that has an opt out provision, see New Oakleigh, which I'll come back to in a moment.

PN1223

It comprehends that agreements during their time will operate in a practical and real way, and as I think your Honour, Senior Deputy President Harrison, pointed out that if there operation ceases for one reason or another they do not operate again.

PN1224

The scheme provided for the Act - by the Act that I've spoken about also includes section 203. I don't take the Commission to it now, but 203 is about the type of flexibility device that you are allowed to have in an enterprise agreement. It contemplates that a degree of flexibility in and around an agreement will be appropriate and that is the device by which the Act permits that to happen.

PN1225

It doesn't contemplate a flexibility device that enables you to negotiate a new agreement. It just does not contemplate it. It's certainly not an agreement that will operate. Nor does the Act contemplate anything other than a new agreement coming in over the top to apply until such time as the nominate term has expired.

PN1226

It contemplates that after the expiry of the nominate term you may engage in industrial action to secure another agreement. It doesn't contemplate any other circumstance in which you can, as it were, replace the old agreement before the end of its nominate term. That's the device that this agreement creates.

PN1227

My learned friend deprecates - and he did it a large number of times on the previous occasion, he did it a number of times today - the right to take protected industrial action is foundational to the scheme of collective bargaining provided for by this Act.

PN1228

The right to take that action with the object of obtaining terms and conditions of employment that are beneficial and favourable to those to whom the enterprise agreement will apply is fundamental.

PN1229

What this agreement does is it says that, yes, the company can enter into Greenfields agreements, a species of enterprise agreements, but the other participants, the CFMEU, the CEPU, and AMWU, will not be permitted for four years to take protected industrial action to secure that agreement - the Greenfields agreement.

PN1230

SENIOR DEPUTY PRESIDENT HARRISON: Well, you can't take protected industrial action in relation to Greenfields agreements under the Act. There is no such thing. There's protected industrial action for Greenfields.

PN1231

MR REITANO: Except in the circumstance where a union would be able to say under the Act, "I'm not going to enter into a Greenfields agreement, I'll wait until you" - - -

PN1232

SENIOR DEPUTY PRESIDENT HARRISON: I understand that. You made that submission last time.

PN1233

MR REITANO: Yes.

PN1234

SENIOR DEPUTY PRESIDENT HARRISON: Yes, I do understand that.

PN1235

MR REITANO: Also the - I don't think I need to labour the point, but also a union might say, "Well, we are going to, when you start employment people, to take industrial action to secure the benefit of a certified agreement." So it's slightly different but the same point.

PN1236

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1237

MR REITANO: What the Act doesn't contemplate is that either a union or some employees will not have the facility of industrial action available to them. This agreement (a) - 2(a) comprehends a union is deprived of that; and in 2(b) comprehends that employees will be deprived of that, because bear in mind what one view of 2(b) is that a replacement enterprise agreement that comes in over the top of the Greenfields will displace the operation of this.

PN1238

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1239

MR REITANO: So it's one or both of those classes of people are deprived of that capacity.

PN1240

I want to then take the Tribunal - and I hope I don’t - I don't want to labour it but I do need to take the Tribunal to paragraph - two paragraphs of New Oakleigh. You might recall that on the last occasion I pressed that the circumstances in New Oakleigh, insofar as undermining collective bargaining were concerned were important to the submission we make. Could I firstly do that without going to it, but could I remind your Honours that my learned friend pressed hard - paragraphs 82 and 83 of her Honour Justice Katzmann's decision. Now, New Oakleigh dealt with that.

PN1241

New Oakleigh is a Full Bench of this Commission. I don't think that either are inconsistent and I don't suggest that for a moment - but the interpretation and the dealing with - of what her Honour Justice Katzmann said, is a long way from what my learned friend put to this Tribunal - or this Commission.

PN1242

Could I go to New Oakleigh? It's found in, I think, tab 11 of my learned friend's authorities. I think your Honours and Commissioner, you will recall that New Oakleigh was the last word on locked out provisions which appeared in enterprise agreements.

