TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1058355
s.158 - Application to vary or revoke a modern award
Application by Allison & Phil Family Trust
Children's Services Award 2010
2.03 PM, MONDAY, 14 DECEMBER 2020
THE COMMISSIONER: Hello, and welcome to the conference. I have got Mr Gunn?
MR J GUNN: Good afternoon, Commissioner.
THE COMMISSIONER: And Mr Arndt?
MR J ARNDT: Yes, Commissioner. I am with my colleague (audio malfunction).
THE COMMISSIONER: Sorry, you broke up there. Your colleague?
MR ARNDT: Ms Lombardelli.
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?
MR GUNN: If I may, Commissioner?
THE COMMISSIONER: Sure.
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:
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.
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.
THE COMMISSIONER: (Audio malfunction.)
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:
The employee will work under direct supervision in a team environment and will receive guidance and direction at all times.
It then goes on under B.1.1(b) to say:
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.
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.
THE COMMISSIONER: Yes, (audio malfunction).
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.
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:
Will be paid no less than the following percentages of the corresponding Children's Services Employee Level 1 or 2 rate.
MR GUNN: The latter, Commissioner, is what we would say.
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 - - -
MR GUNN: No, Commissioner, I haven't.
THE COMMISSIONER: No, all right. All right, thanks for that. Anything else?
MR GUNN: No, thank you, Commissioner.
THE COMMISSIONER: Mr Arndt?
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.
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.
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.
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?
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.
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.
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.
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.
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.
THE COMMISSIONER: Yes, okay. What do you think about that idea, Mr Gunn?
MR GUNN: I'm comfortable, Commissioner. I think, yes, it seems strange to have a junior rate that says you get the adult rate.
THE COMMISSIONER: Yes.
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.
THE COMMISSIONER: You would do that in combination with what Mr Arndt is suggesting or as an alternative?
MR GUNN: No, in combination, Commissioner.
THE COMMISSIONER: Yes.
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.
THE COMMISSIONER: Yes, okay. What do you think about that, Mr Arndt?
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 - - -
THE COMMISSIONER: Sorry, (audio malfunction) gone awry. Just try - yes, you are back now.
MR ARNDT: I'll make it nice and short then. To the extent that (audio malfunction) necessary.
THE COMMISSIONER: Sorry, I'm getting massive feedback. Esther, is there anything we can do about that?
MR ARNDT: Should I try now? Mr Gunn is muted now.
THE COMMISSIONER: Yes, that's it.
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.
THE COMMISSIONER: Yes.
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.
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 - - -
MR GUNN: If I may, Commissioner?
THE COMMISSIONER: Yes?
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.
THE COMMISSIONER: Okay.
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.
THE COMMISSIONER: Yes.
MR GUNN: So they would still actually get an increase on their birthday turning 19.
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.
All right, understood. Thank you for that and, again, thanks for your time. If there's nothing else, we'll pack up.
MR ARNDT: Thank you, Commissioner.
MR GUNN: Thank you, Commissioner.
THE COMMISSIONER: Thanks a lot, have a good day.
ADJOURNED INDEFINITELY [2.21 PM]