Liquor, Hospitality and Miscellaneous Union-South Australian Branch and Others

application to terminate a preserved State agreement.

[1] On 18 February 2009 Coca-Cola Amatil (Aust) Pty Ltd (CCA) made an application pursuant to clause 21 of Schedule 8 of the Workplace Relations Act 1996 (the Act), seeking to terminate the Coca-Cola Amatil (Aust) Pty Ltd (South Australia) Enterprise Development Agreement, South Australia Operations, 2005-2008 (hereinafter referred to as "the Agreement").

[2] The Agreement is a preserved collective State agreement. It was certified by the Industrial Relations Commission of South Australia on 16 December 2005 (File No. 8053 of 2005) and attained its nominal expiry date on 30 September 2008. Clause 4 of the Agreement defines the parties bound by the Agreement as CCA, the Unions and the employees whose contract of employment is otherwise covered by the terms and conditions of the awards. The Unions are defined in clause 3: Definitions as the Liquor, Hospitality and Miscellaneous Union, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

[3] On 6 March 2009 the Liquor, Hospitality and Miscellaneous Union filed an application for directions. This was the subject of a telephone conference on 12 March 2009 and Directions were subsequently issued.

[4] The application was initially the subject of a hearing on 18 March 2009. At this, and the subsequent hearing, CCA was represented by Mr Griffin QC and Mr Manuel, of counsel. The three unions, parties to the agreement, being the Liquor, Hospitality and Miscellaneous Union (LHMU), Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (hereinafter referred to as the unions) were represented by Mr Stanley QC and by Ms Eaton of counsel. At this initial hearing, the unions requested that the Commission reconsider the extent to which appropriate steps had been taken to obtain the views of persons bound by the Agreement about whether it should be terminated.

[5] This issue was the subject of a decision and directions issued on 26 March 2009. In summary, CCA were directed to provide to all employees of CCA whose employment is covered by the Agreement a written invitation to provide, in writing to me, by 14 April 2009, their views as to whether they thought the Agreement should be terminated. Employees were able to express these views on a named or an anonymous basis, although my decision detailed that advices which could be verified would be accorded greater weight. Mr Macolino, State Human Resources manager SA/NT for CCA provided an affidavit to the Commission verifying that my Directions of 26 March 2009 had been complied with.

[6] Some 20 responses were received by 14 April 2009. These responses were viewed by the representatives of both CCA and the unions, on 15 April 2009.

[7] The application was the subject of a further hearing on 16 April 2009. Written material to clarify undertakings provided by CCA and to reflect the final positions of the parties on various issues have also been received.

[8] In formulating a conclusion relative to this application I have had regard to all of the material and evidence provided to me. I have noted the evidence of Mr Sinaunou of CCA and that whilst the unions did not provide witness evidence, the Unions did table various documents. I have noted that the parties have provided additional material to me subsequent to the hearing and I have taken this information into account.

[9] It is also appropriate that I note that during the course of the proceedings in this matter the unions sought the assistance of the Commission in efforts to reach a replacement agreement with CCA. CCA opposed any delays in these proceedings but confirmed its preparedness to engage in further discussions consequent upon the termination of the agreement.

[10] Clause 21 of Schedule 8 specifies that a preserved collective State agreement may only be terminated in the way in which a certified agreement could have been terminated prior to 26 March 2006. Section 170MH of the pre-reform Act details the agreement termination arrangements.

[11] Section 170MH of the pre-reform Act states:

"170MH Terminating a certified agreement in public interest after nominal expiry date

(1) After the nominal expiry date of a certified agreement:

(b) a majority of the employees whose employment is subject to the agreement; or

(c) an organisation of employees that is bound by the agreement and that has at least one member whose employment is subject to the agreement;

may apply to the Commission to have the agreement terminated.

(2) On receiving the application, the Commission must take such steps as it considers appropriate to obtain the views of persons bound by the agreement about whether it should be terminated.

(3) If, after complying with subsection (2), the Commission considers that it is not contrary to the public interest to terminate the agreement, the Commission must, by order, terminate the agreement.

(4) The termination takes effect when the Commission's order takes effect."

[12] The agreement has exceeded its nominal expiry date. Accordingly, CCA, as the employer, is able to make this application.

