Sydney Water EBA Campaign

Insofar as the matters contained in the statutory declaration are within your

knowledge do you agree that the answers given to each of the questions

addressed in the statutory declaration are correct -

and each of the declarations says, "Yes." It's become apparent to me via what has

been communicated to me by my associate that those forms were probably

prepared in a fairly mechanical fashion without due attention to the employer's

declaration and that there is in fact a contest in relation to the contents of the

answer to question 2.23 in the employer's F17 declaration. I understand, and

correct me if I'm wrong, that the extent of an individual flexibility term was a

significant matter in dispute and a significant issue in bargaining between the

parties, and that some at least of the unions regard themselves as having been, if I

can put it in the vernacular, spivved in this regard.

Now, I note that compliance with the requirements in section 202(1) is not a

condition precedent to approval of the agreement. Section 186 specifies what the

tribunal has to be satisfied about in order to approve an agreement and indeed if it

is satisfied of those matters it must approve the agreement, and a term that fits the

description in 202(1) and complies to the requirement in 203, is not one of the

conditions precedent that has to be satisfied before the tribunal must approve the

agreement. Rather the statutory scheme would appear to be that there is either a

term that purports to be a flexibility term in accordance with 202, or there isn't,

and if there is no such term at all, or if there is a purported term that doesn't meet

the requirements, then section 202 subsection (4) operates and the model

flexibility term is taken to be a term of agreement, and pursuant to

section 201(1)(b)(i) the tribunal is required to note in its decision that the model

flexibility term is taken under subsection 202(4) to be a term of the agreement.

Now, it seems to me just clear beyond any scope for argument that at the very

least clause 44 of the agreement does not meet the requirement in

section 203(2)(b), just to choose one of them. But that's the most clear-cut one it

seems to me. There just can't be any argument that that requirement is not met.

There is nothing in clause 44 that looks even vaguely approximate to the

requirement that the term require the employer to ensure that any individual

flexibility arrangement agreed to under the flexibility term must be about matters

that would be permitted into the arrangement or an enterprise agreement and must

not include a term that would be an unlawful term if the arrangement were an

enterprise agreement.

The consequence of that is that there is no serious scope for argument that

clause 44 is a flexibility term within the meaning of section 202 and accordingly it

would prima facie appear to be the case that this is a case where 202(4) applies

and the notation in 201(1)(b)(i) must be made. The purpose of this mention was

to raise all of those matters with you and I should have added at the outset to

apologise to Sydney Water for proceeding on a wild goose chase in relation to

undertakings that arose on account of a misunderstanding for which I accept

responsibility. But the position, it seems to me, is as I describe it, concerned with

in the first instance simply the operation of the statue rather than any issue about

undertakings.

Now, that is all subject to this qualification: section 187(2) is one of the

requirements about which Fair Work Australia must be satisfied pursuant to

section 186. This set of circumstances raises in my mind as a possibility, or at

least as a potential issue, an argument that Sydney Water was aware that the

extent of a flexibility term in the agreement was a real issue in bargaining, that the

unions were opposed to the incorporation of the model flexibility clause and

wanted to achieve something that was significantly narrower, and that there may

be an argument available under section 187(2) that the approval of the agreement

would not be consistent with, or would undermine, good faith bargaining if it

could be demonstrated that Sydney Water had effectively adopted a tactic of

negotiating about the terms of clause 44 and the extent of any flexibility term all

the while knowing that what was being negotiated would not comply and simply

turning around after the event and saying, "Well, ya sucks boo. Section 202

subsection (1) and section 203 requirements haven't been met. We know you

unions thought this was a big ticket item and we negotiated hard to get where we

got to with clause 44, but you've got to cop the model flexibility clause anyway."

Now, that's a theoretically available argument. Whether it's an argument that

succeeds either at an evidentiary level or at a legal level is another issue altogether

and I assume that Sydney Water's position would be, "Well, no such thing like

that occurred and that this was all a misunderstanding as much by us as by the

unions, and that whilst we tried to get a flexibility term, that was going to be a

flexibility term that was in compliance with the act, through ignorance on the part

of all parties that didn't occur and it was only picked up when we came to prepare

our documentation for the approval application, and we've simply done what

we're obliged to do in answering the questions in the employment declaration

truthfully."

