Linfox - Twu (Carter Holt Harvey - Oberon Gate 6, Lower Mount Road, Oberon NSW 2787) Enterprise Agreement 2003 & ors [2004] NSWIRComm 1059 (30 July 2004)

Last Updated: 30 August 2004

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

McKENNA C

30 July 2004

Matter No IRC 7197 of 2003

LINFOX-TWU (CARTER HOLT HARVEY - OBERON GATE 6, LOWER MOUNT ROAD, OBERON NSW 2787) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7198 of 2003

LINFOX-TWU (COLES MYER LOGISTICS, SMEATON GRANGE) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7199 of 2003

LINFOX-TWU (A E BAKER) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7200 of 2003

LINFOX-TWU-AIR LIQUIDE ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7201 of 2003

LINFOX-TWU (HARDY WINES) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7202 of 2003

LINFOX-TWU (COLES SOMERSBY) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7203 of 2003

LINFOX-TWU (PGH BRICKS AND PAVERS/MONIER TILES) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7205 of 2003

LINFOX-TWU (COLES FLEMINGTON) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7206 of 2003

LINFOX-TWU (COLES MYER LOGISTICS HUNTINGWOOD) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

Matter No IRC 7356 of 2003

LINFOX-TWU (BUILDING AND CONSTRUCTION NSW X - DOCK ) ENTERPRISE AGREEMENT 2003

Application by Linfox Australia Pty Ltd for approval of enterprise agreement

DECISION

These ten applications for the approval of enterprise agreements were filed on 17 December 2003 and, in the case of the last-named application, 22 December 2003. They were allocated on 23 December 2003 and listed initially on 8 January 2004.

The body of each application is in parallel terms, but there are site-specific annexures to each application. On the occasion of the first listing, Linfox Australia Pty Ltd and the Transport Workers' Union of New South Wales advised they were in consent as to the terms of the agreements and were, at that stage, jointly seeking approval. Despite the parties' consent on the terms of the agreements, I raised with the parties a number of matters concerning various clauses. While it is unnecessary to traverse the full detail of the concerns raised with the parties, they included matters as basic as specifying the incorrect name of the union to the content of clauses which purported to superimpose on the Act's requirements ways, for example, to make, vary and extend further agreements.

Later in the course of proceedings, it emerged there was a further impediment to the approval of the agreements. Shortly stated, the parties disagreed about the meaning of the wording of certain aspects of the agreements. That is, although there was agreement about the words in question, the parties had placed quite different, and irreconcilable, interpretations on those words. Section 35(1)(c) of the Act provides that the Commission is to approve enterprise agreements only if satisfied, among other matters, that "the parties understand the effect of the agreement". There would have been an impediment to approval where, plainly, there was no mutuality of understanding as to the effect of the proposed agreements.

A wide range of other matters which formed part of the initial applications were such that the applications would have been dismissed had the parties pressed for their approval. The parties submitted, however, that the applications should not proceed to hearing. Instead, the parties requested, and were granted, adjournments to allow further discussions on the content and intended meaning of the agreements. In all, the applications were listed before the Commission on ten occasions to allow those discussions (namely, 8 January; 10, 19 February; 3, 19, 29 March; 27 April; 7, 26 May; 13 July 2004).

On 13 July 2004, an amended application was tendered in IRC03/7197 as a template for further submissions on all the agreements. Appropriately signed, amended applications were subsequently filed in all matters on 20 July 2004.

The parties submitted they are now in agreement as to the form of the amended applications and as to their meaning. Mr J Fox, Linfox's solicitor, submitted that if there are any issues such as would cause the applications to be dismissed, the parties would seek to have an opportunity to further consider and address on those matters. Given the unusually long period of time these applications have been before the Commission, the number of adjournments that have been granted, the statutory intention emphasising expedition (s34(3)) and the apparent absence of special circumstances, I consider, however, that it is time for these applications to be finally determined.

A large number of matters that have been the subject of earlier discussion in the proceedings have now been satisfactorily addressed. It seems to me the following are the remaining clauses of potential concern.

Clause 3.2 - Parties Bound

Clause 3.1 deals with the parties to be bound by the agreement. Clause 3.1 provides, in an unremarkable way, the agreement is binding on the TWU, Linfox and Linfox employees whose employment is covered by the Transport Industry (State) Award. However, cl 3.2 further provides that the agreement has the following binding effect:

3.2 This agreement is also binding on each successor and transmittee of Linfox, including the customer, other principal logistics providers, and their respective sub-contractors and labour hire agencies.

