AG2015/1282, Transcript of Proceedings [2015] FWCTrans 419 (17 July 2015)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1052105

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COMMISSIONER CAMBRIDGE

AG2015/1282

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

Application by Camp Somerset Pty Ltd (ACN: 075466081)
(AG2015/1282)

Sydney

12.04 PM, WEDNESDAY, 1 JULY 2015

PN1

THE COMMISSIONER: Yes. We re on record so could I take the appearances in the matter, please.

PN2

MR M TAYLOR: If it pleases the Commission, Michael Taylor, HMT Consulting, appearing on behalf of the applicant employers, Camp Somerset Proprietary Limited, and the Urban Challenge Proprietary Limited, and appearing by virtue of a telephone connection to Mooloolaba on the Sunshine Coast in Queensland. I understand that Mr Paul Colagiuri is present in the Commission in Sydney, who is representing directly the companies.

PN3

THE COMMISSIONER: Yes. You are Mr Colagiuri.

PN4

MR P COLAGIURI: Paul Colagiuri, Commissioner.

PN5

THE COMMISSIONER: Good, thank you. The matter is listed today for hearing, and the purpose of the proceeding is to advise the applicant of a number of concerns that arise in respect of the application. What I ll do is I ll run through those concerns. There s a transcript obviously that will be available after today, and that can help refer back to these matters so there s a reference point for the future in terms of this.

PN6

What usually happens is that I will run through the various concerns, and then if there s something that immediately springs to mind, then obviously I m quite content to hear from anyone about that. But sometimes these matters then require further consideration with the assistance of the transcript, to refer to the various issues, and then in due course we often get some further material provided, which addresses the concerns one way or another.

PN7

So if we just work through the documents and I ll raise the concerns as we move through the material. In terms of the approval process issues, and looking at the form F17, which is the employer s statutory declaration, that s only given by you, Mr Colagiuri. Is that right?

PN8

MR COLAGIURI: That s correct.

PN9

THE COMMISSIONER: Do you have any role with the other employer, the Urban Challenge or ‑ ‑ ‑

PN10

MR COLAGIURI: That s correct. My role is general manager for both organisations.

PN11

THE COMMISSIONER: For both organisations. So, in effect, you can give this statutory declaration for both of those organisations?

PN12

MR COLAGIURI: Yes, that s correct, sir.

PN13

THE COMMISSIONER: That wasn t clear. It seems that only Camp Somerset has been named as the employer in this. That may not be of great consequence but I m a little unsure about exactly what the process was here. This is unusual in that we have a multi-enterprise agreement and the Act has different sort of prescriptions and arrangements for multi-enterprise agreements, and how they re voted upon. From what I can gather here, there was a sort of two-stage process where the larger of the two bodies, which is I think Camp Somerset ‑ ‑ ‑

PN14

MR COLAGIURI: That s correct.

PN15

THE COMMISSIONER: They went ahead and voted first or something.

PN16

MR COLAGIURI: That s correct.

PN17

THE COMMISSIONER: Then the next the Urban Challenge voted after that or something, did they?

PN18

MR COLAGIURI: That s correct, and in truth also it would be worth just pointing out that there are a reasonable number of staff that work across both organisations. So their vote was captured in the earlier vote at Camp Somerset, and it was only those staff that work uniquely for the Urban Challenge that voted in the secondary process.

PN19

THE COMMISSIONER: Right. It may not be of great consequence in the scheme of things but I think the Act anticipates that in multi-enterprise agreement processes, each of the employees of the respective employers would vote separately and that the votes of each of those would be effectively recorded separately. One only needs to get one vote up with one of the employers to get the whole of the multi-enterprise agreement made, as it s described.

PN20

MR COLAGIURI: We certainly have the details of the individual votes that our attending officer can provide in terms of where the votes came from.

PN21

THE COMMISSIONER: Well, I m not saying that this is wrong or would disturb the vote or anything like that but it s a little tricky with multi-enterprise arrangements. This is often overcome when single-interest employer declarations are provided for. There s another part of the Act which says that in order to overcome some of the difficulties with multi-enterprise agreements, you can make an application for a single-interest employer declaration and that avoids a lot of this, and it effectively treats the two, three, four, however many employers as one body.