Now, the issue is whether or not the unions are simply going to cop this, or

whether there is, in fact, a case that you wish to make, pursuant to section 187(2).

I would add this comment, that such a case should not be made unless there is a

proper evidentiary foundation for it. In other words it's not enough to simply

make the allegation of bad faith, which is what the allegation would be. There

would need to be some proper evidentiary foundation for it. I do not know

whether the unions are in a position to respond to that at the moment.

In any event, those are the comments that I thought would set the scene for what

we need to address. If the unions are not minded to pursue a section 187(2) point.

I would emphasise again that such a point sho uld not be pursued unless there is in

fact some material evidentiary basis for it, and it's not merely sufficient to just

point to the bare facts of negotiation for the terms of clause 44 followed by the

employers' declaration. The evidence would need to go beyond that. If there is to

be no such point taken, then it seems to me that the tribunal must approve the

agreement, and must meet the notation required by section 202, subsection four.

Now, who would like to go first?

MS McMANUS: Your Honour, it's Sally McManus here. I'm the branch

secretary of the Australian Services Union and we represent 80 per cent of the

workers at Sydney Water that are covered by this agreement.

THE VICE PRESIDENT: Yes.

MS McMANUS: I'd just like to say that I think yo u gave a really good summary

of the situation, and just to say that the ASU does want to pursue an argument

under section 187(2), that it does undermine the good faith bargaining

requirements and we do believe that we'll be able to put on proper evidence that

Sydney Water has acted in bad faith in their attempt to seek the approval of this

enterprise agreement and have the model flexibility term inserted.

THE VICE PRESIDENT: Yes. So you would be contending at a factual level

that the extent of any individual flexibility term in the agreement was a big ticket

item in the negotiation?

MS McMANUS: That's exactly right, your Honour.

THE VICE PRESIDENT: There's presumably documentation to that effect?

MS McMANUS: Yes, your Honour.

THE VICE PRESIDENT: I mean correspondence and presumably witness

evidence as well. Okay. Thank you, Ms McManus. Who would like to go next?

MR KEMPTON: Your Honour, Simon Kempton here from the Association of

Professional Engineers. We actually support the ASU's arguments in 187(2), we

believe that there is quite strong evidence that shows that good faith bargaining in

this, and we'd like to run it as well.

THE VICE PRESIDENT: Fine. Are the other unions in the same position?

MR McKINNON: The CEPU supports that position.

THE VICE PRESIDENT: Yes.

MR KENNEDY: Same from the AMWU, your Honour.

THE VICE PRESIDENT: Thank you. I take it the ASU took the lead in the

negotiations here. Or was there a - - -

MS McMANUS: Yes, your Honour, I think that would be fair to say.

THE VICE PRESIDENT: What do you call it? A - - -

MS McMANUS: Single bargaining unit?

THE VICE PRESIDENT: Single bargaining unit.

MS McMANUS: It's not exactly that way, but its probably a fair way of

describing it.

THE VICE PRESIDENT: Okay, fine. Okay, what have Sydney Water got to

say?

MR SAUNDERS: We would obviously contest any cost taken by - - -

THE VICE PRESIDENT: Of course, Mr Saunders, I took that as - - -

MR SAUNDERS: We have sufficient evidence to establish that the way that this

has panned out hasn't been a breach of good faith bargaining requirements under

the act.

THE VICE PRESIDENT: Yes. Okay. Mr Saunders, do you accept that this was

a big ticket item in the bargaining?

MR SAUNDERS: Yes. The original way that the draft agreement was presented

included two flexibility terms, one which was eventually retained, one which was

over the course of the negotiations removed. The one that was removed,

obviously was the one that was based on the model flexibility clause. That was

changed to some degree as the negotiations progressed, notably to restrict the

scope of the terms of the agreement that could be varied under an individual

agreement.

THE VICE PRESIDENT: Yes.

MR SAUNDERS: However, the union has quite firmly put the position that that

wasn't sufficient to meet their log of claims and they didn't wish to proceed down

that path, at which point the clause was removed. However, when that was made

it was quite openly said that this is a requirement of the act, and that it is our

reading of the act that should we delete this clause Fair Work Australia will be

forced to put in the model clause in any event. My submission would be that all

the parties went into this - - -

THE VICE PRESIDENT: Mr Saunders, can I just say if the evidence establishes

that, then you win hands down. It would be as simple as that. But as I understand

what's been said by Ms McManus and the others, is that there would be a serious

factual contest that that would be the final evidentiary position. Am I right about

that, Ms McManus?

