AG2014/10202, Transcript of Proceedings [2015] FWCTrans 123 (16 March 2015)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009                                                               1051442-1

                                                                                                                            

COMMISSIONER GREGORY

AG2014/10202

s.185 - Application for approval of a single-enterprise agreement
 
Application by MSS Security Pty Ltd
(AG2014/10202)
 
 
 

Melbourne

WEDNESDAY, 18 FEBRUARY 2015

PN1.

THE COMMISSIONER:  Good afternoon, everyone.  I'll take the appearances in this matter, perhaps starting in Brisbane.

PN2.

MR S ONG:  Thanks, Commissioner.  It’s Ong, initial S, for United Voice.

PN3.

THE COMMISSIONER:  Thank you very much, Mr Ong.  And here in Melbourne?

PN4.

MS M STINSON:  Margaret Stinson for MSS Security.

PN5.

THE COMMISSIONER:  Thank you very much, Ms Stinson.  All right.  This matter has obviously been listed for hearing primarily to deal with the issues that have been raised by United Voice in its form F18.  I also note that an earlier section 739 application has also been joined to this matter.  I'll perhaps just indicate as well that whilst there were no directions issued for filing, I have also received the written submission from the applicant, so, Ms Stinson, thank you very much for that, together with the various attachments that accompany it and I have read that material.

PN6.

In terms of how we proceed this afternoon, I don’t necessarily have a fixed view about how we proceed, but I would perhaps just suggest, Mr Ong, given that United Voice have raised various issues, as I say in the form F18, you've now had the benefit of reading the submissions that have been provided by the employer.  Are you happy to go first in terms of the submissions that you make?

PN7.

MR ONG:  Indeed, certainly, Commissioner.  I'll ‑ ‑ ‑

PN8.

THE COMMISSIONER:  Ms Stinson, are you happy to proceed in that way?

PN9.

MS STINSON:  Yes, I'm happy to proceed on that basis.

PN10.

THE COMMISSIONER:  Yes.

PN11.

MS STINSON:  I would just like to clarify, if possible, as to whether the two matters will be heard separately or combined.  Our preference is for the two matters to be treated separately because we don’t believe they have a bearing on the approval of the agreement.

PN12.

THE COMMISSIONER:  So really the matter that’s the subject of the dispute, it’s really in relation to issues in the past, is that what you're saying, that it’s a separate matter?

PN13.

MS STINSON:  Correct.

PN14.

THE COMMISSIONER:  Are you proposing to make submissions about that today as well?

PN15.

MS STINSON:  Yes, I would like to.

PN16.

THE COMMISSIONER:  Okay.  All right, Mr Ong, you understand that?  Ms Stinson is putting the position that the two matters are separate.  Whilst she is prepared to make submissions in regards to both, she’s proposing that perhaps we deal with one and then the other.  Perhaps we deal first with the application for approval of the agreement and then perhaps with any submissions you wish to make in regard to the dispute notification.

PN17.

MR ONG:  I'm certainly happy to proceed on that basis, Commissioner.  Yes, certainly the approval of the agreement is not contingent on resolution of the dispute at all.

PN18.

THE COMMISSIONER:  Look, at this stage then I might just take any submissions you wish to make in regards to the application for approval of the agreement and then we'll deal with the other matter after that.

PN19.

MR ONG:  Thank you, Commissioner.  If it does please, I will remain seated, I think, so that my face doesn't disappear off screen.

PN20.

THE COMMISSIONER:  That's fine.

PN21.

MR ONG:  If there’s no objection to that, Commissioner.

PN22.

THE COMMISSIONER:  Not at all.

PN23.

MR ONG:  Look, I have had the benefit of seeing the applicant’s submissions in respect of the objections which were raised in United Voice’s form 18.  I will run through them in turn, but for what it’s worth I don’t also have any objections to the characterisation of them, I suppose is a shorthand way of referring to each of the objections either, Commissioner.

PN24.

THE COMMISSIONER:  Thank you.

PN25.

MR ONG:  So, look, on the first objection referred to by the applicant as the explanation of EA objection, notwithstanding, Commissioner, that no members have actually come forward with positive evidence in relation to this particular objection, it is one which United Voice does maintain requires resolution and, to some extent, interpretation potentially by the Commission.  Throughout all of my submissions, Commissioner, I will let the form 18 sit on the table, as it were, as read so I'll endeavour to be brief and really just supplement those submissions which are on the record, are on the file, and really just expand upon them and also by reference to the applicant’s submissions.  So with that in mind ‑ ‑ ‑

PN26.

THE COMMISSIONER:  So just in regard to that first objection, the submission you've made there ‑ ‑ ‑

PN27.

MR ONG:  Sure.

PN28.

THE COMMISSIONER:  ‑ ‑ ‑ you're saying that there’s no individual employee that’s actually come forward and indicated a concern in terms of the procedure, but you still press that particular position.

PN29.

MR ONG:  Commissioner, it’s something which emerged throughout the access period, one which we've sought to – press is the only word that I can really use to encourage members to come forward if there were any instances where they feel as though they’ve been marginalised or in any way left out of the information sessions, the obligations which the employer has in respect of notifying employees of the relevant materials in the access period.  So it is a case that I lead no positive evidence in respect of that, but nonetheless, there are some brief submissions which go towards interpretation of the relevant section which we think are worthy of some consideration nonetheless, Commissioner.

PN30.

So really the contention is that the union members are employees who are those relevant employees who have particular circumstances as that clause is outlined, I believe, at section 180 subsection (5), off the top of my head.  I haven't written it down, certainly, Commissioner, but whilst it’s a somewhat tangential example.  First and foremost, Commissioner, I can’t point – despite research – to any particular instance where this particular question has been the subject of any consideration by this place or indeed the courts, Commissioner, but it would be our submission that union members, particularly in instances where the union was an active presence in bargaining; employees who have particular circumstances as that wording is required in relation to the access period, Commissioner.

PN31.

