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AG2008/123, Transcript of Proceedings [ 2009] FWATrans 83  (17 February 2009)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 19730-1

COMMISSIONER WHELAN

AG2008/123

cl.2A(1)(b) Sch. 7 - Application for an order to vary pre-reform certified agreement

National Union of Workers
and
Ross Cosmetics Australia Pty Ltd
(AG2008/123)
Ross Cosmetics and National Union of Workers Enterprise Agreement 2005

(ODN AG2005/1377)
[AG842628 Print PR962755]]




Melbourne

10.05AM, MONDAY, 2 FEBRUARY 2009

PN1

MS K TRAN: I appear for the National Union of Workers.

PN2

MR F BEARD: I appear for the Ross Cosmetics.

PN3

THE COMMISSIONER: Thank you. Ms Tran this application has been brought under the provisions of the Act in relation to the extension and variation of the pre-Reform agreements. I’ve noted from the material that’s been lodged in relation to this that it appears that it is the intention of the parties to retrospectively vary provisions of the agreement and I’d like you to address me in relation to that.

PN4

MS TRAN: Yes Commissioner, what you say is correct and a part of this agreement variation both parties are seeking to vary the 2006 and 2007 rates as outlined in the original 2005 agreement. The reason behind this is due to these rates being incorrect. The NUW I believe have sent your chambers, I think two documents which support that the rates were incorrect and as a result of that we seek to correct it in this application.

PN5

THE COMMISSIONER: Ms Tran can you explain to me why this has never been varied before? This correspondence as I understand it which you’ve provided to me that’s addressed to Mr Kilkenny from Mr Gidley is dated 23 December 2005. Why was there no action taken until 2008 I think, December 2008 if there was an error in the agreement that had been certified why was there no action taken to amend the agreement?

PN6

MS TRAN: I’m afraid I don’t have an answer there for you Commissioner. My understanding based on the documents in the file was that a letter was exchanged between both parties and that there was an understanding that these rates were incorrect and the correct rates were provided thereafter and as a result it must have been that both parties did not see an issue with that.

PN7

THE COMMISSIONER: Well the 2005 enterprise agreement is a legally enforceable document and it’s never been varied. So what are you telling me that the rates for 2006 and 2007 that appear in that document have never been paid?

PN8

MS TRAN: Yes, that would be correct Commissioner. I would probably like to get some comment from the company as well in terms of what their background on this situation is.

PN9

THE COMMISSIONER: When you say there was an exchange of correspondence I have a letter to Mr Kilkenny.

PN10

MS TRAN: Yes.

PN11

THE COMMISSIONER: I don’t have a letter from the union.

PN12

MS TRAN: Yes, that’s correct sorry Commissioner.

PN13

THE COMMISSIONER: So the only evidence is this letter from Mr Gidley to Mr Kilkenny in December 2005, is that right?

PN14

MS TRAN: Yes, that’s correct.

PN15

THE COMMISSIONER: Well I will for the purposes of the record mark that correspondence.

EXHIBIT #NUW1 LETTER FROM MR GIDLEY TO MR KILKENNY DATED 23/12/2005

PN16

THE COMMISSIONER: Thank you. Mr Beard there was I think Ms Tran suggested that there were some matters that you could enlighten me about in relation to this?

PN17

MR BEARD: My understanding of the situation I basically joined the company in late 2007 and I only sort of came across this matter when going through the files. I think at the time the company thought that there was definitely an error and it could address that error simply by communicating with the union and just confirming that the rates were incorrect. Thus, it didn’t think it was necessary to take the matter back to the Industrial Commission to have rectified. We both understood, both the company and the union understood that the rates were incorrect, it could operate with that document it was the understanding at the time of the company. It subsequently realised that it became a on a formal basis and so it was left to sort of run without correction.

PN18

THE COMMISSIONER: Thanks Mr Beard. Is there anything else you want to put in relation to that particular issue Ms Tran?

PN19

MS TRAN: No Commissioner.

