TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 45357-1

VICE PRESIDENT WATSON
SENIOR DEPUTY PRESIDENT ACTON
COMMISSIONER HAMPTON

AM2010/265 AM2010/266 AM2010/267 AM2010/268
AM2011/4 AM2011/5 AM2011/6

Sch. 3A, Items 29 & 30 - FWA to consider varying modern awards etc.

Applications by Australian Nursing Federation
(AM2010/265) (AM2010/266) (AM2010/267) (AM2010/268)

Application by Health Services Union
(AM2010/4) (AM2010/5) (AM2011/6)






10.16AM, THURSDAY, 7 APRIL 2011

RESERVED FOR DECISION

THE FOLLOWING PROCEEDINGS WERE CONDUCTED VIA VIDEO CONFERENCE AND RECORDED IN MELBOURNE

PN1

VICE PRESIDENT WATSON: Can we have the appearances, please?

PN2

MR E. WHITE: I seek permission to appear on behalf of the Nursing Federation. Their applications, I think, are AM2010/265 to 268.

PN3

VICE PRESIDENT WATSON: Mr White, thank you.

PN4

MR D. LANGMEAD: I seek permission to appear for the Health Services Union.

PN5

VICE PRESIDENT WATSON: Mr Langmead.

PN6

MR G. BOYCE: If it pleases, I seek permission to appear for the Aged Care Employers, Aged Care Association of Australia and Aged and Community Services Association.

PN7

VICE PRESIDENT WATSON: Mr Boyce.

PN8

MR B. BRIGGS: Briggs, initial B, continuing my appearance for Australian Business Industrial.

PN9

VICE PRESIDENT WATSON: Mr Briggs. Any appearances in Sydney?

PN10

MR A. COQUILLON: If the tribunal pleases, Coquillon, initial A, HSU East assisting Mr Langmead if necessary.

PN11

VICE PRESIDENT WATSON: Yes, thank you.

PN12

MR D. YUILLE: If the commission pleases, Yuille, initial D, on behalf of the Catholic Commission for Employment Relations.

PN13

VICE PRESIDENT WATSON: Mr Yuille. Permission is granted to counsel in all cases. Who would like to go first? Mr White.

PN14

MR WHITE: Thank you. In this matter our submissions have been filed already but early this morning at about quarter to 9 we forwarded to the tribunal further outline which we propose to follow this morning. Attached to that outline are extracts from a series of documents which I’ll take the tribunal to as we go through. It’s probably fair to say that the essential argument between the parties is the breadth of the meaning “kind of” - - -

PN15

SENIOR DEPUTY PRESIDENT ACTON: I can’t hear you, Mr White.

PN16

MR WHITE: Sorry, your Honour. It is probably fair to say that the essence of the argument between the parties is the breadth of the expression “kind of instrument” where it’s used in section 113, particularly section 113(7), because in respect of the Division 2B Awards it appears to be the only basis for the employer opposition that if the tribunal was to grant the applications, then employees covered by those Division 2B Awards would be better off than employees otherwise covered by the modern award.

PN17

What I attempted to do in the outline which was filed this morning was to go through the legislative background and history in support of the contention put by the ANF that an expansive meaning should be given to the words in section 113(7) to the effect that the more generous long service leave provisions are provided in the state awards which were preserved under the Workplace Relations amendments as NAPSAs apply. I don’t spend much time on paragraph 6 onwards, save to say that the schedule 3, part 2 has the effect that what were called NAPSAs become award-based transitional instruments. In our submission it’s of some significance that they’re characterised as award based.

PN18

Our submission is that schedule 3 reflects a mechanism adopted by parliament in some senses by characterising groups of instruments. The characterisation in schedule 3 essentially involved characterisation into two types: award-based instruments and agreement-based instruments. NAPSAs, which provide the more generous entitlements, are award-based transitional instruments.

PN19

Now, from paragraph 14 and onwards I’ve set out what we consider to be the history of section 113. The first part of that history probably starts with an extra parliamentary document, that is other than a bill or an act, which is the discussion paper in relation to the National Employment Standards Exposure Draft. I’ve included as extracts in the bundle of documents some pages from that draft. In particular we have included paragraphs 237 and 238. Now, this was an exposure draft published after the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008. You’ll see the government’s stated intention in paragraphs 237 and 238 expressly include that the provisions of NAPSAs in respect of long service leave are to continue to apply.

PN20

Paragraph 242 is another indication of the government’s intention, to the effect that those more generous long service leave provisions continue to apply in the interim without being able to be bargained away. That intention is reinforced by the extract I’ve provided of the draft National Employment Standards, page (xvi), dealing with long service leave, 446, where there’s specific reference made to NAPSAs (indistinct) agreements preserving state awards. That’s in subclause 46(2). So at the beginning of the process we say parliamentary or government’s intention was clear, that the more generous provisions of the NAPSAs were to continue.

PN21

The next thing that happened after that was apparently inconsistent with the stated intention. The inconsistency was contained in the bill that was introduced, the Fair Work Bill. The Fair Work Bill extracts are that relating to long service leave. By clause 113(4) of that bill reference was made to instruments as defined in the Workplace Relations Act 1996 immediately before the commencement of the part. Now, inconsistently with the intention in the exposure paper, “award” was apparently confined to exclude the state awards – were preserved by the Workplace Relations Act and apparently “award” in that manifestation of clause 113 was confined to awards created under the Workplace Relations Act. To some extent that contrary intention seems to be supported by the explanatory memorandum, which I think is the extract, the next document in the bundle, paragraph 440 and onwards.