MS McMANUS: That is correct, your Honour.

THE VICE PRESIDENT: I don’t see any other course other than making

provision for, or setting down the matter for hearing and probably a timetable for

evidence, in respect to which the unions should go first rather than Sydney Water,

because it’s the unions that really have the burden of establishing section 187(2)

requirement not having been met. It's for Sydney Water to defend against that

contention. Does anyone have a different view?

MR SAUNDERS: No, your Honour.

THE VICE PRESIDENT: Okay, fine. Ms McManus, I take it you've sort of got

the lead role here. What's the minimum time frame that you think you can prepare

your evidence in?

MS McMANUS: 21 days, your Honour. Would that be okay?

THE VICE PRESIDENT: Well, the problem with 21 days is that's going to set in

course a timetable that's not going to see this matter heard and determined for

some couple of months, I would have thought, because Sydney Water would want

a similar period, and would reasonably expect to get it, which would take us to

42 days, and then there will be a need for some time in reply, I would have

thought, which is going to take us to, say about 50 days, and then by the time it's

heard and a decision prepared, we're looking at a minimum of a couple of months.

Is there going to be a need for an order for the production of documents? Or do

you have all the documents you need?

MS McMANUS: Your Honour, I'm not certain about that, I would have to have

a close look, so I wouldn't want to commit myself either way. The 21 days, from

our perspective was also partly to do with the fact that our lead negotiator is on

leave, she does get back next Tuesday, so perhaps we could squeeze it into a

14-day period.

THE VICE PRESIDENT: Okay. 14 days for Sydney Water, is that sufficient,

Mr Saunders?

MR SAUNDERS: That would be sufficient, commissioner.

THE VICE PRESIDENT: Okay, fine. I'll allow a short time for reply. Just bear

with me for a minute. So that would be 25 February for the unions for their

evidence and 11 March for Sydney Water and say 17 March for any reply

evidence from the unions, and then 19 March for a hearing. Now, my associate

will, once these directions have been finalised, will send them out formally, but I

just am wanting to work this out now to see if anyone has any difficulties with

them. Does anyone have any problems with that? So union evidence

25 February, Sydney Water evidence 11 March, union reply 17 March, hearing

19 March.

MR SAUNDERS: That's fine.

MS McMANUS: That's okay, your Honour.

THE VICE PRESIDENT: Okay, fine. Can I just ask you, Mr Saunders, has

there been any pay increases actually delivered yet, or are you waiting for the

formal approval?

MR SAUNDERS: The pay increases is actually (indistinct) process those as well

as the promised back-pay for those in early December.

THE VICE PRESIDENT: Okay, fine. So nobody is going to be - no employers

are going to be significantly prejudiced as a result of there being some delay in the

process of sorting this out?

MR SAUNDERS: No.

THE VICE PRESIDENT: Okay. Fine. Now, I think its probably desirable that,

in addition to evidence there be an outline of argument, not about the evidence so

much, because the evidence is going to, you know, no doubt evolve as the

timetable unfolds and as the thing unfolds in hearing. But an outline in relation to

what people contend about section 187 and what is wrapped up in it. I think this

will be the first of the Mohicans in relation to section 187, so it's uncharted

territory in terms of precisely what it means. Does anyone want to dissent from

that view? No? Okay. So we'll have in addition to the evidence an outline of

contentions in relation to the effect of section 170. In other words, let me just

make that clear for the unions, Ms McManus and Mr Kempton, Mr McKinnon

and Mr Kennedy. It's incumbent upon you to allow Sydney Water to know how

you put your case on section 187, and that's going to mean identifying what you

say the effect of section 187 is, and in a very broad-brush way, making the factual

assertions that you say would make out the objection based on section 187.

MS McMANUS: I understand, your Honour.

THE VICE PRESIDENT: Okay, fine. Is there anything else that is then required

in this matter from anyone? There being no voices raised, I'll conclude the

telephone mention at this point, and my associate will send out some directions

consistent with what I've indicated. Thanks very much indeed. That concludes

the matter.

MR SAUNDERS: Your Honour, thank you.