What I would point to is a somewhat tangential example which is derived from the explanatory memorandum to the Act, Commissioner.  Obviously, I’ve got an extract here which is taken from the decision of Newlands Coal [2011] FWAFB 7325.  Commissioner, in that decision SDP Hamberger relies on this illustrative example in the context of “fairly chosen”.  So that’s what that illustrative example – taken from paragraph 778 of the explanatory memoranda, which is in relation to that fairly chosen requirement, which is obviously throughout the bargaining process.

PN32.

Now, whilst we don’t push any argument whatsoever that this group of employees was fairly chosen, it does give some indication anyway that union members are a group which require some sort of – or worthy of some specific consideration when it comes time.  So, Commissioner, whilst I don’t necessarily have anything which, like I said any positive evidence, I can lead or, indeed, any precedent which I can point to to support that contention, it is one which we would ask you to consider nonetheless.  Anyway, that’s the first objection, Commissioner.  That's all I have to say on that first objection, so if you like I can move through to the next objection, Commissioner.

PN33.

THE COMMISSIONER:  Just before you do, Mr Ong ‑ ‑ ‑

PN34.

MR ONG:  Sure.

PN35.

THE COMMISSIONER:  ‑ ‑ ‑ obviously had the benefit of reading the employer’s submissions, is your position influenced in any way by what the submissions that they have – or has your position changed in any way by the submissions that have been made in regard to the point in response?

PN36.

MR ONG:  Commissioner, we do accept that the wording of the act is clear and it has been the subject of some consideration as well, which is that the wording around “reasonable steps, reasonable efforts” be taken by the employer.  Commissioner, in this instance we would say that is generally the case, but with one omission, which is in respect of union members and allowing the union bargaining representatives the opportunity to address union members, Commissioner.  So that would be really to the point of what the objection is.

PN37.

THE COMMISSIONER:  Thank you.

PN38.

MR ONG:  So moving to the next objection, Commissioner, which is the future wages objection, obviously this is somewhat interrelated with the matter which is subject to dispute, but nonetheless I will focus this brief submission in respect of the approval.  Look, I'm keenly aware and acknowledge the limitations of the BOOT test in respect of this particular objection, Commissioner.  That is obviously the BOOT test only applies at the time of approval and cannot necessarily foreshadow what may happen in respect of minimum award wages or, indeed, other entitlements through any minimum wage review, award review or any other sort of application which comes before this place, Commissioner.

PN39.

Principally, Commissioner, the objection is included and is maintained in light of the present dispute which the parties are engaged in and, really, the possibility or likelihood that the parties will end up in future disputes come July each year.  Our submission on this point, Commissioner, is that I suppose the threat, possibility, likelihood, however you wish to frame it, of further disputation may result in employees not being better off overall.  So it’s not so much the wages inasmuch in themselves in isolation, Commissioner.  It is coupled with the potential for disputation down the line.

PN40.

Commissioner, I suppose, unfortunately, I suspect that the Commission go with the weight of precedent on this particular objection and I acknowledge that that’s something of a fact of life under the Act.  So whilst the objection is maintained, I will accept that it is with no great conviction, Commissioner.  That's the second objection.

PN41.

THE COMMISSIONER:  What about the effect of section 206 in regard to that objection, Mr Ong?

PN42.

MR ONG:  Commissioner, I think it is to be read – certainly 206 is there and we will turn to that following this matter and into the next matter.  It is certainly a situation in the union’s view that agreement wages cannot fall below their equivalent in the modern award.  That is absolute, but that’s also to be read against the context of the BOOT test and what your job is today in respect of approving the agreement and assessing whether it is better off overall compared to the reference document, Commissioner.

PN43.

THE COMMISSIONER:  So you're really saying that it’s not just in this case a question of straight comparison between wage rates.  It’s all of the additional provisions and how they operate and penalty rate provisions and whatever else is contained in the agreement that need to be taken into account in this context.

PN44.

MR ONG:  Commissioner, in respect of the second objection, I don’t actually press that point.  I say that the second objection – and we are moving into the territory of the dispute, I will admit, Commissioner, but the minimum obligation as far as wages is concerned is absolutely.

PN45.

THE COMMISSIONER:  Yes.

PN46.

MR ONG:  That is not a matter of offsetting against other conditions.  It’s not an exercise which in itself is subject to the BOOT test or any other offsetting.

PN47.

THE COMMISSIONER:  Yes.  I wasn't meaning to imply that.  Yes.

PN48.

MR ONG:  Sure, sure.  Yes, really, Commissioner, just to summarise that objection, it’s not strictly the wages themselves.  It is the threat of future disputation which we say has a bearing on whether employees are better off overall, Commissioner.

PN49.

THE COMMISSIONER:  Thank you.

PN50.

MR ONG:  So moving to the third objection, Commissioner, which is the Sunday overtime objection.  That objection is maintained, Commissioner, notwithstanding the reliance of the applicant in their written materials on the case of Harland and the comments of the Commission referred to in that case around the award modernisation process, Commissioner.  The objection is based not only on the material which we've already put forward, but also some further practical realities which are experienced within the industry which, in my view, may not have been appropriately ventilated in the Harland decision, Commissioner.  Particularly, and again from a practical perspective, United Voice is aware that because of this practice of rostering overtime on Sundays there may be some flow on impacts, particularly in respect of paid leave entitlements.

PN51.

So, Commissioner, we’re aware of a memorandum that was sent to employees at the airport site and before I go any further, I do acknowledge that the airport is covered by a separate enterprise agreement and not this one.  So that memorandum indicates, Commissioner, that there’s no ability or entitlement to paid leave, which is taken on the Sunday overtime shifts.  So this is despite Sunday shifts forming part of the regular roster, Commissioner.  So we’d imagine that this practice which has, as I said, been implemented at the airports, would flow on to the sites that would be covered by this particular agreement.

PN52.

So it will be the case that obviously if an employee calls in sick on the day of the rostered overtime, that being a Sunday shift, they will not be paid for that shift.  It’s the view of United Voice – and we submit that this practical example merely serves to highlight the manner of overtime allocation proposed by the applicant is utterly arbitrary and aimed solely at defeating entitlements that would otherwise be enjoyed by employees.

PN53.

