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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1035123-1
COMMISSIONER LEE
C2012/4998
s.739 - Application to deal with a dispute
National Union of Workers
and
Warehouse Solutions Pty Ltd
(C2012/4998)
Altona Regional Distribution Centre Enterprise Agreement 2010
(ODN AG2010/12669)
[AE879696 Print PR500156]]
Melbourne
10.07AM, THURSDAY, 31 JANUARY 2013
Reserved for Decision
Continued from 20/11/2012
PN29
THE COMMISSIONER: Good morning everyone, I'll take appearances please.
PN30
MR D. MUJKIC: If it pleases the Commission, Mr D. Mujkic, appearing for the National Union of Workers. With me is Mr C. Stotts, also of the National Union of Workers.
PN31
THE COMMISSIONER: Thank you, Mr Mujkic.
MR D. PROIETTO: Good morning, Commissioner. If it pleases the Commission my name is Mr D. Proietto and I seek leave to appear on behalf of the respondent. Also appearing with me is Mr S. Tully and Mr L. Kolawitza, both from the respondent or I should say a parent company associated with the respondent, Commissioner.
PN33
THE COMMISSIONER: Yes. Any objection to permission to the parties?
PN34
MR MUJKIC: No.
PN35
THE COMMISSIONER: Permission is granted Mr Proietto. The first matter we need to deal with is the order to produce. So the parties are familiar with the very recent history of this matter where the NUW, at a very late stage I might say, sought an order to have production of documents provided. In the ordinary course of events I issued the order. The respondent objected to that course and I subsequently set it aside and set it down for argument this morning and I will deal with that as a first issue, so I will hear from you first Mr Mujkic as to why I should grant the order. You have seen the correspondence from the respondent indicating its opposition, so I'm interested in your views.
PN36
MR MUJKIC: I have. My understanding is the objection is made because the evidence is not relevant therefore shouldn’t be admitted, and that is because of the particular nature of the jurisdiction of the Commission today and that the words in the dispute procedure refer to disputes relating only to the agreement or the national employment standards. I mean the first point I make is the rules of evidence don't technically apply to the Commission but of course they're a very good guide. I think the Evidence Act is probably the best way to start. Before I do that I will refer to a decision in a minute, so I might just pass this up, Commissioner, so it's handy.
PN37
THE COMMISSIONER: Thank you.
PN38
MR MUJKIC: Section 55 of the Commonwealth Evidence Act says, "Evidence is relevant if it's evidence that could rationally affect directly or indirectly the assessment of the probability of the existence of a fact in issue in the proceeding." So two issues to consider, one is what are the facts in issue that relate to this evidence or this evidence would relate to and then secondly whether the evidence could rationally effect the assessment of the probability of the existence of those facts. We say the facts in issue that are relevant, or that this evidence would be relevant to are firstly the industrial context which is a big issue that today, Commissioner. The industrial context I refer to is this, that is that employees of the respondent to whom this dispute directly relates may have had an entitlement, a contractual entitlement to an over-award or over-agreement payment.
PN39
We are not seeking to agitate a dispute about that, what we are saying is that may or may not be a fact and the Tribunal may or may not be required to decide whether or not that is in fact the case and we say it's a relevant matter in relation to the industrial context that the parties would have known prior to a negotiation of this enterprise agreement. Secondly, perhaps more directly, the evidence is relevant to our argument about the no extra claims provision in the agreement. The no extra claims provision says that neither party - I'll just refer to the provision directly, Commissioner. So neither party will seek any changes to conditions of employment and we say the phrase "conditions of employment" would refer to contractual conditions of employment, not just to those in the enterprise agreement. I will refer if I can to one of the decisions in that bundle that's been passed up, Commissioner, I think it's towards the end of the bundle.
PN40
It's the CEPU v. Transfield Services Australia Pty Ltd, a decision of her Honour Senior Deputy President Acton. In that decision her Honour considers an extra claims clause or agreement. So the dispute if I can just give the background, give the Commission some background. The dispute in that case revolved around a change to the payment to employees when they were performing overtime on the afternoon or night shift, so that the union was arguing that employees were entitled to both the shift penalty and the overtime penalty because that's what had been paid historically to those employees. The employer was arguing that there was no such entitlement and therefore they were at liberty to change the way that payment was calculated.
PN41
Her Honour considered the no extra claims provision because the union argued that changing that condition are entitled to an extra claim and her Honour considered firstly the enterprise agreement to see if there was any entitlement to both a shift premium and an overtime penalty when an employee was working overtime on shift and there wasn't. Her Honour then considered the contracts of employment and her Honour found there was no entitlement to that condition in the contract of employment. So both were considered, not only enterprise agreement but also contracts of employment to determine whether or not these conditions of employment existed and that's what we'll be asking the Commission to consider today or tomorrow, depending on how we go with time. The relevant paragraphs, and it's a bit hard to specify because there's a fair bit of discussion about it, but certainly paragraphs 10 to 23 of her Honour's decision but particularly paragraph 20 where her Honour considers the oral terms of the contract and paragraph 21 where her Honour considers implied terms of the contract. So not only are we considering the express terms of the contract in this decision but we are considering oral terms, implied terms as well. So we say there is broad considerations here when we're looking at extra claims and extra claims clauses and obviously the evidence that we seek - - -
PN42
THE COMMISSIONER: It all links to the no extra claims clause?
PN43
MR MUJKIC: Yes, although there is a - all these clauses are different, so the no extra claims clause is slightly different terminology of course. There is also a clause either in the same part of the agreement or a different part that seeks to preserve existing employment conditions or entitlements. So perhaps in that sense it's broader than the clause in the current enterprise agreement, the one that we are disputing about today. Although as I say the no extra claims clause in the 2010 Altona agreement is quite broad, it doesn't talk about - it not only prevents parties seeking additional claims but it states that no party will seek to change existing entitlements or conditions. That's quite broad, broader than what you would normally see in a no extra claims clause we say, broader than the clause for no extra claims that her Honour considered.
PN44
More akin to the clause 2.2 of part A that her Honour considered in part 5, that's acceded in paragraph 5 of that decision I'm referring to. So the clauses are different in their content but it's the phrase "conditions of employment" that's in both, the clause I am referring to in our agreement and that was in the agreement that her Honour considered and that's the phrase that we need to consider. I don't think we can say conditions of employment should be confined to conditions or entitlements in the enterprise agreement, the clause doesn't say that, there is no reason to take that narrow approach and her Honour certainly didn't in this decision. So they are the facts in issue, the two important facts in issue that we say evidence would be relevant to. Firstly industrial context and whether employees were entitled to an over-award payment or over-agreement payment and we say that's a relevant fact in issue that should be considered by the Tribunal.
PN45
Secondly, in relation to the no extra claims clause whether there is over-award, over-agreement payments were a contractual condition of employment. The second part of the test is whether the evidence would affect or actually affect the assessment of the probability of the existence of the fact in issue and I think that second limb is satisfied quite clearly if we accept that the two facts in issue referred to are facts in issue in the proceeding, because clearly if we're trying to decide whether employees had an entitlement to these so-called conditions of employment well, the first thing we would look at is the contract of employment and that's going to assess, that's going to give us the answer subject to evidence of oral terms of subject to implied terms of course, but that's the first thing we look at. So I think the second limb is clearly satisfied, the contents of those contracts or letters of offer would - if we use the language of the Act - would rationally affect the assessment of the probability of - - -
PN46
THE COMMISSIONER: But there is no contest about the existence of the over-award payments if you like continuing, the contest is about whether or not this 3.5 per cent, the third of the increases in the agreement should be applied to their current actual rate of pay?
PN47
MR MUJKIC: There is no context to the rates of pay that these employees receive.
PN48
THE COMMISSIONER: Yes, and isn't the letter of offer simply going to confirm that, that they were paid an above-award - - -
PN49
MR MUJKIC: It may or may not I haven't seen it, that's why I asked for them to be produced.
PN50
THE COMMISSIONER: Yes.
PN51
MR MUJKIC: I think though if it does then that is going to be relevant particularly for the no extra claims part of our argument, if there is an entitlement to this and I am happy to assert that there is but I'm worried that the respondent is going to take issue with that. I can't simply assert that all these employees have a particular entitlement because the industrial context for each employee might be slightly different. So the evidence in the witness statements provides the context to a degree, but it doesn't provide that contractual context. So there's lots of evidence about promises made and things that occurred in the past, but whether or not those promises are contractual terms of not and whether employees actually have an entitlement can't necessarily be answered. It might be but it can't necessarily be answered by simply relying on the witness statements that have been filed, and I think quite possibly the contracts of employment give us a clear answer that for some - maybe all - the employees. As I say, I don't know, I haven't seen them.
PN52
THE COMMISSIONER: Is there any reason why this order was sought this week when materials were filed some time ago?
PN53
MR MUJKIC: Yes, we first did try and undercut as many of these contracts that we could, but some have been filed with the witness statements, not all, some time passed, we hoped to uncover the rest, we couldn’t. Of course also Christmas and New Year's holidays didn't assist and that was the reason. So apologies to the Commission if that was an inconvenience. I don't think that there is any particular prejudice to the respondent, the contractual documents that they have been well aware of that are in there exist and I would have thought very, very easy to uncover. I presume that hard copies are kept in employees' files, if people still keep hard copies of things, I think they do. I don't think it would have been a particular difficulty for the respondent to uncover those documents.
PN54
THE COMMISSIONER: Right.
PN55
MR MUJKIC: That's it, Commissioner.
PN56
THE COMMISSIONER: Thank you. Mr Prioetto.
PN57
MR PROIETTO: Thank you, Commissioner. We received notice of the order for production of documents, it was sent to us late on Tuesday evening and we received it Wednesday morning and obviously once we received that we gave notice to the Commission of our objection to the production of the documents. The basis for the objection, Commissioner, is broadly speaking set out in the email that I stent to your Associate yesterday which is in our submission it is not relevant to the proceeding and the reason for tat is because, as Mr Mujkic has identified, the dispute settlement clause which empowers this Tribunal makes it clear that this is a dispute over the application of the agreement. The Commission is not a jurisdiction to determine matters of a contractual nature, and I will come to what Mr Mujkic says about the no extra claims clause in a minute. The question that the Commission has asked to be answered in this case is should the three and a half per cent wage increase payable from 1 August 2012 pursuant to clause 16 of the Altona Regional Distribution Centre Enterprise Agreement 2010 be applied to the actual rates of pay of employees.
PN58
So this is a general question regarding the interpretation of the agreement and in my submission the Commission does not need to and in fact should not delve into the particular circumstances of individual employees. To the extent that letters of offer could give rise to any entitlement to employees these are contractual in nature and could never be said to constitute a dispute over the application of the agreement. In my submission the history of why employees have been paid certain amounts I not just relevant to this dispute. So we don't oppose this on the basis that these are documents we want to hide or we do not want the other side to see. If the Commission orders that they be provided they will be provided, we have got them here. Frankly I don't think they take the matter much further. But we don't want this to become some sort of massive case which chases every rabbit down every hole and wastes considerable time and money at least for our side and prolongs the outcome of this matter. So our objection is based on relevance which will then lead to inefficiency.
PN59
In relation to the things that Mr Mujkic has said I think Commissioner you have already picked up on the first issue which is to the extent that the employees of the respondent have an entitlement to over-agreement rates of pay, although no concession has been made that these constitute a contractual entitlement, there is an agreed statement of facts whereby the respondent has said yes, 13 employees were receiving over-agreement rates of pay as at 1 August 2012. So there is no dispute about that. So to the extent that there is evidence that needs to be led to that fact that's not relevant or it's not necessary, it's not a necessary (indistinct) of whether there's an offer. In relation to the no extra claims clause, in my submission Commissioner this is really a back door attempt by the NUW to turn this into a dispute over contractual entitlements and it's not right and the Commission should not extend its jurisdiction that far.
PN60
The no extra claims clauses were first inserted into enterprise agreements after a decision of a full court of the federal court found that a union could take industrial action in relation to matters not in an enterprise agreement and it subsequently led to a change in the law and an express exclusion in the Workchoices legislation which has been followed by the Fair Work Act which makes it abundantly clear that no party, either an employer or employee can take industrial action during the nominal life of an enterprise agreement. But that is the industrial history to no extra claims clauses, they were first inserted after I think it was the (Indistinct) West decision of the federal court which found that if an agreement was silent on an issue then industrial action could be taken during the life of that agreement to pursue that claim. So that's what those clauses go to. They don't have the effect that's been espoused today of somehow extending agreements in this all encompassing code that might mean that no employer could ever change any term and condition of an employee during the life of an agreement.
PN61
If an agreement were to have that effect it would mean effectively that no employee could ever go to an employer during the life of the agreement and say, I performed brilliantly during the last 12 months, I know the agreement says I should only have the 3.5 per cent wage increase, I'm already earning an over-agreement rate of pay, I should be entitled to a 5 per cent additional bonus. That would be the effect of what Mr Mujkic is saying, that no employee could ever make that claim. Quite frankly, Commissioner, I think it's a stretch and it's not within the realm of the Tribunal to make that finding. In relation to that sort of general substance of the no extra claims clause ultimately our case, our primary case is this is not an extra claim because we are entitled to do what we've done and you will either find that is true or not true.
PN62
If you find that is not true and you don't need to see the letters of offer to decide that, then you don't need to consider the no extra claims clause because we lose. If you find that we are entitled to do what we've done, then again you don't need to consider the no extra claims clause because you'll be finding we're not making an extra claim, we're doing what we're entitled to do under the agreement. So in my submission the no extra claims clause actually doesn't add anything to this arbitration. It's sort of one of those add-ons at the end and you don't need to have regard to it. You will decide this matter either on the substance of the general dispute. Should all employees have received the 3.5 per cent wage increase in their general rates of pay? Now, in relation to this decision of Senior Deputy President Acton I have only just been provided with a copy and I have not seen it before, Commissioner.
PN63
I do though in paragraph 10, and I must say I haven't read the whole decision, at paragraph 10 her Honour says, "I am not persuaded the payment of overtime, that both overtime penalty and shift premium rates is or was a) a (indistinct) condition of employment or employment condition or entitlement from around which shift maintenance, electricians." So she is putting some limits on what is meant by the term "condition of employment". I think she goes on to say, "Indeed in paragraph 12 the relevant awards and enterprise agreements specifically allow for the payment of overtime to such employees either of the overtime penalty rate and substitution for the shift premium rate or the overtime penalty rate or shift premium rate." That is the agreement in question expressly deals with this issue. In my submission that is analogous to our case where the 2010 agreement expressly deals with the issue of what employees are to be paid.
PN64
At the end in the finding, in her conclusion at paragraphs 22 through to 24 her Honour finds, "In the circumstances the payment between 2003 and 2011 by Transfield to the employees of overtime and thus overtime penalty and shift premium rates is not sufficient to make it a relevant condition of employment or entitlement for them. Since Transfield's payment of overtime from mid-July 2011 (indistinct) overtime penalty rates is not a change to a condition of employment or an entitlement and does not go to a matter which is outside the terms of the agreement. I am not persuaded such payment is another claim or extra claim that is contrary to clause 4 of the agreement." I say, Commissioner, that is on all fours with our case. Our case is that we are entitled to do what we have done under the agreement and if you find that to be the case there is no extra claim, in which case the second element of Mr Mujkic's argument in relation to why (indistinct) letters of offer is not relevant. They are my submissions in relation to that matter. If the Commission pleases.
PN65
THE COMMISSIONER: Yes.
PN66
MR MUJKIC: Commissioner, could I respond briefly, just obviously that was the first time I've heard the objection proper and can I say that my friend's abridged reading of her Honour's decision skips over the relevant parts where her Honour deals with contractual terms and conditions after her Honour considers enterprise agreements, so paragraphs 13 to 21, the Commission there considers after they considered the enterprise agreement considers the written and oral and implied terms of the contract so that that's important. In relation to jurisdiction my friend said that the Tribunal or the Commission cannot determine because of its jurisdiction today, cannot determine matters, contractual matters at all. Now that is not right. The Commission has got a particular jurisdiction. It cannot arbitrate disputes that are only of a contractual nature and that don't relate to the agreement or the national employment standards.
PN67
We agree there, that is the Tribunal's jurisdiction, but it may or may not be required while it's trying to resolve that dispute to determine matters of a factual nature that go to contracts of employment, that's not unusual. A whole range of possible disputes might arise under the terms of the agreement and contractual terms may or may not be relevant, that's the question, are they relevant. I can't, as far as I'm aware, I'm not aware of any decision of the Commission that says we cannot look at contractual terms because our jurisdiction is confined to resolving a dispute under the agreement.
PN68
THE COMMISSIONER: The argument is that it's not relevant to determining the construction of this particular agreement.
PN69
MR PROIETTO: Yes, and if that's the argument that's a different argument to what was said, which is we're not even allowed to look at that because the jurisdiction prevents us. I don't think that's right. The jurisdiction allows us to look at it, the Commission doesn't decide whether it's relevant or not and I have made submissions about relevance and the only additional point I want to make is about the no extra claims clause and the relevance of that argument. I think we're delving into argument now which I think is prolonging the outcome. If we get access to this evidence I think the hearing will be prolonged by about 60 seconds, I think we have already prolonged the outcome by 30 minutes talking about it.
PN70
But the no extra claims argument that we seek to make is this, because there is quite a possibility that the Commission makes this decision, that is that the respondent is not obliged to pay the wage increase that we say that they are obliged to pay the actual rates of pay pursuant to clause 16, but it is pursuant to clause 7 because that is a condition of employment that it seeks to change unilaterally and that's the argument we will be making. So I appreciate that my friend has got the ability to say that's not relevant and that's of little use, we've got a different view, so I don't wish to spend a lot more time on that because we'll go into that further. Unless there's any questions that's it on this point, Commissioner.
PN71
THE COMMISSIONER: No, I've got enough there. I'm going to adjourn for 10 minutes or so to consider what I do with this and in particular to have a look at that decision you referred me to, which I haven't seen before today either and we might reconvene at 10.45.
<SHORT ADJOURNMENT [10.31AM]
<RESUMED [10.51AM]
PN72
THE COMMISSIONER: As a preliminary matter I need to make a ruling on whether or not to grant the order to produce documents that was sought by the National Union of Workers. I have considered the matter and the submissions of the parties. I agree with the respondent that I am not in a position to be determining matters of a contractual nature and I agree that the agreed facts documents set out the actual rates of the relevant employees and that in that context it may be that the letters of offer that are sought by the union are of limited value in terms of me reaching a determination in the matter. However, it is possible that there may be some link of the letters of offer to the case that the union wants to run in terms of in particular the no extra claims clause and its role in terms of the industrial context of the agreement and the way in which I should read the agreement as a whole, particularly in considering as I said the no extra claims clause in that context.
PN73
While it may be that the respondent is right that the material that is sought by the NUW is of no relevant to the matter, to deny the material sought by the union at this stage I have formed the view that I would actually need to pre-determine to some extent the argument about the no extra claims clause and were to do that that of course would introduce a serious element of procedural unfairness and that's not something that the Tribunal should do. Therefore I have also considered I think there is little or no prejudice to the respondent in terms of providing the documents and I understand that the documents that are discoverable are here and I have had regard to your comment, Mr Mujkic, that 30 seconds or so aside from the 50 minutes we have spent with argument about this matter would be the extent of the delay and so for that reason if necessary I will make the order as sought but I was going to query Mr Proietto whether that would be necessary in the circumstances that simply you would take my decision on this and provide the material as sought.
PN74
MR PROIETTO: That's sufficient, Commissioner.
PN75
THE COMMISSIONER: Thank you, Mr Proietto. Then that matter is dealt with, so we will proceed with the case. Mr Mujkic.
PN76
MR MUJKIC: Thank you, Commissioner. Some documents have just been passed to me, we'll have a look at those over lunch and not use up any more time.
PN77
THE COMMISSIONER: Yes.
PN78
MR MUJKIC: This application, Commissioner, considers the term or terms of an enterprise agreement and how they are to be interpreted, so we must consider both the terms and the legal principles that govern the interpretation of enterprise agreement terms. There is an important legal point that the parties disagree on and that is whether an ambiguity required for extrinsic materials to be admissible as evidence. We say extrinsic materials are admissible when interpreting the terms of an enterprise agreement and we say that approach is consistent with authorities of the Commission and courts and we will deal with those later on today or tomorrow, and of course the respondent has a different view. But what I want to say by way of starting Commissioner is we say the application can actually be determined without recourse to those extrinsic materials.
We say they are important but even if they are disregarded the industrial context we say is sufficient without regard to those materials to decide the case in the manner we say it should be decided. Because where the parties agree is that industrial context that preceded the making of the 2010 enterprise agreement and it's of course in that context that the terms of the enterprise agreement have to be interpreted in and we say there is only one sensible interpretation available to the Commission if that context is considered and not disregarded and that is to answer the question that’s asked of the Commission with the word "yes". Before I call witnesses I just thought we might mark, before I forget at least, there was an agreed facts document that was filed I think by us, Commissioner.
EXHIBIT #M1 AGREED FACTS DOCUMENT
PN80
MR MUJKIC: Also a number of enterprise agreements or clauses of enterprise agreements were filed (indistinct). I don't think we need to mark those, they're Tribunal documents.
PN81
THE COMMISSIONER: I don't believe they need to be marked. Just be clear both sides when you're referring to agreements, what will happen in this case inevitably is that people will start talking about "the agreement" but always be clear which agreement you are referring to.
PN82
MR MUJKIC: I think (indistinct) if I say "the agreement" I'm referring to the 2010 agreement, if I refer to any other agreement I'll make sure I'm much more specific than that.
PN83
THE COMMISSIONER: Yes.
PN84
MR MUJKIC: Me and my friend had a discussion before we started this morning about witnesses in the court room when evidence is given. I think we made a preliminary assessment that witnesses should leave apart from one of the respondent's witnesses, so someone is available to instruct.
PN85
THE COMMISSIONER: Yes.
PN86
MR MUJKIC: So unless the Commission has got a particular view on that - - -
PN87
THE COMMISSIONER: No, that will be appropriate.
PN88
MR MUJKIC: Mr Emery will give evidence first so perhaps if Mr Emery stays and goes straight in the witness box.
PN89
THE COMMISSIONER: All right, and other witnesses are - Mr Tully I expect, you are - - -
PN90
MR PROIETTO: Mr Tully will stay to instruct if that's okay, Commissioner.
PN91
THE COMMISSIONER: Yes, that's fine.
PN92
MR PROIETTO: Can I just raise one preliminary issue about witnesses as well, and that is about who is in attendance today. There was some discussion between the parties yesterday as to who would be required for cross-examination and of the current employees of the respondent only Mr Emery is required for cross-examination today. I pass it on to Mr Mujkic and expressed the view that any other employees who were rostered to attend for work and who weren't union delegates would be expected to return for work today. Mr Mujkic expressed the view that he would rather witnesses here, even if they didn't fall into one of those two categories for one of two reasons.
PN93
One would be so that they could be in the witness box to depose to the truth of their statements, and the second one was in the event that you, Commissioner, had any questions for them. So we acquiesced and allowed those who wanted to come to come and we paid for the transport out here and the rest of it. I suppose I'm just raising it as a preliminary matter now because we are prepared to say to the Commission if it's acceptable that those witnesses who are not required for cross-examination don't need to be in the witness box from our perspective. We accept the Commission can accept their evidence as sworn testimony, as if it were sworn testimony, we wouldn’t make any objection to that. Which just leaves one - - -
PN94
THE COMMISSIONER: And with the same weight that I would give to any other testimony.
PN95
MR PROIETTO: Correct. Yes, we won't make any submissions about that. Mr Mujkic will correct me if I'm wrong I think the only other ground upon which they are entitled to stay being if there's any questions for you that you wish to ask them. So the two employees who fall into that category are Rieta Medancic and Michael Cunningham. Mr Riches(Indistinct) is also here today but he is not rostered to work. Mr Medancic is here, he's not a witness in the proceeding but he's a union delegate so we're comfortable with him being here and Mr Emery is required for cross-examination and is a NUW delegate, so we are entirely comfortable with that. I am in your hands, Commissioner.
PN96
THE COMMISSIONER: I don't really want to start running through the list and deciding who I'm going to ask questions of and who I won't, so basically I think we'll leave it on this basis that once they've - and I think it would be more straightforward for me if people were to depose to the statements they are prepared to make and that won't take an enormous amount of time, but if there are no questions from me and there is no cross-examination then obviously they would be free to go.
PN97
MR PROIETTO: If the Commission pleases.
PN98
MR MUJKIC: Thank you, Commissioner, I would like to call Mr Emery please.
THE COMMISSIONER: The other witnesses are to now leave the room.
<IAN ALBERT EMERY, SWORN [11.00AM]
<EXAMINATION-IN-CHIEF BY MR MUJKIC [11.01AM]
PN100
MR MUJKIC: Mr Emery, I will just pass a document up to you in a moment?
---Thank you.
PN101
Mr Emery, the document in front of you is a document dated 3 December 2012, 20 paragraphs with three attachments. Is that the statement you have prepared for this proceeding?---Without reading everything it's the date and about the amount I did, yes.
PN102
Can you confirm that the contents are true and correct?---I do.
Commissioner, can we mark that statement.
EXHIBIT #M2 WITNESS STATEMENT OF IAN EMERY
PN104
MR MUJKIC: Mr Emery, since you have made that statement a couple of other witness statements have been filed in this proceeding, so one by Mr Stewart Tully and one by Ms Louise Tebbutt, so I'm just going to ask you about what's in those statements, okay?---Yes.
PN105
Mr Tully in his statement at paragraph 7 of his statement, and I'll read it to you, you don't have it in front of you, I'll just read it to you. He says, "The negotiations," and he is referring to the negotiations in 2010 for the current enterprise agreement. "The negotiations in relation to any percentage increases in wage rates were discussed on the basis of an increase of the wage rates specified in the agreement." What do you say to that?---Could you repeat that?
PN106
Yes. "The negotiations in relation to any percentage increases in wage rates were discussed on the basis of an increase to the wage rates specified in the agreement."?---No, it was never brought up, it was just as I've done the last five EBAs, it was never - - -
PN107
The wage rates specified in the agreement were not referred to?---No, just whatever percentage we got, that was what it always has been, what a person's wage was on was 3, 3 and a half, that's our - you know I thought by myself everyone took it.
**** IAN ALBERT EMERY XN MR MUJKIC
PN108
At paragraph 13 of your statement, could you just have a look at paragraph 13 quickly?---Yes.
PN109
You say that the company's claim to red circle the wage rates of - I think you've passed it, paragraph 13, so it's on the third page?---Yes, I'm with it now.
PN110
You're referring to the company's claim to (indistinct) the red circling claim, you say at some stage this claim was taken off the table. Then you say, "The human resources representative agreed that it was harsh and hard to do or words to that effect." Mr Tully at paragraph 11 of his statement says, "I don't agree with what Mr Emery," what you say in your statement in paragraph 13, "in particular Ms Tebbutt did not say that the claim in relation to absorption was harsh or hard to do." What do you say to that?---I'd say words to the effect that we just said it come across that it's always been what conditions were on and then in words of effect, well it would be a bit hard to go on with it, that they - I think it was on the same afternoon that they dropped it and that was it, there was never really much discussion on it at all.
PN111
In relation to the dropping of the claim, Ms Tebbutt at paragraph 16 of her statement says, "While we withdrew the claim we did not in any way concede or withdraw our managerial prerogative not to pass on a wage increase at any time in the future." What do you say to that?---Never discussed. It was just taken - as I remember it was brought up in the morning on the same afternoon, when we walked back in there was no discussion on it, it was just taken off the - they just removed it.
PN112
Did anyone from the company during these negotiations or at any other time suggest to you that they could red circle employees wages unilaterally?---No, never ever.
**** IAN ALBERT EMERY XN MR MUJKIC
PN113
At paragraph 18 of Ms Tebbutt's statement she says this, "It is also very clear in my recollection that the discussion during negotiations regarding any percentage increases in wage rates was in relation to the rates in the agreement and not actual rates of pay," what do you say to that?---No.
PN114
You just need to speak up?---Sorry, no.
PN115
You mentioned before you were involved in (indistinct) were you in involved in the 2007 negotiations?---Yes.
PN116
Was there ever during that negotiation or any other negotiation was a distinction made between wage increases on the wage figures specified in the agreement and employees actual (indistinct)?
PN117
THE COMMISSIONER: Just wait, Mr Mujkic.
PN118
MR PROIETTO: Sorry, I don't object just for the sake of objecting, Commissioner, but there's a lot of leading questions happening here in circumstances where it should be evidence-in-chief. I don't want to make a big deal about it but they've all been leading questions so far.
PN119
THE COMMISSIONER: You are alive to that consideration, Mr Mujkic?
PN120
MR MUJKIC: Yes.
PN121
THE COMMISSIONER: I think it would be desirable that you draw the evidence in a more objective manner.
PN122
MR MUJKIC: Sure, I'll do that. I might take you, Mr Emery, one further question really?---Excuse me your Honour, could I - are we withdrawing the evidence are we?
**** IAN ALBERT EMERY XN MR MUJKIC
PN123
THE COMMISSIONER: No, you don't have to worry about that, it's really just a matter about the way you're being asked questions?---Thank you, yes.
PN124
You just keep answering the questions.
