TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009 40799-1

COMMISSIONER HAMPTON

AM2011/4 AM2011/5 AM2011/6

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

Application by Health Services Union

(AM2011/4)
Aged Care General Services (State) Award
[RA120011)

(AM2011/5)
Charitable Sector, Aged And Disability Care Services (State) Award 2003
[RA120117]

(AM2011/6)
Charitable, Aged and Disability Care Services (State) Award
[RA120118

Adelaide

9.23AM, WEDNESDAY, 23 FEBRUARY 2011

PN1

THE COMMISSIONER: Yes, please be seated. All right. I'll take the appearances, and please feel free to remain seated.

PN2

MR M. McLEAY: Thank you, Commissioner. If the tribunal pleases, McLeay, initial M., for the Health Services Union.

PN3

THE COMMISSIONER: Thank you, Mr McLeay.

PN4

MR McLEAY: With me is MR B. COQUILLON, one of my colleagues from our HSU East Branch.

PN5

THE COMMISSIONER: Thank you, Mr McLeay.

PN6

MR G. BOYCE: If the tribunal pleases, Boyce, initial G., seeking leave to appear for the Aged and Community Services Association of New South Wales and ACT Inc and also the Aged Care Association of Australia New South Wales.

PN7

THE COMMISSIONER: Thank you, Mr Boyce.

PN8

MR B. BRIGGS: Briggs, initial B., appearing on behalf of the Australian Business Industrial.

PN9

THE COMMISSIONER: Thank you, Mr Briggs.

PN10

MR D. YUILLE: Yuille, initial D., on behalf of Commissioner for Employment and Relations.

PN11

THE COMMISSIONER: Thank you, Mr Yuille. Mr Boyce, just in relation to your application for permission does anyone else wish to be heard on that?

PN12

MR McLEAY: We have no objections, Commissioner.

PN13

THE COMMISSIONER: Very well. Look, I think the circumstances of this matter, particularly the issues that are likely to arise, lend themselves to representation so permission is granted, Mr Boyce.

PN14

MR BOYCE: Thank you, Commissioner.

PN15

THE COMMISSIONER: All right. Look, I have read the respective submissions that have been filed. I thought we should deal with the application for an adjournment. Mr Boyce, do you want to speak to that matter?

PN16

MR BOYCE: Yes, Commissioner, thank you. We rely on the correspondence that was forwarded to your associate dated 21 February 2011. In addition to that, I call in aid a recent decision of the Federal Court in Singh v The Secretary of the Department of Education, Employment and Workplace Relations (2011) FCA 116. It's a decision of Bromberg J of 2 February 2011. In respect they were proceedings where a judgment in another proceeding raises some issues and is reserved and merely - his Honour sets out at paragraph 7 or refers to paragraph 7 in the decision of Lockhart J in Sterling Pharmaceuticals Pty Ltd v The Boots Co (Australia) Pty Ltd (1992) 34 FCR 287 at paragraphs 290 to 291, and his Honour then sets out the considerations relevant to the grant of a stay, or in this case, an adjournment including:

PN17

The determination in the other matter may have material effect on these proceedings. Secondly, that there will be a waste of your time and expense in preparation for hearing of the proceeding giving the similarity of issues to be determined; and thirdly, that the law should thrive against permitting multiplicity of proceedings in relation to similar issues, and in determining to grant the stay, Bromberg J also notes that he could not identify any reasonable basis upon which it might be appropriate for the proceedings to be heard and determined prior to the other reserve judgment being delivered.

PN18

Mr Commissioner, as stated in our correspondence of 21 February 2011, these are mirror submissions and mirror arguments in these matters which were heard by Watson VP on 17 February 2011 in matter numbers AM2010/265, 266, 267 and 268. The vice-president reserved his decision. All parties to those proceedings considered the issue is significant. The ANF on 21 February also wrote to Watson VP seeking that he referred the matter to the president so the president may consider whether the arguments should be dealt with by a full bench. It may well be, Commissioner, depending upon the decision of the vice-president or as a result of the referral of the full bench and the determination by the full bench, there may not be any opposition to these applications.