PN20

THE COMMISSIONER: Now you have material that you’ve lodged in support of this which indicates that there was consultation with the employees. Did that consultation go to the facts that the union was – the employer was seeking to vary rates that were expressed in the agreement for 2006 and 2007?

PN21

MS TRAN: Commissioner based on my discussions with the organiser for the site, yes, that employees and members had been consulted about this change.

PN22

THE COMMISSIONER: I think I’d need to know more than that Ms Tran. This is a very serious situation. You have a certified agreement which has particular rates in it, that is a legally enforceable document and a letter written to Mr Kilkenny has no legal effect whatsoever. So as far as these employees are concerned that document and those rates are the rates that they should have been being paid. Now I don’t know whether they understand that or not, and I don’t know what they think they’ve voted for.

PN23

MS TRAN: Commissioner I understand your concern may I ask what you would suggest we do in this situation?

PN24

THE COMMISSIONER: Well I’m not 100 per cent clear what you can do Ms Tran because I’m not sure that you can retrospectively vary these rates because these rates of pay relate to periods of time which are now in the past, and which were enforceable at that time. I don’t think that you can retrospectively take away the rights of the people to enforce what was in the agreement at the time. Now if they’ve chosen not to do that that might be the case, but I don’t know that you can take that away from them.

PN25

MR BEARD: Commissioner can I just say something? The document itself, the inconsistency is the basis of the rate adjustment and the quoted rates for all the gradients. So it’s obvious there’s no continuity in the previous agreement taking it forward. So where it talks about a rate of pay based on the first pay period, if you were to take that and apply it to these rates, its the obvious error. So I don’t understand how these rates have been calculated.

PN26

THE COMMISSIONER: I don’t understand how the rates have been calculated they are the rates that appear in the agreement. Now if there was an error, or if there was some ambiguity in relation to that then the appropriate measure was to bring an application before this Commission to vary that agreement before those rates became operative, not three years after they became operative.

PN27

MR BEARD: Yes, I understand that Commissioner. But I mean the understanding of both the employer and the union and the employees is that a percentage increase will be applied to the rate at that particular point where the agreement was signed and that was the employees understanding and that has been applied. The break down is the actual quoted rates don’t align with that calculation.

PN28

THE COMMISSIONER: They may not, but this is the document that they voted on and the document that they voted on and was certified in September 2005, sets out rates of pay which on my understanding would be like, legally enforceable and a letter from the company to the union, doesn’t change that, because that letter doesn’t actually vary this agreement in any way whatsoever. Ms Tran I think that I need two things. I need some legal argument in relation to my legal power to do what you’re asking me to do. I also need to know exactly what it was that these employees thought they were voting for when they voted to retrospectively vary this agreement and change the rates of pay that existed and were supposed to have existed according to this agreement, since April 2006 and April 2007. Now it’s not at all clear to me that that’s what they understood. How many employees are we talking about?

PN29

MR BEARD: About 120 on average.

PN30

THE COMMISSIONER: Well I don’t think I’ve got sufficient information before me for me to form a view as to whether or not they genuinely understood what they were doing. Two, I need from you some legal argument as to my capacity to grant this application because on the face of it, I don’t think that I have that capacity. If you wish to bring an application before this Commission to vary it on the basis that there is some ambiguity in the original agreement, that’s a different matter. But I still have some difficulty in retrospectively varying rates that appear in this document and have never actually been paid as far as I understand.

PN31

Now I think that you’re in a bit of strife quite frankly because on the face of it those rates are legally enforceable. So I think that I – it’s the most appropriate thing for me to do is to adjourn this, these proceedings and I’ll relist it on notification from the union, but I will need to have more than I’ve got before me at the moment, all right?

PN32

MS TRAN: Yes, thank you Commissioner, we’ll seek counsel on that.

PN33

THE COMMISSIONER: I think that would be a very good idea. Thank you.

<ADJOURNED ACCORDINGLY [10.18AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #NUW1 LETTER FROM MR GIDLEY TO MR KILKENNY DATED 23/12/2005 PN15