PN1

JUSTICE ROSS: Good morning. Can I mention some preliminary matters before we get underway. The first is that in the statement published yesterday we drew the parties' attention to, in particular, the information note on piece rate data relating to Mr Kelly and Mr McClintock. We also provided an additional information note in relation to that material. I appreciate that the parties will not have - well not necessarily have had the opportunity to check the data underlying those information notes and we propose to give you an opportunity to do that if you wish to take it, and to file whatever you wish to say about the accuracy of the information note and the additional information note, and you can do that by 4 pm next Friday.

PN2

I'd emphasise that's about the accuracy of the note and whether it accurately represents the material. You should make any submissions you want to make about what flows from the information note and the additional information note during the course of this morning's hearing. That is you should assume that it's accurate and make whatever submissions you wish to make on that basis, and you'll have that opportunity to deal with the accuracy or otherwise that I've indicated.

PN3

The second point to note we'll take a break at some point, convenient point during the morning. The third point is that we've received - and thank you for that Mr Dalton - the AFPA's response to the further issues that were put in yesterday's statement and I think each party has been provided with a copy of that. Are there any other preliminary matters before we get underway?

PN4

I think Mr Dalton you wanted to tender the material annexed to your aid memoire. I might just check now, is there any opposition to that? That is Dr Underhill's submission to the Education and Employment References Committee and the (indistinct) WHM inquiry report into people working under the 417 working holiday visa program. No? All right, well we'll get - I'll sort out the exhibit numbers for that when we come to you, Mr Dalton.

PN5

MR DALTON: Thank you, your Honour.

PN6

JUSTICE ROSS: All right. We'll get underway. Mr Gibian.

PN7

MR GIBIAN: Thank you, your Honour. Perhaps what I'll do is address the matters in this order. Perhaps if I can firstly as was perhaps contemplated by the statement of yesterday just address the three of those questions arising from that statement that appear to be addressed to the parties, including at least the AWU. Those three issues are those addressed at paragraph - those at paragraph 35 relating to the press and other materials concerning a proposed agriculture visa. Secondly, the questions at paragraph 38 in relation to the 15 per cent uplift and thirdly, the questions at paragraph 40 in relation to the AFPA alternative proposal which they in part addressed but perhaps I can answer.

PN8

If I can deal with them in that order then. Firstly, so far as the question at paragraph 35 as to the material annexed to the statements of Ms Tann and Ablett, the AWU's position is in short twofold. Firstly - sorry, I'm just getting a lot of beeps here. Firstly, that in short we would say that there's no basis upon which the Commission would make findings that the workforce going forward, at least so far as the seasonal harvesting workforce is concerned will be fundamentally different in the future than it has been in the recent past, based upon mere public statements and intention to introduce a new type of visa. As yet, no more than intention and the scope of which or conditions attaching to which are unknown. In context in which although the flow, particularly of working holidays makers has been interrupted, as one would expect by the COVID-19 pandemic, the policy settings of all governments are endeavouring to ensure that both generally - that industry generally is able and society generally is able to return to normal interactions as quickly as that is possible.

PN9

The second observation we would make is that, in any event, as we understand the proposals, it is not suggested that there would be a fundamental change in the nature of the workforce by reason of a significant change in the composition of the harvesting workforce by a significant increase in local workers, rather that the working holidaymakers would be supplemented by a visa class type with South-East Asian nations, and in that circumstance, we don't think there's any reason to think that the deficiencies identified in the current operation of the award as a minimum safety net have any likelihood of abating in the future, given the likely composition of the workforce, even if there was some alteration in the composition by reason of an, as yet, unknown visa type.

PN10

The second issue addressed to the parties, including the AWU, in the statement of yesterday concerns the question of if the application is granted, whether the 15 per cent uplift in clause 15.2(b) ought be maintained. The AWU believes that the award should retain the arrangements for formalised piece rates agreements and for the 15 per cent uplift in addition to inserting a floor. We have made three observations in that respect, and I might say we would be, if it would assist the Commission, happy to provide an additional note on these matters which could flesh them out in a little bit more detail.

PN11

The first observation we would make is that there are other awards which contain a floor of minimum payments together with provisions for an uplift or premium payable to piece workers which would be taken into account in the setting of piece work rates under the awards. At least three awards have that feature. The Sugar Industry Award at clauses 17.3A(a) and (b) provide for a 20 per cent piece work loading in addition to the floor. So far as the timber industry is concerned - sorry, it's a particular stream within the Timber Industry Award, the name of which has just escaped me, but it's clause 13.2(a) and (b) provide for a 12.5 per cent target in addition to a minimum floor of rates, and a Meat Industry Award at clause 18.9 provide for at least a 20 per cent incentive loading. There are additional loadings for daily hire and casual workers on top of that 20 per cent in addition to a floor.

PN12

Arguably, the Real Estate Award and the Textile Industry Awards have a similar feature, although the structure of those arrangements are a little different and potentially distinguishable, but they appear to both provide for a supplement in addition to minimum payments that cannot be undercut.

PN13

JUSTICE ROSS: Mr Gibian, look, I don't think we'll take up the suggestion that you have made of the filing of an additional note; rather, I think we would adopt the approach or suggestion in the AFPA's material filed this morning, that is that if we were minded to do something about this, we would put the parties on notice and provide them with an opportunity to respond to it.

PN14

The issue that does arise, though, is that both - well, in fact, I think most parties, but particularly yourselves and the UWU, have highlighted the complexity in the calculation in 15.2 and that's evident from the Federal Court's pronouncements on it as well, and how one goes about determining the amount that an average competent employee could earn. It just seems to have a level of complexity about it.

PN15

The evidence discloses a range of methods employed by growers to fix that rate, and yet your application does nothing about any of that complexity, a point that's made against you in the submissions of some of the employer organisations. It just seems odd that we would deal with the application for a minimum floor without addressing what's been disclosed in the hearing to be the complexity in 15.2(b).

PN16

MR GIBIAN: Well, perhaps can I say two things about that, your Honour. Firstly, we think that the uncertainty and subjective nature and complexity of the calculation that is required to make the assessment of the average competent worker as standard is, on our submission, an important reason why that provision in itself is not a sufficient provision so far as a minimum safety net standard is concerned in the absence of there being a floor to ensure that it can't be utilised either deliberately or unwittingly as - - -

PN17

JUSTICE ROSS: No, no, I understand the argument you are putting about it, but it's your characterisation of it that you have just made a moment ago that you seem to expect that we just take that into account for your purpose, that is, setting a minimum floor, but we just then don't do anything about it.

PN18

MR GIBIAN: Well, firstly, as I say, it is a less critical issue if it is not the basis of the minimum standard, and that is that there is a floor in addition. The second observation I was going to make is that whilst we haven't proposed to fundamentally change the basis of the calculation, we have included a requirement for the recording of hours at least, which would provide for some additional foundation upon which the minimum standard - I'm sorry, the competent average worker standard would be capable of being more readily interrogated and enforced. There is a real difficulty and basically a practical impossibility, in the absence of recording of hours of piece workers, for an after the event interrogation of whether that standard has been reached.

PN19

JUSTICE ROSS: No, no, I follow that from your perspective, you don't see a necessary change in 15.2(b), but given the complexity and the uncertainty, et cetera, it may be said that it creates a compliance trap for growers, and what's the purpose of that? Shouldn't the award be simple and easy to understand?

PN20

MR GIBIAN: Well, in our submission, we're making it simpler and easier to understand by at least ensuring that growers - that employees will know that they are entitled to at least the minimum hourly rate.

PN21

JUSTICE ROSS: Sure.

PN22

MR GIBIAN: And employers (audio malfunction).

PN23

JUSTICE ROSS: But that says nothing about 14.2(b). I understand what you're saying at the moment.

PN24

MR GIBIAN: I accept that, your Honour, that we haven't endeavoured to alter the way in which that operates other than providing a floor and including requirements for the recording of hours, which would assist, at least, both growers and, to the extent that there was the need for unions or regulators or individual employees to enforce that provision, to at least have some basis to do so.

PN25

JUSTICE ROSS: Okay. Well, look, as I indicated, I think we needn't delve into the other in great detail in these proceedings because, well, there would be a number of steps before we would even get to the point, but if we did get to the point, while we are conscious of the propositions that the AFPA make, the parties should be given an opportunity to say what they want to say about that and it's probably best done if we get to that point rather than done in any sort of vacuum, as it would be at the moment.

PN26

MR GIBIAN: Yes.

PN27

JUSTICE ROSS: Sorry, Mr Gibian, so you have finished addressing the questions in the statement? Is that where we're at?

PN28

MR GIBIAN: I was just addressing the uplift question, obviously. The only additional observations we wish to make about that - and I won't go into them, given what your Honour has said - is that the uplift, as we understand it, was set not merely on a risk-reward type basis, that is to compensate for the risk the employee would earn less than the hourly rate, but to take into account both the benefit to the employer and the work intensification for employees potentially involved in piece rates arrangements.

PN29

And thirdly, I think, which as is acknowledged in the note that we received from the AFPA this morning, that the piece work provision in 15.2(e) excludes overtime and hours arrangements for piece workers. We've only asked for a floor based on the minimum hourly rate, and that there ought be an uplift to allow piece workers the opportunity at least to earn additional earnings to compensate for the absence of overtime and other penalty provisions.

PN30

JUSTICE ROSS: All right. The point you just made about work intensification and that being a basis for the uplift, what's the authority in support of that proposition?

PN31

MR GIBIAN: Just overnight we were trying to find them, and we didn't find a - I had in mind that there were clearer ones than the ones that I was able to find in the time I had overnight. The note that I had is of a shearing case, AWU v Graziers Association, which is [1927] 25 CAR 626 at 631. I had in mind that there were others, but as I say, regretfully I was unable to find them overnight, having received the statement yesterday.

PN32

JUSTICE ROSS: Look, as far as I'm aware there's no arbitral authority that tells us where the 15 per cent in this award - what the basis of it is.

PN33

MR GIBIAN: I think that is right. I think that is right. There was earlier discussion about what was previously ‑ ‑ ‑

PN34

JUSTICE ROSS: Yes, but that was more about the weight of the pre-reform instruments, I think, the 12 and a half versus 15. Is there any arbitral authority around the establishment of the 12 and a half that you're aware of?

PN35

MR GIBIAN: I had recollection that there was, yes; but as I say, last night unfortunately I was unable to put my finger on it. If it would assist, I will persist in those endeavours later today or over the weekend.

PN36

JUSTICE ROSS: That would assist me, yes.

PN37

MR GIBIAN: But as I say, my clear recollection of the authorities is that the uplift was not - both in this industry and more generally, where that it exists, it's not merely in relation to a risk-reward arrangement, but to recognise that there is some benefit to the employer and additional stressors on the employee by reason of a payment by results arrangement.

PN38

JUSTICE ROSS: All right. Thank you.

PN39

MR GIBIAN: The third question that we were asked in the statement, which in part we've addressed already, was what we said about the AFPA's alternative proposal. We've said two things about that. First is that - and we made this point in our reply submissions - is that it doesn't address what we say is the fundamental difficulty with the current provisions as a minimum safety net standard in the sense that as we've already discussed, it gives rise to an uncertain, subjective, and difficult to enforce provision, which as a minimum standard is not adequate.

PN40

Secondly what's proposed in more detailed terms in appendix (d) to the AFPA's closing submissions is a complex and, on the face of it would seem to have - a complex proposal which on the face of it would seem to have (indistinct) difficulties in application.

PN41

It would seem to require at least - it appears to double the length of the clause for starters, and it would appear to require growers to do at least the following: keep a running record of designated competent workers from day to day, and as I say, that could vary from day to day; assess each new employee on a daily basis and form a judgment as to suitability, efficiency and adequacy of their work, and keep a record of that assessment; thirdly separately record the hours and produce outcome of workers deemed competent from day to day, as opposed to workers from day to day not deemed competent; fourthly calculate the output of each non-competent employee separately and compare that with the slowest competent worker, again presumably on a day to day basis, that presumably varying on a day to day basis; fifthly, separately report any work which was done which wouldn't produce a piece work outcome, cleaning up or other tasks, and pay separately by reason of an hourly rate; and sixthly, retain records of all of those matters.

PN42

In the context of an industry with known and documented issues with compliance, both generally and with respect to recordkeeping arrangements, certainly compared to a simple enforceable minimum standard of an hourly rate, the Commission would conclude that it's likely to have real practical difficulties in implementation and would be inadequate as a safety net standard.

PN43

We would add that there seems to be no evidence at all from any witness commenting upon the practicality or other of this proposal. Even Mr King didn't give evidence in that respect. And it was reasonably plain, even from his evidence, that records of that type or a process of that type was not undertaken even within a large enterprise in the nature of cost as business.

PN44

JUSTICE ROSS: All right. Mr Gibian, I should have mentioned this at the beginning, but we've obviously had the opportunity to read each parties' submissions, their closing submissions, and the aide‑memoires that have been filed yesterday, so for each of you there's no need to traverse the same ground. We're particularly interested in, where any questions in the statement were directed to you, what your answer is to those; but also perhaps the elaboration on the points made in the aide‑memoire and what you say the evidence that you refer to under the various topics should lead us to conclude.

PN45

MR GIBIAN: Yes. Thank you. I will endeavour to be as brief as I can. I know there's a lot of people who need to ‑ ‑ ‑

PN46

JUSTICE ROSS: No, no, that's find.

PN47

MR GIBIAN: There were six topics that I was going to address, and I will endeavour to address them as quickly as I can. The first I think is quite brief, but I did just wish to emphases, that is I've perhaps combined some of the subjects in the aide‑memoire that we filed yesterday, but we will follow that broad outline.

PN48

Firstly just in relation to the history of piece rates provisions, what we have emphasised, particularly in the reply submissions so far as the history is concerned, is that whilst it is true that piece rates arrangements have existed in horticulture for many, many decades, that in their origin at least they were introduced together with safeguards which don't presently exist.

PN49

Either initially - sorry, perhaps - made plain in the extracts that were contained in our submissions and also in the background paper that the Commission prepared on piece rates at Part 2.3 on page 8, that initially in the judgments of Higgins J, by reference to a minimum floor of the type that's now proposed, conscious of and on the basis of there being an identified difficulty in individual workers being able to negotiate an appropriate piece rate with an employer, who would have a much better knowledge of matters that are relevant to the appropriate piece rate to be set, and the practical unreality of an employee being able to make a fair contract in that context.

PN50

Or secondly when the minimum floor was no longer present, the judgment of O'Meagher J in 1939 by reference to a requirement which subsequently existed for many years for agreement with or approval by a relevant union in setting piece rates which would enable an indecent party with expertise and knowledge to assess whether the rate proposed by an employer was appropriate.

PN51

And it appears to be unclear from the history when that second protection disappeared, or whether it was a result of any considered deliberation of the Commission, we don't think one can draw that conclusion from what happened in the award modernisation in 2009.

PN52

We've made two observations about that. Firstly, that as Higgins J originally recognised, it is conceptually and practically difficult to imagine any employee being in a position to meaningfully negotiate appropriate piece rates. That difficulty is further accentuated by the information and the material presently before the Commission as to the changes in the composition of the workforce in recent decades, particularly the prevalence of both labour hire arrangements where neither the employer or the employee would have the knowledge necessary to assess an appropriate piece rate, and in light of the prevalence of overseas or inexperienced workers in the industry.

PN53

The second observation we make in that respect in connection with the evidence is that all of the evidence, such as is before the Commission in relation to the way in which piece rate agreements are made, makes clear that there isn't any - likely to be any genuine negotiation in relation to piece work agreements. There's no evidence of any employees being given the option of hourly or piece rates. The piece rates, so far as growers gave evidence, were determined unilaterally and generally in advance of the employee commencing work and simply presented to the employee.

PN54

Where a labour hire company's involved, the labour hire company's simply informed of the rate to be applied. What's more, the evidence is that the rates are, in some instances at least, varied unilaterally from day to day with little opportunity for any individual worker to contribute to, much less agree to, in a genuine way. That is at best the employee is informed upon turning up to work on a particular day what rate will apply. We've set out the references in that respect from paragraphs 26 to 41 of the evidentiary closing submission. We think the proper conclusion to be drawn is that a system which depends upon individual employee agreements is not sufficient to provide a fair and relevant safety net in the particular circumstances of this industry at least for piece workers.

PN55

The second subject matter I wish to address briefly was composition of the workforce and this is primarily to respond to what is said in the AFPA's closing submissions on this issue. There doesn't seem to be disagreement that there are difficulties in giving precise figures as to the - as to both the total and composition of the horticulture workforce, given particularly the presence of undocumented workers and the itinerant nature of the - particularly the harvesting workforce. It appears to be agreed that the total workforce is something in the range of 120,000 or above, given the presence of a certain proportion at least of undocumented workers.

PN56

The primary intent of the AFPA's submission as we - on this subject matter particularly at paragraphs 11 to 13 of its final submissions, appears to be to downplay the proportion of workers who are working holidaymakers or in particular - or temporary migrant workers more generally. It is suggested in this context that working holidaymakers are between 21 and 33 per cent of the workforce. In our submission, that is at least to some extent, misleading at least as relevant to this proceeding. We make two observations in that respect.

PN57

Firstly, the total figure that was put to Dr Underhill in cross-examination of 119,000 was derived from the ABARES publication at page 516 of the court book, by way of adding a figure of around 63,000 overseas workers to a figure of 56,000 Australian seasonal workers given for the February 2019 period. The paragraph that's taken from the top of page 516 in the court book in the publication 'Labour use in Australian agriculture' makes plain the large degree of varied ability in that respect in the - from month to month in the total workforce, and that is the - the numbers vary significantly and would be significantly lower than that at other times of the year.