PN1243

The Full Bench started dealing with the issue of the earlier judgment in Newlands Coal at paragraph 58. I don't want to read that, but I do ask the Commission to bear in mind that in respect of the issue that the Full Bench was considering it was departing from what had been said in Newlands Coal.

PN1244

At paragraph 76, they dealt with the third proposition of (3), and said:

PN1245

Thirdly, the majority decision in Newlands number 2, in finding the requirements of 186(3) are met, fail to take into account that the exclusion of employees who elect not to be covered by the Newlands agreement from the group of employees covered by the agreement has the effect of undermining the objects, purpose and scheme of the Act.

PN1246

That's the submission we had - run hard here. In 77:

PN1247

As we earlier indicated the matter of an opt out clause or provision undermining the objects, purpose and scheme of the Act was argued by the CFMEU at first instance before Commissioner Roe.

PN1248

It was a matter before the Appeal Full Bench in Newlands number 1 and Newlands number 2. Section 578(a) of the Fair Work Act requires that in performing functions or exercising powers in relation to a matter under a part of the Fair Work Act, Fair Work Australia must take into account the objects of the Act and any objects of the part of the Fair Work Act. The matters was only partially considered in the majority decision in Newlands number 1, and the decision in that case was set aside by Justice Katzmann, the majority decision in Newlands number 2 does not refer to the matter in deciding the fairly chosen issue.

PN1249

Justice Katzmann in CFMEU v Fair Work Australia in considering whether the Newlands Coal Agreement is an enterprise agreement within the meaning of the Fair Work Act does not its opt out clause as inconsistent with the purpose of relevant provisions of the Fair Work Act to facilitate the making of a democratic and informed decision on whether the agreement should be made.

PN1250

There's an express reference to paragraph 83, the paragraph my learned friend referred to in the footnote.

PN1251

However, her Honour recognises that the provisions of section 186 of the Fair Work Act may impose statutory limits on the class of employees who may be covered by an enterprise agreement.

PN1252

And there's an express reference to paragraph 82 of her Honour's decision in the footnote. Then there's a reference - sorry, I should read on:

PN1253

Further, in Cimeco's case, a Full Bench of FWA states that the selection of the group of employees covered by the enterprise agreement on the basis of criteria which would have the affect of undermining collective bargaining or other legislative objections would be unlikely to be fair.

PN1254

Now, this is dismissed by the Deputy President. He says - although there's one sentence that my learned friend read where the Deputy President refers to:

PN1255

There's nothing in the agreement that was made with an intention among the mining collective bargaining might convey the inference that there was something,

PN1256

It's quite clear the Deputy President concluded that there's nothing in this agreement that undermines collective bargaining. That was important to his decision. In New Oakleigh the then Tribunal, now Commission, went on and said:

PN1257

The object of the Fair Work Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians, but amongst other things achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.

PN1258

Can I pause there - I'll come to it because they say it:

PN1259

The clear rule about industrial action is that it's available in protected form to secure an agreement which is outside its nominate term. It's not available in its protected form to secure an agreement when the agreement is within its nominate term.

PN1260

An object of the enterprise agreement is part of the Fair Work Act includes providing a simple, flexible, and fair framework that enables collective bargaining in good faith, particularly, at the enterprise level for enterprise agreements that deliver productivity benefits. The Fair Work Act promotes such objects by, amongst other things, providing (1) for employees to take protected industrial action or a proposed enterprise agreement.

PN1261

Any employee under this agreement is deprived of that opportunity. They cannot take protected industrial action in respect of an enterprise agreement that covers - sorry - replaces a Greenfields agreement and they cannot, if their industrial organisation so desires a wait for the Greenfields site to come into operation and people to be employed and take industrial action then either.

PN1262

DEPUTY PRESIDENT SMITH: Can I ask you this question? They can if - at the beginning if an agreement is put forward that says, "This is the full compass of the agreement we want to make. A part of that compass enables us to - both of us, to have this agreement not apply in very particular circumstances when other agreements are made." Now, they have access to industrial action when reaching this agreement.

PN1263

MR REITANO: Yes.

PN1264

DEPUTY PRESIDENT SMITH: So why should they have double access to industrial action in circumstances they already contemplate in this agreement?