PN22

So at that stage we’ve got a broad intention on the part of the government expressed to have the effect that the more generous provisions are to continue. There seemed to be a limitation of that in the way in which it refers to the bill (indistinct) but after the first bill there was introduced into the parliament - I think into the Senate – amendments, and those amendments included amendments to clause 113. Significantly, the old clause 113(4) became new clause 113(7) with significant, substantial changes. Instead of referring to instruments as defined in the Workplace Relations Act, it’s now referred to the “kind of instruments”, a further characterisation process, that continue in existence by schedule 3 of the Fair Work (Transitional Provisions) Act.

PN23

The tribunal obviously knows that under schedule 3 NAPSAs became workplace instruments which then became award-based transitional instruments. So the significant change in the wording of the two bills reflects, we say, moving away from what was apparently a more confined approach in the first bill compared with that in the exposure draft.

PN24

The supplementary explanatory memorandum which was introduced at the same time – I’ve included extracts from that in the bundle – made no reference to the new clause 113(7). So whilst, commencing at paragraphs 37 onwards, it deals with the long service leave, it does not refer to the new clause 113(7). To get some understanding of that one would need to go back to Hansard when Senator Ludwig introduced the amendments. In Hansard 19 March 2009, page 2038, Senator Ludwig explains. He says:

PN25

In addition, item 7 provides for a fairer balanced transition to new long service leave arrangements where an employee’s long service leave entitlement has previously been excluded.

PN26

Now, given the history exposed so far, we say the matters excluded to which he is referring could only refer to those matters which were excluded by the narrow scope of the previous clause 113(4). Up until that time nothing else had been previously excluded. So just pausing there, we have an original intention of government, a narrow clause 113(4) in the first bill, a more expansive 113(7) in the amended or supplementary bill and an acknowledgment by the senator that the purpose of the expansion in 113(7) was to bring up or carry on into existence matters which had been excluded, we say, by the previous narrow 113(4).

PN27

The method used by parliament, we say, is a method of characterisation, and that could be seen by way of further example in addition to the breadth of the words “kind of instrument” used in section 113 to the explanatory memorandum in the Transitional Provisions Act. I think that’s the last document in the bundle wherein paragraph 32 parliament, it is explained in schedule 3, continues the process of characterising the transitional provisions.

PN28

VICE PRESIDENT WATSON: It’s not hard to imagine ways in which this could have been drafted in a way that is a lot clearer.

PN29

MR WHITE: No doubt. I don’t know if your Honour has read the decision of Deva v University of Western Sydney - - -

PN30

VICE PRESIDENT WATSON: I have read that.

PN31

MR WHITE: - - - where Perram J makes similar observations about the accuracy or the clarity of transitional provisions in the various acts.

PN32

VICE PRESIDENT WATSON: Yes.

PN33

MR WHITE: But whilst it could have obviously been drawn in a much clearer way, we say the history of it shows that it was intended to have an expansive meaning. The government moved away from provisions which were narrow and adopted a mechanism, we say, to give an effect to any intention of the government which was more fully explained in the exposure draft. We also say it’s supported by the observations of Senator Ludwig.

PN34

VICE PRESIDENT WATSON: I guess this issue arises also indirectly. Is it necessary that we form a view about what is the effect of section 113 and is it appropriate for this tribunal to undertake a task of interpretation?

PN35

MR WHITE: Well, we’re addressing this because it is put on the part of the employers that the tribunal shouldn’t exercise its discretion to make the orders under section 30 in relation to the Division 2B Awards it would be unfair if somebody got more than somebody else. That’s the only reason we’re addressing it. We think, in terms, that’s a poor argument and I’ll come to what we say the proper effect of section 30 is. Certainly the tribunal can, and we say should, make the orders sought by the ANF in relation to the Division 2B Awards, even if the employers’ interpretation of section 113 is correct. So the longwinded answer to your Honour, you don’t need to resolve this in order to have power to exercise the discretion to make the orders sought. The only thing you would need to resolve is perhaps if the employers pressed the argument that fairness means people get inferior conditions, but it’s not - - -

PN36

VICE PRESIDENT WATSON: It goes to the discretionary reasons as to the treatment of different categories of employees.

PN37

MR WHITE: Yes. We’ll perhaps wait for arguments from employers for equal treatment of people to be brought up. That’s just an aside.

PN38

VICE PRESIDENT WATSON: Yes.

PN39

MR WHITE: Paragraphs 27 and following in effect summarise what I’ve just put to the tribunal about what “kind of instruments” means in section 113. I’ve explained why it is that we think that that is so. Getting back to the point your Honour raised, the opposition of the employers to the making of the orders that are sought, we say, is inconsistent with the purpose and objects of the amendments to the Fair Work Act which were affected by the Fair Work Amendment (State Referrals and Other Measures) Bill 2009. I think I’ve provided an extract of that in the documents forwarded to the tribunal. The explanatory memorandum for the introduction of that bill, we say, reinforces what is appearing in parliament, that Fair Work should make the orders preserving more generous long service entitlements provided in the Division 2B Awards. It’s 122 and 123 I think I’ve referred the tribunal to. It’s at paragraph 123. It provides:

PN40

Modern awards cannot deal with long service leave but some state system employees may have long service leave entitlements under state awards. They’ve got a way to be given power to make orders preserving those long service entitlements from 1 January.