PN58

Secondly, the relevant issue for the purposes of this proceeding really ought focus upon the seasonal hubs of the workforce. It is that workforce that is obviously enough mostly likely to be remunerated by way of piece rates arrangements because of the nature of the work being picking work. The evidence of grower witnesses such as it is, is that they generally have a number, be it a smaller number of year round employees remunerated on an hourly or weekly basis who perform a different type of work in the maintenance of the farm and the like, and that it is - the piece work's arrangements are used as one would expect in the harvesting periods. So it's really so far as looking at piece rates arrangements concern concentration of beyond seasonal harvesting workforce. In that respect the data primarily is that taken from the NALAC - the National - I've forgotten the acronym now - publication. Particularly at page 514 of the court book, which identified in 2018/19 period a figure of 35,000 working holidaymakers and some 12,000 other seasonal workers program.

PN59

JUSTICE ROSS: Sorry, is the court book reference for that - you said 514 or is it 1306 in your - - -

PN60

MR GIBIAN: Yes, I'm sorry, 1306 is the commencement of that document. The figure in relation to the seasonal worker program and the working holidaymaker numbers is at page 1514.

PN61

JUSTICE ROSS: 1514?

PN62

MR GIBIAN: Yes. Then the second reference I was going to make in that respect within that same document was at page 1397, which is the - in the middle part of that page refers to a figure of 57 per cent of casual and contract employment in the 2019 period, being comprised of overseas workers in harvesting in 2019. A figure referred to by Dr Underhill in her report - initial report.

PN63

If you take those figures together, we think that - and again everyone I think accepts that this is in somewhat rough terms, that in terms of a seasonal harvesting workforce we're looking at something under 100,000, probably 80 or 90,000 or so, of which overseas workers primarily either working holidaymakers or on the seasonal workers program would be at least 50 to 60 per cent of that component, that workforce. And that working holidaymakers would be at least in the range of 40 to 50 per cent of the harvesting workforce in that sort of 18, 19, 20 period. That is the relevant proportions, in our submission, that the Commission would look at for the purposes of the workforce most directly affected by the piece work provisions in the Horticulture Award.

PN64

We've added an addition reference in that respect to an article which I think we referred to in earlier submissions and to which reference is made in the Commission's research reference list, that an article by Ian Campbell entitled 'Harvest Labour Markets in Australia'. That publication it's the Journal of Australian Political Economy, so it's volume 84, commencing at page 46. There's a portion of that article from page 58 to page 61 under a heading 'Changing Size and Composition of the Seasonal Workforce', which appeared to us to provide a useful overview. It's not an additional primary source, but it provides a useful overview of the available data and studies as to the changing workforce composition within the seasonal harvesting workforce.

PN65

In brief overview, at page 58, there's an indication of the difficulty in providing an estimate as to the overall workforce, but the broad shifts in composition are more straightforward, that temporary migrant workers have, over the last 20 years or so, dramatically increased in significance at the expense of Australian itinerant workers, which were a significant proportion of the workforce 15 to 20 years ago, and that the harvest workforce is now weighted to the three temporary migrant worker groups, being working holidaymakers, Pacific Island workers through the Seasonal Workers Program, and undocumented workers.

PN66

There's a suggestion that the figure given in this article is - that an even greater proportion of seasonal workers are from one of those groups, up to around 70 per cent, somewhat higher than the 57 per cent given in the (indistinct) publication and, at page 60, in the bottom part of the text on that page, that working holidaymakers are likely to constitute around 50 per cent of the harvest workforce, with a smaller proportion under the Seasonal Workers Program, around 15 per cent of the seasonal workforce in that category.

PN67

As I say, that appeared to us to be a useful alternative, at least, summary of the available sources, broadly consistent with what I have said the Commission ought find in relation to the seasonal harvesting workforce, which, as I say, is the relevant portion of the workforce to which attention would be directed for the purposes of the present proceedings.

PN68

JUSTICE ROSS: Mr Gibian, you would be aware that in the AFPA's submission and in the response to questions filed this morning, in their submission - well, they identified that there were a number of sources in the reference list that were not in evidence in the proceeding and that we ought not have regard to them and I have identified those in their note filed this morning and, at 7, they refer to the Campbell article. So, to the extent that you want to rely on the Campbell article, you should tender it. To the extent that those other interested parties wish to comment on the article and the parts that you have taken us to, they could have leave to file a note on that by 4 pm next Friday. That would be the way we would propose to deal with it, but do I take it that you want to tender that article, Mr Gibian?

PN69

MR GIBIAN: If that's a convenient course, yes.

PN70

JUSTICE ROSS: Is there any objection to that course, subject to what I have indicated, that you would have an opportunity to file a note commenting on it?

PN71

MR DALTON: No, your Honour.

PN72

JUSTICE ROSS: Thanks, Mr Dalton. I don't see anyone else objecting, so I will mark the Campbell article entitled "Harvest Labour Markets in Australia" and mark that exhibit AWU30.

EXHIBIT #AWU30 CAMPBELL ARTICLE ENTITLED 'HARVEST LABOUR MARKETS IN AUSTRALIA'

PN73

As I have said, other interested parties will have an opportunity to file a note commenting on what Mr Gibian has said about that article and about the article itself by 4 pm next Friday. Thank you, Mr Gibian.

PN74

MR GIBIAN: Yes, could I just have a moment, your Honour?

PN75

JUSTICE ROSS: Yes, certainly.

PN76

MR GIBIAN: Yes, thank you, your Honour. Just in relation to the AFPA's submission in that respect, it's a matter for the Commission, of course, but, in our submission, the Commission is not restrained from informing itself as it considers appropriate and it's clearly put the parties on notice that there are relevant publications to which some regard may be had in the Commission's deliberation of the proceedings. We don't think there is a strict limitation upon the capacity of the Commission to refer to other matters in the references if it's useful to the Commission's determination, but, as I say, it is a matter for the Commission, of course.

PN77

JUSTICE ROSS: I agree with part of that, and that is we can inform ourselves as we see fit, but the reference list was prepared by Commission staff. We didn't put the parties on notice that we would have regard to matters in the reference list that were not tendered, and if there is something on that list that has not been tendered that a party wishes to draw our attention to, as you have just done with the Campbell article, then you are free to do that and seek to tender it and we will provide an opportunity for others to comment, but, subject to that formal tender, speaking for myself, I would be minded to adopt the approach that the AFPA has identified, that is, we wouldn't have regard to material that's not been tendered or isn't referred to our dealt with in one of the expert reports, for example.

PN78

There are a number of - Mr Dalton or the AFPA has identified in an annexure to their note the matters that have not been in evidence in some other way. If there's something in there that a party wants to draw our attention to, then they can do that, but that will be subject to other parties being given an opportunity to comment.

PN79

Okay, thanks, Mr Gibian. Yes, go on.

PN80

MR GIBIAN: Yes, may it please. That was what I proposed to say about the evidence in relation to workforce composition. In summary, we think when one looks at the seasonal harvesting workforce, we think it is overwhelmingly overseas workers in the clear majority and that working holidaymakers, at least up until the pandemic time, were at least 40 to 50 per cent of that workforce, supplemented by the Seasonal Workers Program and a not insignificant number of undocumented workers.

PN81

The third subject matter, which really is covered in (c) and (d) in the aide memoire that I wanted to address is the critique that's made of Dr Underhill's research and other research survey-type material that is before the Commission. That is particularly in the AFPA's submissions. The approach that is invited by the AFPA's closing submissions is to suggest that each survey, research document or study, perhaps with the exception of Dr Underhill's research, to some extent at least, should be given no probative value at all on the basis of a methodological critique based upon the assertion that those studies don't produce outcomes which can, in a strict way, be seen as representative of or reflective of the whole of the horticulture workforce. We wanted to make three points in relation to that approach.

PN82

The first is that the approach advocated by the AFPA involves an attempt to look at each piece or each study in isolation from the rest of the evidence. It is an attempt to critique the study or piece of research in isolation, and not to look at the research as a whole.

PN83

The circumstances in which - which is before the Commission is that there is a wide array of studies, reports, investigations by academics, unions, and government bodies, all of which support the general thrust of a conclusion that there is a significant problem with the earnings of piece rates workers in particular seasonal harvesting work. And we note in that respect that Dr Underhill in her initial report at page 490 of the court book at paragraph 37 gives what is in itself an expert opinion in relation to the other research, that all of the research supports that broad conclusion.

PN84

We accept of course that the various surveys, studies or investigations that are before the Commission differ in degree and nature, and in the methodological approaches which have been adopted, and that no doubt affects the weight individually or the significance individually which would be attached to any specific study.

PN85

But it is in our submission very significant that really all of the research points in one direction in this respect, and there is no study of any type that points in any clear way in the opposite direction, that is that there is no problem of significance with the piece work arrangements in the horticulture industry and the rates of pay which are consequent upon those piece work arrangements.

PN86

Each of the various studies and investigations which are before the Commission support and bolster the conclusions of the others. And it's not possible to say that no probative value or no weight at all would be given to the various studies that support that broad conclusion. Can we give some - and I can do this by merely identifying the places in the Court Book - give some examples.

PN87

Firstly the Wage Theft report, that of Berg and Farbenblum, which commences at page 878 of the Court Book, involved a survey, which at page 889 is indicated involved some 4322 participants who were temporary migrant workers. And that covered a broader area than horticulture of course, but included horticulture workers. And that page 907 to 908 involved - indicated 15 per cent of those earned less than $5 an hour; 31 per cent, less than $10 an hour, for example.

PN88

Do we say that that report can in some strict statistical sense be extrapolated to all of the horticulture workforce, whether it be harvest workers or not, or whether it may be temporary migrant workers were not; we don't say in a strict statistical sense that's possible. Is it a study which is of significance in identifying an issue, a significant problem with the pay outcomes which result from piece work arrangements in the horticulture industry; we say of course it is.

PN89

Secondly the Fair Work Ombudsman's enquiry, which commences at page 994, particularly at page 1022, identified significant problems with the misuse of piece work arrangements, including in relation to failures to document and have piece work agreements in place. Is that relevant in assessing whether there is an issue or whether the piece work arrangements give rise to an appropriate minimum safety net; of course it is.

PN90

The NUW Farmworkers Speak Out report, to which I think particular reference is intended to be made in oral submissions, commences at page 1636 of the Court Book involved, as is set out at page 1641, in-person interviews with 650 farm workers. We accept that this was a study which was conducted by in-person interviews arranged primarily through two mass meetings organised by the union at two particular locations.

PN91

Obviously there would be, we accept, a degree of self-selection bias involved in the top of process, and obviously it was limited to those two particular regions. But again we say that that doesn't mean it is not of significance and of probative value in assessing whether there is a significant issue with the pay outcomes consequent upon piece work arrangements in horticulture; and the outcomes of that include at page 1645 and 1646 the average earnings of something like $14.80 an hour among that cohort, 62 per cent earning below the minimum wage.

PN92

The final example the Unions New South Wales study - I'm sorry. The final dot point under point (d) on page 2 of the aide-memoire was intended to refer to the Wage Theft report commencing at page 291 of the Court Book. It involved, as is recorded at page 299 and 300, 1300 participants, 1001 of which worked on farms in the last year; their earning reported at page 310 as 15 per cent earning less than $7 an hour, 29 per cent earning 8 to $11 an hour, for example.

PN93

Again those findings are all significant in identifying whether or not it can be said that there is a significant issue or problem to be addressed, irrespective of whether or not in some strict sense they can be said to be representative of or involving a stratified sampling of the entire horticulture workforce. They suggest very strongly that the award is not acting as a proper safety net. And as I say, each of those pieces of evidence support and bolster the conclusions of the others, particularly in the absence of any country studies suggesting a different picture.

PN94

The second observation we wish to make in relation to the approach to the survey and other research adopted by the AFPA is that it - particularly the repeated assertions in the table in their final submissions that no probative value be attached to various pieces of evidence - is that the reference to probative value begs the question of "probative of what", that is probative value is referrable to what is in issue in the proceedings.

PN95

The assumption underlying the submission is that the probative value, or a piece of evidence has no probative value unless it would be sufficient to prove to a high level the precise level of earnings of horticulture workers across the workforce. That, in our submission, is to mistake the issue in the proceedings.

PN96

The matter at issue in the proceedings is whether or not it is necessary, to achieve the modern award objective, to vary the piece rates provisions to ensure that there is a fair and relevant safety net, and whether the best way to do that is by inserting a floor of minimum wages. Any evidence which goes to suggest that the award is not providing a fair and relevant safety net has some probative value in that respect. And all of the types of evidence to which I have referred fall into that category.

PN97

Individual employee experience is probative in that respect. It may not be sufficient in itself if it were the only evidence, but it is probative in that sense, in the sense that it explains that an individual employee is able to explain and individual employees called by the AWU and the UWU do so, explain their circumstances and their experience and give flesh to why the current system is unable to provide a relevant safety net.

PN98

JUSTICE ROSS: Mr Gibian, I'm not sure I'm following that argument. It seems to me you might be conflating relevance to probative value. The evidence of an individual worker may be relevant to the matters in issue in the proceedings but I don't think it would be contentious that the weight we would attribute to that, similarly to the evidence of a single employer in an industry with mainly employers, would not be as great as the weight one might attribute to evidence of a number of employees or a number of employers, either sourced through a survey or some sort of focus group research. So it's - I don't think it's suggested that it's not relevant. It's suggested that for the reasons outlined it has no probative value.

PN99

MR GIBIAN: I accept the thrust of what your Honour says, at least in the first part of your Honour's observations. That is obviously we accept that individual experience or the weight to be attached to it is limited because it is individual in nature. Obviously in a qualitative sense it is able to explain in some respects why it can flesh out why an individual employee is likely to have difficultly in meaningful participating in a piece work agreement or being able to judge or assess the nature of a piece rate which is or adequacy of a piece rate which is offered. But I accept in a broad sense what your Honour has said.

PN100

We don't think that leads to a conclusion that there's no probative weight or no probative value at all which appears to be the submission which is put, both in relation to the individual evidence but also in relation to all of the other studies as I apprehend it. But I accept the broad thrust of what your Honour's said.

PN101

The second observation I was going to make in that respect is that evidence of a survey type or investigations or studies that have been conducted which indicate that the award or support the conclusion that the award fails to provide a fair and relevant safety net for a significant segment of the workforce is obviously significant, and would be sufficient in itself to demonstrate that the award fails to set a figure and minimum safety net. In this respect, as we've said in the final factual submissions, it's not necessary for the Commission to make specific findings as to the average or median earnings of all piece workers to resolve this proceedings, nor given the uncertainty of the workforce composition would that be possible. It is sufficient, in our submission, that the Commission be as satisfied as it can be that there is a substantial problem with the pay outcomes that are experienced by piece workers as a consequence of the provisions of the award. That the award is not in those circumstances providing a fair and relevant safety - minimum safety net. As I say, one would form that conclusion looking at all of the evidence together, not looking at each piece of evidence and endeavouring to attach a label of probative or not to each individual piece of evidence.

PN102

Each piece of evidence has some probative value, noting what your Honour has said - your Honour the President has said in relation to the weight that can be attached to particular pieces of evidence therein. All of it has some weight and we say in substance all of it points in one direction in terms of the conclusion the Commission ought to draw as to the adequacy of the present award provision so far as piece workers are concerned, providing a fair and relevant minimum safety net.

PN103

The third issue that I wish to address briefly is to respond to the criticisms of Dr Underhill made by Mr Houston and in the AFPA's submissions. Can I commence that issue by making initial observations in relation to Mr Houston's experience and background. As we've observed in the submissions he professed to have no particular knowledge of horticulture, he had not conducted survey research of the type which he was critiquing, nor had he ever previously undertaken an exercise of critiquing research of that type.

PN104

His first report in particular in that context is an example of an attempt to counsel a degree of impossible perfection so far as social science research methodology is concerned. An assertion that one would need to have a perfectly stratified sample representative of the constitute element to be research population. Dr Underhill has responded to that in her reply statement marked as AWU17, commencing at page 321 of the court book, to explain why that perfect arrangement is impossible and that a non-probability sampling approach is the best and only available approach.

PN105

Coming to the substance of the criticisms, they really fall into two categories identified within Mr Houston's first report at AFPA6 at page 3128 of the court book, at paragraph 32. The first is the assertion of the sample used in the research studies or samples used in the research undertaken by Dr Underhill and Professor Rimmer were not representative. And the second is the samples would contain or be affected by self-selection bias.

PN106

Can I deal with those two (indistinct) in turn. Firstly, so far as the representativeness of the samples is concerned, ultimately it becomes obvious that the criticism was principally one. That is that the studies concentrated on the working holidaymaker portion of the workforce, rather than the whole of the horticulture workforce. Mr Houston made clear ultimately in his reply - or supplementary report I should say, AFPA7 which is not in the court book, at paragraph 35, and in his oral evidence particularly at PN3827 and 3828, that he did not criticise or have criticisms of the reports or the studies themselves undertaken by Dr Underhill, but rather his observations were as to the capacity to generalise the findings made in those studies to the horticulture workforce as a whole because of the concentration of those studies on the working holidaymaker or temporary migrant worker portion of the population.

PN107

Within that workforce it was ultimately accepted that it was possible to apply and appropriate to apply, to produce at least useful approximations, appropriate statistical measures, including the men with the new test to determine whether there were significant - statistically significant differences between the outcomes for hourly worker and piece rates employees as a consequence or demonstrated by those studies. Mr Houston in his supplementary report AFPA7 at paragraphs 26 to 28 and in his oral evidence at PN3955 to 3959. Again, the only issue raised was the degree to which it was possible to generalise from those studies to the workforce, the horticultural, as a whole.

