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C2017/6326, Transcript of Proceedings [2018] FWCTrans 190 (8 June 2018)

TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009                                       1056005

COMMISSIONER JOHNS

C2017/6326

s.739 - Application to deal with a dispute

United Voice

 and 

Serco Australia Pty Ltd

(C2017/6326)

Serco Immigration Services Agreement 2015

Sydney

10.20 AM, FRIDAY, 25 MAY 2018


PN1

THE COMMISSIONER: I will take the appearances please.

PN2

MR S BULL: If the Commission pleases, my name is Bull. I appear for the applicant in these proceedings.

PN3

THE COMMISSIONER: Thank you.

PN4

MR B BROWN: If it please the Commission, Brown initial B, solicitor. I continue to seek leave on behalf of the respondent.

PN5

THE COMMISSIONER: I think I granted leave.

PN6

MR BROWN: You have, but I didn't want to be presumptive. With me is Mr Graham who is the National Industrial Relations Manager for the respondent.

PN7

THE COMMISSIONER: Yes, very good. Gentlemen, first of all, can I start by apologising for the delay at the start, then can I thank you for the submissions which have been filed. I found them very useful. Have there been some continuing discussions between the parties?

PN8

MR BULL: That's why we're here, because Serco is difficult to deal with. We're at a point where I don't think we're reconcilable in the sense that they're not going to agree to what we want and we're going to continue to want something which they're not going to agree to.

PN9

THE COMMISSIONER: All right.

PN10

MR BROWN: In terms of the broader industrial relations landscape, and you are one of the panel judges, Commissioner. In terms of the renegotiation of the National Enterprise Agreement, that's going very well.

PN11

THE COMMISSIONER: Good.

PN12

MR BULL: We actually have, on some levels, a functional relationship. We have in-principle agreed with the respondent in relation to a successor agreement to the current enterprise agreement.

PN13

THE COMMISSIONER: What's clause 19 going to say in that?

PN14

MR BULL: Well, we did try. We were bargaining for a remote district allowance and we tried, but it was not successful. There's still the 20 cleaners on Christmas Island which it always seems to come down to. But that agreement, there should hopefully be a new agreement in about a month if all goes well.

PN15

Do you have a copy of the enterprise agreement?

PN16

THE COMMISSIONER: Yes.

PN17

MR BULL: I apprehend that you've read and digested my submissions and the material of the respondent.

PN18

THE COMMISSIONER: I have. Can you just go to your reply submissions?

PN19

MR BULL: I was going to say that the process of don't it, doing the submissions has assisted me at least refine what I think this dispute is about. In a jurisdictional sense, this is a private arbitration. The jurisdictional fact, to use the trendy term, is the fact that there is a dispute in terms of the agreement and I'd say that's clear.

PN20

THE COMMISSIONER: But as I've apprehended the material, I'm not determining the application of the agreement. You don't say, and I think it's common ground, that the entitlement to the remote district allowance, the RDA, if it arises, does not arise under the agreement. You say it arises - you sort of, it seems to me you don't - well maybe I'll put it this way. Do you say it arises as a matter of contract between your members - two different groups, I know, and Serco?

PN21

MR BULL: Possibly.

PN22

THE COMMISSIONER: Yes.

PN23

MR BULL: But it's not an entitlement under the enterprise agreement. So, I'm not going to bother pushing that barrow.

PN24

THE COMMISSIONER: Yes, so I can basically put the enterprise agreement - other than establishing that the enterprise agreement gives me the jurisdiction under the dispute resolution clause, I just put the enterprise agreement aside. I don't need it at all to resolve the dispute.

PN25

MR BULL: Yes, it's not going to help you, no.

PN26

THE COMMISSIONER: No, that's what I understood.

PN27

MR BULL: You don't have to read it; it's horrible.

PN28

THE COMMISSIONER: But then the question is, if I was to answer the questions, the articulated questions in the affirmative, would the affirmative answer to those questions be inconsistent with something that's in the agreement?

PN29

MR BULL: I don't think so.

PN30

THE COMMISSIONER: Well, in your reply submissions, you say that the respondent has failed to identify some provision of the agreement which would prohibit the respondent paying to Darwin-based employees, the RDA. Mr Brown in his submission does squarely identify the provision in 19(c). I'm just saying in your reply submissions you say they've failed to identify it. They did identify it, they've squarely said it's 19(c), where 19(c) says - let me just go to it.

PN31

MR BULL: 19(c) is the entitlement to the allowance.

PN32

THE COMMISSIONER: Yes, but in the first paragraph, the last sentence:

PN33

Further, this allowance would cease to apply if an employee transfers from a remote district.

PN34

In this circumstance we have employees transferring from the remote district. The remote district is defined as Christmas Island and Wickham Point and the agreement says this allowance will cease. So, if I find that they have a contractual entitlement to it, am I doing something which is inconsistent with the agreement? I think that's the argument Mr Brown puts.

PN35

MR BULL: I say no.

PN36

THE COMMISSIONER: I think it's probably the strongest argument.

