AG2013/360, Transcript of Proceedings [2013] FWCTrans 269 (12 April 2013)

102516633601

TRANSCRIPT OF PROCEEDINGS

---

Fair Work Act 2009 1047769-1

COMMISSIONER SIMPSON

AG2013/360

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

Application by Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(AG2013/360)





Brisbane

10.31AM, WEDNESDAY, 3 APRIL 2013

PN1

THE COMMISSIONER: Good morning. I'll start with appearances.

PN2

MS T. BUTLER: Thank you, Commissioner. If it please the commission, my name is Butler, initial T. I seek permission to appear on behalf of the union in each of the respective agreements (indistinct)

PN3

THE COMMISSIONER: Thanks, Ms Butler.

PN4

MR W. SMITH: Commissioner, if it pleases the commission, Wayne Smith. I'm representing three of the organisations listed: FDS Plumbing, End Fire Engineering, and the third party is Absolute Fire Protection.

PN5

THE COMMISSIONER: FDS Plumbing.

PN6

MR SMITH: Yes.

PN7

THE COMMISSIONER: What was the second one?

PN8

MR SMITH: End Fire, Commissioner. E-n-d Fire.

PN9

THE COMMISSIONER: Yes.

PN10

MR SMITH: And the third one is Absolute Fire Protection.

PN11

THE COMMISSIONER: Yes. Thanks for that, Mr Smith. Thank you, Ms Butler.

PN12

MS BUTLER: Can I hand up to the commission some company extracts.

PN13

THE COMMISSIONER: Yes. So are we content to proceed in the first instance, Ms Butler, on the basis that we're dealing with those three? Is that the way we're proceeding, or - - -

PN14

MS BUTLER: Commissioner, I'm in your hands in that respect.

PN15

THE COMMISSIONER: Yes.

PN16

MS BUTLER: I've got some submissions to make, too, about the effect of the coverage and the application clauses that might actually assist the commission in that respect. Having said that, I put it in an email to your associate this morning that some of the employers, Mr Smith has advised me, are actually out of town because of the Easter holidays.

PN17

THE COMMISSIONER: Yes, okay.

PN18

MS BUTLER: He's been able to speak with one of them this morning, but a number of them are unable to be contacted at this stage.

PN19

THE COMMISSIONER: Sure.

PN20

MS BUTLER: So perhaps it would be preferable to deal with the three matters that Mr Smith - - -

PN21

THE COMMISSIONER: All right. Can I just say this before you start into your submissions. It's my view that I've got an open mind about working towards a solution to the issue. I note in the decision that was handed down in the other matters before SDP Richards, he didn't close his mind to the ability - I think the words he used in his decision were "saving the bargain", as it were.

PN22

I guess the issue that I'm grappling with that I'm happy to hear you on - I've read the correspondence from the union yesterday afternoon - is just this question that was flagged in his decision about jurisdiction, that being: is there an agreement for the purposes of section 172(2) and how do we deal with that issue?

PN23

I think there are ways for it to be dealt with, subject to the parties being content to turn their minds to that question, but keeping in mind of course that the way this legislation works is that ultimately the agreements are made between the employer and the employees, so we've got to be mindful of that in how I can be satisfied that it is an agreement for the purposes of section 172. I think if we get over that issue, the others fall away, from what I can see at this stage.

PN24

MS BUTLER: Commissioner, on that point, as the Commissioner rightly points out, at the end paragraphs of the decision of SDP Richards from paragraph 85 onwards, the commission gave the parties the opportunity to seek to resolve the matters.

PN25

THE COMMISSIONER: Yes.

PN26

MS BUTLER: On reading the decision, it's clear that the commission's difficulty arose because the parties submitted that the effect of the coverage clause was to bind future related bodies corporate.

PN27

THE COMMISSIONER: Yes.

PN28

MS BUTLER: It might be, Commissioner, that in this situation, that could be addressed quite conveniently by the parties agreeing that the construction that's intended in respect of the application and coverage clauses is only to apply to existing related bodies corporate and associated entities, which deals with the question of whether or not you've got a clearly defined set of parties intended to be bound by the agreement. But, Commissioner, it becomes a moot point, because there are no current related bodies corporate.

PN29

THE COMMISSIONER: Yes.

PN30

MS BUTLER: They're relational extracts that I've just handed to the commission to demonstrate that there are no related bodies corporate in the ASIC records for any of the employers. One of the employers, End Fire, previously had some shareholdings in another company, but that shareholding has ceased. We're aware that in two of the entities some of the directors have got shareholding interests in other companies, but none of the entities themselves have got a related body corporate within the meaning of the Corporations Act, so we're beginning to argue over a hypothetical in some respects.

PN31

THE COMMISSIONER: I guess the other issue that SDP Richards turned his mind to was prospective future arrangements and his concerns about the operation of section 186(3) - that is, "fairly chosen" issues - in the context of - and we'd have to deal with that.

