PN1

VICE PRESIDENT HATCHER: All right. Can I take the appearances, please. So, Ms Sostarko, you appear for the MBA?

PN2

MS R SOSTARKO: Yes, your Honour. Accompanied by my colleague, Mr McGregor.

PN3

VICE PRESIDENT HATCHER: All right. Ms Adler, you appear for the Housing Industry Association?

PN4

MS M ADLER: Yes, thank you, your Honour.

PN5

VICE PRESIDENT HATCHER: Ms Paul, you appear for the Australian Industry Group?

PN6

MS V PAUL: Yes, your Honour.

PN7

VICE PRESIDENT HATCHER: Now, Mr Boncardo, you appear with Mr Maxwell and Ms Wiles for the CFMMEU.

PN8

MR P BONCARDO: Your Honour, I appear for the construction and general division of the CFMMEU with Mr Maxwell. I don't appear for the manufacturing division, who I understand Ms Wiles represents.

PN9

VICE PRESIDENT HATCHER: All right. Last I checked, Williams and Hersey were still with Law. But in any event, I note that. Mr Crawford, you appear for the AWU?

PN10

MR S CRAWFORD: I do, your Honour, yes. Thank you.

PN11

VICE PRESIDENT HATCHER: Ms Ambihaipahar, you appear for the CEPU?

PN12

MS A AMBIHAIPAHAR: Yes, your Honour. May it please the Commission.

PN13

VICE PRESIDENT HATCHER: And, Ms Devasia, you appear for the AMWU? Ms Devasia, are you there?

PN14

MS A DEVASIA: Yes, your Honour. Yes, I do. Sorry, I was on mute.

PN15

VICE PRESIDENT HATCHER: Yes, all right. Okay. So how do we want to start? Ms Sostarko, I understand the first witness is not available till 11. Is that right? Ms Sostarko, your microphone is on mute.

PN16

MS SOSTARKO: Apologies, your Honour. Yes, your Honour, at this time he is expecting to appear at 11. However, if it's convenient to the Commission, we can bring that time forward. He is available this morning, if that's suitable.

PN17

VICE PRESIDENT HATCHER: We just want to get started. Does anyone want to make opening submissions, or should we just go straight into the witnesses?

PN18

MS SOSTARKO: Your Honour, we would be happy to take the opportunity to make some brief opening statements in the event that there's an opportunity to do so.

PN19

VICE PRESIDENT HATCHER: Okay. Go ahead.

PN20

MS SOSTARKO: Thank you, your Honour. Your Honours and Commissioner, I just would like to make some opening comments that will hopefully assist the Commission and provide some context and background to this proceeding. The application before the Commission is made pursuant to section 157 of the Act and seeks temporary variations to three construction awards in light of COVID-19 and the challenges it presents to workplaces in the building and construction industry.

PN21

The variations are sought at annexures A and B to the originating application dated 27 May 2020. I will return to address those in a moment. Just in a general overview, we say that from the outset we would - in many respects this is an application that we genuinely wish we didn't need to bring. However, as the Commission is aware, the COVID-19 pandemic and the various challenges that it has created for workplaces are unprecedented, and it remains a source of future uncertainty.

PN22

Obviously the building and construction industry has been deemed an essential service by government, and it hasn't been subjected to specific government shutdowns, directions, or similar restrictions which we've seen in other sectors. This doesn't mean that the industry hasn't suffered any adverse impact, nor experienced a diverse range of adverse ramifications. And in fact we would say it has been to the contrary.

PN23

Border closures, community lockdowns, and other restrictions introduced by government in response bring with them aspects that have manifested themselves in a range of ways, and in different regions throughout the sector. The Commission will appreciate the majority of work undertaken in our sector can't be performed from home, therefore in order to continue operation, building and construction workplaces have experienced significant disruptions to accommodate a raft of new obligations. These include things such as social distancing, hygiene requirements, and the need for extra facilities to keep the workplaces safe.

PN24

The evidence of Mr Grippi will illustrate the impacts and give the Commissioner a better understanding of the practical ramifications typical of those experienced by the industry. There is also a further range of broader economic effects flowing through to ‑ ‑ ‑

PN25

VICE PRESIDENT HATCHER: Ms Sostarko, sorry, you're just cutting out a little bit. I'm not sure whether it's because you keep moving away from the microphone.

PN26

MS SOSTARKO: Okay, I will bring it closer. If you can bear with me.

PN27

VICE PRESIDENT HATCHER: Thank you.

PN28

MS SOSTARKO: Sorry. I'm not sure if you ‑ ‑ ‑

PN29

VICE PRESIDENT HATCHER: I just missed probably the last 20-odd words.

PN30

MS SOSTARKO: Okay. I was just saying that Mr Grippi's evidence will illustrate the adverse impacts. We also make the point that there are a further range of broader significant economic impacts flowing through the economy that are a direct and indirect cause of these adverse conditions experienced by the industry.

PN31

And Mr Garrett's evidence will outline these in detail, but for today's purposes I note that there have already been significant amounts of jobs lost in the sector, and that the economic conditions remain volatile, and market confidence is down. Much of the work the industry has undertaken ‑ ‑ ‑

PN32

VICE PRESIDENT HATCHER: You're cutting out again. There's some problem with your microphone, I think.

PN33

MS SOSTARKO: Okay. I'm off mute.

PN34

VICE PRESIDENT HATCHER: It's not that, it's as though the reception disappears ‑ ‑ ‑

PN35

MS SOSTARKO: Is not good. What I might do. Apologies ‑ ‑ ‑

PN36

VICE PRESIDENT HATCHER: It's fine at the moment, so ‑ ‑ ‑

PN37

MS SOSTARKO: I might try reconnecting to the Wi-Fi, but please stop me if that happens again. I will lean in as much is possible. I guess the point that I was at was that the work, although was already on foot, but is drying up, and the expectations of further work levels is not looking positive. So while the current economic data paints a gloomy picture, future expectations are not looking any brighter, and for the next six months it's looking even worse ‑ ‑ ‑

PN38

VICE PRESIDENT HATCHER: You've cut out again, Ms Sostarko.

PN39

MS SOSTARKO: Okay. Apologies to your Honour. We might just disconnect from the connection that I'm connected to and we will try an alternate connection. Please bear with us.

PN40

VICE PRESIDENT HATCHER: All right.

PN41

THE ASSOCIATE: Vice President, might I also suggest, for other parties that aren't speaking, just to cut their video, because that often would speed up the connection for people with weaker connections. Hopefully that helps.

PN42

MS SOSTARKO: Apologies, your Honour. Can you hear us now?

PN43

VICE PRESIDENT HATCHER: I can. I can hear something loud in the background. I don't know whether it's running water or traffic. That's better now.

PN44

MS SOSTARKO: Excellent. Thank you. All right. My apologies for that. At your convenience, shall I continue?

PN45

VICE PRESIDENT HATCHER: Yes.

PN46

MS SOSTARKO: Thank you, your Honour. So the point that I was making was that given the recent developments in Victoria in recent weeks, it illustrates just how volatile the situation can become at any point, and reinforce that the only one thing that we can be certain of is that the situation remains uncertain. But I would add that it's not all bad news.

PN47

Since the pandemic began there have been a range of state and federal government measures announced to help workplaces and business, such as the JobKeeper program, and several designed specifically to assist our industry, such as the HomeBuilder program. These measures of course have been most welcome, and are either already comprehensively embraced by the industry, and HomeBuilder it is expected, for example, to benefit certain parts of the sector.

PN48

We hope they in fact do make a positive difference, but it remains to be seen. And some measures, specifically JobKeeper, the JobKeeper program, are scheduled to cease in September, which coincides with the point that the industry expects to feel the brunt of the downturn.

PN49

So if I can just briefly go to our variations. The reason why the variations are structured as they are is exactly to address these issues that we forecast to be on the horizon. They were drafted with three different considerations in mind.

PN50

The first of these was to mimic those temporarily made to the Fair Work Act, and we call those the JobKeeper changes, if you will, which we consider will deliver consistency amongst the industry and workplaces while JobKeeper remains in place; extend them beyond the time they are scheduled to cease, so they remain until the end of December, thereby covering the next six months, which are expected to be the most difficult for the industry. We say that there's some utility in mimicking those provisions require a schedule in our awards.

PN51

VICE PRESIDENT HATCHER: Can I just interrupted there, Ms Sostarko. Of course you can't mimic them because - you haven't mimicked them because (1) there's no payment obligation; (2) there's no obligation to maintain people in employment; and (3) there's no compulsory dispute resolution mechanisms.

PN52

MS SOSTARKO: Well, your Honour, perhaps "mimic" is the wrong expression, but essentially in terms of the directions and requests that are contained within that schedule, by vast majority they are those which are currently enabled under the legislative provisions with respect to JobKeeper.

PN53

VICE PRESIDENT HATCHER: All right.

PN54

DEPUTY PRESIDENT GOSTENCNIK: But they don't operate in isolation, they operate in conjunction with a scheme where the minimum payment is required to be made by the employer, and financial reimbursement is later made.

PN55

MS SOSTARKO: Yes, I certainly note that, your Honour. I would also note in terms of that concept of (indistinct) the way that some of those parts of the amendments to the Act operate, I would probably add that the thing that's also very important about the way the schedule is drafted in the context of those is the safeguards emulate those which are within the Act.

PN56

VICE PRESIDENT HATCHER: Yes, all right.

PN57

MS SOSTARKO: So in other words, in addition to (indistinct) the other changes that are balanced by majority of the (indistinct) within the schedule are also those that have been either applied in other awards by consent temporarily, or at the Commission's own motion. So the point ‑ ‑ ‑

PN58

DEPUTY PRESIDENT GOSTENCNIK: We lost you again. I think you've lost Internet connection. You're back.

PN59

MS SOSTARKO: I'm back. It's going to be torturous, isn't it. In other words, the point we're trying to make is that we (indistinct) in terms of the majority of those proposals within the schedule. The second consideration was to help workplaces better accommodate things like social distancing and site hygiene, which is obviously extremely important, as well as to enable them to make temporary adjustments announced by state and local government as to the times during which work can be performed.

PN60

And the third (indistinct) overarching consideration was to give industry workplaces and the members that all parties appearing today represent, the best possible array of options to better deal with the existing challenges; provide greater options to plan ahead for the future challenges; and encourage workforces to keep connected to their workplaces, while keeping them - while helping to minimise them, or even avoid future adverse impacts wherever we can.

PN61

Regrettably, and I apologise for the cliché, but we are really living in unprecedented times, and recent events in Victoria, for example, have shown just how quickly things can change. So to reiterate what I said earlier, we consider the variations to be akin to essentially an insurance policy. And we actually hope that things will be such that workplaces won't need to utilise them. But it's our view that even if they help just one workplace to keep their doors open, or help one more work to keep their job, that's the outcomes that we really want to see.

PN62

I will just quickly just mention that in terms of the drafting of the schedule, we will be (indistinct) and indicate that the employers are very open to any improvements that may need to be made to the variations with proposed. We certainly don't say that they're perfect, but we certainly hope there would be (indistinct) giving rise to the proposed variations are.

PN63

Secondly we want to make sure and ensure that there are sufficient checks and balances in place; that workers are consulted, along with their representatives, if requested; and that there are the sufficient safeguards to ensure that all flexibilities are used appropriately.

PN64

I should also – apologies – point out at this juncture that since the application was filed, two items contained within the schedule which we sought to bring forward have now come into effect by way of determinations in the award stage four-yearly proceeding. If I could just take it to those two items, which is items R8.5.1, which is the item pertaining to taking an accrued RDO. And item H.11 at point 1, which is the time off instead of (indistinct) and corresponding (indistinct) and we seek that those items now be (indistinct).

PN65

Regrettably (indistinct) applications (indistinct) and those (indistinct) no doubt raised (indistinct) reasons as to why that's the case. We will address these obviously at the appropriate juncture, but if I could just point out to the Commission that it's probably more familiar with the way our sector operates in practice than most, and obviously familiar with the relevant awards.

PN66

And obviously no doubt those opposed will try to argue that the variations sought aren't necessary; and if they are, the awards already allow for significant flexibility. If those opposed are right, then let's make that clear, and that's what we're seeking today. But we say there are still some obvious areas where the awards can lead to some unworkable outcomes in the current situation. And if I could just give you three brief examples of those.

PN67

For example, with respect to annual leave and directions to take excessive annual leave, the on-site award, currently at clause 38.7, says that employees can't be directed to take leave if this results in employees having less than six weeks' leave remaining, and that leave must not be in blocks less than one week, and must be given with at least eight weeks' notice.

PN68

Another example of where there is some level of (indistinct) with respect to RDO, and the fact that they can't take them individually. And if you want to change, it needs to be (indistinct) and (indistinct) effectively a one week (indistinct) certainly is a vast improvement on that which was previously within the on-site award. It still doesn't allow for one employee to take their RDO earlier or at a different (indistinct).

PN69

And the third point, for example, that I would like to draw your attention to, if I could, is the definition of redundancy in the on-site award, which we would argue almost incentivises workers to end employment, which is exactly the last thing that should happen in this current situation, particularly as the sector has been widely acknowledged as being an essential part of the future economic recovery, whatever that may be.

PN70

So those opposed appear to suggest that the (indistinct) as (indistinct) that this is part of the normal cycle within the industry, and that we've overstated (indistinct) to date. And I recall an item in their evidence which suggests some impact (indistinct)

PN71

DEPUTY PRESIDENT GOSTENCNIK: I'm sorry, you've cut out again.

PN72

MS SOSTARKO: I'm back? Okay. I will try not to ‑ ‑ ‑

PN73

VICE PRESIDENT HATCHER: No, you're just coming in and out.

PN74

MS SOSTARKO: Yes, okay.

PN75

VICE PRESIDENT HATCHER: Ms Sostarko, perhaps why don't you just shut off your video, and perhaps that might improve the sound quality.

PN76

MS SOSTARKO: Okay. Is that better, your Honours?

PN77

VICE PRESIDENT HATCHER: We can hear you at the moment.

PN78

MS SOSTARKO: Okay, that's good. If you will, I will take you back to the point that we were making with respect to the modest downturn that the unions had cited of 5 per cent, and we would say that 5 per cent of almost 1.2 million people, which would equate to upwards of 50,000 jobs, is not an insignificant number in any way. And it's widely accepted that COVID-19 has brought about some of the most challenging economic circumstances we've ever seen.

PN79

It also appears that those opposed will argue that the various stimulus measures announced mean everything will be fine, that there's nothing to worry about, or even go as far as to suggest that the government will do whatever it takes to keep the industry afloat, and predict that a range of measures they expect to be forthcoming, but yet (indistinct) perhaps there's something that they know that we don't know about. We hope they're right, but we just don't know, which is why we need this insurance policy (indistinct)

PN80

(indistinct) that not all work undertaken in the sector is government funded. Can I say there's also some suggestion or flavour through the reply submissions that infers employers have some sort of sinister or ulterior motive behind the variations sought. We're not exactly sure what type of theories will be advanced in this regard, but we want to dispel those right up front by simply observing that ‑ ‑ ‑

PN81

VICE PRESIDENT HATCHER: Ms Sostarko, you've cut out again. I don't think the vision is a problem.

PN82

MS SOSTARKO: No. I'm going to reconnect to a different Wi-Fi.

PN83

DEPUTY PRESIDENT GOSTENCNIK: Ms Sostarko, while you're doing that, can I ask you to consider this: are you able to explain why it is that employers can't utilise the existing provisions in relation to taking of accrued RDOs to achieve what is sought to be achieved by variation? And in particular, 33.1(c)(i).

PN84

MS SOSTARKO: I'm back, momentarily if anything. Apologies, your Honour, were you going to ask a question?

PN85

DEPUTY PRESIDENT GOSTENCNIK: Yes. I'm just wondering why the applicants say that the provisions of clause 33.1(c)(i) are not sufficient to enable the employer to organise RDOs in a manner which will assist them during the pandemic.

PN86

MS SOSTARKO: Certainly there is, your Honour, would note, as I've said, the provision is a great improvement on that which was its predecessor, but that said, the point we're making is that that only allows flexibility by the majority. It doesn't provide the opportunity for individual workers to make those arrangements with their employer.

PN87

DEPUTY PRESIDENT GOSTENCNIK: Well, no, the third dot point is the majority, but the other requirement in relation to rostering RDOs can be utilised, surely, to roster a number of RDOs in respect of individual employees on different days, depending on the circumstances faced by the employer. And all that's required is seven days' notice.

PN88

MS SOSTARKO: Yes, but I would like to take that ‑ ‑ ‑

PN89

DEPUTY PRESIDENT GOSTENCNIK: Sure.

PN90

MS SOSTARKO: ‑ ‑ ‑ yes, your Honour. However, I would suggest that certainly there is no provision in there with respect to directions, obviously, which is something that is provided for in the schedule.

PN91

DEPUTY PRESIDENT GOSTENCNIK: It says, "An RDO will be taking one of the following ways." But in any event, you can take that on board and ‑ ‑ ‑

PN92

MS SOSTARKO: If I can come back to you.

PN93

DEPUTY PRESIDENT GOSTENCNIK: Yes, of course.

PN94

MS SOSTARKO: (Indistinct) that subsection. I will make a note of that. So we (indistinct) just highlight the fact that there is obviously - the schedule is temporary. There is a defined end date, which is ‑ ‑ ‑

PN95

VICE PRESIDENT HATCHER: You're cutting out again.

PN96

MS SOSTARKO: Okay. A might try and turn the camera off again, see if that helps.

PN97

VICE PRESIDENT HATCHER: I don't think it's a problem. If it's your Internet connection, then you're just going to be dropping in and out.

PN98

MS SOSTARKO: Apologies, your Honour. If I can just take a moment for us to perhaps look at what our alternatives are, because at the moment in this space that we are in, were exhausted all of those (indistinct) wouldn't mind ‑ ‑ ‑

PN99

VICE PRESIDENT HATCHER: All right. Go ahead.

PN100

MS SOSTARKO: ‑ ‑ ‑ try and remedy the situation.

PN101

MS ADLER: Your Honour, it's Ms Adler here. If it would assist, I could take this opportunity to also make some brief opening comments while my colleagues are sorting out their technology.

PN102

VICE PRESIDENT HATCHER: I think they're entitled to hear what you're going to say as well. It's an attractive course since your coming through loud and clear, but I think in fairness I think they need to participate as well.

PN103

MS ADLER: Thank you, your Honour.

PN104

DEPUTY PRESIDENT GOSTENCNIK: Mr Maxwell, none of your members are unduly interfering in the Wi-Fi connection at the MBA, are they?

PN105

MR MAXWELL: No, your Honour.

PN106

MR BONCARDO: Your Honour, Mr Boncardo here, and Mr Maxwell (indistinct) CFMEU (indistinct)

PN107

VICE PRESIDENT HATCHER: No, we can't hear you either. Was that you, Ms Sostarko?

PN108

MS SOSTARKO: Yes, it's Ms Sostarko here. I've put in some headphones and connected via a third connection, so I'm hoping we might have solved the problem.

PN109

VICE PRESIDENT HATCHER: Okay. That should be okay. We just need to keep the volume up.

PN110

MS SOSTARKO: Yes, okay.

PN111

VICE PRESIDENT HATCHER: Perhaps if you can go back to what you were saying about accrued RDOs and your answer to the question that Gostencnik DP asked you.

PN112

MS SOSTARKO: Your Honour, apologies, we're just looking at that. If you wouldn't mind just ‑ ‑ ‑

PN113

VICE PRESIDENT HATCHER: All right.

PN114

MS SOSTARKO: ‑ ‑ ‑ come back to that point.

PN115

VICE PRESIDENT HATCHER: All right. You can come back to that at any stage today or tomorrow.

PN116

MS SOSTARKO: Thank you, your Honour. I appreciate that. So if I could just go back to the point that I think - I'm hoping was last heard, which was just clarifying a few broader points about the proposed variation, and we're emphasising that they are in fact temporary, that they're clearly defined in date, that there are checks and balances in place with respect to all of the proposed amendments, and there are safeguards built into them.

PN117

Some of those being that records need to be kept; worker representatives have a role if so requested, in-parliament accrual are unaffected; and therefore we're asking that this Commission has necessary powers to ensure the schedule is not misused, has powers to resolve disputes if they arise, and has powers to determine any extension if sought. How this leads those opposed to assert that this is part of some grand plan that is not, on its face, is beyond us.

PN118

So in summary we emphasise that the changes we seek are only temporary, and simply provide employers with options in the unfortunate event that the poor economic predictions actually become a reality. The changes also acknowledge the mixed blessing, if you were, that come from being able to continue to function as an industry, as well as the raft of measures they've had to put in place to ensure social distancing is adhered to, and of course that safety is the top priority on site.

PN119

These measures and new obligations, as a consequence of the pandemic, logically have a substantial impact on how work is programmed, and as recent developments in Victoria have highlighted, will likely continue to do so into the foreseeable future. This is why we would argue the changes regrettably are necessary.

PN120

VICE PRESIDENT HATCHER: Ms Sostarko, can I just ask you about the end date. That goes beyond the end of the JobKeeper scheme. One of the difficulties we have at the moment is that we don't know what the government is going to do with respect to the JobKeeper scheme and whether it will continue, be extended, be modified, be scrapped. It seems to me to be unlikely at this stage that the government will let the thing fall off a cliff, as it were.

PN121

MS SOSTARKO: Well, yes, we would hope so, obviously. But that said, there are no guarantees. And as I've raised earlier, the union submissions have essentially stated that their expectation is that the government will come to the rescue in any means that it sees fit. While we don't have any guarantees about that, and obviously at the time of filing this application there was certainly no word of expectation that those arrangements were going to continue beyond September. And at the moment we can only deal with what is before us, and it is that they are set to conclude at that time.

PN122

VICE PRESIDENT HATCHER: Thank you.

PN123

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Ms Sostarko, in the event that the government does not extend the JobKeeper scheme, or perhaps changes the eligibility rules, but let's for present purposes assume that it will end on the date that it is said to end; and if we were to grant the applications, wouldn't the effect - sorry, I withdraw that.

PN124

Let's assume the government did continue the JobKeeper scheme, and if we were to grant the amendments, wouldn't one effect be that employers in the building and constructions sector would then have a choice of utilising the award provisions without the strictures of the JobKeeper regime, and without the protections afforded employees in relation to that scheme, the one-in all-in arrangements and so forth, and they could nonetheless have access to the various JobKeeper directions that are currently only available to those employees who are participating in the scheme.

PN125

MS SOSTARKO: Certainly, your Honour, the first point I would raise is that we would argue that there are sufficient safeguards (indistinct) with respect to those changes. I am not sure, and I certainly (indistinct) make that quite clear, that that's an important part of those changes, and they've been drafted very carefully with that in mind. But with respect to certainly the way that the application is currently drafted, is that those provisions are not to be applicable to those who are eligible for the scheme.