PN41

So the object of the power given to the tribunal is to preserve the long service leave entitlements. In the overall scheme of what’s happening one can see why that would be so. Ultimately, the national standards about long service leave would be developed. We say, given the emphasis both in the section 113 as well as the state referral bill, the emphasis is on the preservation of entitlements. Those are preserved pending the formulation of standards. There is no way, we say, to reduce standards pending the establishment of a national standard.

PN42

In paragraph 29 I summarise that position. In paragraph 30 we point out an absurdity which would flow from the employers’ propositions. That is, whilst modern awards can’t deal with long service leave, nonetheless the employer contends that they can deal with that in a negative way. It would be, we say, a surprising proposition that a document specifically precluded from dealing with that topic nonetheless has the effect of dealing with the topic, albeit in a negative way. One shouldn’t construe legislation which has a limitation in a way which has an effect despite that limitation.

PN43

Now, as we understand it, the employers’ proposition is that they limit the meaning of “award” to that which was defined in the Workplace Relations Act. So much may be so but it continues – the secondary argument is that the words of expansion, that is documents or instruments of that type, should be given some limited meaning. We say, for the reasons of the history we’ve gone through, there’s no intention expressed by parliament that words of expansion should be limited in such a way. The Amasel decision of the full bench – it is apparent from that decision that this is a matter which was specifically the subject of argument in a discussion before that full bench. It appears they were specifically directed to what has now been raised and, in any event, in the event that this full bench decides to decide that issue it’s unencumbered, we say, by any other previous decision.

PN44

VICE PRESIDENT WATSON: Are we encumbered by the opening words of item 31 in a way that the other full bench was not?

PN45

MR WHITE: Sorry, your Honour?

PN46

VICE PRESIDENT WATSON: In a way that the other full bench was not.

PN47

MR WHITE: Can you just bear with me? Sorry, your Honour. Item 31 of schedule 3 - - -

PN48

VICE PRESIDENT WATSON: Yes, schedule 30.

PN49

MR WHITE: Schedule 30. Just to make sure I’m reading the same item, that provides the termination of Division 2B State Awards - - -

PN50

SENIOR DEPUTY PRESIDENT ACTON: No, it’s during the period of 12 months his Honour is referring to, as I understand it.

PN51

MR WHITE: I’m sorry, your Honour. I must admit I haven’t given a separate thought to that. I think perhaps Commissioner (indistinct) that decision. That is during the period of 12 months.

PN52

VICE PRESIDENT WATSON: That’s the point. If you haven’t prepared to deal with that maybe you need to take it on notice.

PN53

MR WHITE: Yes, I’ll do that.

PN54

VICE PRESIDENT WATSON: That appears to be – well, I’ve raised the issue that that’s the item that this application is made under. The full bench last year didn’t need to deal with it because they were within the period.

PN55

MR WHITE: I think the application was made in the period.

PN56

VICE PRESIDENT WATSON: Well, we need to be satisfied we have jurisdiction. So we’d be assisted by your submissions on that point.

PN57

MR WHITE: Thank you, your Honour. I will - - -

PN58

VICE PRESIDENT WATSON: I don’t know whether any other party will raise it but it does appear to arise. So we would certainly be assisted by any submissions you make about our power to deal with the application in light of those opening words.

PN59

MR WHITE: Now, unless you wish me to speak to any point in the outline or to any of the matters that I’ve raised, subject to the matter you raise now, they’re the submissions of the ANF.

PN60

VICE PRESIDENT WATSON: We might mark the outline, Mr White, together with the attachments. I might mark them as a bundle.

EXHIBIT #W1 OUTLINE OF SUBMISSIONS WITH ATTACHMENTS

PN61

VICE PRESIDENT WATSON: Yes, thank you, Mr White. Mr Langmead.

PN62

MR LANGMEAD: If the tribunal pleases. The Health Services Union adopts and supports the submissions of the ANF in relation to both the point (indistinct) interpretation of section 113 as to the application in any event of the 2B Awards and say the purpose of the power in the tribunal to make the orders (indistinct) operation of 2B Awards in relation to long service leave being given effect to by exercising that power. Notwithstanding, even if we’re wrong on that point, that the intention is to provide for (indistinct) I might also say that in relation to the interpretation of 113 we submit that in accordance with (indistinct) and the principles of interpretation where a provision is intended to provide a benefit or to be beneficial (indistinct) that it should be worded so as to best give effect to that purpose. In our submission section 113 is intended to preserve widely those matters and, accordingly, 113(7) should be interpreted in the way the ANF urged upon the tribunal. I’d also like to take on notice the point about the 12 months. If the tribunal pleases.

PN63

VICE PRESIDENT WATSON: Thank you, Mr Langmead. Mr Boyce.

PN64

MR BOYCE: Your Honour (indistinct) filed by email our supplementary submissions this morning. I’ve got copies with me.

PN65

VICE PRESIDENT WATSON: I think we’ve all got those submissions.