PN1265

MR REITANO: Because - because the - well, there's two answers to that. One is they're not the only people put out of industrial action, in my submission, I say the union has put out industrial action in respect of a Greenfields agreement. I know what Senior Deputy President Harrison says about that.

PN1266

DEPUTY PRESIDENT SMITH: Yes.

PN1267

MR REITANO: But I say the effect of that is to put them out of industrial action. That's the first point and the second point is that the Act just doesn't contemplate that type of scenario. The Act contemplates that when you're in battle, and I know the High Court deprecates the use of the analogy - but when you're in battle for an enterprise agreement one of the weapons that is available to you is protected industrial action. "That is we are sitting down and negotiating an agreement and if you don't come to where I want you to be, we're out."

PN1268

That's what I'm entitled to do to get an agreement. I'm not entitled to do that to get an agreement, to get an agreement, which is two steps removed. The Act just does not contemplate it. It doesn't contemplate two agreements operating at the same time. It says entitlement prevails - - -

PN1269

DEPUTY PRESIDENT SMITH: No, no, I understand that.

PN1270

MR REITANO: - - - it doesn't contemplate industrial action being subject to some outside force of immunisation, that is that this Commission approving an agreement that would prevent someone in the future seeking to have an agreement.

PN1271

DEPUTY PRESIDENT SMITH: Let me give you an example with say Local Government. You say it's not permissible under the Act for employees in Local Government to agree that here is an agreement and as a part of that agreement they will subsequently negotiate an agreement to cover their recreational facilities, their pool and the like, and that when they all vote on that they know that they won't - and as a part of the agreement you say, "When an agreement is reached in relation to the recreational employees this agreement will no longer apply, this agreement will."

PN1272

You're saying that is inconsistent with the scheme of the Act because the employees negotiating recreation agreement don't get access to industrial action.

PN1273

MR REITANO: In part - I should add - I haven't looked at it, but I'm not - I'm not by any means suggested it meets a - but section 203 deals with flexibility arrangements. I don't know whether that would cover - - -

PN1274

DEPUTY PRESIDENT SMITH: It may.

PN1275

MR REITANO: If it does then a fortiori my argument wins.

PN1276

DEPUTY PRESIDENT SMITH: Yes.

PN1277

MR REITANO: If it doesn't it's perfectly neutral because what you have to do is when you sit down and look to see whether the criteria for the group to be fairly chosen is met, you have to ask yourself that very question.

PN1278

DEPUTY PRESIDENT SMITH: I follow.

PN1279

MR REITANO: That is, is - in approving this agreement, is it fair to have that provision that may - and I put it no higher at the moment - may enable the workforce to somehow swap recreational employees to terms and conditions that they don't want and put them to one side, and then say, "By the way, we're not negotiating that other agreement for recreational employees, sorry, but no industrial action for you."

PN1280

DEPUTY PRESIDENT SMITH: No, not putting them to one side. Include them in the over arching agreement - - -

PN1281

MR REITANO: Yes.

PN1282

DEPUTY PRESIDENT SMITH: - - - I'm not picking on circumstances that used to be known as LAWAs and were struck down, Local Area Work Agreements - - -

PN1283

MR REITANO: Yes.

PN1284

DEPUTY PRESIDENT SMITH: - - - I'm sorry - were struck down. Where it was similar to that, but then after that there was an approach whereby parties identified the full scope of an agreement but said there may be other agreements reached. Everybody voted. Everybody said, "Yes, that's fine. If you reach another agreement this agreement will not longer apply and the new agreement will."

PN1285

MR REITANO: Yes.

PN1286

DEPUTY PRESIDENT SMITH: Now, the kernel of your argument is because the employees don't get access to industrial action that approach is fundamentally flawed.

PN1287

MR REITANO: It's not just that but, yes. It's not just because they don't get access to industrial action, it's because it's not something that the Act contemplates in terms of the operation of enterprise agreements either. It says - in relation to the type of scenario - your Honour presents - the Act contemplates all these blah terms about flexibility and so on - the Act directs attention to flexibility of enterprise agreements in section 203.

PN1288

DEPUTY PRESIDENT SMITH: Yes.