PN108

On that basis, so far as least as to the comparator between hourly worker earnings and piece worker earnings, there does not appear to be dispute that Dr Underhill's studies do demonstrate a statistical significant difference between pay of hourly and piece rate workers to the disadvantage of piece rate workers or piece workers, not explained, not otherwise explained, at least so far as the target population of those studies was concerned, the working holidaymakers in particular and temporary migrant workers in particular. Those differences were not explained by other aspects raised in Mr Houston's first report, particularly the issue as to whether there was a like to like comparison of hourly rate workers and piece workers. Dr Underhill made clear in her supplementary report in reply, AWU17, that the subjects of the survey studies were performing or overwhelmingly performing the same work, whether hourly workers or piece rate workers.

PN109

As we understand it, there is maintained a position by the AFPA that the same cannot be said in relation to the absolute value of the earnings, that is as to whether or not the amount of the average earnings, mean or median earnings, of piece workers derive from the studies that Dr Underhill undertook are capable of extrapolation even within the working holidaymaker or temporary migrant worker populations. As we understand it, the concern raised in that respect as to the effect of self-selection, or potential for self-selection, bias, in short, that disgruntled workers are more likely to participate in the surveys and, for that reason, in terms of absolute value, the outcomes are likely to understate the average or median earnings of piece workers.

PN110

In that respect, we comment as follows. Dr Underhill accepted that there was a potential for a degree of self-selection bias and that was unavoidable given the steps that need to be taken to conduct a study of this type with a population such as the horticulture workforce, but she explained the steps that were taken to endeavour to control and to limit the degree to which that would affect the outcomes of the research, including undertaking a process of conducting focus groups prior to the survey to identify the composition of and the best or optimal mechanisms for addressing, sorry, accessing that population, by covering the various major geographic regions in which seasonal harvesting work is undertaken and in providing incentives for persons to participate in the surveys and focus groups so as to encourage disinterested persons to participate. Mr Houston, particularly at PN3871 to 3872, accepted that those are exactly the type of steps that one would take to limit the effect of self-selection bias.

PN111

We also emphasise in Dr Underhill's reply report, AWU17, at court book 321 at paragraphs 4 and 5, the national and international recognition of this research as a stand-out research in accessing difficulty to access populations such as an itinerant seasonal horticulture workforce, and that attests to the standard and quality of the research that was undertaken. The Commission can be satisfied that this was high quality social science research, that appropriate and available steps were taken to limit the effects of any self-selection bias, and that any lingering self-selection bias which was unavoidable would no more than moderate to a marginal degree the outcomes of the research.

PN112

We say that, in the context in which one is looking at the absolute earnings outcomes, colloquially it's not close, that is, this is not a case in which the earnings of the piece workers were marginally below hourly rates or marginally below the target earnings of piece workers, they were very substantially below, that is, as is set out in the tables in Dr Underhill's initial report, AWU16, at page 486 and 487 of the court book, the difference between the mean and median earnings of piece workers subject of the study were very much below the average competent or even minimum hourly rates, the difference in the 2014 study being a mean of $11.69 and a median of $12 compared to the average competent worker target of $19.40; in the 2018 study, a mean of 16.28 and a median of $15 compared to an average competent worker target of $26.29.

PN113

It is in that context that one would look at whether or not weight should be attached to those outcomes. In our submission, clearly the effects of any self-selection bias would, at most, marginally affect the degree of that difference.

PN114

Finally in that respect, in our submission, we don't think the Commission would infer that, although Dr Underhill's reports concentrated on the working holidaymaker and temporary migrant worker categories, that one would simply infer that there are no problems with payment of piece workers for the remaining population. The problems for the undocumented portion are likely to be even more severe, as I think this acknowledged. So far as there is a remnant local itinerant harvesting worker population, there is no positive evidence for the Commission that the piece work arrangement are different or more satisfactory for that cohort. So far as there is evidence of it in relation to the grower witnesses before the Commission, it was that they simply set a rate for the workforce, not differentiating between the working holidaymaker or other migrant worker part of their workforce and any local workers, of whom they all attested to have - or many attested, I'm sorry - to have some, and, thirdly, that the economics would suggest that, as matter of logic, it is unlikely that the other part of the workforce would be able to be paid very substantially more than the 50 to 70 per cent of the workforce that are temporary migrant workers or 40 to 50 per cent who are working holidaymakers.

PN115

That was what I proposed to say in relation to the treatment of the survey and other research reports.

PN116

The fourth matter that I was going to address was briefly to address the competent worker concept, or the average competent worker concept. The Commission, in its earlier background paper, provided a summary of the approach that the Federal Court has taken, particularly arising out of the judgment of Justice Rangiah about concept, and I think all the parties agreed that the summary was appropriate, that it would involve assessment of the average competent employee, requires ascertainment of the hypothetical available workforce assessing and excluding those who are not competent, considering the rate of pick of the average worker among the hypothetical competent workforce. Take into account personal characteristics and the features of that workforce, experience, skills and the like and external factors such as crop weather, time of year et cetera.

PN117

All of that, as we've already discussed, gives rise to the degree of uncertainty and the like, which we say makes that standard inadequate as a minimum safety net. The evidence of the grower witness subsidies is that there was a wide variety of methods used to calculate what was asserted to be an appropriate rate. All of the witnesses accepted that the average rate, pick rate, or the pick rate of the workers generally would vary considerably both between different farms, different parts of the same farm, from day to day based upon weather conditions and other factors, such that it was very difficult to place any certain or make any certain assessment of the pick rate that could be expected of workers generally or of an average competent worker.

PN118

We note in particular Mr King's evidence at PN3310 to 3312, that in his understanding of Costa's operations in the berry business, it regarded competence as a matter - as a concept that would vary day to day. That an individual work could be competent one day and not competent the next day based upon a relationship to the average pick rate. That, in our submission, demonstrates the uncertainty and difficulty in application of the concept.

PN119

The second observation we wish to make in relation to the average worker to concept - average competent worker concept is that there is a significant submission made that the floor of minimum hourly rates is not justified because of the presence of a - at any time significant cohort of incompetent workers. We did just want to respond to that and there's two matters that we raise in that respect.

PN120

Firstly, we don't think there is any basis upon which the Commission would conclude that workers who are performing work and are training or learning the job for a period of time ought be entitled to a lower - a rate of pay lower than the minimum rate for a level 1 employee under the award, noting that the level 1 classification includes it as being the rate appropriate to an employee involved in induction in training. We note in that respect Mr King's evidence at PN3373 to 3374, that in fact Costa was trialling at least paying new employees on an hourly basis during a training period on the basis that that was a fair way to remunerate those employees, and as a method as I apprehended it of retaining those employees and not losing their labour because they were earning an inadequate for the - during a training period.

PN121

The second observation we make in that respect is that the evidence - and we've set it out at paragraphs 110 to 113 of the factual submission - supports the conclusion that the proposition that it takes some weeks to become - for workers generally to become competent is exaggerated, and that even the grower evidence, particularly from the Farmers Federation was such as to indicate that generally workers would become competent within a number of days. So far as pick rates are concerned within a number of days or at least within a week, and that that this is not an issue of significance in determining whether a minimum floor ought be included in the award.

PN122

The fifth subject matter and the second last which I wish to make reference is the question of compliance and enforcement. A central submission advanced by the Farmers Federation in particular is that the - to the extent that there are concerns as to the payment of piece workers under the award, it is a question of compliance and ought to be solved by enforcement. As we've indicated in the reply submissions, it is - that is not a submission which ought to be accepted. The nature of the award provision is such as to contribute to noncompliance and the difficulty with enforcement. As we've discussed, the subject is subjective, uncertain and uncertain nature of the standard is an enormous impediment to compliance and enforcement as the Fair Work Ombudsman had observed.

PN123

We just wanted to emphasise that point by reference to the outcome of the majority judgment in the appeal in Hu, namely that workers - piece workers or workers under a piece work agreement with an inadequately set rate do not default to the hourly rate but rather are entitled to the piece rate which ought to have been set.

PN124

Now on its face that mightn't be a more beneficial outcome in the sense that the rate that ought to have been set ought to have allowed that employee to earn 15 per cent more than the - at least an average competent employee to earn more than 15 per cent above the hourly rate, but we did wish to emphasis that what it would require is going back up to six years later after the work had been performed to determine the group of competent employees that existed at the time that the inadequate piece work arrangement was in place. Determine the pick rate of the competent cohort of employees that existed at that time. Determine the average rate at which those employees ought to have been paid over the hours worked and to do so in the absence of there being any requirement for hours of work to be maintained - records of hours of work to be maintained, much less any record of who was competent and not competent among the employee cohort at a particular time.

PN125

This is to set up what would appear to be a quite inadequate or impossible task of enforcement. It may be possible to prove that the rate was not adequate as it was in Hu on the basis that in that case none of the employees were able to pick at a rate which would have earned them 15 per cent above the hourly rate. But in that case the ombudsman didn't attempt to prove that there was - what the rate ought to have been, which would be necessary under that approach to recover any underpayment.

PN126

As Bromberg J observed, that is to be compared with the certainty and clarity of a minimum time based payment.

PN127

JUSTICE ROSS: Mr Gibian, were there any subsequent proceedings, as in was there any - was that matter taken any further, was there ultimately an order made for the payment of any amount?

PN128

MR GIBIAN: I did have a look into that and I couldn't find anything, your Honour, that explained what happened.

PN129

JUSTICE ROSS: Okay. Thank you.

PN130

MR GIBIAN: We'll make some further inquiries if we can but as I say, when one even just looks conceptually what was necessary data, certainly in the original proceedings the approach taken by the ombudsman was not to seek to prove what the rate ought to have been but simply prove that piece worker agreements had been entered into which did not have an adequate or the rate in those agreements was not adequate. Obviously in the context of its submission that there was a default to the hourly rate in that circumstance.

PN131

The final subject matter that I wish to address quite briefly is the grower evidence primarily from the National Farmers' Federation. As we have discussed, obviously, in our submission, not too much can be made of that individual and anecdotal evidence and, in a general sense, one would not expect growers whose piece worker arrangements were seriously deficient to want to come forward and put on evidence before the Commission. However, we have observed an endeavour to describe in the factual submissions that even that evidence demonstrates significant difficulty by the application by even those growers of the piece work arrangements in the sense that they demonstrated no genuine negotiation or consultation in relation to the setting of piece rates, a variety of methods which are used to set those rates, and adjustment of piece rates and that, in a number of instances, in terms of earnings for the employees appeared to be problematic.

PN132

In terms of the additional research documents provided by the Commission of Mr McClintock and Mr Kelly, we did want to just make a couple of observations. The information note in relation to Mr McClintock, the initial document provided averages of all of the records, as we understand it. The supplementary provided more information as to comparison with both the minimum wage and the minimum hourly rates and target for piece rate employees.

PN133

The observation we wish to make about that, about Mr McClintock's records, which were AWU21, is that they demonstrated very substantial differences in the outcomes between different cohorts of employees which perhaps aren't necessarily reflected by an examination of averages alone. As we understood his evidence, it was that the documents that were AWU21 contained separate sheets for separate labour hire operators providing workers at the same time at the particular farm. The records at the commencement of AWU21 with respect to one labour hire provider demonstrated that the groups of employees, and it's apparent from pages 2, 5, 6 and following, demonstrate that all, or virtually all, of the workers engaged by that labour hire contractor earned well below the hourly rates of pay.

PN134

The averages appear to be bolstered - the same is true for the second labour hire provider, whose records commence at page 178. The averages seem to be somewhat bolstered by the third labour hire provider for which, for reasons that are not clear on the evidence, the earnings seem to be somewhat higher, and we think in that respect that just looking at the averages doesn't necessarily give a full picture, that there were cohorts of workers performing particular tasks in particular areas of the farm that were earning well below the hourly rates.

PN135

The same is true of the Costa Berry analysis document marked as AWU28, which also endeavoured produce - well, purported to show, in the absence of Costa actually being willing to produce records - purported to show a summary of averages of workforce across various regions. The overall average on the first page of AWU28 for the Berry operations showed an average close to, but albeit somewhat below - across the whole of the operations purported to show for the month of May 2021 an average close to, albeit somewhat below, the target rate, but, as we have observed, when one looks at the different regions, the average was very much below in Corindi, Coffs Harbour, in Far North Queensland and in Gin Gin in Western Australia, the overall average appearing to be bolstered by the operations in Tasmania, again for reasons that Mr King wasn't able to assist us with.

PN136

If I could just have a moment?

PN137

JUSTICE ROSS: Certainly.

PN138

MR GIBIAN: Unless there's anything I can assist with further, those were the initial oral observations I wished to make in addition to the written documents that we have prepared.

PN139

JUSTICE ROSS: Thank you, Mr Gibian. Ms Burke?

PN140

MS BURKE: Thank you, your Honour. Your Honour, I might start, if it's convenient, with a couple of the questions in the statement and then I will briefly address the NFS' written submission and then the AFPA's written submissions, and that includes addressing the first question to the UWU in the statement, because I've got a few other things to say about Dr Howe's evidence.

PN141

From the outset, can I just note something in relation to a question from your Honour to Mr Gibian regarding the post appeal events in Hu. My instructor at the UWU worked for the FWO in that case, so I'll speak to her directly and get that information and be able to hopefully illuminate that question for your Honour after the short break that you foresee might occur.

PN142

JUSTICE ROSS: Thank you, Ms Burke.

PN143

MS BURKE: Looking at the statement, the first question for the UWU concerns Dr Howe. I will deal with that shortly. The second question is at paragraph 34, which is: what does the UWU put in reply to paragraph 16 of the AFPA's closing submission regarding the potential change in the horticulture labour force? At paragraph 16, the first sentence there, which is that:

PN144

It is difficult to predict how long pandemic-related travel restrictions will continue.

PN145

Well, that's obvious and we agree with that, and the second sentence is:

PN146

However, there is no reason to expect working holidaymakers to return to pre-pandemic levels in the near future or at all.

PN147

That is just pure speculation and the UWU adopts what Mr Gibian said on behalf of the AWU in respect of that.

PN148

Then, in paragraph 35, the question is:

PN149

What findings are proposed on the basis of the material attached to the statements of Ms Tan and Ms Ablett?

PN150

Again, the UWU adopts the statements made by the AWU in respect of that, but certainly no findings in any sense can be made about what the workforce might look like in the future based on a collection of press releases and other public comments from politicians. If we had some piece of proposed law, we might be having a different conversation, but we don't.

PN151

Then in respect of the question at paragraph 38 about whether there are any award with minimum clause plus an uplift, that question has been addressed by the AWU. I will just note that there are a couple of pre-modern awards that we found that also have that sort of arrangement and, if necessary, if there are preliminary views published by the Commission on that topic, we will identify those then.

PN152

The submission made by the AWU in respect to the question about whether, if the uplift is removed, should the capacity to make a piece work agreement be retained is also adopted by the UWU.

PN153

Similarly, the UWU adopts the AWU's submissions on the AFPA's proposed variation. I just want to note additionally that the AFPA's proposal does not resolve what is - the fact that employees bear 100 per cent of the burden of risk that the employer gets the average competent worker calculation wrong, given the asymmetry between grower and worker. And the AFPA's proposal does nothing to address that. And it does in fact, as observed by Mr Gibian, make the award substantially more complicated, not less complicated.

PN154

Turning brief to the submissions of the NFF, there are just a couple of points I want to address. The first is the submission that - or it seems to be that the failure by certain workers, certainly the workers who gave evidence for the UWU and were cross-examined - the failure by those workers to make complaints is described as a lack of enforcement, and it's extrapolated from that that there is accordingly limited enforcement in the award; and then at paragraph 5(d) submitted that amending the award could not be a panacea for that lack of enforcement.

PN155

In response just want to observe the really self-evident point that workers have all sorts of reasons for not making complaints about their pay under the Horticultural Award. It's a stretch to describe those reasons as a sort of broad limited - level of limited enforcement. And of course the evidence from the key regulator directly in the Harvest Trail report, which is referred to in the UWU's submissions at paragraph 92, that the Fair Work inspectors' ability to enforce the award is compromised by the absence of records.

PN156

So in respect of the timekeeping variation proposed, at the very least it is absolutely the case that a variation could and would go some way to improving enforcement. Then the NFF has some things to say about the negative consequences of granting the variation, and suggests that evidence from pickers, Mr Fatui and - I don't know whether it's Mr or Ms Uata - that each of those was a powerful statement about the negative consequences of granting the application, and should be fully accepted.

PN157

I will just observe that Mr Fatui's evidence suggests on its face that he was under the impression that the proposition was to abolish piece work altogether, and so his evidence on that topic must be treated with a great deal of caution. And Uata is not a picker at all. This person worked on farms for a little while after school, and has since - gives evidence as somebody who is a member of the community in Griffith.

PN158

And then finally as to the NFF's survey evidence, the submission is that it should be given considerable weight. It's still not clear to me at least from the NFF's submissions what findings the Commission is being asked to draw from that survey, but in any event that survey is, in my respectful submission, transparently unreliable. It fails each of the criteria identified by the expert panel in the annual wage review, the 2013 annual wage review at paragraph 442; and there are the other issues with the questions, and certainly some of the answers that are identified in the UWU's submissions.

PN159

Turning now to the submissions made by the AFPA, there are four things that I would like to address arising from those submissions: the first concerns various matters relating to the evidence of Dr Howe; the second, and relatedly, is the AFPA's reliance on the Omnipoll survey of vegetable growers; third, something briefly about the vulnerable nature of the workforce; and then fourth, the identification of a series of propositions made by the AFPA that are unsupported by the evidence.