PN126

And the point that we make in terms of, say, September, is that this seems to provide an extension of some of those flexibilities under the scheme to assist employers once that scheme (indistinct).

PN127

DEPUTY PRESIDENT GOSTENCNIK: Yes, I see. I understand. Thank you.

PN128

VICE PRESIDENT HATCHER: All right. So, Ms Adler, do you want to go next?

PN129

MS ADLER: Yes, your Honour, if that's appropriate.

PN130

VICE PRESIDENT HATCHER: All right. So before you start, now we've passed Ms Sostarko and her technical difficulties, perhaps the other parties can, if they wish, turn back on their video. All right, Ms Adler.

PN131

MS ADLER: Thank you, your Honour. I will try to avoid repeating matters that Ms Sostarko has addressed, but I do think it's important that we set out what our claim is and why we're here today. Obviously the construction industry was deemed an essential service and so has continued to operate throughout this pandemic, but we do submit that the construction industry, specifically the residential building industry, has not been immune to the impacts of this pandemic.

PN132

Obviously that's why we have filed this application, why we've made submissions. And just to clarify, the submissions that we rely on our amended submissions dated 30 June, not the previously filed submissions of 15 June. If granted, the application would see the inclusion of a temporary schedule applicable until 31 December that would provide employers and employees with a range of options regarding workplace flexibilities.

PN133

The way that we see this application is basically in four groupings or four categories of amendments. The first relate to provisions that were introduced as part of the Commission decision of 8 April to introduce unpaid pandemic leave and annual leave at half pay that went into around 99 modern awards.

PN134

The second category are provisions that were adopted in the Clerks Award in March that allowed a direction to be given to take annual leave on the basis that the employee would have a remaining leave balance of two weeks. I know that matter has progressed since then, and there were some reasons published on 9 July and a revised schedule issued. However, the provision in relation to a direction to take annual leave, subject to some safeguards, remains in that schedule as far as I understand it.

PN135

The third category relate to provisions that we say reflect those adopted in the JobKeeper package, noting the questions that Ms Sostarko has already been asked, and predominantly are set out in clause H.7 of the schedule and relate to hours of work.

PN136

The final category of proposed changes relate to what we say are three industry-specific provisions that are causing hardship to industry, including changes to the taking of RDOs, the casual employment minimum engagement periods in both the Building Award and the Joinery Award, and the industry-specific redundancy scheme under the Building Award.

PN137

The objective of the joint application is to retain jobs and support businesses to stay in business; to assist the construction industry to stabilise; to support the industry, including both employer and employees during these unprecedented times; and to secure the survival of as many businesses as possible. It is a genuine attempt to provide viable options to those on the ground with ways of maintaining existing employment arrangements, albeit in a modified form, for a discrete period of time.

PN138

As Ms Sostarko indicated, it's hoped that these measures, if granted, will not be needed. The HIA's forecast as to the predicted decline in housing activity and consequential negative impact on the economy as a result of the pandemic are inaccurate; and that the timing of the protected downturn coinciding with the end of JobKeeper in September does not leave the economy to fall off the so-called cliff.

PN139

I think everyone in the industry would breathe a collective sigh of relief if these provisions did not come to fruition. And then if the schedule was act granted, it may never have been needed, as the application and the operation of the schedule is linked to the impacts of COVID. But what if these forecasts are realised? HIA's national outlook and our new home sales data, both of which are attached to our submissions, are just one of maybe a few credible and reputable sources of economic information on the housing sector.

PN140

The data that is relied on by many businesses, large and small, to make critical business decisions. It is not often completely wrong or is wildly inaccurate as put forward by the unions. If that is the case, and our forecasts are even remotely accurate, and the granting of the schedule can save one job, for one business can continue to operate, surely it would be worth it then. There doesn't really seem to be much downside to us.

PN141

Keeping a job, maybe on reduced hours or maybe by taking some annual leave, is surely a better outcome than unemployment. It is extremely disappointing that the unions fail to see this. Accusing industry of using COVID as an opportunity to reduce entitlements to attack the safety net, and to shift the cost burden of this pandemic onto employees is simply untrue and is based on nothing more than ludicrous assertions.

PN142

The unions seem to ignore two critical components of this application. Firstly there are a range of safeguards in the schedule that will protect the interests and rights of employees: for example, a direction in regards to a matter addressed in the schedule will only apply where COVID is the reason attributable to the change; and in all cases consultation is required; and in most cases the agreement of the employees is also required.

PN143

VICE PRESIDENT HATCHER: Can I just put you there, Ms Adler. So how do we – in terms of just changes that might be required as a result of a general downturn in demand, how do we determine whether that was caused by COVID or something else? I mean, I think your own evidence demonstrates there was already a downturn in housing starts well before the pandemic started, which was discernible late last year. How can we tell the difference?

PN144

MS ADLER: Your Honour, I probably might respectfully disagree with your take on the data. We were going into an uptick. So in January, February 2020, based on our data we were looking at heading into an up cycle, and then it was literally the day or the day after, or certainly the month of March, after the restrictions were announced, there was a sharp drop in activity, in new home sales, approvals, across most of the indicators that we've attached or are included in our reports.

PN145

And what I hope to show through the evidence is that you can actually pinpoint within a month where the drop-off has occurred, and it is an unusual drop-off compared to other sort of – the GFC or the introduction of the GST. This is an unusual way for the sector to operate, unlike other sort of recessionary events, I guess I should say.

PN146

VICE PRESIDENT HATCHER: Does your answer mean that your organisation regards any drop in demand as being caused by COVID?

PN147

MS ADLER: During this period, yes.

PN148

VICE PRESIDENT HATCHER: I mean, part of the difficulty is, I think, that unless we get a vaccine tomorrow, the pandemic will have effects on temporary and permanent immigration which is likely to be felt for years, and that will obviously flow through to demand for new residential housing. But you say that's all something that should be accounted for?

PN149

MS ADLER: Yes. I guess our position is, your Honour, that what we're seeking is a – it's a Band-Aid solution to allow businesses the opportunity to recalibrate. So as you say, this is a long-term problem. We can't solve this overnight. But businesses need to be given the opportunity to adjust the way they do business, basically, to account for the new world that we going to be looking at for the next, you know, however many years that is.

PN150

Such certainly, you know, the time limit on the schedule is purposeful in that it is directed at a period of time through which we see the hardest part of the cycle as a result of COVID, and also to give businesses an opportunity to recalibrate in light of what their new outlooks will be over the coming years.

PN151

VICE PRESIDENT HATCHER: What's the connection between the pandemic and the proposed reduction in the minimum casual daily start – minimum start?

PN152

MS ADLER: It's a flexibility option. So if you've got reduced work and you want to keep your employee on, you don't have four hours a day for this particular casual employee but maybe you do have a couple of hours a day, you can't do that under the award, you can't keep that person employed for less than four hours. So again it's one of a number of options to allow somebody to continue to come in to work that would otherwise not be available under the current provisions.

PN153

VICE PRESIDENT HATCHER: Thank you.

PN154

MS ADLER: Thank you, your Honour. So the second component of the application that the union is seeking to ignore and that we've already talked about is that it is temporary. As soon as 1 January 2021 comes around, any direction that would have been given under the schedule will basically cease to exist. Therefore we submit that the material and evidence we rely on in these proceedings will demonstrate the following four things: firstly that the pandemic has had and is having an undeniable impact on the construction industry and the residential building industry in particular.

PN155

Not only is it - we say it's clear through our forecasts, but it was also recognised in the recent annual wage review decision, which grouped the construction industry in the central cluster, and as part of group 2 awards that will be subject to the minimum wage increase from November. The wage panel observed at paragraph 47 that:

PN156

The industries in the central cluster have clearly been impacted by the COVID-19 pandemic.

PN157

The witness statements of Warwick Temby and Laura Regan we say also paint the picture of an industry in distress.

PN158

Secondly JobKeeper is not available to all businesses experiencing financial difficulties as a result of COVID. We believe our evidence will (indistinct) which is the qualifier for JobKeeper, has been difficult for some in the residential building industry to satisfy, not because they have not experienced hardship of financial strain, but because of the lag nature of the impact of the pandemic on residential construction activity. We say this has also created an uneven playing field that our application seeks to remedy.

PN159

Thirdly we say that as a consequence of the impact of the pandemic, the awards that are the subject of this application are no longer meeting the modern awards objectives. As such, employers and employees need support through the additional measures set out in the proposed schedule to ensure that the awards can continue to meet those objectives.

PN160

VICE PRESIDENT HATCHER: Are you able to say approximately what proportion of your members are on JobKeeper?

PN161

MS ADLER: No, your Honour, unfortunately. We tried to find some data, sort of a sectorial analysis of the take-up of JobKeeper, and it just doesn't seem to be available at the moment. Obviously we would have found that if use also, but it doesn't seem to be available at the moment.

PN162

My final point, your Honour, is that the proposed schedule, we say, is a balanced response that has been adopted in other awards to a set of unprecedented circumstances, and that's why we would ask that the Commission grant the application. Thank you.

PN163

VICE PRESIDENT HATCHER: All right. Ms Paul, do you want to say anything an opening?

PN164

MS PAUL: No, your Honour. We will concur with the statements already made on behalf of the employers.

PN165

VICE PRESIDENT HATCHER: All right. Do the unions want to say anything at this stage, or shall we just proceed to the evidence?

PN166

MR BONCARDO: Your Honour, I'm content to proceed to the evidence. There is one matter of housekeeping in respect to the order of production which was served on Richard Crookes Constructions. Notwithstanding the extension that your Honour gave to Richard Crookes Constructions to produce documents yesterday ‑ by 1 o'clock yesterday - there still has not been compliance by Richard Crookes Constructions with a number of paragraphs of the order for production.

PN167

That does present difficulties in cross-examining Mr Grippi later on today, as I understand he's available sometime this afternoon. And frankly it's not satisfactory that there hasn't been production. There has been no proper explanation given as to why production has not occurred. And to the extent required, I call again on the order for production which your Honour issued on 3 July.

PN168

VICE PRESIDENT HATCHER: Ms Sostarko, do you want to respond to that?

PN169

MS SOSTARKO: Thank you, your Honour. I'm going to defer to my colleague Mr McGregor to provide a response.

PN170

MR S MCGREGOR: Thank you, your Honour. It's Mr McGregor for – Sam McGregor for the Master Builders.

PN171

I reject the assertion that there wasn't an explanation for further production of documents. We filed correspondence with the Commission yesterday which outlined a response to all outstanding items. It included production of further documents where they were available; and where they weren't available, we had identified clear reasons why they weren't produced.

PN172

VICE PRESIDENT HATCHER: Well, I mean, if it's the case that there is nothing to produce, that's one thing; but speaking for myself, it seemed to me some of the answers just seemed to be a refusal to comply.

PN173

MR MCGREGOR: I might take the Commission and the parties through the outstanding items if that would assist.

PN174

VICE PRESIDENT HATCHER: If you can add anything. But, I mean, I'm only interested in what category you have nothing to produce, and what are the remaining categories, because it seems to me that notwithstanding the instructions which were given on Friday, that the answer seemed to be, "We're not complying."

PN175

MR MCGREGOR: Well, I would say that – if I could say with respect to item 1, then, I will touch on that, we have noted in our correspondence filed yesterday that Richard Crookes doesn't have any documents to produce, on the basis that it remains manifestly unclear what exactly it was the CFMEU were seeking. In our original response to the notice to produce, which I believe was 9 July, we sought clarification as to the documents, and noted that we were happy to provide those if the CFMEU provides us with some clarity, the documents they sought, and they didn't provide us that clarity at all, they just merely noted that they were seeking relevant documents.

PN176

Unfortunately, as we outlined in our response yesterday (indistinct) can't do it ‑ ‑ ‑

PN177

VICE PRESIDENT HATCHER: You're cutting out, Mr McGregor.

PN178

MR MCGREGOR: I will repeat myself again, then. Sorry, your Honour. My point was at large, if we don't know what we're expected to produce, we can't - and we did seek clarification from the CFMEU, and they're the ones that refuse to provide that to us. With respect to item 5, again, look, we stand by what we've said now correspondence. It's with our deepest apologies that we couldn't get instructions on that point.

PN179

We have noted that Mr Grippi has taken unforeseen and urgent personal leave, and I personally don't have insight into the reasons behind that. But the point being that again it's just not a matter that we could get instructions on. And if nothing else, we would stress that at the end of the day it is open to the Commission to take the evidence on its face and give it appropriate weight when Mr Grippi is cross-examined. And if the non-production of documents under item 5 is going to tip the balance of that weight, then that's a matter for the Commission in considering that evidence.

PN180

With respect to item 6, we note that we did produce documents yesterday (indistinct) taking over those documents which the CFMEU have provided, at least undertook to provide it, when documents were produced under that item, and we've just sought that the Commission would make the confidentiality order over all the parties with respect to those documents.

PN181

With respect to item 8, we thank the CFMEU for providing clarity over exactly what it was, the documents that were sought, and we referred the CFMEU two documents that would satisfy production of that order.

PN182

And with respect to items 10 and 11, the only point that we can make is that – or reiterate our initial response that we were not being belligerent in not providing documents (indistinct) the category is too broad for us to identify any documents, and without clarification on exactly what was being sought, we are going to be measuring, I suppose, a piece of string which we have no understanding of how long or short it could possibly be.

PN183

And so again we sought that clarification and it wasn't provided, and so we are not in a position to produce documents. So I think there is a distinction to be made at large that where documents haven't been produced, it's not by choice, it's because of a lack of clarity or understanding (indistinct).

PN184

VICE PRESIDENT HATCHER: Mr Boncardo, unless you've got any further submission you want to make, I think it's clear that there's no intention to produce further documents, so I think the only thing that can be said for the time being is that if you want to make a submission about the weight to be given to the evidence of certain witnesses based on the failure to produce documents in accordance with the order, you can do so in due course.

PN185

MR BONCARDO: If the Commission pleases.

PN186

VICE PRESIDENT HATCHER: All right. So are we ready to call the first witness, Mr Garrett?

PN187

MR MCGREGOR: We are, your Honour. I will take that one, and we will advise Mr Garrett that (indistinct).

PN188

VICE PRESIDENT HATCHER: If we can let Mr Garrett in and give him the affirmation, please.

PN189

THE ASSOCIATE: Mr Garrett, can you please state your full name and address.

PN190

MR GARRETT: Shane William Garrett, based at care of Master Builders Australia, 44 Sydney Avenue, Forrest, ACT.

<SHANE WILLIAM GARRETT, AFFIRMED [11.05 AM]

EXAMINATION-IN-CHIEF BY MS SOSTARKO [11.05 AM]

PN191

MS SOSTARKO: (Indistinct) have you prepared a statement for these proceedings?‑‑‑(Indistinct reply)

PN192

VICE PRESIDENT HATCHER: Sorry. Just hold on, Mr Garrett.

PN193

Ms Sostarko, you seem to have removed the previous connection that you had. Can you do again what you were previously doing.

PN194

MS SOSTARKO: Okay.

PN195

VICE PRESIDENT HATCHER: And there seems to be a lot of background noise coming from somewhere.

PN196

MS SOSTARKO: Your Honour, can you (indistinct).

PN197

VICE PRESIDENT HATCHER: Just try that again. I think that's better.

PN198

MS SOSTARKO: Okay. Thank you, your Honour.

PN199

VICE PRESIDENT HATCHER: All right. Go ahead.

PN200

MS SOSTARKO: Apologies, Mr Garrett. Can you hear me now?‑‑‑Yes, I can hear you perfectly. Thank you.

PN201

Thank you. So I just had a couple of questions, but I should - as I was saying, have you prepared a statement for the proceedings?‑‑‑Yes, a statement has been prepared.

PN202

And do you have a copy with you?‑‑‑I do indeed, yes.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN203

And is the document entitled Statement of Shane William Garrett?‑‑‑That is correct.

PN204

If the Commission pleases, I seek that the document be marked as an exhibit and (indistinct).

PN205

VICE PRESIDENT HATCHER: All right. Thank you. The statement of Shane William Garrett dated 19 June 2020 will be marked exhibit 1.

EXHIBIT #1 STATEMENT OF SHANE GARRETT DATED 19/06/2020

PN206

MS SOSTARKO: Thank you, your Honour. I would just like to ask a couple of questions, if I could.

PN207

VICE PRESIDENT HATCHER: Yes.

PN208

MS SOSTARKO: Mr Garrett, can I take you to paragraph 14 of your statement, please?‑‑‑Yes.

PN209

Can you please explain to the Commission the basis on which you've made the comment at that paragraph?‑‑‑Certainly. So this estimate of construction job losses was based on weekly information provided by the ABS relating to the percentage change in construction employment over the period since the beginning of 2020. I should stress that the ABS in that particular data series did not provide numbers on construction employment; however, they did provide an estimate of total construction employment for the month of February 2020. And combining that with the series referenced in paragraph 14, I was able to estimate the number of job losses in construction which occurred between 14 March of this year and 30 May, which at the time of the statement was the latest date for which employment estimates had been prepared by the ABS.

PN210

VICE PRESIDENT HATCHER: Mr Garrett, do you have the equivalent number for February 2019?‑‑‑I do. If you just give me a moment, I will be able to access that. The equivalent figure for February 2019 I believe was 1,146,880.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN211

Right. While you're there, can I just take you to paragraph 15. Does that indicate that at least in the residential sector there had already been a significant decline in starts?‑‑‑Yes. Residential building activity had actually peaked during the 16-17 financial year. I will just confirm that with you now. Yes, during 2016 calendar year, in fact, the total number of new dwelling starts across Australia reached an all-time high of 234,332. The amount of new home building activity across the country has been in decline since then.

PN212

All right. And are you able to say that the reasons for that are?‑‑‑Yes, there were a number of reasons. If we go back to the peak of the market back in 2016, prices in major markets, including Sydney and Melbourne, started to fall, house prices, and there was a fall of about 20 per cent in house prices between about 2016 and 2018 or thereabouts, and that was obviously a negative from the point of view of stimulator demand (indistinct) what also happened was that there were some restrictions placed on the participation by foreign buyers in the Australian market, starting from 2015, pillar of demand for new home building, and the restrictions, which included super taxes and the like, caused new home building activity in those markets to decline. There were a number of other reasons well. Economic growth had slowed over the last three or four years across the country. And what we also saw, which would have been of particular importance to demand from investors, was a deceleration of rental price increases across most markets. And in fact during 2019 rental price inflation hit its lowest rate since at least 1972. Those will be some of the main reasons for the reduction in the home building activity.

PN213

And what was the projection of that same sector for 2020 pre-the pandemic?‑‑‑Master Builders Australia published a set of reports, as luck would have it, just at the end of February, just before the worst – the coronavirus pandemic took hold. I will just summarise what those were, as was the case at the end of February. At the end of February we anticipated that new home building activity, in terms of the number of starts, would bottom out at just over 159,000 during the 2020-21 financial year. All of our forecasts are prepared on a financial year basis. That was the position pre-the rapid deceleration in the COVID-19 scenario. We then saw new home building activity starting to recover during the 2021-22 financial year, reaching about 169,000 in 21-22; and over subsequent years eventually topping 200,000 new dwelling starts by the time the year 2024-25 rolled around. That was what our view was prior to the deterioration in the COVID-19 situation.

PN214

Thank you. Sorry, Ms Sostarko. You've muted yourself.

PN215

MS SOSTARKO: Okay, thank you.

PN216

Mr Garrett, can I now take to paragraph 20. Would you be able to explain to the Commission the basis of ‑ ‑ ‑

PN217

VICE PRESIDENT HATCHER: Ms Sostarko, you're cutting in and out. You need to put those headphones back on I think. That seems to make it work.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN218

MS SOSTARKO: Okay, just one moment, your Honour. See if that works. (Indistinct).

PN219

VICE PRESIDENT HATCHER: Just say that – start again.

PN220

MS SOSTARKO: Is that – can you hear me better, your Honour?

PN221

VICE PRESIDENT HATCHER: Yes. That makes it work better, when you do that.

PN222

MS SOSTARKO: Excellent. Thank you.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN223

Apologies, Mr Garrett. My question was if you go to paragraph 20 of your statement, and if you wouldn't mind explaining to the Commission the basis on which you draw the conclusions made in that?‑‑‑Yes. So obviously the emergence of the COVID-19 difficulties, which really gathered legs during the month of March, that has resulted in our forecast for building and construction activity being revised very substantially. The amount of building work which takes place is dependent on a number of things. If I was to kind of go through them in order of importance and in order of how influential they are, population growth would probably be the single largest driver of activity for building. Obviously when we have more people in the country, we need more buildings in the country. The COVID‑19 situation means that now oversees migration into Australia has basically been at or about zero since the most stringent travel restrictions were imposed in the second half of the month of March of this year. That's obviously a severe negative from the point of view of underlying demand for building work. Employment is also a very key driver of the number of building projects which takes place. The latest figures we have on employment numbers indicate that well over 800,000 jobs have disappeared from the Australian economy since the peak unemployment which occurred in February of this year, so those are two of the critical factors. Another one, which is much more difficult to measure, and relies more on sense, is confidence; in other words the view households and businesses have of what the future is going to look like. That is something which COVID-19 has impacted upon very badly. When it comes to a big-ticket expenditure item like a building project, a renovation project, or initiation of the construction of a new home, people's views about how they see the future in economic terms; how they see their own job sustainability, for example; how stable and how reliable they see their income streams as being, all those have a very major impact on people's willingness to proceed with large expenditure items like building work; and also on people's willingness to borrow money and get into debt for the sake of undertaking those activities. Those, I would say – there are lots of other factors at play, obviously, but those, I believe are the key factors of influence in terms of influencing what will occur in terms of building activity over the coming years.

PN224

Thank you. Thank you, Mr Garrett. A few weeks have passed since you wrote the statement. Can you identify if the situation has changed during this time, and provide the Commission with the latest (indistinct)?‑‑‑So the statement was written on 19 June, which is about - give or take, about three weeks ago. The situation hasn't changed significantly since then, I would say. The statement was made after, for example, the HomeBuilder initiative had been announced. We have had a number of other official data releases, which gives us a better factual sense of what is happening on the ground. We've had – for example, last week we've had figures on lending activity. Lending activity had been holding up reasonably well up until April, according to the official figures, but the figures last week for the month of May, for example, indicate that lending went into a reverse in the month of May, especially when it comes to investors' willingness to purchase investment properties. Those figures saw a very considerable reduction, as did some of the lending figures relating to owner occupiers' purchases of established dwellings, and to a lesser extent new dwellings.