PN1289

MR REITANO: It says, "That's how you achieve it." It may or may not - it's doesn't matter for my argument - it may or may not allow the scenario that your Honour has referred to. What we do know is it doesn't permit it to happen this way because the group must be fairly chosen - there's a whole range of considerations.

PN1290

If I take your Honour's example, assume 20,000 employees in the Local Government employer that your Honour is referring to, assume 50 of them work at the swimming pool, and the agreement says, "Well, unless there is an agreement made for the 50 people this agreement applies." What sort of negotiating position, in terms of collective bargaining, are the 50 in. They're the only people who are going to be affected by it.

PN1291

The Commission, at the point of approval, asks itself - or - - -

PN1292

DEPUTY PRESIDENT SMITH: That's a fairly chosen point, isn't it?

PN1293

MR REITANO: Indeed.

PN1294

DEPUTY PRESIDENT SMITH: Well, what I was trying to establish was whether or not it's absolutely fundamental to the proposition that you advance, namely, that putting to one side the fairly chosen point, if employees can't get access to industrial action it cannot be collective bargaining.

PN1295

MR REITANO: Yes. Under this Act.

PN1296

DEPUTY PRESIDENT SMITH: Yes.

PN1297

MR REITANO: Under this Act.

PN1298

DEPUTY PRESIDENT SMITH: Yes.

PN1299

MR REITANO: Yes.

PN1300

DEPUTY PRESIDENT SMITH: All right. Thank you.

PN1301

MR REITANO: If employees want to enter into another enterprise agreement that comes in over the top of the existing one during its nominate term it can't be collective bargaining under this Act.

PN1302

DEPUTY PRESIDENT SMITH: Yes, I - - -

PN1303

MR REITANO: It just doesn't permit it. It says - it says, "If you want flexibility see section 203." The Act provides - if one - if one looks at the Act it provides the whole scheme for what's permitted and what's not. My learned friend says, either he appeals to flexibility or he says that the Act prohibit this from happening. Well, it does because section - the sections of the Act relating to the operation of enterprise agreements don't contemplate it.

PN1304

The sections of the Act relating to protected industrial action don't contemplate it. The scheme of the Act insofar as that it does contemplate flexibility does in section 203. This type of arrangement is not something that's contemplated. If we take out the Greenfields exclusion - and I think in argument it was almost suggested that we do that - there might be other considerations. I opened on some of these that I don't run away from, but entering into an agreement in the circumstances here with four employees of Bibra Lake that cover - I can't remember now, but it was nearly 70 different classifications - of itself had some difficulty with it.

PN1305

If one looks at John Holland, and the decision there - as I think his Honour Justice Bolton said in argument during that case to my learned friend but in another guise, an agreement with three people for the whole of Western Australia, it just doesn't sound right, and the same here. An agreement with four people that is to cover the whole State just doesn't sound right, particularly, when there's 70 classifications.

PN1306

It becomes all the more problematical when you insert into it the exclusions about Greenfields agreements and exclusions about enterprise agreements that replace the Greenfields agreements. Just something not contemplated in the scheme of collective bargaining provided for by the Act.

PN1307

SENIOR DEPUTY PRESIDENT HARRISON: It might be wide open under the Act the enter into such an agreement the first time the employer goes into a - - -

PN1308

MR REITANO: I'm sorry, your Honour, I missed the first part.

PN1309

SENIOR DEPUTY PRESIDENT HARRISON: It may well be quite open to an employer under the Act when they go into a State for the first time, so I'm by no means certain that if Mi & E came into Perth for the first time - only had four employees - what in the Act would necessarily have stopped it getting an enterprise agreement with those four despite the fact it was going to operate throughout whole State despite the fact it has 74 classifications?

PN1310

MR REITANO: Because at the point of approval, and that's not this case of course, but at the point of approval the Commission is required - and I think I should just slightly come at it from the approach I took in John Holland but I'll deal your Honour's question first.

PN1311

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1312

MR REITANO: The question that must be asked: is this group fairly chosen?

PN1313

SENIOR DEPUTY PRESIDENT HARRISON: Well, it's - well, I suppose put to one side - the question whether it's all of the employees in the State, but it's - they are the only employees of the employer at the time the agreement was made.

