Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - [2010] FWA 1171

[2010] FWA 1171

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.318 and 319—Application for an order relating to instruments covering new employer and non-transferring employees in agreements

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(AG2009/17162)
The Commonwealth Scientific and Industrial Research Organisation (CSIRO)
(AG2009/19768)

COMMISSIONER DEEGAN

CANBERRA, 15 FEBRUARY 2010

Orders relating to instruments covering new employer and transferring employees.

[1] This decision concerns 2 applications; one filed by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“CEPU”) on 23 October 2009 for orders under ss. 318 and 319 of the Fair Work Act 2009 (“the Act”) and the other filed by the CSIRO on 3 December 2009 for orders pursuant to s.318 of the Act. By consent the applications were heard together and this decision relates to both.

[2] Both applications are concerned with the proposed transfer on 27 February 2010 of the business conducted at the Canberra Deep Space Communication Complex (“the CDSCC”) at Tidbinbilla in the Australian Capital Territory from Raytheon Australia Pty Ltd (“Raytheon”) to the Commonwealth Scientific and Industrial Research Organisation (“the CSIRO”). The applications relate to current employees of Raytheon Australia Pty Ltd who will be transferring to the CSIRO and new employees who will be commencing at the CDSCC site post 27 February 2010 will be covered by the Canberra Deep Space Communication Complex Combined Unions Certified Agreement 2005 (“the CDSCC Agreement”) or the CSIRO Enterprise Agreement 2008-2011 (“the CSIRO Agreement”) which currently covers all CSIRO employees.

[3] The CEPU application was amended prior to the hearing and, as amended, seeks an order that new employees engaged by the CSIRO to work at the CDSCC after the transfer will be covered by the CDSCC Agreement. The CSIRO application seeks orders that the CSIRO Agreement covers both transferring and new employees engaged at the CDSCC.

[4] At the hearing the CEPU, the Association of Professional Engineers, Scientists and Managers, Australia (“APESMA”) and the Australian Manufacturing Workers’ Union (“AMWU”), union parties to the CDSCC Agreement, appeared as respondents to the CSIRO application and the CSIRO responded to the CEPU application.

Background

[5] The CDSCC is one of the three deep space communications facilities which make up the National Aeronautics and Space Administration (“NASA”) Deep Space Network (“DSN”). The other two DSN facilities are located in the USA and Spain. The DSN is a facility of NASA and is managed and operated for NASA by the Jet Propulsion Laboratory (“JPL”). NASA meets the costs of the facility.

[6] Currently, the CDSCC is managed by Raytheon Australia Pty Ltd under a contract with the Australian Government. That contract is managed on behalf of the Australian Government by CSIRO.

[7] During the hearing information was requested about the arrangement under which the CDSCC is operated for NASA. A document containing the following information was provided:

Arrangements under which CDSCC operates

1. There are Exchanges of Notes between the Government of the United States of America and the Government of the Commonwealth of Australia which establish a cooperative program facilitating space flight operations. See, most recently, Australian Treaty Series, no. 31 of 2000. These arrangements have operated since an Exchange of Notes dated 25 March 1970 (ATS 1970 no.4).

2. Pursuant to the Exchanges of Notes, there is a Co-operating Agency Arrangement for the establishment and operation of space vehicle tracking and communications facilities in Australia in support of NASA space projects. These facilities include the Canberra Deep Space Communication Complex, or CDSCC, at Tidbinbilla.

3. The US Government Cooperating agency is NASA. The Australian Government Cooperating agency is CSIRO (although initially it was the Department of Science and Technology).

4. CSIRO and predecessor Australian Government Cooperating Agencies have outsourced the management of labour requirements at the CDSCC to Raytheon Australia and a predecessor contractor.

5. As from 27 February 2010, CSIRO will continue to be the Australian Government Cooperating Agency with responsibility for management of the CDSCC but will no longer outsource the management of labour requirements to the CDSCC to Raytheon Australia.

[8] On 30 July 2009, employees of Raytheon Australia at the CDSCC site were advised that CSIRO was intending to cease the “outsourcing arrangement” with Raytheon Australia and that CSIRO intended to manage directly the operations at the CDSCC. CSIRO is to take over the CDSCC from 27 February 2010 and all employees of CDSCC have been offered employment with the CSIRO.

[9] Employees at the CDSCC (other than a very small number of senior managers) are covered by the CDSCC agreement which commenced operation on 2 December 2005, was varied on 13 January 2007 and has an expiry date of 2 June 2010.

[10] Employees of the CSIRO are covered by the CSIRO Agreement which commenced on 24 November 2008 and has an expiry date of 16 February 2011.

Legislation

[11] Chapter 2 Part 2-8 of the Act applies to transfer of business and Division 2 of that part deals with the matter of transfer of Instruments.

[12] There is no contest between the parties to these applications that the proposed takeover of the contract to operate the CDSCC by CSIRO is a transfer of business in the terms of s.311of the Act

[13] Sections 309, 313, 318 and 319 of the Act are of particular relevance to the applications:

Section 309 - Object of this Part

The object of this Part is to provide a balance between:

(a) the protection of employees' terms and conditions of employment under enterprise agreements, certain modern awards and certain other instruments; and

(b) the interests of employers in running their enterprises efficiently;

if there is a transfer of business from one employer to another employer.

313 Transferring employees and new employer covered by transferable instrument

(1) If a transferable instrument covered the old employer and a transferring employee immediately before the termination of the transferring employee’s employment with the old employer, then:

(a) the transferable instrument covers the new employer and the transferring employee in relation to the transferring work after the time (the transfer time) the transferring employee becomes employed by the new employer; and

(b) while the transferable instrument covers the new employer and the transferring employee in relation to the transferring work, no other enterprise agreement or named employer award that covers the new employer at the transfer time covers the transferring employee in relation to that work.

(2) To avoid doubt, a transferable instrument that covers the new employer and a transferring employee under paragraph (1)(a) includes any individual flexibility arrangement that had effect as a term of the transferable instrument immediately before the termination of the transferring employee’s employment with the old employer.

(3) This section has effect subject to any FWA order under subsection 318(1).

Section 318 - Orders relating to instruments covering new employer and transferring employees

Orders that FWA may make

(1) FWA may make the following orders:

(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;

(b) an order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.

Who may apply for an order

(2) FWA may make the order only on application by any of the following:

(a) the new employer or a person who is likely to be the new employer;

(b) a transferring employee, or an employee who is likely to be a transferring employee;

(c) if the application relates to an enterprise agreement--an employee organisation that is, or is likely to be, covered by the agreement;

(d) if the application relates to a named employer award--an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).