PN225

DEPUTY PRESIDENT GOSTENCNIK: Mr Garrett, has the MBA conducted any research in respect of the number of its members or businesses in the sector that are currently participating in the JobKeeper scheme?‑‑‑No, we don't have any figures on JobKeeper amongst our members. We haven't done that.

PN226

There was some data released last Friday which indicated that the building industry topped the list of the highest numbers of businesses that applied for JobKeeper in April and May, and that approximately 350,000 construction workers are in receipt of JobKeeper payments. Are you aware of that dataset at all?‑‑‑I haven't seen it in detail. It sounds like an accurate reflection - - -

PN227

This is in a newspaper article last Friday. Ms Sostarko or Ms Adler, perhaps one of your colleagues could do some work in trying to obtain the dataset. It seems to me that that would be useful information that we had.

PN228

MS SOSTARKO: Your Honour, if I may, we did also see those reports and tried to ascertain where those figures came from, and haven't been able to to date.

PN229

DEPUTY PRESIDENT GOSTENCNIK: I've had a quick look on the ATO's site, and also on the Treasury site, and haven't been able to find them.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN230

THE WITNESS: It may well be the case that construction is the largest sector for that, one of the reasons being that construction accounts for more businesses than any other sector in the Australian economy.

PN231

VICE PRESIDENT HATCHER: Ms Sostarko. We're not hearing you, Ms Sostarko, unfortunately.

PN232

MS SOSTARKO: Apologies, your Honour. My unmute is temporarily unresponsive, but I've got you back.

PN233

VICE PRESIDENT HATCHER: Yes, okay.

PN234

MS SOSTARKO: Certainly, your Honour, we will seek to get to the bottom of the source of that data, but we would preface it by saying that it's extremely difficult at the moment to quantify the uptake in the scheme. But if we can take that on notice and come back to you with what we can.

PN235

VICE PRESIDENT HATCHER: Right. Thank you. Any further questions of this witness?

PN236

MS SOSTARKO: Yes, your Honour. Thank you.

PN237

Mr Garrett, a report by Dr Toner and Associate Prof Rafferty has been filed in these proceedings. Do you have a copy with you?‑‑‑Yes, I do. Yes, I have it here.

PN238

I should just clarify, Mr Garrett, can you hear me clearly at this point?‑‑‑I can hear you, yes.

PN239

Okay, thank you. Have you had the opportunity to read this report?‑‑‑I have, yes.

PN240

Can I then take you to section 3, which is at page 10 (indistinct)?‑‑‑Yes.

PN241

And ask if you have any observations to make for the Commission about that section?‑‑‑Yes, I do have an observation to make. The first line, which reads:

PN242

To date the effects of COVID-19 has only had a relatively modest contractionary effect on the level of activity in the construction industry in Australia.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN243

It describes a relatively modest contractionary effect. The only official figures that I have seen relating to construction activity post the COVID-19 other figures to which I referred to earlier in terms of employment in construction. And again just to remind everyone, the figures which now go up as far as 13 June, these are the weekly employment figures, indicate that construction employment has fallen by 5.3 per cent since 14 March of this year. That's an equivalent, in my book, to about 63,000 jobs. I would take issue with the description of that as being a modest contractionary effect because I think for any sector to lose 5 per cent of the total job count over the course of about three months is quite a rapid pace of deceleration.

PN244

Thank you. Can I also then take you to section (indistinct) 13. On that page I refer you to the fourth paragraph where it starts, "Furthermore".

PN245

VICE PRESIDENT HATCHER: What page, Ms Sostarko?

PN246

MS SOSTARKO: At page 13, your Honour, and it's the fourth paragraph, that starts with (indistinct).

PN247

Can you see that part, Mr Garrett?‑‑‑That's quite right, yes. I've got that.

PN248

Do you have any observations to make about that paragraph?‑‑‑So yes, there is a sentence there which reads:

PN249

In the wake of the global financial crisis 2008-2009 we saw that a range of government stimulus and investment programs put a floor under construction activity.

PN250

The issue there, I would say, is that if you look at the results, the official figures from the ABS relating to that period, particularly if you look at residential building, new home building actually saw two fairly substantial reductions during the GFC period. There was an initial fall-off in new home building during 2008 and 2009; we then had a government stimulus, which lifted that; but following on from that we then saw two further years of contraction in new home building activity. In fact new home building activity fell by 11.7 per cent in 2011, and fell by a further 1.1 per cent in 2012, so - - -

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN251

VICE PRESIDENT HATCHER: Mr Garrett, and I just interrupt you. You're answering that question by reference to residential construction. I'm not sure that this paragraph is confined in that way?‑‑‑Sure, okay. Just by way – I think the stimulus at the time was focused on residential construction. There was a homebuilder boost, for example, offered at the time. I would just point out that the reductions in new home commencements at the time were quite considerable, despite the government stimulus which was provided at the time. Furthermore ‑ ‑ ‑

PN252

(Indistinct) there was that school hall building program or something, wasn't there, as well?‑‑‑That's right, yes, the BER, yes. And that did provide support to commercial building, a portion of commercial building at the time, sir. Parts of the building industry did respond favourably at the time, but other parts did not. And in fact the effect of the stimulus was short lived. And when we look, say, at new home-building activity over that period. Just another comment I would make in relation to that paragraph is that there's a sentence a little further down which reads:

PN253

We also know that in the wake of this crisis, likely future demand for construction will be significantly boosted by a range of measures already announced by state and federal governments.

PN254

It also indicates that more stimulus is on the way, though I would withhold from speculating on the impact of any unknown future stimulus on building activity until we actually see what that stimulus is and how big it is.

PN255

MS SOSTARKO: Thank you, Mr Garrett. Can I now take you briefly to appendix 1 at page 14?‑‑‑Yes.

PN256

I'm not an economist, but it appears to me that the proposition in that section is that the sector experiences economic side-effects, and this is something that the sector is accustomed (indistinct) can I ask you to explain ‑ ‑ ‑

PN257

VICE PRESIDENT HATCHER: Sorry, Ms Sostarko, your question cut out. Can you ask the question again, please.

PN258

MS SOSTARKO: Yes, your Honour, I will do that. Apologies. I will try again. The question was: it appears that that part of the report is essentially asserting that the sector experiences economic cycles, and this is something that it's accustomed to. I just asked Mr Garrett if he could explain to the Commission ‑ ‑ ‑

PN259

VICE PRESIDENT HATCHER: Sorry, Ms Garrett(sic) can you just ask the last bit again. So you said, "Can you ask Mr Garrett to explain", and then you cut out.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN260

MS SOSTARKO: What his thoughts are on ‑ ‑ ‑

PN261

VICE PRESIDENT HATCHER: Doing a bit of lip reading, Mr Garrett, I think you're being asked to comment on that part of the report?‑‑‑Yes, okay. So yes, the section of the report indicates that the fluctuations in the construction industry tend to be very large, relative to other parts of the economy. That's true. So when - construction activity tends to enjoy an even bigger bounce than the rest of the economy; when things are a little bit more difficult, construction tends to receive an overly large reduction in activity. That is true. I would just say that that may be the case. I would argue that even though obviously the economic environment has cooled over the last number of months, and even though construction activity is susceptible to large reductions, it is still something that the industry should be trying to avoid at a time like this. Yes, so just because big reductions have happened in the past, it doesn't mean we should sort of accept that they should happen on this occasion, and we should still try and do all we can to prevent that from happening.

PN262

MS SOSTARKO: So in your experience, how do the circumstances faced during COVID-19 compare to the usual industry cycles?‑‑‑Well, this one is different and bigger for a number of reasons. First of all, as I said earlier, the key demand drivers of building activity have faced, as far as I can see, their largest ever reduction. So for example net overseas migration into Australia has always been an important driver of new home-building activity and demand for housing generally. Given that that overseas migration has basically slumped to almost zero in the current environment, that does make it a much more difficult environment for us to be grappling with. Like even back, say, in the early 90s, during 92, 93, that overseas migration to Australia bottomed out at 30,000 per year. But at the rate we're going, we're going to be much lower than that this time, and that would make it, since at least modern records began, the weakest period in modern history for net overseas migration. So that ticks a box as being a very negative demand shock for building activity across Australia. But as I said, we've also had a massive hollowing out of employment in the economy since February. As I say, that has meant a reduction in total employment of over 800,000 across the economy over a period of about three months, according to the latest figures, and that's another huge shock for demand for building activity across the economy. So both the pace and the magnitude of the reverse in demand for building is one which I have never seen, at least according to modern records. And that makes this situation all the more challenging.

PN263

I was just about to add then, Mr Garrett, would it be correct to assume, then, that the pandemic is not a normal part of usual construction cycles?‑‑‑I would think not. No, I think that the reverses to demand, just the sheer scale of them and the speed of them, make this a much more different downturn to previous ones.

PN264

Thank you. I certainly – unless there's anything else you would like to add or make in terms of observations, Mr Garrett, your Honours, I have nothing further.

*** SHANE WILLIAM GARRETT XN MS SOSTARKO

PN265

VICE PRESIDENT HATCHER: Thank you. Mr Boncardo, are you next?

PN266

MR BONCARDO: Thank you, your Honour.

CROSS-EXAMINATION BY MR BONCARDO [11.33 AM]

PN267

MR BONCARDO: Mr Garrett, I just want to clarify something in respect to a question that the Vice President asked of you in relation to that the state of the construction industry – I think his Honour's questions were focused on the state of the residential sector of the industry – and your answer was that you forecast the industry to start to recover in 2021 to 2022. Do you recall giving that evidence?‑‑‑So that evidence was provided, yes, it would begin – the recovery would begin in 2021–22, correct.

PN268

Can I ask, sir, do you have a copy of your statement with you?‑‑‑I do indeed.

PN269

I just want you to help me, sir, understand. If you look at page 3, sir, of the attachment to your statement. Do you have that?‑‑‑So page 3 of the attachment?

PN270

Yes?‑‑‑And the attachment – is this the forecast?

PN271

That's so?‑‑‑Yes, gotcha.

PN272

And you will see there, sir:

PN273

Revised forecasts for new home-building commencements to 2024-2025.

PN274

?‑‑‑Yes.

PN275

Those are the forecast current in April 2020. Is that right?‑‑‑That is correct, yes.

PN276

And if you look up at the table above that, you will see the forecasts for pre-COVID February 2020?‑‑‑Yes.

PN277

And it was anticipated, wasn't it, that the industry would continue to decline in terms of new home-building in the 2020-2021 financial year. Do you see that?‑‑‑Yes.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN278

And there would be a pick up in the 21-22 financial year?‑‑‑Yes.

PN279

And if I can get you to turn, sir, to page 6 of the attachment?‑‑‑Yes.

PN280

This concerns commercial building. And looking at the pre-COVID circumstances for commercial building, would you agree with me that commercial building was anticipated to commence rebounding, so to speak, in the 2023-2024 financial year?‑‑‑Yes, that's correct.

PN281

And in fact according to your forecasts as at April 2020, rebound is to occur in commercial building in 2022-2023. Is that so?‑‑‑That is so, yes.

PN282

Thank you. Now, Mr Garrett, I want to ask you some questions about the survey that you referred to at paragraph 29 of your statement. Can I ask you, sir, you have a copy of the survey results that were produced by the Master Builders?‑‑‑Yes, I do.

PN283

And you're able to access those without any issue?‑‑‑Yes. I have a printout of a summary of the results, a sort of summary report for - - -

PN284

You're familiar with those results, aren't you?‑‑‑Yes.

PN285

And you're familiar with the questions that were asked. Correct?‑‑‑Yes.

PN286

You're familiar with question 3 that was asked, that in that:

PN287

The start COVID-19 crisis, how had the amount of forward work on your books changed?

PN288

?‑‑‑Yes.

PN289

Those are the results that you refer to paragraph 29?‑‑‑Yes.

PN290

This survey was completed, I think, on 15 April. Correct?‑‑‑Yes.

PN291

All right?‑‑‑In or around that date, anyway, if not the 15th itself. Yes.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN292

And this question did not differentiate as between the reasons for falls in the amount of forward work. Correct?‑‑‑Yes, it did not. It just asked for what they believed would happen.

PN293

And it didn't ask, for example: how as the amount of forward work on your books changed because of COVID?‑‑‑Yes.

PN294

All right. Thank you. Now, you've read the Master Builders application in this matter?‑‑‑Just going back to your last question, just to emphasise that the question does read:

PN295

Since the start of the COVID-19 crisis, how has the amount of forward work on your books changed?

PN296

So it is implicit in the responses that the cause of the change is COVID-19 related. Just point that out.

PN297

(Indistinct) that it implicit in the responses?‑‑‑Well, it is implicit in the question, so I would imagine that many of the respondents would have interpreted the change they've experienced in their books as being due to COVID-19.

PN298

That's what you're speculating. Is that right, sir?‑‑‑That would be my judgement.

PN299

You read the application in this matter?‑‑‑Yes.

PN300

You understand it concerns three awards?‑‑‑That's right. I haven't read all of the application. I am familiar with the thrust of the application. That's how I would say.

PN301

You understand that awards cover and apply to employees who work in particular classifications or particular occupations or particular industries. Correct?‑‑‑That's my general understanding.

PN302

And you would agree with me, wouldn't you, that we cannot tell from the questions posed in the survey – and I'm asking generally about the survey – if any of the respondents employ any employees who fell under either one or more of these awards?‑‑‑Do you mind repeating that question. I just want to listen to it more carefully.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN303

I will ask the question again. You would agree with me, wouldn't you, that it is not possible to tell which, if any of the MBA members who responded to your survey employed anyone under any of the awards are the subject of the application?‑‑‑Yes, there isn't a means of doing that. In other words, there isn't any way of identifying characteristics of respondents, apart from the information provided in the survey.

PN304

And there was nothing asked in the survey of the respondents as to how many employees any of them employed?‑‑‑That's correct.

PN305

You understand also that awards do not apply to employees if an enterprise agreement is in place that regulates the terms and conditions of employment of employees in a particular enterprise?‑‑‑I couldn't comment because that is not my area of expertise.

PN306

If I can perhaps ask you this, then: there were no questions posed in the survey that differentiated between employers who might have been covered by an enterprise agreement and employers who might have been covered by one of the three industry awards the subject of the application?‑‑‑So yes, all people who participated in the survey were asked the same set of questions.

PN307

Perhaps you could answer my question, and it might be my fault for not making the question particularly clear. But you would agree with me, wouldn't you, that no information was given by any of the respondents to the survey as to whether or not they were covered by an enterprise agreement?‑‑‑Yes, that question wasn't asked, so yes.

PN308

The MBA has, as its members, a number of people who are sole traders?‑‑‑Certainly, yes.

PN309

And you would be familiar, wouldn't you, that those members may not employ anyone at all?‑‑‑Absolutely, yes.

PN310

And that a number of the survey respondents fell into the category of sole traders?‑‑‑That would be correct, yes. There are considerable numbers of people who are not employers who are active in the building and construction industry. So yes, it's very likely some of those people did participate in the survey.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN311

And other people who may be members of the MBA who participated in the survey could be engaged in a business where they're engaging workers as subcontractors rather than employees?‑‑‑That's quite possible, yes. It's a common model in the industry.

PN312

We have no knowledge or no means of knowing, do we, as to which respondents to the survey might have been sole traders?‑‑‑We don't, apart from the question around employee numbers. People were asked:

PN313

Since the start of the COVID-19 crisis, how has the number of employees in your business changed?

PN314

In that situation there was an option to indicate whether there had been a reduction or whether there had been an increase. That implicitly therefore indicates – or at least identifies some of the respondents who did or who do have employees in their business.

PN315

And, sir, a respondent to the survey who didn't employ anyone, there was no answer available to them to that question, was there?‑‑‑There was the facility to comment, so that's another facility through which non-employers would have been able to respond.

PN316

Did you take those into account when you compiled the responses to question 4 into percentages and numbers?‑‑‑Well, there was a third option regarding "it has largely stayed the same", but I would imagine that anybody who is a sole trader would have opted for that, given that that would have been an accurate description of the headcount of their business.

PN317

That's what you imagine, is it?‑‑‑Well, that's what logic suggests to me would have happened.

PN318

I want to ask you some questions about forecasting. You would agree with me that forecasting is not scientific. It's not a recognised science. Correct?‑‑‑Well, forecasting is a process which combines evidence with technique to produce results. Whether that counts as being scientific or not is not a matter for me to say.

PN319

It's an exercise in prediction, isn't it?‑‑‑Well, it's an exercise in establishing what the future might look like, yes.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN320

And it's a predictive exercise based on a number of variables. Correct?‑‑‑It is, yes. It's based upon the information available to the forecaster at the time at which the forecast has been compiled.

PN321

And if that information changes, that could result in a change in the forecast. Correct?‑‑‑That is right, yes.

PN322

And a forecast that might have been current one month ago might be radically different today due to changes in variables. Correct?‑‑‑That's quite possible. That was the basis for us revising our forecast in April, compared with February, in fact.

PN323

And the forecasts that are before the Commission are forecasts that were current in April. Correct?‑‑‑They were prepared and published towards the end of April. That is right.

PN324

That was before stimulatory measures were introduced by the government, such as the HomeBuilder scheme?‑‑‑It was before some stimulatory measures were introduced by the government. Some other stimulatory measures had been announced prior to the April forecasts being produced.

PN325

The HomeBuilder scheme was announced in May. Correct?‑‑‑The HomeBuilder scheme was announced in early June, which was subsequent ‑ ‑ ‑

PN326

Thank you?‑‑‑ ‑ ‑ ‑ to that.

PN327

Forecasters use a model to input data and spew out results. Is that right?‑‑‑That's the general principle of forecasting, yes.

PN328

And unless the model is known, and unless the data that's imported into the model is known, it is not possible to make an assessment of the reliability of the forecast. Correct?‑‑‑The forecast reliability can only be established once the forecast period has ended, which is five years from now.

PN329

All right. But you would agree with me, wouldn't you, that you haven't exposed in your evidence, sir, what particular model or what particular methodology you used to compute the forecasts that you have set out in your witness statement?‑‑‑No, the methodology has not been set out. I'm happy to talk you through it if you like.

PN330

No, thank you. Just pardon me a moment. Thank you, Mr Garrett.

*** SHANE WILLIAM GARRETT XXN MR BONCARDO

PN331

VICE PRESIDENT HATCHER: Does anyone else wish to cross examine this witness? No, all right. Any re-examination, Ms Sostarko?

PN332

MS SOSTARKO: Yes, your Honour. I just have one question for Mr Garrett.

RE-EXAMINATION BY MS SOSTARKO [11.48 AM]

PN333

MS SOSTARKO: Mr Garrett, noting that you're not an IR specialist, I think we can assume that ‑ ‑ ‑

PN334

VICE PRESIDENT HATCHER: Ms Sostarko, you will have to start again. That is cut out.

PN335

MS SOSTARKO: Okay. I will lean in, your Honour.

PN336

Mr Garrett, can you hear me now?

PN337

VICE PRESIDENT HATCHER: Only just.

PN338

THE WITNESS: Just, yes.

PN339

MS SOSTARKO: Okay.

PN340

VICE PRESIDENT HATCHER: That's better, when you do that.

PN341

MS SOSTARKO: Okay. Apologies, everyone.

*** SHANE WILLIAM GARRETT RXN MS SOSTARKO

PN342

Mr Garrett, noting that we can all assume at this point that you're not an industrial relations expert specialist, can you tell us whether to your knowledge the survey was prepared for the purposes of obtaining information pertaining to the various industrial instruments that employees in the sector are engaged under; and if not, what was the purpose of the survey?‑‑‑The purpose of the survey was – there were a number of different purposes for the survey. The first was to gauge what the likely course of activity in building on the ground was going to be over the next while in light of the COVID-19 situation developing. Other purposes of the survey just included trying to identify specific logistical issues that members of the MBA builders involved were experiencing at the time. For example, at the time there was a perception in some reports that the supply of building materials had been adversely affected by the COVID-19 crisis, and one of the purposes of the survey was to (a) identify if those issues existed in the real world, and (b) what action could be taken to deal with them. But as I say, it was generally an attempt to see what direction things were going in, and also to identify specific problems at specific issues that Master Builders Australia could play a role in remedying.

PN343

Thank you. Thank you, Mr Garrett. You were asked a question about forecasting methodology. Could you very briefly just explain what that is for us?‑‑‑Forecasting methodology relates to converting known information at the time the forecast is made into a forecast of what is going to happen in the future, based on understandings of how the process being forecast actually operates. So for example I talked about population before. We know that population has an influence on, say, new home building activity. So in terms of the forecasting exercise, what we would have done is we would have tried to identify what was going on with population, and then use that to produce estimates of how many new homes were going to be built in the future. So it's a process really that marries the availability of factual information with the best understanding we have of the process through which factors, situations, and economic conditions on the ground influence the activity which we're interested in forecasting, in our case the number of new homes being built, and also the volume of commercial building activity which takes place.

PN344

Was that methodology applied for the April forecasts?‑‑‑It was, yes. In the particular situation in April, given that we knew we were almost certainly facing into a deeper downturn than we had previously anticipated, one of the things, for example, I would have done was I would have looked at past new home building downturns in each of the eight states and territories and seen what kind of magnitudes they had experienced in the past; and then really using that past information as a guide to what a larger than usual downturn might look like in the current scenario.

PN345

Thank you, Mr Garrett.

PN346

Nothing further, your Honour.

PN347

VICE PRESIDENT HATCHER: If there's nothing further, Mr Garrett, thanks for your evidence. You're excused, which means you can simply disconnect?‑‑‑Thank you very much, your Honour.

<THE WITNESS WITHDREW [11.53 AM]

PN348

VICE PRESIDENT HATCHER: All right. Ms Adler, is Mr Temby the next witness?

*** SHANE WILLIAM GARRETT RXN MS SOSTARKO

PN349

MS ADLER: I believe so, yes, your Honour.

PN350

VICE PRESIDENT HATCHER: Is he available yet?

PN351

MS ADLER: I've asked him to be available from midday. I can ask him if he can just login a little bit earlier, if that is helpful.

PN352

VICE PRESIDENT HATCHER: Yes.

PN353

MS ADLER: Just bear with me a moment. He should be present momentarily, your Honour.

PN354

THE ASSOCIATE: Would you please state your full name and address.

PN355

MR TEMBY: Warwick Temby, (address supplied).

<WARWICK TEMBY, AFFIRMED [11.55 AM]

EXAMINATION-IN-CHIEF BY MS ADLER [11.55 AM]

PN356

MS ADLER: Mr Temby, have you provided a statement in these proceedings?‑‑‑Yes, I have.

PN357

Do you have a copy of it in front of you?‑‑‑I do.