PN1314

MR REITANO: Certainly.

PN1315

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1316

MR REITANO: And, your Honour, sitting as the enterprise agreement approver, still must ask the question: is this group fairly chosen?

PN1317

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1318

MR REITANO: It matters not whether the union turns up, the obligation is on the Tribunal and if - if we can posit thousands of scenarios - if there is an agreement with 74 classifications that cover scaffolders, riggers, and all the types of people that you'd find on a building site, and then you see that the four people that are currently employed by the company are the accounts clerk, and the payroll officer, and the secretary, and the receptionist, one might say, "Why is this group fairly chosen?" This is covering administrative type employees and has all these classifications that one would normally attribute to a building site.

PN1319

It doesn't sound fairly chosen when you put it that way. It just doesn't. And that's the - the way in which this arose - this provision arose, the history of it - which I can't recall if I dealt with it in this case or not - but the history of it arises over a series of cases commencing with a case known as Mine Management, which I think your Honour, Senior Deputy President Harrison might have - - -

PN1320

SENIOR DEPUTY PRESIDENT HARRISON: At first instance.

PN1321

MR REITANO: Yes.

PN1322

SENIOR DEPUTY PRESIDENT HARRISON: Well, not sat on, I was the decision maker at first instance.

PN1323

MR REITANO: Where they entered into an agreement either with themselves or with one employee. I can't remember. It doesn't matter at the moment. But it went to the Full Court of the Federal Court and they made observations about, "Well, that's be fair." And then the formulation under the Act changed - - -

PN1324

SENIOR DEPUTY PRESIDENT HARRISON: Then it came back here and was approved.

PN1325

MR REITANO: Yes.

PN1326

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1327

MR REITANO: But the formulation of the test in the Act changed to include, I think, part or parts of the whole of business, or part or parts of the business. That came before a different Tribunal in a case involving the Pilbara and there were issues about that formulation which I need not trouble the Tribunal with.

PN1328

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1329

MR REITANO: The most recent iteration of that problem or the solution to that problem or the solution to that problem appears in the Fair Work Act. What the legislature has said is, "Here's a Tribunal or a Commission" - it was a Tribunal then, it's a Commission now - "that has historically dealt with notions of fairness."

PN1330

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1331

MR REITANO: I point to unfair dismissal cases, obviously. And so I'm going to impose on the Tribunal the power to determine the issue as to whether the group is fairly chosen. I reckon I'm on a lay down misere in respect of my clerical employees - the four clerical employees setting terms and conditions for riggers.
But there are thousands of permeations.

PN1332

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1333

MR REITANO: At the time this agreement is certified there are four employees covering 74 classifications, it's not a long way there.

PN1334

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1335

MR REITANO: In circumstances where you can then negotiate other agreements, presumably, for people in the future who will be employed who won't have the facility of taking industrial action. It's those circumstances that we submit to the Tribunal - or the Commission that render the approach taken by Deputy President McCarthy as an erroneous one. He didn't consider issues to do with collective bargaining; he didn't consider a range of the other issues that are referred to in our written submissions and the submissions that - - -

PN1336

SENIOR DEPUTY PRESIDENT HARRISON: I think in fairness to him, he did consider that - you just say his consideration was erroneous - - -

PN1337

MR REITANO: Yes.

PN1338

SENIOR DEPUTY PRESIDENT HARRISON: - - - was in error.

PN1339

MR REITANO: The dismissive approach - sorry, I don't want to sound pejorative.

PN1340

SENIOR DEPUTY PRESIDENT HARRISON: No, I think what you're about to launch into would have been an unfair criticise of him as well. You take issue with it.

PN1341

MR REITANO: I don't think - I didn't intend to be unfair or unfairly criticise him, but his understanding and the way in which we presented the argument in respect of depriving us of the benefit of collective bargaining is absent any analysis of the right to take protected industrial action in circumstances.

