AG2017/6578, Transcript of Proceedings [2018] FWCTrans 116 (12 April 2018)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009                                       1055804

COMMISSIONER CAMBRIDGE

AG2017/6578

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

Application by Reoweld Pty Ltd
(AG2017/6578)

Sydney

2.02 PM, THURSDAY, 5 APRIL 2018

PN1

THE COMMISSIONER: Good afternoon. We are on record, so we might start by taking the appearances in the matter, please.

PN2

MR C LOWE: Good afternoon, Commissioner. Lowe, for the applicant employer.

PN3

THE COMMISSIONER: Thank you. The matter is listed today for hearing and the purpose of this proceeding is to advise the applicant of concerns that the Commission has about certain aspects of the application. The process is one where I'll run through those concerns and because there is a transcript, that might avoid the need for all the notetaking that might otherwise have to be undertaken. There is a transcript that will be produced after this and then people can go back to the transcript, look at the points raised and then address them one way or the other.

PN4

Often there might be some immediate prospect that the concern that I raise can be extinguished, if you like. By all means interrupt me and tell me, "Oh, no, Commissioner, you've got that all wrong." I'm quite happy for that to happen because we very often do get these things wrong, but the process is run through the concerns. If there is some initial comment or suggestion or response you want to make, by all means do that, but more likely the best way to do it is to then go back, go through the transcript, go through each of the points of concern, consider them and then develop a response to those concerns.

PN5

I find this the more efficient way of doing these things, frankly, than sending you a communication which sets these things out and we get involved in a sort of series of communications that takes so long. I think this is a more efficient way of doing it, so that's what we will do. We have got an application for approval of an enterprise agreement that involves, in this instance, four reference instruments. There are four modern awards that effectively need to be used as reference material for the purposes of the BOOT - the better off overall test.

PN6

What I'm going to do in a moment is get to the actual agreement document and alongside that I've got the four reference instruments, and I'll be going through the concerns that have been identified in respect of that. If you have got the reference instruments yourself or you've got a copy of the actual agreement document, it's going to be helpful so that you can keep up with what is going forward.

PN7

In terms of preapproval steps, I have not been able to identify any significant problems there, so all those technical problems that have beset this process for many years now - the dates, the NERR and all those things - that all seems to me to be, from my reading of it, not an issue here. Essentially the matters relate to the BOOT and there is one minor matter to do with the authorisation signature. We'll get to that at the very end of the document. The person who signed it on behalf of employees, I think there might be a tidy‑up there that's needed.

PN8

Perhaps the way to start might be to actually go to the agreement document itself and to just start working through this from front to back, clause by clause and identifying concerns. So starting with the agreement document it's clear from, I think, the provisions in clause 6 that the agreement is what you might describe as a stand‑alone agreement. It's quite clear that it's going to, according to clause 6.2, operate to the exclusion of any of the awards or previous agreements.

PN9

That means that these reference instruments - and we might just identify those in the order that I think logically need to be dealt with. The reference instruments are the Manufacturing and Associated Industries and Occupations Award 2010; then the Road Transport and Distribution Award 2010; then the Road Transport (Long Distance Operations) Award 2010; then finally the Clerks - Private Sector Award 2010. That is the sequence and that follows the sequence of the way the document has been constructed itself with its different parts.

PN10

Obviously for the BOOT purposes we're not incorporating any of those and so where there are bits and pieces in those documents that might provide for some benefit, obviously we have to be cognisant of that when we're doing this comparison. So then let's get onto the first sort of significant concern.

PN11

Perhaps before I get onto another point of detail, it's also clear that the agreement is stand alone. It is not pulling in any of the other terms of those reference instruments and clause 8 talks about the way in which this is constructed. It provides for rates of pay that you might describe as being all‑inclusive. The rates of pay here pick up everything. There aren't any other allowances or penalty bits and pieces that hang off any of this. We've got sort of an all‑up rate approach in respect of how this has been constructed.

PN12

Now we get to the first point of detail, in clause 8.1.3. This clause, I don't quite follow. I'm not sure what the actual practical operation of that provision would emerge as. I would be keen to get some sort of explanation of how that would work. I just don't follow it, to be honest, so that's the first concern. I'm not sure what that 8.1.3 is actually trying to do.