PN358

Is that statement dated 15 June, and some 34 paragraphs long, and include one annexure?‑‑‑That's true.

PN359

Do you wish to make any changes to the statement?‑‑‑No.

PN360

And finally, is that statement a true and correct record of the evidence it wished again in these proceedings?‑‑‑It is, yes.

PN361

Thank you. I seek that the statement be marked as an exhibit in these proceedings, your Honour.

*** WARWICK TEMBY XN MS ADLER

PN362

VICE PRESIDENT HATCHER: Statement of Warwick Temby dated 15 June 2020 will be marked exhibit 2.

EXHIBIT #2 STATEMENT OF WARWICK TEMBY DATED 15/06/2020

PN363

MS ADLER: Thank you, your Honour. I don't have any questions.

PN364

VICE PRESIDENT HATCHER: Are you next, Mr Boncardo? Mr Boncardo, you're on mute.

PN365

MR BONCARDO: I apologise, your Honour. I should have done this before the statement was tendered, but there are a number of objections that the CFMEU has made to the statement. I'm content for your Honours to note them, instead of going through them line by line, and I will make submissions in due course as to the weight that can be given to some of the more egregious example the hearsay in Mr Temby's statement ‑ ‑ ‑

PN366

VICE PRESIDENT HATCHER: All right ‑ ‑ ‑

PN367

MR BONCARDO: ‑ ‑ ‑ if that's a convenient course.

PN368

VICE PRESIDENT HATCHER: - - - appropriate. So the objections are noted. Submissions may be made as to the weight of the evidence, or aspects of it, in due course.

PN369

MR BONCARDO: Thank you, your Honour.

CROSS-EXAMINATION BY MR BONCARDO [11.57 AM]

PN370

MR BONCARDO: Mr Temby, sir, you would agree with me, wouldn't you, that a significant number of people operating in the residential building industry trade as sole traders?‑‑‑Yes.

PN371

A significant number of those people are HIA members. Correct?‑‑‑Yes.

PN372

And oftentimes they don't employ anyone at all. Correct?‑‑‑Depends on your interpretation of "often". Surveys that we've done of HIA members in the past have surprised us in some ways about how many of the sole traders do actually employ.

*** WARWICK TEMBY XXN MR BONCARDO

PN373

And a significant number of people working in the industry are engaged as contractors instead of employees, via ABNs. Correct?‑‑‑No, they're engaged as contractors. The ABNs is part of being a contractor, but not exclusively the whole story.

PN374

And you would agree with me that those people would represent a not insignificant portion of workers in the residential home building industry?‑‑‑Yes, they're not insignificant.

PN375

Can I just take you to annexure A of your statement, sir?‑‑‑Certainly.

PN376

This is the life cycle home building project diagram. I just want you to just have a look at the last row at the base of page, which says "Employees"?‑‑‑Yes.

PN377

And it then says:

PN378

Workforce made up of licensed builders and trade contractors.

PN379

You see that?‑‑‑Yes, I see that.

PN380

Can I just ask you, sir, are we to interpret that as being engaged at the pre-construction stage, but licensed builders and trade contractors being engaged at the other stages of the life-cycle of the home building project?‑‑‑I think the chart probably suffers a little bit from trying to summarise what's a complex process in a reasonably simple timeline. The workforce in the industry is made up of licensed builders, trade contractors, and employees. The licensed builders and trade contractors - sorry. The licensed builders are engaged throughout the process; the trade contractors are engaged during the construction stage of the process; employees are engaged throughout the process, but are weighted towards the front end of the process.

PN381

And is that why, sir, if you look at about halfway up, there is a reference to employees, you will see:

PN382

Up to 70 per cent of full-time, part-time and casual staff in volume home building are engaged in sales and pre-construction stages.

PN383

?‑‑‑Yes, that's why I said that the employment was weighted towards the front end of the process.

*** WARWICK TEMBY XXN MR BONCARDO

PN384

And those people aren't carpenters and builders labourers, are they?‑‑‑No, they're not.

PN385

And they're not people covered by the awards the subject of this application, are they?‑‑‑Potentially we get a few site supervisors who would be covered by the provisions of this award who are in that part of the process.

PN386

VICE PRESIDENT HATCHER: Can I just make sure I understand that. So when you talk about volume home building, you're talking about the project and companies, are you? Is that effectively what you're talking about?‑‑‑Yes.

PN387

And so the staff there would be the sales staff, the draughtspeople, forepersons, those sort of things?‑‑‑Estimators, job schedulers, sales, colour consultants, contract administrators, those sorts of people.

PN388

Yes, all right. Thank you.

PN389

MR BONCARDO: Mr Temby, can I get you to turn to the next page of your statement, which is a document entitled Making Space on Site?‑‑‑Yes.

PN390

Do you see that?‑‑‑I don't have a copy of that, but I do have it on the screen here in front of me.

PN391

MS ADLER: Sorry, your Honour, just to - - -

PN392

THE WITNESS: I don't think that was part of my statement, in any event.

PN393

MS ADLER: No.

PN394

MR BONCARDO: I apologise, sir. You are in fact correct. It's I think attachment D to the HIA documents which have been filed in support of the application. But you have a copy of it in front of you?‑‑‑I do, yes.

PN395

And this is - - -

PN396

MS ADLER: Sorry to interrupt, just briefly. I just take issue with this witness being asked a question about material that wasn't part of his statement.

*** WARWICK TEMBY XXN MR BONCARDO

PN397

VICE PRESIDENT HATCHER: Well, Mr Boncardo is entitled to ask about other material as long as the – I think you need to establish some knowledge or familiarity with the document, Mr Boncardo.

PN398

MR BONCARDO: Mr Temby, you've seen this document before?‑‑‑Yes.

PN399

Were you involved in drafting it?‑‑‑No.

PN400

Do you have any knowledge about it being distributed to HIA members?‑‑‑Yes.

PN401

Have you participated in the process of distributing it to HIA members?‑‑‑No.

PN402

Have you participated in the process of educating HIA members about it?‑‑‑No.

PN403

Has the HIA done anything to educate its members about what is the Making Space on Site document?‑‑‑Yes.

PN404

Can I, sir, ask you, do you see point 4?‑‑‑Yes.

PN405

Do you see, sir, there's a reference to:

PN406

Ensuring all workers have access to appropriate safety equipment.

PN407

?‑‑‑That's not in the copy I have here, in your submission, under point 4.

PN408

No, I am asking you about the Making Space on Site document, sir?‑‑‑Yes, that's the one I'm looking at.

PN409

All right. I understand that there are two, there's an Industry Guideline to Manage Covid-19 on Renovation and Repair Sites?‑‑‑That's one I'm looking at, yes.

PN410

I'm trying to ask questions about the one about managing COVID-19 on new housing sites?‑‑‑You didn't make that clear.

*** WARWICK TEMBY XXN MR BONCARDO

PN411

I apologise, sir. Could I ask you whether you can pull up a copy of that document?‑‑‑Yes, I can.

PN412

You've got that document now?‑‑‑Yes, I have.

PN413

It's a document you're familiar with?‑‑‑I've read it, yes.

PN414

And it applies to building and trade contractors. Correct?‑‑‑I believe so.

PN415

Do you have any familiarity, sir, with the obligations on persons conducting businesses or undertakings under work health and safety legislation?‑‑‑I have some familiarity with that, yes.

PN416

You understand there's an obligation to provide adequate facilities for the welfare of workers at work, and access to those facilities?‑‑‑Sure.

PN417

And that is something that the HIA seeks to educate members about?‑‑‑Yes.

PN418

And you would agree with me, sir, wouldn't you, if you look at the policy point number 3, that providing adequate cleaning products and facilities for all workers on site is something that your members who are PCBUs would have to do in any event?‑‑‑Sorry, I'm not sure where you're reading from.

PN419

If you look at point 3 on the New Housing Sites document, it's entitled, "Ensure adequate hygiene facilities are provided on site for all workers." Have you got that?‑‑‑Point 3 is, "Managing the customer."

PN420

You're still looking, Mr Temby, at the Renovation and Repair Sites document. I'm asking you about the New Housing Sites document?‑‑‑Right, okay. I'm with you now. I apologise.

PN421

Do you have point 3 of that document?‑‑‑I do, yes.

PN422

And you see the first dot point, sir?‑‑‑Yes.

PN423

"Provide adequate cleaning products and facilities for all workers on site"?‑‑‑Yes.

*** WARWICK TEMBY XXN MR BONCARDO

PN424

(Indistinct) you, sir, is you would agree with me, wouldn't you, that that is something that HIA members are required to do in any event in accordance with their obligations under work health and safety?‑‑‑That's probably true, but there's no harm in reminding them.

PN425

All right, understood. So that's intended as a reminder. Correct?‑‑‑Well, I think although it needs to be looked at in the context of the whole COVID episode where we're encouraging people to provide potentially additional cleaning products for members in the context of the coronavirus pandemic.

PN426

And if you scroll down to point 4, sir, you see that?‑‑‑Yes.

PN427

Tell me whether that says, "Ensure all workers have access to appropriate safety equipment"?‑‑‑Yes, it does.

PN428

And the first dot point refers to providing access to PPE. Do you see that?‑‑‑Yes.

PN429

You would be surprised, wouldn't you, if workers attending homebuilding sites didn't have access to gloves and eye protection?‑‑‑I would be surprised, yes. But again, this is just by way of a reminder. I'm not sure what you're heading for, what's your point?

PN430

Mr Temby, don't worry about asking me questions, just listen to my questions and answer mine. Thank you, Mr Temby.

PN431

VICE PRESIDENT HATCHER: Does anybody else wish to cross-examine this witness? No. Any re-examination, Ms Adler?

PN432

MS ADLER: No thank you, your Honour.

PN433

VICE PRESIDENT HATCHER: All right. Thank you for your evidence, Mr Temby. You're excused, which means you can simply disconnect?‑‑‑Thank you.

<THE WITNESS WITHDREW [12.07 PM]

PN434

VICE PRESIDENT HATCHER: Ms Adler, is the next witness Ms Regan?

PN435

MS ADLER: If you give me a minute, your Honour, I will try and locate her and get her online as quickly as I can.

*** WARWICK TEMBY XXN MR BONCARDO

PN436

VICE PRESIDENT HATCHER: Thank you.

PN437

MS ADLER: Your Honour, she should be joining us shortly.

PN438

VICE PRESIDENT HATCHER: Thank you.

PN439

THE ASSOCIATE: Ms Regan, can you see and hear me?

PN440

VICE PRESIDENT HATCHER: Do you know what's going on, Ms Adler?

PN441

MS ADLER: No, your Honour. She appears to be there. I'm just not sure why she can't hear us or why we can't hear her. I will ‑ ‑ ‑

PN442

VICE PRESIDENT HATCHER: Shall we disconnect and try to connect her again?

PN443

THE ASSOCIATE: I will disconnect her, Vice President. Ms Regan, can you see and hear us now?

PN444

MS ADLER: No. She's saying she can't see or hear us either.

PN445

THE ASSOCIATE: Ms Adler, on her end is it saying that she's in the hearing?

PN446

MS ADLER: Let me ask her.

PN447

THE ASSOCIATE: Could you please state your full name and address?

PN448

MS REGAN: Yes. I'm Laura Regan (address supplied).

<LAURA REGAN, AFFIRMED [12.13 PM]

EXAMINATION-IN-CHIEF BY MS ADLER [12.13 PM]

PN449

MS ADLER: Ms Regan, have you provided a statement in these proceedings?‑‑‑Yes, I have.

*** LAURA REGAN XN MS ADLER

PN450

Do you have a copy of it in front of you?‑‑‑Yes, I do.

PN451

Is that statement dated 15 June, and some 23 paragraphs long?‑‑‑Yes, it is.

PN452

Do you wish to make any changes to the statement?‑‑‑No, I don't.

PN453

And finally, is that statement a true and correct record of the evidence you wish to live in these proceedings?‑‑‑Yes, it is.

PN454

Thank you. I seek that the statement be marked as an exhibit in these proceedings, your Honour.

PN455

VICE PRESIDENT HATCHER: The statement of Laura Regan dated 15 June 2020 will be marked Exhibit 3.

EXHIBIT #3 STATEMENT OF LAURA REGAN DATED 15/06/2020

PN456

MS ADLER: Thank you, your Honour. I don't have any questions.

PN457

VICE PRESIDENT HATCHER: All right. Mr Boncardo.

PN458

MR BONCARDO: Thank you, your Honour. Your Honour, I understand that it's tendered on the basis of – on the same basis that Mr Temby's statement was tendered, in relation to the objections.

PN459

VICE PRESIDENT HATCHER: Yes, that's correct.

PN460

MR BONCARDO: Thank you.

CROSS-EXAMINATION BY MR BONCARDO [12.14 PM]

PN461

MR BONCARDO: Ms Regan, a number of HIA members operate as sole traders, don't they?‑‑‑Yes, that's my understanding.

PN462

You would agree with me that a significant number of HIA members operate as sole traders?‑‑‑I couldn't comment on the number of them, but yes, some do.

*** LAURA REGAN XXN MR BONCARDO

PN463

And that would agree with me that a large number of people who work in the residential building industry on-site trade as sole traders?‑‑‑I couldn't comment on the majority or the amount of, but yes, some do operate in the residential construction industry on-site.

PN464

VICE PRESIDENT HATCHER: Mr Boncardo, can I just interrupt. That expression "sole traders" I think usually refers to somebody who is non-incorporated. Are you excluding, as it were, incorporated sole traders?

PN465

MR BONCARDO: I will be clear, your Honour.

PN466

VICE PRESIDENT HATCHER: Yes, all right.

PN467

MR BONCARDO: You would agree with me that a number of people who work in the residential building industry either traders sole traders or trade through a corporations?‑‑‑Yes.

PN468

And a number of workers in the residential building industry will be engaged as contractors rather than employees. Correct?‑‑‑Yes.

PN469

Thank you. You've made some reference in your statement to an unnamed unknown member who was unfamiliar with the redundancy provisions of the Building and Construction General On-Site Award. I just want to ask you some questions, Ms Regan, about the HIA's role in educating its members on their obligations to their employees. Does the HIA engage in activities that educate its members on their obligations towards their employees under an industrial instrument?‑‑‑Yes, they do.

PN470

And does that include educating them on the entitlements under the award, the award is the subject of these proceedings?‑‑‑Yes, we do.

PN471

Do you do that by distributing and publishing information?‑‑‑Yes, we do, through a number of means. So we've got an information service, we distribute information through a general information line (indistinct) a number of other information sources (indistinct)

PN472

And that information includes information about the redundancy provisions of the Building and Construction General On-Site Award?‑‑‑Yes, it does.

*** LAURA REGAN XXN MR BONCARDO

PN473

And that information about redundancy, is that published and distributed regularly?‑‑‑I couldn't comment as to how regularly. We do have information available (indistinct)

PN474

And your members aren't told, are they, that if they're small businesses, they are not obliged to pay redundancy under the Building and Construction General On-Site Award, are they?‑‑‑Sorry, could you please repeat that question.

PN475

Your members aren't told there's no obligation on them to pay redundancy if they're a small business and they're covered by the Building and Construction General On-Site Award?‑‑‑They're advised of the obligations under the award, which is (indistinct)

PN476

All right. Thank you. I'm sorry, my screen has - - -

PN477

VICE PRESIDENT HATCHER: So has mine. I'm not sure what's going on. That's interesting. Is it your banner, Mr Boncardo?

PN478

MR BONCARDO: It's not mine, I thought it was Ms Sostarko's your Honour.

PN479

VICE PRESIDENT HATCHER: All right. You're finished, Mr Boncardo?

PN480

MR BONCARDO: Yes, your Honour.

PN481

VICE PRESIDENT HATCHER: Any further cross examination? No? All right, any re-examination, Ms Adler?

PN482

MS ADLER: No, your Honour.

PN483

VICE PRESIDENT HATCHER: All right. Thank you for your evidence, Ms Regan. You're excused, which means you can simply disconnect?‑‑‑Your Honour, if I may, am I able to remain in the proceeding just listen in?

PN484

Yes, you can?‑‑‑Thank you.

<THE WITNESS WITHDREW [12.19 PM]

PN485

VICE PRESIDENT HATCHER: Is that all the witnesses we have until 2.30?

*** LAURA REGAN XXN MR BONCARDO

PN486

MS ADLER: By our records, yes, your Honour.

PN487

VICE PRESIDENT HATCHER: All right. Can we mark any of the statements - I'm sorry. So there are no further employer statements that are still pressed that are not required for cross-examination. Is that correct?

PN488

MR BONCARDO: With the exception of Mr Grippi, your Honour.

PN489

VICE PRESIDENT HATCHER: He's coming this afternoon, isn't he? Yes, all right. So shall we simply adjourn till 2.30, then? I should just check this again. Who's available at 2.30? Is that Dr Toner, is it?

PN490

MR BONCARDO: Dr Toner is, your Honour, yes.

PN491

VICE PRESIDENT HATCHER: Is everyone happy to interpose Dr Toner and then return to Mr Grippi?

PN492

MS ADLER: Yes, your Honour.

PN493

MS SOSTARKO: Yes, your Honour.

PN494

VICE PRESIDENT HATCHER: All right. We will now adjourn, and resume at 2.30.

LUNCHEON ADJOURNMENT [12.20 PM]

RESUMED [2.32 PM]

PN495

VICE PRESIDENT HATCHER: All right. So Mr Boncardo you've got the next witness, is that right?

PN496

MR BONCARDO: Yes, your Honour. Doctor Toner, as I understand it, is in the virtual lobby.

PN497

VICE PRESIDENT HATCHER: All right.

PN498

MR BONCARDO: Ready to appear.

PN499

VICE PRESIDENT HATCHER: All right. Let's get him in then, please.

PN500

THE ASSOCIATE: Doctor Toner, can you hear me?

PN501

DR TONER: Yes.

PN502

THE ASSOCIATE: Yes. I think your video is just loading. All right. Doctor Toner, can you please state your full name address?

PN503

DR TONER: Yes. Phillip Anthony Toner, (address supplied).

<PHILLIP ANTHONY TONER, AFFIRMED [2.33 PM]

EXAMINATION-IN-CHIEF BY MR BONCARDO [2.33 PM]

PN504

VICE PRESIDENT HATCHER: Mr Boncardo? I think he might be on mute.

PN505

MR BONCARDO: I am indeed on mute. I apologise.

PN506

VICE PRESIDENT HATCHER: It sounded that way, Mr Boncardo.

PN507

MR BONCARDO: I'll take that as an observation, your Honour. So your name is Phillip Toner?‑‑‑Correct.

PN508

And you have prepared with Dr Michael Rafferty two reports for the purposes of these proceedings?‑‑‑Correct.

PN509

One is a report - expert report - which was filed with the Commission on the - on Friday 10 July?‑‑‑Yes.

PN510

And that report is true and correct to the best of your knowledge and belief?‑‑‑Yes.

PN511

Are there any matters in that report that you wish to amend or otherwise qualify?‑‑‑No.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN512

VICE PRESIDENT HATCHER: That's my phone. Ignore it. What was the date of that report again, Mr Boncardo?

PN513

MR BONCARDO: It's the 10 July, your Honour. It's the document that was filed on Friday, together with the attachments is - it's numbered after page 50 and there are a number of attachments to it.

PN514

VICE PRESIDENT HATCHER: All right. Well, I'll mark that. So the expert report of Dr Toner and Associate Professor Rafferty, dated 10 July 2020 will be marked Exhibit 4.

EXHIBIT #4 EXPERT REPORT OF DR TONER AND ASSOCIATE PROFESSOR RAFFERTY DATED 10 JULY 2020

PN515

MR BONCARDO: Thank you. And Dr Toner, you've also prepared a supplement to your expert report?‑‑‑Correct.

PN516

And that is a six-page document which was filed with the Commission yesterday?‑‑‑Yes.

PN517

Is that report true and correct?‑‑‑Yes.

PN518

And I should just ask was that a report you prepared with Associate Professor Rafferty?‑‑‑No. That was myself.

PN519

I see. Are there any corrections you wish to make to that report and are there any qualifications you wish to make to the opinions expressed in it?‑‑‑No.

PN520

Your Honour, I tender the supplementary expert report.

PN521

VICE PRESIDENT HATCHER: All right. The supplementary report of Dr Phillip Toner dated 13 July 2020 will be marked Exhibit 5.

EXHIBIT #5 SUPPLEMENTARY REPORT OF DR PHILLIP TONER DATED 13/07/2020

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN522

MR BONCARDO: Thank you, your Honour. And Dr Toner, I just have a few short questions arising from some evidence given by Mr Garrett who is an economist employed by the Master Builders Association and the questions that arise from evidence that he gave before the Commission this morning. Can I ask you, Dr Toner, whether you have your first report with you?‑‑‑Yes, I have it on as a PDF on the screen, yes.

PN523

Thank you. And you're able to access it?‑‑‑Yes. Yes.

PN524

All right. Thank you. Now, I want to ask you a question about page 10 of the report where you are - - -

PN525

VICE PRESIDENT HATCHER: Sorry, Mr Boncardo.

PN526

DEPUTY PRESIDENT GOSTENCNIK: Sorry, can you repeat that?

PN527

VICE PRESIDENT HATCHER: What was the number?

PN528

MR BONCARDO: Page 10, your Honour.

PN529

VICE PRESIDENT HATCHER: Ten?

PN530

DEPUTY PRESIDENT GOSTENCNIK: Page 10.

PN531

VICE PRESIDENT HATCHER: Ten.

PN532

MR BONCARDO: Page 10.

PN533

VICE PRESIDENT HATCHER: Thank you.

PN534

MR BONCARDO: And you're dealing on page 10 with a question about the impact of COVID-19 and the institution of restrictions by the Commonwealth and the State Governments on the building and construction industry. And you express the opinion that to date the effects of COVID-19 have only had a relatively modest contractual effect on the level of activity in the construction industry?‑‑‑Yes.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN535

Mr Garrett was asked about your use of the word 'modest' there. Can I ask you if you could elaborate on what you meant by a relatively modest contractionary effect and what you were referring to?‑‑‑Well, I suppose there's two aspects to it. There's relative to other contractions that have occurred historically that decline is relative to those other declines modest, that is, it's smaller - much smaller than other declines, that is noting the fact that the industry is very cyclical and volatile. The second aspect in terms of modest is the fact that there are ambiguous and contradictory - there's ambiguous and contradictory data as to the scale of job loss. Using the ABS payroll data would indicate some decline but then also a modest increase - sorry, a decline of 5.3 percent, then an increase of .3. However, complicating it is the fact that the ABS labour force starter actually shows over the year to May 2020 an increase of 1.2 percent in total construction employment. And construction services even larger, 3.7 percent. So in totality - the totality of that evidence that's why we use the term 'modest'.