[13] Consistent with my decision of 26 March 2009 [1], I am satisfied that all appropriate steps have been taken to obtain the views of persons bound by the Agreement. In this respect I have noted that CCA have some 124 employees covered by the Agreement and am satisfied that these employees have all had the opportunity to express to the Commission, their views about the application.

[14] The primary issue for determination goes to the extent to which, consistent with section 170MH(3), I consider that termination of the Agreement would not be contrary to the public interest.

[15] I have considered this issue relative to the approach generally applied by the Commission to section 170MH. Secondly, I have considered a motion put by the Unions for the matter to be referred to the Court on a question of law. Thirdly, I have considered the application in the context of the arrangements that will apply to employees in the event that the Agreement is terminated.

[16] The Agreement in clause 6: Relationship to Parent Award, provides that that it is to be read and interpreted in conjunction with the Awards except to the extent of any inconsistency. The Awards are defined in clause 3 as the Aerated Waters Manufacturing Award and the Metal Industry (South Australia) Award as at 30 September 2005.

[17] The Agreement provides for wages substantially in excess of those which would otherwise apply. Whilst the agreement deals with employment conditions in a comprehensive fashion, the hours of work arrangements are particularly significant in that these arrangements provide for an annual average of 38 ordinary hours per week, to be achieved by working differential summer and winter work rosters. The Agreement also details comprehensive overtime and casual employment provisions.

[18] The CCA position is that the Agreement was negotiated prior to changes which included the doubling of production output and incorporates practices which restrict the production of product in a cost-effective manner. Further, the evidence of the CCA South Australian Supply Chain Operations Manager, Mr Sinainou was that the requirements of the agreement posed threats to the safety of workers who were able to elect to work excessive overtime.

[19] The unions conceded that the Commission's general approach to the consideration of section 170MH(3) was set out in detail in a range of decisions, but most clearly summarised in Kellogg Brown and Root Pty Ltd and others (Kellogg) [2].

"[21] It seems to us that confusion will arise if attempts are made to paraphrase the statutory test and to formulate rules or guidelines for its application. All that need be said is that despite the requirement in s.170MH(2) to take steps to ascertain the views of the parties to the agreement, ultimately the test is that set out in s.170MH(3). That test is based on the public interest alone. If the legislature had intended that the interests of the negotiating parties should also be considered it could have made specific reference to those interests. The terms of s.170MH(3) can be contrasted with 170MX(5)(c) which reads:

"170MX What happens if Commission terminates a bargaining period under subsection 170MW(3) or (7)

(5) In exercising those arbitration powers, the Full Bench must have regard to the following:

(c) the interests of the negotiating parties and the public interest;

[22] The absence of any reference to the interests of the negotiating parties in s.170MH(3) is significant. It follows that the views of persons bound by the agreement may be relevant to the exercise of the discretion if they shed light upon the effect of termination on the public interest, but they should not be given any independent weight. To do so would be to import into the application of the section something which on its proper construction it does not include.

[23] The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them.

[24] We were referred to a number of authorities concerning the ascertainment of the public interest. It is sufficient to refer to two. The first is the decision of the High Court of Australia in Queensland Electricity Commission; Ex parte Electrical Trades Union of Australia14(the QEC case). In that case the Court was considering the exercise of the discretion conferred on the Conciliation and Arbitration Commission by s.41(1)(d)(iii) of the Conciliation and Arbitration Act 1904. A similar discretion is now conferred upon this Commission by s.111(1)(g)(iii) of the Act. That section reads:

(g) dismiss a matter or part of a matter, or refrain from further hearing or from determining the industrial dispute or part of the industrial dispute, if it appears:

(iii) that further proceedings are not necessary or desirable in the public interest;"

[25] The QEC case was concerned with whether or not the Commission had failed to exercise its jurisdiction in upholding an application by the Queensland Electricity Commission to refrain from further hearing or from determining an industrial dispute between it and the Electrical Trades Union of Australia. The following passage appears in the joint judgement of the majority:

". . . Ascertainment in any particular case of where the public interest lies will often depend on a balancing of interests, including competing public interests, and be very much a question of fact and degree. In this case the Commission was called upon to weigh in the balance two competing public interests. One was the importance of settling in its entirety the dispute initiated by the E.T.U.'s log of claims. The other was the importance of leaving the dispute to be resolved by the State tribunal despite the limitations on its jurisdiction if that course was likely to maintain the marked improvement in industrial relations in the industry that had occurred since the dispute arose and thereby contribute to industrial peace and an efficient power supply."

