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Fair Work Act 2009                                       1057322






s.157 - FWC may vary etc. modern awards if necessary to achieve modern awards objective


Application by









4.35 PM, TUESDAY, 8 OCTOBER 2019


JUSTICE ROSS:  Can I have the appearances in Sydney, please.


MR S CRAWFORD:  If it pleases the Commission, Crawford, initial S, from the AWU.


JUSTICE ROSS:  Thank you.


MR S BULL:  If it pleases the Commission, Bull, S, for United Voice.


MR S SMITH:  If the Commission pleases, Smith, initial S, with Mr H Harrington, for the Australian Industry Group.


JUSTICE ROSS:  Yes, Mr Smith.


MR N WAGE:  Your Honour, I appear for Australian Business Industrial and the New South Wales Business Chamber Limited, with Ms H Hamberger.


JUSTICE ROSS:  Thank you.


MR S MAXWELL:  If the Commission pleases, Maxwell, initial S, for the Construction, Forestry Maritime, Mining and Energy Union, Construction and General Division.


JUSTICE ROSS:  Thanks, Mr Maxwell.


MR S HOWE:  Your Honour, Howe, initial S, for the AMWU.


JUSTICE ROSS:  Thank you.  In Adelaide?


MR G SMITH:  If it pleases the Commission, Smith, initial G.  I appear for the AMIEU.


JUSTICE ROSS:  Thank you.  Brisbane?


MR J MATTNER:  If it pleases the Commission, Mattner, J, for the Australian Federation of Air Pilots.


JUSTICE ROSS:  Thank you.  In Melbourne?


MR T CLARK:  Trevor Clark, for the ACTU.


MS V WILES:  Your Honour, it's Wiles, initial V, for the CFMMEU, Manufacturing Division.


JUSTICE ROSS:  Thank you.  I issued a statement on 28 August concerning the review of certain C14 rates in modern awards and inviting submissions in respect of the provisional views set out in that statement.  Submissions have been received by ABI, the Australian Meat Industry Employees Union, the AWU, the AFAP, Ai Group, the CFMEU Manufacturing Division and the AMWU.


If I can summarise them in this broad way:  other than Ai Group, nobody really contests the idea that they should be reviewed and should be referred to a Full Bench.  The question then becomes, well, what is the best way of proceeding?  Ai Group raises - which I would say at first blush I'm not that attracted to the argument, but nevertheless - that there is no power to have a review despite the fact you can issue a determination of your own motion.


It occurs to me that rather than perhaps diverting time and resources to have that view contested by others and determined, Mr Smith, is there any impediment to these matters all being considered in an annual wage review?  I'm not asking you whether they should be.  I'm asking you as a question of jurisdiction and power.


MR S SMITH:  Your Honour, if I can just clarify our position.  All we were seeking to do - and it may not be completely clear - was to question where that line might be drawn between what powers might be available under 157 and the 156 process.  You know, we have highlighted that decision of the Full Court of the Federal Court there which didn't seek to differentiate between the two; so we're not pressing the issue, in short, in these proceedings.


It does seem to us that there is a dividing line there somewhere between the idea of a review at large and proceedings under 157 relating to potential variations to an award, but we do nothing more than just highlighting that we haven't had time to think about that issue.  We're not pressing it at the moment.  We did want to just flag the fact that we think there is a potential issue there, but we're not pressing it.


JUSTICE ROSS:  There are a couple of aspects about that that trouble me a little.  Really what I want to seek to find is a solid basis on which to undertake the task.  You have indicated that you don't propose to take it at this time and I'm a bit concerned that we then embark on some process consistent with the view of the other parties, refer it to a Full Bench and then Ai Group bobs up whenever this process starts a few months down the track and says, 'Well, there's a jurisdictional issue.'  I think that issue really needs to be resolved first.


Getting back to my point, it seems on the face of it sort of unassailable that there are two other options at least.  Any of the union parties could just apply to vary these awards - make an application to vary - and that could be dealt with on its merits.  In fact it doesn't need to be referred to a Full Bench.  It could be referred to a number of individual members.