PN536

VICE PRESIDENT HATCHER: So Dr Toner can you just angle your camera slightly? We can only see about the top half of your head?‑‑‑Sorry. Sure - down?

PN537

No, that's a bit too far down. Just a little bit back. That's too far up now?‑‑‑Oh, sorry.

PN538

Stop. Just there. Stop. Stop. No, that's back where we were.

PN539

MR BONCARDO: So back a bit?‑‑‑I see. I can see myself now. Right. Sorry about that.

PN540

VICE PRESIDENT HATCHER: Ms Sostarko, you should put your microphone on mute. I can hear you.

PN541

MS SOSTARKO: Apologies. Sorry, your Honour. Can I just ask a question? I appear to be logged on (indistinct)

PN542

VICE PRESIDENT HATCHER: We didn't really hear that Ms Sostarko and we can't see you. So I don't know what's going on.

PN543

MS SOSTARKO: Okay. It would appear that I'm logged in twice. I'll log out once again.

PN544

VICE PRESIDENT HATCHER: I can still hear you.

PN545

THE ASSOCIATE: We can hear you.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN546

VICE PRESIDENT HATCHER: You shouldn't say those sorts of things about the Vice President. Any publicity is good publicity. All right. Mr Boncardo? Sorry, Dr Toner had you finished your answer?‑‑‑Yes.

PN547

Yes. All right. Mr Boncardo?

PN548

MR BONCARDO: Thank you. Thank you Vice President. And Dr Toner - Dr Garrett - he's not Dr Garrett - Mr Garrett was asked a question by the Vice President as to the number of jobs in the construction industry as at February 2019?‑‑‑Mm-hm.

PN549

And that's according to my note was $1,146,880. Are you able to tell the Commission what the current number of jobs in the construction industry are?‑‑‑Right. Well, using the same data source, that is to say the labour - ABS Labour Force publication, as of May 2020, the figure is 1179.6.

PN550

And when you say .6 - you're referring to - - -?‑‑‑That's - yes, sorry. It's $1,179,600.

PN551

VICE PRESIDENT HATCHER: Yes, thank you.

PN552

MR BONCARDO: Thank you very much. All right.

PN553

VICE PRESIDENT HATCHER: Sorry, that was compared to what again?

PN554

MR BONCARDO: Compared to February 2019 where Mr Garrett said there $1,146,880.

PN555

VICE PRESIDENT HATCHER: Right. Good, thank you.

PN556

MR BONCARDO: Mr Garrett also gave some evidence about the global financial crisis and the government response to the global financial crisis, Dr Toner, in respect to stimulatory measures that were adopted by governments at a Commonwealth and State level and he expressed the opinion in respect to the home building sector that there was a reduction during the GFC period but with the then global - Government stimulus lifted the sector - but thereafter there were two years of contraction in 2011 and 2012. Can I ask you what, if anything, you have to say about that?‑‑‑So that was a contraction. I have as part of the report I did use data on chart five - figure five of my report - actually has output data for the various sectors over the period.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN557

VICE PRESIDENT HATCHER: What page is that Dr Toner?‑‑‑Sorry, that's - - -

PN558

MR BONCARDO: Page 23.

PN559

VICE PRESIDENT HATCHER: Page 23.

PN560

THE WITNESS: I'm just going back to the original source data and - - -

PN561

MR BONCARDO: Page 24. I apologise?‑‑‑Right. It's just on the PDF you can't actually call up the actual numbers. Right. Sorry, the question relates to residential construction in 2011 and '12.

PN562

Yes. And the question is directed to whether or not you would agree or disagree with the view that there was a contraction in the residential construction industry during those years?‑‑‑No. 2011 residential construction output actually went up by 3.6 percent. This follows - the sequence is this - 2009 GFC residential construction falls by half a percent. There's government response. It increases by 3.6 percent in 2010, another 3.6 percent in 2011. There's a decline of 6.4 percent in 2012. And 2013 there's an increase of 3.5 percent.

PN563

Thank you. The Vice President, Dr Toner, asked Mr Garrett about government stimulatory measures that included the school core building program and Dr Garrett said that those kind of measures provided support to the commercial building sector and that the effect of the government stimulus was short lived that is after the GFC. I was wondering if you could express an opinion about the effect of government stimulus on to the GFC and whether it was short lived. And what impact, if any, it had on the commercial building sector?‑‑‑On the commercial sector? Yes, that's - I'll take that to be non-residential.

PN564

Thank you?‑‑‑Construction. It's a little bit ambiguous the term 'commercial' but I'll take it to be non-residential construction. What actually happened for that sector - non-residential construction - 2009, it didn't fall at all - and actually during the peak of the GFC non-residential construction output increased by 3.5 percent 2009, 2010 increased by 8.6 percent, 2011 increased by .7, declined by 6 percent in 2012 and another 2 percent in 2013 and then increased by 5 percent in 2014. So once again we have this pattern of cyclicality. I wouldn't call three years of growth, that's from 2009 to 2011 short-term. I'd leave it at that.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN565

Thank you, Dr Toner. And, finally, Dr Toner, I want to ask you some short questions about a matter that's been raised with the parties over the luncheon break and I'd just like to ask you some questions about the home builder package. Are you familiar with the home builder package?‑‑‑Slightly. I know of it. But, look, I'm not an expert on it, that's for sure.

PN566

As I understand it it's a package whereby the Commonwealth Government offers $25,000 grants for people to build new homes or to substantially renovate those homes?‑‑‑Yes, I'm familiar at that level, yes.

PN567

Great. Now, there's an article in today's Australian newspaper which suggests the projections for the home building sector as a result of the home building program are positive and that there was a 77 percent jump in new home sales for the month of June. The article goes on to set out that the Master Builders Association has reported that in the past four weeks activity in the sector had returned to pre-COVID-19 levels and that the package had delivered the most effective stimulus in decades.

PN568

Now, I'd just like you to assume that that's correct and I have no reason to doubt that it's incorrect?‑‑‑Mm-hm.

PN569

And ask you that on the basis of that information what, if anything, do you have to say about the prognosis for the residential building sector in the short to medium term?‑‑‑Well, on that information you would have to say that it's in a good position. There was - I could go on and on - but I just would notice that there was definitely a period of over-supply, significant over-supply leading into the 2018-19 period, where there was a very high level of activity, and it did fall off towards the end of 2019 and my understanding is there's considerable oversupply in the sector. So this - there'd be a lot of stock on the market and possibly is that influencing those sales?

PN570

I can't tell you unfortunately?‑‑‑I'm sorry.

PN571

I can just read what I've read in The Australian?‑‑‑Yes. Well, on the basis of - well, sticking to the question - sorry, sticking to the question - yes, you'd have to say that on the basis of that information, in The Australian, the position looks fair to good.

*** PHILLIP ANTHONY TONER XN MR BONCARDO

PN572

VICE PRESIDENT HATCHER: So, Dr Toner, is the stimulus package like that likely to increase demand for residential building services in the medium term? Or simply bring forward demand?‑‑‑That's a very good point. Typically, you could call something like that an investment incentive. Governments often use these sorts of incentives for capital equipment, for ICT - other expenditures. Typically the way investment incentives work is two things. It makes economic. It gets potential investors over a hurdle level - the hurdle rate of return level - so it can generate new activity. But it definitely also brings forward activity on the basis that investors are concerned and households as well are concerned that the incentive might be relatively temporary. So it does tend to bunch up activity.

PN573

Right. Thank you.

PN574

MR BONCARDO: Thank you, Dr Toner. Those were the additional questions that I had for you. Now one of the representatives for the applicants will ask you some questions I think?‑‑‑Good, thank you for that.

PN575

VICE PRESIDENT HATCHER: All right. So who's going to cross-examine this witness?

PN576

MS ADLER: Thank you, your Honour. I will. It's Ms Adler from - - -

PN577

VICE PRESIDENT HATCHER: Thanks, Ms Adler.

CROSS-EXAMINATION BY MS ADLER [2.51 PM]

PN578

MS ADLER: Thank you. Good afternoon, Dr Toner?‑‑‑Hello.

PN579

My name's Melissa Adler. I represent the Housing Industry Association and I just have a few questions if I could?‑‑‑Sure.

PN580

Just to start out with, could you give me a bit of an idea of how many reports or how much work you've done for the union movement in the last decade?‑‑‑Oh, in the last decade? I did do a thing for the ACTU on the apprentice wage case, largely on the basis that I've done a lot of work in that area. Yes, so my recollection to the best of my knowledge it was one.

PN581

Just the one in the last decade?‑‑‑That's to the best of my knowledge. The best of my recollection. You've put me on the spot.

PN582

Okay, thank you. And then we've been talking about the residential building industry. How would you characterise your experience in relation to that sector specifically?‑‑‑Well, I'm an economist, not a builder. So it would be decades of interest and research on the construction sector. I'm reasonably familiar with most of the sectors - the drivers, the major players - that sort of thing.

*** PHILLIP ANTHONY TONER XXN MS ADLER

PN583

So would you say that you would accept that in the residential building industry economic impacts, generally, have a lagged effect?‑‑‑Yes. Yes.

PN584

Okay, thank you. And just moving to the content of your report?‑‑‑Mm.

PN585

I'll mostly focus on the key conclusions at the outset. I also just want to confirm that you do, in fact, have a copy of the submission that we made dated the 30 June?‑‑‑Right.

PN586

Because I'd like to refer to a couple of things in the attachments to that submission?‑‑‑Yes. It gets a little bit - I'm pretty sure I've got everything on line but everything has got these weird alpha-numerics - you know - so, I'm not - yes, I'm pretty sure I've got it.

PN587

Well, we'll see how we go. Hopefully we get there. The first thing I'd just like to put to you is that looking at your report, as a whole, there's really nothing new in there. I mean you talk about the cyclical nature of the industry. You talk about - you know - the high degree of subcontractor but they're not really new - - -?‑‑‑No.

PN588

- - -sort of ideas are they?‑‑‑No.

PN589

No. And just moving on to the cyclical nature of the sector that we've already talked about - what, in your view, would be the normal length of a cycle in the construction industry?‑‑‑From peak to peak it's around three to five years.

PN590

Okay. So that's a decent - that's a decent amount of time - three to five years. So, you know - - -?‑‑‑But I'll - can I quality that?

PN591

If I can just leave it there for the minute?‑‑‑Oh, right.

PN592

It might come up as I just take you through a couple of things.

PN593

MR BONCARDO: If I can interrupt? And I apologise for interrupting but I think Dr Toner should be permitted to conclude his answer. He's given an answer and he said he wishes to qualify it.

PN594

VICE PRESIDENT HATCHER: Well, I'll let you raise it in re-examination.

*** PHILLIP ANTHONY TONER XXN MS ADLER

PN595

MR BONCARDO: Certainly, your Honour.

PN596

VICE PRESIDENT HATCHER: Go ahead, Ms Adler.

PN597

MS ADLER: Thank you, your Honour. So if I can just take you - so the submission that I referred to earlier - if I can take you to page 25 of that submission?‑‑‑That's - is that HIA amended submission?

PN598

Yes. Yes?‑‑‑Great. I've got it. Page 25.

PN599

Yes?‑‑‑Page 25. Yes, HIA forecasts?

PN600

Yes. So there's a graph there of the housing forecast and - you know - the sort of the smoothed out line sort of gives you that picture of those peaks and troughs in that cyclical nature in the sector, would you agree with that?‑‑‑Yes.

PN601

Yes. And they sort of match what you said about them taking about three to five years? The ups and downs?‑‑‑Yes. Yes.

PN602

Yes. Okay. And then if I can take you to page 73 of the submission?‑‑‑Seventy-three, yes.

PN603

So I'd better get myself there too and that's our - unfortunately it's not our most recent new home sales data but page 73 there's a graph at the top that shows new house sales?‑‑‑Yes.

PN604

And you'll see the tail end of that we've got a bit of a spike in, was it February? And then there's a drop in March. Would you agree with that?‑‑‑Yes, correct.

PN605

Yes. So then the last thing that I wanted to take you to was hopefully you've got a copy of our media release that we issued on the 9 July?‑‑‑Yes. I do have that. Yes.

PN606

And that talks about finance data and the fact that there's a record low that was recorded in May, that there was a drop of 9.1 percent in housing finance data. The lowest on record. You've got a copy of that? You've - - -?‑‑‑Yes. Yes.

*** PHILLIP ANTHONY TONER XXN MS ADLER

PN607

Okay. So I put to you that this type of activity - so compared to the chart that we looked at at the beginning - we've got the nice curves, then we've got our new sales data which shows a steep drop from say February to March and then we've got our housing finance data that shows that in May it was the lowest level of finance on record. Would you say that that activity is a normal example of the peaks and troughs that the sector experiences?‑‑‑Yes. Yes.

PN608

So earlier you said to me that the cycle would go for three to five years?‑‑‑Yes.

PN609

And now we've got a drop - a significant drop in that - for example, the new home sales from February to March - that's obviously a lot shorter than three to five years?‑‑‑Yes.

PN610

But you think we're still in what would normally be termed the cyclical nature of the sector? We're still within the normal parameters of what that would normally look like?‑‑‑Yes. Yes.

PN611

Okay. All right. Thank you, Dr Toner.

PN612

VICE PRESIDENT HATCHER: Sorry, can I just interrupt, Ms Adler? Doctor Toner what relationship, if any, is there between loans to owner occupiers for established homes and the help of the construction of new homes?‑‑‑There's no direct relationship. In fact, my understanding, is the great bulk of housing loan activity actually goes towards financing and refinancing of established residences, not towards the construction of new - new homes by a very substantial share. So the great bulk of lending goes towards, as I say, financing and refinancing to established residents.

PN613

And just one other question. You said three to five years - sorry, two questions I've got. The first one is you said three to five years from peak to peak in the cycle normally. When do you place the last peak?‑‑‑Right. Well, looking at the data we find the last large peak in residential construction was 2016

PN614

2016. All right. And so my third question is if the Pandemic leads to a medium or long-term reduction in immigration is that likely to lead to a reconfiguration of the residential construction sector and perhaps the restructuring of the way that cyclical pattern works?‑‑‑I wouldn't say it would influence the level of - it won't influence the level the fact that the industry is subject to cycles. It will probably mean that the cycles aren't quite - the peaks of the cycles don't get as exaggerated if you see what I'm getting at. It will still remain the cyclical industry but it's likely to be at a lower level. Those cycles will be at a lower level of activity if migration remains at sustained low levels.

*** PHILLIP ANTHONY TONER XXN MS ADLER

PN615

Right. Thank you, Ms Adler.

PN616

MS ADLER: Thank you, your Honour. Doctor Toner, just a follow-up question from the questions his Honours was asking you, just in relation to that housing finance data. Would you agree that that is a lead indicator of activity?‑‑‑Yes.

PN617

Thank you.

PN618

VICE PRESIDENT HATCHER: Sorry, a lead indicator of activity in what?

PN619

MS ADLER: Construction.

PN620

VICE PRESIDENT HATCHER: Is that relevant? Is that what you agreed to, Dr Toner?‑‑‑Correct.

PN621

Yes. Right, thank you.

PN622

MS ADLER: Just moving on then, Dr Toner, to the commentary in your report around forecasting and the difficulties with doing that you've outlined that in your report, I think, in a number of different places. But you don't say anything about, well as far as I understand, consumer confidence or consumer sentiment and how that plays into activity and then how that plays into forecasting. So I guess I would put to you, you know, would you agree that consumer confidence and consumer sentiment or the public perception of construction and homebuilding activity are important factors in forecasting and in contributing to housing activities?‑‑‑They certainly influence the level of that activity. There's no doubt. I actually did refer to that when I was dealing with in the report explaining why the industry is so cyclical and I did refer to the notion of animal spirits, the Keynes' term for households and investors. So, yes, obviously confidence is but incorporating confidence into a quantitative forecast is difficult in the extreme, I would say.

PN623

Okay, thank you. Just one further question on that subject. So I guess I would put to you that given that consumer confidence is important in building activity?‑‑‑Mm.

*** PHILLIP ANTHONY TONER XXN MS ADLER

PN624

There's really no benefit to industry to predict such significant declines as outlined in, sort of - for example - HIA forecasts unless there was reasonable prospects that these predictions would materialise. What benefit would it be to make such predictions?‑‑‑I can potentially think of several. Potentially, if you were being Machiavellian - putting a Machiavellian spin on it - you could say that potentially the industry association is seeking no end of going into obviously some sort of decline or forecast decline to encourage government to be very active in its endeavours to prop up the industry. So that's one interpretation of why an industry association may come up with a sort of pretty dire forecast. Yes.

PN625

Okay. Thank you, Dr Toner. That's all the questions that I have, your Honour.

PN626

VICE PRESIDENT HATCHER: Right, thank you. Does anybody else wish to cross-examine, Dr Toner?

PN627

MS SOSTARKO: Yes, your Honour. It's Ms Sostarko here.

PN628

VICE PRESIDENT HATCHER: All right. Yes, go ahead. So can you see Ms Sostarko, Dr Toner?‑‑‑Hello.

CROSS-EXAMINATION BY MS SOSTARKO [3.05 PM]

PN629

MS SOSTARKO: Hello. Good afternoon. My name's Rebecca Sostarko and I appear for Master Builders Australia. Thanks for making yourself available. As you know we've just got a couple of questions. I am assuming you have a copy of the report handy that we have been referring to? Your report that is?‑‑‑Oh, yes. Sorry.

PN630

Yes. If I could just take you - sorry, I'm just going to turn you up a bit, if I could just take you to page two which is the introduction and overview?‑‑‑Right. Yes.

PN631

And at the very first paragraph, the last sentence reads, structured around five research questions supplied by the CFMEU?‑‑‑Yes.

PN632

And it follows that there are four conclusions that are reached. I just wanted to check are we missing one? Was there - sorry - and then it follows that there are five conclusions that have been predicting response. There are only four that have been listed?‑‑‑(Indistinct reply)

PN633

And as in is it missing?‑‑‑Gee, that's a bit of an oversight.

PN634

That's okay. I mean I'm not trying to pick you up on typos. I just wanted to make sure that that wasn't in our copy?‑‑‑No. It's not there.

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN635

Okay, thank you. So in terms of conclusion one you say that the changes are not based on improving productivity or innovation?‑‑‑Mm-hm.

PN636

Are you familiar, Dr Toner, with the changes that we're seeking by way of this application?‑‑‑Only - I must say I haven't looked closely at the employer claims.

PN637

Okay. So have you reviewed the application?‑‑‑Only in a very cursory fashion.

PN638

So can I assume then are you able to identify then perhaps not where in it's suggested by the applicant that the variations will improve levels of innovation in the industry?‑‑‑No, I'm not. I'd be interested to hear what the argument is.

PN639

Okay, thank you. I will move on to my next question. So I'm assuming you'd be aware of the Job Keeper amendments prior to the Fair Work Act?‑‑‑I'm - you know - in general terms.

PN640

Yes. And assuming that your knowledge is general were you aware that they were part of a broader Omnibus Bill introduced in response to the Corona Virus?‑‑‑No.

PN641

Okay. Well, I just - if I may - I just want to read you a quote from the Treasurer, extracted from Hansard, of the Commonwealth Parliament?‑‑‑Mm-hm.

PN642

From the 23 May this year at page 2777. Now I just mention for the Commission's benefit and the parties that we'll provide a copy of that extract as we speak but the Treasurer spoke when introducing the Bill and I quote stated, 'The Corona Virus Economic Response Package (indistinct) Bill, 2020 is designed to keep Australians in jobs and businesses in business and build a bridge to the recovery. These measures are consistent with our principles. They are targeted. They are temporary. They are scaleable and they are based on our existing tax and transfer system. The measures contained in this package of bills are designed to bolster domestic confidence and household consumption, reduce cash flow pressures for businesses and support investment to lift productivity and to keep people in jobs.'?‑‑‑Mm.

PN643

So my question to you, Dr Toner, is now are you aware that the majority of changes sought by this application reflect largely the flexibilities in those Job Keeper amendments in the Fair Work Act?

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN644

MR BONCARDO: I object.

PN645

VICE PRESIDENT HATCHER: No. Just hold on. Just hold on, Dr Toner. What was that Mr Boncardo?

PN646

MR BONCARDO: I object to that question. It is not correct, in general terms, that the flexibilities in this application reflect what has occurred pursuant to section of Part 6(4)(c) of the Act, given that there are material differences as, I think, your Honour the vice President identified during the course of Ms Sostarko's opening submission.

PN647

VICE PRESIDENT HATCHER: Ms Sostarko, I think we can make our own comparison between the application and the legislation. I'm not sure the witness can add anything to that.

PN648

MS SOSTARKO: Okay, thank you, your Honour. I'll move on. If I can put to conclusion two?‑‑‑Mm-hm.

PN649

We're still at page two, Dr Toner?‑‑‑Yes.

PN650

You say that the industry has the second lowest number of workers on standard forms of employment of any in Australia?‑‑‑Yes. On non-standard forms of employment, yes.

PN651

So, Dr Toner, I put it to you that that's not quite right?‑‑‑Of second lowest, yes. Yes, but go on.

PN652

And the reason I question that is because we've reviewed the ABS data set again (indistinct)

PN653

VICE PRESIDENT HATCHER: You're dropping out again. Ms Sostarko, you just dropped out. So we just got to you reviewed the ABS data set.

PN654

MS SOSTARKO: Yes. I'm going to, your Honour, put my headphones in and see if that helps.

PN655

VICE PRESIDENT HATCHER: Well, it always does. So perhaps you should keep them in.

PN656

MS SOSTARKO: Is that better, your Honour?

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN657

VICE PRESIDENT HATCHER: Yes, it is better.

PN658

MS SOSTARKO: Excellent. Okay. So going back to that we have reviewed the ABS data set and being the ABS labour force detailed quarterly?‑‑‑Mm-hm.

PN659

It's released in May 2020?‑‑‑Mm-hm.

PN660

And as I mentioned we will provide the Commission and the parties with a copy of that report. But in summary that data set shows, Dr Toner, that the construction industry employs the most fulltime workers being - - -?‑‑‑Sure.

PN661

- - -92,414?‑‑‑Yes.

PN662

And in addition 84.1 percent of all jobs in the sector (indistinct) time are being replaced. Would you say that that data aligns with the (indistinct) that you reached in conclusion two?‑‑‑Actually, it's - they're separate conceptual structures. Forms of employment relate to things like self-employment, contractors, sub-contractors. It's the distinction between being an employee and being in what - I'm not an employment lower obviously - but being in other forms of employment. In particular, as I say, being self-employed, being a contractor - those sorts of things - so, yes - the construction industry has always been noted for it's very high levels of full-time employment, largely on the basis, I think that, investors, developers, household et cetera - commissioning work, typically want it done, ASAP, because of the high holding costs. So just to sort of cut - answer the question directly - the issue of high levels of full-time employment is completely separate from conceptually from the issue of this other classification system for forms of employment and which I say relate to what are called non-standard forms of employment, especially contract and self-employment. Where, for example, you have lots of people who appear to be employees but they're actually ABN contractors.