Commissioner, I haven't had the opportunity to go into any great depth, but I would imagine there’d potentially also be some flow on into hours of work and the averaging arrangements which would be impacted by this example that I point to of an employee taking a sick day on their rostered overtime shift and, like I said, there could be some potential impact there, but one which I’ve not fully explored yet.  So on that basis, Commissioner, the Sunday overtime objection is strenuously maintained by United Voice.

PN54.

THE COMMISSIONER:  Thank you.

PN55.

MR ONG:  So turning finally, Commissioner, to the fourth objection, which I haven't got the name of from the submissions ‑ ‑ ‑

PN56.

THE COMMISSIONER:  Voluntary overtime.

PN57.

MR ONG:  ‑ ‑ ‑ the voluntary overtime objections.

PN58.

THE COMMISSIONER:  Yes.

PN59.

MR ONG:  That's what it’s referred to.  I just wanted to get the correct name, Commissioner.  So acknowledging again the existence of the BOOT and the obligations that that imports on yourself and also the matters which are referred to – sorry, the decisions, rather, that are referred to by the applicant in their material, the no disadvantage test, the relationship between the no disadvantage and the BOOT test and we do certainly acknowledge both of those tests.  Whilst there are significant differences, they do require a global assessment of the proposed agreement in totality against the relevant reference document, Commissioner.

PN60.

In this instance, though, Commissioner, in respect of the voluntary overtime, to United Voice it’s quite self-evident that the ability for employees to be rostered to work on overtime shifts at times which would otherwise attract the full whack, I suppose, of penalty rates is clearly disadvantageous to employees in that regard.  So the proposal here is for overtime to attract casual rates, this voluntary overtime concept.  Casual rates, of course, attract a penalty of 25 per cent and under the agreement and, for that matter the award, the overtime rates are time and a half for the first two hours and then double time thereafter with, of course, certain circumstances where all overtime is double time.

PN61.

So, again, I haven't done the specific figures myself, Commissioner, but it would be quite apparent that the difference between a minimum penalty of 50 per cent versus a maximum penalty of 25 per cent would be quite stark.  So this is also against the backdrop where the minimum wages are not massively in excess of the minimums provided in the award, Commissioner.  The material provided in the form 17 does conveniently have that comparison and you will see that the rates comparison document or, really, the BOOT document, I suppose you'd call it, Commissioner, which contains all of that material by way of comparison will reveal that there’s not a substantial – in my view anyway – difference between the non-aggregated wage rates contained in the proposed agreement versus the minimum rates contained in the award, Commissioner.

PN62.

Just as an example, you look at a level 1 employee, $19.20 under the proposed agreement versus level 1 under the award being 18.95.  That is a difference obviously, but we would submit that it’s not that substantially different, certainly when you factor in the other conditions that are lost, but most notably this voluntary overtime concept, Commissioner.  So therefore, Commissioner, we submit that the proposed undertaking is insufficient to meet the concerns that the Commission should have in respect of this voluntary overtime provision, Commissioner.

PN63.

We’d, therefore, contend that there should be an undertaking that this provision related to voluntary overtime is not relied upon at all and that the general overtime provisions contained in the agreement apply to all overtime worked under the agreement, Commissioner.  I have nothing on these matters.

PN64.

THE COMMISSIONER:  Sorry, I just missed that – you said at the outset that your view would be that the undertaking should indicate that the voluntary overtime provision does not operate at all.

PN65.

MR ONG:  Indeed.  That's correct, Commissioner.

PN66.

THE COMMISSIONER:  Right.  Yes.  And the undertaking that’s been proposed regarding the auditing of employee entitlements, you're not supportive of that.  You're just indicating obviously that the award overtime provision should apply instead.

PN67.

MR ONG:  Indeed, Commissioner.  That's correct.

PN68.

THE COMMISSIONER:  All right, thank you.  Mr Ong, thank you very much for that.  Ms Stinson, as I said, I have read the submissions you've already provided so thank you very much for those.  I'm not necessarily wanting you to read all of those, but I'm not waiting to inhibit anything that you do want to say.  Please, over to you.

PN69.

MS STINSON:  Thank you, Commissioner.  So I’d just like to take the opportunity on behalf of the applicant just to outline our key contentions and our arguments for why the respondent’s objections should be rejected.

PN70.

THE COMMISSIONER:  Thank you.

PN71.

MS STINSON:  So, firstly, in addressing the explanation, the enterprise agreement objection where it’s alleged that we did not take all reasonable steps to explain the terms and effects of the agreement.  We submit that in accordance with section 180.5 of the Act, the applicant comprehensively demonstrates discharge of its obligation to take all reasonable steps to ensure the terms and conditions of the enterprise agreement were explained to employees and this is detailed in paragraphs 2.4 and 2.6 of our form 17.

PN72.

This also included a terms and effect document which was nine pages in length, which discussed numerous methods of sourcing information and MSS providing information to its employees.  So our submission is that MSS took the responsibility as the employer to take all steps to ensure the terms and conditions of the agreement were in fact explained to employees.

PN73.

THE COMMISSIONER:  Thank you.

PN74.

MS STINSON:  We also submit that the company did not at any time tell the union that it could not speak to employees nor did the company reject any request by the union to speak to employees about the EA and in accordance with the case of the CFMEU v Tahmoor Coal Pty Ltd, the applicant was required under section 180 of the Act to communicate with its employees regarding the enterprise agreement and we submit the union’s non-attendance at any of these meetings and the applicant’s decision to communicate directly with employees are not grounds for refusing to approve the enterprise agreement.

PN75.

There are also cases which have been submitted, in our submission, such as the NTEIU case and the CFMEU case which I’ve mentioned which go into detail about the employers’ obligation to explain and interact with its employees.  In the case of the NTEIU, the employees weren't new to the bargaining process.  They were well informed by the organisation and about the pre-approval steps.  So we submit that our case is very similar to that in that our employees have been through the bargaining process previously and the bargaining representatives that the union refers to were extensions of the management team in discussing what the company’s offer was rather than to actually explain the terms and effects of the agreement and that was solely essentially my responsibility and that’s demonstrated through the information sessions that we ran.

PN76.

