TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 52317-1

SENIOR DEPUTY PRESIDENT HARRISON

AM2011/12

s.158 - Application to vary or revoke a modern award

Application by Australian Federation of Employers and Industries
(AM2011/12)
Road Transport and Distribution Award 2010

(ODN AM2008/21)
[MA000038 Print PR986380]]




Sydney

2.02PM, THURSDAY, 9 JUNE 2011

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

Continued from 19/04/2011

PN118

THE SENIOR DEPUTY PRESIDENT: First, here in Sydney, are there any changes to the appearances?

PN119

MR M. BURNS: Your Honour, I'm here now. Michael Burns from the TWU.

PN120

THE SENIOR DEPUTY PRESIDENT: Mr Burns. Mr Story, I don't think you were with us on the last occasion, were you?

PN121

MR D. STORY: I was on the last occasion but not the time before that.

PN122

THE SENIOR DEPUTY PRESIDENT: Not the one before? Yes, sorry about that that.

PN123

MR STORY: Thank you.

PN124

THE SENIOR DEPUTY PRESIDENT: All right. Mr Ryan, you're there in Melbourne?

PN125

MR P. RYAN: Yes, your Honour.

PN126

THE SENIOR DEPUTY PRESIDENT: Now, I have received - and I imagine anyone else subscribing to the Road Transport and Distribution Award has received - the submissions and evidence lodged in accordance with the directions earlier made. Now, we need to talk about what happens next. Mr Story, can you tell me - have there been any discussions, subsequent to the filing of these documents, with the union or ARTIO?

PN127

MR STORY: No, not at this stage.

PN128

THE SENIOR DEPUTY PRESIDENT: All right. Now, Mr Burns, do you want to say something about the documents that have been filed?

PN129

MR BURNS: Just shortly. I mean, it doesn't change our view of the application: that the application should be dismissed on jurisdictional grounds and before getting into the merits. I don't want to go into the merits. I mean, in relation to this exercise, because we have a quid pro quo, we represent employees and some are drivers in the milk industry ourselves, so my concern about this application is that if it is to be granted, then it just opens up the door. I've got plenty of applications that I can make that could be made similarly as this one. So if you're of the view to grant this one, then next week, I would suggest, we could start filing more. But the reality is that this application should be dealt with in the context of the two year review next year. That position has been firmly put. The union does not have unlimited resources to keep dealing with these applications and the one that, if this is let go, will potentially follow. In a situation where my submissions are just really going to go to the jurisdictional point. But I think our position is clear.

PN130

THE SENIOR DEPUTY PRESIDENT: What is the jurisdictional point?

PN131

MR BURNS: That this application doesn't - there's no ambiguity in the current award. The federation appeared during the modern awards process. It's had a fair hearing. It appeared and made submission on at least four occasions during the modern award process. It made submissions in relation to the draft modern award that was proposed. I can't say that it wasn't there during the process, in the basis that it either forgot to submit in relation to the milk industry or it wasn't representing the milk industry during that stage. It doesn't appear to be an argument that can be successful: that this was just an ambiguity or an issue of clarity that needs to be resolved. So there's that burden - in reaching the modern award clause objectives, I don't think we even get there.

PN132

THE SENIOR DEPUTY PRESIDENT: I just didn't understand the jurisdictional objection. I had rather thought there was jurisdiction to entertain this application. I did not additionally think it was put on the grounds of ambiguity rather than - it was a variation justified by reference to achieving the modern award objective. If that's the case, I can't see that I wouldn't have jurisdiction to entertain it. Discretionary issues, of course, are other considerations and I take everything you've said about jurisdiction to go to discretion.

PN133

MR BURNS: Yes.

PN134

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that.

PN135

MR BURNS: If I can just pocket it at that, that's really as much as I really have to say. You've had that put by me and by (indistinct) on the last occasion. As to the merits - I think the employer associations will have more to say about the merit sides and the nature of the conditions under the award and the effect on the industry et cetera. But our one would primarily be - it's just a simple one. We've all got lots of issues with the modern award and we'd love to have lots of changes made. This is just one of them and if Fair Work Australia's position - wants to open the door, that we're going to start dealing with them now instead of in six months' time, then perhaps we should get this hearing over and done with quickly so we can start doing that. But I would think that it's in the public interest really, if we're going to take it that far, to have this variation dealt with in the context of all the other variations that all the other industries have to - dealt with so in the end we don't have a modern award that is stretched a number of different ways. So I'm just going to keep it as simple as that.