PN663

So could I ask then, Dr Toner, if I take that point on its face, but I think it's more important to ask where that - how you have reached that conclusion?‑‑‑Oh, right.

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN664

And the data you're citing when you make those claims?‑‑‑Sure. Yes. That comes from, as I say, there's ABS publications. It's supplements to the labour force which specifically look at - it's an annual survey of the work force's supplement to the labour force where they go into - they specifically want to know about forms of the employment. Like, labour hire - those sorts of forms of employment. We have like a triangular contractual relationship, sort of non-standard forms of employment. It's not entirely clear who actually is the employer. So you've got - sort of not - that's what I mean by non-standard. There is this separate ABS data collection that looks at self-employment, then contract labour hire and the construction industry because of the cyclicality and volatility - you know - has always had a high propensity to use non-standard forms of employment.

PN665

VICE PRESIDENT HATCHER: Doctor Toner, when you refer to a 'high propensity' did you mean a high number in absolute terms? Or a high number in - - -?‑‑‑Higher proportion.

PN666

High - - -?‑‑‑High proportion.

PN667

Yes.

PN668

MS SOSTARKO: Okay, Dr Toner, well in the absence of any data sources I'll move on to my next question?‑‑‑I could look it up for you if you want.

PN669

That's fine. I think I've pressed that point. We'll move on to the next one which is in conclusion three you say that activity may have declined over recent months but it's hard not to conclude that even these changes have been within the normal range of volatility. Doctor Toner, you're not suggesting that the ramifications arising from this Pandemic as simply normal volatility, are you?‑‑‑I'm - well, based on - not on forecasts but on the actual data in front of us which we dealt with in terms of the payroll data showing ambiguous results, a decline and then a more recent rise and then the ABS labour force data actually indicating a 1.2 per cent rise over the year to May it's, I suppose, I'm not forecasting. I'm just basically saying on what we know now the latest available data if there is a downtown it doesn't appear to be extreme at the moment. Certainly there's no statistical basis on which to say that as we speak at the moment.

PN670

VICE PRESIDENT HATCHER: Doctor Toner, in your analysis have you taken into account at all in reaching that conclusion the impact of the Job Keeper wage subsidy on the industry and whether the actual number employed is reflective? That is how much of the industry is being supported by a wage subsidy so that perhaps the real level of employment is not disclosed from the figures?‑‑‑Mm. That's a really good point. I'm unaware. I stand to be corrected but I am not aware of data showing Job Keeper use or the number of people on Job Keeper by industry. It's possible it's out there. I just haven't come across it.

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN671

A number I've come across is somewhere in the order of 330,000 workers or employees on Job Keeper?‑‑‑That would be - yes, well that's - we're looking there at - what, roughly a quarter - a quarter of the workforce - which is high. You'd have to - I'm just trying to think why that - - -

PN672

It may be that those employees are usefully employed in which case when Job Keeper comes off and assuming demand remains the same that it won't make much of a difference. But if, in fact, it's hiding the - - -?‑‑‑Mm. It's - - -

PN673

- - -an under-employment if you like then it might make a significant difference?‑‑‑You are correct.

PN674

Ms Sostarko, just going back to the issue you last raised. I've just Googled this. So the ABS it's 6333.0. Characteristics of Employment Australia August 2019 at graph seven shows that the industries with the highest proportion of non-employees, both independent contractors and other business operators were agriculture, forestry and fishing, 56 per cent and construction 39 percent. Is that the data you were thinking of Doctor Toner?‑‑‑Correct.

PN675

Yes?‑‑‑Sorry, I couldn't recall the catalogue number.

PN676

MS SOSTARKO: Okay, thank you, your Honour. I appreciate that. On this point in terms of volatility, Dr Toner, it's widely accepted at this point that we're now in a recession for the first time in 28 years and I would suggest that's not usual volatility is it?‑‑‑We are - yes, as you say, I mean being for Australia to be in a recession is unusual.

PN677

I'll take you to my next question if I could? At conclusion four, still on page two, it states 'Making forecasts during times of change and turmoil is notoriously difficult even where obvious conflicts of interest are not present.' Doctor Toner, on what grounds do you infer there is an obvious conflict of interest with the forecasts produced by Master Builders in these proceedings?‑‑‑Well, I suppose on the basis that they're not independent. They're not independent forecasts.

PN678

So was this something that you were told? Or is this something you have assumed during the preparation of your research?‑‑‑Well, I'm just sort of - it's just a fact, isn't it?

PN679

Well, I'm not sure about that. So there's no grounds or reasons that you've given provided in making this - - -

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN680

VICE PRESIDENT HATCHER: I think the only point that he's making, is he not, is that the forecast is prepared by an applicant to these proceedings. You'd be making the same point with the CFMEU or an applicant and it produced a forecast.

PN681

MS SOSTARKO: Okay, thank you, your Honour. I'll move on. Section 4 of your report. If you go to page 11, right? In the first paragraph the second sentence states so we're not talking about the bolded text. We're talking about the first paragraph. It states that, 'There is likely to be more stimulus in the pipeline.' Can you see that sentence?‑‑‑Yes.

PN682

Well, this part of the report strongly infers that there's more stimulus on the way but that's speculation, isn't it, Dr Toner? Or do you agree with that?‑‑‑Yes. It's - it is speculation based on the fact that I've formed the opinion that the government appears to have a - how would you express it - a very strong desire not to see economic conditions get worse. An almost of whatever it takes attitude to prevent the economic growth slowing more.

PN683

Yes, I did note, Dr Toner, that you make that point in the third paragraph, but again I would ask if you could point to the Commission to any announcements, confirmation or detail that evidences the whatever it takes assertion that you note in that paragraph?‑‑‑No. I've just formed that opinion.

PN684

Okay, thank you. At - - -?‑‑‑Although I would - just to clarify that. It's really on the basis of the unprecedented level of intervention and expenditure that I formed that opinion.

PN685

Okay. Sorry, Dr Toner, I'll move on. If at that same paragraph - - -?‑‑‑Mm.

PN686

Sorry. On that same page at paragraph two you say, 'It must be acknowledged that there is a strong agreement first regarding the scale of stimulus that will be introduced by some of these measures such as the home builders, because they rely ultimately on the decision making of private investors and households to respond to the government incentives.' Does this remain your evidence, Dr Toner?‑‑‑Yes, it does. Only qualified that there was a high degree of uncertainty but only qualified, I suppose, by the most recent statement from the barrister quoting from The Australian newspaper regarding the effect of home builder. So we were, in a sense, that most latest bit of information sort of does confirm there was a lot of uncertainty but it could have gone either way, households could have sat on their hands, or they could have responded quite strongly. And it looks like it's the latter.

PN687

On that point, Mr Boncardo brought our attention to that article in The Australian today and I just had a question for you with respect to that if I could?‑‑‑Mm.

*** PHILLIP ANTHONY TONER XXN MS SOSTARKO

PN688

You mentioned earlier that you were vaguely familiar with the home builder package. Is that correct? Did I interpret that correctly?‑‑‑Yes. Basic.

PN689

Yes. And so are you aware of that package? For example there are certain income thresholds, and expenditure caps associated with it?‑‑‑Yes. Yes. Yes.

PN690

Okay. So, although - well, obviously we're all very hopeful that the package will have the effect that it is intended to do and we fully support it. Were you were aware that that package is, in effect, though quite limited in its scope and only applies to residential projects and not the commercial sector?‑‑‑Yes. That is correct.

PN691

Yes, thank you. I think that's all Dr Toner. Thank you very much for your time?‑‑‑Well, thank you for your questions.

PN692

VICE PRESIDENT HATCHER: All right. Any further cross-examination? Ms Paul?

CROSS-EXAMINATION BY MS PAUL [3.26 PM]

PN693

MS PAUL: Yes, just a couple of short questions, for Dr Toner. Doctor, you've made - I just draw your attention to your report. At page four the section that reads, 'The application to vary the award.'?‑‑‑Mm-hm.

PN694

Now I think you were asked earlier and correct me if I'm wrong but you were asked about whether you'd seen the application. When you said you had really only a cursory, you hadn't looked at the application. It was only a cursory review or a cursory view. Is that - would that be correct?‑‑‑That is correct.

PN695

Okay. So you go - I mean it's a fairly short section - but you do draw some conclusions about the application and particularly if the application was granted you say the workforce would be even more precarious, uncertain and pressured. That's at page five?‑‑‑Yes.

PN696

So is that again based on just an assumption about the application and the breadth of the application?‑‑‑Can I say - look, I'm not trying to avoid the question, but there was a division of labour.

*** PHILLIP ANTHONY TONER XXN MS PAUL

PN697

Okay?‑‑‑In preparing this report I focused mostly on the data, towards the end of the report, and Dr Rafferty did these sections here where that required an analysis of the proposal. So my knowledge really of what is being proposed comes from a cursory reading of the proposals as well as from what's in this report - this explanation.

PN698

Yes. So would it be correct then to say that the words and the quite absolute statement that seems to be there that the application granted would make the workforce even more precarious, uncertain and pressured, may not be correct?‑‑‑If the - I'll put it like this - if the analysis of what was in those reports is incorrect well it follows - yes, that statement is incorrect. But if that analysis was correct well the statements is correct.

PN699

VICE PRESIDENT HATCHER: Put it this way, Dr Toner, on the top of page five there's a summary of the changes?‑‑‑Yes.

PN700

Assuming the summary is correct?‑‑‑Yes.

PN701

Did you maintain or adopt or depart from the conclusion statement?‑‑‑No.

PN702

There beneath?‑‑‑No. No. It was formed on the basis of that summary of the proposals.

PN703

Right. Well, do you want to contend that the summary is inaccurate in some respect?

PN704

MS PAUL: Well, yes, your Honour. It is slightly. I'd like to put some context around a few of the items in the summary to Dr Toner.

PN705

VICE PRESIDENT HATCHER: Right.

PN706

MS PAUL: If the issue - I think one of the things that you've raised in the summary was the fact that the reduction of the ability of employees to work normal hours, by increasing the normal span of hours - if, for example, that was - if that provision or what was being requested to the change?‑‑‑Mm.

PN707

Was actually to allow for an employer and employee to actually reach agreement to change the hours that they choose. Would that change your - would that have changed the conclusion? Or would that have impacted your conclusion?‑‑‑Upon reflection if it was a mutually agreed and beneficial and - you know - lots of other conditions were met. I'd have to agree with you.

*** PHILLIP ANTHONY TONER XXN MS PAUL

PN708

Thank you. And similarly too because I believe that - you know - the third dot point, reduce the take-home pay of employees by making Saturdays normal hours not attracting overtime, again if that was as a result of an agreement between the employer and employee you'd agree that that would be the same as your answer to the previous question?‑‑‑Yes. Subject to those caveats if there was a mutually agreed understanding and mutually beneficial I - yes.

PN709

Yes. I ask - and only I ask that only because that actually is the provision that's being sought is by agreement between an employer and employee?‑‑‑No.

PN710

So I'll leave that as in terms of where that stands. I've got no further questions. Thank you very much. Thank you, your Honour.

PN711

VICE PRESIDENT HATCHER: All right. Any re-examination, Mr Boncardo?

PN712

MR BONCARDO: Yes, thank you, your Honour.

RE-EXAMINATION BY MR BONCARDO [3.30 PM]

PN713

MR BONCARDO: Doctor Toner, Ms Adler asked you at the outset whether you'd done much work for the union movement in the past decade and I think your answer was you'd done one report. Have you done any reports for industry associations?‑‑‑To the best of my knowledge I've done work for the AIG, the MBA and ACI as well as Group Training Australia which is an industry association representing group training organisations in Australia that's relating to apprentices.

PN714

Thank you, Dr Toner. And Dr Toner just so when you're absolutely clear the AIG is the Australian Industry Group, the MBA is the Master Builders Association and ACI is the Australian Chamber of Commerce and Industry. Is that what you are referring to?‑‑‑Correct.

PN715

All right. Now - - -?‑‑‑That was a long time ago.

*** PHILLIP ANTHONY TONER RXN MR BONCARDO

PN716

Thank you. Ms Adler asked you a question about the cyclical nature of the sector and what you would regard as 'normal' and your answer was that it goes from peak to peak within three to five years but you then said that you wanted to qualify your answer in that respect. Can you tell us why you want to qualify your answer? And what parts of your answer you wish to qualify?‑‑‑Right. When I say that typically a duration of these cycles is around three to five years and that's peak to peak. What I'm getting - that could be misconstrued to imply that it takes up to five years for - during that period - it's all in - the industry is in recession. You can, in fact - if you look at that figure five again in my report you can see what I was getting at there. That figure five showing the movement in output. It clearly shows that it's cyclical. It's on page 24 but the output can actually still be turning positive as it goes up. That's what I was wanting to qualify. I'm sort of bumbling the answer a bit but you can actually have positive growth right through that period but it can take three to five years for it, for an activity to get back to the same level or higher. That's what I mean by peak to peak.

PN717

Thank you. And Ms Adler's question and your response I think where in respect to the industry generally. Can I ask you to comment on the various sectors of the industry and the period from peak to peak for the residential sector, the engineering sector which you identified in figure five and what you term the non-residential sector?‑‑‑Mm.

PN718

Are they different or are they similar?‑‑‑Basically what our analysis showed - you can see how engineering is far more volatile. It's incredibly 'peaky' or 'troughy' to use those terms. It's much more violent in its movements. There's also looking, just eyeballing the data. You can actually see that there's a tendency for the cycles to be slightly counter-cyclical with each other. As one goes up another goes down. You can see that clearly. For example, in 2015/16 where engineering collapses but residential and non-residential or especially residential increases quite strongly. So there's an element of countervailing forces within the construction industry to balance out so that, in fact, if you look at - that's why the total figure isn't as wild in its swings as the components because the components do tend to, to some extent be counter-cyclical.

PN719

Thank you, Dr Toner. Doctor Toner the Vice President asked you a question about the relationship between loans to owner occupiers for established homes and the help of the industry more generally. And your answer was, according to my note, that there was no direct relationship between lending activity because - a lot of that activity went to financing and refinancing existing residences. Are you able to comment upon what, if anything, we can draw from statistics about lending and activity in the construction industry more generally?‑‑‑Well, it's a tricky one that. I do know it's a really interesting thing that just - - -

PN720

I'm sorry to interrupt Dr Toner. I talked about the construction industry generally but perhaps if you could focus on residential construction, and if you have any comments about the other sectors, if you could identify those other sectors when you're giving your answer?‑‑‑Oh, right. It's again it's initially to do with even residential - it's - there's not a one to one correspondence because, for example, loans can be taken out and people then decide not to actually go ahead with the construction. So there's some correspondence but it's not as close as you'd think. There can be delays, for example. There's a whole range of leads and lags.

*** PHILLIP ANTHONY TONER RXN MR BONCARDO

PN721

VICE PRESIDENT HATCHER: Delays in the construction industry. You must be kidding Mr Toner?‑‑‑Indeed.

PN722

Sorry. I've lost the track here. I thought we were talking about loans to buy existing established houses?‑‑‑Mm-hm.

PN723

Not to build a house that is I thought you'd agree with Ms Adler that loan activity for established houses was a lead indicator of activity in the construction sector. Have I misunderstood that?‑‑‑To buy established homes? Look, I'd have to say I'm not entirely sure about that. No, look I'd be surprised. It wouldn't be a very close correspondence. You can have, for example, the last - you can have periods where house price - say house price turnover is quite high but that is not necessarily related or doesn't necessarily lead to a surge or a collapse in new residential construction. There can be quite long - I think it's quite a complex interaction between those two things. The decision - turnover in existing residences and the effect of that on investors say or households then deciding to either build or not build I think that's a quite a complex relationship.

PN724

Well, I mean couldn't it be said that the number of people seeking to buy an existing home is also a proxy for the number of people seeking to buy a newly constructed home or is there no connection?‑‑‑Look - no - because I'd say again one of the complications there is what happens in periods as we've gone through recently where there's been effectively an oversupply of residences, especially apartments, and there's a surge in activity subsequently as they're sold. That won't necessarily mean that there's going to be a surge in apartment construction activity - probably the opposite. I think it's complex.

PN725

Right. Thank you.

*** PHILLIP ANTHONY TONER RXN MR BONCARDO

PN726

MR BONCARDO: Doctor Toner, you were asked some questions by Ms Sostarko from the Master Builders about your opinion in respect to government stimulatory measures and your answer was that you formed the opinion that the government had adopted or had a strong desire not to see economic conditions get worse based on what you termed an 'unprecedented level of intervention and expenditure'. Can you say based on your experience and based on your study, how the level of intervention and expenditure by the Commonwealth Government and State Governments in response to the current crisis compares and contrasts to prior instances such as the global financial crises or the recession at the commencement of the 1990's?‑‑‑That is difficult to put a figure on in the sense that we know that there's a lot of activity. I mean just look at the appendix we prepared but if you - there's - the extent to which there's actually hard numbers put on that in terms of the level of activity I am not in a position to say. All I would say just restate my position that it doesn't - my opinion is that there is this commitment - it's almost a whatever it takes attitude on the part of the Commonwealth and State. I'm not in a position to put an actual dollar figure on what the current response - what is that worth? As I say, partly because some of this actually does rely on private sector activity, like the home builder. It's difficult to know what the actual effect will be because there's this - as it were - private sector multiplier or lever that has to be enacted for the work to - for the government stimulus to be effective.

PN727

According to the Master Builders that lever has well and truly been pulled but we'll leave that to later in the day perhaps. Doctor Toner, you were asked some questions in relation to your knowledge of the applications made by the respondents in this matter and can I just draw your attention to pages 31 and 32 to your report?‑‑‑Thirty-one and 32.

PN728

And I just want to ask you whether you can pull those up for me?‑‑‑I'm sorry about this. I'm having trouble finding my report. What did it actually relate to, sorry?

PN729

The letter of instruction that you were provided by the union and (indistinct)?‑‑‑Right. Yes. Yes. Right.

PN730

What I want you to do, I want you to read that summary and then I'm going to ask you some questions arising from the questions that Ms Sostarko and Ms Paul asked?‑‑‑Thirty-one and 32.

PN731

Yes. There's a summary of the applications made in this matter and I'd like you to read it to yourself. It starts about halfway down page 31?‑‑‑Is that the specific variations?

PN732

Correct?‑‑‑Right. 'The specific variations to the award sought by the applicant.'

PN733

VICE PRESIDENT HATCHER: Just read it - just read it to yourself, Dr Toner and then - - -?‑‑‑Oh, sorry.

PN734

Is the question I think?‑‑‑Right.

PN735

MR BONCARDO: So, Dr Toner, you've read the summary now?‑‑‑Mm.

PN736

You have?‑‑‑Mm.

*** PHILLIP ANTHONY TONER RXN MR BONCARDO

PN737

If you could answer 'yes' for the purposes of the transcript?‑‑‑Sorry. Yes. Yes.

PN738

Could I ask you to assume that that summary is correct?‑‑‑Mm.

PN739

And can I take you to page five of your report?‑‑‑Mm-hm.

PN740

Where after the dot points there's a conclusion proffered about the application and can I ask you in light of what you have just read and presuming that it accurately reflects the application for variations made in these proceedings do you wish to qualify, or otherwise amend the conclusion that you have set out in the first substantive paragraph of page five after the dot points? Take your time reading that conclusion?‑‑‑Mm. Upon reflection, no.

PN741

There are no changes or qualifications that you would make?‑‑‑Taken as a whole - taken as a whole - no. I mean - you know - yes, taken as a whole that would be my response.

PN742

Thank you, Dr Toner. That's the re-examination.

PN743

VICE PRESIDENT HATCHER: All right. Thanks, for your evidence, Dr Toner. You're excused which means you can simply disconnect?‑‑‑Thank you very much. Thank you for your questions. Bye.

<THE WITNESS WITHDREW [3.47 PM]

PN744

VICE PRESIDENT HATCHER: All right. So, Ms Sostarko, Mr Grippi is the next witness?

PN745

MS SOSTARKO: Yes, your Honour. I believe that he is in the virtual lobby.

PN746

VICE PRESIDENT HATCHER: All right. Well, let's get him in then.

PN747

THE ASSOCIATE: Vice President, it does not appear that Mr Grippi is in the virtual lobby. Perhaps check again?

PN748

VICE PRESIDENT HATCHER: Can you chase that up, Ms Sostarko, please?

*** PHILLIP ANTHONY TONER RXN MR BONCARDO

PN749

MS SOSTARKO: I will do, your Honour. Your Honour, he was still waiting but he said that he will log out and log back in. For some reason, obviously, he's dropped off.

PN750

VICE PRESIDENT HATCHER: Okay.

PN751

MS SOSTARKO: Just give it a moment if you wouldn't mind. I'm assuming, your Honour, your Associate will let us know if he's in.

PN752

VICE PRESIDENT HATCHER: Well, it usually comes up. I can see it.

PN753

MS SOSTARKO: Right.

PN754

THE ASSOCIATE: He's still not in the lobby, Ms Sostarko. Could you perhaps check that he has got the correct details and isn't dialling into the test lobby from yesterday.

PN755

MS SOSTARKO: Okay. We'll make sure of that. Apologies, your Honour. We're just resending him the notice of listing which contains the link just to ensure that he's not logging into the test link.

PN756

VICE PRESIDENT HATCHER: All right. Right. So he's in the lobby now.

PN757

MS SOSTARKO: Thank you. Thank you, your Honour.

PN758

THE ASSOCIATE: Mr Grippi, can you hear and see me?

PN759

MR GRIPPI: Yes, I can. Can you hear and see me?

PN760

THE ASSOCIATE: Yes. Okay. Mr Grippi, could you please state your full name and address?

PN761

MR GRIPPI: Tony Grippi from Richard Crookes Constructions, (address supplied).

PN762

THE ASSOCIATE: Thank you. I'm now going to read out an affirmation and if you agree could you please confirm by saying 'I do.'

<TONY GRIPPI, AFFIRMED [3.53 PM]

EXAMINATION-IN-CHIEF BY MS SOSTARKO [3.53 PM]

PN763

VICE PRESIDENT HATCHER: All right. Ms Sostarko?

PN764

MS SOSTARKO: Thank you, Mr Grippi. I appreciate your time today. I just in the first instance ask you have you prepared a statement in these proceedings?‑‑‑Yes, I have.