PN1342

It seems to treat collective bargaining as something that is separate and apart from the right to take protected industrial action. And, look, it might be - I think in various - at various times in history one might have said that collective bargaining was, in fact, something that occurred without access to industrial action or protected industrial action. But that's not the scheme of this Act. The scheme of this Act specifically envisages it. So when we talk about collective bargaining, we talk about it under this scheme.

PN1343

DEPUTY PRESIDENT SMITH: Well, at the very least it provides a right. You say the right are inextricable. You cannot collective bargaining without the right to take industrial action.

PN1344

SENIOR DEPUTY PRESIDENT HARRISON: Except for a Greenfields - - -

PN1345

MR REITANO: The right to take protected industrial action.

PN1346

DEPUTY PRESIDENT SMITH: Protected industrial action, yes, I'm sorry.

PN1347

MR REITANO: Without having the right available - - -

PN1348

DEPUTY PRESIDENT SMITH: You don't have to exercise it, but you cannot collectively bargain without the right available - - -

PN1349

MR REITANO: Under the scheme of this Act.

PN1350

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1351

MR REITANO: And the one way you give away that right is the one provided for by the Act entering into an enterprise agreement. But you don't give it away in respect of negotiating future agreements that might apply to you. You have to have - "This agreement covers my employment and I have the right to take industrial action once it's expired. I'm not expected to negotiate in an environment devoid or absent (indistinct)" That's the scheme contemplated by the Act. That's the vice in this agreement. It takes it away. I takes it away under (b) clearly, and in my submission, takes it away under (a) - when I say (a) - 2(b) and arguably takes it away in respect of (a) and we contend it does because we are deprived of that right in an objective sense.

PN1352

SENIOR DEPUTY PRESIDENT HARRISON: How long do you think you'll be, Mr Reitano?

PN1353

MR REITANO: 10 minutes, your Honour, less than 10 minutes.

PN1354

SENIOR DEPUTY PRESIDENT HARRISON: Of course, we will sit on.

PN1355

DEPUTY PRESIDENT SMITH: Sit on.

PN1356

MR REITANO: Could I - without - I think I was at 79 of New Oakleigh, could I just skip over 79 and I've listed off what I say is the most important aspect in the six dot points that appear there, but I think some of the others are relevant, but I don't need to read them.

PN1357

At 80 the Full Bench says:

PN1358

The objects, purpose and scheme of the Fair Work Act in respect of bargaining the statutory employment agreements is for collective rather than individual bargaining at the enterprise and for enterprise rather than individual agreements. As part of the scheme and in order to promote the collective nature of the bargaining at the enterprise level, under the scheme and the enterprise nature of the agreements, under the scheme, an employee who falls within the scope of an operational enterprise agreement is covered by the agreement whether or not they voted for the approval of the agreement, such an employee is subject to the employee rights and employee obligations in the agreement.

PN1359

Further an employee who falls within the scope of an operational enterprise agreement is precluded from taking protected industrial action for another proposed enterprise agreement until the nominal expiry of the agreement is passed regardless of whether they voted to approve the agreement, such an employee is subject to the statutory rights and obligations associated with the operation of the agreement.

PN1360

Such rights and obligations and the objects in the Fair Work Act they are intended to promote are undermined by an opt out clause or provision in the coverage terms of an enterprise agreement, for example, an employee who opts out or employees who opt out, pursuant to the clause or provision are free to seek to take protected industrial action for another proposed enterprise agreement before the nominal expiry of the agreement that previously cover them.

PN1361

The reverse situation, of course, applies here. You're not free to take it, but you can negotiate for another enterprise agreement. That protected industrial action could be for a proposed agreement with a coverage clause in the same terms as that of the previous agreement, perhaps, only excluding employees still covered by the previous agreement.

PN1362

So you could have all - in this case - you could have everyone at Bibra, the four employees, who have imposed conditions on everyone else by their vote, going over to the new Greenfields agreement or the new agreement somewhere else and leaving behind the terms of the agreement that they negotiated and which they chose not to take industrial action about.

PN1363

By allowing such a scenario, an opt out clause or provision undermines, amongst other things, the provision of the Fair Work Act for an enterprise agreement to have a nominal life during which protected industrial action is not available and, thereby, an opt out clause undermines the objects of the Fair Work Act concerned with achieving productivity and fairness through collective bargaining at enterprise level guided by clear rules governing industrial action for enterprise agreements.