[26] It is clear from this passage that the ascertainment of the public interest may involve balancing countervailing public interests. That the Commission should take all of the circumstances into account is made clear by Dawson J in Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd.16 These authorities provide useful general guidance in the application of the test in s.170MH(3). They illustrate the types of interests which can be properly described as public interests and confirm the breadth of circumstances which may be relevant to the ascertainment of those interests."

[21] The Unions noted that this decision and approach had subsequently been followed by the Commission in Tristar Steering and Suspension Australia Limited (Tristar) [3] and Cochlear Limited Enterprise Partnership Agreement 2005 (Cochlear)[4].

[22] The unions put to me that the conclusion in Kellogg was in error in that the appropriate construction of the Act required that any consideration of the public interest pursuant to section 170MH(3) should take into account the views of persons bound by the agreement so as to reflect the requirement that these views be sought in section 170MH(2). The unions put the position that the concept of the public interest in section 170MH(3) should include consideration of the interests of the parties.

[23] Notwithstanding this position, the unions acknowledged that the weight of Full Bench authority was such that I was obliged to follow the approach articulated in Kellogg unless and until this was overturned by a Full Bench or by the Court.

[24] The unions moved for the Commission to refer the operation of section 170MH(3) to the Court as a question of law. This motion was made pursuant to section 46 of the pre-reform Act on the basis that a Full Bench of the Commission had concluded that Schedule 7 of the Act should be read so as to invoke the relevant terms of the pre-reform Act. Whilst, in this respect I was referred to the Cochlear decision, the more appropriate reference must be to the first of the Tristar decisions [5]. In any event, the unions noted that section 122 of the Act as it presently operates, is in the same terms as the previous section 46.

[25] In support of this motion, the unions argued that the approach adopted by the Full Bench in Kellogg, and subsequent decisions was at odds with that articulated by Munro J in Joy Manufacturing Co Pty Ltd (Joy Manufacturing) [6] where His Honour stated:

"[33] The Act does not require determinative weight to be given to the views of persons bound by the relevant agreement. Rather it would appear that such views merely create the framework within which to assess the determinative consideration, contrariety with the public interest. Presumably, if all persons bound support the termination of the Agreement, no need exists for a close scrutiny of public interest considerations. Where some persons bound seek in effect to have the Act operate to continue the relevant agreement in force, the issue that is thereby raised is to be resolved by a determination as to whether termination of the relevant agreement would be against the public interest. In that determination, the factors and considerations most likely to be relevant to the assessment of the public interest are those advanced by persons bound by the agreement who oppose the application for termination of it."

[26] The unions argued that limitations on their appeal rights to the Court made such a reference appropriate in that a reference represented the only way whereby the proper construction of section 170MH(3) could be considered by the Court, and that I should not reach a conclusion in this matter pending such a reference.

[27] Whilst it matters little in practical terms, I consider that the question of a reference to the Court should be considered pursuant to the former section 46. This section stated:

"46 References to Court by Commission on question of law

(1) The Commission may refer a question of law arising in a matter before the Commission for the opinion of the Court.

(2) If the question referred to the Court is not whether the Commission may exercise powers in relation to the matter, the Commission may, in spite of the reference, make an award, order or decision in the matter.

(3) On the determination of the question by the Court:

(a) if the Commission has not made an award, order or decision in the matter - the Commission may make an award, order or decision not inconsistent with the opinion of the Court; or

(b) if the Commission has made an award, order or decision in the matter - the Commission shall vary the award, order or decision in such a way as will make it consistent with the opinion of the Court."

