6
[Extract from Queensland Government Industrial Gazette,
dated 18 March, 2005, Vol. 178, No. 11, pages 260-264]
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
Industrial Relations Act 1999 – s. 156 – application to certify agreement
The Salvation Army AND Employees of the Salvation Army (No. CA31 of 2005)
THE SALVATION ARMY SALARY SACRIFICE CERTIFIED AGREEMENT
COMMISSIONER ASBURY 7 March 2005
Application for certification of agreement made between employer and employees – Right to be heard under s. 155 – Contention that agreement did not pass no-disadvantage test – Contention that employer party not correctly named in agreement – Leave granted to amend agreement – Finding that amendments were of a formal or technical nature or did not adversely affect a relevant employee’s interests – Contention that requirements of s. 144(2) had not been met – Finding that s. 144(2) does not require the Commission to be satisfied that each relevant employee was notified of rights to be represented but that reasonable steps were taken in this regard – Finding that employer took reasonable steps to notify employees of their right to be represented by a relevant employee organisation – Commission cannot decide that an organisation of employees is bound by an agreement other than in accordance with s. 166(2) – Argument that decision that organisation of employees is bound by agreement is a formal or technical amendment under s. 151 rejected – Requirement for organisation seeking to be bound to satisfy the Commission with respect to the matters in s. 166 of the Act – No objection by employer party to Commission deciding that organisations are bound by agreement – Affidavits in relation to matters in s. 166(2) accepted – Decision that organisations of employees are bound by agreement – Finding that agreement meets requirements for certification under s. 156 – Finding that there are no grounds under s. 157 for certification of agreement to be refused – Agreement certified.
DECISION
This is an application under Chapter 6 of the Industrial Relations Act 1999 (the Act) by the Salvation Army (ACN 32234126186) for the certification of the Salvation Army Salary Sacrifice Certified Agreement (the Agreement). The Agreement is made between the Salvation Army and its employees. At the first hearing into the application for certification of the Agreement on 4 February 2005, the following organisations sought to be heard pursuant to s. 155 of the Act and to oppose the certification of the Agreement in the form it then took:
The Australian Workers’ Union of Employees (AWU);
Queensland Services, Industrial Union of Employees (QSU);
Queensland Nurses’ Union of Employees (QNU);
Liquor Hospitality and Miscellaneous Union, Queensland Branch, Union of Employees (LHMU); and
Australian Municipal, Administrative, Clerical and Services Union, Central and Southern Queensland Clerical and Administrative Branch, Union of Employees (AMACS).
It was not in dispute that all of these organisations of employees were “relevant” for the purposes of s. 155 of the Act and accordingly they were granted a right to be heard on the application for certification.
At that stage the concerns of the organisations of employees centred on the fact that they were party to certified agreements which also contained provisions for salary sacrifice, and an alleged lack of clarity about whether the Agreement in this case would over-ride those agreements. There were also a number of deficiencies in the application and the affidavit in support of the certification of the Agreement. Given the scope and extent of the objections sought to be raised by the organisations of employee seeking to be heard, the application for certification was adjourned to enable the parties to have some discussions in order to attempt to narrow the differences between them and for the Salvation Army to have an opportunity to address some of the concerns raised by the organisations of employees seeking to intervene in the certification of the Agreement.
The hearing was resumed on 22 February 2005. It was apparent from submissions at this hearing that the objections to the certification of the Agreement could be broadly categorised on the basis of those organisations objecting to the certification on the basis of substantive provisions of the Agreement and those objecting on the basis that they were not party to the Agreement. The objections of the QNU were in the former category, while those of the AWU; LHMU and AMACS were in the latter. On the basis of clarification provided by the Salvation Army during the period of the adjournment, including a number of proposed amendments to the Agreement, the QSU no longer pressed an objection to certification of the Agreement and did not wish to be bound by it or heard further on the application for certification.
The QNU objections to the certification of the Agreement were as follows:
· because all the Agreement provided for was salary sacrifice and grievance procedures, it did not meet the no-disadvantage test;
· employees would be further disadvantaged because the Agreement provided that financial counselling and advice in relation to participation in salary sacrificing would be the responsibility of employees;
· the Agreement did not provide for any assistance to employees in the event that salary sacrifice arrangements “went wrong” and employees were financially disadvantaged; and
· the Agreement did not specify a mechanism for recording of salary sacrifice arrangements in time and wages records.
Mr Ross also raised the fact that the Agreement stated that it was made between the Salvation Army Australia Eastern Territory Social Work and the Salvation Army Australia Eastern Territory General Work, and that those organisations were party to the Agreement. This conflicted with the affidavit filed in support of the application for certification, which stated that the employer was the Salvation Army (ACN 32234126186). The hearing on 22 February 2005 was adjourned for a short period to enable the parties to discuss the issues raised by the QNU. Following those discussions some amendments to the Agreement were proposed by the Salvation Army and said to have been agreed with all organisations of employees. The amendments essentially corrected the titles of industrial instruments and operating divisions of the Salvation Army stipulated in clauses dealing with the scope and application of the Agreement and ensured that the incorporated entity the Salvation Army (ACN 32234126186) was stipulated as the employer party to the Agreement.