PN136

THE SENIOR DEPUTY PRESIDENT: All right, I might come back to you. But thank you for that.

PN137

MR BURNS: Thank you.

PN138

THE SENIOR DEPUTY PRESIDENT: Mr Ryan.

PN139

MR RYAN: Thank you, your Honour. I noted the application is phrased so as to achieve the modern award objective. That's set out in section 134 quite precisely as "fair and relevant minimum safety net of terms and conditions." Then there are factors that are taken into account, and they're listed in items (a) to (h) in section 134. But the modern award objective is quite simple: "The fair and relevant minimum safety net of terms and conditions." The modern award has achieved that, in our submission, your Honour. The application seeks to turn back the clock to allow so-called flexibility. I note that between the NAPSAs that are mentioned in the submission and the RTD or the modern award, overtime appears consistent, generally, as time and a half and double time.

PN140

Time and a half for the first two hours and double time thereafter. Now, overtime is not a transitioning matter under the Road Transport and Distribution Award. I note that shift penalties can be implemented through transitioning. It appears to me that the structure set up in page 19 of the submission - there's been no attempt to restructure operations. For instance, what would happen if the shift mentioned in paragraph 19 commenced at 12.20 am and finished at 8.20 am and it was paid as a night shift? I would think that that would significantly impact structures that are contained throughout the document. Further, your Honour, I noted there was a provision in the RTD award that allows early morning shifts and they can commence between 12.01 am and 6 am on Monday to Friday, but only for specified industry sectors.

PN141

Again, I ask the question of - what would be the costing if this subclause became applicable, noting that it can also be transitioned? That's the clause in the award that deals with what could be considered not dissimilar subsectors of the industry dealing with newspaper deliveries; meat deliveries; live poultry; a driver employed in a fish, fruit or vegetable store. It may well be that a driver employed will not fit within that category, but it doesn't appear to me that there's been any attempt to cross on those bases. I also note that the workers at Brisbane and Melbourne, from whom a witness statement has been made by their leading hand delivery driver, are employed under our enterprise agreement. Therefore, the modern award has had no immediate impact on that company's structure.

PN142

That EBA expires in February 2012. That EBA has a rate of pay on a daily basis with an optional sack date. But that rate of pay, which at the moment is $154 a day from Monday to Friday, includes this specified rate you're compensated, penalties and wage components, including public holiday, annual leave loading, overtime, cash handling allowance, night worker allowance, penalty payments and work outside a specified spread of hours. So it seems to me that this submission is attempting to put in place something that a company that is currently operating under an EBA will be able to use down the track. At the moment, I don't think they're under the Road Transport and Distribution Award, and varying it as sought would have no immediate impact.

PN143

THE SENIOR DEPUTY PRESIDENT: By that submission, I take it, you don't think they're covered - you don't think it applies to them at the moment because an enterprise agreement - - -

PN144

MR RYAN: At the moment, your Honour.

PN145

THE SENIOR DEPUTY PRESIDENT: - - - applies to them?

PN146

MR RYAN: Because they have the enterprise agreement that specifically excludes - this agreement is a comprehensive agreement and excludes protected award conditions et cetera.

PN147

THE SENIOR DEPUTY PRESIDENT: Yes. But - - -

PN148

MR RYAN: So I'm saying that the award is not relevant at this point in time.

PN149

THE SENIOR DEPUTY PRESIDENT: Yes, all right.