Matters that FWA must take into account

(3) In deciding whether to make the order, FWA must take into account the following:

(a) the views of:

(i) the new employer or a person who is likely to be the new employer; and

(ii) the employees who would be affected by the order;

(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

(c) if the order relates to an enterprise agreement--the nominal expiry date of the agreement;

(d) whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace;

(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when order may come into operation

(4) The order must not come into operation in relation to a particular transferring employee before the later of the following:

(a) the time when the transferring employee becomes employed by the new employer;

(b) the day on which the order is made.

Section 319 - Orders relating to instruments covering new employer and non-transferring employees

Orders that FWA may make

(1) FWA may make the following orders:

(a) an order that a transferable instrument that would, or would be likely to, cover the new employer and a non-transferring employee because of subsection 314(1) does not, or will not, cover the non-transferring employee;

(b) an order that a transferable instrument that covers, or is likely to cover, the new employer, because of a provision of this Part, covers, or will cover, a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) an order that an enterprise agreement or a modern award that covers the new employer does not, or will not, cover a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer.

Note: Orders may be made under paragraphs (1)(b) and (c) in relation to a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer, whether or not the non-transferring employee became employed by the new employer before or after the transferable instrument referred to in paragraph (1)(b) started to cover the new employer.

Who may apply for an order

(2) FWA may make the order only on application by any of the following:

(a) the new employer or a person who is likely to be the new employer;

(b) a non-transferring employee who performs, or is likely to perform, the transferring work for the new employer;

(c) if the application relates to an enterprise agreement--an employee organisation that is, or is likely to be, covered by the agreement;

(d) if the application relates to a named employer award--an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).

Matters that FWA must take into account

(3) In deciding whether to make the order, FWA must take into account the following:

(a) the views of:

(i) the new employer or a person who is likely to be the new employer; and

(ii) the employees who would be affected by the order;

(b) whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment;

(c) if the order relates to an enterprise agreement--the nominal expiry date of the agreement;

(d) whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace;

(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;

(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;

(g) the public interest.

Restriction on when order may come into operation

(4) The order must not come into operation in relation to a particular non-transferring employee before the later of the following:

(a) the time when the non-transferring employee starts to perform the transferring work for the new employer;

(b) the day on which the order is made.

The s.318 application

[14] Under s.317 of the Act, Fair Work Australia (“FWA”) has the power to make orders relating to the transfer of business from Raytheon to CSIRO. For the purposes of the s.318 application made by the CSIRO and the application of s.318 to that application, the CDSCC Agreement is the relevant transferable instrument.

[15] As the new employer for the purposes of s.318 (2) CSIRO is seeking orders in the terms set out in s.318(1) to the effect that

(a) the CDSCC Agreement will not cover it or employees transferring from Raytheon to CSIRO and

(b) that the CSIRO Agreement will cover transferring employees.

[16] It was the position of CSIRO that the orders it sought would “rise and fall together” and that FWA would make either both or neither. It was put that the order sought in (b) in paragraph [15] above was sought only for the avoidance of doubt.

[17] It is common ground that in determining whether to make the order sought by CSIRO FWA must take into account or have regard to the matters set out in s.318(3).

[18] The CSIRO application was made in early December 2009. Directions were issued for the filing of outlines of submissions and witness statements. The period provided was of necessity truncated given that the transfer of business is to take place on 27 February 2010 and CSIRO must make the necessary administrative arrangements prior to that date to finalise the employment arrangements for transferring staff. The intervening holiday season made it impossible to deal with the matter any earlier, as it was impractical to further shorten the time allowed for the filing of the statements of evidence and submissions.

[19] The hearing of this matter took place over three days with each day requiring extended sitting hours. Evidence was taken from fourteen witnesses, most of whom were required for cross-examination. Extensive opening and closing submissions were made in addition to the outlines of submission filed in accordance with the directions. Initially it appeared that a decision on the matter was required by 14 February 2010 as offers of employment made to, and accepted by, some Raytheon employees were made conditional upon the CSIRO application being granted by that date. During the hearing counsel for CSIRO indicated that if no decision was made by 14 February 2010 CSIRO would, if the application were granted, make further offers of employment in the same terms in the place of those that lapsed. 1

[20] In deciding whether to grant the CSIRO application I have taken into account the evidence brought by each party to the proceedings and the oral and written submissions. However, I do not intend to canvas all the evidence before me in this decision. I will deal with each of the criteria set out in s.318 (3) in turn. I will do this in the light of the object of the part set out at s.309 of the Act, that is, the need to balance the protection of employees’ terms and conditions of employment under enterprise agreements and the interests of employers in running their enterprises efficiently.

The views of the new employer

[21] According to the CSIRO by taking over the operation of the CDSCC, CSIRO was “integrating the work performed at the Tidbinbilla facility into its own operations”. Further it was put that the CDSCC was not intended to be a separate enclave managed by CSIRO. It was argued that “integration is therefore a very important aspect of the significant and newly formed astronomy and science business unit within CSIRO. The success of that unit requires in part full integration of the complex into CSIRO's operations. By that it means integration in a real and material sense from day one.” 2

[22] Much was made on behalf of CSIRO of the “One CSIRO” policy and the current CSIRO Agreement, which has one classification structure applying to the majority of CSIRO staff.

[23] CSIRO has and continues to acquire smaller businesses involving the transfer of personnel from the businesses acquired. In each transfer of business CSIRO has, consistent with its strategy of maintaining one system applicable to all its employees, subsumed the transferring employees into its classification system under the CSIRO certified agreement. 3

[24] Both the evidence and submissions of the CSIRO supported a clear finding that the view of that organisation is that the transferring employees should be covered by the CSIRO Agreement. According to its submissions the “CSIRO should be given the opportunity to manage the new business unit in a way which allows it to decide how and when it will attract new employees. If CSIRO finds itself in a position that it's reasonably generous certified agreement, with all its benefits, prevented from attracting the relevant number of staff at this complex, and it is unable to do so through its various provisions which I took you to in opening, that this is a matter that CSIRO, with respect, must manage.” 4

[25] CSIRO relied on the evidence of Dr Lewis Ball, the Acting Director of the Astronomy and Space Science Business Unit who it was said “clearly has some vision as to the future”. 5

[26] The CSIRO argument was that the evidence supported a finding that by allowing the CSIRO Agreement to continue to operate to the exclusion of the CDSCC agreement, there was a greater probability that there would be an efficient integration, in the true sense, from the beginning of this new venture. It was put that a separate industrial instrument or industrial instruments will provide a barrier to the proper integration and the effectiveness of that new unit. CSIRO submits that integration is beneficial to the organisation. 6

[27] Dr Ball gave evidence about the new unit formed in CSIRO of which CDSCC will form part. His evidence also went to the Square Kilometre Array project, which he saw as a vehicle to develop the synergies that exist between the work performed by employees at CDSCC and the operations of CSIRO. Dr Ball's evidence noted the opportunities for current Raytheon employees to work collaboratively with others within CSIRO on the new projects. It was argued for CSIRO that those opportunities do not exist for those employees currently. 7

[28] CSIRO also relied on the evidence of Mr Warren Smith, Deputy General Manager Human Resources CSIRO, who put forward the view that multiple agreements operating in CSIRO would undermine the benefits associated with the organisation's strategy. 8

[29] It was argued for the respondent unions that despite the CSIRO desire to maintain its One CSIRO policy by bringing the CDSCC employees under the CSIRO Agreement classifications from the date of the takeover of the CDSCC, there would still be disparities between the terms and conditions of staff employed at the CDSCC and those in other parts of CSIRO.