[28] References of questions of law have occasionally be considered by Full Benches of the Commission. They have rarely been granted but were considered at length in Finemores v Papa [7]. In that matter the Full bench stated:

"It is clear that under s 46 of the Act the Commission is given a discretion as to whether a question of law arising in a matter should be referred to the IR Court. The approach to the exercise of the discretion has been described by a Full Bench of the Commission as follows (Print K3795):

"The Commission is generally charged with the statutory duty to prevent and settle industrial disputes expeditiously (s 110(1)) and `shall act according to equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms' (s 110(2)(c)). Questions of law often arise in proceedings in the Commission and the resolution of them is within the jurisdiction of the Commission (see eg R v Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd [1987] HCA 29; (1987) 163 CLR 140 at 149) though their determination is not conclusive. In our view it is unlikely that the legislature intended that when a question of law arises in proceedings in the Commission one party can, by a request that the question be referred under s 46, require its determination by a Full Court of the Court (see s 53(2) of the IR Act). The effective operation of the Commission could thereby be substantially frustrated by a party seeking delay. In our view whether a question of law is referred under s 46 is a matter for the Commission to determine having regard to the circumstances in which the question of reference arises."

It has been said by another Full Bench of the Commission that amongst the criteria to be considered in determining whether to refer a question of law to the Court are "the nature of the question, the context in which the question arises and the nature of the delay that may be involved by such a reference" (see Hoyts Corporation Pty Ltd and Australian Theatrical and Amusement Employees Association, Print K4341).

In the present appeals we consider that there are special and unique circumstances which make it appropriate to refer the various questions of law to the Court. In particular the questions concern the jurisdiction with respect to unfair contracts for services entered into by independent contractors and raise issues of fundamental importance in the determination of the appeals having regard to the Reform Act amendments and the recent decision of the High Court in Re Dingjan. Although the Order and decisions appealed against were made in the exercise of the Commission's jurisdiction under ss 127A-127C of the Act, the jurisdiction under those provisions has now been transferred to the IR Court as a result of amendments by the Reform Act. In view of the transfer of the jurisdiction over unfair contracts it is appropriate and desirable that the questions of law be referred to and determined by the IR Court. Although there will be some delay in the determination of the appeals occasioned by such reference, it is preferable to have the questions determined by a judicial body before the merits and other issues raised in the appeals are dealt with by the Commission."

[29] In this matter I am not satisfied that the nature of the matter in question is such that it should be properly described as a question of law which warrants a reference to the Court. The unions' position is simply summarised as a disagreement with the approach adopted by successive Full Benches with respect to section 170MH. The unions have appeal rights, from both this decision and any subsequent proceedings. To the extent that an appeal is made, the unions have the right to seek a referral to the Court at that point. I consider it would be inappropriate for the Commission as presently constituted to countenance a reference to the Court in those circumstances where such a reference would usurp the customary practices and procedures of the Commission. Unlike Finemores, there is nothing here that is so unique or special to make it appropriate that I refer a question to the Court. The decision of the Full Bench in Kellogg is abundently clear, as are those that have followed. Applying the decision in Finemores I can see no basis for a referral of a question to the Court.

[30] For these reasons the unions' motion for a reference to the Court is refused.

[31] Notwithstanding the unions' objection to the approach adopted by the Full Bench in Kellogg, I have applied that approach in my considerations below. In doing so, I am satisfied that there is nothing before me which is so fundamentally inconsistent with the circumstances in Kellogg that I should adopt a different application of section 170MH(3).

[32] In Tristar [8] the Full Bench stated and reaffirmed the following extract from Kellogg:

"[27] It should be emphasized that the Commission's consideration of the public interest for the purpose of s.170MH(3) is directed to the consequences of terminating the agreement. In a given case, some consequences will be clearly predictable, others will be less so. For the most part the Commission should be guided by the likely foreseeable consequences of termination rather than speculation about possible consequences."

[33] The Full Bench in Tristar then considered the consequences, from a public interest viewpoint, of termination of the agreement. I have followed that approach.

[34] CCA submitted that there were no public interest considerations that mitigate against termination of the Agreement.

[35] CCA argued that the Agreement operates so as to impede its endeavours to improve its operational efficiency and reduce production costs in that it established an hours and overtime structure not suited to the current operational requirements.

[36] Further, CCA argued that the agreement operates so as to allow employees to elect to work overtime and that given the current operational demands, certain employees had elected to work hours which had been assessed as unreasonable. CCA argued that, under the current agreement terms it did not have the capacity to require that this overtime work be equitably shared amongst permanent employees, or distributed to casual labour hire employees. CCA relied on an expert independent safety report which proposed a progressive reduction of average weekly hours. CCA provided an action plan directed at this reduction but argued that it could not be fully implemented because of the constraints of the current Agreement.