Mr Fox submitted the words of cl3.2 were to be read in the limited context, for example, of the definition of "party" as specified in the Dictionary to the Act (that is, "party to an industrial instrument includes the successor of a party to the instrument"). However, I do not consider the agreement can have a binding effect on third parties as contemplated in the plain words of the agreement. For instance, the clause, within terms, refers to "the customer, other principal logistics providers, and their respective sub-contractors and labour hire agencies"; it remains unclear to me how any of these could be said to be a "party" within the meaning of the Act, despite the parties' submissions as to the agreed meaning.

Clause 5 - Extensions of Agreement

Clause 5 gives effect to the parties' intention that the agreements should have practical effect for five years, notwithstanding the general proviso in s42 of the Act that the nominal term of an enterprise agreement must not be more than three years. There is no suggestion these agreements concerned "projects" within the meaning of s42(3) of the Act such as would allow a departure from the usual time limitation, but I think the amended form of the clause is now such as may be approved. That is, the clause now recognises there is a nominal period of three years. I think it is open to the parties to agree that the provisions would continue to operate, in practical terms, for two years after the nominal three years' duration. As the Act stands, it would not be possible to seek an "extension" as contemplated in the agreements (cl5.2 and 5.3), but the clauses now refers also to seeking the approval of further, or "replacement" agreements - which would be more consonant with the statutory framework.

Although the provisions concerning the period of operation are somewhat unusual, I do not consider they would now pose an impediment to approval.

Clause 7 - Variation of Agreement

The initial cl7 contemplated new agreements being initiated and made through dispute mechanism procedures under the Act, in a way which is simply not available under the statutory provisions. The amended applications have been recast to more appropriately reflect the variation mechanism set out in the Act, for instance at s43. A recast provision has now been proposed which reads as follows:

7.3 If these discussions do not result in an agreement between the parties, then either party may, in accordance with clause 20 (Disputes), notify a dispute to the Commission.

7.4 The parties agree the Commission may conciliate and if necessary make a recommendation about issues between them, on the basis of industrial and commercial merit considerations. The Commission's recommendation shall form the basis of an application by the parties for the agreed variation of this Agreement by way of a further enterprise agreement in accordance with section 43 of the Act.

The functions and powers of the Commission in relation to industrial disputes are set out in Ch 3 of the Act, coupled with the effect of other provisions such as the public interest and the legislative objects. Although the exercise of the Commission's dispute resolution jurisdiction may involve making a recommendation on the bases of industrial and commercial merit considerations, a clause of this nature plainly could not circumscribe the Commission's powers. To the extent the clause appears to purport to specify the sole or principal bases for any recommendation in industrial dispute proceedings, it seems inapt.

12 Other matters

Clause 12.6 deals with agency casuals. It provides:

Agency casuals may, while engaged to perform work in respect of new contracts or operations, receive lesser rates than those set out in this agreement, for their initial three months.

While it is not entirely clear from the face of the agreements, the rates for agency casuals apparently are intended to be fixed by reference to the agreements, but agency casuals' rates are not specified in the agreements. In those circumstances, I could not be satisfied the no net detriment test has been met in relation to those classes of employees. However, the agreement is not stated as being binding on agency casuals: that is, agency casuals, presumably, would be employees of the relevant agency rather than Linfox. Presumably also, agency casuals' employment terms and conditions would be governed by the relevant award minima otherwise applicable to the agencies' employees. In any event, I note the parties have reached an agreement concerning agency casuals as an integral part of the discussions concerning these agreements, the terms of which appear satisfactory. Those terms have been committed to writing and recorded in the proceedings.

16 - Pay Options, 18 - Further agreements and local matters

Clauses 16 and 18 provided, in the initial applications, internal mechanisms for adjusting payments locally - with the result the no net detriment test could not, for reasons of uncertainty, be met. However, in the amended application any such further agreements must, by virtue of the amended cl18.2, be submitted to the Commission for approval. As such, the clauses are now unobjectionable in terms of the legislation.

Although most of the clauses that initially were of concern have now been omitted or qualified in the amended applications, or otherwise satisfactorily addressed in submissions over the course of the proceedings, I continue to hold reservations about some of the matters outlined above. It would be preferable if the clauses in question were not included or had been further modified, just as it would have been preferable for the standard anti-discrimination provision to be included (being a matter raised earlier in the proceedings with the parties). Shortly stated, however, despite the provisions concerning the purported binding effect of the agreement and the purported restrictions on the exercise of the Commission's dispute powers, the agreements will operate only to the extent that is jurisdictionally permissible or appropriate. I think sufficient work has been done to bring the applications into a form which, on balance, may result in approval. In short, there now appears to be no remaining impediment to approving the amended agreements, having regard to the statutory requirements and the prevailing principles.

The ten applications are approved in their amended form filed on 20 July 2004.