PN150

MR RYAN: My final point would be: even if the award was relevant - and there are issues associated with the structures that are in place - the Road Transport and Distribution Award, in clause 8, allows facility of provisions to be utilised between an employer and an employee dealing with hours of work, ordinary days, days of the week, hours of work, thread of hours. Hours of work, ordinary hours, normal rostered days off et cetera. So there are six or seven clauses in the facilitation agreement - can specifically be enacted, if these people were under an award, to potentially deal with the situation at hand. So we oppose the application, your Honour, on the basis that the modern award objectives have been achieved. This adds nothing whatsoever towards achieving the modern award's objective and secondly, it seems to me the evidence presented - and the questions I asked about - what if minimal or minor restructures to the operational environments occurred - what impact that would have. I don't have the answer to that but it's an issue that would have to be addressed and we oppose the application as it's currently addressed.

PN151

THE SENIOR DEPUTY PRESIDENT: Yes, thanks. Now, Mr Story, I read your submissions and the evidence. You've heard what Mr Burns and Mr Story have to say. Now, what do you submit I should do next with your application?

PN152

MR STORY: Your Honour, actually I would submit that the jurisdictional issue has been met in that the high standard of demonstrating the application is necessary to achieve the modern award's objective has been demonstrated.

PN153

THE SENIOR DEPUTY PRESIDENT: I don't understand there's any jurisdictional issue.

PN154

MR STORY: Yes.

PN155

THE SENIOR DEPUTY PRESIDENT: I have jurisdiction to hear, sit, call on applications under section 157, as this is, and 158.

PN156

MR STORY: Absolutely.

PN157

THE SENIOR DEPUTY PRESIDENT: I do understand, though, there are discretionary reasons why it said this application should not be entertained further or, if is - foreshadowed that it should be dismissed because it doesn't meet the required standard of discretion as the aspects referred to. Now, maybe we're all using the word jurisdiction in a way that is probably more a question of power. But if there is a jurisdictional issue, I would need to better understand that. So assume at the moment there's no question of jurisdiction; there are a number of questions as to discretionary aspects as to whether this matter should proceed further.

PN158

MR STORY: Yes, I understand, your Honour. It's AFEI's position that the merits for hearing this further, in exercising that discretionary power, have been demonstrated.

PN159

THE SENIOR DEPUTY PRESIDENT: Yes.

PN160

MR STORY: If you don't mind if I respond to a few of the points that have been made, particularly in relation to what was raised by Mr Ryan. The EBA that was referred to in the witness statement of John Wilce from the Brisbane Milk Distributors - Mr Ryan is correct in that the modern award doesn't apply to that employer yet, but what they have done is forecast the cost involved of negotiating their next agreement, even considering things like transitional arrangements and whilst - - -

PN161

THE SENIOR DEPUTY PRESIDENT: It didn't occur to me immediately that the indicative sums that are mentioned, which of course are not actual sums now but are projected sums - it didn't occur to me that the transitional provisions have been factored into them.

PN162

MR STORY: The reason it looks like that, your Honour, is that a lot of these shift times - they fall outside the strict shift definitions. So they're not able to apply, in a lot of cases, the actual transitional shift penalty. What they're lumped with is an overtime penalty, which isn't transitioned for the majority of each of their shifts. Unless a shift finishes at 8.30 am, it's no longer a night shift. Part of the problem for milk vendors is that if shifts often don't finish by 8.30 - - -

PN163

THE SENIOR DEPUTY PRESIDENT: Yes, it's not at 8.30; it's at or before, isn't it?

PN164

MR STORY: At or before. Yes, that's right. So once they don't finish that time, they're no longer falling in that night shift and so it's overtime until they hit 4.30 in the morning. The problem is that, as is outlined in paragraph - - -

PN165

THE SENIOR DEPUTY PRESIDENT: I didn't think their shifts were finishing - well - - -

PN166

MR STORY: There is one shift there that finishes on time - sorry, within the night shift, which is the 9 pm until 5 am, which has the most minimal impact for them. It's the others that are up to $12,000 difference that's the issue. Part of the problem for milk vendors - - -

PN167

THE SENIOR DEPUTY PRESIDENT: One of the things I was looking at is that, on the one hand, there's this emphasis on the penalties that might be incurred for work that's happening after, say, 8.30. But in another paragraph, there's this emphasis on the need to be at places 4.30, 3 o'clock, 6 am et cetera. Now, I was just trying to marry those two up. I had rather assumed the operational requirements may well accommodate shifts finishing at or before 8.30 am.