PN37

MR BULL: These are things that are more matters for evidence. When Wickham Point opened, I understand they paid staff there a remote district allowance. At the time, the industrial instrument only mentioned Christmas Island. The point is, that there is clearly a capacity under most enterprise agreements, and particularly this one for the employer to pay additional things.

PN38

THE COMMISSIONER: Of course, and an enterprise agreement is always a minimum. You can always pay above an enterprise agreement. There's no issue there.

PN39

MR BULL: I'm essentially asking you to resolve a dispute concerning a number of exercises of managerial discretion and the first one is the discretion to continue to pay the allowance to staff as they transfer from Wickham Point to the Darwin facility. They also pay it to ones which they engage shortly thereafter. They pay these people for about a month. I was going to hand you up some letters if it helps, but they're just the correspondence in relation to the transfers and so forth.

PN40

THE COMMISSIONER: Yes.

PN41

MR BULL: I might just hand them up. They provide a bit of context.

PN42

THE COMMISSIONER: You say I can decide it - it seems to me, more likely than not, the dispute is one that - to pick up the language of clause 45, a matter pertaining to the employment relationship. That doesn't restrict me to the contract of employment, but it seems to me the employment relationship between the employees and the company would incorporate a dispute about the contract of employment.

PN43

MR BULL: But it doesn't - - -

PN44

THE COMMISSIONER: You don't pin your hat on that. You say that might be one limb, but it might also be managerial prerogative; it might be a case of equity or something like that. Of course, I note that in deciding matters, section 578(b) requires me to take into account equity, good conscious and the merits of the matter.

PN45

MR BULL: I was going to hand up two cases.

PN46

THE COMMISSIONER: Yes.

PN47

MR BULL: It's well recognised - - -

PN48

THE COMMISSIONER: I might just mark this bundle of letters as exhibit A1. Thank you.

EXHIBIT #A1 BUNDLE OF LETTERS FROM THE APPLICANT

PN49

MR BULL: Basically, this is the letter. It's one of the workers, Mary Ann Verdon and the first one is the overpayment notification which is the decision to stop paying it. The respondent's characterised this as an administrative error. I'd say that's not the appropriate way to characterise it. You don't pay 30 odd people, $300 a fortnight for over a year and then say it's an administrative error. The other correspondence is just the confirmation of the redeployment when they're transferred from Wickham Point.

PN50

The interpretation that I'll be asking you, if we get to this point, to cast on what I say is fairly uncontroversial facts is that they close this large centre which has about 300 odd employees. They have to retain a small staff in Darwin for what they call APOD, it's an alternative place of detention. They choose to basically promise, warrant, continue, whatever you want to call it, the payment of an allowance which under the agreement, is specific to a particular location, which is Wickham Point.

PN51

They tell the 30 odd people who are selected or select themselves to not be made redundant and transfer to the Darwin facility. They say we will continue this payment and it does continue for over a year and then under then out of the blue, it ceases.

PN52

THE COMMISSIONER: When I read that sort of factual circumstance, I did wonder whether you might be better placed somewhere else. Say for example, the Federal Circuit Court or the Federal Court and alleging that there's been some breach of section 18 of the Australian Consumer Law which used to be the old section 52. In that you say, don't you, that the point in time that these people were transferred or moving, a representation was made to them that they would continue to receive the allowance. They relied upon the representation. Now the allowance has been removed, that's their loss and in that respect, to the extent that they were coaxed to go across on the premise they continue to get the allowance, Serco has engaged in misleading and deceptive conduct.

PN53

MR BULL: That's one way to put it.

PN54

THE COMMISSIONER: You could run a misleading and deceptive conduct case in the Federal Circuit Court or the Federal Court and then in the accrued jurisdiction, run a breach of contract claim. I mean, I have in mind a decision of Finkelstein J from 7 April 2000 where this issue of whether in the renegotiation of an employment contract that is considered to be in trade or commerce, and he held it was. I'm wondering whether then, is that something that I can have regard to, if I have to decide this to take into account equity, good conscience and the merits of the matter. And whether or not Serco engaged in misleading and deceptive conduct.

PN55

MR BULL: I don't know whether you would have to get to that depth of legal analysis. Because the nature of the jurisdiction is that we've decided to confer upon the Commission, you, the resolution of this dispute. So, the jurisdictional fact is that there's a dispute in terms of the disputes clause. I think there's no great dispute about that. There is a dispute pertaining to the employment relationship and by virtue of the agreement, we give to you the capacity to resolve that dispute and making a binding determination.

PN56

You can't arbitrarily or in a sort of completely unreal way make a determination. You've got to do something which is logical and makes sense.

PN57

THE COMMISSIONER: Yes, I've got to hang my hat on something, so it might be that I hang my hat on the fact of it being a breach of contract because these terms have been incorporated or something like that. I might hang my hat on Serco having engaged in misleading and deceptive conduct at the time and it would be inequitable to allow Serco to now withdraw from those representations that it made that convinced people to come across.

PN58

I think also in your submissions you refer to other principles of equity and maybe you could expand upon those for me. But at the end of the day, I have to hang my hat something.

