PN987

VICE PRESIDENT HATCHER: All right, are the appearances the same as before? Yes, all right. I'm guessing there might be some preliminary issues?

PN988

MR P BONCARDO: Yes, your Honour. There is a preliminary issue in relation to the article that appeared in the Australian yesterday which contained a number of factual propositions asserted by the Master Builders Association. There was correspondence which I understand the Commission was copied into sent last night to the Master Builders Association asking a very simple question, or series of questions as to whether or not the Master Builders accepted the propositions advanced in that article. A response has been received as I understand, a number of moments ago from Mr Schmitke which I think can fairly be said does not answer the questions asked of the Master Builders and my client's submission is that - - -

PN989

VICE PRESIDENT HATCHER: I'm sorry, Mr Boncardo, you're cutting out.

PN990

MR BONCARDO: I apologise, Vice President, is that better?

PN991

VICE PRESIDENT HATCHER: Yes, that's better.

PN992

MR BONCARDO: Thank you. My client's position is that the factual propositions attributed to the Master Builders in the article contained in the Australian are very relevant to the question at issue in these proceedings. And in the event that they are not accepted by the Master Builders or their accuracy is not agreed to by the Master Builders then it will be my client's application to either have Ms Wawn called to give evidence in these proceedings, or alternatively to have Mr Garrett recalled to give evidence about the matters set out in the article. I can tell your Honour that - - -

PN993

VICE PRESIDENT HATCHER: Can you just pause, Mr Boncardo. I can't see Ms Sostarko and Ms Adler. Are you there?

PN994

MS R. SOSTARKO: Yes, your Honour.

PN995

VICE PRESIDENT HATCHER: All right. Sorry, you're there now. That's all right. So you were there all along, were you?

PN996

MS SOSTARKO: Yes. We were just asked to put our videos on - off to help with connection.

PN997

VICE PRESIDENT HATCHER: Okay. All right, go ahead, Mr Boncardo.

PN998

MR BONCARDO: Thank you, your Honour. Your Honour, I was proposing to tender the article in the CFMEU's case this morning. If it is to be tendered or able to be tendered for a hearsay purpose, namely for the truth of the assertions made by Ms Wawn and attributed to the Master Builders Association that will probably be sufficient for my purposes but I'm unclear as to what the Master Builders' position is in respect to the factual propositions advanced in the article.

PN999

VICE PRESIDENT HATCHER: All right. Well, I'll come to Ms Sostarko in a second but I just want to ask Ms Adler something first. Ms Adler, in the press release you sent us there is reference to upcoming HIA data for new home sales in June. And I infer from that article that that data is now available - essentially reference to it. Am I - - -

PN1000

MS M ADLER: Yes, your Honour.

PN1001

VICE PRESIDENT HATCHER: Can you provide us with that data?

PN1002

MS ADLER: That's the June new home sales data?

PN1003

VICE PRESIDENT HATCHER: Yes.

PN1004

MS ADLER: Yes, I can, your Honour.

PN1005

VICE PRESIDENT HATCHER: Can you do that today, please?

PN1006

MS ADLER: Yes, I can.

PN1007

VICE PRESIDENT HATCHER: All right. Ms Sostarko, what's your response to this?

PN1008

MS SOSTARKO: Thank you, your Honour. This morning at 9.54 a.m. the Commission hopefully received a copy of our response to Mr Maxwell's correspondence and given that the parties would not have had much opportunity to review it, if it pleases I'll just briefly take the Commission through that response, and that being that as the Commission will recall yesterday this matter was raised at 1.47 p.m. and obviously we addressed that during the proceeding yesterday, and that in addition to that we certainly would hold the view that those views that we advanced yesterday stand and that they are in fact entirely consistent with the position that we've advanced throughout these proceedings, particularly as noted at paragraph 20 of our outline of submissions and by way of the evidence contained in the statement of Mr Garrett, and that in fact it is our understanding that that response satisfied the Commission in terms of any views that the parties would be seeking in response to this article.

PN1009

VICE PRESIDENT HATCHER: Well, I'd guess, with respect, that your understanding is incorrect. I think what the request is, is to say something about what's in the article. That is, does that reflect the views of the MBA? Is that the position of the MBA?

PN1010

MS SOSTARKO: Well, our position is that certainly we would stand by any comments with respect to whatever was stated in relation to the Homebuilder package but your Honour, you may recall yesterday that our points made were that this is but one of many stimulus packages and it is one that is confined quite narrowly to one part of the residential building sector. So we certainly would not retract any of those comments but we would also say that those comments are not inconsistent with any submissions that we have made in these proceedings to date.

PN1011

VICE PRESIDENT HATCHER: We can address that in closing submissions. I think that the immediate point is, can we take what's in the article as a true and correct statement of the MBA's position in respect of the Homebuilders package as at yesterday.

PN1012

MS SOSTARKO: Yes, your Honour. As at yesterday, yes.

PN1013

VICE PRESIDENT HATCHER: All right. Now, was what was stated in the article on behalf of the MBA based upon any data that the MBA had or is it anecdotal in nature?

PN1014

MS SOSTARKO: I would need to take some instruction on that or get some advice internally on that question, your Honour, if I could. Obviously we were in the proceedings yesterday and this matter is dealt with by obviously our communications team and our CEO. And I should note that she has actually been on leave for the last two business days so any questions with respect to the genesis of these comments we would be happy to provide but I would need to take those on notice.

PN1015

VICE PRESIDENT HATCHER: All right, you can do that but can I emphasise with respect that this needs to be done urgently?

PN1016

MS SOSTARKO: So - - -

PN1017

VICE PRESIDENT HATCHER: It is reasonably clear to me that, for example, and it may be (indistinct) that with the HIA data but it seems reasonably clear to me that at least in the second and third paragraphs that the MBA seems to be referring to some data of some sort.

PN1018

MS SOSTARKO: So just for clarity, your Honour, is it that what you're asking of us is to provide source data, if any, that relates to the statements made within paragraphs 2 and 3 of the article?

PN1019

VICE PRESIDENT HATCHER: Or the article in its entirety. I give those as an example, but any source data upon which the MBA statements are based, and I don't think I need to make an order at this point but would like to be produced to the Commission as soon as possible.

PN1020

MS SOSTARKO: Yes, your Honour. I'll take that on notice and we'll come back to you as a matter or urgency.

PN1021

VICE PRESIDENT HATCHER: All right. And just with that I think the position is you're content with Mr Boncardo tendering the article on the basis that what is quoted on behalf of the MBA in the article is a true and correct statement of the MBA's position as at yesterday morning?

PN1022

MS SOSTARKO: Yes, your Honour.

PN1023

VICE PRESIDENT HATCHER: Yes.

PN1024

MS SOSTARKO: We wouldn't have any objection to that.

PN1025

VICE PRESIDENT HATCHER: And, Ms Adler, insofar as the HIA is referred to, do you take any different position?

PN1026

MS ADLER: No, your Honour. We stand by the comments made in the article.

PN1027

VICE PRESIDENT HATCHER: Yes, all right. Thank you. I think that resolves the issue, Mr Boncardo?

PN1028

MR BONCARDO: It certainly does, your Honour. Is it convenient for me to tender the article now?

PN1029

VICE PRESIDENT HATCHER: Yes, all right. So we'll just call it, Homebuilder package article in the Australian Newspaper of 14/07/2020. That will be marked exhibit 7.

EXHIBIT #7 HOMEBUILDER PACKAGE ARTICLE IN THE AUSTRALIAN NEWSPAPER DATED 14/07/2020

PN1030

MR BONCARDO: Thank you, your Honour.

PN1031

VICE PRESIDENT HATCHER: Are there any other preliminary matters?

PN1032

MR BONCARDO: Not so far as I'm concerned, your Honour.

PN1033

VICE PRESIDENT HATCHER: Anything else? All right, can we proceed to the next witness?

PN1034

MR BONCARDO: Certainly, your Honour. Your Honour, the next witness, or the first witness in my case is Mr Davies. I understand that he is in the virtual lobby.

PN1035

VICE PRESIDENT HATCHER: All right, can we get him then please?

PN1036

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

PN1037

MR DAVIES: I can but I can't see you. But I can hear you. There you go.

PN1038

THE ASSOCIATE: Great. Would you be able to state your full name and address, please?

PN1039

MR DAVIES: My name is Nigel Davies, (address supplied).

<NIGEL DAVIES, AFFIRMED [10.14 AM]

EXAMINATION-IN-CHIEF BY MR BONCARDO [10.15 AM]

PN1040

VICE PRESIDENT HATCHER: Mr Boncardo?

PN1041

MR BONCARDO: Thank you. Sir, your name is Nigel Davies?‑‑‑It is.

*** NIGEL DAVIES XN MR BONCARDO

PN1042

And you are one of two Assistant National Secretaries of the Construction & General Division of the CFMMEU?‑‑‑I am.

PN1043

And you have prepared a witness statement for these proceedings, sir, comprising some 42 paragraphs and a number of annexures which is dated 10 July 2020?‑‑‑I have.

PN1044

Is that statement true and correct to the best of your knowledge and belief?‑‑‑It is.

PN1045

Your Honour, I tender Mr Davies' statement.

PN1046

VICE PRESIDENT HATCHER: All right, the statement of Nigel Davies dated 10 July 2020 will be marked exhibit 8.

EXHIBIT #8 STATEMENT OF NIGEL DAVIES DATED 10/07/2020

PN1047

MR BONCARDO: Thank you. And your Honour, I have a number of additional questions (indistinct). Mr Davies, at attachment MD1 to your statement there is a document enterprise entitled, "Coronavirus Guidelines for the Building & Construction Industry, Victoria, Revision No. 4", are you aware of that?‑‑‑I am.

PN1048

Can you tell the Commission whether there has been a fifth revision to that document and when that revision came into effect?‑‑‑The fifth revision came into effect yesterday morning on construction sites around Melbourne, Victoria. And basically that fifth revision was the added personal protective equipment on site and the temperature testing (indistinct).

PN1049

All right, thank you, Mr Davies. Now Mr Davies, can I ask you with respect to personal protective equipment that you say is a (indistinct) to the guidelines can you explain what that equipment is and what is involved in that particular revision ?‑‑‑In the fifth revision now?

PN1050

Yes?‑‑‑Okay, so the PPE, as in - and we're talking about face masks now because there are times on the construction sites and especially on these super scrapers, the 50 storey plus one we - that's been a concern and a problem in distancing people, so obviously we're following the relative guidelines that the governments and the health departments are trying to put in place.

PN1051

And those guidelines relate to the use of face masks?‑‑‑Face masks and temperature testing before coming (indistinct).

*** NIGEL DAVIES XN MR BONCARDO

PN1052

I see. Thank you, sir. Now I understand that - your Honour, a copy of the revised guidelines, hot off the press as of yesterday, have been sent to the Commission and I'm not sure whether your Honours and the Commissioner have received those yet. They were sent earlier this morning. I apologise that they weren't distributed around earlier but I would seek to tender a copy of that.

PN1053

VICE PRESIDENT HATCHER: Yes, we've got that. Yes, I have that, yes. So do you tender that?

PN1054

MR BONCARDO: I do, your Honour.

PN1055

VICE PRESIDENT HATCHER: All right, COVID-19 Guidelines for Building & Construction Industry Victoria Revision 5, 14 July 2020, will be marked exhibit 9.

EXHIBIT #9 COVID-19 GUIDELINES FOR BUILDING & CONSTRUCTION INDUSTRY VICTORIA, REVISION 5 DATED 14/07/2020

PN1056

MR BONCARDO: Thank you. Mr Davies, just one final matter. Can you tell the Commission based on your observations and your experience in the last couple of months as to how the building industry is, in general terms, dealing with the COVID pandemic on site?‑‑‑So from our perspective, and obviously I've been tied down in Melbourne for obvious reasons, and I make it a point to get myself on the construction site, at least once a week, I try and get out there twice a week just to see, one, just the general feel around the whole place. Now what we've experienced is some great innovation from the builders and the workers themselves, and not only to separate the workforces and stuff like that, so we've implemented back in some construction sites now in order to - especially on the major high rises here in Melbourne, because we've got some buildings now that are exceeding a hundred storeys so you can imagine that you're (indistinct) up to twelve hundred workers in one particular site. So we've spread the actual amenities so therefore if the construction workers that are working in the top half of the building, the amenities have moved up to the top half of the building, so therefore it takes the pressure off the lifts and the ally (indistinct) and getting the workers up and down to their workplaces. So the amenities are there and they're all within their groups, so - also what is also happening as well is just the cleaning and general hygiene around the construction sites now are better than ever in all of my 35 years in the industry. Construction sites are (indistinct). They're a really good thing to be part of and it's something that we should keep adopting, moving forward away from this pandemic. What we're also experiencing, as well, is obviously there are some people who are going to say there's a loss in productivity. We're not seeing that. In fact we're actually seeing a gain in some areas, especially on the high rises and in the civil sector. There's been no change level (indistinct) change (indistinct).

*** NIGEL DAVIES XN MR BONCARDO

PN1057

Mr Davies, your connection just cut out or became very blurry. Would you be able to repeat what you said after you commenced talking about productivity levels?‑‑‑Yes. Obviously there is a little bit of concern with the productivity. We can't see any change in productivity whatsoever, as far as a loss of productivity because of the staggered times and the staggered meal breaks that we've sort of implemented across all the industry. So, yes, it's going exceptionally well, considering the situation we're all in.

PN1058

Thank you, Mr Davies. Your Honour, that's the supplementary examination-in-chief.

PN1059

VICE PRESIDENT HATCHER: Mr Davies, it's Vice President Hatcher. In projects where they've introduced staggered starts has that resulted in any part of the workforce either working overtime that they wouldn't have worked before, or working additional overtime that they wouldn't have worked before? That is, extending the hours required to be worked?‑‑‑Yes - no, I understand. No, not necessarily. So we have workers that might start as early as 5.30 in the morning in order to start that staggered times, but what they'll be doing, then they'll be finishing their normal shift at, say, whether it be at 2 o'clock or 2.30, or 3.30, whatever their normal hours of work would have been when the normal platform of, say, 7 o'clock to 5.00. There's no (indistinct).

PN1060

What's the usual start time for the standard hours in Victorian construction agreements?‑‑‑Normally on the 36 hour week is 7.00 till 3.30 with one lunch break, but there's an additional two hours of overtime as a general rule throughout the industry.

PN1061

All right, so when you start before 7.00 is that where the two hours of overtime is logged, as it were, is it?‑‑‑Yes, it is in this case, yes.

PN1062

All right, so does a 5.30 start means that there's additional overtime involved?‑‑‑It all depends on what time they finish. Some of them might finish at that 2 o'clock and just do the eight hours and - - -

PN1063

All right, thank you?‑‑‑Or from the 6 a.m. in this case, yes.

PN1064

All right. Well, who would like to cross-examine this witness?

PN1065

MS ADLER: Your Honour, it's Ms Adler. I'm happy to lead off if that's agreeable.