PN160

In relation to those last three points, in particular I want to make this broader observation, that in their submissions the AFPA set up a particular standard of evidence to which it says the Commission must adhere, that is:

PN161

Robust statistical evidence which is representative of the examined population, free from bias, and mathematically sound.

PN162

But it then selectively excludes from that standard certain evidence that, not coincidentally, it relies on in support of its position. So for example on page 15 of their submissions at the AFPA say in respect of the lay evidence that:

PN163

Anecdotal evidence from a small number of witnesses handpicked by interested parties has almost no probative value, and that generalised assertions about pay outcomes in the industry from, among others, growers, has almost no probative value.

PN164

And yet Mr King's evidence, the one lay witness called by the AFPA, is extensively relied on by the AFPA in its written submissions. Mr King of course is a grower, he's a lay witness, he was handpicked - I assume that pun is intentional - to give evidence by an interested party. I will come back to the specific propositions made by the AFPA that rely on Mr King's evidence in due course, but that is relevant context.

PN165

First, in the statement the Full Bench asked the UWU to address the weight that should be attributed to the evidence of Dr Howe in her first statement at paragraph 19. That statement needs to be understood in its proper context, and the purpose for which the UWU is relying on it. The UWU does not submit that the Commission should find as a matter of fact that piece workers earned less than $15 an hour. And as Mr Gibian said, it is not necessary for the Commission to make a finding of the precise mathematical amount by which pickers and horticultural workers are underpaid in order to vary the award.

PN166

The finding that the Commission is asked to make on the basis of Dr Howe's report and other evidence is that piece rates are generally set at levels which means that workers do not earn at least minimum award rates. In his first statement Mr Houston stated his conclusion that the Towards a Durable Future report does not quantify in the mathematical or qualitative sense the average pay received by piece rate workers. That is of course correct, and neither the UWU nor Dr Howe contended that to be the case.

PN167

The question in the statement refers to the recent observation of the full bench in the SCHADS decision concerning the weight be given to a statement of an expert where the basis of the opinion is not expressed and it can't be tested. Of course the principle is not disputed, but it cannot be said that Dr Howe's opinion was not tested in cross-examination, at least that part of it concerning the $15 amount was tested in cross-examination, and the AFPA has deployed a number of adjectives in its written submissions on that topic.

PN168

As to the basis of her opinion, that was the subject of detailed explanation in her reply report. Again as Mr Houston observed, Dr Howe's conclusion was based on the outcomes of the focus group research published in Towards a Durable Future and on other reports, which is identified in her first statement, namely the 2016 FWO report and the National Migrant Workers survey.

PN169

The conclusions in Towards a Durable Future are soundly based on the research which underpin it, and that includes qualitative data. Data of course does not mean just numbers. Mr Houston again states that qualitative data can't be relied on to draw quantitative conclusion with statistical confidence, and again no one is contesting the proposition, it's a strawman argument. But that is not to say that qualitative research is not an accepted, valuable method of social science research, and that conclusions cannot be drawn from the research.

PN170

In the same SCHADS case referred to in the statement, the Full Bench observed at paragraph 168 that:

PN171

The validity of qualitative research is widely accepted, including in the Commission.

PN172

And I'm aware of at least one occasion where the Commission itself has commissioned qualitative research. And further, and still in the SCHADS case, the Full Bench noted that:

PN173

A way to challenge conclusions expressed in qualitative research is to call for the records of interviews in question.

PN174

A path not taken by the AFPA. And finally I will just note that in the SCHADS case the full bench was critical of an expert report of Dr Stanford for, among other things:

PN175

Failing to link the opinions expressed in that report with the answers given by research participants in the focus group that underpin Dr Stanford research in that case.

PN176

But by contrast Dr Howe expressly did this in her second statement at paragraph 19. I just want to reiterate what is said in the UWU's submissions, or the point in the UWU's submissions at paragraph 48, which is that Dr Howe's evidence should be read in the context of the evidence as a whole, which is my learned friend Mr Gibian submitted, is overwhelmingly supportive of the proposition that there is a problem with underpayment of piece workers in the horticulture industry, to pick out and isolate one sentence in one report as a basis for undermining the whole of the evidence is simply illogical.

PN177

The next point in relation to Dr Howe's evidence that I want to address is referred to at paragraph 88 and footnote 101, and again at paragraph 94(a) in the AFPA's submissions, and that's an attack on the absence of the appendices from the original filed version of Dr Howe's report. This is frivolous submission but because it's been made I have to address it. Yes, it's the case that the original filed version did not contain the appendices and Dr Howe gave an explanation for it, which was that they were inadvertently left off the email due to the file size being too large to be sent by the university's email server.

PN178

Nevertheless, the AFPA say that this explanation should not be accepted, and then they make some observations about other ways to send large attachments, and about the size of their own file of the appendices, the implication being that it could send a nine megabyte file so why couldn't anyone else. Which is a frankly remarkable submission for any member of the Victorian Bar to make, given the limitations of the BCL email server. But in any event, and more seriously, there is no reason not to accept Dr Howe's explanation why the appendices were left off. She said it was inadvertent. There's absolutely no basis to assert directly or by insinuation that she deliberately withheld the appendices so as to avoid scrutiny. That is with respect a completely absurd proposition, given that the appendices are publicly available, the report refers to them. There's no way of hiding their existence. Dr Howe stated in evidence at transcript 887 that the report was provided to the AFPA and other grower groups on publication which means that the AFPA have had it since January 2019. The appendices have been in the possession of the AFPA's lawyers since at least 2 June and they were provided to Mr Houston and that there's no suggestion of any prejudice as a result of their inadvertent omission from the attachment.

PN179

Third, there is the accusation of partiality and that is addressed in the UWU's submissions at paragraph 48. The precise source of the partiality was not clear until the AFPA's written submissions were received on Monday. There at paragraph 93 it's asserted that:

PN180

The apparent partiality demonstrated by Dr Howe arises from -

PN181

And I'm quoting -

PN182

A cause she pursues in her academic research work which is improving regulation of pay and working conditions of temporary migrants.

PN183

It is not clear at all how the pursuit of improved regulation of pay and working conditions is a partisan issue. It's something that is in fact expressly relied on by the AFPA to justify their proposed variation. At paragraph 34 of their submissions, the AFPA say:

PN184

The purpose of the proposed variation is to provide additional implementation machinery to support the transparent and consistent application of the piece work rate.

PN185

And at paragraph 35(a) they say:

PN186

It is to make it easier for workers, unions and the FWO to enforce the uplift term.

PN187

Turning now to the AFPA's reliance on the Omnipoll vegetable growers survey. This survey of course is accepted from the AFPA's standards that it applies to all other components of all other evidence, including particularly Dr Howe and Dr Underhill's evidence. Although having said that of course the AFPA does rather damn that Omnipoll with fake praise calling it the least fad of the available research. Even so, there are particular limitations of that survey that has not been acknowledged by the AFPA in their submissions, and the first of those is its representativeness of growers more broadly.

PN188

At paragraph 92(a) of their submissions, the AFPA state that:

PN189

There is less reason to expect that vegetable growers are an unrepresentative cohort of growers compared to working holidaymakers.

PN190

But it certainly doesn't tell you why that should be the case. You don't need to go to it, I'm happy to read it and give you the reference but in the most recent ABARES - this is from December 2020 - labour use in Australian agriculture report which is in the court book at 511, and I'm looking at page 514 it states there that:

PN191

In 2018 and 19 fruit, grape and nut farms employed around 104,000 workers. Vegetable farms employed around 38,000 workers.

PN192

So that is the total horticultural workforce in 2018/19 was 142,000, at least in terms of people employed. People might have been - the same person may have been employed in different places. But of that 142,000, vegetable farms employed just 26 per cent of all workers, and there's no reason to think that those proportions have radically changed since 2013. I'd just ask that the Full Bench recall that the AFPA say that between 21 and 33 per cent of the total horticultural workforce is working holidaymakers, and yet the vegetable growers survey is representative of growers more broadly but working holidaymakers aren't representative of anything.

PN193

The second limitation in the Omnipoll survey is the sample size of vegetable growers. As the AFPA note at paragraph 91(b) of their submissions:

PN194

The pick vegetable grower body has identified 1552 contacts.

PN195

Which the AFPA states as samples go is a very large proportion of the total population of just over 4000 vegetable growing businesses. But those numbers are quite unreliable. As the survey noted 540, that is over a third of the 1552 contacts, were not vegetable growers at all. That's in the UWU's written submissions at paragraph 47. It does call into question the robustness, to borrow a favourite word, of the pick body's contact list.

PN196

I just note that - - -

PN197

SPEAKER: (Indistinct).

PN198

MS BURKE: I'm sorry.

PN199

JUSTICE ROSS: No, that's all right, Ms Burke. Whoever that was, can you just make sure everyone that you've got your microphone on mute please. Thank you, Ms Burke.

PN200

MS BURKE: Thank you. In respect of the growers answer to the question which the AFPA is particularly focused on, just 64 growers answered that question. That's 1.5 per cent of the population of vegetable growers, which you'll recall employs just 26 per cent of all horticulture workers. So in my respectful submission, the AFPA's reliance on the Omnipoll vegetable growers survey is very clearly an exercise in special pleading on the part of one single piece of evidence.

PN201

The third issue that I want to address regards the vulnerability of the workforce. In their submissions at paragraph 15 the AFPA state that:

PN202

Pacific Islander workers are generally less vulnerable -

PN203

This is contrast to working holidaymakers -

PN204

Because the scheme under which they are brought is in highly regulated.

PN205

Now to the extent that suggests that Pacific Island workers or seasonal workers brought under the seasonal worker program are not vulnerable, that proposition is disputed and there's significant evidence to that effect, including in the Fair Work Ombudsman's Harvest Trail Report, this is at court book page 1010, which states that the Commission, I beg your pardon, the ombudsman considers temporary visa holders as vulnerable workers, doesn't distinguish between types of visa holder. In the submission made by the NUW to the Joint Standing Committee at court book 2370 to 2372, which makes the obvious point that workers on those visa programs are highly dependent on their employer, who is their visa sponsor. Their right to stay in the country is linked to their employment, meaning workers are often reluctant to speak out about issues for fear of losing their jobs. That self-evident point really is also made in Towards a Durable Future where the authors, the project authors observed that the tarred nature of the SWP produces worker vulnerabilities and that's at court book 2566.

PN206

Finally, I just want to identify the numerous propositions made in the AFPA's submissions that have no evidentiary basis at all and ought not be accepted by the Commission. First, at paragraph 23 that a substantial cohort of the workforce is not competent at any given time. The evidence relied on for that proposition is Mr King, again hand picked lay witness and a single grower, which on the AFPA standard disqualifies him to give any probative evidence.

PN207

Second, that some workers will lack motivation to pick at the speed of an average competent worker. That's at paragraphs 24 and 25. Now, as a general hypothesis, it may well be right that some workers will be more motivated than others, but that proposition has general application across the entire labour force, not just horticulture. There will be motivated and less motivated in every sector. What the AFPA does not explain is why less motivated workers should be paid below the minimum wage.

PN208

Third, at paragraph 30, it's asserted that the workforce contains a substantial cohort of slower pickers. This is really, I suppose, a subset of the proposition that there's a substantial cohort of incompetent workers, but the assertion that the workforce contains a substantial yet unnumbered cohort of slower pickers relies entirely on Mr King's evidence, which has the problems already identified.

PN209

Fourth, at paragraph 31 to 32, there is really a cascade of unsupported speculation in the submissions. All of the evidence relied on in support of those propositions is from growers. Now, the AFPA has nailed its colours to the mast on lay evidence. It cannot say that it has no probative value if it is evidence called by unions and otherwise rely on it to make good the propositions it wishes to in its submissions.

PN210

I just want to address one final point in relation to this topic and that is that at paragraph 31(a) the AFPA assert that the hourly rate will have a demotivating effect on workers. There's absolutely no evidentiary basis for that assertion, and that is something that could have been the subject of, for example, probative evidence from an expert behavioural economist, for example, and that person might have conducted analysis on the factors that maximise worker motivation in this context, but certainly there was nothing like that before the Commission to enable a finding to the effect that the hourly rate will have a demotivating effect, and I also note that in the UWU's submissions, we have observed that a substantial cohort of the picking workforce is employed on hourly rates, and one would think that if it was demotivating and attracting all kinds of lazy workers, slow workers, grey nomads with their, as I've said, unspecified lifestyle preferences, that we would have heard from at least one of them, and we didn't

PN211

On the assertion that the hourly rate will demotivate workers, there is no basis whatsoever to draw any conclusions to that effect. Otherwise, if I can just have a moment, your Honour?

PN212

JUSTICE ROSS: Certainly.

PN213

MS BURKE: Thank you. No further submissions from the UWU.

PN214

JUSTICE ROSS: Thank you, Ms Burke. I'm not sure if there are any representatives from 88 Days and Counting present in the hearing. If there are, is there anything you wish to say. Mr Bretherton?

PN215

MR BRETHERTON: Yes, I'm here. Sorry, I haven't had a lot of time to prepare because of my disability, I had quite a flare the past week, but, yes, I can add some further responses, if you wish, your Honour.

PN216

JUSTICE ROSS: Well, it's a really a matter for you, Mr Bretherton. We have got your submissions, it's whether anything arose from what the unions have said this morning or if there's anything in the material that has been filed that you wish to briefly comment on, that's all.

PN217

MR BRETHERTON: Yes, sure, just on section 34, section 284, just on providing the minimum wage objectives applies to the Commission's functions or powers. Just on point (a), we believe that piece rates create an unfair market to producers to compete as wages seem to be set below the hourly rate and it makes it hard for producers who are competing with businesses who are under paying their workers to reduce their overheads. It also hinders employment growth as the industry has high attrition rates and from Mr King's own admission, it was unable to help job seekers off unemployment benefits.

PN218

On points (b), (c), (d) and (e), the piece rates reduce social inclusion as the piece rates in their current form have significant barriers to people with disabilities, sick or injured workers, migrant workers and those on unemployment benefits as the calculations aren't clear or accessible either in many languages or in languages of people with disabilities, and they are usually presented to the workers on the day with little time to process or negotiate, which may hinder people with neurodiverse disabilities to be able to negotiate and barter with their employers.

PN219

Mr King also admitted that low wages were a factor in job seekers returning to these unemployment benefits, which relates back to point (c) of that part.

PN220

On points (b), (d) and (e), Mr King was also unsure if people with disabilities' capacity to work were calculated into the piece rate or if their piece rate was calculated based on their individual capacity, or if it was solely based on able-bodied workers, meaning disabled or injured workers were potentially at a disadvantage to be able to earn as much as their able-bodied peers. It could well be that these subclasses of workers could be deemed as unproductive workers and that evidence provided by Mr King was that some of these unproductive workers were being paid below the minimum hourly rate.

PN221

In terms of disabled workers' history, we also have been deemed as unproductive workers for a lot of our history and I see this as possibly discriminatory if we are included in this list of unproductive workers and it doesn't meet the social inclusion part of point (b).

PN222

So, yes, it's our belief at 88 Days and Counting that introducing an hourly-based rate would reduce or remove a lot of these barriers to these subclasses of employees. Yes, that's it.

PN223

JUSTICE ROSS: Thank you, Mr Bretherton. Now might be a convenient time to take a break of 15 minutes and resume at 11.50 and then we would go to you, Mr Dalton. Is that convenient?

PN224

MR DALTON: Yes, your Honour.

PN225

JUSTICE ROSS: All right. Can I ask the parties, you know the document the appendices to the Curable Futures report that includes the material about the Omni survey, if I can ask if you have got that available when we come to deal with your submission, Mr Dalton.

PN226

All right, thank you very much, we will adjourn until 11.50, thank you.

SHORT ADJOURNMENT [11.34 AM]

RESUMED [11.49 AM]

PN227

JUSTICE ROSS: Mr Dalton, we might begin by marking the two documents you wanted to tender. We've marked Dr Underhill's submission to the Education and Employment References Commission as exhibit AFPA8 and the Fair Work Ombudsman WHM Inquiry Report as exhibit AFPA9.

EXHIBIT #AFPA8 DR UNDERHILL'S SUBMISSION TO THE EDUCATION AND EMPLOYMENT REFERENCES COMMISSION

EXHIBIT #AFPA9 FAIR WORK OMBUDSMAN'S WHM INQUIRY REPORT

PN228

Thank you, Mr Dalton.

PN229

MR DALTON: Thank you, your Honour. My submission today will be in four parts. The first part will be directed at narrowing the issues and I'll take as a reference point the five principal factual propositions that the AWU has put forward in its closing submissions, and by reference to those findings, I'll refer to them as findings in this submission, I'll identify what is in contest and what's not in contest.

PN230

The second part will deal with finding 3 of the AWU's submission which is really the factual proposition they're asking the Commission to accept in respect of pay outcomes. The third part of the submission, your Honour, will address what probably shapes as the real issue in the case, certainly if the Commission were minded to make some form of variation. So we'll make some submissions about what's the most appropriate course to adopt and how the Commission should approach that.

PN231

Part four, which is really further to part three will explain our alternative variation proposal and make some submissions as to why the Commission should prefer that variation if the Commission were minded to make a variation.

PN232

So dealing with part one, narrowing the issues. Subject to two caveats, my client would not contest much of the rest of the AWU's factual propositions. The two caveats are finding three, the payment outcomes. I want to put that to one side and as I said I'll deal with that in the part two piece of the submission. The second caveat is to - is in respect of some of the other proposed findings that various alleged problems in the industry are widespread. Again, I'll put that to one side for present purposes.