[37] CCA put this issue of safety as a positive public interest consideration associated with the termination of the Agreement.

[38] The unions disputed the extent to which the Agreement prohibited this reduction in working hours and challenged the consistency of the CCA position given that there had been instances where CCA had rewarded employees who had worked longer hours.

[39] My consideration of the Agreement provisions indicates that the capacity does exist for employees to rely on the agreement to insist on overtime being allocated to them. Further, on the evidence before me, I accept the expert safety report provided to CCA which concluded:

"The information contained within the following report clearly identifies CCA (SA) has a Duty of Care requirement to ensure the health and safety of its workforce by minimising the risk associated with employees working long and excessive hours of work. The Supply Chain Director CCA, ACTU, Industrial Relations Commission and many reports that have been written clearly understand and state the need for all employees to have a sound life balance mix with work, travel, home life and recreation and they should not work excessive long hours."

[40] In these circumstances it is not necessary that I make findings relative to specific examples, or the specific instances referred to by the parties such as Ms Haasteren's situation.

[41] Section 107 of the Act in its present form in section 97 of the pre-reform Act both obligate the Commission to take account of any law relating to employee health, safety or welfare. The parties have not brought to my attention a legislative Occupational Health, Safety or Welfare imperative which mitigates in favour of either CCA or the unions

[42] Whilst I have concluded that the capacity to more equitably share and arrange overtime to ensure that specific employees do not work excessive hours, is a positive public interest issue, the nature of the public interest test in section 170MH is such that the test is a negative one in that it is only considerations that are contrary to the public interest that go to the Agreement termination issue. Accordingly, I do not consider that the safety issue is a factor that can be relied upon as a basis for the termination of the Agreement. Conversely, it is not a factor which is contrary to the public interest.

[43] On the information before me I have concluded that if the Agreement is terminated it is likely that CCA will seek to change existing arrangements with respect to the allocation and organisation of overtime and working hours but there is no definitive evidence of the exact effect of termination of the Agreement.

[44] CCA have provided the Commission and the unions, and its employees, with a number of undertakings. These are set out in detail in material and information provided by CCA. However, in summary terms CCA undertook, during the proceedings, to preserve, for a period of at least six months or until a new agreement is made, wages and specific agreement provisions covering:

• Non-work days accrued during the summer schedule of 2008/9 by employees in manufacturing and warehouse to the date of termination of the agreement will be preserved and taken during 2009.

• Current wages will be preserved with respect to permanent weekly hire employees and casual employees.

[45] Further, in the course of the proceedings, CCA undertook that these undertakings extended to any weekly hire employees engaged during the period for which the undertaking applied. Secondly, that during the period for which the undertakings applied, CCA would not replace existing weekly hire employees with casual labour hire employees. Finally, CCA confirmed that if the Agreement is terminated it will continue to use casual employees according to business needs.

[46] In its reply filed in the Commission on 28 April 2009, CCA advised "… The Applicant is prepared to extend the period of undertakings to the time of the making of a new agreement or the time of operation of a modern award whichever is the sooner." I have taken this as an extension of the previous maximum six month undertaking so that the maximum duration of the undertakings is now 1 January 2010.

[47] In its reply, CCA also advised that it had prepared a letter to each of its employees inviting each employee to incorporate the undertakings into the terms of their contract of employment in the event of termination of the Agreement.

[48] The unions argued that these undertakings had the effect of forcing the union parties to reach an agreement, that they were in any event not properly enforceable and would be likely to give rise to disputation which the Commission would be unable to resolve. The unions referred me to the decision of Cargill C in Cochlear. In that matter the Commission expressed a reservation about the extent to which the oral undertakings provided could be enforced.

[49] In this situation the undertakings are generally documented and I am satisfied that the circumstances under which they have been given are substantially different from those considered in Cochlear.

[50] I accept that the practical effect of the CCA undertakings may be to encourage the reaching of an agreement and that a limited potential exists for future disputation over the effect or the enforceability of these undertakings.

[51] I am unable to conclude that the nature of these undertakings is a matter relevant to the broader public interest. It certainly goes to the interests of the competing parties. The effect of these undertakings is however, a matter of conjecture at this stage. Consistent with the approach adopted in Kellogg [9] I am not inclined to speculate on these issues.