PN22

But, look, in the scheme of things that may not be of great consequence. But I did note I was a little surprised to see a document was provided, which is the returning officer s report, which has written in it:

PN23

This report must be retained by the site manager with a copy sent to HMT Consulting. It is not to be forwarded to the Fair Work Commission.

PN24

THE COMMISSIONER: But I ve got it, so I m not sure about that. But, as I say, this might pale into insignificance when we get to some of the other matters in terms of the content of the agreement document. But one other point in the process question here arose, and that was in respect of young employees. I d have to say, I looked at some of the material that you sent to employees, and some of it is very good. It s good to see the sort of invitation being made about these things.

PN25

But one of the things that we the Act seems to be directing us towards is obviously people for whom English is a second language, and you ve picked that up in one of the notices that you sent out, I see that. But one of the others and one of the others that s fairly important, I think, is how young people are dealt with. Young employees are a particular sort of category of employees who the Act treats as having particular circumstances and needs.

PN26

Often what we ve seen and I don t know the age of the young people and how many there are, although we ve got some information on a number of young employees. But I think what I m ordinarily concerned about is if we ve got people, particularly if they re under 18 years of age I don t know if you have any of those, but particularly if they re under 18 years of age, employers have often included a suggestion for those people, if they want to have a parent or other adult assist them in respect of any of the aspects of the agreement process, then they re quite entitled to have a parent or another adult, you know, effectively come along and participate and help them through the process.

PN27

We don t get it happening too often and once again it s probably only a minor issue and, as I say, it would only be - I think you ve got you ve indicated you ve only got four under 21.

PN28

MR COLAGIURI: We do, Commissioner, and one of those is under 18, and happens to be my son.

PN29

THE COMMISSIONER: That s probably not a problem then. He could have his parent help him. All right. But, look, in terms of that it may well be just worth nothing perhaps for the future about whether or not it s easier to use the single-interest employer declaration process. Although there s only two employers here, and it does appear that what we ve had is the aggregate number of votes from each of the two employer voting bodies aggregated, from what I can gather.

PN30

MR COLAGIURI: That s correct, and as I mentioned, Commissioner, a number of those staff would, in the course of their normal working year, be employed in both parts of the organisation, under both employers.

PN31

THE COMMISSIONER: So, what, they work for one employer for one period, and the other employer for another?

PN32

MR COLAGIURI: The nature of the work in many cases is our workforce is a very freelance or transient workforce, so there are staff that will do the busier weeks for one company, and the busier weeks for the other company, and the busier weeks for several other companies around the State in their other weeks as well. That s the way people work in our industry.

PN33

THE COMMISSIONER: Yes. All right. Well, in any event, as I say, I don t know that they re major issues in terms of process and it probably would be something that if there was nothing else of concern, we could sit down and work out how it could be addressed. That is, the question of whether this was appropriately conducted in terms of the balloting process. You might have imposed a more stringent requirement on yourself, aggregating it because I think the Act actually says all you have to do is just get a vote up at one of the employers, and the other one follows suit and the agreement is made. It s a bit interesting but anyway.

PN34

We might move on then to what we might describe as the more substantial questions, and they relate to the agreement document itself, and issues which can be broadly described as concerns relating to whether or not the agreement can pass the better-off overall test. Here I think it s easier for me to work through the document from start to finish, from front to back, and just look at some of the questions that arise in my mind when I see the document.

PN35

Some points here are very minor and could easily be addressed. Some of them are just typos, for instance, and obvious mistakes. Some are more substantial and will require, I think, careful consideration after today. But if we just go through these things. The first thing is you ve got the parties bound on the outside of the well, the sort of title page of the document. Nothing wrong with that

PN36

But one of the definitions here that you ve missed for naming the employer or the companies, is also the terminology the company . You can go to various provisions and you will find reference to the company . Clause 9.2 for instance, it starts, The company . So we really need both in the parties bound and also in the definitions clause, wherever I saw that, to include ‑ ‑ ‑

PN37

MR TAYLOR: Forty-five.

PN38

THE COMMISSIONER: To include that as part of your definition for fixing that up. As I say, that s one of those things that could easily be rectified. That s not a major issue but it s something that probably could be tidied up.