*** NIGEL DAVIES XN MR BONCARDO

PN1066

VICE PRESIDENT HATCHER: All right, yes.

CROSS-EXAMINATION BY MS ADLER [10.23 AM]

PN1067

MS ADLER: Thank you, Mr Davies. My name is Melissa Adler and I represent the Housing Industry Association. Can you see and hear me okay?‑‑‑I can.

PN1068

I just have a few questions for you. Just one arising out of an answer that you provided to Mr Boncardo just a moment ago. You said that you'd get out and try and visit one to two sites a week just to check on how things are going. What type of construction sites are they?‑‑‑All commercial construction.

PN1069

Okay, thank you. If I can just - - -?‑‑‑And civil infrastructure.

PN1070

Sorry?‑‑‑Commercial construction and civil infrastructure.

PN1071

Okay, thank you. Taking you to your statement now, and I presume you have a copy of that with you - - -?‑‑‑I do.

PN1072

Yes. So you set out at paragraphs 3 to 6, your work experience in the industry, is that correct?‑‑‑Yes.

PN1073

And you say at paragraph 4 that your duties vary from general labouring, operating plant, rigging and post construction cleaning?‑‑‑Yes.

PN1074

Do you have any experience in economic activity or economic forecasting, or economic modelling? Have you got any qualifications in those fields?‑‑‑No.

PN1075

No, okay, thank you. And then also just on your experience, would it be fair to say that your exposure in the industry is mostly in relation to commercial and civil infrastructure projects?‑‑‑Yes.

*** NIGEL DAVIES XXN MS ADLER

PN1076

Thank you. Now unfortunately I am using the guidelines that were attached to your statement so I don't have a copy of the updated one just sent through this morning, so hopefully we can make do with the one that was attached to your statement. I just have a few questions about that. If we go to paragraphs 10 to 26 of your statement you talk about those guidelines that are attached to your statement at ND1. And would it be fair to say that those guidelines are largely targeted to more complex buildings such as those commercial and civil infrastructure projects you've been referring to?‑‑‑Yes.

PN1077

Yes. Okay, thank you. And then at paragraph 26 of your statement you comment on the introduction of safety measures in low level construction. What do you mean by "low level construction"?‑‑‑Can you repeat the question? What do I mean by - - -

PN1078

By low level construction? Can you see that in about the second line of paragraph 26?‑‑‑Yes.

PN1079

You say that the safety measures such as those outlined in the guidelines have had little to no impact on productivity in low level construction or civil infrastructure works", and I'm asking you what you mean by, "low level construction"?‑‑‑Lower level, as in probably under ten storeys.

PN1080

Under ten storeys?‑‑‑Or even - even, yes, probably under 20 storeys, actually.

PN1081

So you're not referring to, say, a single dwelling house?‑‑‑No.

PN1082

No, okay. And then I guess following on from that, given the nature of those guidelines they're not really suited for all types of construction work, are they?‑‑‑I can't see why not. They're very, very best practice and they're - I notice that they're using these Victorian guidelines now in Canberra and they've got a lot of lower level, as in housing, in the Canberra sector and in the ACT, yes.

PN1083

And is it your view that they're using these guidelines on single detached dwellings?‑‑‑That is my understanding in the ACT.

PN1084

Okay. So if I can take you to the guidelines - are there page numbers, there are page numbers - it's page 13, paragraph 3.9.8?‑‑‑Page 13, three point - - -

PN1085

Nine point eight?‑‑‑Yes.

PN1086

Have you got that there? So that paragraph says, "Where practicable workforce amenities may be placed on different levels of high-rise buildings"?‑‑‑That's correct.

PN1087

So how would that be relevant for a single detached dwelling?‑‑‑It wouldn't b e.

*** NIGEL DAVIES XXN MS ADLER

PN1088

It wouldn't be? Okay, thank you. Then also on page 15 at paragraph 3.15.9, have you got that paragraph there - - -?‑‑‑I do.

PN1089

Again it talks about the complexities of larger buildings and the impact of COVID. How would that be relevant to a low rise single detached building?‑‑‑It wouldn't be.

PN1090

Thank you. Moving on from the guidelines to some other comments in your statement, at paragraph 39 you state that you're aware of the variation to expand ordinary hours of work to include 6 am to 2 pm on Saturday with the effect being that workers would not receive the current penalty rates during those hours. And then at paragraph 40 you go on to say that employees could be directed to attend work on Saturdays and denied penalty rates. Have you got those paragraphs in front of you?‑‑‑Paragraph 39, yes.

PN1091

And I probably should have asked this question first, I apologise. You're familiar with the application that employer groups have made in these proceedings?‑‑‑I am.

PN1092

Thank you. Are you aware that under that application, in order for those ordinary hours to be varied the employee and the employer have to agree to the change?‑‑‑Yes.

PN1093

So the comment there at paragraph 40 that says, "An employee could be directed to attend work", that's not absolutely correct, is it?‑‑‑Maybe not.

PN1094

No, okay. Thank you. That's all the questions I have for you, thank you, Mr Davies.

PN1095

VICE PRESIDENT HATCHER: All right, Ms Sostarko, did you want to cross-examination this witness?

CROSS-EXAMINATION BY MS SOSTARKO [10.30 AM]

PN1096

MS SOSTARKO: Yes, thank you, your Honour. Good morning, Mr Davies. My name is Rebecca Sostarko. I appear for Master Builders Australia. I'm just going to ask you a couple of questions about your statement. Did you prepare that statement?‑‑‑I did.

PN1097

And do you have a copy of that with you?‑‑‑I do.

*** NIGEL DAVIES XXN MS SOSTARKO

PN1098

Great, thank you. I'm just double checking that. Mr Davies, is it fair to say that the bulk of the CFMMEU Construction & General Division members can be categorised as employees of businesses?‑‑‑Yes.

PN1099

And is it also correct to say that while some may be members, very few sole traders or subcontractors themselves would be members of the CFMMEU?‑‑‑Many would be members.

PN1100

So noting your position within the CFMMEU you would be aware of the policies on matters of safety on worksites, that's correct?‑‑‑Yes.

PN1101

And would it be fair to say that the CFMMEU takes safety - sorry, I'm getting tongue-tied - on worksites, very seriously?‑‑‑Yes.

PN1102

Even that they see it as the number one priority for the union members. Is that correct to say?‑‑‑Absolutely.

PN1103

Yes. In your statement you've stepped out the measures that the CFMMEU have taken to ensure worksites in Victoria are COVID safe, which as per your discussion with Ms Adler includes participation in the development of the set of industry guidelines, is that correct?‑‑‑Yes.

PN1104

And you've also mentioned in paragraph 14, if I could take you to paragraph 14 of your statement, that a part of these guidelines is to stagger meal breaks on site and that work groups have been separated in order to assist the number of people accessing areas, is that correct?‑‑‑Yes.

PN1105

Can I now, Mr Davies, take you to paragraph 18 of your statement, and would you be able to read that paragraph out to us?‑‑‑"As a consequence of adopting such measures to the best of my knowledge there have only been seven confirmed cases of COVID-19 on Melbourne constructions sites as of July 2020. With each of these cases occurring at separate sites this number has increased to 20 as a result of the recent COVID-19 cases in Victoria."

PN1106

Thank you, Mr Davies. Now I'm not exactly qualified in immunology or virology but what these facts tell me is that over the four months of March, April, May and June, so effectively since the pandemic was declared, construction sites have averaged less than two cases per month. Does that sound about right?‑‑‑I'll take your word on it, yes.

*** NIGEL DAVIES XXN MS SOSTARKO

PN1107

And then from 2 July, to date which has been a total of eleven days, Victoria has seen a further 13 cases on construction sites, is that right?‑‑‑Yes, even more so - - -

PN1108

So that would mean that Victoria is on track to an average now of approximately 30 cases in the month of July, which shows a significant increase from the average of two confirmed cases per this month. Would you say that's correct?‑‑‑Yes.

PN1109

So would it not be a correct observation to then make that construction sites in Victoria seem to have become more vulnerable to COVID-19 in the last couple of weeks alone, notwithstanding obviously the great work that MBAV and the CFMMEU in Victoria, along with obviously the work, health and safety regulators and Safe Work Australia in producing industry guidance to manage those outbreaks on site?‑‑‑There's been a lot of work been, yes, throughout Victoria (indistinct).

PN1110

If I could take you to paragraph 21, Mr Davies, of your statement, you say that, and I quote, "The fact that there has been so" - - -

PN1111

VICE PRESIDENT HATCHER: Sorry, before you go on, Mr Davies, the number of confirmed cases are based on workers who have returned positive tests. Do we know from that data whether any or all of them contracted the virus on site?‑‑‑My understanding is that there's only one site that had a - maybe the possibility of passing it on, on site. All others - and that site was actually featured in the media yesterday. I believe there's a number of 13 on particular site now, to date. But all the others have been in single figures on the site.

PN1112

Yes. My question really is whether there's a connection between the worker and contraction from another worker on site, or whether - take the first seven for example, what if any evidence is there that the workers contracted the virus by working on site rather than having contracted the virus elsewhere? Have these tests been tests conducted at site?‑‑‑Yes. Yes, especially here in Victoria if I can elaborate on that. Here in Victoria we have an industry fund by the name of Inca(?) Link and have a medical bus. They're testing, I believe around about in the figure of 600 people per day. We're into the thousandth already now and they go from site to site, as well as onsite places where we can actually test, so there's thousands of construction workers that have already been tested and continue to be tested on a daily basis.

PN1113

Yes, all right. Thank you. So, Mr Davies, part of your answer before last got a bit obscured by background noise. Did I understand you to say that in this recent wave there'd been 13 tested positive at one site? Is that what you just said?‑‑‑That is correct, your Honour.

*** NIGEL DAVIES XXN MS SOSTARKO

PN1114

And what type of site is that?‑‑‑This is a commercial construction site.

PN1115

All right, and that presumably leads to an inference that there's been transmission on site?‑‑‑We believe so.

PN1116

Yes?‑‑‑We believe so. Obviously it's in the hands of the Department of Health and that site has been shut down and I think it's into its eleventh or twelfth day today, of shutdown.

PN1117

All right, thank you. Ms Sostarko?

PN1118

MS SOSTARKO: Thank you, your Honour. I was just taking the witness back to paragraph 20 of his statement, if you wouldn't mind going back to that, Mr Davies?‑‑‑Yes.

PN1119

And in that paragraph you state that "the fact that there has been so few confirmed cases on construction sites despite the industry continuing to operate as a consequence of its essential status is testament to the comprehensive safety measures that have been adopted by builders, employers, employees and the division across the country." Do you stand by that comment, Mr Davies?‑‑‑I do. I do.

PN1120

Just moving on slightly and I say that it's relevant to the Commission's questions to you put just prior to that last question. I'm assuming you haven't studied virology, Mr Davies?‑‑‑You assume right.

PN1121

So you're not in a position to comment on whether a confirmed case on a construction site was in fact caused by transmission on a construction site, or ultimately if it indeed was acquired elsewhere, would you not?‑‑‑No.

PN1122

So therefore when you make the comment at paragraph 21 which states that "this is a testament to the comprehensive safety measures that have been adopted", what you really mean is that builders and employees have been keeping each others safe as best they can but you don't actually know whether the virus is being spread on site or not?‑‑‑No, I do not.

PN1123

If I can just take you to paragraph 27 of your statement you say, "I'm not aware of any major contractors or subcontractors undertaking wide-scale redundancies." Is that what you said, Mr Davies?‑‑‑Yes. Yes.

*** NIGEL DAVIES XXN MS SOSTARKO

PN1124

And are you aware of how (indistinct) or, as you might call them, non major contractors, work in the building industry?‑‑‑In the commercial sector?

PN1125

Well, just broadly, but perhaps, in either sector? Well, if I could just tell you, Mr Davies, that there is a data set that records this type of information and it's the ABS data set 8165.0 Business Entries and Exits, and if it pleases, we'll tender a copy of that report, which shows that there are around 220,000 non employing businesses in the sector and about 150,000 with one to 19 employees. So Mr Davies, is it not being correct to say that your evidence at paragraph 27 neglects to even consider the relationship between COVID-19 redundancies and those 370,000 business that I've just referred to?‑‑‑I can only speak for what's happening in commercial construction.

PN1126

Okay, thank you. If I could now direct you, Mr Davies, to paragraph 28 of your statement where you say, "In my opinion based on my experience and knowledge of the industry the forecast declining construction activity has been overstated in the applicant's material. Are you qualified in economics, Mr Davies?‑‑‑No, I am not.

PN1127

And was it not your evidence at paragraphs 3 to 6 of your statement that your entire career in the construction industry has been a labourer and then a union official?‑‑‑Yes.

PN1128

Thank you, Mr Davies, I have nothing further.

PN1129

VICE PRESIDENT HATCHER: All right. Ms Paul, did you want to ask this witness any questions?

PN1130

MS PAUL: No, your Honour.

PN1131

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

RE-EXAMINATION BY MR BONCARDO [10.42 PM]

*** NIGEL DAVIES RXN MR BONCARDO

PN1132

MR BONCARDO: Thank you, your Honour. Mr Davies, you were asked some questions by Ms Adler about the industry guidelines that were attached to your statement and about which a further revised version was tendered in evidence. Mr Davies, can I ask you, do those guidelines apply generally to construction sites from skyscrapers right through to single dwelling houses?‑‑‑Well, with the people that are involved, not only ourselves but there's also the Master Builders and the likes, I daresay that they'd be adopting this throughout the industry.

PN1133

And can I take you to page 5 of ND1 to your statement, sir. At page 5 of the guidelines there's a heading entitled, "Purpose"?‑‑‑Yes.

PN1134

I'd just like you to read, sir, clause 1.3 to yourself and then I want to ask you a question about it?‑‑‑Yes.

PN1135

Are the guidelines tailored to any particular sector of the industry, sir?‑‑‑No, they are not.

PN1136

Are they general in nature?‑‑‑They are.

PN1137

All right, thank you. You were asked some questions by Ms Sostarko about the number of confirmed cases of COVID-19 in the construction industry in Victoria and you gave some evidence in respect to figures. Are you able to tell the Commission how many employees work in the Victorian construction industry?‑‑‑In the Victorian construction industry, and this is across all sectors, I believe it would be around the 300,000 mark.

PN1138

Thank you, sir. You were also asked some questions by the Vice President about whether or not you were aware of transmissions occurring on site with the exception of the 13 employees who returned positive tests in respect to the site that you mentioned in your evidence. Are you aware of any other positive tests resulting from transmissions occurring on site?‑‑‑No.

PN1139

Thank you. Ms Sostarko asked you towards the end of your cross-examination, sir, about your experience and whether or not you had qualifications in economics. You've worked in the construction industry, sir, I think since 1989?‑‑‑I have.

PN1140

Have you experienced peaks and troughs, and booms and busts in that industry?‑‑‑I sure have, yes.

PN1141

You're familiar with those?‑‑‑Yes.