MR MUJKIC: At paragraph 9 of Ms Tebbutt's statement, and again you don't have it in front of you, Mr Emery, but she refers to negotiations that occurred some time after 2001 and she says - and I'm paraphrasing - she says that the company changed the clause in the agreement because it was aware of the compounding effect that wage increases were having on employees receiving over-agreement rates of pay. What do you say to that?---Never discussed.
<CROSS-EXAMINATION BY MR PROIETTO [11.08]
PN126
MR PROIETTO: Good morning, Mr Emery?---Good morning.
PN127
Just on that last point, Mr Emery, you say that you were involved in the last five EBA negotiations, is that correct?---Yes.
PN128
So that would include the 2010 agreement, is that correct?---Yes.
PN129
The 2007 agreement?---Yes.
PN130
The 2004 agreement?---Yes.
PN131
The 2003 agreement?---There was one - I had an illness in 2002 but I'm pretty sure I was in all those.
PN132
And the 2001 agreement, in the last five agreements, I think that's correct Mr Emery?---(No audible response.)
**** IAN ALBERT EMERY XXN MR PROIETTO
PN133
You were just asked by Mr Mujkic then in relation to something that was in Ms Tebbutt's agreement that a change - - -
PN134
THE COMMISSIONER: Statement, not agreement.
PN135
MR PROIETTO: I beg your pardon. Ms Tebbutt's statement. I might just read that out to you again, just so there is no confusion, just bear with me Mr Emery I have a lot of documents here?---Yes.
PN136
This has just been read to you by Mr Mujkic, I'm just doing this out of fairness to you?---No worries.
PN137
It's in paragraph 9, "My recollection is that the respondent set out to change its language after 2001 because he was aware of the compounding effect that these wage increases were having for those employees already receiving over-agreement rates of pay." Do you remember that, Mr Mujkic just read that to you. Your answer to that was the change was never discussed?---Not to my knowledge and recollection no.
PN138
But you were in those negotiations weren't you, Mr Emery?---I had a hip operation in 2002, so I take it I would have been there the previous year.
PN139
Can I just show you then the agreement in 2001, if that's okay?---Yes.
PN140
Again you'll need to bear with me. So I'm only on one page from this, this is the relevant page which was attached to the submissions of the NUW. You'll see there I've just got a flag, Mr Emery, so if the Commission pleases this is attachment 5 to the applicant's written submissions, it's the 2001 agreement.
PN141
**** IAN ALBERT EMERY XXN MR PROIETTO
THE COMMISSIONER: Yes.
PN142
MR PROIETTO: I have only got one copy of it unfortunately. So if you look at paragraph 15 of that, clause 15 I should say?---Yes.
PN143
Do you see there, Mr Emery, there's about a 5 per cent wage increase for all employees, can you see that in each of the relevant years?---5 per cent increase payable from the first full period of commencement of the year. First of the first 2001.
PN144
I think before that there is also a sentence to the effect that - just want to read out the stem to that, so what comes before sub-paragraph A, again I don't have it in front of me, Commissioner?---Sorry, "The classification definition set out in clause 12.1 to 12.2 applied to the company's operations located at Doherty's Road, Altona."
PN145
I haven't got it in front of me, but I'll come back to that. Thank you for reading that, Mr Emery, can I also just hand you then the next agreement, the one that followed that in 2003 and again I've only got the one extract, Commissioner, this is the attachment 4 to the applicant's written submissions, it's the one that immediately precedes the attachment you have just seen. You will see there, Mr Emery, there has in fact been a change in the wording of the wages clause, hasn't there? The wages clause now looks very much like the wages clause that's in the current agreement, doesn't it?---What point are you trying to get across with this?
PN146
I'm just asking you to answer my question, Mr Emery?---Yes, sorry?
PN147
The question is, it's true isn't it that the wages clause in 2001 is different to the wages clause in the 2002 agreement?---Definitely is, definitely is.
**** IAN ALBERT EMERY XXN MR PROIETTO
PN148
Can I have those documents back now. Mr Emery, when Ms Tebbutt talks about a change after 2001, the wording of the wages clause that
is in fact true isn't it?
---It is true but it was never discussed at length during the meeting and I think it's been put in very cleverly some time within
- I sat at the meeting and I honestly and I've taken the oath cannot ever remember going into deep discussion. I can tell the difference
between that and that, yes, sir.
PN149
You would have endorsed the agreement to the members, wouldn't you?---We all endorsed it and we all read it.
PN150
So you read the agreement and you endorsed it to the members?---Yes, we did.
PN151
Mr Emery, you say in paragraph 9 of your witness statement, you've got a copy of your witness statement in front of you, don’t you?---Yes.
PN152
Paragraph 9 of your witness statement says, "Since I've started I've always received (indistinct) a wage increase that was negotiated between the company and the union. All workers received the same increase whatever we provided for in the agreement." Do you see that, Mr Emery?---I can see that.
PN153
So put it another way, what you are saying there is even if the enterprise agreement did not provide for a percentage increase to your actual rate of pay, that is what you always received?---Since I started that work and I think my first agreement by the company I've always received that wage plus the $15 that I received from the start, nothing has ever changed and I can never remember any negotiations that it was going to change. I'm sorry if I'm - - -
PN154
No, I accept that Mr Emery, thank you. I'm just focussing on the bit in your witness statement where you say, "Whatever was provided for by the agreement." Do you see?---Yes, yes.
**** IAN ALBERT EMERY XXN MR PROIETTO
PN155
So what you're saying effectively is that wage increases were given by the company each year at its discretion and not because it was required to do so by the terms of the enterprise agreement?---As I said before it was never discussed at any length, never discussed at all so I just took it naturally that everyone's $15 or $10 whatever it was, that was what the 3 per cent, 2 per cent would be.
PN156
Yes, so what you are saying is it doesn’t matter what the agreement says we always got the wage increase, is that what your evidence is?---Well, the company was always very good at - we got the wage increase, yes, never any problem.
PN157
We go to the negotiations for the current agreement, I will call it the 2010 agreement?---2010.
PN158
You say in your witness statement or you refer to the fact that absorption for part of the company's log of claims and then you go on to say in paragraph 13 that at some early stage in the bargaining process that claim was taken off the table, that's your evidence isn't it, Mr Emery?---It was the first day, yes.
PN159
You then say that the human resources representative agreed that it was harsh and hard to do, or words to that effect? There are actually two human resources representatives during those negotiations, weren't there Mr Emery?---Yes.
PN160
Do you recall which human resources representative (indistinct)?---I do not but I can just remember - I haven't - you know I'm not what would you say, I haven't got that - I certainly haven't got Alzheimer's but I can certainly remember if there was any discussion and the words as I remember were you know it would be a bit hard to do. Whether you call that hush or (indistinct) the right context I don't know, but I do remember there was a lot of discussion on it and I do remember that it was sort of said that it was really we'll take it off the books now because it's a bit harsh. So I understand what everyone else is saying but I can only tell you as I remember - as I can recall it.
**** IAN ALBERT EMERY XXN MR PROIETTO
PN161
You've just given me two different versions of the word, you've said initially that it was "hard" and maybe not "harsh" and then you've said it was "harsh", so which one was it, did they say it was harsh or it was hard?---Well, (indistinct) harsh and hard in a meaning et cetera, you know, I - it come across that it was probably unfair to be going so many years just to take it off the books like that.
PN162
I'm not asking you about what you interpreted, I'm asking you about what was supposedly said?---I'm telling you as far as I can remember, whether it was word for word but I'm fairly sure that "harsh" or "unfair" was mentioned because I clearly remember thinking to myself well, I'm glad that's off the books, we never had much of a fight over it, it was just taken away.
PN163
So you remember what was said and who said it?---No. To be quite honest I couldn't even recognise the people that were there.
PN164
I put it to you that Louise Tebbutt was the person who did most of the talking in negotiations, would you agree with that?---That would be quite right, yes. Yes, Louise was in the team one?
PN165
Yes?---Yes. As I remember she was - she was the only one I think that I can remember.
PN166
No, there was a second HR practitioner?---Was there?
PN167
Yes, Jacqui Mark was also there, but if she's the only one that you remember?
---No, because she had - I remember her saying we've going to be in this for the long haul and that's why I can remember her words
and it was fairly admirable the way the whole thing was really done, there was never objection to anything much.
PN168
**** IAN ALBERT EMERY XXN MR PROIETTO
If Ms Tebbutt was the only one you can remember and you agree she was the one who did most of the talking, I put it to you - - - ?---Yes, I do.
PN169
- - - that your evidence is probably that if those comments were made they were made by her, is that what you're saying, Mr Emery?---Well, I'd have to say it, yes.
PN170
Mr Mujkic has already referred to the witness statements of Mr Tully and Ms Tebbutt and Ms Tebbutt denies making that comment and Mr Tully says that he does not believe that these were the words that Ms Tebbutt used. Mr Gary Stutz also gives evidence about this conversation and he says that what Ms Tebbutt actually said was, "All right, I suppose that's off the table then." So I put it to you Mr Emery that Ms Tebbutt never said those words?---Well, in much of a way, "harsh" or thing those words, it was as I recall it and I've still as far as I'm concerned telling the truth as I recall it and I'm not changing what I state in there is exactly right.
PN171
Mr Emery, you say that in paragraph 17 of your statement you felt the failure to pass on the full frequent 5 per cent wage increase to all workers in 2012 went against what you had discussed during the 2010 negotiations and your exact words were that you had agreed to wage increases for all workers in 2010, that's your evidence isn't it Mr Emery, that's what you say?---What - sorry what - - -
PN172
I've already read to you what's in paragraph 17 of your statement?---Yes, sorry, yes.
PN173
But it's true isn't it, Mr Emery, that the 2010 agreement doesn't have a clause saying that all employees will receive a 3.5 per cent wage increase?---No, it doesn't but when you sit and go through so many you do class as honesty and a man's word as a very strong point that I was brought up with and there's one thing I am not is I can make mistakes, I am a hot head but I am not a liar, and everything I've stated there, sir, is correct, I'm answering your correctly.
**** IAN ALBERT EMERY XXN MR PROIETTO
PN174
Mr Emery, I'm not suggesting you're a liar?---I'm just saying my memory is one of the things I cannot recall - - -
PN175
Just listen to the question, Mr Emery, the question was the agreement doesn't have a clause saying that all employees will receive a 3 or 3.5 per cent wage increase, does it?---It doesn't have a clause but it's always been 3.5 or 3 per cent is what we all received and there was never any question that it wasn't going to be passed on.
PN176
That's in dispute but in any event you've answered my question, Mr Emery?
---Yes, sorry wasn't I clear on that?
PN177
No, no, that's fine, you answered my question in the first sentence?---Thank you.
PN178
It's true isn't it, Mr Emery, that whatever wages were discussed during negotiations and percentage increases, they were only ever discussed by reference to the rates of pay in the agreement, that's right isn't it?---In the agreement, yes.
PN179
Just on that then, you said in your evidence-in-chief that your recollection of the negotiations was that the wage rates, increases to wage rates were discussed as increases to actual rates of pay?---What was - - -
PN180
That's what you said to Mr Mujkic?---Yes, it was actually rates of pay that had been, yes.
PN181
Actual rates of pay in the agreement or employees' actual individual rates of pay?
---Well as it had been in the past. How you interpret that, sir, I'm not - - -
PN182
The evidence of Mr Tully and Ms Tebbutt was that during negotiations for the 2010 agreement whenever wage rates were discussed they were very clear that the percentage increase was to wage rates in the agreement?---It was never discussed in the other way that money - it was 3 per cent on what a person was actually getting, that's how it was taken and when it was taken - - -
**** IAN ALBERT EMERY XXN MR PROIETTO
PN183
I'm not asking you how it was taken, I'm asking you how it was put?---That's how it was put.
PN184
You're saying that Mr Tully and Ms Tebbutt said during negotiations for the 2010 agreement that the wage increase were wage increases
to actual rates of pay?
---Well, I don't recall them going into that - you know it was always taken as a man to man and when fair discussions that no one
ever said it's 3.5 per cent on the EBA, not the 13 people who are getting this and that and what we're disputing at the present time.
So what I'm saying to you is it was never brought up that it was going to exclude those over-award payments.
PN185
So you're just saying that you assumed that it was 3.5 per cent?---Well, yes I did - - -
PN186
For actual rates of pay?--- - - - assume, yes.
PN187
You assumed it?---I assumed that there was nothing to say anything was going to change.
PN188
But if Mr Tully and Ms Tebbutt say, as they have in their witness statements, that they always talked about wage increases to the rates of pay in the agreement you cannot dispute that, can you Mr Emery?---I cannot dispute, sir, no.
PN189
Mr Emery, paragraph 20 of your witness statement you refer to a meeting you attended with the then DC manager Helen Cusack, along with Michael Cunningham, Jamie Bates and Paul Davis, that meeting occurred in 1999 didn't it, Mr Emery?---Sorry, that was in the poly shop, yes.
PN190
In 1999?---The poly shop is first yes and Helen Cusack was the - - -
**** IAN ALBERT EMERY XXN MR PROIETTO
PN191
Did it happen in 1999?---1999, 2000 around that time. I couldn’t give you direct year, sorry.
PN192
In paragraph 6 of your witness statement, Mr Emery, if I could just ask you to look at the last paragraph, paragraph 6?---Of - - -
PN193
Sorry, I withdraw that. Sorry for confusing you, Mr Emery, that's my fault. The last sentence of paragraph 6?---6.
PN194
See you're talking in that meeting with the head of (indistinct) in Victoria (indistinct) Wills?---Yes.
PN195
You're told you'll get an over-award payment and you're told at this meeting, "I was expressly told this rate of pay could never be lowered." It's true isn't it, Mr Emery, that your rate of pay has never been lowered?---No.
PN196
It's not true, your pay has been reduced has it?---Now it has.
PN197
Been reduced has it?---Yes.
PN198
Your rate of pay has been reduced?---It was never reduced, it wasn't passed on the full amount the way I was expecting.
PN199
My question was has your rate of pay ever been reduced?---Yes.
PN200
Your rate of pay has been reduced has it? So it's gone from let's say $33 to $32 has it?---No, no, I didn't get the full percentage that I had sat in an EBA under fair discussions, so I took it that I had got a - I'm still a grade 3 (indistinct) - - -
PN201
**** IAN ALBERT EMERY XXN MR PROIETTO
I'm not asking about negotiations now, I'm asking you a question. Has your rate of pay ever been reduced?---Not by the EBA, no, sir.
PN202
I'll take you to the first attachment to your witness statement?---Sorry, what?
PN203
Attachment 1 to your witness, have you got that, it's a letter addressed to you dated 30 October 1995?---I'm employed at the store, is that the one?
PN204
It looks like that, Mr Emery. Mr Emery, have you got that one?---Number 1?
PN205
That one there?---That's it.
PN206
No, no, attachment 1. That's the first attachment to your witness statement.
PN207
THE COMMISSIONER: If you turn to the end of your statement and then there's some attachments, it's the letter of offer?---I see.
PN208
From (indistinct) in '95?---Yes, I see. That wasn't a wage review? No, right.
PN209
MR PROIETTO: You've gone past it, Mr Emery?---Yes, here I am, sorry. Got it now.
PN210
That letter is dated 30 October 1995, isn't it?---That's correct.
PN211
It refers to your employment as a loss prevention officer, that's right isn't it?
---That's correct.
PN212
You're no longer employed as a loss prevention officer, are you, Mr Emery?---No, sir, I'm a grade 3 store person as I was employed under the conditions. I'm still a grade 3 and the agreement was when I come back out to the warehouse that I was still a grade 3 store person, the only - - -
**** IAN ALBERT EMERY XXN MR PROIETTO
PN213
I'm just asking you about this document at the moment, Mr Emery. You haven't been employed as an LPO since the late 1990s?---No, no.
PN214
No further questions.
PN215
THE COMMISSIONER: Anything arising?
PN216
MR MUJKIC: No, Commissioner.
THE COMMISSIONER: I don't have any questions for you, Mr Emery, so thank you for your evidence, you can step down?---Thank you.
<THE WITNESS WITHDREW [11.28AM]
MR MUJKIC: We call Mr Gary Stutz next please.
<GARY JAMES STUTZ, SWORN [11.29AM]
<EXAMINATION-IN-CHIEF BY MR MUJKIC [11.29AM]
PN219
MR MUJKIC: Just passing up a document to you, Mr Stutz?---Thank you.
PN220
Mr Stutz, it's a document dated 6 December 2012, 16 paragraphs, can you confirm that is a statement you prepared for this proceeding?---I believe so to the best of my recollection, yes.
PN221
Are the contents of that true and correct?---Yes.
I would like to mark that, Commissioner, thank you.
EXHIBIT #M3 WITNESS STATEMENT OF GARY STUTZ
PN223
MR MUJKIC: Mr Stutz, since you have made that statement a couple of other statements have been filed in this proceeding, one by Mr Stewart Tully and one by Ms Louise Tebbutt so I'm just going to ask you some questions about the content of those statements. Mr Tully in his statement at paragraph 7, you don't have it in front of you but I'll read it out to you. He's referring to negotiations, he's referring to the 2010 negotiations for the current agreement. Mr Tully says at paragraph 7, "The negotiations in relation to any percentage increases in wage rates were discussed on the basis of an increase to the wage rates specified in the agreement." What do you say to that?---My understanding that it was across the board for all employees on their rates.
PN224
How did you have that understanding?---That was my opening statement in the - when we sit down and started the agreement, it's for everyone on site, everyone covered by this agreement will get those increases.
PN225
At paragraph 12 of Mr Tully's statement he takes issue with what you say at paragraph 8 of your statement and Mr Tully says, "I deny that the company told the NUW during the first negotiation that we wanted to bring everyone at the DC down to the same rate of pay." What do you say to that?---There was some discussion around one of their claims in relation to, for want of a better term, red circling, I'm not sure if that's a term they used or not from memory, but where anybody above the agreement rate would have that increase eaten up over the term of the agreement.
**** GARY JAMES STUTZ XN MR MUJKIC
PN226
In paragraph 13 Mr Tully teaks issue with what you say in paragraph 12 and what he says is, where you say that the existing agreement would be rolled over and that annual wage increases of 3 per cent for all workers covered by the agreement was agreed that this was not the case. At no stage was it agreed that all employees would receive a wage increase, what do you say to that?---Again that's not my recollection at all.
PN227
What is your recollection?---My recollection is again nothing was brought to my attention that it wasn't for every employee covered by this agreement to receive the increase.
PN228
I'll take you to parts of Ms Tebbutt's statement now. At paragraph 16 Ms Tebbutt says this, "While we withdraw the claim," and she is referring there to the claims of the red circling that you referred to earlier. "While we withdrew the claim, we did not in any way concede or withdraw our managerial prerogative not to pass on a wage increase at any time in the future. In my mind it was absolutely clear there was no agreement to pass on all wage increases to all employees throughout the life of the 2010 agreement." What do you say to that?---Well, I think once a claim is withdraw it is dead, it is finished with, it's not to be brought up again at a later date, the matter was resolved.
PN229
Ms Tebbutt refers to the managerial prerogative not to pass on a wage increase at any time in the future. Was that managerial prerogative discussed during the negotiations?---Not to my recollection.
PN230
At paragraph 17 of her statement Ms Tebbutt says this, "While the NUW did not agree to a clause expressly allowing red circling, at no stage during the negotiations did they seek to include a clause expressly disallowing it." What do you say to that?---It wasn't on our initial log of claims.
**** GARY JAMES STUTZ XN MR MUJKIC
PN231
Why not?---Because there was no need for it, our log of claims started that everyone gets the increase.
PN232
Ms Tebbutt in her statement also refers to an enterprise agreement that the NUW is covered by, it's the Officeworks Customer Fulfilment Centre National Union of Workers Agreement 2009. Were you involved in the negotiation of that agreement?---No, I think it might have been in Ken Vandermuellen's area at the time, not mine, never had the site.
PN233
At paragraph 22 Ms Tebbutt takes issue with something in Mr Emery's statement. Mr Emery says in his statement, I'm paraphrasing, but he says that the red circling claim when it was dropped, when it was taken off the table Ms Tebbutt said that it was harsh - it would have been a harsh thing to do anyway and she says in her statement, "I have no recollection of saying the words that it was harsh or hard to do or words to that effect and I do not believe that I used those words." What do you say to that?---Listen, it was not a claim the company pushed particularly hard for. I don't believe Ms Tebbutt believed they were going to get the claim. I think it was just one of those throwaways that occasionally unions or companies will put forward. While I don't actually recall that particular conversation, whether I was there or not there at the time I don't know, but like I said I don't think it was a claim they honestly thought they were going to get.
PN234
Why do you say it was a claim that they didn't think they could get?---Listen, I think we the union members went forward with a very reasonable position, they wanted after break gains, they were after wage increases of around CPI. In my time with the NUW very, very rare that you see a group of employees go forward with such moderate claims, you know there were no outlandish claims put forward at the log of claims meeting. I think we opened up by saying - no, I said that I don't see this being a particularly difficult agreement and I think our position is very reasonable. I can't see it taking longer than two or three meetings.
**** GARY JAMES STUTZ XN MR MUJKIC
PN235
You refer to your time in the NUW, how many negotiations approximately are you involved in as an NUW official?---Somewhere the high side of 50, 75, a number.
PN236
I'll just take you back to Ms Tebbutt's statement briefly. At paragraph 23 she is referring to your statement and she refers to paragraph 10, so maybe have a quick look at paragraph 10, Mr Stutz. It's your summary of a part of the 2010 agreement, of the negotiations for the 2010 agreement sorry?---Yes.
PN237
She says - Ms Tebbutt says, "My recollection is broadly similar - " - to your evidence in that paragraph, "However, I wish to clarify," so Ms Tebbutt wishes to clarify, "that at all stages I refer to the wage increases as being wage increases to the rates of pay in the agreement and not wage increases for all employees and to actual rates of pay." What do you say to that?---If that was her genuine understanding it's different from my genuine understanding.
PN238
What she says though, she doesn't say "understanding", she says, "I referred to the wage increases as being wage increases to the rates of pay in the agreement and not wage increases for all employees and to actual rates of pay." So do you remember that?---If she was to have referred to it bluntly like that, no, I couldn’t have accepted that on behalf of my members or our members.
PN239
She also takes issue with paragraph 12 of your statement where you say there was an in principle agreement for an annual wage increase of 3 per cent?---Yes.
She says this was not the case, "We never discussed or agreed to wage increases for all employees, we only discussed wage increases in the context of the rates of pay in the agreement." So what do you say to that?---Again, my clear understanding is our initial claim was that everyone covered by the agreement would get the wage increases. My understanding was that.
**** GARY JAMES STUTZ XN MR MUJKIC
<CROSS-EXAMINATION BY MR PROIETTO [11.40AM]
PN241
MR PROIETTO: Good morning, Mr Stutz?---How you going?
PN242
I'm well, thank you. Mr Stutz, you've got a copy of your witness statement there, is that right?---Yes.
PN243
Just reflecting on something you just said to Mr Mujkic that you have done somewhere between 50 and 75 EBA negotiations, I put it to you that you're a pretty experienced negotiator?---Done it a few times.
PN244
Would you agree that you're a pretty experienced negotiator?---Yes.
PN245
You say in paragraph 12 of your witness statement, have you got that there?
---Yes.
PN246
"At the third meeting we reached an in principle agreement between those at the bargaining table which was for an effective roll over of the existing agreement and annual wage increases of 3 per cent for all workers covered by the agreement." That's what you say there, Mr Stutz?---Yes, the only changes would have been (indistinct) requirements by Fair Work and the 3 per cent directly after that the company asked me to put that position to our members for a vote which they allowed us to get the guys off the floor there and then and had the mass meeting to vote on the agreement 15 minutes after it.
PN247
I'll put it to you, Mr Stutz, that in fact what was agreed was that there would be a 3 per cent increase to the rates of pay in the agreement, that's what was actually agreed, wasn't it?---I don't believe so, no.
PN248
**** GARY JAMES STUTZ XXN MR PROIETTO
You don't believe so, no, all right. That's what the agreement says though, doesn't it?---It says there's a 3 per cent increase, yes.
PN249
Doesn't it?---Well, I can't recall directly at this point what was in it, I think in the last year it was extra wasn't it?
PN250
It was and then there was a 3.5 per cent increase?---Yes.
PN251
I'll just give you a copy of the agreement, Mr Stutz. Do you want to take me to the clause, Mr Stutz, where it says that all employees will receive a 3 per cent increase. The wage clause is on page 26 of clause 16?---It wouldn’t say that in there, no.
PN252
It doesn’t say that in the agreement does it?---No.
PN253
There's no reference to 3 per cent is there?---No.
PN254
There's no reference to 3.5 per cent is there?---No.
PN255
There's no reference to actual rates of paid employees, is there?---No.
PN256
I put it to you Mr Stutz that any reasonable person picking up this agreement and reading clause 16 of the 2010 agreement would understand that the only requirement on Warehouse Solutions after 1 August 2012 is to pay a grade 3 store worker $30.199 2 cents per hour, that's correct isn't it, Mr Stutz?---Well, then why would they continually pay these people above that rate?
PN257
I'm just asking you to answer my question, Mr Stutz?---It could be historically that's never been the case there.
PN258
**** GARY JAMES STUTZ XXN MR PROIETTO
Just answering my question, I put it to you that any reasonable person reading clause 16 of the 2010 agreement would understand that the only requirement on Warehouse Solutions after 1 August 2012 is to pay a grade 3 store worker $30.1992 per hour, that's correct isn't it, Mr Stutz?---Yes, as per that document.
PN259
I also put it to you Mr Stutz that during the negotiations when wage increases were discussed, on the part of Mr Tully and Ms Tebbutt, they were only ever raised in the context of percentage increases to the rates of pay in the agreement itself and not to actual rates of pay, that's true isn't it, Mr Stutz?---No, I clearly because I knew there were a few people not specifically how many at the time, but I knew there were people who were on historical arrangements and I would make - I had made it clear that those people would be covered by this agreement and would get those increases as well.
PN260
That's not reflected in the agreement though is it, Mr Stutz?---No, it's not. I suppose I generally expect some good will and historical - like those increases were passed onto people for at least two agreements prior to this one.
PN261
But it's not reflected in the agreement, is it, Mr Stutz?---Why would I make a change that the company abided to, everyone abided to it.
PN262
Just going back to the question. What I put to you was that the evidence of Mr Tully and Ms Tebbutt is that during the negotiations for the agreement they were very clear to talk about percentage increases to rates of pay in the agreement, would you are with that or not?---I wouldn’t, no.
PN263
Are you saying then that Ms Tebbutt talked about wage increases for everyone, are you?---That is my understanding.
PN264
Not your understanding, what do you recall? Do you recall Ms Tebbutt saying that this is a wage increase that is meant to apply to all employees do you?
**** GARY JAMES STUTZ XXN MR PROIETTO
---Listen, I don't have my notes with me, obviously it's been a while since I negotiated this, I've negotiated a lot, I don't recall every negotiation word for word. However, I can tell you that if there was something like that said, clearly said it would have got my back up. It would have got my back up in a hurry and that would have then had me saying no, I'm not going to accept that.
PN265
Did you read your notes for the purposes of preparing your witness statement, Mr Stutz?---I did not, no, just on my best recollection.
PN266
You've done 75 of these agreements but you're adamant that when Ms Tebbutt and Mr Tully talked about percentage wage increases they didn't talk about percentage wage increases to the agreement, is that your evidence today?---My evidence today is that the red circling, there was a claim put forward for it, we rejected that claim, my belief, my strong belief is at the end of that discussion that claim is withdrawn and dead and from that point on all wage increases would apply to all people covered by this agreement.
PN267
I'm not talking about your belief, Mr Stutz, I'm talking about what was said. Do you recall what was said or not?---Well, if it - if something different to that was said I would have definitely remembered it because we would have been arguing about it some more.
PN268
You don't say in your witness statement that the respondent said during negotiations the wage increases would be the actual rates of pay, you actually don't say that in your witness statement, do you Mr Stutz?---No, I don't but that was probably an omission on my part in the witness statement.
PN269
Are you saying then that given the evidence of Mr Tully and Ms Tebbutt that they are lying about what they said during the 2010 negotiations?---I wouldn’t call anyone a liar but I would say their view is wrong.
**** GARY JAMES STUTZ XXN MR PROIETTO
PN270
So you have talked in your statement and we've just talked a bit now about the fact the respondent asked for red circling and absorption, when the respondent asked for it and the union said no, all that meant wasn't it, Mr Stutz, that there would be no express clause in the agreement expressly allowing for absorption, that's all it meant wasn't it?---Well, again I think wouldn't a reasonable person think that when that argument was had and it was rejected and quite strongly rejected that would be the end of it?
PN271
I don't know about that, Mr Stutz, because you've just agreed that a reasonable person looking at this agreement would assume that
all Warehouse Solutions need to do is to pay the minimum rate. You have admitted that, haven't you, Mr Stutz?
---It would read like that, yes.
PN272
So the starting point for the negotiations was, wasn't it, that where the respondent could do absorption anyway, that's the true position isn't it, Mr Stutz?---No, not at all. Let's be honest, we make a log of claims and our log of claims is that we want a roll over of that agreement. If I make a claim for a roll over of that agreement that doesn't mean I get to make wholesale changes through the drafting process because it suits our position at the time.
PN273
I'm not talking about wholesale changes, Mr Stutz. The clause in the 2007 agreement is nearly identifiable to the clause in the 2010 agreement?---As a roll over would be.