PN19

Finally, there, in my submission, can't be any prejudice to the HSU given the commission as presently constituted the decision to make the order in the SDA applications going back to 1 January 2011 which effectively if the tribunal is of a mind to make the orders sought then there won't be any prejudice to employees or HSU members as a result of the proceedings being adjourned.

PN20

THE COMMISSIONER: Mr Boyce, are you instructed as to whether there are any other jurisdictional matters arising here?

PN21

MR BOYCE: No, Commissioner. I suppose there's no - the point we press isn't as much jurisdictional.

PN22

THE COMMISSIONER: No, no, you're right. I shouldn't have said "other". I'll correct that. Are you instructed as to whether there are any jurisdictional matters that you are to raise?

PN23

MR BOYCE: No.

PN24

THE COMMISSIONER: All right. Look, I raise that in the context of the decision I made in the SDA matter. You'll appreciate I there had to deal with both jurisdiction and power of the tribunal. I formed those views but I formed those views in the absence of any contrary argument.

PN25

MR BOYCE: Yes.

PN26

THE COMMISSIONER: All right. Very well. Mr Boyce, just as a matter of practicality, if the matter were to proceed do you have anything significant to put beyond that which is set out in relation to the submissions that are filed?

PN27

MR BOYCE: I've got - yes, Commissioner. I've got additional comments and a decision - another decision of the full bench which you yourself referred to in the SDA applications of 9 February 2011 at paragraph 9 which, without getting into the detail, I submit is consistent with the submissions we put as to the operation of the NES concerning NAPSA long service leave entitlements.

PN28

THE COMMISSIONER: All right. Thank you. Mr Briggs, perhaps you might just clarify the position of the ABI in relation to the adjournment.

PN29

MR BRIGGS: ABI seeks to rely on its written submissions, your Honour, and it also agrees with the points raised by Mr Boyce in these matters. There is nothing - the only other issue in terms of these proceedings, your Honour, is the effective commencement of the proposed orders if the commission was minded to make them, but I believe the HSU has some comments on that.

PN30

THE COMMISSIONER: All right.

PN31

MR BRIGGS: So I might leave it for them.

PN32

THE COMMISSIONER: Very well.

PN33

MR BRIGGS: Thank you, Commissioner.

PN34

THE COMMISSIONER: Thank you. All right. Mr McLeay, perhaps you might speak to the issue of the adjournment.

PN35

MR McLEAY: Commissioner, we oppose the adjournment. We don't see that it's necessary. As Mr Boyce has pointed out, there are some similarities to the applications put forward by the nurses, but there are also some differences. These are a different set of employees, different set of awards, and unlike the nurses' case the submissions from the employers are not just in opposition. In this case there is at least the CC - the Catholic Commission for Employment Relations doesn't oppose our application whereas in the nurses' application the employers who were present all opposed. So we say on that basis that we should be able to proceed today. We understand from - well, reading the submissions put forward that they are substantially the same and that the employers would be in a position to kick on.

PN36

THE COMMISSIONER: All right. Thank you. Mr Yuille, do you want to speak to the adjournment question?

PN37

MR YUILLE: In terms of the adjournment we wouldn't oppose it at all. So we don't have any comments on that really.

PN38

THE COMMISSIONER: Right. Thank you. Look, gentlemen, of course I've given this some consideration prior to the proceedings given the material that has been filed. Are any parties aware of any further developments in relation to the referral request? I understand that some correspondence was exchanged or provided to the Vice President's office on Monday, or at least late last week. Is there any time frame been given to the parties?

PN39

MR BOYCE: No, Commissioner, not that we're aware of. Whether the Vice President refers the matter or makes a determination in his own (indistinct) we haven't been informed either way as yet.