PN168

MR STORY: I understand what you're saying there, your Honour. They're required to start often around 2.00 in the morning. 2.00 or 3.00 in the morning to get these deliveries done to a lot of businesses and the like. You've also got schools where they need to deliver to at the start of the operating times. What it means is for an eight hour shift for your full-time employees in order to have - there's often no work in the late evening. So around midnight, there may not be much work at all and it all starts around 3 am. So it's from that point and that's the point as well, where they're often able to access the distribution centres and the reasons they can't have a normal night shift and finish 8.30 is because their hours will need to operate beyond that time in order to afford their full-time employees work and to meet the varied requirements of businesses, schools and hospitals.

PN169

The other issue raised by Mr Ryan was the 30 per cent shift penalty. On that, I'd like to say that yes, it's true that Fair Work Australia has given consideration for these other industries. So for newspapers and fish and fruit and vegetable distributors that do operate at night. We would say that shows that consideration has been given in the past to these types of industries but we are not asking that they be put into that clause of the award, 22.4, because that was a term that's generally been borrowed from the Transport Workers Award 1998, which the milk vendors were not covered by at the time; they had their own, in some cases, non-transport or, in other cases, much more narrowly applicable transport-based awards, which had very different penalty rates, such as - in our submission, there's the penalties in Victoria and Tasmania of no penalty rate, or as little as seven per cent in New South Wales and 10 per cent in parts of Queensland. So the 30 per cent penalty is still a significant shift for this industry and it wouldn't, in our submission, adequately address the issue that this sector of the transport industry has been pushed into terms that have never historically applied to these types of employers.

PN170

THE SENIOR DEPUTY PRESIDENT: Nonetheless, there is force, is there not, in the submission that this award actually does identify and accommodate employers in the industries that might have a number of similarities and it has seen fit to extend the accommodation only so far as 22.4 goes, not further.

PN171

MR STORY: Yes, I understand that.

PN172

THE SENIOR DEPUTY PRESIDENT: There's some strength in that submission.

PN173

MR STORY: It does, however - there's a historical basis for that clause.

PN174

THE SENIOR DEPUTY PRESIDENT: I have no doubt about that but we don't need to return other than just once to say many opportunities were given and alerts sent out to address these very things during the couple of years that this award was under consideration.

PN175

MR STORY: I understand that.

PN176

THE SENIOR DEPUTY PRESIDENT: Well, a couple of years might be a bit of an exaggeration, but it's more than 18 months.

PN177

MR STORY: Yes, your Honour, I understand. I mean, it's unfortunate that these weren't raised during the award modernisation.

PN178

THE SENIOR DEPUTY PRESIDENT: Well, it is very difficult. It's borderline inexplicable, given that the coverage clause actually goes to some lengths to define the sector in the road transport and distribution industry. The coverage clause actually identifies the sector and goes to some extent to describe it and it has many attributes that would show that what you're seeking here is a variation in relation to a subsector of that sector and exposure draft pleading with parties to look at the description of the industry, to consider it, to come and address the full bench on it and, in the context of some other sectors of the industry coming along and asking for specific accommodation as to hours. That was all before us. It's hard to know what else the full bench could have done to have alerted this subsector of the sector to come along and make the submissions. So it's a bit of an uphill battle here. It's not really - none of these things are on all fours with any other but it, as variations go, has got a few hurdles.

PN179

MR STORY: I understand that, your Honour. I would submit that yes, whilst there are a lot of hurdles to meet here, that this industry is, I suppose, affected in a very particular way. I understand from talking to the other parties there are a lot of groups within the transport sector that are unhappy with aspects. But I would say that this industry is unique in that, in most states, they weren't covered by the ordinary transport awards and they had their own very specific milk vending awards and it is a real shame that this wasn't raised earlier, 18 months ago, or longer ago, during award modernisation. But I was still asked that this be considered further because it is a real issue in terms of financial viability for this sector.

PN180

THE SENIOR DEPUTY PRESIDENT: Yes, you were addressing the various aspects raised by Mr Ryan in particular. I think I took you off on a tangent there for a little while.