EXHIBIT #B1 SUBMISSIONS OF AGED CARE EMPLOYERS

PN66

MR BOYCE: I rely on what I’ve said below in terms of submissions and also ACE1, being the earlier submissions. These submissions focus upon this issue of construction of section 113(3).

PN67

VICE PRESIDENT WATSON: Could you repeat for my benefit why you say that the dispute over the interpretation of section 113 is significant or more so in relation to the application before us?

PN68

MR BOYCE: Well, it goes to the exercise of your discretion generally. Going back to the decision of the full bench concerning the Division 2B State Awards (2010) FWAFB 8558, paragraphs 12 and 14 in particular, the tribunal hangs it hat, so to speak, heavily upon issues of equity and consistency in the Division 2B State Awards, particularly at 14 about halfway down. Equally, the tribunal in award modernisation proceedings, both for industry (indistinct) and enterprise awards, has seen fit to press issues of consistency across all those outcomes on an interim basis and, therefore, it does in my submission go to discretion to create entitlements that are different in the statutory scheme for Division 2B employees into those that are national systerm employees who came into the system on 1 January 2010.

PN69

VICE PRESIDENT WATSON: There’s really three groups of employees, aren’t there? People who may have had more beneficial long service leave entitlements under a federal award, their being the first group; the second being those covered by NAPSA with more beneficial entitlements. This application relates to the third group, being those covered by schedule 2B awards.

PN70

MR BOYCE: Yes.

PN71

VICE PRESIDENT WATSON: The position in relation to those covered by federal awards is clear, and those more beneficial entitlements are preserved, are they not?

PN72

MR BOYCE: That’s correct, yes.

PN73

VICE PRESIDENT WATSON: There’s a dispute as to the effect of section 113 in relation to second group.

PN74

MR BOYCE: Yes.

PN75

VICE PRESIDENT WATSON: In terms of consistency and as a matter of discretion, why is it critical to form a view as to the effect of section 113 in relation to the second group?

PN76

MR BOYCE: Well, it really just goes to considerations the tribunal have in terms of the exercise of its discretion to make an order. That’s as high as I put it and that’s reflected in paragraph 14 of the full bench’s decision where it talks about model arrangements that have been (indistinct) and the reluctancy to adopt a different approach. It may be also that where the awards are sought in terms of the awards – the federal awards can comply with NAPSAs and also (indistinct) effectively cover the field in relation to the 2B employers as well as employers of other 2B employees who are national system employees. So the disparaging (indistinct) and state.

PN77

VICE PRESIDENT WATSON: Yes. So it bears on our discretion in that manner.

PN78

MR BOYCE: Yes.

PN79

VICE PRESIDENT WATSON: Since I’ve interrupted you, do you have submissions on the question I raised with Mr White regarding the opening words of item 30?

PN80

MR BOYCE: No, your Honour, I haven’t – wasn’t aware of the point.

PN81

VICE PRESIDENT WATSON: You’re not putting to us that there’s any impediment on this bench dealing with the applications subject to the matters of discretion that you’ve raised with us?

PN82

MR BOYCE: No, but I’d probably like to reserve my right to submit something supplementary on that point either after the adjournment today or after (indistinct) new applications filed outside the (indistinct) and the ANF’s have been filed (indistinct)

PN83

VICE PRESIDENT WATSON: Yes. Well, if the point is taken it would be quite a significant point to deal with.

PN84

MR BOYCE: Yes.

PN85

VICE PRESIDENT WATSON: Dealt with in that way, in the supplementary way, it seems to be going to jurisdiction being a significant point.

PN86

MR BOYCE: Yes.

PN87

VICE PRESIDENT WATSON: Very well.

PN88

MR BOYCE: So just putting that point to one side, in page 2 of my submissions I point out the (indistinct) on subsection (7) of section 113 and the term “of a kind”, “a transitional instrument of that kind”. So, firstly, we have a reference to a “kind of instrument” and then, secondly, a reference to “a transitional instrument of that kind”, the first obviously being an instrument at large and the second being a transitional instrument as defined in the transitional act. When you look back to section 113(2), particularly (2)(b), that’s the only section of 113 that talks about “kinds of instrument” and the notation under section 113 also refers to an “instrument of a kind”. Nowhere else is “of a kind” used in the section. It being important too by distinction, section 113(6) talks about “any of the following instruments”. So it doesn’t talk about instruments of a kind either. So in my submission section 113 isn’t read by reference to subsection (7).

PN89

VICE PRESIDENT WATSON: That seems to ascribe a very sophisticated and subtle drafting technique in the legislation. I don’t know whether the legislation deserves that accolade.

PN90

MR BOYCE: Yes. As to what purpose it’s somewhat difficult to ascertain because the words must have some work to do, but in my submission if they’ve got any work to do, it’s to do under section 113(2), not the section more broadly. That’s indicated by the fact that subsections 113(2)(a) and also 113(3)(a) and (3)(b) all refer to an award or a State Reference Transitional Award. They don’t say “of a kind”, a kind of instrument, as subsection (2) does.

PN91

Now, just while I’m there, section 113(3)(a) talks about in terms of an award for a State Reference Transitional Award. If the tribunal is minded to look back to schedule 3, item 2 in the transitional act, what will be seen is that under schedule 3, item 2 and schedule 3, item 5(c) every single instrument listed in that part of the transitional act is listed in section 113 itself somewhere other than the notional agreement preserving the state award. So they’re all there, other than a NAPSA.

