The Following Proceedings Were Conducted Via Video Conference and Recorded in Canberra

TRANSCRIPT OF PROCEEDINGS

Fair Work Act 200960317-2

COMMISSIONER DEEGAN

B2011/177

s.229 - Application for a bargaining order
Australian Municipal, Administrative, Clerical and Services Union
and
Australian Taxation Office
(B2011/177)

Canberra

4.05PM, FRIDAY, 12 AUGUST 2011

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN CANBERRA

Reserved for Decision

PN1

THE COMMISSIONER: Yes, could I have the appearances? I will start in Melbourne.

PN2

MR J. LAPIDOS: Thankyou, Commissioner. Jeff Lapidos for the Australian Services Union and appearing with me in Melbourne is MrKeith Meynell and in Canberra MrGeoff Southern.

PN3

THE COMMISSIONER: Yes, thankyou, MrLapidos. MrLapidos, you needn't stand from now on. If you remain seated, that will be fine.

PN4

MR LAPIDOS: Thanks very much, Commissioner.

PN5

THE COMMISSIONER: Thankyou.

PN6

MR M. BYRNES: May it please, Commissioner, Byrnes, B-y-r-n-e-s, initial M, solicitor, seeking permission to appear for the respondent, for the Australian Taxation Office, here with Ms Hinde, H-i-n-d-e, initial M, from the Australian Taxation Office.

PN7

THE COMMISSIONER: Thankyou, MrByrne. Is there objection, MrLapidos?

PN8

MR LAPIDOS: There is, Commissioner.

PN9

THE COMMISSIONER: Would you like to make out the objection?

PN10

MR LAPIDOS: Yes, Commissioner. We've had the benefit of some notice in writing from MrByrne. First of all, he makes some reference in section6 of his document to my qualifications as an advocate. I just wanted to explain that I'm not an industrial officer and never have been. I generally do no present at hearings for Fair Work Australia, though I commonly appear with an industrial officer or counsel who does generally present. I have appeared ad litem at unfair dismissal conferences where all except one to date has been able to be settled, but I've never appeared at an unfair dismissal hearing - in fact the union has never had to run one - and also I have no legal qualifications, though I do have an economics degree from Monash University that was completed in 1977.

PN11

In terms of section 596, I think it is - yes, 596 subsection(2)(b) which is that it would be unfair not to allow the person to be represented because the person is unable to represent himself, herself or itself effectively, the Tax Office has over 24,000employees, Commissioner, and a budget in excess - an annual budge in excess of $3.1billion. It has a substantial legal practice area staffed by many qualified lawyers and solicitors. The Tax Office could have arranged for someone other than MrLast to appear and I note that they have a Ms Melissa Hinde appearing in Canberra before you. It appears to me, Commissioner, that Clayton Utz have taken it for granted that they would get permission from you to represent them.

PN12

THE COMMISSIONER: MrLapidos, why would you say that?

PN13

MR LAPIDOS: Only because the way they have presented themselves in section5 they say they prepared their case with MrLast and that they're the only people - that MrLast is no longer able to attend and the Tax Office considers it would be unfairly prejudiced. They could've applied for an adjournment, I suppose, or as they have Ms Hinde and briefed her adequately.

PN14

In terms of fairness between the parties in section596(2)(c) we say it would be fairer to deny permission - fairer to the ASU to deny permission to the Tax Office and in terms of complexity of the matter we believe this isn't a complex matter and we are concerned that counsel could make a simple issue complex. In this case before you we only have an issue in relation to three questions which we asked the Tax Office to answer in accordance with section228(1)(b) and while they did provide answers, we say that the answers weren't germane to the questions.

PN15

Now the Tax Office indicates it wishes to make an issue of whether the words "disclosing relevant information" in 228(1)(b) is restricted to merely providing information it already has in documentary form or whether it's required to disclose information and that seems to be the only complexity that they wish to raise before you other than they seem to be saying also that there's voluminous documentation that they have provided to the union about the ATO's finances and while there are a lot of pages of documents, Commissioner, the questions themselves are quite simple and we say it's a simple matter of judgment on your part about whether they have answered the questions or not and then there's a matter of the exercise of your discretion in the various orders that we have sought.