PN40

THE COMMISSIONER: Yes. Do I understand the precise point that's being referred is whether or not the NAPSA parties, to use the shorthand, are subject to long service leave preservation under section 113? Is that the genesis of the referral request?

PN41

MR BOYCE: That's part of it but I suppose the determination that flows from that goes to the full bench decision that the tribunal as presently constituted was a party to in (2010) FWAFB 8558 where really at paragraphs 12 to 14 the tribunal talks about consistency in transitional arrangements in modern awards and the importance of that as well as the reluctance of the tribunal to adopt a different approach. Flowing into that I suppose is the acceptance or the statement at paragraph 55 where whilst there was no contender in the proceedings, the submission was made that preservation of long service leave terms in 2B state awards was really replicating what occurs under section 113 in relation to NAPSAs. So the issue then arises as to whether the tribunal has anything to say about preservation of 2B state service leave terms if as a matter of law they (indistinct) been preserved for NAPSAs. So I suppose that's where the issue might ultimately go as opposed to perhaps just a straight view of the tribunal as to whether as a matter of law section 113 preserves NAPSA long service leave terms.

PN42

THE COMMISSIONER: Yes. You'll appreciate that, you know, obviously I can't speak on behalf of the full bench, but what I would say is that all parties need to be very careful about reading decisions, particularly where matters have not been argued, because obviously what occurs in that paragraph is merely a summary of a broad proposition. Because there was no argument there is no discussion about the full details of the propositions underlying that and perhaps for my part I should make the same comment in relation to the decision I made in relation to the SDA matter. I've correctly observed the terms of the submission put by the SDA, but you will see that I've very carefully not dealt with that question and indeed the precise basis upon which I granted the application is in paragraphs 15 to 29 and you'll see that that's the basis upon which I granted that application and not necessarily the basis upon which it was sought.

PN43

So, look, having said that, it seems to me that, look, it is appropriate for me to take account of the proceedings before Watson VP. Notwithstanding some different circumstances here, fundamentally those that oppose the application are raising precisely the same issues and generally speaking the same issues arise. It's also appropriate that I deal with matters as expeditiously and efficiently as possible. So what I propose is as follows, that you put your submissions on the merit of the applications today because by and large they are already before the tribunal and basically all you need to do is speak to those and make any additional submissions.

PN44

However because of the considerations we've already outlined what I propose to do is to await the outcome of the consideration of the referral by Watson SDP. If the referral is refused then I'll decide the matter based on the material that's already before the tribunal. If the referral is granted then I would seek some further submissions from the parties as to the handling of this matter, noting of course that there remains two options. One would be that this remains adjourned pending the outcome of the referral or, secondly, these matters might also be joined. But that's not a decision that I would need to make now, or that you need to make submissions on. But if the referral is granted, it would seem to me it is appropriate that you be given an opportunity to say something about that at that point. Lastly, if Watson SDP decides the matter in its own right - sorry, Watson VP decides the substance of the matter in the interim, then I would give liberty to apply. So, look, that's what I propose to do.

PN45

MR BOYCE: Thank you.

PN46

THE COMMISSIONER: All right. Mr McLeay, perhaps then as the applicant we might start with you.

PN47

MR McLEAY: I'm sorry, Commissioner, I didn't hear what you said.

PN48

THE COMMISSIONER: What I'm proposing to do is to hear the merit of the case but await the outcome of Watson VP's deliberations subject to the caveats that I just announced.

PN49

MR McLEAY: Thank you, Commissioner. The HSU seeks that these orders be made. The award still has some application and as such there is (indistinct) that the awards provided benefit beyond the state act - - -

PN50

THE COMMISSIONER: Mr McLeay, look, I'm sorry to interrupt. Has the broadcast been breaking up from your end?

PN51

MR McLEAY: No, Commissioner. I just haven't heard everything. I'm sorry.

PN52

THE COMMISSIONER: That's all right, because there is a bit of break-up in the line on this end.

PN53

MR McLEAY: Is that any better, Commissioner?

PN54

THE COMMISSIONER: That sounds good. Thank you.