PN32

MS BUTLER: And he found, Commissioner, that because the parties had submitted that it was intended to apply to future related bodies corporate, that that issue then arose in respect of the future employees of those future related bodies corporate.

PN33

THE COMMISSIONER: Yes.

PN34

MS BUTLER: But on the reading of the provision in that case and the reading of the relevant provisions in this case, there's no express intention to apply it prospectively. It says it applies to all related and associated entities, so it could, I would submit, equally be construed as applying to related and associated bodies corporate that are in existence at the time at which the agreement is made.

PN35

THE COMMISSIONER: Okay. So that's a distinction between these matters and those matters that were before SDP Richards.

PN36

MS BUTLER: Yes.

PN37

THE COMMISSIONER: All right. Thank you for that.

PN38

MS BUTLER: Because he expressly asked Mr Crank of the BLF whether they were intended to have a prospective effect and, as I understood the decision, he was effectively - well, he was leaving it to the parties to determine their course.

PN39

THE COMMISSIONER: Yes.

PN40

MS BUTLER: But I got the impression that the SDP was encouraging Mr Crank to reconsider the submission that had been made about the prospective operation of the provision.

PN41

THE COMMISSIONER: Yes.

PN42

MS BUTLER: So if you read the actual provision - does the Commissioner have one of the template agreements?

PN43

THE COMMISSIONER: Yes. I'm looking at Absolute Fire. That's 358.

PN44

MS BUTLER: So if you look at clauses 1.3 and 1.4, you get the application and the coverage provisions, and the first sentence of 1.3 is the relevant sentence, which defines the term - sorry, Commissioner.

PN45

THE COMMISSIONER: Yes, I'm with you now, just about. Yes, I'm with you.

PN46

MS BUTLER: Which defines the term "the employer" as including the named company and all related and associated entities, and so, Commissioner, as a question of construction, having regard to that phrase, what might objectively be meant by that phrase is the related and associated entities that are in existence at the time at which the agreement is made.

PN47

THE COMMISSIONER: Of which there are none.

PN48

MS BUTLER: Of which there are none, Commissioner.

PN49

THE COMMISSIONER: Yes.

PN50

MS BUTLER: So, that being the case and having regard to the fact that it is a template agreement of course and these are template clauses, the parties' intentions would have been to capture any related and associated entities in existence at the time that the agreement was made and, if so, to ensure that the persons that were employed by those related and associated entities in the classifications within the agreement were balloted, but as there were none, there were no such employees balloted, and if you have regard to the actual applications, the paperwork that was filed in support of the approval of the agreements, it's quite clear, Commissioner, that in each case the named employer and the relevant employees made the agreement.

PN51

So we would submit that if the parties could make clear to the commission in the manner invited by SDP Richards in the CFMEU case that that provision was intended to have that effect, was intended to be construed in that manner, and that was to be recorded in the approval decision, then that would have the effect, should there be any doubt down the track, if a court or a commission were trying to construe the agreement, what the intention of the parties was in an effective sense, objectively recorded and having regard to the words, and it doesn't require particular abuse or damage to the words as they appear. In fact, to read it as applying to future employers or bodies, I would submit, would require more operation, more construction work, than simply understanding it as referring to things in existence at the time that the agreement was made.

PN52

THE COMMISSIONER: Yes.

PN53

MS BUTLER: So I don't think that any particular damage is done to the provision if it's construed that way, and if it's clear on the face of the record that it was understood at the time the agreement was made to be construed that way, then that, I would submit, would really remove the concern about the jurisdictional issue of "With whom was the agreement made?"

PN54

But having said that, I'd submit to the commission - and obviously with all due respect to SDP Richards - it's clear from the agreement and from the approval documentation that was submitted by the employers with the approval application that the persons that made the agreement were the named employer and the employees.

PN55

Now, those persons made the agreement. Those persons put into the agreement a clause purporting to bind third parties. The analogy would be Mr Smith and I entering into a contract that purported to bind his brother as well. We might have put that in. That doesn't make the brother a party to the agreement and it also doesn't have the effect of binding him. The doctrine of privity would prevent that and, by analogy, they are the parties that have made this agreement and tried to capture third parties.

PN56

Even if they did exist, which they don't, that actually wouldn't be effective, and it doesn't go to the jurisdiction because the persons that have made the agreement are the persons that have met their obligations under section 172 of the Act and under the agreement provisions of the Act. The effect would just be that that provision, to the extent that it purported to try to capture other entities into the coverage and the application of the agreement, would not give effect.