Regarding the second objection, the future wages objection, where it’s alleged that from 1 July to 1 November the enterprise agreement is likely to fall below the base hourly rate, per our submission, we do respectfully submit to the Commission that the Commission should resist the union’s invitation to predict the future and decide what the Full Bench will order regarding the minimum wage.  Instead, the Commission should, and respectfully we say this, make the assessment on the agreement against the BOOT assessment and on the materials currently before it.

PN77.

In regards to the Sunday overtime allocation objection, we submit that we can, as the employer, roster overtime on Sundays under the Security Industry Award and in fact it is addressed in clause 21.2D of the Security Award.  Further, there is nothing in that award that prohibits Sunday shifts being rostered as overtime as evidenced in our submission in the case of Harland and others v MSS Security.

PN78.

THE COMMISSIONER:  Ms Stinson, what do you say to the point I understand Mr Ong makes that employees working those rosters could be disadvantaged if they take a sick day or if one of their sick days falls on the day of that particular roster?

PN79.

MS STINSON:  Commissioner, the overtime is overtime, so if they call in sick they're not paid for that shift.

PN80.

THE COMMISSIONER:  They're not working those additional hours.

PN81.

MS STINSON:  Yes.  But they would have the ability to take their sick leave from their entitlements should they have entitlements available to them.  The company wouldn't withhold that.  Sorry, have I misunderstood?

PN82.

THE COMMISSIONER:  No.  So these would be additional rosters to the hours normally worked.

PN83.

MS STINSON:  Sorry, Commissioner, are we talking about the allocation of overtime or the overtime at casual rates?

PN84.

THE COMMISSIONER:  I was just, sorry, talking about the allocation on the Sundays.

PN85.

MS STINSON:  Okay.  So the overtime on Sundays is paid according to the agreement and according to the award, therefore, there is no reduction in entitlements.

PN86.

THE COMMISSIONER:  Yes.  I think the point that Mr Ong is making, though, is in regard to what happens in the situation where an employee is sick on one of those days when they would otherwise be working that rostered overtime.

PN87.

MS STINSON:  So in that case, Commissioner, the employee would be paid their leave entitlements, personal leave.

PN88.

THE COMMISSIONER:  Based on what rate of pay?

PN89.

MS STINSON:  It would be based on their ordinary hourly rate of pay.

PN90.

THE COMMISSIONER:  Yes.  All right, thank you.

PN91.

MS STINSON:  Thank you.  So in the final matter of the voluntary overtime objection concerned with there being no benefit to the employee who agrees to work overtime at the casual rates, we submit that the Commission needs to make a global assessment of whether any over award benefits contained in the EA outweigh disadvantages to an employee when compared to the security award.  We submit that by employees being available to work casual rates overtime, they're more likely to be offered those shifts and therefore increase their earning capacity.

PN92.

However, to address the potential concerns, we have done some wage modelling and we've come to the view that employees at level 1 and 2 work 11 hours of casual rate overtime and still remain within that better off overall.  Level 3 at 12 hours, level 4 at 16 hours, in accordance with 4.3.6 over an eight-week roster cycle.  Those employees would still be better off overall and should it be acceptable, we would intend to provide the Commission with undertakings in relation to this.

PN93.

THE COMMISSIONER:  The undertaking that you've foreshadowed in outline, they involve some auditing of the situation of those employees and is it also proposed that if those audits indicate some shortfall between the entitlements under the agreement and what the employee would otherwise be entitled to under the award that that shortfall would be made up.  Is that what’s being proposed?

PN94.

MS STINSON:  That's correct; to ensure that they're always better off overall.  So in our submission on page 5, we list the table of quarterly equivalent hours.

PN95.

THE COMMISSIONER:  Yes.

PN96.

MS STINSON:  So where an employee works above those hours over the quarter, they're automatically considered as an auditable employee and if it’s identified that they have been in fact underpaid, we will make sure that they're paid over and above so that they're better off overall.

PN97.

THE COMMISSIONER:  Yes, thank you.

PN98.

MS STINSON:  So in conclusion, Commissioner, and for the reasons set out, we submit that the union’s objections should be rejected with the exception of the voluntary overtime objection, which as I mentioned we intend to address by way of undertakings and we therefore submit the MSS Security Queensland Enterprise Agreement 2014 to 2018 should be approved.  The applicant does consider that its submissions should address any concerns the Commission may have.  However, if the Commission does still hold concerns, we would like the opportunity to discuss those concerns further.

PN99.

THE COMMISSIONER:  Thank you.

PN100.

MS STINSON:  Thank you.

PN101.

THE COMMISSIONER:  I should have asked you this earlier, Ms Stinson, but in terms of the future wages objection, your submissions also foreshadow a possible undertaking being provide in that regard.  Do you have any words in mind at this stage or is that really – you put that forward, that proposal, if it does transpire that I do have concerns about that particular issue?

PN102.

MS STINSON:  Commissioner, I do have some proposed undertakings here with me today, so should you like to look at those or consider those then I'm more than happy to present those for your consideration.

PN103.

THE COMMISSIONER:  Okay.  Are they something you can hand up?

PN104.

MS STINSON:  Yes, sure.

PN105.

THE COMMISSIONER:  That would be appreciated.

PN106.

MS STINSON:  Sorry, that’s the overtime one.  My apologies.

PN107.

THE COMMISSIONER:  Thank you.  The undertaking you've handed up in regard to the future wages objection, if I can describe it in that way, it has the undertaking 1, which relates to payments made by the company to employees prior to the date of approval of the new EA.  Does that relate more to the other matter than this matter?

PN108.

MS STINSON:  Yes.  That would be the period between January 14 and 2 November, the underpayment allegations.

PN109.

THE COMMISSIONER:  Yes.  So it’s really to do with that other issue rat her than this matter.  Yes.  Mr Ong, it’s a little difficult obviously in these circumstances just to give you all the detail, but essentially what’s being proposed is two undertakings:  (1) essentially in summary:

The company undertakes that during the nominal life of the new agreement it will not pay less than the base hourly rates of pay applicable under the security award as amended from time to time.

PN110.

And it also proposes a further undertaking in regard to the overtime issue, which essentially encompasses the audits that have been spoken about in regards to those particular groups of employees and then, again, an undertaking that if there are any shortfalls, compared to the relevant award, that those shortfalls will be made up within a seven-day period.  I think you're proposing that the orders would be conducted on a quarterly basis.  Is that right?