[30] Under cross-examination Dr Ball agreed that there would be differences between the employment conditions of CDSCC staff and others in his unit, given the CSIRO commitment to maintaining the conditions of most CDSCC staff. He also agreed that he was concerned that those disparities would cause division. 9 It was his view however that the acceptance of the offers made to current CDSCC staff by CSIRO would “minimise the differences to the extent that they can be, whilst being as fair as possible to the CDSCC employees.”10

[31] It was also the view of Dr Ball that the activity of the CDSCC facilities would not change but would continue to meet “the evolving needs of NASA”. 11

[32] Evidence was given by Mr Anton Niedermier, the Project Officer, Policy and Remuneration, about the manner in which CSIRO is able, under its classification system, to accommodate a very wide range of employees, and the evidence that the classification system has been developed to accommodate a wide range of classifications. There was evidence of the history by which the classification system was developed and much made of the considerable effort which was made to achieve a single integrated system.

[33] It was the CSIRO position that persons with professional qualifications and research staff should not be treated in a different fashion. They would all come within one integrated system which could accommodate persons across a diverse range of qualifications and skills and the performance at work. 12

[34] Mr Neidermeier was asked whether, if the CSIRO's application were unsuccessful and the CDSCC agreement persisted, he saw any problem in the future with bringing CDSCC into a CSIRO agreement via enterprise bargaining. He replied that he couldn’t see any problem bringing them into the enterprise bargaining process but the issue was more around the perceptions of other staff. 13

[35] Mr Smith, gave evidence concerning the history of collective agreements in CSIRO, the difficulties that would be faced if the CDSCC Agreement transferred to CSIRO, other business transfers experienced by CDSCC and the consultations that had occurred with CDSCC staff concerning the CSIRO takeover and the arrangements that would be put in place to ensure staff were not disadvantaged if the CSDCC Agreement did not transfer. When questioned about whether the existence of “grandfathering arrangements” for CDSCC staff would be as divisive as retaining the CDSCC Agreement Mr Smith responded that in his view staff understand that “those historical arrangements, whilst not ideal, may be necessary in particular circumstances and that can be accepted, whereas formalising through different terms and conditions and applying that to a range of staff, new staff and existing staff, is a process that, in my view, is different and will lead to unrest”. 14

[36] It was put to Mr Smith that the CDSCC site was significantly different to many other sites operated by CSIRO as it has an operational rather than research basis. It was the evidence of Mr Smith that CSIRO operates other sites on that basis. 15

[37] The evidence of Mr Neidermeier was that at the Animal Health Laboratory (“AHL”) in Geelong, operated by the CSIRO, a large part of the division is the responsibility of the engineering department. According to Mr Neidermeier the AHL has seven engineers and 30 or 40 technicians of a total of about 250 staff. It was his evidence that the AHL has some very critical equipment and monitoring requirements to do with the quarantine area where they conduct research on exotic diseases, and the engineering staff have very responsible roles. 16

[38] When asked whether it was conceivable that there could be separate conditions for employees engaged at CDSCC Mr Smith replied that it was conceivable but that it would need to be consistent with CSIRO's strategy and practice. 17

[39] Mr Timothy Le Mesurier, Antenna and Site Facilities Manager at CDSCC gave evidence for the CEPU on the differences in operation between the CDSCC site and other sites currently operated by CSIRO and claimed by CSIRO to have similarities with CDSCC, such as the telescopes at Parkes and Narrabri. He pointed to the criticality of the operations noting that the research operations operated by CSIRO were not as critical as the spacecraft tracking operation at CDSCC. Whereas short delays in research caused by equipment malfunctions could be tolerated at the CSIRO sites much of the operations at CDSCC related to one-off events such as space launches and special manoeuvres of spacecraft. He noted that at CDSCC “we have to go to a much higher level of critical support” and they've long recognised the differences between CDSCC and CSIRO in terms of all this.”

[40] Mr Le Mesurier also noted that the only recognised professional qualification under the CSIRO Agreement is for PhD staff. He had concerns with that point and disputed Mr Neidermeier's claim that it caused no problems. He stated that there was currently a professional classification stream under the CDSCC Agreement and that “most professional engineering-based organisations have that arrangement”. He was aware CSIRO did not and it was his experience, gained over the previous 6 months dealing with CSIRO, that they have very little understanding of such professional engineering organisations having those requirements.

[41] Mr Le Mesurier agreed with Dr Ball that there were synergies that could be realised and stated that he was not against CSIRO taking over control of the site. It was his view that there needed to be a clear understanding of the role of the CDSCC and the roles of CDSCC staff, so that they can make a successful transition. He believed that there were misunderstandings about the work performed by CDSCC staff. While he accepted that CSIRO employed persons with similar backgrounds and qualifications to those employed at the CDSCC across a range of functions he noted the totally different work environment. He agreed that CDSCC employed a small number of administrative and human resources staff and also an occupational health and safety person but noted that, in relation to the technical staff, while the qualifications may have been similar to those held by CSIRO staff the experience would be significantly different.

[42] CSIRO relied upon the decision in Queensland Nickel Pty Ltd [2009] FWA 335 of Senior Deputy President Richards of 22 September 2009, to support their claim that significant weight should be given to the CSIRO desire not to undermine the One CSIRO policy. While it was acknowledged that in that case the unions did not oppose the employer application and that a majority of employees voted in favour of the transferring to the new agreement, it was put that the weight given by the Senior Deputy President to the new employer’s one-staff policy would be of assistance in the determination of this matter.

[43] Essentially it was the position of the respondent unions that despite the desire of the CSIRO to ensure the integrity of its One CSIRO policy, its application if granted would actually extend the operation of divergent pay and conditions within CSIRO, albeit confined to a particular site. It was noted that all the evidence was that the main activity of the CDSCC site would not change as a result of the CSIRO takeover, and that if there was a desire for more research to be conducted at the site the existence of the CDSCC Agreement was no barrier to this outcome.

[44] It was put for the CEPU that the evidence of Mr Ball, who was the relevant manager for the Australia Telescope National Facility, and thus the person best placed to comment in respect of his own department, that the synergies with CDSCC which he sought to exploit primarily related to opportunities two or three years in the future.