PN92

Also importantly is the amendment which added the State Reference Transitional Award to section 113(3). So under the transitional act an award-based transitional instrument includes award of the State Reference Transitional Award or Common Rules Award and a notion of then preserving state awards. If the tribunal was to read “award” to include a notional agreement preserving state award then it should also read it to include a State Reference Transitional Award, but what’s the need to include State Reference Transitional Award in section 113(3) if “awards” is to be read to include an award-based transitional instrument at large under the transitional act? It clearly doesn’t make any sense.

PN93

Now, I also make the point that the term “of a kind” may go to the nature of the definition of “transitional instrument” under schedule 3 which one starts off with the instruments listed becoming WR Act instruments. So they practically fall into the transitional act on that basis and automatically become WR Act instruments. But they don’t become transitional instruments unless they satisfy item 2(3) to 4(a), and there’s various ways in which some of those WR Act instruments become transitional instruments where, for example, they were made but not formally approved upon the (indistinct) commencement. So a transitional instrument has a number of types of kinds to it, even though it may be of the same species. So in my submission what I - - -

PN94

COMMISSIONER HAMPTON: Surely those amendments were just dealing with the issue about the transitional instruments, that is the need to deal with the fact that there were certain employers and employees that were already subject to the AIRC awards with long service leave terms in them and the need to accept the fact that those long service leave provisions needed to be preserved. So surely the amendment is only going to that. It doesn’t even try to address the issue of the NAPSA (indistinct)

PN95

MR BOYCE: Sorry, Commissioner, I - - -

PN96

COMMISSIONER HAMPTON: Well, it seems to me that the amendment is only trying to deal with those nonconstitutional corporations who were subject to awards that the AIRC made under the Conciliation and Arbitration - - -

PN97

MR BOYCE: Yes.

PN98

COMMISSIONER HAMPTON: So surely the amendments are only trying to deal with that question. To read other motives or effects in this, isn’t that a long bow?

PN99

MR BOYCE: Well, it’s not a motive, Commissioner; it’s merely that they weren’t included. So there was, in my submission, an intention not to include them and an intention not to read “award” as being an award-based transitional instrument under the legislation broadly but to actually limit it to an award as defined in the transitional act, which then actually doesn’t define it. So you have to go back to the Workplace Relations Act and the submissions which I’ll take the bench through. So we’ll go back through that history on the way back to the – the Act was in place prior to the Work Choice agreements. It’s really just this notion that “of a kind” expands to an award to include an award-based transitional instrument and, in my submission, it doesn’t, and telling to that proposition is that a State Reference Transitional Award is also an award-based transitional instrument but has been specifically named and the NAPSA hasn’t.

PN100

COMMISSIONER HAMPTON: I understand you say, look, if the union’s proposition is correct they didn’t need to make the amendment.

PN101

MR BOYCE: Yes.

PN102

COMMISSIONER HAMPTON: Now, obviously I’ll need to consider that but it seems to me you’re also trying to draw out of the fact, well, they didn’t deal with the NAPSA, so they didn’t intend to. Now, that just seems to me a little speculative, that’s all.

PN103

MR BOYCE: Yes. Well, it’s just my submission that if they wanted to include it then they should have made it, I suppose is - - -

PN104

COMMISSIONER HAMPTON: I suppose they could have made a lot of things if they wanted to.

PN105

MR BOYCE: Yes. Now, the other issues that arise really go to (indistinct) in the ANF’s submissions but there were two questions that His Honour Vice President Watson raised in transcript on 17 February. There are really three questions but two of the questions are essentially the same issue at PM102 and PM110. Not to quote but just to sort of paraphrase, the questions:

PN106

Would not I expect to see something more clear if the change suggested has actually occurred?

PN107

In answer to that question it’s my submission that things could not have been more clear than the standard operation of Part 2.1 or 2.2 or 2.3 of the Act. Also reading the transitional act as a whole, when you look at all those matters the legislation has widely come over the top of Commonwealth contracts. It has also come over the top of the transitional instruments and imposed National Employment Standards on those instruments, notwithstanding the bargains that were made in relation to those instruments.

PN108

So it has taken a significant effect intentinoally to modify those instruments that a previous legislation, notwithstanding its broad changes, didn’t ever seem to do. It also created or allowed the creation of modern awards and the extinguishment of federal awards and NAPSAs through their creation, other than as has been preserved through transitional agents or Part 2.2 of the Act. The development that long service leave entitlements of NAPSAs isn’t preserved, in my submission, should be seen as one of the many changes the legislation has served up to both employers and employees, not something that’s requiring any particular specification on each of long service leave.

PN109

Mr White took the bench to the explanatory memorandums and various other documents. What use the tribunal makes of those, I suppose, depends upon, firstly, a finding that there was some ambiguity or uncertainty as to the provision. By that I mean ambiguity or uncertainty as to the award defined in section 113(3)(a), the meaning of that award. As I’ve said, I say there’s no ambiguity or uncertainty as to the meaning of the award in 113(3)(a) or that the result of the outcome – I’m referring to section 15AB of the Interpretation Act – results in a manifestly absurd or unreasonable outcome.