PN55

MR McLEAY: Thank you. In pushing ahead with the application, Commissioner, the previous awards provided long service benefits that went beyond the New South Wales Long Service Leave Act. We seek to preserve those benefits. The awards continue to apply, particularly in local government in New South Wales. We say that the decision of the full bench saw that there was provision to make this application. The full bench provided a template to make the application or to provide a template for draft orders. We seek that those orders be made and that they be made effective of 1 January 2011.

PN56

THE COMMISSIONER: You otherwise rely on your written submissions?

PN57

MR McLEAY: We do.

PN58

THE COMMISSIONER: Thank you. All right. Who would like to lead off for the employers? Mr Boyce?

PN59

MR BOYCE: Thank you, Commissioner. I refer to our submissions of 21 February 2011. I seek to tender those.

PN60

THE COMMISSIONER: Yes. Look, they are properly before the tribunal. I don't propose to, sort of, formally mark those. But all of the written submissions are properly before the tribunal.

PN61

MR BOYCE: Yes. Thank you, Commissioner. The application is opposed. Just at the outset and for the record, my clients take no issue with the analysis as far as the 2B state award long service leave provisions being more beneficial than the stage legislation. They also take no issue with the terms of the orders sought by the HSU if an order is ultimately in the discretion of the tribunal made, however, it is submitted that no order should be made. Commissioner, you point out in your decision of 9 February (2011) FWA 761 at paragraph 28 - you point out, "Notwithstanding item 30 of schedule 3A of the transitional act provides that an order can be made, it is still within the discretion of the tribunal as to whether an order is to be made."

PN62

I also note that in that decision and also in the decision of the full bench of 5 November 2010 the issue that is now being sought to be raised by the aged care employers wasn't in contempt or argued to any extent. As has already fallen from you, Commissioner, paragraph 55 of the full bench decision of 5 November 2010 merely points out submissions that were made, but doesn't also consider in any detail the nature of the issues or the operation of section 113 of the act. Commissioner, the opposition to the order really goes to the intent of the full bench decision on 5 November 2010 at paragraphs 12 to 14, particularly at paragraph 12 where the full bench points out the traditional provisions in modern awards currently represent the then commission's conclusions on the appropriate transitional arrangements for national system employers and employees previously covered by relevant transitional instruments.

PN63

Also at 14 the full bench says there, "There is a reluctance to adopt a different approach for employers and employees presently covered by division 2B state awards," and that there is strong reasons for equity for not doing so. So in that light my submission is that NAPSA long service leave provisions are not preserved under section 113 of the act. Section 113(1) - I'll take the tribunal to the terms. It focuses upon applicable award-derived long service leave terms, and they're defined expressly in subsection (3). In (3)(a) it talks about the terms of an award or a state reference-transitional award. In my submission, section 113 doesn't preserve entitlements to long service leave beyond those two instruments as they would have otherwise been known in the transitional act.

PN64

Section 113 subsection (7) refers to instruments of a kind are references to transitional instruments of that kind that continue in existence by schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act. Schedule 3 item 2 subitem (5)(a) defines transitional instruments or classifies transitional instruments in various ways. (5)(a) talks about awards and notional agreements preserving state awards as being award-based transitional instruments. In my submission, given that the term "award" is not inclusive of the term, "Notional agreements preserving state awards," the reference in section 113 subsection (3)(a) to award does not include NAPSA. Section 113(7) is a reference to instruments of a kind as provided in the transitional act. That does not expand the meaning of an award to include a NAPSA.

PN65

Now, annexed to our submissions is an extract from Mr Stewart's book, Stewart's Guide to Employment. I merely call that in aid of the submissions I have just made to the construction of section 113, and the author's conclusion at paragraph 11.36 about the preservation of long service leave terms from former instruments being limited to federal awards, be they federal awards that apply to corporations under the former Workplace Relations Act or federal awards that were transitional federal awards.