PN1364

I rely on the next paragraph without reading it, which is paragraph 83.

So fundamental to what we submit is the position is the scheme of the Act itself, and it's that scheme which the Deputy President, in our submission, failed to properly understand or failed to properly give weight to in making the decision he did.

PN1365

Could I deal briefly with two other matters? The first matter is the fact that my learned friend seemed to make a virtue of authorities that said that you can't do indirectly what you - prohibited from doing directly. They run contrary to his argument. The Act does not permit this. Just doesn't permit it. The Act contemplates specifically and directly the circumstances in which an enterprise agreement will cease to operate.

PN1366

The rules in 51 through to 58 are all directed at, and New Oakleigh confirms it, the fact that an enterprise agreement approved under the Act shall operate until terminated in one of two ways: an opt out provision is contrary to it; and a provision like this one that brings the agreement to an end for certain employees is contrary to it.

PN1367

DEPUTY PRESIDENT SMITH: Does it follow - sorry - but does it follow that the ADJ Contracting agreement also offends the Act?

PN1368

MR REITANO: I haven't looked at it in detail but it sounds like it does, yes. But the fact that other agreements - - -

PN1369

DEPUTY PRESIDENT SMITH: No, no, I understand that.

PN1370

MR REITANO: - - - can't affect - - -

PN1371

DEPUTY PRESIDENT SMITH: So any agreement made with contractors that seeks to allow for site specific or project specific agreement subsequently made is inconsistent with the Act unless those agreements terminate.

PN1372

MR REITANO: Or unless 203 operates, and I haven't - and I said to - I can have a look - 203 is the provision that requires or allows flexibility provisions to be found in - - -

PN1373

DEPUTY PRESIDENT SMITH: Yes, yes.

PN1374

MR REITANO: - - - agreements - - -

PN1375

DEPUTY PRESIDENT SMITH: It's not uncommon, is it, for - particularly, in building and construction, for that sort of framework to be applied?

PN1376

MR REITANO: I would think so, I don't know, your Honour. I'm not deliberately avoiding your Honour's questions.

PN1377

DEPUTY PRESIDENT SMITH: No, no, no.

PN1378

MR REITANO: I would imagine so, is the probably the answer I can give you. I don't have any instructions on it. I'd never considered how that interacts with 203, I just haven't considered it. Perhaps, I should have.

PN1379

SENIOR DEPUTY PRESIDENT HARRISON: There's been a lot of cutting and pasting of clauses that may have been acceptable back when agreements were being lodged with the workplace authority and don't seem to have been revisited in the subsequent changes to workplace relations. They certainly don't seem to have been revisited with the Fair Work Act. I think that is where some of these have started to - I shouldn't say, go wrong, that's something for us to consider - but somehow they don't seem to have been revisited to ensure they comply with the current provisions of the Act.

PN1380

MR REITANO: Yes.

PN1381

SENIOR DEPUTY PRESIDENT HARRISON: In any event, this case is if they achieve no more they achieve the fact that you and others will advise those you represent to be very careful about the way they frame their coverage clauses or parties bound. They keep on calling them parties bound.

PN1382

MR REITANO: Yes. It would appear on the face of it that 203 would cover the scenario that your Honour is talking about.

PN1383

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1384

MR REITANO: On a quick read. I'm not suggesting that - - -

PN1385

DEPUTY PRESIDENT SMITH: No. Well, I'm not sure it would in the sense that you - there are practical problems in trying to go on site without being party to the site agreement. I don't put anything higher than that.

PN1386

MR REITANO: I've said what I have to say about it.

PN1387

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1388

MR REITANO: The other issue I wanted to deal with is the issue of undertakings, and I simply submit that - there's no undertaking that can fix these. The clause of the agreement that excludes Greenfields agreements and/or agreements on top of Greenfields agreements was what was voted on and employees may or may not have been led one way or another - one just doesn't know to have approved it or not. In that sense an undertaking can't fix it. It's not a situation where, for example, one might be considering applying the better off overall test and one requires an undertaking that could give people more than what might be the ambiguity or otherwise in the clause. It's a situation where you just don't know what the outcome would have been - - -

PN1389

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1390

MR REITANO: - - - particularly in circumstances where it appears - I understand, on instructions - it certainly appears that employees were led to believe that they would only get more beneficial terms of Greenfields agreements. It's difficult to craft any undertaking that would meet the concern.