PN233

So dealing with the findings in turn, finding one, vulnerable cohort. That's a finding that's expressed as:

PN234

Workforce has dramatically changed in recent years and labour force is open to exploitation.

PN235

Your Honour will see from the closing submissions that there's not much dispute between AFPA and the union parties in respect of the overall size and composition of the horticultural workforce. It's upwards of 120,000, could be 140,000, some of the uncertainty in the total number comes down to whether undocumented workers are fully captured or not, there's not a likelihood that they're not fully captured and so it could be a number of thousands on top of those estimated figures. But 130,000 is a reasonable estimate of the total workforce numbers in any given year, and that would cover anyone who's working for whatever period of time in horticulture, harvest or otherwise.

PN236

There's no dispute that the workforce is comprised of several distinct cohorts; local workers, WHMs, Pacific Islander workers, international students and undocumented migrants. There's some residual difference between the parties as to the precise proportions between those groups, in particular how big a proportion of the harvest workforce is made up of WHMs. Now on that issue we rely on our submissions, our closing submissions at section A.3. We don't think a lot's likely to turn on the exact proportions but we hold our submission that the approximate percentage is as we put forward.

PN237

We've heard some submissions today from Mr Gibian taking you to other figures that suggest that the proportion of WHMs may be higher. We have worked off the ABARES numbers and we have also made reference to the - that percentage figure of 57 per cent overseas migrants, which also my junior reminds me, that's a figure that's cited from ABARES, which is the Department of Agriculture figure. And overseas migrants of course is the overall cohort of migrants, of which WHMs are a subset.

PN238

We have the estimated figures again in ABARES of 30 to 35,000 WHMs and 12,200 seasonal worker program Pacific Islander workers. So even if you assumed no other migrants, which of course you wouldn't assume that, you would assume there are significantly more - that if you assume for present purposes no other migrants, WHMs would make up - and using 35,000 figure - 35,000 plus 12,200 for SWPs, that's 74 per cent of the migrant workforce; 74 per cent times 57 per cent - being 57 per cent the overseas migrants making up the harvest workforce, that's the harvest workforce - gives you 42 per cent.

PN239

So again - and it's clear that that figure is inflated. So we hold by the estimates that we have put forward as to the proportion of WHMs. At its highest, the WHMs would make up around 40 per cent of the harvest workforce, and a lower percentage of the horticulture workforce more generally.

PN240

There's no dispute, at least between AFPA and the unions, on two factual matters that are relevant to finding 1. First: undocumented migrants and WHMs have characteristics that make them more vulnerable to exploitation as compared to other cohorts of the workforce - characteristics.

PN241

So undocumented migrants are the most vulnerable group, and WHMs are the second most vulnerable group; and we make that submission at paragraph 15 of our closing, and it's entirely consistent with the previous papers published by Dr Howe in particular, which refers to segmentation of the workforce; segmentation being by reference to the different characteristics of the various cohorts; and also Dr Underhill, layered vulnerability, referring to the different layers again attaching to different cohorts based on their different characteristics.

PN242

The second proposition that I think there's common ground on is that prior to COVID‑19, that cohort of WHMs made up a substantial proportion of the workforce. So we say that the figures around between 21 per cent and around one third in 2019. And again as I've stated, the number of undocumented migrants is unknown, but it's a substantial number running into the thousands.

PN243

JUSTICE ROSS: Mr Dalton, can I just get you to - those two points relate to what you've described as the first finding.

PN244

MR DALTON: Yes.

PN245

JUSTICE ROSS: Can you just articulate the first finding again and where we might find that.

PN246

MR DALTON: Yes. So if you look at the AWU's submission, it's helpfully set out in a clear structure of factual propositions, and there are five of them, and there are headings for each one.

PN247

JUSTICE ROSS: Which submission?

PN248

MR DALTON: That's the AWU closing submission.

PN249

JUSTICE ROSS: Yes. Thank you.

PN250

MR DALTON: 26 July.

PN251

JUSTICE ROSS: Yes, thanks very much.

PN252

MR DALTON: Page 3, your Honour.

PN253

JUSTICE ROSS: Yes, got it. Thank you.

PN254

MR DALTON: So those two factual matters that I say that AFPA would not dispute bear upon finding 1. AFPA would also accept that the composition of the workforce has changed in recent years, but we would make two points about this. First it's not correct to paint the emergence of a significant migrant workforce in horticulture as a recent phenomenon that has really only become apparent since the modern award was made.

PN255

So for example the figures for second year visa applications granted for WHMs who performed the 88 days' work, that was introduced in 2005. Dr Underhill ‑ ‑ ‑

PN256

JUSTICE ROSS: ‑ ‑ ‑ I'm sorry. I'm not sure the AWU is dating the change from the making of the modern award; they referred to the change that has taken place over the last 20 years. Do you take issue with that proposition?

PN257

MR DALTON: No. We would accept that there's a higher number of overseas workers as compared to 20 years ago. That's what the material would suggest. But we want to make some points just to make clear that there was still a significant proportion of temporary overseas workers working in the industry in the years leading up to the making of this modern award. So we just wanted to make that relevant point.

PN258

The composition features to which the union makes reference were also features in relation to this relevant cohort that existed prior to the award being made by the Full Bench in 2020 that was the subject of that variation case that the AWU appeared in and made submissions in. So just to deal with those facts, Dr Underhill's report at paragraph 12, that's at 478 and 479 of the Court Book, she notes that it was introduced in 2005, that 88-day second year visa aspect; and it coincided with a driving up of the WHM numbers from that year.

PN259

Dr Underhill also in paragraph 12 at page 478 of the Court Book estimates that by 2006 WHMs made up 20 to 30 per cent of the workforce, which we say is quite a similar figure to the proportion of WHMs in the workforce prior to the pandemic in 2019.

PN260

The second point we want to make about this is that more recent trends show that WHMs are declining as a proportion of the workforce. So even prior to the pandemic the number of WHMs travelling to Australia declined by about 23 per cent from 2012-13 to 2017-18, according to Dr Howe's Durable Future report. I will give you the page reference for that, it's Court Book 2548.

PN261

And as we know, with the pandemic and the attendant border closures, the proportion of WHMs who have gone home has been significant; and the proportion of WHMs has further dramatically declined in 2020. Plainly there is uncertainty around the pandemic, the border restrictions, and visa regulations. So our point here is it cannot be assumed that WHMs will return to pre-pandemic levels. We cannot assume anything about the levels at which they will return to, or the timing of any such return.

PN262

The cohort of Pacific Islander workers under the SWP scheme has increased from less than 100 seven years ago, to about 10 per cent in 2019. But overall, subject to those observations, the gist of finding 1 is uncontentious from my client's perspective, that is that the substantial presence in the horticulture workforce of temporary migrant workers, in particular WHMs, engages the consideration in section 134(1)(g) of the Act, that is the need for the award to be simple and easy to understand.

PN263

Finding 2, I quote it, again working off the headings in the AWU's submission, your Honour:

PN264

Widespread problems in the use of the piece rate remuneration system under clause 15 of the award.

PN265

I want to put to one side for the moment the question of how widespread the issues are said to be and put aside some of the tendentious language in that postulated finding. But, if you really look at what the finding is about, you can see it at paragraph 2(b) of the AWU's submission. I would ask the members of the Bench to look at that paragraph of the AWU's submission, paragraph 2(b). You will see there it's about the specific award requirements around a written piece work agreement having to be made and having to be genuinely paid, so it's drawing in particular on 15.2(f), (g) and (h), and under the cover of this proposed finding, finding 2, the AWU is claiming that those provisions in clause 15.2 do not, as a matter of practical reality, provide meaningful protection against a worker being exploited under a piece rate agreement.

PN266

Again, my client would not contest the gist of that proposition, that is, provisions of that kind do not of themselves provide much protection in practice; they are only going to be as good as the protections in the mechanism for fixing piece rates, which really feeds into the AWU's finding 4, because if the mechanism is not adequately protective, those other provisions around genuine agreement are not going to offer much protection and would not be an adequately safety net, so ultimately, we get to the merits of the AWU's finding 4, which I will deal with in a moment.

PN267

Finding 3, the poor payment outcomes, as the members of the Bench will know, most of the evidence revolved around that issue and that's an issue on which my client and the union parties are probably the furthest part. I will address that shortly in part 3 and I will ultimately demonstrate that there's been significant moderation of the position on that issue, at least from the AWU's perspective, and that ultimately resolution of the specific aspects of that evidentiary contest is ultimately probably not going to make a lot of difference.

PN268

I will deal with finding 4 now. This is the finding that the standard of average competent worker is subjective and open to abuse. Again, putting aside some of the tendentious language there, we again don't contest the gist of that proposition. So, we agree that the current ACE, average competent employee, standard is problematic in two respects.

PN269

First, the test is not documented in the award. One needs to look at the case law, and in particular the Federal Court Hu litigation, to which the parties have already made reference, to find the test. So, that makes it more difficult for both workers and farmers to even know what the test is, whether it exists and what it involves.

PN270

Secondly, the test leaves a lot of room to the discretion of the employer in terms of arriving at the threshold of competence and also in terms of identifying the ACE. That makes it more difficult for the grower to set the piece rate correctly and it makes it more difficult for workers, unions and the Fair Work Ombudsman to verify compliance and to enforce clause 15.2, particularly given that there's no express obligation on an employer under clause 15.2 to record the hours worked. As I will explain later, our proposal addresses many of those difficulties and most of those difficulties. The AWU's proposal does not address them.

PN271

Finding 5 is in relation to the AWU's proposed variation to impose that explicit obligation on an employer to keep records of the hours worked and the factual proposition is that the Commission should conclude that that part of the variation would not impose any unreasonable additional administrative burden on employers. Again, the AFPA would agree with that proposition, and we would also agree with the thrust of what the AWU has put on that question as really if you are complying with the existing clause 15.2 and setting the rate properly, you would need to address the question of hours for the calculation and so you would need to do some mental process and, frankly, one would expect an employer or a grower to make a record of that mental process of recording the hours, and obviously requiring a record of hours worked would aid in enforcement, so we are common ground with the AWU on finding 5.

PN272

AS you will note from that part of the submission, there's a lot of ground here on which my client is not contesting and is not in the fray. What we do contest are some aspects going to finding 3 and that's the subject of the next part of the submission.

PN273

We say that there's limitations in the unions' expert materials and we have covered that comprehensively in our 26 July closing submission. Your Honour, we note in particular, having now read the AWU's closing submission, that it has moderated the position in relation to this issue quite considerably. If you go to their original submission at page 465 of the court book, at paragraph 22(a),you will see that the submission is made that:

PN274

The various government reports and academic studies referred to above overwhelmingly demonstrate that the majority of workers in horticulture who are paid piece work rates receive well below the minimum hourly rates of pay in the Horticultural Award and below the national minimum wage.

PN275

That sort of assertion prompted my client to scrutinise the evidence in support of that claim. That explains Mr Houston's involvement as an independent expert to review and critique the expert opinions provided by Dr Howe and Dr Underhill in their reports and it explains why we spent some time cross-examining those experts in relation to their findings and the data and research upon which they were relying in support of those findings.

PN276

We submit that the AWU's original submission that I have just read out to you was a significant overstatement of the position and we note that finding 3 is expressed in more moderate terms.

PN277

Just to complete our response in respect of the limitations of the experts' evidence and the research papers and inquiries, et cetera, that they refer to, you will note from yesterday's aide-memoire that AFPA filed that we have supplemented the table that we had provided in our 26 July closing submissions, which summarised our own view of the evidence and explained why we said it was of little or no probative value, we have supplemented that in the aide-memoire by reference to the additional sources on which the unions relied in their closing submissions, and so we rely on that and that should be read with our table on 26 July.

PN278

There are only two further matters that I want to add on the issue of the problems with the union party's expert evidence. First, is to deal with the role of Mr Houston and the criticisms that the unions make of his contribution, and secondly the Commission's approach to survey evidence and what we have described as some ipse dixit findings in the expert evidence.

PN279

Dealing with Mr Houston, the union's criticise him on the basis that he's not an expert in horticulture or migrants or employee earnings more generally and he doesn't have much experience in administering surveys. With respect, we submit that that criticism misses the point. Mr Houston wasn't there as a competing expert in migrant labour in horticulture. He was there to bring his extensive experience in economics and statistics, to bring some statistical and logical rigor to the analysis. Rigor that it turned out the union's experts had not applied in presenting their opinions in the reports filed in this case.

PN280

So for example, consider the issue of the statistical tests. Dr Underhill initially applied the statistical test called the T test to her survey results. The question legitimately arises as to whether the application of that test was appropriate and Mr Houston through his expertise pointed out in his report that that was not an appropriate test. Dr Underhill eventually agreed and accepted that it wasn't the appropriate test to apply and she applied a different test, the Mann-Whitney U test. That again raised a legitimate question about what the U test actually tells us as a matter of mathematical logic. What's the hypothesis that that test can test? Does it allow you to extrapolate from an unrepresentative sample to a whole population?

PN281

Again, Mr Houston was able to contribute to that issue, explaining that the U test can be used to test the relationship hypothesis, that is the hypothesis that piece workers earn less as compared to time workers with the sample population. But as a matter of mathematics it says nothing at all about the absolute dollar earnings, so it can't be used to extrapolate the - it cannot be used to support Dr Underhill's finding as to the absolute range of in dollar terms or percentage terms of earnings of piece workers within the sample population, let alone the overall population.

PN282

Dr Underhill eventually conceded all of those propositions. I'll give you the references for that. These are transcript references. Paragraph number 1342 to 1343. 1390 to 1393 and 1408. In the end, Mr Houston's reports simply identified the problems and at least in the case of Dr Underhill, for the most part once that problem was identified she conceded them. Other problems, once identified, were obvious as a matter of common sense. For example, you don't need to be an expert to see that if a survey doesn't collect any data distinguishing piece worker earnings from time worker earnings, like the 2017 Berg and Farbenblum survey, it's not going to tell you anything useful about piece worker earnings.

PN283

You don't need to be an expert to see that if a survey is marketed as seeking evidence of 'exploitation', and 'oppressive working conditions', as the most recent June 2021 Union to New South Wales survey did, the results are going to be poisoned by extreme self-selection towards very disgruntled workers. You don't need to be an expert to see that if a study overwhelmingly targets WHMs, that the results of that study are not representative of the whole population of workers. On the experts' own researchers the whole population is segmented one with layered vulnerabilities and therefore distinguishable characteristics.

PN284

I'll deal with the Commission's approach to surveys and the ipse dixit expert opinions. Your Honour, you provided us with a background paper referring to some earlier Full Bench decisions dealing with the use of survey evidence. There are some observations there, particularly apposite to the survey evidence in this case. All of the survey evidence. In particular, the annual wage review decision 2012/13, it's [2013] FWCFB 4000, paragraphs 441 to 442, some general observations were made about survey evidence. In that particular case it was in the context of a survey of members prepared by ACCI and the Full Bench was making some general observations about the - that such material needs to be prepared in a way that would allow the tribunal to be confident that it's reliable, that it's a reliable representation of the issues at hand. I'll quote from paragraph 441:

PN285

We appreciate the additional relevant material that some parties, ACCI in particular, seek to put to us based on their own collection of data. This material can add detail and depth to our understanding, however if we are to rely on such material we need to be confident that it's a reliable representation of the issues at hand.

PN286

Can I emphasise what follows:

PN287

There are well understood rules about the conduct of surveys that need to be followed if the results of a survey of a sample of a particular population are to accurately represent the picture that you would get if you obtained the same information from that entire population.

PN288

The passage then goes on to explain what sort of features you would expect to provide a survey that would do that. But it's perhaps more concisely set out in the next paragraph, paragraph 442 and I'll read that out:

PN289

In evaluating the extent to which we can rely on survey evidence that is submitted to us, we would look for an account of the nature of the survey population, the method of collecting responses, the response rate and total number, evidence that the respondents are a true random sample or close enough of the survey population, and testing of findings against comparable aggregates produced by the ABS or other known reliable sources. It would also assist to provide a record of the questions asked.

PN290

Now it's clear that none of the survey material presented by any party would really satisfy those expectations and so the Commission should be approaching that survey evidence and attach the appropriate weight to it, having regard to the deficiencies in the surveys.

PN291

In relation to the ipse dixit evidence, we have made this submission quite (indistinct) in respect of Dr Howe's evidence. We rely on what we say in writing in our closing submission of 26 July. We note paragraph 172 of the recent SCADS Award decision to which your Honour has drawn the parties attention to over the last 24 hours. We say that that's the correct approach and it's particularly relevant to the assessment of aspects of Dr Howe's evidence that we've pointed out in our closing submission.

PN292

Lastly just on one aspect that arises in respect of the UWU's submission around Dr Howe's omission of the appendices to the Durable Future report. Just to be clear, on my instructions the appendices are not publicly available. The appendices were referred to in the report. Mr Houston, noting the reference to the appendices, sought them out and was able to obtain them, we understand, through a paid subscription.

PN293

If I could go back to the finding 3. As I say, it's expressed in more moderate terms. So if you look at for example paragraph 2(c) of the AWU's closings submission, which elaborates on the finding, it says:

PN294

The evidence shows there is a substantial and widespread problem of pieceworkers being lowly paid despite working long, irregular hours, and commonly earning hourly rates well below the minimum hourly rate prescribed by the Award for the type of employment and classification level.

PN295

So what started as a submission that the majority were being paid well below the award rate and the national minimum wage has become "piece workers being commonly paid below the award rate". So it appears that the factual dispute, at least as between my client and the AWU, has narrowed somewhat, and ultimately what remains of that factual dispute is the extent to which - what is meant by "commonly or widespread".