The views of the employees who would be affected by the order

[45] The CSIRO argued that while the views of CDSCC employees were to be taken into account in the determination of the application they did not have any more weight than the other factors FWA was required to take into account.

[46] All three unions respondent to the CSIRO application stated that it was the view of the majority of their members that they retain coverage under the CDSCC Agreement and not be forced to transfer to coverage by the CSIRO Agreement.

[47] It was the evidence of Mr Ewen Hopkins, Telecommunications Specialist CDSCC, that from 29 October to 1 November a secret ballot was conducted to survey the views of the employees at CDSCC to determine whether there was support for continued coverage under the CDSCC agreement or a transfer to CSIRO Agreement. 18 The result of the survey was that 94 Employees wished to retain the CDSCC Agreement while 2 employees preferred to transfer to the CSIRO Agreement.

[48] It was argued for the CSIRO that at the time the survey was conducted the employees were unaware of the terms of the offers of employment that the CSIRO intended to make to them and therefore the survey should be discounted.

[49] Evidence was also presented of a petition signed by 77 CDSCC staff stating that they wished to remain covered by the CDSCC Agreement. The signatures were collected between 18 December 2009 and 8 February 2010. All the employment offers that were made by CSIRO to CDSCC staff had been made by 18 December.

[50] Although some suggestion was made by CSIRO that the views of the employees had been influenced by the attitude of the unions, it was the evidence of CSIRO witnesses that only 30% of the employees at CDSCC had accepted the offers of employment made by CSIRO. 19

[51] It was put for APESMA that there was no evidence to suggest that employees reached their respective positions other than by reasoned analysis. It was noted that, in addressing the decisions employees would make in relation to superannuation, counsel for the CSIRO had operated on the assumption that the employees were “rational actors” and the CEPU operated on the same assumption concerning the employees’ views about their future agreement coverage.

[52] It was argued by APESMA that CDSCC staff had put particular work into the negotiation of the CDSCC agreement and that the agreement had resulted in a highly productive workplace with very low staff turnover. It was argued that the CDSCC Agreement was a highly specialised instrument and if the CDSCC employees lost coverage by it, and in particular the classification structure provided by it, the employees would be put into a position of having to renegotiate the lost conditions from the start with CSIRO. It was the submission of APESMA that FWA should have regard to this in determining the application.

Whether any employees would be disadvantaged by the order in relation to their terms and conditions of employment

[53] It is the position of the CSIRO that if FWA grants the s.318 application CDSCC employees who accept offers of employment with CSIRO will not be disadvantaged in relation to their overall terms and conditions of employment.

[54] Mr Niedermeier’s evidence was that an extensive process was conducted after July 30 2009 to ensure that, in terms of relative work value, CDSCC employees would transfer to a CSIRO classification level which was comparable. Having taken into account all the information he had gathered and that had been gathered for him he presented his findings to the management and sought their input, and the assignment of classifications was completed in late 2009. 20. It was also his evidence that he considered that it was appropriate that the CSIRO work value or classification standards were “applied to transferring employees or qualified engineers in the same way as it currently applies to CSIRO engineers who deliver site engineering services”21

[55] CSIRO presented evidence detailing the manner in which the translation of each of the CDSCC employees under the classification scale in the CSIRO Agreement was determined. Mr Neidermeier was asked whether he had considered, in carrying out the translation process, looking at classifications in organisations who did similar work to the staff at CDSCC rather than concentrating on the CSIRO classifications which dealt with work of a much different nature. It was his evidence that such an exercise would have been practical only if CSIRO had been considering abandoning the current unitary structure and developing a parallel employment stream for CDSCC staff. According to Mr Neidermeier that was not something CSIRO would consider doing, not just for engineering, but for anyone given the current level of support for the unitary system within CSIRO. 22

[56] The evidence was that in a minority of cases the classification resulted in an increase in salary for some employee. In the majority of cases employees were provided with a salary allowance and a classification allowance to ensure that they were not disadvantaged by the translation to the CSIRO Agreement. In addition a number of staff who had particular conditions under the CDSCC Agreement not available under the CSIRO Agreement had special conditions attached to their offers of employment which would continue to apply to them so long as they were employed at the CDSCC site. It was also the position of the CSIRO that the difference in employer superannuation contributions of 0.6% (applicable only to employees of CDSCC contributing at least 5% of salary to superannuation) was also compensated for in the salaries offered to employees. The CSIRO position was that the evidence of Mr Jeffrey Warner, Consulting Actuary, and in particular his report 23 that CDSCC employees who elected to change to a public sector superannuation fund and salary sacrifice the additional salary amount paid in compensation for the lower employer superannuation contribution, would be slightly advantaged by the transfer to the CSIRO Agreement.

[57] Other matters that were the subject of special conditions of offer related to additional insurance cover, redundancy, annual leave loading, travel, transition between day work and shift work, overtime payments for CSIRO level 5 and 6 (specific provision was made because overtime is not available at those levels under the CSIRO agreement), telephone assistance, rostered days off, transport, provision of meals and reduction of the notice period.

[58] It was also noted for the CSIRO that under the CSIRO Agreement and applicable public sector legislation staff would have access to a number of superior entitlements in the nature of long service leave, maternity and paternity leave and other special types of leave. Additionally it was the evidence of CSIRO witnesses that CDSCC employees would have access to in situ promotion, cash performance bonuses and premium salary steps under the terms of the CSIRO Agreement which were not available under the CDSCC agreement. An aide memoire was handed up setting out the various benefits of each of the agreements. Finally each employee was to receive, upon transfer to the CSIRO Agreement, a lump sum payment of $7000 for “intangible benefits and features due over time which cannot be replaced and as an encouragement to staff to accept the offer.”

[59] The position of the three unions was that staff would be disadvantaged in relation to their terms and conditions of employment if the application were granted as the CDSCC agreement was a superior agreement for CDSCC staff.

[60] It was reiterated that the CDSCC agreement is a bespoke industrial instrument tailored for the needs of the CDSCC, built to fit both the employees and the facility itself. Further it was a classic example of enterprise bargaining resulting in improvements in productivity and improvements in conditions as well. Accordingly, it was the union position that the best means of ensuring the continuation of the excellent level of productivity currently at the CDSCC, or in the alternate, throughout CSIRO, is to ensure that all employees of the CDSCC remain employed subject to the CDSCC Agreement.

[61] Evidence called by the unions showed that generally, under the CDSCC Agreement staff had

higher base salaries

greater access to increased salaries through incremental progression

employer contribution to superannuation of 16% ( and from 1 March 17%) for those employees contributing 5%+ compared to 15.4% contribution under the CSIRO offer

a superior classification structure developed in 2007 particularly for the nature of the work carried out at the CDSCC with a professional stream recognising the competencies of professionally qualified engineers and broadbanding giving recognition to the need to gain on the job experience for the special nature of the work required at the CDSCC

allowances which gave proper recognition to the operational nature of, and the criticality of, the work performed at the CDSCC.