PN110

Now, even if the tribunal does make a finding giving effect under section 15AB that it can turn to this (indistinct) material, in my submission the information does not establish as a fact what parliament intended. It’s not to be used as a substitute for legislative text and it can’t alter the interpretation the tribunal has of section 113 without reference or without reference having been made to those materials. Indeed, when the tribunal goes through the material – I might just firstly go to the annexure to exhibit W1.

PN111

There was reference there made to the discussion paper. Clearly in the discussion paper NAPSAs are included. The word NAPSA or the notional agreement preserving state awards is set out there in the discussion paper but the fact is it has been removed from the legislation. The discussion paper really appears to have been put out as a consultative mechanism. It’s not something that is to be seen as ultimately affecting the interpretation of the Fair Work Act.

PN112

Secondly, there’s reference there made to the bill. The bill talks about kinds of instruments in the original publication of section 113(4), reference to a kind of instrument being as a type of Workplace Relations Act immediately before (indistinct) commencement. It’s somewhat unclear. I’m not sure when this was released but it’s unclear as to the status of the transitional act at the time that reference to the Workplace Relations Act was made. Equally, that section again talks about kinds of instruments in subsection (2). It doesn’t refer to kinds of instruments anywhere else and it limits itself to an award.

PN113

Then there was a reference made to Senator Ludwig and his comments. In my submission the reliance placed upon those comments is misplaced. Just looking at the full quote of what he has to say, the first were items 1 and 7. Items 1 and 7 aren’t references to section 113. It was proposed they’re references to, it appears, particular amendments that have been moved going to a number of different matters. Item 1 talks about the definition of a particular award providing long service leave terms. Item 7 is a complete reproduction of section 113. So it’s not actually sections 1 and 7 of section 113.

PN114

Then the general reference to item 7, which is a reference to the whole section 113, that Senator Ludwig makes really talks about fair balance where employees’ long service leave entitlements had been excluded. In my submission that relates to where, under the former legislation, an employer or employee could read it to exclude long service leave from a workplace agreement. Essentially, his comments there go to the revival of those provisions on the termination of such instruments. They don’t go to consideration of section 113(7).

PN115

The extracts that I’ve provided, I’ve page numbered those. I really just go back to the point that we started off with the explanatory memorandum of the Fair Work Bill which says on page 2, fourth paragraph down:

PN116

The NES terms of long service leave will draw upon current state and territory arrangements.

PN117

It does refer to state and territory legislation awards and agreements. On page 3 it says:

PN118

The NES will preserve the current arrangements for long service leave.

PN119

Again, there’s a reference there to legislation awards and agreements. Just to note that these quotes I’m providing are the regulatory impact statement; they’re not the actual explanatory memorandum. But then throughout the rest of the explanatory memorandum itself, particularly on page 8 and page 9, the reference there is limited to pre-modernised awards. On page 10 there’s a reference to section 155 which says the tribunal has gone on to include long service leave in modern awards. Just over the page on 11 – this is the key, this is why it’s not an absurd result as far as NAPSAs being included or their long service leave entitlements being preserved. It talks there about the prohibition. It anticipates the development of a national long service leave entitlement under the NES:

PN120

This ensures that modern awards do not pre-empt the outcome of the development of a national standard.

PN121

That same 11:13:30 development of a national standard is reflected throughout the remainder of the parts of the explanatory memorandum on issues relating to long service leave. So clearly there was contemplation that the exclusion was there for an intended purpose, to ensure that modern awards didn’t create entitlements to long service leave prior to that national standard coming into effect. The remainder of the extracts, as I’ve said, don’t take the point any further but merely show, in my submission, that what’s preserved is pre-modernised award entitlements to long service leave and federal awards.

PN122

COMMISSIONER HAMPTON: Mr Boyce, just getting back to your point about the extract, Hansard I think illustrates the – when I was referring earlier about the – and sort of reading in what may have been intended. Now, you say the reference to “excluded” there was because previous instruments having long service leave were excluded. That’s the essence of what I think you indicated. Surely 113(2) actually preserves the great bulk of those instruments, preserves Australian workplace agreements with long service leave and preserves other MXs and pre-reform certified agreements. If they had long service leave terms in them then the 113(1) general award doesn’t apply. So I’m just speculating that it’s very difficult to speculate what that phrase actually meant.

PN123

MR BOYCE: What I understand of the two (indistinct) is preserve those instruments of a kind as far as they refer to long service leave, but if they go away the employee is revived under section 113(1).

PN124

COMMISSIONER HAMPTON: Yes, if those instruments are terminated.

PN125

MR BOYCE: So if, for example, a workplace agreement said an employee shall not receive any long service leave and that instrument ceases to have effect, then the employee can go back to the federal award provisions under the NES and obtain the benefit of those, notwithstanding that 113(2) does preserve the workplace agreement to the extent that it deals with long service leave and therefore preserves the exclusion.

PN126

COMMISSIONER HAMPTON: It just seemed to me that’s equally consistent with saying, well, the NES says you can keep what you had at the time, leaving aside the issue about NAPSAs for a moment. It seems to me that the intent of the NES is that you keep whatever long service leave you had at the time, until a genuine national standard on long service leave is developed.