PN39

We then move through to some of the issues that start to emerge in respect of the better-off overall test. Looking at the configuration of the document, it s divided up into parts A, B, C and D, and unless I ve misunderstood this, the provisions in part A have general application across all employees, and then part B deals with salaried staff. So salaried staff, other than where there s clearly some sort of exemption from anything in part A part A applies to them but then part B picks up their more detailed descriptions. Similarly for field staff it s part C, and for support staff it s part D.

PN40

I understand that but what I m having I ve had some trouble with what I see as being potentially some internal contradictions. If I go to clause 8, clause 8.1 provides for the broadest spread of hours that I have ever seen. Ordinary hours can be in effect any time, according to that clause. Ordinary hours by their nature would not attract any form of overtime or penalty or other payment. They re ordinary hours.

PN41

But if we go to clause 46.4 under part D, we find here and presumably I m not sure about this but support staff in part D, and in clause 46.4, get some Sunday and public holiday rates. So immediately for me I say, well, which applies, and that s the dilemma that I see. That s the sort of dilemma you get where you have the document s construction and the way it has been put together, creating the potential for some ambiguity or difficulty to emerge. That s the first one that I could see.

PN42

In clause 9, the next clause, there s a typo in the first line but, once again, clause 9.1(a) says that:

PN43

The rates that are contained in schedule 1 of part C

PN44

so that s just those that relate to field staff and not salaried employees or support staff

PN45

compensation for all incidents of ordinary work hours.

PN46

But then if we go to part C we find that the rates that are here also have a field work allowance of $18 a day, and overtime rates applicable to employees contained shall be $48.20. Once again this, to me, it seems to be contradictory. I don t quite know which applies, and there are numerous examples of this that I ve seen as I ve gone through the document. So it s of concern that the document itself provides the prospect for significant ambiguity or difficulty in its interpretation in that regard.

PN47

Then at clause 9.2 what I thought was a beneficial provision here which said that, we re anticipating an adjustment on 1 July this year, and then every year thereafter, but I couldn t understand how a six and a half per cent benchmark rate above the level 1 from the Amusement, Events and Recreation Award actually applied because the rates that are in the in the various parts, other than the salaried staff, which I don t know how to reference them but in terms of support staff and field staff, those rates aren t six and a half per cent above the level 1 rate out of the Amusement, Events and Recreation Award. In fact they re, on one analysis, lower.

PN48

So I don t know how you could maintain a six and a half per cent benchmark when you actually start with a rate that s lower. Perhaps I could just go straight to that to show you how. If we go to page 33 and we look at the rates that are contained in that part, which is the support staff rate, the introductory rate of $16.90, when one goes to that level 1 of the Amusement, Events and Recreation Award, $16.90 is not six and a half per cent above that reference that clause 9 was providing for. The level 1 rate, grade 1 as it is in the Amusement, Events and Recreation Award was $17.35 before today. So 16.90 is less than that. It s certainly not six and a half per cent above it. So I don t quite know how all of that works.

PN49

It s complicated further when if we look at the 16.90 rate, and we understand that clause 16(f), which is in the general part, part A, which applies to everyone, I think, says there s no annual leave loading. A rate without an annual leave loading has to then accommodate the effect of the annual leave loading which is when it s all calculated out there s a simple equation for this and it s 1.346 per cent in an hourly rate.

PN50

So immediately the rates here aren t valid compared with those that are in the Amusement, Events and Recreation Award because they have annual leave loading, and so one would have to add straight away 1.346 per cent to these rates for there to be a valid comparison to it, just on the question of there being no annual leave loading involved. But, in any event, what I say, we re even starting from a position where when I look at clause there s clause 9, it seems to infer that the existing rates at six and a half per cent above this figure but they re not. They re actually lower.

PN51

As I say, the direct comparison at the level 1 or grade 1 of Amusement, Events, at the time of doing this before they went up today the hourly rate for a grade 1 under the Amusement, Events and Recreation Award was $17.35. The introductory rate here is $16.90. So I just can t follow how that works, I m afraid. Anyway, we will move on from clause 9. Once again, you can see that in clause 10 there s the The Company again. That appears in a variety of clauses.