PN13

If an employee has a claim against the employer, how could that be subsumed or consumed by all the payments under this? There could be a claim against the employer for workers compensation. How could that be picked up by that concept? How could it be offset against any liability or claim? That is the sort of question mark I have around that clause.

PN14

MR LOWE: Yes, I take your point, Commissioner. I would probably like to get instructions on that.

PN15

THE COMMISSIONER: Yes. I don't want immediate answers to all of this and I think you have been brought into it logistically because we had a problem with Newcastle and so forth. When I'm raising these questions, I'm raising them for the purposes of the transcript as much as anything else.

PN16

MR LOWE: Yes. Thank you.

PN17

THE COMMISSIONER: The next concern relates to clause 8.2.2 and 8.2.3 on the next page. These are clauses which talk about repayment of overpayments and authorisation for the employer to deduct amounts. Now, my concern is that these arrangements might contravene section 324 of the Act which deals with this question about the way in which an employer can deduct amounts from payments for wages and other remuneration.

PN18

The concern there is that there is a need, I think, to get a written authorisation from an employee, but there is also the capacity for enterprise agreements to provide for a mechanism for that. I'm just concerned here about, on its face, whether these provisions might conflict with section 324 of the Act. All right.

PN19

Now, moving on to the next issue, clause 9.3.4 might conflict internally with a couple of other provisions that I have identified where casual employment has some minimum terms of engagement. 9.3.4 talks about an hour's notice for termination and in other parts of the document or somewhere else there are often minimum terms of engagement for a casual employee, so there's a little concern there that there might have been some conflict with that. If a person was brought in to work for a minimum period of, say, three or four hours and then within one hour they were dismissed, how would that work? I guess that's the concern that arises from that provision.

PN20

The next provision relates to what is essentially the absence from the document of any prescription for rates to be paid for working public holidays. This relates to clause 11 of the agreement. 11.1.1 says:

PN21

An employee is entitled to a day off on a public holiday, subject to the employer requesting an employee to work on a particular public holiday.

PN22

Well, perhaps it should say an employee is entitled to a paid day off. That might be just a simple improvement. I think that is probably implied, but then it's clear that the employer could request the employee to work the public holiday. They have been identified there, but the rates for public holiday work I think are absent from the agreement document. I'm happy to be corrected, but I couldn't find what public holiday rates would apply.

PN23

We then move past the change and dispute resolution process, and we get into what you might describe as a more nuts and bolts part. We've moving on now to Part 2 where we first get to reference instruments. This is workshop employees and the reference instrument then is this Manufacturing and Associated Industries modern award. Just doing what you might describe as some comparisons here, I'm looking at the hours of work clause which is 16.1.

PN24

This can be contrasted with what is in the modern award - this particular reference, modern award - the Manufacturing and Associated Industries Award at clause 36.2. The first thing that I notice here is the spread of hours is expanded from the modern award. The modern award is 6 am to 6 pm and here it is 5 am to 6 pm, so there is an extra daily span of an hour, but then there is a prescription for working eight hours in each day and having a rostered day off.

PN25

Now, I'm not sure whether that as a fixed arrangement for work doesn't conflict with the NES in section 62 of the Act, where what you've actually got here is a prescription which says that you must work 40 hours a week. I did this sort of notional working comparison. I know this is to do with what you see on TV with Compare the Pair, but it's a bit like that; I'm taking two people.

PN26

Let's be a level 3 workshop employee which is aligned to the C13 rate, I think, and let's just look at if I'm an employee working under the agreement and I work from 5 am for eight hours each day, Monday to Friday, although I get a rostered day off at the end of that. Compare that to what would apply to a person working the same under the award. It's a notional sort of idea of 5 am start and a 40‑hour week. It's fairly clear under the agreement as a level 3 it's $19.60 by 40 hours, so that's going to generate for that person $784.

PN27

Move then to the C13 under the award and of course the hourly rate is lower, I accept that, it's 18.81, but one of those hours - that is the hour between 5.00 and 6.00 - would be paid at time and a half, and the extra two hours over and above the 38 would be paid at time and a half under the award. Doing my Compare the Pair‑type idea, the person working under the agreement would get $784 a week and when you calculate out 18.81 by 38, plus two hours at time and a half and five hours at time and a half, working under the award you come out with $912.25 a week. That raises a concern for me.

