TASMANIAN INDUSTRIAL COMMISSION

Industrial Relations Act 1984
s.70(1) appeal against decision

G & A L Tambakis
trading as Georgios Café and Takeaway
(T 9814 of 2001)

and

Persons employed as Casual and Part-Time Employees

Appeal against a decision handed down by Commissioner Imlach arising out of TE 1130 of 2001 - Appeal upheld - decision revoked - new decision made - agreement approved pursuant to s.61J of the Act

[1] This is an appeal by G & A L Tambakis trading as Georgios Cafe and Takeaway (the appellant), against a decision of Commissioner Imlach in Matter TE1130 of 2001.

[2] The Commissioner in that matter dismissed an application made pursuant to s.61H of the Industrial Relations Act 1984 (the Act) to approve and register an enterprise agreement made between the appellant and its employees. He also refused an application made by the Department of Justice and Industrial Relations, Enterprise Agreements Unit (the department), on behalf of the appellant, for a further adjournment to allow further negotiation and to make some changes to the proposed agreement.

[3] One adjournment had already been granted to allow the department to reply to submissions presented by the Australian Liquor, Hospitality and Miscellaneous Union (the union) appearing on behalf of one of the employees who would be covered by the agreement if it were approved and registered.

[4] The matter was relisted at the request of the department for it to seek a further adjournment to allow it to:

"... ensure that the process is squeaky clean, scruplously transparent and that we can address Mr Tullgren's [for the union] concerns, not necessarily those that we disagree with or those that we agree with but just agree with Mr Tullgren that the process adopted left cause for concern and that needs to be remedied and that's a fair cop and I'll take it and that's the purpose of our submissions to you ..."

[5] The Commissioner in his decision said "I refuse any further adjournment and dismiss the application so that, if the agreement is to be pursued, it will be done de novo and free of any suspicion or doubt".

[6] The grounds of appeal are as follows:

"1. The Commissioner made a legal error in refusing to approve the Enterprise Agreement contrary to the requirements of Section 61J(1) of the Industrial Relations Act, 1984.

2. The decision was unreasonable and unjust in that the Commissioner did not give reasons for the refusal to approve the Enterprise Agreement.

3. The decision was unreasonable and unjust in that the Commissioner did not set out where the Enterprise Agreement did not meet the requirements of the Industrial Relations Act, 1984.

4. The Commission erred by not giving sufficient weight to the wishes and evidence of the parties to the agreement."

[7] The application was filed in the Commission on 26 April 2001, by the department on behalf of the appellant. The appellant had utilised the service provided by the department to assist in the negotiation and preparation of an enterprise agreement between it and its employees. The appellant is party to the Restaurant Keepers Award (the award) and the union was not involved in the negotiations for the agreement. The proposed agreement is a `second generation' agreement and was to replace the Georgios Cafe & Takeaway Enterprise Agreement of 1997 which operated from 6 November, 1997. That agreement was to remain in force for a period of three years.

[8] The proposed agreement would have application to ten employees, nine of whom had indicated their support for it and one, represented by the union, who opposed its approval and registration.

[9] At the initial hearing for the approval and registration of the agreement the union had been instructed by that member to appear and oppose the approval and registration of the agreement.

[10] The union argued that the proposed agreement should not be approved or registered as the process as to its making was flawed. The union said that employees had been misinformed by the department and the appellant as there had been a "failure to advise that the award applied because the previous agreement had expired. Nowhere in the documents does it in fact indicate that the award has application now if and until any agreement is made".

[11] Further, the union submitted before the Commissioner that the department had a duty of care when providing information to employees and said that "Again, the employees were relying on the ability of Mr Evans and the department or his unit to impart accurate and truthful information about the agreement."

[12] Accordingly, it was the view of the union that the tests required by s.61J of the Act had not been met and that employees had not been properly informed of their rights or the impact of the proposed agreement on those rights.

[13] The union also argued that the statutory tests set out in sections 61F and 61I of the Act had not been satisfied and that the conditions found in the proposed agreement were less than the minimum conditions prescribed in s.61F of the Act in respect to annual leave, sick leave and parental leave.