PN296

Within WHMs there would be evidence open to the Commission, depending on the view of "commonly" and "widespread", but ultimately that's a matter of semantics, and we say it's probably an arid debate, because ultimately once poor payment outcomes on piece rates could be said to be occurring at a material level within a substantial cohort of the workforce, being WHMs, then there's a question as to whether the safety net needs fixing by some kind of a variation.

PN297

We say the real issue is - it probably emanates from finding 4 ‑ ‑ ‑

PN298

JUSTICE ROSS: I'm sorry, Mr Dalton, just before you go to that, do I take it from the last submission that your client is not contesting that - I've forgotten how you've framed it, but poor payout comes - or below that which would be expected by the application of 15.2(b) exists at a material level within a substantial cohort of horticultural workers, being the WHMs. Is that the ‑ ‑ ‑

PN299

MR DALTON: Yes, your Honour.

PN300

JUSTICE ROSS: Yes, I follow. Thank you.

PN301

MR DALTON: And so really the remaining factual controversy above and beyond that is really just ‑ ‑ ‑

PN302

JUSTICE ROSS: No, I follow, yes.

PN303

MR DALTON: Yes, just a question of the intensification of finding 3, which is outcome. So just to be clear on the structure of these principal findings that the AWU puts, and which in large measure we don't cavil with, at the heart of it is finding 4. The union itself in its submissions says that that's the heart - that that lies at the heart of the inadequate protection, is the mechanism. We accept that there are problems with the existing clause for the reasons that I just mentioned.

PN304

Findings 1 and 2 go to explain why the problems with that mechanism raise questions about whether that's an adequate safety net having regard to the composition of the workforce, in particular the cohorts that are vulnerable; and having regard to the fact that general provisions around a requirement for genuine agreement, et cetera, won't save that, for practical experience.

PN305

So really we say that if the Commission were minded to make a variation based on those matters, and having regard to the submissions that we make as to those matters, the question arises as to what is the most appropriate variation to remedy the problems that exist. On that the union parties' written submissions don't really engage.

PN306

By and large they simply assume that if you establish a problem with the clause as it currently stands, it somehow follows that the AWU's proposed variation should be made. Our submission is that it doesn't follow. None of those five principal findings posited by the union point to an hourly rate floor as necessarily being the solution to the problem. And indeed the AWU's variation doesn't directly address its own complaints, a matter that your Honour has raised with my learned friend this morning.

PN307

We say that when you follow the structure of the fact findings along the lines that I said: fact finding 4, problems with the clause, subjectivity, difficulties in enforcement, et cetera; read with findings 1: particular features, vulnerable features of cohorts within the workforce, combined with these clauses about genuine agreement not saving it; it would logically follow that you would ask the question about: well, look, what ways can that mechanism in clause 15.2 for fixing a piece rate be tightened?

PN308

Fix that up, you have better protection; the vulnerable are less open to exploitation; the exploitation and poor pay outcomes are less likely to occur. That would be the logical first question that you would ask yourself as to what is the appropriate variation in considering options around that. But the AWU's proposal doesn't do that at all.

PN309

Under its proposal it leaves the current concept of average competent employee in the award completely unchanged, does nothing to improve or refine it. Employers will still be required to set piece rates so that an average competent employee can earn at least 15 per cent more than the minimum hourly rate in exactly the same way as they are doing now, without any further guidance.

PN310

All of the problems associated with the current regime to which the union points in finding 4: the vague nature of the test of average competence; the fact that the test leaves much to the employer's discretion; the provision is hard to enforce; the fact that the test is not even spelled out in the clause; all of those problems remain unaddressed under the AWU's variation.

PN311

Instead of fixing the problems in the piece worker safety net, their proposal just adds another safety net, leaving the original first safety net intact, but on the basis implicitly that it's simply irrelevant or less important for some classes of workers. That's the position of the AWU. So that's not really a solution to the problems they've identified, and it's certainly not the sole possible appropriate variation.

PN312

So we say that if the Commission is satisfied that a variation is necessary, the real issue for the Commission is crafting the most appropriate variation necessary to achieve the safety net objectives. That's an evaluative exercise, and the Commission is going to have to make reasonable predictions about the potential impact on the industry and the workforce of the various possible variations.

PN313

There's no crystal ball here. The potential impacts are not easy to predict. The Commission is going to be assisted by the contextual evidence that we have in the materials as to the nature of the industry, the nature of the produce, the perishability of the produce, the fact that it needs to be picked within extremely tight windows, the fact that if it's overripe the value of the product drops dramatically, the nature of the workforce, all of the features around that, particularly around harvest time. All of that contextual evidence will assist. Very little of that, by the way, is in dispute.

PN314

Now there's a lot of bare self-serving assertions from witnesses in this case from all interested parties, the AWU and the UWU witnesses, as well as growers in particular. Now the Commission will filter this through its own experience and expertise and industrial common sense to make reasonable predictions about the risk or the likelihood about alleged impacts.

PN315

Could we offer some examples from our perspective of potential impacts that are based on opinion evidence including from AFPA's witness Mr King, that can pass that filter of being a reasonable assumption based on common sense and based on ordinary understanding of human experience. So the first example, with the casual hourly rate as the minimum payment outcome, growers are naturally going to look at ways to avoid or minimise an increase in their unit labour costs by being more selective in their hiring, by culling workers whose productivity doesn't keep pace with the minimum pay and by using machinery or automation where available.

PN316

That's the natural response that you would expect from growers and employers. Any of those things if done can detract from promoting social inclusion through workforce participation. It's not the only factor, there are factors in this evidence that would suggest that could be other impacts as well that point in other directions but we're saying that that is an impact that a number of witnesses, particularly growers, have pointed to and we say that the Commission should accept it, not just because it's an opinion coming from a witness but because that opinion makes sense. That's likely. We know that from ordinary human experience that employers are going to look at ways to avoid or minimise an increase in their unit costs if a minimum payment outcome is inserted into the award.

PN317

A second example is that it can't be assumed that the insertion of a guaranteed minimum hourly rate in clause 15 would lead to an increased participation of local workers. Now Mr King accepted that it would be a - that it would be a factor that might make the work more attractive to a local worker but it's amongst several factors that have proven over time to be unattractive to that source of labour. The Commission may note that there's a reference in court book 1512 to the seasonal work incentive trial, the National Agricultural Advisory Committee Report 2020 makes reference to that at that page, and it was expected that 7500 recipients of unemployment benefits who are local workers would take up that opportunity to earn up to $5000 without that being offset against their unemployment benefits and only 700-odd took it up.

PN318

The third example I want to put forward is that the introduction of an hourly floor could demotivate piece workers in a particular part of the spectrum. Those whose current earnings are less than the hourly rate or only slightly more than the hourly rate. Now Mr King gave that opinion evidence at paragraph 57 of his primary statement, that's at court book 3115 and in his reply statement at paragraph 12(c). We say that the Commission should accept that, again not just because a witness says so. It is opinion evidence, we accept that, but it's opinion evidence based on his experience, his considerable experience, in growing operations. It makes sense, it makes sense, it's consistent with ordinary understanding of human behaviour. If an hourly floor is introduced a worker who's currently earning less than the hourly rate because they're relatively slow is going to earn more than they used to earn without having to push themselves. So they will be able to slow down without any loss of earnings. So it stands to reason that there is a real likelihood that the hourly floor is going to impact how that cohort of worker approaches their work.

PN319

Similarly a worker who currently earns slightly above the hourly rate will be able to slow down substantially with only a marginal reduction in earnings. For that worker the marginal benefit of continuing to work as far as they can will become very small. Again we say those propositions should be accepted as a matter of common sense and human experience that there's a likelihood, certainly a real prospect that if you introduce the minimum hourly rate as the floor for piece work that workers who are on that productivity spectrum that I've just mentioned their approach to their work and how fast they work could be adversely affected.

PN320

VICE PRESIDENT CATANZARITI: Mr Dalton, Catanzariti VP speaking here.

PN321

MR DALTON: Yes, Vice President?

PN322

VICE PRESIDENT CATANZARITI: That's making an assumption that the employer has to keep these people on. These people are not necessarily within the remit of the unfair dismissal jurisdiction given how short term their employment is, so why would workers not performing have to be kept on?

PN323

MR DALTON: Yes, so they don't have to be kept on and as I've mentioned, one of the impacts of this is that workers who are slower are liable to be culled in circumstances where under the existing scheme where they're paid in proportion to their productivity, they would not be culled. But here the adverse impact on the motivation and therefore a drop off in productivity would be that you could drop off as far as the employer's tolerance would allow you to. So that could still be a significant drop in productivity as compared to what that worker would produce under the current clause or in the absence of an hourly rate floor, but the employer could still tolerate that for various reasons. One, that it's not such a significant drop as to be unacceptable within a particular timeframe. Secondly, it's all going to depend on what the available labour is and bearing in mind that the hourly floor would apply right across the board.

PN324

So your Honour is - Vice President, you're right to point out that of course the ultimate response that the employer can take and that a grower can take is to finish up that casual worker or labour hire worker, but it still leaves this real issue, this real prospect of productivity levels dropping off with the demotivation, particularly affecting that cohort, that sort of coalesce between being under the hourly rate or slightly over the hourly rate.

PN325

If I could now move to part four of my submissions, the final part which is dealing with the various proposals for variation. As I've said in respect of the AWU's variation, it doesn't really deal with problems that they have identified. But in addition to that, it has a raft of negative consequences, both for the industry and the workers themselves which we have brought together and summarised in section A.9 of our closing submission. I don't repeat them in oral submissions now.

PN326

Dealing with our proposal, we have prepared a draft clause for consideration. It's in appendix D. It might be convenient at this point to ask the members of the Bench to look at that clause and in particular look at the version that has the mark-ups, which is on page 43 of our 26 July submission. Those red mark-ups show the changes to the existing clause 15.2 to the award. Starting with subparagraph (b), the key feature here is to disentangle two concepts that are currently mixed together.

PN327

The first concept is the agreed piece rate in the piece work agreement. So, if you are going to employ someone as a piece worker, you have to enter into an agreement with the employer and you have to fix a rate in that agreement.

PN328

The second concept is the minimum permissible piece rate. As things presently stand, subclause (b) mixes those two things in together and we, under this proposal, separate them out so that it's clear that the obligation is to pay for all work performed in accordance with the piece work agreement either at the rate that's fixed by the agreement or the minimum piece work rate that's calculated in accordance with 15.2(k), whichever is the higher.

PN329

We say that that's useful to do because it's not really practical for the worker and the employer to negotiate a rate in a piece work agreement that complies with the 15 per cent uplift requirement up front or over time given variability and given the need to reset. The rates are going to be subject to frequent changes, the information to work this out is in the possession of the grower or employer, so, in reality, we say it is only really the grower or employer who can adjust it frequently and it's impractical and pointless to have a new piece work agreement made every time the rate needs to be adjusted. So, under this proposal, which separated those things out, the rate can be set up front in the piece work agreement, but the obligation to pay for the work as a minimum will be the minimum piece work rate that's calculated in accordance with 15.2(k).

PN330

When you look at (c) and (d), they are just consequential amendments. In (b) and (c) - sorry, in (b) and (d), the reference to 15.2(n) is a reference to, in effect, hourly rates needing to be paid for particular work, and so it's addressing a criticism that's raised by the unions that some work is not really inherent to piece work and shouldn't be subject to a piece work rate. We recognise that point and so subparagraph (n) deals with that and that's why it's carved out from the piece work provisions.

PN331

Dealing with the basis for calculation of the minimum piece work rate in subparagraph (k), (k) needs to be read with (l) and when you look at both of those clauses, they do three things that we say address the fundamental problems that have been identified by the AWU in finding 4.

PN332

First, 15.2(k) provides a mathematical formula that's objective. It doesn't rely on employer discretion to fix the minimum piece for a given task; it's calculated upon the completion of a pay period. So, the criticism that the clause is - that the ACE standard is subjective and it's left for the employer, we say that this addresses that criticism.

PN333

Secondly, 15.2(l) sets out the definition of competent piece worker as articulated in Hu. So, you don't need to go to case law to know what a competent worker is. It expressly acknowledges that the employer has discretion in that matter, but the third key aspect of these provisions, and this one is found in 15.2(l), is it puts an important protection in, a backstop on the employer's discretion, by deeming an employee to be competent regardless of what the employer might think after a threshold. We have put in indicatively 20 days; that's not set in stone, but we say that that represents a general estimate of how long it might take to definitely become competent for any piece worker for most crop types.

PN334

The Commission has heard evidence that there seems to be a bit of a spectrum of how long it might take depending on the crop, so less crops require less skill. For example, hardier fruit is something that requires less skill to be competent at picking, whereas others are more delicate, so, for example, raspberries are more difficult, it takes more time to be competent. We have the data point, in effect, under the Hu decision where Rangiah J was prepared to proceed on the basis that for mushroom picking, two weeks would be the threshold for becoming competent.

PN335

The minimum pick rate guarantee you will find at 15.2(m). This is an important protective mechanism that addresses one of the particular concerns that's raised by the union parties. In respect of new starters, particularly WHMs, with high attrition rates, et cetera, who may struggle to achieve competency, this would provide an earnings floor, albeit lower than the minimum hourly rate that's applicable to time-based workers. It would be an earnings floor that would ensure that regardless of the productivity of the worker, it would be topped up to the rate of output of the slowest competent piece worker. So, it's a floor, it's protective, it doesn't presume what their productivity will be. Their productivity could be higher, but it ensures that if their productivity is lower, that the worst payment outcome they can get will be the payment outcome that the slowest competent worker receives.

PN336

Let's say you've got a group of 10 piece workers and two of the workers are not competent and eight of the workers are competent, and the two workers who aren't competent pick, let's say 3 kilograms an hour of the product. If the slowest competent worker picks at the rate of 4 kilos per hour, under subparagraph (m) of our proposal, for the purposes of calculating the pay of the workers who are not competent, their output must be topped up from three kilos an hour to four kilos an hour.

PN337

Just dealing briefly with subparagraph (n) which I alluded to earlier, you will see that there are two parts to it, and the "and"; it has to have both of those features. So if a piece worker is being required to perform work that doesn't yield any piece work output and is not an inherent part of the agreed piece work - it has got to be both of those features; then that work will need to be paid at the minimum hourly rates.

PN338

Lastly our proposal, reflecting our agreement with the AWU's finding 5, is to put in a provision that expressly obliges the employer to keep the relevant records for the purposes of making the calculations, and that would include keeping a record of the hours worked by all of the piece workers.

PN339

Lastly I just want to deal with what the AWU has said about our proposal. They haven't said much. As we understand it, they've made the following points: first that the proposal doesn't address the problem that the standard is subjective and uncertain, and individual employees can't test compliance. We say that that criticism is unfounded.

PN340

The standard becomes largely objective, that's clear from the mathematical exercise in subparagraph (k). The only subjectivity left is in respect of identification of competence, and that has an important protection that is objective, being that backdrop of deemed competence after a threshold period of a number of working days.

PN341

Second point that they've raised is that it will fail to ensure that employees don't get the minimum hourly rate. We know that the UWU has made a similar submission. That's true, but it's inherent in the concept of a piece rate with no floor, it's part of the risk-reward. We described it in our original submission as risk-reward bargain.

PN342

In saying that we weren't suggesting that the award is some kind of negotiated outcome, we're just simply making the obvious fact that this sort of arrangement that has been long in industrial awards, in particular for horticulture, we're simply recognising that the essential feature of it involves a trade-off, and quid pro quo between on the one hand an uplift for piece workers of 15 per cent, and on the other hand the absence of a guarantee in terms of minimum earnings.

PN343

The earnings risk is a large part of the justification for the 15 per cent uplift, as the AWU acknowledged at the time of the award modernisation at paragraph 21 of that decision, which is found at 193 IR 163. To be clear, our submissions is risk-reward, being a longstanding feature of this provision in this industry, has intrinsic industrial merit for a piece rates mode of remuneration, particularly given this industry and the labour market.

PN344

The third criticism that the AWU has made is that the proposed variation of AFPA imposes an administrative burden. It seems a somewhat hypocritical submission to make given that the existing clause 15 piece work arrangements is not something that the union is seeking to address beyond the insertion of the hourly floor and the insertion of hourly rates.

PN345

But we would make the following submissions in response to that: the employers are always free to choose not to use piece rates. Piece work is optional. If it's to remain as an available mode of engagement and the uplift is to be retained -and the AWU is not suggesting otherwise - then there has to be mechanisms to make sure that the piece rates are set appropriately.

PN346

In large part our proposed variation would reflect the exercise that employers would need to follow to set the rate correctly under the existing clause. Our proposal simply puts the process on a clear and objective basis.

PN347

Those are our oral submissions for today, otherwise we rely on the written submissions that we have filed to date and the aide‑memoire. If the Commission pleases.

PN348

JUSTICE ROSS: Thank you, Mr Dalton. Just before we take a short break, can I take you to the Omnipoll and the appendices. If you go to page 39 of the Omnipoll report, that's the page dealing with paying above and below award rates.

PN349

MR DALTON: Yes.

PN350

JUSTICE ROSS: So I'm just trying to understand the data that's on this page. So you can see on the right-hand side of the page the first square, the authors set out that in relation to piece workers, respondents were asked the hourly rate of pay they paid an average competent adult piece worker. So they're given data about that. They then apply a decision rule, which is how they discriminate between whether the employer is paying above or below the award, and that's set out in the box underneath the chart. They also make that point in the second dot point on the right.

