PN1

THE COMMISSIONER: Hello, and welcome to the conference. I have got Mr Gunn?

PN2

MR J GUNN: Good afternoon, Commissioner.

PN3

THE COMMISSIONER: And Mr Arndt?

PN4

MR J ARNDT: Yes, Commissioner. I am with my colleague (audio malfunction).

PN5

THE COMMISSIONER: Sorry, you broke up there. Your colleague?

PN6

MR ARNDT: Ms Lombardelli.

PN7

THE COMMISSIONER: All right. It's a small gathering this afternoon. The issue is that - just bear with me. There has been, as I understand it, an application from an individual to alter the Children's Services Award to deal with the, perhaps I'll describe it as an anomaly as such, that a 19 year old Children's Services employee would be paid no less than 21.06 whereas an adult, 1.1, would be getting no less than 20.29 per hour. The President has asked me to convene a conference of the parties to discuss the matter and essentially see if there's any proposals as to whether, I guess, (a), does anything need to be done about this and, (b), if so, what? Who would like to go first?

PN8

MR GUNN: If I may, Commissioner?

PN9

THE COMMISSIONER: Sure.

PN10

MR GUNN: Mr Gunn here. This is a longstanding anomaly, for want of a better word. It all comes back to clause 14.3(b), which states:

PN11

Junior employees employed as Children's Services Employee Level 1 or Children's Services Employee Level 2 will be paid no less than the following percentages of the corresponding Children's Services Employee Level 2 rate.

PN12

The Fair Work Ombudsman has taken that, quite correctly, quite literally, at no doubt those rates. It appears to us at CCSA that this is simply a drafting anomaly from back in 2009/2010. We can't find any cogent reason why that was written as the following percentages of the corresponding Children's Services employees Level 1 or Level 2 rate, unless there was some argument that was put forward at that time. We are unable to find any record of that.

PN13

THE COMMISSIONER: (Audio malfunction.)

PN14

MR GUNN: If I may, Commissioner, one other thing, whilst it has been around for 10 years, it is rarely an issue. Level 1 employees, if we go to schedule B of the current 2010 version of the award, B.1.1 defines what the requirements are to be a Level 1 employee, including having no formal qualifications but able to perform work within the scope. It then follows:

PN15

The employee will work under direct supervision in a team environment and will receive guidance and direction at all times.

PN16

It then goes on under B.1.1(b) to say:

PN17

A Level 1 employee will progress to the next level after a period of one year or (my emphasis) earlier if the employer considers the employee capable of performing the work at the next level or if the employee actually performs work at the next level.

PN18

Our view is that it's very rarely that somebody would be needed to be employed in Level 1 for any extended period of time because you're basically taking another Children's Services employee off the floor. Instead of working directly with the children, instead you are requiring them to supervise the lowest qualified individual in the service, and that is not a practical way to run a service.

PN19

THE COMMISSIONER: Yes, (audio malfunction).

PN20

MR GUNN: And given that it's only this one age group as well, moving from 19 to 20, where it comes up. If the award is being properly applied in terms of classification between Level 1 and Level 2 and then with the one in five chance that somebody will have a 20th birthday in that time, so it rarely arises as a practical issue.

PN21

THE COMMISSIONER: Yes, I see, I see. Summarising all of that, is the position then, yes, it's an anomaly, but it's longstanding, there's no need to do anything about it, or should 14.3(b) be amended to now read, in the second part of it:

PN22

Will be paid no less than the following percentages of the corresponding Children's Services Employee Level 1 or 2 rate.

PN23

MR GUNN: The latter, Commissioner, is what we would say.

PN24

THE COMMISSIONER: Yes, okay. Just working that through, if it was to say that - well, of course, if you're a Level 1, you will get 100 per cent of 1.1 (audio malfunction). I understand. Have there been any discussions with the UWU about the matter? They haven't attended today and if there's anything put, obviously they will get a chance to comment, but have you had any discussions with them, Mr Gunn? Do you know where they are on this particular - - -

PN25

MR GUNN: No, Commissioner, I haven't.

PN26

THE COMMISSIONER: No, all right. All right, thanks for that. Anything else?