PN57

THE COMMISSIONER: I guess the issue, though, in relation to the other matters was that SDP Richards gave the parties an opportunity. He actually put to them questions to clarify these points so that he could, in his own mind, form a view about whether or not he had jurisdiction, and on the basis of the answers that he got, he concluded he didn't, which I think was clearly the case in those circumstances, whereas what you're saying here is that on the basis of what I'm hearing as we are here now, the circumstances are that this is not a case that takes the agreement outside section 172(2) in this particular set of facts, I think.

PN58

MS BUTLER: Yes.

PN59

THE COMMISSIONER: So then I think in terms of what's proposed, it's not really in the form of an undertaking under section 190.

PN60

MS BUTLER: But a clarification.

PN61

THE COMMISSIONER: Yes, but I guess, coming to the other point I raised - is who gives that clarification in circumstances where we're dealing with an agreement, a single employer agreement, between an employer and its employees? How do we get that?

PN62

MS BUTLER: Well, Commissioner, notwithstanding that it's the employer and the employees that make the agreement, the Act has a clear scheme for bargaining representatives. In a section 190 situation the commission is entitled to take notice of the bargaining representatives of which it has knowledge. The commission is not obliged to undertake an inquiry as to who were all of the bargaining representatives involved in each particular agreement.

PN63

That would be impracticable, particularly for larger enterprises, so the commission is entitled to rely upon the views of the bargaining representatives in that situation. I'm not saying that that situation applies, but by analogy the commission would be entitled to take into account the views of the bargaining representatives in respect of each of the agreements as to the proper construction of clauses 1.3 and 1.4, and that's particularly the case given the nature of the agreement is a template agreement.

PN64

The union clarification about what's intended by the provision, I'd submit, would be relevant to the construction of the agreement at this point and would assist each of the employers and also the commission to form a similar view that the construction of that provision is the construction for which I've contended, which is that it was intended to apply only to existing related and associated entities.

PN65

THE COMMISSIONER: Yes. Do you know off the top of your head, Ms Butler, if there are other bargaining representatives identified in the six agreements, besides the Plumbers Union?

PN66

MS BUTLER: I don't believe that there are, Commissioner, but not having them in front of me - - -

PN67

THE COMMISSIONER: No, that's fine. Look, it might be one that you could take on notice, but I'm inclined to the view that it may well be that the clarifications are provided by - and I haven't heard from you yet, Mr Smith, but assuming that the proposal being put by Ms Butler is acceptable, at least to the three employers that you represent - that the clarifications would be provided by the employer and bargaining representatives for the purposes of those agreements which, it appears to be in each case, was the Plumbers Union. If there was another bargaining representative under the scheme of the Act, then I think it would be appropriate that they also be asked to confirm that that was their understanding.

PN68

MS BUTLER: Thank you, Commissioner. As I said, I'm not aware of any of the bargaining representatives - - -

PN69

THE COMMISSIONER: Okay. It may well be there aren't any, but I think I say that just for the purposes of the fact that we are in a slightly different situation, or a different situation than what we might be if it was purely a matter for, say for example, the BOOT.

PN70

MS BUTLER: Yes.

PN71

THE COMMISSIONER: I just would like to have a bit of a belts-and-braces approach in terms of what the parties understood they were doing at the time. All right.

PN72

MS BUTLER: Commissioner, it might not be necessary then for us to proceed with the section 190 proposed undertaking that was sent through to the commission yesterday. The clarification can be in very similar terms.

PN73

THE COMMISSIONER: I think in writing, yes.

PN74

MS BUTLER: Yes.

PN75

THE COMMISSIONER: Yes, I think that might be - - -

PN76

MS BUTLER: When you say in writing, Commissioner, would a single document circulated and signed - - -

PN77

THE COMMISSIONER: Yes.

PN78

MS BUTLER: Or a counterpart document circulated and signed, making clear that they were being signed on behalf of each of the employers and each of the bargaining representatives?

PN79

THE COMMISSIONER: Yes. I think that would be an appropriate format, yes.

PN80

MS BUTLER: Thank you, Commissioner.

PN81

THE COMMISSIONER: All right. Mr Smith.

PN82

MR SMITH: Thank you, Commissioner. First of all, generally support Ms Butler's submission in relation to how we deal with the issue of the words.

PN83

Commissioner, just by way of background, I was involved in the preparation of this agreement, negotiation of this agreement, on behalf of the associations of the National Fire Industry Association, the Master Plumbers Association and also the Air Conditioning and Mechanical Contractors Association, so I have some pretty good familiarity with the agreement and the background to it.

PN84

THE COMMISSIONER: Yes.

PN85

MR SMITH: The reason I make that statement is, a point that I think is relevant is that since the time of that template document being negotiated and the first round of agreements going through Fair Work Australia, as it was then, back in December 2011, there have been to my knowledge - and I would have that knowledge if it had occurred - there has been no issue in relation to another entity or associated party, associated organisation, of the named organisation in the agreement being in some way, shape or form performing work that falls within the scope of the agreement.