PN1391

SENIOR DEPUTY PRESIDENT HARRISON: Yes.

PN1392

MR REITANO: Those are the submissions I wanted to make.

PN1393

DEPUTY PRESIDENT SMITH: And you're appearing for the CEPU, CFMEU, and AMWU.

PN1394

MR REITANO: Yes, your Honour.

PN1395

DEPUTY PRESIDENT SMITH: Thank you.

PN1396

SENIOR DEPUTY PRESIDENT HARRISON: Yes, Mr Gianetti?

PN1397

MR GIANETTI: Sorry, your Honour. Can I just have one (indistinct) on the issue of undertakings at the finish, and that is that that's a concern for the bargaining representatives of the agreement that the Tribunal would need to consult with, not the appellants.

PN1398

SENIOR DEPUTY PRESIDENT HARRISON: But you should assume that if the Full Bench was persuaded by Mr Reitano's submission we would not see it appropriate to come back to you and ask for an undertaking. So I suppose what I'm saying is if you want to say something now you should do so, and not assume that later you could, perhaps, criticise this Full Bench for not giving you an opportunity to craft an undertaking that's so broad you might have covered all the concerns we may have in our reasons for decision - - -

PN1399

MR GIANETTI: Your Honour - - -

PN1400

SENIOR DEPUTY PRESIDENT HARRISON: - - - very eloquently but - - -

PN1401

MR GIANETTI: - - - the only thing I would say at this point is that if it is deleterious as my friend puts it, then surely it's capable of rectifying in a way that would be pleasing to employees because they won't be suffering the disadvantage that's so impacting them right now. And that should be considered, but in circumstances where we understand what your concerns are first that we would reserve the opportunity. Because we don't know what undertakings it is we're supposed to be making right now. We may - - -

PN1402

SENIOR DEPUTY PRESIDENT HARRISON: I think the one that we've mentioned earlier is that, certainly, clause 2(b), doesn't apply, and I'm not too sure that it extends to 2(a) as well. But, certainly, 2(b) is - was one matter that was raised earlier and I think the response to that was that if you had to do so that would not be something you would be insisting on and with 2(b) remaining it would not cause you difficulties for that clause not to operate.

PN1403

MR GIANETTI: Yes, correct. That's what - - -

PN1404

SENIOR DEPUTY PRESIDENT HARRISON: "Operate" is the incorrect word. An undertaking would be that the agreement would be read as if that clause was not there.

PN1405

MR GIANETTI: Was not there.

PN1406

SENIOR DEPUTY PRESIDENT HARRISON: Yes. But I just want to indicate that if there is anything else that you want to say about the undertakings at the moment you should because as Mr Reitano has said the errors and the difficulties he has with the findings made by the Deputy President cannot be rectified by undertakings.

PN1407

MR GIANETTI: Yes. Well, our view is, your Honour, that - they use one example, but would rectify all their concerns and another would be that the section 58 be applied as it is, and that is that, you know, our Greenfields agreement won't come into operation until the Mi & E agreement passes the nominal expiry date, whichever. But, I mean, your Honour, I'm in a severe position of difficulty that until I understand what the Full Bench's reasoning one way or another is: if you come down on our side, great; if not then, you know, it's appropriate that we understand that level of what the concern is.

PN1408

I don't accept at all that Mr Reitano's submission must result in it, if you actually look at QBH, that it was the self executing nature of that clause - despite - and it's not being (indistinct) it's the self executing nature of it that said that it was inappropriate to have undertakings. So I don't think Mr Reitano's submission travels that far. If it please the Commission.

PN1409

SENIOR DEPUTY PRESIDENT HARRISON: Thank you both for your submissions. We will reserve our decision and now adjourn.

<ADJOURNED INDEFINITELY [1.13PM]