PN27

MR GUNN: No, thank you, Commissioner.

PN28

THE COMMISSIONER: Mr Arndt?

PN29

MR ARNDT: I've got no issue with anything that Mr Gunn has said or proposed because it does seem to be a sensible course that, you know, the relevant classification would be the relevant rate in which to apply the junior percentage to.

PN30

The only issue or complicating matter that we can bring to the table, and I appreciate it's probably over complicating matters, but in digging up and trying to find out the answer to this particular quirk, I'm not sure, at least on the correspondence that was going around in 2009 in relation to the creation of the award, I'm not sure that we could say that it's an obvious error or that there's been an obvious, you know, anomaly or drafting error. I am looking at a document that was sent to the Industrial Registrar 26 October 2009 from Livingstones Australia which identifies an agreed position and the agreed position in relation to 14.4(b) and (c) identifies that the change to the award is one single scale for junior rates as a percentage of Level 2.

PN31

That, on its face, suggests to me that this seems to be an agreed position. I appreciate that it seems sensible to us and could possibly be the right answer, but I don't want to let the Commission be in a position where - I mean it doesn't seem as if the - it seems like that was the intention of the parties. I'm not sure why, I can't assist the Commission on that point, but it does seem to be the position of the parties that, for whatever reason, they wanted to calibrate junior rates against Level 2.

PN32

THE COMMISSIONER: Yes, all right. If that's right, and that accords with the research done by the team at the Commission, that there was an agreed draft clause between the LHMU and it just says "employer groups", whoever they may be, which applied them to the Level 2 rate only. It does look like it was an intended approach. If that's right and the avenue that Mr Gunn is canvassing is not available, what's the view? It would be a sleeping dog argument? Leave the anomaly as it is because it doesn't really, as Mr Gunn put it, as a matter of practicality, given the way one would sensibly staff to deal with ratios and so on, it wouldn't arise as a problem hardly ever?

PN33

MR ARNDT: It may well be a sleeping dog issue. We only appear on behalf of ABI and New South Wales Business Chamber, but we have canvassed some views of the wider industry in some other industry groups who would say that there is no - there's no basis to go down in pay as you get older, so, on that view, there is a general acceptance that if it can be fixed, it should be.

PN34

In preparation for this conference, we tried to work out the path of least variation, so to speak, in trying to work out what would be the least that the Commission could do to actually fix this. As we see it, the least that - the smallest change to the clause that the Commission could make to fix it, as we see it, would be just to remove the reference to under 20s in the junior rates clauses and then they are entitled to 100 per cent of the Level 2 rate. If that was removed, essentially only one group of employees, albeit an extremely small group of employees, if they do exist, as Mr Gunn has mentioned, that would be the way to change it in the most efficient way, just removing under 20 employees from the junior rates clause.

PN35

It seems an odd clause anyway because those employees are entitled to a hundred per cent of the Level 2 rate whether or not they are Level 2 or not, but that was the proposal that - not our proposal, but that was a proposal that we came up with that could change the fewest amount of pay rates for the fewest amount of employees.

PN36

THE COMMISSIONER: Yes. So then 18 year olds are on 90 per cent and then 19 year olds, well, they don't get a hundred per cent of Level 2, they get whatever they get. They either get (audio malfunction) Level 2, if they are a Level 2, and if they are a Level 1, they will get a hundred per cent of that.

PN37

MR ARNDT: Which essentially would be limiting the variation proposed by Mr Gunn just to the problematic age group, so to speak, as opposed to changing the clause's application to everyone.

PN38

THE COMMISSIONER: Yes, okay. What do you think about that idea, Mr Gunn?

PN39

MR GUNN: I'm comfortable, Commissioner. I think, yes, it seems strange to have a junior rate that says you get the adult rate.

PN40

THE COMMISSIONER: Yes.

PN41

MR GUNN: I guess the other thing would be the position that the applicants put forward, Mr Patterson, I believe it was, about, you know, that it wasn't economically viable to reduce someone's pay, the other option would be to do as Mr Arndt has suggested and perhaps - I don't know if this is possible or not - to have a note that - because it does involve the interaction of two different pay rates, Level 1 and Level 2 - that moving from one age group to the next will not result in a reduction in payment to the employee, in which case then the only group that would be affected would be those who were 19 years of age at commencement of their Level 1 employment.