PN16

THE COMMISSIONER: That's it, is it, MrLapidos?

PN17

MR LAPIDOS: Yes, Commissioner.

PN18

THE COMMISSIONER: Good, thankyou. MrByrne, it would be only fair if you remain seated unless you feel more comfortable on your feet. It's a matter for you. It's just the upping and downing, as you will note, from the use of

PN19

MR BYRNES: Yes, Commissioner, I'm happy to address you seated if that's okay.

PN20

THE COMMISSIONER: That's fine.

PN21

MR BYRNES: Commissioner, can I just say it's MrByrnes with an "s".

PN22

THE COMMISSIONER: MrByrnes, fine.

PN23

MR BYRNES: Yes, just for the sake of the record. Commissioner, I take it you have a letter that we addressed to your associate dated 8 August 2011.

PN24

THE COMMISSIONER: I do and I have read the letter.

PN25

MR BYRNES: I very much adopt those submissions, Commissioner, if I may, to save time without addressing you point by point in respect of those. We say, in short, that there are some relatively complex legal questions to be considered in relation to the interpretation of section228(1)(b) in particular in relation to documents that either don't exist or where there is complexity or difficulty in producing the documents or providing or furnishing the relevant information. We say there are some potentially complex legal submissions in relation to that. We say that the matter has some factual complexity. We say that the matter would be more expeditiously addressed if I had an opportunity to present the matter on behalf of the Australian Taxation Office.

PN26

MrGreg Last who ordinarily would have appeared before you is unfortunately not available. He's interstate today. MrLast in conjunction with both myself and other colleagues from Clayton Utz have been involved in the preparation of this matter, including the preparation of evidence and it's our respectful submission that the Australian Taxation Office would be disadvantaged in these circumstances if indeed I was not granted permission to appear in relation to this application having regard to that. Certainly it is true that the Australian Taxation Office is a large organisation, but MrLast is the relevant officer and regrettably he is interstate today. Not everybody in the Australian Taxation Office clearly has worked on this matter or has knowledge of this matter. The people that do - it's very limited in scope.

PN27

Ms Hinde is here today very much as - no disrespect to Ms Hinde but very much as a last-minute courtesy to Fair Work Australia in circumstances where permission is denied, but she has only had knowledge of the matter in the last fewhours or so, last 24 hours or so at best, so it would disadvantage the Australian Taxation Office in those circumstances if Ms Hinde was called upon to present the case. I'm sure she could capably do so, but in those circumstances it would prejudice our interest because MrLast and Clayton Utz have been the relevant legal personnel working on this matter.

PN28

THE COMMISSIONER: Allright, thankyou. Do you want to add anything, MrLapidos?

PN29

MR LAPIDOS: Only, Commissioner, that in terms of our assertion the Tax Office has taken a favourable decision for granted. It seems to me that they must have known for some time that MrLast would not be available. Their written submission says that he went to Mackay and was required there from Wednesday the 10th until Friday, 12August and in proceedings before Fair Work Australia. They refer to a dispute so I presume that would've been before Fair Work Australia. Normally Fair Work Australia would give advance notice of a listing and so I would expect, Commissioner - are you having trouble finding something?

PN30

THE COMMISSIONER: No; no, I'm having trouble following this argument, but go on.

PN31

MR LAPIDOS: Well, the only argument is that they have known for some time that MrLast would not be available. They have said to you that Ms Hinde has only been briefed on this matter at the last few hours and presumably that's on the basis that they've assumed that you would grant their application.

PN32

THE COMMISSIONER: They might have assumed that on the basis that I sent back a notice when I was asked to deal with the question of legal representation in advance that I would refuse to deal with legal representation in advance because I was too busy this week, MrLapidos, but I would deal with it at the commencement of these proceedings, but my normal position would be that legal representation would be allowed in a bargaining order matter given the complexity of the legal issues involved as to whether or not - the importance of the issuing of bargaining orders. They are not issued lightly. I have to make sure I have jurisdiction. I have to make sure I exercise my discretion properly. I consider them complex legal issues in every case that comes before me and normally I would advise parties that it was likely that I would, unless there was a very good reason why not, allow legal representation to either side.