PN59

MR BULL: Estoppel, or something like that.

PN60

THE COMMISSIONER: Yes, that's right.

PN61

MR BULL: The point is, I've handed up two decision which sort of illustrate that the jurisdiction is fairly broad-brush in that you've got the capacity to basically make decisions on the basis of what you consider reasonable and just. The first one is a decision by Hamberger SDP and it essentially deals with the fact that an employer didn't offer two employees voluntary redundancies and Hamberger SDP said frankly, they should have. That's dealing with a discretion.

PN62

THE COMMISSIONER: Can you just take me to - on what basis does he say. Does he just sort of say look, just out of fairness, they should have, or what did he hang his hat on?

PN63

MR BULL: No, there's a complex history of where they get transferred around and there's allegations of bullying and so forth.

PN64

THE COMMISSIONER: Just take me to where he finally comes to the view that yes, they should have.

PN65

MR BULL: Towards the end. If you look at paragraph 107. Hang on, 108. The transferred the workers to places where they've got no real work. You're looking at 107, 108, 109. Looking at it myself, sorry.

PN66

THE COMMISSIONER: No, that's all right.

PN67

MR BULL: Probably 110, they talk about - - -

PN68

THE COMMISSIONER: Isn't this a 739 matter as well?

PN69

MR BULL: Correct, and there's also a bullying application I think in the background.

PN70

THE COMMISSIONER: Do we see what the dispute resolution clause looked like?

PN71

MR BULL: You're dealing with a foreign member of this Commission and a thoughtful one. The point of the decision is that this is not the sort of - it's really reviewing a discretionary decision of an employer.

PN72

THE COMMISSIONER: His Honour refers to XPT.

PN73

MR BULL: Yes. You have categories of I suppose, rights.

PN74

THE COMMISSIONER: The other hat is an unreasonable exercise of managerial prerogative.

PN75

MR BULL: Correct, which in a court, you probably wouldn't be able to do anything about. I'm suggesting that I don't need to establish that there's a breach of contract. I don't need to establish that they've contravened the Trade Practices legislation, although obviously, if they have, that's helpful. What I need to convince you is that there's another outcome which is the appropriate and reasonable outcome. Because what we've done by the agreement and the disputes clause, is basically say to you, we have a dispute and we want you to solve it.

PN76

Provided that your resolution of the dispute is not utterly aberrant, we should be stuck with the resolution you consider appropriate. But obviously, it needs to be resolved in the context of what is a reasonable and appropriate resolution of the dispute. The fact that a court might do something is obviously relevant. I'm not suggesting that we only have sort of good conscience and equity to hang our hat on.

PN77

There are, I say, things that can be sort of - the conduct of the respondent produces legally cognisable consequences that are of significant, because these employees transfer according to I say, a fairly obvious promise. They're paid money for a year and then I say, in an arbitrary and unjust manner, it's just stopped. One of the issues I was going to say, part of the articulated question is an assessment of the withdrawal of the payment, which literally just happens out of the blue, we say, for no particular reason.

PN78

One interpretation is that it's paid for a reasonable period. Once the workers are secure in the new facility, the respondent feels that it no longer needs to rely on the inducement to get labour to this new facility, so it's comfortable to withdraw it. We say that's unreasonable.

PN79

The agreement provides how you pay the entitlement, but we're beyond that territory. We're not dealing with an entitlement under the agreement. Once Wickham Point closes and once the employer pays the allowance to people when there is no location which creates the entitlement, we can put the agreement to one side, so we're beyond the issue of transferring. Because they've continued to pay it after the employees transfer for well over 12 months. The characterisation of if all as a dreadful mistake or a clerical error, is ridiculous.

PN80

It was done for reasons that - the respondent got benefit in that it got security in relation to labour for a new but smaller facility in the Northern Territory where there is custom and practice. It's a well-known fact that people get paid remote or district allowances in that place. You can argue about whether they were appropriate, but it's a feature of the industrial culture of that place and it did it to ensure that it would maintain labour and it's quid pro quo and it's unreasonable that it can dud these people in the manner it has.

PN81

THE COMMISSIONER: I think that one issue we haven't really got across is the operation of 739(5). The Fair Work Commission must not make a decision that is inconsistent with this Act or a Fair Work Instrument that applies to the parties. I cannot make a decision that is inconsistent with the Serco Immigration Service Agreement 2015. That agreement says at 19(c):

PN82

This allowance would cease to apply if an employee transfers from a remote district.

PN83

What's the answer to that?

PN84

MR BULL: Well, the answer is that if you make any decision about whether or not the respondent should continue to pay, or the appropriateness of the ceasing to pay. It's not about the agreement, it's about the exercise - - -

PN85

THE COMMISSIONER: If I issued a decision that said under the agreement they must continue to get it, that would be inconsistent with the agreement.

PN86

MR BULL: Correct.

PN87

THE COMMISSIONER: But if I'm saying no, you get it because of contract. When we're talking about in 19(c), further this allowance. That means this allowance under the agreement, not the contractual allowance or the equitable allowance or whatever. That must be the case.

