Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

asked the Minister for Broadband, Communications and the Digital Economy, upon notice, on 3 April 2012:

With reference to Clause 22 of the formal agreements made between Australia Post and Licensed Post Offices (LPO):

(1) When Clause 22 is invoked in order to terminate an LPO agreement:

(a) is it the intention of Australia Post that compensation paid is "fair and reasonable"; if not, what are the intentions of Australia Post; and

(b) is the market value of an LPO considered when determining the rate of compensation where market value is in excess of three times business revenue; if not, why not.

(2) Can details be provided of the formal policy of Australia Post in regard to the use of Clause 22, including:

  (a) in what circumstances termination without cause can be implemented;

  (b) what is the compensation policy in circumstances where termination without cause is implemented, including whether full compensation is required to be paid, and if it is not paid, why not; and

  (c) does Australia Post have a policy with regard to the use of Clause 22; if so, can a copy be provided; if not, why not and on what basis is the clause exercised.

(3) Can details be provided of the policy work undertaken by Mr Gary Ward in relation to the use of Clause 22 by Australia Post, including whether that work is available; if so, can a copy be provided.

(4) Does Australia Post intend to invoke Clause 22 as a bargaining tool against licensees who request fair payment under their LPO agreement.

(5) Does Australia Post acknowledge that it would be fair and reasonable that any decision to terminate an LPO agreement under Clause 22 be required to pass through an independent public review, thereby enabling licensee representation prior to termination; if not, why not.

(6) In regard to the Vaucluse LPO and Campbell Town LPO, detailed separately:

  (a) which Australia Post official was responsible for invoking Clause 22;

  (b) who is responsible for determining the licensee compensation payments;

  (c) what were the market values of each LPO at the time of termination;

  (d) was the market value greater than three times the business revenue; and

  (e) has an offer of three times business revenue been made to the licensees by way of compensation; if not, why not.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

The answer to the honourable senator's question is as follows:

(1) (a) It is Australia Post's intention to conduct itself in a "fair and reasonable" manner in all matters relating to the administration of the LPO Agreement.

  (b) As part of reaching agreement with the outgoing licensee on the compensation payable under Clause 22, Australia Post will consider a range of factors that may include the licensee's submission on the market value of the underlying business. Australia Post's considerations are subject to the contractual terms provided under the LPO Agreement.

(2) (a) The LPO Agreement provides that either party may terminate the Agreement subject to providing 90 days notice to the other party.

  (b) The LPO Agreement provides that termination compensation shall be an amount agreed between Australia Post and the licensee. "However such amount shall not be less than an amount equal to the Business Revenue over the period of twelve (12) months prior to the date of termination nor greater than that amount multiplied by three (3)."

  (c) Australia Post's policy documents with respect to Clause 22 are commercial-in-confidence. Either party to the LPO Agreement may decide that they do not wish to maintain an ongoing licensee/licensor relationship. Australia Post may decide to exercise its rights under this clause for matters such as, but not be limited to, network planning considerations, a loss of trust and confidence in Australia Post's relationship with the licensee or a loss of trust and confidence in the suitability of the licensee.

(3) Mr Ward ceased employment with Australia Post in March 2007.

Mr Ward's employment with Australia Post was not directly related to policy work in relation to Clause 22 of the LPO Agreement.

(4) Australia Post has not, and does not intend, to invoke Clause 22 as a bargaining tool against licensees who request fair payment under their LPO Agreement.

(5) Australia Post does not agree that an independent public review of a decision to terminate an LPO Agreement under clause 22 would be fair and reasonable.

The relationship between Australia Post and any licensee is governed by the terms of the LPO Agreement and further defined through the Franchising Code of Conduct. It is appropriate for both parties that any decision to terminate the licensee/licensor relationship is undertaken in accordance with these provisions.

(6) (a) The General Manager Retail Sales & Service approved the termination of the LPO Agreements for Vaucluse and Campbell Town.

  (b) The compensation payment will be an amount agreed between Australia Post and the former licensee subject to the contractual terms provided under the LPO Agreement.

  (c) Australia Post is not in a position to advise the market values of each LPO.

  (d) Refer to answer (c) above.

  (e) In the matters mentioned, agreement has not been reached on the figure for business revenue. The current offers made by Australia Post have been in accordance with the terms of the LPO agreement and based on information available to Australia Post, information provided by the respective former licensees and negotiations to date with each of the former licensees.