PN28

Now, I accept here that you might say, "But hang on a minute. The person working under the award doesn't get that day off." That's true, so you could then even take out the two additional hours and I think you'll still find that the rate under the award operation would be more beneficial than the rate under the agreement operation. They are the concerns I have about essentially the way in which the hours of work have been stipulated in clause 16.1.

PN29

Moving on to the next point, in clause 16.4 - and I think this is probably consistent in the other areas of the operation, as well - we have got additional hours and weekend work. In this instance - and I think this occurs elsewhere - weekend work is fixed at time and a half for the first three hours and double time thereafter. If you go to clause 40.8 of the Manufacturing and Associated Industries Award, 40.8 has got a Sunday work provision in it which is all double time and also with a minimum of three hours.

PN30

It doesn't take much thought to contemplate a person who might be brought into work on a Sunday being paid - well, what rate, I don't know - but it would under the agreement only be in the first three hours, say, at time and a half compared to under the award it would be double time; so once again then that rate is a concern. Perhaps then we will leave the Manufacturing and Associated Industries Award and we will go onto the transport part.

PN31

Some of the concerns that exist with this daily span and the 40‑hour week arise also in the other parts, but I think it's not quite as pronounced here. The arrangements here - and particularly coming from the reference instruments, as well - they seem to be a bit more consistent. There we are, that's what I was going to mention: there is a casual employee being entitled to a minimum of four hours' work, so that earlier provision about one hour's notice immediately jumps to mind. What happens with a person that has got four hours' work but they're sacked in the first hour? That's in clause 18.2.2 and, as I say, it seems to conflict with the earlier prescription about being able to terminate a casual with an hour's notice.

PN32

We then get onto the remuneration questions here. I note - and this also applies in the other parts, I think. Certainly in respect of the Clerks part - the local driver is just fixed as an hourly rate of $21.15 and from the F17 documentation that is equated to a grade 3, I think, under the Road Transport and Distribution Award. A grade 3 under that, the equivalent rate is $20.10, so there is about a dollar and five cents an hour more I think under the agreement.

PN33

The task for me then is, well, if I look at a lot of the other things that are in that Road Transport and Distribution Award, and there are a lot of allowances - I know there is a suggestion here that none of these allowances apply and so forth, and maybe they don't - there is only a dollar and five cents an hour here that you're playing with in terms of the comparison. I think that's the point I'm making.

PN34

I'm assuming, too, that that - and this might be easily verified - grade 3 rate for a local driver involves a truck that doesn't exceed 13.9 tonne gross vehicle mass, I think. I'm assuming that none of the local drivers would drive a vehicle of a larger carrying capacity or otherwise the whole equation gets thrown into the air.

PN35

If we then move over the page, once again we've got clause 19.3, "Additional hours and weekend work". As with the earlier position in respect of the workshop, all weekend work in terms of penalty rates is just attracting the time and a half for the first three hours and then double time. Clause 28.1(b) of the Road Transport and Distribution Award fixes penalty rates for a Sunday. Any time between midnight on a Saturday and midnight on a Sunday is all double time.

PN36

Once again doing the sort of comparison, how do you deal with a person who might be called into work on a Sunday where they would be getting - say if they were guaranteed three hours or something like that, they would get it at time and a half under the agreement, but under the award it would have been paid at double time. I suppose that's the simple comparison.

PN37

Similarly, clause 22.3 of the Road Transport and Distribution Award fixes a daily span of hours. There doesn't appear to be a daily span of hours here. The daily span under the reference instrument is 5.30 am to 6.30 pm, but here it appears that although you can't work in excess of eight, they could be at any time of the day. There doesn't appear to be any stipulated daily span of hours for your local drivers.

PN38

There is also a clause in the modern award, clause 28, which specifies the minimum amount of time worked on a weekend. There is a minimum of four hours' work, I think, under clause 28.1(c) of the Road Transport and Distribution Award which, once again, would mean there would be a comparison here where if a person could be called in to just work for an hour, theoretically there is no reason why they couldn't.