The other alternative is that, on the face of it, it could be said that the Commission has an obligation in an annual wage review to review modern award minimum wages - and bearing in mind this issue was raised in the context of the annual wage review decision, it could just be rolled into the annual wage review.


MR S SMITH:  Your Honour, one thing that is quite different about this case - and of course the other cases relating to undergraduate qualifications has some similar issues - you know, it's well established that where a party makes an application, then there would be a draft determination in nearly all circumstances so that we know what the case is about, what we need to do to defend that case if it's not our draft determination.


This seems to be quite different and we haven't had time to think through the issue, so that's why we're not putting it any higher than just simply saying given that 156 has been removed, there does seem to be a dividing line there somewhere between - - -


JUSTICE ROSS:  I don't think it's difficult to find the case you would need to meet.  We can simply invite the unions to file draft determinations.  They have all expressed an interest in the matter and all expressed support for it being resolved in particular ways.  ABI has a different view in relation to some of those matters going to the competency question, but I just don't want to waste everybody's time.  We embark on a process and then Ai Group bobs up at some stage down the track saying, 'We've had a think about it now and we do think there is a jurisdictional problem.'


How do we resolve that matter?  I've identified two ways.  That is, it can be dealt with in the annual wage review.  That would be a compressed time frame and everyone else has got different things to do, but that would seem to be certainly available as an option.  The second is unions with an interest can simply file applications to vary and you can defend each of those cases individually.


Third, people can have a think about whether there is any issue with the process that's proposed, with the power under 157, reflect on that and let me know in a week or so, two weeks, where they land on that question.  That way at least that will give you a chance to think about it, because I don't think it's an answer to the issue that there might be a problem with 157.  Really what I'm pointing out to you is there are other avenues in which to deal with it and you might need to consider which of those is the one that you think might be the most appropriate.


MR S SMITH:  Your Honour, we're happy to form a firmer view at an early stage, but we just didn't have time to give the issue sufficient thought.


JUSTICE ROSS:  No, no, sure.


MR S SMITH:  This one is a little narrower than the other one in the sense that we're really talking about C14 rates in a discrete number of awards.  The issue is about whether there should be a transitional period to move to the equivalent of the C13 rate, so it is a lot more specific than the other one that's really about a whole raft of awards and the way qualifications align.  The same issue came up in our thinking with both of them and we - - -


JUSTICE ROSS:  Yes, but again the answer may end up coming back to the same options.  We're not canvassing the other issue at the moment; there is a Full Bench that's looking at one aspect of that at least in relation to one award.  Applications can be made by unions to change the linkages between awards as they see fit really.  I must say I think it's a bit optimistic the idea that you get an application and you would have a variation determination, because I've been struggling to get draft variation determinations out of any number of parties in the award review proceeding.


I can see that if the concern is one of sort of procedural fairness, how do you know what to respond to.  I don't think the review has shown any lack of procedural fairness.  It would be very unlikely that we would embark on a process without at least providing a provisional view in respect of something so that you know exactly what you're meeting.  How do we resolve this initial which section - which box do we go into and would four weeks be sufficient for you to conclude your view on it?


MR S SMITH:  Yes, that would be plenty, your Honour.


JUSTICE ROSS:  All right.  Perhaps if you file that, the others can file in response.  I will issue short directions for the filing and reply.  Is anyone taking issue with my broad summary of the position?  Leave aside Ai Group for a moment, but there's an acknowledgment, yes, there is an issue; no opposition to the referral of the matter to a Full Bench; no real contest about the list of awards that fall in this category.  The divide then becomes, well, what does one do about this?


Broadly speaking, ABI divides them up which, you know, is around the issue of competency.  Those structures as I understand your position, Mr Wade (sic), the awards that provide for competency based systems - much like the way apprenticeships have moved from time based to competency based - that those awards where the C14, the movement to the next level, is competency based, we shouldn't touch those because that's the nature of the system.  Those that don't have that, require some further examination.  Is that - - -


MR WAGE:  That is our view, your Honour.  In the context of further examination, we simply pose the question that it might well be asked whether or not the C14 rate of pay is the appropriate rate of pay if one values the work properly.  Obviously that's a matter for people to agitate if they feel it's inappropriate.