PN88

MR BULL: It's a continuation of the payment. The payments, you refer to the agreement but the entitlement to the payment is not coming from the agreement. It's not unusual in workplaces where people have grandfathered conditions, that's a common feature of a number of workplaces. Essentially, we're saying that by their conduct that they're grandfathered in relation to a group of people the payment of this allowance.

PN89

You can't say that there's an entitlement under the agreement because in terms of what the agreement says, no there isn't because there isn't the location and so forth. But that doesn't stop you saying there's - - -

PN90

THE COMMISSIONER: If I find there is a continuing entitlement to the RDA, either it's a continuing entitlement founded on some other basis.

PN91

MR BULL: On the conduct of the respondent.

PN92

THE COMMISSIONER: Yes, and so therefore a finding that they're entitled to it on that basis, is not inconsistent with the clause in the agreement which says you don't get it under the agreement.

PN93

MR BULL: Correct.

PN94

THE COMMISSIONER: Yes, I understand the argument.

PN95

MR BULL: There's no a great deal more I can say. Unless you've got any more questions?

PN96

THE COMMISSIONER: No, I've been greatly assisted.

PN97

MR BULL: The two things I've given you are both recent examples where this Commission has essentially arbitrated and made determinations about things that could be called fairly pure managerial.

PN98

THE COMMISSIONER: Gregory C, what's his about?

PN99

MR BULL: The second one is actually - it's GPS Tracking or something and the interesting thing about that is that the disputes clause is actually quite narrow. It's only matter arising under the agreement and the Act. The union seems to convince the Commissioner that there's various clauses of the agreement that are enlivened and Gregory C had no problem determining that he had jurisdiction to determine the dispute.

PN100

The sort of disputes where pure discretion is commonly arbitrated is for example, is when an employer attempts to adopt a drug or alcohol testing policy. That's something that is a discretionary matter. They're common, as you'd be aware. There's many cases about buccal swabs and so forth. Industrial Commissions in Australia do view themselves as competent to deal with those matters. They've frequently got nothing to do with agreements or legislation; it's just about whether a particular policy is the appropriate one. There's no, I say, conceptual difference between dealing with - - -

PN101

THE COMMISSIONER: Because this is a policy about whether or not to pay the RDA.

PN102

MR BULL: Correct. Also, the appropriateness of a decision that they've just arbitrarily stopped paying something. This is the context where - it's a significant allowance, they've structured their finances and so forth on the basis that they get this money. We say they should be grandfathered. The respondent can come to some other arrangement with this group, but at the moment, they're stuck with paying this. That's what we say. They don't have to pay new people, if they hire new people.

PN103

THE COMMISSIONER: If they're hiring new people, they could make it very express that they're not to be.

PN104

MR BULL: Yes, so we're not saying it's an entitlement.

PN105

THE COMMISSIONER: How many people are we talking about?

PN106

MR BULL: I think probably less than 28. I've got instructions from about 14, but depending on what happens, I'll obviously have to get more instructions. It might be useful if we can talk about how we progress this.

PN107

THE COMMISSIONER: If I find that I have jurisdiction, then I have to turn my mind to whether we could run sort of two test cases. You find your best candidate in category one and your best candidate in category two and we run it as sort of a representative case, rather than having all of them.

PN108

MR BULL: I'd like to do that and I don't know whether frankly, you're going to lose much, because the paperwork is all the same. It might be people complaining in a slightly different way, but I don't know whether there's going to be frankly that much difference between - - -

PN109

THE COMMISSIONER: I mean I prefer - well, I'd be surprised if the matter couldn't proceed largely on the basis of an agreed statement of facts.

PN110

MR BULL: With one or two witnesses.

PN111

THE COMMISSIONER: Yes.

PN112

MR BULL: I wouldn't mind for example getting some evidence from the respondent about why they stopped paying this at the time they stopped paying it.

PN113

THE COMMISSIONER: If their defence is administrative error they're going to have to put someone in the box about all of that.

PN114

MR BULL: Yes, I think you get it.

PN115

THE COMMISSIONER: Yes, yes. Thank you, Mr Bull.

PN116

Mr Brown?

PN117

MR BROWN: I'd hope that you get my point as well. It's a very narrow one.

PN118

THE COMMISSIONER: Well, that's why I focussed on 19(c). I think it's your best point.

PN119

MR BROWN: Can I just make a comment about what this case is not. You might recall that there was quite a big industry very early in - the history of 739 where the notification would be put in, the respondent would turn to the prayer of the applicant and what they seek and there would be the ensuing argument about whether what they sought or seek could be achieved et cetera and whether it was within jurisdiction; and more recently the Full Bench has said the actual application in itself is very much a work in progress and that sometimes through the conciliation process the prayer or the matters to be determined can change, and there's a Full Bench decision which I should have at my fingertips which I don't, which overrules the decision of the Williams C which basically, to put my gloss on it, says that on the issue of jurisdiction you've got to remain seated until we are at where we are.