PN351

So for a casual, if the employer is paying less than $22, then they are paying below the award. And you can see in the results box on the bottom right-hand side that they conclude that 15 per cent of the respondents were paying below the award rate. And the way I think you get the 15 per cent is if you look at the - that's for piece workers. If you look at the chart and the red dots, that sets out the percentage of respondents paying at particular pay points.

PN352

The first is two, then it be at less than 15, then there's six at 19, and four at 20; that gets you 12 per cent. And then there are three at 21, that gets you 15 per cent. So in other words, there are 15 per cent who are paying less than $22 for their piece workers.

PN353

The difficulty that I have with that proposition, and it's an interpretation of the data that they've been given, is that the respondents were asked what hourly rate of pay do they pay an average competent adult piece worker; and the answer to that is not twenty - the answer to "what does the award require" is not $22.

PN354

At the relevant time the award rate - and it's set out in the document - was $17.70 for a level 1, and if you apply the casual loading it was $22.13. But you would need to add to that the 15 per cent, so that gets you to, for a level 1 average competent casual piece work award rate at that time was $25.44.

PN355

MR DALTON: That's correct.

PN356

JUSTICE ROSS: Well, if you then look at the data again and you look at the chart and you ask yourself the question, well, how many, what proportion were paying, let's say, $25 or less, that is less than the award rate for an average competent casual piece worker at the time, and you add up those numbers, then, instead of getting 15 per cent, you get - you have to add the 8 at $22 to the 12, so that's 20, so you're at 35 per cent, then you add the 1 at 35/36 and then you add the 15 per cent at 25, you get 51 per cent. So, instead of being 15 per cent who pay below the award, it's 51 per cent.

PN357

MR DALTON: Yes.

PN358

JUSTICE ROSS: I follow from the concessions made and, as you put it, the narrowing of the issues, and I'm not suggesting that this data then leads you to some extrapolation that, you know, 50 per cent of workers in the industry are being underpaid, and I follow that we don't need to make a precise finding about any of this, but that seems to follow from just an analysis of the material at page 39. I only raise it because you have referred to this particular conclusion, and I might be missing something - that's entirely possible - but it seemed to me, given the way the question was framed of the respondents, that it's not referable to $22 but rather it's referable to the level 1 average competent casual piece worker rate, which at that time was $25.44.

PN359

MR DALTON: Yes, so, your Honour, your reading of page 39 accords with our reading, that is, the red dots and the numbers within them represent the percentages applicable to the respondents in respect of the growers paying piece rates.

PN360

JUSTICE ROSS: Yes.

PN361

MR DALTON: You are also correct about the figure of $25.44 being the uplift rate, that, setting the piece rate correctly, an average competent employee would be able to earn too. That doesn't meant that they actually earn to that. The clause says you have to set the rate at a rate that would enable the average competent employee to earn to that target.

PN362

JUSTICE ROSS: No, I follow that.

PN363

MR DALTON: Yes.

PN364

JUSTICE ROSS: It's not that they would be - the most you could say, based on the responses, is that about 51 per cent indicated that they weren't paid at that rate, at the competent rate. The award hourly rate is the $22.13.

PN365

MR DALTON: Yes, your Honour, in terms of the pay outcome.

PN366

JUSTICE ROSS: Yes.

PN367

MR DALTON: Your Honour is correct, subject to one caveat. It would be unclear - you'll see it's $25 in this chart.

PN368

JUSTICE ROSS: Yes, yes.

PN369

MR DALTON: It doesn't tell us whether there's a rounding in terms of the respondents, et cetera.

PN370

JUSTICE ROSS: No, true.

PN371

MR DALTON: So it's a bit rubbery in terms - I think you used that figure of 51, which would not have included anyone who has responded at 25.

PN372

JUSTICE ROSS: Yes.

PN373

MR DALTON: And so, subject to that, your interpretation of this data would be correct.

PN374

JUSTICE ROSS: Okay. All right, thank you, Mr Dalton.

PN375

MR DALTON: Thank you.

PN376

JUSTICE ROSS: I wonder, Mr Donaghey, what we were intending to do was to take a break until 2 o'clock, but I'm not sure how long you are likely to be or how long Mr Harrington is likely to be. Can you give an indication?

PN377

MR DONAGHEY: I think about 30 to 35 minutes, your Honour.

PN378

JUSTICE ROSS: All right. Mr Harrington?

PN379

MR HARRINGTON: We would anticipate not needing any more than 10 to 15 minutes, your Honour.

PN380

JUSTICE ROSS: I think we will adjourn until 2 o'clock, then we will hear from you, Mr Donaghey, and, Mr Harrington, from you and then anything in reply from the AWU and UWU. Is everyone content with that course? I'm open to alternatives. No? All right, we will adjourn until 2 pm. Thank you very much.

LUNCHEON ADJOURNMENT [1.11 PM]

RESUMED [2.00 PM]

PN381

JUSTICE ROSS: Mr Donaghey.

PN382

MR DONAGHEY: Thank you, your Honour. Some brief oral submissions to supplement the written submissions, your Honours and Commissioner. The position of NFF is largely as is contained in the written submissions, and is to - in a pithy, one-line sense is to the following effect: that the AWU/UWU applications should not be granted; do not rise to the point of making good their case for the variation of the Horticulture Award; and the primary point, which I think is contained sufficiently in the written documents, but bears repeating here for what I'm about to say about other matters, is that the nature of the material relied upon is a curious combination of not merely hearsay which would ordinarily be given a dearth of weight or a lack of weight, but a combination of things such as hearsay, opinion, and other problematic sources of evidence.

PN383

NFF have filed essentially what is a submission as to weight, which is largely a table, and the effect of that table is to point out some of these combined effects and the consequences of them, meaning what happens to that opinion combined with hearsay combined with conclusion-type evidence, and what should the tribunal deal with that. There's no need for me to rehearse that, I think, in oral submissions.

PN384

But that leads me to the second major point in the NFF's submission, and that is the AFPA's alternative, which is - NFF's attitude to that is endorsement subject to a qualification I'm about to give, that is to say NFF says that there is much merit and much force in AFPA's draft award amendment. The only difficulty with that for NFF is that the consultation that has been engaged in to date has been incomplete.

PN385

It has been uniformly positive about that award term, and I will give some reasons about that in a moment. However, it has not been unqualified. We've got some points which I will take your Honour and Commissioner to in just a moment, but the concern at NFF is simply that the consultation, a bit like AiG's position, is not sufficiently comprehensive that we can give the tribunal a total picture of NFF's position today.

PN386

What I'm about to give is an indicative position, and I will go to that in a moment, after addressing some of the aide-memoire questions which are directed to all parties, and that includes NFF. The first aide-memoire question I think is the Tan Ablett question, I think, in paragraph 35 of the most recent statement: what findings are proposed on the basis of the material attached to the statements of Ms Tan and Ms Ablett.

PN387

The position adopted by NFF is simply that the position of the harvest workforce is currently uncertain, and the proportion of what have come to be called in this proceedings WHMs will fall, and there's no guarantee they will return. So accordingly the evidence about size and nature of that current workforce gives rise to a degree of uncertainty in respect of the use to which the Tan and Ablett material can be put.

PN388

There is a prospect that in the near future workforce with the proposed agricultural visa will be more heavily regulated for compliance, but that's by no means certain at this point. So that's simply a degree of uncertainty pointed to by NFF. I think from Ablett's statement in particular, all we can say is that it's possible that a change will be made or policy will be made by the federal government in the near future.

PN389

The second point from the aide-memoires is the paragraph 38 question about piece work agreements. The question is:

PN390

If the 15 per cent uplift factor is removed, should the Horticulture Award retain the capacity for an employer and employee to enter into a piece work agreement?

PN391

NFF's answer is yes to that because the certainty of specified terms on which piece rate work is done, whilst not necessarily comprehensive in many cases of piece work agreements, as has been seen from the evidence in this case, can differ in their form and in their content, they achieve a clarity that NFF submits is positive for both parties. In other words, having a requirement that an agreement be signed creates a degree of clarity, it also creates a single touchstone; a reference point, if you like, for the parties to look back to if there is any dispute later.

PN392

Piece rates stand under the AWU's proposal is becoming far more marginalised in horticulture than they are; and they are, as we've heard from the evidence, reasonably mainstream. But removing the piece rate agreement as a condition is something the NFF doesn't support for the reasons I've given.

PN393

That brings me to paragraph 40, which is the AFPA alternative clause. There I think two themes from the NFF's perspective can be discerned. The first one of those is the one I've already named, it's broadly positive. In other words, there is seen by the NFF a significant advantage to having a more comprehensive layout of a piece rates clause in the form that AFPA is proposing.

PN394

I understand from Mr Gibian's submissions earlier today that - and I'm paraphrasing - he said that this is a complex proposal, difficulty with application. That's not all my learned friend said, but that's the start of what my notes reveal his submission to be. That is a submission that NFF doesn't support. Rather, on the flipside, it is simply a case that having laid out almost a formula for piece rates, that is to the advantage of those who are seeking to apply the award and seeking to comply with it also.

PN395

One of the clauses that Mr Dalton took your Honours and Commissioner to, which is proposed 15.2(l) has been the subject of some concern from NFF's members, for example to be performing the tasks and the deeming over a period of 20 days. It's sufficient to say that several members have identified that as too long a period, others may have a different view. Because those consultations are not yet concluded, I can't be more decisive than that, and would seek to be heard on a form of the order should that position come to pass.

PN396

But, a reminder, this is very much an alternative submission for the NFF. The primary submissions is that, for the reasons given, the AWU and UWU application does simply not warrant the clause that is sought and the grafting on of the hourly rate in particular, and there are submissions about that.

PN397

I will pause at this point because what I have to address is a series of comments that I think arise out of the other submissions that have been heard earlier in today's hearing, but all that I am about to say should be viewed through the prism of those two major points: the opposition to the unions' application and the second point about the alternative AFPA position. Put simply, there is a great deal of distance between the unions and NFF regarding both the evidence that is relied upon and the appropriateness of the characterisation of it, if I can put it baldly.

PN398

Turning then to some of those points essentially raised against NFF, it was suggested, I think by Ms Burke, that the emphasis upon enforcement by the AWU is misguided, and NFF puts simply that that is wrong because the effect of the current form of the award, and I'm summarising the positions put by both of the unions in this respect, is that there were difficulties arising from the form of the award in compliance, and that I think another submission made, and I think it was also by Ms Burke, was to the effect that the inclusion of an hourly rate would create a kind of record that could be used for enforcement.

PN399

It is plain from the form of the statements tendered in this proceeding that lack of information about the work actually performed could not realistically prevent an attempted enforcement. Rather, from the cross-examination and things that were put in the written submissions so far, it's clear that there is simply an unwillingness, both from the individual pickers themselves and, to a significant degree, from the union delegates who would ordinarily be pursuing on behalf of those members to actually crystallise the claim and either seek any redress beyond merely raising it with the particular employer. For example - and these examples I am about to give are examples largely from the UWU's material, but the same can be said for the AWU's material.

PN400

The first point, for example, is Mr Wakefield's statement, which is UWU4. It is clear from what Mr Wakefield says at paragraph 15 that he is cognisant of the period in which he worked, that is to say, he could base a claim on that period which he worked simply by giving evidence on his own behalf; it's not the case that the piece rate in that case would have prevented him from doing really anything. The same goes for Mr Karhu's statement. He refers, in paragraph 9, to the days he worked. Now, it is less certain with Mr Karhu, because of the form of his expression, whether he is talking about a day of any particular length. Mr Wakefield actually names the hours he worked in paragraph 15 on a particular day. Mr Karhu is more circumspect.

PN401

But the point is still the same: in award breach applications of various kinds, one just simply requires evidence of the periods worked and there's a sense in which some of the anecdotal material, such as in Mr Ali's statement, where a very low rate of pay was identified, there's a sense in which that appears not to - prosecution or enforcement or any other kind of action, even as lowly and as fundamental as a complaint, seems not to have been even attempted in some of those cases.

PN402

Obviously the examples that arise from some of the statements have come to the unions' attention for a particular reason, they were the subject of complaints, but when I pressed some of those union witnesses in respect of taking that any further, there seemed to be a complete lack of examples of taking it any further.

PN403

The last example from the UWU's statement, and that's UWU2, Mr Rodney Noel McDonald, Mr McDonald is much more comprehensive than the two other witnesses I have used as examples because he identifies with both day and hours in paragraph 5, where he identified that he had been underpaid, and so the same point arises, and just to give one small example from the AWU's statement, Ms Ee's statement, which is think is AWU1, an example was given in paragraph 7 where she refers to the days and hours worked on a particular time where she complained that there was a piece rate of $40 per trench, she completed an amount that would have entitled her to a $25 payment. Now, it's axiomatic from that that she knows the pieces sufficient to make that piece rate claim even if there were other reasons why she claims she didn't get paid.

PN404

The NFF's point about enforcement is not that it is somehow a major point in favour of retaining the present system, but rather one of the discretionary factors which could lead to impetus to change the current form of clause 15.2 is simply not dealt with by the union evidence, and I don't think I can put it any higher than that. It is simply that enforcement has not been attempted in many cases and it doesn't seem to be taken much further than that.

PN405

Another submission in response is in relation to both Ms Uata, whose statement was tendered by consent. The purpose of Ms Uata's statement was not to identify her as a picker, she is rather someone who has contributed to picking on a community basis and it was to show the diversity of the many types of pickers, not all of whom fall into the usual cohort of agricultural workers or horticultural workers; in other words, this is a diverse group and the effect of exclusion from picking by a contraction of the use of piece rates is a telling discretionary factor against granting the application.

PN406

Something was made, and I think it was of the survey evidence in the latest - sorry, your Honour, in one of the latest statements, there was an information note provided by the Commission about the comparison of location data between the NFF survey annexed to Mr Rogers' statement and the ABARES data. Would now be a convenient time for me to address that?

PN407

JUSTICE ROSS: Yes.

PN408

MR DONAGHEY: I think I've only got a few more things to say.

PN409

JUSTICE ROSS: I think, Mr Donaghey, that information note was provided at the time when it wasn't clear what your client would be arguing about the survey.

PN410

MR DONAGHEY: (Audio malfunction.)

PN411

JUSTICE ROSS: As I understand it, you have clarified that and you are not contending that the survey results can be extrapolated to all horticultural employers, you are more indicating that it's in the nature of an expression of view by those particular respondents, so it's more anecdotal in nature.

PN412

MR DONAGHEY: It is anecdotal.

PN413

JUSTICE ROSS: Yes.

PN414

MR DONAGHEY: And, your Honour, and I think, again, Ms Burke made a comment about this in her oral submission, this is a situation where it's not put, as your Honour has just said, extrapolation, but, in any event, I'm not sure the ABARES data would assist the Commission in any great way, and the reason for that is that rather than focusing on horticulture, it seems to focus on agriculture everywhere, so one presumes that while the NFF survey was required to have a basis and one of the questions was, you know, "Where are you from and what crop do you grow?", one would assume that the ABARES data is a different data set and would include things like share farming, open land cropping and raising stock and other things that are agricultural but not necessarily horticultural. So yes, the survey evidence I don't think is - even giving it its full force which I think is necessary to do, I don't think it reaches that extrapolation point that your Honour has just named.

PN415

I don't think - I'm just looking at my notes if you'll give me a moment. Yes, I think I'll leave it there. Just as a conclusionary point, this is a situation in which the utility or non of piece rates is likely to have a great effect on the makeup of those engaged at harvest time. The tenure of the NFF's evidence is that there is a positive explosion in engagement of harvest workers from a period from the low of some dozens to a significant higher number, for example, in respect of Mr Trewin's operation. This is the kind of operation, I think, where small changes in respect of the award which governs horticulture have magnified effects on the industry become particularly busy harvest times, and subject to any questions your Honours and Commissioner might have, that's the oral submission for the NFF.

PN416

JUSTICE ROSS: Thank you, Mr Donaghey. I note what you say about the AFPA's proposed alternate variation. You would have heard Mr Dalton go through the various findings proposed by the AWU.

PN417

MR DONAGHEY: Yes.

PN418

JUSTICE ROSS: And in the course of that, seeking to narrow the issues in contest and identifying those matters which were not contested by the AFPA.

PN419

MR DONAGHEY: Yes.

PN420

JUSTICE ROSS: Are you at one with the AFPA in relation to the narrowing of the issues or not?

PN421

MR DONAGHEY: No, my instructions are in the same form as the written submissions were put, that is to say whilst the concessions made by Mr Dalton, and I understand he's put some - spent some time in his submissions on those, my instructions are to as it were stick with the written documents and the written submissions that your Honours and Commissioner have, and so I'm unable to narrow the issues any further than they are. I observe, your Honour, from that point that there is a greater distance between NFF and the union parties in this proceeding than there is now between AFPA and the union parties.

PN422

JUSTICE ROSS: I follow, thank you. Mr Harrington.

PN423

MR HARRINGTON: Thank you, your Honour. We simply wish to rely on the written submissions that we filed in the Commission back on 1 June in these proceedings. Although we make no further submissions replying to the other parties' final submissions, if I could just make a few broad points which we still stand by and then perhaps address two of the questions which arose out of the statement which the Commission published yesterday.

PN424

AI Group continues to oppose the introduction of the time based floor for piece workers engaged under this award. We continue to stand by our submission that the safety net provided under clause 15.2 of the Horticulture Award for piece work is appropriate and that enables the average competent employee to earn more than the minimum rate that would otherwise apply under the award to an employee engaged at the same classification.

PN425

Much of the argument from the union parties pertains to issues of enforcement of existing provisions rather than the adequacy of the safety net provided. It's accepted that there are complexities in the method of arriving at the appropriate piece work rate but we don't see how the amendments resolve those issues. The Horticulture Award already prohibits coercion of an employee into making an agreement. We also wish to note that the minimum wages objective should apply in these proceedings and the Commission must be satisfied that the variation was justified for work only reasons.