MR WAGE:  If there is a true competency element to the structure, we wouldn't want to see some artificial temporal constraint placed on that.  It wouldn't be appropriate for the employer or the employee.


JUSTICE ROSS:  It may be that - well, I'll come back to what the next steps might be, but it does seem on the face of it there would be some utility in discussions between the parties once we're over which path are we following in some discussion around, well, what's said about the competency based structure.  It would be, on the face of it, an odd result if an award was structured from the bottom to the top competency based and then we impose a time period for the attainment of competencies only at one level.


I know a number of unions have put, well, you should be taken to acquire the competencies either within a week or 38 hours or within three months, et cetera, but I think you would have to consider the question, well, why at that point and not at other points?  Similarly, Mr Wade (sic), back to you, the question you might need to consider is, well, how does one resolve any dispute about whether you have met the particular competency, because under some of these awards - not perhaps to the same extent as the Retail Award which I had the pleasure of this morning - the competency sort of has a lack of precision about it and that may be an issue that can be the subject of discussion, as well.


Not, as I say, to the extent of the Retail Award where I think one of the indicative tasks at level 3 is the fitting of surgical corsets.  They don't describe particular skills, just indicative tasks.  That's not the same degree of problem here.  For example, the one - I think it's about quarrying.  It says, 'Will have some familiarity with quarrying skills,' or whatever that might be.  Now, there might be more precision that can be put around that perhaps, but the question then comes back to, well, what if the employee thinks they've met the competencies and the employer doesn't think they have?


MR WAGE:  Sir, if I can just make a few observations about that.  The Quarrying Award, by way of example, the language was expressly aligned to AQF packages when it was particularly first put out - - -




MR WAGE:  - - - in consultation with the Australian Workers Union.  The second issue is that from experience if there is any debate about that, the disputes procedure applies.  I don't think the Commission has ever needed to arbitrate those matters.  It has always been resolved in conciliation today.


JUSTICE ROSS:  I don't think we've got the power to arbitrate under the dispute settlement clauses.


MR WAGE:  Sorry, I apologise.  I'm contemplating what might have occurred under enterprise agreements.  They're very reflective of the structure.


JUSTICE ROSS:  But I accept the point.


MR WAGE:  Yes.


JUSTICE ROSS:  I don't recall us being inundated with a flood of applications.


MR WAGE:  No.  The third point is one has to be careful, because if you take quarries as the example, if you're not actually competent at the grade 1 level you simply aren't able to do the work at the grade 2 level.  You wouldn't be safe to do it.  I think one size won't fit all.




MR WAGE:  There will have to be some inquiry into the true nature of these structures, because I can appreciate that if the functioning of the structure was to simply tie somebody to a low rate of pay while they're actually doing productive work, I concede that's not a fair thing to do.


JUSTICE ROSS:  Yes.  It's really trying to find a workable way through that issue, yes.


MR WAGE:  Yes.  I suspect if the parties have an open mind, we may find solutions for that on a consensual basis rather than an arbitrated basis.


JUSTICE ROSS:  Yes.  I certainly think that would be a desirable outcome and I want whatever process we end up with to provide sufficient opportunity for that to occur.


MR WAGE:  Yes.  It might well be that some awards - they could express an indicative period within which people normally actually obtain a level of competency - - -




MR WAGE:  - - - as opposed to a hard arbitrary rule.


JUSTICE ROSS:  It may be that they would be expected to attain that level of competency within X period.


MR WAGE:  Yes, absolutely.


JUSTICE ROSS:  At least it then provides a workable guideline for both parties, yes.


MR WAGE:  Both parties, yes.