PN1142

Can you tell the Commission based on your experience, heading into February 2019, was the commercial construction sector in a boom period or was it in decline?‑‑‑It was starting to slow down. It was starting to slow down.

*** NIGEL DAVIES RXN MR BONCARDO

PN1143

And when had it peaked, sir?‑‑‑I'd say we were starting to peak, around about the - late last year.

PN1144

Can you answer the same question in relation to the civil construction sector?‑‑‑Yes, the civil - the sector has, if anything, grown since then.

PN1145

And can you attribute any reasons for that growth?‑‑‑Just with the infrastructure projects that's going on around all the major cities, particularly instead of building the high rises we seem to be concentrating a lot now in the infrastructure around.

PN1146

All right, thank you, sir. And just finally, are you able to say anything about the residential sector and whether that was peaking or in decline earlier this year?‑‑‑I thought the residential sector, this is my opinion, was fairly stable at the start of this year.

PN1147

Okay, thank you, sir. That's the re-examination, your Honour.

PN1148

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

<THE WITNESS WITHDREW [10.47 AM]

PN1149

All right, so Mr Boncardo, that's all of your witnesses required for cross-examination?

PN1150

MR BONCARDO: It is, your Honour, yes. There is a statement from a Jade Ingham, the President of Construction General Division and I understand the tender of that statement is consented to by the applicant. I formally tender Mr Ingham's statement.

PN1151

VICE PRESIDENT HATCHER: All right, just hold on a second.

PN1152

MR BONCARDO: (Indistinct) Mr Maxwell (indistinct) sign (indistinct) statement (indistinct).

PN1153

VICE PRESIDENT HATCHER: All right, you're just cutting out, Mr Boncardo, but I think I heard you say that it's unsigned?

*** NIGEL DAVIES RXN MR BONCARDO

PN1154

MR BONCARDO: It's unsigned and a signed copy will be provided by Mr Maxwell very shortly.

PN1155

VICE PRESIDENT HATCHER: All right, thank you. So the statement of Jade Ingham dated 10 July 2020 will be marked exhibit 10.

EXHIBIT #10 STATEMENT OF JADE INGHAM DATED 10/07/2020

PN1156

So is that your case, Mr Boncardo?

PN1157

MR BONCARDO: Your Honour, there were a couple of other documents that I wished to tender arising from Mr Grippi's cross-examination yesterday and it may not be strictly necessary to tender these documents, but one was the order made by your Honour on 3 July 2020 requiring Richard Cook Constructions to produce certain documents.

PN1158

VICE PRESIDENT HATCHER: Yes.

PN1159

MR BONCARDO: The other was the Master Builders Response to your Honour's chambers dated 13 July 2020 in respect to the order for production.

PN1160

VICE PRESIDENT HATCHER: Sorry, what was the date of that again?

PN1161

MR BONCARDO: 13 July 2020. It's a letter addressed to your Honour from Ms Sostarko.

PN1162

VICE PRESIDENT HATCHER: All right, I'll mark those together. Is there any objection to that? No?

PN1163

MS ADLER: No, your Honour.

PN1164

MS SOSTARKO: No objection. We have no objection to that.

PN1165

VICE PRESIDENT HATCHER: Yes, all right. I'll just mark them as one bundle. So the Commission order for production and the MBA response dated 13 July 2020 will be marked exhibit 11.

EXHIBIT #11 COMMISSION ORDER FOR PRODUCTION AND MBA RESPONSE DATED 13/07/2020

PN1166

MR BONCARDO: Thank you, your Honour. And the final document I seek to tender is the document that Mr Grippi was cross-examined on yesterday which was referred to as attachment 4. That document is at page 425 of the material produced by the Master Builders Association.

PN1167

VICE PRESIDENT HATCHER: All right. So attachment 4, document produced by Master Builders Association, is there any objection? No? That will be marked exhibit 12.

EXHIBIT #12 ATTACHMENT 4, DOCUMENT PRODUCED BY MASTER BUILDERS ASSOCIATION

PN1168

MR BONCARDO: And Mr Maxwell also reminds me, your Honour, that yesterday during my cross-examination of Mr Grippi I referred to two enterprise agreements, and your Honour I think asked me the names of those agreements. Mr Maxwell, as I understand it, has forwarded to your Honour's chambers this morning copies of those agreements. To the extent required I tender both of those agreements.

PN1169

VICE PRESIDENT HATCHER: Yes, well, it's not necessary to mark those but we note those.

PN1170

MS SOSTARKO: Sorry, your Honour, I was struggling to get myself off mute. If it pleases, if I could just refer back to the previous attachment 4 that Mr Boncardo referred to. Just for clarity that document obviously was produced as part of that order upon Richard Cook Constructions. It obviously wasn't a document that we tendered in evidence in our own submissions, just for clarity.

PN1171

VICE PRESIDENT HATCHER: Okay. All right, that's your case, Mr Boncardo?

PN1172

MR BONCARDO: It is, your Honour.

PN1173

VICE PRESIDENT HATCHER: All right, so Mr Crawford, so do you tender all the statements that you filed?

PN1174

MR CRAWFORD: Yes, I do, your Honour. That should be our seven statements.

PN1175

VICE PRESIDENT HATCHER: All right, we'll just go through those. So the statement of Andrew Duffy dated 6 July 2020 will be marked exhibit 13.

EXHIBIT #13 STATEMENT OF ANDREW DUFFY DATED 06/07/2020

PN1176

The statement of Paul Cradden(?) dated 7 July 2020 will be marked exhibit 14.

EXHIBIT #14 STATEMENT OF PAUL CRADDEN DATED 07/07/2020

PN1177

The statement of Nicholas Camper(?) dated 8 July 2020 will be marked exhibit 15.

EXHIBIT #15 STATEMENT OF NICK CAMPER DATED 08/07/2020

PN1178

The statement of Ronnie Hayden dated 8 July 2020 will be marked exhibit 16.

EXHIBIT #16 STATEMENT OF RONNIE HAYDEN DATED 08/07/2020

PN1179

The statement of Steven Crawford dated 8 July 2020 will be marked exhibit 17.

EXHIBIT #17 STATEMENT OF STEVEN CRAWFORD DATED 08/07/2020

PN1180

The statement of Garry Henderson dated 8 July 2020 will be marked exhibit 18.

EXHIBIT #18 STATEMENT OF GARRY HENDERSON DATED 8 JULY 2020

PN1181

And the statement of Anthony Callinan(?) dated 10 July 2020 will be marked exhibit 19.

EXHIBIT #19 STATEMENT OF ANTHONY CALLINAN DATED 10/07/2020

PN1182

Is that all your case, Mr Crawford?

PN1183

MR CRAWFORD: It is, thank you, your Honour.

PN1184

VICE PRESIDENT HATCHER: All right, is there any other evidence by any other union's appearing? No? All right. Ms Adler, did you tender that HIA press release? And did you want to tender it?

PN1185

MS ADLER: The one that you were speaking of this morning?

PN1186

VICE PRESIDENT HATCHER: No, the 9 July one which talked about loans to owner/occupiers.

PN1187

MS ADLER: Sorry, your Honour - - -

PN1188

VICE PRESIDENT HATCHER: I don't think you've tendered that.

PN1189

MS ADLER: No, I have not. I did share a copy of it with all the parties and the Bench, I believe, but yes, your Honour, if we could tender that.

PN1190

VICE PRESIDENT HATCHER: All right, so HIA media release dated 9 July 2020 will be marked exhibit 20.

EXHIBIT #20 HIA MEDIA RELEASE DATED 09/07/2020

PN1191

MS ADLER: Thank you, your Honour.

PN1192

VICE PRESIDENT HATCHER: All right, is that all the evidence?

PN1193

MR BONCARDO: Yes, your Honour.

PN1194

VICE PRESIDENT HATCHER: All right. Are the parties ready to proceed with submissions or do you want a short break?

PN1195

MS ADLER: I would appreciate a short break, your Honour, just from my perspective.

PN1196

VICE PRESIDENT HATCHER: All right, well, let's say we'll start opening submissions at a quarter past eleven.

PN1197

MS ADLER: Thank you, your Honour.

PN1198

VICE PRESIDENT HATCHER: All right, we'll adjourn until then.

PN1199

MS ADLER: Thank you.

SHORT ADJOURNMENT [10.56 AM]

RESUMED [11.18 AM]

PN1200

VICE PRESIDENT HATCHER: Ms Adler, thank you for sending that HIA report. I might mark that as an exhibit if there's no objections. So the HIA New Home Sales Report dated June 2, 2020 will be marked exhibit 21.

EXHIBIT #21 HIA NEW HOME SALES REPORT DATED 02/07/2020

PN1201

All right, who wants to go first with submissions? Hold on, Ms Sostarko is not in yet. Are you there, Ms Sostarko?

PN1202

MS SOSTARKO: May it please your Honour, I just had some technical issues but I'm here.

PN1203

VICE PRESIDENT HATCHER: All right. In case you missed it I've just marked the HIA New Home Sales Report of June 2020 as exhibit 21.

PN1204

MS SOSTARKO: Thank you, your Honour.

PN1205

VICE PRESIDENT HATCHER: All right, so who'd like to go first with submissions on behalf of the applicants?

PN1206

MS SOSTARKO: Your Honour, we're happy to kick off if the other employers are happy for us to do so.

PN1207

VICE PRESIDENT HATCHER: All right.

PN1208

MS SOSTARKO: So thank you, your Honours and Commissioner. I'd just like to make a couple of comments in closing. While we would say that it's clear that the industry has done an exemplary job in controlling the risks associated with COVID-19, having quickly made adjustments to ensure the safety of all workers on site, this has not come without the exertion of extensive effort and resources on behalf of businesses. We are all aware that the outcome of these massive efforts has been simply that the industry has been able to stay open. We have seen in other countries such as New Zealand, for example, where that the industry has been shut to stem the spread of the virus and we're as a nation, extremely lucky that businesses have gone to the length that they have to protect their workers on site to keep the industry going and to keep people in jobs, which we say is fundamentally food on the table for some 1.1 million construction workers.

PN1209

Now the evidence of both Mr Grippi and Mr Davies highlights these lengths the constructions business have gone to, to not only ensure that work continues to happen safely but so that the jobs and livelihoods of many Australians are not put in jeopardy by way of avoiding an industry-wide shut down. It cannot be understated that in the absence of these efforts, very well we may have seen mass unemployment just as the other sectors are experiencing in the economy. But as the recent weeks have shown we are not by any means out of the woods yet and indeed Mr Davies provided written evidence that shows despite the efforts of workers the likelihood of further cases on site is increasing. As these risks increase the industry will need to respond in an even more targeted way and this may be to keep sites open but it will most definitely be to protect some semblance of productivity in the sector.

PN1210

If we can't respond in the appropriate way the outlook for protecting businesses and by virtue, employment in the sector, is concerning to say the very least. As articulated by Mr Garrett extraneous economic pressures have a direct correlation with the prosperity of the building and construction industry and with the evidence multiple witnesses have illustrated that the pandemic has had the effect of causing businesses to bear significant cost and disruption to deal with the safety impacts brought on by the pandemic to date. And we can't reiterate enough that there is anything but certainty about what the future might hold. You only need to refer to the unwavering safety guidance published by SafeWork Australia, various state territory regulators to understand that employers continue to have to, and meet ongoing obligations with respect to how they manage the risk of COVID-19 in the workplace. Yet even on the union's own evidence instances of the virus on construction sites have increased almost exponentially in the last couple of weeks and this will, I'm sure, continue to cause significant stress and uncertainty as it arises in the minds of employers and employees alike.

PN1211

Indeed we might say, some will say that they're not worried and that's okay, but importantly some will approach their employees and say, for example, "My wife at home, she's high risk if she catches the virus but I still need to work, I still need to pay for the roof over my head", and that some employees might say, "Hey, boss, can I start later, finish later, maybe do some work on the weekend? It'll mean that I won't have to be exposed to so many people on site." Indeed that work might - - -

PN1212

VICE PRESIDENT HATCHER: Ms Sostarko, can you just explain that?

PN1213

MS SOSTARKO: So the point that I'm - - -

PN1214

VICE PRESIDENT HATCHER: How does a change in the span of hours lead to a person who is exposed to the risk of COVID avoiding contact with other people on site? I just can't imagine a realistic scenario in which that happens.

PN1215

MS SOSTARKO: Well - - -

PN1216

VICE PRESIDENT HATCHER: That's the first thing. Let me finish. And the second thing is, the notion that somebody who's exposed to risk would be allowed to come to work is, I thought, an affirmer(?) to the very safety procedures that have been adopted.

PN1217

MS SOSTARKO: Sorry, that comment that I just made in my remarks was simply saying that for example, you might have someone at home who obviously doesn't have the virus but that you are living with and therefore you are trying to minimise your contact with the virus, yourself to avoid any transmission to those that you reside with. And the point essentially that we're making here is that if an employee comes to their employer and says, "Look, I just want to be able to manage my working hours around that to limit the number of people that I'm in contact with to best avoid that risk", then that's the point we're seeking to make here, your Honour.

PN1218

VICE PRESIDENT HATCHER: But how would that work in a practical sense? That is, I can't imagine a scenario where a one hour shift in a span of hours would allow somebody to avoid contact with other workers on a building site.

PN1219

MS SOSTARKO: It depends, I suppose, entirely how the work is programmed. It may very well be that for example, whatever team that employee is working within might only work within the span of Monday to Friday, and perhaps that could give provision for that person to come in and do some fixing or whatever it may be, to finish off that part of that team's work on the Saturday morning. That's the type of scenario that I suppose we're trying to convey here.

PN1220

VICE PRESIDENT HATCHER: How does that lead to the person not having contact with other workers?

PN1221

MS SOSTARKO: Well, because it limits that. That's the point we're trying to say, is that by providing them with options in terms of when they can and can't be on site and giving employers also the incentive to say, well, if that means that I'm not having to necessarily pay you penalty rates to come in, and if that's something you also feel comfortable doing then great.

PN1222

VICE PRESIDENT HATCHER: Right.

PN1223

MS SOSTARKO: So, sorry, just to continue - - -

PN1224

MS ADLER: Sorry, Deputy President, your light's (indistinct).

PN1225

VICE PRESIDENT HATCHER: Yes, I know. I know. I just realised that.

PN1226

MS SOSTARKO: Ms Sostarko, why can't some of these concerns the individual workers might have, that is to alter their working arrangements, why can't they be addressed through an individual flexibility arrangement?‑‑‑We would argue, your Honour, that that may be the case but in this instance for the purposes of this unique set of circumstances it makes it very clear to both employers and employees that this is an option available to them at that time that can be dealt with quickly by way of application of the schedule.

PN1227

VICE PRESIDENT HATCHER: But what's complex about the individual flexibility arrangement?

PN1228

MS SOSTARKO: Well, I would say that there is obviously, not having that provision in front of me at the moment, your Honour, but I would - - -

PN1229

VICE PRESIDENT HATCHER: Well, 7.1 allows for agreements to be made to meet the genuine needs of both employer and employee about, amongst other things, the arrangements for when work is performed and then a range of other things such as overtime rates, penalty rates, allowances.