PN111.

MS STINSON:  That's correct, Commissioner.

PN112.

THE COMMISSIONER:  Yes.  Mr Ong, I'm happy to send those to you and if there’s any further comment you want to make in response, you can do so perhaps in the next day or two.  Are there any further submissions you want to make at this stage in regard to what you've just heard from Ms Stinson?

PN113.

MR ONG:  Indeed.  Thank you, Commissioner.  In all honesty I'm more concerned with the undertaking in respect of objection (4) rather than objection (2).  The undertaking in respect of objection (2), we have the benefit of section 206, anyway.

PN114.

THE COMMISSIONER:  Yes.

PN115.

MR ONG:  But that undertaking would nonetheless go towards the concerns which I raised, which was the potential of future disputation.  So they do serve to tie away that loose end, I suppose, Commissioner.  So I'm certainly happy to proceed on that basis subject to having the opportunity to view them, of course.  An undertaking ‑ ‑ ‑

PN116.

THE COMMISSIONER:  Can I just ask you about that?  When you say it goes to future disputation, so is it more to do with the perception that the employees might have rather than the reality of what is going to occur?

PN117.

MR ONG:  Commissioner, we are talking hypotheticals, of course.  Ms Stinson and the applicant is right in that we don't know what the minimum wage panel will order come June this year.

PN118.

THE COMMISSIONER:  Can I just ask, given all of that uncertainty, is there any reason why you – I mean, that’s always the case.  We never know with any agreement – we don't know what the minimum wage review outcome is going to be.  Are there any reasons why you press this issue now in regards to this application as opposed to why not raise it in regards to any application that’s made for an approval of an agreement?  Are there any particular circumstances that make it more of a concern in this matter than it would normally be?

PN119.

MR ONG:  Commissioner, quite easily the answer there is the present dispute.

PN120.

THE COMMISSIONER:  Yes.

PN121.

MR ONG:  That is plain and simple the reason why this is being present.

PN122.

THE COMMISSIONER:  So it relates to what’s gone on in the past rather than ‑ ‑ ‑

PN123.

MR ONG:  Indeed, Commissioner, and not – sorry to cut you off – some far flung past, but the past – the matter which is still on foot, Commissioner.

PN124.

THE COMMISSIONER:  Yes, okay.

PN125.

MR ONG:  So it is plain and simple that reason.

PN126.

THE COMMISSIONER:  Fine.  I understand that submission.  Thank you.  Is there anything more you want to say at this point?

PN127.

MR ONG:  Commissioner, we will obviously keenly await the wording in respect of the fourth objection, the voluntary overtime objection.  On its face, Commissioner, again, without having seen the undertaking, I’ve seen the outline of what it proposes to do, but I would think that our objection is maintained, but we’d leave that in your hands to make the decision as to whether it did pass the BOOT.

PN128.

THE COMMISSIONER:  What I might do with those – I don’t want to put too much pressure on you, but I understand the submission you make in regard to that matter, which is, as I understand it, that you would prefer simply that the award overtime provisions apply instead of what’s now proposed in the agreement in conjunction with the proposed undertaking.  Is that a fair representation of your position?

PN129.

MR ONG:  That's quite correct, Commissioner.

PN130.

THE COMMISSIONER:  Look, can I just ask perhaps - we'll send you up these proposed undertakings later this afternoon.  If you have any further comments or any further submissions to make about them, other than what I’ve just indicated as to what I take to be your submissions, if you could perhaps provide them to me within the next two or three days, that would be appreciated otherwise I'll just work on the basis that the submissions you've made in regards to the agreement provisions and the proposed undertakings remain as they are.

PN131.

MR ONG:  Certainly, Commissioner.  I can commit to having a response to you by the end of the week, certainly.

PN132.

THE COMMISSIONER:  Thank you very much.  As I say, there’s no need for a response if your position is simply as you've indicated it to be at this point.

PN133.

MR ONG:  Thank you, Commissioner.

PN134.

THE COMMISSIONER:  All right.  If that’s the case, in regard to that particular matter, I might just indicate that I will take just some, hopefully, brief time to consider the submissions that you made in regards to that matter before coming to a decision.  So we'll perhaps just treat that matter as adjourned on that basis at the moment, if that’s acceptable to both of you.

PN135.

MR ONG:  Yes, Commissioner.

PN136.

THE COMMISSIONER:  Okay.  Fine. All right, Mr Ong, if we perhaps deal with the other matter at this point.  Do I take it that in regard to this matter you’re wanting to make formal submissions rather than to deal with the matter in conference?  Is that the way you intend to proceed with it at this point?

PN137.

MR ONG:  Commissioner, I'm hopeful we can – it was listed, I think, for mention.

PN138.

THE COMMISSIONER:  Yes.

PN139.

MR ONG:  So I'm hopeful that we can at least come to some sort of position between us about how this matter can be on a path to resolution today, Commissioner.

PN140.

THE COMMISSIONER:  Okay.

PN141.

MR ONG:  So I'm certainly happy to talk to that very quickly.

PN142.

THE COMMISSIONER:  All right.  I'm happy to hear anything you have to say.

PN143.

MR ONG:   Thanks, Commissioner.  So subsequent to the original conference that was convened by Commissioner Spencer in this particular matter, the respondent, Ms Stinson, indeed provided United Voice with correspondence in relation to this matter.  I take it you've received that correspondence, Commissioner?  I believe it was dated 30 January, off the top of my head.  Yes.

PN144.

THE COMMISSIONER:  I’ve got a reasonable amount of material.  I think 29 January.

PN145.

MR ONG:  That sounds about correct, Commissioner.  I'll take that.

PN146.

THE COMMISSIONER:  Yes.

PN147.

MR ONG:  So there’s two major points, I suppose, that I'll talk to, Commissioner, in regards to that correspondence.  I take it as well, Commissioner, that you've received all the other material of course, the form 10 application and on 3 December United Voice did report back to Commissioner Spencer.  I take it that material has been received.

PN148.

THE COMMISSIONER:  Mr Ong, I have the file sitting right in front of me.  Sorry.  You referred there particularly to what?