PN120

Now this has to be distinguished from those sorts of cases because we've been greatly assisted in this case by the articulated question, and so our starting point is the articulated question. My friend has done exactly what was required of him. The articulated questions are put in on one basis and one basis only and that is that my friend would have you hand down a decision - and that's an important word in this context - that affirms the two propositions, and they're extracted in my submissions. When one goes to my friend's initial submission and indeed the submission in reply my friend seems to put his energies into a part of the case which quite frankly has got nothing to do with my retort.

PN121

Because of the nature of this particular dispute resolution clause in this particular enterprise agreement I am stuck with the fact that issues can come from a number of directions and you'd have to assume from directions that don't naturally, or on the face of it, fall within the industrial instrument. You've referred to breach of contract. For the older people in the room the Trade Practices - because I can't bring myself to call it what it's called now. There's Equity, capital E, and then there is the statutory concept of equity and good conscience that we all know about but of course that is also - it's not at large, capital E Equity, that is also framed by the objects of the Act.

PN122

Now we have to accept or my client has to accept that the dispute could emerge from any one of those bubbles and it could very well find itself in front of you. But the rubber hits the road at the decision, and the decision - and my friend only wants one answer to that decision and if there be the sort of inconsistency that I'm submitting, you can't do it. Now why is that there we say? Section 739(5) has been described by people as an attempt to (a) - these are all in the pejorative of course - to prevent the trade in palm tree justice that tended to predate other regimes. That's a nasty way of putting it.

PN123

I have a different way of putting it is to say that I think what the legislature really intended with section 739(5) was to make it very clear that enterprise agreements per se were not Magic Puddings, and that's a very important part of the objects of the Act and our bargaining system. The bargain being that you set the bargain and you are stuck with that bargain.

PN124

THE COMMISSIONER: But normally I mean more often than not we see dispute resolution clauses which deal with the application of the agreement and the NES and it is limited to those two.

PN125

MR BROWN: Yes.

PN126

THE COMMISSIONER: And then you have a dispute under 739 and it's very clear you can't make a - I can't make a decision, the Commission can't make a decision which is inconsistent with that enterprise agreement. And so you're looking at what is the decision here? Is it telling the parties to do something that the enterprise agreement is telling them not to do? That's a very sort of clear example of inconsistency. But in this matter this is not an agreement which is limited to the application of the agreement and the NES. It's broader than that and you can always have a situation where a contract of employment or there's an employment entitlement which is above the enterprise agreement or above award, above enterprise agreement.

PN127

And how is me saying as a matter of equity, contract, whatever, these employees have a continuing entitlement to the RDA? How is that really inconsistent with the agreement, because the agreement doesn't say - if the agreement said there can be no term in a contract of employment which gives the employees an RDA or there can be no other basis for the RDA other than this agreement, me making that decision would be squarely inconsistent. But there isn't those express words in the agreement so how can - if I find that there is some entitlement to the RDA under some other head, how is that directly inconsistent with the agreement?

PN128

The only thing you can point to is that one sentence in 19(c), but surely that sentence in 19(c) is referring to the allowance as the allowance in the agreement? You cease to get the allowance under the agreement, not you cease to get the allowance under some other head. Because Serco could tomorrow agree to contractually - I know it says it hasn't, but it could agree tomorrow to contractually give these people the RDA even though the agreement doesn't give them the entitlement to it. So if Serco can do it why can't I tell Serco to do it?

PN129

MR BROWN: An extremely long question.

PN130

THE COMMISSIONER: Sorry.

PN131

MR BROWN: I'm going to have to - - -

PN132

THE COMMISSIONER: I should have broken it up.

PN133

MR BROWN: No, no, not at all. Not at all. No, I'm going to try to deal with it in this way. When one looks at the framework of 739 clearly there was an obvious intention there that the parties could agree upon a dispute resolution procedure that could have as its subject matter matters not even envisaged, that go beyond the Fair Work instrument. Clearly. But 739(5) is the break and you can't get away from it because we'll call it - and I'll own the expression, it's the anti-Magic Pudding clause. It is meant to stop it - - -

PN134

THE COMMISSIONER: You know when I put that in the decision this is going to get a run in Workplace Express, don't you?

PN135

MR BROWN: Well, I kind of like the Magic Pudding. My children quite enjoyed it. But it is the anti-Magic pudding clause and it's there for a reason and it may well be, it may well be, Commissioner, that there could be matters that are we'll call it above the line. In other words they could arise out of any number of things outside of the Fair Work industrial instrument and as part of a conciliation process and possibly even the arbitration process it's possible, it's possible to frame an outcome that does not offend 739(5). But the reason why I started my submissions today by saying one should not confuse this case with what I'll describe as unripe applications. This is a ripe application because my friend - - -

PN136

THE COMMISSIONER: Because we know exactly what they want.

PN137

MR BROWN: They know exactly what they want and I'm submitting to you very, very - and now I answer your question. It's not just quite 19(c). It's 19(c) and I have raised the no extra claims commitment - - -

PN138

THE COMMISSIONER: The no extra claims clause.

PN139

MR BROWN: And 19(c) has two aspects of it, Commissioner.