PN765

And Mr Grippi, do you have a copy with you?‑‑‑Yes. I have a copy in front of me, including the annexures that were attached to that statement.

PN766

And is that the document entitled 'Statement of Tony Grippi of Richard Crookes Constructions.'?‑‑‑Yes. Correct.

PN767

If the Commission pleases I seek that the document be marked as an exhibit and that be taken as read.

PN768

VICE PRESIDENT HATCHER: All right. Statement of Tony Grippi dated 16 June 2020 will be marked Exhibit 6.

EXHIBIT #6 WITNESS STATEMENT OF TONY GRIPPI DATED 16/06/2020

PN769

Anything further, Ms Sostarko?

PN770

MS SOSTARKO: We have nothing further for the witness at this time, your Honour.

PN771

VICE PRESIDENT HATCHER: All right. Mr Boncardo?

CROSS-EXAMINATION BY MR BONCARDO [3.54 PM]

PN772

MR BONCARDO: Mr Grippi, you understand don't you, that it's important to comply with orders made by the Fair Work Commission?‑‑‑Yes. Absolutely.

PN773

*** TONY GRIPPI XN MS SOSTARKO

*** TONY GRIPPI XXN MR BONCARDO

And so far as you're aware Richard Crookes Constructions understands that it's important to comply with orders made by the Fair Work Commission?‑‑‑Yes, of course.

PN774

And both you and Richard Crookes Constructions will do your utmost to comply with orders made by the Commission?‑‑‑Yes. Totally.

PN775

And you understand that an order was made by the Commission on the 3 July this year for Richard Crookes Construction to produce documents?‑‑‑Yes. I am aware of those orders.

PN776

Yes. Richard Crookes Constructions was served with that order wasn't it?‑‑‑Correct.

PN777

And the Master Builders sought that aspects of that order be set aside. Are you aware of that?‑‑‑Portions of it.

PN778

And that the Commission determined that certain aspects weren't to be set aside and the documents were to be produced yesterday. You're aware of that?‑‑‑Yes.

PN779

Now can I ask you, sir, you make reference at paragraph 10 of your statement to 4,000 workers working on Richard Crookes Construction sites?‑‑‑Yes, that's correct.

PN780

How many of those are employed directly by Richard Crookes?‑‑‑Richard Crookes Constructions at the time of the Pandemic commencing employed 800 people. That's the staff of Richard Crookes which includes construction workers, our managing director, including myself. Our trade partners account for the balance, making up the 4,000. So it's approximately 4,000. It could be slightly more or slightly less on any one time but they're the number of workers, trade contractors, under our supervision at any one time.

PN781

VICE PRESIDENT HATCHER: So, Mr Grippi, paragraph 10 refers to workers on the sites. I assume that meant actually on performing construction work on site?‑‑‑Correct.

PN782

So what's the number of direct employees, if we're just looking at onsite people?‑‑‑Are you talking about the direct employees from our trade contractors or Richard Crookes themselves?

*** TONY GRIPPI XXN MR BONCARDO

PN783

No. Direct employees of Richard Crookes Constructions who work on site?‑‑‑Staff and construction workers?

PN784

Yes?‑‑‑Staff and construction workers of our 800 staff about 150 are support staff and head office staff. The balance are in delivery. Delivery and our multiple projects.

PN785

Yes, thank you.

PN786

MR BONCARDO: So about 650 on site. Is that right?‑‑‑Yes, that's correct.

PN787

That's 650 people who would receive pay slips. Right?‑‑‑Correct. That's salaried staff, that is project managers, project directors, cadets, engineers, every position traditionally associated with a construction project, a building project.

PN788

And Richard Crookes Constructions issues them pay slips, doesn't it, in the respect of the time that they work?‑‑‑Of course they do. Some of them are salaried staff. They get paid monthly. Some of them are weekly - weekly employees, paid weekly. Some are on timesheets but the vast majority are salaried staff who are paid monthly for whatever hours they work.

PN789

Well, just let me ask you this. There would have been nothing preventing Richard Crookes Constructions from obtaining pay slips issued to its employees who worked at Richard Crookes sites for the week of 16 June 2020 and producing those to the Commission.

PN790

MS SOSTARKO: Your Honour, if I may? This matter was dealt with by my colleague or by my colleague in response this morning as we all know. And in that response it was very clear in our correspondence filed that (indistinct) was with respect to this (indistinct) Richard Crookes and that any weight given to this paragraph within the witness's evidence should be determined by the Commission. We'd also question the relevance of this line of questioning in terms of these proceedings.

PN791

VICE PRESIDENT HATCHER: I reject that objection. I allow the question.

PN792

MR BONCARDO: Do you want the question again, Mr Grippi? Do you remember the question?‑‑‑You can ask again if you like. I don't mind.

*** TONY GRIPPI XXN MR BONCARDO

PN793

Given that Richard Crookes issues its employees pay slips, there was nothing preventing Richard Crookes by one o'clock yesterday, providing to the Commission, the pay slips of its employees for the week of the 16 June 2020?‑‑‑Look, my understanding of the question, sir, was that you're after the pay slips that 4,000 workers across our sites now. It's logistically not possible to do that, given that the vast majority are not under our - they're not employed directly by ourselves. And in addition to that - you know - a lot of that is commercial in confidence. You know, we would need to seek the permission of those individuals to be passing - you know - their pay slips and their - you know - and what they're getting paid on a monthly or a weekly basis - not to respond for privacy reasons.

PN794

Did you read the order for production made by the Commission?‑‑‑Yes, I did.

PN795

And you would have read paragraph one of that order, sir, that it sought documents recording a number of 4,000 workers referred to at paragraph 10 of your statement who are directly employed by Richard Crookes Constructions. Do you remember reading that?‑‑‑Look, my statement didn't, as far as I'm concerned, and as I meant that the 4,000 workers are on Richard Crookes sites but not directly employed by Richard Crookes so I thought that was made perfectly clear.

PN796

I'm asking you not about your statement. I'm asking about the order for production. Did you read that order for production and understand that it sought documents relating to employees who were directly employed by Richard Crookes Constructions?‑‑‑Yes.

PN797

And you decided not to produce those documents?‑‑‑Look, without getting the permission of our 650 workers that would take some time and I think there would be some privacy issues associated with that. So, rightly, or wrongly we haven't produced that on this occasion.

PN798

MS SOSTARKO: Your Honour, I would also note that when we dealt with this matter this morning my colleague outlined that the points that he sought clarification has specifically got the CFMEU (indistinct). He did not receive that clarification (indistinct).

PN799

VICE PRESIDENT HATCHER: Well - - -

PN800

MS SOSTARKO: When those documents weren't able to be produced.

*** TONY GRIPPI XXN MR BONCARDO

PN801

VICE PRESIDENT HATCHER: Yes. Well, that assumes that some clarification was required, Ms Sostarko.

PN802

MR BONCARDO: Mr Grippi, I have just one further question on this. Are you aware that it's a criminal offence to not comply with an order of the Fair Work Commission.

PN803

VICE PRESIDENT HATCHER: Well, if you just stop there, Mr Boncardo. I mean I know the order was directed at a corporate entity but - - -

PN804

MR BONCARDO: I won't pursue that. I won't repeat that.

PN805

VICE PRESIDENT HATCHER: Yes. Fine.

PN806

MR BONCARDO: Now, Mr Grippi, Richard Crookes Construction in New South Wales is covered by the Richard Crookes Construction Pty Ltd CFMEU Collective Agreement 2017-2018, isn't it?‑‑‑Yes, that's correct. That's for our CW the CW's employed by us - yes, correct.

PN807

And you're the General Manager, Operations, Sydney for Richard Crookes Constructions?‑‑‑Correct.

PN808

And prior to that I think you've worked for over two decades as a construction manager and project manager for Richard Crookes?‑‑‑Yes. Yes, I've come up through the ranks.

PN809

You're experienced in industrial relations?‑‑‑Yes. Sufficiently experienced.

PN810

You understand the difference between an enterprise agreement and an award?‑‑‑Correct.

PN811

You understand that the employees who are employed as CW's by Richard Crookes Constructions are covered by an enterprise agreement, aren't they?‑‑‑Yes. Correct.

PN812

They're not covered by the - - -

PN813

VICE PRESIDENT HATCHER: Mr Boncardo, can you just give me the name of that agreement again?

*** TONY GRIPPI XXN MR BONCARDO

PN814

MR BONCARDO: Sorry, your Honour. It's the Richard Crookes Construction Pty Ltd/CFMEU Collective Agreements 2017-1018. We'll provide the Commission a copy in due course.

PN815

VICE PRESIDENT HATCHER: Thank you.

PN816

MR BONCARDO: And that agreement covers your CW's in New South Wales. Correct?‑‑‑Yes. Correct.

PN817

And you understand that this application relates to three industry awards?‑‑‑Yes.

PN818

None of those awards apply to any of your employees in New South Wales. Correct?‑‑‑I don't understand your line of questioning but go on I'll see if I can keep up.

PN819

Regarding the first awards apply to, that is determine the terms and conditions of employment of Richard Crookes CW's in New South Wales, do they?‑‑‑I don't understand that questioning. I'm sorry.

PN820

Are you serious, Mr Grippi?‑‑‑So just repeat the question again, sorry?

PN821

VICE PRESIDENT HATCHER: Let me - I think what Mr Boncardo is trying to ask you is that in so far as you have construction workers directly employed?‑‑‑Yes.

PN822

You apply the terms of the enterprise agreement, not the terms of the award?‑‑‑That's right. Absolutely.

PN823

Yes?‑‑‑That's right. That goes without saying. I just didn't understand what the line of questioning was about.

PN824

MR BONCARDO: So you'd agree with me that this application seeks to vary three awards. It's going to have no impact whatsoever on your direct employees. When I saw 'your' I mean Richard Crookes Constructions?‑‑‑Yes. It may have an impact on the CW's but it certainly won't have an impact on the rest of our employees.

PN825

And you also understand, sir, that - - -

*** TONY GRIPPI XXN MR BONCARDO

PN826

VICE PRESIDENT HATCHER: Sorry, the CW's we're interested in Mr Crookes - I think what the question was that an award change won't benefit you because your obligation is to comply the terms of the enterprise agreement, not the award?‑‑‑Yes, that's correct.

PN827

MS SOSTARKO: Your Honour, if I may I'd like to object to this line of questioning, Mr Grippi - those who would have read his statement - which I assume is for the parties to this proceeding would note that his evidence goes to the protocols in place as a consequence of the Pandemic in terms of safety. Mr Grippi, is not by any means what we would consider to be an industrial relations expert, although, obviously, he has some exposure to that by way of his role in the company. But I would question what relevance is of Mr Boncardo pressing this point.

PN828

VICE PRESIDENT HATCHER: Well, it goes to paragraph 21, doesn't it, Ms Sostarko? That is the witness expressed the opinion that the company would receive some benefit from the application.

PN829

MS SOSTARKO: Well, I don't want to answer that question.

PN830

VICE PRESIDENT HATCHER: No. But that's why it's relevant, isn't it?

PN831

MR BONCARDO: Precisely that's the question.

PN832

VICE PRESIDENT HATCHER: All right. Sorry, Ms Sostarko, have you finished?

PN833

MS SOSTARKO: Yes. No, I have, your Honour.

PN834

VICE PRESIDENT HATCHER: All right. We'll proceed, Mr Boncardo.

PN835

MR BONCARDO: And it's the same position in the Australian Capital Territory, isn't it, Mr Grippi? That Richard Crookes is covered by an enterprise agreement down there?‑‑‑Yes. Correct.

PN836

And that's the Richard Crookes Construction Pty Ltd and CFMEU ACT Enterprise Agreement 2016-2019?‑‑‑Yes. Correct.

*** TONY GRIPPI XXN MR BONCARDO

PN837

I want to ask you some questions about some other parts of your statement, sir. And I want to take you to paragraph 13 where you've referred to breaks that have had to be staggered to ensure lunch rooms and site sheds are not overcrowded and that's had the effect of causing further disruption to the flow of work on sites. Do you see that?‑‑‑Yes.

PN838

Now, you understand don't you, sir, that the order for production issued by the Commission sought, amongst other things documents concerning or recording in the period 1 March 2020 to present any disruptions in the flow of work to Richard Crookes Constructions as referred to at paragraph 13 of your statement?‑‑‑Yes.

PN839

And Richard Crookes Constructions produced absolutely nothing in response to that part of the order. Correct?‑‑‑Look, I think if you look at the - my collective submission there may be some duplication. So can I answer the question?

PN840

No one's stopping you, Mr Grippi?‑‑‑Thank you. Thank you. So look the disruption it could be measured in either time or costs so since - - -

PN841

Mr Grippi, if I can stop you there? I asked you whether - I put to you that Richard Crookes Constructions didn't produce a single document in respect to further disruptions to the flow of work as referred to at paragraph 13 of your statement. Do you agree or disagree?‑‑‑Look, I'm coming to the question. So my answer to that Phillip is that disruption is measured in either time and/or costs. There's a submission which I have given you which is typical of a project. It was probably our largest project at the time which details the costs applied purely and totally applicable and relevant for our management of COVID. And you can see that it's had a significant impact. We've tried to mitigate construction to our project because reputationally what is credible for us is that we finished our projects on time and we have chosen to throw resources at it so that we could keep our sites safe. Keep our sites as productive as possible. And there has been disruption. There's no question about it and we've got costs that we've tracked for each of our projects which, you know - which are undisputed. They're the costs that are not recoverable. Those costs are ongoing. And whilst the disruption on some jobs have been different. Like at the time we had closer to 50 projects. We've got closer to 45 projects at the moment because we haven't been able to replenish the projects that have been completed. A small industrial project, a horizontal project would have minimal disruption because there is space for people to social distance, a vertical project, a vertical project suffers a greater amount of disruption.

PN842

Thank you, Mr Grippi. Have you finished your answer?‑‑‑Look, I can finish there.

*** TONY GRIPPI XXN MR BONCARDO

PN843

You would answer all of those disruptions that you're alleging have occurred are they recorded on documents somewhere?‑‑‑Yes, they are.

PN844

And you didn't produce any of those documents to the Commission.

PN845

MS SOSTARKO: Your Honour, if I could just interject at this point? And correct me if I'm wrong, Mr Grippi. The document that was produced - - -

PN846

MR BONCARDO: Is this an objection? Or is this an attempt to lead?

PN847

MS SOSTARKO: Well, I'm trying to assist the Commission just to guide them as to perhaps what Mr Grippi was referring back to.

PN848

VICE PRESIDENT HATCHER: Well, I think - - -

PN849

MS SOSTARKO: If I could, your Honour?

PN850

VICE PRESIDENT HATCHER: I think the process is that you can object to a question on an appropriate basis, Ms Sostarko. So is there an objection to that question?

PN851

MS SOSTARKO: Well, yes. I object, your Honour. And my objection is that Mr Boncardo was claiming that Richard Crookes had not produced any documents evidencing those disruptions and costs.

PN852

VICE PRESIDENT HATCHER: All right. So Mr Boncardo the objection is that there was an incorrect factual premise in your question.

PN853

MR BONCARDO: And I am asking not about costs. I am asking about disruptions to the flow of work on sites.

PN854

VICE PRESIDENT HATCHER: Right.

PN855

MR BONCARDO: Paragraph 13.

PN856

VICE PRESIDENT HATCHER: All right.

*** TONY GRIPPI XXN MR BONCARDO

PN857

MR BONCARDO: And you've agreed with Mr Grippi that there are documents recording that?‑‑‑That's right. And those documents are recording that by way of - by way of costs.

PN858

By way of costs?‑‑‑Yes.

PN859

And you've produced how many of those documents to the Commission?‑‑‑I've produced one example. I didn't think it was appropriate to produce 45 to 50 examples across all our projects.

PN860

Was it a decision that you made by yourself?‑‑‑Yes.

PN861

Thank you. Can I suggest to you, sir, that the document that you have produced which I think is marked 'Attachment 4'?‑‑‑Correct.

PN862

In documents that have been produced says nothing at all about the disruption to the flow of works on site?‑‑‑Well, there's - my reading of it, Phillip, it does because the structure - - -

PN863

VICE PRESIDENT HATCHER: Can I just remind you, that we just operate on a last name basis here. We don't - it's not an informal chatter. So - - -?‑‑‑Sorry, Mr Hatcher.

PN864

That's all right.

PN865

THE WITNESS: So, Mr Boncardo, look as far as I'm concerned - like I said - disruption is measured in either time or cost and I've given you a detailed break-up of the cost centres associated with a typical project and I can talk further to that document if you so wish.

PN866

MR BONCARDO: Well, what I want to suggest to you, Mr Grippi, is that your evidence that staggered break times that have caused a disruption to the flow of works on site is simply incorrect and if it was correct you would have produced documents recording disruptions to the flow of work?‑‑‑Okay. Well, I refer you again to Attachment 4 and maybe by way of example I can talk to that project and a number of other projects.

*** TONY GRIPPI XXN MR BONCARDO

PN867

All right. Mr Grippi, let me just ask you about Attachment 4? There's a cost for rubbish removal. What on earth does rubbish removal have to do with disruptions to the flow of work on sites arising from staggered break times?‑‑‑Okay. So that cost code you will find that there's no costs associated with rubbish removal. So these - - -

PN868

I apologise, sir. I got that wrong. Let me ask you about labour hire. What on earth does labour hire which is costed there at $38,200 as at 30 June have to do with staggered break times to ensure lunch rooms and site sheds are not overcrowded?‑‑‑Okay. So, look I can talk to that in great detail. So if you can just picture a construction site with 300 workers. So this particular site probably had closer to 250 workers. At the height of the Pandemic, if you recall - I certainly recall because I was living and breathing it as was the rest of our business and the rest of the workforce. There was panic out there. So we had a security guard making sure that people were socially distancing. We had the regulator coming to our sites. We had a number of your officials, obviously trying to keep sites safe, so we had - on this particular site - we had to disengage our turnstile because we didn't want anyone to touch it so we had to open up the gates on the side of the turnstile and have the security guard there. And ensure that everyone was swiping their access card so that we had an accurate record of everyone on the site. So that was a cost centre which we wouldn't have otherwise have had to have incurred.

PN869

Mr Grippi, can I stop you there? My question relates to paragraph 13 and staggered breaks and what I am asking is what on earth labour hire expenditure has to do with the staggering of breaks?‑‑‑And I was getting to that point. So - - -

PN870

(Indistinct) if you could?‑‑‑So we, for the sites where we didn't have sufficient accommodation, whether to stagger lunches and we were able to make sure that the outgoing lunch period that they were vacated before the next lunch period took place. So we had security guards on a number of our projects making sure that people were being - or people were socially distancing, weren't overcrowding because at the peak of this Pandemic the industry was at risk of shutting down. So we threw everything that was required to keep our sites, safe, open and the industry open.

PN871

That's your answer is it?‑‑‑Yes.

PN872

Now, paragraph 14 you talk about some tasks having to be undertaken outside of ordinary working hours?‑‑‑Yes.

PN873

Now, you know what time your employees start work on your sites, don't you?‑‑‑I'm talking generally about the industry. So the example I can give you there.

*** TONY GRIPPI XXN MR BONCARDO

PN874

Mr Grippi, just listen to the question and answer the question. You or Richard Crookes Constructions has records of when its employees start work. Correct?‑‑‑Correct.

PN875

It has records of when its employees finish work. Correct?‑‑‑Correct.

PN876

It has site registers at each of its sites. Correct?‑‑‑For our people, yes.

PN877

And do your subcontractors?‑‑‑Well, we don't necessarily log in when they start work but some sites, yes. If there's a turnstile. Some sites, no - where it's a sign-on register.

PN878

So there would have been nothing preventing Richard Crookes Constructions from producing to the Commission yesterday documents recording daily start and finish times of its employees. Correct?‑‑‑Look, potentially - potentially not but - - -

PN879

Do you say in respect to daily starts and finish times of employees of Richard Crookes Constructions subcontractors?‑‑‑Well, we wouldn't have those. We wouldn't have accurate records. So it wouldn't be appropriate for us to be passing those on if they weren't totally accurate, particularly if there just sign-on records without recording an accurate time of commencement or departure of site.

PN880

There's not some spate of inaccurate record-keeping going on at Richard Crookes Constructions is there, Mr Grippi?‑‑‑No, I don't think so.

PN881

So you just - - -?‑‑‑They were - I've got nothing to hide. I'm just giving you an open and transparent appraisal of what our experience has been during this Pandemic.

PN882

So open and transparent that you decided to thumb your nose at the order for production made by the Commission?‑‑‑No. That's not the case.

PN883

Well, could I suggest - - -

PN884

MS SOSTARKO: Your Honour, objection.

*** TONY GRIPPI XXN MR BONCARDO

PN885

VICE PRESIDENT HATCHER: It's already been asked and answered, Ms Sostarko.

PN886

MR BONCARDO: Can I suggest to you, sir, that paragraph 14 of your statement that there has been a slowing down of progress resulting in some tasks being undertaken outside of ordinary working hours is incorrect, so far as concerns Richard Crookes Constructions?‑‑‑If I can answer it this way? The example that I'd like to give you and ordinary hours, under our award for example, is between 6.00 and 6.00. So to mitigate delay on some projects and this is vertical projects, we would start transport in the workforce from 6.00 o'clock in the morning. So we're actually not physically doing work but so that we're not breaching the DA hours and we would transport in our Alimak three to four workers at the most so that we could ensure that we were social distancing to say level 22, and it would take normally - it would normally take 15 minutes to get the entire workforce to the workface. But whilst we've been managing this Pandemic it would take an hour or an hour 15 to get the same number of workers to the workplace. So that has - that adds an impact on time. The subcontractors also, on this particular project are also covered under the same - the same enterprise agreement or very similar enterprise agreement would be taking advantage of the ordinary hours of work, commencing at 6.00 o'clock. However, ordinarily they mightn't have to work overtime in order to produce the same amount of work. They would have to have worked overtime in order to maintain our program. So the disruption would be when they're coming down for lunch the reverse would take effect. So it would take a lot longer to get the workforce to their lunch rooms and then back up to the workforce and also when exiting - exiting the site so - and that would be relevant for workers who were working at the upper level. The productivity for those trades working on the upper levels was obviously impacted significantly.

PN887

VICE PRESIDENT HATCHER: So, Mr Grippi, just so I understand it. I thought your purpose of your evidence was to say that that had caused some overtime costs to be incurred. I'm looking at paragraph 14?‑‑‑Yes. All our CW's work overtime. All our CW's work overtime and to be perfectly honest we're cutting overtime at the moment because we're actually trying to save costs whilst we're still trying to maintain productivity. The subcontractors have certainly worked overtime and without checking their time slips before the Pandemic and after the Pandemic you know it'd be difficult to verify but it goes without saying their productivity has dropped during this period be it that - you know - may be a little bit of complacency has set in or it would streamline and optimise the process, notwithstanding the measures are still in place but it is coming at a cost to them which they are bearing. We certainly can't afford to be paying them overtime to maintain that program as such.