PN274
That's right, so it's been open to the respondent to absorb wages for quite some time?---Well, why didn't they do it prior to this?
PN275
That's not my question, Mr Stutz. My question is isn't it true the starting position for the negotiations is that Warehouse Solutions on the terms of the agreement could absorb wages anyway, that's true isn't it?---I don't believe so, I think there was always discussion around it - the discussion I had was that there would be no absorption and I would assume other organisers (indistinct) - - -
**** GARY JAMES STUTZ XXN MR PROIETTO
PN276
I'm not talking (indistinct) - - - ?--- - - - would be having discussions.
PN277
Just listen to the question (indistinct). What I put to you earlier was that on the terms of the 2010 agreement all that the respondent is required to do is to pay the minimum rate of pay set out in that agreement. It follows that if it's paying above that it doesn't need to and I'm putting to you that the starting point for the 2010 negotiation was that and therefore that absorption was open to the respondent. That's my question, I'm asking you whether you agree or disagree?---I would disagree.
PN278
Mr Stutz, once the respondent asked for absorption and your evidence was they dropped it pretty quickly and your evidence was it was just a throwaway position put forward by the company, that's what you said isn't it?---Yes.
PN279
You could have asked for an express provision disallowing absorption couldn’t you?---Again they didn't fight particularly hard for it.
PN280
No, no, that's not my question. You could have asked for an express provision disallowing absorption, couldn’t you?---Technically I could have but again I'm not going to make extra claims in the middle of negotiations.
PN281
Why not, unions do that all the time?---I don't.
PN282
Unions do it all the time and often in response to claims that are made by an employer, that's true isn't it, Mr Stutz?---Some unions do, yes.
PN283
It's true isn't it that a non-absorption clause is a feature in a number of enterprise agreements, that's true isn't it, Mr Stutz?---It is, yes.
PN284
**** GARY JAMES STUTZ XXN MR PROIETTO
Mr Stutz, you said in your evidence-in-chief that you started your negotiations by saying that everyone will get these increases,
that was your evidence wasn't it?
---Yes.
PN285
I put it to you that that's not true and that the discussions were always on the basis of percentage wage increases to the rates of pay in the agreement?---When I start negotiations we'll present the log of claims, the company would already have a copy of them but I would bring a log of claims to everyone at the meeting, I would present those log of claims to everyone at the meeting, I would then go through each point on that log of claims and explain it in detail as to what was meant by that log of claims. At the end of that very first session I would then ask the company to do the same with their log of claims so that no one was under any misunderstanding as to what was being asked.
PN286
But your log of claims Mr Stutz simply says, "The agreement includes a wage increase of 6 per cent for each year of the agreement, all wage increases will also be paid (indistinct) allowances payable at the site." It doesn't talk about a percentage wage increase to actual rates of pay does it?---No.
PN287
Just confirming some evidence you gave in evidence-in-chief, Mr Stutz, you were asked about the statement in Mr Emery's witness statement that he believed one of the HR representatives during the negotiation had said that the red circling claim was harsh and hard to do and you said that you couldn’t recall that conversation, that's correct isn't it, Mr Stutz?---That's correct, I may not have been there when that was said.
PN288
I have no further questions.
PN289
THE COMMISSIONER: Anything arising, Mr Mujkic.
PN290
**** GARY JAMES STUTZ XXN MR PROIETTO
MR MUJKIC: No questions, Commissioner.
<CROSS-EXAMINATION BY THE COMMISSIONER [11.54AM]
PN291
THE COMMISSIONER: Mr Stutz, you were still the organiser on site when the agreement was approved by the members and I'm talking about the mass meeting?---(Indistinct) formal vote?
PN292
I'll ask the question rather than you trying to guess what I'm going to say, it'll take longer that way. So I'm talking about the vote that was taken to approve the agreement for the purposes of Fair Work Australia, then ultimately (indistinct) the agreement, you were involved in that process?---I was, yes.
PN293
To the best of your recollection what was the material that was supplied to the employees when they were voting to approve that agreement?---They would have had a copy of the agreement, they would have had a copy of the NES, maybe a policy - a copy of the policies of Warehouse Solutions policies and procedures and that's about it I think.
PN294
Was there one meeting to - how many employees are covered by this agreement do you recall?---About 35 (indistinct).
PN295
So there was one meeting to explain the agreement was there or two?---There was a meeting directly after (indistinct) had an informal vote to accept the terms. The document was drafted by the company. That was put forward, I made myself available for anyone that wanted to ask questions. I believe the company may have put a (indistinct) forward or held a meeting maybe I'm not sure, hard to recall back that far, but I know I was there on a number of occasions over the week to make myself available around that, meal times, if anyone had any questions they wanted to ask.
**** GARY JAMES STUTZ XXN
PN296
Was there any discussion about the matter that's in the dispute that I'm trying to determine today with the employees, between you and the employees?---I don't believe so, no. I think we had discussions. I think the agreement was held in good faith. It was relatively easy, everyone was polite and there was no real angst throughout the negotiations, I'm a little surprised we're here now. I wouldn't have seen this as being a problem. There was nothing throughout those negotiations that would at any point in my mind lead me to believe that these increases were not going to be passed onto anyone, you know there was nothing that I felt was underhanded or devious or anything like that. You know, it was very straightforward, I think they were - - -
PN297
My question is just was it was not raised by any of the employees?---No.
PN298
Thank you. Nothing arising from that?
PN299
MR PROIETTO: Not from me, Commissioner.
PN300
MR MUJKIC: No, Commissioner.
THE COMMISSIONER: Thank you, Mr Stutz, thank you for your evidence, you can step down?---No problems, thank you.
**** GARY JAMES STUTZ XXN
<THE WITNESS WITHDREW [11.57AM]
MR MUJKIC: Commissioner, if I can call Mr Michael Cunningham please.
<MICHAEL WILLIAM CUNNINGHAM, SWORN [11.59AM]
<EXAMINATION-IN-CHIEF BY MR MUJKIC [11.59AM]
PN303
MR MUJKIC: We'll just pass up a document to you, Mr Cunningham?---No worries, thank you.
PN304
Five paragraphs, one dated 3 December. Is this a copy of the statement you have prepared for these proceedings?---Yes, it is, yes.
Can you confirm that it's contents are true and correct, please?---Yes, they are.
**** MICHAEL WILLIAM CUNNINGHAM XN MR MUJKIC
<CROSS-EXAMINATION BY MR PROIETTO [12.00PM]
PN306
MR PROIETTO: Good morning, Mr Cunningham?---Good morning.
PN307
Just if you've got your witness statement there in front of you?---Yes.
PN308
Just on the second page at page 3, you say about half way through that paragraph, "I was told by management when I started work in the warehouse I would remain on this same rate of pay." Your rate of pay has never been decreased has it, Mr Cunningham?---Not that I recall, no.
PN309
You say that just a little bit further along in the same paragraph, "One of the reasons I was told my rate of pay would stay the same is because I would be using some of the same tradesman skills I was using as a furniture polisher." You don't use any of your tradesman skills anymore as a grade 3 store worker do you, Mr Cunningham?---No.
PN310
No further questions, Commissioner.
THE COMMISSIONER: Thank you for your evidence, Mr Cunningham, you can step down?---Thank you.
**** MICHAEL WILLIAM CUNNINGHAM XXN MR PROIETTO
<THE WITNESS WITHDREW [12.01PM]
PN312
THE COMMISSIONER: We will tender that witness statement.
MR MUJKIC: Sorry, Commissioner, thank you.
EXHIBIT #M4 WITNESS STATEMENT OF MICHAEL CUNNINGHAM
PN314
THE COMMISSIONER: I might change my view on how we proceed from here. Was there any other, other than the witness statements that have already been prepared for the remaining witnesses for you, is there anything further that you seek to adduce from any of the - - -
PN315
MR MUJKIC: For one witness there is, there's Medancic, I have one question. Just to put the Commission's mind at ease. There's four statements left, two of the witnesses are unavailable due to health issues, that's Papageorgiou and Ms Smith, so they are not here to affirm or swear an oath. We still rely on those statements that have been filed.
PN316
THE COMMISSIONER: So can we just deal with those two?
PN317
MR MUJKIC: Yes.
PN318
THE COMMISSIONER: You didn't have any cross-examination for those witnesses?
PN319
MR PROIETTO: No, I said earlier, Commissioner, I'm happy for those to be taken as sworn evidence.
THE COMMISSIONER: We will treat them on that basis then, I will treat them as equal in weight to the others. So we might actually tender those.
EXHIBIT #M5 WITNESS STATEMENT OF MR PAPAGEORGIOU
EXHIBIT #M6 WITNESS STATEMENT OF MS SMITH
PN321
MR MUJKIC: That leaves Mr Riches and Ms Medancic, so as I said I've got a question for Ms Medancic. I don't have any questions for Mr Riches, I don't know about my friend.
THE COMMISSIONER: All right. Mr Riches, do we have any questions - we might deal with Mr Richards on the same basis as Papageorgiou and Ms Smith, so I will treat that as sworn evidence, that evidence of Mr Riches.
EXHIBIT #M7 WITNESS STATEMENT OF MR RICHES
PN323
MR MUJKIC: Thank you, Commissioner, so that leaves only Ms Medancic, so perhaps if we call her.
THE COMMISSIONER: Yes.
<RIETA MEDANCIC, SWORN [12.04PM]
<EXAMINATION-IN-CHIEF BY MR MUJKIC [12.04PM]
PN325
MR MUJKIC: Ms Medancic, we are just passing up a document to you, it's 11 paragraphs long dated 3 December, is that a copy of the statement you have prepared for this proceeding?---Yes, it is.
Can you confirm that the contents of that document are true and correct?---Yes, it is.
EXHIBIT #M8 WITNESS STATEMENT OF RIETA MEDANCIC
PN327
MR MUJKIC: Ms Medancic, since you made that statement Mr Stewart Tully has also made a statement and filed that as part of this proceeding, I would just like to ask you a question about part of Mr Tully's statement. In his statement at paragraph 14 he says that when he commenced as a DC manager in 2006 you were performing work within the classification of clerical grade 4 which is the same rate of pay as a grade 3 store person, what do you say to that?---I believe that I was performing a grade 5 store person which is a grade 6 clerical.
PN328
Why do you say that?
PN329
THE COMMISSIONER: I'll just ask you to repeat that and speak up a little bit, it's just a little bit hard to hear you?---I'm sorry. Yes, my classification is a grade 5 store person which is the same as a grade 6 clerical and the position of pay roll was a higher grade than a grade 3 or grade 4 clerical.
MR MUJKIC: Why do you say that that was your classification?---Because that's what the classification that I had at the time and when I went into pay roll.
**** RIETA MEDANCIC XN MR MUJKIC
<CROSS-EXAMINATION BY MR PROIETTO [12.06PM]
PN331
MR PROIETTO: Ms Medancic, what Mr Tully actually says in his witness statement is that the work you were performing was effectively the equipment of grade 4 work, that's true isn't it?---Grade 4 clerical - - -
PN332
Sorry, I'll withdraw that. At the time that we're talking about which is in 2006 when Mr Tully commenced, what he's saying is not that your classification for pay roll was a grade 4, what he's saying is the work you were actually performing is equipment to a grade 4 clerical role, that's true isn't it?---Not to my knowledge.
PN333
You say Ms Medancic at the end of your witness statement, this is paragraph 11 of your witness statement, "It is still my understanding that I should be classified as a grade 5 as my duties have not changed and no one has told me otherwise." But it's true isn't it, Ms Medancic, that since you were in the role as gift registry team leader, your role has changed a number of times?---Yes, the word - what I meant by "role" was my classification, my grading.
PN334
You are now currently working as a store worker grade 3 in gift registry, is that right?---Yes, in - yes, the type of work I'm doing, yes.
PN335
And all your colleagues are classified as grade 3 store workers, aren't they?---Yes, that's right.
PN336
No further questions, Commissioner.
PN337
THE COMMISSIONER: Nothing?
PN338
MR MUJKIC: Nothing arising.
THE COMMISSIONER: Thank you very much, Ms Medancic, your evidence is concluded, you can step down, thank you very much?---Thank you.
**** RIETA MEDANCIC XXN MR PROIETTO
<THE WITNESS WITHDREW [12.08PM]
PN340
MR MUJKIC: Thank you, Commissioner, that's all the evidence for the applicant.
PN341
THE COMMISSIONER: Thank you. We might just have a 10 minute adjournment and then we'll move to your witnesses, Mr Proietto.
<SHORT ADJOURNMENT [12.08PM]
<RESUMED [12.24PM]
PN342
THE COMMISSIONER: Mr Proietto.
PN343
MR PROIETTO: Thank you, Commissioner. I don't propose to make any long statements in opening submissions, you have read the outline of submissions.
PN344
THE COMMISSIONER: I've read all the materials.
PN345
MR PROIETTO: So I suppose just very briefly what we say in relation to this case is that clause 16 of the 2010 agreement should be given its plain and ordinary meaning. What the NUW is asking to do during this arbitration is effectively to re-write the clause, not just interpret it. We also say through our submissions that you shouldn’t have resort to extrinsic material. To the extent that you do it should be the material that's referred to in the high court in Amcor in the leading judgement there which is to look at the industrial purpose and the historical context. We say the indsutrial purpose of an enterprise agreement is to set minimum rates of pay which is what this agreement does. If there have been over agreement rates of pay to the extent that they are agreed and there is no admission as to that, that they are contractual entitlements and not something that arises because of the agreement. In terms of the historical context I have already touched on that a little bit today when Mr Emery was in the witness box, the change that occurred and there is some evidence about that as well and we certainly say - - -
PN346
THE COMMISSIONER: The 2001 agreement change?
PN347
MR PROIETTO: Yes, there is actually an even greater history to that which I will take the Commission to in closing submission, but that is part of it that this change is consistent with the evidence that we have led about the reason for that change and allowing us to do what we've done now. Finally in relation to the raising of the absorption clause through the negotiations, we say that was neither here nor there. It is clear in terms of the agreement that absorption was allowed prior to the negotiations. The evidence will be that it was raised really as something to throw away and that was conceded in evidence-in-chief by Mr Stutz as well. It shouldn't be a material factor affecting the interpretation of the agreement or any factor at all and that will be the case of the respondent in this matter, Commissioner, which we will obviously expand on in closing submissions. So we have got two witnesses who filed statements in this matter. Our first witness is Mr Stewart Tully and I call him to give evidence.
THE COMMISSIONER: Yes, thank you.
<STEWART TULLY, AFFIRMED [12.26PM]
<EXAMINATION-IN-CHIEF BY MR PROIETTO [12.27PM]
PN349
MR PROIETTO: Mr Tully, can you please repeat your full name for the transcript?---Stewart Tully.
PN350
What is your business address?---121-131 Darby's Road, Altona North.
PN351
Have you prepared a witness statement for the purposes of these proceedings?
---Yes, I have.
PN352
Have you got a copy of that witness statement with you?---Yes, I do.
PN353
Is it true and correct in every particular, Mr Tully?---No, there's one part I would like to omit in clause 20 please.
PN354
Okay?---It refers to a picker is no longer used at the warehouse. That is correct. A picker is currently still used at the warehouse, I would like to make that change.
PN355
Do you want to delete the words, "A picker is no longer used at the warehouse."?
---Yes, please.
PN356
So then it stands, "A picker - " - is it still true, Mr Tully, that a picker allowance has not been included?---Correct.
PN357
So we're just removing the words, "from a picker" to "and", otherwise Mr Tully is your witness statement true and correct?---Yes.
PN358
I tender that witness statement.
THE COMMISSIONER: No objection?
EXHIBIT #P1 WITNESS STATEMENT OF STEWART TULLY
PN360
MR PROIETTO: Just one quick question, Mr Tully. How many employees are currently engaged by the respondent who is subject to this agreement?---There are 51 permanent employees at the site.
**** STEWART TULLY XN MR PROIETTO
PN361
When the agreement was voted on in 2010 what was the number back then?---It would have probably been around 54 at the time.
<CROSS-EXAMINATION BY MR MUJKIC [12.28PM]
PN362
MR MUJKIC: Mr Tully, if I could take you to the 2010 negotiations. Could you explain how it was agreed that Warehouse Solutions could revisit the issue of red circling wage rates during the life of the agreement?---How it was agreed?
PN363
Yes, that was agreed wasn't it?---I don't understand the question, agreed by whom?
PN364
Agreed by the parties in negotiation?---It came up, it was on our log of claims at the time.
PN365
So was it agreed or was it not agreed that Warehouse Solutions could revisit this issue during the life of the agreement?---We didn't have a discussion about whether it would be agreed or not, we believed that we could always revisit that particular issue at any time.
PN366
Who believed that?---The company.
PN367
But you didn't raise that belief with Gary Stutz or anyone else at the bargaining table?---No.
PN368
You say at paragraph 7, I think you've got your statement in front of you?---Sure.
PN369
Paragraph 7 it's the last sentence, I'll just get you to explain this to me, "My very clear recollection is that the agreement was for certain percentage wage increases to the rates of pay in the agreement but," and this is the important bit, "but that the respondent could revisit the issue of red circling wage rates during the life of the agreement." So was that agreed or wasn't agreed?---That was my understanding.
**** STEWART TULLY XXN MR MUJKIC
PN370
Hang on, it says there that that was agreed. The agreement was - so agreement requires two parties doesn't it, or more?---Sure.
PN371
You can't (indistinct) with yourself (indistinct). I'm asking you the question because it just - - - ?---No, the agreement - it's my understanding the agreement makes that an option for the business at any time.
PN372
Well, hang on, so when you say the agreement was for in paragraph 7 I am assuming you're referring to an agreement between Warehouse Solutions and employees as represented by the NUW, yes?---That's correct.
PN373
So you say the agreement was for two things you say, "Certain percentage wage increases to the rates of pay in the agreement and or but that the respondent could revisit the issue of red circling wage rates at any time during the life of the agreement." So was that part of the agreement was it?---That's my understanding, yes.
PN374
MR PROIETTO: Sorry to interrupt but that's not what it says. I mean what Mr Mujkic is trying to get Mr Tully to agree to is what he stumbled over which is "and", it says "but" not "and". What the sentence says is what was agreed is in the first part, and then it goes on to say "but" - - -
PN375
MR MUJKIC: It's Mr Tully's statement.
PN376
MR PROIETTO: But the premise of the question is wrong.
PN377
THE COMMISSIONER: I am having trouble following. Can you take me to the paragraph that you're - - -
PN378
**** STEWART TULLY XXN MR MUJKIC
MR MUJKIC: Paragraph - so paragraph 7, the last sentence.
PN379
THE COMMISSIONER: Yes.
PN380
MR MUJKIC: "The agreement was for certain percentage wage increases to the rates of pay in the agreement but that the respondent could revisit the issue of red circling wage rates." So what I'm trying to understand is whether this part of red circling was part of the agreement. So I thought your evidence was that it was, but your evidence was also that it wasn't raised, it was just that the company believed it had that ability. So how can it form part of the agreement if it wasn't discussed and agreed to during the negotiations?---There's no particular reference to red circling in the EBA, but it's certainly my understanding that in time the business could exercise that particular option.
PN381
Yes, and you are free to have your understanding but that understanding wasn't raised during the negotiations and it certainly wasn't agreed to at the negotiations, that's right, isn't it?---It didn't have to be, it was taken off the table, so.
PN382
So you had a claim to do that?---Sure.
PN383
And that was taken off the table?---Yes.
PN384
Once that was taken off the table you didn't say to the NUW, we're taking this off the table but we can do it anyway, so?---That was always our understanding, we didn't need to explain that.
PN385
Until August last year, 2012, it has been the practice to pass on all wage increases that have been negotiated, that have been provided for by the enterprise agreement to all employees covered by the agreement, that's right isn't it?---Are you talking all agreements or - - -
**** STEWART TULLY XXN MR MUJKIC
PN386
The agreements that you're aware of that you've been present for, the years that you've been present for?---The previous two agreements that's been the case, yes.
PN387
Were you involved in the 2007 negotiations?---Yes, I was.
PN388
When I say "involved" you were at the meetings?---I was at the meetings.
PN389
You were at the meetings as negotiator for the agreement?---Yes, that's right.
PN390
And wage increases were negotiated as part of that agreement, yes?---Yes.
PN391
All employees covered by the 2007 agreement would have received wage increases that were negotiated in 2007, 2008 and 2009?---Look, the wage increases applied to the rates of pay.
PN392
Just the question, so the question was were wage increases negotiated, you said yes. The second question is this, all employees covered by the 2007 agreement would have received those wage increase in 2007, 2008 and 2009, that's right isn't it?---That would be correct.
PN393
At the time of the 2007 negotiations did you or anyone else at Warehouse Solutions make a distinction between the rates of pay in the agreement and actual rates of pay that employees were receiving in the 2007 negotiations?---We would have been referring to the rates of pay in the agreement.
PN394
Did you make a distinction though between the rates of payment in the agreement and the actual rates of pay?---We didn't need to because it was expressly written in the EBA.
PN395
**** STEWART TULLY XXN MR MUJKIC
You didn't need to because it's always been the practice to pass on the negotiated wage increase to everyone, hasn't it?---It has been a past practice.
PN396
Considering that past practice when wage increase are discussed at a negotiation it's fair to assume that those increases were to be passed on to all employees covered by the agreement?---It's not my assumption, no.
PN397
Why not?---Because we're talking expressly about the EBA rates of pay as we have both of those (indistinct) - - -
PN398
Your understanding is you say in your statement that Warehouse Solutions is not obliged to pass on wage increases to all employees pursuant to that clause, that's right isn't it?---We're obliged to follow the prescribed rates of pay in the agreement.
PN399
I put it to you that that is a legal opinion, you are entitled to have that, that's fine. That's your opinion, that's fine. When did you come to that view?---It's always been my view.
PN400
Always. So I presume you - when did you start, 2006 as the DC manager?---Yes.
PN401
What were you doing if I can ask before that, were you employed by Myer or Warehouse Solutions before that?---I was employed by Coles.
PN402
But not in their distribution centre?---I had worked there previously but I'd worked at a number of distribution centres over a period of time.
PN403
So were you familiar with the terms of the relevant enterprise agreement at the time - so when you started in 2006 were you familiar with the terms of the enterprise agreement or did you look at it to familiarise yourself with it?---I certainly would have sat down and read it, yes.
**** STEWART TULLY XXN MR MUJKIC
PN404
You looked at the wages clause I presume?---Obviously, yes.
PN405
What did you think?---I thought it was a very generous agreement.
PN406
That's okay isn't it?---There's nothing wrong with that.
PN407
Did you look at the wage clause and think, well all these people are getting higher than these paid rates. Did that come up as an issue then, were you aware of it then?---I did notice some anomalies, yes.
PN408
Did you do anything about them?---Not at the time, no.
PN409
Why not?---I just had other things to focus on in terms of setting up a distribution centre for Myer, a new DC operation at the time and our focus was getting that up and running. It wasn't a priority at the time.
PN410
You say in your statement that around 2012, some time prior to 1 August 2012 the business was after some cost savings and you then thought that well, let's red circle the rates of pay because that's a cost saving, that's right, isn't it?---That's one of the reasons.
PN411
You could have done that for five years, six years before that?---Yes.
PN412
It would have been a substantial saving for the business?---Sure it would have.
PN413
So why didn't you do that?---Because as I said at the time when we set up the business in 2006 it was essentially a new site and there was a different focus at the time and (indistinct) - and following on from that the economic conditions declined significantly.
**** STEWART TULLY XXN MR MUJKIC
PN414
So it's company practice is it that when things are going well the company pays employees higher than it is required to do?---I think it's a general thing that there's probably less scrutiny on costs when the business is going well.
PN415
You were DC manager when you started here at 2006, that's right isn't it? So at Coles previous to that were you distribution centre
manager in a managerial role?
---Yes, I had both, a distribution centre roles and also other managerial roles with (indistinct).
PN416
So if we look at directly before 2006 you were in a managerial role?---Yes.
PN417
I would have thought that in a managerial role cost savings and the costs associated with your responsibilities would be a pretty important let's say marker or way of assessing your abilities and your performance, yes?---That's right.
PN418
So you would have achieved a pretty good result for the business if in 2006 you red circled everyone's wages, yes?---It would have certainly have improved the financial position of the site, certainly.
PN419
So what I don't really understand is why you wouldn’t do it then and why you did it on 1 August 2012?---I'll go back to what I said before, we were setting up a site in 2006 and at the time our primary focus was getting the business up and running.
PN420
You say at paragraph 5 of your statement you were keen to make a number of changes to the agreement, so this is preceding the 2010 negotiation, you were keen to make a number of changes to the agreement, can you tell us what they were?---I was hopeful we could simplify the agreement, it was a pretty wordy sort of document in length and maybe make it a bit more user friendly, a bit more concise, more reflective of the modern day operation.
**** STEWART TULLY XXN MR MUJKIC
PN421
Anything else, any particular changes that might be seen to be cost savings?---Not that I can recall.
PN422
So the red circling claim was that your idea, Ms Tebbutt's idea or someone else's idea?---I think it basically was put on the log, I had some limited input into the log but it wasn't my specific request to have it on.
PN423
Do you think it's a bit silly to put something on a log of claims you can do anyway?---I just think it was one of those things we put on there at teeth ima.
PN424
Because you knew if you red circled everyone's wages you knew that wouldn’t be a very popular decision, right?---I didn't think about it in terms of popularity, in fact it could have been quite the opposite. You've got three quarters of the workforce that are being paid less than the other - - -
PN425
Okay, but the employees affected - - - ?--- - - - (indistinct).
PN426
The employees affected?---It would have been a popular decision for the 75 per cent of the workforce.
PN427
I'm not asking about those, for the employees affected?---You asked me if it was unpopular or not and - - -
PN428
Okay (indistinct)?--- - - - I'm saying it's not.
PN429
So for the 25 - on your percentages, I don't know if they're right but for the 25 per cent that are affected you would have assumed that red circling their wages wouldn’t be the most popular thing in relation to those individuals?---I would presume it wouldn’t be popular.
**** STEWART TULLY XXN MR MUJKIC
PN430
Yes, why then - you've got this secret ability to do this, why then put it as a claim and red flag it to everyone?---It's not a secret.
PN431
Hang on, you said you didn't explain it to anyone, the company had the ability to red circle people's wages but you never referred to that in negotiations, so how could anyone else know you had that ability?---(Indistinct) in the EBA.
PN432
That's your interpretation of the EBA, that's obviously in dispute, so what I'm saying is - - -
PN433
THE COMMISSIONER: Perhaps if you just ask the questions rather than the commentary.
PN434
MR MUJKIC: Yes. You must have known that there were other interpretations available in relation to the wages clause of the EBA, yes?---No.
PN435
Why not? So your opinion is the only - - - ?---I only had one interpretation and that was the way I read the EBA.
PN436
Do we know why we put it on the log of claims then so we can do it but we'll put it on the log of claims anyway, why would we do that?---I don't know.
PN437
Paragraph 7 of your statement you say, "It is my very clear recollection that we did not make any promises or representations in relation to percentage wage increases for employees generally." I will put it to you that neither did you make any specific representations that said the opposite, that is that any negotiated wage increases were only to be applied to the rates of pay in the agreement, that's true isn't it?---Can you ask the question again please?
PN438
**** STEWART TULLY XXN MR MUJKIC
Yes. I put it to you that during the negotiations in 2010 it was never expressly stated that the wage increases that were negotiated were to be applied only to the rates of pay specified in the enterprise agreement?---I think it was expressly stated because it was put in a draft of the EBA and that was - - -
PN439
Expressly stated, I mean said by you or Ms Tebbutt or any other Warehouse Solutions employee?---We were always talking to the rates of pay in the EBA.
PN440
How, you expressly stated that?---Well, expressly enough to put it in a draft - - -
PN441
What I'm putting - the question is - - - ?--- - - - (indistinct) of the workforce.
PN442
The question is this, it was never expressly clearly stated by you or Ms Tebbutt or anyone else from Warehouse Solutions that the
wage increases that were to be negotiated were to be applied only to the wage rates specified in the agreement?
---Again I go back to the draft of the EBA that was put out and voted on (indistinct) - - -
PN443
But the draft is not - the draft is a document, right, the draft is a document?
---Which expressly stated - - -
PN444
The draft (indistinct)?--- - - - that it was referring to wage rates in the EBA.
PN445
So is the answer to the question that I asked no because my question was did you, did Ms Tebbutt or anyone else that was employed by Warehouse Solutions expressly state that the wage increases that were negotiated would only be applied to the rates of pay in the agreement?---It was my understanding that we were always talking to the rates in the EBA.
PN446
So the answer to my question is no, is that correct?---Are you answering the question?
**** STEWART TULLY XXN MR MUJKIC
PN447
I'm asking you if the answer is no because you're not answering the question?
---Well, I thought I had.
PN448
THE COMMISSIONER: You haven't and I want you to answer the question. So ask the question again and this time please answer it, Mr Tully.
PN449
MR MUJKIC: Do you want me to ask the question again?
PN450
THE COMMISSIONER: Yes, I want you to ask it again.
PN451
MR MUJKIC: So the question is, it's true isn't it that no one from Warehouse Solutions, not you, not Ms Tebbutt or anyone else who was present in the 2010 negotiations expressly stated that the wage increases that were negotiated were to be applied only to the rates of pay that are specified in numbers in the agreement?---From my recall, my recall?
PN452
Yes?---We were always expressly discussing rates of pay relating to the EBA.