PN1230

MS SOSTARKO: Yes, understood. Understood, your Honour, and I certainly would say that there is potentially provision for that type of arrangement. However I would say that administratively there's obviously quite a bit associated in terms of making sure that those requirements are met but also obviously there's the application of the BOOT in terms of those arrangements. So I guess essentially, yes, there may be provision for that but if we're speaking on a temporary basis dealing with ad-hoc scenarios where people just need to be able to do work and continue to do work and keep disruptions to a minimum and be flexible as they need to be, we would argue that that part of the schedule deals with those types of arrangements much more quickly and efficiently.

PN1231

VICE PRESIDENT HATCHER: Yes.

PN1232

MS SOSTARKO: Thank you, your Honour. The point I was going to just quickly make which was that the union would have you believe that an acceptable response is that you might say, well, sorry, I just can't afford to pay you overtime at that time, and that should be the end of it. And what we're proposing is not that. It's just to allow those workers to reach an agreement, as I've said, that facilitates different working hours and it really is just as simple as that with minimal paperwork to be able to keep work going.

PN1233

As to the economic impacts the union seemed confused as to how they interplay with our application. We've not said that things are bad and that this is the way to fix it. We've said that things are uncertain. And if it means that they turn bad which none of us can predict, and indeed stimulus measures may even help to protect us against those economic troubles that we've had forecast, we need to be able to respond in a way that keeps people employed. Both of the experts have stated without hesitation that the impact of stimulus is uncertain. Mr Toner stated in no uncertain terms that even packages like Homebuilder are directly linked to consumer confidence which just because it's strong today there's no guarantee it will be strong tomorrow.

PN1234

And on the one hand there's asserted that the current downturn is the result of some ordinary cyclical pattern but this is also contrasted by Dr Toner's evidence that essentially governments will do whatever it takes to get us through the crisis. Either way the unions by way of that evidence have highlighted, and we would agree, that there's much uncertainty about the economic future. And - - -

PN1235

VICE PRESIDENT HATCHER: Just looking at this HIA report, exhibit 21, and although there's some big state differentials, if I'm reading it correctly it says that new home sales for private houses for the last three months, Australia-wide are higher than for the equivalent three months last year, which I just find astonishing, but that's what their data says.

PN1236

MS SOSTARKO: I think I'd like to defer to Ms Adler in response to that in the first instance, your Honour.

PN1237

VICE PRESIDENT HATCHER: All right.

PN1238

MS ADLER: Your Honour, would you mind pointing me to the paragraph you're referring to in the new home sales?

PN1239

VICE PRESIDENT HATCHER: We're looking at the table on page 6.

PN1240

MS ADLER: So - - -

PN1241

VICE PRESIDENT HATCHER: The top of page 6. So we've got private houses - now I hope I'm reading this correctly, it's got "three months to June '19, Australia wide, 13,801; three months to June 20, 13,929; increase 0.9 per cent." I mean, as I said, there's big state differentials but that's the aggregate figure, isn't it?

PN1242

MS ADLER: I think the way, and I'm not an economist but the way it's been explained to me, and it doesn't come out in the outlook that we attached to our submission but a further produced outlook is that what's happened is that there was an original forecast of - sorry, just bear with me, your Honour - so originally our forecasts were saying there was going to be approximately 173,000 homes built in the year 2021. That was revised down to approximately 111,000 homes. And since Homebuilder, that's been revised upwards to 135,000 homes. So we're seeing I guess in a global sense it starts to decline but then lifts back up as a result of the activity stimulated by Homebuilder. So it's hard to get a sense either on the month by month data or the three monthly data as to the actual fluctuations in the market.

PN1243

VICE PRESIDENT HATCHER: Yes, all right. Ms Sostarko?

PN1244

MS SOSTARKO: Moving on from that, your Honour, if I could, I would simply say that we'd strongly discourage the Commission giving any weight to the inference and I refer back to those comments of Dr Toner within which he said, off his statement that governments would do - or his report, I'm sorry, that said governments would appear to be happy to do whatever it takes to get the sector out of the crisis. We certainly would discourage the Commission giving any weight to the inference that we should all be comforted by the fact that the government has some kind of endless pool of resources that will come to the rescue of the sector in perpetuity. And in particular it should be noted that despite the suggestion that the government might be considering extending the JobKeeper scheme there's been no announcement confirming any type of extension, and even if one was banking on such an announcement there's even less certainty about to whom any extensions might apply.

PN1245

VICE PRESIDENT HATCHER: Ms Sostarko, as a matter of timing presumably the government will tell us before it ends, what they're going to do.

PN1246

MS SOSTARKO: Yes.

PN1247

VICE PRESIDENT HATCHER: Why would we act on the assumption that the JobKeeper scheme is not going to continue instead of waiting to find out whether it will continue? I mean, as I understood the opening submissions part of this application is premised upon the fact that there's a substantial possibility that the scheme will not continue.

PN1248

MS SOSTARKO: Yes, and certainly there are two responses to be made to that in that the first is, well, obviously those who have been shielded in some way from the pain if that's what we can call it, by being eligible to claim JobKeeper for their employees, obviously that will all rapidly come t an end and we're concerned about what the impacts of that might be. But second to that and I think that this was a comment made by Ms Adler in these proceedings which was that given the nature of the sector and the way that the income and is turned over and recorded within businesses that it's not always easy to light it all up so that they may be eligible regardless of the fact that they are in fact feeling those impacts. I know I have ineloquently summarised your comment, Ms Adler, but I think that was the intent of what she was saying, is just because on paper the don't qualify doesn't mean that they're not suffering, and there are various reasons for that in terms of the way that those businesses function.

PN1249

If I could go on, your Honour, more importantly as Dr Toner inferred yesterday they can be no guarantee that future stimulus is on its way and even if it is, there's definitely no guarantee it will shield our industry from what could be described as catastrophic, potentially, impacts that the virus could have across the full range of the sectors. We've heard evidence from Mr Garrett that "forecasting has been extremely difficult over this period it is clear that our industry is facing an extremely difficult time ahead, and yes, quantifying what that looks like might be extremely difficult, if not impossible to some degree but that further support is needed for these changes at this time. While noting that the not insubstantial stimulus measures have already been put in place we recognise that there needs to be other options available to employers to assist them in getting through what is an unprecedented period in Australia's history and to provide them with every possible opportunity to hold onto their staff even in the face of adversity."

PN1250

And I would say just quickly in addition to that comment I know that there's been a lot of talk about the peaks and troughs and the cyclical nature of our sector but I think we could all agree that this pandemic does not represent anything that would form part of one of those normal troughs, as we so described.

PN1251

VICE PRESIDENT HATCHER: Ms Sostarko, speaking for myself one of the things that troubles me about aspects of the employer application is that the replication of a part of an economic package, the JobKeeper package for general application without the additional obligations placed on employers as a condition of being able to utilise the provisions of the Fair Work Act. That is, to keep employees employed, to apply the JobKeeper scheme on a one in, all in basis, to make regular fortnightly payments based on the hours of work or $1500, whichever is the greater, all of those things are part of an economic response but with flexibilities come obligations.

PN1252

MS SOSTARKO: Yes. Yes, your Honour, and look - - -

PN1253

VICE PRESIDENT HATCHER: The proposal advanced by the employer seeks the flexibilities but there are no corresponding obligations.

PN1254

MS SOSTARKO: Well, your Honour, I certainly, if I could take you to our determination which was marked Annexure A to our originating application - - -

PN1255

VICE PRESIDENT HATCHER: Yes.

PN1256

MS SOSTARKO: And 8.1 of the schedule of that (indistinct) outlines obviously what the genesis of it is and the purposes of what the schedule is required or it has been established to do. And then 8.2 then talks about general conditions and that's where obviously we talk about the safeguards in terms of written requests and so forth, and computation. But I would have to say to you and I just need to find the correct provision and perhaps Ms Adler might be able to seek this while I'm speaking, but it certainly means the point needs to be made that within that there are safeguards that the directions are given to essentially curb any damage as a direct correlation to COVID-19. And so that it's not as if there isn't that correlation. That qualification needs to be made, per se. Obviously there's no financial obligation to have met some sort of threshold in terms of downturn in income and profits and so forth but it certainly is required that the provisions are to help ensure where reasonably possible employees remain productively employed and that as consequence of the damage that is likely caused by the pandemic.

PN1257

VICE PRESIDENT HATCHER: I accept that there's a requirement for a cause or connection but the difficulty is this. Under the JobKeeper scheme and employer can implement a partial stand down and that might have the effect of reducing an employee's hours to nil, or to a few hours a week but there is a corresponding obligation that they will pay the employee at least $1500 a fortnight. Under your regime an employer can give the same direction but no consequent obligation to make any payment other than the reduced hours for which the employee is engaged.

PN1258

MS SOSTARKO: And certainly I take your point, your Honour. But I - - -

PN1259

VICE PRESIDENT HATCHER: And in circumstances where that employer is not as dramatically affected because they don't qualify for JobKeeper, as the employer who qualifies for JobKeeper is affected but nonetheless has that obligation.

PN1260

MS SOSTARKO: Yes, I do understand and I reiterate the point that obviously post September, at this stage, we would hope that this provides those employers who were previously eligible for the scheme to at least have some options other than what I would only describe as going nuclear and letting go their staff because they simply cannot continue to do so without that support of the government.

PN1261

VICE PRESIDENT HATCHER: I understand that but your application is not limited in that respect. It's not limited to employers who as at 29 September, qualify for JobKeeper.

PN1262

MS SOSTARKO: No, I certainly know that and you are correct in that that obligation is absent within the schedule and we certainly made no secret of that point.

PN1263

VICE PRESIDENT HATCHER: Yes.

PN1264

MS SOSTARKO: So if I could, your Honour, I'll just to conclude and I think it's appropriate at this time just to remind the Commission of the safeguards that are obviously attached to that schedule. And those in summary are that of course, and we must reiterate this point if we haven't already clearly enough, that they are temporary, that they are only temporary, that they are to, what we say, designed to get people through a period of time that is a infinite period of time where we can provide some assistance to them and that's it, that there is a defined date and that's clearly proposed, that there are checks and balances and those checks and balances essentially mimic those of the JobKeeper arrangements. There needs to be records kept, worker representatives have a role, entitlement accruals are unaffected and the like. So I think it's important at that juncture to remind the parties that that's the case.

PN1265

And just to conclude, it's our submission now and has been from the outset, that the schedule we proposed should be seen as an insurance policy and that we believe that even in the face of government stimulus that industry, or at least some of the sectors within it, will be rocked by the pandemic. Businesses and employers must have the requisite tools to protect their businesses, their jobs and their livelihoods and on its face those flexibilities don't currently exist within the award. And finally we'd just like to say that these changes are as much about safety as they are about ensuring the industry's future is protected. People need to be able to make arrangements that allow them to feel and be safe on site even if in the face of strong guidelines as we've reviewed this morning from the various associations, unions and regulators. Secondly, this is not a normal cycle, as I've said and experts have told us they can't be sure about what the future holds. But most importantly, if this change helps one business to stay open, or one employee to stay in a job, or even make one worker feel more safe to go to work then we would say this has been a worthwhile endeavour. And that concludes our closing comments, thank you.

PN1266

VICE PRESIDENT HATCHER: Ms Sostarko, the issues is not whether employees feel safe, it's whether they actually are safe. And I thought the evidence to date has been is that employers have taken extensive measurers and established guidelines to permit the safe performance of work to the extent that's possible.

PN1267

MS SOSTARKO: That's right.

PN1268

VICE PRESIDENT HATCHER: And they've done that within the existing framework. That is, I don't recall the evidence to suggest that there's been any award inhibition on employers implementing the steps they have, which are obviously very impressive, to make the workers as safe as reasonably practicable.

PN1269

MS SOSTARKO: Yes. No, I understand and I reiterate that point, your Honour, that in terms of - and that obviously makes reference to us seeking a temporary extension to the ordinary hours of work and there are obviously two limbs to that part of the application, the first being to allow the safe distancing of workers on site, and secondly and it is a minor point but it is one worth making, that it also gives employers and employees the potential to agree to other times that they can be on site if they both agree that it's more practicable or desirable for them to do so.

PN1270

VICE PRESIDENT HATCHER: All right, thank you. Ms Adler?

PN1271

MS ADLER: Thank you, your Honour. I would take the opportunity to make some closing arguments to address the matters put forward in our schedule and also to take the opportunity to respond to some of the matters raised in the CFMMEU submission that was filed in reply which is dated 10 July. So, your Honours and Commissioners, I have to say that from HIA's perspective we feel this is a really sad state of affairs. We filed this application in May which is when we saw an industry in turmoil. There was little prospects of sale and cancellation rates were increasing daily. The months of April and May were what can only be described as a scary time for those businesses.

PN1272

So to support the industry, to do what industry associations do to try and create conditions for the best outcomes for the sector we decided to seek a range of temporary variations to some construction related awards to provide some options to keep businesses in business and employees employed. Yet here we are arguing about matters that could genuinely, we say, be in the best interests of everybody instead of allowing businesses to get on with business in a way that keeps employees employed and houses being built.

PN1273

Throughout these proceedings you've heard a lot about construction activity, residential versus commercial, actual verse predictions, numbers going up and numbers going down, at different points in time for different reasons that mean different things, and unfortunately the workings of the construction sector are complex and multifaceted. We do however submit that on balance the economic analysis shows that the construction industry has been impacted by the pandemic. How could it not have been. There are directions made for people to stay home, the introduction of social distancing and other health and hygiene requirements, severe limitations on both domestic and international travel and other restrictions imposed to stop the spread of the pandemic. We say that in light of those circumstances the awards the subject of the application are no longer meeting the Modern Award's objectives and that the consequential affect on businesses and employment in the construction industry of the pandemic justifies the granting of the application.

PN1274

For the sake of absolute clarity HIA also submits that the consequences of the impact of the pandemic are hitting employers and employees in the residential building industry who are covered by the awards that are the subject of the application. Exhibit 2 which is the statement of Warwick Tenby sets out the breakdown of employment in the sector. Over a million people are employed with just over 700,000 employed in construction roles. These are not sole traders or incorporated businesses, this is the number of people directly employed. A natural consequence of a downturn in activity is that people will lose their jobs. We argue that the granting of the schedule will mitigate these impacts to keep people employed and businesses in business to buy time to readjust their operations to accommodate for the structural changes to the economy.

PN1275

The union's evidence seeks to argue that the economic impacts are overstated, that what the industry is currently experiencing and may experience in the future is simply a part of the usual cyclical nature of the sector. However when put to Dr Toner it was clear that we are not experiencing a normal trough as seen throughout the history of the construction industry. Dr Toner confirmed that a cycle from peak to peak can take anywhere from three to five years, not the three months' downturn in activity that we have seen that we say can be directly attributable to COVID. Similarly, the report of Dr Toner and Associate Professor Rafferty point to the stimulus measures targeted at the construction industry as no more than a usual response to recessionary conditions. We submit that this significantly underplays the unprecedented circumstances the industry is facing. These measures, particularly those targeted at the residential building industry, are unashamedly targeted at bringing forward the demand for housing that has been stunted by COVID.