PN52

Then clause 10.3 seems to indicate and there s some other provisions later on which deal with this, which trouble me greatly, where an employee is required to attend a meeting or a training session and it appears that they re compensated for that to a maximum of $20. Now, do I infer from that that a person might be required to attend a meeting at the workplace, for however long that might last, not be paid any remuneration for the attendance but instead just receive a maximum of $20? That would clearly be something that I would have great difficulty with.

PN53

In clause 11, Superannuation, the clause doesn t deal with the question of the default fund superannuation and that could be easily rectified though but it would need to ensure that in the absence of there being any nominated account from the employee so we were dealing with default fund payments it has to go into a superannuation fund that has a My Super product. That s a requirement, I think, of section 190 or something, 190(h), I think it is. Moving on then. Clause 16 deals with annual leave and provides for a requirement where in 16(b):

PN54

A person has greater than four weeks the company

PN55

the company again, as I say, once again the terminology

PN56

the company may direct the employee to take part of the leave to reduce the accrual.

PN57

This has been the subject of a very interesting major case recently, this whole question of this, and it might be that whatever was being done here might be done in accordance with this prescription. It s quite it attracted a bit of publicity actually. The Commission made a decision fairly recently which dealt with this whole question of there being an entitlement for employers to require people to take excessive annual leave. I think it s unfair and it hasn t been dealt with before then, and there s now quite a good regime.

PN58

I think it s a good regime, which says here, look, this is the process. That if people are starting to accumulate annual leave, you are entitled to, within certain protocols, require the people to take the leave. So it s little more prescriptive, I think, than what you ve just got there, which doesn t say it just says take part of the leave . I think the Full Bench decision actually probably gives you a better guide and it might be that you can incorporate some of those concepts into that particular clause.

PN59

Moving on then and this was a point I just touched upon a minute ago, we ve got another clause, clause 19.1, where if I read this to say that if field staff, prior to their actual employment commencing, be required to attend a familiarisation program for up to seven days, such attendance will be unpaid. It would be very difficult to see how that could overcome the better-off overall test.

PN60

There are similar provisions further on in this clause about paid a short day if you attend regular staff and training days, but then there s a once again, there s almost a little internal contradiction: voluntary workshops are unpaid. So there s some difficulty with those provisions.

PN61

Getting on a little further we got to the first of the discrete parts, part B, salaried staff. This clearly shows that there are provisions from part A that are not applying to salaried staff. So I understand that. But then clause 31.2 is something I don t follow. It just says:

PN62

The hours of work of salaried staff shall be averaged over 52 weeks.

PN63

But nowhere can I find what the average would be. It just seems that that particular clause and sentence doesn t really do anything. Then we have a provision in 32.2 which is sort of internal reconciliation process to find out whether you re better off as a salaried staff employee or had you been actually engaged in a presumably in one of the other parts as a field staff or support staff I don t know.

PN64

Coupled to the dilemma I have with that, is that I don t know how I reference any of this, and the salaries that are fixed in 34 are in a range. These are being adjusted in accordance with 9.2 but, as I mentioned a moment ago, I m not sure how 9.2 well, the starting point for 9.2 isn t six and a half per cent. If we were looking at six and a half per cent, how is that I don t know how that fits into this range of salaries that are set out in clause 34.

PN65

Other provisions in part C, which give rise to significant concern, involve clause 36 which I find to be I know we re trying to cater for unusual work circumstances but when the prescription for the hours of work ordinary hours of work, can be categorised into sort of short, normal and long days, it makes trying to do any sort of comparison almost impossible.

PN66

You know, it s good to have a degree of flexibility and agreement, but these things have to pass a test, and there s been recent very notable publicity about agreements that have seen to have been significantly disadvantaging employees. So there s a degree of attention that has to be paid to these things. I tried to do a simple comparison using now that we re in part C, looking at this field staff, looking at I think the field staff with referencing for field staff the Miscellaneous Award, which is I think broadly described as the catch-all award, with the lowest sets of rates and conditions in it of all the Modern Awards.

PN67

I just tried to look at what a normal day might mean in a comparative sense. For a probationary employee there s another concern here about the levels that are being used here too, because the levels don t line up neatly with the under the Miscellaneous Award, their level 1 is effectively a probationary employee within three months of employment. The level 1 employee is of less than three months and not carrying out level 3 or 4 duties. Then level 2 is the general level for persons employed for more than three months.