PN149.

MR ONG:  So obviously the dispute notification.

PN150.

THE COMMISSIONER:  Yes.

PN151.

MR ONG:  So we'll take that.  But on 3 December 2014, I emailed actually Commissioner Spencer’s associate with a report back in respect of the dispute, Commissioner.

PN152.

THE COMMISSIONER:  Yes.  3 December?

PN153.

MS STINSON:  I have a copy here, Commissioner.

PN154.

THE COMMISSIONER:  I have a letter from Ms Stinson of that date.  Yes, sorry.  I have an email from you as well, Mr Ong.  Thank you.

PN155.

MR ONG:  Yes.

PN156.

THE COMMISSIONER:  Yes, I have already read that.  Thank you.  Yes.

PN157.

MR ONG:  Excellent.  Thanks, Commissioner.  So, look, I'll let those again sit on the table, Commissioner.

PN158.

THE COMMISSIONER:  Thank you.

PN159.

MR ONG:  So I'll talk mainly to the matters raised in Ms Stinson’s letter from 29 January.  There’s two major takeaways, I suppose, from my perspective in relation to that.  The first one is that this matter is to be treated discretely from the approval application.  As I did mention earlier in the other matter, Commissioner, the approval of the agreement does not hinge on the outcome of this dispute.  Indeed, it’s my recollection that that was the position put forward quite strenuously by the union in the earlier conference before Commissioner Spencer.  So, look, I won’t labour that point.

PN160.

On the second major point raised in the correspondence, Commissioner, we do acknowledge the proposed understanding in respect of the dispute.  Indeed, the offering of that position by the respondent is in many respects appreciated because section 206 is something of a road to nowhere in and of itself.  It’s presumably enforcement of section 206 – is reliance on bring an underpayment claim or a breach of award/breach of agreement claim in the Federal Court or Federal Circuit Court.  So if there is a means to resolve it in this place rather than one of those places then that would certainly be appreciated by all parties, I think, certainly from a cost perspective.

PN161.

We do note though, Commissioner, that the proposed undertaking is only to come into effect following a decision of the Commission.  Commissioner, we’d be prepared to enter into discussions today, be they on the record or not, with the respondent and yourself, indeed about whether you both be amenable to the issuing of a recommendation in this matter and I'm certainly prepared for that to be by way of written submissions or otherwise.

PN162.

Indeed, if it is the case where the respondent has strenuous objections, or indeed yourself has strenuous objections, the matter can proceed to a decision from yourself and from my perspective, I think it’s certainly possible for that to be done on the papers without the need for any formal hearing.  I don't know if there’s any evidence which would be particularly contentious in this matter, Commissioner.  Other than that, that’s really all I have to say in that particular matter and, again, I rely on the material that’s already been presented in this matter, Commissioner.

PN163.

THE COMMISSIONER:  The recommendation that you refer to, can you give me an indication of what you're suggesting it might contain?

PN164.

MR ONG:  Commissioner, it would be in essence really that section 206 has not been complied with in that the minimum wage is contained in the enterprise agreement – the still current enterprise agreement – have fallen behind their equivalents in the modern award.  I haven't given any strenuous thought, I must admit, to what the wording of a recommendation would look like, but it would be to encapsulate that there has been a prima facie breach of section 206 and the effect of that recommendation, Commissioner, would be to make good that prima facie breach, Commissioner.

PN165.

THE COMMISSIONER:  Thank you for that.  Perhaps we'll hear from Ms Stinson in terms of how she believes the matter should proceed from this point.

PN166.

MS STINSON:  Thank you, Commissioner.  Are you comfortable with me just heading straight into our submission regarding this matter rather than providing you with background?

PN167.

THE COMMISSIONER:  I am indeed.

PN168.

MS STINSON:  Thank you.  So the respondent’s proposed $250 payment to employees, as was outlined in previous submissions as a payment in consideration of the bargaining period and the parties having not reached agreement prior to the nominal expiry date of the agreement, which was 1 July.  The respondent’s view at the time was that the best way for employees to receive an increase was to negotiate a new agreement and, unfortunately, the protracted negotiations prevented us from doing so, despite there being five months of negotiations and clear intentions of the organisation that we wanted to pass on increases.

PN169.

The effective full pay period for award increases commenced on 14 July, which was the first full pay period for MSS Security and the respondent made a commitment to both its employees and at conference that should the agreement be approved, upon approval it would pay the employees the rates of pay contained in the proposed agreement in addition to the $250 payment commencing from Monday, 3 November.

PN170.

Therefore, we don’t see that there’s any exacerbation by the enterprise agreement approval process, as suggested by the applicant, I believe it was 3 December.  The applicable period, therefore, that we see as being in contention is 16 weeks and using the same basic methodology used by the applicant in their correspondence to the Commission on 3 December, we've identified the differences when compared to the rates in the agreement to the rates in the award as level 1, being $212.80 over the 16-week period; level 2 at $224.96 over the 16-week period; level 3 at $212.80 and level 4 at $194.56.

PN171.

The respondent has taken some time to closely examine and calculate the wages paid in accordance with the agreement and then compared to the security award and the respondent has come to the view that there has been a minor discrepancy in the initial calculation of $250 and keeping in mind that when that initial 250 was considered, we were considering that the proposed agreement rates would also be 1.4 per cent above the award.

PN172.

So in terms of moving this matter forward, our assessment for the collective employee group concerned and each of the levels, we've identified that the collective group of employees engaged under 3.1 of the agreement equates to an average of $266.71 per employee, excluding the $250 payment.  So that’s the gap that we've identified.

PN173.

THE COMMISSIONER:  So that’s 267?

PN174.

MS STINSON:  266.71.

PN175.

THE COMMISSIONER:  266.71?  How does that compare?  Where does that fit in with the figures you just gave me for each level?

PN176.

MS STINSON:  So the levels that I’ve communicated were just at a basic level against the agreement to the actual award.

PN177.

THE COMMISSIONER:  Yes.

PN178.

MS STINSON:  However, these figures that I'm presenting now are the figures that we've calculated based on the wages paid to employees over that 16-week period.

PN179.

THE COMMISSIONER:  Thank you.