[14] Section 61F provides:

"(1) For an employee not otherwise covered by an award or a registered agreement, conditions of employment fixed by an enterprise agreement in respect of rates of wages must not be less than:

(a) subject to paragraph (c), in the case of a person other than an adult:

(i) who is 18 years or age or under, 50% of the hourly rate referred to in paragraph (b); or

(ii) who is 19 years of age, 65% of the hourly rate referred to in paragraph (b); or

(iii) who is 20 years of age, 80% of the hourly rate referred to in paragraph (b); and

(b) in the case of a person who is an adult, an hourly rate calculated by reference to the minimum wage as established by the Commission under section 35(1)(b) and to the ordinary weekly hours of work for which that person is employed; and

(c) in the case of an apprentice or trainee, the appropriate rate specified in a relevant award.

(2) For an employee not otherwise covered by an award or a registered agreement, conditions other than wages must not be less than:

(a) in the case of annual leave the lowest amount of paid annual leave specified in any award; and

(b) in the case of sick leave, the lowest amount of paid sick leave specified in any award; and

(c) in the case of parental leave, the lowest amount of parental leave specified in any award."

[15] The department representative submitted in the proceedings below that an award of the Commission has application to the appellant so s.61F does not need to be considered.

[16] Section 61I states:

"(1) The Registrar is to refer an agreement lodged under s.61H to the President who is to refer the agreement to a Commissioner who must:

(a) set a hearing date and notify the Minister and the parties to the agreement accordingly; and

(b) forward a copy of the agreement to the Minister and the parties to the agreement.

(2) At the hearing, the Commissioner must satisfy himself or herself that the parties to the agreement are aware of:

(a) their entitlements and obligations under the agreement and this Part; and

(b) any changes to existing conditions of employment which will result from the agreement taking effect.

(2A) At the hearing, the Commissioner must be satisfied that any secret ballot required to be conducted in relation to the agreement has been conducted in accordance with s.61ZD(1).

(2B) For the purpose of subsection (2), the Commissioner must be satisfied that the parties to the agreement were provided with a written statement at least 2 weeks before the ballot to approve the agreement that specifies:

(a) any changes to their entitlements and obligations resulting from the agreement taking effect; and

(b) the nature of any changes to existing conditions of employment.

(3) The Commissioner may summon any person to attend a hearing.

(4) A person who is summoned to attend a hearing must not, without reasonable excuse, fail or refuse to attend the hearing as required by the summons.

Penalty:

A fine not exceeding 10 penalty units.

(5) A hearing is to be conducted in such manner as the Commission may determine.

(6) A party to the enterprise agreement may appear before the Commission in person or by an agent.

(7) At the hearing, the Commissioner may:

(a) with the consent of the parties, correct or amend any error, defect or irregularity relating to the agreement; and

(b) with the consent of a person, add or delete the person as a party to the agreement; and

(c) give any direction or do any thing necessary or convenient for the just and expeditious determination of the hearing; and

(d) inform himself or herself on any matter in any way he or she thinks fit.

(8) The Commissioner is not bound by the rules of evidence in informing himself or herself on any matter at a hearing."

[17] The Commissioner noted in his decision that the union had "canvassed a number of provisions in the agreement and their negative comparison against the relevant award provisions."

[18] At the hearing below the Commissioner sought the views of the four employees present as to whether they considered that the process for the making of the agreement had been fair and free from duress. Each agreed that the process was fair, that there had been no duress and that the terms of the agreement were fair. Those employees not in attendance were represented by those who were present. Another employee provided a statement in support of the proposed agreement.

[19] We now consider the grounds of appeal:

Appeal ground 1

1. The Commissioner made a legal error in refusing to approve the Enterprise Agreement contrary to the requirements of Section 61J(1) of the Industrial Relations Act, 1984.

[20] The appellant submitted that s.61J(1) of the Act required that the Commission must approve an agreement unless satisfied that:

"(a) the conditions of employment specified in the agreement do not comply with the minimum conditions of employment specified in s.61F; or

(c) the matters referred to in s.61E are not contained in the agreement; or

(ca) the bargaining process adopted by the parties to the agreement was not appropriate and f air; or

(d) the agreement was made under duress; or

(e) any matter raised during a hearing convened under s.61I by the Minister, or by an organisation intervening under s.27, justifies refusal of the approval of the agreement; or

(f) the agreement is not fair in all the circumstances; or

(g) the requirements referred o in s.61I(2), (2A) and (2B) have not been met."

[21] The appellant said that at the hearing below the advocate for the company went through each of the provisions of s.61J(1) stating that none had been breached and accordingly there was no reason for the Commissioner to refuse to approve the agreement. Further, that it was an "imperative" on the Commissioner to approve the agreement unless one of the grounds had not been satisfied.