PN181

MR STORY: Sorry about that. In relation to that, I don't think there's too much more to say on the issue of the enterprise agreement in that what this employer was trying to show is that when their next agreement is negotiated that they are now looking at a much higher bar for their organisation so that, whilst they previously had paid an amount of $52,000 per annum, they're now looking at up to $64,000 per annum for certain runs and that's a very significantly demonstrative cost impact for an employer that's really only a small employer with 15 drivers.

PN182

THE SENIOR DEPUTY PRESIDENT: Potential cost impact: yes. A consideration in relation to section 157, I don't know.

PN183

MR STORY: Well, this employer is covered by the modern award. They are not yet bound by - - -

PN184

THE SENIOR DEPUTY PRESIDENT: It doesn't apply to this employer.

PN185

MR STORY: Yes.

PN186

THE SENIOR DEPUTY PRESIDENT: Yes.

PN187

MR STORY: But it will be an issue for them when it comes to re-negotiation of the agreement.

PN188

THE SENIOR DEPUTY PRESIDENT: Yes, I understand that, which is, at the earliest, end of February next year.

PN189

MR STORY: That's right, in 2012.

PN190

THE SENIOR DEPUTY PRESIDENT: Yes.

PN191

MR STORY: The only other submissions I'd like to make, your Honour, and they have been referred to in our written submissions, the full bench decisions that were made in early 2010 in the General Retail Industry Award, in which it was recognised that a requirement to operate ordinary hours on an overtime basis is generally not appropriate. That was a comment of the full bench, and that the general retail industry award was varied for newspapers and retail bakery employees because there was a history in those awards in the sector of recognising the unique requirements for those types of employers. I would submit that those same considerations should apply here.

PN192

THE SENIOR DEPUTY PRESIDENT: All right. Well, this matter today is only listed for mention and/or further directions so, Mr Burns and Mr Ryan, I don't think to the extent you've already foreshadowed what should be the fate of this application, I don't think you can press, in all fairness, that I proceed to deal with it now. I think it's been useful, though, that the hurdles that it might face have been highlighted. I might return to them in a minute too. But I think now we've got to this stage, Mr Story presses his application. He's put on evidence. Each of you has foreshadowed, firstly that you wish - and I think it's you wish to make submissions, though you probably prefer to do so again, but I think you do procedurally have to do so as to why it should proceed no further.

PN193

We need to talk about whether it might be that they should just be limited to the sort of submissions that can be made in writing rather than require you to address the merit issues. There might be a bit of an overlap between the submissions in merit but I'm going to try and avoid complicating this too much. Look, in no particular order, all of the matters raised by Mr Ryan, I think, are matters that are of significance for me to consider as to why this should go no further. Mr Burns no doubt adopts all of those. He may or may not, but he rightly says this is at a time that serious consideration must be given to - why should this matter proceed now? I am not unaware of the fact that people are making this what they will ask to be revisited some time after January next year.

PN194

It's not surprising, given the nature of this undertaking that was achieved in a relatively short period of time. So why in this subsector of a sector of the industry would this be entertained now and then not all these other matters that are on these ever-growing lists that parties want to revisit, which I would not be at all surprised include spans of hours and penalties. I think it is of real significance that penalties are being transitioned. I think it's of real significance that the only evidence put on is that of one operator in Brisbane who's currently covered by an enterprise agreement and will be so covered until next year. I don't know how extensive the fact of contractors rather than employees is in this subsector of the sector. I do happen to know there are a number of them because of other matters I've been involved in the Road Transport and Distribution Award, where they have been contractors who have been doing the transport of the milk in circumstances comparable to Brisbane milk distributors.

PN195

I see that the award already accommodates not dissimilar activities in a certain way in clause 22.4, where a standard for-all-purposes penalty - I think the point raised by Mr Ryan is also right there, flexibility firstly in the award in relation to starting and finishing times. There's also individual flexibility. The sorts of mix and match of the runs you talk about on the face of it, one has to assume there'd be something to be said for individual flexibility by reference to each or any of the drivers who work those rather different spans. But I suppose none of that really matters so much when you've got an enterprise agreement. If this matter is to proceed further and I'm assuming it will because you've pressed for it to do so - I raised this on the last occasion - the way you describe the sector of the industry that you want to be covered by this variation and you identify who you're not intending to cover in that respect, the bulk milk (indistinct) that will need to be considered very closely because it has to marry in with the definition of this sector of the industry in the coverage clause.