PN39

It could be any hour. It could be - whatever it is, but called into work for one hour on a Sunday and get just time and a half, whereas that work under the award would have attracted a minimum engagement of at least four hours' work at double time. As I say, you don't need to do too much modelling of working of the hours to see what might be the impact of that and how that might create problems for an employee to be better off overall.

PN40

Then moving on to the next point, we now move into the long distance driving and the Road Transport (Long Distance Operations) Award. This is an award which has historically had minimum rates for week and for per‑kilometre arrangements. I just note that the weekly minimum rates that are fixed in clause 22.6.2 are exactly the same as those that are prescribed in the award.

PN41

Immediately if you're just working as a long distance driver on a minimum weekly rate, if you haven't got a lot of the other entitlements that the award provides for you, your rate is exactly the same. It doesn't have any gap in it and no additional amount paid. However, I note that the agreement does appear to be generous in respect of the - I think it's generous - cents per kilometre rate, because the comparison here is that for the grade 2 which is paid at 45 cents and the grade 4 which is paid at 45 cents, is higher than the equivalent in the award. A grade 2 in the award is only 40.45 cents per kilometre and the grade 4 is 41.42, so clearly you've got a more beneficial rate for the rate per kilometre here, at 45 cents per kilometre.

PN42

My concern then is this piece that's added at the bottom of clause 22.6.6 where these established distances - which I've done the calculation - they're all fixed for either a grade 2 or a grade 4. A person driving the grade 2 13.9 tonne truck is getting a generous rate per kilometre compared to the award. These fixed figures are established there for what must be regular trips between the workshop, Coffs Harbour, Macksville, Dubbo, Tamworth and Canberra, but then it says that the distances can be reviewed by the employer and varied.

PN43

It just seems that the employer has complete unilateral capacity to change the distances. All it has to do is notify the drivers in the next pay slip. To some extent it really defeats the purpose of a prescription. It could just be changed. I'm not saying the employer would do that, but it's a rather unusual provision to just say, "Well, if we decide for whatever reason instead of Dubbo being a 1072‑kilometre round trip, now we think it's only an 875‑kilometre round trip, I can just do that according to the agreement provision."

PN44

Clause 23.2, this has got some public holiday payment involved. This is just the long distance truck drivers and public holiday payments. It picks up something that is almost identical to the reference instrument, except that it doesn't provide for - I think at clause 26.4 of the Road Transport (Long Distance) Award, payment for work on public holidays "an employee must be paid for a minimum of four hours' work." Once again you've got this absence of a minimum prescription for work there for the public holidays. As I say, in the other areas of the operation of the agreement there doesn't appear to be any prescription for what you would get paid for working on a public holiday.

PN45

Then we get onto the last group, the office employees and the Clerks - Private Sector Award. That is the relevant instrument. Clause 24.3.1 just simply says that the - there isn't a separate prescription of rates that you can find with a difference in them to the reference instrument. It just says that you will get no less than the minimum of the Clerks - Private Sector Award. All that is saying is, well, you'll get that same rate. If you would be better off by getting the same rate, I'm not sure. Then when you look at some of the other provisions that are here and don't get picked up, there is some fairly clear concern.

PN46

Clause 24.6.2 talks about working overtime on Saturdays, Sundays or public holidays, but I can't find any prescription for what you would be paid for the public holidays and there is no distinction between a Saturday and a Sunday as with the other parts of this where the additional hours and weekend work are all rolled together. The Sunday isn't distinguished between the Saturday and there isn't any specification of a spread of hours again.

PN47

Clause 25, I think it is, of the Clerks - Private Sector Award, at 25.1(b) there is a 7 am to 7 pm Monday to Friday and 7 am to 12.30 pm Saturday spread, but there is no prescription here again for a daily span of hours. Theoretically at least there could be a person working at 3 am in the morning and, once again, we've got a 40‑hour week prescription. There are no Sunday rates at all and clause 27.2(b) of the Clerks - Private Sector Award has got all work done on a Sunday must be paid at the rate of double time and, once again, four hours' minimum. This Sunday work prescription of double time and fixed four‑hour minimum arrangements emerge again.