[52] CCA and the unions have both acknowledged that in the event of termination of the Agreement, the Aerated Waters Manufacturing Award and the Metal Industry (South Australia) Award will apply. The parties agree that if the agreement is terminated the Notional Agreements Preserving State Awards (NAPSAs) consistent with Schedule 8 of the Act, which replaced the traditional state awards for bodies corporate apply together with the Guarantees. The majority of CCA employees would be covered by the Aerated Waters Manufacturing NAPSA.

[53] The unions assert that this NAPSA has not been maintained to the extent that it can be said to prescribe acceptable minimum industrial standards. In this respect the unions referred to the NAPSA provisions relating to a 40 hour week and wage rates approximating 60% of those set out in the Agreement. The unions assert that the absence of proper industrial standards to apply in the event of termination of the Agreement was a matter of broad public interest.

[54] Any consideration of what represents acceptable alternative industrial standards must take into account the operation of the existing Guarantees with respect to wages, leave and minimum ordinary hours of work, together with impending changes to the Act and the operation of the modern awards which will replace the existing NAPSAs from 2010.

[55] In the intervening period, I have no reason to doubt that the CCA undertakings will be honoured. Further, to the extent that the unions suggest that the NAPSA hours of work provisions or other leave arrangements may apply, the guarantees set out in the Act establish minimum standards that I must consider to be appropriately described as acceptable minimum industrial standards. The NAPSA's can have no application in these respects. To the extent that the NAPSA wage rates are argued to be incapable of being described as appropriate minimum industrial standards, I note that these rates have been increased by the Australian Fair Pay Commission since 2006 and that there is no evidence that establishes that they are of an unsatisfactory standard. The difference between the NAPSA-based wage rates and the agreement rates may be a testament to the negotiating success of the parties but it cannot be said to prove that the wages Guarantee is fundamentally deficient.

[56] As I have stated, I have no reason to doubt that the CCA undertakings will be honoured, but even if I were wrong in that regard I do not accept the union argument that there is no appropriate underlying industrial instrument to govern the employment relationship. The two NAPSAs cannot be said to be so deficient that, in the public interest, termination of the Agreement is inappropriate.

[57] The unions also put to me that reliance on the NAPSA provisions would be likely to give rise to industrial disputation which would be contrary to the public interest. Further, that this concern was exacerbated by the absence of any effective capacity to vary the NAPSAs apart from the annual wage review process. Again, it may be that industrial disputation arises consequent upon a failure to reach agreement and CCA's reliance on the NAPSA provisions but, consistent with the Full Bench conclusions in Kellogg, I am not able to speculate on this as a matter of public interest.

[58] CCA detailed the dates of its various discussions and negotiations with employees. It asserted that it had been, since July 2008, actively seeking to reach an agreement with its employees and the union representatives.

[59] The unions, and, for that matter, a number of employees, asserted that the CCA position has been inflexible and that union proposals had been rejected as CCA concluded that these did not meet its negotiating imperatives. The unions submitted that the evidence of the CCA Supply Chain Operations Manager, Mr Sinainou went to confirm that the CCA position was inflexible and demonstrated that CCA was not bargaining in good faith.

[60] There is no evidence before me that supports a conclusion that the CCA bargaining position was such that it mitigates against termination of the agreement. That the negotiation process has taken a long time and has apparently been characterised by strongly held positions by the relevant parties does not establish behaviour contrary to the public interest. Indeed, Munro J's observations in Joy Manufacturing appear relevant:

"[40] The consideration most relied upon by Mr Cross was the unproductive nature of the protracted negotiations for a replacement agreement. I am unable, in the circumstances of this case, to discern in that consideration any substantive effect on the public interest that termination of the expired agreement would cause. Regrettable though it may be, the parties' inability to secure agreement, and the remoteness of their being likely to do so, does not of itself generate a public interest in whether or not the expired agreement should be terminated. There may be circumstances in which no real effort to reach agreement has been made, or it has not been practicable to negotiate an agreement because of some intervention or factor. In such cases, expedition in terminating an expired agreement may be contrary to a public interest that the bargaining processes of the Act be allowed effect pending which the agreement should remain in force pursuant to section 170LX. However, subject to that opportunity being afforded, I am not persuaded that a positive public interest in bringing about the end of the expired agreement ought be inferred simply from a protraction of negotiations, or from a protraction of industrial action. More immediately section 170MH does not operate in a way that requires any such positive effect to exist. It is sufficient that the Commission finds that the effect of termination of the Agreement is not contrary to the public interest. The existence of a positive effect of termination on the public interest may become relevant to such a finding if a balance has to be assessed after taking into account an effect that is against the public interest. However, if there is no identified effect of termination that is against the public interest, it appears to be immaterial that there is or is not a positive public interest in the termination of the relevant agreement."