[62] A number of union witnesses had prepared spreadsheets to determine the relative advantages and disadvantages of the agreements. It was the evidence of these witnesses that generally, after the first year of operation, they would be worse off in relative terms under the conditions offered by the CSIRO under the CSIRO Agreement.

[63] This evidence was challenged by the CSIRO on the basis that the spreadsheets had not taken account of a number of advantageous provisions that would apply under the CSIRO agreement, and had been prepared on the basis of assumptions as to the future that were not sustainable. The witnesses generally agreed that the calculations had been based on assumptions that the status quo in relation to the two agreements would continue to operate for at least the next five years. It was these assumptions that lead to conclusions about reduced redundancy entitlements and incremental progression. All the witnesses claimed to have taken into account those more advantageous provisions of employment under the CSIRO agreement when determining the relative advantage to them of the two agreements. However a number of the union witnesses took the view that conditions which were not clearly an entitlement under an industrial instrument and were vulnerable to changes in policy or other management discretion should not be given the same weight as entitlements included in the CDSCC Agreement.

[64] It was put for the unions that the uncertain position relating to the retention of special entitlements contained solely in the CSIRO letters of offer should be given full weight in considering whether the employees would be disadvantaged if the CDSCC Agreement did not transfer.

[65] It was the submission of the CEPU that in determining the question of disadvantage no account should be taken of terms and conditions of employment set out in the offers of employment made by CSIRO, but only those employment matters contained in the enterprise agreements. It was put that sections 318 and 319 deal with industrial instruments and neither section provides for the taking into account of common law contracts of employment. For the purposes of comparison it was put that had CDSCC employees been employed on contracts of employment with superior conditions to those contained in the CDSCC Agreement those contracts would not be relevant to the proceedings before FWA. Alternatively it was put that little weight should be attached to the offer of employment conditions not underpinned by an industrial instrument as these were more difficult to enforce and less certain.

[66] Evidence was given by Ms Alexandra Allars, Workplace Relations Manager CSIRO concerning the loss of special entitlements on transfer of CDSCC staff. She stated that CDSCC staff had been guaranteed that the special arrangements would remain in place while they were employed at the CDSCC, and whether or not a transfer would result in the loss of those entitlements would depend on all the circumstances. Short term transfers and secondments would not normally result in the loss of such entitlements. 24

[67] It was the position of CSIRO that the special conditions offered to CDSCC employees to remove any disadvantage brought about by the transfer to the CSIRO Agreement were enforceable employment conditions that would be retained by those employees for the term of their employment at the CDSCC site.CSIRO also noted that not all CDSCC employees had been translated to the maximum point on the salary scale for their classification under the CSIRO classification structure, and thus some would have access to further incremental advancement which was, in the submission of the CSIRO, more easily accessed as a result of satisfactory performance than increments under the CDSCC Agreement.

[68] The unions took issue with a number of the matters claimed by the CSIRO to be advantages of CSIRO Agreement coverage. The evidence was that the system of in situ promotions at CSIRO had its origins in academia and that it would not be unusual for a staff member to sit on the maximum increment of a classification for 3 to 5 years. It was the submission of the CEPU that the evidence of a number of the witnesses has been that an in-situ promotion was unlikely for CDSCC staff given the circumstances and structure of the CDSCC.

[69] It was also put for the unions that the increments available to CDSCC employees under their agreement are terms and conditions of their employment. Against this the CSIRO had put that under the CSIRO agreement there were various mechanisms to ensure that employees could continue to achieve pay rises into the future. These included in-situ promotions and various cash bonuses. The witnesses called by the unions claimed that currently their terms of employment provided transparent performance indicators by meeting which they could obtain and improve their future earnings as opposed to discretionary, albeit subject to appeal, decisions provided under the CSIRO Agreement, which might not have application to their circumstances. The union witnesses could not be certain of obtaining a premium level or an in situ promotion or any expectation of being appointed as a specialist.

[70] APESMA put that Mr Steven March, Engineer, CDSCC in his testimony shone a light on the level of disadvantage that was hidden in the offers, particularly in relation to redundancy, given the potential for significant disadvantage once the special conditions of offer concerning redundancy expired after 5 years. The witness was also concerned by the significant discretion that would reside in CSIRO in relation to a number of the special conditions that were offered outside the CSIRO Agreement, conditions which were currently enforceable terms of the CDSCC Agreement. It was argued that the “equal benefits” offered by CSIRO were only provided for under policy and were not enforceable terms of the CSIRO agreement.

[71] In response it was put for CSIRO that it was unlikely that CSIRO, as a public entity, would fail to honour the offered terms and conditions.

The nominal expiry date of the enterprise agreement

[72] So far as the nominal expiry date of the enterprise agreement was concerned it was put for the CSIRO that the very short period for which the CDSCC agreement would continue to operate (2 July 2010) mitigated against the legislation permitting the agreement to be imposed into the operation for what might well be a relatively short period of time.

[73] The CEPU argued that the reference in ss.318 (3) and 319 (3) to enterprise agreement referred to the new employer’s enterprise agreement, the CDSCC Agreement being referred to as the “transferable instrument”. In this regard it was noted that the CSIRO Agreement had less than one year until its nominal expiry date of 16 February 2011.

Whether the transferable instrument would have a negative impact on the productivity of the new employer's workplace

[74] It was the submission put for CSIRO that there can be no doubt that there will be a negative impact on the employer of maintaining two distinct employment systems which do not complement each other. 25 The evidence of Dr Ball was that it would be his intention, as the leader of the business unit incorporating the CDSCC, to encourage much more active interaction between staff engaged in different activities across the unit. It was his evidence that, in particular, the sharing of knowledge and of best practice between those different groupings could occur on a short timeline.26 He was concerned however, that in circumstances where the aim was to bring together staff with similar skills working in similar roles, there would be staff working for the same organisation under quite different terms and conditions.27

[75] APESMA submitted that the matter dealt with in s.318 (d) was whether “the transferable instrument would have a negative impact on the productivity of the new employee's workplace”, and that the reference to “workplace” did not mean enterprise. It was argued that term workplace is used throughout the Act to distinguish from an enterprise. According to the submission the relevant issue of productivity arises solely in relation to the CDSCC. In this regard there was no evidence that productivity at the CDSCC would be negatively impacted upon by the persistence of the CDSCC agreement. It was put that the evidence of Dr Ball was that largely the work would remain the same at the CDSCC so any effect on productivity would be difficult to discern.