These amendments corrected errors which were typographical or involved in a misunderstanding of the distinction between an incorporated entity which legally employed the persons to be covered by the Agreement, and the operating divisions in which those persons worked. The proposed amendments also clarified the extent of the employer’s obligations with respect to ensuring that the structure of any agreed remuneration package complied with taxation and other relevant legislation; gave rights to employees with respect to being provided with details of payments and transactions made on their behalf and deleted a provision which would have enabled the employer to make deductions of amounts overpaid from monies owing to employees. I would not have certified an agreement containing a provision purporting to allow such deductions to be made in any event. An amendment was sought to attach a grievance handling procedure referred to in the Agreement as a Schedule. The employer indicated in response to a question from the Commission that it would give an undertaking to the effect that salary sacrifice arrangements would be recorded in time and wages records.
I was satisfied at the hearing on 22 February 2005 that the proposed amendments were of a formal or technical nature and also did not adversely affect a relevant employee’s interests. Accordingly pursuant to s. 151 of the Act the steps in s. 142(2) and (3) were not required to taken again with respect to the amendments. Leave was granted for the Agreement to be amended.
However, it should generally be noted that it is a fundamental requirement that the legal entities party to a certified agreement be clearly identified. Regrettably it is my observation that this is a requirement which is frequently overlooked. In this regard the Practice Note dealing with Certified Agreements PN 6 published at (2004) 175 QGIG 1084-1085 which provides as follows, should also be noted:
“1. The correct names of the legal entities (including any ACN number) that have made the Agreement must appear in each of the following:
· the application for certification (Form 40);
· the (names of the) parties bound clause ;
· the signature block; and
· the affidavit supporting the application.
The legal entities are to be shown as follows:
If the employer is incorporated pursuant to the Corporations Act 2001 (Cwth) then the ACN must be included both in the parties bound clause and the affidavit supporting the application.
If the employer is incorporated pursuant to some other legislative enactment then the name of that legislation is to be referenced in both the parties bound clause and the affidavit supporting the application. For example, if the employer is incorporated pursuant to the Associations Incorporation Act 1981 (Qld) then the parties bound clause should state "(name of employer) incorporated pursuant to the Associations Incorporation Act 1981".
A business name or trading name cannot be a party to a certified agreement. If the employer is not an incorporated entity then the names of the individuals behind the business name or trading name must be identified both in the parties bound clause and in the affidavit supporting the application.”.
To date I have taken the view, in the absence of objections from parties to agreements and those with a right to be heard on certification, that a clarification or correction of the name of the legal entity party to the Agreement is a formal or technical amendment under s. 151 and as such that the steps in 144(2) and (3) are not required to be taken again as a result of such an amendment. If circumstances arise where there is a challenge to such an amendment by an organisation with a right to be heard on the certification of an agreement, a different view may be taken.
Following the amendments the QNU maintained its objections to certification of the Agreement but narrowed those objections to whether the requirements of s. 144(2) had been met. That section provides as follows:
“What is to be done when an agreement is proposed
…
(2) when a certified agreement is proposed to be made with an organisation of employees or employees, the employer must take reasonable steps to ensure –
(a) at least 14 days before the relevant employees are asked to approve the agreement, each relevant employee has, or has ready access to, the proposed written agreement; and
(b) the terms of the agreement (including the procedures for preventing and settling disputes), and the effect of the terms, are explained to each relevant employee before approval is given; and
(c) for an agreement with employees – each relevant employee is informed that he or she may ask a relevant employee organisation to represent the employee in negotiating with the employer about the agreement…”.
Compliance with this requirement is made mandatory by s. 156(a) which provides the Commission must certify an agreement if and must not certify an agreement unless the requirements of s. 144 (and other requirements in s. 156) have been met. QNU submitted that the Commission could not be satisfied that these requirements had been met and that the Commission should either delete provisions of the Agreement which would make it applicable to employees covered by industrial instruments to which the QNU was a party or to employees eligible to be members of the QNU, or alternatively, refuse to certify the Agreement altogether.
I am unable to accept the QNU’s submission that it would be open to the Commission to unilaterally delete provisions of an agreement so that its scope and application with respect to certain employees was altered, as a result of finding that requirements of the Act necessary for certification had not been met. An agreement made under Chapter 6 of the Act comes into existence at the point it is made not at the point it is certified. Once an agreement is validly made as provided under Chapter 6 of the Act, the parties to it acquire rights and obligations which are independent of certification. Included in those rights is a right that an application for certification of an agreement made under Chapter 6 be heard and determined as provided in that Chapter. Before an agreement is certified, s. 151 applies with respect to amendments to it. That section refers to “a proposed agreement” while other sections which operate prior to certification refer to “an agreement”.
In my view the concept of amendment for the purposes of s. 151 requires at least a request from one of the parties to the Agreement, or where the amendment is suggested by the Commission or a non-party to the agreement, the acquiescence of the parties to the Agreement particularly where there is a substantive, rather than a formal or technical amendment to an agreement. Recording that an organisation of employees is bound by an agreement within the body of the agreement is in my view an amendment of a formal or technical type: see for example Queensland Diagnostic Imaging Pty Ltd Enterprise Bargaining – Certified Agreement 2003 (2003) 173 QGIG 152 at157. Changing the scope of the agreement so that it ceases to apply to a group of employees is probably not an amendment for a formal or technical reason, particularly where there is no evidence of the wishes of those employees not to be bound by the agreement and there is evidence that the participated in the making of the agreement. In the current case, the employer party to the Agreement contended that there were nurses in its employment who were not covered by industrial instruments providing for salary sacrifice, and that those nurses were part of the body of employees who had approved the agreement as required by s. 156(g) of the Act. Evidence of this was also provided in the form of an affidavit accompanying the Agreement. There was no evidence to the contrary, and I am not prepared to impose such an amendment on the parties to the agreement.