PN180.

MS STINSON:  Then further going into the levels, we've done an assessment and at level 1, which accounts for approximately 24.2 per cent of the employee group, the shortfall in payment is covered by the $250 payment.

PN181.

THE COMMISSIONER:  Yes.

PN182.

MS STINSON:  Should that $250 payment be paid to employees at that level, there will be an overpayment benefit collectively of $4932.52.  At level 2, which accounts for 46.4 per cent of the employee group, the shortfall equates to an average of $50.88 per employee when taking into consideration the $250 payment.  Level 3, which accounts for 24.7 per cent of the employee group, the shortfall equates to $15.57 per employee.  Again, when taking into consideration the $250 payment.  Finally, level 4, which equates to 4.7 per cent of the employee group.  The shortfall equates to $30.93 per employee when taking that into consideration as well.

PN183.

So our submission, Commissioner, is that we demonstrate through our calculations that in consideration of the award payments from the first full pay period in July, the agreement rates paid and the $250 payment, that there is a minor discrepancy in levels 2 to 4 when compared against the award and that’s for the period between July and November.

PN184.

We, therefore, submit that in making a determination the Commission could additionally take into consideration the wage rates applicable in the proposed agreement from 3 November, which would place employees 1.4 per cent above the base rate of the award.  We submit that if the Commission is satisfied that on average the $250 payment is sufficient to compensate for any underpayment, the company will proceed with the payment as agreed.

PN185.

Alternatively, in the event that the Commission finds that further compensation needs to be paid, the respondent submits that payment should be set out in accordance with point 12 and I do have a ‑ ‑ ‑

PN186.

THE COMMISSIONER:  Thank you very much.

PN187.

MS STINSON:  ‑ ‑ ‑ submission before you.  Point 12 and the various levels listed.  It is MSS Security’s intention to honour the $250 payment irrespective of the status and hours of employees, even where some employees may not actually – would have had the capacity to earn that $250 over that period.  However, if the Commission does determine that it does require a full audit of individual employees, the respondent seeks approval to withhold the 250 payment for those employees for which the audit results in no further payment required.

PN188.

THE COMMISSIONER:  Just on those figures you just gave me, so from levels 2, 3 and 4, 50.80, 15.57, 30.93, there again they're an average figure of the discrepancy for each of the individuals in that category, are they?

PN189.

MS STINSON:  No, Commissioner, they're based on actual data from the period between 14 July and 2 November.

PN190.

THE COMMISSIONER:  Yes.

PN191.

MS STINSON:  The wage is actually paid to employees in addition to penalties and loadings.

PN192.

THE COMMISSIONER:  So every level 2 employee, for example, in the relevant period is $50.80 out of pocket.  Is that what you're saying?

PN193.

MS STINSON:  Correct.

PN194.

THE COMMISSIONER:  I apologise for perhaps not entirely coming to grips with all of what’s gone on in regards to this and I need to review the file again against the background of the submissions you're now making.  Given the amounts that you've identified, why would the company not just simply propose – and I guess we can leave the level 1 group out because they’ve all – well, I guess there’s a question whether we do leave them out.  You're basically saying that they’ve already – the $250 payment would more than compensate them for any shortfall that’s been incurred in regard to that group.

PN195.

MS STINSON:  Yes, that's correct, Commissioner.

PN196.

THE COMMISSIONER:  Yes.  So why would you not then propose to resolve the matter simply on the basis of making a payment to each employee of the actual amount that represents the shortfall that they’ve incurred?

PN197.

MS STINSON:  Commissioner, the reason why MSS Security hasn't done so is that that $250 ‑ ‑ ‑

PN198.

THE COMMISSIONER:  I'm not being critical, by the way, in saying that.  I'm just asking the question.

PN199.

MS STINSON:  Thank you – is the $250 payment was offered as part of the negotiation process for the enterprise agreement in consideration that we couldn't reach agreement and pay the increases from 1 July, which was our intention.

PN200.

THE COMMISSIONER:  So it was really a sort of package proposal of the $250 plus the new agreement that would be proposed in resolution of the dispute to do with this past issue about underpayments?

PN201.

MS STINSON:  Yes.  Although the dispute hadn’t – I don't believe was in place at that time when the agreement went out to vote.  However, during that process the dispute did occur and the intention behind the $250 was to recognise that employees hadn’t received their increase from 1 July.

PN202.

THE COMMISSIONER:  So when you say “dispute” it was already an issue in the workplace, but there hadn’t sort of formally been a dispute in regard to it.

PN203.

MS STINSON:  Correct.

PN204.

THE COMMISSIONER:  Yes, okay.  Is there anything more you want to say at this stage?

PN205.

MS STINSON:  No, thank you.

PN206.

THE COMMISSIONER:  In terms of how you suggest the matter be resolved or moved from this point, Mr Ong seems to be suggesting that it be left with me and I make some recommendation and the matter be resolved on that basis.  What do you say in regard to that suggestion?

PN207.

MS STINSON:  I guess our submissions, Commissioner, show how we would like the matter resolved should you be satisfied that the calculations that we've presented meet the requirements and should we be required to provide further calculations to further satisfy you we would be willing to do so.

PN208.

THE COMMISSIONER:  Fine, thank you.  I haven't obviously read those submissions yet.  Look, I'll go back to you, Mr Ong.  One way of dealing with this matter – I'm open to anything further you want to say at this point, but I think I now have a better understanding about what the dispute is about and I'm certainly prepared to give some further consideration to what’s already on the file and the submissions that have been made today against that background.  It may well be, though, that I still perhaps want to have some further discussions with both of you about what are the next steps.

PN209.

It may be that I come to perhaps a view that might be a way forward and then I'd discuss that view with both of you maybe in a telephone conference or something of that nature.  Mr Ong, do you have any views about how we proceed from today, given what you've heard from Ms Stinson?

PN210.

MR ONG:  Commissioner, I'm at your direction.  Certainly having heard the ‑ ‑ ‑

PN211.

THE COMMISSIONER:  That's a very dangerous position to be in, Mr Ong.

PN212.