PN1276

We have talked about the impact of Homebuilder and obviously your Honour has looked at the new home sales data that's been marked exhibit 21, and I guess what I would draw your attention to are the opening comments to that report on page 2 that we say, and our data shows, and our position is that while the reports for a month look good, we say it doesn't fully offset the results from the last three months. There's also caution to be expressed in interpreting data from a single mum and I believe in the article in the Australian our chief economist has actually said that we need to wait for more data to see what the actual impact would be. So we say the impact of Homebuilder should not be overestimated at this point in time. It will pull forward demand for what would otherwise have been a significant gap in the pipeline for residential building work. In fact the activity that Homebuilder may stimulate arguably provides more reasons to grant the application to ensure that those in the industry can meet this demand and also continue to comply with the COVID health and hygiene requirements. Moving back to the views of - - -

PN1277

VICE PRESIDENT HATCHER: I'm not sure I understand that. So that proposition is, the variation is necessary to meet increased demand?

PN1278

MS ADLER: And to continue to meet the health and safety requirements. So if you need to ensure that there's social distancing onsite, if you say that you want to comply with the HIA guidelines that are attached to our submission, staggering meal times and ensuring there's appropriate cleaning of any shared plant and machinery or tools, you might need extra time to do that.

PN1279

VICE PRESIDENT HATCHER: All right.

PN1280

MS ADLER: So if we move back to the views of the unions regarding the current economic conditions the CFMEU argue that what has been termed "macro economic issues", which they state at paragraph 102 of their submission will not affect employees. This to us seems like an untenable position. Not only has it been recognised in a number of decisions of the Commission that these conditions are impacting businesses on the ground every day, including the most recent annual wage decision, but it's simply illogical to assert that macro economic conditions do not and will not affect the circumstances faced by employers and employees on the ground. It is HAI's view that the position taken by the unions sees three unacceptable consequences.

PN1281

Firstly, their position does nothing to further the interests of the employees who they claim to represent. The union's position in objecting to this application will impact on the losses of jobs and the closure of businesses. Secondly, their position takes a simple choice away from an employee to have a job or to not have a job, whether that be on reduced hours or not. Finally we say the union's position fails to acknowledge what is plainly obvious that the world has changed and will be changed forever. The crisis in Victoria is but a sign of how precarious the current conditions are - six weeks of lockdown with the possibility of an extension. The situation emerging in New South Wales is also looking grim and of a concern. And a number of observations made by the Full Bench in their 9 July decision in the Clerks Award which is [2020] FWCFB 3443, are relevant.

PN1282

For example, at paragraph 36 to 37 the Full Bench stated, "It seems to us that the recent second surge of COVID-19 cases in Victoria highlights the uncertainty and the outside risks in the short to medium term as the majority observed in the 2019 to 2020 annual wage decision." They go on to say that "while the second wave of COVID-19 infection is presently limited to Victoria that fact does not obviate the risk of further outbreaks in other states and territories." The recent annual wage review decision also observed at paragraph 35 that, and I quote, "Despite the success in flatting the curve health experts and the Commonwealth government have advised that some level of restrictions on movements and gatherings, as well as border controls and social distancing measures are likely to continue for some time, possibly until a vaccine is developed. The highly infectious nature of COVID-19 and concerns about the second wave of infections add to the uncertainty." This does not mean industries using COVID as some subversive attempt to whittle away award conditions. To the contrary. The application was to put in place a number options supported by a range of safeguards to ensure that there is a transition to the new normal to ensure that employers and employees can whether this storm and re-emerge on the other side ready to do business differently.

PN1283

So I'd just like to take your Honours and Commissioner through what we're actually proposing in the schedule and during my opening, if you recall I broke these down into four categories so I'll work through each of the categories, and as I mentioned at the outset take that opportunity to respond to some of the arguments raised in the CFMEU's submissions dated 10 July. So the first category are the provisions that were introduced as part of the Commissioner's decision of 8 April to introduce unpaid pandemic leave and annual leave at half pay. So we argue that the economic conditions have deteriorated to such a level as to counterbalance the observations made by the Full Bench regarding the impact of COVID on the construction industry at the time of handing down that 8 April decision.

PN1284

Section 4 of HIA's submission in these proceedings summarises the economic conditions facing the sector supported by HIA's national outlook and that May new homes sales report, and also the March quarter trades report. The evidence of Warwick Tenby also establishes the deterioration of the residential building industry. Further, Dr Turner also confirmed during his cross-examination the lagged impact of economic conditions on the residential building industry. Referring to the evidence of Mr Davies, under cross-examination he admitted that he was not an economist and confirmed that his experience and knowledge of the construction industry was confined to those matters such as general labouring. His opinion as to the forecast of the construction industry we say are irrelevant and should be given little weight, particularly in light of the materials put forward by the employer groups to the contrary.

PN1285

I have already made some comments regarding the Toner and Rafferty report at the outset and so the only further comment I wish to make is that their observations appeared to be somewhat generic and out of touch. In fact, Dr Toner did not really seem familiar with the application on which his reported was said to be based. We say therefore the conclusion outlined in their report regarding the economic activity and the economic state of the industry should be given little weight when put against the contemporary and industry specific economic materials put forward by both HIA and the MBA.

PN1286

Moving on to the second category of variations set out in the schedule, these relate to the provisions adopted in the Clerks Award in March to allow a direction to be given to take annual leave on the basis that the employee would have a remaining balance of two weeks.

PN1287

Paragraph 61 of the CFMMEU's submission claim that our item H.5.3 was at odds with section 93(3) of the Fair Work Act. Section 93(3) allows that a modern award claim can include a term requiring an employee or allowing for an employee to be required to take paid annual leave in particular circumstances, but only if the requirement is reasonable.

PN1288

There are just two matters I would like to raise in reply. Firstly, this matter of reasonableness was dealt with both in the 28 March Full Bench decision which is 2020 FWCFB 1690, dealing with the COVID related schedule in the Clerks Private Sector Award and also more recently in the July decision, which is 2020 FWCFB 3443 dealing with the same award.

PN1289

Secondly, the issue of reasonableness within the meaning of section 93(3) was dealt with by both of these Full Benches.

PN1290

At paragraph 65 of the March decision, the Full Bench held that, and I quote,

PN1291

We note that the terms in question are of limited duration to address an extraordinary set of circumstances. A direction to take annual leave requires the giving of at least one week's notice and such a direction shall not result in an employee having less than two weeks accrued annual leave remaining. Further, in issuing a direction to take annual leave an employer is required to consider an employee's personal circumstances.

PN1292

At paragraph 70 to 71 of the July decision, the Full Bench held that

PN1293

Clause I.2.3 provides that an employer may request that an employee take paid annual leave; the employee must consider the request and must not unreasonably refuse the request. The term in question is of limited duration and is a response to an extraordinary set of circumstances. Further, the right to request is subject to a number of safeguards: Firstly, the employer must consider the employee's personal circumstances; the request must not result in the employee having a balance of paid annual leave of fewer than two weeks; an employer can only make a request where it is reasonable in all the circumstances and if the request is made for reasons attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19 and is necessary to assist the employer to avoid or minimise the loss of employment; and a period of leave must start before 30 September 2020 but may end after that date.

PN1294

On these bases, both Full Benches were satisfied that the proposed clause in the schedule attached to the Clerks Private Sector Award was omitted and was reasonable within the meaning of section 93(3).

PN1295

We say that the joint employer provision addresses the majority of these matters. While it is our primary position that what is proposed in clause H.3.3 is reasonable within the meaning of section 93(3), if there is any doubt we would not oppose considering additions such as those made in the Clerks Private Sector Award to ensure that the terms complied with section 93(3).

PN1296

Moving then to the third category of proposed amendments, and these are the ones that we say are reflective of those adopted as part of the JobKeeper package; and they are set out at clause H.7 of the Schedule and obviously they predominantly deal with hours of work. At paragraphs - -

PN1297

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Ms Adler. The concession that you have made in relation to the annual leave and reasonableness requirement, is that a concession that's made by all of the employer applicants or just the HIA?

PN1298

MS ADLER: I'm just speaking for (indistinct) at this point.

PN1299

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right.

PN1300

MS ADLER: At paragraph 79 of the CFMMEU submissions, the union's claim that these measures will further casualise the industry and the proposal is a disguised attack on conditions. We say these claims are, firstly, outlandish and, secondly, are simply a distraction aimed at moving the focus of these proceedings away from the sensible and balanced approach being proposed by the industry in response to a set of unprecedented circumstances.

PN1301

The measures, we say, in clause H.7 are surrounded by a range of safeguards. For example, any directions made regarding clause H.7 must be in accordance with clauses H.1 and H.2 of the schedule. This means that any direction regarding working hours must, for example, arise from the COVID pandemic and government initiatives to slow the transmission of COVID.

PN1302

Any direction must also, for example, help ensure that employees remain productive during COVID and continue to contribute to the business of their employer where it is safe and possible for the business to continue operating.

PN1303

Further, clauses H.2.1(b) and (c) requires that any direction be consistent with the overall intent of the schedule and will have no effect unless the employer has information that leads them to reasonably believe that the direction is necessary to continue the employment of one or more employees.

PN1304

Not only does clause H.2.2 require that consultation occur regarding any direction, but the schedule also seeks to amend current clause 8.5 of the On-site Award, for example, to ensure that a matter given effect by the schedule is covered by the consultation requirements for major workplace changes.

PN1305

Clause H.3.2 also provides that the current dispute resolution clause applies to matters arising under the schedule.

PN1306

VICE PRESIDENT HATCHER: Ms Adler, of course, under the award dispute resolution clause, there is no capacity to arbitrate other than by consent and (indistinct) JobKeeper scheme. So, I mean, in practical terms it simply means that if a direction is made and the employee disputes it the employee has no capacity to challenge that unless they want to take court proceedings. Is that not correct?

PN1307

MS ADLER: No. That's correct, your Honour. Although we w would say that there's a number of - I don't want to keep using the word "safeguards", but a number of steps in place prior to having to get to that provision that would bring to light any issues that might arise regarding a direction of that nature.

PN1308

VICE PRESIDENT HATCHER: But I think in the JobKeeper scheme for example, there have been disputes about whether the preliminary steps have been taken properly or at all. And again, there's been arbitrations of that issue. Again, that's not something that can occur under an award clause, unless the employee takes the employer to court.

PN1309

MS ADLER: Yes. I accept that, your Honour.

PN1310

VICE PRESIDENT HATCHER: All right.

PN1311

MS ADLER: Any direction given under the schedule won't affect leave entitlements. They will continue to accrue as if no direction had been given. An employee who is subject of a direction also retains their employment status.

PN1312

DEPUTY PRESIDENT GOSTENCNIK: Ms Adler, just following up the vice president's question, have the employer's given any thought to a proposal whereby a condition of exercising a power under the proposals is that an employer will consent to the condition arbitrating a dispute about the application of the particular provision that's being utilised?

PN1313

MS ADLER: We've not considered that, your Honour, but I am happy to consider it and discuss with the other parties.

PN1314

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right.

PN1315

MS ADLER: So just finishing off the point that an employee's status remains as it was before any direction was given. So they remain a full-time employee if that's what their status was, notwithstanding that their hours may be reduced for a discrete period.

PN1316

Also the direction is temporary. An employee who may be the subject of a direction will return to full-time hours either when the direction is withdrawn or when the schedule ends. In relation to clause H.7.2, which relates to the ordinary hours of work and the expansion of those hours across Saturdays, any change by clause H.7.2 must also be by agreement.

PN1317

This matter was not contemplated by the evidence of Dr Toner or Mr Davis, both of which seemed to be unaware of this fact. That agreement must be reached in addition to complying with all the consultation obligation (indistinct) and with the option for such a matter to be (indistinct) the resolution processes under the Award.

PN1318

The unions also claim that the changes to ordinary hours are not necessarily to comply with COVID health and hygiene requirements. Staggering of hours is already occurring without any award changes. The changes are simply an attempt to fast track projects and then also seek to criticise HIA's industry guidelines for working safely during COVID on residential building sites.

PN1319

Again, we are not quite sure why these arguments are levelled. They seem to be a distraction from the central point that we are trying to make. We are supportive of construction businesses. We can operate and comply with COVID health and hygiene requirements without meeting the measures outlined in the schedule.

PN1320

Obviously they have had to find out a way to continue to work in a compliant manner given the flexibilities offered by the schedule have not been in place, nor were the provisions under the Fair Work Act when all this started. So they have had to find a way through it. It's also possible that these businesses that have been able to comply with these health and hygiene requirements and vary their working arrangements have been receiving JobKeeper and have issued JobKeeper enabling directions to vary working hours.

PN1321

Elaborating on JobKeeper just for a moment, the evidence of Warwick Temby sets out what we say is the problematic nature with JobKeeper. Not only that it is due to end when the most significant downturn in activity has been predicted to commence, but the uneven playing field that is created is certainly an undesirable outcome in our view.

PN1322

The failure of the scheme to account for the unique nature of the residential building industry being the lag nature of economic impacts means that the industry will be suffering just as stimulus measures cease. In HIA's (indistinct) these options available via the modern award will have two positive outcomes. Firstly, it will mitigate the undoubted impact that the end of JobKeeper will have in September and secondly it will restore balance to the sector by having those workplace options available to all and not just some businesses impacted by COVID.

PN1323

The unions also failed to acknowledge that there will be businesses, particularly small businesses in the residential building industry that firstly may not have the capability or the capacity to alter working patterns without some sort of support. And, secondly, may have not have for JobKeeper. Those businesses are not left with very many options unfortunately.

PN1324

The insertions at paragraph 86 of the CFMMEU's submissions that expands the ordinary hours of work is simply a way to fast track projects is completely unsupported. Under the current conditions how could work be done any faster. The changes are aimed at enabling the same - sorry, the changes outlined in the schedule are aimed at enabling the same or similar amounts of work to be done over a longer period to allow for more time for work health and safety compliance.

PN1325

We say that and as outlined in our submissions, these changes are necessary to ensure that the awards can continue to meet the modern award's objective is in light of the current pandemic. The current award provisions do not provide the adequate flexibilities to respond to the requirements imposed by COVID and HIA's submissions at paragraph 6.4.10 through to 6.4.14 outline the challenges faced by businesses looking for options to keep their employees employed while also responding to the changing levels of demand.

PN1326

Moving to the final category of variation today in the schedule, the three industry-specific provisions that we say are causing hardship to the industry. These include the changes to the taking of RDOs, casual employment minimum engagement periods and the industry specific redundancy scheme under the Building and Construction General On-site Award

PN1327

I just deal briefly with the directions to take RDOs. Firstly, under the provisions that did commence on 1 July as a result of the Four-yearly Review Modern Award proceedings, an RDO can be taken in various ways, subject to a number of safeguards. RDOs can be banked and there can agreement not to work on a RDO roster. During COVID these options are very important and may be being used

PN1328

HIA would submit, however, that it is equally important to have the ability for an employer to direct an employee to take an RDO as set out in proposed clause H.5.4, as is the case regarding the proposal around the taking of annual leave.