[22] It was also submitted that the union consistently referred to the agreement not satisfying the requirements of s.61F although it conceded that the employees were covered by the award.

[23] We agree that s.61F is not relevant to the consideration for approval of the agreement before the Commissioner.

[24] Although the Commissioner gave no reasons pursuant to s.61J(3) for not approving the agreement we are of the view that the matters raised by the union in the hearing were a significant factor in him not doing so. However, in the absence of any specific reasons we can only assume by the conclusion he reached that he was not satisfied that the process was appropriate and/or fair. We come to that assumption having considered his determination that if the agreement is to be pursued "it will be done de novo and free from any suspicion or doubt".

[25] We do not consider the Commissioner has made a legal error in his refusal to approve the agreement as he has the power to not approve an agreement if he is not satisfied that it has met the requirements of the Act.

[26] We concede however that he was required by s.61J(3) to inform the parties in writing of his reasons for not doing so.

[27] It seems to us that the Commissioner was of the view that the process undertaken by the appellant to inform employees about the agreement was `tainted' by an inference that he had somehow provided approval of the agreement prior to any formal hearing of the application. That seems to be the basis of his comment that any new application be free from suspicion or doubt.

[28] We reject appeal ground 1 that the Commissioner has made a legal error in refusing to approve the agreement.

[29] Appeal grounds 2 and 3

2. The decision was unreasonable and unjust in that the Commissioner did not give reasons for the refusal to approve the Enterprise Agreement.

3. The decision was unreasonable and unjust in that the Commissioner did not set out where the Enterprise Agreement did not meet the requirements of the Industrial Relations Act, 1984.

[30] The appellant dealt with appeal grounds 2 and 3 together and submitted that logical argument against the decision was difficult as the Commissioner had failed to provide any reasons for his refusal to approve the agreement as required by s.61J(3) which states:

"If the Commissioner refuses to approve an enterprise agreement, the Commissioner, by notice in writing, must advise the parties to the agreement and the Minister of the reasons for refusal."

[31] We acknowledge that the Commissioner did not provide any reasons for refusing to approve the agreement, other than his comment that if the agreement is to be pursued it will be "de novo" and "free of any suspicion or doubt."

[32] The Act requires that reasons be provided if a Commissioner refuses to approve an enterprise agreement.

[33] Accordingly appeal grounds 2 and 3 are upheld as the Commissioner was required to provide reasons for his decision as required by s.61J(3).

[34] Appeal ground 4

4. The Commission erred by not giving sufficient weight to the wishes and evidence of the parties to the agreement."

[35] The Commissioner has made his decision having heard the parties to the agreement, the union and the department. It would appear from his determination that he has rejected the application for approval of the agreement being of the view that the process was so tainted by unfairness, suspicion and doubt that if the parties wished to further pursue an agreement they were able to do so but as a new application. We presume from his comment, maybe borne from frustration, that the proposed agreement had little, if any, likelihood of success at that time and that the parties should commence the process de novo.

[36] We are satisfied that the Commissioner has taken into account the "wishes and evidence of the parties to the agreement" and has exercised his discretion to reject the proposed agreement on his assessment of that evidence and the submissions presented.

[37] We note also that the submission of the department, when seeking a further adjournment, raised concerns about the process that had been adopted and its intention to remedy that process.

[38] We reject appeal ground 4.

[39] It would seem to us that the Commissioner has only considered the issue of what is referred to as the serious matter and the request for an adjournment in his decision.

[40] There has been a practice in the past whereby parties to an enterprise agreement have been able to seek the views of a member of the Commission prior to the agreement being lodged and prior to the employees having voted on the agreement. The Commission member would preview the agreement and indicate to the parties any areas of concern and, in most cases where necessary, changes would be made to assist Commission approval.

[41] That practice has not existed for some time and no preview of agreements will be provided by members of the Commission. It was an inappropriate practice for an independent tribunal.

[42] Accordingly, any view we now express about that practice is of little relevance other than to reiterate that it is no longer available as the process itself, or so it seems, has been misunderstood and, it is submitted by the union, misrepresented, by those availing themselves of it. This, it would appear, has influenced the Commissioner in reaching his decision.