MR ONG:  Indeed, indeed.  Having heard the submissions from Ms Stinson, you have the submissions from the union.  Obviously, without wanting to foreshadow what opinion you may have, but I'm certainly comfortable with you proceeding with making a recommendation on that basis if that is the most appropriate way to proceed.  Obviously, like you said, Commissioner, if you feel there’s more input needed then I'm certainly happy to convene again by way of teleconference, or whatever, is most convenient.

PN213.

THE COMMISSIONER:  I mean, to ask you the question – Ms Stinson has talked about, I guess, as I understand it, the original proposal being a payment of the $250 on the conclusion of the future agreement.  She’s also identified the actual amounts that represent the shortfall that each individual employee has incurred as a result of this situation.  I mean, do you have a preferred view about how the matter is resolved, whether it is simply on the basis of $250 on the conclusion of the future agreement or would it be better resolved by specific payments of the actual shortfall amount being provided to each employee?

PN214.

MR ONG:  Commissioner, one part of me says that section 206 imposes a pretty strict liability, I suppose, and there’s no opportunity for offsetting, but we do work in the real world, of course, so I'm aware that if there is the possibility of the $250 incentive payment being withheld for whatever reason or reduce, or whatever the case may be, I certainly don’t want to jeopardise that on behalf of my members.  Just by way of clarification on one point ‑ ‑ ‑

PN215.

THE COMMISSIONER:  I think that there’d be winners and losers, I think, wouldn't there if that were to be the situation?

PN216.

MR ONG:  There’s always winners and losers in these matters, Commissioner, but I do take your point.  Just one thing that I did want to clarify perhaps with Ms Stinson was around the 3 November date.  That was one which must have passed through my radar at the previous conference.  Is that in respect of the – well, can you just elaborate on what that relevance was?

PN217.

MS STINSON:  The relevance to that was that the payment of the wages under the agreement would be effective from 3 November, therefore, that period that we’re discussing under this dispute starts on 14 July, ends on 2 November and the payment, should the agreement be approved, of the 250 would also be obviously effective from that 3 November date and if my recollection serves me better, we did discuss it at conference.

PN218.

MR ONG:  Look, that may well be the case and sorry to jump in there.  It may well be the case, but like I said, it’s just slipped through my net.  Look, that does put a slightly different slant on things, I would imagine, in that if the period we are talking about is well defined and is not ongoing then that certainly puts a very different perspective on there.

PN219.

Commissioner, if it pleases you, what we may do is I may seek some further instruction from my members on this matter as to the figures which have now been put forward and the application - we’re obviously the applicant in this matter, so I can certainly report back if there is any necessity to bring it back and then clarify how we do proceed from there, Commissioner, I think.

PN220.

THE COMMISSIONER:  Okay.  Do you have any objection to that course?

PN221.

MS STINSON:  No, I don’t, Commissioner.

PN222.

THE COMMISSIONER:  All right.  These submissions are on the record.  In a sense, we’re probably proceeding more in the way of a conference to see whether we can find some sort of agreed or, at least, accepted way of resolving the matter.  I'm happy, Mr Ong, if you would like to have some further discussions with your members and to provide me with any views that they might have about how the matters should be dealt with based on what you've heard today.  If you want to get back to me, obviously I think it would be sensible to copy the company in as well, and on the receipt of that response we can give some further consideration to how the matter proceeds from this point, whether it proceeds by way of perhaps a further conference to see whether we can get a mutually agreed position or if it appears as though there is some further deadlock, whether the Commission does need to get involved in more formally determining the matter.

PN223.

I'm happy to try and proceed at this stage on the basis that we are looking still to see whether we can find a way of resolution, particularly because it doesn't appear as though you're too far apart and there is a degree, certainly a significant degree of goodwill, between both of you to try and get the matter resolved, that we continue to see whether we can work to get some resolution that is on a basis that is acceptable to both of you.

PN224.

MR ONG:  That's appreciated, Commissioner.

PN225.

THE COMMISSIONER:  Mr Ong, I'm not putting any pressure on, how much time do you think?  When do you anticipate you might come back to me?

PN226.

MR ONG:  Commissioner, this time next week I would think.

PN227.

THE COMMISSIONER:  Okay.  What’s today, Wednesday?  All right.  I think we'll leave it on the basis that I would expect to hear from you by close of business by the end of next week – is that the correct date – yes, it is – by the close of business on 27 February.  If you could get back to me on or before that, that would be appreciated.

PN228.

MR ONG:  Thank you, Commissioner.  You know me well to give me that extra time.

PN229.

THE COMMISSIONER:  Ms Stinson, is there anything more you want to say at this point?

PN230.

MS STINSON:  Thank you, Commissioner.

PN231.

THE COMMISSIONER:  Okay.  Look, I might just then summarise for the record that we have dealt with two matters this afternoon; the first is an agreement application in AG2014/10202.  The parties have made submissions in regard to that application.  I have heard those submissions.  At this stage I have reserved my decision in that matter to give some further consideration to those submissions and I will during the course of that provide Mr Ong with copies of the proposed undertakings that have been provided by the employer this afternoon and I understand that he has indicated that he will, if he wishes to make any further comment in regard to those undertakings, provide those comments to me by close of business on 20 February.

PN232.

The second matter involves a dispute notification in C2014/6948.  We have had some further discussions.  Those discussions are on the record at this point, but we are continuing to work towards, hopefully, an agreed resolution of that matter and as part of the process in train at this stage, Mr Ong has undertaken to come back to the Commission with the views of his members regarding the proposals that have been canvassed today and to do that by close of business on 27 February.

PN233.

Mr Ong, do you have any further comments, submissions you want to make in regard to either of the matters we've been dealing with this afternoon?

PN234.

MR ONG:  Nothing further, Commissioner.  Thanks for your time.

PN235.

THE COMMISSIONER:  Ms Stinson, anything further from you?

PN236.

MS STINSON:  No, thank you, Commissioner.

PN237.

THE COMMISSIONER:  All right.  At this point I'll just simply say thank you very much to you both for the submissions you've made in respect to both matters this afternoon.  Hopefully, both of them will be concluded in a relatively short space of time.  At this stage the Commission is adjourned in regard to both matters.

ADJOURNED INDEFINITELY                                                           [5.04 PM]