PN1329

Moving to the variations sought in relation to the casual minimum engagement period, it is proposed that the minimum engagement period for casual employees under Building Award be reduced from four to two hours and under the Joinery Award from 7.6 to two hours. We say the argument is simply one of fact involving a number of trade-offs.

PN1330

A business may have some work ongoing and need a labourer to attend a handful of sites under construction to clean at the end of every day, for example. As time goes on in the pipeline of work dries up the number of sites diminishes. There is no longer four hours of work for this employee. So the only choice the employer has is to no longer engage that labourer. The labourer loses their job. It's unclear why the unions hold the view that a minimum of two hours or work is not better than no work.

PN1331

Moving to the industry-specific redundancy scheme. The unions raise a number of objections to the proposed changes to the industry-specific redundancy scheme. Under section 141(3)(a) of the Fair Work Act, the Commission has the power to varying industry specific redundancy scheme by varying the amount of redundancy payable under that scheme.

PN1332

We say that that is all that the application seeks to do. HIA submits that the Commission has the power to grant that variation and it does nothing to impact the industry-specific (indistinct) All of the other provisions are untouched.

PN1333

Under the current provision, an employer could be sent broke by the redundancy obligations under the award. This could mean more than one employee loses their job and I'm not sure that that's really the best outcome during the current crisis.

PN1334

What the unions also fail to recognise is that the proposed - the proposal to adopt a provision reflective of section 120 of the Act, which is the capacity to pay provision does not mean an employee is automatically disentitled to their severance pay. There is a clear safety net meaning the Commission is the one that will ultimately determine this, not the employee.

PN1335

All other sectors are entitled to this option. So why not during these unprecedented times should those in the construction industry not be afforded the same option? We would say the evidence of Laura Regan, which is marked exhibit 3 also highlights the adverse impact of these provisions on HIA members in support of the need for change to provide some relief during these difficult times.

PN1336

VICE PRESIDENT HATCHER: So what did her evidence say about that?

PN1337

MS ADLER: So her evidence set out the experience of a number of members who are looking at their options regarding downsizing of their staffing and that the feedback from those members was that having to pay that redundancy obligation, if termination was an option, would severely impact the business and may, in fact, lead to them having to close.

PN1338

VICE PRESIDENT HATCHER: All right. Okay.

PN1339

MS ADLER: So just finally and briefly in conclusion, I just would like to refer to the remarks the Prime Minister made on Friday, 10 July which places important emphasis on economic flexibility and regulatory reform for successful recovery. The Prime Minster is saying, and I quote:

PN1340

We had Michael Brennan from the Productivity Commission come and present on the regulator challenges. He made very important points that a flexible economy would be the most successful in recovering from the COVID-19 recession around the world and how we manage regulation and deregulation is very important to maintaining and achieving that flexibility to support our economic recovery. A more flexible regulatory environment is required as the economy continues to feel the impacts of COVID-19.

PN1341

Section 6 of HIA's submissions sets out in detail why the current award conditions do not meet the modern awards objectives and how it is proposed to ensure the awards continue to meet those objectives, notwithstanding the pandemic.

PN1342

All that the application is seeking is the insertion of a range of options to be afforded to both employers and employees on a temporary basis to mitigate the impact of the pandemic on the construction industry and its workforce.

PN1343

Thank you, your Honour.

PN1344

VICE PRESIDENT HATCHER: Thank you. Ms Paul?

PN1345

MS PAUL: I only have a very short addition to the submissions already made by the other two employer associations and that's just to deal with the issue pertaining to Mr Toner's evidence around the impact of the application and it appears that the last paragraph of page 5 of the report which is at section 2, Mr Toner, I think, admitted the fact that he - that this wasn't an area that he had actually spent a lot of time on and as this was a joint report. But it does appear that there seemed to have been some misunderstanding of the application in the outcomes that have been proposed. And, in particular, the outcome that if the application were granted it would make the workforce even more precarious, uncertain and pressured.

PN1346

Bearing in mind that when taken to the two dots points above, being the reduction of flexibility of employees in accessing award entitlements -sorry, the ability of employees to work normal hours, increasing the span of hours issue, as well is the reduction in take-home pay of employers making Saturdays normal hours, Mr Toner initially accepted the fact that the conclusion may have been wrong on the basis that he was unaware that the - both of those provision or both of those dot points related to employees and the employer actually agreeing. I accept he did put some caveats around it.

PN1347

But what became more apparent was in re-examination when Mr Boncardo had raised - asked him to read the provisions or the ambit of what they were asked to do, he had a cursory look at it and then changed his position again to effectively say that he would stand by the conclusions.

PN1348

Well, either scenario, we say that's not reliable and clearly the conclusions drawn are far too extensive in terms of an application that seeks to be only for a limited period and within the circumstances of the pandemic.

PN1349

So the fact that the conclusions drawn talk about the fact of creating a more precarious uncertain and pressured - I don't necessarily - we would submit that that is not proven in any other part of the report or identified in any other part how that conclusion could be drawn other than the broad statement has actually been made above it.

PN1350

But further, that the risks of these proposed changes would cannibalise the current workforce with unknown future and (indistinct) pressures for efficiency in management and innovation and create grounds for conflict. Again, there is nothing that supports that conclusion in the report and certainly not in any evidence that's been put before the Commission. So we say that in terms of the impact of the application on the award or on employees and the employer, we would certainly say that Mr Toner's - the report shouldn't - the Commission should give little weight to Mr Toner's statements as well as to the report in that regard.

PN1351

We do want to echo the submissions already made. The application does contain a number of safeguards, mainly bringing in the ability for the Commission to be involved as in through a dispute resolution process, plus the fact that the application itself requires in some instances agreement with - the provision requires agreement with the employees. But to take too, I guess, the position as being - the comment made by Deputy President in relation to the JobKeeper enabling provisions and we accept that the JobKeeper enabling provision in its current form relates to the fact that there is a payment or a floor payment in relation to $1500, but that is also tied to the government making that payment to the employer to maintain that.

PN1352

The very nature that the actual JobKeeper provisions do indicated the necessity for flexibility for employers and how they actually operate in this pandemic provision - in this pandemic - situation of a pandemic and we say is relevant for the purposes of award - of award flexibilities as well.

PN1353

And again, the provisions that we're seeking have been curtailed to those employers that are able to determine or identify that they need the flexibilities as a direct result of COVID or it's COVID-related and on the basis that it's on the second (indistinct) that is to enable them to ensure that no employee or either one or more employees aren't going to lose their jobs. And it is within that framework which provides the greatest level of protection for any concerns that the unions may have about the application and about the schedule as it would be applied.

PN1354

And those inherent protections, we say would be sufficient and are necessary and also sufficient to ensure that the application of the schedule is, as Ms Sostarko indicated, a necessary element for construction because it actually provides that insurance. It is the insurance that when things happen they happen fairly quickly in this pandemic and the employer has the ability to actually act on it in a fairly quick and swift manner.

PN1355

And as, indeed, the Commission would be aware, the construction sector is one that is based on a high level of subcontractor. So the fact that if you actually have, at some point of a chain, one subcontractor failing to be able to keep its employees to undertake work, that impacts on a whole number of other employees, some that may be covered by JobKeeper, some that may be covered by the award or enterprise agreements.

PN1356

So unlike other industries, this is one in which we say that whilst there may be some question mark that may be raised in the Commission's mind as to whether this is the appropriate time where the economic data identifies that there is specific need right now. There is certainly one thing that all the economic data is indicating is that there is uncertainty as to the future in relation to employers. And in an environment where we are talking about a subcontractor chain, that impact on one employer or a few employers at a particular level in the subcontractor chain is going to impact on everybody in a particular project or in a particular build.

PN1357

So we would submit that there is sufficient levels of uncertainty.

PN1358

DEPUTY PRESIDENT GOSTENCNIK: Sorry, Ms Paul. That last comment might be so, but into the mix must be recognised that the capacity to respond, even if the application were granted in full is determined in large measure as to the mix of industrial instruments that would apply at a particular site.

PN1359

MS PAUL: Absolutely, your Honour. I accept that, but the issue is that as this is likely to apply across a number of sectors and it's - sorry, a number of components of the construction industry, because then we would say that, at the very least, what you do have is some level of protection or, I guess (indistinct) better term insurance for employers in the sector, that a subcontractor that they may have engaged or a subcontractor that's working for another party that actually provides in accordance with an award, there is some level of protection that the actual project, however big or however small is able to continue. That is not going to be perfect and it's not a perfect and the only solution, but it's certainly one that we see as necessary to provide some level of flexibility with the awards in circumstances where speed is part of a necessity to make changes, particularly in a pandemic.

PN1360

DEPUTY PRESIDENT GOSTENCNIK: Yes. Thank you.

PN1361

MS PAUL: Otherwise we'll have no further comments to make and we rely on the submissions made by HIA and MBA.

PN1362

DEPUTY PRESIDENT GOSTENCNIK: Ms Paul, do you have anything to say about my exchange with Ms Adler about the reasonableness concession?

PN1363

MS PAUL: I would like to give that some thought, your Honour, but certainly it would be something that we'd maybe be prepared to look at entertaining, but one which we would like to have some thought and some discussion with the other parties.

PN1364

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right.

PN1365

VICE PRESIDENT HATCHER: Thank you, Ms Paul. Mr Boncardo?

PN1366

MS SOSTARKO: Your Honour, apologies for the interjection. It's Ms Sostarko here and I just - just before the unions make their closing comments I wanted to seek leave to deal with those two outstanding meters and, your Honour, you may choose to do that at the very conclusion, but (indistinct) wish to raise that we failed to respond to your request with respect to that article in the Australian, and would you prefer that our response be moved to the end of those closing comments and - - -

PN1367

VICE PRESIDENT HATCHER: If you've got the data available, you can send - - -

PN1368

MS SOSTARKO: Yes. Okay. I appreciate - yes. So our response - well, our response is that if you have the article in front of you, firstly I'd like to say that I've been instructed that the comments weren't based on any data received from Treasury. We have yet to receive any such data. But if I could point the Commission to the ninth and tenth paragraph of that article and the ninth paragraph being Master Builders Association Chief Executive Denita Wawn told the Australian. Do you have, your Honour - can you see that paragraph?

PN1369

VICE PRESIDENT HATCHER: Yes.

PN1370

MS SOSTARKO: It then goes on to quote her where it said, "Just today I have been told by industry veterans who had some of the largest building businesses in the country that this is the most effective government (indistinct) they have seen in decades." And then following on, the next paragraph, "Reports from members are backing this up on a daily basis."

PN1371

So my instructions are that those comments were made in response to feedback directly from our memberships.

PN1372

VICE PRESIDENT HATCHER: All right. Thank you.

PN1373

MS SOSTARKO: And if I could, your Honour, the second point that I just wanted to settle which was in response to the Deputy President's question about the clause 33.1(c)(i) and if I recall, your Honour, your question related to why the second bullet point within 33.1(c)(i) does not provide for what we are seeking within our schedule at 8.5.4.

PN1374

So the substance of the provision at 8.5.4 of the draft determination is that it allows for an employer to direct an employee to take any accrued RDOs by giving at least one week's notice. In the alternative, provision 33.1(c)(i), the second bullet point, obviously provides for a day within a 20-day four-week cycle which - with seven days' notice an RDO is to be taken. However it only allows for, on its face, a day during that cycle. It doesn't allow for a direction for any more than that.

PN1375

DEPUTY PRESIDENT GOSTENCNIK: Yes. All right.

PN1376

VICE PRESIDENT HATCHER: Thank you.

PN1377

MS SOSTARKO: Thank you, your Honour.

PN1378

VICE PRESIDENT HATCHER: Mr Boncardo?

PN1379

MR BONCARDO: Thank you, your Honours and Commissioner. If I can make this observation at the outset, there is no received at all from any employer covered by any of the three awards, the subject of this application that any of the provisions of the schedule sought to be imposed in the award by this application will make one iota of difference to their businesses, to their capacity to conduct those businesses safely during the context of the pandemic and to their ability to retain their employees in the current climate that exists in the industry.

PN1380

That proposition that I have just enunciated cannot be disputed by any of the applicants. They have not called any one of their members to give evidence in support of any of the variation is being sought. In my submission, that should be the end of the matter.

PN1381

If I can give you a road map as to where I want to go with my oral submissions this afternoon, I want to start by dealing with some particular provisions of the variations that are sought, to address some of the issues which, with respect to the advocates for the applicants have not been addressed in their oral submissions, those issues being raised by members of the Bench. I then want to say something about the facts that have emerged during the course of the proceedings and I want to conclude by dealing with section 134 factors to the extent that they need elaboration.

PN1382

I have sent through and I hope that at least that the Vice President's chambers have received this, a skeleton argument. I'm going to speak to that today. It's more a ready reckoner for members of the Full Bench as to the CFMMEU's contentions and relevant decisions of the Full Bench of the Commission in respect to awards in the period since about April this year.

PN1383

Yet if I can deal with the clauses that permit a direction to reduce hours to be issued by an employer, that is clause H.7.1 of the proposed variation. And this provision was described, I think by Ms Sostarko as a provision that mimicked the provisions of Part 6-4C of the Act and I think your Honour the Vice President pointed out, with respect, correctly that it does not mimic in its entirety or to an large per cent those provisions, because as your Honour the Deputy President pointed out, there are no correlative obligations imposed upon employers and no safeguard provisions provided in the amended schedule in respect to employees. And I've missed it in the skeleton argument. The provisions at Part 6-4C that are absent from the proposed variations, those being 789GD, 789GC, 789GDA, 789GP and most importantly, as your Honour the Vice President and I think Gostencnik DP have also pointed out, 789GB.

PN1384

There is a power, as your Honour the Vice President knows well from the Prosegur case for the Commission to arbitrate any dispute concerning a matter relating to part 6.4(c) of the Act. And that power is available in respect to setting aside a JobKeeper direction, substituting another - an alternate direction or making any order the Commission considers appropriate.

PN1385

There is no similar obligation or no similar capacity here and the upshot is that the employee who is given a direction pursuant to H.7.1 will have to go off to the Federal Court and seek declaratory relief and relief under sections 545 of the Fair Work Act in order to deal with a circumstance where an employer may not have consulted with them, where a direction is unreasonable in all the circumstances or where that direction is not based upon any of the relevant integers that are outlined in the application that precede the power to give a direction in the first place.

PN1386

The reasonableness or otherwise of the direction under section 789GDA was a matter that the Full Bench considered very recently in a Prosegur case which I have referred to and relevantly in that decision, and I've included a copy of that in a list of authorities that have been sent round to members of the Full Bench, the Full Bench made the point that pursuant to section 789GB(7) in resolving a dispute about the operation of Part 6-4C, the Commission is required to take into account fairness as between the parties. That is, even if a direction is reasonable and operates reasonably in respect to both the employer and the employee, the Commission still has a discretion to ameliorate the direction or otherwise vary it to deal with matters of fairness. That is simply not available in the circumstances proposed under clause H.7.1 of the variation.