PN42

THE COMMISSIONER: You would do that in combination with what Mr Arndt is suggesting or as an alternative?

PN43

MR GUNN: No, in combination, Commissioner.

PN44

THE COMMISSIONER: Yes.

PN45

MR GUNN: What would happen then is that, because we haven't referred to under 20s, if you are a 19 year old, you get Level 1 or Level 2 and you're the only people who don't get the benefit of the (indistinct) as Level 1 employee referenced to Level 2 and then what my proposal, the additional line I am suggesting would mean that somebody who starts as an 18 year old and who happens to turn 19 whilst still a Level 1 wouldn't suffer a reduction in pay back to that lower pay rate, they would continue with the pay rate they had commenced at.

PN46

THE COMMISSIONER: Yes, okay. What do you think about that, Mr Arndt?

PN47

MR ARNDT: Commissioner, I'm not opposed to the idea. I'm not sure that it's necessary. I think we have run the rates and no one would be in that position. I stand to be corrected on that, but I think our position would be if the group of employees who are subject to the junior rates clause, when graduating out of the junior rates clause, on the face of the clause, wouldn't suffer a reduction in rates as it would be mathematically not possible, then I don't think that note would be necessary. Our numbers suggest that it's not, but if that's not the case, then obviously there may be some utility, but we are in resounding agreement (audio malfunction) deal with the issue (audio malfunction) as someone ticks over to - - -

PN48

THE COMMISSIONER: Sorry, (audio malfunction) gone awry. Just try - yes, you are back now.

PN49

MR ARNDT: I'll make it nice and short then. To the extent that (audio malfunction) necessary.

PN50

THE COMMISSIONER: Sorry, I'm getting massive feedback. Esther, is there anything we can do about that?

PN51

MR ARNDT: Should I try now? Mr Gunn is muted now.

PN52

THE COMMISSIONER: Yes, that's it.

PN53

MR ARNDT: Sorry, Mr Gunn. The short point is to the extent that Mr Gunn's proposed note is unnecessary because the maths won't result in anyone going down in a rate, we wouldn't support the inclusion of the note.

PN54

THE COMMISSIONER: Yes.

PN55

MR ARNDT: Our maths suggest that it's not necessary, but if it is necessary and if the award on its face could have a scenario where someone went down in pay, we would be comfortable that it should identify that someone shouldn't go down in pay on the basis that they have their birthday in relation to these rates.

PN56

THE COMMISSIONER: Understood. All right, thanks for that and thanks for making yourselves available. I will prepare a note for the consideration of my colleagues and we will be in touch, as they say, but the provisional view - - -

PN57

MR GUNN: If I may, Commissioner?

PN58

THE COMMISSIONER: Yes?

PN59

MR GUNN: I've just been running some quick numbers whilst Mr Arndt was talking, and my apologies for not being muted earlier. At this stage, I haven't run it fully, but I tend to agree with him, I think it won't be necessary.

PN60

THE COMMISSIONER: Okay.

PN61

MR GUNN: If we remove the under 20 years, then some people might stay - they would still go up by a smaller amount than they otherwise would, they would go up to 100 per cent of the 1.1 rate, which would still be more than 90 per cent of the 2.1 rate, if that makes sense.

PN62

THE COMMISSIONER: Yes.

PN63

MR GUNN: So they would still actually get an increase on their birthday turning 19.

PN64

THE COMMISSIONER: Yes. In short, the simplest way through is no other change other than striking out the under 20 years 100 per cent of the adult rate from 14.3(b) and then it will just have the three years under 17, under 18 and under 19 and 70, 80 and 90 and that would be it.

PN65

All right, understood. Thank you for that and, again, thanks for your time. If there's nothing else, we'll pack up.

PN66

MR ARNDT: Thank you, Commissioner.

PN67

MR GUNN: Thank you, Commissioner.

PN68

THE COMMISSIONER: Thanks a lot, have a good day.

ADJOURNED INDEFINITELY [2.21 PM]