PN140

THE COMMISSIONER: Yes, just in relation to the no extra claims clause submission, to be fair to you I don't know that I'm overly persuaded by that. I think that the no extra claims clause is really limited to an industrial claim in terms of the things that are within the agreement.

PN141

MR BROWN: I said I had one good point and that's the second one.

PN142

THE COMMISSIONER: Right, yes. Yes.

PN143

MR BROWN: So I'll stick with what I'll say is my good point.

PN144

THE COMMISSIONER: Yes, yes.

PN145

MR BROWN: 19(c) has two aspects of it because there is the words that my friend is confronted with:

PN146

Further, this allowance would cease to apply if an employee transfers from a remote district.

PN147

Now some people would say that's game, set and match but the other way you could look at it is this. If you were to hand a decision down that gifted a person this allowance when they are at Darwin it is in fact a direct contradiction because the industrial instrument could not be clearer, there are only two places on this globe that you get this allowance, Christmas Island and Wickham Point. It's an agreed fact in this matter that Wickham Point is not Darwin. They are quite some distance apart and the prayer that my friend wishes to the two questions is very, very precise.

PN148

We would submit that there would have to be some violence to the English language to hand a decision down that affirms these two questions which, if it be a decision would not be directly inconsistent with 19(c). That's my only point in this case. I can't help myself on one of the - I'm almost done. I can't help myself on one of the other things. I am aware of the Finkelstein decision that you referred to but I would make one comment, that misleading and deceptive conduct in the context of that legislative framework, it has to be knowingly false at the time that it was said or said with reckless indifference to the truth, and that would present some interesting arguments in that one.

PN149

THE COMMISSIONER: No, that's not what happened in (indistinct).

PN150

MR BROWN: Sorry, sometimes when one talks about misleading and deceptive conduct per se regard is not had to the definition of it under section 52. I'm now falling back into the Trade Practices Act, I'm sorry.

PN151

THE COMMISSIONER: It's section 19.

PN152

MR BROWN: Certainly.

PN153

THE COMMISSIONER: Yes.

PN154

MR BROWN: But for something to be, for a representation to be misleading and deceptive it must be either (a) knowingly false at the time that it was said or (b) said with reckless indifference to the truth. Now the only reason why I raise that is that you've thrown my friend a bit of a lifeline there to go to the Federal Court but I wanted to put him on notice that - - -

PN155

THE COMMISSIONER: I think it was called a handball, wasn't it?

PN156

MR BROWN: A handball.

PN157

MR BULL: I don't want to go there particularly.

PN158

MR BROWN: I'm more attracted to your other argument, Commissioner, not that the Commissioners have arguments, they have decisions. But your framework for the resolution is 578 and 578 is not at large. It's not the equity division of the Supreme Court. It doesn't beg Latin maxims. It talks about the objects of the Act and one of the objects of the Act - and this is my last point - is that when people make bargains they're held to them and to the content of them, and 739(5) is there. It's the gatekeeper. It's to stop palm tree justice. It's to stop enterprise agreements into Magic Puddings, because if you had that you wouldn't make them.

PN159

Now in terms of if you were against us on the application before you, which is that the Commission is not in the business of doing things that result in nullities then that would be the end of it. But if you were against us in relation to how the case could be run I think you've made some very helpful suggestions, and even though United Voice and my client have had a bit of a patchy track record on the Commission's view as to what were stated - my apologies, agreed statements of fact, I think if ever there was a case that should be dealt with in that regard there should be directions issued accordingly. If the Commission pleases.

PN160

THE COMMISSIONER: Yes. Thank you. Just one thing, it sort of - well, not sort of, it did come up in the reply submissions of United Voice the reference to these cases, in particular XTP and now we've got these other decisions that have been handed up. Would you want some time to address those in some written submissions?

PN161

MR BROWN: No for this reason. I said I only had one good point and it doesn't relate to that point. A moment ago I said that in terms of the framework, and I used the expression "above the line", there can be any number of - with this particular dispute resolution clause, Commissioner, I have to accept that the dispute can come from any one of a number of angles and that one of those angles could very well be - - -

PN162

THE COMMISSIONER: Managerial prerogative.

PN163

MR BROWN: Managerial prerogative. But it all - - -

PN164

THE COMMISSIONER: Hangs on the decision - - -

PN165

MR BROWN: The rubber hits the road at the decision. If you make a decision that is responsive to the articulated question you have to come to the conclusion that there is a direct inconsistency with 19(c) and that is the end of it. So I don't need to bore you with some on the hop submissions in relation to management prerogative. It really wouldn't matter where it came from. This is all about the decision that you ultimately can make.

PN166

THE COMMISSIONER: Thank you.

PN167

MR BROWN: Thank you.

PN168

THE COMMISSIONER: Anything in reply?

PN169

MR BULL: Just very briefly. Look, I think if we were arguing after the close of Wickham Point that employees who had transferred to the Darwin Airport were deserving of the remote district allowance we'd have a problem. The significance is - - -

PN170

THE COMMISSIONER: Sorry, if they'd stopped it?

PN171

MR BULL: If they stopped it.