[43] In this matter the allegation is that the employer provided a copy of the proposed agreement to the Commissioner who indicated a concern about some of its provisions which were then addressed by the employer. The union submitted that the amended agreement was then presented to the employees as a "fait accompli" inasmuch as the employees were led to believe that the Commissioner had given some `informal' approval and that they, by implication, should accept its terms.

[44] It was submitted by the union before the Commissioner that the bargaining process was unfair inasmuch as the company relied upon, and indicated to the employees, that the Commissioner had previewed the proposed agreement, had suggested some changes which the appellant had included in the proposed agreement and that the document then presented had the imprimatur of the Commission. This was done by a letter provided to the employees by the department representative, which included the following paragraph:

"The Commissioner indicated that the agreement needed significant change before he would consider it to be fair and reasonable. Your employer has agreed to make all changes requested - see new agreement attached ..."

[45] In raising an objection to the approval and registration of the agreement the union said:

"... we wish to raise a serious matter; that it is clear, we say, that the intent of that paragraph is to clearly indicate to employees that the Commission has already prejudged this agreement; that it was given the agreement or consulted about the agreement; it expressed some concerns but said - and I don't say this is in fact what the Commission said because we're not party to those discussions - but that the implication in the words is, that before the Commissioner would consider it to be fair and reasonable that it clearly provides an impression that the agreement, with these changes being made, would be considered fair and reasonable by the Commission and would be approved."

[46] The Commissioner has refused to approve the agreement seemingly being of the view that the process was not "free of suspicion or doubt."

[47] In doing so he was obviously persuaded by the submissions of the union on behalf of one of the employees who would have been party to the agreement.

[48] The Commissioner came to his determination having had the benefit of questioning the employees and hearing the evidence of the appellant. Having had that benefit he decided to reject the proposed agreement.

[49] We are inclined to the view that his concern about the process was justified. This view is supported by the submission of the department. The information provided to employees may well have indicated to them that the proposed agreement had in fact been given approval by the Commissioner and thereby did influence their decision to accept its terms.

[50] We note however that none of the employees present were asked whether the letter from the department had influenced their acceptance of the proposed agreement.

[51] Another matter raised during the proceedings which needs to be addressed, although not a matter under appeal, was the provision in the proposed agreement which limited the hours of work available for casual employees to a maximum of 20 hours. At the hearing below an exchange took place between one of the employees and the Commissioner about that limitation. The employee wished to be able to work in excess of 20 hours per week, in fact her choice was to be able to work 25 hours per week, this she was told was not available to her and was a limitation imposed by the Commission. This is incorrect; the Commission approves or rejects agreements in accord with the requirements of the Act, it does not have any limitations which it imposes on parties to an agreement other than if required by the Act. The approval or rejection of an enterprise agreement requires an assessment of all of the conditions found in the agreement, the requirements of the Act and whether or not the agreement is fair "in all the circumstances".

[52] The union, both before us and before the Commissioner, detailed what it claimed were the "unfair" provisions of the proposed agreement and also raised the issue of what instrument applies whilst an agreement is being negotiated and any previous agreement, if applicable, has expired. The Act provides at s.61(O)(1) that a registered enterprise agreement remains in force for the period specified in the agreement. In this case the previous agreement expired on 6 November 2000 and accordingly, as there was no agreement to replace it at the time of its expiration, the relevant award should have applied until such time as a new agreement was reached and approved by the Commission.

[53] Further it was submitted that the employee, represented by the union, was currently being paid according to the terms of the proposed agreement and not the appropriate award.

[54] In respect to that issue the union submitted that "There is nothing in the Act that can be construed as saying that an employee who has opposed can have by a majority vote their rights overridden to enforce their award entitlements......" The union relied on s.61M of the Act in support of its contention saying that "... the agreement prevails over the provisions of any award, industrial agreement or order of the Commission that deal with the same matters in so far as they purport to apply ...".

[55] The Act at s.61D(1) provides:

"An enterprise agreement may be made between any employer and any one of the following:

(a) one or more employee organisations representing persons employed in the enterprise;

(b) each of at least 60% of the individuals employed in one or more classes of employment in the enterprise;

(c) an employee committee formed under this Part to represent persons employed in the enterprise;

(d) any other person employed in the enterprise who is not included in paragraph (a), (b) or (c)."

[56] Accordingly the approval and registration of an enterprise agreement, in accord with the requirements of the Act, would have application to all employees in the enterprise party to that agreement.