[76] It was the submission of the CEPU that foregone improvements in productivity are not the same as a negative impact on productivity. According to the submission the CSIRO would not be less productive if the CDSCC agreement persisted. Further, the fact that the CSIRO stated that there are productivity gains to be made is not a relevant criteria under sections 318 or 319. It was argued that by creating two CDSCCs (in terms of conditions of employment) at the workplace, it was more likely that the non-transfer of the CDSCC instrument would result in a negative impact.

[77] The CEPU argued that the CSIRO had based much of its concerns not to have more than one agreement operating within CSIRO on the experience of that organisation prior to the development of the single award for the organisation in 1990. It was noted that prior to the making of the 1990 award CSIRO was covered by a number of industrial awards and determinations, the majority of which were made under the Conciliation and Arbitration Act 1904. The proceedings themselves for the 1990 award were conducted under the Industrial Relations Act 1988. CEPU did not contest that these awards may have created real issues of productivity for the CSIRO at that time.

Whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer

[78] It was the position of CSIRO that it would be extraordinarily wasteful to require CSIRO to put a new system in place and to administer that system, with a very real prospect that at some future time it would revert to the one system. It was argued that administering two systems would also result in higher costs with no resulting benefit. It was the CSIRO submission that it was clear on the evidence that there would be economic disadvantage to CSIRO in summary terms, an inability to maximise the benefits for the new unit on a completely integrated basis, the inability or impediment on realising the synergies in the short, medium and long term and the additional costs associated with running two systems. Additionally if CSIRO were required to employ new employees on CDSCC terms and conditions the costs will create significant economic disadvantage with no benefit. 28

[79] The evidence of Mr Euan Sangster, Executive Manager, Software Services, CSIRO was that the cost of reconfiguring the automated SAP system that was utilised to administer the CSIRO human resources and financial systems would be considerable and could reach as much as $450,000. Under cross-examination he stated that it was not necessary to totally automate the system in order that the employees were paid and some manual processing would reduce the cost of reconfiguring the system. It was his evidence that that was a valid option but that he had been asked to prepare costings on a total automated system and had costed no other options.

[80] CSIRO put the evidence of Mr Sangster on the basis that CSIRO wishes to proceed to fully integrate the operations of the CDSCC into its operations as a whole, and to integrate the payroll system and HR system from the complex into the SAP system. In these circumstances there would be significant costs associated with it. The SAP system described by Mr Sangster was not simply a payroll system. It is an integrated system which dealt with procurement, finance, HR matters, each of which interacted with the other.

[81] Under cross-examination Mr Sangster stated that the different salary conditions applying to CSIRO employees affected by arrangements under Clause 11 of the CSIRO Agreement were accommodated by the SAP system, as they were dealt with by an annual allowance.

[82] It was put on behalf of the unions that the CSIRO relied principally on the figure of $450,000 as being the cost involved in integrating the CDSCC Agreement into the SAP system. According to the unions following the evidence of Mr Sangster, this position was simply not tenable. Mr Sangster had undertaken no analysis of the CDSCC current arrangements in arriving at the $450,000 figure. Further he was unable to comment on whether the current payroll system at CDSCC, a payroll system able to be retained by CDSCC regardless of who operates the site, was compatible with the SAP system.

[83] It was also the submission of the unions that the testimony provided by Ms Francis appeared to suggest that there were some issues that would have to be worked through with JPL and NASA in terms of not only the payroll system but potentially about other systems. The position seemed to be that there could be some substantial issues in relation to the incorporation of the CDSCC financial system generally into the CSIRO system. In the circumstances it was put that little weight could be given to Mr Sangster’s evidence.

The degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer

[84] It was the position of CSIRO that there are substantial differences between the terms of the CDSCC Agreement and the CSIRO Agreement, giving rise to a lack of business synergy. 29

[85] The CEPU noted the absence of any definition of “business synergy” in the FWA but submitted that the goal of achieving “business synergy” could be delivered by ensuring that the CSIRO Agreement did not apply at CDSCC and allowing the CDSCC Agreement which was “highly tailored to the specific business needs at CDSCC” to prevail 30.

[86] APESMA noted the differences between the two agreements but contended that, as the CDSCC Agreement would apply only to the CDSCC and there would be “no interaction between employees at the CDSCC facility and those employed at other CSIRO facilities” then the differing terms and conditions would not amount to an interruption of business synergy. 31

[87] The AMWU noted the significant differences between the two agreements and that the CSIRO did not have a workplace instrument currently covering the CDSCC site. 32

The public interest

[88] CSIRO argued that it is in the public interest for CSIRO to be able continually to make advances in the areas of astronomy and space science. It also put that by operating CDSCC, CSIRO would be able to build its reputation as a credible operator of and contributor to space science technology. Additionally, differences in terms and conditions of employment applying to CDSCC staff would lead to divisions which would impede the organisation’s overall efficiency and productivity. 33

[89] Similarly CEPU argued that it was in the public interest for CDSCC to continue to operate as a productive and efficient component of the DSN. CEPU relied on the results delivered by CDSCC to date 34 and put that the staff should be able to continue to operate under the industrial instrument specifically “tailored” to the CSDCC site.35 Similar views were expressed by the CEPU and AMWU.36

[90] It was also argued for the CEPU that it is in the public interest for employees to be able to rely upon their industrial conditions and for those not to be fundamentally amended in the absence of some compelling reason to the contrary. It was put that it is the default position in Part 2-8 of the FWA that following a transfer of business the status quo, in relation to the employees’ terms and conditions of employment under an enterprise agreement, should be maintained. Further it was contended that the objects of the Part refer to the balancing act and that the balancing act must be viewed in terms of the operation of section 313, 318 and 319, namely that absent some reason to the contrary the agreement continues to operate 37.

[91] APESMA were concerned that it was in the public interest for that organisation to be able to continue to represent its members engaged at CDSCC. It was noted that APESMA was a party to the CDSCC Agreement but had no role in relation to the CSIRO Agreement and would lose its ability to properly represent it members if the CDSCC Agreement did not transfer. APESMA is subject to a demarcation arrangement in relation to its coverage at CSIRO. 38

The s.319 application

[92] In relation to the application made pursuant to s.319 the CSIRO essentially relied on the evidence and submissions filed in relation the s.318 application. It was argued that the CSIRO Agreement, for all those reasons advanced in relation to the s.318 application, should apply both to transferring employees and any new employees engaged by CSIRO to work at the CDSCC.

[93] CSIRO called evidence to the effect that, despite the submissions and the evidence of some witnesses called by the unions, it was not anticipated that CSIRO would have any difficulty recruiting new staff to work at CDSCC under the terms of, and classifications contained in, the CSIRO Agreement. The evidence called by the CSIRO was to the effect that CSIRO had not had difficulty in recruiting engineers in the past and, if any difficulty was encountered with the salary rates available under the CSIRO Agreement, there was the ability within the terms of the agreements to pay additional salary in order to meet the market.