PN172

THE COMMISSIONER: When Wickham Point closed.

PN173

MR BULL: Correct.

PN174

THE COMMISSIONER: You wouldn't be here.

PN175

MR BULL: No, and the point is we don't - - -

PN176

THE COMMISSIONER: But your point is they can - okay, yes?

PN177

MR BULL: They continue to pay it after the entitlement, after the relevant entitling criteria had ceased to exist. So the location which you know, is the closest thing to anything that would have entitled them stopped. So the transfers - so if you want to be literal, 19(c) talks about a transfer from the location. If they transferred from the location, it was continued to be paid for 12 months after that so by their conduct they haven't acted in accordance with the agreement and that's because we're not saying it's an entitlement under the agreement.

PN178

THE COMMISSIONER: No, of course not.

PN179

MR BULL: It's arising because of the conduct of the respondent in continuing to pay it to a large group of people for, we say, fairly obvious reasons for 12 months. The other thing, in relation to the Magic Pudding argument, and it's nice to see Norman Lindsay and those books getting a rating.

PN180

THE COMMISSIONER: Revived.

PN181

MR BULL: The whole notion - dispute resolution is in itself a type of entitlement. You know, the Act has particular rules about you've got to have them in enterprise agreements. It's clearly acknowledged that it's a thing that is desirable and provides something in an enterprise agreement, and the point about if there had been significant disputes about whether you'll get arbitration and so forth, it is actually providing principally the workforce with something, and it's necessarily - it's not a precise - it's a meta entitlement in that you don't know exactly what it is.

PN182

It's an entitlement to have entitlements dealt with or some determination and, you know, the respondent has to - frankly, it is what it is and the dispute resolution clause of this agreement is broad and the parties have decided that they will allow a third party, the Commission, to make determinations about things pertaining to the employment relationship. So characterising it as a Magic Pudding is, you know, pejorative. We're not assuming that you're going to do anything which is aberrant or without reason.

PN183

THE COMMISSIONER: I'm not known for doing such things.

PN184

MR BULL: But there are - you know, you're not the proverbial drunken sailor. But there are - I withdraw that. I've done it now. The point is look, there are situations where it will generate what appear to be entitlements. They're not, they're resolutions. It's a resolution of disputes. So, saying it's some Magic Pudding is a pejorative way to describe it. These clauses because of their width, their depth and their capacity will generate outcomes that are not necessarily contemplated by the agreement. But that's what they're designed to do and what the parties have agreed that they will do. That's all I want to say.

PN185

THE COMMISSIONER: Yes. Thank you. We will adjourn until a quarter past 11.

SHORT ADJOURNMENT                                                                  [11.04 AM]

RESUMED                                                                                             [11.16 AM]

PN186

THE COMMISSIONER: Gentlemen, I have been greatly assisted by the submissions which have been filed in the matter and also the oral submissions which have been made today. For reasons which will be fully explained in the substantive decision, I have decided that I am not satisfied that an affirmative answer to the articulated questions would offend against section 773(9)(5)(sic). For the reasons that I will explain further it seems to me that on the proper application of the Berri principles when interpreting the meaning of clause 19(c) in the enterprise agreement the reference to "this allowance" means the RDA, the remote district allowance under the agreement.

PN187

I am not satisfied that any decision that I made, if I made a decision to continue the RDA, would be an award of the RDA under the agreement. It would be under some other head and therefore not directly inconsistent with the agreement. On that basis I am not satisfied that - well, I am satisfied that I have jurisdiction to continue with the matter.

PN188

Look, I think we should take a short break to allow you to have some discussions between yourselves about the programming of it. As I've said, it seems to me that there could be principally an agreed statement of facts, maybe a limited number of witnesses. If of course you think the matter needs to be heard in Darwin I would be available on Tuesday 7 August to do that, but I'll leave it to you. Maybe I could give you 10 minutes or so to have some preliminary discussions.

PN189

MR BULL: If the Commission pleases, thank you for the decision.

SHORT ADJOURNMENT                                                                  [11.18 AM]

RESUMED                                                                                             [11.38 AM]

PN190

MR BULL: My friend will do most of the talking but I was going to say look, we have some - - -

PN191

THE COMMISSIONER: That's not uncommon.

PN192

MR BULL: We have some preference to actually having a hearing in Darwin. We're going to have members - we're going to try and reduce the number of people but there is a certain amount of show, if you like, where they like to have their day in court and it shows that we're doing something. So 7 August would be - well, I think we can do one day.

PN193

THE COMMISSIONER: Yes, yes.

PN194

MR BULL: And we'll keep it short and sweet. There's a few - we're going to try and do agreed facts.

PN195

THE COMMISSIONER: Yes.

PN196

MR BULL: And I can probably have three or four witnesses and those witnesses will be maybe two transferees, for want of a better term, and maybe someone who was hired. It might have to be - and hopefully with the agreed facts I can eliminate - otherwise I might have to get a statement from the organiser or whatever about, you know, what was said and so forth, but that can probably be incorporated into the facts. So our evidence wouldn't be - and the evidence is not going to be frankly very complex. So yes, we might have three witnesses.