PN33

Now, I don't accept that the Tax Office will be disadvantaged by not being allowed legal representation necessarily but I do accept that, in my view, the matter will proceed more efficiently if the Tax Office are allowed to use their legal representative who is across these matters and, given the time of the day and the fact that this had to be put on at fairly short notice because it's a bargaining order application and because I'm under a lot of pressure with a lot of work at the moment and I did my absolute best to actually fit it in this week and because I'm not available at all next week, I don't want it to go over. My main concern is that I deal with it so that it's properly dealt with in advance of anything else happening with this agreement and should be dealt with efficiently. So I will allow MrByrnes to appear and, MrLapidos, I do remember on occasions you appearing before me not as Fair Work Australia but as the old commission on your own and in hearings, not in conferences.

PN34

MR LAPIDOS: Yes, but only once before you in 1998, Commissioner.

PN35

THE COMMISSIONER: I think there might have been another occasion, MrLapidos, but I don't think it comes into it. You have got a lot of experience and I don't think you need downplay your experience in these matters. You are an experienced industrial person and I will make allowances for any lack of advocacy skills that you might have today.

PN36

MR LAPIDOS: Thankyou, Commissioner.

PN37

THE COMMISSIONER: So I think the best to do would be we get on with the matter.

PN38

MR BYRNES: May it please, Commissioner.

PN39

THE COMMISSIONER: Thankyou. Allright. MrLapidos, it's your application. Would you like to make out the grounds, please?

PN40

MR LAPIDOS: Thankyou, Commissioner. Commissioner, the Australian Services Union is a bargaining party for the proposed ATO enterprise agreement and makes an application for bargaining orders pursuant to section229(1) of the Fair Work Act. In terms of section229 subsection(4) we are concerned that the Tax Office is not complying with the good faith bargaining requirement of section228(1)(b), that is, to disclose relevant information other than confidential or commercially sensitive information in a timely manner.

PN41

We have given written notice to the Tax Office and the other bargaining representatives who have been involved in bargaining in accordance with section229 subsection(4)(b) of our concerns and that notice is attached to our application in form 32, Commissioner. We say we gave the Tax Office ample time to respond to our concerns and in fact the Tax Office did respond to our concerns. In terms of the requirements for making a bargaining order in this case you have to be satisfied that it's reasonable to do so in the circumstances. That's in section230(1)(c). We will come to that and we will seek to adduce evidence before you, Commissioner.

PN42

In terms of the nature of the order that we're seeking we are asking you to make twoorders pursuant to section231(1)(a) that a bargaining order must specify all or any of the following: the actions to be taken and the requirements imposed upon the bargaining representatives for the purpose of ensuring they meet the goodfaith bargaining requirements and I will refer to some legal authority in a moment. The bargaining orders that are seeking are set out in our form32 application and we are seeking two orders, Commissioner.

PN43

The first order is that the Tax Office will provide pertinent responses to the ASU's questions numbered1, 2 and 4 within seven days of the date of this order and the second order that we're seeking is that the Tax Office will allow a minimum of a further 14days of goodfaith bargaining following the provision of the required answers prior to finalising a draft enterprise agreement for consideration by Tax Office employees. In referring to 14days of goodfaith bargaining we are referring to a twoweek period of goodfaith bargaining.

PN44

Commissioner, in terms of section228(1)(b) there is some authority from WhelanC in National Union of Workers v Defries Industries Pty Ltd (2009) FWA88. I do apologise that I haven't provided this to you. I thought I would be there in Canberra and be able to hand it up. This was in the context of the employer not providing the union with its response to union proposals and at paragraph64 the Commissioner said:

PN45

Section 228(1)(b) refers to disclosing relevant information in a timely manner. The reason for the disclosure of information is to allow the other bargaining representative(s) to give consideration to the bargaining representative's position. In my view, the employer failed to provide relevant information on twooccasions. First, prior to the meeting on 24July 2009 Mr Poxon had prepared a document which included the company's position on what matters in the NUW draft were "negotiable" and what were "non-negotiable". By failing to reveal the employer's position, the NUW had no opportunity to consult its members on whether it should continue to pursue nonnegotiable matters or not or whether to narrow the agenda to the matters which were "negotiable".