PN426

The piece work rates in the Horticulture Award provide an incentive for employees to lift their production with a view to earning more than the implemented time rate of pay. For less competent employees the corollary is that they would earn less. Now that's just a necessary feature that enables pay to be linked to productivity. We've said that the horticulture sector is within the sights of the Fair Work Ombudsman and efforts have been geared towards increasing compliance in that sector. If there's an issue with the current provisions not being applied, to our mind, it's not justification to grant a variation. It's rather an issue of enforcement. Even if it's accepted that the absence of a requirement to keep time-based records of hours to facilitate enforcement, this says nothing about the necessity to impose a floor in the minimum piece work rate.

PN427

I might just move on to two of the questions that were put in the statement that was issued on the 29th. At paragraph 38 the question was to all the parties:

PN428

If the 15 per cent uplift factor is removed from clause 15.2(b), should the Horticulture Award retain the capacity for an employer and an employee to enter into a piece work agreement?

PN429

To that we'd say if the Commission wants to consider such a variation, we reserve our comments until we've seen a proposed variation. However, if the 15 per cent uplift factor is removed, there may still be employers that see value in the piece work provision and we wouldn't necessarily say that the provision should be removed entirely. We consider though that the AFPA's submission that the double whammy - I think that's the term they used of a floor in the piece work rate, combined with the retention of the uplift factor would leave very little incentive for employers to engage the piece work provisions in the award.

PN430

At paragraph 40 some commentary was sought from all the parties on the AFPA's proposed alternate variation to the award. Regarding the more detailed draft at appendix B of the statement, we would suggest that our comments reflect those that we made in relation to the outline of the AFPA's alternative in the background paper, and we've put all those in the aide memoire.

PN431

We're not opposed to machinery provisions but we express concern of those that impose additional obligations and specifically they'd be providing a 20 day period after which the employee is deemed to be competent, the provision of payment to not yet competent employees that equals the average rate of the output of the slowest competent worker in the group, and obligations pertaining to recording hours of work. Now these are all new obligations which are not currently present in the award and on our assessment they're not justified in the materials that the Commission currently has before them in these proceedings. So if it pleases the Commission, those are our oral submissions.

PN432

JUSTICE ROSS: Thank you, Mr Harrington. Anything in response, Mr Gibian?

PN433

MR GIBIAN: Thank you, your Honour. There were just a few matters. Primarily I think I wish to say a few things about - in response to what Mr Dalton has said concerning the AFPA alternative proposal. There were just a few other matters before I come to that. So far as the workforce composition is concerned, the AFPA wishes to stick with its 21 to 33 per cent of the working holidaymaker population. The point that we've endeavoured to make in our submissions already is that the relevant cohort, so far as this proceeding is concerned, is really the seasonal harvest workforce which I think it was accepted would be at least 40 per cent. On our view it would be somewhat higher than that but perhaps not a whole lot turns on that. We would say at least 40 to 50 per cent.

PN434

JUSTICE ROSS: I'm not sure Mr Dalton said at least 40 per cent.

PN435

MR GIBIAN: Sorry. I think he said in most (indistinct), I apologise.

PN436

JUSTICE ROSS: Yes.

PN437

MR GIBIAN: As I say, we think it would be somewhat higher than that, 40 to 50 per cent of the seasonal harvesting workforce. The second point in that respect is that - - -

PN438

JUSTICE ROSS: I'm sorry, Mr Gibian, just on that issue, I mean do we really have to decide whether it's - I understand your point about the seasonal and the harvest workforce but what follows from whether it's 35, 40 or 45 per cent? And on what basis could you really make any sort of determinative decision in the space where we have a significant number of undocumented workers?

PN439

MR GIBIAN: I agree, your Honour, that it's - that it would not be necessary for the Commission to make a clear finding and as your Honour says no certain finding could be made, given the presence of, as everyone recognises, the significant number of undocumented workers. Given at least the AFPA's concession that there is a material underpayment issue with a substantial part of the workforce, whether it's the substantial part is 35, 40 or 45 per cent, we would say the clear inference to be drawn is that the current award is not meeting the modern awards objective, irrespective of whether it's 35, 40 or 45 per cent, as it were.

PN440

An observation was made to the effect that the changes in the composition of the workforce to which we have referred predated the making of the award and I think Your Honour the President clarified that our position wasn't that those changes had occurred exclusively or primarily since 2010. The point that we would make about that, to the extent that any reliance is made upon that point, is that there isn't any suggestion that in the award modernisation proceedings, given their nature, that there was any consideration in detail of any evidence in relation to the workforce composition or its change, and that primarily the conditions were taken from the 2000 award, as one would expect in the context of those proceedings, without consideration to the effect of the changes which had occurred from the early 2000s or late 1990s period.

PN441

In relation to the survey and other evidence, there are perhaps two observations that I need to make in relation to the AFPA's submissions. In relation to the defence of Mr Houston and the submissions that we have made as to his knowledge of and experience in either horticulture or employee-related survey material itself, I would make two observations.

PN442

The first is that we accept that Mr Houston made certain observations which were accepted by Dr Underhill and properly made, including the focus of her research upon working holidaymaker or temporary migrant worker populations in particular. We do think that his absence of experience in relation to horticultural or employee research generally is relevant, certainly in comparison to that of Dr Underhill, in assessing what is reasonable and practical and viable so far as data and survey approach is concerned in relation to this workforce in particular, and Mr Houston's initial report particularly was a counsel towards a form of impossible perfection so far as empirical research in this area was concerned, which, if followed, would result in the Commission having to throw its hands up and do nothing, rather than acting upon and taking, with appropriate caveats, such information as it is possible to obtain and available.

PN443

The second point is that reference was made to a passage from the Annual Wage Review decision to which the Commission referred in the background paper, particularly at paragraphs 441 and 442, as to including references within paragraph 441, the report being 235 Industrial Reports at 332, to there being well understood rules about the conduct of surveys that need to be followed if the results of a survey of a sample of a particular population are to accurately represent the picture that you would get if you obtained the same information from the entire population.

PN444

The point that we make in that respect is, as I endeavoured to articulate in our earlier submissions, that to be relevant and probative for present purposes, it is not necessary for all of the material to be capable of extrapolation to the broader population; it, nonetheless, can be significant in itself, and in that respect, we note the concessions that were made to the effect that there is a material level of underpayment, or the Commission could properly find there is a material level of underpayment within a substantial portion of the workforce, and that that has a relationship to the form of the current award provision. I don't know that there was necessarily clear acceptance, but we think the only inference to be drawn from that is that it is necessary to achieve the modern awards objective that a variation to the award be made in relation to piece workers.

PN445

As to the form of the variation, it was first said that the unions' proposal does not address the deficiencies it has identified in the current award and in its application in horticulture. That is not the case and we would make four observations in that respect.

PN446

The first is as to paid outcomes, that is, that there is, at least so far as the AFPA is concerned, accepted to be a material level of underpayment within a substantial component of the workforce. The application addresses that by ensuring that piece work arrangements cannot operate so as to permit employees to be paid lower than the minimum rates the Commission has determined are appropriate for this form of work; it ensures piece rates don't lead to that outcome. The AFPA's alternative proposal, to which I will come in a moment, does not do that.

PN447

Secondly, so far as it is common ground, perhaps between all parties, that this workforce contains a significant proportion of employees who have characteristics that would make them vulnerable, the proposal for a minimum rate floor provides a straightforward, clear and certain provision, easily understood by that workforce, as to the minimum they can be paid for performing the harvesting work is concerned. It does not rely on subjective and uncertain assessments to ascertain what is the minimum amount an employee is required to be paid; it merely requires a multiplication of the number of hours worked by the minimum rate set in the award.

PN448

The third observation is that it substantially addresses the enforcement issue in the sense that it provide a clear minimum which can be easily enforced if there are underpayments, so long as evidence can be given of the hours of work that have been performed, in relation to which there is a requirement to keep records and, in that respect, it creates a safety net which is both readily enforceable and difficult, if not impossible, to avoid.

PN449

The fourth observation we make in that respect is that the inclusion of a minimum guaranteed payment by reference to the hourly rates or time-based payment is a provision made in the various other modern awards to which we have made reference in the proceedings which contain piece work provisions and, historically, when piece work rates were first introduced in this industry, a solution which the Commission thought appropriate as a safeguard.

PN450

As to what was suggested to be the potential impacts of the variation sought by the AWU, the minimum floor, it was suggested that it would result in increased employment costs, resulting in more selective hiring and recourse to technological solutions, to the extent that those were available. In that respect, firstly, none of that would be inconsistent with the modern awards objective. Leaving that to one side, there would only be an increase in employment costs of any substance for a grower as a consequence of the insertion of a minimum rate floor if there were a substantial number of workers employed under piece work agreements who work below that amount at present. To the extent that is the case, that is the very vice that ought be addressed by a variation to the award.

PN451

Secondly, it was said that there would be a demotivation of workers, relying primarily upon the evidence of Mr King, albeit supplemented by what was said to be common sense. We say two things about that. Firstly, the common industrial sense is that to the extent that piece rates are operated appropriately, that is, that they provide a realistic, viable opportunity for most workers to earn above, and substantially above the hourly rate of pay, there is no reason to think that those employees would not work in a manner which would seek to maximise their earnings in the main, and any impact would be at the margins.

PN452

Secondly that is consistent with what Mr King said as well. His evidence at PN3439 was that in the majority he would believe workers would continue to strive to maximise their earnings and not be demotivated. His exception was only that there may be, in his opinion - individual opinion that there may be a portion of the workforce who weren't around the hourly rate that may suffer from a degree of motivation.

PN453

The answer to that of course is that an employer is entitled to, as is required and necessary in any other workplace covered by any other of the modern awards made by this Commission, to supervise its employees to ensure they are working appropriately; and if they are not, then, as was pointed out by Catanzariti VP, there is no requirement that they be retained, particularly given the casual and itinerant nature of the work involved.

PN454

Finally can I address a few matters in relation to the AFPA alternative proposal that were raised. Firstly as an overall observation, to some extent, albeit perhaps a limited one, the proposal does seek to introduce a form of floor in the sense that there is a threshold of competency; and in (m) of the clause, a requirement that an employee who doesn't fit within the competent category would be paid at least the rate of the slowest competent worker.

PN455

If there is recognition that there ought be a floor of some variety; with respect, we don't understand any basis upon which the Commission would insert a floor which is not the minimum rate that the Commission has determined is appropriate for this form of work, that is the hourly rate set by the award.

PN456

The second observation about that floor is it is transparently able and open to manipulation in the sense that an employer may deem everyone to be competent, in which case there is no make-up, and any employee is to be - the slowest employee is paid merely what the slowest employee is paid; or a single employee who was a slow worker could be categorised within the competent stream such that the floor would be reduced to a very slow or very low level.

PN457

The method of calculation proposed in (k), as a minimum standard, is again unsatisfactory, in our submission. What it would mean, and candidly was said, would be to take away from any agreement by the employee what the minimum rate would be. That is, the employee or the employer would not know what the minimum they were entitled to be paid or to pay - required to pay, respectively - until an expos facto calculation after the event, and that is a surprising outcome.

PN458

Surprising as a safety net, that is we think that to provide a clear, easily understood, fair and relevant safety net, it needs to be certain, and the hourly rate floor provides that benefit.

PN459

As to the definition of competence in (l) in the proposed clause, I apprehend that Mr Dalton said that the 20 days figure was not set in stone, in his words. But we think that that is obviously substantially in excess of - at least on the evidence available - most of the growers said was the relevant period by a factor of at least four.

PN460

It would also mean, having regard to the evidence, that many workers, the harvest period would expire, that is it would be over before the worker became competent according to the formulation, and the worker would then presumably move on to another employer, and then would be incompetent again for a further four-week period, or three and a half week period, depending on the number of working days. And the berries were an example of the crops which had shorter harvest periods.

PN461

Finally it was suggested that the arrangement provided a more objective mathematical method of calculating what the piece rate was required to be. We accept it's an improvement on the present system, but it still fails to provide a certain minimum standard, still depends upon assessments of competence, and has the potential to - no, I withdraw that. I withdraw the words "has the potential." If I could just have a moment.

PN462

JUSTICE ROSS: You're on mute, Mr Gibian.

PN463

MR GIBIAN: Yes, I'm sorry, your Honour. If I could just have a moment. I just want to get some instructions on one point.

PN464

JUSTICE ROSS: Sure.

PN465

MR GIBIAN: One final observation is, as the members of the Bench will have apprehended, in our submission a minimum guarantee payment is necessary to achieve the modern awards objective, and to provide a clear minimum entitlement, and to ensure that piece work arrangements don't result in employees receiving less than the Commission has determined ought be the minimum amount for the payment for this form of work.

PN466

In addition to that, we believe that the 15 per cent uplift, and to the extent that it is available, a providing for piece work ought be retained. We note what has been said in relation to the difficulties of the calculation contemplated by the average competent worker - or the assessment contemplated by the average competent worker concept. So long as it is in addition to a guaranteed floor, which as I say, we regard as essential.

PN467

We're not opposed to consideration of whether that could be clarified in some way, but we don't think that the proposal by the AFPA as an alternative, which fails to provide any guaranteed minima, would achieve the modern awards objective. Unless there's anything further in relation with I can assist, those are the observations we wish to make in reply.

PN468

JUSTICE ROSS: Thanks, Mr Gibian. Ms Burke, just before I go to you, can I go back to Mr Donaghey.

PN469

MS BURKE: Sure.

PN470

JUSTICE ROSS: Mr Donaghey, my associate has brought to my attention that the witness statement of - I'm sure I don't have the pronunciation correct - Akata Uata, which is the volunteer member of the Multicultural Council of Griffith, it's in the Court Book at 3082, hasn't actually been tendered. I'm assuming you wanted to tender it, and I would mark it as an exhibit NFF15.

PN471

MR DONAGHEY: Thanks to your Honour's associate. Yes, that was an oversight.

PN472

JUSTICE ROSS: No, no. No problem. Thank you.

EXHIBIT #NFF15 WITNESS STATEMENT OF AKATA UATA

PN473

Ms Burke.

PN474

MS BURKE: Thank you, your Honour. Just some very brief points in reply. I'd first like to clarify what I think might have been a misunderstanding about the submission I made this morning on the part of the NFF. I did not submit that the introduction of an hourly rate would assist enforcement. I put that proposition with regard to the requirement to keep a time record. It's specifically that.

PN475

In relation to Mr Wakefield whose statement was referred to by my learned friend Mr Donaghey. Mr Wakefield didn't work as a piece worker, he never has. He's only worked hourly rates, so his evidence in terms of knowing what hours he worked is directly related to the nature of that work. I might have misheard but there was a reference to paragraph 15 of his witness statement. That paragraph 15 of his witness statement refers to a conversation he had with blueberry pickers in a hostel, so I don't think that was quite the right reference. I think one of us has it wrong but in any event, he's never worked as a piece worker.

PN476

As for Mr McDonald, it's correct that he identified the days and hours that he worked and in that respect was able on his own understanding of the evidence to ascertain if he thought he'd been underpaid. But when he was asked about that in cross-examination, he said, and the transcript reference is PN527, that he didn't make a complaint because he didn't believe it would have been successful, because it would have been his word against his employer's. His hours were not recorded on his payslip.

PN477

Then in terms of a couple of matters that require reply that were raised by the AFPA. On the point about whether the introduction of an hourly floor would demotivate workers, just further to what Mr Gibian said about that, I just wanted to add that there was actual evidence from piece workers or from people who do this work about what motivates them. That evidence is summarised in the UWU's submissions at paragraph 78. That evidence should be preferred on that topic.

PN478

Finally, and I can't quite believe I need to go here but the appendices are publicly available. I have found them by Googling them this afternoon. I'm very happy to send everybody the link to the University of Sydney website and I'm sorry Mr Houston had to pay for them.

PN479

In relation to a question from your Honour about the Fair Work Ombudsman v Hu, can I just address what I think was the question, which is that the ombudsman brought proceedings against the director of the employer, the employer itself, the company was in liquidation and it essentially settled the claim against the director with respect to declarations and penalties, regarding the underpayment of hourly rates. The ombudsman did not proceed with declarations and penalties in relation to the underpayment of piece work related underpayments. The decision of the Federal Court reporting that is [2020] FWA 936. I hope that answers your Honour's question about that.

PN480

JUSTICE ROSS: That does, thank you, Ms Burke.

PN481

MS BURKE: Thank you. Unless there are any further questions those are the submissions of the UWU.

PN482

JUSTICE ROSS: Thank you very much. Well, I think that concludes the proceedings subject to the leave that's been granted to file the material by 4 pm next Friday. Anything further before we adjourn? No?

PN483

MR GIBIAN: No, thank you, your Honour. I thank the members of the Commission for their patience in the proceedings.

PN484

JUSTICE ROSS: No, no, not at all. Thanks very much for your submissions. We'll adjourn.

ADJOURNED INDEFINITELY [2.51 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AWU30 CAMPBELL ARTICLE ENTITLED 'HARVEST LABOUR MARKETS IN AUSTRALIA'........................................................................................................... PN72

EXHIBIT #AFPA8 DR UNDERHILL'S SUBMISSION TO THE EDUCATION AND EMPLOYMENT REFERENCES COMMISSION............................................ PN227

EXHIBIT #AFPA9 FAIR WORK OMBUDSMAN'S WHM INQUIRY REPORT PN227

EXHIBIT #NFF15 WITNESS STATEMENT OF AKATA UATA.................. PN472