PN1387

And I just note for your Honours' and the Commissioner's benefit, the remarks of the Full Bench in Re Vehicle Manufacturing Repair Services and Retail Award 2010 [2020] FWCFB 2367 at paragraph 93 as to the incorporation of equivalent safeguards for employees where JobKeeper style powers are afforded to employers. And that is a point I think your Honour the Deputy President raised during your interchange with Ms Adler in particular. There are, in my submission, a dearth of safeguards for employees included in this schedule.

PN1388

The other matter that should be noted in relation to H.7.1 is that the capacity for an employer to give a direction reducing hours is effectively at large and that is extraordinary, even in the context of modern awards where power is to reduce employees' ordinary hours have been granted by the Commission.

PN1389

And I have noted, for example the Vehicle Repair Services and Retail Award 2020, dealt with by the Full Bench in a decision issues recently, [2020] FWCFB 3416 where full-time employees could be directed to work an average of 22.8 to 38 ordinary hours a week; part-time employees could be directed to work an average of 75 to 100 per cent of their agreed hours and that in the event that such a direction was imminent, employees have the option to increase their payback to usual levels by accessing accrued entitlements. None of those safeguards are present in the variations proposed here.

PN1390

And in my submission, firstly there is no evidentiary basis for the Commission to be affording employers in the industries covered by any of these awards, the extraordinary power to give the kind of directions sought and remembering also that this application seeks that the schedule apply up until the end of this year, there is no basis for any such power to be afforded.

PN1391

But in any event, the power that is afforded is an extraordinary one without any safeguards attached to it at all. And I've listed also in the skeleton argument additional safeguards that have been inserted into the Clerks Award and the Restaurant Award in respect to the facilitation of secondary employment and training matters, and the requirement to notify an employee's union of an intention by an employer to issue such a direction. None of those things are present here.

PN1392

And it's curious that they are not, in circumstances where there provisions have been included in other awards which are apparently being mimicked by the employers in this case.

PN1393

If I can turn next to the provision dealing with an agreement to vary ordinary hours, that is clause H.7.2, firstly I'd make the point I've already made that we don't have any evidence that there is any issue at all with employers and employees making individual flexibility agreements pursuant to clause 7.1 of (indistinct) 7.1(a) I should say of each of the awards at issue in these proceedings to vary arrangements for when work is performed.

PN1394

What is really sought, in my respectful submission, and I think this was made clear in an interchange between (indistinct) being the Deputy President and Ms Adler, is that the employers do not want the BOOT requirement imposed by the IFA provisions of the Award to apply. They simply want the capacity reach agreement with their employees to vary hours in circumstances where that would leave employees worse off.

PN1395

And we say, from the outset, that if the concern here as it appears to have been articulated in submissions this afternoon is to ensure that there are safety measures able to be put in place on site by, for example, staggering start times et cetera, but that can be attended to by an individual flexibility agreement and there is no evidence that individual flexibility agreements cannot be or haven't been used effectively to deal with the issue that is asserted.

PN1396

It was also suggested by, I think Ms Sostarko in her evidence that there are an industry (indistinct) in entering into individual flexibility agreements. Now that is in conflict, in my submission, with what Ms Adler has told the Commission about there being significant safeguards and significant steps that have to be (indistinct) that's pursuant to scheduling (indistinct)

PN1397

VICE PRESIDENT HATCHER: Mr Boncardo, I am having some trouble hearing you. I think every time you turn away - - -

PN1398

MR BONCARDO: I apologise, Deputy President. Is that better?

PN1399

VICE PRESIDENT HATCHER: Yes, it is. Thank you.

PN1400

MR BONCARDO: Now, the consultation provisions under clause H.2.2 impose a number of prerequisites before such an agreement could presumably be reached. So we've got the MBA saying there are going to be administrative difficulties, but we've got HIA saying, "Well, you don't really need to worry about any of these things being abused by employers, because with got robust consultation provisions." The arguments just do not stack up in my submission.

PN1401

If I can turn now to clause H.5.3 and directions to take annual leave, and we contend in the written submissions the term as proposed is contrary to section 93(3) of the Act and if I can elaborate on that briefly and not what is not included in the proposed clause, there is no requirement for an employer in giving the direction to give consideration to an employee's personal circumstances. There is no requirement that the direction be given to avoid or minimise loss of employment of the particular employee. There is no entitlement for an employee to have the Commission arbitrate a dispute about the direction.

PN1402

Now, I've spoken about it being a direction and that is what it is. It is not a request. I think Ms Adler said in her opening submissions that in the context of the Clerks Award, which was originally varied to provide a power of direction that the Full Bench had recently not varied a provision of the Clerks Award dealing with directions to take annual leave.

PN1403

That is not correct, with respect and in the Clerks Award decision, that is FWCFB 3443 of 2020, I should say, the Full Bench did vary what is clause I.2.3 of the Clerks Award to provide that the power is one of request only. It is not a power of direction. It is a power of request, which request must take into account the employees personal circumstances and must only be given to avoid or minimise loss of employment. And the Commission can arbitrate a dispute about it.

PN1404

And it's a direction that cannot be unreasonably refused by an employee. None of those matters are present here and given the lack of those safeguards our contention is that the provision is not reasonable for the purposes of section 93(3), therefore contravenes section 55 and it is not a permitted term by reason of section 136(2)(b) of the Act. And in any event, there is no evidentiary basis for the inclusion of this provision. There has been no one come along to say, "Well, we are having difficulties with our business at the moment and in the event that we are able to direct employees to take annual leave, that would be something that would enable us to retain our current workforce." No evidence like that was before the Bench. So interesting is the jurisdictional argument is, that aspect of the application should be dismissed on the merits in any event.

PN1405

In respect to directions to take accrue RDOs, I think your Honour the Deputy President pointed out clause 33.1(c)(i) of the On-site Award and I would not, in particular, the second dot point under that provision which permits an employer in setting a roster to roster particular employees as having particular RDOs on days throughout the 20-day cycle.

PN1406

That, in our submission, was a flexibility that is appropriate to deal with any perceived issues the employers may be agitating here. It was a flexibility introduced most recently by the Full Bench including the three members presiding here and there is no evidence before you that it's not working appropriately.

PN1407

There is no evidence before you that the additional (indistinct) and that protection or that aspect of the application should be rejected on the merits.

PN1408

In respect to the- what is (indistinct) one of the most extraordinary aspects of the application, if you like, and that is the (indistinct)

PN1409

VICE PRESIDENT HATCHER: Sorry. You're fading out again, Mr Boncardo.

PN1410

MR BONCARDO: I'm sorry, your Honour. Is that better?

PN1411

VICE PRESIDENT HATCHER: Yes. That is better.

PN1412

MR BONCARDO: Thank you. Page 9.1 to 9.2 which deal with the industry-specific redundancy scheme, that again can be dismissed on the merits, because there isn't before you any evidence from an employer that sets out that that scheme is operating in the context of the COVID in a way that is undermining their business or undermining their capacity to sustain the employment of the employees.

PN1413

Ms Adler referred to the evidence of Ms Regan and if I can remind your Honours and the Commissioner about Ms Regan's evidence, which I objected to at paragraph 16 through to 21, she records contacts with unnamed - I should say three unnamed and unknown members of the HIA who made complaints in very general terms about difficulties they are having with their business. Only one of their complaints; that is, member A, concerns redundancy and member who was entirely ignorant of their obligations under the award says that the redundancy provisions would put a financial strain on their struggling business.

PN1414

Now that kind of quality of evidence, which is bereft of any probative value at all cannot justify on the merits the extraordinary aspect of the claim being agitated here.

PN1415

We've raised, in our written submissions some jurisdictional arguments in relation to the application concerning redundancy. Interesting as those are, my submission is your Honours and the Commissioner don't need to delve into those, because you could just dismiss this on the merits, although that, strictly speaking, is the wrong way to deal with the matter. But if I could just elaborate briefly on the submission concerning section 141(4)(b) of the Act, namely that the variation will result in the industry-specific nature of the scheme not being retained and just make these points, firstly, as your Honours and the Commissioner and two other members of the Full Bench noted in the Construction Industry Full Bench redundancy - I withdraw that - the decision of 4 yearly review of modern awards - Construction awards [2018] FWCFB 6019 at paragraph 82, to change the definition of what constitutes redundancy would alter the industrial balance of the scheme and its historic industry-specific character. That is what is proposed here. Picking up section 389 of the Act, which is what is sought, and saying, Well, that will constitute a redundancy for the purposes of clause 17 of the Award, and section 389, akin to section 119, requires that - well, it sets out relevantly that a genuine redundancy occurs if a person's employer no longer requires their job to be performed by anyone because of changes in the operational requirements of the employers enterprise is akin to, in my respectful submission, and not substantively different to section 119(1)(a) of the NES.

PN1416

And what is being proposed here would alter the industry specific nature of the scheme. That is in two components, firstly by (indistinct) the definition of redundancy and, secondly, by permitting a section 120 style reduction to be permitted. In any event, there is no evidentiary basis for the proposed change. There is no evidence that the scheme is operating in an adverse fashion in the context of total. There is no evidence as to the frequency with which payment is being made to employees who have resigned their employment.

PN1417

We have got sort of vague contention floating about in the submissions of the HIA and the MBA that employees are incentivised to resign or may be incentivised to resign their employment because they will get redundancy. Now, firstly, there is no evidence that that's ever happened and secondly, there is no evidence that it's a problem and, thirdly, it's an absurd proposition to be advanced by the employer associations in the current climate where no doubt people are concerned about retaining their jobs instead of throwing up their hands and saying, "Look, I can get a few weeks of redundancy pay if I resign here because of clause 17 of the Award, therefore I'm going to abandon my employment and go and look for work elsewhere." It just does not make sense.

PN1418

Additionally, there's no cost evidence of the costs of payment of redundancy in the context of any particular business. There is no evidence that the industry specific scheme is exceeding the costs of the NES provisions in their totality and, finally, employers are contributing - who contribute to an industry fund under clause 17.4 will, in my submission, be put at a disadvantage if the application is granted.

PN1419

Now, the application concerns both the On-site award and what is, from recollection, clause 12 of the Mobile Cranes Award, which also contains a similar industry-specific redundancy scheme. We have heard nothing about (indistinct) we've heard nothing also, I should say (indistinct) not relevant to redundancy, but (indistinct) employers seem focused (indistinct) on the On-site Award and we don't have any evidence, let alone submissions, about evidentiary matters concerning the (indistinct).

PN1420

In relation to casual engagement, we say that fails on the merits. There is not a skerrick of evidence that any (indistinct) industry employer is having issues with the minimum (indistinct) engagement provisions. And the extent of the change, particularly in the context of the (indistinct) proposed should be noted. That is a reduction in the minimum casual engagement of 7.6 to two hours. That is a substantive change, as is a reduction from four to two hours, for which there is no evidentiary basis.

PN1421

If I could turn now to make some comments about the evidence and the evidence that first emerged this morning and yesterday afternoon in respect to the residential sector, is telling and is (indistinct).

PN1422

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

PN1423

MR BONCARDO: I'm sorry, your Honour. It may not be attractive, but I will perhaps move closer to my screen. Is that better?

PN1424

VICE PRESIDENT HATCHER: Yes. We'll just turn off the video if it's offensive.

PN1425

MR BONCARDO: I'm sure that may have already occurred. The exhibit 21, the HIA new home sales document, which deals with new home sales in June is a very important piece of evidence and I just note the statements in the blurb on page 2, amongst other things, that new home sales in June returned the highest monthly result in nearly a decade, there being a dramatic increase due to the HomeBuilder program.

PN1426

And then on the fourth paragraph, the second sentence, the figures in June whilst not fully offsetting the dismal results for the preceding three months cause the HIA to be cautious about over interpreting data, but goes on to say this:

PN1427

It is however a clear indication that HomeBuilder will protect jobs in the sector in the second half of 2020 and into 2021.

PN1428

Now, this application is concerned with the second half of 2020 and the HIA's own statement - well, own evidence which - I mean, own publication which presumably is reliable and correct - is that by reason of the government stimulatory package, jobs in the sector are going to be protected in the second half of 2020. Why, I asked rhetorically, is there any need for this application?

PN1429

And I also - I've let the members of the Full Bench read the balance of the blurb to themselves, because it is in (indistinct) and it is important, but I would also draw attention to the figures on page 3 and I do note the Vice President's, with respect, correct observation that the level of housing activity or new - housing activity does vary from state to state, but the Australian, the overall result in respect to (indistinct) sales in June is 77.6 per cent higher than in May. And your Honours and the Commissioner see that that is the highest score on the chart that is provided at page 3 of the document.

PN1430

In relation to the Master Builders statements to the Australian which Ms Sostarko has accepted as being correct, your Honours and Commissioner will recall the report by the Master Builders that the package had delivered the most effective stimulus in decades and Ms Sostarko's most recent - I won't say they are a concession, because they are not a concession, but most recent acknowledgment, no doubt an acknowledgment that needed to be made that the Chief Executive of the Master Builders Association had spoken gospel truth in her statement to the Australian about reports she had received from industry veterans who described the stimulus as being the most effective in decades. And there were also reports from members backing that up on a daily basis.

PN1431

Now, this is not - and the CFMMEU accepts without any qualification that circumstances existing at the moment are exceptional and circumstances are imposing difficulties for people in - people who operate in the industry as employers, principal contractors or employees, but it is clear that the industry in the civil sector, commercial sector and now in the residential sector has managed to cope and cope very well in all of the circumstances. And this application is not necessary or required in order to deal with the kind of issues that were present, for example in the restaurant industry or in the retail industry as a result of COVID.

PN1432

If I can deal with the evidence of Dr Toner and respond to Ms Paul's assertion about Dr Toner changing his position in relation to (indistinct) in the first substantive paragraph on page 5 of his report, your Honours and the Commissioner will recall that in re-examination I asked him to read and he did read carefully - he took some time reading (indistinct) the constructions the union had (indistinct) the application at pages 31 to 32 of (indistinct) summary f the application. I asked him whether or not he'd qualify or otherwise depart from what was in the first substantive paragraph at page 5 and his answer was a resounding no.

PN1433

So with respect to Ms Paul, he didn't change his position. His position - - -

PN1434

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

PN1435

MR BONCARDO: Sorry, your Honour.

PN1436

VICE PRESIDENT HATCHER: That's better.

PN1437

MR BONCARDO: Thank you. His position remained as set out in paragraph 5 of the report. Now his report and his supplementary report, in my submission, were otherwise unchallenged and the Full Bench ought accept the opinions and the conclusions reached there. The evidence of Mr Garrett was in my submission, in a number of respects, illuminating and helpful because when Mr Garret was asked what the main drivers were in relation to firstly demand in the industry and the capacity for work and people to remain employed in the industry, he gave a number of reasons. Now of those reasons pertain to industrial relations arrangements between employees and employers and more specifically, those arrangements affected by the awards, the subject of this application.