PN453
Okay, so why didn't you - I've asked the question four times, why didn't you say that - - - ?---Well, I tried to answer it and obviously it wasn't - - -
PN454
No, you were referring to the agreement?---I must have missed (indistinct) to your question.
PN455
Okay. So you expressly stated every time and you referred to wage rates and wage increases, this is only to be applied to the wage
rates in the agreement?
---My role in the EBA negotiation was limited in terms of discussion with the NUW people there so you would probably have to ask Louise
exactly - - -
PN456
**** STEWART TULLY XXN MR MUJKIC
Did you say anything in the negotiation?---I was there to provide you know information on the running of the site and that sort of stuff.
PN457
Who made that distinction expressly, was it you, Ms Tebbutt or someone else, who said clearly that the wage increases that were being negotiated were to be applied only to the rates of pay in the agreement?---I'm talking about my recall of the events, yes.
PN458
Yes?---Is that we're always talking expressly about the wage rates as per the EBA.
PN459
So when you say we were always talking about you mean you and Louise?---We as - Myer as a team.
PN460
I know but Myer can't talk?---Okay.
PN461
You can talk and Ms Tebbutt can talk, so did you ever say - did you ever expressly say the wage rates would be only to the - that wage increases were to be applied only to (indistinct)?---I may not have expressly said those actual words in the conversation but it was my understanding that was the - - -
PN462
You assumed when you were discussing wage rates and wage increases - - - ?---I haven't got a transcript of the events that took place so it was three years ago.
PN463
But at the time you assumed when the parties were discussing wage increases that they would be applied to the rates in the agreement?---That was always my understanding, yes.
PN464
So (indistinct) someone from Myer expressly apparently said at some stage that the wage increases would only be applied to the wage rates in the agreement, so what was the reaction of the NUW representatives in the meeting to that statement?---I can't recall.
**** STEWART TULLY XXN MR MUJKIC
PN465
Was there a reaction?---I can't recall.
PN466
What was the reaction when you put the claim forward that you wished to red circle the wages of employees?---It was - it was dismissed by the NUW.
PN467
Why wouldn't the NUW, and that might be Mr Stutz, it might be Mr Emery or any other NUW representative in the meeting, why wouldn’t they say when you say - when you're discussing wage increases and you or Ms Tebbutt say, now these increases are only to be applied to the rates in the agreement, why wouldn’t they say hang on, we don't agree to that because you already tried to put that in as a claim?---I don't know, you'd have to ask them.
PN468
It's the same effect though isn't it, or the difference is this if you red circle it definitely happens, if you don't red circle it may or may not happen, depending on whether or not you wish it to happen, that's right isn't it?---We always believed we had the opportunity to revisit it.
PN469
You would have to concede wouldn’t you that it's quite possible that NUW representatives in the meeting and employees at the site could have a different interpretation to the wages clause in the agreement?---I don't know, you'd have to ask them.
PN470
It's possible though, isn't it?---It's possible, yes.
PN471
Did you ever discuss the possible different interpretations of the clause in the negotiations?---Did I ever discuss? No.
PN472
Was it ever discussed in the negotiations?---I didn't realise there was a difference in interpretation.
**** STEWART TULLY XXN MR MUJKIC
PN473
You assume there was one interpretation available and that was never discussed?
---That's correct.
PN474
You say in paragraph 11 of you statement or you take issue, sorry, with what Mr Emery says when Mr Emery says in his statement that when the red circling claim was dropped off Ms Tebbutt said something to the effect of it was harsh or hard to do anyway?---Sure.
PN475
You take issue with that and you say, "This is not language that Ms Tebbutt would use." What do you mean by that?---We never believed it was harsh or hard to do.
PN476
But that doesn't mean that's not language that she would use, it’s not particularly offensive language is it?---It was never - we never thought that was the case.
PN477
Do you remember what she may have said when that claim was dropped off?---I think we just moved on to the next point on the log.
PN478
If I take you to the part of your statement where you referred to the witness statement of Ms Medancic, so that's paragraphs 13, 14, 16?---Sure.
PN479
You say at paragraph 14 that when you commenced as the DC manager in 2006 Ms Medancic was performing work within the classification of clerical grade 4, now that is just your opinion again of what the work - what the appropriate classifications for the work that she was performing, that's right isn't it?---It's not my opinion, it was - the work that she was performing fell within that classification.
PN480
That's your opinion, I'm sorry but the classification structure in the agreement determines the appropriate classifications, yes, you agree to that?---The classification structure determines the appropriate rate of pay.
**** STEWART TULLY XXN MR MUJKIC
PN481
Yes. Yes, okay?---Yes.
PN482
Who determines what classification applies to which employee?---Well, it would depend on where the person was working at the time, it would depend - would determine what the classification was.
PN483
But the agreement determines it, so you can't say well I think this is grade 4 and therefore it's grade 4. You have to work within
the confines of the agreement?
---Sure.
PN484
So when you say Ms Medancic was performing work in the classification of clerical grade 4 that is just basically, if I can rephrase, in my opinion I believe the work Ms Medancic was performing is work that should be classified as a grade 4 under the agreement, that's right isn't it?---No, I based it on the fact that her co-workers were performing the same work and were being paid at that rate of pay.
PN485
Are you aware that Ms Medancic has always been classified as a grade 5?---I had been aware.
PN486
So when was that changed?---After a meeting in August 2012.
PN487
You decided to change her classification?---We decided to align her classification with the work she was doing.
PN488
Where in the 2010 agreement does Warehouse Solutions have the power or ability to unilaterally change people's classifications?---I don't think there's anything expressly in there.
PN489
You decided that you wanted to align everyone to the same rate of pay?---I decided I wanted people to be paid for the work they were doing, that's correct. Paid correctly.
**** STEWART TULLY XXN MR MUJKIC
PN490
You never consulted Ms Medancic about that, you never said, I think you're on the wrong classification, with do you say to that? You simply changed her classification from 5 to 3?---At a meeting I had with the 13 people.
PN491
You told her, you never asked her what her opinion on that was?---I didn't ask for an opinion, no.
PN492
Did you speak to her directly at that meeting or you just spoke to the group?---I spoke to the group.
PN493
How from a practical point of view - how do you alter someone's classification, do you log into the payroll system and change the number?---I'm not actually sure how the details of how the pay - - -
PN494
How would it practically take effect, do you direct someone in payroll to do that or - - - ?---Yes, certainly I make a direction to someone to do that.
PN495
When was that direction made?---It would have been shortly after, some time, within a week of that meeting in August.
PN496
So you had a meeting, you explained to everyone what you were going to do and you did it?---M'm.
PN497
So this discussion about Ms Medancic and her classification, I put it to you that the same applies to Mr Papageorgiou as well. You thought that Mr Papageorgiou should be classified differently, spoke to the group, you directed someone to change that classification?---That's correct.
PN498
Can we just go back to this issue of the red circling and the company's ability to red circle that wage rates?---Yes.
**** STEWART TULLY XXN MR MUJKIC
PN499
This ability was never - you say it's your opinion - this opinion was never communicated to the employee group as a whole, was it?---Sorry, can you repeat the question please.
PN500
Yes, of course. The ability of the company to red circle employees' wage rates or to absorb wage increases for people on a high rate of pay, this ability or your opinion that you ahd this ability was never communicated to employees generally prior to August 2012, that's right, isn't it?---We never had a general meeting to discuss that issue, no.
PN501
I put it to you that's because you believe that as soon as you raised that it would be disputed by the NUW and by the employees?---That would always be the case.
PN502
So you knew that was going to be disputed when you did it in August 2012?
---Yes, I did.
PN503
That's why you did it a day or two prior to you going on annual leave, that's right isn't it?---No, annual leave was irrelevant, it was just the timing.
PN504
You would have known for the whole of the calendar year in 2010 that wage increases were to be paid on the first pay period in August?---Right.
PN505
Yes?---Yes, (indistinct) the same, yes.
PN506
When were you scheduled to go on leave?---I can't recall if I was even aware I was on leave, I'll take your word for it.
PN507
I put it to you you were on leave on or about the first week of August, that's right isn't it?---I don't understand what you're actually suggesting.
**** STEWART TULLY XXN MR MUJKIC
PN508
What I'm putting to you is that you intentionally notified employees your decision to red circle their wages a day or two before you went on annual leave because you knew it was going to create a bit of a shit fight, excuse my language, apologies Commissioner.
PN509
THE COMMISSIONER: Yes?---And what's the relevance of it?
PN510
MR MUJKIC: I'm intrigued as to the answer to this question?---Where is it going?
PN511
THE COMMISSIONER: I am hoping to spend time today, Mr Mujkic, eliciting information from witnesses that will help me determine the matter and whether or not Mr Tully was going on leave is not really - - -
PN512
MR MUJKIC: It's not - - -
PN513
THE COMMISSIONER: Presumably there's some basis to where you're going with this.
PN514
MR MUJKIC: I can refer to that in submissions rather than while the witness is here.
PN515
THE COMMISSIONER: I am happy for you to continue if there is some relevance but I'm struggling to see what it is.
PN516
MR MUJKIC: I think Mr Tully's evidence was he wasn't sure if he went on leave, so as I understand your evidence before you can't recall whether or not you went on leave in August?---I trust that what you're saying is correct, but I can't see the relevance of what you're trying to suggest.
**** STEWART TULLY XXN MR MUJKIC
PN517
I won't ask you (indistinct) the other questions if you're not sure of that, that's all.
PN518
THE COMMISSIONER: Can I say in terms of language, from time to time witnesses refer to conversations where swearing is commonplace and it finds its wage to the Tribunal and that's fine but I don't really see a need for it to be wantonly introduced from the bar table.
PN519
MR MUJKIC: No, I withdraw that, Commissioner.
THE COMMISSIONER: Thank you.
<RE-EXAMINATION BY MR PROIETTO [12.56PM]
PN521
MR PROIETTO: Just quickly, Mr Tully. There are some questions about precise language that might or might not have been used during the negotiations for the 2010 agreement in relation to wage rates. Can you just inform the Commissioner what is your recollection of the discussion in relation to percentage increases to wage rates during the 2010 agreement?---It was always my understanding we were referring to the rates of pay in the EBA.
PN522
I've got no further questions, Commissioner.
PN523
THE COMMISSIONER: So you and Ms Tebbutt were involved in the negotiations. You were asked some questions about this but I'm still not exactly clear so I'm going to ask you a couple more?---Sure.
PN524
The decision to put a sunset clause as it was referred to in the materials, in your log as it were, I recall it was the fifth item, was that your decision or was that Ms Tebbutt's decision or someone else's decision?---The log was basically Ms Tebbutt's creation. I had some limited input into suggestions around particular aspects of what might be included, I never - I wasn't specifically honing in on that as an issue.
**** STEWART TULLY RXN MR PROIETTO
PN525
Did you discuss that claim with her for the sunset?---I'm sure we would have gone through the log at some point prior to the negotiation and had - it would have come up in discussion.
PN526
You don't remember specifically having a conversation?---Not specifically, no.
PN527
Right?---But it would be pretty unusual for me to - for us to go in without having gone through each point.
PN528
Your evidence is that you were always clear that you could do in effect what that sunset clause claim sought to give you the ability to do?---Yes.
PN529
In that context why make that claim?---In the 2010 log?
PN530
Yes?---I think we were probably looking for things to put on the claim at the time and that was one of them, but whether we were successful or not it was always my intention to revisit it at some point which I did.
PN531
Yes, very well, no more questions?
PN532
MR MUJKIC: No, Commissioner.
THE COMMISSIONER: Thank you, Mr Tully.
**** STEWART TULLY RXN MR PROIETTO
<THE WITNESS WITHDREW [12.59PM]
PN534
THE COMMISSIONER: Yes, Mr Proietto.
PN535
MR PROIETTO: I'm just conscious of the time, Commissioner. I'm actually hoping we might get finished today.
PN536
THE COMMISSIONER: Yes, I'm hoping the same but it really is a question whether we go to Ms Tebbutt now and have a later lunch or not and that's just a consideration of how long we think that she might go for.
PN537
MR PROIETTO: That was 45 minutes I think. Mr Mujkic has just said to me that he thinks he'll be the same period of time with Ms Tebbutt as he was with Mr Tully.
PN538
THE COMMISSIONER: In that case we might adjourn for lunch now. We will resume at two p.m.
PN539
MR PROIETTO: Yes, if the Commission pleases.
<LUNCHEON ADJOURNMENT [12.59PM]
<RESUMED [2.07PM]
PN540
MR PROIETTO: I call the next witness, Commissioner.
PN541
THE COMMISSIONER: Thanks, Mr Proietto.
MR PROIETTO: The next witness is Ms Louise Tebbutt.
<LOUISE TEBBUTT, AFFIRMED [2.08PM]
<EXAMINATION-IN-CHIEF BY MR PROIETTO [2.09PM]
PN543
MR PROIETTO:
PN544
And what is your business address?---It’s 800 Collins Street, Docklands of Victoria Harbour.
PN545
Have you prepared a witness statement for the purpose of these proceedings?
---Yes, I have.
PN546
And you’ve got a copy of that witness statement with you?---Yes, I do.
PN547
Is the witness statement true and correct in every particular?---Yes, it is.
PN548
I tender that document, Commissioner.
THE COMMISSIONER: Yes, that is P2.
EXHIBIT #P2 STATEMENT OF LOUISE TEBBUTT
PN550
MR PROIETTO: Now, Ms Tebbutt, shortly Mr Mujkic will have some questions for you but just before we do that, just a quick question. There was a long discussion this morning in relation to, I suppose the negotiations that took place during the course of the 2010 agreement or for the 2010 agreement and as a result what words were used in relation to the percentage wage increases to be reflected in that agreement. Can you just inform the commission what your recollection is of your discussions?---My recollection is that we spoke about adjustments as they related to the minimum rates of pay as described in the body of the agreement and clause 16. I have reflected upon that both in the preparation of my witness statement and subsequent to the events of today and I can say with an absolute truthfulness that that is my recollection of the events as they occurred and the adjustments related to the table, clause 16, which prescribes the minimum rates of pay.
**** LOUISE TEBBUTT XN MR PROIETTO
PN551
I have no further questions, Commissioner.
PN552
THE COMMISSIONER: Mr Mujkic.
MR MUJKIC: Thank you, Commissioner.
<CROSS-EXAMINATION BY MR MUJKIC [2.10PM]
PN554
MR MUJKIC: So let’s go over what you’ve just said, Ms Tebbutt, in your evidence. You’ve said that it clearly stated that any wage increases – and this is my understanding of what you just said so if I’m wrong please correct me – any wage increases will be paid under the minimum rates of pay as described in the relevant clause of the agreement. Is that correct?---Correct.
PN555
Are they the words, as far as you recall that you used? So did you use the words “minimum rates of pay”?---In the context of the negotiations we spoke about adjustments relating to the rates of pay described in the agreement. I can’t recall whether we used the minimum rates of pay but the only context that we spoke about adjustments was in relation to the clause of the agreement which spoke to the rates of pay.
PN556
So you’re not sure if you used the word “minimum rates of pay” but you say that you definitely used the phrase “rates of pay as described in the agreement”?---To the best of my recollection they would have been words that I expect that I would have used in the context of the union discussions.
PN557
Do you expect you would have used or you recall using those words?---I expect I would have used.
PN558
Do you expect that you made a reference to the rates of pay in the agreement or are you sure you made a reference to the rates of pay in the agreement?---We spoke about the rates of pay contained in the body of the agreement in clause 16 and we represented any of the adjustments proposed to those rates as described in the clause.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN559
But did you make a distinction between those rates of pay and the actual rates of pay?---We spoke about the rates of pay prescribed in the body of the agreement at clause 16.
PN560
So you didn’t clearly distinguish between when you were discussing in this negotiation – clearly distinguish between the rates of pay in the agreement and actual rates of pay that employees received?---Because we spoke about the adjustment applying to the rates of pay contained in clause 16 of the agreement.
PN561
You commenced employment with Myer in 2006, your statement says. What were you doing prior to 2006 if I can ask?---I worked for Coles Myer which is when Myer formed part of the Coles Myer business.
PN562
In the same position? The position is called national employee relations manager?---I worked in the employee relations functions for Coles Myer. Myer was not – they used to allocate particular brands. Myer was not my accountability at the time though we worked as a very small, close team and there was sharing of information amongst the brands or the businesses at the time from the individual employee relations managers that were looking after each of the divisions.
PN563
Can I ask how long you’ve been in a human resources or employee relations or industrial relations manager for Myer or related company?---Well, my history of human resources started with the then Coles Myer group in 1997 when I joined Coles Myer and I worked at a number of different divisions across the Coles Myer group including Myer for a point in time when the transition occurred from when in effect the Myer group left the Coles Myer group and - - -
PN564
Thanks, Ms Tebbutt, that’s fine. I just wanted to know the year. So 1997?
---Correct.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN565
What I want to ask is is it unusual in your experience for a company like Warehouse Solutions or any other company in the group of companies that you’ve been responsible for, is it unusual for it to pay a wage to its semi-skilled workers that is higher than what it’s legally required to do?---I can’t talk to what other companies may or may not do.
PN566
Well, have you seen this particular instance because your evidence is “We paid a particular rate of pay but we didn’t have to. We could have at any time absorbed future wage increases but we just chose not to.” Is that a unique circumstance - I would have thought it would be as far as you’re aware? You can only tell us what you know?---I think individual circumstances and individual companies and their performance at particular points in time will dictate courses of action that companies will take.
PN567
Are you aware of any other example in your working life with Coles Myer or Myer or any other related company, are you aware of any other circumstance where what I’ll say are senior skilled workers, so warehouse workers or similar, have been paid a wage that’s higher than what the company believes it’s required to pay them?---Yes, I am.
PN568
Yes, can you describe that circumstance for us?---I know that there are team members in our Myer stores where they have received over-award payments for roles they performed at some particular points in time, very historical circumstances similar to the situation at the Altona site who have continued to receive those payments whilst they are no longer undertaking those duties.
PN569
You say in your statement that you’ve held the view for quite some time that the company, Warehouse Solutions, could if it wished to choose to red circle all the wage rates of the employees. How long have you held that view?---I’ve held that view during the 2010 negotiations, the 2007 negotiations, when we carried the agreement over for the transmission of business, which was the 2004 agreement and that’s been my direct view, my direct knowledge of it and my view of it that we did always have the prerogative to apply that and then I was aware of it through my association in 2001 with regards to when Myer was part of the Coles Myer group.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN570
Why didn’t you do it then?---Because why would we – well, we didn’t do it because circumstances didn’t warrant the action at the time until the events which occurred in 2012 when we decided that we would exercise our long-held view not to pass on the adjustment.
PN571
So you’ve got this ability. Why then put a claim on the log of claims in 2010 that would give you that ability? You could already do it, couldn’t you?---Correct, we could.
PN572
Why is it in the log of claims?---It’s in the log of claims for no other reason that we put it on knowing that if we were to withdraw the claim, which we fully expected to do, that we would not be sacrificing or losing anything by the removal of it from the log of claims.
PN573
With respect, Ms Tebbutt, I just find it hard to believe that you thought you could do something but you put it on the log of claims anyway just so you could withdraw it. That’s your evidence, isn’t it?---That is my evidence and it is as stated in my witness statement.
PN574
Did you ever communicate this to the NUW representatives or any other employees that are covered by the agreement?---I’m not sure of your question. In what circumstances?
PN575
You held a view that – when I say “you”, the company, Warehouse Solutions, had the ability to at any time red circle the wage rates of certain employees. Did you ever communicate that view to any employees that are covered by the agreement or any NUW representatives involved in negotiating the 2010 agreement or any other agreement you’ve been involved in?---No, we didn’t.
PN576
Why not?---Because we didn’t describe what is our view about that clause in the same context that we didn’t describe what our view was about – or the application of the sick leave clause or the annual leave clause.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN577
Yes, of course, but you didn’t have a claim about those clauses. You had a claim about red circling wage rates?---Yes.
PN578
I just find it hard to understand why you wouldn’t also say, “We don’t really need to do this because we’ve got this ability anyway”?---Well, I would suggest to you that we were in the middle of negotiations. Why would we do that?
PN579
So put yourself in the seat of – you remember Mr Gary Stutz?---I do.
PN580
So put yourself in Gary Stutz’ spot. He sees a claim in a log of claims from an employee that says, “We wish to red circle employees’ wage rates.” He then, according to his statement, and I think you broadly agree with this part of his statement, the NUW says “No, we don’t agree with that claim,” and that claim is dropped off the table. It’s reasonable for Mr Stutz and the other people involved to then assume that that’s the end of that and any wage rates are going to be applicable to everyone.
PN581
MR PROIETTO: Is that a question?
PN582
THE WITNESS: I’m not sure. Am I meant to respond to that?
PN583
MR MUJKIC: I thought it was. It’s reasonable, isn’t it, for Mr Stutz and everyone else in that room - - -
PN584
THE COMMISSIONER: Right.
PN585
MR MUJKIC: - - -representing employees, it’s reasonable for them to assume, isn’t it, that that’s the end of that and that any increases negotiated in that room would apply to all employees?---Well, we would rely upon the fact that we gave the NUW two drafts of the agreement which solely spoke to adjustments in the table which describe the minimum adjustments to the rates of pay.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN586
Well, what I’m trying to get at is this. So you’ve got a belief that you can red circle wages. You then put a claim forward that suggests that you don’t have that ability and you want to get that ability through these negotiations. That’s what a claim suggests, you’re seeking something you don’t already have – you understand that, yes, generally speaking?---I understand how to prepare a log of claim but I’m - - -
PN587
Yes, so - - -?---- - -not answering in the affirmative to what you are suggesting about why that occurred.
PN588
Sure, so when that claim is dropped off isn’t that a signal to the other side in the negotiation that what you sought to do with that claim you no longer will or can do?---I don’t propose to answer on the view of the NUW or Mr Stutz at the time. I know that we built the claim for the purpose of seeking a rollover deal, for want of a better description, and that by removing the claim from the log we were not conceding what was our long-held view that we could apply it if circumstances warranted it. And in August of last year circumstances warranted the application of that and not passing on the adjustments to the relevant team members.
PN589
Did you put the claim on the log so that you could, in an ideal world, rephrase clause 16 or whatever number it is, the wage clauses, to make sure that you could without doubt absorb wage increases?---No, we didn’t and I can also say the NUW in response to that item being on our log of claims did not seek for an amendment to that - - -
PN590
We’ve read your statement, Ms Tebbutt. I understand that’s in your statement?
---Of course.
PN591
We’ve read that. You say at paragraph 14, you say “the NUW made it clear they didn’t agree to the claim so that the red circling claim hence was withdrawn.” In Mr Stutz’ statement he says that he used the phrase, “over my cold, dead, fat body.” Do you recall Mr Stutz using that phrase?---I do have a recollection of Mr Stutz using that phrase because it is the type of thing that you recall in your mind because it was funny at the time when he delivered the line.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN592
Yes?---I cannot recall the words he said prior to that and I’ve got to say his comments almost superseded and topped whatever went before because we were all laughing when he said that.
PN593
Yes, it’s a good turn of phrase. So that’s Mr Stutz’ response to your claim to red circle employees’ wages. That claim is then dropped off. And your evidence is that at some stage in the negotiations it was made clear that any wage increase would be only on the rates of pay described in the agreement. So what was Mr Stutz’ response to that?---I’m sorry, are you asking me to describe what - - -
PN594
I’m asking you how did Mr Stutz respond when you – because this is your evidence - - -?---Yes.
PN595
- - - you said that any negotiated wage increase was only to be applied to the rates of pay as described in the agreement. Did Mr Stutz say anything to that? Did he respond to that in any way?---Well, he did because he agreed to the drafting in the agreement which prescribed the rates of pay over the life of the agreement.
PN596
Well, he didn’t agree to the agreement. The employees agreed to the agreement. What I’m asking for is this. So in the negotiations, during the course of the negotiations, your evidence is that you clearly said that the wage increases that are negotiated are only to be applied to the wage rates described in the agreement, yes?---Correct.
PN597
When you said that, I don’t know how many times you said that but when you said that, did Mr Stutz respond in any way to that?---I cannot recall Mr Stutz saying anything explicitly apart from us shaking hands at the end of the negotiations and saying, “We’ve got an agreement. We will put it to the floor.” Now, I’m not quoting Mr Stutz there. I know we shook hands and I know he said, “I’ll put it to the floor” in that type of vernacular.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN598
You say in your statement that you refer to wage increases being wage increases to the rates of pay not actual rates of pay. So what I want to understand whether you made that distinction clearly at any time during the negotiations or did you simply use the phrase, “rates of pay in the agreement”?---Sorry, would you mind repeating that question?
PN599
Sure. So your statement at paragraph 23, if you want to have a look at it, it might help, so the second sentence at paragraph 23 - - -?---Yes.
PN600
- - - you say – sorry, it’s not the second sentence. It’s just after that comma in the third line,
PN601
PN602
What I want to try and understand because I don’t think it’s made clear by that phrase – I could be wrong – did you actually make a distinction during the negotiations between actual rates of pay and the rates of pay in the agreement or did you simply assume that when you were talking about rates of pay it was the rates of pay in the agreement that you were referring to?---We spoke about rates of pay in the agreement.
PN603
So you didn’t make a distinction between rates of pay in the agreement and actual rates of pay? It’s just that when you were talking rates of pay in your mind you were talking about rates of pay in the agreement?---We used wording – I used words that spoke about rates of pay in the agreement because it is our obligation in terms of the rates of pay that we pay in clause 16.
PN604
So NUW oppose your red circling claim?---Yes.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN605
But presumably they didn’t oppose what you say was negotiated, which was that rates of pay would only be for the rates of pay in the agreement. Now, that seems a bit strange, doesn’t it? To oppose one so strongly and not oppose the other?---It could be anything, it could be strange, it could be that they wanted to get a deal. It could be that Gary had – in my recollection he was doing a massive amount of EBA negotiations. I can’t talk to that. All I can talk to is that we put forward the adjustments, the adjustments related to the rates of pay in the agreement.
PN606
Well, that’s what they’re related to in your opinion but what I’m trying to get at is that opinion of yours was not clearly communicated to Mr Stutz or anyone else in that room except maybe for Mr Tully?---Well, I have a very different opinion of that.
PN607
You refer at paragraph 17 to another enterprise agreement. I could call it the Officeworks Agreement. How did you find that agreement or get your hands on that agreement?---Whenever we undertake a renegotiation of agreements we look at what others are doing and in particular we tend to look at our old brothers and sisters from the old Coles Myer group because the agreements have been so similar and the individuals who I used to work with have at times worked for those agreements. So I became aware of that through my association with my Coles Myer days. We also look at other agreements as part of any building or understanding about what’s occurring at other sites et cetera. So I would suggest that would be quite commonplace to do that and I suspect the NUW also looks at what is achieved in other sites and clauses and - - -
PN608
You looked at a number of agreements prior to 2010, so this Officeworks is one of them?---Yes.
PN609
And would it be fair to say that a whole range of different wage clauses are in those agreements? They’re all in different content?---Correct.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN610
And some may refer to red circling or not red circling and wage rates being applied to all wages and some probably don’t. That’s right, isn’t it?---I’m sure there’s a whole array of different clauses and representation of clauses in different agreements.
PN611
Who decided in August last year to red circle the wage rates of the relevant employees?---I think it was a combined decision on the back of the circumstances which occurred in the organisation where there were 100 redundancies which occurred. We had made two profit downgrades for the year. The question was asked and it really was from our general manager of supply chain with regards to was there an opportunity with regards to costs savings at the site. We knew that we could act on this clause if we wanted to which we’ve been relying upon our long-held view that we could have if circumstances warranted it and in light of that I say we made the decision. I’m happy to put my hand up and say I made the decision. Equally, I think, the general manager of supply chain would say he made the decision and I suspect Mr Tully would say he made the decision. So we all had that combined view.
PN612
But when things are going well for the business do you still look for costs savings?---We do look for costs savings but we also, if things are going well whatever the definition of “going well” is because shareholders always want more and there are always costs constraints in retail – if we can avoid it we will.
PN613
Would it be a good business decision then to red circle employees’ wages, I don’t know, in 2007, 2005 even earlier, wouldn’t it?---It could have been but we didn’t see the need. The circumstances of 2012 were unique in a sense that we had – and actually if I can talk to earlier times we were owned by private equity. We were in the turnaround phase of the business and the business was trying to invest in supply chain. We were making modifications at the site with regards to invest with new equipment, the sortation machine, et cetera. So it wasn’t that we thought that there was an opportunity to take costs out of the business at that time. In 2012 we had been publicly listed, the value of our shares had not been where we thought it was going to be, the two profit downgrades occurred, there was a general requirement across the organisation to undertake costs savings, particularly in the light of you know 100 people left the business in that July, August.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN614
Got made redundant?---Got made redundant. To not act would have been in complete contradiction to everything else that had occurred.
PN615
Yes, if I can just ask you about another part of your statement. You talk about in paragraph 9 your recollection that the respondent or the company deliberately sought to change the language in the wage clause after 2001. So I just want to understand how you have that recollection because your statement says you were employed by Myer in 2006. So how do you have a recollection of something that happened after 2001 and presumably what you mean there is before 2003, I assume?---No, it relates to my time when I was part of the Coles Myer employee relations group, where how the function worked was there were employee relations specialists aligned to each of the different businesses. My recollection is that at the time there was a lady by the name Judy Barnesby who had been involved with what was then called the Doherty’s Road site and there had been discussions about the compounding nature of the adjustments occurring based upon rates of pay of individuals. So people who were earning considerably more received adjustments that were – the gap just kept getting greater and it was compounding the gap between individuals who were no longer performing duties which they’d undertaken many, many years ago but hadn’t for a very long time working alongside individuals performing basically the same duties. And my recollection is sitting in at Tooronga hearing these conversations. We did share that information across the group.