PN46

In paragraph 65 he went on to say:

PN47

Second, the failure to indicate to the NUW that any changes to the employer's draft provided to them on 30 July 2009 could only be considered if they were provided by 2 August denied the employees represented by the NUW the ability to put a position which could be considered by the employer, prior to a final document being distributed.

PN48

In our case, Commissioner, we are seeking information directly relevant to the ATO's claim that it cannot afford more than 4per cent this year, 2 and a halfpercent pay increase next year and a further 2 and a half per cent pay increase in the following year. The ASU does not believe that's the case and the ATO to date, in our opinion, has not been able to show that in financial terms. All we have are assertions from the Tax Office about affordability and its assertion that it cannot afford to pay more and, more importantly, an absence of information about the productivities it will reap in future years as a result of a very large investment over many years in its IT systems from the socalled Change Program.

PN49

Commissioner, if you decide to make an order in relation to the provision of information, as I said, we seek a second order that would delay the Tax Office putting its proposed agreement to its employees for a vote so that the information provided could be considered by the unions and other bargainingrepresentatives and discussed with the Tax Office. Section255 subsection(1) limits Fair Work Australia's power to make certain orders, particularly those that have the effect of requiring an employee to approve or not approve an enterprise agreement.

PN50

It's our submission that the second order that we're seeking would not offend the section. There is some authority for this in a decision by HamptonC in Australian Meat Industry Employees Union v T & R (Murray Bridge) Pty Ltd (2010) FWA 1320. In that case the Commissioner decided to make orders to require the employer to meet with the union and other bargaining agents and to consider the union's log of claims. That would have the effect of delaying the employer from putting a proposed agreement to the employees for a vote. The Commissioner decided that in the particularcircumstances an order in relation togoodfaith bargaining should be made to enable the objects of the Act and where the employees would not be ultimately foreclosed from voting for a proposed period that may emerge through goodfaith bargaining. We have references to what the Commissioner said at paragraphs 71, 72, 73 and 74. I could read them out, Commissioner. I'm just concerned that they might be too long.

PN51

THE COMMISSIONER: It is not necessary to read them out. I will refer to them when making my decision.

PN52

MR LAPIDOS: Yes, Commissioner. Commissioner, I think that it would be useful for us to look at the particularquestions and the answers that the Tax Office gave in this matter. If I could take you to our application for a bargaining order, I have extracted from correspondencebetween the Tax Office and the ASU our questions and their responses. I don't want to read the whole lot to you, Commissioner, but if I can first refer to question 1 which is on what we have numbered page3 of the application

PN53

THE COMMISSIONER: Allright. MrLapidos, I'm pleased you don't want to read it all to me because I don't want you to read it all to me. What I would like you to do is tell me where the deficiencies are in the answers.

PN54

MR LAPIDOS: Yes.

PN55

THE COMMISSIONER: I have read the documents, but I certainly don't want your questions and the Tax Office answers read out or referred to at any great length. I want you to show me or explain to me why you say what you got isn't what you asked for.

PN56

MR LAPIDOS: Yes.

PN57

THE COMMISSIONER: Okay.

PN58

MR LAPIDOS: If I can refer first to question 1, it is a simple question and what we are seeking is the assumptions the Tax Office made in its assessment that the proposed salary increase for the next three years is the maximum it can afford over this period. If necessary, we can put into evidence the fact that the Tax Office has repeatedly told bargainingrepresentatives and its employees that its pay offer is the maximum it could afford and that was why it was crucial for us to understand why it was saying that the pay offer was the maximum it could afford. We wanted to understand exactly why it said that was the maximum it could afford and so the question was: what are the assumptions that the Tax Office has relied on in making that decision that