PN127

MR BOYCE: Yes, that may well be the intention. It’s just that the words don’t assist to that end. I mean, I think what I said originally about all of this (indistinct) material is that it’s a question really as to what it actually tells the tribunal, because on the one hand some of it is saying NAPSAs are included and on the other hand it’s saying it’s just pre-modernised awards. So the effect of both of those things is that it cancels itself out as having any value for an assessment of section 113.

PN128

The next question that the Vice President raised on transcript was that if it was the intention to exclude NAPSA long service leave entitlements, why wouldn’t the legislative regime choose to preserve the 2B State Award long service leave provisions and, subsequent to that, why could the tribunal not have the same discretion for NAPSAs as it does for 2B employers. Notwithstanding the time I’ve had to consider those questions, I still see it as difficult to resolve or answer. perhaps for 2B State Awards there was some – yes, it’s speculation to some trade-off with the state governments to obtain the referrals that they obtained. As far as the discretion for NAPSAs, I can’t take the point any further than my answer on 17 February. What I do point out though is that item 30 of schedule 3A does stand in stark contrast to the interpretation of the answer from the ANF as to section 113. It’s a comprehensive mechanism of preservation of long service leave subject to the tribunal’s discretion.

PN129

I have looked at some case law on this phrase “of a kind”. I don’t intend to hand anything up. There’s not much of it around. I’ve got a case of Burton v the Commonwealth (1998) 165 CLR 1, paragraphs 5 to 8. The High Court talks about the phrase “of a kind” but it’s in the context of (indistinct) disease in a schedule to that act, but they do make some comments about how it might have been interpreted. There’s also Customs and Excise Commissioners v Mechanical Services (Trailer Engineers) Ltd 1 All ER 501 at 508 to 511. There’s discussion there about goods of a kind suitable for use and the use of the phrase “kind”, what that means and “of a kind” and how that might be interpreted. Then, finally, Dragon Traders Pty Ltd v ACT Gambling and Racing Commission (2006) ACT AAT 3, a decision of 7 February 2006 by Peedom P. At paragraphs 21 and 25 the president there has a discussion about the use of the phrase “of a kind”.

PN130

VICE PRESIDENT WATSON: It’s hardly terms of art. It’s more in the notion of ordinary language that bears its meaning from the context in which it’s used in the relevant legislation. Is that the effect of the (indistinct) you refer to?

PN131

MR BOYCE: Essentially, your Honour, other than “of a kind” is well referenced to a genus, class or description, and the point was about common characteristics. Now, in that regard, if we get there – and I don’t submit that the tribunal needs to get there. But if that is a test or a consideration – and NAPSA, in my submission, is a subspecies of a transitional instrument and it’s also a kind of award-based transitional instrument. It’s in a class of an award-based transitional instrument but it’s not kind of award or a State Reference Transitional Award. The question then comes to essentially what does the tribunal do or what purpose does this subsection (7) have to all the other instruments that are listed there which are expressed clearly by definition in the transitional act. They don’t require any extension.

PN132

So the only instrument under section 113 that requires an extension is NAPSA, to the extent from an award. In my submission “of a kind” doesn’t take it into that realm or into that extension. Bearing in mind that a NAPSA has a different history. It was made a different way. Its rules as to variation or inclusion of the Workplace Relations Act, all of those matters find themselves in schedule 8 of the Workplace Relations Act, it’s not an instrument that by any analysis is of a kind of a federal award as that legislation recognises federal awards. If it pleases, those are my submissions.

PN133

VICE PRESIDENT WATSON: Thank you, Mr Boyce. Mr Briggs.

PN134

MR BRIGGS: Thank you, your Honour. The ABI is broadly in support of Mr Boyce’s submissions. I also would ask at this point that the submissions of (indistinct) Industrial in relation to the earlier proceedings may need to be tendered, if that’s appropriate.

PN135

VICE PRESIDENT WATSON: Yes, well, they’re on the file and those submissions are before us.

PN136

MR BRIGGS: Thank you, your Honour. ABI primarily relies on its earlier written submissions in that regard. There are a few points raised by the bench that I will briefly seek to address here. I’m willing to answer any questions the bench may have arising from those but otherwise we do rely on the written submissions and the submissions of Mr Boyce.

PN137

Your Honours asked as to why the question of whether or not NAPSA long service leave entitlements should be considered in these proceedings. It is ABI’s submission that there are strong policy grounds for deciding this point in this matter. It would be important to make it clear whether NAPSA long service leave terms continue to apply to give certainty to all parties, employers and employees. It is an appropriate forum to determine that point. ABI would also submit, however, that if the bench intends to depart from the stated strong reasons of equity for maintaining comity between the Division 2B entitlements and other national system employees and not create an inconsistent entitlements, it would be appropriate for the full bench, as currently it consists, to state the reasons for doing so.

PN138

ANF also raised the issue of how a kind of award is characterised. ABI submits that in the history pointed out and elaborated in Mr Boyce’s submissions in this regard they did not acknowledge that the transitional act also varied section 113 to include State Reference Transitional Awards and that the specific amendment include these. There’s a general assumption that a term in legislation acts to the exclusion of other terms and I think that is quite important with regard specifically when you look across section 113. There is quite detailed listing of awards where it’s appropriate and where they apply to those provisions of the Act. As such, the deviation from the section 46(2) provided by the applicants, the decisions that deviate from the original wording, is a quite clear indication that NAPSA was consciously excluded in that regard.