[61] Related concerns were also raised by some of the employees who wrote to the Commission. These concerns went to the intransigence of CCA, and a commonly referenced concern that CCA was seeking to impose a reduction of employment benefits specified in the Agreement at a time when it was alleged to be financially well off and when it was spending significant amounts of money on promotional activities.

"[35] Before leaving this part of the decision it is opportune to comment on the submission advanced by some of the appellants that the conduct of a party in bargaining is not a relevant consideration in the exercise of discretion required by s.170MH(3). This proposition must be rejected as too wide. There may be circumstances in which unconscionable conduct by a party in connection with the renegotiation of an agreement touches the public interest and should be taken into account. This, however, is not such a case."

[63] I am unable to identify any actions on the part of CCA which are indicative of unconscionable conduct such that this conduct would represent a broader public interest consideration. There is a very real difference between strongly held views on the part of either or both parties, and conduct which goes to a public interest consideration. In this matter, the evidence is that the parties have met on numerous occasions over a substantial period of time, and that both parties have endeavoured, and remain, in pursuit of an agreement.

[64] Additionally, the question of how CCA conducts its marketing functions is quite outside of any considerations of the broader public interest.

[65] The position put by a number of employees in the responses to the Commission went to the relevance of CCA's recognition as the national CCA "State of the Nation Winner". Mr Sinainou addressed this issue at some length. I have concluded that, on the basis of his evidence, this national award within the CCA group was the result of a broad matrix of indicia and CCA remains concerned that its South Australian operations recorded comparatively high production costs.

[66] In any event, to the extent that CCA seeks to improve its efficiency of operation and may, or may not do so through termination of the Agreement, this is not a factor which could be considered contrary to the public interest for the purposes of section 170MH(3).

[67] A number of the employee responses to the Commission flagged concern over the potential for CCA to increase its reliance on labour hire arrangements at the expense of direct employment. To at least some extent, the undertakings given by CCA may have addressed these concerns.

[68] However, there is no evidence that allows me to conclude that permanent employees will be dismissed and replaced by labour hire casual employees. Any conclusion in this respect would be substantially speculative such that I am unable to conclude that CCA's future employment strategies are contrary to the public interest.

[69] Certain of the employee responses provided to me also objected to the termination of the agreement on the basis that this would result in a reduction in employee income and working hours benefits. Clearly, this is a real issue of concern to employees and quite likely a substantial issue in the ongoing negotiations.

[70] I do not wish to denigrate this concern in any way as it may well reflect a consequence of termination of the Agreement. However, it is a matter that goes directly to the interests of the parties and cannot be described as a broader public interest consideration.

[71] The Act prescribes a system whereby, once an agreement has passed its nominal expiry date and the necessary prerequisite approvals for industrial action have been achieved, the parties may elect to engage in industrial action in order to pursue their respective positions. Whilst I am not advocating such action and have confirmed to the parties that the Commission is available to assist in negotiations to reach a new agreement, these provisions make it clear that the negotiation outcomes are effectively in the hands of the parties and should not be the subject of evaluation by the Commission as part of the considerations associated with the termination of the Agreement.

[72] The Commission is required to terminate an agreement where the prerequisites in section 170MH(1) and (2) are met and where the Commission concludes that termination of the agreement is not contrary to the public interest.

[73] The provisions and requirements of sections 170MH(1) and (2) have been met. There is no evidence before me that indicates that, on the approach endorsed by the Full Bench of the Commission in Kellogg, termination of the Agreement would be contrary to the public interest. The Coca-Cola Amatil (Aust) Pty Ltd (South Australia) Enterprise Development Agreement, South Australia Operations, 2005-2008 agreement must therefore be terminated.

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