PN196

So far, it doesn't. I did raise that on - earlier occasion. So you are entitled to press for this matter to proceed and my current disposition is that I would hear next any submissions as to why it should not proceed any further at this stage, namely it shouldn't proceed to a full-blown hearing. That's not a very good way of describing it but I suppose I'm not currently disposed to direct either the union or ARTIO to put on witness evidence. I'm inclined to think that the matters they wish me to take into account now and - should persuade me that this matter should proceed no further would lend themselves to written submissions. So I think that should be done, Mr Burns and Mr Ryan.

PN197

MS C. BROOKS: Your Honour, sorry. If I may interrupt, I'm Ms Brooks from the Australian Industry Group.

PN198

THE SENIOR DEPUTY PRESIDENT: My goodness me, Ms Brooks. I am so sorry.

PN199

MS BROOKS: That's okay. I have nothing further to add, merely that we would require the same right to make submissions as well.

PN200

THE SENIOR DEPUTY PRESIDENT: Look, I'm sorry. I don't know why I had assumed you were appearing today with Mr Story.

PN201

MS BROOKS: We're sitting together so I understand.

PN202

THE SENIOR DEPUTY PRESIDENT: It's on the sheet in front of me. I do apologise for that. What would you like to say about what I'm intending to do without hearing you?

PN203

MS BROOKS: I don't have any reason to backtrack. Obviously section 157 does impose a higher hurdle, so we understand that it is a higher hurdle for any application to vary a modern award. But we don't oppose any jurisdictional objections. But we do see from the evidence that there may be an issue for this industry. We'd need to seek further - and do some further consultation with our members on that. But we'd merely seek the right to make submissions as well as the other parties in this matter.

PN204

THE SENIOR DEPUTY PRESIDENT: Of course. Yes, all right. So then my question is to each of you: what period of time would you wish to put on written submissions as to why this matter should proceed no further? Shall I start with you, Mr Burns?

PN205

MR BURNS: Three weeks.

PN206

THE SENIOR DEPUTY PRESIDENT: Mr Ryan?

PN207

MR RYAN: Four weeks.

PN208

MS BROOKS: I'm happy with three weeks, your Honour.

PN209

THE SENIOR DEPUTY PRESIDENT: All right. Mr Story, what do you want to say about granting each of the others who are represented today four weeks - - -

PN210

MR STORY: I have no issue.

PN211

THE SENIOR DEPUTY PRESIDENT: - - - to file written submissions?

PN212

MR STORY: I have no issue, your Honour.

PN213

THE SENIOR DEPUTY PRESIDENT: All right. That's what we'll do. Shall we identify what that date might be? One, two, three. Close of business Thursday 7 July? Does that sound about right? If you'd file those - obviously because this is a proceeding by way of these documents being posted to the relevant web site - I am assuming, as you would all subscribe to it, you will all be alerted as soon as they're posted. Now, I am rather inclined to - well, I suppose this is the only issue, Mr Story - is whether, for one reason or another, you would seek and I would grant an opportunity to file submissions in reply. That would be the only reason why I wouldn't then say, "Right, I reserve my decision subject to reading those." I think I must give you that opportunity, hot on the heels of the last submission coming in, getting a note straight away to say, yes you do wish to reply.

PN214

It will have to be limited to a reply because otherwise we'll start getting into wider merit and evidential matters. So put in that note letting me and the others know what the issues are and seeking a time, but if that could be as short a time as possible. But I won't put a time on you now because you don't know what the scope of the reply might be. If you don't want to reply, that's fine. Let us know that too. Subject to all of that, I think it is appropriate that I make a - I issue a ruling. Anyone disagree with it going down that track? Is that how we'll do it? Mr Ryan?

PN215

MR RYAN: No, your Honour.

PN216

THE SENIOR DEPUTY PRESIDENT: All right. I'll adjourn on that basis.

<ADJOURNED INDEFINITELY [2.37PM]