PN86

The agreement itself refers to major commercial fire services, major commercial plumbing, major commercial mechanical services work, and there is some precedent in a number of different forums that goes to the definition of what major commercial work is. For example, Commissioner, the Building Services Authority has a definition of what that type of work is. There have been previous agreements where the wording was more specific about dollar value around major commercial work.

PN87

So I just make the point that, as I said, the document itself talks about the name of the company and then "associated and related entities", blah blah blah, "major commercial work" or "the scope of this agreement relates to major commercial". Can I just - - -

PN88

MS BUTLER: Yes, absolutely.

PN89

MR SMITH: If I may, Commissioner, I'll just take you to - this one here is the agreement. That's a better one. Excuse me, Commissioner. I'll just find an example of that.

PN90

So, for example, the agreement very specifically excludes in 1.3 employees engaged in maintenance or service work. It goes on to say:

PN91

Employees primarily engaged on maintenance and/or service work may agree to be covered by this agreement for a short period of time to a maximum of one continuous block of three weeks' duration where such employees are engaged on a construction site.

PN92

So that's just one that I've picked straight up. That limits the application and scope of this agreement to major commercial, not to other work that may be carried out by the company that doesn't fall within that scope.

PN93

THE COMMISSIONER: I think we're sort of going off on a little bit of a tangent here. The real issue in terms of the section 172(5) question about related entities for the purposes of approval of agreements is that it can't be a definition which is indeterminate, I think was the word that SDP Richards used. It can't be a circumstance which is not made out at the time the approval is being considered.

PN94

So you can't have a circumstance where, for the purposes of section 172(5)(b), it isn't known and it isn't made out at the time of consideration of approval who the entities were, and that's important because section 188 provides that I've got to be satisfied about the requirements of section 180 and 181 when I'm considering whether or not the agreement can be approved, and I can't be satisfied about those things if there's a possibility that coverage of the agreement is a moving feast, you see. So that's the difficulty.

PN95

Now, we can deal with that in these circumstances because Ms Butler is standing here telling me we do know what the situation is, and we are also going to clarify that the coverage for the purposes of this agreement, it is agreed, is the employees and employers who participated in the making of this agreement.

PN96

MR SMITH: Yes.

PN97

THE COMMISSIONER: It's not going to change. I think that's right, isn't it?

PN98

MS BUTLER: Yes, Commissioner.

PN99

MR SMITH: And we support that. I support the submission in my role as the representative for those organisations named. Just in relation to your point about other bargaining representatives, I'm not sure where that may lead to, but in terms of my role in putting together that template and my knowledge of what was driving - the reasoning for those words - that submission would sit comfortably within what was intended at the time.

PN100

THE COMMISSIONER: Yes, okay. Well, that's good, and it may well be there aren't any others, and you either are or you aren't for the purposes of the Act. It will be known. If there were some other individuals that stepped through the hoops for the purposes of being appointed in the making of any of these agreements, we can quickly identify who they are and they will be asked to provide their confirmation of what we understand was agreed.

PN101

MS BUTLER: Yes, Commissioner. We'll have a single consent document for each agreement and we'll make sure that any bargaining representatives of which we become aware - - -

PN102

THE COMMISSIONER: Yes, all right. Thank you for that. Thanks, Mr Smith.

PN103

MR SMITH: Thank you, Commissioner.

PN104

THE COMMISSIONER: On the basis of what I'm hearing at this stage and on the basis of what's proposed to be done by Ms Butler acting on behalf of the applicant in each of the cases, which is the CEPU Plumbing Division, and the employer in each case - and we're talking about the three that you're dealing with, Mr Smith, but I presume, Ms Butler, this discussion extends to the other three?

PN105

MS BUTLER: Yes, we'll seek the same confirmation from each of the other three.

PN106

THE COMMISSIONER: Yes, okay then.

PN107

MS BUTLER: But as I say, Commissioner, some of them are away at the moment, as I understand.

PN108

THE COMMISSIONER: Yes. No, I understand. Okay. All we can do is move as quickly as we can, subject to people's availability. I think just to close things off, in relation to the submissions you've made and the documentation you've provided to me confirming the circumstances of the fact that we are dealing with the employer in each case, if we could get some documentation attached to those so that they can go on the file for the purposes of confirming that position.

PN109

MS BUTLER: Yes, Commissioner.

PN110

THE COMMISSIONER: All right. On that basis, if I get the information in the format as it appears it's intended that I will, I can't see any other reasons why the agreements can't be approved. All right, are there any other matters anyone wants to raise?

PN111

MS BUTLER: No. Thank you, Commissioner.

PN112

MR SMITH: No, thank you, Commissioner.

PN113

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

<ADJOURNED INDEFINITELY [10.53AM]