[57] The appellant argued that the test to be applied was a "fairness in all the circumstances" test and we agree with that submission. However, the retrospective application of any enterprise agreement, which has the effect of diminishing award entitlements, may experience difficulty when it comes to satisfying the fairness test. We note that the Act is silent about retrospectivity for enterprise agreements but deals specifically with that issue for industrial agreements and awards.

[58] Further, the appellant argued that it was only the employer who provided sworn evidence and that the union had the opportunity to cross examine the witness on the issues it now raises but did not do so. Likewise a number of the employees were present and none were called to be examined nor was the employee the union was representing asked to give any evidence. All that was provided were assertions from the bar table.

[59] As previously noted, we consider that the reason the Commissioner dismissed the application for approval of the agreement related to his concern about the process and not the content of the proposed agreement. He is able to do so pursuant to s.21(2)(c)(iv) although we note his decision lacks particularity as to which section of the Act he did so act.

[60] The Commissioner also rejected the application by the department for a further adjournment. His rejection of that application is not the subject of appeal. Nevertheless we are of the view that the Commissioner was able to do so and that such decision was taken in consideration of the particular circumstances of this matter.

[61] We uphold appeal grounds 2 and 3 and, pursuant to s.71(13)(a) revoke the decision of Commissioner Imlach in TE 1130 of 2001.

[62] Having revoked the decision the Bench has given consideration to s.71(13)(b) and (c) of the Act. That is, whether it should make a decision dealing with the subject matter appealed against or direct the Commissioner or another Commissioner to take further action to deal with the subject matter of the decision.

[63] The appellant requests the Full Bench to approve the agreement in the form in which it was put before the Commissioner. The union argued that as the appellant is in breach of the relevant award it is estopped from proceeding with the appeal. There was insufficient evidence before us in this matter to establish that the employer was in breach of the industry award. In any case, this issue is being tested, via a separate application (T 9901 of 2001), before the Commission and we are of the view that this application should be allowed to take its course.

[64] We have decided to approve the agreement with variations to the operative date and its duration for the following reasons.

[65] The major issue of concern to the Commissioner went to the question of process, and in particular the wording of a letter to the employees, which may have given the impression that the Commission had already approved the agreement. With the benefit of hindsight, all parties to this matter, including this Bench, consider this occurrence to have been both inappropriate and unfortunate. We note, however, that the department and not the direct employer prepared this letter.

[66] Whether this letter had any influence on the views of employees is unknown. This question was not, on its face, pursued by the Commissioner, nor did Mr Tullgren seek to cross examine the employees present at the initial hearing.

[67] The employer and nine out of ten employees supported the agreement as presented in the original hearing.

[68] An inordinate amount of time has passed since this matter was first lodged with the Commission.

[69] Section 61J requires that "...a Commissioner must approve an enterprise agreement unless satisfied that ...". The Commissioner did not make a specific finding that requirements had not been met.

[70] Section 21(2)(n) of the Act, required the Commission to "... do all such things as are necessary or expedient for the expeditious and just hearing and determination of that matter."

[71] In light of the above, we have decided to end the uncertainty associated with this matter as is consistent with the public interest requirements of s.20 of the Act.

[72] Accordingly and in consideration of the matters raised, both in this appeal and before the Commissioner, and in recognition of some genuine issues raised by Mr Tullgren, we amend the agreement in the following manner:

[73] Clause 4 - Duration will be amended to operate from 26 April 2001 (the date the agreement was lodged with the Commission) and it will also be amended to expire on 30 June 2002.

[74] In light of the flawed process, as balanced against other considerations as outlined above, we believed the approval of the agreement, as amended, provides the fairest outcome to all concerned.

ORDER

Subject to the following amendment, The Georgios Café & Takeaway Enterprise Agreement 2001 is approved pursuant to s.61J of the Act.

Amendment:

Delete Clause 4 and substitute the following:

"4. DURATION

This Agreement will commence on 26 April 2001 and remain in force until 30 June 2002."

 

P L Leary
PRESIDENT

Appearances:
Mr A Cameron, from the Tasmanian Chamber of Commerce and Industry Limited, for G & A L Tambakis trading as Georgios Cafe and Takeaway
Mr P Tullgren, from the Australian Liquor, Hospitality and Miscellaneous Workers Union - Tasmanian Branch, for Ms L Harris

Date and Place of Hearing:
2001
November 14
Hobart