PN48

On top of that, if we then look at just - I mean, there is clause 19 which has a whole variety of allowances in it which are just omitted. If one thinks about it then, if you're only just getting the equivalent rate of remuneration as set out in clause 24.3.1, it's a difficulty establishing how you could be possibly better off with all these other provisions being absent.

PN49

The final concern relates to what I mentioned earlier, the capacity to sign. There is a regulation that deals with this. This is probably a fairly easily addressed concern. The others relating to the BOOT are probably much more difficult than this one, but someone has signed this by the name of Geoff Scott. Capacity to sign the agreement is given as "workshop representative".

PN50

I think regulation 2.06A requires an explanation of the basis for the authority. Now, that could be as simple as, "Well, you know, I was elected as the" - or, "I was nominated", or whoever it is, but I'm not sure just simply "workshop representative" is sufficient to satisfy the requirements of that regulation. All right. Sorry it's a little bit laborious, but we got to the end of it.

PN51

I suppose what we need to look at now is - as I say, you will get the transcript. I'm aware, Mr Lowe, that you probably weren't involved in a lot of the development of this. I think it might have been a Newcastle based arrangement. I'm not sure about all of that, but obviously whoever is involved in it will need to get the transcript and go through these things.

PN52

A number of options emerge. As I say - and I keep repeating myself - if I've got something wrong here, I'm quite happy to be corrected. If I've made an obvious error with interpreting some of this or if there are ways in which you think that - or whoever is going to be dealing with this thinks, "Oh, no, we can address that concern by an undertaking", or whatever it might be, then obviously I'm open to that proposition.

PN53

I have to be fairly blunt about this though. There are a quite a lot of concerns and whether undertakings might not amount to a significant change and the problems that gives rise to, because if there is a substantial change then that can't be addressed by way of undertakings. I think there needs to be some contemplation of all of this; analysis of what the concerns are that I've raised. Then, as I say, a response to my chambers.

PN54

That might be, "Oh, Commissioner, we can address all these points. You've got this wrong, you've got that wrong and this wrong", or whatever it might be. "Here are some undertakings and we think that in that form the matter could go forward", or it might be that looking at all of this the number and nature of the undertakings might amount to substantial change. In that case, then you'll have to consider whether you will still want to press ahead with the application.

PN55

That is obviously something that will need to be considered in consultation with your member. That is best done, I think, by getting the transcript, reading it all, digesting it, discussing it with the employer - - -

PN56

MR LOWE: Yes.

PN57

THE COMMISSIONER: - - -and then coming to some particular view about how you might approach it.

PN58

MR LOWE: I agree with that approach, yes.

PN59

THE COMMISSIONER: Yes, all right. Now, there is no fixed time frame on all of this and I have to say - I mean, this was filed back in December last year. I should stress though that I only got the file on 26 March this year. There is a bit of a backlog with some of these. It's not something that I can control, but what I like to do once I've got them is try and get them on fairly quickly one way or the other so that people can at least start to consider some of these issues. That is the purpose of trying to get this moving forward for you. All right.

PN60

MR LOWE: Thank you.

PN61

THE COMMISSIONER: Nothing further then at this stage? We will expect to hear something from the applicant. As I say, there is no fixed time frame for doing that. The transcript will probably be available at some stage next week and that is the starting point for your deliberations.

PN62

MR LOWE: I would think, Commissioner, that - I've taken down I think at a least a dozen concerns. There may be more that I've missed.

PN63

THE COMMISSIONER: Yes.

PN64

MR LOWE: But once we write them all down, we may be able to have a response to you fairly promptly within say two weeks or so.

PN65

THE COMMISSIONER: All right, yes.

PN66

MR LOWE: Two to three weeks.

PN67

THE COMMISSIONER: Obviously that's the point we're up to.

PN68

MR LOWE: Yes.

PN69

THE COMMISSIONER: Whatever the nature of that response is, I'll consider it. Sometimes we wind up with a second hearing if there are issues that need to be ventilated further. We can't predict exactly what pathway the matter might take from this point forward, but, as I say, I like to get this out onto the table early. As soon as I can convey this to you, the better off I think you are.

PN70

MR LOWE: Thank you.

PN71

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

PN72

MR LOWE: Thank you.

ADJOURNED INDEFINITELY                                                           [2.40 PM]