PN616
So did Ms Barnesby report to you in her capacity as - - -?---No, I reported to her.
PN617
Okay, so you say you had these conversations at Tooronga which is where the office was, I’m assuming?---Yes.
PN618
You had these discussions over a cup of tea or over a hot dog or were they in a formal meeting where you or Ms Barnesby were discussing what was negotiated in the 2003 agreement?---We would have regular meetings scheduled amongst the group where people would give updates about what was occurring at negotiations and my recollection is - - -
**** LOUISE TEBBUTT XXN MR MUJKIC
PN619
Negotiations generally across the whole group?---Correct. It was a very standard and usual practice, one that I applied with my own team and we would get together to talk about the activities occurring across different - - -
PN620
So in paragraph 9 when you referred to the fact of compounding wage increases, you’re referring there to that effect across the Coles Myer group as it were?---No, I’m talking about what was then the Doherty’s Road Agreement.
PN621
What relationship or what responsibility did you have to the Doherty’s Road site? Commissioner, so that when we say the Doherty’s Road site, that’s the location of the warehouse that’s covered by the agreement.
PN622
THE COMMISSIONER: Yes, I understand.
PN623
MR MUJKIC: What role or responsibility did you have over the Doherty’s Road site at 2011 or thereabouts?---I didn’t have any and I don’t believe I’m overstating that. I’m talking about in the context of conversations with what was my then line manager talking about work that she was undertaking.
PN624
So you remember clearly your line manager 10, 12 years ago told you about an enterprise agreement that you had nothing to do with at a site you had nothing to do with, but that she was seeking to deal with compounding wages?---I think you are oversimplifying the dynamic of what occurs in the workplace and the sharing of information between line managers and their direct reports. I remember those conversations because it was one of those experiences where there was a general level of concern about how is it that the gap in the parity of wages was continuing to occur and it was something that I wanted to – I was a relatively young practitioner at the time. I was learning from Judy thinking, “I don’t want to have this experience, or if I do, remembering that the way in which our work was structured the businesses we worked for were clients and we were trying to get the best outcome for our clients or our customers, being the brands.” So I understand why you would challenge my recollection of that. I could tell you a conversation 20 years ago that related to how staff abused discount cards and they are key learnings in your career that you tick off and say, “I’ve got it. I’ve got to remember that,” and that was one of those for me.
**** LOUISE TEBBUTT XXN MR MUJKIC
PN625
Do you know if Ms Barnesby was directly involved in negotiations post 2001 at Doherty’s Road?---I think she was.
PN626
You think she was?---I think she was.
PN627
How sure are you?---As unsatisfactory as it is, all I can say is I think she was. I am relatively certain but not 100 percent.
PN628
Is Ms Barnesby still employed by either Myer or a related entity?---No she isn’t, she’s not.
PN629
If I can take you to a part in your statement at paragraph 18 where you refer to the NUW log of claims and you’ve taken a part of the log of claims within your statement. It’s the claim that relates to wage increases and it says that,
PN630
The agreement includes a wage increase of 6 percent for each year of the agreement.
PN631
Now, you say that that clearly that that language reflects your understanding which was that only wage rates in the agreement were to be increased. I don’t understand how the language in log of claims reflects that. So do you want to explain that for me?---If we had agreed to that log of claims of a 6 percent adjustment, I would have expected in the wages table in clause 16 that the rate of pay would have changed by 6 percent in that table.
PN632
No, sorry, I’m not talking about the figure. Paragraph 18 there says,
PN633
It’s my clear recollection that discussions during negotiations regarding any percentage increases were in relation to the rates in the agreement
PN634
**** LOUISE TEBBUTT XXN MR MUJKIC
?---Yes.
PN635
And you say that’s reflected in the log of claims. So if I read that claim that to me simply says that we want a 6 percent wage increase each year?---Yes.
PN636
It doesn’t specify actual rates of pay and it doesn’t specify agreement rates of pay, isn’t that right?---When I read that clause that to me, I interpret that in a way that says a 6 percent adjustment would be reflected in changes to the rates of pay in the agreement.
PN637
Okay, no further questions, Commissioner, thank you.
PN638
MR PROIETTO: No questions, Commissioner.
PN639
THE COMMISSIONER: I’ll just take you back to the 2001 change that Ms Barnesby was involved in, Ms Tebbutt?---Yes.
PN640
And your evidence is that you were concerned about the widening disparity?
---H’mm.
PN641
Those are the words you used, you’ll correct me if I misrepresent what you’ve said. That occurred at 2001. So you were
concerned about that at that time?
---We were aware – yes, correct.
PN642
And that was the reason for seeking the change in the wording of the wages clause at that time, is that right?---My recollection is that that is correct.
PN643
What happened to that problem between 2001 and 2012?---We had relied upon and in our view that we could exercise it, we saw in 2006 when the business was sold we didn’t see – our view was that we didn’t want to, is that we would continue with the practice at the site. In 2012 after two profit downgrades - - -
**** LOUISE TEBBUTT XXN MR MUJKIC
PN644
The question is what happened with that problem, you identified as the problem, that’s your evidence?---H’mm.
PN645
I’m interested in what happened to that problem over that decade?---It continued to grow.
PN646
It got worse?---Correct.
PN647
Yes, and were there further discussions about that problem amongst your HR team?---From time to time. The reality is for us, in terms of the attention of our team, is the Altona site would generally get a very small amount of our time and attention because it is directed towards the majority of our business. So it may get discussed but it would be very infrequent.
PN648
Anything arising from that?
MR PROIETTO: Just one question, I suppose.
<RE-EXAMINATION BY MR PROIETTO [2.42PM]
PN650
MR PROIETTO: Ms Tebbutt, that change that you talk about from the 2001 agreement to what then became the 2003 agreement, was the change at the time about actually affecting the change or having the ability to do so?---It was about having the ability and when we had that ability our view has been very longstanding that we’ve had that.
PN651
No other questions.
THE COMMISSIONER: Thanks, Ms Tebbutt, you can step down.
<THE WITNESSES WITHDREW [2.42PM]
PN653
THE COMMISSIONER: We’re all done on the evidence?
PN654
MR PROIETTO: That is the evidence of the respondent, yes, thank you, Commissioner.
PN655
THE COMMISSIONER: All right, are we ready to proceed?
PN656
MR MUJKIC: I am, Commissioner, yes, if the commission is.
PN657
THE COMMISSIONER: I am. I’m not the one on my feet though.
PN658
MR MUJKIC: We’ll consider how to interpret the agreement. I think we’ve had a couple of witnesses have a go at interpreting the 2010 agreement so it’s our turn. I think we should start – just passed to my friend some copies of some cases that I’ll refer to, the same as in the bundle that was passed up this morning.
PN659
THE COMMISSIONER: Just before you start - - -
PN660
MR MUJKIC: Yes.
PN661
THE COMMISSIONER: - - -what do you propose to do with the material that was sought and was the subject of argument on the threshold today, which I haven’t seen?
PN662
MR MUJKIC: If the commission would like to see the material I’m more than happy to pass it up. I don’t think it’s necessary that we mark it and I don’t propose to tender it as evidence.
PN663
THE COMMISSIONER: You don’t?
PN664
MR MUJKIC: No.
PN665
THE COMMISSIONER: Okay.
PN666
MR PROIETTO: I have no objection to the commission seeing it. I mean it’s being produced now. It was the subject of reasonably detailed submissions for 45 minutes this morning. I’ve provided them to my learned friend. I don’t know whether he intends to rely on it. He hasn’t adduced it in evidence.
PN667
THE COMMISSIONER: Yes.
PN668
MR PROIETTO: I suppose you might draw an inference from that, you might not. We haven’t led it either.
PN669
THE COMMISSIONER: It’s a matter for him as to whether he wants to adduce it. If you don’t want to adduce it I don’t want to see it.
PN670
MR MUJKIC: No, there’s no need.
PN671
THE COMMISSIONER: Right, okay, very well.
PN672
MR MUJKIC: So I was going to start with the fundamental point when it comes to interpreting an enterprise agreement, that’s to interpret it in its context. So I just want to refer quickly to a couple of passages in the Amcor decision, the High Court decision in Amcor.
PN673
THE COMMISSIONER: Yes.
PN674
MR MUJKIC: And I’m sure the Commissioner is familiar with the decision but I’ll be quick. So firstly, in the second paragraph of the judgment of Gleeson CJ and McHugh J on page 246 of the report, the first sentence in the second paragraph, “The resolution of the issue” - in Amcor the court is considering a particular term that provides for redundancy entitlement and the question was whether in the particular circumstances of the case employees covered by that agreement were entitled to a redundancy. So,
PN675
The resolution of the issue turns upon the language of the particular agreement understood in the light of its industrial context and purpose and the nature of the particular reorganisation
PN676
- the reorganisation of the business in that case. And Kirby J makes a similar point at pages 270 to 271.
PN677
THE COMMISSIONER: Sorry, just before you go on - - -
PN678
MR MUJKIC: Yes.
PN679
THE COMMISSIONER: - - -so where are you referring me to on page 246?
PN680
MR MUJKIC: So 246, the first sentence in the second paragraph there of the judgment, Gleeson CJ and McHugh J.
PN681
THE COMMISSIONER: Thank you.
PN682
MR MUJKIC: Simply for the point that we need to consider - - -
PN683
THE COMMISSIONER: Context and purpose.
PN684
MR MUJKIC: - - -context and purpose, yes. Then Kirby J makes a similar point although he reflects upon it in a little bit more detail and this is at page 270 going onto to 271 of the report, paragraph 96 and his Honour says,
PN685
The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to clause 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the agreement. Approaching the interpretation of the clause in that way accords to the proper way adopted by this court of interpreting industrial instruments and especially certified agreements.
PN686
So I refer to those two passages just for the fundamental and simple point that we have to consider context and that we should in the words of Kirby J “strive for a sensible outcome.”
PN687
THE COMMISSIONER: Yes.
PN688
MR MUJKIC: Now, when it comes to context we refer to our written submissions at paragraph 8 and we say the relevant context is this. Firstly, that industrial relations and negotiations for enterprise agreements often involve negotiations for annual wage increases. An annual wage increase, in most but not all cases, is the key factor of the outcome of negotiations and we simply assert that. But we say that’s a relevant consideration in context. So when the parties negotiated the 2010 agreement the wages outcome for employees covered by the agreement would have been the key consideration in that negotiation.
PN689
Secondly, we say that the actual rates of pay of a substantial number of employees covered by the 2010 agreement, so it’s 13 out of I think Mr Tully’s evidence was 51, 13 out of 51, the actual rates of pay of those employees are for a number of different reasons higher than the rates of pay specified in the wage table in clause 16 of the 2010 agreement and the similar clauses in predecessor agreements. We say this has been the industrial reality for a long time and in Mr Emery’s case since 1995. We say these facts were known by the respondent to be the case when the 2010 agreement was negotiated and in fact for the last six enterprise agreements employees on rates of pay that are higher than the numbers specified in the agreement have been receiving annual wage increases. That evidence is not in dispute.
PN690
We also say that the 2010 agreement is virtually identical in content to its predecessor, the 2007 agreement. Now, there are some changes to – obviously wage rates have been updated. There were also clauses at part 8 of the agreement. I suspect that those were what Mr Stutz referred to earlier as legislative changes so they were clauses that would have not been allowed to have been in the 2007 agreement because they would have been deemed unlawful under the previous Act. But apart from that the content is as far as I can tell if not identical then virtually identical and that’s a relevant factor to consider. Clause 16 itself has been identical in content save for the date and wage figures since the 2003 agreement and during that entire period all employees have always received wage increases pursuant to the clause on the actual rates of pay.
PN691
I’d like to refer to the GrainCorp decision, NUW v GrainCorp if I can. That’s in the bundle there, Commissioner. The situation in GrainCorp was this. There was a clause in that agreement that referred to a manning level of 39 employees and the relevant clause is at paragraphs 10 and 11 of the decision of Ives DP at pages 137 and 138. I don’t propose to consider that clause in detail but that was a clause that provided for a particular manning level. The company disputed it. In fact it was required to employ 39 full-time employees. The union said, “Yes, they were.” And the relevant part of the decision, paragraph 49 where the Deputy President emphasises the importance of the fact that the agreement that was considered in that case was a virtual rollover or virtually identical to the agreement before it. So paragraph 49 on page 146 the Deputy President says,
PN692
I do consider what happened prior to the making of the 2001 agreement to be most pertinent particularly in the circumstances where the eventual 2001 agreement was a rollover of the previous 1998 agreement.
PN693
And what we have in our set of circumstances, Commissioner, is we have 2007 agreement. During the life of that agreement employees received wage increases on their rates, on the actual rates of pay.
PN694
THE COMMISSIONER: Yes.
PN695
MR MUJKIC: That agreement is then rolled over in Mr Stutz’ words into the 2010 agreement. During the life of the 1998 agreement in the GrainCorp case the employer acted as if it was bound by the relevant manning clause. It then sought to introduce a claim during the 2001 negotiations that meant it would not be required to always employ 39 full-time employees. That claim was rejected and then during the life of the 2001 agreement the company sought to reduce the manning levels below 39 so in a sense, quite similar circumstances to what we’re considering today.
PN696
That is, we have a clause that may be ambiguous. We have the parties acting as if they had a particular belief in how that clause operated. We then have a claimed change to how that clause operates, that claim is rejected and then we have the employer seeking to effectively do what it sought to do through that claim that was brought during negotiations. And the Deputy President found that in fact the clause in the 2001 agreement did require the employer to employ 39 full-time employees. Now, of course the clause is different to what we’re dealing with today but I raise the decision for a couple of reasons. The factual similarities and also the amount - - -
PN697
THE COMMISSIONER: Did he find that the clause that was in dispute was ambiguous?
PN698
MR MUJKIC: I don’t believe so. I believe he simply relied on the words in the clause to find that the employer was required to employ 39 full-time employees. There may be some obiter about ambiguity.
PN699
THE COMMISSIONER: That’s all right.
PN700
MR MUJKIC: But I don’t think it was necessary for him to rely on ambiguity. His Honour just relied on the terms of the - - -
PN701
THE COMMISSIONER: Yes.
PN702
MR MUJKIC: We also say the other industrial context that’s relevant, that’s subparagraph (v) of paragraph 8 of our submissions and this agreement, the 2010 agreement, it has got a genesis in the 1993 agreement and the relevant clause in the 1993 agreement forms part of our submissions. So the 1993 agreement, the relevant clause is attachment 8 to our submissions. That clause expressly stated that the wage increases referred to in the clause were to be paid on the actual rate of pay and not absorbed into any over-award payments.
PN703
So this is the first enterprise agreement made at the enterprise and that was expressly stated in that clause possibly because a similar phrase is used in the award that would have applied at that time but we don’t know. There’s no evidence about what the parties intended to do but the wording is similar to the relevant award. That clause is then in its basic exact content in 1995 and onwards up until that change that occurs in 2003 where there are no references to how wage increases are to be applied. There’s simply a wage table in the clause.
PN704
Ms Tebbutt’s evidence was that that was an intentional change at the time in 2003 but we say that the evidence today of Ms Tebbutt on that point was highly unreliable. It’s hearsay evidence of a discussion that occurred possibly 12 years ago and so little weight should be put on it. We’ve got no reliable evidence of what occurred in the 2003 negotiations. What we have is the industrial context that is undisputed and that is that throughout this time, 1993 onwards, the clause changes in form but the employees keep receiving wage increases every year on their actual rate of pay for 19 or so years, during the life of, I think seven or eight enterprise agreements.
PN705
So three key factual matters that go to context, we say: one is that the rates of pay for a number of employees is higher than the rates of pay specified in the agreement; secondly, the fact that the agreement is virtually identical to its predecessor and also at least is identical to the agreement before that and thirdly, that the history of the wages clause in the enterprise agreements that have preceded the 2010 agreement strictly are going to the fact that employees were to receive wage increases of actual rates of pay and there being no evidence at any time that the parties intended to depart from that.
PN706
Yes, the words were taken out of the agreement but as Mr Tully said he sought in (indistinct) to simplify the agreement. We can guess that perhaps the agreements were simplified at some stage and these words were taken out. We’ve got no evidence about that. We don’t know why it was taken out but the parties conducted themselves, continued to conduct themselves in the same way. So my submission is there was never any intention to change the effect of that clause even though the wording was changed over the years.
PN707
If we move on from context we also say that in interpreting the clause the commission needs to take a practical and not a strict or pedantic approach and that phrase is from the decision of Madgwick J in Kucks v CSR. I might go briefly – I might not – I think it’s - - -
PN708
THE COMMISSIONER: No, it’s worthwhile.
PN709
MR MUJKIC: It’s a good passage. I think it’s worth looking at again and again. So it’s on page 184 of the decision under the subheading “Legal Principles” where Madgwick J says,
PN710
It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer or framers of the document, bearing in mind that such framer or framers were likely of a practical bent of mind. They may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.
PN711
Thus for example it is justifiable to read the award to give effect to its evident purposes having regard to such context despite mere inconsistencies or infelicities of expression which might tender some other reading and meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these expressions which have been held in the case of other instruments that have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
PN712
If I could stop there for one moment, Commissioner. This is part of giving effect to an agreement’s purposes. Well, we say the purpose of this agreement, one of its purposes is to provide for annual wage increases for all employees covered by it. That was the purpose of its predecessor and its predecessor. It was a rollover agreement. The only changes were made were some representational rights and union rights and the wage increase. That was the purpose of the agreement, to continue with existing terms and conditions of employment and provide for annual wage increases. I’ll come to the second part of the passage and it’s this part of the passage that my friend has placed in submissions of the respondent as I guess are taken out of context, not out of context but one should read the two paragraphs together.
PN713
THE COMMISSIONER: We can all agree on that. They have been both selectively quote them but that’s okay.
PN714
MR MUJKIC: That’s quite possible but I think they need to be read together.
PN715
THE COMMISSIONER: Yes, they do.
PN716
MR MUJKIC: So the point I want to make though is that we need to look at the words in the term but we must also read the term in its context. I’ll read the passage,
PN717
But the task remains one of interpreting the document produced by another or others. The court is not free to give effect to some anteriorly derived notion of what would be fair or just regardless of what had been written into the award. Deciding what an existing award means is a process quite different from deciding that ultimately does what might fairly be put into an award. So for an example ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.
PN718
And what we say, Commissioner, is that if we only look at the words of the clause we’re left in a bit of confusion because the clause doesn’t say a lot. There’s a wage table and there are classifications firstly. So we can read a few things into that. Then the only actual words, if I get to it, so apart from “grade 1” onwards, the only words really are “hourly rate as at first pay period on after.” It doesn’t say things like, “These are the rates specified by this agreement or required to be paid by this agreement.” It doesn’t say, “These are the amendment rates required to be paid by this agreement.” It is simply a table. The words that used to form part of the clause in previous agreements have been taken out over time. The clause has been simplified but the wage table remains.
PN719
So we say that if you look at that, firstly we can’t disregard context. We must look at the context but even if we forget about the context for a second, I don’t think that there’s enough from what I said ordinary or well-understood words in that clause to explain to us what it means. If we start looking at context which is what we should do, the picture becomes even more grey because we start to understand that for a long time employees have received annual wage increases pursuant to this clause or we assume that it was pursuant to that clause.
PN720
THE COMMISSIONER: When you say context, you mean history, don’t you?
PN721
MR MUJKIC: Yes, yes, yes.
PN722
THE COMMISSIONER: Not context?
PN723
MR MUJKIC: Well, the two and one are in effect the same in some circumstances. So when we say employees were paid above agreement rates of pay if we use that phrase - - -
PN724
THE COMMISSIONER: Yes.
PN725
MR MUJKIC: - - -that’s a historical fact.
PN726
THE COMMISSIONER: Yes.
PN727
MR MUJKIC: But at the time of the negotiations of the 2010 agreement that was a - - -
PN728
THE COMMISSIONER: That formed a part of the context.
PN729
MR MUJKIC: That forms part of the context.
PN730
THE COMMISSIONER: I understand.
PN731
MR MUJKIC: The history of previous agreements, that’s relevant just for its historical relevance and therefore it’s part of the context. But primarily the 2007 agreement was being renegotiated. The terms of that agreement must form part of the context. It was that what was renegotiated in 2010. So history and context, I think, can merge.
PN732
THE COMMISSIONER: So you say that clause 16 is ambiguous?
PN733
MR MUJKIC: Yes.
PN734
THE COMMISSIONER: Yes.
PN735
MR MUJKIC: But regardless of that ambiguity or not, regardless of whether there’s an ambiguity we have to look at the context because that’s how we interpret enterprise agreements and I think - - -
PN736
THE COMMISSIONER: I still want to hear more from you on why I should consider that clause 16 is ambiguous in its terms and why I shouldn’t have regard to that second paragraph in Kucks where I should be according the ordinary or well-understood words their ordinary or usual meaning.
PN737
MR MUJKIC: Yes. In the respondent’s submissions they say that enterprise agreements are designed to provide minimum rates of pay.
PN738
THE COMMISSIONER: Yes.
PN739
MR MUJKIC: I disagree with that. Awards are designed to provide minimum rates of pay. What enterprise agreements are designed to do is provide the terms and conditions as agreed by employees and the employer at the particular enterprise. That’s what enterprise agreements are designed to do. Often, if not in all cases, that includes annual wage increases to particular rates of pay. So we can’t exclude that context there. We just can’t exclude that.
PN740
So when we look at this wage table the first thing we see are numbers that increase over time but we’ve got no capacity to understand why they increase or by what figure. So already we’re asking ourselves what the meaning of the clause is and why the numbers are increasing. Secondly, we also say that enterprise agreements when it comes to wages often do two things: provide for a rate of pay that an employer cannot go below. So I don’t mean that in a strict legal sense. In a strict legal sense they always provide for a rate of pay that an employer cannot fall below. But in a practical sense they provide for two things: a rate of pay that an employer cannot go below and that they pay employees at that enterprise or – sorry the rate of pay the employer cannot fall below but might go above at that enterprise and that’s understood to be the case by the parties or a rate of pay that is a rate of pay that applies to everyone at that enterprise.
PN741
When we look at this clause we don’t know which of the two applies. There’s nothing that tells us these are the rates of pay that apply to each classification covered by this agreement. I can see that there’s grade 1, grade 2, grade 3, grade 4 et cetera and then there are numbers. But there’s not a sentence that clearly says the wage figures below are the wages applicable to the classifications specified in this agreement. So my view is that there are two possibilities. The parties say that these are minimum rates and we can go above them or the parties say that these are the rates of pay that must be paid.
PN742
Once we start looking at context, and I say that we have to give ordinary words their ordinary meaning but we don’t disregard context. When we start looking at context I say that the parties have considered those two possibilities, that is the rates of pay are minimum rates but we might pay above them or they are the rates of pay and have agreed that they are the minimum rates of pay, we can go above them but that everyone will receive the agreed wage increases that have been negotiated. We say that’s what the context tells us.
PN743
THE COMMISSIONER: And you say there’s enough ambiguity in this clause for me to have need to rely on that context?
PN744
MR MUJKIC: Well, my primary submission, Commissioner, is you must consider the context regardless of ambiguity. We cannot disregard context when we interpret the terms of an enterprise agreement. That’s what Amcor says and that’s what Madgwick J says. So there are two points and we shouldn’t exclude either one. I concede that ordinary words must be given their ordinary meaning but I also say that you must consider the context.
PN745
THE COMMISSIONER: Yes.
PN746
MR MUJKIC: That’s the first point. So there’s no need to look at ambiguity. You must consider the context and when you start considering the context in this case, I say there’s an ambiguity on the face of it but if you consider the context there’s certainly an ambiguity. In the respondent’s submissions we have this example of a reasonable person picking up the agreement and looking at the clause and then what would that reasonable person say? Well, I’ve never heard of such a test when interpreting an enterprise agreement. The commission is not a reasonable person. The commission has to consider the terms in their context and I think that’s the fundamental point.
PN747
What I might do, I think it’s on this point, Commissioner, so recently a full bench of Fair Work Australia, or relatively recently, 2010, the test for interpreting the terms of an enterprise agreement.
PN748
THE COMMISSIONER: Sorry - - -
PN749
MR MUJKIC: Yes, it’s AWU, WA Branch v Co-operative Bulk Handling Ltd. And I’ll come back to this decision because it’s directly on point about the extrinsic materials argument.
PN750
THE COMMISSIONER: Yes.
PN751
MR MUJKIC: I just wish to go to paragraph 13 of the decision, where the full bench is referring to a previous decision and my notes escape me at this point which is unfortunate.
PN752
THE COMMISSIONER: In paragraph 13 they’re referring to shortened purpose.
PN753
MR MUJKIC: So paragraph 13 of this judgment which is different to the certain paragraphs that have been taken from a judgment of – so paragraph 13 is on page 3 and then there’s an excerpt from a judgment of Lawler VP that goes for a few pages. Then on page 8 is paragraph 13 of the full bench judgment.
PN754
THE COMMISSIONER: Sorry, you’ve lost me now. So we are looking at - - -
PN755
MR MUJKIC: Page 8.
PN756
THE COMMISSIONER: - - - of Cooperative Bulk Handling?
PN757
MR MUJKIC: Yes, in paragraph 13 on page 8.
PN758
THE COMMISSIONER: Right.
PN759
MR MUJKIC: And there’s a reference there to a decision of the Federal Court and Logan J.
PN760
THE COMMISSIONER: Yes.
PN761
MR MUJKIC: The full bench cites this paragraph,
PN762
The starting point must always be the language employed by the parties to an industrial agreement.
PN763
So that’s the starting point.
PN764
THE COMMISSIONER: Yes.
PN765
MR MUJKIC:
PN766
But industrial context and purpose are always relevant when construing that language.
PN767
Always relevant, so don’t just look at the words. We have to consider the context.
PN768
THE COMMISSIONER: Yes.
PN769
MR MUJKIC: That was the point. Now, I’ll come back to this decision in a moment when I consider extrinsic materials because it’s on point as well.
PN770
THE COMMISSIONER: Yes.
PN771
MR MUJKIC: Now, if we accept the respondent’s evidence and their proposed interpretation of the clause it would be this that is the parties agreed that the respondent had the ability to at any time, without notice, red circle the wage rates of employees who were on a rate of pay than that prescribed by the agreement at any time. So that’s what the parties negotiated apparently in 2010, in 2007 and also may I say in 2003 and 2005. And we would say that’s quite fanciful and unlikely that the parties would negotiate a clause that gave one party the ability at any time to change the rates of pay that are payable to employees or at least change the effect of future wage increases on those rates of pay. That’s quite fanciful that the parties directly negotiated that without, may I say, without discussing it and considering it in detail.
PN772
If I go to some of the evidence very briefly, the evidence of Mr Stutz was that he expressly stated that any wage increases were to be paid on the actual rates of pay of all employees. That’s his evidence and I appreciate that that conflicts with the evidence of Ms Tebbutt but in our mind Mr Stutz was a very reliable witness. That was his evidence. He expressly stated that and that was the position of the NUW. He also stated he does not recall or did not recall any distinction made between actual rates of pay and agreement rates of pay and he said if such a distinction was ever made – these are his words – “it would have got my back up.” And we know when the red circling claim was put on the table his back got up because he used that phrase, “over my dead, cold, fat body” whatever it was. So he got his back up there. But if we’re to accept Ms Tebbutt’s evidence he simply accepted that the agreed clause would allow the employer to red circle wages at any point in time. I just find that very difficult, very difficult to believe.
PN773
I’ll turn now to the extrinsic materials point but I might talk about the material first and then explain why we say it’s admissible.
PN774
THE COMMISSIONER: Yes.
PN775
MR MUJKIC: I made a point this morning, Commissioner, that we say there’s enough industrial context here to determine the matter without having regard to the extrinsic material but the extrinsic material is helpful because if there was any doubt of what we say I think that puts it – I think the extrinsic material puts it to bed. And when I’m referring to extrinsic material it’s the log of claims presented by the employer in the negotiations in 2010 and that log of claims forms a part of the statement of Mr Emery. It’s attachment 2 to Mr Emery’s statement.
PN776
One thing that’s important is when we’re considering the intention of the parties, so in interpreting the agreement we have to consider what the parties objectively intended not subjectively and there’s a reference to that in the respondent’s submissions and we agree. There’s a fair bit of evidence, I think, today about what a particular person thought was negotiated but we say the log of claims, as a document, goes to objective – and what happened to that log of claims and whether it was agreed to or not goes to what the parties objectively sought to include in the agreement. There’s a claim there for a sunsetting of above-agreement payments and that claim is rejected. The agreement then is effectively rolled over. So from that we have to assume that the parties agreed or at least the respondents believed they did not have the capacity to do that. It sought to introduce that, it failed and the agreement was rolled over. Therefore what used to occur prevails.