PN197

THE COMMISSIONER: Yes.

PN198

MR BROWN: My client is agnostic as to whether the matter is heard in Darwin or Sydney, but 7 August in Darwin or Sydney as it may be. In terms of perhaps some directions that may be suitable, the first direction would be that an agreed statement of facts be done by a certain time. My friend has made reference to the obvious fact and it is conceded that it would be a waste of everyone's time and effort if all 17 or all 22 had to give evidence. There are two categories of employees that are affected. If my friend wishes to go with two or three or one or two of each category we understand that.

PN199

THE COMMISSIONER: Or maybe two of each.

PN200

MR BROWN: Yes.

PN201

MR BULL: Maybe two.

PN202

THE COMMISSIONER: Yes.

PN203

MR BROWN: That coupled with the agreed statement of facts would make sense and then the third order would be that the evidence in reply by the employer, whether my friend needs evidence in reply to the reply, but that could be accommodated with the 7 August date. There seems to be plenty of time for that.

PN204

THE COMMISSIONER: Yes.

PN205

MR BROWN: I think we have collectively let you down in the past with agreed statements of fact, Commissioner, for which we apologise and we both acknowledge and accept that on the last time it caused the Commission some inconvenience, but that will not happen again.

PN206

THE COMMISSIONER: Yes.

PN207

MR BROWN: If the Commission pleases.

PN208

THE COMMISSIONER: Yes, well I think that's sensible. So an agreed statement of facts by some date, then the applicant's evidence from two people in each category, then the respondent's evidence and then the applicant's reply evidence and then the matter to be listed for hearing for one day in Darwin on Tuesday 7 August.

PN209

MR BROWN: If the Commission pleases. Would it be impolite to ask when we are likely to get the decision from today?

PN210

THE COMMISSIONER: No, I intend to incorporate my reasons for decision in the substantive decision.

PN211

MR BROWN: If the Commission pleases.

PN212

THE COMMISSIONER: Yes.

PN213

MR BROWN: No, sorry, I apologise - - -

PN214

MR BULL: We won't get a separate written decision.

PN215

THE COMMISSIONER: About jurisdiction?

PN216

MR BROWN: Yes.

PN217

THE COMMISSIONER: Yes you will but it will form part of the substantive decision. So that when I hand down the substantive decision it will say "On 25 May I had a hearing about whether or not I had jurisdiction to deal with this matter. I decided at that point I did, and these are the reasons why I did".

PN218

MR BROWN: I think in popular parlance I have lost this morning.

PN219

THE COMMISSIONER: Yes.

PN220

MR BROWN: Would it be inconvenient if I could get reasons for losing this morning?

PN221

THE COMMISSIONER: You will have the reasons when I publish my substantive decision.

PN222

MR BROWN: I have no instructions at the moment and it is in the nature of an interlocutory decision and it's infamous that any attempt to appeal an interlocutory decision is something you'd have to take very seriously. But by not having reasons I don't have the ability to take instructions on whether the matter that I've lost this morning is appellable. Would it be imprudent to press the Commission for reasons in relation to this morning's decision so I could take instructions?

PN223

THE COMMISSIONER: Can I have my calendar please?

PN224

MR BROWN: Thank you. I did this once in the State Commission and Staff J described my submission as curt. I don't want to be seen as curt.

PN225

THE COMMISSIONER: What do you lose, Mr Brown? I mean if I - you know, in the substantive decision if I indicate that I have jurisdiction - or you might win and I say "They don't get the RDA" and there would be no merit in - I mean you might win the substantive matter and the matter goes no further. If in the substantive decision I say "Well, here are my reasons for decision in relation to why I think I can decide the RDA and here is my decision in relation to the RDA" then you can appeal that.

PN226

MR BROWN: My client loses, put bluntly, the ability to have reviewed what has transpired today. If - and there's a big underline of "if" here - if my client had leave it would have the potential to either stay the proceedings.

PN227

THE COMMISSIONER: The hearing. Yes, I understand.

PN228

MR BROWN: And my client would avoid the cost.

PN229

THE COMMISSIONER: Yes, I understand. All right, I will publish my reasons for the decision of today in advance of 15 June, which is 21 days from today. But I just give you a heads up that it might be around 11 or 12 June.

PN230

MR BROWN: The timing of it is completely up to the Commission. We understand that.

PN231

THE COMMISSIONER: And if by later today, if by 12 noon on Monday, you two could agree on the timetable for each of those five steps and submit them to my chambers I'll issue those directions.

PN232

MR BROWN: If the Commission pleases. Thank you.

PN233

THE COMMISSIONER: Is there anything further this morning?

PN234

MR BULL: No, thank you. Thank you, Commissioner.

PN235

MR BROWN: Thank you.

PN236

THE COMMISSIONER: Then we're adjourned.

ADJOURNED UNTIL TUESDAY, 07 AUGUST 2018                   [11.46 AM]


LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #A1 BUNDLE OF LETTERS FROM THE APPLICANT.............. PN48


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