[94] It was the submissions of the unions that if the CDSCC Agreement were to continue to apply to transferring employees at CDSCC then in order to avoid workplace disharmony and the problems that could arise from employees working side by side at the CDSCC performing the same tasks but with vastly different salaries and terms of employment, the CDSCC Agreement should also cover new employees.

[95] Evidence was also called by the unions to the effect that difficulty had been encountered in the past, prior to the reclassification project which was embodied in the CDSCC Agreement, in recruiting and retaining skilled staff at the CDSCC. It was the union position that similar difficulties would be encountered if recruitment were attempted under the terms of the CSIRO Agreement, given the classifications afforded to CDSCC roles under that agreement in the translation exercise conducted by Mr Neidermier.

Decision

[96] In light of all the evidence adduced and submissions made I have reached the following conclusions in relation to each of the matters which I am required to take into account in determining the application made pursuant to s.318 of the Act.

[97] So far as s.318 (3) (a)(i) is concerned, I accept that the CSIRO position is that that the efficiency and productivity of the organisation will be enhanced if the CDSCC Agreement does not transfer. While I note that view I am not convinced, on the evidence, that the case made by CSIRO concerning the difficulties created for it by the continued operation of the CDSCC Agreement is persuasive. Given that the majority of employees transferring to CSIRO will do so on substantially different salaries and conditions of employment than other CSIRO staff, even if the CDSCC Agreement does not transfer, I am unable to accept that the situation will, for the reasons advanced by CSIRO, be deleterious to its operations to such an extent that this factor should outweigh all other criteria which must be taken into account in determining the application.

[98] I accept the importance to CSIRO of the One CSIRO Policy but am not convinced that an additional enterprise agreement operating, for historical reasons, at a discrete workplace which has only a marginal relationship to the majority of CSIRO operations will undermine that policy. In this regard I accept the union submission that a great deal had changed in the industrial relations landscape since CSIRO moved in 1990 to one enterprise award from a plethora of awards and determinations. Not least of these changes is the overwhelming emphasis on bargaining at the enterprise level. The CSIRO relied on the Queensland Nickel decision for support as to the importance that should be attached to the employer’s One CSIRO policy. It should be noted that although the employer in that case also had a “one staff’ policy, it operated under three separate enterprise agreements.

[99] In relation to the criterion set out at s.318(3)(a)(ii) I have determined that the majority of employees currently employed at the CDSCC site prefer to maintain the regulation of their terms and conditions of employment under the CDSCC Agreement. That this is the case is clear from the fact that only 30% of the relevant employees accepted the offers of employment made by CSIRO.

[100] I give little weight, if any, to the survey conducted in early November 2009 directed at ascertaining the views of employees. At that stage the employees were not aware of the final offers to be made by the CSIRO. I do, however, take account of the petition signed by the employees after the final offers were made. I am not convinced that the employees who rejected the CSIRO offers or signed the petition did so for any reason other than it was their view that the CDSCC Agreement offered, in their case, superior employment conditions. Nor do I discount the petition on the basis that the unions advised the employees that their views would be taken into account in the FWA proceedings and they could indicate their view by signing the petition. This would seem to be eminently sensible advice. As the numbers signing the petition accords generally with the numbers who rejected CSIRO offers there would seem to be no reason to doubt the veracity of the views expressed in the petition. While the petition was public the acceptance or rejection of CSIRO offers was a private decision for each employee.

[101] While I do not elevate the criterion set out in s.318(3)(b) to a determinative position it is my view that the paragraph is of particular importance. If no employee were to be disadvantaged as a result of a s.318 order then much more weight could be given to factors such as the views of the employer and matters of productivity, cost and business synergy. In my view the evidence is clear in relation to this matter. While some or all employees could well be advantaged in monetary terms in the first year of operation of the CSIRO Agreement when taken together with the other elements of the offer (not least of which is the $7000 lump sum inducement to accept the offer) it is apparent that the majority of employees consider that they will suffer disadvantage overall in subsequent years. It is also apparent that some employees are not convinced that the offers made have the certainty and ease of enforceability of their current terms and conditions and the evidence appears to support them in this view.

[102] I am unable to accept the CEPU submission that I should have no regard to the terms and conditions of employment set out in the offers to the employees which are not clearly underpinned by the CSIRO Agreement. Subparagraph 318(3)(b) does not refer only to the provisions of the applicable enterprise agreement but to “terms and conditions of employment”. In my view this encompasses more than a direct comparison of the applicable agreement provisions. I have taken into account the CSIRO offers. In doing so I must also give weight to the fact that some of the terms of those offers are not so certain as the provisions of the CDSCC agreement which they are intended to replace (e.g. overtime, provision of meals) as they are dependent on the application of less certain provisions of the CSIRO Agreement. 39

[103] So far as the position with superannuation is concerned while I do not give it much weight, as some monetary compensation has been included in the offers to offset the lesser employer contribution under the CSIRO Agreement, I do take into account the necessary steps that an employee would need to take in order to redress the superannuation disadvantage (join the public sector fund, salary sacrifice additional money). In light of these matters I do not accept that there is no disadvantage to the employees so far as superannuation is concerned.

[104] Overall I accept that there is some disadvantage to employees brought about by the proposed reclassification under the CSIRO Agreement. In many cases access to further increments will be lost. I should note that in this respect I am not convinced that the evidence showed that CSIRO increments were easier to access than CDSCC increments.

[105] A large number of CDSCC staff were translated to the top of the classification level under the CSIRO Agreement (evidenced by the number of classification allowances required to be paid to ensure they were not disadvantaged in salary terms). I am persuaded by the views of the CDSCC employees who gave evidence in support of the union case that they anticipated little further progression through the CSIRO classifications, given the different nature of the work performed at CDSCC and the research roles of the vast majority of senior CSIRO staff. The evidence as to the roles of engineers in CSIRO generally, the alleged equivalence of engineers performing site maintenance work and those working at the CDSCC, and the apparent lack of emphasis placed on professional engineering qualifications in CSIRO support my conclusion that those staff who anticipated little further progression under the CSIRO Agreement did so on reasonable grounds.

[106] Clearly employment by the CSIRO under the terms of the offers made has some advantages for CDSCC staff. It is secure public sector employment and it is less likely that the operation of the CDSCC will again move to another contractor. Long service leave entitlements are enhanced as are a number of other leave entitlements. Union witnesses recognised that some CSIRO terms and conditions were advantageous but were not persuaded that these outweighed the advantages of continued coverage by the CDSCC Agreement. Nothing put on behalf of the CSIRO has convinced me that these employees were mistaken in the assessment of their own positions or that overall the majority of CDSCC employees would not suffer disadvantage by losing the certainty provided under the generally superior conditions of the CDSCC Agreement.