PN777
Similar to the GrainCorp situation and if I find it I might just go to a passage again in that decision. So it’s the NUW v GrainCorp, Ives DP at paragraph 58. The Deputy President is considering the clause so we’re talking about the manning level here, the 39 full-time employees requirement and the fact that the employer in this case sought to change that and had a claim to alter that clause during negotiations preceding the agreement that was made to which the dispute relates, similar to here. And the Deputy President says at paragraph 58 on page 148,
PN778
I noted with interest that a clause in those terms was sought by GrainCorp in the process of negotiating a new agreement in 2001. When GrainCorp, its employees and the NUW agreed to rollover the 1998 agreement the parties effectively resiled from those claims made in negotiations and agreed to the terms previously in existence under the 1998 agreement except for pay rates which were increased.
PN779
That’s precisely what occurred in this case, Commissioner.
PN780
I do not accept the evidence of Mr Scully and Mr McConaughey and their two company witnesses, that they had either not considered the meaning and effect of clause 2 of appendix B which is obviously the clause that’s in dispute at the time of negotiating the 2001 rollover or that they had formed a view that the clause only applied to reductions in staff as a result of workplace flexibility.
PN781
And what that means is that they formed the view that they could do what they sought to do with the claim anyway and the Deputy President says that they have not formed that view. Then there’s a quote from Mr Lyons, the NUW advocate,
PN782
It beggars belief that the company would seek removal of a provision which they didn’t think meant anything which they didn’t think added anything.
PN783
And I could make the same submission and I will. It beggars belief that the respondents believed it had the ability to do something yet then included a claim on its log of claims to achieve just that. I just don’t understand that. It’s totally nonsensical.
PN784
When we look at the terms of the extrinsic materials, so claim 5, we say there’s no ambiguity about it. That’s important. So we’re not trying to introduce extrinsic material that’s itself unhelpful. We say this is clearly helpful and unambiguous and there’s no dispute about the claim being brought and introduced in the context in which it was introduced. So that’s also important to note. So we say it wasn’t agreed by the parties and why we’re here today arguing about precisely that point.
PN785
If we go now to the issue of whether or not we’re allowed to consider the material, the respondent’s submissions say we’re not or we are only if there’s an ambiguity in the clause. And we say well, that’s not right. We can look at the extrinsic material in any case and we rely on a number of decisions so firstly GrainCorp, Commissioner, and I think the relevant part is in the submissions but it’s at page 145. The Deputy President summarises what his Honour refers to as the principles of interpretation. It’s subparagraph (e) in paragraph 47,
PN786
The court or tribunal’s recourse to extrinsic materials in the interpretation of industrial instruments is not dependent upon the existence of ambiguity in the industrial instrument.
PN787
Not dependent, so different to the test in relation to contracts that we have High Court authority for and the Deputy President relies on a decision of Marshall J and that decision is in the bundle. So if we go to that it’s the ASU v Treasurer of the Commonwealth decision, Marshall J. And his Honour considers extrinsic material and whether or not it’s admissible on page 346 and 347 and in the first part after the subheading there he says there are divergent lines of authority whether or not we’re allowed to recourse to extrinsic material. There’s what his Honour calls a cautious approach and then there’s what his Honour calls the more generous and recent approach and his Honour refers to the decision of Short v FW Hercus of the Federal Court.
PN788
Then I want to turn to page 347 if I can to what his Honour says after he considers the two competing views. And on 347 his Honour says,
PN789
As is evident from my judgment in Barlow v Qantas where I was sitting as a member of a full court of the Industrial Relations Court of Australia I prefer Burchett J’s approach to award interpretation -
PN790
- and that’s the approach that’s referred to as the more general and recent approach.
PN791
There is no sound reason why recourse to probative extrinsic material by the court should be conditional on identification of an ambiguity. Further there is no sound reason why use of the extrinsic material should be limited to identifying the mischief sought to be addressed by the award, as distinct from construing the meaning of the award itself. But the debate is rather academic. I regard myself bound by the approach of Burchett J in Short v Hercus.
PN792
And that’s the approach that his Honour favours anyway and he says it’s binding.
PN793
THE COMMISSIONER: Yes.
PN794
MR MUJKIC: So his Honour says he favours it but it’s a binding approach.
PN795
THE COMMISSIONER: Yes.
PN796
MR MUJKIC: Similarly, the other relevant authorities, Watson v ACT Department of Disability, Housing and Community Services, a decision of Lawler VP of this commission, pages 401, 402, Commissioner, of the decision of the Vice President. Again, there’s a consideration prior to this of all the different authorities. At paragraph 15 the Vice President says,
PN797
In summary, the general principles governing the construction of contracts laid down by the High Court in the Codelfa Construction Pty Ltd v State Rail Authority of New South Wales case - - -
PN798
THE COMMISSIONER: I don’t - - -
PN799
MR MUJKIC: Sorry.
PN800
THE COMMISSIONER: Where are you?
PN801
MR MUJKIC: Page 401.
PN802
THE COMMISSIONER: 401.
PN803
MR MUJKIC: Paragraph 15 down the bottom.
PN804
THE COMMISSIONER: Thank you very much.
PN805
MR MUJKIC:
PN806
In summary, the general principles governing of construction of contracts in that case apply to the construction of industrial agreements. However, consistent with the approach in Kucks and Short v FW Hercus Pty Ltd industrial agreements must always be construed in context -
PN807
- that’s the point I’ve been making, Commissioner -
PN808
- the context of particular provisions within the agreement as a whole in the context in which the agreement was made including any relevant statutory or historical context, extrinsic evidence as to the context in which the agreement was made including the statutory and historical context will be admissible to demonstrate the existence of ambiguity and/or to resolve ambiguity.
PN809
Then I turn finally to this full bench decision that I referred to just before, Commissioner, the Bulk Handling one. And this is directly on point because the member of Fair Work Australia at first instance - - -
PN810
THE COMMISSIONER: Sorry, where are we now?
PN811
MR MUJKIC: Sorry, so Bulk Handling, AWU, WA Branch v Cooperative Bulk Handling Ltd, Fair Work Australia, full bench of 2010. So it was an appeal from a decision of Commissioner Williams.
PN812
THE COMMISSIONER: Yes.
PN813
MR MUJKIC: The dispute in this case was again about a particular clause in an enterprise agreement that – and the clause is in the judgment. The clause is on page 8 at paragraph 15. It talks about what functions employees are required to do. The employer sought to require employees to perform particular functions known as weighbridge duties. The union said that they were not required under the terms of clause 8 to perform those duties. Commissioner Williams made a finding that extrinsic material was not admissible when that clause was to be interpreted. And the full bench found otherwise. In paragraph 14 on page 8 the full bench says, and it’s a full bench of Kaufman SDP, Richards SDP and Commissioner Roberts, they say that the extract from Watson – so that’s the decision of Lawler VP
PN814
and the approach of Logan J informed the manner in which we approached the test of construing the agreement and leads to the conclusion that regard must be had to extrinsic material in order that the meaning of the clause in question may properly be understood.
PN815
THE COMMISSIONER: Sorry, what paragraph is that?
PN816
MR MUJKIC: Sorry, paragraph 14 on page 8.
PN817
THE COMMISSIONER: 8.
PN818
MR MUJKIC: And again we have this issue of the - - -
PN819
THE COMMISSIONER: We’ve been there before.
PN820
MR MUJKIC: Yes, yes, so paragraph 14 at page 8. The extrinsic material that the full bench regards in this case again is material relating to the negotiations because of this issue of weighbridge duties was expressly considered in the negotiations preceding the agreement as well as the predecessor agreement and that details in paragraph 17. There’s also a consideration of the custom and practice and the fact that the relevant employees were not required to perform these weighbridge duties historically speaking so all that is the context and the extrinsic material there.
PN821
So we say there’s clear authority that the tribunal can have regard to extrinsic material without the need for an ambiguity. I’ll just deal briefly with, because we should, with the authorities in the respondent’s submissions about this issue and that’s why those authorities are in the bundle as well just to make this easier. So the first one is City of Wanneroo v Michael Lindsay Holmes, the decision of French J as he then was. His Honour says at paragraph 43 - - -
PN822
THE COMMISSIONER: Just before you go on - - -
PN823
MR MUJKIC: Yes.
PN824
THE COMMISSIONER: - - -just so I understand your approach - - -
PN825
MR MUJKIC: Yes.
PN826
THE COMMISSIONER: - - - you are taking on these authorities. If you look at paragraph 14 of the decision you just took me too FWA 3481 - - -
PN827
MR MUJKIC: Yes, yes.
PN828
THE COMMISSIONER: - - -and the bench there at paragraph 14 refers to the extract from Watson and the approach of Logan including that regard has to be had to extrinsic material in (indistinct) clause the question may probably be understood. Now, in referencing Watson, I think the key paragraph there is, if you go to paragraph 15 which is above paragraph 14 because it’s from the quote from Watson - - -
PN829
MR MUJKIC: Yes.
PN830
THE COMMISSIONER: - - -that last sentence says,
PN831
Extrinsic evidence as to the context in which the agreement was made including the statutory and historical context will be admissible to demonstrate the existence of ambiguity and/or to resolve ambiguity.
PN832
So do I understand your position to be that the extrinsic material is an aide in demonstrating the existence of ambiguity or resolving the ambiguity or both?
PN833
MR MUJKIC: Or both? I’d like to resolve the ambiguity if I say there is one. But just prior to that I make this point that Marshall J doesn’t take that narrow an approach. So Marshall J doesn’t say we can only have recourse to extrinsic materials to see if there’s an ambiguity or not, or sorry, what are the words of the Vice President, “to demonstrate the existence of ambiguity.” So Marshall J doesn’t say we need to use it to demonstrate the existence of an ambiguity. His Honour simply says we should have regard to it and that’s in the ASU case.
PN834
THE COMMISSIONER: Yes, but he’s relying on Burchett J in Short v Hercus so he’s bound then by that, isn’t he?
PN835
MR MUJKIC: Yes, yes.
PN836
THE COMMISSIONER: He’s not going any further than – he’s not going any further than Burchett J?
PN837
MR MUJKIC: No, but I think the point is in a way academic because the point is we can have recourse to the extrinsic material. We don’t know if there’s going to be an ambiguity unless we look at the material. Once we look at the material there’s either an ambiguity or there isn’t. If there is, the material will hopefully assist us to resolve the ambiguity and we say in this case it does. If we look at the extrinsic material and we still say, “Well, I can’t see any other reading except for in this case the reading proposed by the respondent, well, the extrinsic material is there but it doesn’t assist the tribunal in any way.” Does that answer?
PN838
THE COMMISSIONER: No.
PN839
MR MUJKIC: Answer the question? No?
PN840
THE COMMISSIONER: The question is - - -
PN841
MR MUJKIC: Yes.
PN842
THE COMMISSIONER: - - -is your position that the – a great deal turns on clause 16.
PN843
MR MUJKIC: Yes.
PN844
THE COMMISSIONER: Clause 16 on the view of the respondent is, “I read it. It’s clear. It says ‘Here is your hourly rate. You’re a grade 1 you get this rate and at a particular date you’ll get another rate.’” Your position is that it’s not clear. That it’s ambiguous.
PN845
MR MUJKIC: Yes, my position is it could mean two things and that is, these are the rates of pay that apply to everyone - - -
PN846
THE COMMISSIONER: Yes.
PN847
MR MUJKIC: - - -or these are minimum rates of pay but we understand that other people receive higher rates of pay. In my view both of those possibilities generally imply enterprise agreements across the board. It’s always one of those two options and I think that clause doesn’t give us enough information to decide one or the other. But we then look at context. So even if we don’t accept my submission there, we have to look at the context anyway and I think the context creates the ambiguity first of all because the way the clause has been applied over time and the fact that people are on rates of pay that are higher than those numbers in the clause, suggests that the payers have considered these two options and chosen one but failed to clearly and expressly reflect that in the clause. I think at that stage there is a clear ambiguity. I then say that if there’s ambiguity there we can have extrinsic material anyway.
PN848
But if there is no ambiguity there, we look at the extrinsic material and the log of claims, surely there we have an ambiguity because it’s clear that the parties themselves had a particular interpretation of this clause and it’s a longstanding clause the parties have applied in agreements over time.
PN849
THE COMMISSIONER: All right.
PN850
MR MUJKIC: So if we accept the extrinsic material it’s for the purpose that the Vice President is permissible and it’s for the purpose that the full bench says it’s permissible because once we look at that material even if we don’t think there’s an ambiguity – and I say there is – but if we think there isn’t, well there certainly is now because it’s clear that the parties have a particular interpretation of that clause that isn’t clearly reflected in the clause and that’s the ambiguity and we’re then using that extrinsic material to resolve that ambiguity and we say to take the approach that we say should be taken in relation to that clause.
PN851
THE COMMISSIONER: Okay.
PN852
MR MUJKIC: I’ll deal with the other authorities briefly but the point I make on these authorities is that whenever they refer to extrinsic material it’s referred to in obiter. There’s no binding authority in the cases referred to by the respondent about this point. So that’s my fundamental point. So I’ll go to the passages that are relevant - - -
PN853
THE COMMISSIONER: Yes, okay.
PN854
MR MUJKIC: - - -and I think that will become clear.
PN855
THE COMMISSIONER: Yes.
PN856
MR MUJKIC: So there’s the 1989 decision of French J and when his Honour considers extrinsic material and this is at paragraph 40.
PN857
THE COMMISSIONER: Which decision is this?
PN858
MR MUJKIC: So sorry, the City of Wanneroo v Michael Lindsay Holmes.
PN859
THE COMMISSIONER: Wanneroo.
PN860
MR MUJKIC: Yes, so I believe the copy the tribunal has is the same as mine, so it’s page 20 of 23, paragraph 43. His Honour says,
PN861
Resort to such matters as prefatory statements in negotiations is of dubious assistance - - -
PN862
THE COMMISSIONER: Paragraph 43.
PN863
MR MUJKIC: 43, about halfway through – resort to such matters” – well, it’s halfway through that passage before - - -
PN864
THE COMMISSIONER: Yes, I’m with you, yes.
PN865
MR MUJKIC: Yes, sorry,
PN866
Resort to such matters as prefatory statements in negotiations is of dubious assistance if admissible at all - - -
PN867
- - - and there’s a reference there to Seymour v Stawell Timber Industries. So his Honour doesn’t find that you cannot have regard to this evidence. His Honour is questioning whether it’s admissible but he doesn’t find one way or the other but he doesn’t need to. That’s the point, Commissioner, he doesn’t need to and that’s important.
PN868
THE COMMISSIONER: Yes.
PN869
MR MUJKIC: If we maybe go to Seymour then because that’s the decision that’s referred to there by French J, so Seymour v Stawell Timber Industries Pty Ltd, a decision of the full court of the Federal Court in 1985.
PN870
THE COMMISSIONER: Just give me a moment. In paragraph 33, you’re just taking me to and this is where the tension is in the law on this point.
PN871
MR MUJKIC: Yes.
PN872
THE COMMISSIONER: At the bottom of that page it continues,
PN873
It is of course no part of court’s task to assign a meaning in order that the award may provide what the court thinks is appropriate. Indeed it’s been said a tribunal interpreting an award must attribute to the words used their true meaning even if satisfied that so construed they would not carry out the intention of the award-making authority - - -
PN874
- - - et cetera. What do you say about that?
PN875
MR MUJKIC: All I can say about that passage, Commissioner, is that over time that that view has not been accepted.
PN876
THE COMMISSIONER: Yes.
PN877
MR MUJKIC: Clearly, in Short v Hercus and in Kucks, courts are asking us to look at the intention of the parties and that’s of primary concern. So the Madgwick J passage – the famous passage that’s always used and is used by Kirby J in Amcor refers to considering the intention of the parties, of course objective intention, not subjective - - -
PN878
THE COMMISSIONER: Yes.
PN879
MR MUJKIC: - - -objective intention of the parties. Now, if French J in that paragraph is suggesting that we should not give that primacy then I don’t believe that that’s still the law. I don’t know if that’s necessarily what his Honour was suggesting there. Perhaps there’s an issue of whether the intention that’s referred to is subjective or objective. I’m not sure there but I’d say that, clearly, since then decisions have said you must consider the intention of the parties.
PN880
THE COMMISSIONER: Yes.
PN881
MR MUJKIC: And I don’t think that’s in any doubt. In Seymour and I might just because I’m sure that my friend will talk about this in more detail so I might just flag the relevant sections. But in Seymour there are three judgments, Northrop, Keeley and Gray JJ and they all in part consider this point of whether we can consider extrinsic material but in each case it’s always obiter and we say it’s not binding. So in relation to Northrop J it’s at bottom of page 290 which is the copy that I’ve given there, doesn’t have page numbers, but it’s the second page.
PN882
THE COMMISSIONER: Yes.
PN883
MR MUJKIC: It’s the second page and it’s said there at the end, the last paragraph on the left page, if I can call it that - - -
PN884
THE COMMISSIONER: Yes.
PN885
MR MUJKIC: - - -that’s page 290,
PN886
This matter illustrates the wisdom of the principle of law which prevents reference to negotiations between parties leading to the making of an agreement as an aide to the construction of the agreement.
PN887
So it’s referred to there, this apparent principle, but it’s not used. It’s not strictly binding. It’s used in obiter, we say. Similarly, Keeley J, and this is page 299, but it’s the sixth page on the right-hand side the second paragraph. There, Keeley J makes a similar point.
PN888
THE COMMISSIONER: Where does that start?
PN889
MR MUJKIC: Yes, “If the opinion already expressed, the clause E.35 Part 3 construed in its context merely preserve the operation, is not correct”
PN890
THE COMMISSIONER: No, I still can’t find it. So it’s page one, two - - -
PN891
MR MUJKIC: It’s the sixth page - - -
PN892
THE COMMISSIONER: I’m with you now, sorry go on.
PN893
MR MUJKIC: - - -which is 299 so it’s on the right-hand side and it’s that second paragraph on the page, “if the opinion already expressed.” And it says there,
PN894
In those circumstances all extrinsic evidence cannot be admitted to add or to subtract from its terms. The evidence is admissible of a statement made jointly by both parties at the time of the agreement explaining the meaning of the language used by both parties.
PN895
But again, this is obiter. And there’s an excerpt from a contracts textbook and it’s that part that’s used in the respondent’s submission. So it’s not the part of the judgment but it’s the Chitty on Contracts which we say is of limited value now that there’s clear authority that say we don’t take the same approach to interpreting an industrial instrument as we do to interpreting a contract.
PN896
Now, Gray J, and this will be the easiest way to get to this, this is the third page from the last page and this goes to the point we were talking before about intention too, I think. It’s page 308 which is the left-hand side page down the bottom towards the end, five lines up or so, “if a court is required” – and I think that’s the relevant passage,
PN897
If a court is required to face the task of construing an ambiguous provision in an award and if the - - -
PN898
THE COMMISSIONER: I still can’t – I don’t have any page numbers so - - -
PN899
MR MUJKIC: Yes, no, my apologies.
PN900
THE COMMISSIONER: Are you saying it’s the last - - -
PN901
MR MUJKIC: So it’s not the last page, it’s not the second last, it’s the third last page.
PN902
THE COMMISSIONER: So third last page?
PN903
MR MUJKIC: Yes, sorry, down the bottom of the left-hand page, “if a court is required” it starts.
PN904
THE COMMISSIONER: There’s a big paragraph at the bottom of the page and it’s halfway through that, is it?
PN905
MR MUJKIC: No, no, it’s further down, it’s about five lines from the bottom.
PN906
THE COMMISSIONER: Yes.
PN907
MR MUJKIC: Sorry, “if a court is required” - - -
PN908
THE COMMISSIONER: Yes, I’m with you, yes.
PN909
MR MUJKIC:
PN910
If a court is required to face the task of construing an ambiguous provision in an award if the means exist to resolving that ambiguity by reference to the actual expressed intention either of the arbitrator or of the parties in the case that the consent award is difficult for the court to turn its back on such means I therefore favour the view that resort be had to such means. It will assist in ascertaining in the intention of the maker or the makers of the award in the case of an ambiguity.
PN911
So there’s no clear statement there about extrinsic material. So there are three judgments there of the Federal Court but we don’t say they bind us in a way that means we cannot look at extrinsic materials.
PN912
The other decision referred to in the respondent’s submissions is Oceanic Coal Australia Pty Ltd v Parker and the decision there says at paragraphs 50 and 51, page 13, paragraphs 50 and 51. It’s 51 that’s the relevant one,
PN913
As the above authorities indicate the test of the relevant clause’s primacy in ascertaining its meaning - - -
PN914
- - - and there’s a reference to the clause - - -
PN915
- - - indeed the text of clause 12(b)(i) leaves little room for ambiguity and lends itself well to the simple formula which Oceanic submits is to be applied. Given that that clause can be read without significant ambiguity recourse to extraneous principles are unnecessary in ascertaining its meaning.
PN916
Firstly, I don’t think the court here is saying “We cannot have regard to extrinsic material,” simply that in this particular case they’re unnecessary. So that may well be the case after one considers the terms of an enterprise agreement. We say in this case there are two possible interpretations of the clause and it’s unclear when we look at the context which one we should adopt and the extrinsic material is there to assist us so we should refer to it. This certainly doesn’t say we cannot have regard to it. It simply says it’s unnecessary in this particular circumstance.
PN917
The other decision, I won’t go to it. It’s the Telstra decision. I don’t think it’s in the bundle that I provided, Commissioner. It’s the decision of the full bench of the commission but it’s an application to remove an ambiguity from an agreement so it’s of little assistance because the test there is different to what we’re dealing with.
PN918
THE COMMISSIONER: And this is the one cited by the responded as authority for not relying on history.
PN919
MR MUJKIC: Yes, I think it’s for not relying on extrinsic material.
PN920
THE COMMISSIONER: Right.
PN921
MR MUJKIC: But as I said, it’s a different application and different test.
PN922
THE COMMISSIONER: Yes.
PN923
MR MUJKIC: So I don’t see how that’s relevant today.
PN924
THE COMMISSIONER: Yes.
PN925
MR MUJKIC: I mean obviously it has some relevance but we say it shouldn’t be followed. We say the Bulk Handling full bench is the approach and that’s the approach in Short v Hercus and Kucks that’s been followed more recently, followed by Marshall J and Lawler VP in Watson and then more recently in the Bulk Handling full bench.
PN926
THE COMMISSIONER: Okay.
PN927
MR MUJKIC: So if there was any doubt for the extrinsic material we’d say if you look at the extrinsic material that doubt is removed. If there is any doubt about how to answer the questions asked of the tribunal we obviously say the question is yes. My last point, Commissioner, is this no extra claims point.
PN928
THE COMMISSIONER: Yes.
PN929
MR MUJKIC: And I’m conscious of the time but I think I’ve got time. I won’t take too long. We say, in summary, that the respondent’s submissions are inconsistent with the no extra claims clause. As I said, the no extra claims clause is quite broad and it states not only that the parties will not make any additional claims but they also won’t make any changes to conditions of employment. There are some decisions there that refer to what a no extra claims clause is, does and what it’s designed to do. It’s the full bench of the commission in MFB v The UFUA and there’s also a decision of O’Callaghan SDP in the Electrolux v AMWU case and I’ll just point to the relevant passages.
PN930
So firstly the full bench MFB v UFUA case was an appeal from a decision of Commissioner Simmons and at paragraph 28 on page 9 the full bench refers us to the commissioner’s decision and I don’t take any issue with the way the commissioner characterises the no extra claims clause. The issue there was the MFB’s attempt to implement a new policy and what Commissioner Simmons said and this is now on page 10, it’s paragraph 27 of the Commissioner’s reasons - - -
PN931
THE COMMISSIONER: Yes.
PN932
MR MUJKIC: - - -but it’s prior to paragraph 29 of the full bench’s reasons. And the full bench doesn’t take issue with this. So the paragraph says,
PN933
Taking account of the context of the agreement as a whole, unless the proposed change contemplates a variation to a specific entitlement or obligation or goes to a matter outside the scope of the agreement that it does not amount to an extra claim for the purpose of clause 49. Of course that change would need to be proposed in accordance with the requirements of clause 11, which is the introduction of - - -
PN934
So the Commissioner there is talking about specific entitlements or obligations. Similarly, O’Callaghan SDP adopts a similar definition and again this is issued about a policy being introduced.
PN935
THE COMMISSIONER: The O’Callaghan decision is in - - -
PN936
MR MUJKIC: Electrolux, sorry, Commissioner, Electrolux v the AMWU.
PN937
THE COMMISSIONER: Yes.
PN938
MR MUJKIC: The relevant paragraph is 51, “in this context.” His Honour says,
PN939
In this context I consider that the no extra claims prohibition refers to matters which form specific entitlements or conditions of employment.
PN940
And there we have that decision of Acton SDP that we referred to earlier where her Honour considers not just entitlements under the agreement but contractual entitlements as well. So what we say is that the no extra claims clause prevents the employer from seeking to absorb certain over-agreement payments where individuals have an entitlement either contractual or under the agreement to those over-agreement payments. Now, there’s no entitlement, no specific entitlement to any individuals under the agreement for over-award payments but we say there are certainly contractual entitlements for at least two employees and that’s Mr Emery. We’ll refer to his letter of offer. That’s attachment 1 to the witness statement of Mr Emery that refers to an above-award component of $15 per week non-absorbable. There’s no evidence that that contract has been varied or altered in any way since its inception in 1995.
PN941
Similarly with Ms Papageorgiou, her contract which is attachment 1 or her letter of offer which is attachment 1 to her statement refers to an above-award payment of $50 per week. Again, we say that contractual entitlement still exists. In addition we also say that Ms Papageorgiou and Ms Medancic have a contract that specifies their classification and that’s the classification that we say, that’s the one that’s in their statement. So in Ms Medancic’s case it’s the grade 5 classification and in Ms Papageorgiou’s case it’s also the grade 5 classification.
PN942
Both contracts refer expressly to that classification and the respondent had no power under the agreement to seek to alter that classification. If there’s a dispute about it, well, that can be brought under the terms of the agreement but there’s no power to unilaterally alter an employee’s classification of their contractual entitlement. And in Ms Medancic’s case, to make this clear, Commissioner, Ms Medancic wasn’t receiving an over-agreement or over-award rate of pay. Her case is rather unique. She’s simply receiving the rate of pay for a grade 5 store worker. It’s the respondent’s view that she’s a grade 3 store worker. Mr Tully’s evidence was that he directed someone to change the classification in or around August 2012 from grade 5 to grade 3.
PN943
THE COMMISSIONER: Yes.
PN944
MR MUJKIC: That then has the effect of Ms Medancic receiving a rate of pay higher than the so-called agreement rate of pay because her classification is incorrect. But we say that Ms Medancic, the evidence is she’s a grade 5. There’s no evidence to the contrary. There’s no power to unilaterally change someone’s classification and if that’s the case then the no extra claims prevents the employer from denying any wage increase to Ms Medancic. Unless there are any questions, Commissioner, that’s all the submissions I wish to make at this stage.
PN945
THE COMMISSIONER: All right, thanks very much.
PN946
MR MUJKIC: Thank you.
PN947
THE COMMISSIONER: Are you happy to conclude at this point?
PN948
MR PROIETTO: I am, Commissioner, if the commission pleases.
PN949
THE COMMISSIONER: Well, I think it would be beneficial to conclude the matter today if can.
PN950
MR PROIETTO: I agree.
PN951
THE COMMISSIONER: But perhaps before you start, we might just take a very brief adjournment, say 5 minutes.
PN952
MR PROIETTO: That’s fine.
<SHORT ADJOURNMENT [3.50PM]
<RESUMED [4.01PM]
PN953
THE COMMISSIONER: Yes.
PN954
MR PROIETTO: Thank you, Commissioner. The question that this commission is charged with answering is should the three and a half percent wage increase payable from 1 August 2012 pursuant to clause 16 of the Altona Regional Distribution Centre Enterprise Agreement 2010 be applied to the actual rates of pay of employees. I was going to say Fair Work Australia - now the Fair Work Commission should answer this question in the negative. It was never agreed that all employees would be entitled to a 3.5 percent wage increase for the actual rates of pay from 1 August 2012.
PN955
In our submission the evidence establishes that the parties agree to percentage increases to the wage rates in the agreement. So much is clear from the evidence of Mr Tully and Ms Tebbutt and by the terms of the agreement itself. In fact there’s been quite some discussion today about the intention of the parties. The best reflection of the intention of the parties is the terms of the agreement themselves. We say the terms of that agreement are clear and unambiguous and do not in any way support the interpretation proposed by the NUW. The commission’s role is to construe and interpret that agreement. What the NUW is asking you to do, effectively, is to rewrite it and that is not something that is open to you to do.
PN956
We say the clause is clear on its terms. It is drafted in a way which is exactly the same as most modern awards are drafted by this tribunal and which has been accepted for many years as common industrial practice. If you were to call up the General Retail Award you will see it says, “Rates of pay payable to employees are as follows, classification, rate of pay.” There is nothing in any way ambiguous about the way the clause is drafted. There’s been argument about over-agreement entitlements. There have always been people who have received over-agreement rates of pay but this is a dispute over the application of the agreement. At the end of the day you need to consider under this agreement what are employees entitled to receive? And my very clear submission is they are entitled to receive the amount that is in the agreement.
PN957
What I want to do today is really follow the course that’s been established by Mr Mujkic, talk about the terms of the agreement, then talk about some of the case law. The case law is difficult to follow, I need to say, Commissioner. I don’t envy your challenge in that regard.
PN958
THE COMMISSIONER: Yes.