PN66

Also, Commissioner, I refer to the decision of the full bench in Armacell Australia Pty Ltd and others (2010) FWAFB 9985 at paragraphs 24 to 26. This, as I said, was referred to by you, Commissioner, in footnote 9 to your decision. At paragraphs 24 to 26 the full bench in that determination, be it in relation to an enterprise agreement does make some consideration of division 9 part 2(2) of the act in regard to section 113, as well as the operation of section 27(2)(g) of the Fair Work Act. The analysis of the full bench there is also consistent with the submissions I've just made as to the operation of section 113.

PN67

So the net effect, Commissioner, if the tribunal is to accept that NAPSA long service leave terms haven't been preserved then, in my submission, in the exercise of its discretion, won't make an order preserving long service leave provisions for employees under division 2B state awards, because that would create two different long service leave entitlements, it would mean that transitional arrangements are different for employees doing the same work in the same industry under the same award, and on that basis, it would be not appropriate to make the order, bearing in mind that those employees will be covered by the state long service leave laws pursuant to section 27(2)(g) in any event, just as all of the other employees whose NAPSAs cease to exist as a result of making a modern award on 1 January 2010.

PN68

I also note for the tribunal's consideration, the exercise of its discretion, at paragraph 16 of the full bench decision of (indistinct) the full bench talks about the state tribunals making changes to state awards between the commencement of the Work Choices legislation in March 2006 and the reference taking effect 1 January 2010, and that many of those changes taken by state tribunals haven't been mirrored in the federal system.

PN69

In my submission, the HSU has not identified any of the long service leave terms in these applications that have been altered or changed between the commencement of Work Choices and the referral of the powers on 1 January, that result in these provisions being in any way different during that period of time for national system employees, as they were known under the former Workplace Relations Act, and employees who weren't part of that system by virtue of their employer not being a constitutional corporation. If it pleases, those are my submissions.

PN70

THE COMMISSIONER: Mr Boyce, just in relation to the issue of parity and what I think you correctly pointed out was the full bench desire to as far as possible have common conditions moving forward, which of course is the whole idea of the transitional provisions themselves, it seems to me that long service leave, we do start from a slightly different proposition, though, because even accepting for the purposes of this question that you're right about the operation of section 113 in relation to the NAPSAs, it seems to me in long service leave we do start from a slightly different point, in that the act itself and its approach to the national employment standard on long service leave starts from a different proposition.

PN71

That is, the broad proposition is, "Look, whatever your long service leave provisions were at the time, you've preserved those pending the development of a truly national NES for long service leave." So, for instance, the fact that federal award based long service leave provisions have been preserved which are different than state provisions in a sense automatically preserves the difference on long service leave. So it seems there's a different policy approach to long service leave than perhaps to other matters.

PN72

MR BOYCE: Yes, that's correct, but only as far as awards go. In this instance, NAPSA provisions haven't been preserved by section 113, which are really a significant majority for these awards as far as the 2B award applications currently being considered by the tribunal. Item 30 of schedule 3A really highlights - there was no arrangements made for long service leave preservation in a transitional sense under the Fair Work Australia or the transitional act, because it's a completely new (indistinct) it's very prescriptive and express as to how it operates, notwithstanding that it still gives the tribunal a discretion as to whether to preserve those.

PN73

But for other than federal, effectively all of the people on the NAPSAs would have been entitled to at least 2B state long service leave entitlements under their former NAPSA, but those have been lost, in my submission, and have been preserved, and therefore, for reasons of equity, these employees who have never been covered by a federal award should not have their long service leave provisions preserved under the 2B instrument either. But it is a matter of discretion for the tribunal.

PN74

THE COMMISSIONER: Yes, thank you, Mr Boyce. All right. Mr Briggs.

PN75

MR BRIGGS: Thank you, your Honour. ABI seeks to rely on written submissions, as I earlier advised. I don't believe there's anything in addition to add to what Mr Boyce has already aired for the commission, and so ABI will just seek to answer in the submissions.