PN68

So, once again, here the alignment seems to have shifted downwards. There s a level 5 that s prescribed in your classification structures, but there s no level 5 rate when you get to your schedule. But then getting back to the sort of short-hand comparison that I tried to make as best I could, I tried to see, well, does $182 for a normal day s work, whatever that might be, look like a reasonable proposition. That was the sort of question I asked myself.

PN69

Not knowing exactly what a normal day is, but I m assuming that it might be particularly because it could include travelling and other things, I did a sort of simple comparison of taking the lowest rate I could find in the lowest Modern Award, the Miscellaneous Award, and doing a comparator with what you might describe as a 10-hour day. Factoring in the annual leave, factoring in that there might be some overtime for a 10-hour day under that, the lowest I could get to was $188.10 before I looked at any of the other hours provisions. So that gives rise to serious concern.

PN70

Then moving to similar sort of comparisons under the terms of the support staff referencing the Amusement, Events and Recreation Award, things for instance like casual employees working up to 12 hours, ordinary hours in a day. Clause 10.4(c) of the Amusement, Events and Recreation Award limits that to 10. So you start looking at all of these things and then the averaging arrangements in clause 40 about 38 averaged over 52 weeks, averaged over the entire year, that s a reflection also of the ordinary hours before where anytime of the day or night of any day of the week, of any day of the year, is ordinary time effectively.

PN71

Then we get to the minimum wages in clause 41, and as I ve said, just the starting point for the introductory level, it s not anywhere near 6.5 per cent above a benchmark. It s below the comparator of $17.10 when you just factor in no annual leave loading.

PN72

Then the adjustment provisions I assume that the adjustment provisions in clause 9.2 would apply to those rates but in it s not mentioned in part D, but it was mentioned in part C and part B. So I don t know why that s not mentioned there. Once again, this could be the subject of argument arising. There s also a typo in level 4. The level 4 has gone backwards. Level 3 is 18.70 and level 4 has gone back to 17.70. So that s probably just a typo or something.

PN73

MR TAYLOR: Yes.

PN74

THE COMMISSIONER: Then clause 42, we ve picked up allowances. These are allowances that you can find in the Amusement, Events and Recreation Award, I think, or elsewhere, but they reference a standard rate. But the standard rate, I don t think, is prescribed in the document. So that creates another problem. Yes, I was looking for standard rate but I couldn t find it. Standard rate, yes.

PN75

Then once again, ordinary hours of work, maximums in excess of the significantly in excess of the comparative position in the Amusement, Events and Recreation Award.

PN76

So in simple terms, I ve got some significant concerns about how the document could pass the better-off overall test. I m quite content for that to be considered and to be persuaded otherwise but, as I say, just from the broad proposition of looking at what is implied to be a starting point of six and a half per cent above a benchmark and finding that you re actually below that not above it to any degree gives rise to serious concern.

PN77

There are a variety of other things. The other thing that also probably would need to be attended to is an explanation for the authority that employees have signed the document on behalf of their fellow workers. Regulation 2.06A requires that there be an explanation of how the person obtained the authority. Very often they obtain the authority by being appointed as bargaining representatives or something. But to just say you ve been authorised doesn t explain how you ve been authorised, and there s a regulation that requires that.

PN78

So they are the various issues that give rise to concern and I guess in the circumstances it might be appropriate that some time is given for the applicants to consider all of that and then to respond in due course.

PN79

MR TAYLOR: Commissioner, may I ask, at what point will the transcript be available?

PN80

THE COMMISSIONER: I think it comes within a few days, I think. We actually will send it. I think now the process is one where we have a system that actually well, I think it automatically sends to the parties the transcript once it comes to us.

PN81

MR TAYLOR: Right.

PN82

THE COMMISSIONER: So it gets emailed, I think.

PN83

MR TAYLOR: Reasonably, we won t be in a position to respond to any general terms until we see the transcript, which could be next week presumably.

PN84

THE COMMISSIONER: It might be next week. It could be later this week but it wouldn t be, for instance, beyond the end of next week.

PN85

MR TAYLOR: No. Okay.

PN86

THE COMMISSIONER: All right. On that basis then the proceedings now stand adjourned.

ADJOURNED INDEFINITELY [12.44 PM]