PN959
MR PROIETTO: What our submission will be is what the case law does say, contrary to what Mr Mujkic has submitted that the primary test is not context. The primary test is what do the words of the agreement say and you need go no further than that, thankfully, because beyond that it gets a little bit complex. There are competing full court authorities, there are competing full bench authorities. The High Court position is reasonably clear but not that detailed.
PN960
THE COMMISSIONER: Yes.
PN961
MR PROIETTO: So finding a path through that jurisprudence is not necessarily easy. I think at its highest what you can rely on if you think there is ambiguity, and we say you don’t need to go there but if you think there is ambiguity we say you can rely on the historical context effectively. We’re going to show you why that favours our interpretation, not their interpretation. But beyond that you shouldn’t have any recourse to extrinsic material. We say the case law demonstrates that but I accept that there are competing views and there is no real clear authority from the High Court as to how you should interpret an enterprise agreement where there is ambiguity.
PN962
The other really important point I need to make, Commissioner, about the cases that deal with extrinsic material and ambiguity is they turn on words and phrases. So for example, in the Kucks decision, the dispute was what is meant by ordinary hours or pardon, ordinary rate of pay. What does that term mean? And that has challenged courts for many a generation and there is obvious ambiguity about that and an obvious need to look elsewhere, look beyond the four squares of the agreement.
PN963
THE COMMISSIONER: Yes.
PN964
MR PROIETTO: In the decision of Marshall J which Mr Mujkic has referred to which was subsequently relied on in Ives DP decision. The question there was about a different locality. The phrase used was “different locality.” When are employees going to be entitled to redundancy payments in circumstances where they’ve moved to a different locality? Does that mean within the same city? Does it mean beyond the city? Does it mean beyond state boundaries? What does it mean? And in that case his Honour Marshall J looked at an extrinsic document that suggested how the thing had been applied in the past and it made sense in that case because there was an ambiguity in the language that was used.
PN965
Here there is no ambiguity about the clause. It is a commonplace everyday clause that is found in many enterprise agreements and all modern awards, the high point of the industrial instrument that has been handed down by this tribunal after many hours of debate before as to how an award should appear and I think that is a really important point. I don’t have a modern award to hand up today, Commissioner. I’m sorry for that. I was looking at the i-phone - - -
PN966
THE COMMISSIONER: That’s okay.
PN967
MR PROIETTO: - - -before, not to check my messages but - - -
PN968
THE COMMISSIONER: I think I can provide one.
PN969
MR PROIETTO: I’m sure you can. That’s what I was doing before. So that’s an outline of what I want to talk about today. I hope that doesn’t take too long because many of the cases that I wanted to refer to you’ve already been taken to. I’ll take you to GrainCorp first.
PN970
THE COMMISSIONER: Yes.
PN971
MR PROIETTO: GrainCorp is a decision of Ives DP and he sets out fairly early on – he lists effectively what he says the appropriate test is for interpreting enterprise agreements. I won’t hand you up a copy because you’ve got a copy and Mr Mujkic you’ve got a copy.
PN972
While he lists a number of things he talks about ambiguity and I’ll get to that. The first thing he says. The first rule he sets out is if the terms of an industrial instrument are clear and unambiguous then the industrial instrument must be interpreted in accordance with that clear and unambiguous meaning. That is the first principle. As I’ve said there was enough discussion in submission today regarding various legal principles. At the end of the day the principle which is the most important and which has the most judicial support is this one. If the terms of an industrial instrument are clear and unambiguous then it must be interpreted in accordance with that clear and unambiguous meaning. When the 2010 agreement was made between Warehouse Solutions and its employees what the employees considered and voted on were the terms of the agreement. Those terms are abundantly clear.
PN973
I then refer to the decision of Madgwick J in John L Pierce Pty Ltd v Kennedy. This was not a case that Mr Mujkic referred to so I think presumably he formed a view that I haven’t selectively quoted from this case. I haven’t got a bundle, unfortunately, Commissioner.
PN974
THE COMMISSIONER: That’s all right.
PN975
MR PROIETTO: But as I say I won’t be handing up many cases because most of them have been handed up. And the relevant extract can be found on page 463 at paragraph 20 and he writes,
PN976
I acknowledge the submissions of the respondent that such an interpretation of the word “income” among other things set
the legal rates under the 1998 award and this in effect awards employers who are not complying with the 1988 award. I also appreciate
that such interpretation brings about a result which is unfair to those employers who were acting lawfully in compliance with the
1988 award and may tend to call in question the worth of compliance with future awards. However, as Higgins J in the context of
interpreting words in the Constitution in Amalgamated Society of Engineers v Adelaide Steamship, the question is what does the language mean? And when we follow what the
language means in its ordinary and natural sense it is our duty to obey that meaning, even if we think the results be inconvenient
or impolitic
or - - -
PN977
PN978
I turn to the next two cases, Commissioner. You’ve been taken to Oceanic Coal and you have a copy of that.
PN979
THE COMMISSIONER: Yes.
PN980
MR PROIETTO: I don’t accept that those comments were obiter. The judge in that case was asked to consider two competing interpretations and he found on the plain language of the agreement that he preferred one meaning and it was in the context of an appeal decision where the primary judge had actually found a different meaning. So there was a fair argument that there was ambiguity but Cowdroy J found that there was not and didn’t have to have recourse to extrinsic material.
PN981
THE COMMISSIONER: So that’s para 51?
PN982
MR PROIETTO: Well, what I’m referring to immediately there is – just bear with me. I’ll have to get out my copy of the decision, Commissioner.
PN983
THE COMMISSIONER: Paragraph 51 says,
PN984
As the above authorities indicate the test of relevant clause has primacy in ascertaining its meaning.
PN985
MR PROIETTO: Yes.
PN986
THE COMMISSIONER: That’s what NUW took me to but said I shouldn’t have much regard to it because it was obiter.
PN987
MR PROIETTO: Well, that’s right. I don’t accept that it’s obiter.
PN988
THE COMMISSIONER: Right.
PN989
MR PROIETTO: It’s not like a throwaway line. He’s devoted the whole paragraph to it under the heading, “Finding.” To me that suggests it’s the ratio of the case.
PN990
THE COMMISSIONER: Yes.
PN991
MR PROIETTO: And he says, the last sentence,
PN992
Given that clause 12(b)(i) can be read without significant ambiguity recourse to extraneous principles aren’t necessary in ascertaining its meaning.
PN993
And despite that in paragraph 47 earlier he actually acknowledges there might even be two possible meanings but he just reads the clause and interprets it as he sees fit.
PN994
THE COMMISSIONER: Yes.
PN995
MR PROIETTO: And quotes, 48,
PN996
Applying such interpretation, an interpretation that identifies no ambiguity in the relevant clause there is no occasion to have regard to the history and subject matter of the award.
PN997
THE COMMISSIONER: Yes.
PN998
MR PROIETTO: So that’s what Cowdroy J said about that. I was then to talk about Kucks but really the commission has been taken to Madgwick J’s decision in Kucks, both the provision that my learned friend extracted in his outline and the one that’s extracted in ours.
PN999
THE COMMISSIONER: Yes.
PN1000
MR PROIETTO: I think it probably does give as fair a summary of the law as you can rely on, Commissioner. I think you could probably do a lot worse than rely on the decision in Kucks in this decision. It was referred to favourably in the Amcor decision by the High Court.
PN1001
THE COMMISSIONER: Yes.
PN1002
MR PROIETTO: And certainly to the extent - - -
PN1003
THE COMMISSIONER: And in the full benches that I was taken to - - -
PN1004
MR PROIETTO: That’s right.
PN1005
THE COMMISSIONER: - - -and headed by his Honour Kaufman SDP and also the decision of not a full bench but the decision of Lawler in Watson.
PN1006
MR PROIETTO: Yes, that’s correct. In relation to Wanneroo, again, I don’t necessarily accept those comments that you were taken to by Mr Mujkic are obiter. In any event they were made by a judge who has turned out to be a pretty good lawyer, given he’s now the Chief Justice of the High Court and I think they should not be regarded lightly just because Mr Mujkic believes that they’re obiter. We say that when all of these authorities are taken together it’s abundantly clear that where the words of an agreement are clear and unambiguous they must be given their ordinary meaning, even if that construction might lead to what some people might perceive to be an unfair or unjust outcome.
PN1007
THE COMMISSIONER: Yes.
PN1008
MR PROIETTO: And it’s also clear that this principle of construction must be given primacy above all others. In terms of clause 16 of the agreement you’ve got a copy of that in front of you, Commissioner - - -
PN1009
THE COMMISSIONER: Yes.
PN1010
MR PROIETTO: - - - amongst probably thousands of other documents.
PN1011
THE COMMISSIONER: No, that one has been sitting open all day.
PN1012
MR PROIETTO: It refers to the classification definitions set out in clauses 13.1 and 13.2 of the agreement and then sets out a table containing the relevant rates of pay. In the first row the following statement is repeated in respect of each of the relevant years, “Hourly rate as at first pay period on or after 1 August 2010 [sic]” and the various rates are then listed for each of the relevant periods. Underneath the table it states, “The hourly rate of pay for a part-time employee shall be an amount equal to 136th of the appropriate” – it says “appropriation classification rate of pay.” I assume the word “appropriation” should “appropriate.” And there is a similar statement following that in respect of casual employees who receive a loading.
PN1013
The only possible interpretation of this clause is that employees who are covered by the agreement, by the 2010 agreement are entitled to the wage rates specified in clause 16. Any person who was to pick up this agreement for the first time and we would be under absolutely no doubt that come 1 August 2012 the wage rates that the respondent is required to pay to its employees are those listed in the final column of the table. There’s no room for any other construction. Mr Mujkic, I think, laboured to try to find ambiguity in this point, with respect and in my submission his views or opinions or submissions as to why there’s ambiguity in this clause cannot be accepted.
PN1014
Enterprise agreements are not or have not ever been introduced to provide for pay rates of employment as was, I think, loosely suggested by Mr Mujkic. The purpose of enterprise agreements is to increase productivity and they are – they’re not the ultimate safety net because that is an award and subject to a brief period under the Work Choices legislation, to make an enterprise agreement you always needed to pass the safety net test, a BOOT or the no disadvantage test. But they still provide the minimum terms and conditions of employment. The employer is free to provide terms and conditions of employment above that. It is commonplace. It happens all the time.
PN1015
There is no reason why in its discretion subject to contractual principles any employer cannot have an agreement that sets a bottom rate of pay, above the award obviously, and then provides terms and conditions of employment above that. That is absolutely commonplace and that is what this agreement does. That is what this clause does and its terms are clear and unambiguous. Mr Stutz on cross-examination conceded that any person who picked up the agreement, any reasonable person who picked up the agreement would agree with the construction that I’ve espoused.
PN1016
Further evidence of this is that the commission is being asked by the NUW to find that clause 16 should be construed as effectively stating that all employees are to get a 3.5 wage increase from 1 August 2012 to their actual rates of pay. That’s what you’re being asked to decide. This is despite the fact that the term 3.5 percent does not appear anywhere in the 2010 agreement. You would have to work out the percentage based on the rates of pay in the column and do that backwards in order to figure out the percentage of 3.5 percent. It’s pretty hard to do. I’m not sure I could. And then you’d also have to infer - - -
PN1017
THE COMMISSIONER: I wouldn’t admit to that if I were you that it’s particularly difficult.
PN1018
MR PROIETTO: Well, I’m not a mathematician, Commissioner.
PN1019
THE COMMISSIONER: Well, that’s evident.
PN1020
MR PROIETTO: One would then have to infer that the percentage increase is attributable to actual rates of pay rather than those that are in the 2010 agreement. With respect that is fanciful and what you’re being asked to do is not interpret the clause but rewrite it. It is possible that some employees believe that they have an entitlement to a higher rate of pay based upon historical payments and discussions between members of the respondent’s management. But this is a dispute about matters arising under the agreement. The question needs to be: because of the agreement are these employees entitled to the 3.5 percent wage increase from their actual rates of pay? And the agreement just does not provide for that. So the answer to the question, Commissioner, is clearly no. In relation - - -
PN1021
THE COMMISSIONER: Even if I’m with you on the terms of the clause the position I’ve been asked to adopt by Mr Mujkic is that I’ve got to not just look at the words of the clause but I’ve got to look at the context as well and the context is that this identical clause has been around for three agreements - - -
PN1022
MR PROIETTO: Yes.
PN1023
THE COMMISSIONER: - - -in identical terms and notwithstanding that, the practice of the employer was to pay the – notwithstanding what you say are the difficulty of doing the maths - - -
PN1024
MR PROIETTO: Yes.
PN1025
THE COMMISSIONER: - - -there was clearly an understanding of what the increases were and they were paid based on the actual rates and that was the practice.
PN1026
MR PROIETTO: Yes, yes.
PN1027
THE COMMISSIONER: That’s the first significant contextual issue. The second is of course as you’re well aware the negotiations where, I understand the evidence of Mr Tully and Ms Tebbutt - - -
PN1028
MR PROIETTO: Yes.
PN1029
THE COMMISSIONER: - - - but it is odd that one would make a claim to alter the arrangement for those who are on over-agreement payments and seek to sunset them and withdraw that claim but then assert after continuing the practice under this agreement for yet two more payments - - -
PN1030
MR PROIETTO: Yes.
PN1031
THE COMMISSIONER: - - -and then on the third payment to say, “Actually we’ve always maintained” - - -
PN1032
MR PROIETTO: Yes, yes.
PN1033
THE COMMISSIONER: It’s powerful context you would have to agree, would you not?
PN1034
MR PROIETTO: Well, I think you need to consider all of the context so that will include going back and looking at all the old agreements so we’ll do that. I’ll take you to those old agreements because they’re important as well because the changes that occur are completely consistent with the evidence that Ms Tebbutt gave about what the employer intended to do in relation to those clauses.
PN1035
THE COMMISSIONER: Yes.
PN1036
MR PROIETTO: So that’s the first thing about the context. The second thing about paying an over-agreement wage rates and continuing to do that is that it’s the prerogative of the employer to do that. If they want to continue to pay employees over-agreement rates of pay they’re entitled to do that and the employees took them for many, many years even though they were working jobs which didn’t attract that level of pay. At the end of the day the question has to come back to this: does the agreement require those payments to be made? And the answer is no. So that’s the question that you need to keep coming back to. In relation to the negotiations, as Mr Mujkic says, there’s limited recourse you can have to evidence that was given. We’ve tendered some cases to which Mr Mujkic took you to in relation to a legal principle that you shouldn’t have any regard to the negotiations. You can have regard to - - -
PN1037
THE COMMISSIONER: The Telstra case.
PN1038
MR PROIETTO: - - -well objectively ascertainable – not the Telstra case. It was the Seymour v Stawell Timber Industries.
PN1039
THE COMMISSIONER: That’s all right, it’s in here, yes.
PN1040
MR PROIETTO: That was the decision about not having any regard to negotiations and I think French J in Wanneroo makes some comments about that as well. So you think about negotiations, Commissioner, which you would well know, in an industrial context many things are said, many claims are made. The evidence of Ms Tebbutt today was that they put the claim in because they wanted a quick and easy rollover agreement. As it turned out that’s what the NUW wanted but when Warehouse Solutions did its log of claims it didn’t know that. It thought this could be a tough drawn-out negotiation. It wanted to have some things on the table which it could withdraw to be seen to be giving something. As it turned out there were three meetings and it was an easy deal but the respondent did not know that going into the negotiations.
PN1041
Mr Stutz’ evidence was entirely consistent with Ms Tebbutt. He’s described it as a throwaway as well. So the evidence, I submit that both Mr Tully and Ms Tebbutt were very honest and believable witnesses. The evidence as to why they put the claim on is entirely reasonable and the starting point needs to be, and this I think got a bit lost in Mr Mujkic’s submissions because he said that while in the 2007 agreement there were wage rates payable on actual rates of pay, sorry wage increases paid on actual rates of pay.
PN1042
Well, there were, but not because the 2007 agreement required it. It hasn’t been required of the respondent since 2001. So I can certainly understand, Commissioner, why it’s troubling to you that it was raised in the negotiations and then withdrawn and then happened two years later anyway but all that was raised - and this is a very important point – all that was raised was the claim that there be an express term in the agreement allowing the respondent employer to do it.
PN1043
By removing the claim for an express clause the respondent was not saying, “We’re never going to do it during the life of the agreement.” And the NUW is representing members. It can’t abdicate its responsibility to do that. If it’s bargaining on behalf of its members it’s got a responsibility to negotiate the agreement. There were two separate drafts of the agreement provided to the NUW. It’s very clear on its terms what it says and what it does. So I’m going to come to the industrial context which I think will give you a bit more comfort as well. But this is clearly an open position that this has been able to have been done for a number of years now.
PN1044
At the end of the day these employees have been receiving money which is over and above the entitlement of 75 percent of their colleagues for doing the same work for historical reasons that are no longer relevant and haven’t been relevant for more than 10 years. To put it in the terms of an employee who spoke to Mr Tully shortly after this decision, “I know I’ve been on a good wicket.” So we can talk about fairness and all the rest of it but these employees have been on a good wicket for 10 years and the employer is a good employer. They did not want to have to bring it to an end unless they absolutely had to but you heard the evidence of Ms Tebbutt about the reasons why that had to happen in 2012.
PN1045
THE COMMISSIONER: Yes, I’m not in the fairness phase because that doesn’t have a role in the construction of the - - -
PN1046
MR PROIETTO: No.
PN1047
THE COMMISSIONER: I think we all agree on that. At least that’s one area where there’s no confusion.
PN1048
MR PROIETTO: Yes.
PN1049
THE COMMISSIONER: All I say is that in particular, as I said there were the two issues but I hear what you say about negotiations and there’s even, yes, there is authority that that shouldn’t even play a role but the history is significant.
PN1050
MR PROIETTO: I’ll come to the history in a minute.
PN1051
THE COMMISSIONER: Yes.
PN1052
MR PROIETTO: I just want to harp on this point as I think it’s important. All that the negotiations can really show is that the claim was made and a lot of claims were withdrawn and that’s really all you can rely on. All that proves is that the respondent – there wasn’t an express provision in the agreement to allow it to do what it thought it could already do. It doesn’t prove that it was never going to do it. It doesn’t prove that it agreed that it wasn’t going to do it. But that’s all that means. I don’t think I can take it any further.
PN1053
THE COMMISSIONER: Yes, yes, no.
PN1054
MR PROIETTO: Can I just talk about GrainCorp quickly?
PN1055
THE COMMISSIONER: Yes.
PN1056
MR PROIETTO: I just want to because my learned friend has placed significant reliance on it, almost arguing that it’s right on point. Well, it’s not and it’s distinguishable on many levels.
PN1057
THE COMMISSIONER: Yes.
PN1058
MR PROIETTO: In GrainCorp the employer was the party arguing for the agreement to be construed in a manner entirely inconsistent with its plain and ordinary meaning. So GrainCorp was arguing that the agreement should be construed in a way which, reading the decision is, I don’t want to be disrespectful to (indistinct) but laughable. But there is an express clause and Mr Mujkic took you to it which said that the number of full-time employees, 39, is to be maintained for the life of the agreement, meaning that replacements will be sought when numbers fall below this level. That’s at paragraph 10 of GrainCorp, pretty clear and unambiguous and at the end of all of this you ask Mr Mujkic whether or not the Commissioner found there was ambiguity. He did not. He found that the clause was clear and unambiguous and capable of being determined on its very clear terms. So it was the employer in that case, not the union, that was arguing for a different interpretation from the one that is obvious on its face.
PN1059
THE COMMISSIONER: Yes.
PN1060
MR PROIETTO: And that is obviously a very clear distinction and all the negotiations and the discussions and all the rest of it need to be considered in that context because it’s a fundamental difference. It flips the whole case on its head. So the same point for the negotiations in 2010 in our case - and I’ve just talked about this - was that the respondent could on the terms of the 2007, I’m talking about this case now, I’m still talking about GrainCorp and I’m talking about our case.
PN1061
But the respondent, Warehouse Solutions could under the terms of the 2007 agreement absorb wage increases. That’s our submission about that. And we say there’s no debate about that because the clause is the same as the covered clause. You do not need to ask for this to be expressly stated in the agreement. By contrast that it did say for reasons that Ms Tebbutt has explained, by contrast in GrainCorp the employer wanted to remove that 39 employee cap and it needed to have it removed in order to be able to reduce the headcount below 39. But having asked for it, it then resiled from the claim and agreed for a rollover of the agreement. So the starting point was completely different. The starting point was GrainCorp couldn’t do what it wanted to do. In our case we can do what we want to do as a starting point.
PN1062
So GrainCorp needs to be treated with some caution and we say it’s clearly distinguishable on the facts. Again we say that and obviously we disagree with Ives DP’s finding earlier on that you can have recourse to extrinsic material even when there’s no ambiguity but as I say it’s notable in that case that his Honour decided without having had recourse to extrinsic material.
PN1063
THE COMMISSIONER: Yes.
PN1064
MR PROIETTO: Just quickly in relation to Marshall J’s decision which is another case that’s been referred to. This is the one where there was the dispute about what does different locality mean and Marshall J really just relies on the decision of Burchett J and he in fact extracts the relevant provision in that. I’ve got a different version that’s been handed up but under the heading, “Extrinsic Material and Award Interpretation” - - -
PN1065
THE COMMISSIONER: Yes.
PN1066
MR PROIETTO: - - -it’s the third paragraph down that he quotes from Short v Hercus, Burchett J’s decision - - -
PN1067
THE COMMISSIONER: Yes.
PN1068
MR PROIETTO:
PN1069
The context of an expression may thus be much more than the words that are its immediate neighbours.
PN1070
And I just want to focus on the word “expression,” “context of an expression.”
PN1071
Context may extend to the entire document of which it is a part or to other documents with which there is an association. Context may also include in some cases ideas that gave rise to an expression in a document from which it has been taken.
PN1072
Again the word “expression.”
PN1073
When the expression was transplanted it may have brought with it some of the soil in which it once grew retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance standing bare in alien ground. True, sometimes it does stand as if alone but that should not be just assumed in the case of an expression with a known source without looking at its creation, understanding its original meaning and then seeing how it is used.
PN1074
Very colourful language by Burchett J, but I think it’s important because it focuses on the word “expression.” It comes back to the point I was making earlier, Commissioner, that what we’re talking about when we’re looking at extrinsic material is helping us to determine there’s a word or a phrase or a term or an expression which is ambiguous, what does it mean? We just don’t have that in this case. So it’s to the extent that if you follow through Burchett to Marshall J’s decision to Ives DP, that’s the line of authority. That’s actually the relevant part of the decision that was relied upon by Marshall in turn which was relied upon by Ives DP.
PN1075
THE COMMISSIONER: Yes.
PN1076
MR PROIETTO: So we then need to be careful when we say well we can rely on extrinsic material and there’s no ambiguity because if you trace it through and follow the reasoning, he’s not really saying that. I’m not going to take you to the next couple of cases in my outline which is Wanneroo. My learned friend has done that. He’s also absolutely right about the extract in our submission at paragraph 28. We quoted from Seymour v Stawell but had a note to tell you that as we’re embarrassed it was actually from Chitty on Contract which was being quoted in the decision so my apologies for that.
PN1077
THE COMMISSIONER: Sure.
PN1078
MR PROIETTO: And then there’s the decision of Cowdroy J to which I’ve already taken you to.
PN1079
THE COMMISSIONER: Yes.
PN1080
MR PROIETTO: So then we get to the decision of Telstra v The CPSU and Mr Mujkic has said you should have no regard to that whatsoever because it’s an application under section 170NB(5). I do have a copy of that decision if it assists. This is the decision of a full bench of the tribunal which comprised of Ross VP, as he then was, Brian Lacy SDP and Commissioner Smith as he then was. I suppose I should deal with the threshold issue as to whether or not you can have regard to this case, Commissioner. I say you absolutely can. So this was a case decided under the old 170NB(5) of the Workplace Relations Act which was an application to remove or vary ambiguity.
PN1081
THE COMMISSIONER: Ambiguity in agreements.
PN1082
MR PROIETTO: But the process that the tribunal followed in all of those cases was exactly the same process that the cases say you should be following here: ask is there an ambiguity? And if there is an ambiguity, should we vary the agreement? Now, the latter point of that, varying agreement, not so but the test is exactly right and in fact if you trace back through this decision you get to Codelfa, the High Court decision in Codelfa. If you trace back from the decisions that you were handed by Mr Mujkic which he wants you to rely on, and by that I’m referring to Watson v ACT, Lawler’s decision - - -
PN1083
THE COMMISSIONER: Yes.
PN1084
MR PROIETTO: - - -and the other one that was handed to you - - -
PN1085
THE COMMISSIONER: Kaufman full bench in - - -
PN1086
MR PROIETTO: Yes, that’s the one, the Cooperative Bulk Handling.
PN1087
THE COMMISSIONER: - - - the Bulk Handling, yes.
PN1088
MR PROIETTO: They also find their root in Codelfa.
PN1089
THE COMMISSIONER: Yes.
PN1090
MR PROIETTO: So if you look for example at paragraph 15 from the extract on page 8 of the Bulk Handling decision, they summarise it,
PN1091
In summary the general principles going to construction of contracts laid down by the High Court in Codelfa apply in the construction of industrial instruments. However consistent with the approach in Kucks and Short v Hercus an industrial instrument must always be construed in context, the context of particular provisions with the agreement as a whole and the context in which the agreement was made including any relevant statutory or historical context.
PN1092
And then it goes on,
PN1093
Extrinsic evidence as to the context in which the agreement was made including the statutory and historical context will be admissible to demonstrate the existence of ambiguity and/or to resolve ambiguity.
PN1094
I don’t think that goes as far as was put to you by Mr Mujkic but I suppose the point I’m making in this regard is that this was a full bench decision that followed the Ives DP and by extension followed the decision of Marshall J. It was if I can say, with respect, a high-powered full bench of this tribunal and it set down the principles which I say are the relevant principles on which the commission can rely. Those principles are set out - - -
PN1095
THE COMMISSIONER: We’re still talking about Bulk Handling, aren’t we?
PN1096
MR PROIETTO: No, I beg your pardon, Commissioner. I’ve actually moved on to the decision in Telstra.
PN1097
THE COMMISSIONER: That’s the high-powered bench.
PN1098
MR PROIETTO: That’s the high-powered bench, which is no disrespect to Kaufman SDP and the other higher members of this tribunal.
PN1099
THE COMMISSIONER: I take it he wouldn’t take offence.
PN1100
MR PROIETTO: He would, yes, because he would.
PN1101
THE COMMISSIONER: Yes, go on.
PN1102
MR PROIETTO: I beg your pardon but my point was that at the end of the day I don’t think that this decision can be as easily dismissed because it’s under 170NB(5) as Mr Mujkic has said and it can be relied upon by this tribunal.
PN1103
THE COMMISSIONER: Right.
PN1104
MR PROIETTO: So as I say it’s subsequent to the decision of Marshall J and Ives and its root as is the decision of the full bench in Kaufman SDP’s case, Codelfa. And the relevant principles are really set out as you follow them through from paragraph 33 on page 150 where Mason J is quoted and he says,
PN1105
The true words of evidence of surrounding circumstances is admissible to assist in the interpretation of a contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking, facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction unless they were known to both parties, although as we have seen if the facts are notorious knowledge of them will be presumed.
PN1106
Then the full bench goes on to refer to the decision of Nicholson J in BP Australia and this is really I think the crux of the decision which they accept. And I need to say that Nicholson J’s decision was upheld – well, parts of it were overturned on appeal but the full bench endorsed what he said about interpretation of contracts. And the principles are set out in dot points in paragraph 34,
PN1107
It is necessary first to determine whether the contract has a plain meaning or contains an ambiguity. If it has a plain meaning evidence of surrounding circumstances will not be admissible to contradict the language of the contract. If the language of the contract is ambiguous or susceptible to more than one meaning evidence of surrounding circumstances is admissible to assist in the interpretation of the contract and it goes on.
PN1108
So again we come back to this issue of is evidence of surrounding circumstances or extrinsic material admissible in circumstances where there was no ambiguity? I won’t take you to any other cases, Commissioner. I had a couple of others but at the end of the day the case law is problematic on it. I think what you can take away from it is that the High Court cases in Codelfa and Amcor really are the starting point. They effectively say that really unless an industrial instrument is capable of more than one meaning you shouldn’t have regard to extrinsic material. Although there is some tension in that because Amcor does say you can have limited regard to extrinsic material but the thing about Amcor is that the leading judgment of Gleeson CJ talks only industrial context. Sorry, I’ve just got to find my reference to that. So Gleeson CJ and McHugh talk about the language of a particular agreement,
PN1109
The resolution of the issue turns upon the language of the particular agreement understood in light of its industrial context and purpose and the nature of the particular reorganisation.
PN1110
The reference to the particular reorganisation I think was relevant to that case because it was about a redundancy. But that is effectively the test. There is enough case law to be honest, Commissioner, for you to find that you can only have regard to any extrinsic material if there is ambiguity and that is our primary submission. I don’t resile from that. What I am saying in the alternative is that to the extent you feel bound to follow other authorities it suggests you can have resort to extrinsic material, the cases that are relevant to your determination are Short v Hercus which has been referred to throughout all of the authorities and I took you to the very relevant provision on that and the High Court decision in Amcor which is quite limited recourse to extrinsic material.