PN1438

Your Honours and the Commissioner have also heard evidence from Mr Grippi. In my respectful submission, whilst there were aspects of Mr Grippi's evidence which your Honours and the Commissioner may accept in respect to the institution, for example, of staggered break times and the like, conclusions that Mr Grippi drew or what we have described in our written submissions as bold assertions in respect to disruptions to the flow of work, disruptions to productivity should be rejected by this Commission.

PN1439

And I am speaking in particular of the assertions made at paragraphs 13 to 14, 16 to 17 and paragraph 19 of Mr Grippi's statement. Extraordinarily, Mr Grippi has, as your Honours and the Commissioner know - well, I should say Richard Cook Constructions, not Mr Grippi personally, failed to comply with an order of this Commission to produce documents relevant to the conclusions asserted in his statement.

PN1440

And that is a matter that ought be of concern to the Commission. It ought also, with respect, be of concern to the Master Builders Association who called Mr Grippi as a witness, but what it means for the purposes of assessing his evidence is that the Commission and the respondent unions were deprived of relevant and admissible material is - potentially admissible materials that went to the opinions proffered. That undermines, in my submission, his credit, but it also undermines the reliability of his evidence and the notions which was advanced by Ms Sostarko that there was some ambiguity in the orders made by the Commission is, with respect, and absolute nonsense.

PN1441

Those orders were clear. Those orders could not have been misinterpreted and the notion that Richard Cook Constructions was excused from complying with the order - orders I should say - because there was some need to clarify those orders is a nonsense and it should be rejected.

PN1442

I would make one observation about Mr Grippi's evidence and that is that he did say that workers on Richard Cook's sites were starting work at 6 o'clock in the morning and working through to 6 pm. Now, I would note that under clause 33.5 of the On-site Award an employer is able to reach agreement with its employees to vary the span of hours so there's a 6 o'clock start time.

PN1443

VICE PRESIDENT HATCHER: I think the Richard Cook agreements had a 6 am to 6 pm span of hours anyway, didn't they?

PN1444

MR BONCARDO: Precisely. They did. They did, your Honour, and the evidence at paragraph 21 of Mr Grippi's statement where he boldly asserts that this application is going to be of assistance has to be rejected, because this application is going to have no impact whatsoever on Richard Cook Constructions or, for that matter, the significant number of subcontractors who it engages who Mr Grippi were covered by enterprise agreements.

PN1445

In fairness to Mr Grippi, he did say that some of them were covered by the award, although that evidence was, like most of Mr Grippi's evidence, fairly vague and general.

PN1446

Would your Honours and the Commissioner bear with me for a moment? Your Honours and Commissioner, unless there are any questions, we rely on the written submissions. The application is opposed. The modern award objective - actually, I apologise, I forgot to deal with the modern award objective. I have dealt with that in the skeleton argument by elaborating on sections 131, 134(1)(a) and 134(1)(b).

PN1447

In particular, I just note in respect to 134(1)(a) that is, the impact of the proposed variations on the low paid that a good deal of employees covered by these three awards would be classed as low paid employees and I've set out the relevant parts of the most recent Full Bench decision on the Fast Food Award, which set out the figures as to two-thirds of median full-time wages. That is a matter that, in our submission, counts squarely against the Commission granting the variation and I've also said something very briefly about collective bargaining which is a repetition, to a large extent of what is in the written submissions.

PN1448

So unless there are any questions, that's what I wanted to say by way of oral address.

PN1449

VICE PRESIDENT HATCHER: Thank you. Mr Crawford? Are you there Mr Crawford?

PN1450

MR CRAWFORD: Yes, your Honour. Your Honour, the AWU's interests focuses on the civil construction industry. Five different officials have given evidence that work in the civil construction industry is continued with minimal disruption during the pandemic. Mr Callinan(?) gives that evidence for New South Wales at paragraph 5 and 6 of his witness statement. Mr Hayden gives that evidence for Victoria at paragraphs 5 to 9. Mr Cradden gives that evidence for Queensland at paragraphs 4 to 7. Mr Duffy gives that evidence for Western Australia at paragraphs 5 to 8 and Mr Henderson gives that evidence for South Australia at paragraphs 5 to 8 of his witness statement. None of that evidence was contested. None of the witnesses were cross-examined.

PN1451

We say that that evidence clearly demonstrates that there has not been a significant reduction in hours of work across Australia for the civil construction industry. There is not a need to take annual leave that is any higher than usual. There is no additional redundancies are anything like that in the civil construction industry either.

PN1452

Turning to my own witness statement, I have attached 20 media releases from the Minister for Infrastructure, Mr McCormack. Those media releases or concern funding announcements for the civil construction sector which have been made since 13 April 2020. All of the announcements include that there is - the Federal government is committing massive amounts of additional spending to the civil construction industry.

PN1453

In attachment SC2 to my witness statement, Mr McCormack is reported as stating, "Construction is key to navigating Australia out of the pandemic, while maintaining jobs and (indistinct) growth and (indistinct) which is vital to Australia's immediate and (indistinct) and we are committed to ensuring our (indistinct) dollar pipeline stays on track to (indistinct)

PN1454

So that is the Federal Government spending announcement on civil construction. Mr Callinan (indistinct) in his witness statement also gives evidence about New South Wales government spending announcements concerning infrastructure. In particular from paragraphs 7 to 11 of Mr Callinan's statement and attachment TC8 to Mr Callinan's statement is a letter from the New South Wales Treasurer which confirms the New South Wales government's commitment to its 97.3 billion dollar infrastructure program.

PN1455

Mr Hayden's witness statement also contains additional information about Victorian state government's spending. In particular, a recent announcement dated 8 July where the Victorian government announced it would accelerate its 2.2 billion dollar (indistinct) construction (indistinct) and I also note that evidence about spending announcements from the Queensland government is also contained in appendix 2 of Dr Toner and Associate Professor (indistinct) and also Jade Ingham's statement at attachment JI1.

PN1456

I note that Mr Garrett from the Master Builders acknowledges in paragraph 25 of his witness statement that government-backed transport infrastructure investment was already ramping up prior to COVID-19 and additional government stimulus has the potential to offset some of the (indistinct) of private sector projects.

PN1457

So bringing all that together, we would say it's clear that the civil construction industry has been specifically targeted by governments. It's a sector that (indistinct).

PN1458

VICE PRESIDENT HATCHER: Sorry, you are cutting out, Mr Crawford.

PN1459

MR CRAWFORD: Can you hear me, your Honour?

PN1460

VICE PRESIDENT HATCHER: Yes. That's better.

PN1461

MR CRAWFORD: So we say that the - those government announces established that the civil construction industry has been specifically identified by government as an industry that will help drive Australia's recovery from the pandemic and that will inevitably lead to more revenue for businesses operating in that sector and also more employment.

PN1462

Building on that, your Honour, we've included - we have them witness statement of Mr Campa(?) which deals with ABS data about the engineering construction industry. That what is included in the ABS definition is identified in paragraph 2 of Mr Campa's statement. And the ABS data concerns three measures; value of work done, value of commenced and value of work yet to be done.

PN1463

And at paragraph 6 of his statement, Mr Campa highlights the value of work commenced is an indicator for direct economic activity in the very short term. And he refers to that is over the next one to two quarters and value of work yet to be done is an indicator for the short medium term and he uses that as an example - he uses the example four to eight quarters for that measure.

PN1464

And then at paragraph 16, Mr Campa highlights that the value of work commenced in the March 2020 quarter was up 42 per cent from the previous quarter. And also in paragraph 16 Mr Campa highlights that value of work yet to be done in the March 2020 quarter was up 7 per cent from the previous quarter and that was the highest quarterly figure since September 2015. And given that the application seeks changes that would apply from the remainder of 2020, we say that the outlook for the civil construction industry for that period, being the rest of this year, based on this latest ABS data is very positive and we would say that is unsurprising, given me array of government spending announcements that we've already referred to.

PN1465

The employer evidence in relation to the civil construction industry in specific is virtually non-existent. Their evidence is focused predominantly on the residential housing industry and to some extent the commercial construction industry.

PN1466

As Mr Boncardo has already made the point, there are no employees who have given evidence in these proceedings covered by the award anyway and that is obviously certainly the case for the civil construction industry as well. And we would say that in those circumstances the evidence led could not possibly justify these quite significant changes to the award in relation to the civil construction industry.

PN1467

I'd reiterate a point that Mr Boncardo has already made that a lot of these provisions have been taken from previous applications concerning, for example, the Restaurant Industry Award and the Hospitality Industry Award. As we all know, a lot of those businesses in those industries have been absolutely decimated by the pandemic. They have been forced to entirely close for periods.

PN1468

Even now, in many area across Australia they are subject to quite strict limitations on what they can do on the number of patrons they can let in et cetera and in strong contrast to that the civil construction industry has continued operating without break throughout the entirety of the pandemic and not only that, there are - it is clear, as I've already pointed out that this is an industry that has been specifically targeted by the government for massive amounts of expenditure to drive Australia's economic recovery.

PN1469

So in terms of industries in Australia, the civil construction industry could not be more different of distinct from other industries that have already had their industry awards varied in a similar manner such as the Restaurant Industry Award and the Hospitality Industry Award.

PN1470

The only other general point I'm making closing is that the MBA and I think the AIG also referred to the need for these variations to address uncertainty. I think the MBA also refer to the changes as an insurance policy, but I would make the point that test the Commission needs to apply is necessity, that the changes have to be necessary to ensure that the modern award meets the modern award's objective. So that test does not sit well with the proposal from the employers which is basically, "It is uncertain what will happen in the future. You know, you should make these changes just to safeguard the industry, because we don't really know what's happening, what will happen in the future." We would say (indistinct) at all well with the test required under the Fair Work Act which would basically necessitate the Full Bench concluding that the changes are necessary, based on the situation at the moment.

PN1471

Unless there are any questions, those would be my submissions.

PN1472

VICE PRESIDENT HATCHER: Thank you. Does any representative of either of the other unions wish to make submissions? No? All right. Any submissions briefly in reply?

PN1473

MS SOSTARKO: No, your Honour. Not from the Master Builders perspective.

PN1474

VICE PRESIDENT HATCHER: Ms Sostarko, can I just ask you one question? Mr Boncardo made reference to clause 33.5(a) of the On-site award.

PN1475

MS SOSTARKO: Yes. Early starts. Yes, your Honour.

PN1476

VICE PRESIDENT HATCHER: That would make at least on the front end, your provision about the span of hours unnecessary, would it not?

PN1477

MS SOSTARKO: Your Honour, I certainly noted that comment of Mr Boncardo. However, that was with reference to a comment the Mr Grippi made in evidence yesterday. But - - -

PN1478

VICE PRESIDENT HATCHER: No. (Indistinct) Mr Grippi. But just clause 33.5(a) allows by agreement the start time to be moved forward to 6 am.

PN1479

MS SOSTARKO: Yes.

PN1480

VICE PRESIDENT HATCHER: So that makes unnecessary, does it not, that aspect of your application about start times, at least at the front end.

PN1481

MS SOSTARKO: At the front end, perhaps you are right. I would like to consider that concept and if there is any unintended consequences in us making that concession, your Honour. But certainly in terms of obviously the finish times, that principal wouldn't apply.

PN1482

VICE PRESIDENT HATCHER: I mean, how useful is it, I mean at least in the current (indistinct), how useful is it to be able to work to 7 pm when it's dark anyway? I mean - - -

PN1483

MS SOSTARKO: Well, certainly, your Honour on commercial construction sites - sorry, the first point that I would make is that in evidence before the Commission it has been highlighted that there are a number of orders, perhaps not so described as orders, but announcements made by local government and state governments that have expanded the hours of work permissible on construction sites.

PN1484

So there certainly would be, particularly in non-residential areas, I would say, that there would be absolutely opportunity for people to work after hours, under the spotlights. There are all sorts of things that would facilitate that. So certainly that would absolutely be the case and particularly encouraged by the fact that those governments have now allowed for that work to happen outside of what we would describe as ordinary hours.

PN1485

VICE PRESIDENT HATCHER: All right. Thank you. Ms Adler, did you want to make any submissions in reply?

PN1486

MS ADLER: No, your Honour. Thank you.

PN1487

VICE PRESIDENT HATCHER: All right. Ms Paul?

PN1488

MS PAUL: Sorry. No, your Honour.

PN1489

VICE PRESIDENT HATCHER: All right. Well, if there's nothing further, we thank the parties for those submissions. We will reserve our decision and now adjourn.

ADJOURNED INDEFINITELY [1.20 PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #7 HOMEBUILDER PACKAGE ARTICLE IN THE AUSTRALIAN NEWSPAPER DATED 14/07/2020.............................................................................................. PN1029

NIGEL DAVIES, AFFIRMED.......................................................................... PN1039

EXAMINATION-IN-CHIEF BY MR BONCARDO...................................... PN1039

EXHIBIT #8 STATEMENT OF NIGEL DAVIES DATED 10/07/2020....... PN1046

EXHIBIT #9 COVID-19 GUIDELINES FOR BUILDING & CONSTRUCTION INDUSTRY VICTORIA, REVISION 5 DATED 14/07/2020............................................... PN1055

CROSS-EXAMINATION BY MS ADLER..................................................... PN1066

CROSS-EXAMINATION BY MS SOSTARKO............................................. PN1095

RE-EXAMINATION BY MR BONCARDO................................................... PN1131

THE WITNESS WITHDREW.......................................................................... PN1148

EXHIBIT #10 STATEMENT OF JADE INGHAM DATED 10/07/2020..... PN1155

EXHIBIT #11 COMMISSION ORDER FOR PRODUCTION AND MBA RESPONSE DATED 13/07/2020............................................................................................................. PN1165

EXHIBIT #12 ATTACHMENT 4, DOCUMENT PRODUCED BY MASTER BUILDERS ASSOCIATION................................................................................................... PN1167

EXHIBIT #13 STATEMENT OF ANDREW DUFFY DATED 06/07/2020. PN1175

EXHIBIT #14 STATEMENT OF PAUL CRADDEN DATED 07/07/2020. PN1176

EXHIBIT #15 STATEMENT OF NICK CAMPER DATED 08/07/2020..... PN1177

EXHIBIT #16 STATEMENT OF RONNIE HAYDEN DATED 08/07/2020 PN1178

EXHIBIT #17 STATEMENT OF STEVEN CRAWFORD DATED 08/07/2020 PN1179

EXHIBIT #18 STATEMENT OF GARRY HENDERSON DATED 8 JULY 2020 PN1180

EXHIBIT #19 STATEMENT OF ANTHONY CALLINAN DATED 10/07/2020 PN1181

EXHIBIT #20 HIA MEDIA RELEASE DATED 09/07/2020......................... PN1190

EXHIBIT #21 HIA NEW HOME SALES REPORT DATED 02/07/2020.... PN1200