[107] In this regard I also note that under the terms of the CSIRO Agreement, CSIRO has unfettered ability to permanently transfer employees. CDSCC employees subjected to such a transfer from the CDSCC would, on the evidence, lose all the additional entitlements (over and above the terms of the CSIRO Agreement) included in the CSIRO offer. While such a scenario is probably unlikely the risk is real.

[108] Section 318(3)(c) requires that the expiry date of the enterprise agreement should be taken into account in the determination of the application. The enterprise agreement for the purpose of this application is the CSIRO Enterprise Agreement which expires on 16 February 2011. After that date the agreement could be replaced by a new agreement in significantly different terms. The CSIRO Agreement could have less than one year of operation in relation to the CDSCC employees if it were to apply. In the circumstances it would seem unnecessarily disruptive to CDSCC employees to change their employment arrangements so significantly for what could be a relatively short period of operation.

[109] CSIRO claimed that for the purposes of s.318(3)(d) the continued operation of the CDSCC Agreement would have a negative impact on the productivity of CSIRO. On the evidence and given the easily quarantined operation of the CDSCC site I am not convinced that, should there be any negative impact, it would be very substantial. Bringing the CDSCC into the CSIRO SAP system will clearly not be an easy task in the light of the evidence about NASA requirements in relation to procurement and financial matters. Even without continued operation of the CDSCC Agreement very different salary, allowance and other conditions will apply to a majority of staff at the CDSCC. In my view the continued operation of the CDSCC Agreement will have little negative impact on CSIRO as an organisation, particularly given the unique position of CDSCC in terms of its relationship with NASA and the control and funding that flows from that relationship.

[110] The only real economic disadvantage relied on by CSIRO for the purposes of s.318(3)(e) arises from the cost of incorporating the CDSCC payroll system based on the CDSCC Agreement into the CSIRO automated SAP system. The evidence in this respect was unsatisfactory. The cost will flow only if CSIRO implements its desire to fully incorporate CDSCC into the SAP system despite the continued application of the CDSCC Agreement. Once again, given the unique position of CDSCC, CSIRO could avoid any significant cost by delaying the total incorporation of the CDSCC systems. Given that the CDSCC currently runs stand alone systems this option is clearly available. It is also important that the cost of operating the CDSCC is met by NASA and although CSIRO will not receive a management fee for operating the facility (as Raytheon did) it will be compensated for general and administrative costs 40

[111] It would appear to be common ground that there is very little business synergy (s.318 (3)(f)) between the CDSCC Agreement and the CSIRO Agreement. No doubt this is a consequence of the very apparent differences in emphasis attached to the operations of the CDSCC and the vast majority of the business of CSIRO which, generally, is a research based organisation with a few operations based areas. I am unable to accept that imposing an agreement that has little “business synergy” with the operations of CDSCC on the employees at CDSCC is a reasonable response to a recognition of that lack of synergy.

[112] In my view the public interest (s.318(3)(g)) is best served in the circumstances of this application if the employees at CDSCC are able to continue to receive the benefits of the enterprise agreement which was negotiated specifically for the needs of the employees at CDSCC and the operations of the CDSCC. In this regard I also give some small weight to the argument advanced by APESMA concerning its inability to properly represent its members if they are employed pursuant to the CSIRO Agreement. Given that the concern of the CSIRO to enhance its reputation and abilities in the field of space tracking science is probably only as important as the need for the CDSCC to continue to provide an efficient and effective resource as part of the DSN other public interest concerns appear to be equally balanced.

[113] Taking into account all of the matters set out above, and in order to give proper effect to the objects of the Part set out at s.309 (a), while balancing the interests of the employer as required by s.309(b) it is my determination that the s.318 application made by CSIRO should be dismissed. In my view, only by permitting the transfer of the CDSCC Agreement can the protection of the employees’ terms and conditions of employment by enterprise agreements be properly maintained in the circumstances of this case.

[114] So far as the s.319 application by the CEPU is concerned I have taken into account all the same matters, so far as they are relevant, that were raised in relation to the s.318 application. Again I am of the view that, at this stage, the default position under the Act should apply and that no order should be made in relation to future employees.

[115] Clearly CSIRO opposes the making of the s.319 order. Additionally I am unable to find that future employees would be subjected to the same disadvantages as current employees and I am unable to take account of their views as they are yet to exist. I have had regard to the views of some employees as to their view concerning future employees working alongside them under different conditions but this evidence is not as persuasive as their views in relation to their own positions. In this regard I also note the very low staff turnover at CDSCC and am unable to conclude that the magnitude of the problem would support the making of an order. While the views of some union witnesses that recruitment to CSIRO will be difficult under the CSIRO Agreement may be proved to be valid, that is a matter for CSIRO to manage as it sees fit and not a proper reason for making a s.319 order.

[116] In the absence of any compelling evidence that supports the granting of the s.319 application I refuse to make the orders sought by the CEPU.

[117] While I am refusing to make the order under s.319 sought by the CEPU at this stage there is scope under the Act for an order to be made in the future should there be some major change in circumstances.

COMMISSIONER

Appearances:

Mr Harry Dixon, SC and Mr Ingmar Taylor of counsel for the applicant.

Mr Michael Wright, Mr Neville Betts CEPU, Mr Dave Smith, Mr Michael Murphy APESMA and Mr Ian Morrison, AWMU for the respondent.

Hearing details:

Canberra

8-10 February 2010

1 Transcript PN320.

2 Transcript PN29.

3 Transcript PN78.

4 Transcript PN2938.

5 Transcript PN2825.

6 Transcript PN30.

7 Transcript PN45.

8 Transcript PN1062

9 Transcript PN386-388.

10 Transcript PN390.

11 Transcript PN403.

12 Transcript PN68.

13 Transcript PN538.

14 Transcript PN1092.

15 Transcript PN1182.

16 Transcript PN569.

17 Transcript PN1258.

18 Transcript PN1684.

19 Transcript PN1350.

20 Transcript PN69.

21 Exhibit CSIRO12, paragraph 26.

22 Transcript PN581.

23 Exhibit CSIRO13, Attachment 3.

24 Transcript PN1388.

25 Transcript PN153.

26 Transcript PN430.

27 Transcript PN426.

28 Transcript PN154.

29 CSIRO Outline of Submissions paragraph 27.

30 CEPU outline of submissions paragraphs 95-99.

31 APESMA outline of submissions paragraphs 3.5.3 -3.5.4.

32 AMWU outline of submissions paragraph 37.

33 CSIRO Outline of Submissions paragraphs 28-34.

34 Transcript PN416–PN418.

35 CEPU Outline of Submissions paragraphs 101-108.

36 APESMA and AMWU Outlines of Submission.

37 Transcript PN1601.

38 Transcript PN2164.

39 Evidence of March

40 Exhibit CSIRO 16 paragraph 7

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