PN139

I also point out this point, that in relation to my initial statement that there’s a strong policy ground for making it clear whether the NAPSA long service leave terms continue. It’s also consistent with Fair Work Australia’s previous handling of the question of whether or not long service leave provisions in NAPSAs continue. I provided my oral submissions in earlier matters to descriptions of how the bench previously considered this issue and I pointed out that that’s a situation that the full bench has never acted on the assumption that NAPSA long service leave provisions actually do continue. There has always been reference to those employees who would be covered by section 113.

PN140

I also point out that neither the ACTU in its submissions in the Division 2B proceedings or the New South Wales State Government to the extent that they dealt with the issue made the point that NAPSA-derived long service leave terms were continuing. So therefore if Fair Work Australia was to deal with the issue of whether or not long service leave going to NAPSAs are excluded or not, it is consistent with previous deliberations on this point.

PN141

Two final points I’d like to make. The applicants suggested in their oral submissions today that it is the employers seeking to define equity or making parties equal in this regards as taking away benefits from employees. ABI submits that in this situation it is the policy condition of the full bench to bring comity between those two parties and that the employers in this regard are simply trying to ensure that this position is maintained.

PN142

I’d also point out that the written submissions by the applicants at paragraph 30 of what was lodged this morning argued that the absurd effect would be that a modern award is in effect dealing with long service leave arrangements even though the position of modern awards don’t deal with long service leave. ABI’s interpretation is that it’s the legislative effect of making modern awards and thereby making NAPSAs redundant and turn them into modernised instruments that deals with long service leave provisions in this regard. There isn’t any clause in the modern award or isn’t the creation of a modern award that has this effect and doesn’t have a direct effect on long service leave entitlements. Those are my submissions, your Honours.

PN143

VICE PRESIDENT WATSON: Thank you, Mr Briggs. Mr White. Sorry, are there any submissions in Sydney?

PN144

MR COQUILLON: HSU relies on Mr Langmead’s submissions, thank you.

PN145

VICE PRESIDENT WATSON: Yes, thank you.

PN146

MR YUILLE: The Catholic Commission for Employment Relations on the previous submissions. We don’t have anything to add.

PN147

VICE PRESIDENT WATSON: Yes, thank you, Mr Yuille. Mr White.

PN148

MR WHITE: Without wanting to perhaps forego the chance at a later time to put in written submissions relating to the point your Honour raised about item 30, on consideration it appears to be the case that Fair Work Australia has already considered the 12-month period. The question of whether or not any more should be made in relation to long service leave, I think in the decision of 5 November 2010 in paragraph 55 there is an express consideration of that question. All that was left to be done after that consideration was the making of specific orders to the original orders, a clear distinction to be drawn between the consideration of the matter which the full bench had already done and the making of orders.

PN149

The full bench said, “Yes, we’ve considered it,” and there is no opposition essentially. So rather than make a general order, it would be preferable to make orders in relation to specific awards. We’ve provided the form of a draft order. Then found in the last sentence of paragraph 55:

PN150

The order will be made in relation to particular Division 2B State Awards on application.

PN151

So consideration within the meaning of item 30 has occurred. It occurred within the time. All that we’re now doing is seeking orders to be made consistent with that consideration. It may well be that the employers have had more leeway than they should have had. Whilst one could consider that there might be some debate about the terms of the order, given the findings of the full bench there that’s probably not the case or not the principle to reopen consideration. In any event, the tribunal has considered it and made a finding in relation to it in its earlier decision. The process now - - -

PN152

VICE PRESIDENT WATSON: What the full bench did in 2010 satisfies paragraph A in considering whether orders should be made.

PN153

MR WHITE: Yes.

PN154

VICE PRESIDENT WATSON: Do you say that that’s the only work that those opening words do? Do they not flow through to paragraph B, because the full bench didn’t make an order. It certianly adopted a position in relation to orders. Do you say that that paragraph B should be read as being satisfied by what the full bench in paragraph 55?

PN155

MR WHITE: Yes, your Honour, until the order was made.

PN156

VICE PRESIDENT WATSON: And produced a draft order.

PN157

MR WHITE: And produced draft orders. Then after that indicated that that order would be made on application which was then made. I don’t have any submissions in reply to any particular - - -

PN158

VICE PRESIDENT WATSON: I’m not sure I understood what you said at the start. Do you wish the opportunity to put written submissions in relation to this jurisdictional point?

PN159

MR WHITE: Perhaps it would be wise to reserve that right in relation to that, your Honour.

PN160

VICE PRESIDENT WATSON: Yes. Mr Langmead, what’s your position?

PN161

MR LANGMEAD: I seek to exercise that right too, your Honour.

PN162

VICE PRESIDENT WATSON: Yes. Well, we would be disposed to permit the parties to file written submissions in relation to the point just mentioned. Is a week sufficient?

PN163

MR LANGMEAD: Yes, your Honour.

PN164

MR WHITE: Yes, your Honour.

PN165

VICE PRESIDENT WATSON: And a similar period to respond or the employers would perhaps have 48 hours for any reply. We’ll issue formal directions reflecting that and otherwise reserve our decision in this matter. We’ll now adjourn.

<ADJOURNED INDEFINITELY [11.35AM]