PN1111
Short v Hercus talks to expressions, expressions that might be susceptible to more than one meaning. Amcor talks about limited recourse to other material. So to the extent that you can look at extrinsic material, and again, our primary submission is that you can’t, to the extent that you can it’s very limited.
PN1112
THE COMMISSIONER: Within the bounds set by Short v Hercus and Amcor.
PN1113
MR PROIETTO: Yes, yes.
PN1114
THE COMMISSIONER: Yes, I understand what you’re saying.
PN1115
MR PROIETTO: Sorry, Commissioner.
PN1116
THE COMMISSIONER: You’re right.
PN1117
MR PROIETTO: Just bear with me.
PN1118
THE COMMISSIONER: That’s okay.
PN1119
MR PROIETTO: I just want to make a point about changes, just to throw one more hand grenade into this mix, Commissioner, is that all of this case law really, or the last components of it occurred prior to the Fair Work Act coming into operation. Prior to the Fair Work Act coming into operation a union agreement was made between a union and an employer. That’s the very clear language of section 170LJ of the Workplace Relations Act so contractual principles could apply because an agreement was made in those circumstances. So to the extent that extrinsic materials such as a log of claims or negotiations might be relevant it came up in those matters.
PN1120
Under the Fair Work Act an agreement is now made when the employees approve it and they vote on it so there is no direct connection between the negotiations between bargaining representatives anymore and the case law needs to be tempered in that way. I think it makes it even harder for the applicant to make out its case in terms of relying on extrinsic material relevant to the negotiations because when the employees go to vote on the agreement they look at the four squares of the agreement that they’re voting on and they vote on that agreement and the terms of the agreement as I’ve said are very clear and unambiguous. So I think that is an important point for this commission to bear in mind when it’s considering the authorities, but the authorities really all relate to a time when an agreement was made between a union and the employer and that is no longer the case. Can I just take you to the history, quickly, Commissioner, and context?
PN1121
THE COMMISSIONER: Yes.
PN1122
MR PROIETTO: So the first agreement as you’ve been told was the 1993 agreement. I want to work backwards through the attachments to the applicant’s submissions. So the very first one is attachment 8, it’s the Myer Grace Bros Distribution Centres (Victoria) Certified Agreement ‘93 and you’ll see there at clause 10(a) – have you got a copy, Commissioner?
PN1123
THE COMMISSIONER: I’m getting there. Sorry, attachments to the - - -
PN1124
MR PROIETTO: It’s actually the applicant’s submissions in this matter.
PN1125
THE COMMISSIONER: Yes, attachment 8, yes, I’m with you now.
PN1126
MR PROIETTO: So clause 10 sets out wage increases.
PN1127
THE COMMISSIONER: Yes.
PN1128
MR PROIETTO: And it says, “Wages for weekly employees shall be increased as follows, all classifications covered by this agreement,” 2 and a half percent increase from June 1993, 4 percent from October ’93 and so on.
PN1129
THE COMMISSIONER: Yes.
PN1130
MR PROIETTO: So in my submission that’s pretty clear that all employees either get a 2.5 percent wage increase or 4 percent wage increase et cetera. It goes on to say,
PN1131
The wage increases specified in subclause (a) of this clause shall be payable in addition to the award rate of pay for the relevant classification and the total amount shall constitute part of the all purpose award rate of pay in respect of employees covered by this agreement.
PN1132
Then it goes on to say relevantly in (c)
PN1133
The wage increases referred to in subclause (a) are to be paid on the actual rate and not be absorbed into any over-award payment - - -
PN1134
- - - clear and unambiguous. We then move to the 1995 agreement. A similar clause – I won’t take you through all of it but a subtle difference in that clause (c) says,
PN1135
The wage increases referred to in subclause (a) of this clause shall be paid on the classification rate for each classification of employee covered by this agreement and shall not be calculated on over-award amounts. However, wage increases as specified should not be absorbed into over-award payments.
PN1136
So what they’re saying there is that if you were receiving an over-agreement rate of pay you still get the 2.5 percent increase, but the 2.5 percent increase is to agreement rate not to your over-award rate.
PN1137
And then if we go to 1995 through to the next agreement, 1997, and we’re looking more like the cause of (indistinct). I accept that. 15.1 says,
PN1138
Wages for full-time employees shall be increased as follows for classifications covered by this agreement: 5 percent wage increase payable from the first full pay period.
PN1139
It goes on to have a table below but in my submission it’s clear that what is intended by that clause is that all employees are to get a 5 percent wage increase. Then we move through to 2001.
PN1140
THE COMMISSIONER: So it’s at that point any particular reference to absorption disappeared.
PN1141
MR PROIETTO: Disappeared, correct, and in fact, but having said that there was no need for an express no-absorption clause because all of the employees were getting a 5 percent wage increase irrespective and it’s the same in 2001. And then we get to 2004 which is the agreement that followed what Ms Tebbutt gave evidence about being that there was a concern that Myer didn’t have the ability or I should say Warehouse Solutions didn’t have the ability under the terms of the relevant agreement to stop the over-award rates of pay continuing to escalate. They wanted to do something about it. Then you start getting a clause which looks very, very similar to ours. So in 2004 you’ve effectively got a very similar clause to the clause that is in the subsequent agreement. Sorry, it’s the 2003 agreement and then repeating ’04, ’07 and 2010 where you’ve basically just got minimum rates of pay. There is no statement to the effect that all employees are to get a percentage wage increase.
PN1142
Mr Emery gave evidence this morning that there was never any change discussed as between 2001 and 2003 and then on cross-examination he conceded that there was a change in fact between 2001 and 2003. That change is entirely consistent with the evidence that Ms Tebbutt gave about Myer and the Coles Myer group wanting to make a change and in my submission that industrial context and history absolutely supports the interpretation and the construction that the respondent has placed in relation to this clause, absolutely does and must be given some weight. Sorry, Commissioner, just bear with me.
PN1143
There’s been some discussion today about the fact that wage rates were passed on in 2010 and 2011. That is irrelevant to any consideration, Commissioner, that you might have. There’s very clear authority that the subsequent conduct of the parties is irrelevant in construing an agreement and you can find reference to that at the Telstra decision that I’ve just referred to at paragraph 42. I won’t take you to it, and also the judgment of Nicholson J in the BP case which I actually haven’t handed up, I don’t think, at 74. I might just hand you a copy of that so you’ve got that reference. I won’t take you to it. There’s no dispute about those authorities in my submission. But what that means is you can’t regard as relevant the fact that wage increases were passed on in 2010 and 2011.
PN1144
In any event, Commissioner, the submission is that the fact that the two earlier wage increases were passed on to all employees is irrelevant. An employer is always at liberty to make over-award or over-agreement payments. The question in this case is whether the respondent was legally required to make such an increase on 1 August 2012 because of the 2010 agreement. And the answer is clearly no.
PN1145
I just want to touch briefly on the evidence of Ms Medancic and Ms Papageorgiou. Both filed witness statements in this matter which allege they haven’t been properly classified.
PN1146
THE COMMISSIONER: Yes.
PN1147
MR PROIETTO: Ms Medancic alleges that she should be classified as a grade 5 store person not a grade 3 store person and Ms Papageorgiou alleges that she should be classified as a grade 5 store person and not a grade 4 clerical. Mr Tully gave evidence that Ms Medancic and Ms Papageorgiou are properly classified as grade 3 store person and grade 4 clerical respectively. This is because the work they are currently performing and have been for a number of years falls squarely within the description of those classifications in the 2010 agreement. There’s no doubt about this and on cross-examination Ms Medancic conceded the work she’s doing – her co-workers who do exactly the same work as she does, are properly classified as grade 3 store person. So the basis of both of their claims appear to be that they allege they were told that they would remain at a particular classification level will receive certain over-agreement payments. Such claims, which are not admitted by the respondent, are contractual claims that fall outside the scope of this dispute and we say the commission doesn’t have a jurisdiction to deal with them.
PN1148
In relation to the extra claim point, and I’m coming to the end of my submissions, you’ll be pleased to know, Commissioner, but I do need to spend a little bit of time on this point because it was really raised today in a I suppose a slightly different way the language had been pleaded in the outline of submissions, which is no criticism. I just feel I need to do it because I haven’t dealt with it in our outline of submissions.
PN1149
THE COMMISSIONER: Yes.
PN1150
MR PROIETTO: As I understand it, what Mr Mujkic is saying is that the effect of a no extra claims clause is that neither party can make any changes to any conditions of employment during the life of an EBA. He’s saying that we made a change to an employment condition by absorbing wages and we are precluded from doing so.
PN1151
In order to succeed with this arguments he needs to at the very least prove that it was a term and condition of employment that the employees receive each percentage wage increase on their actual rates of pay. That has to be the term and condition that he’s saying to not be changed because that is what has changed and he doesn’t get past first base, Commissioner, because there is no evidence of that in this case. So if I can take you to the relevant witness material. In fact he’s only raised this point in submission at the end he only referred to three employees so I take it from that that he’s only pressing this part of his submission in relation to those three employees. I’m sure he’ll correct me if I’m wrong on that.
PN1152
MR MUJKIC: Yes, that’s right, that’s right.
PN1153
MR PROIETTO: That’s right, thank you. So I’ll only take you to those three. Ian Emery’s witness statement, Mr Emery says at paragraph 6 relevantly in the last paragraph, “At this meeting I was expressly told that this rate of pay could never be lowered.”
PN1154
So his evidence is that his rate of pay could never be lowered. That’s the highest point he can put his – that’s his evidence. It certainly is a long way from whenever there are percentage wage increases at any time in the future to the enterprise agreement you will always get the percentage wage increase on your actual rate of pay. It’s not there.
PN1155
In relation to Ms Medancic, reliance I think he’s placed on her the attached letter to the statement but I’ll just take you to paragraphs 3 and 4 of her statement. Just bear with me, Commissioner. She says,
PN1156
At the time I explicitly stated that I’d only accept the payroll position if I remain in the same classification. This was agreed to by the then distribution centre manager, Helen Cusack and Phil Humphreys who was the administration manager. I don’t recall signing any document at this time but there was no change to my classification or rate of pay at the time. It was only my duties that changed. I continued to and was required to attend weekly grade 5 team leader meetings.
PN1157
But then her position changed again subsequent to that. She moved to a different role completely and she gave no evidence about any statements or representations that were purportedly made to her at the time. In addition, the contract of employment that is attached to her witness statement talks about her classification and it’s dated October 1999 as a grade 5 store-person where she’s in the grade 5 team leader position. That’s two positions subsequent to the one that she finds herself in now. So those contractual documents are just not relevant to her current position. Every employee has an appointment and those terms are either written, oral or implied. She’s moved to a completely new role from the role she was in when the representations were made to her and they’re just no longer current.
PN1158
THE COMMISSIONER: Yes.
PN1159
MR PROIETTO: And finally, I can make the same submission in relation to Ms Papageorgiou. So if you look at her contract – sorry, I’ll just go back from that actually. The contract that she was given, this is Ms Medancic, actually says, “Your rate of pay will be that for grade 5 store-person which is currently $19.2638 per hour.” So that was a representation that was made to her. At the time that she got this letter she was classified as a grade 5, “that’s your rate of pay.” There’s nothing in there about continuing to receive percentage wage increases on over-agreement rates of pay. And it’s the same for Ms Papageorgiou.
PN1160
So we say irrespective of whether there is any legal merit to this argument and I argued pretty forcefully before the commission this morning that there was not, and I maintain that, even if Mr Mujkic gets through the front door, he can’t come up the staircase because the term and condition of employment that he claims applies just doesn’t. And on that point if you refer both to Acton SDP’s decision which you were taken to this morning, she finds that there is no evidence in that case that the term and condition of employment that is said to have been a term and condition of employment actually was and therefore she doesn’t actually determine whether the no extra claims clauses have work to do. She says at paragraph 10,
PN1161
I’m not persuaded the payment of overtime at both the overtime penalty and shift penalty rates is or was a condition of employment or an employment condition or entitlement for the (indistinct) shift maintenance electricians.
PN1162
And she goes on to explain the deficiencies in the evidence which quite frankly are right on point here and the only finding you can make in my submission on this is that there is no evidence that it was a condition of employment or an employment condition that each of those three employees was to get a percentage wage increase equivalent to that in the agreement to their actual rates of pay at all times in the future. There’s just no evidence to that effect.
PN1163
THE COMMISSIONER: Yes.
PN1164
MR PROIETTO: And it’s the same with the decision of O’Callaghan SDP. If I can briefly take you to that, this is the one, Electrolux Home Products v AMWU. He finds there that there is a change to policy that was proposed by the company and in relation to how it managed annual leave and the union objected to that because employees who were making applications for leave were suddenly being rejected and that hadn’t happened. And they relied on the no extra claims clause much as Mr Mujkic had but O’Callaghan SDP found that it wasn’t a term and condition of employment. He said it didn’t actually meet that threshold. He said,
PN1165
It would be illogical to interpret these provisions such that they prohibited any change during the life of the agreement where those changes are consistent with the specific entitlements and nominated conditions of employment and relate to managerial practices associated with the administration of those entitlements or conditions.
PN1166
That comes back to the argument that we did make in our submissions which was that at the end of the day you are going to decide whether or not the employer was entitled to do what he did. If you formed the view that it was entitled to do it then it falls within the changes that are consistent with specific entitlements and nominated conditions of employment and relate to managerial practice. If you find that we weren’t entitled to do what we did then you don’t need to consider the no extra claims clause because you will have found for the other side. So we say that there is no work for this no extra claims clause to do because there is no contractual entitlement to always get the percentage wage increases. Even if you find that there was we say that this argument will rise and fall really on the substantive matter which is whether we’re entitled to do what we did.
PN1167
There’s a broader point here, Commissioner, about whether no extra claims clauses are really entitled to have this effect and I think to be honest O’Callaghan J’s decision is probably pretty fair on that point. He says the changes which are the rights and conditions may fall within the clause but things that fall within managerial quality probably don’t. I’d go even further than that and say that if you look at the reason why these clauses were included in the first place their purpose was to avoid protected industrial action in the life of the agreement and they’ve just remained there for historical reasons that no one can explain. But I don’t think you need to decide that point because I don’t think the argument actually, as I say, up the stairs or even through the front door.
PN1168
Can I just very quickly just check my notes when I find them because there were some other matters that Mr Mujkic raised which I just thought I might address very quickly before finalising.
PN1169
THE COMMISSIONER: Just while you’re doing that, so it’s right then, Mr Mujkic, that the no extra claims submission revolves around those three employees?
PN1170
MR MUJKIC: Yes, that’s right.
PN1171
THE COMMISSIONER: Yes.
PN1172
MR MUJKIC: I’m happy to - - -
PN1173
THE COMMISSIONER: Not the broader group?
PN1174
MR MUJKIC: No, no and I’m happy to explain why. It’s because there’s insufficient evidence before the tribunal in our view to say that they’ve got conditions of employment that are sought to be changed. So we say that for those three there there’s sufficient evidence to make that finding.
PN1175
THE COMMISSIONER: Thanks.
PN1176
MR PROIETTO: I’m sorry about this, Commissioner. Do you mind just giving me one minute indulgence as I find my notes?
PN1177
THE COMMISSIONER: That’s fine.
PN1178
MR PROIETTO: Look, I just want to address some things very quickly. Mr Mujkic said that this affected a substantial number of employees. It’s actually approximately 25 percent. So the vast majority of employees at the site remain unaffected by this issue. I’ve taken you through the history. He sort of queried Ms Tebbutt’s evidence about the historical change and he called that evidence unreliable. I don’t accept that. I thought she was a very forthright and honest witness. Her evidence is entirely consistent with the history of the agreements that I’ve just taken you through and there is no evidence that’s been led that contradicts it, and nor was her evidence challenged on cross-examination so I reject those statements outright.
PN1179
He also says both in his written submissions and today that there’s no evidence that there was an intention to depart from the no absorption provisions. Well, it’s very clear if you trace through the history that I took you through, Commissioner, that there was a clear intention to move away from that. I’ve talked about, frankly, I think he strained when he tried to find an ambiguity in clause 16 and I’ve referred you to the modern awards. To be fair the only ambiguity I found in clause 16 was Mr Mujkic’s explanation as to why there was ambiguity in it. I didn’t follow that argument, with respect, Commissioner.
PN1180
MR MUJKIC: I think the extrinsic materials might - - -
PN1181
MR PROIETTO: I’ve explained to you my view on that. We’ve talked about the industrial content and purpose. I’ve explained why I think that those actually support our interpretation, not the interpretation put forward by Mr Mujkic. So that’s it. In summing up, I think I can probably do that very quickly, Commissioner. The terms of the 2010 agreement are clear and unambiguous. They do not require recourse to extrinsic material to determine their meaning and at the end of the day that should be the end of the matter. However, all this has been led and NUW is straining to have evidence of the negotiations admitted because they believe that will allow you to rewrite the clause. You can’t do that. All you can do is interpret the agreement and in our submission there is only one possible construction and that is that from 1 August 2012 the employees of the respondent were told to pay the wages set out in clause 16.
PN1182
The extrinsic material is of no assistance because it does not assist with interpretation of the clause. There is no ambiguity. There is no uncertainty. There is no expression that is capable of more than one meaning. To the extent that you find you are entitled to take into account extrinsic material all this demonstrates was that the respondent made a claim for an express provision allowing for absorption which was rejected by the union. This does not mean that the employer agreed that absorption would not happen. Nor does it mean that the employer agreed to wage increases to actual rates of pay. That’s manifestly not what was agreed during the negotiations for the agreement. The other extrinsic material which you if you feel the need compelled to review, in relation to the historical context, clearly supports the position that has been put forward today by the respondent. So unless there are any other questions, Commissioner, they are the submissions of the respondent in this matter.
PN1183
THE COMMISSIONER: No, I’m done on the questions for you, thanks very much.
PN1184
MR PROIETTO: Thank you.
PN1185
THE COMMISSIONER: Mr Mujkic.
PN1186
MR MUJKIC: I’ll be very brief, Commissioner. I wish to make three points only.
PN1187
THE COMMISSIONER: Yes.
PN1188
MR MUJKIC: Firstly, on GrainCorp and the relevance of GrainCorp, I don’t think I ever said that GrainCorp was directly on point. What it’s helpful for is a couple of things. Firstly, a good summary of the relevant principles of interpretation. Secondly, the facts of GrainCorp are quite similar to the facts of this case and I think that the relevance is how the Deputy President looks at those facts and how he considers them and what he takes away from that context. That’s the relevance. So yes, different clause, the problem with these authorities is that the clause we’re looking at is always very different so it can never be directly on point really. But it’s the facts, and I think the way that the Deputy President looks at those facts that can guide you, Commissioner, in making your decision.
PN1189
Secondly, I just want to respond to this argument that was put briefly about how Fair Work Act agreements are made when employees vote to approve the agreement and that therefore there’s this whole history of case law will need to change and I don’t think that’s right. In the context of the Fair Work Act the bargaining representative if there is one acts as a sort of agent, or a limited kind of agent in the context of the Act for employees for whom it’s the bargaining representative. So in effect the employees are negotiating the agreement even though they’re not physically there. It’s the bargaining representative acting as an agent. So extrinsic material that relates to the bargaining representative’s views or claim et cetera has to be admissible otherwise, “Well, lodge a claim, irrelevant. It’s not the employees lodging a claim, it’s the unions in this case,” or in whatever case the bargaining representative – so I don’t think that submission is right.
PN1190
And thirdly, perhaps finally, I agree with my friend’s point that the case law can be difficult to follow here but what I think in my view there are decisions that stand out. That’s Amcor, that’s the High Court. They don’t tell us everything, they tell us a few things. There’s the decision in Kucks, which is referred to in Kirby J’s judgment and also O’Callaghan J’s judgment and then there’s Short v FW Hercus and perhaps that’s the most helpful because it tells us a lot and I note it’s the judgment of Burchett J but the other justices agreed with the findings. The reason it’s perhaps the most helpful is because it’s a full court of the Federal Court and it’s a case where the court has the most to say about how the terms of an agreement should be interpreted. So I think that those three decisions are really the key ones. The other ones sort of revolve around them in a kind of universe. That’s all, Commissioner, if the commission pleases.
PN1191
THE COMMISSIONER: Probably for the both of you a decision that hasn’t been referred to and I don’t think there’s a need to but I’ll just bring it to your attention really. There was a full bench decision headed by the now Ross J so it’s a relatively recent one, 21 June last year, Cape Australia v CFMEU, which dealt with the approach of the interpretation of enterprise agreements and of course starts with the full bench setting out the approach. I’ll probably just have some regard to the way that that’s structured. I’m just raising it now because if you wanted to have a short break and have a look at it, if there’s anything you want to say about it, but the relevant cases we’ve covered extensively. They are Amcor and French J in Wanneroo which in turn in course invokes Short v Hercus and in turn Marshall J and the ASU v Treasurer Commonwealth of Australia. So I just think that the way that that sets out the approach to the authorities. It doesn’t go to the issue of extrinsic materials because that wasn’t a consideration in that case.
PN1192
But I just raise that because it may well be something that I’ll have regard to as I delve into the approach that I’m going to take to the law on construction. But I simply raise it because there might be a desire to say something to me about that. The relevant references to it are no more than a page or two. I’m happy if the parties want to have a quick look at that agreement. I could furnish you with the copies and you can say anything you want to say to me about that.
PN1193
MR MUJKIC: Yes, I think that’s prudent.
PN1194
MR PROIETTO: Yes, I think that would be prudent, Commissioner.
PN1195
THE COMMISSIONER: Yes, all right. We’ll adjourn briefly and my associate will furnish you with copies and you can let me know when you’re ready to come back and say anything to me about it.
<SHORT ADJOURNMENT [5.07PM]
<RESUMED [5.25PM]
PN1196
THE COMMISSIONER: Who wants to go first?
PN1197
MR PROIETTO: Probably you, I think.
PN1198
MR MUJKIC: Thank you, Commissioner. I don’t take issue with the summary of principles by the full bench, mostly it’s the same cases that we’ve been referring to today are referred to there.
PN1199
THE COMMISSIONER: Yes.
PN1200
MR MUJKIC: Just one point, I think there’s been a bit of disagreement today about whether we could look at context on the face of the clause or whether we need to first decide whether or not we can decide the matter on just ordinary meaning of the clause. And my view was we always had to look at context and I pointed to a whole range of authorities – you always look at context, putting aside extrinsic materials. That’s another issue and the full bench doesn’t deal with that. And all I say is that in paragraph 7 when there’s that part of the Wanneroo decision of French J I think that supports what I’ve been saying and it’s the second sentence,
PN1201
As with the task of statutory construction regard must be paid to the context and purpose of the provision.
PN1202
So of course you look at the ordinary meaning, you can’t not. That’s the purpose of interpreting the clause but you also have a look at the context and then often you may have a tension between the two and how that tension is resolved is the difficult part and I think, Commissioner, that’s what you’ll be grappling with.
PN1203
THE COMMISSIONER: Yes.
PN1204
MR MUJKIC: But we’ve tried to assist you in answering that question and hopefully we have.
PN1205
THE COMMISSIONER: Yes.
PN1206
MR MUJKIC: That’s all I wanted to say.
PN1207
THE COMMISSIONER: Thanks very much.
PN1208
MR PROIETTO: Also, just very quickly, Commissioner, I think what’s interesting about this decision is that the focus of the case is very much on the language of the agreement, what does the agreement mean? And in fact the full bench goes into quite minute details to - - -
PN1209
THE COMMISSIONER: The link between the clauses.
PN1210
MR PROIETTO: - - -what do the ordinary words of the agreement mean? And for them context means, context of the agreement really. They look at the dispute resolution clause as it relates to other clauses in the agreement. I didn’t really talk about that today but certainly in our written submission I think we say that there is nothing in the context in the 2010 agreement which supports the construction put forward by the NUW in this case. So we do at least touch on that. It’s also interesting that the search for meaning of what as a provision in an agreement means starts with the agreement itself and I think that comes through very loudly in this decision.
PN1211
The legislative context is also important and again, I didn’t actually mention this today but in paragraph 46 of our outline of submission we talk about the legislative context, which probably is that – well, I probably did touch on it but not directly – that industrial instruments enterprise bargaining agreements are made and they set minimum rates of pay at the workplace. That’s what they do. So we say that in the industrial context, which is referred to in this decision also supports our interpretation.
PN1212
In relation to just a couple of minor things, there’s already been a reference to paragraph 53 and context, but again, as I’ve said the starting point for these things is
PN1213
[t]he construction of an award like that of a statute begins with consideration of the ordinary meaning of its words.
PN1214
That’s the full first sentence in Wanneroo that’s referred to. Then it goes on to be some other conversation but my submission, my first submission today, really was that primacy must be given to that point and that is consistent with this decision. The point of Wanneroo, what that really goes on to say and my learned friend has obviously talked about this extract but,
PN1215
resort to such matters as prefatory statements and negotiations is of dubious assistance if admissible at all.
PN1216
So they don’t cite that part of Wanneroo but they obviously cite with approval the decision and the decision is all the decision and it comes with it that other part. So that was at page 378 of Wanneroo, directly under the heading, “Interpretation Application of the Award.” I won’t take you to it.
PN1217
THE COMMISSIONER: Yes.
PN1218
MR PROIETTO: Just two more very quick points. At the end of paragraph 9,
PN1219
Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.
PN1220
I think the point about that is that a tribunal shouldn’t strain to give a meaning to something that is not there because if employer or employees are in breach of the enterprise agreement then the penalty now is up to $51,000. So there needs to be some caution exercised in giving too liberal a meaning to the clause and I think that’s the point that’s being made there.
PN1221
Two final points, and I know I’ve already said that so I should have said three final points. Paragraph 35,
PN1222
Contrary to appellant’s submissions paragraph 5.3 should be given its plain and natural meaning as a complete sentence.
PN1223
And finally paragraph 45, “We recognise that the construction” - and I think this is actually quite an important point because it’s entirely consistent with what I’ve been saying today -
PN1224
We recognise that the construction we have adopted may be seen to give rise to some anomalous results but if those consequences flow from the language of the agreement it is not the function of the tribunal to rewrite the bargain agreed upon by those who made the agreement.
PN1225
I couldn’t probably put it better myself, Commissioner, because what I’ve been trying to say today is that what the NUW is seeking you to do is not to interpret the agreement but to rewrite it and this is the full bench of the commission saying you can’t do that, if the commission pleases.
PN1226
THE COMMISSIONER: All right, thank you. I thought that was necessary obviously in light of that agreement being there and expect that should any decision I make here be, heaven forbid, subject to review anywhere else if one of you aren’t happy with it – and one of you won’t be happy – then it’s quite possible that any full bench, I would have thought, they’re looking at that particular decision amongst the others that have been referred to. So that was the basis for canvassing it with you. I appreciate your views on it. The hearing is concluded. I reserve the decision not surprisingly. There are some significant matters to consider. I thank you both for your clear submissions and preparation for the case and we’ll adjourn at this point.
<ADJOURNED INDEFINITELY [5.32PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #M1 AGREED FACTS DOCUMENT PN79
IAN ALBERT EMERY, SWORN PN99
EXAMINATION-IN-CHIEF BY MR MUJKIC PN99
EXHIBIT #M2 WITNESS STATEMENT OF IAN EMERY PN103
CROSS-EXAMINATION BY MR PROIETTO PN125
THE WITNESS WITHDREW PN217
GARY JAMES STUTZ, SWORN PN218
EXAMINATION-IN-CHIEF BY MR MUJKIC PN218
EXHIBIT #M3 WITNESS STATEMENT OF GARY STUTZ PN222
CROSS-EXAMINATION BY MR PROIETTO PN240
CROSS-EXAMINATION BY THE COMMISSIONER PN290
THE WITNESS WITHDREW PN301
MICHAEL WILLIAM CUNNINGHAM, SWORN PN302
EXAMINATION-IN-CHIEF BY MR MUJKIC PN302
CROSS-EXAMINATION BY MR PROIETTO PN305
THE WITNESS WITHDREW PN311
EXHIBIT #M4 WITNESS STATEMENT OF MICHAEL CUNNINGHAM PN313
EXHIBIT #M5 WITNESS STATEMENT OF MR PAPAGEORGIOU PN320
EXHIBIT #M6 WITNESS STATEMENT OF MS SMITH PN320
EXHIBIT #M7 WITNESS STATEMENT OF MR RICHES PN322
RIETA MEDANCIC, SWORN PN324
EXAMINATION-IN-CHIEF BY MR MUJKIC PN324
EXHIBIT #M8 WITNESS STATEMENT OF RIETA MEDANCIC PN326
CROSS-EXAMINATION BY MR PROIETTO PN330
THE WITNESS WITHDREW PN339
STEWART TULLY, AFFIRMED PN348
EXAMINATION-IN-CHIEF BY MR PROIETTO PN348
EXHIBIT #P1 WITNESS STATEMENT OF STEWART TULLY PN359
CROSS-EXAMINATION BY MR MUJKIC PN361
RE-EXAMINATION BY MR PROIETTO PN520
THE WITNESS WITHDREW PN533
LOUISE TEBBUTT, AFFIRMED PN542
EXAMINATION-IN-CHIEF BY MR PROIETTO PN542
EXHIBIT #P2 STATEMENT OF LOUISE TEBBUTT PN549
CROSS-EXAMINATION BY MR MUJKIC PN553
RE-EXAMINATION BY MR PROIETTO PN649
THE WITNESSES WITHDREW PN652
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