JUSTICE ROSS:  Yes, all right.  Well, before I invite anyone else to say whatever they wish to say - other than repeat what they have already put in writing - what I had in mind then arising from the discussion is that Ai Group will have a period of four weeks from today to file its submission clarifying its view about the jurisdictional basis for the approach that has been proposed.  If I form the view that 157 is not available to the Commission on its own motion, then I want to know what you say about 285 and what you say about the capacity of any union to make an application to vary under 157.


Then, two weeks following that, any party will have an opportunity to file submissions in response and following that I'll issue a statement which will - depending on where all that goes.  If there is, no sort, of agreed resolution around jurisdiction, then we'll need to have a process for determining that.  If there is, then it will summarise the submissions to date and canvass a range of questions and then put to the parties, well, how might a conciliation process usefully be conducted?


It probably doesn't need to involve everyone at the same time, so how might they be grouped to cover those who have got common interests in particular awards and how might that move forward, because it doesn't necessarily need to be the same solution in every instance.  That's what I've got in mind and at some point these issues will - they will either be varied on a consensual basis or determined through one process or another.


That's what I'm proposing to do.  Is there anything anyone wishes to say about anything that has been said this afternoon?


MR BULL:  Your Honour, Bull.  I think you might not have mentioned that United Voice did make a submission.


JUSTICE ROSS:  You did, yes.


MR BULL:  A brief one.  Reflecting on Mr Smith's concern, my understanding is that this review is essentially - it's an award variation on the initiative of the Commission under 157 of the Act.  A feature of 157 is that things can be determined by a single member of the Commission.


JUSTICE ROSS:  I wasn't proposing to determine it by myself, but - yes.


MR BULL:  Well, what I was going to suggest is that - I'll just make the suggestion - a way to deal with the so‑called jurisdictional objection if it's determined by a single member, the objector or whatever then has the facility of an appeal under the Act to a Full Bench.


JUSTICE ROSS:  Yes, but that might involve you in extensive factual proceedings, evidence and the like, and then there is an appeal on a jurisdictional point.  It may render it nought the effort that the parties have put in before.  What I'm trying to avoid is exactly that problem where everyone gets engaged in the process, they go through whatever it is, conferences, evidence, et cetera, there is a determination and - I'm not picking on you, Mr Smith.  You're the only one that has raised it - then Ai Group raises at a late stage a jurisdictional objection.


I'm just wanting to bring forward all of that to the front and work out, well, what is the soundest way on which to proceed.  The issues can be addressed in any one of a number of ways; let's try and get the most sensible.  Probably it would suit everyone if, whatever avenue, there is a Full Bench so the matter is ultimately not subject to an appeal, but judicial review.  Anyone else in Sydney?  In Melbourne?


MR CLARK:  This is Trevor Clark from ACTU here.  That course seems sensible to us, so - yes.


JUSTICE ROSS:  Okay.  Thank you.


MR CLARK:  That was all.


JUSTICE ROSS:  Is there anything else?


MR CLARK:  Sorry, I can't hear you, your Honour.


JUSTICE ROSS:  Can't you?


MR CLARK:  I heard you then.


JUSTICE ROSS:  Okay.  I had heard your earlier submission.  I was wondering if there was anything further you wanted to say.


MR CLARK:  No, no, I'm quite content with - - -


JUSTICE ROSS:  All right.  In Adelaide?


MR G SMITH:  Nothing to add, your Honour.  We are happy with that course.


JUSTICE ROSS:  Thank you.  In Brisbane?


MR MATTNER:  We are happy with that course of action, your Honour.


JUSTICE ROSS:  All right.  I will issue short directions.  The transcript will be available - published on the web site - so you will have copies of that.  We will just reflect on what is the most sensible avenue.  In the meantime I would encourage you to have those discussions that we discussed beforehand.  It needn't be with everybody, but there might be a solution.


You have mentioned one area, quarrying.  There may be others where a solution presents itself to the parties and there's nothing to stop you working through those issues in the meantime.  Okay?  No questions?  All right.  Thanks very much.  You will hear from me.

ADJOURNED INDEFINITELY                                                            [4.59 PM]