*** TONY GRIPPI XXN MR BONCARDO

PN888

So, Mr Grippi, I fully understand your point about productivity but I am focusing on is paragraph 14 where you said some tasks, having to be completed outside of ordinary working hours. So what actually are you referring to there?‑‑‑Okay. So there's some projects where when the order was made by Bob Stokes allowing - you know - the industry to be working Sundays and Saturdays and there was a number of subcontractors who took that offer up, be it that they - you know - they couldn't afford to have all their workforce working on a Sunday, for example, and paid overtime. But there was some trades who were - who were in a panic - and we noticed their numbers drop at the height of the Pandemic because they were afraid. They were afraid of their wellbeing and probably - it was probably more associated with the Asian cohort to be perfectly honest. And a number of them chose to work outside of ordinary hours and that would be, you know, of an afternoon when there was less people on site and some of them chose to work a Sunday. But it wasn't sustainable at the time.

PN889

Okay. I just want to pin you down. So some worked on a Sunday?‑‑‑Yes.

PN890

On your projects?‑‑‑On some projects.

PN891

Yes?‑‑‑On some projects.

PN892

And you said some worked of an afternoon. What do you mean by that? What time are you talking about?‑‑‑Some have worked till 7.00 o'clock. Some have worked till 6.00 o'clock. Depending on when they started. Right? So we staggered our start times from 6.00 o'clock and we had everyone in. And this is where you've got a site of say 300 or 400 people and we had everyone in by 8.00 o'clock. Some sites had nice amount of real estate where we could separate the cohort. Some of them had to be lined up in the street and that's why we had to stagger their start times so we didn't have 200 people trying to get in the gate at 6.30 or 7.00 o'clock in the morning because the media was watching us. The politicians were watching us. So that's why we staggered the start times. And they would normally work their eight or nine or 10 hours - you know - between 6.00 o'clock and 6.00 o'clock in accordance with their general agreement. There's some that would choose to work. So we've got some sites that are working 14 hours a day because of the time pressures. Because of COVID probably not impacted further because of COVID - yes - if that makes sense.

PN893

Okay, thank you.

PN894

MR BONCARDO: Mr Grippi, in part of the answer that you gave me you referred to the subcontractors having the same EBA as Richard Crookes Constructions. Do you remember giving that evidence?‑‑‑Look, some wouldn't. Certainly not. We would have - we would have at any one time, Mr Boncardo, you know, 2,000 - 2,000 trade contractors - separate subcontractors. Some would be covered by the Award. Some of them would be covered by an EBA. Some of them would be covered by a new EBA, some by an expired EBA. There'd be every agreement that's probably in existence. Does that answer the question?

*** TONY GRIPPI XXN MR BONCARDO

PN895

No, it doesn't but I'll ask another one. Now, I want to ask you about paragraph 16 of your statement and you assert there that the engagement of cleaners has caused significant disruptions to workflow. Now, you're aware, aren't you, that paragraph 10 of the order for production are called for documents concerning or recording the significant disruptions to workflow referred to at paragraph 16 of your statement. You're aware of that?‑‑‑Yes.

PN896

And you didn't produce a single document?‑‑‑Look, I'm referring to the same document - the same cost document that I've referred to earlier.

PN897

MS SOSTARKO: Your Honour, I object to that. Given that as noted previously Attachment 4 which is at page 425, the documents produced by Richard Crookes Constructions provides the very details that Mr Boncardo is referring to.

PN898

MR BONCARDO: That's just nonsense but, in any event, that's not an accurate reflection of the document and I am entitled to ask questions about production of materials or non-production of materials recording significant disruptions at work.

PN899

VICE PRESIDENT HATCHER: Just go ahead.

PN900

MR BONCARDO: Mr Grippi, you're not suggesting, are you, that Attachment 4 records anywhere any particular disruption of workflow?‑‑‑Well, look I'm saying that it does because disruption comes in time and/or costs. We've chosen to throw money at it in the form of spending money to keep our sites safe.

PN901

VICE PRESIDENT HATCHER: Mr Grippi, in paragraph 16 you seem to separate the two things. Do you see that? You say 'It's not only come at additional costs but also'?‑‑‑The disruption to workflow would be that waiting for the six people in HF for example to exit, waiting for our cleaners to clean, to hygienically clean the rooms before the next sitting and this is what we've been doing before the next sitting. So it's not just a free for all where 16 people will go into a shed. So there needs to be a process to be followed in accordance with our response plan. So that's the disruption - that's the disruption that I'm referring to and there's a cost associated with it in time and cost.

PN902

MR BONCARDO: And you haven't produced a single document besides what you say is attachment four that refers to any significant disruption of work at any particular project. Correct?‑‑‑Yes. Well, I'm relying on Attachment 4. There's a big cost for that. That's three months. That's a three month cost on one project - on one project.

*** TONY GRIPPI XXN MR BONCARDO

PN903

Now, the coded response plan which is attached to your statement, sir. This is a plan that applies at all Richard Crookes sites was it?‑‑‑Yes. Correct. Correct.

PN904

And it's a plan that deals - you'd agree with me - in general terms with a work, health and safety matter. Correct?‑‑‑Look, amongst other things, primarily that's why the document was produced because in mid March at the height of the Pandemic - - -

PN905

No, I didn't ask you about - I didn't ask you anything about when it was produced or how it was produced. I've just asked you about its content and I'll ask you now, sir. Who authored this document?‑‑‑Okay. Well, that's where I was leading to. In mid-March when a number of our sites and our clients were in a panic and were asking what our response was, how we were managing COVID-19 on their sites and on our sites.

PN906

Mr Grippi, can you just tell me who authored the document? I'm not interested in the history. I just want to know who authored it. Who wrote it?‑‑‑I'm getting to that. I'm getting to that.

PN907

I want you to get straight to it. It will be much quicker if you answer the question that's asked instead of giving a broad-brush narrative. Who authored the document?‑‑‑Okay. The COVID-19 response team. Okay? It was a group of 10 senior individuals from our organisation. There was an external facilitator and also a health hygienist professional who oversaw the document and also signed it off. So it wasn't one particular person. It was the RCC COVID Response Team.

PN908

Were they all members of management, sir?‑‑‑They were all members of management except for an external facilitator and co-leads. I was the leader. I was the leader of our response team and we had a health professional to ensure that the health advice that obviously we were getting and the government was issuing was being awareness of the document appropriately and the minimum guidelines that we set were appropriate at the time and you will note that was contrary for revisions because as the health advice was being revised we would revise it and give our teams the tools so that they could focus on implementing rather than making it up as they went or interpreted it as they went. So we were charged with giving our teams the tools to make the sites safe. Keep them open. Keep the industry open and keep the sites as productive as possible under the circumstances.

PN909

Now, Mr Grippi, Richard Crookes Constructions developed a policy, announced the policy and implemented the policy on its sites. Correct?‑‑‑Correct.

*** TONY GRIPPI XXN MR BONCARDO

PN910

Did you engage at all with any of your workers about the formulation of the policy before it was announced and implemented. Correct?‑‑‑Sorry, I don't understand the question. Engagement of?

PN911

Did you engage with your workforce or consult with your workforce at all before the policy was announced and implemented. Correct?‑‑‑There was quite a bit of consultation. Quite a bit of questioning. We set up a dedicated email addressed so that anyone, obviously there was lots of anxiety out in the field so any questions that were answered. So for the first two weeks it was quite intense. We were answering questions that were coming into the task force that we'd set up. We were answering them. We were being proactive so that we could keep people as calm as possible under the circumstances.

PN912

Two more matters, Mr Grippi and I'll be as quick as I can in dealing with them. Paragraph 11 of the order for production sought documents concerning or reporting the significant delays referred to at paragraph 19 of your statement. Now paragraph 19 dealt with workers being transported, presumably in Alimaks on multi-level projects. See that?‑‑‑Yes.

PN913

And Richard Crookes Constructions didn't produce a single document in answer to paragraph 11 of the order for production. Correct?‑‑‑I think our response plan covers that in detail what our hoist guidelines were. So we did produce the hoist guidelines.

PN914

A hoist guidelines document that causes significant delays on multi-level projects is it?‑‑‑Correct. Because we had to limit the number of workers that could be transported at any one time. So what would ordinarily take 15 minutes to get the workforce to the upper level of the multi-storey building would take between an hour and 75 minutes.

PN915

And you'd agree with me, wouldn't you, that you have not produced a single document showing any particular delay on any project as a result of the use of social - or the employment of social distancing in this?‑‑‑Look, I refer to my earlier point and maybe you don't like the way I'm saying it but - - -

PN916

I'd like you to answer my question, Mr Grippi?‑‑‑Yes, I'm referring back to Attachment 4. Attachment 4 because - - -

PN917

Attachment 4. So Attachment 4 records significant delays resulting from the safe use of lifts and hoists does it?‑‑‑There's the cost attributed to it is certainly covered in there. And look there is certainly some other sites where there has been. There has been a delay. Like I said the horizontal - the horizontal projects.

*** TONY GRIPPI XXN MR BONCARDO

PN918

Let's just look at Attachment 4, sir. 'Temporary fencing, boarding and protection'. That has nothing to do with the safe use of lifts and hoists does it?‑‑‑Well, that one there in particular does not. That one there in that clause there in particular does not.

PN919

(Indistinct).

PN920

VICE PRESIDENT HATCHER: So that question cut out Mr Boncardo.

PN921

MR BONCARDO: Site accommodation has nothing to do with the use of lifts and hoists does it?‑‑‑Not site accommodation wouldn't - no.

PN922

Cleaning. Nothing to do with lifts and hoists?‑‑‑Look, there was a requirement to clean but - you know - we furnished our hoist drivers with proper sanitary equipment. But that particular exercise of cleaning a hoist wouldn't but transporting two or three people at a time as opposed to 14 people at a time, just by default - just mathematically of course it causes delay.

PN923

Sir, but you're just making up that Attachment 4 has anything at all to do with delays on multi-level projects?‑‑‑What's the question again? Am I making it up?

PN924

Just making up this evidence about Attachment 4 having anything to do with the ways on multi-level projects?‑‑‑No. I'm not making it up. We have got - - -

PN925

MS SOSTARKO: Objection, your Honour. Objection. My objection - - -

PN926

MR BONCARDO: Mr Grippi?

PN927

VICE PRESIDENT HATCHER: Hold on. Hold on. What's the objection?

PN928

MS SOSTARKO: Your Honour, my objection is that this line of questioning that Mr Boncardo was pursuing - - -

PN929

MR BONCARDO: Is finished.

PN930

VICE PRESIDENT HATCHER: Sorry, we're getting some cross conversation here.

*** TONY GRIPPI XXN MR BONCARDO

PN931

MR BONCARDO: It's finished, your Honour. I've - - -

PN932

VICE PRESIDENT HATCHER: No, I think I should just hear what Ms Sostarko has to say. Ms Sostarko?

PN933

MS SOSTARKO: Thank you, your Honour. My point was this that the further and with respect to our correspondence in response to the notice to produce on behalf of Richard Crookes Constructions noted that there was insufficient particularity in terms of what it was that the unions was seeking in terms of the production of documents. Now, certainly, Mr Boncardo at this point in time is narrowing down that type of document that they were seeking but we did seek further clarification on that point and were not provided it at the time the notice was issued.

PN934

VICE PRESIDENT HATCHER: Well, again, that's noted Ms Sostarko but that has since had some clarification was required in the first place. But in any event so where are we up to, Mr Boncardo?

PN935

MR BONCARDO: Your Honour, I just want to ask a couple more questions on Attachment 4 and then I will move on to one last very quick topic. Mr Grippi, which project does Attachment 4 relate to?‑‑‑Look, I'd rather not say if that's okay unless I absolutely have to.

PN936

I would ask you to tell the Commission the project it relates to?

PN937

VICE PRESIDENT HATCHER: Mr Grippi, is there some reason why you can't answer that question? Or don't want to answer that question?‑‑‑Look, I just want to protect the team. I just want to protect the team.

PN938

MR BONCARDO: I press the question.

PN939

VICE PRESIDENT HATCHER: So protect them from what?‑‑‑Just from potential undue attention. I can if you press it.

PN940

MS SOSTARKO: Your Honour, I'd like to raise an objection to that question.

PN941

VICE PRESIDENT HATCHER: Yes.

*** TONY GRIPPI XXN MR BONCARDO

PN942

MS SOSTARKO: In that I think what Mr Grippi is actually seeking to articulate is that those documents, surely the Commission understands are largely commercial in confidence and I don't - we certainly wouldn't see the necessity in him providing that information.

PN943

VICE PRESIDENT HATCHER: Well, Mr Grippi didn't say they were commercial in confidence. He said he didn't want to draw attention to the team.

PN944

MS SOSTARKO: Understood, your Honour, but I suspect that that was what he was inferring. But I'll let Mr Boncardo clarify that question of Mr Grippi.

PN945

THE WITNESS: A lot of what I've provided everyone is commercial in confidence. I've provided what I've provided because I've been asked for additional information. It seems that maybe it hasn't ticked all the boxes but I can honestly say that what I've written is an accurate appraisal of what our business has experienced. We're not out of the woods yet. We're going to continue to incur costs. It's a CBD site. You know we've only got three CBD sites at the moment. It is one of our larger CBD sites which is under some significant time pressure at the moment.

PN946

VICE PRESIDENT HATCHER: All right. What's the next question, Mr Boncardo?

PN947

MR BONCARDO: I just want to ask you about your COVID-19 advice for staff leave options document, sir. You're aware of that that was produced - the only documents produced yesterday. You've got that Mr Grippi?‑‑‑I do have Mr Boncardo.

PN948

I just want to take you to the second subheading, 'What happens if I become unwell or develop - - -

PN949

MS SOSTARKO: Your Honour, before we go on. This is the very document I object to this question being pressed at this point without the undertaking that was sought in relation to these documents. I don't believe that we have actually had that undertaking from the CFMMEU.

PN950

VICE PRESIDENT HATCHER: Well, production of documents and access to them is always on the basis that they'll be used only for the purpose of the proceedings. So I'm not sure an undertaking is required. I invited the MBA to provide a confidentiality order. If you want to ask for an order apply for it and tell me what you're actually asking for.

*** TONY GRIPPI XXN MR BONCARDO

PN951

MS SOSTARKO: Well, okay. I'll qualify that objection in that we would just like to note that that document would be used only for the relevance of these proceedings.

PN952

VICE PRESIDENT HATCHER: All right. I understand your client would know that's the case, Mr Boncardo.

PN953

MR BONCARDO: My client's well familiar with what Justices Hayne, Heydon and Crennan say in Hearne v Street.

PN954

VICE PRESIDENT HATCHER: All right. Well, go ahead.

PN955

MR BONCARDO: Mr Grippi, it's set out in the paragraph that I've directed your attention to that if you are sick you will be able to access your sick leave entitlements and if you do not have enough sick leave accrued for the period of your absence, Richard Crookes Constructions will agree to let employees go into a negative sick leave balance of up to two weeks. Do you see that?‑‑‑Yes, I do see that.

PN956

So is it the case that Richard Crookes Construction is providing all of its employees in the event that they either have COVID-19 type symptoms or are otherwise required to self-isolate with ability to go into a negative sick leave balance of up to two weeks?‑‑‑Look at the time that was the case and this refers to staff. You'll find the last paragraph of the document refers to construction workers but in relation to - in relation to that second paragraph - in that advice which at the time - at the time was current. And it probably is still current. You know we've employed a number of people in the last 12 months. And unfortunately we've put an equal number off. But some wouldn't have had leave entitlements in their balance and we chose so that - because obviously a number of people were suffering anxiety because of cash flow and costs and concerned about not being paid. So we chose to at least eliminate that anxiety by saying that - you know - we'd let you go into negatives so that you've still got your monthly pay coming in. So at the time that was current. Does that answer the question? Sorry I can't hear you. You're on mute.

PN957

VICE PRESIDENT HATCHER: I think you're muted Mr Boncardo.

*** TONY GRIPPI XXN MR BONCARDO

PN958

MR BONCARDO: I've adopted that practise. It does not apply to CW's who are covered by your enterprise agreement does it?‑‑‑No. Correct. Yes, because obviously we didn't want to contradict what the agreement - our CW's were covered under. So this and a number of these questions if I might say came about by questions coming into the response team. So, you know, we had all sorts of questions and obviously all of them coming from a place of anxiety.

PN959

Thank you?‑‑‑Does that answer the question?

PN960

That's the cross-examination.

PN961

VICE PRESIDENT HATCHER: Right. Any re-examination, Ms Sostarko?

PN962

MS SOSTARKO: Yes, your Honour.

RE-EXAMINATION BY MS SOSTARKO [4.42 PM]

PN963

MS SOSTARKO: Sorry, Mr Grippi - I've lost sight of him. There he is?‑‑‑Yes, I'm here.

PN964

The document that we last referred to or that Mr Boncardo was last referring to which is the leave options document that was a draft document, was it not? It actually wasn't a settled document in terms of a company policy?

PN965

MR BONCARDO: I object to the question. It's leading. Ms Sostarko should not lead in re-examination.

PN966

VICE PRESIDENT HATCHER: Well, that's noted but anyway was it a draft document Mr Grippi?‑‑‑Yes. Correct.

PN967

Yes. All right?‑‑‑We - if I may - we develop a number of draft documents because we had another stream working on what we would do, what our business would do, and respond to in the event of an industry shutdown. So whilst our total focus was on keeping our site safe and open and the industry open we did have to have a contingency plan which was a draft document which we haven't shared, in the event of an industry shutdown.

PN968

All right. Ms Sostarko?

PN969

MS SOSTARKO: Right. Thanks, Mr Grippi. My other question is with respect to enterprise agreements. Are you aware that enterprise agreements are underpinned by Award conditions?‑‑‑Yes.

*** TONY GRIPPI RXN MS SOSTARKO

PN970

And are you also aware that when the Award changes this may also impact enterprise agreement conditions. Yes?‑‑‑Correct. Yes.

PN971

And the final question I have was with respect to sick leave. Would you say, Mr Grippi, that the negative sick leave as referred to in the second paragraph of that draft leave options document is quite different to the concept of unpaid Pandemic leave or the like. Is that correct?

PN972

MR BONCARDO: I object to that question. I don't understand how that arises at all from cross-examination.

PN973

VICE PRESIDENT HATCHER: No. Well, I'll allow it. Mr Grippi?‑‑‑Yes. Correct.

PN974

MS SOSTARKO: And would you - well, do you know why those two types of leave are different and can you explain to us what your understanding for the difference?

PN975

VICE PRESIDENT HATCHER: Ms Sostarko, I think it's pretty obvious to us what the difference is.

PN976

MS SOSTARKO: Okay. Thank you. Nothing further, your Honour.

PN977

VICE PRESIDENT HATCHER: All right. Thanks for your evidence, Mr Grippi. You're excused which means you can simply disconnect?‑‑‑Thank you. Enjoy the rest of the proceedings, guys.

<THE WITNESS WITHDREW [4.45 PM]

PN978

VICE PRESIDENT HATCHER: Ms Sostarko, again, just dealing with that last leave options document obviously the transcript at some stage will be placed on the website.

PN979

MS SOSTARKO: Yes.

PN980

VICE PRESIDENT HATCHER: And will be public accessible.

PN981

MS SOSTARKO: Yes.

*** TONY GRIPPI RXN MS SOSTARKO

PN982

VICE PRESIDENT HATCHER: So if you want to apply for a confidentiality order can you think about that overnight and send us something which would - which you ask us to make.

PN983

MS SOSTARKO: We'll seek instructions on that. Thank you, your Honour.

PN984

VICE PRESIDENT HATCHER: Yes. All right. Unless there's anything else we can deal with right now we'll adjourn and resume at 10.00 am in the morning.

PN985

MR BONCARDO: If the Commission pleases.

PN986

VICE PRESIDENT HATCHER: Yes. All right. We're now adjourned.

ADJOURNED UNTIL WEDNESDAY, 15 JULY 2020 [4.45 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

SHANE WILLIAM GARRETT, AFFIRMED.................................................. PN190

EXAMINATION-IN-CHIEF BY MS SOSTARKO.......................................... PN190

EXHIBIT #1 STATEMENT OF SHANE GARRETT DATED 19/06/2020... PN205

CROSS-EXAMINATION BY MR BONCARDO............................................. PN266

RE-EXAMINATION BY MS SOSTARKO....................................................... PN332

THE WITNESS WITHDREW............................................................................ PN347

WARWICK TEMBY, AFFIRMED.................................................................... PN355

EXAMINATION-IN-CHIEF BY MS ADLER.................................................. PN355

EXHIBIT #2 STATEMENT OF WARWICK TEMBY DATED 15/06/2020. PN362

CROSS-EXAMINATION BY MR BONCARDO............................................. PN369

THE WITNESS WITHDREW............................................................................ PN433

LAURA REGAN, AFFIRMED........................................................................... PN448

EXAMINATION-IN-CHIEF BY MS ADLER.................................................. PN448

EXHIBIT #3 STATEMENT OF LAURA REGAN DATED 15/06/2020........ PN455

CROSS-EXAMINATION BY MR BONCARDO............................................. PN460

THE WITNESS WITHDREW............................................................................ PN484

PHILLIP ANTHONY TONER, AFFIRMED.................................................... PN503

EXAMINATION-IN-CHIEF BY MR BONCARDO........................................ PN503

EXHIBIT #4 EXPERT REPORT OF DR TONER AND ASSOCIATE PROFESSOR RAFFERTY DATED 10 JULY 2020.................................................................. PN514

EXHIBIT #5 SUPPLEMENTARY REPORT OF DR PHILLIP TONER DATED 13/07/2020................................................................................................................................. PN521

CROSS-EXAMINATION BY MS ADLER....................................................... PN577

CROSS-EXAMINATION BY MS SOSTARKO............................................... PN628

CROSS-EXAMINATION BY MS PAUL.......................................................... PN692

RE-EXAMINATION BY MR BONCARDO..................................................... PN712

THE WITNESS WITHDREW............................................................................ PN743

TONY GRIPPI, AFFIRMED.............................................................................. PN762

EXAMINATION-IN-CHIEF BY MS SOSTARKO.......................................... PN762

EXHIBIT #6 WITNESS STATEMENT OF TONY GRIPPI DATED 16/06/2020 PN768

CROSS-EXAMINATION BY MR BONCARDO............................................. PN771

RE-EXAMINATION BY MS SOSTARKO....................................................... PN962

THE WITNESS WITHDREW............................................................................ PN977