PN76

THE COMMISSIONER: Very well. Thank you. Mr Yuille.

PN77

MR YUILLE: Thank you, Commissioner. Yes, the Catholic Commission for Employment Relations basically rely on our submission. From our perspective, the majority of our employers are division 2B employers who are covered by the previous state awards and have the beneficial long service leave provisions, and they've really provided provisions on that basis. Also, of our federal employers, they're covered by agreements, and in those agreements they have the beneficial long service leave provisions consistent with the HSU's application. So on that basis we don't oppose the application as submitted.

PN78

THE COMMISSIONER: Very well. Thank you. Well, Mr McLeay, any response?

PN79

MR McLEAY: Just in terms of - you asked Mr Boyce whether in terms of long service leave the act came from a different policy position. When we read the NES draft that was put out, when the draft talked about long service leave, it made the point that all long service leave should be maintained and preserved and not be bargained away. I've just looked it up then. At paragraph 236 of the discussion paper of the National Employment Standards exposure draft, and I'll just read that for you - sorry, I'll just find it again. It's under the long service leave heading in the exposure draft paper, under the subtitle Outline of Entitlement, and paragraph 236 reads:

PN80

Until a uniform long service leave NES is developed, long service leave entitlements in pre-modernised awards, NAPSAs or state and territory laws will be preserved to ensure they cannot be bargained away.

PN81

Following from that and our earlier submissions, Commissioner, we say that the applications should be granted, and that they should be made from 1 January. That concludes our submissions.

PN82

THE COMMISSIONER: All right. Mr Boyce, or Mr Briggs, given that reference wasn't previously cited - - -

PN83

MR McLEAY: No, they haven't, but I'll endeavour to get that to them.

PN84

THE COMMISSIONER: All right. Do you wish to say anything about that?

PN85

MR BOYCE: Commissioner, I'm aware of that provision. My submission merely is, whatever is in a discussion paper, whatever the intention may well be, the words appear to have been left out of the legislation, and it's the words that, in my submission, that the tribunal will start with and make a determination as to whether the words in the statute preserve NAPSA long service leave entitlements before considering whether there's a need to have recourse to the intent of a discussion paper.

PN86

MR BRIGGS: If I may, Commissioner?

PN87

THE COMMISSIONER: Yes.

PN88

MR BRIGGS: I would also draw your attention to the fact that when the Fair Work Act originally commenced, section 113(3) only referred to an award and that the act was later varied to include a reference to a state reference transitional award and the fact that a deliberate decision was made to expand those instruments covered by that provision indicates that a conscious decision was made that only these federal instruments would be covered by these provisions and that that not include a NAPSA. Thank you, Commissioner.

PN89

THE COMMISSIONER: Thank you. Look, just in relation to the discussion paper, Mr McLeay, obviously the tribunal has the capacity to look for extrinsic material but I suspect that the discussion paper is probably right at the outer boundaries of the sort of extrinsic material that the tribunal can consider but nevertheless I will obviously consider everything that has been put subject to that caveat. Unless there's anything further?

PN90

MR McLEAY: No, Commissioner, nothing further from us.

PN91

THE COMMISSIONER: All right. Well, look, while I have got the parties - yes?

PN92

MR McLEAY: That's all, Commissioner.

PN93

THE COMMISSIONER: We need to wait for the delay in the transmission. All right. Look, what I propose do therefore is to deal with the applications on the basis that I announced earlier; that is, you have made your submissions. I will await the outcome of the consideration of a referral by Watson VP. If the referral is refused then I'll decide the application on the basis of the material that you have already advanced. If the referral is granted then I'll give you the opportunity to make further submissions, and there is at least a couple of ways this application could be dealt with including potentially being joined to that referral, or left in abeyance; and lastly, if Watson VP does decide the substance of the matter then liberty to apply is granted to the parties. So I'll leave the matter on that basis. Thank you, gentlemen.

<ADJOURNED INDEFINITELY [10.02AM]